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, 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.

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, as amended (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 statements related to our objectives and business strategy, expectations concerning our financial condition, our revenue, the sufficiency of our liquidity and sources of funding, assumptions with relating to market trends, operations and business, taxes, information technology expenses, the impact of 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 impact of macroeconomic conditions, 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.

Previous wording

These forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If an event occurs, our business, business plan, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Certain factors that could cause actual results to differ include, among others:

Current wording

These forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us at the time of this Quarterly Report. These beliefs, assumptions and expectations are subject to risks and uncertainties and can change as a result of many possible events or factors, not all of which are known to us. If any of these events or risks or uncertainties occur, our business, business plan, financial condition, liquidity and results of operations may vary materially from those results expressed in our forward-looking statements. Certain factors that could cause actual results to differ include, among others:

Previous wording

(2) For a reconciliation to the nearest GAAP measure, see “—Reconciliation and Management’s Explanation of Non-GAAP Financial Measures.”

Current wording

(2) For a reconciliation to the nearest accounting principles generally accepted in the United States (“GAAP”) measure, see “—Reconciliation and Management’s Explanation of Non-GAAP Financial Measures.”

Previous 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.

Current wording

Consolidated income before income taxes during the three months ended March 31, 2026 included the following contributions from our reportable business segments.

Previous wording

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

Current wording

During the three months ended March 31, 2026, we declared and paid total common dividends of $11.8 million.

Previous wording

On October 23, 2025, our board of directors declared a quarterly cash dividend of $0.18 per common share, payable on November 21, 2025 to all common stockholders of record as of the close of business on November 7, 2025.

Current wording

On April 23, 2026, our board of directors declared a quarterly cash dividend of $0.20 per common share, payable on May 22, 2026 to all common stockholders of record as of the close of business on May 8, 2026.

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 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.

Current wording

On January 29, 2026, our board of directors authorized a new stock repurchase program through January 2027, pursuant to which we are authorized to repurchase, in the aggregate, up to $125.0 million of our outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. During the three months ended March 31, 2026, we paid $47.5 million to repurchase an aggregate of 1,238,216 shares of our common stock at an average price of $38.40 per share pursuant to the stock repurchase program.

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.

Current wording

We present certain measures in our selected financial data that are not measures of financial performance recognized by 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 used by management, investors and analysts to assess the use of equity. 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).

Previous 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.

Current wording

Our balance sheet, operating results and certain metrics during 2025 and the first quarter of 2026 reflected uncertainty around general economic, market and business conditions that we expect will remain uncertain for the remainder of 2026. The extent of the impacts of uncertain economic conditions on our financial performance during the remainder of 2026 will depend in part on developments outside of our control, including, among others, changes in 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. These 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 the first quarter of 2026 have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2026.

Previous wording

Uncertainty of general economic, market and business conditions impact 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. Significant judgment is required to estimate the severity and duration of the current economic uncertainties, as well as its potential impact on borrower cash flow. While all industries could experience volatility and adverse impacts, certain of our loan portfolio industry sectors and subsectors, including office buildings, retail, hotel/motel and auto note financing, have an increased level of risk given business and consumer sensitivity to interest rates and the size and permanence of tariffs. Refer to the discussions in the “Financial Condition – Loan Portfolio” and “Financial Condition – Allowance for Credit Losses” sections that follow for more details regarding the Bank’s loan portfolio and significant assumptions and estimates involved in estimating credit losses.

Current wording

Uncertainty of general economic, market and business conditions impacts 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. Significant judgment is required to estimate the severity and duration of the current economic uncertainties, as well as its potential impact on borrower cash flow. While all industries could experience volatility and adverse impacts, certain of our loan portfolio industry sectors and subsectors, including office buildings, retail and auto note financing, have an increased level of risk given business and consumer sensitivity to interest rates and the size and permanence of tariffs. Refer to the discussions in the “Financial Condition – Loan Portfolio” and “Financial Condition – Allowance for Credit Losses” sections that follow for more details regarding the Bank’s loan portfolio and significant assumptions and estimates involved in estimating credit losses.

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 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.

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 2025, deposit costs remained elevated despite actions we took to reduce the interest paid on our interest-bearing deposits. Our cost of deposits decreased during the three months ended March 31, 2026, compared to the same period of 2025, as a result of the rate reductions since September 2025. Additionally, at March 31, 2026, 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

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.

Current wording

We expect that overall deposit funding costs will continue to be influenced by various factors, including, but not limited to competitive pressures, broader economic conditions, future changes in the target range for the federal funds rate, customer behavior and 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 March 31, 2026.

Previous wording

We expect uncertainties related to economic headwinds discussed above, the impact of interest rate movements on the shape and inversions of the yield curve and the increased cost and challenge for deposits that persisted through 2024, to continue during the remainder of 2025.

Current wording

We expect uncertainties related to economic headwinds discussed above, the impact of interest rate movements on the shape and inversions of the yield curve and the continued active management of deposits and related funding costs that persisted through 2025 and into the first quarter of 2026, to continue during the remainder of 2026.

Previous wording

Continuing macroeconomic challenges related to mortgage loan origination volumes, customer sensitivity to interest rates and resulting demand for certain products have resulted in a challenging environment associated with our reporting segments, resulting in variability in their operating results.

Current wording

Continuing macroeconomic challenges related to mortgage loan origination volumes, customer sensitivity to interest rates and resulting demand for certain products have resulted in a challenging environment associated with the mortgage origination segment’s short- and long-term financial condition, resulting in variability in their operating results.

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, 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.

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 investment advisers registered with the SEC under the Investment Advisers Act of 1940, as amended.

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 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.

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. We generated $112.1 million in net interest income during the three months ended March 31, 2026, compared with net interest income of $105.1 million during the three months ended March 31, 2025. The change in reportable business segment net interest income during the three months ended March 31, 2026, compared with the same period in 2025, primarily reflected improvements within the banking segment and corporate.

Previous 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.

Current wording

In the aggregate, we generated $188.4 million and $213.3 million in noninterest income during the three months ended March 31, 2026 and 2025, respectively. The decrease in noninterest income during the three months ended March 31, 2026, compared to the same period in 2025, was predominantly attributable, as noted in the segment results table previously presented, primarily due to a decrease in pre-tax gains associated with merchant bank equity investment activity within corporate, partially offset by increased noninterest income within our broker-dealer segment from principal transactions, commissions and fees and within our mortgage origination segment from net gains from sale of loans.

Previous 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.

Current wording

Income applicable to common stockholders during the three months ended March 31, 2026 was $37.8 million, or $0.64 per diluted share, compared to $42.1 million, or $0.65 per diluted share, during the three months ended March 31, 2025. Hilltop’s financial results during the three months ended March 31, 2026, compared with three months ended March 31, 2025, are discussed in more detail below and within the respective “Banking Segment,” “Broker-Dealer Segment,” “Mortgage Origination Segment” and “Corporate” segment results sections that follow.

Previous 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

Current wording

Certain items included in net income for the three months ended March 31, 2026 and 2025 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 March 31, 2026 and 2025 included net accretion on earning assets and liabilities of $1.3 million and $1.1 million, respectively, and amortization of identifiable intangibles of $0.2 million and $0.3 million, respectively, related to the Bank Transactions.

Previous 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.

Current wording

During the three months ended March 31, 2026 and 2025, purchase accounting contributed 4 and 4 basis points, respectively, to our consolidated taxable equivalent net interest margin of 3.15% and 2.86%, respectively. The purchase accounting activity was primarily related to the accretion of discount of loans which totaled $1.3 million and $1.1 million during the three months ended March 31, 2026 and 2025, respectively, associated with the Bank Transactions.

Previous wording

The tables below provide additional details regarding our consolidated net interest income (dollars in thousands).

Current wording

The table below provides additional details regarding our consolidated net interest income (dollars in thousands).

Previous 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.

Current wording

On a consolidated basis, the change in net interest income during the three months ended March 31, 2026, compared with the same period in 2025, was primarily due to decreased costs of deposits from rate decreases, partially offset by decreased loans held for investment yield and interest-bearing deposits in other institutions 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 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

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 March 31, 2026, the provision for credit losses was primarily driven by a build in the allowance related to specific reserves and net charge-offs, partially offset by changes in the U.S. economic outlook associated with collectively evaluated loans and loan portfolio changes, including

Previous 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.

Current wording

changes in loan mix and risk rating grade migration, within the banking segment since the prior quarter. 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 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.

Current wording

Noninterest expense decreased during the three months ended March 31, 2026, compared with the same period in 2025, primarily due to a net decrease in employees’ compensation and benefits within corporate associated with the sale of a merchant bank equity investment in the first quarter of 2025, partially offset by an increase within our broker-dealer segment associated with increases in employees’ compensation and benefits. During 2025 and through the first quarter of 2026, we continued to experience increases in certain noninterest expenses, compared with respective prior periods, including compensation, occupancy, and software costs, due to inflationary pressures. We expect such inflationary headwinds to continue during the remainder of 2026.

Previous 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.

Current wording

Effective income tax rates during the three months ended March 31, 2026 and 2025 were 22.6% and 22.7%, respectively. During each of the three months ended March 31, 2026 and 2025, 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 investments in tax-exempt instruments.

Previous 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.

Current wording

The increase in income before income taxes during the three months ended March 31, 2026, compared with the same period in 2025, was primarily due to an increase in net interest income and a decrease in the provision for credit losses, partially offset by an increase in noninterest expense. 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

As discussed in more detail below, the banking segment's overall deposit costs decreased during the first nine months of 2025, primarily due to lower rates on interest-bearing deposits and certain customers moving funds out of our higher yielding deposit products. This cost reduction was partially offset by competitive pressures and the reallocation of funds from noninterest-bearing to interest-bearing accounts. We are continuing to actively manage our overall deposit costs and anticipate potential opportunities to further lower interest-bearing deposit rates. Future decisions on the costs of deposits will 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 rate in September 2025, future changes in the target range for the federal funds rate, customer behavior and our liquidity position at that time.

Current wording

As discussed in more detail below, the banking segment's overall deposit costs decreased during the first quarter of 2026, primarily due to lower rates on interest-bearing deposits on certain products and product tiers in conjunction with rate reductions by the Federal Reserve to lower the effective funds rate towards the end of 2025. We are continuing to actively manage our overall deposit costs and will continue to seek opportunities to further lower interest-bearing deposit rates if they present themselves. Future decisions on the costs of deposits will be influenced by various factors, including, but not limited to competitive pressures, broader economic conditions, future changes in the target range for the federal funds rate, customer behavior and our liquidity position at that time.

Previous 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.

Current wording

During the three months ended March 31, 2026 and 2025, purchase accounting contributed 5 and 3 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 3.39% and 2.97%, 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 tables below provide additional details regarding our banking segment’s net interest income (dollars in thousands).

Current wording

The table below provides additional details regarding our banking segment’s net interest income (dollars in thousands).

Previous 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

Current wording

The increase in net interest income during the three months ended March 31, 2026, compared to the same period in 2025, as noted in the table above, was driven by decreased funding costs on our deposit products from rate decreases. This decrease was partially offset by lower earnings on interest‑earning assets due to reduced balances and lower yields and by increased interest income from loans held for investment reflecting higher loan volumes. The average rate paid on interest-bearing liabilities decreased 67 basis points from 3.23% for the three months ended March 31, 2025 to 2.56% for the three months ended March 31, 2026, while the average yield on interest-earning assets decreased 5 basis points from 5.20% for the three months ended March 31, 2025 to 5.15% for the three months ended March 31, 2026.

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 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.

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 March 31, 2026, approximately $501 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 18% 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 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.

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 months ended March 31, 2026, compared to the same period of 2025. We expect such costs during the remainder of 2026 will continue to be influenced by various factors, including, but not limited to competitive pressures, broader economic conditions, 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 March 31, 2026, total estimated uninsured deposits were $5.9 billion, or approximately 56% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $640.8 million and internal accounts of $448.2 million, were $4.8 billion, or approximately 46% of total deposits.

Previous 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.

Current wording

The banking segment retained approximately $54.9 million and $62.5 million in mortgage loans originated by the mortgage origination segment during the three months ended March 31, 2026 and 2025, 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 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

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 March 31, 2026, the provision for credit losses was primarily driven by a build in the allowance related to specific reserves and net charge-offs, partially offset 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 since the prior quarter. The net impact to the allowance of changes associated with individually evaluated loans during the three months ended March 31, 2026 included a provision for credit losses of $4.0 million, while collectively evaluated loans during the three months ended March 31, 2026 included a reversal of credit losses of $2.3 million. The change in the allowance for credit losses during the noted period also reflected other factors including, but not limited to, 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 months ended March 31, 2026 was also impacted by net charge-offs of $4.3 million. 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 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.

Current wording

During the three months ended March 31, 2025, the increase in the provision for credit losses 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 within the banking segment since the prior quarter. The net impact to the allowance of changes associated with collectively and individually evaluated loans during the three months ended March 31, 2025 included a provision for credit losses of $7.7 million and $1.7 million, respectively. The change in the allowance for credit losses during the noted period 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. The change in the allowance for credit losses during the three months ended March 31, 2025 was also impacted by net charge-offs of $4.3 million.

Previous 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.

Current wording

The banking segment’s noninterest income increased slightly during the three months ended March 31, 2026, compared to the same period in 2025.

Previous 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.

Current wording

The banking segment’s noninterest expense increased during the three months ended March 31, 2026, compared to the same period in 2025, primarily due to increases in professional fees, employees’ compensation and benefits and occupancy and equipment expenses. The increase in professional fees during 2026, compared to the same period in 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 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.

Current wording

and structured finance business lines. These increases were offset by a decrease in the public finance services business line. The increase in the fixed income business line’s net revenues was due primarily to improved revenue earned from sales activities in both taxable and municipal capital markets divisions. The increase in the wealth management business line’s net revenue was driven by an increase in asset management fees revenues generated from customer assets under management and earnings on over-the-counter securities transactions. 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 and commodities transactions offset by a decrease in housing revenue period over period. The decrease in the public finance services business lines was due to a decrease in advisory fees. Income before income taxes for the three months ended March 31, 2026 was impacted by the increases in net revenue as described above and a net increase in noninterest expense.

Previous wording

In the broker-dealer segment, interest is earned from securities lending activities, interest charged on customer margin loan balances and interest earned on trading securities used to support sales, underwriting and other customer activities. The increase in net interest income during the three months ended September 30, 2025, compared with the same period in 2024, was primarily due to the increase in net interest income earned from our stock lending activities. During the nine months ended September 30, 2025, compared with the same period in 2024, along with the increase in our stock lending activities, the broker-dealer segment experienced an increase in net interest earned on inventory positions within the fixed income services and structured finance business lines, partially offset by the net interest earned on our correspondent inventory positions.

Current wording

In the broker-dealer segment, interest is earned from securities lending activities, interest charged on customer margin loan balances and interest earned on trading securities used to support sales, underwriting and other customer activities.