Hilltop 8K Announces Financial Results for Fourth Quarter and Full Year 2021 | HTH 27 Jan 22

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 2021

DALLAS — (BUSINESS WIRE) January 27, 2022 — 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 margin⁴decreased 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.

Source: Hilltop Holdings Inc.

Hilltop (HTH) 8-KHilltop Holdings Inc. Announces Financial Results for Fourth Quarter and Full Year 2021