Hilltop 8K Announces Financial Results for Fourth Quarter and Full Year 2020 | HTH 28 Jan 21

Exhibit 99.1

	Investor Relations Contact:
	Erik Yohe
	214-525-4634
	eyohe@hilltop-holdings.com

Hilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2020

DALLAS — (BUSINESS WIRE) January 28, 2021 — Hilltop Holdings Inc. (NYSE: HTH) (“Hilltop”) today announced financial results for the fourth quarter and full year 2020. Hilltop produced income from continuing operations to common stockholders of $112.7 million, or $1.30 per diluted share, for the fourth quarter of 2020, compared to $43.7 million, or $0.48 per diluted share, for the fourth quarter of 2019. Income from continuing operations to common stockholders for the full year 2020 was $409.4 million, or $4.58 per diluted share, compared to $211.3 million, or $2.29 per diluted share, for the full year 2019. Hilltop’s financial results from continuing operations for the fourth quarter and full year 2020 reflect a significant increase in mortgage origination segment net gains from sale of loans and other mortgage production income.

Including income from discontinued operations related to the insurance business, income applicable to common stockholders was $116.4 million, or $1.35 per diluted share, for the fourth quarter of 2020, compared to $49.3 million, or $0.54 per diluted share, for the fourth quarter of 2019, and $447.8 million, or $5.01 per diluted share, for full year 2020, compared to $225.3 million, or $2.44 per diluted share, for full year 2019.

Hilltop also announced that its Board of Directors declared a quarterly cash dividend of $0.12 per common share, a 33% increase from the prior quarter, payable on February 26, 2021, to all common stockholders of record as of the close of business on February 15, 2021.

Additionally, during 2020, Hilltop paid $208.7 million to repurchase approximately 8.78 million shares of its common stock at a weighted average price of $23.76 pursuant to the 2020 stock repurchase program, and inclusive of the tender offer completed in November 2020. These shares were returned to the pool of authorized but unissued shares of common stock. The previously authorized stock repurchase program was active through April 2020 when, in light of the uncertain outlook for 2020 due to the COVID-19 pandemic, the Hilltop Board of Directors suspended the stock repurchase program. Based on Hilltop’s expected ability to maintain strong capital and liquidity to meet the needs of its customers and communities during this exceptional period of economic uncertainty, and given that the previously noted stock repurchase program expired in January 2021, the Hilltop Board of Directors authorized, subject to regulatory review, a new stock repurchase program through January 2022, under which Hilltop may repurchase, in the aggregate, up to $75.0 million of its outstanding common stock.

The COVID-19 pandemic has negatively 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 COVID-19 on our operational and financial performance for 2021 is dependent on certain developments, including, among others, the broader adverse implications of COVID-19 on our customers and clients, potential further disruption and deterioration in the financial services industry, including the mortgage servicing and commercial paper markets, and additional, or extended, federal, state and local government orders and regulations that might be imposed in response to the pandemic, all of which are uncertain.

Jeremy B. Ford, President and CEO of Hilltop, said, “Hilltop’s strong fourth quarter caps off a remarkable, yet unprecedented year. 2020 was a record-breaking year for our company, as PrimeLending funded a record 84 thousand residential mortgage loans, HilltopSecurities generated record net revenue of over $530 million, and Hilltop produced record consolidated earnings. While the pandemic created unique challenges, I could not be prouder of our teammates across the franchise and how they responded to take care of our clients and the communities we serve. Notably, our team at PlainsCapital Bank originated approximately 2,800 PPP loans and deferred loan payments for their commercial and consumer clients that were most impacted by the pandemic.

“Although the pandemic caused Hilltop to change the way we work, it did not deter our team from making progress on large and complex initiatives. By leveraging shared services, the coordinated efforts of our technology, properties management and human resources groups enabled us to effectively transition to a work-from-home model for a majority of our employees since last March. Further, we completed the implementation of our new mortgage loan origination

system at PrimeLending and the core operating system at HilltopSecurities, both of which are foundational for the future growth in these businesses.

“As we embark upon 2021, we believe Hilltop is well positioned with established businesses, synchronized leadership and robust capital. We also believe our dividend increase and share repurchase authorization demonstrate the strength and momentum of our franchise.”

Fourth Quarter 2020 Highlights for Hilltop:

●

For the fourth quarter of 2020, net gains from sale of loans and other mortgage production income and mortgage loan origination fees within our mortgage origination segment was $297.6 million, compared to $157.5 million in the fourth quarter of 2019, an 88.9% increase;

Mortgage loan origination production volume was $6.8 billion during the fourth quarter of 2020, compared to $4.4 billion in the fourth quarter of 2019.

●

The reversal of credit losses was $3.5 million during the fourth quarter of 2020, compared to $0.6 million in the third quarter of 2020;

The reversal of credit losses during the fourth quarter of 2020 primarily reflected improvements in Bank loan portfolio macroeconomic factor assumptions and qualitative factors from the prior quarter, partially offset by the identified changes in the loan portfolio composition and credit quality.

●

Hilltop’s consolidated annualized return on average assets and return on average equity for the fourth quarter of 2020 were 2.83% and 20.56%, respectively, compared to 1.40% and 9.43%, respectively, for the fourth quarter of 2019;

●

Hilltop’s book value per common share increased to $28.28 at December 31, 2020, compared to $26.72 at September 30, 2020;

●

Hilltop’s total assets were $16.9 billion at both December 31, 2020 and September 30, 2020;

●

Loans¹, net of allowance for credit losses, were $7.1 billion at December 31, 2020, compared to $7.3 billion September 30, 2020;

Includes supporting our impacted banking clients through funding of over 2,800 loans through the Paycheck Protection Program, or PPP, with a remaining balance of approximately $487 million as of December 31, 2020, compared to approximately $671 million as of September 30, 2020.

●

Non-performing loans were $79.9 million, or 0.76% of total loans, at December 31, 2020, compared to $84.0 million, or 0.80% of total loans, at September 30, 2020;

●

During the fourth quarter of 2020, we further supported our impacted banking clients through the approval of COVID-19 related loan modifications, resulting in active deferrals that have not reached the end of their deferral period of approximately $240 million as of December 31, 2020;

As of September 30, 2020 and June 30, 2020, active COVID-19 related loan modifications totaled approximately $291 million and $968 million, respectively;

During the third and fourth quarters of 2020, COVID-19 related loan modifications of approximately $714 million have made at least one payment pursuant to agreed-upon contractual terms;

The extent of these loans progressing into non-performing loans during future periods is uncertain.

●

Loans held for sale increased by 9.4% from September 30, 2020 to $2.8 billion at December 31, 2020;

●

Total deposits were $11.2 billion at December 31, 2020, compared to $11.3 billion at September 30, 2020;

●

Hilltop maintained strong capital levels with a Tier 1 Leverage Ratio² of 12.64% and a Common Equity Tier 1 Capital Ratio of 18.97% at December 31, 2020;

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.

●

Hilltop’s consolidated net interest margin³increased to 2.71% for the fourth quarter of 2020, compared to 2.56% in the third quarter of 2020;

●

For the fourth quarter of 2020, noninterest income from continuing operations was $447.9 million, compared to $263.6 million in the fourth quarter of 2019, a 69.9% increase;

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 $436.8 million and $502.1 million at December 31, 2020 and September 30, 2020, respectively.

² Based on the end of period Tier 1 capital divided by total average assets during the quarter, excluding goodwill and intangible assets.

³ Net interest margin is defined as net interest income divided by average interest-earning assets.

●

For the fourth quarter of 2020, noninterest expense from continuing operations was $402.3 million, compared to $307.9 million in the fourth quarter of 2019, a 30.7% increase; and

●

Hilltop’s effective tax rate from continuing operations was 25.1% during the fourth quarter of 2020, compared to 22.8% during the same period in 2019.

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. Insurance segment results and its assets and liabilities have been presented as discontinued operations. Included within discontinued operations of corporate for the fourth quarter of 2020 is the recognition of a pre-tax post-closing adjustment gain of $3.7 million related to the finalization of the June 30, 2020 closing balance sheet, resulting in an aggregate gain on sale of NLC of $36.8 million, net of transaction costs. The resulting book gain from this sale transaction was not recognized for tax purposes pursuant to the rules promulgated under the Internal Revenue Code.

Consolidated Financial and Other Information


Consolidated Balance Sheets	December 31,		September 30,		June 30,		March 31,		December 31,
(in 000's)	2020		2020		2020		2020		2019
Cash and due from banks	$	1,062,560	$	1,277,865	$	1,655,492	$	524,370	$	433,626
Federal funds sold		386		420		385		401		394
Assets segregated for regulatory purposes		290,357		221,621		194,626		178,805		157,436
Securities purchased under agreements to resell		80,319		90,103		161,457		23,356		59,031
Securities:
Trading, at fair value		694,255		667,751		648,037		393,581		689,576
Available for sale, at fair value, net		1,462,205		1,310,240		1,091,348		972,318		911,493
Held to maturity, at amortized cost, net		311,944		323,299		343,198		355,110		386,326
Equity, at fair value		140		117		122		107		166
		2,468,544		2,301,407		2,082,705		1,721,116		1,987,561
Loans held for sale		2,788,386		2,547,975		2,592,307		2,433,407		2,106,361
Loans held for investment, net of unearned income		7,693,141		7,945,560		7,849,904		7,345,250		7,381,400
Allowance for credit losses		(149,044)		(155,214)		(156,383)		(106,739)		(61,136)
Loans held for investment, net		7,544,097		7,790,346		7,693,521		7,238,511		7,320,264

Broker-dealer and clearing organization receivables		1,404,727		1,363,478		1,222,627		1,838,789		1,780,280
Premises and equipment, net		211,595		208,078		210,975		215,261		210,375
Operating lease right-of-use assets		105,757		109,354		119,954		113,395		114,320
Mortgage servicing assets		143,742		127,712		81,264		30,299		55,504
Other assets		555,983		607,932		627,982		846,316		404,754
Goodwill		267,447		267,447		267,447		267,447		267,447
Other intangible assets, net		20,364		21,814		23,374		25,019		26,666
Assets of discontinued operations		—		—		—		249,758		248,429
Total assets	$	16,944,264	$	16,935,552	$	16,934,116	$	15,706,250	$	15,172,448

Deposits:										��
Noninterest-bearing	$	3,612,384	$	3,557,603	$	3,467,500	$	2,865,192	$	2,769,556
Interest-bearing		7,629,935		7,704,312		8,182,098		7,082,297		6,262,658
Total deposits		11,242,319		11,261,915		11,649,598		9,947,489		9,032,214
Broker-dealer and clearing organization payables		1,368,373		1,310,835		1,158,628		1,259,181		1,605,518
Short-term borrowings		695,798		780,109		720,164		1,329,948		1,424,010
Securities sold, not yet purchased, at fair value		79,789		56,023		55,340		22,768		43,817
Notes payable		381,987		396,006		450,158		244,042		256,269
Operating lease liabilities		125,450		122,402		131,411		124,123		125,619
Junior subordinated debentures		67,012		67,012		67,012		67,012		67,012
Other liabilities		632,889		502,517		409,672		408,224		348,519
Liabilities of discontinued operations		—		—		—		139,730		140,674
Total liabilities		14,593,617		14,496,819		14,641,983		13,542,517		13,043,652

Common stock		822		902		902		901		906
Additional paid-in capital		1,317,929		1,443,588		1,439,686		1,437,301		1,445,233
Accumulated other comprehensive income		17,763		23,790		23,813		20,939		11,419
Retained earnings		986,792		942,461		797,331		676,946		644,860
Deferred compensation employee stock trust, net		771		774		778		774		776
Employee stock trust		(138)		(143)		(150)		(150)		(155)
Total Hilltop stockholders' equity		2,323,939		2,411,372		2,262,360		2,136,711		2,103,039
Noncontrolling interests		26,708		27,361		29,773		27,022		25,757
Total stockholders' equity		2,350,647		2,438,733		2,292,133		2,163,733		2,128,796
Total liabilities & stockholders' equity	$	16,944,264	$	16,935,552	$	16,934,116	$	15,706,250	$	15,172,448


	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)	2020		2020		2019			2020		2019
Interest income:
Loans, including fees	$	109,328	$	104,955	$	115,696		$	433,311	$	460,471
Securities borrowed		14,445		10,705		16,196			51,360		69,582
Securities:
Taxable		9,845		11,035		15,174			48,273		58,493
Tax-exempt		1,862		1,687		1,572			6,698		6,159
Other		1,381		1,446		3,180			6,853		15,991
Total interest income		136,861		129,828		151,818			546,495		610,696

Interest expense:
Deposits		9,269		10,700		17,480			47,040		71,509
Securities loaned		12,014		8,729		13,989			42,816		60,086
Short-term borrowings		2,154		2,346		6,244			11,611		26,778
Notes payable		4,807		4,904		2,337			15,897		8,948
Junior subordinated debentures		609		608		909			2,772		3,851
Other		636		641		99			2,193		545
Total interest expense		29,489		27,928		41,058			122,329		171,717

Net interest income		107,372		101,900		110,760			424,166		438,979
Provision for (reversal of) credit losses		(3,482)		(602)		6,880			96,491		7,206
Net interest income after provision for (reversal of) credit losses		110,854		102,502		103,880			327,675		431,773

Noninterest income:
Net gains from sale of loans and other mortgage production income		247,360		307,896		120,573			1,001,059		504,935
Mortgage loan origination fees		50,193		47,681		36,939			171,769		130,003
Securities commissions and fees		35,921		32,496		33,205			142,720		137,742
Investment and securities advisory fees and commissions		42,161		36,866		32,083			131,327		103,787
Other		72,296		77,772		40,846			243,605		186,350
Total noninterest income		447,931		502,711		263,646			1,690,480		1,062,817

Noninterest expense:
Employees' compensation and benefits		291,489		294,907		212,498			1,059,645		844,602
Occupancy and equipment, net		27,596		26,124		30,617			99,416		113,336
Professional services		21,927		17,522		17,211			69,984		60,565
Other		61,336		60,792		47,542			224,758		193,386
Total noninterest expense		402,348		399,345		307,868			1,453,803		1,211,889
							��
Income from continuing operations before income taxes		156,437		205,868		59,658			564,352		282,701
Income tax expense		39,295		46,820		13,579			133,071		63,714
Income from continuing operations		117,142		159,048		46,079			431,281		218,987
Income from discontinued operations, net of income taxes		3,734		736		5,623			38,396		13,990
Net income		120,876		159,784		51,702			469,677		232,977
Less: Net income attributable to noncontrolling interest		4,431		6,505		2,426			21,841		7,686
Income attributable to Hilltop	$	116,445	$	153,279	$	49,276		$	447,836	$	225,291

Earnings per common share:
Basic:
Earnings from continuing operations	$	1.31	$	1.69	$	0.48		$	4.59	$	2.29
Earnings from discontinued operations		0.04		0.01		0.06			0.43		0.15
	$	1.35	$	1.70	$	0.54		$	5.02	$	2.44
Diluted:
Earnings from continuing operations	$	1.30	$	1.69	$	0.48		$	4.58	$	2.29
Earnings from discontinued operations		0.05		0.01		0.06			0.43		0.15
	$	1.35	$	1.70	$	0.54		$	5.01	$	2.44

Cash dividends declared per common share	$	0.09	$	0.09	$	0.08		$	0.36	$	0.32

Weighted average shares outstanding:
Basic		86,269		90,200		90,606			89,280		92,345
Diluted		86,420		90,200		90,711			89,304		92,394


	Three Months Ended December 31, 2020
Segment Results					Mortgage				All Other and		Continuing
(in 000's)	Banking		Broker-Dealer		Origination		Corporate		Eliminations		Operations
Net interest income (expense)	$	106,431	$	8,907	$	(6,842)	$	(4,710)	$	3,586	$	107,372
Provision for (reversal of) credit losses		(3,549)		67		—		—		—		(3,482)
Noninterest income		12,130		141,163		297,523		630		(3,515)		447,931
Noninterest expense		62,878		115,719		206,695		17,299		(243)		402,348
Income (loss) from continuing operations before taxes	$	59,232	$	34,284	$	83,986	$	(21,379)	$	314	$	156,437


	Year Ended December 31, 2020
Segment Results					Mortgage				All Other and		Continuing
(in 000's)	Banking		Broker-Dealer		Origination		Corporate		Eliminations		Operations
Net interest income (expense)	$	390,871	$	39,912	$	(10,489)	$	(14,192)	$	18,064	$	424,166
Provision for credit losses		96,326		165		—		—		—		96,491
Noninterest income		41,376		491,355		1,172,450		3,945		(18,646)		1,690,480
Noninterest expense		232,447		415,463		753,917		53,040		(1,064)		1,453,803
Income (loss) from continuing operations before taxes	$	103,474	$	115,639	$	408,044	$	(63,287)	$	482	$	564,352


	Three Months Ended						Year Ended
	December 31,		September 30,		December 31,		December 31,		December 31,
Selected Financial Data	2020		2020		2019		2020		2019

Hilltop Consolidated (1):
Return on average stockholders' equity		20.56%		25.94%		9.43%		20.03%		11.18%
Return on average assets		2.83%		3.71%		1.40%		2.88%		1.66%
Net interest margin (2)		2.71%		2.56%		3.30%		2.85%		3.48%
Net interest margin (taxable equivalent) (3):
As reported		2.72%		2.57%		3.31%		2.85%		3.48%
Impact of purchase accounting		15 bps		10 bps		19 bps		14 bps		25 bps
Book value per common share ($)		28.28		26.72		23.20		28.28		23.20
Shares outstanding, end of period (000's)		82,185		90,238		90,641		82,185		90,641
Dividend payout ratio (4)		6.67%		5.30%		14.71%		7.18%		13.12%

Banking Segment:
Net interest margin (2)		3.37%		3.03%		3.77%		3.31%		4.00%
Net interest margin (taxable equivalent) (3):
As reported		3.38%		3.03%		3.78%		3.31%		4.01%
Impact of purchase accounting		20 bps		13 bps		25 bps		18 bps		33 bps
Accretion of discount on loans ($000's)		5,629		3,346		5,698		18,831		28,745
Net charge-offs ($000's)		2,688		567		1,348		21,145		5,556
Return on average assets		1.37%		1.14%		1.17%		0.63%		1.36%
Fee income ratio		10.2%		9.2%		10.8%		9.6%		9.9%
Efficiency ratio		53.0%		52.7%		54.9%		53.8%		55.0%
Employees' compensation and benefits ($000's)		34,007		29,808		31,455		127,745		127,985

Broker-Dealer Segment:
Net revenue ($000's) (5)		150,070		149,190		113,128		531,267		455,719
Employees' compensation and benefits ($000's)		87,469		88,063		64,301		311,778		267,663
Variable compensation expense ($000's)		60,295		60,774		39,505		205,464		163,840
Compensation as a % of net revenue		58.3%		59.0%		56.8%		58.7%		58.7%
Pre-tax margin (6)		22.8%		23.7%		21.4%		21.8%		19.7%

Mortgage Origination Segment:
Mortgage loan originations - volume ($000's):
Home purchases		3,683,564		4,183,560		2,958,176		13,413,545		11,718,772
Refinancings		3,114,630		2,266,793		1,442,329		9,556,649		3,860,665
Total mortgage loan originations - volume		6,798,194		6,450,353		4,400,505		22,970,194		15,579,437
Mortgage loan sales - volume ($000's)		6,571,234		6,521,773		4,226,425		22,514,170		14,591,727
Net gains from mortgage loan sales (basis points):
As reported		448		440		304		406		324
Impact of sales to banking segment		(3)		(1)		(8)		(3)		(3)
Mortgage servicing rights asset ($000's) (7)		143,742		127,712		55,504		143,742		55,504
Employees' compensation and benefits ($000's)		163,822		161,738		109,753		586,713		419,135
Variable compensation expense ($000's)		116,736		116,275		67,224		405,116		252,956

(1)	Ratios and financial data presented on a consolidated basis and includes discontinued operations and those assets and liabilities of 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 $0.3 million, $0.3 million, $0.1 million, $1.2 million, and $0.6 million, respectively, for the periods presented and for the banking segment were $0.2 million, $0.2 million, $0.1 million, $0.8 million, and $0.6 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 plus total broker-dealer noninterest income.

(6)	Pre-tax margin is defined as income before income taxes divided by net revenue.

(7)	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	2020		2020		2020		2020		2019
Tier 1 capital (to average assets):
PlainsCapital		10.44%		10.19%		10.37%		12.06%		11.61%
Hilltop		12.64%		13.03%		12.60%		13.03%		12.71%
Common equity Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.40%		14.64%		14.03%		13.33%		13.45%
Hilltop		18.97%		19.85%		18.46%		15.96%		16.70%
Tier 1 capital (to risk-weighted assets):
PlainsCapital		14.40%		14.64%		14.03%		13.33%		13.45%
Hilltop		19.57%		20.46%		19.06%		16.38%		17.13%
Total capital (to risk-weighted assets):
PlainsCapital		15.27%		15.49%		14.88%		14.26%		14.13%
Hilltop		22.34%		23.22%		21.82%		17.00%		17.55%


	December 31,		September 30,		June 30,		March 31,		December 31,
Non-Performing Assets Portfolio Data	2020		2020		2020		2020		2019
Loans accounted for on a non-accrual basis ($000's) (1):
Commercial real estate		11,133		14,079		13,743		23,352		7,308
Commercial and industrial		34,049		38,708		32,259		47,121		15,262
Construction and land development		507		528		1,404		1,402		1,316
1-4 family residential		32,263		28,707		20,552		15,237		12,204
Consumer		28		53		308		310		26
Broker-dealer		—		—		—		—		—
		77,980		82,075		68,266		87,422		36,116
Troubled debt restructurings included in accruing loans held for investment ($000's)		1,954		1,919		2,025		2,286		2,173
Non-performing loans ($000's)		79,934		83,994		70,291		89,708		38,289

Non-performing loans as a % of total loans (2)		0.76%		0.80%		0.67%		0.92%		0.40%

Other real estate owned ($000's)		21,289		25,387		26,602		15,429		18,202

Other repossessed assets ($000's)		101		239		315		315		—

Non-performing assets ($000's) (2)		101,324		109,620		97,208		105,452		56,491

Non-performing assets as a % of total assets (2)		0.60%		0.65%		0.57%		0.67%		0.37%

Loans past due 90 days or more and still accruing ($000's)		243,631		187,105		124,682		101,300		102,707

(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 maturity date of the existing loan. During the fourth quarter of 2020, the Bank’s actions included approval of COVID-19 related loan modifications, resulting in active loan modifications of approximately $240 million as of December 31, 2020, down from approximately $291 million and $968 million as of September 30, 2020 and June 30, 2020, respectively. The extent to which these measures will impact the Bank is uncertain, and any progression of loans, whether receiving COVID-19 payment deferrals or not, into non-accrual status, during future periods is uncertain and will depend on future developments that cannot be predicted.

(2)	Noted balances and percentages during all prior periods reflect reclassifications to conform to current period presentation.


	Three Months Ended December 31,
	2020						2019
	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	$	2,760,798	$	18,692	2.71	%		$	1,914,703	$	19,124	4.00	%
Loans held for investment, gross ⁽²⁾		7,732,754		90,636	4.62	%			7,258,086		96,572	5.24	%
Investment securities - taxable		2,132,863		9,823	1.84	%			1,871,993		16,011	3.42	%
Investment securities - non-taxable ⁽³⁾		258,644		2,188	3.38	%			244,378		1,763	2.89	%
Federal funds sold and securities purchased under agreements to resell		85,716		—	0.00	%			68,278		228	1.32	%
Interest-bearing deposits in other financial institutions		1,200,635		487	0.16	%			325,984		1,408	1.71	%
Securities borrowed		1,501,389		14,445	3.76	%			1,589,465		16,196	3.99	%
Other		49,648		913	7.31	%			87,188		1,654	7.55	%
Interest-earning assets, gross ⁽³⁾		15,722,447		137,184	3.45	%			13,360,075		152,956	4.52	%
Allowance for credit losses		(155,142)							(56,124)
Interest-earning assets, net		15,567,305							13,303,951
Noninterest-earning assets		1,420,479							1,367,068
Total assets	$	16,987,784						$	14,671,019

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,523,955	$	9,269	0.49	%		$	6,100,621	$	17,480	1.14	%
Securities loaned		1,398,943		12,014	3.42	%			1,487,288		13,989	3.73	%
Notes payable and other borrowings		1,150,439		8,206	2.84	%			1,526,567		10,021	2.59	%
Total interest-bearing liabilities		10,073,337		29,489	1.17	%			9,114,476		41,490	1.80	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		3,669,230							2,789,662
Other liabilities		965,150							669,798
Total liabilities		14,707,717							12,573,936
Stockholders’ equity		2,252,989							2,072,865
Noncontrolling interest		27,078							24,218
Total liabilities and stockholders' equity	$	16,987,784						$	14,671,019

Net interest income ⁽³⁾			$	107,695						$	111,466
Net interest spread ⁽³⁾					2.28	%						2.72	%
Net interest margin ⁽³⁾					2.72	%						3.31	%


	Year Ended December 31,
	2020						2019
	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	$	2,306,203	$	74,467	3.23	%	$	1,501,154	$	64,830	4.32	%
Loans held for investment, gross ⁽²⁾		7,618,723		358,844	4.71	%		7,088,208		395,641	5.58	%
Investment securities - taxable		1,897,859		49,936	2.63	%		1,803,622		61,983	3.44	%
Investment securities - non-taxable ⁽³⁾		231,824		7,918	3.42	%		233,713		6,803	2.91	%
Federal funds sold and securities purchased under agreements to resell		90,961		138	0.15	%		63,598		1,236	1.94	%
Interest-bearing deposits in other financial institutions		1,257,902		3,165	0.25	%		371,312		8,469	2.28	%
Securities borrowed		1,435,572		51,360	3.58	%		1,550,322		69,582	4.49	%
Other		59,412		3,687	6.21	%		75,298		6,869	9.12	%
Interest-earning assets, gross ⁽³⁾		14,898,456		549,515	3.69	%		12,687,227		615,413	4.85	%
Allowance for credit losses		(122,148)						(57,690)
Interest-earning assets, net		14,776,308						12,629,537
Noninterest-earning assets		1,537,269						1,397,420
Total assets	$	16,313,577					$	14,026,957

Liabilities and Stockholders' Equity
Interest-bearing liabilities
Interest-bearing deposits	$	7,397,121	$	47,040	0.64	%	$	5,916,491	$	71,509	1.21	%
Securities loaned		1,336,873		42,817	3.20	%		1,423,847		60,086	4.22	%
Notes payable and other borrowings		1,222,044		33,249	2.72	%		1,398,559		41,928	3.00	%
Total interest-bearing liabilities		9,956,038		123,106	1.24	%		8,738,897		173,523	1.99	%
Noninterest-bearing liabilities
Noninterest-bearing deposits		3,304,475						2,635,924
Other liabilities		791,002						614,164
Total liabilities		14,051,515						11,988,985
Stockholders’ equity		2,235,690						2,014,535
Noncontrolling interest		26,372						23,437
Total liabilities and stockholders' equity	$	16,313,577					$	14,026,957

Net interest income ⁽³⁾			$	426,409					$	441,890
Net interest spread ⁽³⁾					2.45	%					2.86	%
Net interest margin ⁽³⁾					2.85	%					3.48	%

(1)	Information presented on a consolidated basis and includes discontinued operations and those assets and liabilities classified of 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 $0.3 million and $0.1 million for the three months ended December 31, 2020 and 2019, respectively, and $1.2 million and $0.6 million for the year ended December 31, 2020 and 2019, 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 29, 2021. Hilltop President and CEO Jeremy B. Ford and Hilltop CFO William B. Furr will review fourth quarter and full year 2020 financial results. Interested parties can access the conference call by dialing 1-877-508-9457 (domestic) or 1-412-317-0789 (international). 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 Hilltop Securities 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, 2020, Hilltop employed approximately 4,900 people and operated approximately 420 locations in 48 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,” “estimates,” “expects,” “extent,” “forecasts,” “goal,” “guidance,” “intends,” “may,” “might,” “outlook,” “plan,” “probable,” “progressing,” “projects,” “seeks,” “should,” “target,” “view,” “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, which have caused and are causing significant harm to the global economy and our business; (ii) the credit risks of lending activities, including our ability to estimate credit losses, as well as the effects 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) risks associated with concentration in real estate related loans; and (vi) changes in the interest rate environment and transitions away from the London Interbank Offered Rate. 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.

Source: Hilltop Holdings Inc.

Hilltop (HTH) 8-KHilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2020