8-K/A - HTH - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

AMENDMENT NO. 1

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2021

Hilltop Holdings Inc.

(Exact name of registrant as specified in its charter)


Maryland		1-31987		84-1477939
(State or other jurisdiction of<br>incorporation)		(Commission<br>File Number)		(IRS Employer Identification<br>No.)


6565 Hillcrest Avenue ****
Dallas , Texas		75205
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (214) 855-2177

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to section 12(b) of the Act:


Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, par value $0.01 per share		HTH		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b–2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Explanatory Note

This Amendment No. 1 to the Current Report on Form 8-K/A is being filed to replace in its entirety Exhibit 99.1 furnished pursuant to Item 2.02 of the original Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on October 28, 2021 due to technical issues during transmission of filing.

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

A copy of the Earnings Presentation of Hilltop Holdings Inc., or the Company, for the quarter ended September 30, 2021 is set forth in Exhibit 99.1 attached to this Current Report on Form 8-K and is incorporated herein by reference. The Company intends to use the Earnings Presentation, in whole or in part, in one or more meetings with investors or analysts, including in a webcast on October 29, 2021 at 8:00 a.m. (central time).

The information in this Item (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth in such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(a)Financial statements of businesses acquired.

Not applicable.

(b)	Pro forma financial information.

Not applicable.

(c)	Shell company transactions.

Not applicable.

(d)	Exhibits.

The following exhibit(s) are filed or furnished, depending on the relevant item requiring such exhibit, in accordance with the provisions of Item 601 of Regulation S-K and Instruction B.2 to this form.

<br><br>		<br><br>
Exhibit<br><br>Number		<br><br>Description of Exhibit
<br><br>99.1		<br><br>Third Quarter 2021 Earnings Presentation (furnished pursuant to Item 2.02).

104		Cover Page Interactive File (formatted as Inline XBRL).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		Hilltop Holdings Inc.,
		a Maryland corporation


Date:	October 28, 2021	By:	/s/ COREY PRESTIDGE
		Name:	Corey G. Prestidge
		Title:	Executive Vice President,
			General Counsel & Secretary

Exhibit 99.1

Hilltop Holdings Inc.<br>Earnings Presentation Q3 2021<br>October 29, 2021
Preface<br>2<br>Additional Information Corporate Headquarters<br>6565 Hillcrest Ave<br>Dallas, TX 75205<br>Phone: 214-855-2177<br>www.hilltop-holdings.com<br>Please Contact:<br>Erik Yohe<br>Phone: 214-525-4634<br>Email: eyohe@hilltop-holdings.com<br>FORWARD-LOOKING STATEMENTS<br>This presentation and statements made by representatives of Hilltop Holdings Inc. (“Hilltop” or the “Company”) during the course of this presentation include “forward-<br>looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks,<br>uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or<br>achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty<br>to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our outlook, our business<br>strategy, our financial condition, our efforts to make strategic acquisitions, our revenue, our liquidity and sources of funding, market trends, operations and business, taxes,<br>the impact of natural disasters or public health emergencies, such as the current coronavirus (“COVID-19”) global pandemic, information technology expenses, capital levels,<br>mortgage servicing rights (“MSR”) assets, stock repurchases, dividend payments, expectations concerning mortgage loan origination volume, servicer advances and interest<br>rate compression, expected levels of refinancing as a percentage of total loan origination volume, projected losses on mortgage loans originated, total expenses, anticipated<br>changes in our revenue, earnings, or taxes, the effects of government regulation applicable to our operations, the appropriateness of, and changes in, our allowance for credit<br>losses and provision for (reversal of) credit losses, future benchmark rates and economic growth, anticipated investment yields, expected accretion of discount on loans in<br>future periods, the collectability of loans, cybersecurity incidents, cost savings expected from initiatives implemented and planned, including core system upgrades and cost<br>reduction efforts, the outcome of litigation, and our other plans, objectives, strategies, expectations and intentions and other statements that are not statements of historical<br>fact, and may be identified by words such as “anticipates,” “believes,” “building”, “could,” “estimates,” “expects,” “forecasts,” “goal,” “guidance”, “intends,” “may,” “might,”<br>“outlook”, “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases. The following<br>factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) the COVID-19 pandemic and the response of<br>governmental authorities to the pandemic, which have had and may continue to have an adverse impact to the global economy and our business operations and<br>performance; (ii) the credit risks of lending activities, including our ability to estimate credit losses and increases to the allowance for credit losses; (iii) the effects of changes<br>in the level of, and trends in, loan delinquencies and write-offs; (iv) effectiveness of our data security controls in the face of cyber attacks; (v) changes in general economic,<br>market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (vi) risks associated with concentration in real estate<br>related loans; (vii) changes in the interest rate environment and transitions away from LIBOR; (viii) the effects of our indebtedness on our ability to manage our business<br>successfully, including the restrictions imposed by the indenture governing our indebtedness; (ix) changes in state and federal laws, regulations or policies affecting one or<br>more of our business segments, including changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and<br>Consumer Protection Act; (x) cost and availability of capital; (xi) changes in key management; (xii) competition in our banking, broker-dealer and mortgage origination<br>segments from other banks and financial institutions, as well as investment banking and financial advisory firms, mortgage bankers, asset-based non-bank lenders and<br>government agencies; (xiii) legal and regulatory proceedings; (xiv) risks associated with merger and acquisition integration; and (xv) our ability to use excess capital in an<br>effective manner. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports<br>on Form 10-Q and other reports, that we have filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this<br>cautionary statement.<br>The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or<br>dates included in the accompanying slides. Hilltop Holdings does not undertake an obligation to, and disclaims any duty to, update any of the information herein.
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Q3 2021<br>3<br>Investor Highlights –<br>Notes:<br>(1) Average Bank Loans HFI reflect consolidated loans held for investment excluding margin loans from the broker-dealer business.<br>• • PlainsCapital Bank generated $62.9 million in pre-tax income during Q3 2021, an increase of $12.7 million<br>from Q3 2020<br>• Average bank loans HFI1 declined from Q2 2021 by $252 million, or 4%, as Paycheck Protection Program<br>(PPP) loan balances declined<br>• Average bank deposits remained stable at $12 billion from Q2 2021 as an increase in core deposits offset the<br>planned run-off in brokered deposits during the period<br>• Reversal of credit reserves of $5.8 million reflects improvements in both the macroeconomic forecast and<br>credit quality metrics on COVID-19 impacted credits. Loan portfolio trends continue to improve across<br>geographies and industries<br>• PrimeLending generated $62.2 million in pre-tax income on $5.6 billion of originated volume during Q3<br>2021<br>• Gain-on-sale margin declined by 94 basis points versus Q3 2020 and 18 basis points versus Q2 2021 to 346<br>basis points<br>• Loan originator headcount increased from Q3 2020 by 127 to 1,314 reflecting strong nationwide recruiting<br>efforts<br>• HilltopSecurities generated $17.4 million in pre-tax income equating to a pre-tax margin of 13.8% in Q3<br>2021<br>• Public Finance delivered net revenues of $37.6 million, a 45% increase from Q3 2020<br>• Structured Finance produced net revenues of $35.4 million, a decrease of 42% versus Q3 2020 as loan lock<br>volume declined 33% and spreads tightened<br>ROAA<br>..86%<br>EPS – Diluted<br>$0.30<br>ROAE<br>5.76% 14.96% $92.9 $1.15 2.13%<br>Net Income<br>MM
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Capital Highlights – Q3 2021<br>4<br>$19.14 $19.65 $20.16<br>$21.85<br>$23.52 $24.77 $25.93 $26.93 $27.77<br>16.15% 16.70%<br>15.96%<br>18.46%<br>19.85%<br>18.97%<br>19.63%<br>20.22%<br>21.28%<br>$0.08 $0.08<br>$0.09 $0.09 $0.09 $0.09<br>$0.12 $0.12 $0.12<br>6.00%<br>8.00%<br>10.00%<br>12.00%<br>14.00%<br>16.00%<br>18.00%<br>20.00%<br>22.00%<br>24.00%<br> $‐<br> $5.00<br> $10.00<br> $15.00<br> $20.00<br> $25.00<br> $30.00<br> $35.00<br> $40.00<br> Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>Tangible Book Value Per Share (Tangible Common Equity / Shares Outstanding) Common Equity Tier 1 risk based ratio Dividends per share<br>Capital Management and Tangible Book Value Growth<br>TBVPS<br>18%<br>Versus<br>9/30/20<br>20%<br>CAGR<br>Since<br>9/30/19<br>• During the quarter, HTH returned $83.9 million of capital to shareholders<br>• $9.7 million of dividends and $74.2 million in share repurchases<br>• Through the third quarter, $153.1 million of capital, or 49% of earnings, has been distributed to shareholders in 2021<br>• All $67.0 million of the PCC TRuPs were retired in the third quarter, saving ~$2 million in annual interest expense<br>1<br>1<br>Notes:<br>(1) Tangible common equity and tangible book value per common share (TBVPS) are non-GAAP financial measures. For a reconciliation of tangible common equity and tangible book value per<br>share to the nearest GAAP measure, see the appendix.<br>(2) At period end.<br>2 2
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5<br>Hilltop Holdings – Q3 Financial Summary<br>$ in Millions, except EPS<br>Income Statement and Key Metrics Q3 2021 Q2 2021 QoQ% Q3 2020 YoY%<br>Net interest income $105.1 $107.9 (3%) $101.9 3%<br>Noninterest income 367.9 339.9 8% 502.7 (27%)<br>Noninterest expenses 355.2 343.4 3% 399.3 (11%)<br>Efficiency ratio 75.1% 76.7% 66.0%<br>Pre-provision net revenue1 117.9 104.4 13% 205.3 (43%)<br>Net charge offs (recoveries) ($0.1) $0.5 (112%) $0.6 (111%)<br>Net ACL build / (release) (5.7) (29.2) (81%) (1.2) 387%<br>Provision for (reversal of) credit losses (5.8) (28.7) (80%) (0.6) 867%<br>Income from continuing operations, before taxes 123.7 133.2 (7%) 205.9 (40%)<br>Net income 95.4 101.9 (6%) 159.8 (40%)<br>Minority interest 2.5 2.9 (12%) 6.5 (61%)<br>Income attributable to Hilltop $92.9 $99.1 (6%) $153.3 (39%)<br>Return on average assets 2.13% 2.29% 3.71%<br>Return on average equity 14.96% 16.42% 25.94%<br>EPS - Diluted $1.15 $1.21 (5%) $1.70 (32%)<br>EOP Shares outstanding (in thousands) 78,959 81,153 (3%) 90,238 (12%)<br>Average assets $17,750 $17,833 (0%) $17,113 4%<br>EOP Assets 17,990 17,665 2% 16,936 6%<br>EOP Loans HFI, net 7,443 7,530 (1%) 7,790 (4%)<br>EOP Deposits 12,132 11,734 3% 11,262 8%<br>Notes:<br>(1) Pre-provision net revenue is calculated as the sum of net interest income and noninterest income less noninterest expense (except provision for loan losses).
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$0.1<br>$5.2<br>($6.1) ($5.0)<br>1.95% 1.94% 1.85%<br>1.51% 1.45%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br>$0.0<br>$20.0<br>$40.0<br>$60.0<br>$80.0<br>$100.0<br>$120.0<br>$140.0<br>$160.0<br>$180.0<br>9/30/2020 12/31/2020 3/31/2021 6/30/2021 Net<br>Recovery<br>Specific<br>Reserves<br>Collective -<br>Economic<br>Conditions<br>Collective -<br>Portfolio<br>Changes<br>9/30/2021<br>6<br>Hilltop Holdings – Allowance for Credit Losses<br>Allowance for Credit Losses at Period End<br>9/30/21 Reserve Composition<br>($ in millions)<br>CRE $68.5 2.26%<br>C&I 30.3 2.31%<br>Construction 5.1 0.65%<br>1-4 SFR 4.5 0.41%<br>Consumer 0.5 1.71%<br>Broker Dealer 0.3 0.04%<br>Mortgage Warehouse 0.3 0.05%<br>Total Reserve $109.5 1.45%<br>ACL / Total Loans HFI<br>$155.2 $149.0 $144.5<br>$115.3<br>($ in millions)<br>$109.5<br>Provision for (Reversal of) Credit Reserves<br>• Applied Moody’s Analytics September 2021<br>single macroeconomic alternative baseline (S7)<br>scenario for economic forecast<br>• Future reserve activity to be driven by new loan<br>production, credit performance and<br>macroeconomic variable adjustments over time<br>• ACL % excluding margin loans,<br>mortgage warehouse lending and PPP<br>loans equated to 1.74% as of September<br>30, 2021<br>ACL / Loans HFI<br>($ in millions)
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2.56%<br>2.71% 2.69% 2.62% 2.53%<br>1. 00%<br>1. 50%<br>2. 00%<br>2. 50%<br>3. 00%<br>3. 50%<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>7<br>Hilltop Holdings – Net Interest Income & Margin<br>Net Interest Margin<br>2<br>Net Interest Margin Rollforward<br>($ in millions)<br>Net Interest Income<br>$101.9<br>$107.4<br>$105.7<br>$107.9<br>$105.1<br> $80. 0<br> $85. 0<br> $90. 0<br> $95. 0<br> $1 00. 0<br> $1 05. 0<br> $110 .0<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>Q2 2021 2.62%<br>Purchase Accounting Accretion (0.07)<br>Cash Increases (0.05)<br>Loans HFS 0.04<br>Other (0 .0 1 )<br>Q3 2021 2.53%<br>Key Drivers & Statistics<br>Q3'20 Q2'21 Q3'21<br>($ in m illions, except as noted)<br>HT H Consolidated<br>Average Earning Assets ($B) $15.8 $16.5 $16.5<br>Banking<br>Accretion Income $3.3 $6.0 $3.2<br>PPP Balance (period end) $67 1 $261 $133<br>PPP Interest & Fee Income $2.9 $6.4 $5.1<br>Cash and Due (Avg. Balance) $1,67 8 $1,7 40 $2,095<br>Mortgage<br>Loans Held for Sale (period end) $2,548 $2,885 $2,109<br>($ in millions)
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$355.5<br>$2 97.5 $3 1 0.4<br>$2 4 2.0 $2 4 2.3<br>$1 41.0<br>$1 41.2 $98.6<br>$83 .5<br>$1 16.1<br>$9.8<br>$1 2 .1<br>$1 1 .3<br>$1 0.2<br>$11.7<br>$(3 .6) $(2 .9) $(2 .8)<br>$4.3<br>$(2 .2)<br>$502.7<br>$447.9<br>$417.6<br>$339.9<br>$367.9<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>PrimeLending HilltopSecurities<br>PlainsCapital Bank Corporate / Other<br>8<br>Hilltop Holdings – Noninterest Income<br>Year-over-Year Noninterest Income ($MM) Noninterest Income<br>Key Drivers & Statistics<br>($ in millions)<br>Q3 2020 $502.7<br>Mortgage Production Income & Fees (113.6)<br>Securities Related Fees & Commissions 14.7<br>Other Inc ome (35 .8)<br>Q3 2021 $367.9<br>Q3' 20 Q2'21 Q3'21<br>Broker Dealer<br>TBA Lock Volume ($mm) $2,663 $1,7 84 $1,7 7 5<br>Mortgage<br>Origination Volume ($B) $6.5 $5.9 $5.6<br>Net gains from mortgage loan sales (bps):<br>Loans sold to third parties 441 37 6 359<br>Impact of loans sold to bank (1) (12) (13)<br>As reported 440 364 346
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$222.3 $225.3 $213.8 $211.9 $213.5<br>$177.0 $177.0<br>$152.9 $131.5 $141.7<br>$399.3 $402.3<br>$366.7<br>$343.4 $355.2<br>66.0%<br>72.5% 70.1%<br>76.7% 75.1%<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>Variable Compensation<br>Expenses Other Than Variable Compensation<br>Efficiency Ratio<br>9<br>Hilltop Holdings – Noninterest Expenses<br>Year-over-Year Noninterest Expense ($MM) Noninterest Expenses and Efficiency Ratio<br>Key Drivers & Statistics<br>Note:<br>(1) Efficiency Ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income.<br>1<br>($ in millions) Q3 2020 $399.3<br>Compensation and Benefits (36.2)<br>Occupancy and Equipment (0.7 )<br>Professional Serv ices (3.0)<br>Other Expenses (4.3)<br>Q3 2021 $355.2<br>Q3' 20 Q2'21 Q3'21<br>Banking<br>Full-Service Branches 60 59 59<br>Efficiency Ratio % (Bank Only) 52.7% 49.7% 48.8%<br>Mortgage<br>Variable Compensation ($mm) $116.3 $97 .1 $88.2<br>Variable Comp / Originated Volume 1.80% 1.65% 1.58%<br>Efficiency Ratio % (PrimeLending Only) 58.7 % 7 9.2% 7 4.0%<br>Broker-Dealer<br>Variable Compensation ($mm) $60.8 $34.4 $53.5<br>Compensation / Net Revenue % 59.1% 66.2% 65.1%
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40%<br>26%<br>10%<br>15%<br>0%9%<br>Commercial real estate<br>Commercial and industrial<br>Construction and land<br>development<br>1-4 family residential<br>Consumer<br>Margin loans at Broker-Dealer<br>$6.6 $6.7 $6.5 $6.3 $6.1<br>$0.7 $0.5 $0.5<br>$0.3<br>$0.1<br>$0.5 $0.4 $0.5<br>$0.6<br>$0.6<br>$0.2 $0.2 $0.3<br>$0.5 $0.7<br>$7.9 $7.7 $7.8 $7.6 $7.6<br> $‐<br> $1.0<br> $2.0<br> $3.0<br> $4.0<br> $5.0<br> $6.0<br> $7.0<br> $8.0<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>1 - 4 Family PrimeLending Retained Mortgages<br>Broker-Dealer Loans<br>PPP Loans<br>All Other Loans<br>10<br>Notes:<br>(1) 1-4 Family PrimeLending Retained Mortgages are loans purchased at par by PlainsCapital Bank from PrimeLending. These are exclusive of the 1-4 family residential mortgages originated through PlainsCapital Bank.<br>The sum of the period amounts may not equal the total amounts due to rounding.<br>Loan Balances at Period End<br>Hilltop Holdings – Loans<br>Key Drivers & Statistics<br>Q3'20 Q2'21 Q3'21<br>Av erage Balance ($B) $7 .7 $7 .7 $7 .5<br>Annualized Loan HFI Yield % 4.32% 4.48% 4.33%<br>Gross Loans HFI by Type at 9/30/21<br>($ in billions)<br>Bank Loans HFI – Fixed vs. Variable Rate at 9/30/21<br>54% 40%<br>6%<br>Fixed rate<br>Variable rate at floors<br>Variable rate not at floors<br>1
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1.9x 1.9x 1.8x 1.7 x 1.8x<br>2.08% 2.05% 1.98%<br>1.64% 1.58%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>2.50%<br>1.0x<br>1.2x<br>1.4x<br>1.6x<br>1.8x<br>2.0x<br>2.2x<br>2.4x<br>2.6x<br>2.8x<br>3.0x<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>ACL/Bank NPLs ACL/Bank Loans HFI<br>567<br>2,688<br>(564)<br>510<br>(62)<br>0.03%<br>0.15%<br>-0.03%<br>0.03%<br>0.00%<br>-1.00%<br>-0.50%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>(1,000)<br>(500)<br>0<br>500<br>1,000<br>1,500<br>2,000<br>2,500<br>3,000<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>($000)<br>NCOs NCOs/Avg. Bank Loans HFI<br>5.9% 5.9% 5.7%<br>4.6% 4.1%<br>0.1% 0.2% 0.1%<br>0.2%<br>0.1%<br>6.0% 6.1%<br>5.7%<br>4.8%<br>4.2%<br>0.0%<br>1.0%<br>2.0%<br>3.0%<br>4.0%<br>5.0%<br>6.0%<br>7.0%<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>% of Bank Loans<br>Classified Special Mention<br>109,620 101,324 99,759 90,061 83,801<br>1.47 %<br>1.39% 1.36%<br>1.28%<br>1.21%<br>0.00%<br>0.25%<br>0.50%<br>0.75%<br>1.00%<br>1.25%<br>1.50%<br>1.75%<br> -<br> 25,000<br> 50,000<br> 75,000<br> 100,000<br> 125,000<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>($000)<br>Total NPAs Total NPAs/(Bank Loans HFI + OREO)<br>11<br>Hilltop Holdings – Asset Quality<br>Criticized Loans Non-Performing Assets<br>Notes: The sum of the period amounts may not equal the total amounts due to rounding. Figures represent bank asset quality metrics only (excludes Loans HFS and Broker Dealer Margin Loans).<br>(1) Total NPAs included non-accrual loans, accruing TDRs, OREO and other repossessed assets.<br>Net Charge-Offs Allowance<br>1 1
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39%<br>42%<br>15%<br>4%<br>Demand<br>Money Market<br>Time<br>Other<br>$5.8 $6.2 $6.4 $6.5 $6.7<br>$3.6<br>$3.6<br>$4.0 $4.2 $4.4<br>$0.9 $0.7<br>$0.7<br>$0.7<br>$0.8 $1.0 $0.7<br>$0.6 $0.3 $0.2 $11.3 $11.2<br>$11.7 $11.7 $12.1<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>Interest-Bearing Deposits Noninterest-Bearing Deposits<br>Broker Dealer Sweep Deposits Brokered Deposits<br>12<br>Notes:<br>The sum of the period amounts may not equal the total amounts due to rounding.<br>(1) Annualized.<br>Deposit Balances at Period End<br>Hilltop Holdings – Deposits<br>Key Drivers & Statistics<br>Q3'20 Q2'21 Q3'21<br>Total Deposits ($B)(average balance) $11.4 $11.8 $11.9<br>Brokered Wholesale Deposits ($B)(period end) $1 .0 $0.3 $0.2<br>Cost of Interest-Bearing Deposits 0.54% 0.3 2% 0.28%<br>Cost of Brokered Deposits 0.62% 0.3 1 % 0.33 %<br>Cost of Total Deposits 0.38% 0.21 % 0.1 8%<br>Interest-Bearing Deposits by Type at 9/30/21<br>($ in billions)<br>1<br>1<br>1
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13<br>Hilltop Holdings – 2021 Outlook<br>Outlook<br>Loan Growth<br>(Full year average HFI loan growth)<br>• 1 – 4 family loan retention $50 - $75 million per month<br>• FY Average Total loan growth of 0 – 3%, excluding PPP loans<br>Deposit Growth<br>(Full year average deposit growth) • FY Average Total Deposit growth of 7 – 10% excluding additional stimulus efforts<br>Net Interest Income<br>• Purchase accounting accretion expected to decline by 10 - 15% versus 2020 levels<br>• Loan yields expected to remain under pressure, excluding accelerated PPP fees<br>• Deposit costs expected to improve slowly as Consumer CDs mature and reset<br>Noninterest Income • Mortgage gain on sale margins continue to be pressured as volumes decline across the<br>industry, FY Average 360 – 385 bps (third party sales)<br>Noninterest Expense • Non-variable expenses to remain stable with 2020 levels<br>• Variable expenses will follow revenue contribution from fee businesses<br>Provision Expense / (Release) • ($20 million) – ($35 million) expected full year provision release<br>Effective Tax Rate (GAAP) • 22 – 24% full year basis
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Appendix<br>14
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52.7% 53.0%<br>48.4% 49.7% 48.8%<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>3.03%<br>3.37%<br>3.30%<br>3.19%<br>2.99%<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>PlainsCapital Bank – Highlights Q3 2021<br>Key Highlights Q3 2020 Q3 2021<br>ROAA 1 .1 4 % 1 .3 6 %<br>Full Serv ice Branches 60 59<br>Net Interest Margin 3.03% 2.99%<br>Assets ($B) $1 3 .4 $1 4.3<br>Summary Results<br>($ in millions) Q3 2020 Q3 2021<br>Net Interest Income $96.4 $100.0<br>Provision for (rev ersal of) Credit Losses -- (5.8)<br>Noninterest Income 9.8 1 1 .7<br>Noninterest Expense 56.0 54.6<br>Income Before Taxes $50.3 $62.9<br>15<br>Efficiency Ratio1<br>Notes:<br>(1) Efficiency Ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income.<br>Net Interest Margin
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Key Highlights Q3 2020 Q3 2021<br>Origination Volume ($mm) $6,450 $5,595<br>% Purchase 64.9% 7 0.6%<br>Sales Volume ($mm) $6,522 $6,196<br>MSR Asset ($mm)(period end) $128 $111<br>16<br>PrimeLending – Highlights<br>Gain on Sale Overview<br>Notes:<br>(1) Gain on Sale calculated as net gains from sale of loans divided by sales volume. Reported Gain on Sale reflects impact of loans retained by PlainsCapital Bank.<br>1<br>Sum m ary Results<br>($ in millions) Q3 2020 Q3 2021<br>Net In ter est Incom e (Ex pen se) ($2 .3 ) ($3 .5)<br>Noninterest Income 355.5 242.3<br>Noninterest Expense 207.2 176.6<br>Income Before Taxes $145.9 $62.2<br>Mortgage Origination Volume<br>$6.5<br>$6.8<br>$6.2<br>$5.9<br>$5.6<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>440<br>448<br>388<br>364<br>346<br>441<br>451<br>398<br>376<br>359<br>Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021<br>Reported Gain on Sale (bps)<br>Gain on Sale of Loans Sold to Third Parties<br>($ in billions)<br>Q3 2021
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HilltopSecurities – Highlights Q3 2021<br>Summary Results<br>($ in millions) Q3 2020 Q3 2021<br>Net Interest Income $8.2 $10.4<br>Provision for Credit Losses (0.6) 0.0<br>Noninterest Income 141.0 116.1<br>Noninterest Expense 114.4 109.2<br>Income Before Taxes $35.4 $17.4<br>17<br>Notes:<br>The sum of the period amounts may not equal the total amounts due to rounding. Presented net revenue by business line may differ slightly from 10-Q due to grouping of certain business lines into ‘Other’.<br>Net Revenues by Business Line<br>Key Highlights<br>($ in millions) Q3 2020 Q3 2021<br>Compensation/Net Rev enue (%) 59.1% 65.1%<br>Pre-tax Margin % 23.7% 13.8%<br>FDIC Insured Balances at PCB $900 $7 94<br>Other FDIC Insured Balances $1 ,6 84 $1 ,594<br>Public Finance Offerings $15,174 $14,832<br>TBA Lock Volume $2 ,6 63 $1 ,7 7 5<br>($ in millions) Q3 2020 Q3 2021<br>Public Finance Serv ices $2 5.8 $3 7 .6<br>Fixed Incom e Serv ices 26.5 15.4<br>Wealth Management<br>Retail 23.0 28.2<br>Clearing Serv ices 8.1 7.6<br>Securities Lending 2.0 2.1<br>Structured Finance 61.1 35.4<br>Other 2.7 0.3<br> Net Revenues $149.2 $126.6
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18<br>Non-GAAP to GAAP Reconciliation and Management’s Explanation of Non-GAAP<br>Financial Measures<br>• Hilltop Consolidated<br>Tangible Common Equity, is a non-GAAP financial measure. Tangible common equity is defined as our total stockholders’ equity,<br>excluding preferred stock, reduced by goodwill and other intangible assets. This is a measure used by management, investors and<br>analysts to assess use of equity.<br>Tangible book value per share, or TBVPS, is a non-GAAP financial measure. TBVPS represents Hilltop’s tangible common equity at<br>period-end divided by common shares outstanding at period-end. This is a measure used by management, investors and analysts to<br>assess use of equity.<br>Reconciliation of Tangible Common Equity and<br>Tangible Book Value Per Share<br>($ '000, except per share amounts) 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 6/30/2021 9/30/2021<br>Total Stockholders' Equity $2,058,269 $2,103,039 $2,136,711 $2,262,360 $2,411,372 $2,323,939 $2,419,185 $2,470,281 $2,476,371<br>Less:<br> Preferred Stock 000000000<br>Common Stockholders' Equity 2,058,269 2,103,039 2,136,711 2,262,360 2,411,372 2,323,939 2,419,185 2,470,281 2,476,371<br>Less:<br>Goodwill 267,447 267,447 267,447 267,447 267,447 267,447 267,447 267,447 267,447<br>Other intangible assets, net 28,432 26,666 25,019 23,374 21,814 20,364 19,035 17,705 16,455<br>Goodwill and intangibles from discontinued operations 27,546 27,477 27,416 0 0 0 0 0 0<br>Tangible Common Equity $1,734,844 $1,781,449 $1,816,829 $1,971,539 $2,122,111 $2,036,128 $2,132,703 $2,185,129 $2,192,469<br>Shares outstanding as of period end 90,629 90,640 90,108 90,222 90,238 82,185 82,261 81,153 78,959<br> Book Value Per Share<br> (Common Stockholder's Equity / Shares Outstanding) $22.71 $23.20 $23.71 $25.08 $26.72 $28.28 $29.41 $30.44 $31.36<br> Tangible Book Value Per Share<br> (Tangible Common Equity / Shares Outstanding) $19.14 $19.65 $20.16 $21.85 $23.52 $24.77 $25.93 $26.93 $27.77
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