Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2021

Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year 2021. Hilltop produced income from continuing operations to common stockholders of $62.2 million, or $0.78 per diluted share, for the fourth quarter of 2021, compared to $112.7 million, or $1.30 per diluted share, for the fourth quarter of 2020. Income from continuing operations to common stockholders for the full year 2021 was $374.5 million, or $4.61 per diluted share, compared to $409.4 million, or $4.58 per diluted share, for the full year 2020. Hilltop’s financial results from continuing operations for the fourth quarter and full year 2021 included decreases in year-over-year mortgage origination segment net gains from sales of loans and other mortgage production income as well as declines in net revenues within the broker-dealer segment’s structured finance business and fixed income services lines, partially offset by improvements in the macroeconomic outlook and resulting beneficial impact on loan expected loss rates within the banking segment.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.15 per common share, a 25% increase from the prior quarter, payable on February 28, 2022, to all common stockholders of record as of the close of business on February 15, 2022. Additionally, during 2021, Hilltop paid $123.6 million to repurchase approximately 3.63 million shares of its common stock at an average price of $34.01 per share pursuant to the 2021 stock repurchase program. These shares were returned to the pool of authorized but unissued shares of common stock. The Hilltop Board of Directors authorized a new stock repurchase program through January 2023, under which Hilltop may repurchase, in the aggregate, up to $100.0 million of its outstanding common stock.

The COVID-19 pandemic has adversely impacted financial markets and overall economic conditions, and is expected to continue to have implications on our business and operations. The extent of the impact of the pandemic on our operational and financial performance for 2022 is currently uncertain and will depend on certain developments outside of our control, including, among others, the ongoing distribution and effectiveness of vaccines, the emergence of new variants of the virus, government stimulus, the ultimate impact of the pandemic on our customers and clients, and additional, or extended, federal, state and local government orders and regulations that might be imposed in response to the pandemic.

Jeremy B. Ford, President and CEO of Hilltop, said, “I am pleased to announce Hilltop’s 2021 strong performance that represents a second consecutive year of outstanding results. Once again, Hilltop generated consolidated annual pre-tax income above $500 million, return on average assets above 2%, return on average equity above 15% and growth in book value per share above 12%. This exceptional financial performance was primarily the result of strong execution by our talented employees, prudent leadership from our experienced management teams, and a commitment to serve our customers and the communities in which they live. PlainsCapital Bank realized further improvement in the quality of its loan portfolio, while expanding business sourcing efforts and the recruitment of talented lending teams. PrimeLending once again originated nearly $23 billion in mortgages, which is a reflection of a well-tuned platform. For the year, Hilltop Securities produced net revenue of $424 million. While the fourth quarter was challenging, Hilltop Securities has an improved infrastructure and a talented team to drive towards a successful 2022.”

Fourth Quarter 2021 Highlights for Hilltop:

• The reversal of credit losses was $18.6 million during the fourth quarter of 2021, compared to a reversal of credit losses of $5.8 million in the third quarter of 2021;
  • The reversal of credit losses during the fourth quarter of 2021 primarily reflected improvements in both macroeconomic forecast assumptions and credit quality metrics.
• For the fourth quarter of 2021, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $192.0 million, compared to $297.6 million in the fourth quarter of 2020, a 35.5% decrease;
  • Mortgage loan origination production volume was $5.0 billion during the fourth quarter of 2021, compared to $6.8 billion in the fourth quarter of 2020;
  • Net gains from mortgage loans sold to third parties increased to 362 basis points during the fourth quarter of 2021, compared to 359 basis points in the third quarter of 2021.
• Hilltop’s consolidated annualized return on average assets and return on average equity for the fourth quarter of 2021 were 1.41% and 9.93%, respectively, compared to 2.83% and 20.56%, respectively, for the fourth quarter of 2020;
• Hilltop’s book value per common share increased to $31.95 at December 31, 2021, compared to $31.36 at September 30, 2021;
• Hilltop’s total assets were $18.7 billion and $18.0 billion at December 31, 2021 and September 30, 2021, respectively;
• Loans¹, net of allowance for credit losses, increased to $7.1 billion at December 31, 2021 compared to $6.8 billion at September 30, 2021;
  • Includes supporting our impacted banking clients through funding of over 4,100 loans through both the initial and second rounds of the Paycheck Protection Program, or PPP, with a remaining balance of approximately $78 million as of December 31, 2021, compared to approximately $133 million as of September 30, 2021;
  • Through January 21, 2022, the Small Business Administration, or SBA, had approved approximately 3,600 PPP forgiveness applications from the Bank totaling approximately $833 million, with PPP loans of approximately $7 million currently pending SBA review and approval.
• Non-performing loans were $51.1 million, or 0.52% of total loans, at December 31, 2021, compared to $62.2 million, or 0.64% of total loans, at September 30, 2021;
• We further supported our impacted banking clients during 2020 through the approval of COVID-19 related loan modifications of approximately $1.0 billion, and continued such support during 2021, resulting in a portfolio of active deferrals that have not reached the end of their deferral period of approximately $4 million as of December 31, 2021, compared to approximately $17 million in active deferment as of September 30, 2021;
  • While the majority of the portfolio of COVID-19 related loan modifications no longer require deferral, such loans may continue to represent elevated risk; therefore, monitoring of these loans continues.
• Loans held for sale decreased by 10.9% from September 30, 2021 to $1.9 billion at December 31, 2021;
• Total deposits were $12.8 billion and $12.1 billion at December 31, 2021 and September 30, 2021, respectively;
• Hilltop maintained strong capital levels² with a Tier 1 Leverage Ratio³ of 12.58% and a Common Equity Tier 1 Capital Ratio of 21.22% at December 31, 2021;
• Hilltop’s consolidated net interest margin⁴ decreased to 2.44% for the fourth quarter of 2021, compared to 2.53% in the third quarter of 2021;
  • Includes previously deferred interest income of $2.2 million during the fourth quarter of 2021, compared to $4.6 million during the third quarter of 2021, related to PPP loan-related origination fees.

• For the fourth quarter of 2021, noninterest income from continuing operations was $284.8 million, compared to $447.9 million in the fourth quarter of 2020, a 36.4% decrease;
• For the fourth quarter 2021, noninterest expense from continuing operations was $322.2 million, compared to $402.3 million in the fourth quarter of 2020, a 19.9% decrease; and
• Hilltop’s effective tax rate from continuing operations was 24.2% during the fourth quarter of 2021, compared to 25.1% during the same period in 2020.

Discontinued Operations

On June 30, 2020, Hilltop completed the sale of National Lloyds Corporation, or NLC, which comprised the operations of its former insurance segment, for cash proceeds of $154.1 million. During 2020, Hilltop recognized an aggregate gain associated with this transaction of $36.8 million, net of transaction costs. Accordingly, insurance segment results and its assets and liabilities have been presented as discontinued operations. The resulting book gain from this sale transaction was not recognized for tax purposes pursuant to the rules promulgated under the Internal Revenue Code.

__________________________
Note: “Consolidated” refers to our consolidated financial position and consolidated results of operations, including discontinued operations and assets and liabilities of discontinued operations.
1	“Loans” reflect loans held for investment excluding broker-dealer margin loans, net of allowance for credit losses, of $733.0 million and $645.6 million at December 31, 2021 and September 30, 2021, respectively.
2	Capital ratios reflect Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period.
3	Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets.
4	Net interest margin is defined as net interest income divided by average interest-earning assets.

Consolidated Financial and Other Information
Consolidated Balance Sheets		December 31,				September 30,				June 30,				March 31,				December 31,
(in 000's)		2021				2021				2021				2021				2020
Cash and due from banks		$	2,823,138			$	2,463,111			$	1,372,818			$	1,564,489			$	1,062,560
Federal funds sold			385				406				387				396				386
Assets segregated for regulatory purposes			221,740				269,506				207,284				273,393				290,357
Securities purchased under agreements to resell			118,262				155,908				202,638				106,342				80,319
Securities:
Trading, at fair value			647,998				609,813				682,483				528,712				694,255
Available for sale, at fair value, net			2,130,568				1,994,183				1,817,807				1,715,406				1,462,205
Held to maturity, at amortized cost, net			267,684				277,419				288,776				300,088				311,944
Equity, at fair value			250				221				193				189				140
			3,046,500				2,881,636				2,789,259				2,544,395				2,468,544
Loans held for sale			1,878,190				2,108,878				2,885,458				2,538,986				2,788,386
Loans held for investment, net of unearned income			7,879,904				7,552,926				7,645,227				7,810,657				7,693,141
Allowance for credit losses			(91,352	)			(109,512	)			(115,269	)			(144,499	)			(149,044	)
Loans held for investment, net			7,788,552				7,443,414				7,529,958				7,666,158				7,544,097
Broker-dealer and clearing organization receivables			1,672,946				1,419,652				1,403,447				1,596,817				1,404,727
Premises and equipment, net			204,438				210,026				212,402				213,304				211,595
Operating lease right-of-use assets			112,328				115,942				115,698				101,055				105,757
Mortgage servicing assets			86,990				110,931				124,497				142,125				143,742
Other assets			452,880				526,339				535,536				648,895				555,983
Goodwill			267,447				267,447				267,447				267,447				267,447
Other intangible assets, net			15,284				16,455				17,705				19,035				20,364
Total assets		$	18,689,080			$	17,989,651			$	17,664,534			$	17,682,837			$	16,944,264
Deposits:
Noninterest-bearing		$	4,577,183			$	4,433,148			$	4,231,082			$	4,031,181			$	3,612,384
Interest-bearing			8,240,894				7,699,014				7,502,703				7,701,598				7,629,935
Total deposits			12,818,077				12,132,162				11,733,785				11,732,779				11,242,319
Broker-dealer and clearing organization payables			1,477,300				1,496,923				1,439,620				1,546,227				1,368,373
Short-term borrowings			859,444				747,040				915,919				676,652				695,798
Securities sold, not yet purchased, at fair value			96,586				113,064				132,950				97,055				79,789
Notes payable			387,904				395,804				396,653				401,713				381,987
Operating lease liabilities			130,960				134,296				134,019				120,339				125,450
Junior subordinated debentures			—				—				67,012				67,012				67,012
Other liabilities			369,606				468,020				348,200				595,045				632,889
Total liabilities			16,139,877				15,487,309				15,168,158				15,236,822				14,593,617
Common stock			790				790				812				823				822
Additional paid-in capital			1,274,446				1,270,272				1,302,439				1,319,518				1,317,929
Accumulated other comprehensive income (loss)			(10,219	)			367				7,093				3,486				17,763
Retained earnings			1,257,014				1,204,307				1,159,304				1,094,727				986,792
Deferred compensation employee stock trust, net			752				751				754				752				771
Employee stock trust			(115	)			(116	)			(121	)			(121	)			(138	)
Total Hilltop stockholders' equity			2,522,668				2,476,371				2,470,281				2,419,185				2,323,939
Noncontrolling interests			26,535				25,971				26,095				26,830				26,708
Total stockholders' equity			2,549,203				2,502,342				2,496,376				2,446,015				2,350,647
Total liabilities & stockholders' equity		$	18,689,080			$	17,989,651			$	17,664,534			$	17,682,837			$	16,944,264

		Three Months Ended												Year Ended
Consolidated Income Statements		December 31,				September 30,				December 31,				December 31,				December 31,
(in 000's, except per share data)		2021				2021				2020				2021				2020
Interest income:
Loans, including fees		$	96,104			$	99,769			$	109,328			$	404,312			$	433,311
Securities borrowed			8,524				8,585				14,445				61,667				51,360
Securities:
Taxable			13,916				12,341				9,845				47,633				48,273
Tax-exempt			2,639				2,687				1,862				9,766				6,698
Other			1,872				1,796				1,381				6,595				6,853
Total interest income			123,055				125,178				136,861				529,973				546,495
Interest expense:
Deposits			4,404				5,303				9,269				23,624				47,040
Securities loaned			6,624				6,519				12,014				50,974				42,816
Short-term borrowings			2,279				2,400				2,154				9,065				11,611
Notes payable			5,871				5,465				4,807				21,386				15,897
Junior subordinated debentures			—				419				609				1,558				2,772
Other			(417	)			(18	)			636				384				2,193
Total interest expense			18,761				20,088				29,489				106,991				122,329
Net interest income			104,294				105,090				107,372				422,982				424,166
Provision for (reversal of) credit losses			(18,565	)			(5,819	)			(3,482	)			(58,213	)			96,491
Net interest income after provision for (reversal of) credit losses			122,859				110,909				110,854				481,195				327,675
Noninterest income:
Net gains from sale of loans and other mortgage production income			156,103				203,152				247,360				825,960				1,001,059
Mortgage loan origination fees			35,930				38,780				50,193				160,011				171,769
Securities commissions and fees			32,801				34,412				35,921				143,827				142,720
Investment and securities advisory fees and commissions			42,834				49,646				42,161				152,443				131,327
Other			17,178				41,955				72,296				128,034				243,605
Total noninterest income			284,846				367,945				447,931				1,410,275				1,690,480
Noninterest expense:
Employees' compensation and benefits			229,717				258,679				291,489				1,007,235				1,059,645
Occupancy and equipment, net			25,741				25,428				27,596				100,602				99,416
Professional services			9,904				14,542				21,927				54,270				69,984
Other			56,832				56,525				61,336				225,291				224,758
Total noninterest expense			322,194				355,174				402,348				1,387,398				1,453,803
Income from continuing operations before income taxes			85,511				123,680				156,437				504,072				564,352
Income tax expense			20,715				28,257				39,295				117,976				133,071
Income from continuing operations			64,796				95,423				117,142				386,096				431,281
Income from discontinued operations, net of income taxes			—				—				3,734				—				38,396
Net income			64,796				95,423				120,876				386,096				469,677
Less: Net income attributable to noncontrolling interest			2,611				2,517				4,431				11,601				21,841
Income attributable to Hilltop		$	62,185			$	92,906			$	116,445			$	374,495			$	447,836
Earnings per common share:
Basic:
Earnings from continuing operations		$	0.79			$	1.16			$	1.31			$	4.64			$	4.59
Earnings from discontinued operations			—				—				0.04				—				0.43
		$	0.79			$	1.16			$	1.35			$	4.64			$	5.02
Diluted:
Earnings from continuing operations		$	0.78			$	1.15			$	1.30			$	4.61			$	4.58
Earnings from discontinued operations			—				—				0.05				—				0.43
		$	0.78			$	1.15			$	1.35			$	4.61			$	5.01
Cash dividends declared per common share		$	0.12			$	0.12			$	0.09			$	0.48			$	0.36
Weighted average shares outstanding:
Basic			78,933				80,109				86,269				80,708				89,280
Diluted			79,427				80,542				86,420				81,173				89,304

		Three Months Ended December 31, 2021
Segment Results										Mortgage								All Other and				Continuing
(in 000's)		Banking				Broker-Dealer				Origination				Corporate				Eliminations				Operations
Net interest income (expense)		$	97,194			$	11,673			$	(3,846	)		$	(3,519	)		$	2,792			$	104,294
Provision for (reversal of) credit losses			(18,450	)			(115	)			—				—				—				(18,565	)
Noninterest income			11,820				82,896				192,311				993				(3,174	)			284,846
Noninterest expense			59,046				92,967				157,172				13,492				(483	)			322,194
Income (loss) from continuing operations before taxes		$	68,418			$	1,717			$	31,293			$	(16,018	)		$	101			$	85,511

		Year Ended December 31, 2021
Segment Results										Mortgage								All Other and				Continuing
(in 000's)		Banking				Broker-Dealer				Origination				Corporate				Eliminations				Operations
Net interest income (expense)		$	406,524			$	43,296			$	(20,400	)		$	(17,239	)		$	10,801			$	422,982
Provision for (reversal of) credit losses			(58,175	)			(38	)			—				—				—				(58,213	)
Noninterest income			45,113				381,125				986,990				9,133				(12,086	)			1,410,275
Noninterest expense			226,915				380,798				731,056				50,507				(1,878	)			1,387,398
Income (loss) from continuing operations before taxes		$	282,897			$	43,661			$	235,534			$	(58,613	)		$	593			$	504,072

		Three Months Ended												Year Ended
		December 31,				September 30,				December 31,				December 31,				December 31,
Selected Financial Data		2021				2021				2020				2021				2020
Hilltop Consolidated (1):
Return on average stockholders' equity			9.93	%			14.96	%			20.56	%			15.38	%			20.03	%
Return on average assets			1.41	%			2.13	%			2.83	%			2.17	%			2.88	%
Net interest margin (2)			2.44	%			2.53	%			2.71	%			2.57	%			2.85	%
Net interest margin (taxable equivalent) (3):
As reported			2.45	%			2.54	%			2.72	%			2.58	%			2.85	%
Impact of purchase accounting			12 bps				9 bps				15 bps				12 bps				14 bps
Book value per common share ($)			31.95				31.36				28.28				31.95				28.28
Shares outstanding, end of period (000's)			78,965				78,959				82,185				78,965				82,185
Dividend payout ratio (4)			15.19	%			10.34	%			6.67	%			10.34	%			7.18	%
Banking Segment:
Net interest margin (2)			2.81	%			2.99	%			3.37	%			3.07	%			3.31	%
Net interest margin (taxable equivalent) (3):
As reported			2.82	%			3.00	%			3.38	%			3.08	%			3.31	%
Impact of purchase accounting			15 bps				11 bps				20 bps				16 bps				18 bps
Accretion of discount on loans ($000's)			4,716				3,221				5,629				18,789				18,831
Net recoveries (charge-offs) ($000's)			405				62				(2,688	)			521				(21,145	)
Return on average assets			1.44	%			1.36	%			1.37	%			1.55	%			0.63	%
Fee income ratio			10.8	%			10.5	%			10.2	%			10.0	%			9.6	%
Efficiency ratio			54.2	%			48.8	%			53.0	%			50.3	%			53.8	%
Employees' compensation and benefits ($000's)			34,415				31,500				34,007				130,276				127,985
Broker-Dealer Segment:
Net revenue ($000's) (5)			94,569				126,570				150,070				424,421				531,267
Employees' compensation and benefits ($000's) (6)			65,301				82,429				87,621				276,176				312,396
Variable compensation expense ($000's)			35,939				53,505				60,295				161,264				205,464
Compensation as a % of net revenue (6)			69.1	%			65.1	%			58.4	%			65.1	%			58.8	%
Pre-tax margin (7)			1.8	%			13.8	%			22.8	%			10.3	%			21.8	%
Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases			3,559,137				3,948,420				3,683,564				14,429,190				13,413,545
Refinancings			1,430,369				1,646,208				3,114,630				8,239,093				9,556,649
Total mortgage loan originations - volume			4,989,506				5,594,628				6,798,194				22,668,283				22,970,194
Mortgage loan sales - volume ($000's)			4,988,538				6,195,559				6,571,234				23,059,160				22,514,170
Net gains from mortgage loan sales (basis points):
Loans sold to third parties			362				359				451				375				409
Impact of loans retained by banking segment			(15	)			(13	)			(3	)			(13	)			(3	)
As reported			347				346				448				362				406
Mortgage servicing rights asset ($000's) (8)			86,990				110,931				143,742				86,990				143,742
Employees' compensation and benefits ($000's)			121,758				134,814				163,822				568,221				586,713
Variable compensation expense ($000's)			73,208				88,153				116,736				373,929				405,116

__________________________
(1)	Ratios and financial data presented on a consolidated basis. For all 2020 periods presented, information includes discontinued operations.
(2)	Net interest margin is defined as net interest income divided by average interest-earning assets.
(3)	Net interest margin (taxable equivalent), a non-GAAP measure, is defined as taxable equivalent net interest income divided by average interest-earning assets. Taxable equivalent adjustments are based on the applicable 21% federal income tax rate for all periods presented. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest margins for all earning assets, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. The taxable equivalent adjustments to interest income for Hilltop (consolidated) were $0.5 million, $0.6 million, $0.4 million, $0.2 million, and $0.3 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.2 million, $0.2 million, and $0.2 million, respectively, for the periods presented.
(4)	Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share.
(5)	Net revenue is defined as the sum of total broker-dealer net interest income and total broker-dealer noninterest income.
(6)	Noted balances and ratios during all prior periods reflect certain reclassifications to conform to current period presentation.
(7)	Pre-tax margin is defined as income before income taxes divided by net revenue.
(8)	Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation.

		December 31,				September 30,				June 30,				March 31,				December 31,
Capital Ratios		2021				2021				2021				2021				2020
Tier 1 capital (to average assets):
PlainsCapital			10.20	%			10.02	%			10.22	%			10.50	%			10.44	%
Hilltop			12.58	%			12.64	%			12.87	%			13.01	%			12.64	%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital			16.00	%			15.40	%			15.00	%			14.74	%			14.40	%
Hilltop			21.22	%			21.28	%			20.22	%			19.63	%			18.97	%
Tier 1 capital (to risk-weighted assets):
PlainsCapital			16.00	%			15.40	%			15.00	%			14.74	%			14.40	%
Hilltop			21.22	%			21.28	%			20.82	%			20.22	%			19.57	%
Total capital (to risk-weighted assets):
PlainsCapital			16.77	%			16.32	%			15.95	%			15.64	%			15.27	%
Hilltop			23.75	%			24.00	%			23.48	%			22.96	%			22.34	%

		December 31,				September 30,				June 30,				March 31,				December 31,
Non-Performing Assets Portfolio Data		2021				2021				2021				2021				2020
Loans accounted for on a non-accrual basis ($000's) (1):
Commercial real estate			6,601				5,705				7,211				10,668				11,133
Commercial and industrial			22,478				29,808				33,033				36,144				34,049
Construction and land development			2				366				474				501				507
1-4 family residential			21,123				25,255				27,100				30,937				32,263
Consumer			23				24				26				26				28
Broker-dealer			—				—				—				—				—
			50,227				61,158				67,844				78,276				77,980
Troubled debt restructurings included in accruing loans held for investment ($000's)			922				1,038				1,139				1,584				1,954
Non-performing loans ($000's)			51,149				62,196				68,983				79,860				79,934
Non-performing loans as a % of total loans			0.52	%			0.64	%			0.66	%			0.77	%			0.76	%
Other real estate owned ($000's)			2,833				21,605				21,078				19,899				21,289
Other repossessed assets ($000's)			—				—				—				—				101
Non-performing assets ($000's)			53,982				83,801				90,061				99,759				101,324
Non-performing assets as a % of total assets			0.29	%			0.47	%			0.51	%			0.56	%			0.60	%
Loans past due 90 days or more and still accruing ($000's) (2):			60,775				175,734				245,828				265,230				243,630

__________________________
(1)	Loans accounted for on a non-accrual basis do not include COVID-19 related loan modifications. The Bank’s COVID-19 payment deferral programs allow for a deferral of principal and/or interest payments with such deferred principal payments due and payable on the maturity date of the existing loan. Since the second quarter of 2020, the Bank’s actions included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $4 million as of December 31, 2021, down from approximately $17 million as of September 30, 2021.
(2)	Loans past due 90 days or more and still accruing were primarily comprised of loans held for sale and guaranteed by U.S. government agencies, including loans that are subject to repurchase, or have been repurchased, by PrimeLending.

		Three Months Ended December 31,
		2021										2020
		Average				Interest			Annualized			Average				Interest			Annualized
		Outstanding				Earned or			Yield or			Outstanding				Earned or			Yield or
Net Interest Margin (Taxable Equivalent) Details (1)		Balance				Paid			Rate			Balance				Paid			Rate
Assets
Interest-earning assets
Loans held for sale		$	1,852,140			$	13,708		2.96	%		$	2,760,798			$	18,692		2.71	%
Loans held for investment, gross (2)			7,695,090				82,396		4.25	%			7,732,754				90,636		4.62	%
Investment securities - taxable			2,677,894				13,916		2.08	%			2,132,863				9,823		1.84	%
Investment securities - non-taxable (3)			331,959				3,188		3.84	%			258,644				2,188		3.38	%
Federal funds sold and securities purchased under agreements to resell			194,351				164		0.33	%			85,716				—		0.00	%
Interest-bearing deposits in other financial institutions			2,683,656				943		0.14	%			1,200,635				487		0.16	%
Securities borrowed			1,474,421				8,524		2.26	%			1,501,389				14,445		3.76	%
Other			52,848				765		5.74	%			49,648				913		7.31	%
Interest-earning assets, gross (3)			16,962,359				123,604		2.89	%			15,722,447				137,184		3.45	%
Allowance for credit losses			(109,555	)									(155,142	)
Interest-earning assets, net			16,852,804										15,567,305
Noninterest-earning assets			1,402,216										1,420,479
Total assets		$	18,255,020									$	16,987,784
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits		$	7,901,704			$	4,404		0.22	%		$	7,523,955			$	9,269		0.49	%
Securities loaned			1,422,303				6,624		1.85	%			1,398,943				12,014		3.42	%
Notes payable and other borrowings			1,233,924				7,733		2.49	%			1,150,439				8,206		2.84	%
Total interest-bearing liabilities			10,557,931				18,761		0.70	%			10,073,337				29,489		1.17	%
Noninterest-bearing liabilities
Noninterest-bearing deposits			4,509,891										3,669,230
Other liabilities			677,433										965,150
Total liabilities			15,745,255										14,707,717
Stockholders’ equity			2,484,301										2,252,989
Noncontrolling interest			25,464										27,078
Total liabilities and stockholders' equity		$	18,255,020									$	16,987,784
Net interest income (3)						$	104,843									$	107,695
Net interest spread (3)									2.19	%									2.28	%
Net interest margin (3)									2.45	%									2.72	%

		Year Ended December 31,
		2021										2020
		Average				Interest			Annualized			Average				Interest			Annualized
		Outstanding				Earned or			Yield or			Outstanding				Earned or			Yield or
Net Interest Margin (Taxable Equivalent) Details (1)		Balance				Paid			Rate			Balance				Paid			Rate
Assets
Interest-earning assets
Loans held for sale		$	2,293,543			$	64,767		2.82	%		$	2,306,203			$	74,467		3.23	%
Loans held for investment, gross (2)			7,645,292				339,548		4.44	%			7,618,723				358,844		4.71	%
Investment securities - taxable			2,493,848				47,582		1.91	%			1,897,859				49,936		2.63	%
Investment securities - non-taxable (3)			313,703				11,448		3.65	%			231,824				7,918		3.42	%
Federal funds sold and securities purchased under agreements to resell			152,273				372		0.24	%			90,961				138		0.15	%
Interest-bearing deposits in other financial institutions			2,078,666				2,942		0.14	%			1,257,902				3,165		0.25	%
Securities borrowed			1,445,464				61,667		4.21	%			1,435,572				51,360		3.58	%
Other			50,929				3,332		6.54	%			59,412				3,687		6.21	%
Interest-earning assets, gross (3)			16,473,718				531,658		3.23	%			14,898,456				549,515		3.69	%
Allowance for credit losses			(129,689	)									(122,148	)
Interest-earning assets, net			16,344,029										14,776,308
Noninterest-earning assets			1,451,928										1,537,269
Total assets		$	17,795,957									$	16,313,577
Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits		$	7,722,584			$	23,624		0.31	%		$	7,397,121			$	47,040		0.64	%
Securities loaned			1,374,142				50,974		3.71	%			1,336,873				42,817		3.20	%
Notes payable and other borrowings			1,216,381				32,393		2.66	%			1,222,044				33,249		2.72	%
Total interest-bearing liabilities			10,313,107				106,991		1.04	%			9,956,038				123,106		1.24	%
Noninterest-bearing liabilities
Noninterest-bearing deposits			4,157,962										3,304,475
Other liabilities			863,976										791,002
Total liabilities			15,335,045										14,051,515
Stockholders’ equity			2,435,185										2,235,690
Noncontrolling interest			25,727										26,372
Total liabilities and stockholders' equity		$	17,795,957									$	16,313,577
Net interest income (3)						$	424,667									$	426,409
Net interest spread (3)									2.19	%									2.45	%
Net interest margin (3)									2.58	%									2.85	%

__________________________
(1)	Information presented on a consolidated basis. For all 2020 periods presented, information includes discontinued operations.
(2)	Average balance includes non-accrual loans.
(3)	Presented on a taxable-equivalent basis with annualized taxable equivalent adjustments based on the applicable 21% federal income tax rates for the periods presented. The adjustment to interest income was $0.5 million and $0.3 million for the three months ended December 31, 2021 and 2020, respectively, and $1.7 million and $1.2 million for the year ended December 31, 2021 and 2020, respectively.

Conference Call Information

Hilltop will host a live webcast and conference call at 8:00 AM Central (9:00 AM Eastern) on Friday, January 28, 2022. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2021 financial results. Interested parties can access the conference call by dialing 1-844-200-6205 (United States), 1-833-950-0062 (Canada) or 1-929-526-1599 (all other locations) and then using the access code 755646. The conference call also will be webcast simultaneously on Hilltop’s Investor Relations website (http://ir.hilltop-holdings.com).

About Hilltop

Hilltop Holdings is a Dallas-based financial holding company. Its primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank. PlainsCapital Bank’s wholly owned subsidiary, PrimeLending, provides residential mortgage lending throughout the United States. Hilltop Holdings’ broker-dealer subsidiaries, Hilltop Securities Inc. and Momentum Independent Network Inc., provide a full complement of securities brokerage, institutional and investment banking services in addition to clearing services and retail financial advisory. At December 31, 2021, Hilltop employed approximately 4,900 people and operated approximately 410 locations in 47 states. Hilltop Holdings’ common stock is listed on the New York Stock Exchange under the symbol “HTH.” Find more information at Hilltop-Holdings.com, PlainsCapital.com, PrimeLending.com and Hilltopsecurities.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or 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 to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our plans, objectives, strategies, expectations, intentions and other statements that are not statements of historical fact, and may be identified by words such as “anticipates,” “believes,” “building,” “could,” “drive,” “estimates,” “expects,” “extent,” “focus,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “probable,” “progressing,” “projects,” “seeks,” “should,” “target,” “view,” “well-tuned,” “will” or “would” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: (i) the COVID-19 pandemic and the response of governmental authorities to the pandemic and disruptions in global or national supply chains, which have had, and may continue to have, an adverse impact on the global economy and our business operations and performance; (ii) the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iii) effectiveness of our data security controls in the face of cyber attacks; (iv) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (v) changes in the interest rate environment and transitions away from the London Interbank Offered Rate; and (vi) risks associated with concentration in real estate related loans. 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 on Form 10-Q and other reports that are filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement.

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