Hilltop Holdings Inc.

Previous wording

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in this Quarterly Report that address results or developments that we expect or anticipate will or may occur in the future, and statements that are preceded by, followed by or include, words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “might,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases, including such things as our business strategy, our financial condition, our revenue, our liquidity and sources of funding, market trends, operations and business, taxes, the impact of natural disasters or public health emergencies, information technology expenses, cybersecurity incidents, capital levels, mortgage servicing rights (“MSR”) assets, stock repurchases, dividend payments, expectations concerning mortgage loan origination volume, servicer advances and interest rate compression, expected levels of refinancing as a percentage of total loan origination volume, projected losses on mortgage loans originated, total expenses, the effects of government regulation applicable to our operations, the appropriateness of, and changes in, our allowance for credit losses and provision for (reversal of) credit losses, expected future benchmark rates, anticipated investment yields, our expectations regarding accretion of discount on loans in future periods, the collectability of loans, and the outcome of litigation are forward-looking statements.

Current wording

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included in this Quarterly Report that address results or developments that we expect or anticipate will or may occur in the future, and statements that are preceded by, followed by or include, words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “forecasts,” “goal,” “intends,” “may,” “might,” “plan,” “probable,” “projects,” “seeks,” “should,” “target,” “view” or “would” or the negative of these words and phrases or similar words or phrases, including such things as our business strategy, our financial condition, our revenue, our liquidity and sources of funding, market trends, operations and business, taxes, the impact of natural disasters or public health emergencies, information technology expenses, cybersecurity incidents, capital levels, mortgage servicing rights (“MSR”) assets, stock repurchases, dividend payments, expectations concerning mortgage loan origination volume, servicer advances and interest rate compression, expected levels of refinancing as a percentage of total loan origination volume, projected losses on mortgage loans originated, total expenses, the effects of government regulation applicable to our operations, the appropriateness of, and changes in, our allowance for credit losses and provision for (reversal of) credit losses, and our related macroeconomic forecast assumptions, expected future benchmark rates, anticipated investment yields, our expectations regarding accretion of discount on loans in future periods, the collectability of loans, and the outcome of litigation are forward-looking statements.

Previous wording

Consolidated income before income taxes during the three and six months ended June 30, 2025 included the following contributions from our reportable business segments.

Current wording

Consolidated income before income taxes during the three and nine months ended September 30, 2025 included the following contributions from our reportable business segments.

Previous wording

During the six months ended June 30, 2025, we declared and paid total common dividends of $23.2 million.

Current wording

During the nine months ended September 30, 2025, we declared and paid total common dividends of $34.4 million.

Previous wording

In January 2025, our board of directors authorized a new stock repurchase program through January 2026, pursuant to which we were originally authorized to repurchase, in the aggregate, up to $100.0 million of our outstanding common stock. In July 2025, our board of directors authorized, subject to non-objection from the Board of Governors of the Federal Reserve, an increase to the aggregate amount of common stock we may repurchase under this program to $135.0 million, which is inclusive of repurchases to offset dilution related to grants of stock-based compensation. During the six months ended June 30, 2025, we paid $68.2 million to repurchase an aggregate of 2,203,936 shares of our common stock at an average price of $30.94 per share pursuant to the stock repurchase program. As a result of share repurchases during 2025, Hilltop has approximately $67 million of available share repurchase capacity, subject to non-objection with respect to the additional $35.0 million, through the expiration of the 2025 stock repurchase program in January 2026.

Current wording

In January 2025, our board of directors authorized a new stock repurchase program through January 2026, pursuant to which we were originally authorized to repurchase, in the aggregate, up to $100.0 million of our outstanding common stock. In July 2025, our board of directors authorized an increase to the aggregate amount of common stock we may repurchase under this program to $135.0 million, which is inclusive of repurchases to offset dilution related to grants of stock-based compensation. Furthermore, in October 2025, the Hilltop board of directors authorized an increase to the aggregate amount of common stock that Hilltop may repurchase under stock repurchase program to $185.0 million, an increase of $50.0 million, which is inclusive of repurchases to offset dilution related to grants of stock-based compensation. During the nine months ended September 30, 2025, we paid $123.2 million to repurchase an aggregate of 3,905,210 shares of our common stock at an average price of $31.56 per share pursuant to the stock repurchase program. As a result of share repurchases during the first nine months of 2025, Hilltop has approximately $62 million of available share repurchase capacity through the expiration of the 2025 stock repurchase program in January 2026.

Previous wording

We present certain measures in our selected financial data that are not measures of financial performance recognized by accounting principles generally accepted in the United States (“GAAP”). “Tangible book value per common share” is defined as our total stockholders’ equity reduced by goodwill and other intangible assets, divided by total common shares outstanding. “Tangible common equity to tangible assets” is defined as our total stockholders’ equity reduced by goodwill and other intangible assets, divided by total assets reduced by goodwill and other intangible assets. These measures are important to investors interested in changes from period to period in tangible common equity per share exclusive of changes in intangible assets. For companies such as ours that have engaged in business combinations, purchase accounting can result in the recording of significant amounts of goodwill and other intangible assets related to those transactions. You should not view this disclosure as a substitute for results determined in accordance with GAAP, and our disclosure is not necessarily comparable to that of other companies that use non-GAAP measures. The following table reconciles these non-GAAP financial measures to the most comparable GAAP financial measures, “book value per common share” and “equity to total assets” (dollars in thousands, except per share data).

Current wording

We present certain measures in our selected financial data that are not measures of financial performance recognized by accounting principles generally accepted in the United States (“GAAP”). “Tangible book value per common share” is defined as our total stockholders’ equity reduced by goodwill and other intangible assets, divided by total common shares outstanding. “Tangible common equity to tangible assets” is defined as our total stockholders’ equity reduced by goodwill and other intangible assets, divided by total assets reduced by goodwill and other intangible assets. These measures are important to investors interested in changes from period to period in tangible common equity per share exclusive of changes in intangible assets. For companies such as ours that have engaged in business combinations, purchase accounting can result in the recording of significant amounts of goodwill and other intangible assets related to those transactions. You should not view this disclosure as a substitute for results determined in accordance with GAAP, and our disclosure is not necessarily comparable to that of other companies that use non-GAAP measures.

Previous wording

In January 2025, our merchant bank subsidiary entered into a definitive agreement to sell all of the capital stock of Moser Acquisition, Inc to Atlas Energy Solutions Inc. (“Atlas”) for consideration including cash and Atlas common stock. On February 24, 2025, the noted transaction to sell the operations associated with our approximate 30% aggregate interest in Moser Holdings, LLC, which owns Moser Acquisition, Inc., was consummated. Our aggregate interest in Moser Holdings, LLC included equity investments that were included, and will continue to be included, within other assets in the consolidated balance sheets until liquidation of Moser Holdings, LLC. A preliminary pre-tax gain of $30.5 million ($23.6 million net of tax) was recorded during the first quarter of 2025 based on our aggregate interest in Moser Holdings, LLC reported as a component of other noninterest income within the consolidated statements of operations. During the second quarter of 2025, we recorded additional net downward adjustments associated with its aggregate interest in Moser Holdings, LLC and the liquidation of a portion of the Atlas common stock of $3.4 million that resulted in an aggregate preliminary pre-tax gain during 2025 of $27.1 million ($21.0 million net of tax). The preliminary gain is subject to change given customary post-closing adjustments, changes in the market value of the stock consideration included in transaction given certain restrictions, and the liquidation of Moser Holdings, LLC.

Current wording

In January 2025, our merchant bank subsidiary entered into a definitive agreement to sell all of the capital stock of Moser Acquisition, Inc. to Atlas Energy Solutions Inc. (“Atlas”) for consideration including cash and Atlas common stock. On February 24, 2025, the noted transaction to sell the operations associated with our approximate 30% aggregate interest in Moser Holdings, LLC, which owns Moser Acquisition, Inc., was consummated. Our aggregate interest in Moser Holdings, LLC included equity investments that were included, and will continue to be included, within other assets in the consolidated balance sheets until liquidation of Moser Holdings, LLC. A preliminary pre-tax gain of $30.5 million ($23.6 million net of tax) was recorded during the first quarter of 2025 based on our aggregate interest in Moser Holdings, LLC reported as a component of other noninterest income within the consolidated statements of operations. During the second quarter of 2025, we recorded additional net downward adjustments associated with its aggregate

Previous wording

On July 4, 2025, legislation referred to as “H.R. 1: One Big Beautiful Bill Act” was signed into law and, among other changes, will modify the tax year in which certain business deductions, primarily depreciation of capital asset additions, are allowed and therefore will influence the time within which income tax payments must be made. While our initial review indicates the legislated changes will not significantly modify our future effective income tax rate, we will continue to monitor for further changes and evaluate the enacted provisions of the new law and potential impacts on our consolidated financial statements as appropriate.

Current wording

On July 4, 2025, legislation referred to as “H.R. 1: One Big Beautiful Bill Act” (“OBBBA”) was signed into law and, among other changes, will modify the tax year in which certain business deductions, primarily depreciation of capital asset additions, are allowed and therefore will influence the time within which income tax payments must be made. We presently expect the permanent disallowance of certain business expenses under the OBBBA and related rules will increase our future effective income tax rate slightly. We are continuing to evaluate the enacted provisions of the new law including additional regulatory or interpretive guidance as that becomes available for potential impacts on our consolidated financial statements as appropriate.

Previous wording

Historically, high-profile banking failures periodically increase market uncertainty and concerns associated with banking sector liquidity positions, increase regulatory scrutiny and underscore the importance of maintaining access to diverse sources of funding. In light of these events, we have continued our efforts to monitor deposit flows and balance sheet trends to ensure that our liquidity needs and financial flexibility are maintained. During 2024, we increased interest-bearing deposit rates to address rising market interest rates and intense competition for liquidity to combat deposit outflows. Throughout 2024, we experienced net interest margin compression reflecting deposit repricing activity and demand deposit migration into interest-bearing accounts. Despite deposits costs remaining elevated during the first and second quarters of 2025, our cost of deposits decreased during the six months ended June 30, 2025, compared to the same period of 2024, as we took actions to reduce the interest paid on our interest-bearing deposits. Additionally, at June 30, 2025, we continued to access core deposits from our Hilltop Securities Federal Deposit Insurance Corporation (“FDIC”) insured sweep program, while the Bank was not utilizing any of its Federal Home Loan Bank (“FHLB”) borrowing capacity.

Current wording

Historically, high-profile banking failures periodically increase market uncertainty and concerns associated with banking sector liquidity positions, increase regulatory scrutiny and underscore the importance of maintaining access to diverse sources of funding. In light of these events, we have continued our efforts to monitor deposit flows and balance sheet trends to ensure that our liquidity needs and financial flexibility are maintained. During 2024, we increased interest-bearing deposit rates to address rising market interest rates and intense competition for liquidity to combat deposit outflows. Throughout 2024, we experienced net interest margin compression reflecting deposit repricing activity and demand deposit migration into interest-bearing accounts. Despite deposits costs remaining elevated during the first nine months of 2025, our cost of deposits decreased during the nine months ended September 30, 2025, compared to the same period of 2024, as we took actions to reduce the interest paid on our interest-bearing deposits. Additionally, at September 30, 2025, we continued to access core deposits from our Hilltop Securities Federal Deposit Insurance Corporation (“FDIC”) insured sweep program, while the Bank was not utilizing any of its Federal Home Loan Bank (“FHLB”) borrowing capacity.

Previous wording

While funding costs will continue to be influenced by various factors, including competitive pressures, broader economic conditions, future changes in the target range for the federal funds rate, our customers’ appetite for higher yields on deposits, and our overall liquidity profile. An unexpected influx of withdrawals of deposits could adversely impact our ability to rely on organic deposits to primarily fund our operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawals of deposits or to fund continuing operations. These sources may include proceeds from FHLB advances, sales of investment securities and loans, federal fund lines of credit with correspondent banks, securities sold under agreements to repurchase, brokered time deposits, borrowings from the Federal Reserve and borrowings under lines of credit with other financial institutions. Refer to the discussions in the “Segment Results – Banking Segment” and “Liquidity and Capital Resources – Banking Segment” sections that follow for more details regarding the Bank’s deposits, available liquidity and borrowing capacity at June 30, 2025.

Current wording

our liquidity position at that time. An unexpected influx of withdrawals of deposits could adversely impact our ability to rely on organic deposits to primarily fund our operations, potentially requiring greater reliance on secondary sources of liquidity to meet withdrawals of deposits or to fund continuing operations. These sources may include proceeds from FHLB advances, sales of investment securities and loans, federal fund lines of credit with correspondent banks, securities sold under agreements to repurchase, brokered time deposits, borrowings from the Federal Reserve and borrowings under lines of credit with other financial institutions. Refer to the discussions in the “Segment Results – Banking Segment” and “Liquidity and Capital Resources – Banking Segment” sections that follow for more details regarding the Bank’s deposits, available liquidity and borrowing capacity at September 30, 2025.

Previous wording

To the extent future operating performance of our reporting segments remain challenged and below forecasted projections during 2025, significant assumptions such as expected future cash flows or the risk-adjusted discount rate used to estimate fair value are adversely impacted, or upon the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform impairment tests on our goodwill and other intangible assets, an impairment charge may be recorded for that period. In the event that we conclude that all or a portion of our goodwill and other intangible assets are impaired, a non-cash charge for the respective amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital.

Current wording

To the extent future operating performance of our reporting segments remain challenged and below forecasted projections, significant assumptions such as expected future cash flows or the risk-adjusted discount rate used to estimate fair value are adversely impacted, or upon the occurrence of what management would deem to be a triggering event that could, under certain circumstances, cause us to perform impairment tests on our goodwill and other intangible assets, an impairment charge may be recorded for that period. In the event that we conclude that all or a portion of our goodwill and other intangible assets are impaired, a non-cash charge for the respective amount of such impairment would be recorded to earnings. Such a charge would have no impact on tangible capital or regulatory capital.

Previous wording

Our balance sheet, operating results and certain metrics during 2025 reflected economic conditions that remain uncertain, and will depend in part on several developments outside of our control including, among others, changes in the political environment, the impact of tariffs and reciprocal tariffs, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates and a volatile economic forecast. As noted within our 2024 Form 10-K, these economic conditions, coupled with exposure to changes in funding costs, inflationary pressures, and international armed conflicts and their impact on supply chains within our business segments during 2024 have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2025.

Current wording

Our balance sheet, operating results and certain metrics during 2025 to date reflected economic conditions that remain uncertain, and will depend in part on several developments outside of our control including, among others, changes in the political environment, the impact of tariffs and reciprocal tariffs, the timing and significance of further changes in U.S. treasury yields and mortgage interest rates and a volatile economic forecast. As noted within our 2024 Form 10-K, these economic conditions, coupled with exposure to changes in funding costs, inflationary pressures, and international armed conflicts and their impact on supply chains within our business segments during 2024 have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2025.

Previous wording

In addition, we are currently evaluating the potential loss exposures in connection with the central Texas flooding that occurred in July 2025. The extent of the financial impact to our banking and mortgage origination segments and associated outstanding loan portfolios and mortgage loan indemnification liabilities remains uncertain.

Current wording

In addition, we evaluated the potential loss exposures in connection with the central Texas flooding that occurred in July 2025 and have not experienced any significant financial impacts to our banking and mortgage origination segments and associated outstanding loan portfolios and mortgage loan indemnification liabilities.

Previous wording

The broker-dealer segment includes the operations of Securities Holdings, which operates through its wholly owned subsidiaries Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC. The broker-dealer segment generates a majority of its revenues from fees and commissions earned from investment advisory and securities brokerage services. Hilltop Securities is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority (“FINRA”) and a member of the New York Stock Exchange (“NYSE”). Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940.

Current wording

The broker-dealer segment includes the operations of Securities Holdings, which operates through its wholly owned subsidiaries Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC. The broker-dealer segment generates a majority of its revenues from fees and commissions earned from investment advisory and securities brokerage services. Hilltop Securities is a broker-dealer registered with the SEC and the Financial Industry Regulatory Authority, Inc. (“FINRA”) and a member of the New York Stock Exchange (“NYSE”). Momentum Independent Network is an introducing broker-dealer that is also registered with the SEC and FINRA. Hilltop Securities and Momentum Independent Network are both registered with the Commodity Futures Trading Commission as non-guaranteed introducing brokers and as members of the National Futures Association. Additionally, Hilltop Securities, Momentum Independent Network and Hilltop Securities Asset Management, LLC are registered investment advisers under the Investment Advisers Act of 1940.

Previous wording

We generate revenue from net interest income and from noninterest income. Net interest income represents the difference between the income earned on our assets, including our loans and investment securities, and our cost of funds, including the interest paid on the deposits and borrowings that are used to support our assets. Net interest income is a significant contributor to our operating results. Fluctuations in interest rates, as well as the amounts and types of interest-earning assets and interest-bearing liabilities we hold, affect net interest income. The change in reportable business segment net interest income during the six months ended June 30, 2025, compared with the same period in 2024, primarily reflected a significant increase within our corporate segment.

Current wording

We generate revenue from net interest income and from noninterest income. Net interest income represents the difference between the income earned on our assets, including our loans and investment securities, and our cost of funds, including the interest paid on the deposits and borrowings that are used to support our assets. Net interest income is a significant contributor to our operating results. Fluctuations in interest rates, as well as the amounts and types of interest-earning assets and interest-bearing liabilities we hold, affect net interest income. The change in reportable business segment net interest income during the nine months ended September 30, 2025, compared with the same period in 2024, primarily reflected significant improvements within corporate and the mortgage origination and banking segments.

Previous wording

In the aggregate, we experienced an increase in noninterest income during the six months ended June 30, 2025, compared to the same period in 2024, as noted in the segment results table previously presented, primarily due to an increase in pre-tax gains associated with merchant bank equity investment activity within corporate. Additionally, within our broker-dealer segment, noninterest income declined due to a reduction trading gains earned from trading activities, offset by increases in investment and securities advisory fees and commissions and securities commissions and fees.

Current wording

In the aggregate, we experienced an increase in noninterest income during the nine months ended September 30, 2025, compared to the same period in 2024, as noted in the segment results table previously presented, primarily due to an increase in pre-tax gains associated with merchant bank equity investment activity within corporate and increased noninterest income within our broker-dealer segment from increased investment and securities advisory fees and commissions partially offset by a reduction in trading gains earned from trading activities.

Previous wording

Income applicable to common stockholders during the three months ended June 30, 2025 was $36.1 million, or $0.57 per diluted share, compared to $20.3 million, or $0.31 per diluted share, during the three months ended June 30, 2024. Income applicable to common stockholders during the six months ended June 30, 2025 was $78.2 million, or $1.22 per diluted share, compared to $48.0 million, or $0.74 per diluted share, during the six months ended June 30, 2024.

Current wording

Income applicable to common stockholders during the three months ended September 30, 2025 was $45.8 million, or $0.74 per diluted share, compared to $29.7 million, or $0.46 per diluted share, during the three months ended September 30, 2024. Income applicable to common stockholders during the nine months ended September 30, 2025 was $124.0 million, or $1.95 per diluted share, compared to $77.7 million, or $1.19 per diluted share, during the nine months ended September 30, 2024.

Previous wording

Hilltop’s financial results for the three months ended June 30, 2025, compared with the same period in 2024, included a reversal of credit losses and an increase in net interest income within the banking segment, net revenues and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had declines in net interest expense, noninterest income and noninterest expense. During the six months ended June 30, 2025, compared with the same period in 2024, financial results included a significant preliminary gain associated with the sale of operations by a merchant bank equity investment within corporate, changes in the provision for credit losses and a decrease in noninterest expenses within the banking segment, net revenues declined and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had declines in net interest expense and noninterest expense.

Current wording

Hilltop’s financial results for the three and nine months ended September 30, 2025, compared with the same periods in 2024, included increases in the reversal of credit losses and net interest income and a decrease in noninterest expenses within the banking segment, net revenues and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had declines in noninterest income, noninterest expense and net interest expense. The financial results for the nine months ended September 30, 2025 also included a significant preliminary gain associated with the sale of operations by a merchant bank equity investment within corporate.

Previous wording

Certain items included in net income for the three and six months ended June 30, 2025 and 2024 resulted from purchase accounting associated with the merger of PlainsCapital Corporation with and into a wholly owned subsidiary of Hilltop on November 30, 2012, the FDIC-assisted transaction whereby the Bank acquired certain assets and assumed certain liabilities of FNB, the acquisition of SWS Group, Inc. in a stock and cash transaction, and the acquisition of The Bank of River Oaks in an all-cash transaction (collectively, the “Bank Transactions”). Income before income taxes during the three months ended June 30, 2025 and 2024 included net accretion on earning assets and liabilities of $0.5 million and $2.0 million, respectively, and amortization of identifiable intangibles of $0.2 million and $0.5 million, respectively, related to the Bank Transactions. During the six months ended June 30, 2025 and 2024, income before income taxes included net accretion on earning assets and liabilities of $1.6 million and $3.4 million, respectively, and amortization of identifiable intangibles of $0.5 million and $1.0 million, respectively, related to the Bank Transactions.

Current wording

Certain items included in net income for the three and nine months ended September 30, 2025 and 2024 resulted from purchase accounting associated with the merger of PlainsCapital Corporation with and into a wholly owned subsidiary of Hilltop on November 30, 2012, the FDIC-assisted transaction whereby the Bank acquired certain assets and assumed certain liabilities of FNB, the acquisition of SWS Group, Inc. in a stock and cash transaction, and the acquisition of The Bank of River Oaks in an all-cash transaction (collectively, the “Bank Transactions”). Income before income taxes during the three months ended September 30, 2025 and 2024 included net accretion on earning assets and liabilities of $0.6 million and $0.7 million, respectively, and amortization of identifiable intangibles of $0.3 million and $0.4 million, respectively, related to the Bank Transactions. During the nine months ended September 30, 2025 and 2024, income before

Previous wording

We present net interest margin and net interest income below on a taxable-equivalent basis. 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 corporate federal income tax rate of 21% for all periods presented. The Company performs periodic reviews of the classification and categorization of the components impacting the calculation of net interest margin. 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,

Current wording

We present net interest margin and net interest income below on a taxable-equivalent basis. 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 corporate federal income tax rate of 21% for all periods presented. The Company performs periodic reviews of the classification and categorization of the components impacting the calculation of net interest margin. 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.

Previous wording

During the three months ended June 30, 2025 and 2024, purchase accounting contributed 2 and 6 basis points, respectively, to our consolidated taxable equivalent net interest margin of 3.04% and 2.92%, respectively. During the six months ended June 30, 2025 and 2024, purchase accounting contributed 3 and 5 basis points, respectively, to our consolidated taxable equivalent net interest margin of 2.95% and 2.89%, respectively. The purchase accounting activity was primarily related to the accretion of discount of loans which totaled $0.5 million and $1.9 million during the three months ended June 30, 2025 and 2024, respectively, and $1.6 million and $3.2 million during the six months ended June 30, 2025 and 2024, respectively, associated with the Bank Transactions.

Current wording

During the three months ended September 30, 2025 and 2024, purchase accounting contributed 2 and 2 basis points, respectively, to our consolidated taxable equivalent net interest margin of 3.09% and 2.85%, respectively. During the nine months ended September 30, 2025 and 2024, purchase accounting contributed 2 and 4 basis points, respectively, to our consolidated taxable equivalent net interest margin of 2.99% and 2.86%, respectively. The purchase accounting activity was primarily related to the accretion of discount of loans which totaled $0.6 million and $0.7 million during the three months ended September 30, 2025 and 2024, respectively, and $2.2 million and $4.0 million during the nine months ended September 30, 2025 and 2024, respectively, associated with the Bank Transactions.

Previous wording

On a consolidated basis, the change in net interest income during the three and six months ended June 30, 2025, compared with the same periods in 2024, were primarily due to decreased loans held for investment yield from rate decreases, decreased costs of deposits from rate decreases and decreased interest costs from the redemption of certain notes payable, offset by increased cost of deposits fromthe shift from noninterest-bearing deposits into interest-bearing products. Refer to the discussion in the “Banking Segment” section that follows for more details on the changes in net interest income, including the component changes in the volume of average interest-earning assets and interest-bearing liabilities and changes in the rates earned or paid on those items.

Current wording

On a consolidated basis, the change in net interest income during the three and nine months ended September 30, 2025, compared with the same periods in 2024, were primarily due to decreased costs of deposits from rate decreases and decreased interest costs from the redemption of certain notes payable, partially offset by decreased loans held for investment yield and interest-bearing deposits yields from rate decreases. Refer to the discussion in the “Banking Segment” section that follows for more details on the changes in net interest income, including the component changes in the volume of average interest-earning assets and interest-bearing liabilities and changes in the rates earned or paid on those items.

Previous wording

The provision for (reversal of) credit losses is determined by management as the amount necessary to maintain the allowance for credit losses at the amount of expected credit losses inherent within the loans held for investment portfolio. The amount of expense and the corresponding level of allowance for credit losses for loans are based on our evaluation of the collectability of the loan portfolio based on historical loss experience, reasonable and supportable forecasts, and other significant qualitative and quantitative factors. Substantially all of our consolidated provision for (reversal of) credit losses is related to the banking segment. During the three months ended June 30, 2025, the reversal of credit losses was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans, loan portfolio changes and net charge-offs, partially offset by a build in the allowance related to specific reserves, including

Current wording

The provision for (reversal of) credit losses is determined by management as the amount necessary to maintain the allowance for credit losses at the amount of expected credit losses inherent within the loans held for investment portfolio. The amount of expense and the corresponding level of allowance for credit losses for loans are based on our evaluation of the collectability of the loan portfolio based on historical loss experience, reasonable and supportable forecasts, and other significant qualitative and quantitative factors. Substantially all of our consolidated provision for (reversal of) credit losses is related to the banking segment. During the three months ended September 30, 2025, the reversal of credit losses was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans and loan portfolio changes, including changes in loan mix and risk rating grade migration, within the banking segment, partially offset by a build in the allowance related to specific reserves, since the prior quarter. The reversal of credit

Previous wording

changes in loan mix and risk rating grade migration, within the banking segment since the prior quarter. The provision for credit losses during the six months ended June 30, 2025 was primarily driven by a build in the allowance related to loan portfolio changes and specific reserves including changes in loan mix and risk rating grade migration, partially offset by net charge-offs and changes in the U.S. economic outlook associated with collectively evaluated loans. Refer to the discussion under the heading “Financial Condition – Allowance for Credit Losses on Loans” for more details regarding the significant assumptions and estimates involved in estimating credit losses.

Current wording

losses during the nine months ended September 30, 2025 was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans and net charge-offs, partially offset by a build in the allowance related to loan portfolio changes and specific reserves including changes in loan mix and risk rating grade migration. Refer to the discussion under the heading “Financial Condition – Allowance for Credit Losses on Loans” for more details regarding the significant assumptions and estimates involved in estimating credit losses.

Previous wording

Noninterest income slightly decreased during the three months ended June 30, 2025, compared with the same period in 2024, primarily due to the receipt of $9.5 million by the mortgage origination segment associated with the Settlements and increases in net gains from sale of loans and other mortgage production income within our mortgage loan origination segment, partially offset by a decrease of mortgage loan origination fees within our mortgage origination segment, net decreases within the broker-dealer segment’s structured finance business line, partially offset by net increases within the broker-dealer segment’s public finance, wealth management and fixed income business lines, and a loss of $3.4 million associated with the sale of operations by the merchant bank equity investment in the first quarter of 2025, partially offset by gains of $2.8 million associated with certain other merchant bank equity investments. Noninterest income increased during the six months ended June 30, 2025 compared with the same period in 2024, primarily due to an updated preliminary pre-tax gain of $27.1 million associated with the sale of operations by a merchant bank equity investment in the first quarter of 2025, while other changes between periods included net decreases within the broker-dealer segment’s structured finance and fixed income services business lines, partially offset by net increases within the broker-dealer segment’s public finance and wealth management business lines, and increases in net gains from sale of loans and other mortgage production income within our mortgage loan origination segment, partially offset by a decrease of mortgage loan origination fees within our mortgage origination segment.

Current wording

Noninterest income increased during the three months ended September 30, 2025, compared with the same period in 2024, primarily due to net increases within all of the broker-dealer segment’s business lines, a gain of $1.1 million associated with the sale of operations by the merchant bank equity investment in the first quarter of 2025 and additional gains of $1.0 million associated with certain other merchant bank equity investments, decreases of mortgage loan origination fees and net gains from sale of loans, partially offset by an increase in other mortgage production income within our mortgage origination segment. Noninterest income increased during the nine months ended September 30, 2025 compared with the same period in 2024, primarily due to an updated preliminary pre-tax gain of $28.1 million associated with the sale of operations by a merchant bank equity investment in the first quarter of 2025, while other changes between periods included net increases within the broker-dealer segment’s public finance, wealth management and fixed income business lines, partially offset by a net decrease within the broker-dealer segment’s structured finance business line, and increases in net gains from sale of loans and other mortgage production income within our mortgage loan origination segment, partially offset by a decrease of mortgage loan origination fees within our mortgage origination segment.

Previous wording

Noninterest expense increased during the three months ended June 30, 2025, compared with the same period in 2024, primarily due to a net increase within our broker-dealer segment associated with increases in employees’ compensation and benefits, partially offset by a decrease in other segment operating costs, a net decrease within our mortgage origination segment driven by decreases in servicing expenses and other segment costs, partially offset by an increase in non-variable compensation and variable compensation associated with increased mortgage loan originations. Noninterest expense increased during the six months ended June 30, 2025, compared with the same period in 2024, primarily due to an increase in employees’ compensation and benefits within corporate, net increases within our broker-dealer segment associated with increases in employees’ compensation and benefits and other segment operating costs, a net decrease within our mortgage origination segment driven by decreases in servicing expenses, non-variable compensation and other segment costs, partially offset by an increase in variable compensation associated with increased mortgage loan originations. We have experienced an increase in certain noninterest expenses during 2025 and 2024, compared with respective prior periods, including compensation, occupancy, and software costs, due to inflationary pressures. We expect such inflationary headwinds to continue and result in higher fixed costs during the remainder of 2025.

Current wording

Noninterest expense increased during the three months ended September 30, 2025, compared with the same period in 2024, primarily due to a net increase within our broker-dealer segment associated with increases in employees’ compensation and benefits, partially offset by a decrease in other segment operating costs, a net decrease within our mortgage origination segment driven by decreases in servicing expenses and variable compensation, partially offset by an increase in non-variable compensation. Noninterest expense increased during the nine months ended September 30, 2025, compared with the same period in 2024, primarily due to an increase in employees’ compensation and benefits within corporate, net increases within our broker-dealer segment associated with increases in employees’ compensation and benefits and other segment operating costs, a net decrease within our mortgage origination segment driven by decreases in servicing expenses and other segment costs, partially offset by increases in lender paid closing costs and variable compensation associated with increased mortgage loan originations. We have experienced an increase in certain noninterest expenses during 2025 and 2024, compared with respective prior periods, including compensation, occupancy, and software costs, due to inflationary pressures. We expect such inflationary headwinds to continue and result in higher fixed costs during the remainder of 2025.

Previous wording

Effective income tax rates during the three months ended June 30, 2025 and 2024 were 23.4% and 22.5%, respectively, and for the six months ended June 30, 2025 and 2024 were 23.1% and 22.5%, respectively. During the three and six months ended June 30, 2025, the effective tax rate was higher than the applicable statutory rate primarily due to the impact of nondeductible compensation expense, other nondeductible expenses and other permanent adjustments, partially offset by investments in tax-exempt instruments. During the three and six months ended June 30, 2024, the effective tax rate was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments.

Current wording

Effective income tax rates during the three months ended September 30, 2025 and 2024 were 23.2% and 22.5%, respectively, and for the nine months ended September 30, 2025 and 2024 were 23.1% and 22.5%, respectively. During the three and nine months ended September 30, 2025, the effective tax rate was higher than the applicable statutory rate primarily due to the impact of nondeductible compensation expense, other nondeductible expenses and other permanent adjustments, partially offset by investments in tax-exempt instruments. During the three and nine months ended September 30, 2024, the effective tax rate was higher than the applicable statutory rate primarily due to the impact of nondeductible expenses, nondeductible compensation expense and other permanent adjustments, partially offset by the discrete impact of restricted stock vesting during the quarter and investments in tax-exempt instruments.

Previous wording

The increase in income before income taxes during the three months ended June 30, 2025, compared with the same period in 2024, was primarily due to a reversal of credit losses and increases in net interest income and noninterest income. The increase in income before income taxes during the six months ended June 30, 2025, compared to the same period in 2024, was primarily due to decreases in the provision for credit losses and noninterest expense and an increase in net interest income. This decrease in noninterest expense was driven by the settlement and receipt of funds during the first quarter of 2025 that reimbursed the Bank for legal fees previously incurred. Changes to net interest income related to the component changes in the volume of average interest-earning assets and interest-bearing liabilities and changes in the rates earned or paid on those items are discussed in more detail below.

Current wording

30, 2025, compared to the same period in 2024, was primarily due to a reversal of credit losses, a decrease in noninterest expense and an increase in net interest income. This decrease in noninterest expense was driven by the settlement and receipt of funds during the first quarter of 2025 that reimbursed the Bank for legal fees previously incurred. Changes to net interest income related to the component changes in the volume of average interest-earning assets and interest-bearing liabilities and changes in the rates earned or paid on those items are discussed in more detail below.

Previous wording

During the three months ended June 30, 2025 and 2024, purchase accounting contributed 3 and 7 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 3.17% and 3.10%, respectively. During the six months ended June 30, 2025 and 2024, purchase accounting contributed 3 and 6 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 3.07% and 3.05%, respectively. These purchase accounting items are primarily related to accretion of discount of loans associated with the Bank Transactions presented in the Consolidated Operating Results section.

Current wording

During the three months ended September 30, 2025 and 2024, purchase accounting contributed 2 and 3 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 3.23% and 3.06%, respectively. During the nine months ended September 30, 2025 and 2024, purchase accounting contributed 2 and 4 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 3.12% and 3.06%, respectively. These purchase accounting items are primarily related to accretion of discount of loans associated with the Bank Transactions presented in the Consolidated Operating Results section.

Previous wording

The increases in net interest income during the three and six months ended June 30, 2025, compared to the same periods in 2024, as noted in the table above, were driven by decreased earnings on interest-earning assets, primarily loan and warehouse line of credit yields and investment securities, significantly offset by the decreased funding costs on our deposit products from rate decreases. The average rate paid on interest-bearing liabilities decreased 70 basis points from 3.89% for the six months ended June 30, 2024 to 3.19% for the six months ended June 30, 2025, while the average yield

Current wording

The increases in net interest income during the three and nine months ended September 30, 2025, compared to the same periods in 2024, as noted in the table above, were driven by decreased earnings on interest-earning assets, primarily loan and warehouse line of credit yields and investment securities, significantly offset by the decreased funding costs on our deposit products from rate decreases. The average rate paid on interest-bearing liabilities decreased 71 basis points from 3.88% for the nine months ended September 30, 2024 to 3.17% for the nine months ended September 30, 2025, while

Previous wording

on interest-earning assets decreased 37 basis points from 5.63% for the six months ended June 30, 2024 to 5.26% for the six months ended June 30, 2025.

Current wording

the average yield on interest-earning assets decreased 37 basis points from 5.66% for the nine months ended September 30, 2024 to 5.29% for the nine months ended September 30, 2025.

Previous wording

Our portfolio includes loans that periodically reprice or mature prior to the end of an amortized term. The extent and timing of this impact on interest income will ultimately be driven by the timing, magnitude and frequency of interest rate and yield curve movements, as well as changes in market conditions and timing of management strategies. At June 30, 2025, approximately $491 million of our floating rate loans held for investment remained at or below their applicable rate floor, exclusive of our mortgage warehouse lending program, of which approximately 61% are not scheduled to reprice for more than one year based upon agreed-upon terms. If interest rates were to continue to fall, the impact on our interest income for certain variable-rate loans would be limited by these rate floors. If interest rates rise, yields on the portion of our loan portfolio that remain at applicable rate floors would rise more slowly than increases in market interest rates, unless such loans are refinanced or repaid. Competition for loan growth could also continue to put pressure on new loan origination rates.

Current wording

Our portfolio includes loans that periodically reprice or mature prior to the end of an amortized term. The extent and timing of this impact on interest income will ultimately be driven by the timing, magnitude and frequency of interest rate and yield curve movements, as well as changes in market conditions and timing of management strategies. At September 30, 2025, approximately $470 million of our floating rate loans held for investment remained at or below their applicable rate floor, exclusive of our mortgage warehouse lending program, of which approximately 45% are not scheduled to reprice for more than one year based upon agreed-upon terms. If interest rates were to continue to fall, the impact on our interest income for certain variable-rate loans would be limited by these rate floors. If interest rates rise, yields on the portion of our loan portfolio that remain at applicable rate floors would rise more slowly than increases in market interest rates, unless such loans are refinanced or repaid. Competition for loan growth could also continue to put pressure on new loan origination rates.

Previous wording

Additionally, within our banking segment, the composition of the deposit base and ultimate cost of funds on deposits and net interest income are affected by the level of market interest rates, the interest rates and products offered by competitors, the volatility of equity markets and other factors. Deposit products and pricing structures relative to the market are regularly evaluated to maintain competitiveness over time. As discussed above, our cost of deposits decreased during the three and six months ended June 30, 2025, compared to the same periods of 2024. We expect such costs during the remainder of 2025 to continue to be driven by various factors, including, but not limited to future changes in the target range for the federal funds rate, our customers’ appetite for higher yields on deposits, and our overall liquidity profile. The Bank’s deposit base primarily includes a combination of commercial, wealth and public funds deposits, without a high level of industry concentration. At June 30, 2025, total estimated uninsured deposits were $5.2 billion, or approximately 50% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $347.3 million and internal accounts of $420.7 million, were $4.5 billion, or approximately 43% of total deposits.

Current wording

Additionally, within our banking segment, the composition of the deposit base and ultimate cost of funds on deposits and net interest income are affected by the level of market interest rates, the interest rates and products offered by competitors, the volatility of equity markets and other factors. Deposit products and pricing structures relative to the market are regularly evaluated to maintain competitiveness over time. As discussed above, our cost of deposits decreased during the three and nine months ended September 30, 2025, compared to the same periods of 2024. We expect such costs during the remainder of 2025 will continue to be influenced by various factors, including, but not limited to competitive pressures, broader economic conditions, the recent 25-basis point decrease in the target range for the federal funds in September 2025, future changes in the target range for the federal funds rate, customer behavior and our liquidity position at that time. The Bank’s deposit base primarily includes a combination of commercial, wealth and public funds deposits, without a high level of industry concentration. At September 30, 2025, total estimated uninsured deposits were $5.7 billion, or approximately 54% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $592.1 million and internal accounts of $370.2 million, were $4.8 billion, or approximately 45% of total deposits.

Previous wording

The banking segment retained approximately $43.2 million and $39.6 million in mortgage loans originated by the mortgage origination segment during the three months ended June 30, 2025 and 2024, respectively, and $105.7 million and $71.9 million in mortgage loans originated by the mortgage origination segment during the six months ended June 30, 2025 and 2024, respectively. These loans are purchased by the banking segment at par. For origination services provided, the banking segment reimburses the mortgage origination segment for direct origination costs associated with these mortgage loans, in addition to payment of a correspondent fee. The correspondent fees are eliminated in consolidation. The determination of mortgage loan retention levels by the banking segment will be impacted by, among other things, an ongoing review of the prevailing mortgage rates, balance sheet positioning at Hilltop and the banking segment’s outlook for commercial loan growth.

Current wording

The banking segment retained approximately $44.9 million and $7.3 million in mortgage loans originated by the mortgage origination segment during the three months ended September 30, 2025 and 2024, respectively, and $150.6 million and $79.2 million in mortgage loans originated by the mortgage origination segment during the nine months ended September 30, 2025 and 2024, respectively. These loans are purchased by the banking segment at par. For origination services provided, the banking segment reimburses the mortgage origination segment for direct origination costs associated with these mortgage loans, in addition to payment of a correspondent fee. The correspondent fees are eliminated in consolidation. The determination of mortgage loan retention levels by the banking segment will be impacted by, among other things, an ongoing review of the prevailing mortgage rates, balance sheet positioning at Hilltop and the banking segment’s outlook for commercial loan growth.

Previous wording

The banking segment’s provision for (reversal of) credit losses has been subject to significant year-over-year and quarterly changes primarily attributable to the effects of changes in economic outlook, macroeconomic forecast assumptions and the resulting impact on reserves. During the three months ended June 30, 2025, the reversal of credit losses was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans, loan portfolio changes and net charge-offs, partially offset by a build in the allowance related to specific reserves, including changes in loan mix and risk rating grade migration, since the prior quarter. The provision for credit losses during the six months ended June 30, 2025 was primarily driven a build in the allowance related to loan portfolio changes and specific reserves, including changes in loan mix and risk rating grade migration, partially offset by net charge-offs and changes in the U.S. economic outlook associated with collectively evaluated loans. The net impact to the allowance of changes associated with individually evaluated loans during the three and six months ended June 30, 2025 included a provision for credit losses of $1.8 million and $3.4 million, respectively, while collectively evaluated loans during the three and six

Current wording

The banking segment’s provision for (reversal of) credit losses has been subject to significant year-over-year and quarterly changes primarily attributable to the effects of changes in economic outlook, macroeconomic forecast assumptions and the resulting impact on reserves. During the three months ended September 30, 2025, the reversal of credit losses was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans and loan portfolio changes, including changes in loan mix and risk rating grade migration, partially offset by a build in the allowance related to specific reserves, since the prior quarter. The reversal of credit losses during the nine months ended September 30, 2025 was primarily driven by changes in the U.S. economic outlook associated with collectively evaluated loans and net charge-offs, partially offset by a build in the allowance related to loan portfolio changes and specific reserves, including changes in loan mix and risk rating grade migration. The net impact to the allowance of changes associated with collectively evaluated loans during the three and nine months ended September 30, 2025

Previous wording

months ended June 30, 2025 included a reversal of credit losses of $9.1 million and $1.4 million, respectively. The changes in the allowance for credit losses during the noted periods also reflected other factors including, but not limited to, the change in economic scenario, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The change in the allowance for credit losses during the three and six months ended June 30, 2025 was also impacted by net charge-offs of $0.9 million and $5.2 million, respectively. Refer to the discussion in the “Financial Condition – Allowance for Credit Losses on Loans” section that follows for more details regarding the significant assumptions and estimates involved in estimating credit losses.

Current wording

included a reversal of credit losses of $7.2 million and $8.6 million, respectively, while individually evaluated loans during the three and nine months ended September 30, 2025 included a provision for credit losses of $4.6 million and $8.0 million, respectively. The changes in the allowance for credit losses during the noted periods also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter, as well as the economic scenario change during the second quarter of 2025. The changes in the allowance for credit losses during the three and nine months ended September 30, 2025 were also impacted by net charge-offs of $0.3 million and $5.4 million, respectively. Refer to the discussion in the “Financial Condition – Allowance for Credit Losses on Loans” section that follows for more details regarding the significant assumptions and estimates involved in estimating credit losses.

Previous wording

During the three and six months ended June 30, 2024, the provision for credit losses reflected a build in the allowance related to specific reserves and loan portfolio changes within the banking segment, slightly offset by improvements to the U.S. economic outlook. The net impact to the allowance of changes associated with individually evaluated loans during the three and six months ended June 30, 2024 included a provision for credit losses of $8.0 million and $12.1 million, respectively, while collectively evaluated loans included a provision for credit losses of $3.0 million and a reversal of credit losses of $4.0 million, respectively. The change in the allowance for credit losses during the three and six months ended June 30, 2024 was also impacted by net charge-offs of $0.1 million and $4.4 million, respectively. The changes in the allowance for credit losses during the noted periods also reflected other factors including, but not limited to, loan growth, loan mix and changes in risk grades and qualitative factors from the prior quarter.

Current wording

During the three months ended September 30, 2024, the reversal of credit losses was primarily driven by net charge-offs and loan portfolio changes, including a change in the macroeconomic outlook scenario utilized, associated with collectively evaluated loans, partially offset by a build in the allowance related to specific reserves within the banking segment since the prior quarter. The increase in the provision for credit losses during the nine months ended September 30, 2024 reflected a build in the allowance related to specific reserves and loan portfolio changes within the banking segment since the prior period, partially offset by the change in the macroeconomic outlook scenario utilized. The net impact to the allowance of changes associated with individually evaluated loans during the three and nine months ended September 30, 2024 included a provision for credit losses of $1.2 million and $13.3 million, respectively, while collectively evaluated loans included a reversal of credit losses of $2.5 million and $6.5 million, respectively. The changes in the allowance for credit losses during the three and nine months ended September 30, 2024 were also impacted by net charge-offs of $2.9 million and $7.3 million, respectively. The changes in the allowance for credit losses during the noted periods also reflected other factors including, but not limited to, loan growth, loan mix and changes in risk grades and qualitative factors from the prior quarter.

Previous wording

The banking segment’s noninterest income increased during the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to the receipt of a legal restitution payment during the second quarter of 2025 that compensated the Bank for previously incurred losses.

Current wording

The banking segment’s noninterest income increased during the nine months ended September 30, 2025, compared to the same period in 2024, primarily due to the receipt of a legal restitution payment during the second quarter of 2025 that compensated the Bank for previously incurred losses.

Previous wording

The banking segment’s noninterest expense increased during the three months ended June 30, 2025, compared to the same period in 2024, primarily due to occupancy and equipment expenses and professional fees, partially offset by a decrease in employees’ compensation and benefits. During the six months ended June 30, 2025, compared to the same period in 2024, noninterest expense declined primarily due to a decrease in professional fees, partially offset by an increase in employees’ compensation and benefits. The decrease in professional fees was driven by the settlement and receipt of $6.5 million during the first quarter of 2025 that reimbursed the Bank for legal fees previously incurred.

Current wording

The banking segment’s noninterest expense decreased during the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a decrease in occupancy and equipment expenses, partially offset by an increase in professional fees. During the nine months ended September 30, 2025, compared to the same period in 2024, noninterest expense declined primarily due to decreases in professional fees and occupancy and equipment expenses, partially offset by an increase in employees’ compensation and benefits. The decrease in professional fees during the nine months ended September 30, 2025 was driven by the settlement and receipt of $6.5 million during the first quarter of 2025 that reimbursed the Bank for legal fees previously incurred.

Previous wording

The increase in net revenue and for the three months ended June 30, 2025, compared with the same period in 2024, was primarily due to improved results within our public finance services, fixed income services and wealth management business lines, partially offset by a period-over-period decrease in results within our structured finance business line. The increase in net revenues in the broker-dealer segment’s public finance services business line was primarily due to improved fees earned from banking services. The increase in the fixed income business line’s net revenues was due primarily to improved revenue earned on municipal trading activities. The increase in the wealth management business line’s net revenue was driven by an increase in advisory fees revenues generated from customer assets under management. The decrease in the structured finance business line’s net revenues was primarily due to a decrease in trading gains from the U.S. Agency to-be-announced (“TBA”) business. Income before income taxes for the three months ended June 30, 2025 was impacted by the increases in net revenue as described above and a net increase in noninterest expenses.

Current wording

The increases in net revenue and income before income taxes for the three months ended September 30, 2025, compared with the same period in 2024, were primarily due to improved revenues within all business lines. The increase in net revenues in the broker-dealer segment’s public finance services business line was primarily due to improved fees earned from banking services. The increase in the fixed income business line’s net revenues was due primarily to improved revenue earned on municipal trading activities. The increase in the wealth management business line’s net revenue was driven by an increase in advisory fees revenues generated from customer assets under management. The increase in the structured finance business line’s net revenues was primarily due to an increase in commissions earned on the sale of agricultural insurance products. Income before income taxes for the three months ended September 30, 2025 was impacted by the increases in net revenue as described above and a net increase in noninterest expense.

Previous wording

The decrease in net revenue and income before income taxes for the six months ended June 30, 2025, compared with the same period in 2024, were primarily due to declines in period-over-period results within our structured finance and fixed income services business lines, partially offset by improved results within our public finance services and wealth management business lines. The decrease in the structured finance business line’s net revenues was primarily due to a decrease in trading gains from the to-be-announced (“TBA”) business partially offset by commissions earned on commodities and securitized mortgage-backed securities transactions. The decrease in fixed income services business line’s net revenues was primarily due to market conditions resulting in the decrease in earnings from fixed income sales and trading activities, in particular, from credit products, partially offset by the relative strength in municipal products. The increase in net revenues in the broker-dealer segment’s public finance services business line was primarily due to improved fees earned from banking services. The increase in the wealth management business line’s net revenue was driven by an increase in advisory fees revenues generated from customer assets under management, partially offset by fees earned from our FDIC sweep program on lower balances period-over-period. Income before income taxes for the six months ended June 30, 2025 was impacted by the decreases in net revenue as described above and a net increase in noninterest expenses.

Current wording

segment’s public finance services business line was primarily due to improved fees earned from banking services. The increase in fixed income services business line’s net revenues was primarily due to market conditions resulting in the increase in earnings from fixed income sales and trading activities, in particular, from municipal products. The increase in the wealth management business line’s net revenue was driven by an increase in advisory fees revenues generated from customer assets under management. The decrease in the structured finance business line’s net revenues was primarily due to a decrease in trading gains from the to-be-announced (“TBA”) business partially offset by commissions earned on commodities and securitized mortgage-backed securities transactions. Income before income taxes for the nine months ended September 30, 2025 was impacted by the changes in net revenue as described above and a net increase in noninterest expense.