Hilltop Holdings Inc. 10-Q

Hilltop Holdings Inc._March 31, 2025 Table of Contents ​ ​ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ​ FORM 10-Q ​ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ For th e quarterly period ended March 31, 2025 ​ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ​ Commission File Number: 1-31987 ​ Hilltop Holdings Inc. (Exact name of registrant as specified in its charter) ​ ​ ​ ​ Maryland ​ 84-1477939 (State or other jurisdiction of incorporation or ​ (I.R.S. Employer Identification No.) organization) ​ ​ ​ ​ ​ 6565 Hillcrest Avenue ​ ​ Dallas , TX ​ 75205 (Address of principal executive offices) ​ (Zip Code) ​ ( 214 ) 855-2177 (Registrant’s telephone number, including area code) ​ Securities registered pursuant to section 12(b) of the Act: ​ ​ ​ ​ ​ ​ Title of each class ​ Trading symbol ​ Name of each exchange on which registered Common Stock, par value $0.01 per share ​ HTH ​ New York Stock Exchange ​ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ◻ ​ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ◻ ​ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ​ ​ ​ ​ Large accelerated filer ⌧ ​ Accelerated filer ◻ ​ ​ ​ Non-accelerated filer ◻ ​ ​ Smaller reporting company ☐ ​ ​ ​ Emerging growth company ☐ ​ ​ ​ ​ ​ ​ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ ​ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ⌧ ​ The number of shares of the registrant's common stock outstanding at April 25, 2025 was 64,155,154 . ​ ​ ​ ​ Table of Contents HILLTOP HOLDINGS INC. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025 ​ TABLE OF CONTENTS ​ ​ ​ ​ PART I — FINANCIAL INFORMATION ​ ​ ​ ​ Item 1 . Financial Statements 3 ​ Consolidated Balance Sheets 3 ​ Consolidated Statements of Operations 4 ​ Consolidated Statements of Comprehensive Income 5 ​ Consolidated Statements of Stockholders’ Equity 6 ​ Consolidated Statements of Cash Flows 7 ​ Notes to Consolidated Financial Statements 8 ​ ​ ​ Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 44 ​ ​ ​ Item 3. Quantitative and Qualitative Disclosures About Market Risk 88 ​ ​ ​ Item 4. Controls and Procedures 92 ​ ​ ​ ​ ​ ​ PART II — OTHER INFORMATION ​ ​ ​ Item 1. Legal Proceedings 93 ​ ​ ​ Item 1A. Risk Factors 93 ​ ​ ​ Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 93 ​ ​ ​ Item 5. Other Information 93 ​ ​ ​ Item 6. Exhibits 94 ​ 2 Table of Contents PART I. FINANCIAL INFORMATION ​ Item 1. Financial Statements. HILLTOP HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2025 2024 Assets ​ ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 1,702,623 ​ $ 2,298,977 ​ Federal funds sold ​ 650 ​ 650 ​ Assets segregated for regulatory purposes ​ ​ 88,451 ​ ​ 70,963 ​ Securities purchased under agreements to resell ​ ​ 99,099 ​ ​ 88,728 ​ Securities: ​ ​ ​ ​ ​ ​ ​ Trading, at fair value ​ 647,158 ​ 524,916 ​ Available for sale, at fair value, net (amortized cost of $ 1,492,604 and $ 1,498,415 , respectively) ​ 1,405,170 ​ 1,396,549 ​ Held to maturity, at amortized cost, net (fair value of $ 687,469 and $ 649,872 , respectively) ​ ​ 762,369 ​ ​ 737,899 ​ Equity, at fair value ​ ​ 286 ​ ​ 297 ​ ​ ​ 2,814,983 ​ ​ 2,659,661 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ 818,328 ​ 858,665 ​ Loans held for investment, net of unearned income ​ 7,966,777 ​ 7,950,551 ​ Allowance for credit losses ​ ( 106,197 ) ​ ( 101,116 ) ​ Loans held for investment, net ​ 7,860,580 ​ 7,849,435 ​ ​ ​ ​ ​ ​ ​ ​ ​ Broker-dealer and clearing organization receivables ​ 1,450,077 ​ 1,452,366 ​ Premises and equipment, net ​ 143,957 ​ 148,245 ​ Operating lease right-of-use assets ​ ​ 93,451 ​ 90,563 ​ Mortgage servicing rights ​ ​ 6,903 ​ ​ 5,723 ​ Other assets ​ 459,774 ​ 470,073 ​ Goodwill ​ 267,447 ​ 267,447 ​ Other intangible assets, net ​ 6,376 ​ 6,633 ​ Total assets ​ $ 15,812,699 ​ $ 16,268,129 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' Equity ​ ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing ​ $ 2,859,828 ​ $ 2,768,707 ​ Interest-bearing ​ 7,972,138 ​ 8,296,615 ​ Total deposits ​ 10,831,966 ​ 11,065,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ Broker-dealer and clearing organization payables ​ 1,446,886 ​ 1,331,902 ​ Short-term borrowings ​ 705,008 ​ 834,023 ​ Securities sold, not yet purchased, at fair value ​ ​ 63,171 ​ ​ 57,234 ​ Notes payable ​ 198,043 ​ 347,667 ​ Operating lease liabilities ​ ​ 110,815 ​ 109,103 ​ Other liabilities ​ 227,988 ​ 304,566 ​ Total liabilities ​ 13,583,877 ​ 14,049,817 ​ Commitments and contingencies (see Notes 13 and 14) ​ ​ ​ ​ ​ ​ ​ Stockholders' equity: ​ ​ ​ ​ ​ ​ ​ Hilltop stockholders' equity: ​ ​ ​ ​ ​ ​ ​ Common stock, $ 0.01 par value, 125,000,000 shares authorized; 64,154,443 and 64,967,984 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively ​ 642 ​ 650 ​ Additional paid-in capital ​ 1,037,138 ​ 1,052,219 ​ Accumulated other comprehensive loss ​ ( 100,654 ) ​ ( 111,497 ) ​ Retained earnings ​ ​ 1,262,586 ​ 1,248,593 ​ Total Hilltop stockholders' equity ​ 2,199,712 ​ 2,189,965 ​ Noncontrolling interests ​ 29,110 ​ 28,347 ​ Total stockholders' equity ​ 2,228,822 ​ 2,218,312 ​ Total liabilities and stockholders' equity ​ $ 15,812,699 ​ $ 16,268,129 ​ ​ See accompanying notes . ​ 3 Table of Contents HILLTOP HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Interest income: ​ ​ ​ ​ ​ ​ ​ Loans, including fees ​ $ 124,692 ​ $ 134,331 ​ Securities borrowed ​ ​ 15,809 ​ ​ 20,561 ​ Securities: ​ ​ ​ ​ ​ ​ ​ Taxable ​ 24,782 ​ 26,241 ​ Tax-exempt ​ 2,613 ​ 2,415 ​ Other ​ 24,903 ​ 26,066 ​ Total interest income ​ 192,799 ​ 209,614 ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense: ​ ​ ​ ​ ​ ​ ​ Deposits ​ 60,051 ​ 69,144 ​ Securities loaned ​ ​ 14,736 ​ ​ 19,039 ​ Short-term borrowings ​ 8,103 ​ 11,588 ​ Notes payable ​ 3,653 ​ 3,590 ​ Other ​ 1,139 ​ 2,632 ​ Total interest expense ​ 87,682 ​ 105,993 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income ​ 105,117 ​ 103,621 ​ Provision for (reversal of) credit losses ​ 9,338 ​ ( 2,871 ) ​ Net interest income after provision for (reversal of) credit losses ​ 95,779 ​ 106,492 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income: ​ ​ ​ ​ ​ ​ ​ Net gains from sale of loans and other mortgage production income ​ 45,281 ​ 40,197 ​ Mortgage loan origination fees ​ 22,451 ​ 26,438 ​ Securities commissions and fees ​ 33,728 ​ 30,373 ​ Investment and securities advisory fees and commissions ​ ​ 36,628 ​ 30,226 ​ Other ​ 75,252 ​ 54,384 ​ Total noninterest income ​ 213,340 ​ 181,618 ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense: ​ ​ ​ ​ ​ ​ ​ Employees' compensation and benefits ​ 176,240 ​ 165,830 ​ Occupancy and equipment, net ​ 19,782 ​ 21,912 ​ Professional services ​ 4,114 ​ 9,731 ​ Other ​ 51,337 ​ 52,550 ​ Total noninterest expense ​ 251,473 ​ 250,023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ 57,646 ​ 38,087 ​ Income tax expense ​ 13,114 ​ 8,565 ​ Net income ​ 44,532 ​ 29,522 ​ Less: Net income attributable to noncontrolling interest ​ 2,416 ​ 1,854 ​ Income attributable to Hilltop ​ $ 42,116 ​ $ 27,668 ​ ​ ​ ​ ​ ​ ​ ​ ​ Earnings per common share: ​ ​ ​ ​ ​ ​ ​ Basic ​ $ 0.65 ​ $ 0.42 ​ Diluted ​ $ 0.65 ​ $ 0.42 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average share information: ​ ​ ​ ​ ​ ​ ​ Basic ​ 64,613 ​ 65,200 ​ Diluted ​ 64,615 ​ 65,214 ​ ​ See accompanying notes . ​ ​ 4 Table of Contents HILLTOP HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Net income ​ $ 44,532 ​ $ 29,522 ​ Other comprehensive income (loss): ​ ​ ​ ​ ​ ​ ​ Change in fair value of cash flow and fair value hedges, net taxes of $( 465 ) and $ 94 , respectively ​ ​ ( 1,581 ) ​ ​ 541 ​ Net unrealized gains (losses) on securities available for sale, net taxes of $ 3,291 and $ 477 , respectively ​ 11,140 ​ ( 86 ) ​ Reclassification adjustment for gains included in net income, net taxes of $ 0 and $ 34 , respectively ​ — ​ 114 ​ Amortization of unrealized losses on securities transferred from available-for-sale to held-to-maturity, net taxes of $ 386 and $ 400 , respectively ​ ​ 1,284 ​ ​ 1,330 ​ Comprehensive income ​ 55,375 ​ 31,421 ​ Less: comprehensive income attributable to noncontrolling interest ​ 2,416 ​ 1,854 ​ ​ ​ ​ ​ ​ ​ ​ ​ Comprehensive income applicable to Hilltop ​ $ 52,959 ​ $ 29,567 ​ ​ See accompanying notes. ​ ​ 5 Table of Contents ​ HILLTOP HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Deferred ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ Compensation ​ Employee ​ Hilltop ​ ​ ​ ​ Total ​ Common Stock ​ Paid-in ​ Comprehensive ​ Retained ​ Employee Stock ​ Stock Trust ​ Stockholders’ ​ Noncontrolling ​ Stockholders’ ​ Shares ​ Amount ​ Capital ​ Loss ​ Earnings ​ Trust, Net ​ Shares ​ Amount ​ Equity ​ Interest ​ Equity Balance, December 31, 2023 65,153 ​ $ 652 ​ $ 1,054,662 ​ $ ( 121,505 ) ​ $ 1,189,222 ​ $ 228 ​ 10 ​ $ ( 292 ) ​ $ 2,122,967 ​ $ 27,362 ​ $ 2,150,329 Net income — ​ ​ — ​ ​ — ​ ​ — ​ ​ 27,668 ​ ​ — ​ — ​ ​ — ​ ​ 27,668 ​ ​ 1,854 ​ ​ 29,522 Other comprehensive income — ​ ​ — ​ ​ — ​ ​ 1,899 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 1,899 ​ ​ — ​ ​ 1,899 Stock-based compensation expense — ​ ​ — ​ ​ 2,940 ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 2,940 ​ ​ — ​ ​ 2,940 Common stock issued to board members 4 ​ ​ — ​ ​ 121 ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 121 ​ ​ — ​ ​ 121 Issuance of common stock related to share-based awards, net 430 ​ ​ 4 ​ ​ ( 2,755 ) ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 2,751 ) ​ ​ — ​ ​ ( 2,751 ) Repurchases of common stock ( 320 ) ​ ​ ( 3 ) ​ ​ ( 5,137 ) ​ ​ — ​ ​ ( 4,801 ) ​ ​ — ​ — ​ ​ — ​ ​ ( 9,941 ) ​ ​ — ​ ​ ( 9,941 ) Dividends on common stock ($ 0.17 per share) — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 11,076 ) ​ ​ — ​ — ​ ​ — ​ ​ ( 11,076 ) ​ ​ — ​ ​ ( 11,076 ) Deferred compensation plan — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 113 ) ​ ( 5 ) ​ ​ 150 ​ ​ 37 ​ ​ — ​ ​ 37 Net cash distributed to noncontrolling interest — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 1,650 ) ​ ​ ( 1,650 ) Balance, March 31, 2024 65,267 ​ $ 653 ​ $ 1,049,831 ​ $ ( 119,606 ) ​ $ 1,201,013 ​ $ 115 ​ 5 ​ $ ( 142 ) ​ $ 2,131,864 ​ $ 27,566 ​ $ 2,159,430 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, December 31, 2024 64,968 ​ $ 650 ​ $ 1,052,219 ​ $ ( 111,497 ) ​ $ 1,248,593 ​ $ — ​ — ​ $ — ​ $ 2,189,965 ​ $ 28,347 ​ $ 2,218,312 Net income — ​ ​ — ​ ​ — ​ ​ — ​ ​ 42,116 ​ ​ — ​ — ​ ​ — ​ ​ 42,116 ​ ​ 2,416 ​ ​ 44,532 Other comprehensive income — ​ ​ — ​ ​ — ​ ​ 10,843 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 10,843 ​ ​ — ​ ​ 10,843 Stock-based compensation expense — ​ ​ — ​ ​ 3,610 ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 3,610 ​ ​ — ​ ​ 3,610 Common stock issued to board members 4 ​ ​ — ​ ​ 121 ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ 121 ​ ​ — ​ ​ 121 Issuance of common stock related to share-based awards, net 229 ​ ​ 2 ​ ​ ( 2,015 ) ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 2,013 ) ​ ​ — ​ ​ ( 2,013 ) Repurchases of common stock ( 1,047 ) ​ ​ ( 10 ) ​ ​ ( 16,797 ) ​ ​ — ​ ​ ( 16,474 ) ​ ​ — ​ — ​ ​ — ​ ​ ( 33,281 ) ​ ​ — ​ ​ ( 33,281 ) Dividends on common stock ($ 0.18 per share) — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 11,649 ) ​ ​ — ​ — ​ ​ — ​ ​ ( 11,649 ) ​ ​ — ​ ​ ( 11,649 ) Net cash distributed to noncontrolling interest — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 1,653 ) ​ ​ ( 1,653 ) Balance, March 31, 2025 64,154 ​ $ 642 ​ $ 1,037,138 ​ $ ( 100,654 ) ​ $ 1,262,586 ​ $ — ​ — ​ $ — ​ $ 2,199,712 ​ $ 29,110 ​ $ 2,228,822 ​ See accompanying notes. ​ ​ ​ ​ 6 Table of Contents HILLTOP HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Operating Activities ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 44,532 ​ $ 29,522 ​ Adjustments to reconcile net income to net cash provided by (used in) operating activities: ​ ​ ​ ​ ​ ​ ​ Provision for (reversal of) credit losses ​ 9,338 ​ ( 2,871 ) ​ Depreciation, amortization and accretion, net ​ 4,606 ​ 5,026 ​ Net change in fair value of equity securities ​ 11 ​ — ​ Equity in earnings of merchant banking subsidiaries ​ ​ ( 42,705 ) ​ ( 2,125 ) ​ Deferred income taxes ​ ​ 2,400 ​ ​ 1,871 ​ Other, net ​ 3,308 ​ 145 ​ Net change in securities purchased under agreements to resell ​ ( 10,371 ) ​ ( 11,597 ) ​ Net change in trading securities ​ ( 96,826 ) ​ ( 141,709 ) ​ Net change in broker-dealer and clearing organization receivables ​ 41,784 ​ 111,867 ​ Net change in other assets ​ 6,316 ​ 5,401 ​ Net change in broker-dealer and clearing organization payables ​ 112,058 ​ 15,861 ​ Net change in other liabilities ​ ( 79,627 ) ​ ( 97,251 ) ​ Net change in securities sold, not yet purchased ​ 5,937 ​ 25,690 ​ Change in valuation of mortgage servicing rights asset ​ ​ 586 ​ 4,383 ​ Net gains from sales of loans ​ ( 45,281 ) ​ ( 40,197 ) ​ Loans originated for sale ​ ​ ( 2,105,473 ) ​ ​ ( 1,951,478 ) ​ Proceeds from loans sold ​ ​ 2,155,244 ​ 2,118,309 ​ Net cash provided by operating activities ​ 5,837 ​ 70,847 ​ Investing Activities ​ ​ ​ ​ ​ ​ ​ Proceeds from maturities and principal reductions of securities held to maturity ​ 17,998 ​ ​ 23,513 ​ Proceeds from sales, maturities and principal reductions of securities available for sale ​ 51,148 ​ ​ 46,538 ​ Proceeds from sales, maturities and principal reductions of equity securities ​ — ​ ​ 1,333 ​ Purchases of securities held to maturity ​ ( 41,120 ) ​ ​ — ​ Purchases of securities available for sale ​ ( 38,522 ) ​ ​ ( 24,039 ) ​ Net change in loans held for investment ​ ​ ( 63,775 ) ​ ​ ( 31,472 ) ​ Purchases of premises and equipment and other assets ​ ( 797 ) ​ ​ ( 2,443 ) ​ Proceeds from sales and distributions of premises and equipment and other assets ​ 48,231 ​ ​ 2,121 ​ Net cash paid to Federal Home Loan Bank and Federal Reserve Bank stock ​ ( 25 ) ​ ​ ( 22 ) ​ Net cash provided by (used in) investing activities ​ ​ ( 26,862 ) ​ ​ 15,529 ​ Financing Activities ​ ​ ​ ​ ​ ​ ​ Net change in deposits ​ ( 230,430 ) ​ ( 189,229 ) ​ Net change in short-term borrowings ​ ( 141,748 ) ​ ( 6,811 ) ​ Proceeds from long-term borrowings ​ 260,157 ​ — ​ Payments on long-term borrowings ​ ( 397,079 ) ​ — ​ Payments to repurchase common stock ​ ( 33,281 ) ​ ( 9,941 ) ​ Dividends paid on common stock ​ ​ ( 11,649 ) ​ ( 11,076 ) ​ Net cash distributed to noncontrolling interest ​ ​ ( 1,653 ) ​ ( 1,650 ) ​ Other, net ​ ( 2,158 ) ​ ( 2,981 ) ​ Net cash used in financing activities ​ ​ ( 557,841 ) ​ ( 221,688 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Net change in cash, cash equivalents and restricted cash ​ ​ ( 578,866 ) ​ ( 135,312 ) ​ Cash, cash equivalents and restricted cash, beginning of period ​ ​ 2,370,590 ​ 1,916,745 ​ Cash, cash equivalents and restricted cash, end of period ​ $ 1,791,724 ​ $ 1,781,433 ​ ​ ​ ​ ​ ​ ​ ​ ​ Reconciliation of Cash, Cash Equivalents and Restricted Cash to Consolidated Balance Sheets ​ ​ ​ ​ ​ ​ ​ Cash and due from banks ​ $ 1,702,623 ​ $ 1,710,066 ​ Federal funds sold ​ ​ 650 ​ ​ 650 ​ Assets segregated for regulatory purposes ​ ​ 88,451 ​ ​ 70,717 ​ Total cash, cash equivalents and restricted cash ​ $ 1,791,724 ​ $ 1,781,433 ​ Supplemental Disclosures of Cash Flow Information ​ ​ ​ ​ ​ ​ ​ Cash paid for interest ​ $ 87,763 ​ $ 109,119 ​ Cash paid (received) for income taxes, net of refunds ​ $ ( 623 ) ​ $ 369 ​ Supplemental Schedule of Non-Cash Activities ​ ​ ​ ​ ​ ​ ​ Conversion of loans to other real estate owned ​ $ 4,842 ​ $ 2,766 ​ Transfer of loans held for investment to loans held for sale ​ $ — ​ $ 31,551 ​ Additions to mortgage servicing rights ​ $ 1,766 ​ $ 3,312 ​ ​ See accompanying notes. ​ 7 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (Unaudited) ​ 1. Summary of Significant Accounting and Reporting Policies ​ Nature of Operations ​ Hilltop Holdings Inc. (“Hilltop” and, collectively with its subsidiaries, the “Company”) is a financial holding company registered under the Bank Holding Company Act of 1956. The Company’s primary line of business is to provide business and consumer banking services from offices located throughout Texas through PlainsCapital Bank (the “Bank”). In addition, the Company provides an array of financial products and services through its broker-dealer and mortgage origination subsidiaries. ​ The Company, headquartered in Dallas, Texas, provides its products and services through two primary business units, PlainsCapital Corporation (“PCC”) and Hilltop Securities Holdings LLC (“Securities Holdings”). PCC is a financial holding company, that provides, through its subsidiaries, traditional banking, wealth and investment management and treasury management services primarily in Texas and residential mortgage lending throughout the United States. Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. ​ Basis of Presentation ​ The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”), and in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, these financial statements contain all adjustments necessary for a fair statement of the results of the interim periods presented. Accordingly, the financial statements do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”). Results for interim periods are not necessarily indicative of results to be expected for a full year or any future period. ​ The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates regarding the allowance for credit losses, the fair values of financial instruments, the mortgage loan indemnification liability, and the potential impairment of goodwill and identifiable intangible assets are particularly subject to change. The Company has applied its critical accounting policies and estimation methods consistently in all periods presented in these consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. ​ Hilltop owns 100 % of the outstanding stock of PCC. PCC owns 100 % of the outstanding stock of the Bank and 100 % of the membership interest in Hilltop Opportunity Partners LLC, a merchant bank utilized to facilitate investments in companies engaged in non-financial activities. The Bank owns 100 % of the outstanding stock of PrimeLending, a PlainsCapital Company (“PrimeLending”). ​ PrimeLending owns a 100 % membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds a controlling ownership interest in and is the managing member of certain affiliated business arrangements (“ABAs”). ​ Hilltop has a 100 % membership interest in Securities Holdings, which operates through its wholly-owned subsidiaries, Hilltop Securities Inc. (“Hilltop Securities”), Momentum Independent Network Inc. (“Momentum Independent Network” and collectively with Hilltop Securities, the “Hilltop Broker-Dealers”) and Hilltop Securities Asset Management, LLC. Hilltop Securities is a broker-dealer registered with the SEC and Financial Industry Regulatory Authority, Inc. (“FINRA”) and a member of the New York Stock Exchange (“NYSE”). Momentum Independent Network is an introducing broker- 8 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 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. ​ In addition, Hilltop owns 100 % of the membership interest in each of HTH Hillcrest Project LLC and Hilltop Investments I, LLC. Hilltop Investments I, LLC owns 50 % of the membership interest in HTH Diamond Hillcrest Land LLC (“Hillcrest Land LLC”) which is consolidated under the requirements of the Variable Interest Entities (“VIE”) Subsections of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). These entities are related to the Hilltop Plaza investment discussed in detail in Note 17 to the consolidated financial statements included in the Company’s 2024 Form 10-K and are collectively referred to as the “Hilltop Plaza Entities.” ​ The consolidated financial statements include the accounts of the above-named entities. Intercompany transactions and balances have been eliminated. Noncontrolling interests have been recorded for minority ownership in entities that are not wholly owned and are presented in compliance with the provisions of Noncontrolling Interest in Subsidiary Subsections of the ASC. ​ In preparing these consolidated financial statements, subsequent events were evaluated through the time the financial statements were issued. Financial statements are considered issued when they are widely distributed to all stockholders and other financial statement users, or filed with the SEC. ​ Significant accounting policies are detailed in Note 1 to the consolidated financial statements included in the Company’s 2024 Form 10-K. ​ Revision of Previously Issued Financial Statements ​ During the second quarter of 2024, the Company identified an immaterial error related to the classification within noninterest income associated with the allocation of earned revenue between commission and principal gains on certain principal trades of fixed income securities. As a result, certain prior period amounts have been corrected for consistency with the current period presentation. The Company assessed the materiality of this error and change in presentation on prior period consolidated financial statements in accordance with the SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements.” Based on this assessment, the Company concluded that previously issued financial statements were not materially misstated based upon overall considerations of both quantitative and qualitative factors. The revisions had no impact on the Consolidated Balance Sheets, Consolidated Statements of Cash Flows, Consolidated Statements of Comprehensive Income or Consolidated Statements of Changes in Stockholders’ Equity within these financial statements, or within previously filed financial statements. Further, the revisions did not result in a change in quarterly or year-to-date net income, basic or diluted earnings per share, or regulatory capital ratios. Accordingly, the Company corrected the immaterial error for the previously reported three months ended March 31, 2024 in this Quarterly Report on Form 10-Q. The following table presents the impact of the revisions of the previously filed financial statements for the three months ended March 31, 2024 to correct for prior period immaterial errors (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2024 ​ ​ (unaudited) ​ ​ As previously ​ Impact of ​ ​ ​ ​ ​ reported ​ Revision ​ As adjusted Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities commission and fees ​ $ 35,557 ​ $ ( 5,184 ) ​ $ 30,373 Other ​ ​ 49,200 ​ ​ 5,184 ​ ​ 54,384 ​ ​ ​ ​ 9 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 2. Recently Issued Accounting Standards ​ Accounting Standards Adopted In 2025 ​ In August 2023, the FASB issued ASU 2023-05 to require joint ventures to initially measure all contributions received and liabilities assumed upon its formation at fair value. The guidance is applicable to joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. The Company adopted the provisions of the amendments as of January 1, 2025. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. ​ In March 2024, the FASB issued ASU 2024-01 to clarify how an entity should determine whether a profits interest or similar award should be accounted for as a share-based payment arrangement or similar to a cash bonus or profit-sharing arrangement. The amendments are effective in annual periods beginning after December 15, 2024, and interim periods within those annual periods, with early adoption permitted. The Company adopted the provisions of the amendments as of January 1, 2025. The adoption of this amendment did not have a material impact on the Company’s consolidated financial statements. ​ Accounting Standards Issued But Not Yet Adopted ​ In October 2023, the FASB issued ASU 2023-06 to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations. The amendments will be effective on the date the SEC removes related disclosure requirements from Regulation S-X or Regulation S-K. If by June 30, 2027, the SEC has not removed the applicable disclosure requirements, the pending amendments will not become effective. Early adoption is prohibited. The Company does not expect the future adoption of this amendment to have a material impact on its consolidated financial statements since the Company is currently subject to the SEC’s disclosure and presentation requirements under Regulation S-X and Regulation S-K. ​ In December 2023, the FASB issued ASU 2023-09 to improve disclosures and presentation requirements to the transparency of the income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. The amendments are effective in annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the provisions of the amendments, which are not expected to have an impact on its financial condition or results of operations. The Company expects to adopt this guidance in its Annual Report on Form 10-K for the year ending December 31, 2025. ​ In November 2024, the FASB issued ASU 2024-03, which was further clarified through the issuance of ASU 2025-01 in January 2025, to improve disclosure on an entity’s expenses and provide more detailed information for specific expense categories in the notes to financial statements at interim and annual reporting periods. The amendments are effective in annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements. ​ ​ 3. Fair Value Measurements ​ Fair Value Measurements and Disclosures ​ The Company determines fair values in compliance with The Fair Value Measurements and Disclosures Topic of the ASC (the “Fair Value Topic”). The Fair Value Topic defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. The Fair Value Topic defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The Fair Value Topic assumes that transactions upon which fair value measurements are based occur in the principal market 10 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) for the asset or liability being measured. Further, fair value measurements made under the Fair Value Topic exclude transaction costs and are not the result of forced transactions. ​ The Fair Value Topic includes a fair value hierarchy that classifies fair value measurements based upon the inputs used in valuing the assets or liabilities that are the subject of fair value measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs, as indicated below. ​ ● Level 1 Inputs : Unadjusted quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date. ​ ● Level 2 Inputs : Observable inputs other than Level 1 prices. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, yield curves, prepayment speeds, default rates, credit risks and loss severities), and inputs that are derived from or corroborated by market data, among others. ​ ● Level 3 Inputs : Unobservable inputs that reflect an entity’s own estimates about the assumptions that market participants would use in pricing the assets or liabilities. Level 3 inputs include pricing models and discounted cash flow techniques, among others . ​ Fair Value Option ​ The Company has elected to measure substantially all of PrimeLending’s mortgage loans held for sale and the retained mortgage servicing rights (“MSR”) asset at fair value, under the provisions of the Fair Value Option Subsections of the ASC (the “Fair Value Option”). The Company elected to apply the provisions of the Fair Value Option to these items so that it would have the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. At March 31, 2025 and December 31, 2024, the aggregate fair value of PrimeLending’s mortgage loans held for sale accounted for under the Fair Value Option was $ 722.6 million and $ 809.8 million, respectively, and the unpaid principal balance of those loans was $ 708.8 million and $ 803.0 million, respectively. The interest component of fair value is reported as interest income on loans in the accompanying consolidated statements of operations. ​ The Company holds a number of financial instruments that are measured at fair value on a recurring basis, either by the application of the Fair Value Option or other authoritative pronouncements. The fair values of those instruments are determined primarily using Level 2 inputs, as further described in Note 3 to the consolidated financial statements included in the Company’s 2024 Form 10-K. Those inputs include quotes from mortgage loan investors and derivatives dealers and data from independent pricing services. The fair value of loans held for sale is determined using an exit price method. ​ The following tables present information regarding financial assets and liabilities measured at fair value on a recurring basis (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Level 1 Level 2 Level 3 Total March 31, 2025 ​ Inputs ​ Inputs ​ Inputs ​ Fair Value Trading securities ​ $ 8,531 ​ $ 637,961 ​ $ 666 ​ $ 647,158 ​ Available for sale securities ​ ​ — ​ ​ 1,374,616 ​ ​ 30,554 ​ ​ 1,405,170 ​ Equity securities ​ ​ 286 ​ ​ — ​ ​ — ​ ​ 286 ​ Loans held for sale ​ ​ — ​ ​ 736,210 ​ ​ 45,360 ​ ​ 781,570 ​ Derivative assets ​ ​ — ​ ​ 65,421 ​ ​ — ​ ​ 65,421 ​ MSR asset ​ ​ — ​ ​ — ​ ​ 6,903 ​ ​ 6,903 ​ Equity investments ​ ​ — ​ ​ — ​ ​ 21,260 ​ ​ 21,260 ​ Securities sold, not yet purchased ​ ​ 63,105 ​ ​ 66 ​ ​ — ​ ​ 63,171 ​ Derivative liabilities ​ ​ — ​ ​ 13,607 ​ ​ — ​ ​ 13,607 ​ ​ 11 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Level 1 Level 2 Level 3 ​ Total ​ December 31, 2024 ​ Inputs ​ Inputs ​ Inputs ​ ​ Fair Value ​ Trading securities ​ $ 11,001 ​ $ 510,585 ​ $ 3,330 ​ $ 524,916 ​ Available for sale securities ​ ​ — ​ ​ 1,366,733 ​ ​ 29,816 ​ ​ 1,396,549 ​ Equity securities ​ ​ 297 ​ ​ — ​ ​ — ​ ​ 297 ​ Loans held for sale ​ ​ — ​ ​ 761,125 ​ ​ 48,657 ​ ​ 809,782 ​ Derivative assets ​ ​ — ​ ​ 67,821 ​ ​ — ​ ​ 67,821 ​ MSR asset ​ ​ — ​ ​ — ​ ​ 5,723 ​ ​ 5,723 ​ Equity investments ​ ​ — ​ ​ — ​ ​ 22,015 ​ ​ 22,015 ​ Securities sold, not yet purchased ​ ​ 52,637 ​ ​ 4,597 ​ ​ — ​ ​ 57,234 ​ Derivative liabilities ​ ​ — ​ ​ 11,290 ​ ​ — ​ ​ 11,290 ​ ​ The following tables include a rollforward for those material financial instruments measured at fair value using Level 3 inputs (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Gains or Losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Realized or Unrealized) ​ ​ ​ ​ Balance, ​ ​ Transfers ​ Included in Other ​ ​ ​ Beginning of ​ Purchases/ ​ Sales/ ​ to (from) ​ Included in ​ Comprehensive ​ Balance, ​ ​ Period ​ Additions ​ Reductions ​ Level 3 ​ Net Income ​ Income (Loss) ​ End of Period Three Months Ended March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Trading securities ​ $ 3,330 ​ $ 637 ​ $ ( 3,442 ) ​ $ — ​ $ 141 ​ $ — ​ $ 666 Available for sale securities ​ ​ 29,816 ​ ​ — ​ ​ — ​ ​ — ​ ​ 738 ​ ​ — ​ ​ 30,554 Loans held for sale ​ ​ 48,657 ​ ​ 4,406 ​ ​ ( 6,734 ) ​ ​ — ​ ​ ( 969 ) ​ ​ — ​ ​ 45,360 MSR asset ​ ​ 5,723 ​ ​ 1,766 ​ ​ — ​ ​ — ​ ​ ( 586 ) ​ ​ — ​ 6,903 Equity investments ​ 22,015 ​ ​ — ​ ​ ( 7,448 ) ​ ​ — ​ ​ 6,693 ​ ​ — ​ 21,260 Total ​ $ 109,541 ​ $ 6,809 ​ $ ( 17,624 ) ​ $ — ​ $ 6,017 ​ $ — ​ $ 104,743 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities ​ $ 24,418 ​ $ — ​ $ ( 4,702 ) ​ $ — ​ $ 635 ​ $ 463 ​ $ 20,814 Loans held for sale ​ ​ 38,036 ​ ​ 25,342 ​ ​ ( 6,076 ) ​ ​ — ​ ​ ( 5,507 ) ​ ​ — ​ ​ 51,795 Loans held for investment ​ ​ 10,858 ​ ​ — ​ ​ — ​ ​ — ​ ​ 353 ​ ​ — ​ ​ 11,211 Derivative assets ​ ​ 820 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 820 MSR asset ​ ​ 96,662 ​ ​ 3,312 ​ ​ — ​ ​ — ​ ​ ( 4,383 ) ​ ​ — ​ ​ 95,591 Equity investments ​ ​ 19,540 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 19,540 Total ​ $ 190,334 ​ $ 28,654 ​ $ ( 10,778 ) ​ $ — ​ $ ( 8,902 ) ​ $ 463 ​ $ 199,771 ​ All net realized and unrealized gains (losses) in the tables above are reflected in the accompanying consolidated financial statements. The unrealized gains (losses) relate to financial instruments still held at March 31, 2025. ​ For material Level 3 financial instruments measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024, the significant unobservable inputs used in the fair value measurements were as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Range (Weighted-Average) Financial Instrument Fair Value Valuation Technique Unobservable Inputs March 31, 2025 ​ December 31, 2024 Trading securities ​ $ 666 ​ Discounted cash flow ​ Prepayment rate ​ — - 12 % ( 5 %) ​ 10 - 12 % ( 11 %) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for sale securities ​ ​ 24,257 ​ Discounted cash flow ​ Discount rate ​ 12.88 - 14.25 % ​ ​ ​ ​ 12.75 - 14.00 % ​ ​ ​ ​ ​ ​ 6,297 ​ Recent transaction ​ Recent transaction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ ​ 45,360 ​ Market comparable ​ Projected price ​ 78 - 94 % ( 92 %) ​ 78 - 95 % ( 93 %) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ MSR asset ​ ​ 6,903 ​ Discounted cash flow ​ Constant prepayment rate ​ ​ ​ ​ 10.53 % ​ ​ ​ ​ ​ 10.10 % ​ ​ ​ ​ ​ ​ ​ ​ Discount rate ​ ​ ​ ​ 15.19 % ​ ​ ​ ​ ​ 14.89 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity investments ​ ​ 19,785 ​ Market comparable ​ Market multiple ​ ​ ​ ​ 13.0 x ​ ​ ​ ​ ​ ​ 12.5 x ​ ​ ​ ​ ​ ​ ​ Discounted cash flow ​ Discount rate ​ ​ ​ ​ 13.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — ​ Market comparable ​ Market multiple ​ ​ ​ ​ ​ ​ ​ ​ ​ 2.0 x - 5.4 x ​ ​ ​ ​ ​ ​ ​ 1,475 ​ Recent transaction ​ Recent transaction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The fair value of certain trading securities are measured using Level 3 inputs. Periodically, the Bank acquires certain government guaranteed loans under Small Business Administration (“SBA”) lending programs which are later securitized into separate securities (“SBA Loans”), including SBA pools and interest only (“IO”) strips. The IO strips are reported at fair value using Level 3 inputs based upon projecting cash flows, which are then discounted to estimate the fair value. Prepayment rates are the most significant unobservable input. ​ The fair value of certain available for sale securities and loans held for investment, prior to the sale of such instruments, held by the Company’s merchant bank subsidiary are measured, under the provisions of the Fair Value Option, using the income approach with Level 3 inputs. The fair value of such financial instruments are based upon estimates of expected cash flows using unobservable inputs, including credit spreads derived from comparable securities and benchmark credit curves, and management’s knowledge of underlying collateral. ​ The fair value of certain loans held for sale that cannot be sold through normal sale channels or are non-performing is measured using Level 3 inputs. The fair value of such loans is generally based upon estimates of expected cash flows using unobservable inputs, including listing prices of comparable assets, uncorroborated expert opinions, and/or management’s knowledge of underlying collateral. ​ The fair value of certain derivatives held by the Company’s merchant bank subsidiary were measured using Level 3 inputs based upon estimates of expected cash flows using unobservable inputs, including management’s knowledge of underlying collateral prior to the sale of such instruments during the second quarter of 2024. ​ The MSR asset is reported at fair value, under the provisions of the Fair Value Option, using Level 3 inputs. The MSR asset is valued by projecting net servicing cash flows, which are then discounted to estimate the fair value. The fair value of the MSR asset is impacted by a variety of factors. Prepayment and discount rates, the most significant unobservable inputs, are discussed further in Note 7 to the consolidated financial statements. ​ The Company has elected to measure certain equity investments, prior to the sale of a single financial instrument during the first quarter of 2025, held by the Company’s merchant bank subsidiary under the provisions of the Fair Value Option using Level 3 inputs to mitigate volatility in reported earnings changes in fair value and better align with merchant bank investment strategy. Changes in fair value are reported within other noninterest income in the accompanying consolidated statements of operations. ​ The Company had no transfers between Levels 1 and 2 during the periods presented. Any transfers are based on changes in the observability and/or significance of the valuation inputs and are assumed to occur at the beginning of the quarterly reporting period in which they occur. ​ The following table presents those changes in fair value of material instruments recognized in the consolidated statements of operations that are accounted for under the Fair Value Option (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ Three Months Ended March 31, 2024 ​ Net Other Total Net Other Total ​ ​ Gains ​ Noninterest ​ Changes in ​ Gains ​ Noninterest ​ Changes in ​ ​ (Losses) ​ Income ​ Fair Value ​ (Losses) ​ Income ​ Fair Value Loans held for sale ​ $ 7,142 ​ $ — ​ $ 7,142 ​ $ ( 11,316 ) ​ $ — ​ $ ( 11,316 ) Loans held for investment ​ ​ — ​ ​ — ​ ​ — ​ ​ 94 ​ ​ — ​ ​ 94 MSR asset ​ ( 586 ) ​ — ​ ( 586 ) ​ ( 4,383 ) ​ — ​ ( 4,383 ) Equity investment ​ ​ — ​ 245 ​ 245 ​ — ​ — ​ — ​ Financial Assets Measured at Fair Value on a Non-Recurring Basis ​ Real estate acquired through foreclosure (“OREO”) is recorded at the time of each property’s respective acquisition date using management’s estimate of fair value. The Company determines fair value primarily using independent appraisals of OREO properties, less estimated cost to sell. In addition, facts and circumstances may dictate a fair value measurement when there is evidence of impairment. The resulting fair value measurements are classified as Level 2 inputs. At March 31, 2025 and December 31, 2024, the estimated fair value of OREO was $ 7.7 million and $ 2.8 million, respectively, and 13 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) the underlying fair value measurements utilized Level 2 inputs. The amounts are included in other assets within the consolidated balance sheets. During the reported periods, all fair value measurements for OREO subsequent to initial recognition utilized Level 2 inputs. The Company recorded no gains or losses during the three months ended March 31, 2025 and a total gain of $ 0.2 million during the three months ended March 31, 2024, which represent a change in fair value subsequent to initial recognition of the asset. ​ Financial Assets and Liabilities Not Measured at Fair Value on Recurring or Non-Recurring Basis ​ The Fair Value of Financial Instruments Subsection of the ASC requires disclosure of the fair value of financial assets and liabilities, including the financial assets and liabilities previously discussed. There have been no changes to the methods for determining estimated fair value for financial assets and liabilities as described in detail in Note 3 to the consolidated financial statements included in the Company’s 2024 Form 10-K. ​ The following tables present the carrying values and estimated fair values of financial instruments not measured at fair value on either a recurring or non-recurring basis (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Fair Value ​ Carrying Level 1 Level 2 Level 3 ​ ​ March 31, 2025 ​ Amount ​ Inputs ​ Inputs ​ Inputs ​ Total Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 1,703,273 ​ $ 1,703,273 ​ $ — ​ $ — ​ $ 1,703,273 Assets segregated for regulatory purposes ​ ​ 88,451 ​ ​ 88,451 ​ ​ — ​ ​ — ​ ​ 88,451 Securities purchased under agreements to resell ​ ​ 99,099 ​ ​ — ​ ​ 99,099 ​ ​ — ​ ​ 99,099 Held to maturity securities ​ ​ 762,369 ​ ​ — ​ ​ 687,469 ​ ​ — ​ ​ 687,469 Loans held for sale ​ ​ 36,757 ​ ​ — ​ ​ 4,325 ​ ​ 33,600 ​ ​ 37,925 Loans held for investment, net ​ ​ 7,860,580 ​ ​ — ​ ​ 324,223 ​ ​ 7,616,707 ​ ​ 7,940,930 Broker-dealer and clearing organization receivables ​ 1,450,077 ​ — ​ 1,450,077 ​ — ​ 1,450,077 Other assets ​ 71,117 ​ — ​ 71,117 ​ — ​ 71,117 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 10,831,966 ​ — ​ 10,826,773 ​ — ​ 10,826,773 Broker-dealer and clearing organization payables ​ 1,446,886 ​ — ​ 1,446,886 ​ — ​ 1,446,886 Short-term borrowings ​ 705,008 ​ — ​ 705,008 ​ — ​ 705,008 Debt ​ 198,043 ​ — ​ 187,183 ​ — ​ 187,183 Other liabilities ​ 17,062 ​ — ​ 17,062 ​ — ​ 17,062 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Estimated Fair Value ​ Carrying Level 1 Level 2 Level 3 ​ ​ December 31, 2024 ​ Amount ​ Inputs ​ Inputs ​ Inputs ​ Total Financial assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 2,299,627 ​ $ 2,299,627 ​ $ — ​ $ — ​ $ 2,299,627 Assets segregated for regulatory purposes ​ ​ 70,963 ​ ​ 70,963 ​ ​ — ​ ​ — ​ ​ 70,963 Securities purchased under agreements to resell ​ ​ 88,728 ​ ​ — ​ ​ 88,728 ​ ​ — ​ ​ 88,728 Held to maturity securities ​ ​ 737,899 ​ ​ — ​ ​ 649,872 ​ ​ — ​ ​ 649,872 Loans held for sale ​ ​ 48,883 ​ ​ — ​ ​ 1,436 ​ ​ 49,435 ​ ​ 50,871 Loans held for investment, net ​ ​ 7,849,435 ​ ​ — ​ ​ 363,718 ​ ​ 7,572,849 ​ ​ 7,936,567 Broker-dealer and clearing organization receivables ​ 1,452,366 ​ — ​ 1,452,366 ​ — ​ 1,452,366 Other assets ​ 69,545 ​ — ​ 69,545 ​ — ​ 69,545 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ 11,065,322 ​ — ​ 11,058,234 ​ — ​ 11,058,234 Broker-dealer and clearing organization payables ​ 1,331,902 ​ — ​ 1,331,902 ​ — ​ 1,331,902 Short-term borrowings ​ 834,023 ​ — ​ 834,023 ​ — ​ 834,023 Debt ​ 347,667 ​ — ​ 331,965 ​ — ​ 331,965 Other liabilities ​ 16,779 ​ — ​ 16,779 ​ — ​ 16,779 ​ The Company held equity investments other than securities of $ 28.3 million and $ 32.9 million at March 31, 2025 and December 31, 2024, respectively, which are included within other assets in the consolidated balance sheets. Of the $ 28.3 14 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) million of such equity investments held at March 31, 2025, $ 2.0 million do not have readily determinable fair values and each is measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The following table presents the adjustments to the carrying value of these investments during the periods presented (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 ​ Balance, beginning of period $ 1,979 $ 6,608 ​ Impairments and downward adjustments ​ ​ ( 21 ) ​ ​ — ​ Balance, end of period ​ $ 1,958 ​ $ 6,608 ​ ​ Merchant Bank Transaction ​ In January 2025, the Company’s 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. The Company’s 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 the Company’s aggregate interest in Moser Holdings, LLC as a component of other noninterest income within the consolidated statements of operations. 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 liquidation of Moser Holdings, LLC. ​ ​ 4. Securities ​ The fair value of trading securities is summarized as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 U.S. Treasury securities $ — $ 2,553 U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ Bonds ​ ​ 20,735 ​ ​ 9,984 ​ Residential mortgage-backed securities ​ 149,393 ​ 35,440 ​ Collateralized mortgage obligations ​ ​ 115,415 ​ ​ 125,515 ​ Other ​ ​ 1,468 ​ ​ 19,877 ​ Corporate debt securities ​ ​ 43,821 ​ ​ 60,594 ​ States and political subdivisions ​ ​ 289,923 ​ ​ 244,076 ​ Private-label securitized product ​ ​ 14,202 ​ ​ 16,208 ​ Other ​ ​ 12,201 ​ ​ 10,669 ​ Totals ​ $ 647,158 ​ $ 524,916 ​ ​ In addition to the securities shown above, the Hilltop Broker-Dealers enter into transactions that represent commitments to purchase and deliver securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligations may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $ 63.2 million and $ 57.2 million at March 31, 2025 and December 31, 2024, respectively. ​ 15 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The amortized cost and fair value of available for sale and held to maturity securities are summarized as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ March 31, 2025 ​ Cost ​ Gains ​ Losses ​ Fair Value U.S. Treasury securities ​ $ 4,993 ​ $ — ​ $ ( 178 ) ​ $ 4,815 U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bonds ​ ​ 103,867 ​ ​ 220 ​ ​ ( 574 ) ​ ​ 103,513 Residential mortgage-backed securities ​ 391,408 ​ 374 ​ ( 31,533 ) ​ 360,249 Commercial mortgage-backed securities ​ ​ 223,141 ​ 345 ​ ( 6,088 ) ​ 217,398 Collateralized mortgage obligations ​ 704,906 ​ 374 ​ ( 46,641 ) ​ 658,639 Corporate debt securities ​ 30,877 ​ 215 ​ ( 538 ) ​ 30,554 States and political subdivisions ​ 33,412 ​ 7 ​ ( 3,417 ) ​ 30,002 Totals ​ $ 1,492,604 ​ $ 1,535 ​ $ ( 88,969 ) ​ $ 1,405,170 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ December 31, 2024 ​ Cost ​ Gains ​ Losses ​ Fair Value U.S. Treasury securities ​ $ 4,991 ​ $ — ​ $ ( 229 ) ​ $ 4,762 U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bonds ​ ​ 112,293 ​ ​ 214 ​ ​ ( 639 ) ​ ​ 111,868 Residential mortgage-backed securities ​ 379,651 ​ 35 ​ ( 38,500 ) ​ 341,186 Commercial mortgage-backed securities ​ ​ 226,326 ​ 161 ​ ( 6,160 ) ​ 220,327 Collateralized mortgage obligations ​ 710,663 ​ 328 ​ ( 53,391 ) ​ 657,600 Corporate debt securities ​ 30,139 ​ 215 ​ ( 538 ) ​ 29,816 States and political subdivisions ​ 34,352 ​ 10 ​ ( 3,372 ) ​ 30,990 Totals ​ $ 1,498,415 ​ $ 963 ​ $ ( 102,829 ) ​ $ 1,396,549 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to Maturity ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ March 31, 2025 Cost Gains Losses Fair Value U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed securities ​ $ 250,486 ​ $ — ​ $ ( 25,092 ) ​ $ 225,394 Commercial mortgage-backed securities ​ ​ 156,646 ​ 201 ​ ( 8,651 ) ​ 148,196 Collateralized mortgage obligations ​ 278,144 ​ 82 ​ ( 33,396 ) ​ 244,830 States and political subdivisions ​ 77,093 ​ 20 ​ ( 8,064 ) ​ 69,049 Totals ​ $ 762,369 ​ $ 303 ​ $ ( 75,203 ) ​ $ 687,469 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held to Maturity ​ ​ Amortized ​ Unrealized ​ Unrealized ​ ​ ​ December 31, 2024 Cost Gains Losses Fair Value U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed securities ​ $ 255,880 ​ $ — ​ $ ( 31,621 ) ​ $ 224,259 Commercial mortgage-backed securities ​ ​ 147,696 ​ ​ — ​ ​ ( 10,688 ) ​ ​ 137,008 Collateralized mortgage obligations ​ 257,230 ​ — ​ ( 38,269 ) ​ 218,961 States and political subdivisions ​ 77,093 ​ 32 ​ ( 7,481 ) ​ 69,644 Totals ​ $ 737,899 ​ $ 32 ​ $ ( 88,059 ) ​ $ 649,872 ​ Additionally, the Company had unrealized net gains of $ 0.2 million and $ 0.2 million at March 31, 2025 and December 31, 2024, respectively, from equity securities with fair values of $ 0.3 million and $ 0.3 million held at March 31, 2025 and December 31, 2024, respectively. The Company recognized nominal net losses during the three months ended March 31, 2025 and 2024, respectively, due to changes in the fair value of equity securities still held at the balance sheet date. During the three months ended March 31, 2025, the Company recorded no sales of equity securities, while during the three months ended March 31, 2024, net gains recognized from equity securities sold were nominal. ​ 16 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Information regarding available for sale and held to maturity securities that were in an unrealized loss position is shown in the following tables (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ Number of ​ ​ Unrealized Number of ​ ​ Unrealized ​ ​ Securities ​ Fair Value ​ Losses ​ Securities ​ Fair Value ​ Losses Available for Sale ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. treasury securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months — ​ $ — ​ $ — — ​ $ — ​ $ — Unrealized loss for twelve months or longer 1 ​ 4,815 ​ 178 1 ​ 4,762 ​ 229 ​ 1 ​ 4,815 ​ 178 1 ​ 4,762 ​ 229 U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Bonds: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 4 ​ ​ 26,251 ​ ​ 7 5 ​ ​ 32,699 ​ ​ 54 Unrealized loss for twelve months or longer 14 ​ 60,835 ​ 567 14 ​ 63,719 ​ 585 ​ 18 ​ ​ 87,086 ​ ​ 574 19 ​ 96,418 ​ 639 Residential mortgage-backed securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 3 ​ 14,861 ​ 63 20 ​ 56,122 ​ 1,384 Unrealized loss for twelve months or longer 120 ​ 284,177 ​ 31,470 107 ​ 283,691 ​ 37,116 ​ 123 ​ ​ 299,038 ​ ​ 31,533 127 ​ 339,813 ​ 38,500 Commercial mortgage-backed securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 2 ​ 29,906 ​ 53 3 ​ 34,539 ​ 70 Unrealized loss for twelve months or longer 18 ​ 189,452 ​ 6,035 20 ​ 197,203 ​ 6,090 ​ 20 ​ ​ 219,358 ​ ​ 6,088 23 ​ 231,742 ​ 6,160 Collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 1 ​ 11,679 ​ 10 2 ​ 9,944 ​ 146 Unrealized loss for twelve months or longer 133 ​ 617,751 ​ 46,631 132 ​ 629,089 ​ 53,245 ​ 134 ​ ​ 629,430 ​ ​ 46,641 134 ​ 639,033 ​ 53,391 Corporate debt securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months — ​ — ​ — 1 ​ 9,271 ​ 538 Unrealized loss for twelve months or longer 1 ​ 9,385 ​ 538 — ​ — ​ — ​ 1 ​ ​ 9,385 ​ ​ 538 1 ​ 9,271 ​ 538 States and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 5 ​ 2,411 ​ 12 4 ​ 1,919 ​ 9 Unrealized loss for twelve months or longer 48 ​ 23,713 ​ 3,405 52 ​ 24,916 ​ 3,363 ​ 53 ​ ​ 26,124 ​ ​ 3,417 56 ​ 26,835 ​ 3,372 Total available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 15 ​ 85,108 ​ 145 35 ​ 144,494 ​ 2,201 Unrealized loss for twelve months or longer 335 ​ 1,190,128 ​ 88,824 326 ​ 1,203,380 ​ 100,628 ​ 350 ​ $ 1,275,236 ​ $ 88,969 361 ​ $ 1,347,874 ​ $ 102,829 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ Number of ​ ​ Unrealized Number of ​ ​ Unrealized ​ ​ Securities ​ Fair Value ​ Losses ​ Securities ​ Fair Value ​ Losses Held to Maturity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months — ​ $ — ​ $ — — ​ $ — ​ $ — Unrealized loss for twelve months or longer 45 ​ 225,394 ​ 25,092 45 ​ 224,258 ​ 31,621 ​ 45 ​ 225,394 ​ 25,092 45 ​ 224,258 ​ 31,621 Commercial mortgage-backed securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months — ​ — ​ — — ​ — ​ — Unrealized loss for twelve months or longer 25 ​ 133,673 ​ 8,651 26 ​ 137,009 ​ 10,688 ​ 25 ​ 133,673 ​ 8,651 26 ​ 137,009 ​ 10,688 Collateralized mortgage obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 1 ​ 14,943 ​ 12 — ​ — ​ — Unrealized loss for twelve months or longer 53 ​ 218,121 ​ 33,384 53 ​ 218,961 ​ 38,269 ​ 54 ​ 233,064 ​ 33,396 53 ​ 218,961 ​ 38,269 States and political subdivisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 8 ​ ​ 5,374 ​ ​ 78 8 ​ ​ 4,305 ​ ​ 24 Unrealized loss for twelve months or longer 169 ​ 61,585 ​ 7,986 169 ​ 62,113 ​ 7,457 ​ 177 ​ 66,959 ​ 8,064 177 ​ 66,418 ​ 7,481 Total held to maturity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss for less than twelve months 9 ​ 20,317 ​ 90 8 ​ 4,305 ​ 24 Unrealized loss for twelve months or longer 292 ​ 638,773 ​ 75,113 293 ​ 642,341 ​ 88,035 ​ 301 ​ $ 659,090 ​ $ 75,203 301 ​ $ 646,646 ​ $ 88,059 17 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) ​ Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties. The amortized cost and fair value of securities, excluding trading and equity securities, at March 31, 2025 are shown by contractual maturity below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Available for Sale ​ Held to Maturity ​ Amortized ​ ​ Amortized ​ ​ ​ ​ Cost ​ Fair Value Cost ​ Fair Value Due in one year or less ​ $ 6,661 ​ $ 6,650 ​ $ — ​ $ — Due after one year through five years ​ 75,234 ​ 74,725 ​ 4,782 ​ 4,516 Due after five years through ten years ​ 49,239 ​ 48,009 ​ 51,621 ​ 46,926 Due after ten years ​ 42,015 ​ 39,500 ​ 20,690 ​ 17,607 ​ ​ 173,149 ​ 168,884 ​ 77,093 ​ 69,049 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed securities ​ 391,408 ​ 360,249 ​ 250,486 ​ 225,394 Commercial mortgage-backed securities ​ 223,141 ​ 217,398 ​ 156,646 ​ 148,196 Collateralized mortgage obligations ​ 704,906 ​ 658,639 ​ 278,144 ​ 244,830 ​ ​ $ 1,492,604 ​ $ 1,405,170 ​ $ 762,369 ​ $ 687,469 ​ The Company recognized net gains of $ 7.8 million and $ 7.6 million from its trading portfolio during the three months ended March 31, 2025 and 2024, respectively. In addition, the Hilltop Broker-Dealers realized net gains from structured product trading activities of $ 9.6 million and $ 32.7 million during the three months ended March 31, 2025 and 2024, respectively. The Company had no other realized gains and losses on securities during the three months ended March 31, 2025 and 2024. All such realized gains and losses are recorded as a component of other noninterest income within the consolidated statements of operations. ​ Securities with a carrying amount of $ 605.6 million and $ 563.9 million (with a fair value of $ 562.9 million and $ 520.0 million, respectively) at March 31, 2025 and December 31, 2024, respectively, were pledged by the Bank to secure public and trust deposits, federal funds purchased and securities sold under agreements to repurchase, and for other purposes as required or permitted by law. Substantially all of these pledged securities were included in the available for sale and held to maturity securities portfolios at March 31, 2025 and December 31, 2024. ​ Mortgage-backed securities and collateralized mortgage obligations consist primarily of Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) pass-through and participation certificates. GNMA securities are guaranteed by the full faith and credit of the United States, while FNMA and FHLMC securities are fully guaranteed by those respective United States government-sponsored agencies, and conditionally guaranteed by the full faith and credit of the United States. ​ 5. Loans Held for Investment ​ The Bank originates loans to customers primarily in Texas. Although the Bank has diversified loan and leasing portfolios and, generally, holds collateral against amounts advanced to customers, its debtors’ ability to honor their contracts is substantially dependent upon the general economic conditions of the region and of the industries in which its debtors operate, which consist primarily of real estate (including construction and land development), wholesale/retail trade, agribusiness and energy. The Hilltop Broker-Dealers make loans to customers and correspondents through transactions originated by both employees and independent retail representatives throughout the United States. The Hilltop Broker-Dealers control risk by requiring customers to maintain collateral in compliance with various regulatory and internal guidelines, which may vary based upon market conditions. Securities owned by customers and held as collateral for loans are not included in the consolidated financial statements. ​ 18 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Loans held for investment summarized by portfolio segment are as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2025 2024 Commercial real estate: ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 1,938,960 ​ $ 1,921,691 Owner occupied ​ ​ 1,446,177 ​ ​ 1,435,945 Commercial and industrial ​ 1,499,982 ​ ​ 1,541,940 Construction and land development ​ 889,941 ​ ​ 866,245 1-4 family residential ​ ​ 1,840,008 ​ ​ 1,792,602 Consumer ​ ​ 27,486 ​ ​ 28,410 Broker-dealer (1) ​ ​ 324,223 ​ ​ 363,718 ​ ​ 7,966,777 ​ 7,950,551 Allowance for credit losses ​ ( 106,197 ) ​ ​ ( 101,116 ) Total loans held for investment, net of allowance ​ $ 7,860,580 ​ $ 7,849,435 (1) Primarily represents margin loans to customers and correspondents associated with broker-dealer segment operations. ​ Past Due Loans and Nonaccrual Loans ​ An analysis of the aging of the Company’s loan portfolio is shown in the following tables (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accruing Loans ​ ​ Loans Past Due ​ Total Past ​ Current ​ Total ​ Past Due March 31, 2025 ​ 30-59 Days ​ 60-89 Days ​ 90 Days or More ​ Due Loans ​ Loans ​ Loans ​ 90 Days or More Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 3,994 ​ $ 3,691 ​ $ 862 ​ $ 8,547 ​ $ 1,930,413 ​ $ 1,938,960 ​ $ — Owner occupied ​ 6,352 ​ ​ 927 ​ ​ 3,956 ​ ​ 11,235 ​ ​ 1,434,942 ​ ​ 1,446,177 ​ ​ — Commercial and industrial ​ ​ 1,498 ​ ​ 2,746 ​ ​ 24,530 ​ ​ 28,774 ​ ​ 1,471,208 ​ ​ 1,499,982 ​ ​ — Construction and land development ​ 6,955 ​ ​ 111 ​ ​ 2,600 ​ ​ 9,666 ​ ​ 880,275 ​ ​ 889,941 ​ ​ — 1-4 family residential ​ 9,342 ​ ​ 1,415 ​ ​ 5,865 ​ ​ 16,622 ​ ​ 1,823,386 ​ ​ 1,840,008 ​ ​ — Consumer ​ 98 ​ ​ 10 ​ ​ — ​ ​ 108 ​ ​ 27,378 ​ ​ 27,486 ​ ​ — Broker-dealer ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 324,223 ​ ​ 324,223 ​ ​ — ​ ​ $ 28,239 ​ $ 8,900 ​ $ 37,813 ​ $ 74,952 ​ $ 7,891,825 ​ $ 7,966,777 ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accruing Loans ​ ​ Loans Past Due ​ Total Past ​ Current ​ Total ​ Past Due December 31, 2024 ​ 30-59 Days ​ 60-89 Days ​ 90 Days or More ​ Due Loans ​ Loans ​ Loans ​ 90 Days or More Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 1,095 ​ $ 361 ​ $ 5,012 ​ $ 6,468 ​ $ 1,915,223 ​ $ 1,921,691 ​ $ — Owner occupied ​ 3,549 ​ ​ 124 ​ ​ 3,869 ​ ​ 7,542 ​ ​ 1,428,403 ​ ​ 1,435,945 ​ ​ — Commercial and industrial ​ ​ 2,488 ​ ​ 7,179 ​ ​ 23,101 ​ ​ 32,768 ​ ​ 1,509,172 ​ ​ 1,541,940 ​ ​ 43 Construction and land development ​ 3,329 ​ ​ — ​ ​ 2,484 ​ ​ 5,813 ​ ​ 860,432 ​ ​ 866,245 ​ ​ — 1-4 family residential ​ 8,404 ​ ​ 1,387 ​ ​ 3,892 ​ ​ 13,683 ​ ​ 1,778,919 ​ ​ 1,792,602 ​ ​ — Consumer ​ 174 ​ ​ 1 ​ ​ — ​ ​ 175 ​ ​ 28,235 ​ ​ 28,410 ​ ​ — Broker-dealer ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 363,718 ​ ​ 363,718 ​ ​ — ​ ​ $ 19,039 ​ $ 9,052 ​ $ 38,358 ​ $ 66,449 ​ $ 7,884,102 ​ $ 7,950,551 ​ $ 43 ​ In addition to the loans shown in the tables above, PrimeLending had $ 24.1 million and $ 22.0 million of loans included in loans held for sale (with an aggregate unpaid principal balance of $ 24.9 million and $ 22.9 million, respectively) that were 90 days past due and accruing interest at March 31, 2025 and December 31, 2024, respectively. These loans are guaranteed by U.S. government agencies and include loans that are subject to repurchase, or have been repurchased, by PrimeLending. ​ 19 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The following table provides details associated with non-accrual loans, excluding those classified as held for sale (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-accrual Loans ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ ​ Interest Income Recognized ​ ​ With ​ With No ​ ​ ​ ​ With ​ With No ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ Allowance Allowance Total Allowance Allowance Total 2025 2024 Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 376 ​ $ 3,865 ​ $ 4,241 ​ $ 396 ​ $ 6,770 ​ $ 7,166 ​ ​ $ 54 ​ $ 1,194 Owner occupied ​ 638 ​ ​ 5,897 ​ ​ 6,535 ​ 4,434 ​ ​ 1,658 ​ ​ 6,092 ​ ​ ​ — ​ ​ 93 Commercial and industrial ​ ​ 42,147 ​ ​ 9,840 ​ ​ 51,987 ​ ​ 29,914 ​ ​ 29,111 ​ ​ 59,025 ​ ​ ​ 107 ​ ​ 102 Construction and land development ​ 198 ​ ​ 2,860 ​ ​ 3,058 ​ 475 ​ ​ 2,330 ​ ​ 2,805 ​ ​ ​ 3 ​ ​ 42 1-4 family residential ​ 1,560 ​ ​ 9,633 ​ ​ 11,193 ​ 1,526 ​ ​ 7,804 ​ ​ 9,330 ​ ​ ​ 227 ​ ​ 493 Consumer ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ — Broker-dealer ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ​ — ​ ​ — ​ ​ $ 44,919 ​ $ 32,095 ​ $ 77,014 ​ $ 36,745 ​ $ 47,673 ​ $ 84,418 ​ ​ $ 391 ​ $ 1,924 ​ At March 31, 2025 and December 31, 2024, $ 4.5 million and $ 3.7 million, respectively, of real estate loans secured by residential properties and classified as held for sale were in non-accrual status. ​ As shown in the table above, loans accounted for on a non-accrual basis decreased from December 31, 2024 to March 31, 2025 by $ 7.4 million. The change in non-accrual loans was primarily due to decreases in commercial and industrial loans of $ 7.0 million and commercial real estate non-owner occupied loans of $ 2.9 million, partially offset by an increase in 1-4 family residential loans of $ 1.9 million. The decrease in commercial and industrial loans in non-accrual status since December 31, 2024 was primarily due to principal paydowns and the reclassification of a single non-accrual loan from commercial and industrial loans to commercial real estate non-owner occupied loans. The decrease in commercial real estate non-owner occupied loans in non-accrual status since December 31, 2024 was primarily due to the foreclosure of two properties within the office and multi-family industry subsector, partially offset by the addition of loans with an aggregate loan balance of $ 2.2 million. The increase in 1-4 family residential loans in non-accrual status since December 31, 2024 was primarily due to the addition of loans with an aggregate loan balance of $ 2.0 million, partially offset by principal paydowns. ​ For non-accrual loans that are considered to be collateral-dependent, the Company has implemented the practical expedient to measure the allowance using the fair value of the collateral. For non-accrual loans that are not collateral dependent, the Company measures the allowance based on discounted expected cash flows. ​ Loan Modifications ​ Loan modifications are typically structured to create affordable payments for the debtor and can be achieved in a variety of ways. The Bank modifies loans by reducing interest rates and/or lengthening loan amortization schedules. ​ The following table presents the amortized cost basis of the loans held for investment modified for borrowers experiencing financial difficulty grouped by portfolio segment and type of modification granted during the periods presented (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Combination ​ Modifications as a ​ ​ ​ Interest Rate ​ Term ​ Principal ​ Payment ​ Term Extension and ​ % of Portfolio ​ Three Months Ended March 31, 2025 ​ Reduction ​ Extension ​ Forgiveness ​ Delay ​ Rate Reduction ​ Segment ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ — ​ $ 2,255 ​ $ — ​ $ — ​ $ — ​ 0.1 % Owner occupied ​ ​ — ​ ​ 3,501 ​ ​ — ​ ​ — ​ ​ — ​ 0.2 % Commercial and industrial ​ ​ — ​ ​ 865 ​ ​ — ​ ​ — ​ ​ 437 ​ 0.1 % Construction and land development ​ ​ — ​ ​ 350 ​ ​ — ​ ​ — ​ ​ — ​ 0.0 % 1-4 family residential ​ ​ — ​ ​ 111 ​ ​ — ​ ​ — ​ ​ — ​ 0.0 % Consumer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — % Broker-dealer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — % Total ​ $ — ​ $ 7,082 ​ $ — ​ $ — ​ $ 437 ​ 0.1 % ​ 20 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Combination ​ Modifications as a ​ ​ ​ Interest Rate ​ Term ​ Principal ​ Payment ​ Term Extension and ​ % of Portfolio ​ Three Months Ended March 31, 2024 ​ Reduction ​ Extension ​ Forgiveness ​ Delay ​ Payment Delay ​ Segment ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ — % Owner occupied ​ ​ — ​ ​ 491 ​ ​ — ​ ​ 3,882 ​ ​ — ​ 0.3 % Commercial and industrial ​ ​ — ​ ​ 16,797 ​ ​ — ​ ​ 166 ​ ​ — ​ 1.1 % Construction and land development ​ ​ — ​ ​ 223 ​ ​ — ​ ​ 1,729 ​ ​ — ​ 0.2 % 1-4 family residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — % Consumer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — % Broker-dealer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ — % Total ​ $ — ​ $ 17,511 ​ $ — ​ $ 5,777 ​ $ — ​ 0.3 % ​ As shown in the table above, loans modified for borrowers experiencing financial difficulty during three months ended March 31, 2024 included a term extension modification for a single loan of $ 13 million in the auto note financing subsector within the commercial and industrial loan portfolio. ​ For those loans held for investment modified for borrowers experiencing financial difficulty during the last twelve months, the following table provides aging and non-accrual details grouped by portfolio segment (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Modified Loans Past Due ​ Total Modified ​ Modified March 31, 2025 ​ 30-59 Days ​ 60-89 Days ​ 90 Days or More ​ Past Due Loans ​ Non-accrual Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 344 Owner occupied ​ ​ 77 ​ ​ — ​ ​ — ​ ​ 77 ​ ​ 77 Commercial and industrial ​ ​ 256 ​ ​ 2,393 ​ ​ 1,303 ​ ​ 3,952 ​ ​ 25,945 Construction and land development ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — 1-4 family residential ​ ​ 141 ​ ​ — ​ ​ — ​ ​ 141 ​ ​ 25 Consumer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Broker-dealer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ $ 474 ​ $ 2,393 ​ $ 1,303 ​ $ 4,170 ​ $ 26,391 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Modified Loans Past Due ​ Total Modified ​ Modified December 31, 2024 ​ 30-59 Days ​ 60-89 Days ​ 90 Days or More ​ Past Due Loans ​ Non-accrual Loans Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ — ​ $ 361 ​ $ — ​ $ 361 ​ $ 361 Owner occupied ​ ​ 86 ​ ​ — ​ ​ 8 ​ ​ 94 ​ ​ 94 Commercial and industrial ​ ​ 752 ​ ​ — ​ ​ — ​ ​ 752 ​ ​ 31,686 Construction and land development ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — 1-4 family residential ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 26 Consumer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Broker-dealer ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Total ​ $ 838 ​ $ 361 ​ $ 8 ​ $ 1,207 ​ $ 32,167 ​ The above tables that present aging and non-accrual details exclude $ 3.2 million and $ 1.7 million of commercial and industrial loans that were modified and subsequently charged-off during the three months ended March 31, 2025 and the year ended December 31, 2024, respectively. ​ 21 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The following tables present the financial effects of the loans held for investment modified for borrowers experiencing financial difficulty during the periods presented (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ Three Months Ended March 31, 2024 ​ ​ ​ Weighted-Average ​ Weighted-Average ​ Weighted-Average ​ Weighted-Average ​ ​ ​ Interest Rate ​ Term Extension ​ Interest Rate ​ Term Extension ​ ​ ​ Reduction ​ (in months) ​ Reduction ​ (in months) Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ ​ — % 11 ​ — % — Owner occupied ​ ​ — % 10 ​ — % 14 Commercial and industrial ​ ​ 1.3 % 17 ​ — % 11 Construction and land development ​ ​ — % 8 ​ — % 15 1-4 family residential ​ ​ — % 6 ​ — % — Consumer ​ ​ — % — ​ — % — Broker-dealer ​ ​ — % — ​ — % — Total ​ ​ 1.3 % 11 ​ — % 11 ​ Credit Risk Profile ​ Management tracks credit quality trends on a quarterly basis related to: (i) past due levels, (ii) non-performing asset levels, (iii) classified loan levels, and (iv) general economic conditions in state and local markets. The Company defines classified loans as loans with a risk rating of substandard, doubtful or loss. There have been no changes to the risk rating internal grades utilized for commercial loans as described in detail in Note 5 to the consolidated financial statements in the Company’s 2024 Form 10-K. ​ 22 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The following table presents loans held for investment grouped by asset class and credit quality indicator, segregated by year of origination or renewal (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortized Cost Basis by Origination Year ​ ​ ​ ​ Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2020 and ​ ​ ​ ​ Converted to ​ ​ ​ March 31, 2025 ​ 2025 ​ 2024 ​ 2023 ​ 2022 ​ 2021 ​ ​ Prior ​ Revolving ​ Term Loans ​ Total Commercial real estate: non-owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Internal Grade 1-3 (Pass low risk) ​ $ 22,642 ​ $ 7,497 ​ $ 4,852 ​ $ 40,932 ​ $ 78,210 ​ $ 7,668 ​ $ 2 ​ $ — ​ $ 161,803 Internal Grade 4-7 (Pass normal risk) ​ ​ 61,018 ​ ​ 273,552 ​ ​ 79,410 ​ ​ 212,658 ​ ​ 266,511 ​ ​ 131,579 ​ ​ 9,965 ​ ​ 15,793 ​ ​ 1,050,486 Internal Grade 8-11 (Pass high risk and watch) ​ ​ 61,727 ​ ​ 98,194 ​ ​ 130,249 ​ ​ 170,901 ​ ​ 46,121 ​ ​ 120,859 ​ ​ 28,496 ​ ​ 1,168 ​ ​ 657,715 Internal Grade 12 (Special mention) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 17,052 ​ ​ — ​ ​ — ​ ​ — ​ ​ 17,052 Internal Grade 13 (Substandard accrual) ​ ​ — ​ ​ 16,952 ​ ​ 1,874 ​ ​ 7,502 ​ ​ 20,774 ​ ​ 561 ​ ​ — ​ ​ — ​ ​ 47,663 Internal Grade 14 (Substandard non-accrual) ​ ​ — ​ ​ 344 ​ ​ 759 ​ ​ 1,296 ​ ​ 1,406 ​ ​ 436 ​ ​ — ​ ​ — ​ ​ 4,241 Current period gross charge-offs ​ ​ — ​ ​ 918 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 918 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: owner occupied ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Internal Grade 1-3 (Pass low risk) ​ $ 8,332 ​ $ 31,271 ​ $ 32,385 ​ $ 12,331 ​ $ 20,550 ​ $ 64,082 ​ $ 7,783 ​ $ 11,922 ​ $ 188,656 Internal Grade 4-7 (Pass normal risk) ​ ​ 39,198 ​ ​ 122,591 ​ ​ 99,963 ​ ​ 111,421 ​ ​ 180,728 ​ ​ 210,082 ​ ​ 26,849 ​ ​ 9,026 ​ ​ 799,858 Internal Grade 8-11 (Pass high risk and watch) ​ ​ 19,142 ​ ​ 61,418 ​ ​ 38,448 ​ ​ 94,182 ​ ​ 54,619 ​ ​ 110,317 ​ ​ 10,947 ​ ​ 505 ​ ​ 389,578 Internal Grade 12 (Special mention) ​ ​ — ​ ​ 2,459 ​ ​ 934 ​ ​ 19,558 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 22,951 Internal Grade 13 (Substandard accrual) ​ ​ 1,480 ​ ​ 8,829 ​ ​ 1,014 ​ ​ 7,371 ​ ​ 9,460 ​ ​ 10,445 ​ ​ — ​ ​ — ​ ​ 38,599 Internal Grade 14 (Substandard non-accrual) ​ ​ — ​ ​ 1,242 ​ ​ — ​ ​ 423 ​ ​ 583 ​ ​ 4,287 ​ ​ — ​ ​ — ​ ​ 6,535 Current period gross charge-offs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial and industrial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Internal Grade 1-3 (Pass low risk) ​ $ 6,014 ​ $ 38,840 ​ $ 9,926 ​ $ 7,929 ​ $ 12,808 ​ $ 3,075 ​ $ 26,580 ​ $ — ​ $ 105,172 Internal Grade 4-7 (Pass normal risk) ​ ​ 45,447 ​ ​ 70,973 ​ ​ 22,355 ​ ​ 48,035 ​ ​ 49,328 ​ ​ 32,734 ​ ​ 289,111 ​ ​ 8,694 ​ ​ 566,677 Internal Grade 8-11 (Pass high risk and watch) ​ ​ 35,676 ​ ​ 112,705 ​ ​ 47,415 ​ ​ 43,080 ​ ​ 32,720 ​ ​ 16,415 ​ ​ 194,869 ​ ​ 4,148 ​ ​ 487,028 Internal Grade 12 (Special mention) ​ ​ — ​ ​ 32,264 ​ ​ 28 ​ ​ — ​ ​ — ​ ​ 1,295 ​ ​ 216 ​ ​ — ​ ​ 33,803 Internal Grade 13 (Substandard accrual) ​ ​ — ​ ​ 5,436 ​ ​ 227 ​ ​ 2,261 ​ ​ 3,279 ​ ​ 1,102 ​ ​ 4,742 ​ ​ 5,121 ​ ​ 22,168 Internal Grade 14 (Substandard non-accrual) ​ ​ — ​ ​ 11,529 ​ ​ 7,629 ​ ​ 7,217 ​ ​ 1,689 ​ ​ 147 ​ ​ 2,107 ​ ​ 21,669 ​ ​ 51,987 Current period gross charge-offs ​ ​ — ​ ​ 117 ​ ​ 156 ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,079 ​ ​ 1,080 ​ ​ 3,432 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Internal Grade 1-3 (Pass low risk) ​ $ 3,433 ​ $ 4,044 ​ $ — ​ $ 2,676 ​ $ 834 ​ $ 113 ​ $ — ​ $ — ​ $ 11,100 Internal Grade 4-7 (Pass normal risk) ​ ​ 52,046 ​ ​ 193,589 ​ ​ 148,944 ​ ​ 64,818 ​ ​ 8,405 ​ ​ 7,595 ​ ​ 8,089 ​ ​ — ​ ​ 483,486 Internal Grade 8-11 (Pass high risk and watch) ​ ​ 42,110 ​ ​ 178,509 ​ ​ 106,291 ​ ​ 24,125 ​ ​ 5,702 ​ ​ 3,304 ​ ​ 5,413 ​ ​ — ​ ​ 365,454 Internal Grade 12 (Special mention) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Internal Grade 13 (Substandard accrual) ​ ​ 1,546 ​ ​ 8,771 ​ ​ 1,343 ​ ​ 149 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 11,809 Internal Grade 14 (Substandard non-accrual) ​ ​ — ​ ​ 1,451 ​ ​ 1,528 ​ ​ 82 ​ ​ — ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ ​ 3,058 Current period gross charge-offs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction and land development - individuals ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FICO less than 620 ​ $ ( 2 ) ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ ( 2 ) FICO between 620 and 720 ​ ​ 6 ​ ​ 992 ​ ​ — ​ ​ — ​ ​ — ​ ​ 806 ​ ​ — ​ ​ — ​ ​ 1,804 FICO greater than 720 ​ ​ 871 ​ ​ 11,986 ​ ​ — ​ ​ — ​ ​ 117 ​ ​ 46 ​ ​ — ​ ​ — ​ ​ 13,020 Substandard non-accrual ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Other (1) ​ ​ — ​ ​ 212 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 212 Current period gross charge-offs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FICO less than 620 ​ $ 111 ​ $ 2,889 ​ $ 617 ​ $ 1,132 ​ $ 436 ​ $ 18,023 ​ $ 193 ​ $ — ​ $ 23,401 FICO between 620 and 720 ​ ​ 7,591 ​ ​ 35,144 ​ ​ 23,155 ​ ​ 14,497 ​ ​ 12,018 ​ ​ 30,000 ​ ​ 2,554 ​ ​ 471 ​ ​ 125,430 FICO greater than 720 ​ ​ 39,278 ​ ​ 156,395 ​ ​ 112,309 ​ ​ 472,493 ​ ​ 649,339 ​ ​ 140,310 ​ ​ 2,701 ​ ​ 417 ​ ​ 1,573,242 Substandard non-accrual ​ ​ — ​ ​ 901 ​ ​ 1,104 ​ ​ 391 ​ ​ 1,091 ​ ​ 7,706 ​ ​ — ​ ​ — ​ ​ 11,193 Other (1) ​ ​ 25,217 ​ ​ 38,394 ​ ​ 12,867 ​ ​ 5,146 ​ ​ — ​ ​ 4,151 ​ ​ 759 ​ ​ 20,208 ​ ​ 106,742 Current period gross charge-offs ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ FICO less than 620 ​ $ 250 ​ $ 1,126 ​ $ 107 ​ $ 170 ​ $ 17 ​ $ 44 ​ $ 365 ​ $ 8 ​ $ 2,087 FICO between 620 and 720 ​ ​ 1,513 ​ ​ 1,608 ​ ​ 880 ​ ​ 669 ​ ​ 79 ​ ​ 64 ​ ​ 2,129 ​ ​ 20 ​ ​ 6,962 FICO greater than 720 ​ ​ 962 ​ ​ 2,382 ​ ​ 1,576 ​ ​ 1,191 ​ ​ 361 ​ ​ 79 ​ ​ 3,009 ​ ​ 12 ​ ​ 9,572 Substandard non-accrual ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Other (1) ​ ​ 3,422 ​ ​ 4,498 ​ ​ 299 ​ ​ 305 ​ ​ 80 ​ ​ 10 ​ ​ 251 ​ ​ — ​ ​ 8,865 Current period gross charge-offs ​ ​ — ​ ​ 47 ​ ​ — ​ ​ 8 ​ ​ — ​ ​ — ​ ​ 3 ​ ​ 9 ​ ​ 67 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loans with credit quality measures ​ $ 479,030 ​ $ 1,538,987 ​ $ 888,488 ​ $ 1,374,941 ​ $ 1,474,317 ​ $ 927,332 ​ $ 627,130 ​ $ 99,182 ​ $ 7,409,407 Commercial and industrial (mortgage warehouse lending) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 233,147 Broker-dealer (margin loans and correspondent receivables) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 324,223 Total loans held for investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 7,966,777 (1) Loans classified in this category were assigned a FICO score for credit modeling purposes. ​ ​ ​ 23 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 6. Allowance for Credit Losses ​ ​ Available for Sale Securities and Held to Maturity Securities ​ The Company has evaluated available for sale debt securities that are in an unrealized loss position and has determined that any decline in value is unrelated to credit loss and related to changes in market interest rates since purchase. None of the available for sale debt securities held were past due at March 31, 2025. In addition, as of March 31, 2025, the Company had not made a decision to sell any of its debt securities held, nor did the Company consider it more likely than not that it would be required to sell such securities before recovery of their amortized cost basis. The Company does not expect to have credit losses associated with the debt securities, and no allowance was recognized on the debt securities portfolio. ​ Loans Held for Investment ​ The allowance for credit losses for loans held for investment represents management’s best estimate of all expected credit losses over the expected contractual life of the Company’s existing portfolio. Management’s methodology for determining the allowance for credit losses uses the current expected credit losses (“CECL”) standard. Management considers the level of allowance for credit losses to be a reasonable and supportable estimate of expected credit losses inherent within the loans held for investment portfolio as of March 31, 2025. While the Company believes it has an appropriate allowance for the existing loan portfolio at March 31, 2025, additional provision for losses on existing loans may be necessary in the future. Future changes in the allowance for credit losses are expected to be volatile given dependence upon, among other things, the portfolio composition and quality, as well as changes in macroeconomic forecasts and loan cash flow assumptions. In addition to the allowance for credit losses, the Company maintains a separate allowance for credit losses related to off-balance sheet credit exposures, including unfunded loan commitments, and this amount is included in other liabilities within the consolidated balance sheets. For further information on the policies that govern the estimation of the allowances for credit losses levels, see Note 1 to the consolidated financial statements in the Company’s 2024 Form 10-K. ​ One of the most significant judgments involved in estimating the Company’s allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the reasonable and supportable forecast period. To determine the Company’s best estimate of expected credit losses as of March 31, 2025, the Company utilized a single macroeconomic alternative scenario, or S5, published by Moody’s Analytics in March 2025 that was updated to reflect the U.S. economic outlook. During our previous macroeconomic assessment as of December 31, 2024, we utilized the same single macroeconomic alternative scenario, or S5, published by Moody’s Analytics in December 2024. The S5 alternative economic scenario expects the economy to underperform in the long-term. In this alternative scenario, elevated borrowing costs reduce credit-sensitive spending, tariffs and immigration policy weaken the economy, and concerns grow about broader international conflicts. Significant variables that impact the modeled losses across the Company’s loan portfolios are the U.S. Real Gross Domestic Product, or GDP, growth rates and unemployment rate assumptions. Changes in these assumptions and forecasts of economic conditions could significantly affect the estimate of expected credit losses at the balance sheet date or between reporting periods. ​ During the three months ended March 31, 2025, 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. Specific to the Bank, 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 changes in the allowance for credit losses during the noted periods were primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The changes in the allowance during the three months ended March 31, 2025 were also impacted by net charge-offs of $ 4.3 million. ​ During the three months ended March 31, 2024, the reversal of credit losses reflected improvements to the U.S. economic outlook, offset by increases in specific reserves within the banking segment. Specific to the Bank, the net impact to the allowance of changes associated with collectively evaluated loans during the three months ended March 31, 2024 included a reversal of credit losses of $ 7.0 million, while the net impact to the allowance of changes associated with individually evaluated loans during the three months ended March 31, 2024 included a provision for credit losses of $ 4.1 24 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) million. The changes in the allowance for credit losses during the noted periods were primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The changes in the allowance during the three months ended March 31, 2024 were also impacted by net charge-offs of $ 4.3 million. ​ Changes in the allowance for credit losses for loans held for investment, distributed by portfolio segment, are shown below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, Provision for ​ Recoveries on Balance, ​ ​ Beginning of ​ (Reversal of) ​ Loans ​ Charged Off ​ End of Three Months Ended March 31, 2025 ​ Period ​ Credit Losses ​ Charged Off ​ Loans ​ Period Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 29,310 ​ $ 6,311 ​ $ ( 918 ) ​ $ — ​ $ 34,703 Owner occupied ​ ​ 33,112 ​ ​ 2,250 ​ ​ — ​ ​ 8 ​ ​ 35,370 Commercial and industrial ​ 25,609 ​ ​ 1,052 ​ ​ ( 3,432 ) ​ ​ 121 ​ 23,350 Construction and land development ​ 7,161 ​ ​ 130 ​ ​ — ​ ​ — ​ 7,291 1-4 family residential ​ 5,327 ​ ​ ( 347 ) ​ ​ — ​ ​ 8 ​ 4,988 Consumer ​ ​ 547 ​ ​ ( 24 ) ​ ​ ( 67 ) ​ ​ 23 ​ ​ 479 Broker-dealer ​ ​ 50 ​ ​ ( 34 ) ​ ​ — ​ ​ — ​ ​ 16 Total ​ $ 101,116 ​ $ 9,338 ​ $ ( 4,417 ) ​ $ 160 ​ $ 106,197 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, Provision for ​ Recoveries on Balance, ​ ​ Beginning of ​ (Reversal of) ​ Loans ​ Charged Off ​ End of Three Months Ended March 31, 2024 ​ Period ​ Credit Losses ​ Charged Off ​ Loans ​ Period Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 40,061 ​ $ 1,149 ​ $ ( 1,647 ) ​ $ — ​ $ 39,563 Owner occupied ​ ​ 28,114 ​ ​ 614 ​ ​ — ​ ​ 9 ​ ​ 28,737 Commercial and industrial ​ 20,926 ​ ​ ( 1,733 ) ​ ​ ( 2,983 ) ​ ​ 342 ​ 16,552 Construction and land development ​ 12,102 ​ ​ ( 2,095 ) ​ ​ — ​ ​ 1 ​ 10,008 1-4 family residential ​ 9,461 ​ ​ ( 728 ) ​ ​ — ​ ​ 11 ​ 8,744 Consumer ​ ​ 648 ​ ​ ( 60 ) ​ ​ ( 81 ) ​ ​ 37 ​ ​ 544 Broker-dealer ​ ​ 101 ​ ​ ( 18 ) ​ ​ — ​ ​ — ​ ​ 83 Total ​ $ 111,413 ​ $ ( 2,871 ) ​ $ ( 4,711 ) ​ $ 400 ​ $ 104,231 ​ Unfunded Loan Commitments ​ The Bank uses a process similar to that used in estimating the allowance for credit losses on the funded portion to estimate the allowance for credit loss on unfunded loan commitments. The allowance is based on the estimated exposure at default, multiplied by the lifetime Probability of Default grade and Loss Given Default grade for that particular loan segment. The Bank estimates expected losses by calculating a commitment usage factor based on industry usage factors. The commitment usage factor is applied over the relevant contractual period. Loss factors from the underlying loans to which commitments are related are applied to the results of the usage calculation to estimate any liability for credit losses related for each loan type. The expected losses on unfunded commitments align with statistically calculated parameters used to calculate the allowance for credit losses on the funded portion. There is no reserve calculated for letters of credit as they are issued primarily as credit enhancements and the likelihood of funding is low. ​ Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2025 2024 Balance, beginning of period ​ $ 7,918 ​ $ 8,876 Other noninterest expense ​ ​ 35 ​ ​ ( 580 ) Balance, end of period ​ $ 7,953 ​ $ 8,296 ​ During the three months ended March 31, 2025, the increase in the reserve for unfunded commitments was primarily due to increases in commitment balances. The decrease in the reserve for unfunded commitments during the three months ended March 31, 2024 was primarily due to decreases in both commitment balances and expected loss rates. ​ ​ ​ 25 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 7. Mortgage Servicing Rights ​ The following tables present the changes in fair value of the Company’s MSR asset and other information related to the serviced portfolio (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 ​ 2024 Balance, beginning of period $ 5,723 ​ $ 96,662 ​ Additions 1,766 ​ 3,312 ​ Changes in fair value: ​ ​ ​ ​ ​ ​ Due to changes in model inputs or assumptions (1) ( 517 ) ​ ( 2,995 ) ​ Due to customer payoffs ( 69 ) ​ ( 1,388 ) ​ Balance, end of period $ 6,903 ​ $ 95,591 ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 ​ 2024 ​ Mortgage loans serviced for others (2) $ 459,517 ​ $ 358,880 ​ MSR asset as a percentage of serviced mortgage loans 1.50 % 1.59 % (1) Primarily represents normal customer payments, the impact of changes in interest rates, changes in discount rates and prepayment speed assumptions, and the refinement of other MSR model assumptions. Included in the three months ended March 31, 2024 are MSR asset fair value adjustments totaling $ 4.8 million which reflect the difference between the MSR carrying value and the sales price included in a signed letter of intent, during April 2024, to sell certain MSR assets. (2) Represents unpaid principal balance of mortgage loans serviced for others. ​ The key assumptions used in measuring the fair value of the Company’s MSR asset were as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ 2024 ​ ​ Weighted average constant prepayment rate 10.53 % ​ 10.10 % ​ Weighted average discount rate 15.19 % ​ 14.89 % ​ Weighted average life (in years) 7.5 ​ ​ 7.8 ​ ​ ​ A sensitivity analysis of the fair value of the Company’s MSR asset to certain key assumptions is presented in the following table (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 ​ Constant prepayment rate: ​ ​ ​ ​ ​ ​ ​ Impact of 10% adverse change ​ $ ( 287 ) ​ $ ( 220 ) ​ Impact of 20% adverse change ​ ( 554 ) ​ ( 426 ) ​ Discount rate: ​ ​ ​ ​ ​ ​ ​ Impact of 10% adverse change ​ ( 354 ) ​ ( 294 ) ​ Impact of 20% adverse change ​ ( 671 ) ​ ( 557 ) ​ ​ This sensitivity analysis presents the effect of hypothetical changes in key assumptions on the fair value of the MSR asset. The effect of such hypothetical change in assumptions generally cannot be extrapolated because the relationship of the change in one key assumption to the change in the fair value of the MSR asset is not linear. In addition, in the analysis, the impact of an adverse change in one key assumption is calculated independent of any impact on other assumptions. In reality, changes in one assumption may change another assumption. ​ Contractually specified servicing fees, late fees and ancillary fees earned of $ 1.0 million and $ 8.2 million during the three months ended March 31, 2025 and 2024, respectively, were included in net gains from sale of loans and other mortgage production income within the consolidated statements of operations. ​ 26 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 8. Deposits ​ Deposits are summarized as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 ​ Noninterest-bearing demand ​ $ 2,859,828 ​ $ 2,768,707 ​ Interest-bearing: ​ ​ ​ ​ ​ ​ ​ Demand accounts ​ 4,019,972 ​ 4,218,225 ​ Brokered - demand ​ 4,833 ​ 4,722 ​ Money market ​ 2,474,436 ​ 2,592,508 ​ Brokered - money market ​ 10,375 ​ 10,451 ​ Savings ​ 231,384 ​ 221,667 ​ Time ​ 1,231,138 ​ 1,249,042 ​ ​ ​ $ 10,831,966 ​ $ 11,065,322 ​ ​ ​ ​ ​ At March 31, 2025, time deposits in denominations that exceed the FDIC insurance limit of $250,000 were $ 587.7 million. ​ ​ 9. Short-term Borrowings ​ Short-term borrowings are summarized as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2025 2024 Federal funds purchased ​ $ 289,828 ​ $ 407,058 ​ Securities sold under agreements to repurchase ​ 175,159 ​ 198,418 ​ Federal Home Loan Bank ​ — ​ — ​ Short-term bank loans ​ ​ — ​ ​ — ​ Commercial paper ​ 240,021 ​ 228,547 ​ ​ ​ $ 705,008 ​ $ 834,023 ​ ​ Federal Funds Purchased and Securities Sold under Agreements to Repurchase ​ Federal funds purchased and securities sold under agreements to repurchase generally mature one to ninety days from the transaction date, on demand, or on some other short-term basis. The Bank and the Hilltop Broker-Dealers execute transactions to sell securities under agreements to repurchase with both customers and other broker-dealers. Securities involved in these transactions are held by the Bank, the Hilltop Broker-Dealers or a third-party dealer. ​ Information concerning federal funds purchased and securities sold under agreements to repurchase is shown in the following tables (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2025 ​ 2024 ​ Average balance during the period ​ $ 560,581 ​ $ 770,705 ​ ​ Average interest rate during the period ​ 4.45 % ​ 5.50 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2025 2024 ​ ​ Average interest rate at end of period ​ 4.52 % ​ 5.06 % ​ Securities underlying the agreements at end of period: ​ ​ ​ ​ ​ ​ ​ ​ Carrying value ​ $ 174,508 ​ $ 198,174 ​ ​ Estimated fair value ​ $ 191,323 ​ $ 214,538 ​ ​ ​ 27 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Federal Home Loan Bank (“FHLB”) ​ FHLB short-term borrowings mature over terms not exceeding 365 days and are collateralized by FHLB Dallas stock, nonspecified real estate loans and certain specific commercial real estate loans. Other information regarding FHLB short-term borrowings is shown in the following table (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2025 ​ 2024 ​ ​ Average balance during the period ​ $ — ​ $ — ​ ​ Average interest rate during the period ​ ​ 4.65 % ​ 5.71 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-Term Bank Loans ​ The Hilltop Broker-Dealers use short-term bank loans periodically to finance securities owned, margin loans to customers and correspondents, and underwriting activities. Interest on the borrowings varies with the federal funds rate. At March 31, 2025, Hilltop Securities had credit arrangements with two unaffiliated banks, with maximum aggregate commitments of up to $ 425.0 million. These credit arrangements are used to finance securities owned, securities held for correspondent accounts, receivables in customer margin accounts and underwriting activities. These credit arrangements are provided on an “as offered” basis and are not committed lines of credit. In addition, Hilltop Securities has committed revolving credit facilities with two unaffiliated banks, with aggregate availability of up to $ 125.0 million. There were no outstanding short-term bank loans at March 31, 2025. ​ Commercial Paper ​ Hilltop Securities uses the net proceeds (after deducting related issuance expenses) from the sale of two commercial paper programs for general corporate purposes, including working capital and the funding of a portion of its securities inventories. The commercial paper notes (“CP Notes”) may be issued with maturities of 14 days to 270 days from the date of issuance. The CP Notes are issued under two separate programs. The Series 2019-2 CP Notes are issued in maximum aggregate amounts of $ 200 million. The CP Series 2024-1 CP Notes were initiated in December 2024 with the first issuances under this new program occurring in the first quarter of 2025. With these first issuances, there were no future issuances allowed under the Series 2019-1 CP Notes program. Until the final maturity of the Series 2019-1 CP Notes, expected in October 2025, the Series 2019-1 and Series 2024-1 CP notes are managed as a single program with a maximum aggregate amount of $ 300 million. The CP Notes are not redeemable prior to maturity or subject to voluntary prepayment and do not bear interest, but are sold at a discount to par. The CP Notes are secured by a pledge of collateral owned by Hilltop Securities. ​ As of March 31, 2025, the weighted average maturity of the CP Notes was 129 days at a rate of 5.02 %, with a weighted average remaining life of 65 days . At March 31, 2025, the aggregate amount outstanding under these secured arrangements was $ 240.0 million, which was collateralized by securities held for Hilltop Securities accounts valued at $ 264.2 million. ​ 28 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 10. Notes Payable ​ Notes payable consisted of the following (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2025 2024 Senior Notes paid off January 2025, net of discount of $ 295 at December 31, 2024 ​ $ — ​ $ 149,705 Subordinated Notes due May 2030, net of discount of $ 377 and $ 405 , respectively ​ ​ 49,623 ​ ​ 49,596 Subordinated Notes due May 2035, net of discount of $ 1,580 and $ 1,634 , respectively ​ ​ 148,420 ​ ​ 148,366 ​ ​ $ 198,043 ​ $ 347,667 ​ On January 15, 2025 (the “Redemption Date”), Hilltop redeemed, at its election, all of its outstanding Senior Notes at a redemption price equal to 100 % of the principal amount of $ 150 million, plus accrued and unpaid interest to, but excluding, the Redemption Date using cash on hand, which also satisfied and discharged the Company’s obligations under the Senior Notes and the Senior Notes Indenture. ​ ​ ​ 11. Leases ​ Supplemental balance sheet information related to finance leases is as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ Finance leases: ​ ​ ​ ​ ​ ​ ​ Premises and equipment ​ $ 4,780 ​ $ 4,780 ​ Accumulated depreciation ​ ​ ( 4,126 ) ​ ​ ( 4,042 ) ​ Premises and equipment, net ​ $ 654 ​ $ 738 ​ ​ The components of lease costs, including short-term lease costs, are as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 ​ 2024 ​ Operating lease cost ​ $ 8,235 ​ $ 8,560 ​ Less operating lease and sublease income ​ ​ ( 452 ) ​ ​ ( 681 ) ​ Net operating lease cost ​ $ 7,783 ​ $ 7,879 ​ ​ ​ ​ ​ ​ ​ ​ ​ Finance lease cost: ​ ​ ​ ​ ​ ​ ​ Amortization of ROU assets ​ $ 84 ​ $ 147 ​ Interest on lease liabilities ​ ​ 76 ​ ​ 95 ​ Total finance lease cost ​ $ 160 ​ $ 242 ​ ​ Supplemental cash flow information related to leases is as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 ​ 2024 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash flows from operating leases ​ $ 8,760 ​ $ 9,308 Operating cash flows from finance leases ​ ​ 78 ​ ​ 97 Financing cash flows from finance leases ​ ​ 144 ​ ​ 229 Right-of-use assets obtained in exchange for lease obligations: ​ ​ ​ ​ ​ ​ Operating leases ​ $ 9,059 ​ $ 13,400 Finance leases ​ ​ — ​ ​ — ​ ​ 29 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Information regarding the lease terms and discount rates of the Company’s leases is as follows. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ ​ Weighted Average ​ ​ ​ Weighted Average ​ ​ ​ ​ Remaining Lease ​ Weighted Average ​ Remaining Lease ​ Weighted Average Lease Classification ​ Term (Years) ​ Discount Rate ​ Term (Years) ​ Discount Rate Operating ​ 5.2 ​ 5.89 % ​ 5.3 ​ 5.74 % Finance ​ 2.5 ​ 5.06 % ​ 2.7 ​ 5.08 % ​ Future minimum lease payments under lease agreements as of March 31, 2025, are presented below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ Operating Leases ​ Finance Leases 2025 $ 22,834 ​ $ 665 2026 ​ 27,235 ​ ​ 813 2027 ​ 22,404 ​ ​ 448 2028 ​ 17,437 ​ ​ 149 2029 ​ 15,278 ​ ​ — Thereafter ​ 23,853 ​ ​ — Total minimum lease payments ​ 129,041 ​ ​ 2,075 Less amount representing interest ​ ( 18,226 ) ​ ​ ( 482 ) Lease liabilities $ 110,815 ​ $ 1,593 ​ As of March 31, 2025, the Company had additional operating leases that have not yet commenced with aggregate future minimum lease payments of approximately $ 3.5 million. Certain of these operating leases commenced in April 2025 with additional operating leases expected to commence in July 2025 with lease terms ranging from three to seven and a half years. ​ 12. Income Taxes ​ The Company applies an estimated annual effective rate to interim period pre-tax income to calculate the income tax provision for the quarter in accordance with the principal method prescribed by the accounting guidance established for computing income taxes in interim periods. The Company’s effective tax rates were 22.7 % and 22.5 % for the three months ended March 31, 2025 and 2024, respectively. During the three months ended March 31, 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. The effective tax rate during the three months ended March 31, 2024 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 . ​ 13. Commitments and Contingencies ​ Legal Matters ​ The Company is subject to loss contingencies related to litigation, claims, investigations and legal and administrative cases and proceedings arising in the ordinary course of business. The Company evaluates these contingencies based on information currently available, including advice of counsel. The Company establishes accruals for those matters when a loss contingency is considered probable and the related amount is reasonably estimable. Any accruals are periodically reviewed and may be adjusted as circumstances change. A portion of the Company’s exposure with respect to loss contingencies may be offset by applicable insurance coverage. In determining the amounts of any accruals or estimates of possible loss contingencies, the Company does not take into account the availability of insurance coverage. When it is practicable, the Company estimates loss contingencies for possible litigation and claims, whether or not there is an accrued probable loss. When the Company is able to estimate such probable losses, and when it estimates that it is reasonably possible it could incur losses in excess of amounts accrued, the Company is required to make a disclosure of 30 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) the aggregate estimation. As available information changes, however, the matters for which the Company is able to estimate, as well as the estimates themselves, will be adjusted accordingly. ​ Assessments of litigation and claims exposures are difficult due to many factors that involve inherent unpredictability. Those factors include the following: the varying stages of the proceedings, particularly in the early stages; unspecified, unsupported, or uncertain damages; damages other than compensatory, such as punitive damages; a matter presenting meaningful legal uncertainties, including novel issues of law; multiple defendants and jurisdictions; whether discovery has begun or is complete; whether meaningful settlement discussions have commenced; and whether the claim involves a class action and if so, how the class is defined. As a result of some of these factors, the Company may be unable to estimate reasonably possible losses with respect to some or all of the pending and threatened litigation and claims asserted against the Company. ​ The Company is involved in information-gathering requests and investigations (both formal and informal), as well as reviews, examinations and proceedings (collectively, “Inquiries”) by various governmental regulatory agencies, law enforcement authorities and self-regulatory bodies regarding certain of its businesses, business practices and policies, as well as the conduct of persons with whom it does business. Additional Inquiries will arise from time to time. In connection with those Inquiries, the Company receives document requests, subpoenas and other requests for information. The Inquiries could develop into administrative, civil or criminal proceedings or enforcement actions that could result in consequences that have a material effect on the Company’s consolidated financial position, results of operations or cash flows as a whole. Such consequences could include adverse judgments, findings, settlements, penalties, fines, orders, injunctions, restitution, or alterations in the Company’s business practices, and could result in additional expenses and collateral costs, including reputational damage. ​ In September 2020, PrimeLending received an investigative inquiry from the United States Attorney for the Western District of Virginia regarding PrimeLending’s float down option. The United States Attorney issued grand jury subpoenas to PrimeLending and PlainsCapital Bank for additional materials regarding this matter. PrimeLending and PlainsCapital Bank are continuing to cooperate with requests for information with respect to this matter. ​ While the final outcome of litigation and claims exposures or of any Inquiries is inherently unpredictable, management is currently of the opinion that the outcome of pending and threatened litigation and Inquiries will not, except related to specific matters disclosed above, have a material effect on the Company’s business, consolidated financial position, results of operations or cash flows as a whole. However, in the event of unexpected future developments, it is reasonably possible that an adverse outcome in any matter, including the matters discussed above, could be material to the Company’s business, consolidated financial position, results of operations or cash flows for any particular reporting period of occurrence. ​ Indemnification Liability Reserve ​ The mortgage origination segment may be responsible to agencies, investors, or other parties for errors or omissions relating to its representations and warranties that each loan sold meets certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. If determined to be at fault, the mortgage origination segment either repurchases the affected loan from or indemnifies the claimant against loss. The mortgage origination segment has established an indemnification liability reserve for such probable losses. ​ Generally, the mortgage origination segment first becomes aware that an agency, investor, or other party believes a loss has been incurred on a sold loan when it receives a written request from the claimant to repurchase the loan or reimburse the claimant’s losses. Upon completing its review of the claimant’s request, the mortgage origination segment establishes a specific claims reserve for the loan if it concludes its obligation to the claimant is both probable and reasonably estimable. ​ An additional reserve has been established for probable agency, investor or other party losses that may have been incurred, but not yet reported to the mortgage origination segment based upon a reasonable estimate of such losses. Factors considered in the calculation of this reserve include, but are not limited to, the total volume of loans sold exclusive 31 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) of specific claimant requests, actual claim Inquiries, claim settlements and the severity of estimated losses resulting from future claims, and the mortgage origination segment’s history of successfully curing defects identified in claim requests. ​ While the mortgage origination segment’s sales contracts typically include borrower early payment default repurchase provisions, these provisions have not been a primary driver of claims to date, and therefore, are not a primary factor considered in the calculation of this reserve. ​ At March 31, 2025 and December 31, 2024, the mortgage origination segment’s indemnification liability reserve totaled $ 8.0 million and $ 8.1 million, respectively. The provision for indemnification losses was $ 0.7 million and $ 0.3 million during the three months ended March 31, 2025 and 2024, respectively. ​ The following tables provide for a rollforward of claims activity for loans put-back to the mortgage origination segment based upon an alleged breach of a representation or warranty with respect to a loan sold and related indemnification liability reserve activity (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Representation and Warranty Specific Claims ​ ​ Activity - Origination Loan Balance ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 ​ Balance, beginning of period ​ $ 21,593 ​ $ 26,909 ​ Claims made ​ 11,034 ​ 10,309 ​ Claims resolved with no payment ​ ( 4,519 ) ​ ( 6,469 ) ​ Repurchases ​ ( 4,260 ) ​ ( 6,784 ) ​ Indemnification payments ​ ( 154 ) ​ ( 486 ) ​ Balance, end of period ​ $ 23,694 ​ $ 23,479 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indemnification Liability Reserve Activity ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Balance, beginning of period ​ $ 8,111 ​ $ 11,691 ​ Additions for new sales ​ 652 ​ 335 ​ Repurchases ​ ( 520 ) ​ ( 1,856 ) ​ Early payment defaults ​ ( 176 ) ​ ( 320 ) ​ Indemnification payments ​ ( 113 ) ​ ( 79 ) ​ Balance, end of period ​ $ 7,954 ​ $ 9,771 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 ​ 2024 Reserve for Indemnification Liability: ​ ​ ​ ​ ​ ​ ​ Specific claims ​ $ 1,489 ​ $ 557 ​ Incurred but not reported claims ​ 6,465 ​ 7,554 ​ Total ​ $ 7,954 ​ $ 8,111 ​ ​ Although management considers the total indemnification liability reserve to be appropriate, there may be changes in the reserve over time to address incurred losses due to unanticipated adverse changes in the economy and historical loss patterns, discrete events adversely affecting specific borrowers or industries, and/or actions taken by institutions or investors. The impact of such matters is considered in the reserving process when probable and estimable. ​ 32 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 14. Financial Instruments with Off-Balance Sheet Risk ​ Banking ​ The Bank is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit that involve varying degrees of credit and interest rate risk in excess of the amount recognized in the consolidated financial statements. Such financial instruments are recorded in the consolidated financial statements when they are funded or related fees are incurred or received. The contract amounts of those instruments reflect the extent of involvement (and therefore the exposure to credit loss) the Bank has in particular classes of financial instruments. ​ Commitments to extend credit are agreements to lend to a customer provided that the terms established in the contract are met. Commitments generally have fixed expiration dates and may require payment of fees. Because some commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third-party. These letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan commitments to customers. ​ In the aggregate, the Bank had outstanding unused commitments to extend credit of $ 2.1 billion at March 31, 2025 and outstanding financial and performance standby letters of credit of $ 53.5 million at March 31, 2025. ​ The Bank uses the same credit policies in making commitments and standby letters of credit as it does for loans held for investment. The amount of collateral obtained, if deemed necessary, in these transactions is based on management’s credit evaluation of the borrower. Collateral held varies but may include real estate, accounts receivable, marketable securities, interest-bearing deposit accounts, inventory, and property, plant and equipment. ​ Broker-Dealer ​ In the normal course of business, the Hilltop Broker-Dealers execute, settle, and finance various securities transactions that may expose the Hilltop Broker-Dealers to off-balance sheet risk in the event that a customer or counterparty does not fulfill its contractual obligations. Examples of such transactions include the sale of securities not yet purchased by customers or for the accounts of the Hilltop Broker-Dealers, use of derivatives to support certain non-profit housing organization clients and to hedge changes in the fair value of certain securities, clearing agreements between the Hilltop Broker-Dealers and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. ​ 15. Stock-Based Compensation ​ During the three months ended March 31, 2025 and 2024, Hilltop granted 3,929 and 3,968 shares of common stock, respectively, pursuant to the Hilltop Holdings Inc. 2020 Equity Incentive Plan (the “2020 Equity Plan”) to certain non-employee members of the Company’s board of directors for services rendered to the Company. ​ 33 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Restricted Stock Units ​ The following table summarizes information about stock-based incentive awards issued pursuant to the 2020 Equity Plan and nonvested restricted stock unit (“RSU”) activity for the three months ended March 31, 2025 (shares in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ RSUs ​ ​ ​ ​ ​ Weighted ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ Grant Date ​ ​ Outstanding Fair Value Balance, December 31, 2024 ​ 1,285 ​ $ 33.02 ​ Granted ​ 399 ​ $ 32.28 ​ Vested/Released ​ ( 291 ) ​ $ 33.60 ​ Forfeited ​ ( 146 ) ​ $ 32.83 Balance, March 31, 2025 ​ 1,247 ​ $ 32.67 ​ Vested/Released RSUs include an aggregate of 62,324 shares withheld to satisfy employee statutory tax obligations during the three months ended March 31, 2025. ​ During the three months ended March 31, 2025, the Compensation Committee of the board of directors of the Company awarded certain executives and key employees an aggregate of 399,032 RSUs pursuant to the 2020 Equity Plan. Of the RSUs granted during the three months ended March 31, 2025, 303,476 that were outstanding at March 31, 2025, are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date. Of the RSUs granted during the three months ended March 31, 2025, 93,851 that were outstanding at March 31, 2025 , provide for cliff vesting based upon the achievement of certain performance goals over a three-year period. ​ At March 31, 2025, in the aggregate, 960,647 of the outstanding RSUs are subject to time-based vesting conditions and generally cliff vest on the third anniversary of the grant date, and 285,919 outstanding RSUs cliff vest based upon the achievement of certain performance goals over a three-year period. At March 31, 2025 , unrecognized compensation expense related to outstanding RSUs of $ 24.3 million is expected to be recognized over a weighted average period of 1.91 years. ​ 16. Regulatory Matters ​ Banking and Hilltop ​ PlainsCapital, which includes the Bank and PrimeLending, and Hilltop are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory — and possibly additional discretionary — actions by regulators that, if undertaken, could have a direct, material effect on the consolidated financial statements. The regulations require PlainsCapital and Hilltop to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company performs reviews of the classification and calculation of risk-weighted assets to ensure accuracy and compliance with the Basel III regulatory capital requirements as implemented by the Board of Governors of the Federal Reserve System. The capital classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the companies to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of common equity Tier 1, Tier 1 and total capital (as defined) to risk-weighted assets (as defined). ​ In order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers, Basel III requires banking organizations to maintain a capital conservation buffer above minimum risk-based capital requirements measured relative to risk-weighted assets. ​ 34 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The following table shows PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including the conservation buffer ratio in effect at the end of the period (dollars in thousands) . Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. Actual capital amounts and ratios as of December 31, 2024 reflect PlainsCapital’s and Hilltop’s decision to elect the transition option as issued by the federal banking regulatory agencies in March 2020 that permits banking institutions to mitigate the estimated cumulative regulatory capital effects from CECL over a five-year transitionary period through December 31, 2024. As of January 1, 2025, Hilltop and PlainsCapital had fully captured the day-one regulatory capital effects resulting from the implementation of CECL. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Requirements ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Including ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Conservation ​ To Be Well ​ ​ March 31, 2025 ​ December 31, 2024 ​ Buffer ​ Capitalized ​ Amount Ratio Amount Ratio Ratio Ratio Tier 1 capital (to average assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ $ 1,306,947 10.22 % $ 1,317,664 9.99 % 4.0 % 5.0 % Hilltop ​ 2,027,974 12.86 % 2,031,069 12.57 % 4.0 % N/A ​ Common equity Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ ​ 1,306,947 15.14 % ​ 1,317,664 15.35 % 7.0 % 6.5 % Hilltop ​ ​ 2,027,974 21.29 % ​ 2,031,069 21.23 % 7.0 % N/A ​ Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ 1,306,947 15.14 % 1,317,664 15.35 % 8.5 % 8.0 % Hilltop ​ 2,027,974 21.29 % 2,031,069 21.23 % 8.5 % N/A ​ Total capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ 1,414,868 16.39 % 1,419,787 16.54 % 10.5 % 10.0 % Hilltop ​ 2,342,124 24.59 % 2,334,679 24.40 % 10.5 % N/A ​ ​ Broker-Dealer ​ Pursuant to the net capital requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Hilltop Securities has elected to determine its net capital requirements using the alternative method. Accordingly, Hilltop Securities is required to maintain minimum net capital, as defined in Rule 15c3-1 promulgated under the Exchange Act, equal to the greater of $1,000,000 or 2% of aggregate debit balances, as defined in Rule 15c3-3 promulgated under the Exchange Act. Additionally, the net capital rule of the NYSE provides that equity capital may not be withdrawn or cash dividends paid if resulting net capital would be less than 5% of the aggregate debit items. Momentum Independent Network follows the primary (aggregate indebtedness) method, as defined in Rule 15c3-1 promulgated under the Exchange Act, which requires the maintenance of the larger of $250,000 or 6-2/3% of aggregate indebtedness. ​ At March 31, 2025, the net capital position of each of the Hilltop Broker-Dealers was as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Momentum ​ ​ ​ Hilltop ​ Independent ​ ​ Securities Network Net capital ​ $ 237,278 ​ $ 5,117 ​ Less: required net capital ​ ​ 6,707 ​ ​ 288 ​ Excess net capital ​ $ 230,571 ​ $ 4,829 ​ ​ ​ ​ ​ ​ ​ ​ ​ Net capital as a percentage of aggregate debit items ​ ​ 70.8 % ​ ​ ​ Net capital in excess of 5% aggregate debit items ​ $ 220,510 ​ ​ ​ ​ ​ Under certain conditions, Hilltop Securities may be required to segregate cash and securities in a special reserve account for the benefit of customers under Rule 15c3-3 promulgated under the Exchange Act. Assets segregated for regulatory 35 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) purposes under the provisions of the Exchange Act are restricted and not available for general corporate purposes. At March 31, 2025 and December 31, 2024, the Hilltop Broker-Dealers held cash of $ 88.5 million and $ 71.0 million, respectively, segregated in special reserve bank accounts for the benefit of customers. The Hilltop Broker-Dealers were not required to segregate cash and securities in special reserve accounts for the benefit of proprietary accounts of introducing broker-dealers at March 31, 2025. ​ Mortgage Origination ​ As a mortgage originator, PrimeLending and its subsidiaries are subject to minimum capital, leverage, net worth and liquidity requirements established by the Department of Housing and Urban Development (“HUD”) and GNMA, as applicable. On an annual basis, PrimeLending and its subsidiaries submit audited financial statements to HUD and GNMA documenting their respective compliance with minimum requirements. On a quarterly basis, PrimeLending reviews these requirements and timely reports any exceptions to HUD and GNMA, as applicable. If any exceptions to these requirements occur, certain additional financial reporting submissions are required. During the first quarter of 2025, PrimeLending received a $ 10 million capital infusion from its parent company, PlainsCapital Bank. As of March 31, 2025, PrimeLending and its subsidiaries’ minimum capital, leverage, net worth and liquidity exceeded the amounts required by both HUD and GNMA, as applicable. ​ 17. Stockholders’ Equity ​ Dividends ​ During the three months ended March 31, 2025 and 2024, the Company declared and paid cash dividends of $ 0.18 and $ 0.17 per common share, or an aggregate of $ 11.6 million and $ 11.1 million, respectively. ​ On April 24, 2025 , Hilltop’s board of directors declared a quarterly cash dividend of $ 0.18 per common share, payable on May 22, 2025 , to all common stockholders of record as of the close of business on May 8, 2025 . ​ Stock Repurchases ​ In January 2025, the Hilltop board of directors authorized a new stock repurchase program through January 2026, pursuant to which the Company is authorized to repurchase, in the aggregate, up to $ 100.0 million of the Company’s outstanding common stock, inclusive of repurchases to offset dilution related to grants of stock-based compensation. During the three months ended March 31, 2025, Hilltop paid $ 33.3 million to repurchase an aggregate of 1,046,540 shares of the Company’s common stock at an average price of $ 31.80 per share pursuant to the stock repurchase program. ​ The Company’s stock repurchase program, prior year repurchases, and related accounting policy are discussed in detail in Note 1 and Note 22 to the consolidated financial statements included in the Company’s 2024 Form 10-K. ​ 18. Derivative Financial Instruments ​ The Company uses various derivative financial instruments to mitigate interest rate risk. The Bank’s interest rate risk management strategy involves effectively managing the re-pricing characteristics of certain assets and liabilities to mitigate potential adverse impacts from changes in interest rates on the Bank’s net interest margin. Additionally, the Bank manages variability of cash flows associated with its variable rate debt in interest-related cash outflows with interest rate swap contracts. PrimeLending has interest rate risk relative to interest rate lock commitments (“IRLCs”) and its inventory of mortgage loans held for sale. PrimeLending is exposed to such interest rate risk from the time an IRLC is made to an applicant to the time the related mortgage loan is sold. To mitigate interest rate risk, PrimeLending executes forward commitments to sell mortgage-backed securities (“MBSs”) and futures contracts. Additionally, PrimeLending has interest rate risk relative to its MSR asset and uses derivative instruments, including U.S. Treasury bond futures and options to hedge this risk. The Hilltop Broker-Dealers use forward commitments to both purchase and sell MBSs to facilitate customer transactions and as a means to hedge related exposure to interest rate risk in certain inventory positions. Additionally, Hilltop Securities uses various derivative instruments, including U.S. Treasury bond futures and options, 36 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) futures contracts, credit default swaps and municipal market data rate locks, to hedge changes in the fair value of its securities. ​ Non-Hedging Derivative Instruments and the Fair Value Option ​ As discussed in Note 3 to the consolidated financial statements, the Company has elected to measure substantially all mortgage loans held for sale at fair value under the provisions of the Fair Value Option. The election provides the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without applying hedge accounting provisions. The fair values of PrimeLending’s IRLCs and forward commitments are recorded in other assets or other liabilities, as appropriate, and changes in the fair values of these derivative instruments are recorded as a component of net gains from sale of loans and other mortgage production income. These changes in fair value are attributable to changes in the volume of IRLCs, mortgage loans held for sale, commitments to purchase and sell MBSs and MSR assets, and changes in market interest rates. Changes in market interest rates also conversely affect the value of PrimeLending’s mortgage loans held for sale and its MSR asset, which are measured at fair value under the Fair Value Option. The effect of the change in market interest rates on PrimeLending’s loans held for sale and MSR asset is discussed in Note 7 to the consolidated financial statements. The fair values of the Hilltop Broker-Dealers’ and the Bank’s derivative instruments are recorded in other assets or other liabilities, as appropriate. Changes in the fair value of derivatives are presented in the following table (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Increase (decrease) in fair value of derivatives during period: ​ ​ ​ ​ ​ ​ PrimeLending ​ $ 989 ​ $ 10,626 Hilltop Broker-Dealers ​ ​ 4,251 ​ ​ ( 3,945 ) Bank ​ ​ ( 23 ) ​ ​ ( 11 ) ​ Hedging Derivative Instruments ​ The Company has entered into interest rate swap contracts to manage the exposure to changes in fair value associated with certain available for sale fixed rate collateralized mortgage-backed securities and fixed rate loans held for investment attributable to changes in the designated benchmark interest rate. Certain of these fair value hedges have been designated as a portfolio layer, which provides the Company the ability to execute a fair value hedge of the interest rate risk associated with a portfolio of similar prepayable assets whereby the last dollar amount estimated to remain in the portfolio of assets is identified as the hedged item. Additionally, the Company has outstanding interest rate swap contracts designated as cash flow hedges and utilized to manage the variability of cash flows associated with its variable rate borrowings. ​ Under each of its interest rate swap contracts designated as cash flow hedges, the Company receives a floating rate and pays a fixed rate on the outstanding notional amount. The Company assesses the hedge effectiveness both at the onset of the hedge and at regular intervals throughout the life of the derivative. To the extent that the derivative instruments are highly effective in offsetting the variability of the hedged cash flows or fair value, changes in the fair value of the derivatives designated as hedges of cash flows are included as a component of accumulated other comprehensive income or loss on the Company’s consolidated balance sheets, and changes in the fair value of the derivatives designated as hedges of fair value are included in current earnings. Although the Company has determined at the onset of the hedges that the derivative instruments will be highly effective hedges throughout the term of the contract, any portion of derivative instruments subsequently determined to be ineffective will be recognized in earnings. ​ 37 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Derivative positions are presented in the following table (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ Notional Estimated Notional Estimated ​ ​ Amount ​ Fair Value ​ Amount ​ Fair Value Derivative instruments (not designated as hedges): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ IRLCs ​ $ 740,393 ​ $ 12,897 ​ $ 384,528 ​ $ 2,942 Commitments to purchase MBSs ​ 1,191,245 ​ 7,106 ​ 1,152,841 ​ 280 Commitments to sell MBSs ​ ​ 2,251,786 ​ ( 5,158 ) ​ 1,954,405 ​ 8,577 Interest rate swaps ​ ​ 65,003 ​ 2,116 ​ 32,000 ​ 1,088 Interest rate swaps back-to-back (asset) (1) ​ ​ 42,920 ​ ​ 642 ​ ​ 24,928 ​ 277 Interest rate swaps back-to-back (liability) (1) ​ ​ 42,920 ​ ​ ( 686 ) ​ ​ 24,928 ​ ( 298 ) U.S. Treasury bond futures and options (2) ​ ​ 88,804 ​ — ​ 119,200 ​ — Interest rate and other futures (2) ​ ​ 38,010 ​ — ​ 245,200 ​ — Credit default swaps ​ ​ 23,000 ​ 41 ​ 14,000 ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative instruments (designated as hedges): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps designated as cash flow hedges ​ $ 255,000 ​ $ 4,740 ​ $ 285,000 ​ $ 6,748 Interest rate swaps designated as fair value hedges (3) ​ ​ 377,811 ​ ​ 30,116 ​ ​ 354,471 ​ ​ 36,914 ​ (1) Noted derivative instruments include both customer-facing derivatives as well as offsetting derivatives facing other dealer banks. The fair value of these derivatives include a net credit valuation adjustment that was nominal at March 31, 2025 and December 31, 2024, respectively, reducing the fair value of the liability. (2) Noted derivative instruments include contracts between the Hilltop Broker-Dealers and PrimeLending and their respective counterparties with changes in fair value of the contracts that are settled daily. (3) The Company designated $ 337.8 million and $ 376.5 million as the hedged amount (from a closed portfolio of prepayable available for sale securities and loans held for investment with a carrying value of $ 307.6 million and $ 339.4 million as of March 31, 2025 and December 31, 2024, respectively), of which, a subset of these hedges are in portfolio layer hedging relationships. The cumulative basis adjustment included in the carrying value of the hedged items totaled $ 30.2 million and $ 37.1 million as of March 31, 2025 and December 31, 2024, respectively. ​ The Bank held cash collateral advances of $ 36.4 million to offset net asset derivative positions on its derivative instruments designated as hedges at March 31, 2025. The Bank and PrimeLending held aggregate cash collateral advances of $ 50.9 million to offset net asset derivative positions on its commitments to sell MBSs and derivative instruments designated as hedges at December 31, 2024. PrimeLending had advanced cash collateral totaling $ 3.1 million to offset net liability positions on its commitments to sell MBSs at March 31, 2025. In addition, PrimeLending and the Hilltop Broker-Dealers had advanced cash collateral totaling $ 4.7 million and $ 4.9 million on various derivative instruments at March 31, 2025 and December 31, 2024, respectively. These cash collateral amounts are included in either other assets or other liabilities within the consolidated balance sheets. ​ Derivatives on Behalf of Customers ​ The Bank offers derivative contracts to certain customers in connection with their risk management needs. These derivatives include back-to-back interest rate swaps. The Bank manages the risk associated with these contracts by entering into an equal and offsetting derivative with a third-party dealer bank. These derivatives generally work together as an economic interest rate hedge, but the Bank does not designate them for hedge accounting treatment. Consequently, changes in fair value of the corresponding derivative financial asset or liability were recorded as either a charge or credit to current earnings during the period in which the changes in fair value occurred, typically resulting in no net earnings impact. ​ 19. Balance Sheet Offsetting ​ Certain financial instruments, including resale and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The Company’s accounting policy is to present required disclosures related to collateral and derivative positions on a gross basis. ​ 38 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) The following tables present the assets and liabilities subject to enforceable master netting arrangements, repurchase agreements, or similar agreements with offsetting rights (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Amounts Not Offset in ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Amounts ​ the Balance Sheet ​ ​ ​ ​ Gross Amounts Gross Amounts of Assets ​ Cash ​ ​ ​ of Recognized ​ Offset in the ​ Presented in the ​ Financial ​ Collateral ​ Net ​ ​ Assets ​ Balance Sheet ​ Balance Sheet ​ Instruments ​ Pledged ​ Amount March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities borrowed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ $ 1,419,089 ​ $ — ​ $ 1,419,089 ​ $ ( 1,356,696 ) ​ $ — ​ $ 62,393 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 38,046 ​ ​ — ​ ​ 38,046 ​ ​ — ​ ​ ( 35,930 ) ​ ​ 2,116 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit default swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 41 ​ ​ — ​ ​ 41 ​ ​ — ​ ​ — ​ ​ 41 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reverse repurchase agreements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 99,099 ​ ​ — ​ ​ 99,099 ​ ​ ( 99,012 ) ​ ​ — ​ ​ 87 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward MBS derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 7,677 ​ — ​ 7,677 ​ ( 310 ) ​ — ​ 7,367 ​ ​ $ 1,563,952 ​ $ — ​ $ 1,563,952 ​ $ ( 1,456,018 ) ​ $ ( 35,930 ) ​ $ 72,004 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities borrowed: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ $ 1,292,365 ​ $ — ​ $ 1,292,365 ​ $ ( 1,214,081 ) ​ $ — ​ $ 78,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 45,243 ​ ​ — ​ ​ 45,243 ​ ​ — ​ ​ ( 44,155 ) ​ ​ 1,088 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit default swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 3 ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 3 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reverse repurchase agreements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 88,728 ​ ​ — ​ ​ 88,728 ​ ​ ( 86,371 ) ​ ​ — ​ ​ 2,357 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward MBS derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 14,719 ​ ​ — ​ ​ 14,719 ​ ​ ( 61 ) ​ ​ ( 4,325 ) ​ ​ 10,333 ​ ​ $ 1,441,058 ​ $ — ​ $ 1,441,058 ​ $ ( 1,300,513 ) ​ $ ( 48,480 ) ​ $ 92,065 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross Amounts Not Offset in ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Amounts ​ the Balance Sheet ​ ​ ​ ​ Gross Amounts Gross Amounts of Liabilities ​ Cash ​ ​ ​ of Recognized ​ Offset in the ​ Presented in the ​ Financial ​ Collateral ​ Net ​ ​ Liabilities ​ Balance Sheet ​ Balance Sheet ​ Instruments ​ Pledged ​ Amount March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities loaned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ $ 1,401,595 ​ $ — ​ $ 1,401,595 ​ $ ( 1,339,251 ) ​ $ — ​ $ 62,344 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 1,118 ​ — ​ 1,118 ​ — ​ — ​ 1,118 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repurchase agreements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 174,508 ​ — ​ 174,508 ​ ( 174,508 ) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward MBS derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 5,729 ​ — ​ 5,729 ​ ( 310 ) ​ ( 2,173 ) ​ 3,246 ​ ​ $ 1,582,950 ​ $ — ​ $ 1,582,950 ​ $ ( 1,514,069 ) ​ $ ( 2,173 ) ​ $ 66,708 December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities loaned: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ $ 1,291,725 ​ $ — ​ $ 1,291,725 ​ $ ( 1,211,426 ) ​ $ — ​ $ 80,299 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest rate swaps: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ ​ 514 ​ — ​ 514 ​ — ​ — ​ 514 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Repurchase agreements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 198,174 ​ — ​ 198,174 ​ ( 198,174 ) ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Forward MBS derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Institutional counterparties ​ 5,862 ​ — ​ 5,862 ​ ( 61 ) ​ — ​ 5,801 ​ ​ $ 1,496,275 ​ $ — ​ $ 1,496,275 ​ $ ( 1,409,661 ) ​ $ — ​ $ 86,614 ​ 39 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) Secured Borrowing Arrangements ​ Secured Borrowings (Repurchase Agreements) — The Company participates in transactions involving securities sold under repurchase agreements, which are secured borrowings and generally mature one to ninety days from the transaction date or involve arrangements with no definite termination date. Securities sold under repurchase agreements are reflected at the amount of cash received in connection with the transactions. The Company may be required to provide additional collateral based on the fair value of the underlying securities, which is monitored on a daily basis. ​ Securities Lending Activities — The Company’s securities lending activities include lending securities for other broker-dealers, lending institutions and its own clearing and retail operations. These activities involve lending securities to other broker-dealers to cover short sales, to complete transactions in which there has been a failure to deliver securities by the required settlement date and as a conduit for financing activities. ​ When lending securities, the Company receives cash or similar collateral and generally pays interest (based on the amount of cash deposited) to the other party to the transaction. Securities lending transactions are executed pursuant to written agreements with counterparties that generally require securities loaned to be marked-to-market on a daily basis. The Company receives collateral in the form of cash in an amount generally in excess of the fair value of securities loaned. The Company monitors the fair value of securities loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Collateral adjustments are made on a daily basis through the facilities of various clearinghouses. The Company is a principal in these securities lending transactions and is liable for losses in the event of a failure of any other party to honor its contractual obligation. Management sets credit limits with each counterparty and reviews these limits regularly to monitor the risk level with each counterparty. The Company is subject to credit risk through its securities lending activities if securities prices decline rapidly because the value of the Company’s collateral could fall below the amount of the indebtedness it secures. In rapidly appreciating markets, credit risk increases due to short positions. The Company’s securities lending business subjects the Company to credit risk if a counterparty fails to perform or if collateral securing its obligations is insufficient. In securities transactions, the Company is subject to credit risk during the period between the execution of a trade and the settlement by the customer. ​ The following tables present the remaining contractual maturities of repurchase agreement and securities lending transactions accounted for as secured borrowings (in thousands). The Company had no repurchase-to-maturity transactions outstanding at both March 31, 2025 and December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining Contractual Maturities ​ ​ Overnight and ​ ​ ​ ​ ​ Greater Than ​ ​ ​ March 31, 2025 ​ Continuous ​ Up to 30 Days ​ 30-90 Days ​ 90 Days ​ Total Repurchase agreement transactions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. Treasury and agency securities ​ $ 37,180 ​ $ 137,328 ​ $ — ​ $ — ​ $ 174,508 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities lending transactions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate securities ​ ​ 52 ​ ​ — ​ ​ — ​ ​ — ​ ​ 52 Equity securities ​ ​ 1,401,543 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,401,543 Total ​ $ 1,438,775 ​ $ 137,328 ​ $ — ​ $ — ​ $ 1,576,103 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above ​ ​ ​ ​ $ 1,576,103 Amount related to agreements not included in offsetting disclosure above ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Remaining Contractual Maturities ​ ​ Overnight and ​ ​ ​ ​ ​ Greater Than ​ ​ ​ December 31, 2024 ​ Continuous ​ Up to 30 Days ​ 30-90 Days ​ 90 Days ​ Total Repurchase agreement transactions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Asset-backed securities ​ $ 117,847 ​ $ 80,327 ​ $ — ​ $ — ​ $ 198,174 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities lending transactions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate securities ​ ​ 52 ​ ​ — ​ ​ — ​ ​ — ​ ​ 52 Equity securities ​ ​ 1,291,673 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,291,673 Total ​ $ 1,409,572 ​ $ 80,327 ​ $ — ​ $ — ​ $ 1,489,899 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gross amount of recognized liabilities for repurchase agreement and securities lending transactions in offsetting disclosure above ​ ​ ​ ​ $ 1,489,899 Amount related to agreements not included in offsetting disclosure above ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — ​ ​ 40 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 20. Broker-Dealer and Clearing Organization Receivables and Payables ​ Broker-dealer and clearing organization receivables and payables consisted of the following (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ 2025 2024 Receivables: ​ ​ ​ ​ ​ ​ ​ Securities borrowed ​ $ 1,419,089 ​ $ 1,292,365 ​ Securities failed to deliver ​ 17,684 ​ 16,045 ​ Trades in process of settlement ​ — ​ 125,736 ​ Other ​ 13,304 ​ 18,220 ​ ​ ​ $ 1,450,077 ​ $ 1,452,366 ​ Payables: ​ ​ ​ ​ ​ ​ ​ Securities loaned ​ $ 1,401,595 ​ $ 1,291,725 ​ Correspondents ​ 14,357 ​ 17,025 ​ Securities failed to receive ​ 12,872 ​ 16,623 ​ Trades in process of settlement ​ 11,113 ​ — ​ Other ​ 6,949 ​ 6,529 ​ ​ ​ $ 1,446,886 ​ $ 1,331,902 ​ ​ ​ 21. Segment and Related Information ​ The Company has two primary business units, PCC (banking and mortgage origination) and Securities Holdings (broker-dealer). Under GAAP, the Company’s business units are comprised of three reportable business segments organized primarily by the core products offered to the segments’ respective customers: banking, broker-dealer and mortgage origination. These segments reflect the manner in which operations are managed and the criteria used by the chief operating decision maker (“CODM”), the Company’s President and Chief Executive Officer, to evaluate segment performance, develop strategy and allocate resources. ​ The banking segment includes the operations of the Bank. The broker-dealer segment includes the operations of Securities Holdings, and the mortgage origination segment is composed of PrimeLending. ​ Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities and management and administrative services to support the overall operations of the Company. ​ Balance sheet amounts not discussed previously and the elimination of intercompany transactions are included in “All Other and Eliminations.” The following tables present certain information about reportable business segment revenues, operating results, goodwill and assets (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2025 ​ Banking ​ Broker-Dealer ​ Mortgage Origination ​ Corporate ​ All Other and Eliminations ​ Hilltop Consolidated Interest income ​ $ 158,545 ​ $ 34,823 ​ $ 11,230 ​ $ 2,815 ​ $ ( 14,614 ) ​ $ 192,799 Interest expense (1) ​ ​ 67,995 ​ ​ 23,255 ​ ​ 12,627 ​ ​ 3,684 ​ ​ ( 19,879 ) ​ ​ 87,682 Net interest income (expense) ​ ​ 90,550 ​ ​ 11,568 ​ ​ ( 1,397 ) ​ ​ ( 869 ) ​ ​ 5,265 ​ ​ 105,117 Noninterest income ​ ​ 10,810 ​ ​ 96,937 ​ ​ 67,775 ​ ​ 43,379 ​ ​ ( 5,561 ) ​ ​ 213,340 ​ ​ $ 101,360 ​ $ 108,505 ​ $ 66,378 ​ $ 42,510 ​ $ ( 296 ) ​ $ 318,457 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for (reversal of) loan losses ​ ​ 9,372 ​ ​ ( 34 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ 9,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-variable compensation and benefits ​ ​ 34,102 ​ ​ 34,781 ​ ​ 28,507 ​ ​ 9,420 ​ ​ - ​ ​ 106,810 Variable compensation (2) ​ ​ - ​ ​ 33,283 ​ ​ 24,832 ​ ​ 11,315 ​ ​ - ​ ​ 69,430 Occupancy and equipment, net ​ ​ 8,489 ​ ​ 4,851 ​ ​ 4,775 ​ ​ 1,834 ​ ​ ( 167 ) ​ ​ 19,782 Professional services ​ ​ ( 4,157 ) ​ ​ 4,456 ​ ​ 3,152 ​ ​ 755 ​ ​ ( 92 ) ​ ​ 4,114 Other segment expense items (3) ​ ​ 13,496 ​ ​ 21,952 ​ ​ 13,394 ​ ​ 2,567 ​ ​ ( 72 ) ​ ​ 51,337 ​ ​ $ 51,930 ​ $ 99,323 ​ $ 74,660 ​ $ 25,891 ​ $ ( 331 ) ​ $ 251,473 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before taxes ​ $ 40,058 ​ $ 9,216 ​ $ ( 8,282 ) ​ $ 16,619 ​ $ 35 ​ $ 57,646 41 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, 2024 ​ Banking ​ Broker-Dealer ​ Mortgage Origination ​ Corporate ​ All Other and Eliminations ​ Hilltop Consolidated Interest income ​ $ 170,395 ​ $ 42,185 ​ $ 12,244 ​ $ 1,915 ​ $ ( 17,125 ) ​ $ 209,614 Interest expense (1) ​ ​ 78,789 ​ ​ 29,916 ​ ​ 16,496 ​ ​ 5,018 ​ ​ ( 24,226 ) ​ ​ 105,993 Net interest income (expense) ​ ​ 91,606 ​ ​ 12,269 ​ ​ ( 4,252 ) ​ ​ ( 3,103 ) ​ ​ 7,101 ​ ​ 103,621 Noninterest income ​ ​ 11,903 ​ ​ 104,578 ​ ​ 66,700 ​ ​ 5,785 ​ ​ ( 7,348 ) ​ ​ 181,618 ​ ​ $ 103,509 ​ $ 116,847 ​ $ 62,448 ​ $ 2,682 ​ $ ( 247 ) ​ $ 285,239 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for (reversal of) loan losses ​ ​ ( 2,853 ) ​ ​ ( 18 ) ​ ​ - ​ ​ - ​ ​ - ​ ​ ( 2,871 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-variable compensation and benefits ​ ​ 32,389 ​ ​ 34,183 ​ ​ 30,506 ​ ​ 11,290 ​ ​ - ​ ​ 108,368 Variable compensation (2) ​ ​ - ​ ​ 35,274 ​ ​ 22,188 ​ ​ - ​ ​ - ​ ​ 57,462 Occupancy and equipment, net ​ ​ 9,335 ​ ​ 4,730 ​ ​ 5,954 ​ ​ 2,060 ​ ​ ( 167 ) ​ ​ 21,912 Professional services ​ ​ 1,973 ​ ​ 3,129 ​ ​ 3,369 ​ ​ 1,260 ​ ​ - ​ ​ 9,731 Other segment expense items (3) ​ ​ 12,323 ​ ​ 20,631 ​ ​ 16,881 ​ ​ 2,774 ​ ​ ( 59 ) ​ ​ 52,550 ​ ​ $ 56,020 ​ $ 97,947 ​ $ 78,898 ​ $ 17,384 ​ $ ( 226 ) ​ $ 250,023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before taxes ​ $ 50,342 ​ $ 18,918 ​ $ ( 16,450 ) ​ $ ( 14,702 ) ​ $ ( 21 ) ​ $ 38,087 (1) Significant interest expenses for each reportable segment that are regularly provided to the CODM include: Banking segment – primarily comprised of deposit interest expense. Broker-dealer segment – primarily comprised of securities loaned and short-term borrowings interest expense. Mortgage origination segment – primarily comprised of interest incurred on warehouse lines of credit held with the Bank. (2) Variable compensation represents performance-based commissions and incentives. (3) Other segment items for certain reportable segments that are regularly provided to the CODM include: Broker-dealer – included brokerage fees expense and travel, meals and entertainment expense. Mortgage origination segment – included mortgage origination and servicing expenses, unreimbursed loan closing costs and business development expense. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage ​ All Other and Hilltop ​ ​ Banking ​ Broker-Dealer ​ Origination ​ Corporate ​ Eliminations ​ Consolidated March 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ $ 247,368 ​ $ 7,008 ​ $ 13,071 ​ $ — ​ $ — ​ $ 267,447 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 12,890,500 ​ $ 2,846,135 ​ $ 912,830 ​ $ 2,474,602 ​ $ ( 3,311,368 ) ​ $ 15,812,699 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Goodwill ​ $ 247,368 ​ $ 7,008 ​ $ 13,071 ​ $ — ​ $ — ​ $ 267,447 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 13,354,407 ​ $ 2,823,582 ​ $ 1,010,727 ​ $ 2,601,888 ​ $ ( 3,522,475 ) ​ $ 16,268,129 ​ ​ ​ 22. Earnings per Common Share ​ The following table presents the computation of basic and diluted earnings per common share (in thousands, except per share data). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to Hilltop ​ $ 42,116 ​ $ 27,668 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 64,613 ​ 65,200 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per common share: ​ $ 0.65 ​ $ 0.42 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Income attributable to Hilltop ​ $ 42,116 ​ $ 27,668 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares outstanding - basic ​ 64,613 ​ 65,200 ​ ​ Effect of potentially dilutive securities ​ 2 ​ ​ 14 ​ ​ Weighted average shares outstanding - diluted ​ 64,615 ​ 65,214 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share: ​ $ 0.65 ​ $ 0.42 ​ ​ ​ ​ 42 Table of Contents Hilltop Holdings Inc. and Subsidiaries Notes to Consolidated Financial Statements (continued) (Unaudited) 23. Subsequent Event ​ In April 2025, PrimeLending entered into multiple Settlement Agreement & Releases (the “Settlements”) related to a matter whereby PrimeLending received an aggregate of $ 9.5 million from the respective parties. The full amount associated with the Settlements will be recorded within noninterest income in the consolidated statement of operations during the second quarter of 2025. ​ ​ ​ 43 Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. ​ The following discussion should be read in conjunction with the consolidated historical financial statements and notes appearing elsewhere in this Quarterly Report on Form 10-Q (this “Quarterly Report”) and the financial information set forth in the tables herein. ​ Unless the context otherwise indicates, all references in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, to the “Company,” “we,” “us,” “our” or “ours” or similar words are to Hilltop Holdings Inc. and its direct and indirect wholly owned subsidiaries, references to “Hilltop” refer solely to Hilltop Holdings Inc., references to “PCC” refer to PlainsCapital Corporation (a wholly owned subsidiary of Hilltop), references to “Securities Holdings” refer to Hilltop Securities Holdings LLC (a wholly owned subsidiary of Hilltop), references to “Hilltop Securities” refer to Hilltop Securities Inc. (a wholly owned subsidiary of Securities Holdings), references to “Momentum Independent Network” refer to Momentum Independent Network Inc. (a wholly owned subsidiary of Securities Holdings, Hilltop Securities and Momentum Independent Network are collectively referred to as the “Hilltop Broker-Dealers”), references to the “Bank” refer to PlainsCapital Bank (a wholly owned subsidiary of PCC), references to “FNB” refer to First National Bank, references to “SWS” refer to the former SWS Group, Inc., references to “PrimeLending” refer to PrimeLending, a PlainsCapital Company (a wholly owned subsidiary of the Bank) and its subsidiaries as a whole. ​ FORWARD-LOOKING STATEMENTS ​ 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. ​ 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: ​ ● the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; ● effectiveness of our data security controls in the face of cyber attacks and any legal, reputational and financial risks following a cybersecurity incident; ● changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; ● changes in the interest rate environment; ● risks associated with concentration in real estate related loans; ● the effects of our indebtedness on our ability to manage our business successfully, including the restrictions imposed by the indenture governing our indebtedness; 44 Table of Contents ● disruptions to the economy and financial services industry, risks associated with uninsured deposits and responsive measures by federal or state governments or banking regulators, including increases in the cost of our deposit insurance assessments; ● cost and availability of capital; ● changes in state and federal laws, regulations or policies affecting one or more of our business segments, including changes in policies under the new Presidential administration, changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and Consumer Protection Act; ● changes in key management; ● competition in our banking, broker-dealer and mortgage origination segments from other banks and financial institutions as well as investment banking and financial advisory firms, mortgage bankers, asset-based non-bank lenders and government agencies; ● legal and regulatory proceedings; ● risks associated with merger and acquisition integration; and ● our ability to use excess capital in an effective manner. ​ For a more detailed discussion of these and other factors that may affect our business and that could cause the actual results to differ materially from those anticipated in these forward-looking statements, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”), which was filed with the Securities and Exchange Commission (“SEC”) on February 14, 2025, this Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and other filings we have made with the SEC. We caution that the foregoing list of factors is not exhaustive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. All subsequent written and oral forward-looking statements concerning our business attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this Quarterly Report except to the extent required by federal securities laws. 45 Table of Contents OVERVIEW ​ We are a financial holding company registered under the Bank Holding Company Act of 1956. Our primary line of business is to provide business and consumer banking services from offices located throughout Texas through the Bank. We also provide an array of financial products and services through our broker-dealer and mortgage origination segments. The following includes additional details regarding the financial products and services provided by each of our primary business units. ​ PCC . PCC is a financial holding company that provides, through its subsidiaries, traditional banking and wealth, investment and treasury management services primarily in Texas and residential mortgage loans throughout the United States. ​ Securities Holdings . Securities Holdings is a holding company that provides, through its subsidiaries, investment banking and other related financial services, including municipal advisory, sales, trading and underwriting of taxable and tax-exempt fixed income securities, clearing, securities lending, structured finance and retail brokerage services throughout the United States. ​ The following historical consolidated data for the periods indicated has been derived from our historical consolidated financial statements included elsewhere in this Quarterly Report (dollars and shares in thousands, except per share data). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 ​ Statement of Operations Data: ​ ​ ​ ​ ​ ​ ​ Net interest income ​ $ 105,117 ​ $ 103,621 ​ Provision for (reversal of) credit losses ​ ​ 9,338 ​ ​ (2,871) ​ Total noninterest income ​ ​ 213,340 ​ ​ 181,618 ​ Total noninterest expense ​ ​ 251,473 ​ ​ 250,023 ​ Income before income taxes ​ 57,646 ​ 38,087 ​ Income tax expense ​ 13,114 ​ 8,565 ​ Net income ​ 44,532 ​ 29,522 ​ Less: Net income attributable to noncontrolling interest ​ 2,416 ​ 1,854 ​ Income attributable to Hilltop ​ $ 42,116 ​ $ 27,668 ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Share Data: ​ ​ ​ ​ ​ ​ ​ Diluted earnings per common share ​ $ 0.65 ​ $ 0.42 ​ Diluted weighted average shares outstanding ​ ​ 64,615 ​ ​ 65,214 ​ Cash dividends declared per common share ​ $ 0.18 ​ $ 0.17 ​ Dividend payout ratio (1) ​ ​ 27.62 % ​ 40.06 % Book value per common share (end of period) ​ $ 34.29 ​ $ 32.66 ​ Tangible book value per common share (2) (end of period) ​ $ 30.02 ​ $ 28.44 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2025 2024 ​ Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 15,812,699 ​ $ 16,268,129 ​ Cash and due from banks ​ 1,702,623 ​ ​ 2,298,977 ​ Securities ​ 2,814,983 ​ ​ 2,659,661 ​ Loans held for sale ​ 818,328 ​ ​ 858,665 ​ Loans held for investment, net of unearned income ​ 7,966,777 ​ ​ 7,950,551 ​ Allowance for credit losses ​ (106,197) ​ ​ (101,116) ​ Total deposits ​ 10,831,966 ​ ​ 11,065,322 ​ Notes payable ​ 198,043 ​ ​ 347,667 ​ Total stockholders' equity ​ 2,228,822 ​ ​ 2,218,312 ​ ​ ​ ​ ​ ​ ​ ​ ​ Capital Ratios: ​ ​ ​ ​ ​ ​ ​ Common equity to assets ratio ​ 13.91 % 13.46 % Tangible common equity to tangible assets (2) ​ 12.39 % 11.98 % (1) Dividend payout ratio is defined as cash dividends declared per common share divided by basic earnings per common share. (2) For a reconciliation to the nearest GAAP measure, see “—Reconciliation and Management’s Explanation of Non-GAAP Financial Measures.” 46 Table of Contents Consolidated income before income taxes during the three months ended March 31, 2025 included the following contributions from our reportable business segments. ​ ● The banking segment contributed $40.1 million of income before income taxes during the three months ended March 31, 2025; ● The broker-dealer segment contributed $9.2 million of income before income taxes during the three months ended March 31, 2025; and ● The mortgage origination segment incurred $8.3 million of losses before income taxes during the three months ended March 31, 2025. ​ During the three months ended March 31, 2025, we declared and paid total common dividends of $11.6 million. ​ On April 24, 2025, our board of directors declared a quarterly cash dividend of $0.18 per common share, payable on May 22, 2025 to all common stockholders of record as of the close of business on May 8, 2025. ​ In January 2025, our board of directors authorized a new stock repurchase program through January 2026, pursuant to which we are authorized to repurchase, in the aggregate, up to $100.0 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, 2025, we paid $33.3 million to repurchase an aggregate of 1,046,540 shares of our common stock at an average price of $31.80 per share pursuant to the stock repurchase program. ​ Reconciliation and Management’s Explanation of Non-GAAP Financial Measures ​ 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). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ 2025 2024 ​ Book value per common share ​ $ 34.29 ​ $ 32.66 ​ Effect of goodwill and intangible assets per share ​ ​ (4.27) ​ ​ (4.22) ​ Tangible book value per common share ​ $ 30.02 ​ $ 28.44 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ 2025 2024 ​ Hilltop stockholders’ equity ​ $ 2,199,712 ​ $ 2,189,965 ​ Less: goodwill and intangible assets, net ​ ​ 273,823 ​ ​ 274,080 ​ Tangible common equity ​ $ 1,925,889 ​ $ 1,915,885 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets ​ $ 15,812,699 ​ $ 16,268,129 ​ Less: goodwill and intangible assets, net ​ ​ 273,823 ​ ​ 274,080 ​ Tangible assets ​ $ 15,538,876 ​ $ 15,994,049 ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity to assets ​ 13.91 % 13.46 % Tangible common equity to tangible assets ​ 12.39 % 11.98 % ​ 47 Table of Contents Recent Developments ​ Senior Notes Redemption ​ On January 15, 2025 (the “Redemption Date”), we redeemed all of our outstanding 5% senior notes due 2025 (the “Senior Notes”) at a redemption price equal to the aggregate principal amount of $150 million, plus accrued and unpaid interest to, but excluding, the Redemption Date (collectively, the “Redemption Price”). The redemption of the Senior Notes was pursuant to the indenture, dated as of April 9, 2015 (the “Senior Notes Indenture”), between the Company and U.S. Bank National Association, as Trustee (solely in its capacity as trustee for the Senior Notes), which permitted the redemption of the Senior Notes beginning 90 days prior to April 15, 2025 (the maturity date of the Senior Notes). The Company irrevocably deposited with the trustee funds using cash on hand in an amount sufficient to pay the Redemption Price on the Redemption Date to satisfy and discharge its obligations under the Senior Notes and the Senior Notes Indenture. ​ Merchant Bank Transaction ​ 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 as a component of other noninterest income within the consolidated statements of operations. 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 liquidation of Moser Holdings, LLC. ​ Economic Environment ​ The extent of the impact of uncertain economic conditions on our financial performance during the remainder of 2025, will depend in part on developments outside of our control including, among others, the timing and significance of further changes in U.S. Treasury yields and mortgage interest rates, changes in funding costs, inflationary pressures, changes in the political environment, the impact of tariffs and reciprocal tariffs, and international armed conflicts and their impact on supply chains. ​ 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. ​ 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 quarter of 2025, our cost of deposits decreased during the three months ended March 31, 2025, compared to the same period of 2024, as we took actions to reduce the interest paid on our interest-bearing deposits. Additionally, at March 31, 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. ​ 48 Table of Contents 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, we anticipate that our cost of deposits will continue to trend modestly downward. 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, 2025. ​ 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 2025. ​ Asset Valuation ​ As discussed in more detail within “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Form 10-K, at each reporting date between annual impairment tests, we consider potential indicators of impairment including the condition of the economy and financial services industry; government intervention and regulatory updates; the impact of recent events to financial performance and cost factors of the reporting unit; performance of our stock and other relevant events. ​ 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. ​ Given the potential impacts of the operating performance of our reporting segments and overall economic conditions, actual results may differ materially from our current estimates as the scope of such impacts evolves or if the duration of business disruptions are longer than currently anticipated. We continue to monitor developments regarding overall economic conditions, market capitalization, and any other triggering events or circumstances that may indicate an impairment in the future. ​ 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. ​ Outlook ​ 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. ​ 49 Table of Contents Factors Affecting Results of Operations ​ As a financial institution providing products and services through our banking, broker-dealer and mortgage origination segments, we are directly affected by general economic and market conditions, many of which are beyond our control and unpredictable. A key factor impacting our results of operations is changes in the level of interest rates in addition to twists in the shape of the yield curve with the magnitude and direction of the impact varying across the different lines of business. Other factors impacting our results of operations include, but are not limited to, fluctuations in volume and price levels of securities, inflation, political events, investor confidence, investor participation levels, legal, regulatory, and compliance requirements and competition. All of these factors have the potential to impact our financial position, operating results and liquidity. In addition, the recent economic and political environment has led to legislative and regulatory initiatives, both enacted and proposed, that could substantially change the regulation of the financial services industry and may significantly impact us. ​ Segment Information ​ The Company has two primary business units, PCC (banking and mortgage origination) and Securities Holdings (broker-dealer). Under GAAP, the Company’s units are comprised of three reportable business segments organized primarily by the core products offered to the segments’ respective customers: banking, broker-dealer and mortgage origination. Consistent with our historical segment operating results, we anticipate that future revenues will be driven primarily from the banking segment, with the remainder being generated by our broker-dealer and mortgage origination segments. Operating results for the mortgage origination segment have historically been more volatile than operating results for the banking and broker-dealer segments. ​ The banking segment includes the operations of the Bank. The banking segment primarily provides business and consumer banking services from offices located throughout Texas and generates revenue from its portfolio of earning assets. The Bank’s results of operations are primarily dependent on net interest income. The Bank also derives revenue from other sources, including service charges on customer deposit accounts and trust fees. ​ 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. ​ The mortgage origination segment includes the operations of PrimeLending, which offers a variety of loan products and generates revenue predominantly from fees charged on the origination and servicing of loans and from selling these loans in the secondary market. ​ Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities, and management and administrative services to support the overall operations of the Company. ​ The eliminations of intercompany transactions are included in “All Other and Eliminations.” Additional information concerning our reportable business segments is presented in Note 21, “Segment and Related Information,” in the notes to our consolidated financial statements. ​ 50 Table of Contents The following table presents certain information about the results of our reportable business segments (in thousands). This table serves as a basis for the discussion and analysis in the segment operating results sections that follow. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Variance 2025 vs 2024 ​ ​ ​ 2025 ​ 2024 ​ Amount ​ Percent ​ Net interest income (expense): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ $ 90,550 ​ $ 91,606 ​ $ (1,056) ​ (1) ​ Broker-Dealer ​ ​ 11,568 ​ ​ 12,269 ​ ​ (701) ​ (6) ​ Mortgage Origination ​ ​ (1,397) ​ ​ (4,252) ​ ​ 2,855 ​ 67 ​ Corporate ​ ​ (869) ​ ​ (3,103) ​ ​ 2,234 ​ 72 ​ All Other and Eliminations (1) ​ ​ 5,265 ​ ​ 7,101 ​ ​ (1,836) ​ (26) ​ Hilltop Consolidated ​ $ 105,117 ​ $ 103,621 ​ $ 1,496 ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for (reversal of) credit losses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ $ 9,372 ​ $ (2,853) ​ $ 12,225 ​ 428 ​ Broker-Dealer ​ ​ (34) ​ ​ (18) ​ ​ (16) ​ NM ​ Mortgage Origination ​ ​ — ​ ​ - ​ ​ — ​ — ​ Corporate ​ ​ — ​ ​ - ​ ​ — ​ — ​ All Other and Eliminations ​ ​ — ​ ​ - ​ ​ — ​ — ​ Hilltop Consolidated ​ $ 9,338 ​ $ (2,871) ​ $ 12,209 ​ 425 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ $ 10,810 ​ $ 11,903 ​ $ (1,093) ​ (9) ​ Broker-Dealer ​ ​ 96,937 ​ ​ 104,578 ​ ​ (7,641) ​ (7) ​ Mortgage Origination ​ ​ 67,775 ​ ​ 66,700 ​ ​ 1,075 ​ 2 ​ Corporate ​ ​ 43,379 ​ ​ 5,785 ​ ​ 37,594 ​ 650 ​ All Other and Eliminations (1) ​ ​ (5,561) ​ ​ (7,348) ​ ​ 1,787 ​ 24 ​ Hilltop Consolidated ​ $ 213,340 ​ $ 181,618 ​ $ 31,722 ​ 17 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ $ 51,930 ​ $ 56,020 ​ $ (4,090) ​ (7) ​ Broker-Dealer ​ ​ 99,323 ​ ​ 97,947 ​ ​ 1,376 ​ 1 ​ Mortgage Origination ​ ​ 74,660 ​ ​ 78,898 ​ ​ (4,238) ​ (5) ​ Corporate ​ ​ 25,891 ​ ​ 17,384 ​ ​ 8,507 ​ 49 ​ All Other and Eliminations ​ ​ (331) ​ ​ (226) ​ ​ (105) ​ (46) ​ Hilltop Consolidated ​ $ 251,473 ​ $ 250,023 ​ $ 1,450 ​ 1 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Banking ​ $ 40,058 ​ $ 50,342 ​ $ (10,284) ​ (20) ​ Broker-Dealer ​ ​ 9,216 ​ ​ 18,918 ​ ​ (9,702) ​ (51) ​ Mortgage Origination ​ ​ (8,282) ​ ​ (16,450) ​ ​ 8,168 ​ 50 ​ Corporate ​ ​ 16,619 ​ ​ (14,702) ​ ​ 31,321 ​ 213 ​ All Other and Eliminations ​ ​ 35 ​ ​ (21) ​ ​ 56 ​ 267 ​ Hilltop Consolidated ​ $ 57,646 ​ $ 38,087 ​ $ 19,559 ​ 51 ​ (1) All other and eliminations amounts during each period include FDIC sweep program revenues and expenses earned on broker-dealer segment deposits placed with the banking segment that are eliminated in consolidation. NM Not meaningful ​ Key Performance Indicators ​ We utilize several key indicators of financial condition and operating performance to evaluate the various aspects of our business. In addition to traditional financial metrics, such as revenue and growth trends, we monitor several other financial measures and non-financial operating metrics to help us evaluate growth trends, measure the adequacy of our capital based on regulatory reporting requirements, measure the effectiveness of our operations and assess operational efficiencies. These indicators change from time to time as the opportunities and challenges in our businesses change. ​ Performance ratios and asset quality ratios are typically used for measuring the performance of banking and financial institutions. We consider return on average stockholders’ equity, return on average assets and net interest margin to be important supplemental measures of operating performance that are commonly used by securities analysts, investors and other parties interested in the banking and financial industry. The net recoveries (charge-offs) to average loans outstanding ratio is also considered a key measure for our banking segment as it indicates the performance of our loan portfolio. ​ In addition, we consider regulatory capital ratios to be key measures that are used by us, as well as banking regulators, investors and analysts, to assess our regulatory capital position and to compare our regulatory capital to that of other financial services companies. We monitor our capital strength in terms of both leverage ratio and risk-based capital ratios based on capital requirements administered by the federal banking agencies. The risk-based capital ratios are minimum supervisory ratios generally applicable to banking organizations, but banking organizations are widely expected to operate with capital positions well above the minimum ratios. Failure to meet minimum capital requirements 51 Table of Contents can initiate certain mandatory actions by regulators that, if undertaken, could have a material effect on our financial condition or results of operations. ​ How We Generate Revenue ​ 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 three months ended March 31, 2025, compared with the same period in 2024, primarily reflected increases within our mortgage origination and corporate segments, partially offset by a slight decrease within our banking segment. ​ The other component of our revenue is noninterest income, which is primarily comprised of the following: ​ (i) Income from broker-dealer operations. Through Securities Holdings, we provide investment banking and other related financial services that generated $70.4 million and $60.6 million in securities commissions and fees and investment and securities advisory fees and commissions, respectively, and $21.6 million and $36.4 million in gains from derivative and trading portfolio activities (included within other noninterest income), respectively, during the three months ended March 31, 2025 and 2024. ​ (ii) Income from mortgage operations. Through PrimeLending, we generate noninterest income by originating and selling mortgage loans. During the three months ended March 31, 2025 and 2024, we generated $67.7 million and $66.6 million, respectively, in net gains from sale of loans, other mortgage production income (including income associated with retained mortgage servicing rights), and mortgage loan origination fees. ​ In the aggregate, we experienced an increase in noninterest income during the three months ended March 31, 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, increases in investment and securities advisory fees and commissions and securities commissions and fees, offset by decreases in trading gains earned from trading activities within our broker-dealer segment. ​ We also incur noninterest expenses in the operation of our businesses. Our businesses engage in labor intensive activities and, consequently, employees’ compensation and benefits represent the majority of our noninterest expenses. ​ Consolidated Operating Results ​ Income applicable to common stockholders during the three months ended March 31, 2025 was $42.1 million, or $0.65 per diluted share, compared with $27.7 million, or $0.42 per diluted share, during the three months ended March 31, 2024. Hilltop’s financial results for the three months ended March 31, 2025, compared with the same period in 2024, included a significant preliminary gain associated with the sale of operations by a merchant bank equity investment within corporate, a significant increase in the provision for credit losses and a decrease in noninterest expenses within the banking segment, net revenues decreased and noninterest expenses increased within the broker-dealer segment, and the mortgage origination segment had a slight increase in net interest income and declines in net interest expense and noninterest expense. ​ Certain items included in net income for the three months ended March 31, 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 March 31, 2025 and 2024 included net accretion on earning assets and liabilities of $1.1 million and $1.4 million, respectively, and amortization of identifiable intangibles of $0.3 million and $0.5 million, respectively, related to the Bank Transactions. ​ 52 Table of Contents The information shown in the table below includes certain key performance indicators on a consolidated basis. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2025 2024 ​ Return on average stockholders' equity (1) ​ 7.82 % 5.23 % ​ Return on average assets (2) ​ 1.13 % 0.74 % ​ Net interest margin (3) (4) ​ 2.84 % 2.85 % ​ Leverage ratio (5) (end of period) ​ 12.86 % 12.49 % ​ Common equity Tier 1 risk-based capital ratio (6) (end of period) ​ 21.29 % 19.73 % ​ (1) Return on average stockholders’ equity is defined as consolidated income attributable to Hilltop divided by average total Hilltop stockholders’ equity. (2) Return on average assets is defined as consolidated net income before noncontrolling interest divided by average assets. (3) Net interest margin is defined as net interest income divided by average interest-earning assets. We consider net interest margin as a key indicator of profitability, as it represents interest earned on our interest-earning assets compared to interest incurred. (4) The securities financing operations within our broker-dealer segment had the effect of lowering both the net interest margin and taxable equivalent net interest margin by 25 basis points and 26 basis points during the three months ended March 31, 2025 and 2024, respectively. (5) The leverage ratio is a regulatory capital ratio and is defined as Tier 1 risk-based capital divided by average consolidated assets. (6) The common equity Tier 1 risk-based capital ratio is a regulatory capital ratio and is defined as common equity Tier 1 risk-based capital divided by risk weighted assets. Common equity includes common equity Tier 1 capital (common stockholders’ equity and certain minority interests in the equity capital accounts of consolidated subsidiaries, but excluding goodwill and various intangible assets) and additional Tier 1 capital (certain qualifying minority interests not included in common equity Tier 1 capital, certain preferred stock and related surplus, and certain subordinated debt). ​ 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. ​ During the three months ended March 31, 2025 and 2024, purchase accounting contributed 4 and 4 basis points, respectively, to our consolidated taxable equivalent net interest margin of 2.86% and 2.87%, respectively. The purchase accounting activity was primarily related to the accretion of discount of loans which totaled $1.1 million and $1.3 million during the three months ended March 31, 2025 and 2024, respectively, associated with the Bank Transactions. ​ 53 Table of Contents The table below provides additional details regarding our consolidated net interest income (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 ​ 2024 ​ ​ Average Interest Annualized Average Interest Annualized ​ ​ Outstanding ​ Earned ​ Yield or ​ Outstanding ​ Earned ​ Yield or ​ ​ ​ Balance ​ or Paid ​ Rate ​ Balance ​ or Paid ​ Rate ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ 709,094 ​ $ 11,438 6.45 % $ 802,098 ​ $ 11,655 5.81 % Loans held for investment, gross (1) ​ ​ 7,890,745 ​ ​ 113,254 5.82 % ​ 7,835,647 ​ ​ 122,676 6.28 % Investment securities - taxable ​ 2,455,590 ​ 24,782 4.04 % 2,619,081 ​ 26,241 4.01 % Investment securities - non-taxable (2) ​ 321,128 ​ 3,253 4.05 % 293,420 ​ 2,992 4.08 % Federal funds sold and securities purchased under agreements to resell ​ 100,691 ​ 1,820 7.33 % 94,108 ​ 1,631 6.95 % Interest-bearing deposits in other financial institutions ​ 2,037,462 ​ 21,192 4.22 % 1,458,784 ​ 19,245 5.29 % Securities borrowed ​ ​ 1,390,797 ​ ​ 15,809 ​ 4.55 % ​ 1,442,870 ​ ​ 20,561 ​ 5.64 % Other ​ 117,155 ​ 1,891 6.55 % 39,885 ​ 5,190 52.19 % Interest-earning assets, gross (2) ​ 15,022,662 ​ 193,439 5.22 % 14,585,893 ​ 210,191 5.78 % Allowance for credit losses ​ (100,704) ​ ​ ​ ​ ​ ​ (110,583) ​ ​ ​ ​ ​ ​ Interest-earning assets, net ​ 14,921,958 ​ ​ ​ ​ ​ ​ 14,475,310 ​ ​ ​ ​ ​ ​ Noninterest-earning assets ​ 1,012,700 ​ ​ ​ ​ ​ ​ 1,522,337 ​ ​ ​ ​ ​ ​ Total assets ​ $ 15,934,658 ​ ​ ​ ​ ​ ​ $ 15,997,647 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits ​ $ 8,186,423 ​ $ 60,051 2.97 % $ 7,748,633 ​ $ 69,144 3.58 % Securities loaned ​ ​ 1,381,819 ​ ​ 14,736 ​ 4.33 % ​ 1,401,975 ​ ​ 19,039 ​ 5.45 % Notes payable and other borrowings ​ 1,065,835 ​ 12,895 4.91 % 1,327,889 ​ 17,810 5.38 % Total interest-bearing liabilities ​ 10,634,077 ​ 87,682 3.34 % 10,478,497 ​ 105,993 4.06 % Noninterest-bearing liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing deposits ​ 2,696,247 ​ ​ ​ ​ ​ ​ 2,951,357 ​ ​ ​ ​ ​ ​ Other liabilities ​ 391,617 ​ ​ ​ ​ ​ ​ 420,355 ​ ​ ​ ​ ​ ​ Total liabilities ​ 13,721,941 ​ ​ ​ ​ ​ ​ 13,850,209 ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 2,184,937 ​ ​ ​ ​ ​ ​ 2,120,494 ​ ​ ​ ​ ​ ​ Noncontrolling interest ​ 27,780 ​ ​ ​ ​ ​ ​ 26,944 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders' equity ​ $ 15,934,658 ​ ​ ​ ​ ​ ​ $ 15,997,647 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (2) ​ ​ ​ ​ $ 105,757 ​ ​ ​ ​ ​ ​ $ 104,198 ​ ​ ​ Net interest spread (2) ​ ​ ​ ​ ​ ​ 1.88 % ​ ​ ​ ​ ​ 1.72 % Net interest margin (2) ​ ​ ​ ​ ​ ​ 2.86 % ​ ​ ​ ​ ​ 2.87 % ​ ​ (1) Average balance includes non-accrual loans. (2) Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on the applicable corporate federal income tax rate of 21% for the periods presented. The adjustment to interest income was $0.6 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. ​ The banking segment’s net interest margin exceeds our consolidated net interest margin shown above. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our banking segment and reduces our consolidated net interest margin, such as the borrowing costs of Hilltop and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities, such as securities borrowed in the broker-dealer segment and securities loaned in the broker-dealer segment, including items related to securities financing operations that particularly decrease net interest margin. In addition, yields and costs on certain interest-earning assets, such as lines of credit extended to other operating segments by the banking segment, are eliminated from the consolidated financial statements. ​ On a consolidated basis, the change in net interest income during the three months ended March 31, 2025, compared with the same period in 2024, was primarily due to decreased loans held for investment yield from rate decreases and decreased costs of deposits from rate decreases offset by increased cost of deposits from the continued shift from noninterest-bearing deposits into interest-bearing products during the quarter-over-quarter period. 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. ​ 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, 2025, the provision for credit losses was primarily driven by a build in the allowance related to loan portfolio changes and specific reserves, including 54 Table of Contents 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. 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. ​ Noninterest income increased during the three months ended March 31, 2025, compared with the same period in 2024, primarily due to a preliminary pre-tax gain of $30.5 million being recorded in the first quarter of 2025 associated with the sale of operations by a merchant bank equity investment, 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. ​ Noninterest expense increased during the three months ended March 31, 2025, compared with the same period in 2024, primarily due to an increase in employees’ compensation and benefits within corporate, a net increase within our broker-dealer segment associated with increases in other segment operating costs, partially offset by a decrease in variable compensation, a net decrease within our mortgage origination segment driven by decreases in 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. ​ Effective income tax rates during the three months ended March 31, 2025 and 2024 were 22.7% and 22.5%, respectively. During the three months ended March 31, 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. The effective tax rate during the three months ended March 31, 2024, 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. ​ Segment Results ​ Banking Segment ​ The following table presents certain information about the operating results of our banking segment (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Variance ​ ​ ​ 2025 ​ 2024 ​ 2025 vs 2024 ​ Net interest income ​ $ 90,550 ​ $ 91,606 ​ $ (1,056) ​ Provision for (reversal of) credit losses ​ 9,372 ​ (2,853) ​ 12,225 ​ Noninterest income ​ 10,810 ​ 11,903 ​ (1,093) ​ Noninterest expense ​ ​ 51,930 ​ 56,020 ​ (4,090) ​ Income before income taxes ​ $ 40,058 ​ $ 50,342 ​ $ (10,284) ​ ​ The decrease in income before income taxes during the three months ended March 31, 2025, compared with the same period in 2024, was primarily due to a significant increase in the provision for credit losses and declines in net interest income and noninterest income, partially offset by lower noninterest expenses. The 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. ​ As discussed in more detail below, the banking segment’s cost of deposits decreased during the first three months of 2025. The rate paid on interest-bearing deposits decreased during the three months ended March 31, 2025, partially offset by continued competition for liquidity and customers seeking higher yields on deposits. We are actively managing our overall deposit costs. Future decisions on the costs of deposits will be determined based on 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. ​ 55 Table of Contents The information shown in the table below includes certain key indicators of the performance and asset quality of our banking segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 2024 ​ Efficiency ratio (1) 51.23 % 54.12 % ​ Return on average assets (2) 0.96 % 1.20 % ​ Net interest margin (3) ​ 2.97 % 3.00 % ​ Net recoveries (charge-offs) to average loans outstanding (4) ​ (0.23) % (0.22) % ​ (1) Efficiency ratio is defined as noninterest expenses divided by the sum of total noninterest income and net interest income for the period. We consider the efficiency ratio to be a measure of the banking segment’s profitability. (2) Return on average assets is defined as net income before noncontrolling interest divided by average assets. (3) Net interest margin is defined as net interest income divided by average interest-earning assets. We consider net interest margin as a key indicator of profitability, as it represents interest earned on interest-earning assets compared to interest incurred. (4) Net recoveries (charge-offs) to average loans outstanding is defined as the greater of recoveries or charge-offs during the reported period minus charge-offs or recoveries divided by average loans outstanding. We use the ratio to measure the credit performance of our loan portfolio. ​ The banking segment presents net interest margin and net interest income in the following discussion and table 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 banking segment 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. ​ During the three months ended March 31, 2025 and 2024, purchase accounting contributed 3 and 5 basis points, respectively, to the banking segment’s taxable equivalent net interest margin of 2.97% and 3.00%, 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. ​ 56 Table of Contents The table below provides additional details regarding our banking segment’s net interest income (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 ​ 2024 ​ ​ Average Interest Annualized Average Interest Annualized ​ ​ Outstanding ​ Earned ​ Yield or ​ Outstanding ​ Earned ​ Yield or ​ ​ ​ Balance ​ or Paid ​ Rate ​ Balance ​ or Paid ​ Rate ​ Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-earning assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ 16,639 ​ $ 396 ​ 9.52 % $ — ​ $ — ​ — % Loans held for investment, gross (1) ​ ​ 7,586,154 ​ ​ 107,809 5.76 % ​ 7,703,946 ​ ​ 115,502 6.01 % Subsidiary warehouse lines of credit ​ 704,040 ​ 12,297 6.99 % 756,594 ​ 15,331 8.02 % Investment securities - taxable ​ 2,016,842 ​ 16,036 3.18 % 2,167,991 ​ 18,100 3.34 % Investment securities - non-taxable (2) ​ 107,232 ​ 921 3.44 % 111,581 ​ 936 3.36 % Federal funds sold and securities purchased under agreements to resell ​ 46,782 ​ 537 4.65 % 70,555 ​ 1,002 5.70 % Interest-bearing deposits in other financial institutions ​ 1,850,400 ​ 20,301 4.45 % 1,414,302 ​ 19,245 5.46 % Other ​ 39,100 ​ 399 4.14 % 37,415 ​ 425 4.56 % Interest-earning assets, gross (2) ​ 12,367,189 ​ 158,696 5.20 % 12,262,384 ​ 170,541 5.58 % Allowance for credit losses ​ (100,640) ​ ​ ​ ​ ​ ​ (110,489) ​ ​ ​ ​ ​ ​ Interest-earning assets, net ​ 12,266,549 ​ ​ ​ ​ ​ ​ 12,151,895 ​ ​ ​ ​ ​ ​ Noninterest-earning assets ​ 750,476 ​ ​ ​ ​ ​ ​ 799,415 ​ ​ ​ ​ ​ ​ Total assets ​ $ 13,017,025 ​ ​ ​ ​ ​ ​ $ 12,951,310 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest-bearing deposits ​ $ 8,157,118 ​ $ 65,585 3.26 % $ 7,653,498 ​ $ 74,908 3.93 % Notes payable and other borrowings ​ 373,408 ​ 2,410 2.62 % 459,750 ​ 3,881 3.39 % Total interest-bearing liabilities ​ 8,530,526 ​ 67,995 3.23 % 8,113,248 ​ 78,789 3.90 % Noninterest-bearing liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest-bearing deposits ​ 2,903,705 ​ ​ ​ ​ ​ ​ 3,107,882 ​ ​ ​ ​ ​ ​ Other liabilities ​ 96,281 ​ ​ ​ ​ ​ ​ 159,315 ​ ​ ​ ​ ​ ​ Total liabilities ​ 11,530,512 ​ ​ ​ ​ ​ ​ 11,380,445 ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 1,486,513 ​ ​ ​ ​ ​ ​ 1,570,865 ​ ​ ​ ​ ​ ​ Total liabilities and stockholders’ equity ​ $ 13,017,025 ​ ​ ​ ​ ​ ​ $ 12,951,310 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (2) ​ ​ ​ ​ $ 90,701 ​ ​ ​ ​ ​ ​ $ 91,752 ​ ​ ​ Net interest spread (2) ​ ​ ​ ​ ​ ​ 1.97 % ​ ​ ​ ​ ​ 1.68 % Net interest margin (2) ​ ​ ​ ​ ​ ​ 2.97 % ​ ​ ​ ​ ​ 3.00 % ​ ​ (1) Average balance includes non-accrual loans. (2) Presented on a taxable equivalent basis with annualized taxable equivalent adjustments based on the applicable corporate federal income tax rates of 21% for all the periods presented. The adjustment to interest income was $0.2 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. ​ The banking segment’s net interest margin exceeds our consolidated net interest margin. Our consolidated net interest margin includes certain items that are not reflected in the calculation of our net interest margin within our banking segment and reduce our consolidated net interest margin, such as the borrowing costs of Hilltop and the yields and costs associated with certain items within interest-earning assets and interest-bearing liabilities, such as securities borrowed in the broker-dealer segment and securities loaned in the broker-dealer segment, including items related to securities financing operations that particularly decrease net interest margin. In addition, yields and costs on certain interest-earning assets, such as lines of credit extended to other operating segments by the banking segment, are eliminated from the consolidated financial statements. ​ 57 Table of Contents The following table summarizes the changes in the banking segment’s net interest income for the periods indicated below, 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 (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 vs. 2024 ​ ​ ​ Change Due To (1) ​ ​ ​ ​ ​ Volume Yield/Rate Change Interest income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans held for sale ​ $ — ​ $ 396 ​ $ 396 ​ Loans held for investment, gross (2) ​ ​ (1,746) ​ ​ (5,947) ​ ​ (7,693) ​ Subsidiary warehouse lines of credit (3) ​ (1,039) ​ (1,995) ​ (3,034) ​ Investment securities - taxable ​ (1,245) ​ (819) ​ (2,064) ​ Investment securities - non-taxable (4) ​ (36) ​ 21 ​ (15) ​ Federal funds sold and securities purchased under agreements to resell ​ (334) ​ (131) ​ (465) ​ Interest-bearing deposits in other financial institutions ​ 5,869 ​ (4,813) ​ 1,056 ​ Other ​ 19 ​ (45) ​ (26) ​ Total interest income (4) ​ 1,488 ​ ​ (13,333) ​ ​ (11,845) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits ​ $ 4,875 ​ $ (14,198) ​ $ (9,323) ​ Notes payable and other borrowings ​ (721) ​ (750) ​ (1,471) ​ Total interest expense ​ 4,154 ​ (14,948) ​ (10,794) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income (4) ​ $ (2,666) ​ $ 1,615 ​ $ (1,051) ​ (1) Changes attributable to both volume and yield/rate are included in yield/rate column. (2) Changes in the yields earned on loans held for investment, gross included a decline of $0.3 million in accretion of discount on loans during the three months ended March 31, 2025, compared with the same period in 2024. Accretion of discount on loans is expected to decrease in future periods as loans acquired in the Bank Transactions are repaid, refinanced or renewed. (3) Subsidiary warehouse lines of credit extended to PrimeLending are eliminated from the consolidated financial statements. (4) Annualized taxable equivalent. ​ With regard to net interest income, as of March 31, 2025, the banking segment maintained an asset sensitive rate risk position, meaning the amount of its interest-earning assets maturing or repricing within a given period exceeds the amount of its interest-bearing liabilities also maturing or repricing within that time period. During a period of declining interest rates, being asset sensitive tends to result in a decrease in net interest income, but during a period of rising interest rates, being asset sensitive tends to result in an increase in net interest income. Given projected impacts on net interest income associated with the expected transition into the next phase of the interest rate cycle, we continue to evaluate our current GAP position, which may result in a repositioning of the banking segment towards a more neutral or liability sensitive balance sheet. ​ The slight decrease in net interest income, as noted in the table above, was driven by decreased earnings on interest-earning assets, primarily loan 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 67 basis points from 3.90% for the three months ended March 31, 2024 to 3.23% for the three months ended March 31, 2025, while the average yield on interest-earning assets decreased 38 basis points from 5.58% for the three months ended March 31, 2024 to 5.20% for the three months ended March 31, 2025. ​ 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, 2025, approximately $675 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 49% 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. ​ 58 Table of Contents 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, 2025, compared to the same period of 2024. While 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, we anticipate that our cost of deposits will continue to trend modestly downward. 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, 2025, total estimated uninsured deposits were $5.6 billion, or approximately 52% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $371.5 million and internal accounts of $485.8 million, were $4.8 billion, or approximately 44% of total deposits. ​ Refer to the discussion in the “Liquidity and Capital Resources – Banking Segment” section that follows for more detail regarding the Bank’s activities regarding deposits, available liquidity and borrowing capacity. ​ To help mitigate net interest income spread volatility between our assets and liabilities, management maintains derivative trades, as either cash flow hedges or fair value hedges, that better align repricing characteristics. Despite having these hedges in place, changes in interest rates across the term structure may continue to impact net interest income and net interest margin. The impact of rate movements will change with the shape of the yield curve, including any changes in steepness or flatness and inversions at any points on the yield curve. ​ The banking segment retained approximately $62.5 million and $32.3 million in mortgage loans originated by the mortgage origination segment during the three months ended March 31, 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. ​ 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, 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 three months ended March 31, 2025 was also impacted by net charge-offs of $4.3 million. During the three months ended March 31, 2024, the reversal of credit losses reflected improvements to the U.S. economic outlook, offset by increases in specific reserves within the banking segment. The net impact to the allowance of changes associated with collectively evaluated loans during the three months ended March 31, 2024 included a reversal of credit losses of $7.0 million, while individually evaluated loans included a provision for credit losses of $4.1 million. The change in the allowance for credit losses during the three months ended March 31, 2024 was also impacted by net charge-offs of $4.3 million. 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. 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. ​ The banking segment’s noninterest income decreased during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to a decrease in oil and gas management fees. ​ The banking segment’s noninterest expense decreased during the three months ended March 31, 2025, compared to the same period in 2024, 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 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. ​ 59 Table of Contents Broker-Dealer Segment ​ The following table provides additional details regarding our broker-dealer segment operating results (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Variance ​ ​ 2025 2024 2025 vs 2024 ​ Net interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Wealth management: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities lending ​ $ 1,073 ​ $ 1,522 ​ $ (449) ​ Clearing services ​ ​ 2,545 ​ ​ 2,650 ​ ​ (105) ​ Structured finance (1) ​ ​ 2,662 ​ ​ 1,769 ​ ​ 893 ​ Fixed income services (1) ​ ​ (168) ​ ​ (656) ​ ​ 488 ​ Other (1) ​ ​ 5,456 ​ ​ 6,984 ​ ​ (1,528) ​ Total net interest income ​ ​ 11,568 ​ ​ 12,269 ​ ​ (701) ​ Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities commissions and fees by business line (2) (7) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income services (1) ​ ​ 3,890 ​ ​ 5,440 ​ ​ (1,550) ​ Wealth management: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail (1) ​ ​ 19,861 ​ ​ 18,738 ​ ​ 1,123 ​ Clearing services ​ ​ 9,043 ​ ​ 9,370 ​ ​ (327) ​ Structured finance (1) ​ ​ 4,886 ​ ​ 2,871 ​ ​ 2,015 ​ Other (1) ​ ​ 913 ​ ​ 708 ​ ​ 205 ​ ​ ​ ​ 38,593 ​ ​ 37,127 ​ ​ 1,466 ​ Investment and securities advisory fees and commissions by business line (3) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Public finance services (1) ​ ​ 25,389 ​ ​ 18,851 ​ ​ 6,538 ​ Fixed income services (1) ​ ​ 96 ​ ​ 2,069 ​ ​ (1,973) ​ Wealth management: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Retail ​ ​ 9,998 ​ ​ 8,544 ​ ​ 1,454 ​ Clearing services ​ ​ 538 ​ ​ 436 ​ ​ 102 ​ Structured finance (1) ​ ​ 603 ​ ​ 247 ​ ​ 356 ​ Other ​ ​ 97 ​ ​ 79 ​ ​ 18 ​ ​ ​ ​ 36,721 ​ ​ 30,226 ​ ​ 6,495 ​ Other (7) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Structured finance (1) ​ ​ 14,000 ​ ​ 26,998 ​ ​ (12,998) ​ Fixed income services (1) ​ ​ 5,064 ​ ​ 6,733 ​ ​ (1,669) ​ Other (1) ​ ​ 2,559 ​ ​ 3,494 ​ ​ (935) ​ ​ ​ ​ 21,623 ​ ​ 37,225 ​ ​ (15,602) ​ Total noninterest income ​ ​ 96,937 ​ ​ 104,578 ​ ​ (7,641) ​ Net revenue (4) ​ ​ 108,505 ​ ​ 116,847 ​ ​ (8,342) ​ Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Variable compensation (5) ​ ​ 33,283 ​ ​ 35,274 ​ ​ (1,991) ​ Non-variable compensation and benefits ​ ​ 34,781 ​ ​ 34,183 ​ ​ 598 ​ Segment operating costs (6) ​ ​ 31,225 ​ ​ 28,472 ​ ​ 2,753 ​ Total noninterest expense ​ ​ 99,289 ​ ​ 97,929 ​ ​ 1,360 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes ​ $ 9,216 ​ $ 18,918 ​ $ (9,702) ​ (1) Noted balances during the prior period include certain reclassifications due to the restructuring of certain business lines to conform to current period presentation (2) Securities commissions and fees includes income from FDIC sweep investments with the banking segment of $4.9 million and $6.8 million during the three months ended March 31, 2025 and 2024, respectively, that is eliminated in consolidation. (3) Investment and securities advisory fees and commissions includes $0.1 million of income from the securitization of Small Business Administration, or SBA, loans originated with the banking segment during the three months ended March 31, 2025, that is eliminated in consolidation. (4) Net revenue is defined as the sum of total net interest income and total noninterest income. We consider net revenue to be a key performance measure in the evaluation of the broker-dealer segment’s financial position and operating performance as we believe it is the primary revenue performance measure used by investors and analysts. Net revenue provides for some level of comparability of trends across the financial services industry as it reflects both noninterest income, including investment and securities advisory fees and commissions, as well as net interest income. Internally, we assess the broker-dealer segment’s performance on a net revenue basis for comparability with our banking segment. (5) Variable compensation represents performance-based commissions and incentives. (6) Segment operating costs include provision for (reversal of) credit losses associated with the broker-dealer segment within other noninterest expenses. (7) During the second quarter of 2024, the Company identified an immaterial error related to the classification within noninterest income associated with the allocation of earned revenue between commission and principal gains on certain principal trades of fixed income securities. As a result, certain prior period amounts within securities commissions and fees noninterest income and other noninterest income have been corrected for consistency with the current period presentation. ​ The decreases in net revenue and income before income taxes for the three months ended March 31, 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 unrealized gains from the U.S. Agency to-be-announced (“TBA”) business partially offset by commissions earned on commodities transactions. The decrease in fixed income services business line’s net revenues 60 Table of Contents was primarily due to market conditions resulting in the decrease in earnings from fixed income sales and trading activities, in particular, from municipal and credit products. The increase in net revenues in the broker-dealer segment’s public finance services business line was primarily due to fees earned from managed assets and municipal advisory revenues. 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 was impacted by the decreases in net revenue as described above and a net increase in noninterest expenses. ​ The broker-dealer segment is subject to interest rate risk as a consequence of maintaining inventory positions, trading in interest rate sensitive financial instruments and maintaining a matched stock loan book. Changes in interest rates are likely to have a meaningful impact on our overall financial performance. Our broker-dealer segment has historically earned a significant portion of its revenues from advisory fees upon the successful completion of client transactions, which could be adversely impacted by interest rate volatility. Rapid or significant changes in interest rates could adversely affect the broker-dealer segment’s bond trading, sales, underwriting activities and other interest spread-sensitive activities. The broker-dealer segment also receives administrative fees for providing money market and FDIC investment alternatives to clients, which tend to be sensitive to short-term interest rates. In addition, the profitability of the broker-dealer segment depends, to an extent, on the spread between revenues earned on customer loans and excess customer cash balances, and the interest expense paid on customer cash balances, as well as the interest revenue earned on trading securities, net of financing costs. The broker-dealer segment is also exposed to interest rate risk through its structured finance business line, which is dependent on mortgage loan production that tends to be adversely impacted by increasing interest rates and resulting in valuation-related adjustments. ​ In the broker-dealer segment, interest is earned from securities lending activities, interest charged on customer margin loan balances and interest earned on investment securities used to support sales, underwriting and other customer activities. The decrease in net interest income during the three months ended March 31, 2025, compared with the same period in 2024, was primarily due to the decrease in net interest income from the wealth management business line from margin loan and stock borrowing activities, partially offset by an increase in net interest earned on inventory positions within the fixed income services business line. ​ Noninterest income decreased during the three months ended March 31, 2025, compared with the same period in 2024, due to a decrease in other income, partially offset by increases in securities commissions and fees and investment and securities advisory fees. ​ Securities commissions and fees increased during the three months ended March 31, 2025, compared with the same period in 2024, primarily due to an increase in commodities product sales commissions and brokerage services fees. ​ Investment and securities advisory fees and commissions increased during the three months ended March 31, 2025, compared with the same period in 2024, primarily due to increases in fees earned from managed assets and municipal advisory transactions. ​ The decrease in other noninterest income during the three months ended March 31, 2025, compared with the same period in 2024, was primarily due to decreases in trading gains earned from structured finance and fixed income services trading activities due to less favorable market conditions. ​ The increase in noninterest expense during the three months ended March 31, 2025, compared with the same period in 2024, was primarily due to an increase in other segment operating costs, primarily quotation expenses and professional services, partially offset by a decrease in variable compensation associated with the decrease in net revenue. ​ 61 Table of Contents Selected information concerning the broker-dealer segment, including key performance indicators, follows (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 ​ 2024 Total compensation as a % of net revenue (1) ​ ​ 62.7 % ​ 59.4 % Pre-tax margin (2) ​ ​ 8.5 % ​ 16.2 % FDIC insured program balances at the Bank (end of period) ​ $ 571,730 ​ $ 754,268 ​ Other FDIC insured program balances (end of period) ​ $ 1,270,734 ​ $ 1,208,696 ​ Customer funds on deposit, including short credits (end of period) ​ $ 221,519 ​ $ 220,932 ​ ​ ​ ​ ​ ​ ​ ​ ​ Public finance services: ​ ​ ​ ​ ​ ​ ​ Number of issues (3) ​ ​ 190 ​ ​ 175 ​ Aggregate amount of offerings (3) ​ $ 14,038,568 ​ $ 12,656,837 ​ ​ ​ ​ ​ ​ ​ ​ ​ Structured finance: ​ ​ ​ ​ ​ ​ ​ Lock production/TBA volume ​ $ 811,901 ​ $ 614,182 ​ ​ ​ ​ ​ ​ ​ ​ ​ Fixed income services: ​ ​ ​ ​ ​ ​ ​ Total volumes ​ $ 47,450,311 ​ $ 88,056,791 ​ Net inventory (end of period) ​ $ 583,275 ​ $ 597,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ Wealth management (Retail and Clearing services groups): ​ ​ ​ ​ ​ ​ ​ Retail employee representatives (end of period) ​ ​ 91 ​ ​ 91 ​ Independent registered representatives (end of period) ​ ​ 164 ​ ​ 185 ​ Correspondents (end of period) ​ ​ 96 ​ ​ 100 ​ Correspondent receivables (end of period) ​ $ 103,515 ​ $ 139,391 ​ Customer margin balances (end of period) ​ $ 219,965 ​ $ 190,461 ​ ​ ​ ​ ​ ​ ​ ​ ​ Wealth management (Securities lending group): ​ ​ ​ ​ ​ ​ ​ Interest-earning assets - stock borrowed (end of period) ​ $ 1,419,089 ​ $ 1,398,644 ​ Interest-bearing liabilities - stock loaned (end of period) ​ $ 1,401,595 ​ $ 1,366,956 ​ (1) Total compensation includes the sum of non-variable compensation and benefits and variable compensation. We consider total compensation as a percentage of net revenue to be a key performance measure and indicator of segment profitability. (2) Pre-tax margin is defined as income before income taxes divided by net revenue. We consider pre-tax margin to be a key performance measure given its use as a profitability metric representing the percentage of net revenue earned that results in a profit. (3) Noted balances during all prior periods include certain reclassifications to conform to current period presentation. ​ Mortgage Origination Segment ​ The following table presents certain information regarding the operating results of our mortgage origination segment (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Variance ​ ​ ​ 2025 ​ 2024 ​ 2025 vs 2024 ​ Net interest expense ​ $ (1,397) ​ $ (4,252) ​ $ 2,855 ​ Noninterest income ​ 67,775 ​ 66,700 ​ 1,075 ​ Noninterest expense ​ ​ 74,660 ​ 78,898 ​ (4,238) ​ Loss before income taxes ​ $ (8,282) ​ $ (16,450) ​ $ 8,168 ​ ​ The mortgage lending business is subject to variables that can impact loan origination volume, including seasonal transaction volumes and interest rate fluctuations. Historically, the mortgage origination segment has experienced increased loan origination volume from home purchases during the spring and summer months, when more people tend to move and sell or buy homes. A decrease in mortgage interest rates tends to result in increased loan origination volume from refinancings, while an increase in mortgage interest rates tends to result in decreased loan origination volume from refinancings. While changes in mortgage interest rates have historically had a lesser impact on home purchases volume than on refinancing volume, net increases in mortgage interest rates since 2022 have continued to negatively impact both purchase and refinance loan origination volumes through the first quarter of 2025. A modest decline in mortgage rates experienced during the second half of 2024 had a slight impact on loan origination volume in the first quarter of 2025, with a minor increase in refinancings as a percentage of total loan origination volume when compared to the first quarter of 2024. During the first quarter of 2025, average mortgage interest rates increased slightly approximating average mortgage rates during the first quarter of 2024. See details regarding loan origination volume in the table below. ​ Recent trends, as well as typical historical patterns in loan origination volume from home purchases and refinancings because of movements in mortgage interest rates, may not be indicative of future loan origination volumes. During 2024 and through the first three months of 2025, certain events initially triggered as early as 2022 have continued to challenge 62 Table of Contents total mortgage market origination volumes because of their effect on the economy, including an increase in average interest rates during this period when compared to the average of the three years prior to 2023, the Federal Reserve’s actions and communications, and geopolitical events. More recently, the Unites States government’s position on increasing tariffs on foreign imports and reciprocal tariffs imposed by numerous United States foreign trading partners on United States exports have added to uncertainties associated with the economy. These events have also adversely impacted the willingness and ability of the mortgage origination segment’s customers to conduct mortgage transactions. Specifically, current home inventory shortages, which have recently shown a slight improvement, and affordability challenges are impacting customers’ abilities to purchase homes. Between September 2024 and December 2024, the Federal Reserve cut the target range for the federal funds rate by 100 basis points to 4.25% - 4.5%. These were the first reductions since March 2022 when the target range was 0.25% - 0.50%. No Federal Reserve cuts were made during the first quarter of 2025. Despite the reduction in the federal fund rate since September 2024, average mortgage interest rates increased during the first quarter of 2025, which hampered mortgage production. We expect loan production during the second quarter of 2025 to improve primarily due to seasonally higher home purchase activity. ​ PrimeLending continues to evaluate its cost structure to address the current mortgage environment and we believe that ongoing initiatives are critical to improving PrimeLending’s short- and long-term financial condition and operating results. The mortgage origination segment experienced operating losses during 2024 which continued into the first quarter of 2025 due to conditions and challenges discussed in detail within this discussion of segment results. In light of these current macroeconomic challenges in the mortgage industry including tight housing inventories and mortgage interest rate levels, the fair value of the mortgage origination reporting unit may decline, and we may be required to record a goodwill impairment charge. These conditions will continue to be considered during future impairment evaluations of goodwill. ​ As a Government National Mortgage Association (“GNMA”) approved lender, we are subject to minimum capital, leverage, net worth and liquidity requirements established by the Department of Housing and Urban Development (“HUD”) and GNMA, including timely reporting if a quarter’s operating loss exceeds more than 20% of its previous quarter or year-end net worth (the “operating loss ratio”) and/or if a quarter’s leverage ratio is below 6% (the “GNMA leverage ratio”). If this occurs, certain additional financial reporting submissions are required. During the first quarter of 2024, the HUD operating loss ratio was 22.6%, while during the second quarter of 2024, PrimeLending reported a HUD operating gain. During the third and fourth quarters of 2024, the operating loss ratios were below the 20% threshold at 14.4% and 16.6%, respectively. During the first quarter of 2025, the HUD operating loss ratio remained below the 20% threshold at 12.9%. During the first and second quarters of 2024, the GNMA leverage ratio decreased to 5.56% and 4.41%, respectively. Including two $10 million capital infusions received by PrimeLending from its parent company, PlainsCapital Bank, in September and December 2024, the GNMA leverage ratio increased to 6.38% and 6.36% during the third and fourth quarters of 2024, respectively. During March of 2025, PrimeLending received an additional $10 million capital infusion from PlainsCapital Bank and the GNMA leverage ratio remained above the required 6% at 7.12%. Any of these trends requiring notification to GNMA and HUD have been reported to those entities, respectively. Such capital infusions are likely in future periods, including those in the near-term, based on various factors including PrimeLending’s financial performance. ​ In addition, as a Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“FHLMC”) approved lender, we are subject to certain minimum capital, net worth and liquidity requirements established by FNMA and FHLMC, including maintaining a minimum capital ratio of 6% (the “FNMA/FHLMC capital ratio”). During the first quarter of 2024, the FNMA/FHLMC capital ratio exceeded the required 6%, however during the second quarter of 2024, the FNMA/FHLMC capital ratio decreased to 5.52%. During the third and fourth quarters of 2024 and the first quarter of 2025, the capital ratio, including the capital infusions previously noted, exceeded the required 6%. FNMA and FHLMC may also monitor additional financial performance trends at their discretion, including risk-based analyses focused on loans that the mortgage origination segment is currently responsible for representations and warranties that agency loans sold meet certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. One FNMA discretionary performance trend monitors the change in adjusted net worth during the prior twelve months. FNMA’s acceptable threshold for this performance trend is less than minus 30%, but is only considered if a company has four consecutive quarterly losses. During the first, second, third and fourth quarters of 2024, PrimeLending experienced four consecutive quarterly losses; the loss ratio during these periods were 37.5%, 28.9%, 23.9% and 13.7%, respectively. PrimeLending also recognized four consecutive quarterly losses during the first quarter of 2025; the loss ratio during this period, including the $10 million capital infusion in March 2025, was 10.5%. Any of these trends requiring notification to FNMA and FHLMC have been reported to those entities, respectively. ​ 63 Table of Contents The loss before income taxes decreased during the three months ended March 31, 2025, compared with the same period in 2024. The decrease was primarily the result of decreases in noninterest expense and net interest expense. ​ During 2022 and continuing through the fourth quarter of 2023, the average quarterly U.S. 10-Year Treasury Rate and mortgage interest rates increased significantly. During the first quarter of 2024 both average quarterly rates decreased slightly and then continued to fluctuate modestly through the first quarter of 2025. More specifically average interest rates during the three months ended March 31, 2025 were relatively flat compared to average interest rates during the same period in 2024. Refinancing volume as a percentage of total origination volume was higher during the three months ended March 31, 2025 at 12.3%, as compared to 7.6% during the same period in 2024. Although we anticipate a slightly higher percentage of refinancing volume relative to total loan origination volume during 2025, as compared to 2024, an even higher refinance percentage could be driven by a slowing of purchase volume due to the negative impact on new and existing home sales resulting from existing home inventory shortages and affordability challenges related to new home construction, and/or an increase in all-cash buyers. ​ The mortgage origination segment primarily originates its mortgage loans through a retail channel, with limited lending through its affiliated business arrangements (“ABAs”). For the three months ended March 31, 2025, funded volume through ABAs was approximately 13% of the mortgage origination segment’s total loan volume. Currently, PrimeLending owns a greater than 50% membership interest in two ABAs. We expect total production within the ABA channel to continue to approximate 13% of loan volume of the mortgage origination segment during the remainder of 2025. ​ The following table provides further details regarding our mortgage loan originations and sales for the periods indicated below (dollars in thousands). Loan volumes associated with mortgage loan transactions facilitated between PrimeLending and third-party mortgage lenders when requested products are not offered by PrimeLending are included in mortgage loan origination units and volume and are not included in mortgage loan sales volume below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ % of ​ % of ​ Variance ​ ​ Amount ​ Total ​ Amount ​ Total ​ 2025 vs 2024 ​ Mortgage Loan Originations - units ​ 5,373 ​ ​ ​ ​ 5,411 ​ ​ ​ ​ (38) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage Loan Originations - volume: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Conventional ​ $ 965,203 55.40 % $ 1,016,197 60.62 % $ (50,994) ​ Government ​ 401,187 23.03 % 400,360 23.88 % 827 ​ Jumbo ​ 118,092 6.78 % 64,918 3.87 % 53,174 ​ Other ​ 257,859 14.79 % 195,011 11.63 % 62,848 ​ ​ ​ $ 1,742,341 100.00 % $ 1,676,486 100.00 % $ 65,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home purchases ​ $ 1,528,560 87.73 % $ 1,548,941 92.39 % $ (20,381) ​ Refinancings ​ 213,781 12.27 % 127,545 7.61 % 86,236 ​ ​ ​ $ 1,742,341 100.00 % $ 1,676,486 100.00 % $ 65,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Texas ​ $ 548,610 31.49 % $ 577,293 34.43 % $ (28,683) ​ California ​ 136,394 7.83 % 119,208 7.11 % 17,186 ​ South Carolina ​ 96,877 5.56 % 81,610 4.87 % 15,267 ​ Florida ​ 73,348 4.21 % 71,376 4.26 % 1,972 ​ New York ​ 66,602 3.82 % 68,064 4.06 % (1,462) ​ Missouri ​ 65,180 3.74 % 68,434 4.08 % (3,254) ​ Arizona ​ 59,758 3.43 % 59,190 3.53 % 568 ​ Ohio ​ 56,050 3.22 % 45,502 2.71 % 10,548 ​ Washington ​ 47,147 2.71 % 44,592 2.66 % 2,555 ​ Colorado ​ 38,303 2.20 % 27,189 1.62 % 11,114 ​ All other states ​ ​ 554,072 31.79 % 514,028 30.67 % 40,044 ​ ​ ​ $ 1,742,341 100.00 % $ 1,676,486 100.00 % $ 65,855 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mortgage Loan Sales - volume: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Third parties ​ $ 1,682,048 ​ 96.42 % $ 1,717,529 ​ 98.15 % $ (35,481) ​ Banking segment ​ 62,507 ​ 3.58 % 32,328 ​ 1.85 % 30,179 ​ ​ ​ $ 1,744,555 ​ 100.00 % $ 1,749,857 ​ 100.00 % $ (5,302) ​ ​ We consider the mortgage origination segment’s total loan origination volume to be a key performance measure. Loan origination volume is central to the segment’s ability to generate income by originating and selling mortgage loans, resulting in net gains from the sale of loans, mortgage loan origination fees, and other mortgage production income. 64 Table of Contents Total loan origination volume is a measure utilized by management, our investors, and analysts in assessing market share and growth of the mortgage origination segment. ​ The mortgage origination segment’s total loan origination volume increased 3.9% during the three months ended March 31, 2025, compared to the same period in 2024, while the loss before taxes decreased 49.7% during the same period. The decrease in loss before income taxes during the three months ended March 31, 2025, when compared to the same period in 2024, was primarily due to decreases in the loss on the change in the net fair value and related derivative activity related to mortgage servicing rights assets, servicing fee expense, net interest expense and segment operating costs, partially offset by a decrease in mortgage loan origination fees and other related income, a decrease in services fees and an increase in variable compensation. ​ The information shown in the table below includes certain additional key performance indicators for the mortgage origination segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ 2025 ​ 2024 ​ Net gains from mortgage loan sales (basis points): ​ ​ ​ ​ ​ Loans sold to third parties ​ ​ 222 ​ ​ 216 ​ Broker fee income (1) ​ ​ 10 ​ ​ 5 ​ Impact of loans retained by banking segment ​ ​ (8) ​ ​ (5) ​ As reported ​ ​ 224 ​ ​ 216 ​ Variable compensation as a percentage of total compensation ​ ​ 46.6 % ​ 42.1 % Mortgage servicing rights asset ($000's) (end of period) (2) ​ $ 6,903 ​ $ 95,591 ​ (1) Broker fee income is earned by the mortgage origination segment for facilitating mortgage loan transactions between PrimeLending customers and third-party mortgage lenders when the requested loan products are not offered by PrimeLending. (2) Reported on a consolidated basis and therefore does not include mortgage servicing rights assets related to loans serviced for the banking segment, which are eliminated in consolidation. ​ Net interest expense was comprised of interest income earned on loans held for sale offset by interest incurred on warehouse lines of credit with the Bank, and related intercompany financing costs. Net interest expense decreased during the three months ended March 31, 2025, as compared to the same period in 2024, primarily due to a decrease in the negative net interest margin. ​ Noninterest income was comprised of the items set forth in the table below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Variance ​ ​ 2025 2024 2025 vs 2024 Net gains from sale of loans $ 38,996 ​ $ 37,881 ​ $ 1,115 ​ Mortgage loan origination fees and other related income ​ 22,451 ​ ​ 26,438 ​ ​ (3,987) ​ Other mortgage production income: ​ ​ ​ ​ ​ ​ ​ ​ ​ Change in net fair value and related derivative activity: ​ ​ ​ ​ ​ ​ ​ ​ ​ IRLCs and loans held for sale ​ 5,616 ​ ​ 4,177 ​ ​ 1,439 ​ Mortgage servicing rights asset ​ (258) ​ ​ (10,045) ​ ​ 9,787 ​ Servicing fees ​ 970 ​ ​ 8,249 ​ ​ (7,279) ​ Total noninterest income $ 67,775 ​ $ 66,700 ​ $ 1,075 ​ ​ Net gains from sale of loans increased 2.9%, while total loans sales volume was flat during the three months ended March 31, 2025, compared with the same period in 2024. The increase in net gains from sales of loans was primarily the result of a slight increase in average loan sale margin. ​ The 15.1% decrease in mortgage loan origination fees during the three months ended March 31, 2025, compared with the same period in 2024, was primarily the result of a decrease in average mortgage loan origination fees, partially offset by a slight increase in loan origination volume. ​ Fluctuations in mortgage loan origination fees and net gains on sale of loans are not always aligned with fluctuations in loan origination and loan sale volumes, respectively, since customers may opt to pay PrimeLending discount fees on their mortgage loans, which are included in mortgage loan origination fees, in exchange for a lower interest rate, which decreases the value of a loan in the secondary market. ​ We consider the mortgage origination segment’s net gains from sale of loans margin, in basis points, to be a key performance measure. Net gains from mortgage loan sales margin is defined as net gains from sale of loans divided by mortgage loan sales volume. The net gains from sale of loans is central to the segment’s generation of income and may 65 Table of Contents include loans sold to third parties and loans sold to and retained by the banking segment. For origination services provided, the mortgage origination segment was reimbursed direct origination costs associated with loans retained by the banking segment, in addition to payment of a correspondent fee. The reimbursed origination costs and correspondent fees are included in the mortgage origination segment operating results, and the correspondent fees are eliminated in consolidation. Loan volumes to be originated on behalf of and retained by the banking segment are evaluated each quarter. Loans sold to and retained by the banking segment during the three months ended March 31, 2025 and 2024 were $62.5 million and $32.3 million, respectively. Loan volumes to be originated on behalf of and retained by the banking segment are expected to 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. ​ Noninterest income included changes in the net fair value of the mortgage origination segment’s interest rate lock commitments (“IRLCs”) and loans held for sale and the related activity associated with forward commitments used by the mortgage origination segment to mitigate interest rate risk associated with its IRLCs and mortgage loans held for sale (“net fair value of IRLCs and loans held for sale”). The increase in net fair value of IRLCs and loans held for sale during the three months ended March 31, 2025, was the result of an increase in the total volume of individual IRLCs and loans held for sale, and to a lesser extent, an increase in the average value of individual IRLCs and loans held for sale during the current quarter. ​ The mortgage origination segment sells substantially all mortgage loans it originates to various investors in the secondary market. In addition, the mortgage origination segment originates loans on behalf of the Bank. The mortgage origination segment’s determination of whether to retain or release servicing on mortgage loans it sells is impacted by, among other things, changes in mortgage interest rates, refinancing and market activity, and balance sheet positioning at Hilltop. During the three months ended March 31, 2025, PrimeLending retained servicing on approximately 6% of loans sold, compared with approximately 10% of loans sold during the same period in 2024. A reduction in third-party mortgage servicers purchasing mortgage servicing rights, even if modest, may result in PrimeLending increasing the rate of retained servicing on mortgage loans sold at any time. The mortgage origination segment may, from time to time, manage its MSR asset through different strategies, including varying the percentage of mortgage loans sold, servicing released and opportunistically selling MSR assets. The mortgage origination segment has also retained servicing on certain loans sold to and retained by the banking segment. Gains and losses associated with such sales to the banking segment and the related MSR asset are eliminated in consolidation. ​ The mortgage origination segment uses derivative financial instruments, including U.S. Treasury bond futures and options and MBS commitments, to mitigate interest rate risk associated with its MSR asset. Changes in the net fair value of the MSR asset and the related derivatives are associated with normal customer payments, changes in discount rates, prepayment speed assumptions and customer payoffs. During the three months ended March 31, 2025, changes in the net fair value of the MSR asset and the related derivatives resulted in net losses of $0.1 million. ​ During the three months ended March 31, 2024, the operating results of the mortgage origination segment were negatively impacted by a decrease of $7.3 million related to a change in the prepayment rates used as inputs to value the MSR asset and to reflect the difference between the MSR carrying value and the sales price reflected in a signed letter of intent, as well as losses of $5.7 million generated by the derivatives used to hedge the MSR. The remaining fluctuations in the net fair value of the MSR asset during the period was primarily due to net gains of $2.9 million driven by net changes in long-term U.S. Treasury bond rates and customer payoffs. During 2024, the mortgage origination segment sold aggregate MSR assets of $87.3 million, which represented $5.2 billion of its serviced loan volume at the time. During the fourth quarter of 2024 and the first quarter of 2025, the mortgage origination segment expensed $1.1 million and $0.8 million, respectively, for amounts paid to the purchasers of these MSR assets for loans included in the sale which prepaid within a defined period of time outlined in the sale agreements. As of March 31, 2025, the mortgage origination segment serviced approximately $477 million of loan volume, valued at $6.9 million. PrimeLending does not currently expect the level of MSR assets to be significant in the short-term. ​ Noninterest expenses were comprised of the items set forth in the table below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ Variance ​ ​ 2025 2024 2025 vs 2024 Variable compensation $ 24,832 ​ $ 22,188 ​ $ 2,644 ​ Non-variable compensation and benefits ​ 28,507 ​ ​ 30,506 ​ ​ (1,999) ​ Segment operating costs ​ 17,868 ​ ​ 20,284 ​ ​ (2,416) ​ Lender paid closing costs ​ 2,500 ​ ​ 1,258 ​ ​ 1,242 ​ Servicing expense ​ 953 ​ ​ 4,662 ​ ​ (3,709) ​ Total noninterest expense $ 74,660 ​ $ 78,898 ​ $ (4,238) ​ 66 Table of Contents ​ Total employees’ compensation and benefits accounted for the majority of noninterest expenses incurred during all periods presented. Historically, variable compensation comprises the majority of total employees’ compensation and benefits expenses. Variable compensation, which is primarily driven by loan origination volume, tends to fluctuate to a greater degree than loan origination volume, because mortgage loan originator and fulfillment staff incentive compensation plans are structured to pay at increasing rates as higher monthly volume tiers are achieved. However, certain other incentive compensation plans driven by non-mortgage production criteria may alter this trend. ​ While total loan origination volume increased 3.9% during the three months ended March 31, 2025, compared to the same period in 2024, the aggregate non-variable compensation and benefits of the mortgage origination segment decreased by 6.6% during the same period. This decrease during the three months ended March 31, 2025, compared to the same period in 2024, was primarily due to a decrease in salaries associated with reductions in underwriting and loan fulfillment, operations and corporate staff as PrimeLending continued to evaluate its cost structure to address the current mortgage environment. Segment operating costs decreased during the three months ended March 31, 2025, compared to the same period in 2024, primarily due to decreases in external legal and occupancy expense. ​ In exchange for a higher interest rate, customers may opt to have PrimeLending pay certain costs associated with the origination of their mortgage loans (“lender paid closing costs”). Fluctuations in lender paid closing costs are not always aligned with fluctuations in loan origination volume. Other loan pricing conditions, including the mortgage loan interest rate, loan origination fees paid by the customer, and a customer’s willingness to pay closing costs, may influence fluctuations in lender paid closing costs. ​ Between January 1, 2016 and March 31, 2025, the mortgage origination segment sold mortgage loans totaling $133.0 billion. These loans were sold under sales contracts that generally include provisions that hold the mortgage origination segment responsible for errors or omissions relating to its representations and warranties that loans sold meet certain requirements, including representations as to underwriting standards and the validity of certain borrower representations in connection with the loan. In addition, the sales contracts typically require the refund of purchased servicing rights plus certain investor servicing costs if a loan experiences an early payment default. While the mortgage origination segment sold loans prior to 2016, it does not anticipate experiencing significant losses in the future on loans originated prior to 2016 as a result of investor claims under these provisions of its sales contracts. ​ When a claim for indemnification of a loan sold is made by an agency, investor, or other party, the mortgage origination segment evaluates the claim and determines if the claim can be satisfied through additional documentation or other deliverables. If the claim is valid and cannot be satisfied in that manner, the mortgage origination segment negotiates with the claimant to reach a settlement of the claim. Settlements typically result in either the repurchase of a loan or reimbursement to the claimant for losses incurred on the loan. ​ The following is a summary of the mortgage origination segment’s claims resolution activity relating to loans sold between January 1, 2016 and March 31, 2025 (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Original Loan Balance ​ Loss Recognized ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ ​ Amount Loans Sold Amount Loans Sold Claims resolved with no payment ​ $ 250,729 ​ 0.19 % $ — ​ - % Claims resolved because of a loan repurchase or payment to an investor for losses incurred (1) ​ ​ 205,494 ​ 0.15 % ​ 24,533 ​ 0.02 % ​ ​ $ 456,223 ​ 0.34 % $ 24,533 ​ 0.02 % (1) Losses incurred include refunded purchased servicing rights. ​ For each loan, when the mortgage origination segment concludes its obligation to a claimant is both probable and reasonably estimable, the mortgage origination segment has established a specific claims indemnification liability reserve. ​ An additional indemnification liability reserve has been established for probable agency, investor or other party losses that may have been incurred, but not yet reported to the mortgage origination segment based upon a reasonable estimate of such losses. Factors considered in the calculation of this reserve include, but are not limited to, the total volume of loans sold exclusive of specific claimant requests, actual claim inquiries, claim settlements and the severity of estimated losses resulting from future claims, and the mortgage origination segment’s history of successfully curing defects identified in claim requests. 67 Table of Contents ​ Although management considers the total indemnification liability reserve to be appropriate, there may be changes in the reserve over time to address incurred losses due to unanticipated adverse changes in the economy and historical loss patterns, discrete events adversely affecting specific borrowers or industries, and/or actions taken by institutions or investors. The impact of such matters is considered in the reserving process when probable and estimable. During the second quarter of 2024, PrimeLending increased the indemnification reserve rate applied to loans sold subsequent to April 30, 2024, to address recent loss trends. During the first quarter of 2025, there was no adjustment made to the indemnification liability reserve. PrimeLending will continue to monitor agency claim inquiry trends and assess its potential impact on the indemnification liability reserve. ​ At March 31, 2025 and December 31, 2024, the mortgage origination segment’s total indemnification liability reserve totaled $8.0 million and $8.1 million, respectively. The related provision for indemnification losses was $0.7 million and $0.3 million during the three months ended March 31, 2025 and 2024, respectively. ​ Corporate ​ The following table presents certain financial information regarding the operating results of corporate (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Variance ​ ​ ​ 2025 ​ 2024 ​ 2025 vs 2024 ​ Net interest income (expense) ​ $ (869) ​ $ (3,103) ​ $ 2,234 ​ Noninterest income ​ 43,379 ​ 5,785 ​ 37,594 ​ Noninterest expense ​ ​ 25,891 ​ 17,384 ​ 8,507 ​ Income (loss) before income taxes ​ $ 16,619 ​ $ (14,702) ​ $ 31,321 ​ ​ Corporate includes certain activities not allocated to specific business segments. These activities include holding company financing and investing activities, merchant banking investment opportunities and management and administrative services to support the overall operations of the Company. Hilltop’s merchant banking investment activities include the identification of attractive opportunities for capital deployment in companies engaged in non-financial activities through its merchant bank subsidiary, Hilltop Opportunity Partners LLC. These merchant banking activities currently include investments within various industries, including power generation, youth sports and entertainment, dental health, and industrial equipment manufacturing, with an aggregate carrying value of approximately $69 million at March 31, 2025. ​ As a holding company, Hilltop’s primary investment objectives are to support capital deployment for organic growth and to preserve capital to be deployed through acquisitions, dividend payments and potential stock repurchases. Investment and interest income earned during the three months ended March 31, 2025 was primarily comprised of dividend income from merchant banking investment activities, in addition to interest income earned on intercompany notes. ​ Interest expense during each of the three months ended March 31, 2025 and 2024 included recurring quarterly interest expense of $3.1 million incurred on our $50 million aggregate principal amount of subordinated notes due 2030 (“2030 Subordinated Notes”) and on our $150 million aggregate principal amount of subordinated notes due 2035 (“2035 Subordinated Notes,” the 2030 Subordinated Notes and the 2035 Subordinated Notes, collectively, the “Subordinated Notes”). Interest expense during the three months ended March 31, 2025 and 2024 also included interest expense of $0.6 million and $1.9 million on our outstanding Senior Notes that were redeemed on January 15, 2025. ​ Noninterest income during each period included activity related to our investment in a real estate development in Dallas’ University Park, which also serves as headquarters for both Hilltop and the Bank, and net noninterest income associated with activity within our merchant bank subsidiary. During the three months ended March 31, 2025, noninterest income included a preliminary pre-tax gain of $30.5 million ($23.6 million net of tax) related to the sale of operations associated with our aggregate interest in Moser Holdings, LLC, while during the three months ended March 31, 2024, noninterest income included a pre-tax gain of $2.8 million associated with the sale of a merchant bank equity investment. ​ Noninterest expenses were primarily comprised of employees’ compensation and benefits, occupancy expenses and professional fees, including corporate governance, legal and transaction costs. During the three months ended March 31, 2025, noninterest expenses increased, compared to the same period in 2024, primarily due to increases associated with employees’ compensation and benefits driven by variable compensation associated with the sale of our aggregate interest in Moser Holdings, LLC. ​ 68 Table of Contents Financial Condition ​ The following discussion contains a more detailed analysis of our financial condition at March 31, 2025, as compared with December 31, 2024. ​ Securities Portfolio ​ At March 31, 2025, investment securities consisted of securities of the U.S. Treasury, U.S. government and its agencies, obligations of municipalities and other political subdivisions, primarily in the State of Texas, as well as mortgage-backed, corporate debt, and equity securities. We may categorize investments as trading, available for sale, held to maturity and equity securities. ​ Trading securities are bought and held principally for the purpose of selling them in the near term and are carried at fair value, marked to market through operations and held at the Bank and the Hilltop Broker-Dealers. Securities classified as available for sale may, from time to time, be bought and sold in response to changes in market interest rates, changes in securities’ prepayment risk, increases in loan demand, general liquidity needs and to take advantage of market conditions that create more economically attractive returns. Such securities are carried at estimated fair value, with unrealized gains and losses recorded in accumulated other comprehensive income (loss). Equity investments are carried at fair value, with all changes in fair value recognized in net income. Securities are classified as held to maturity based on the intent and ability of our management, at the time of purchase, to hold such securities to maturity. These securities are carried at amortized cost. ​ The table below summarizes our securities portfolio (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 Trading securities, at fair value ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ $ — ​ $ 2,553 ​ U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ Bonds ​ ​ 20,735 ​ ​ 9,984 ​ Residential mortgage-backed securities ​ ​ 149,393 ​ ​ 35,440 ​ Collateralized mortgage obligations ​ ​ 115,415 ​ ​ 125,515 ​ Other ​ ​ 1,468 ​ ​ 19,877 ​ Corporate debt securities ​ ​ 43,821 ​ ​ 60,594 ​ States and political subdivisions ​ ​ 289,923 ​ ​ 244,076 ​ Private-label securitized product ​ ​ 14,202 ​ ​ 16,208 ​ Other ​ 12,201 ​ 10,669 ​ ​ ​ 647,158 ​ 524,916 ​ Securities available for sale, at fair value ​ ​ ​ ​ ​ ​ ​ U.S. Treasury securities ​ ​ 4,815 ​ ​ 4,762 ​ U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ Bonds ​ 103,513 ​ ​ 111,868 ​ Residential mortgage-backed securities ​ 360,249 ​ ​ 341,186 ​ Commercial mortgage-backed securities ​ ​ 217,398 ​ ​ 220,327 ​ Collateralized mortgage obligations ​ 658,639 ​ ​ 657,600 ​ Corporate debt securities ​ 30,554 ​ ​ 29,816 ​ States and political subdivisions ​ 30,002 ​ 30,990 ​ ​ ​ 1,405,170 ​ 1,396,549 ​ Securities held to maturity, at amortized cost ​ ​ ​ ​ ​ ​ ​ U.S. government agencies: ​ ​ ​ ​ ​ ​ ​ Residential mortgage-backed securities ​ 250,486 ​ ​ 255,880 ​ Commercial mortgage-backed securities ​ ​ 156,646 ​ ​ 147,696 ​ Collateralized mortgage obligations ​ 278,144 ​ ​ 257,230 ​ States and political subdivisions ​ 77,093 ​ ​ 77,093 ​ ​ ​ 762,369 ​ 737,899 ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities, at fair value ​ ​ 286 ​ ​ 297 ​ Total securities portfolio ​ $ 2,814,983 ​ $ 2,659,661 ​ 69 Table of Contents ​ We had net unrealized losses of $87.4 million and $101.9 million at March 31, 2025 and December 31, 2024, respectively, related to the available for sale investment portfolio, and net unrealized losses of $74.9 million and $88.0 million at March 31, 2025 and December 31, 2024, respectively, associated with the securities held to maturity portfolio. Equity securities included net unrealized gains of $0.2 million and $0.2 million at March 31, 2025 and December 31, 2024, respectively. In future periods, we expect changes in prevailing market interest rates, coupled with changes in the aggregate size of the investment portfolio, to be significant drivers of changes in the unrealized losses or gains in these portfolios, and therefore accumulated other comprehensive income (loss). ​ Banking Segment ​ The banking segment’s securities portfolio plays a role in the management of our interest rate sensitivity and generates additional interest income. In addition, the securities portfolio is used to meet collateral requirements for public and trust deposits, securities sold under agreements to repurchase and other purposes. The available for sale and equity securities portfolios serve as a source of liquidity. Historically, the Bank’s policy has been to invest primarily in securities of the U.S. government and its agencies, obligations of municipalities in the State of Texas and other high grade fixed income securities to minimize credit risk. At March 31, 2025, the banking segment’s securities portfolio of $2.1 billion was comprised of trading securities of $0.7 million, available for sale securities of $1.4 billion, held to maturity securities of $762.4 million and equity securities of $0.3 million, in addition to $10.5 million of other investments included in other assets within the consolidated balance sheets. ​ Broker-Dealer Segment ​ The broker-dealer segment holds securities to support sales, underwriting and other customer activities. The interest rate risk inherent in holding these securities is managed by setting and monitoring limits on the size and duration of positions and on the length of time the securities can be held. The Hilltop Broker-Dealers are required to carry their securities at fair value and record changes in the fair value of the portfolio to the statement of operations. Accordingly, the securities portfolio of the Hilltop Broker-Dealers included trading securities of $646.4 million at March 31, 2025. In addition, the Hilltop Broker-Dealers enter into transactions that represent commitments to purchase and deliver securities at prevailing future market prices to facilitate customer transactions and satisfy such commitments. Accordingly, the Hilltop Broker-Dealers’ ultimate obligation may exceed the amount recognized in the financial statements. These securities, which are carried at fair value and reported as securities sold, not yet purchased in the consolidated balance sheets, had a value of $63.2 million at March 31, 2025. ​ Corporate ​ At March 31, 2025, the corporate portfolio included other investments, including those associated with merchant banking, of available for sale securities of $30.6 million and other assets of $39.1 million within the consolidated balance sheet. ​ Allowance for Credit Losses for Available for Sale Securities and Held to Maturity Securities ​ We have evaluated available for sale debt securities that are in an unrealized loss position and have determined that any declines in value are unrelated to credit loss and related to changes in market interest rates since purchase. None of the available for sale debt securities held were past due at March 31, 2025. In addition, as of March 31, 2025, we evaluated our held to maturity debt securities, considering the current credit ratings and recognized losses, and determined the potential credit loss to be minimal. With respect to these securities, we considered the risk of credit loss to be negligible, and therefore, no allowance was recognized on the debt securities portfolio at March 31, 2025. ​ 70 Table of Contents Loan Portfolio ​ Consolidated loans held for investment are detailed in the table below, classified by portfolio segment (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ ​ 2025 ​ 2024 Commercial real estate: ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 1,938,960 ​ $ 1,921,691 Owner occupied ​ ​ 1,446,177 ​ ​ 1,435,945 Commercial and industrial ​ 1,499,982 ​ 1,541,940 Construction and land development ​ 889,941 ​ 866,245 1-4 family residential ​ 1,840,008 ​ 1,792,602 Consumer ​ ​ 27,486 ​ ​ 28,410 Broker-dealer ​ ​ 324,223 ​ ​ 363,718 Loans held for investment, gross ​ 7,966,777 ​ 7,950,551 Allowance for credit losses ​ (106,197) ​ (101,116) Loans held for investment, net of allowance ​ $ 7,860,580 ​ $ 7,849,435 ​ Banking Segment ​ The loan portfolio constitutes the primary earning asset of the banking segment and typically offers the best alternative for obtaining the maximum interest spread above the banking segment’s cost of funds. The overall economic strength of the banking segment generally parallels the quality and yield of its loan portfolio. ​ As discussed in more detail within the section captioned “Financial Condition – Allowance for Credit Losses on Loans” set forth in Part II, Item 7 of our 2024 Form 10-K and further within the section captioned “Financial Condition – Allowance for Credit Losses on Loans” below, the banking segment’s credit policies emphasize strong underwriting and governance standards and early detection of potential problem credits in order to develop and implement action plans on a timely basis to mitigate potential losses. ​ To manage the credit risks associated with its loan portfolio, management may, depending upon current or anticipated economic conditions and related exposures, apply enhanced risk management measures to loans through analysis of a specific borrower’s financial condition, including cash flow, collateral values, and guarantees, among other credit factors. ​ The banking segment’s total loans held for investment, net of the allowance for credit losses, were $8.3 billion and $8.3 billion at March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, the banking segment’s loan portfolio included warehouse lines of credit extended to PrimeLending and its ABAs of $1.3 billion, of which $739.1 million was drawn. At December 31, 2024, amounts drawn on the available warehouse lines of credit was $0.8 billion. Amounts advanced against the warehouse lines of credit are eliminated from net loans held for investment on our consolidated balance sheets. The banking segment does not generally participate in syndicated loan transactions and has no foreign loans in its portfolio. ​ A significant portion of the banking segment’s loan portfolio at March 31, 2025, consisted of commercial real estate loans secured by properties. Such loans can involve high principal loan amounts, and the repayment of these loans is dependent, in large part, on a borrower’s ongoing business operations or on income generated from the properties that are leased to third parties. ​ 71 Table of Contents The table below sets forth the banking segment’s commercial real estate loan portfolio, by portfolio industry sector and collateral location as of March 31, 2025 (in thousands). There have not been significant changes in the real estate loan portfolio since December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Brownsville- ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ Dallas- ​ ​ ​ ​ ​ ​ ​ Harlingen- ​ San ​ ​ ​ ​ ​ ​ ​ Outside ​ ​ ​ Commercial Real Estate Fort Worth ​ Austin ​ Houston ​ McAllen ​ Antonio ​ Lubbock ​ Texas ​ Texas ​ Total Non-owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Office $ 146,908 ​ $ 222,703 ​ $ 28,423 ​ $ 14,374 ​ $ 22,792 ​ $ 2,339 ​ $ 55,033 ​ $ 309 ​ $ 492,881 Retail ​ 149,547 ​ ​ 75,849 ​ ​ 26,814 ​ ​ 26,007 ​ ​ 19,722 ​ ​ 6,754 ​ ​ 27,301 ​ ​ 8,606 ​ ​ 340,600 Hotel/Motel ​ 32,097 ​ ​ 24,012 ​ ​ 33,719 ​ ​ 16,991 ​ ​ 94 ​ ​ 16,256 ​ ​ 34,856 ​ ​ 13,602 ​ ​ 171,627 Multifamily ​ 52,748 ​ ​ 53,122 ​ ​ 38,134 ​ ​ 49,377 ​ ​ 47,377 ​ ​ 33,799 ​ ​ 53,979 ​ ​ 16,380 ​ ​ 344,916 Industrial ​ 111,319 ​ ​ 57,576 ​ ​ 8,924 ​ ​ 4,480 ​ ​ 2,444 ​ ​ 677 ​ ​ 22,628 ​ ​ 6,930 ​ ​ 214,978 All other ​ 107,026 ​ ​ 61,943 ​ ​ 27,486 ​ ​ 7,261 ​ ​ 25,010 ​ ​ 47,249 ​ ​ 80,496 ​ ​ 17,487 ​ ​ 373,958 ​ $ 599,645 ​ $ 495,205 ​ $ 163,500 ​ $ 118,490 ​ $ 117,439 ​ $ 107,074 ​ $ 274,293 ​ $ 63,314 ​ $ 1,938,960 Owner occupied: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Office $ 142,683 ​ $ 95,229 ​ $ 25,914 ​ $ 16,643 ​ $ 32,702 ​ $ 7,288 ​ $ 10,384 ​ $ 2,716 ​ $ 333,559 Retail ​ 9,065 ​ ​ 15,931 ​ ​ 3,011 ​ ​ 955 ​ ​ 1,187 ​ ​ 140 ​ ​ 3,797 ​ ​ 941 ​ ​ 35,027 Industrial ​ 193,205 ​ ​ 38,153 ​ ​ 30,458 ​ ​ 8,663 ​ ​ 20,790 ​ ​ 6,522 ​ ​ 29,190 ​ ​ 19,979 ​ ​ 346,960 All other ​ 325,250 ​ ​ 75,042 ​ ​ 74,694 ​ ​ 24,104 ​ ​ 48,630 ​ ​ 13,345 ​ ​ 146,740 ​ ​ 22,826 ​ ​ 730,631 ​ $ 670,203 ​ $ 224,355 ​ $ 134,077 ​ $ 50,365 ​ $ 103,309 ​ $ 27,295 ​ $ 190,111 ​ $ 46,462 ​ $ 1,446,177 Total commercial real estate loans $ 1,269,848 ​ $ 719,560 ​ $ 297,577 ​ $ 168,855 ​ $ 220,748 ​ $ 134,369 ​ $ 464,404 ​ $ 109,776 ​ $ 3,385,137 ​ At March 31, 2025, the banking segment had loan concentrations (loans to borrowers engaged in similar activities) that exceeded 10% of total loans in its real estate portfolio. The areas of concentration within our real estate portfolio were non-construction commercial real estate loans, non-construction residential real estate loans, and construction and land development loans, which represented 44.3%, 24.1% and 11.6%, respectively, of the banking segment’s total loans held for investment at March 31, 2025. The banking segment’s loan concentrations were within regulatory guidelines at March 31, 2025. ​ In addition, the Bank’s loan portfolio includes collateralized loans extended to businesses that depend on the energy industry, including those within the exploration and production, field services, pipeline construction and transportation sectors. Crude oil prices remain uncertain given future supply and demand for oil are influenced by international armed conflicts, return to business travel, new energy policies and government regulation, and the pace of transition towards renewable energy resources. At March 31, 2025, the Bank’s energy loan exposure was approximately $60 million of loans held for investment with unfunded commitment balances of approximately $22 million. The allowance for credit losses on the Bank’s energy portfolio was $0.4 million, or 0.7% of loans held for investment at March 31, 2025. ​ The following table provides information regarding the maturities of the banking segment’s gross loans held for investment, net of unearned income (in thousands). The commercial and industrial portfolio segment includes amounts advanced against the warehouse lines of credit extended to PrimeLending. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ Due Within Due From One Due from Five Due After ​ ​ ​ One Year ​ To Five Years ​ To Fifteen Years ​ Fifteen Years ​ Total Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 818,847 ​ $ 878,247 ​ $ 241,866 ​ $ — ​ $ 1,938,960 Owner occupied ​ ​ 430,648 ​ ​ 557,016 ​ ​ 446,519 ​ ​ 11,994 ​ ​ 1,446,177 Commercial and industrial ​ ​ 1,871,317 ​ ​ 312,760 ​ ​ 59,626 ​ ​ — ​ ​ 2,243,703 Construction and land development ​ ​ 764,576 ​ ​ 111,631 ​ ​ 12,899 ​ ​ 835 ​ ​ 889,941 1-4 family residential ​ ​ 226,812 ​ ​ 715,718 ​ ​ 203,572 ​ ​ 693,906 ​ ​ 1,840,008 Consumer ​ 15,925 ​ 11,444 ​ 109 ​ 8 ​ 27,486 Total ​ $ 4,128,125 ​ $ 2,586,816 ​ $ 964,591 ​ $ 706,743 ​ $ 8,386,275 ​ 72 Table of Contents The following table provides information regarding the interest rate composition, based on contractual terms, of the banking segment's loans held for investment, net of unearned income (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans maturing after one year ​ Fixed Interest Floating Interest ​ March 31, 2025 ​ Rate ​ Rate ​ Total Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 667,553 ​ $ 452,560 ​ $ 1,120,113 Owner occupied ​ ​ 680,534 ​ ​ 334,994 ​ ​ 1,015,528 Commercial and industrial ​ ​ 267,595 ​ ​ 104,792 ​ ​ 372,387 Construction and land development ​ ​ 51,669 ​ ​ 73,696 ​ ​ 125,365 1-4 family residential ​ ​ 904,424 ​ ​ 708,772 ​ ​ 1,613,196 Consumer ​ 11,560 ​ 1 ​ 11,561 Total ​ $ 2,583,335 ​ $ 1,674,815 ​ $ 4,258,150 ​ In the table above, floating interest rate loans totaling $334.0 million as of March 31, 2025 had reached their applicable rate floor and are expected to reprice, subject to their scheduled repricing timing and frequency terms. The majority of floating rate loans carry an interest rate tied to a SOFR rate or The Wall Street Journal Prime Rate, as published in The Wall Street Journal. ​ Broker-Dealer Segment ​ The loan portfolio of the broker-dealer segment consists primarily of margin loans to customers and correspondents that are due within one year. The interest rate on margin accounts is computed on the settled margin balance at a fixed rate established by management. These loans are collateralized by the securities purchased or by other securities owned by the clients and, because of collateral coverage ratios, are believed to present minimal collectability exposure. Additionally, these loans are subject to a number of regulatory requirements as well as the Hilltop Broker-Dealers’ internal policies. The broker-dealer segment’s total loans held for investment, net of the allowance for credit losses, were $324.2 million and $363.7 million at March 31, 2025 and December 31, 2024, respectively. This decrease from December 31, 2024 to March 31, 2025 was primarily attributable to a decrease of $46.5 million, or 31%, in receivables from correspondents, partially offset by an increase of $7.9 million, or 4%, in customer margin accounts. ​ Mortgage Origination Segment ​ The loan portfolio of the mortgage origination segment consists of loans held for sale, primarily single-family residential mortgages funded through PrimeLending, and IRLCs with customers pursuant to which we agree to originate a mortgage loan on a future date at an agreed-upon interest rate. The components of the mortgage origination segment’s loans held for sale and IRLCs are as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 2024 Loans held for sale: ​ ​ ​ ​ ​ ​ ​ Unpaid principal balance ​ $ 708,777 ​ $ 802,987 ​ Fair value adjustment ​ 13,833 ​ 6,795 ​ ​ ​ $ 722,610 ​ $ 809,782 ​ IRLCs: ​ ​ ​ ​ ​ ​ ​ Unpaid principal balance ​ $ 740,393 ​ $ 384,528 ​ Fair value adjustment ​ 12,897 ​ 2,942 ​ ​ ​ $ 753,290 ​ $ 387,470 ​ ​ The mortgage origination segment uses forward commitments to mitigate interest rate risk associated with its loans held for sale and IRLCs. The notional amounts of these forward commitments at March 31, 2025 and December 31, 2024 were $1.1 billion and $932.6 million, respectively, while the related estimated fair values were ($2.5) million and $6.4 million, respectively. ​ 73 Table of Contents Allowance for Credit Losses on Loans ​ For additional information regarding the allowance for credit losses, refer to the section captioned “Critical Accounting Estimates” set forth in Part II, Item 7 of our 2024 Form 10-K. ​ Loans Held for Investment ​ The Bank has lending policies in place with the goal of establishing an asset portfolio that will provide a return on stockholders’ equity sufficient to maintain capital to assets ratios that meet or exceed established regulations. Loans are underwritten with careful consideration of the borrower’s financial condition, the specific purpose of the loan, the primary sources of repayment and any collateral pledged to secure the loan. As discussed in more detail within the section captioned “Financial Condition – Allowance for Credit Losses on Loans” set forth in Part II, Item 7 of our 2024 Form 10-K, the Bank’s underwriting procedures address financial components based on the size and complexity of the credit, while the Bank’s loan policy provides specific underwriting guidelines by portfolio segment, including commercial and industrial, real estate, construction and land development, and consumer loans. ​ The allowance for credit losses for loans held for investment represents management’s best estimate of all expected credit losses over the expected contractual life of our existing portfolio. Determining the appropriateness of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for credit losses in those future periods. Such future changes in the allowance for credit losses are expected to be volatile given dependence upon, among other things, the portfolio composition and quality, as well as the impact of significant drivers, including prepayment assumptions and macroeconomic conditions and forecasts. ​ Significant judgment is required to estimate the severity and duration of the current economic uncertainties, as well as its potential impact on borrower defaults and loss severity. In particular, macroeconomic conditions and forecasts are rapidly changing and remain highly uncertain. ​ One of the most significant judgments involved in estimating our allowance for credit losses relates to the macroeconomic forecasts used to estimate credit losses over the reasonable and supportable forecast period. To determine the allowance for credit losses as of March 31, 2025, we utilized a single macroeconomic alternative scenario, or S5, published by Moody’s Analytics in March 2025. During our previous quarterly macroeconomic assessment as of December 31, 2024, we utilized the same single macroeconomic alternative scenario, or S5, published by Moody’s Analytics in December 2024. Management determined it appropriate to utilize the S5 macroeconomic alternative scenario as of March 31, 2025 given the combination of the ongoing resilience of the U.S. economy, continued moderation of inflation, and the potential impact of tariffs and reciprocal tariffs best align with our internal economic outlook. ​ 74 Table of Contents The following table and paragraphs summarize the U.S. Real Gross Domestic Product (“GDP”) growth rates and unemployment rate assumptions used in our economic forecast, and based on the single macroeconomic alternative scenario selected for respective period, to determine our best estimate of expected credit losses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of ​ ​ ​ March 31, ​ December 31, ​ September 30, ​ June 30, ​ March 31, ​ ​ ​ 2025 ​ 2024 ​ 2024 ​ 2024 ​ 2024 GDP growth rates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Q1 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2.4% ​ Q2 2024 ​ ​ ​ ​ ​ ​ ​ 2.1% ​ 0.7% ​ Q3 2024 ​ ​ ​ ​ ​ 2.0% ​ 1.2% ​ 0.4% ​ Q4 2024 ​ ​ ​ 2.6% ​ 1.3% ​ 0.6% ​ 0.0% ​ Q1 2025 ​ 1.2% ​ 1.2% ​ 1.2% ​ 1.0% ​ (1.8)% ​ Q2 2025 ​ 1.1% ​ 1.0% ​ 1.5% ​ (2.0)% ​ (2.8)% ​ Q3 2025 ​ 1.1% ​ 0.3% ​ 1.5% ​ (2.5)% ​ (1.7)% ​ Q4 2025 ​ 0.8% ​ 0.6% ​ 1.5% ​ (1.3)% ​ ​ ​ Q1 2026 ​ 0.8% ​ 0.9% ​ 1.5% ​ ​ ​ ​ ​ Q2 2026 ​ 1.4% ​ 0.9% ​ ​ ​ ​ ​ ​ ​ Q3 2026 ​ 1.9% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unemployment rates: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Q1 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.8% ​ Q2 2024 ​ ​ ​ ​ ​ ​ ​ 4.0% ​ 4.0% ​ Q3 2024 ​ ​ ​ ​ ​ 4.3% ​ 4.1% ​ 4.0% ​ Q4 2024 ​ ​ ​ 4.2% ​ 4.4% ​ 4.1% ​ 4.0% ​ Q1 2025 ​ 4.1% ​ 4.4% ​ 4.7% ​ 4.1% ​ 4.8% ​ Q2 2025 ​ 4.2% ​ 4.6% ​ 4.9% ​ 4.8% ​ 5.6% ​ Q3 2025 ​ 4.6% ​ 4.9% ​ 5.2% ​ 5.6% ​ 6.0% ​ Q4 2025 ​ 5.0% ​ 5.1% ​ 5.2% ​ 6.0% ​ ​ ​ Q1 2026 ​ 5.3% ​ 5.2% ​ 5.1% ​ ​ ​ ​ ​ Q2 2026 ​ 5.5% ​ 5.1% ​ ​ ​ ​ ​ ​ ​ Q3 2026 ​ 5.4% ​ ​ ​ ​ ​ ​ ​ ​ ​ As of March 31, 2025, our U.S. economic forecast assumes elevated borrowing costs reduce credit-sensitive spending, tariffs and immigration policy weaken the economy, and concerns grow about broader international conflicts. As a result, the economy underperforms in the long run. The changes in real GDP on an annual average basis are 1.7% in 2025 and 1.2% in 2026. The unemployment rate increases in the second half of 2025 and reaches a peak of 5.5% in the first half of 2026 before slowly receding. Our forecast considers the potential for monetary policy to ease from the Federal Reserve with the federal funds rate at 3.7% by year end 2025 and 2.9% by year end 2026. Vacancy rates for certain commercial real estate sectors remain elevated, and the interest rate outlook challenges the recovery. ​ Since December 31, 2024, we updated our U.S. economic outlook to reflect our expectations of a period of below trend economic growth beginning in 2025. For the fourth quarter of 2024, real GDP growth was 2.4% annualized, which is higher than the long-term trend, but a deceleration from the third quarter of 2024. The Federal Reserve has paused rate cuts as they balance above-target inflation and labor market health. Trade policy changes add uncertainty to the outlook. ​ During the three months ended March 31, 2025, 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. Specific to the Bank, the net impact to the allowance of changes associated with individually and collectively evaluated loans during the three months ended March 31, 2025 included a provision for credit losses of $1.7 million and $7.7 million, respectively. The changes in the allowance for credit losses during the noted periods were primarily attributable to the Bank and also reflected other factors including, but not limited to, loan mix, and changes in loan balances and qualitative factors from the prior quarter. The changes in the allowance during the three months ended March 31, 2025 were also impacted by net charge-offs of $4.3 million. ​ As noted above, the combined impacts of loan portfolio changes and specific reserves within the banking segment and net charge-offs and changes in the U.S. economic outlook since December 31, 2024 have resulted in a net increase in the allowance at March 31, 2025, compared to December 31, 2024. The resulting allowance for credit losses as a percentage of our total loan portfolio, excluding margin loans in the broker-dealer segment and banking segment mortgage 75 Table of Contents warehouse lending programs, was 1.43% and 1.37% as of March 31, 2025 and December 31, 2024, respectively. While changes in the U.S. economic outlook have been reflected in our current allowance at March 31, 2025, uncertainties that include, among others, the uncertain timing, duration and significance of further changes in market interest rates and an uncertain macroeconomic forecast could adversely impact borrower cash flows and result in increases in the allowance during future periods. While all industries could experience adverse impacts, certain of our loan portfolio industry sectors and subsectors, including real estate collateralized by office buildings and auto note financing, have an increased level of risk. ​ The respective distribution of the allowance for credit losses as a percentage of our total loan portfolio, excluding margin loans in the broker-dealer segment and banking segment mortgage warehouse lending programs, are presented in the following table (dollars in thousands). ​ cv ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allowance For ​ ​ ​ ​ ​ ​ ​ ​ ​ Credit Losses ​ ​ ​ ​ ​ ​ Total ​ as a % of ​ ​ Total ​ Allowance ​ Total Loans ​ ​ ​ Loans Held ​ for Credit ​ Held For March 31, 2025 ​ For Investment ​ Losses ​ Investment ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied (1) ​ $ 1,938,960 ​ $ 34,703 ​ 1.79 % Owner occupied (2) ​ ​ 1,446,177 ​ ​ 35,370 ​ 2.45 % Commercial and industrial (3) ​ ​ 1,266,835 ​ ​ 23,233 ​ 1.83 % Construction and land development (4) ​ 889,941 ​ 7,291 ​ 0.82 % Total commercial loans ​ ​ 5,541,913 ​ ​ 100,597 ​ 1.82 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 family residential ​ 1,840,008 ​ 4,988 ​ 0.27 % Consumer ​ ​ 27,486 ​ 479 ​ 1.74 % Total retail loans ​ 1,867,494 ​ 5,467 ​ 0.29 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total commercial and retail loans ​ ​ 7,409,407 ​ ​ 106,064 ​ 1.43 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Broker-dealer ​ ​ 324,223 ​ ​ 16 ​ 0.00 % Mortgage warehouse lending ​ ​ 233,147 ​ ​ 117 ​ 0.05 % Total loans held for investment ​ $ 7,966,777 ​ $ 106,197 ​ 1.33 % (1) Included within commercial real estate non-owner occupied portfolio are loans within the office, retail and hotel/motel portfolio industry subsectors. At March 31, 2025, the office, retail and hotel/motel loans held for investment balances of approximately $493 million, $341 million and $172 million, respectively, had an allowance for credit losses of approximately $18 million, $3 million and $2 million, respectively, and an allowance for credit losses as a percentage of total loans held for investment of 3.6%, 0.8% and 1.5%, respectively. (2) Included within commercial real estate owner occupied portfolio are loans within the industrial and office portfolio industry subsectors. At March 31, 2025, the industrial and office loans held for investment balances of approximately $347 million and $334 million, respectively, had an allowance for credit losses of approximately $8 million and $8 million, respectively, and an allowance for credit losses as a percentage of total loans held for investment of 2.4% and 2.3%, respectively. (3) Commercial and industrial portfolio amounts reflect balances excluding banking segment mortgage warehouse lending. Included within commercial and industrial portfolio are loans within the auto note financing industry subsector. At March 31, 2025, the auto note financing loans held for investment balance of approximately $85 million had an allowance for credit losses of approximately $4 million, and an allowance for credit losses as a percentage of total loans held for investment of 4.3%. (4) Included within construction and land development portfolio are loans within the retail and office portfolio industry subsectors. At March 31, 2025, the retail and office loans held for investment balances of approximately $39 million and $30 million, respectively, had an allowance for credit losses of approximately $0.5 million and $0.4 million, respectively, and an allowance for credit losses as a percentage of total loans held for investment of 1.2% and 1.4%, respectively. ​ ​ 76 Table of Contents Allowance Model Sensitivity ​ Our allowance model was designed to capture the historical relationship between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes or macroeconomic variables in isolation may not be indicative of past or future performance. It is difficult to estimate how potential changes in any one factor or input might affect the overall allowance for credit losses because we consider a wide variety of factors and inputs in the allowance for credit losses estimate. Changes in the factors and inputs considered may not occur at the same rate and may not be consistent across all geographies or product types, and changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. ​ However, to consider the sensitivity of credit loss estimates to alternative macroeconomic forecasts, we compared the Company’s allowance for credit loss estimates as of March 31, 2025, excluding margin loans in the broker-dealer segment, and the banking segment mortgage warehouse programs, with modeled results using both upside (“S1”) and downside (“S3”) economic scenario forecasts published by Moody’s Analytics. ​ Compared to our economic forecast, the upside scenario assumes the economic impacts from international armed conflicts recede faster than expected and the impact of tariffs on the economy will be less than expected. Business sentiment and consumer confidence rise significantly. Real GDP is expected to grow 3.5% in the second quarter of 2025, 3.1% in the third quarter of 2025, 2.9% in the fourth quarter of 2025, and 2.7% in the first quarter of 2026. Average unemployment rates are expected to decline to 3.5% by the second quarter of 2025 and to 3.2% by the fourth quarter of 2025 before reverting to historical data. Inflation is expected to trend back toward the Federal Reserve’s target sooner than expected, and we expect the federal funds rate to peak at 4.4% during 2025. ​ Compared to our economic forecast, the downside scenario assumes the combination of tariffs, reciprocal tariffs, and rising inflation causes the economy to fall into recession in the second quarter of 2025. Real GDP is expected to decrease 3.2% in the second quarter of 2025, 3.4% in the third quarter of 2025, and 3.7% in the fourth quarter of 2025. Average unemployment rates are expected to increase to 5.9% by the second quarter of 2025 and to 8.3% by the second quarter of 2026, and then revert back to historical average rates over time. The Federal Reserve increases the federal funds rate to control rising inflation to a 5.1% target by the third quarter of 2025 and then reduces it to support the economy to a 3.1% target by the first quarter of 2026. ​ The impact of applying all of the assumptions of the upside economic scenario during the reasonable and supportable forecast period would have resulted in a decrease in the allowance for credit losses of approximately $20 million or a weighted average expected loss rate of 1.1% as a percentage of our total loan portfolio, excluding margin loans in the broker-dealer segment and the banking segment mortgage warehouse lending programs. ​ The impact of applying all of the assumptions of the downside economic scenario during the reasonable and supportable forecast period would have resulted in an increase in the allowance for credit losses of approximately $52 million or a weighted average expected loss rate of 2.1% as a percentage of our total loan portfolio, excluding margin loans in the broker-dealer segment and the banking segment mortgage warehouse lending programs. ​ This analysis relates only to the modeled credit loss estimates and is not intended to estimate changes in the overall allowance for credit losses as they do not reflect any potential changes in the adjustment to the quantitative calculation, which would also be influenced by the judgment management applies to the modeled lifetime loss estimates to reflect the uncertainty and imprecision of these modeled lifetime loss estimates based on then-current circumstances and conditions. ​ Our allowance for credit losses reflects our best estimate of current expected credit losses, which is highly dependent on several assumptions, including the macroeconomic outlook, inflationary pressures and labor market conditions, the impact of tariffs, and international armed conflicts and their impact on supply chains, the U.S elections and other various fiscal and monetary policy decisions. The sensitivities of many of these assumptions are often correlated and nonlinear so these results should not be simply extrapolated to estimate the allowance for credit losses accurately for more severe changes in economic scenarios. Future allowance for credit losses may vary considerably for these reasons. ​ 77 Table of Contents Allowance Activity ​ The following table presents the activity in our allowance for credit losses and selected credit metrics within our loan portfolio for the periods presented (in thousands). Substantially all of the activity shown within the allowance for credit losses below occurred within the banking segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2025 2024 Loans Held for Investment: ​ ​ ​ ​ ​ ​ ​ Balance, beginning of period ​ $ 101,116 ​ $ 111,413 ​ Provision for (reversal of) credit losses ​ 9,338 ​ (2,871) ​ Recoveries of loans previously charged off: ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ Non-owner occupied ​ ​ — ​ ​ — ​ Owner occupied ​ ​ 8 ​ ​ 9 ​ Commercial and industrial ​ 121 ​ 342 ​ Construction and land development ​ — ​ 1 ​ 1-4 family residential ​ 8 ​ 11 ​ Consumer ​ ​ 23 ​ 37 ​ Broker-dealer ​ ​ — ​ — ​ Total recoveries ​ 160 ​ 400 ​ Loans charged off: ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ Non-owner occupied ​ ​ 918 ​ ​ 1,647 ​ Owner occupied ​ ​ — ​ ​ — ​ Commercial and industrial ​ 3,432 ​ 2,983 ​ Construction and land development ​ — ​ — ​ 1-4 family residential ​ — ​ — ​ Consumer ​ ​ 67 ​ 81 ​ Broker-dealer ​ ​ — ​ — ​ Total charge-offs ​ 4,417 ​ 4,711 ​ Net recoveries (charge-offs) ​ (4,257) ​ (4,311) ​ Balance, end of period ​ $ 106,197 ​ $ 104,231 ​ ​ ​ ​ ​ ​ ​ ​ ​ Average loans held for investment for the period ​ $ 7,890,745 ​ $ 7,835,647 ​ Total loans held for investment (end of period) ​ $ 7,966,777 ​ $ 8,062,693 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans Held for Sale: ​ ​ ​ ​ ​ ​ ​ Average loans held for sale for the period ​ $ 709,094 ​ $ 802,098 ​ Total loans held for sale (end of period) ​ $ 818,328 ​ $ 842,324 ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Credit Metrics: ​ ​ ​ ​ ​ ​ ​ Net recoveries (charge-offs) to average total loans held for investment (1) ​ ​ (0.22) % ​ (0.22) % Non-accrual loans: ​ ​ ​ ​ ​ ​ ​ Loans held for investment (end of period) ​ $ 77,014 ​ $ 28,655 ​ Loans held for sale (end of period) ​ $ 4,463 ​ $ 36,081 ​ Non-accrual loans to total loans (end of period) ​ ​ 0.93 % ​ 0.73 % Allowance for credit losses on loans held for investment to: ​ ​ ​ ​ ​ ​ ​ Total loans (end of period) ​ ​ 1.21 % ​ 1.17 % Total loans held for investment (end of period) ​ ​ 1.33 % ​ 1.29 % Total non-accrual loans (end of period) ​ ​ 130.34 % ​ 161.01 % Non-accrual loans held for investment (end of period) ​ ​ 137.89 % ​ 363.74 % (1) Net recoveries (charge-offs) to average total loans held for investment ratio presented on a consolidated basis for all periods. Refer to following table for details by loan portfolio segment. ​ Total non-accrual loans classified as loans held for investment decreased by $7.4 million from December 31, 2024 to March 31, 2025. This decrease was primarily due to decreases in commercial and industrial loans and commercial real estate non-owner occupied loans, partially offset by an increase in 1-4 family residential loans. ​ 78 Table of Contents The following tables present additional details regarding our net charge-offs to average total loans held for investment ratios by loan portfolio segment for the periods presented (in thousands). Substantially all of the activity shown below occurred within the banking segment. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ Recoveries ​ ​ ​ Allowance ​ Net ​ Average ​ (Charge-Offs) ​ ​ ​ for Credit ​ Recoveries ​ Loans Held ​ as a % of ​ Three Months Ended March 31, 2025 ​ Losses ​ (Charge-Offs) ​ for Investment ​ Average Loans ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 34,703 ​ $ (918) ​ $ 1,944,242 ​ ​ (0.19) % Owner occupied ​ ​ 35,370 ​ ​ 8 ​ ​ 1,443,166 ​ ​ — % Commercial and industrial ​ ​ 23,350 ​ ​ (3,311) ​ ​ 1,465,173 ​ ​ (0.91) % Construction and land development ​ ​ 7,291 ​ ​ — ​ ​ 884,952 ​ ​ — % 1-4 Family Residential ​ ​ 4,988 ​ ​ 8 ​ ​ 1,824,180 ​ ​ — % Consumer ​ ​ 479 ​ ​ (44) ​ ​ 24,194 ​ ​ (0.73) % Broker-Dealer ​ ​ 16 ​ ​ — ​ ​ 304,838 ​ ​ — % Total ​ $ 106,197 ​ $ (4,257) ​ $ 7,890,745 ​ ​ (0.22) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net ​ ​ ​ Total ​ ​ ​ ​ ​ ​ ​ Recoveries ​ ​ ​ Allowance ​ Net ​ Average ​ (Charge-Offs) ​ ​ ​ for Credit ​ Recoveries ​ Loans Held ​ as a % of ​ Three Months Ended March 31, 2024 ​ Losses ​ (Charge-Offs) ​ for Investment ​ Average Loans ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 39,563 ​ $ (1,647) ​ $ 1,924,815 ​ ​ (0.34) % Owner occupied ​ ​ 28,737 ​ ​ 9 ​ ​ 1,454,536 ​ ​ — % Commercial and industrial ​ ​ 16,552 ​ ​ (2,641) ​ ​ 1,558,940 ​ ​ (0.68) % Construction and land development ​ ​ 10,008 ​ ​ 1 ​ ​ 986,800 ​ ​ — % 1-4 Family Residential ​ ​ 8,744 ​ ​ 11 ​ ​ 1,763,233 ​ ​ — % Consumer ​ ​ 544 ​ ​ (44) ​ ​ 25,923 ​ ​ (0.68) % Broker-Dealer ​ ​ 83 ​ ​ — ​ ​ 121,400 ​ ​ — % Total ​ $ 104,231 ​ $ (4,311) ​ $ 7,835,647 ​ ​ (0.22) % ​ As previously discussed in detail within this section, the allowance for credit losses has fluctuated from period to period, which impacted the resulting ratios noted in the table above. For the periods presented, the changes in the allowance for credit losses primarily reflected loan portfolio changes, net charge-offs activity, and changes in the U.S. economic outlook. The distribution of the allowance for credit losses among loan types and the percentage of the loans for that type to gross loans, excluding unearned income, within our loan portfolio are presented in the table below (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ % of ​ ​ ​ ​ % of ​ Allocation of the Allowance for Credit Losses ​ Reserve ​ Gross Loans ​ Reserve ​ Gross Loans ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 34,703 ​ 24.34 % $ 29,310 ​ 24.17 % Owner occupied ​ ​ 35,370 ​ 18.15 % ​ 33,112 ​ 18.06 % Commercial and industrial 23,350 18.83 % 25,609 19.39 % Construction and land development 7,291 11.17 % 7,161 10.90 % 1-4 family residential 4,988 23.09 % 5,327 22.55 % Consumer ​ ​ 479 0.35 % 547 0.36 % Broker-dealer ​ ​ 16 4.07 % 50 4.57 % Total $ 106,197 100.00 % $ 101,116 100.00 % ​ 79 Table of Contents The following table summarizes historical levels of the allowance for credit losses on loans held for investment, distributed by portfolio segment (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ September 30, ​ June 30, ​ March 31, ​ 2025 2024 ​ 2024 2024 2024 Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 34,703 ​ $ 29,310 ​ $ 32,330 ​ $ 37,321 ​ $ 39,563 Owner occupied ​ ​ 35,370 ​ ​ 33,112 ​ ​ 34,378 ​ ​ 32,772 ​ ​ 28,737 Commercial and industrial ​ 23,350 ​ 25,609 ​ 28,308 ​ 28,869 ​ 16,552 Construction and land development ​ 7,291 ​ 7,161 ​ 7,924 ​ 7,594 ​ 10,008 1-4 family residential ​ 4,988 ​ 5,327 ​ 7,161 ​ 7,912 ​ 8,744 Consumer ​ ​ 479 ​ ​ 547 ​ ​ 580 ​ ​ 547 ​ ​ 544 Broker-dealer ​ ​ 16 ​ ​ 50 ​ ​ 237 ​ ​ 67 ​ ​ 83 ​ ​ $ 106,197 ​ $ 101,116 ​ $ 110,918 ​ $ 115,082 ​ $ 104,231 ​ Unfunded Loan Commitments ​ In order to estimate the allowance for credit losses on unfunded loan commitments, the Bank uses a process similar to that used in estimating the allowance for credit losses on the funded portion. The allowance is based on the estimated exposure at default, multiplied by the lifetime probability of default grade and loss given default grade for that particular loan segment. The Bank estimates expected losses by calculating a commitment usage factor based on industry usage factors. The commitment usage factor is applied over the relevant contractual period. Loss factors from the underlying loans to which commitments are related are applied to the results of the usage calculation to estimate any liability for credit losses related for each loan type. Letters of credit are not currently reserved because they are issued primarily as credit enhancements and the likelihood of funding is low. ​ Changes in the allowance for credit losses for loans with off-balance sheet credit exposures are shown below (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ 2025 2024 Balance, beginning of period ​ $ 7,918 ​ $ 8,876 Other noninterest expense ​ ​ 35 ​ ​ (580) Balance, end of period ​ $ 7,953 ​ $ 8,296 ​ During the three months ended March 31, 2025, the increase in the reserve for unfunded commitments was primarily due to increases in commitment balances. The decrease in the reserve for unfunded commitments during the three months ended March 31, 2024 was primarily due to decreases in both commitment balances and expected loss rates. ​ Potential Problem Loans ​ Potential problem loans consist of loans that are performing in accordance with contractual terms but for which management has concerns about the ability of an obligor to continue to comply with repayment terms because of the obligor’s potential operating or financial difficulties or whether repayment may depend on collateral or other risk mitigation. Management monitors these loans and reviews their performance on a regular basis. Potential problem loans contain potential weaknesses that could improve, persist or further deteriorate. If such potential weaknesses persist without improving, the loan is subject to downgrade, typically to substandard, in three to six months. Potential problem loans include those loans assigned a grade of special mention and substandard accrual within our risk grading matrix. Potential problem loans do not include purchased credit deteriorated (“PCD”) loans because PCD loans exhibited evidence of more than insignificant credit deterioration at acquisition that made it probable that all contractually required principal payments would not be collected. ​ At March 31, 2025, we had $207.0 million of potential problem loans, compared to $166.9 million at December 31, 2024. Our potential problem loans designated as substandard accrual at March 31, 2025 and December 31, 2024, totaled $133.2 million and $152.6 million, respectively. The decrease from December 31, 2024 to March 31, 2025 was primarily attributable to decreases in commercial and industrial loans, 1-4 family residential loans and construction and land development loans, partially offset by an increase in commercial real estate owner occupied loans. Of the $133.2 million of potential problem loans designated as substandard accrual at March 31, 2025, $47.7 million, $38.6 million and $22.2 million were associated with commercial real estate non-owner occupied loans, commercial real estate owner occupied 80 Table of Contents loans and commercial and industrial loans, respectively, compared to $48.4 million, $37.3 million and $35.2 million, respectively, at December 31, 2024. ​ Potential problem loans designated as special mention were comprised of ten credit relationships totaling $73.8 million at March 31, 2025, compared with four credit relationships totaling $14.2 million at December 31, 2024 . Of the $73.8 million of potential problem loans at March 31, 2025, $71.0 million was associated with five credit relationships included in our commercial and industrial loan portfolio, commercial real estate owner occupied loan portfolio, and commercial real estate non-owner occupied loan portfolio within the office industry subsector. ​ Non-Performing Assets ​ The following table presents components of our non-performing assets (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ ​ ​ ​ ​ 2025 2024 ​ Variance Loans accounted for on a non-accrual basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial real estate: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-owner occupied ​ $ 4,241 ​ $ 7,166 ​ ​ $ (2,925) ​ Owner occupied ​ ​ 6,535 ​ ​ 6,092 ​ ​ ​ 443 ​ Commercial and industrial ​ 51,987 ​ 59,025 ​ ​ (7,038) ​ Construction and land development ​ 3,256 ​ 3,003 ​ ​ 253 ​ 1-4 family residential ​ 15,458 ​ 12,863 ​ ​ 2,595 ​ Consumer ​ ​ — ​ — ​ ​ ​ — ​ Broker-dealer ​ ​ — ​ — ​ ​ ​ — ​ Non-accrual loans ​ $ 81,477 ​ $ 88,149 ​ ​ $ (6,672) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-accrual loans as a percentage of total loans ​ 0.93 % 1.00 % ​ (0.07) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other real estate owned ​ $ 7,682 ​ $ 2,848 ​ ​ $ 4,834 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other repossessed assets ​ $ — ​ $ 98 ​ ​ $ (98) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing assets ​ $ 89,159 ​ $ 91,095 ​ ​ $ (1,936) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-performing assets as a percentage of total assets ​ 0.56 % 0.56 % ​ — % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans past due 90 days or more and still accruing ​ $ 24,145 ​ $ 22,090 ​ ​ $ 2,055 ​ ​ At March 31, 2025, non-accrual loans included 26 commercial and industrial relationships with loans secured by finance company notes receivable, accounts receivable, inventory and equipment. Commercial and industrial non-accrual loans decreased by $7.0 million from December 31, 2024 to March 31, 2025 primarily due to principal paydowns and the reclassification of a single non-accrual loan from commercial and industrial loans to commercial real estate non-owner occupied loans. Non-accrual loans at March 31, 2025 also included $4.5 million of loans secured by residential and commercial real estate which were classified as loans held for sale. At December 31, 2024, non-accrual loans included 27 commercial and industrial relationships with loans secured primarily by notes receivable, accounts receivable and equipment. Non-accrual loans at December 31, 2024 also included $3.7 million of loans secured by residential real estate which were classified as loans held for sale. ​ Other real estate owned (“OREO”) increased from December 31, 2024 to March 31, 2025, primarily due to additions totaling $4.9 million, partially offset by disposals and valuation adjustments totaling $0.1 million. At both March 31, 2025 and December 31, 2024, OREO was primarily comprised of commercial properties. ​ Deposits ​ The banking segment’s major source of funds and liquidity is its deposit base. Deposits provide funding for its investments in loans and securities. Interest paid for deposits must be managed carefully to control the level of interest expense and overall net interest margin. The composition of the deposit base (time deposits versus interest-bearing demand deposits and savings), as discussed in more detail within the section titled “Liquidity and Capital Resources — Banking Segment” below, is constantly changing due to the banking segment’s needs and market conditions. Currently, 81 Table of Contents the banking segment is facing intense competition for its deposit base as customers seek higher yields on deposits. Consistent with the consolidated trend in average rates paid on interest-bearing deposits noted in the table below, the banking segment’s average rate paid on interest-bearing deposits during the three months ended March 31, 2025 was 3.26%, compared to 3.51% during the three months ended December 31, 2024 and 3.93% during the three months ended March 31, 2024. ​ Given the cumulative 100-basis point decrease in interest rates since September 2024 and current deposit levels, the Bank’s cumulative interest-bearing deposit pricing beta, excluding deposits from the Hilltop Securities FDIC-insured sweep program and brokered deposits, has approximated 64%. The deposit pricing beta represents the change in interest-bearing deposit pricing in response to a change in market interest rates. The historical interest-bearing deposit pricing beta for the Bank, excluding deposits from our Hilltop Securities FDIC-insured sweep program and brokered deposits, has approximated 53% . We expect that the Bank’s cost related to interest-bearing deposits during 2025 to continue to be driven by various factors, including competition as well as economic and market area factors. ​ The table below presents the average balance of, and rate paid on, consolidated deposits (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ ​ ​ 2025 ​ 2024 ​ ​ ​ Average Average Average Average ​ ​ ​ Balance ​ Rate Paid ​ Balance ​ Rate Paid ​ Noninterest-bearing demand deposits ​ ​ $ 2,696,247 0.00 % $ 2,951,357 0.00 % Interest-bearing deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Demand ​ ​ 6,717,906 2.86 % ​ 6,279,614 3.55 % Savings ​ ​ 229,378 1.00 % ​ 253,493 1.19 % Time ​ ​ 1,239,139 3.94 % ​ 1,215,526 4.24 % ​ ​ ​ ​ 8,186,423 ​ 2.97 % ​ 7,748,633 ​ 3.58 % Total deposits ​ ​ $ 10,882,670 2.24 % $ 10,699,990 2.59 % ​ ​ ​ The table above includes interest-bearing brokered deposits with balances of approximately $15.2 million at March 31, 2025, compared with approximately $15 million at December 31, 2024. The variability in the level of brokered deposits has been, and will continue to be, managed through asset/liability strategy and policies that address diversification of funding sources and market conditions, including demand by customers and other investors for those deposits, and the cost of funds available from alternative sources at the time. ​ At March 31, 2025, total estimated uninsured deposits were $5.6 billion, or approximately 52% of total deposits, while estimated uninsured deposits, excluding collateralized deposits of $371.5 million and internal accounts of $485.8 million, were $4.8 billion, or approximately 44% of total deposits. Total estimated uninsured deposits were $5.7 billion, or approximately 52% of total deposits, as of December 31, 2024. ​ The following table presents the scheduled maturities of the portion of our time deposits that are in excess of the FDIC insurance limit of $250,000 as of March 31, 2025 (in thousands). ​ ​ ​ ​ ​ Months to maturity: ​ 3 months or less ​ $ 139,968 3 months to 6 months ​ 49,032 6 months to 12 months ​ 47,572 Over 12 months ​ 95,873 ​ ​ $ 332,445 ​ ​ ​ ​ 82 Table of Contents Borrowings ​ Our consolidated borrowings are shown in the table below (dollars in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ Average ​ Average ​ ​ ​ Balance ​ Rate Paid ​ Balance ​ Rate Paid ​ ​ Short-term borrowings ​ $ 705,008 4.13 % $ 834,023 4.64 % ​ Notes payable ​ 198,043 6.75 % 347,667 4.22 % ​ ​ ​ $ 903,051 4.69 % $ 1,181,690 4.52 % ​ ​ Short-term borrowings consisted of federal funds purchased, securities sold under agreements to repurchase, borrowings at the FHLB, short-term bank loans and commercial paper. The decrease in short-term borrowings at March 31, 2025, compared with December 31, 2024, primarily reflected decreases in federal funds purchased by the banking segment and securities sold under agreements to repurchase by the broker-dealer segment, partially offset by an increase in commercial paper by the broker-dealer segment. Notes payable at March 31, 2025 was comprised of Subordinated Notes, net of origination fees, of $198.0 million, while notes payable at December 31, 2024 included Subordinated Notes, net of origination fees, of $198.0 million and Senior Notes, net of origination fees, of $149.7 million that were redeemed on January 15, 2025. ​ Liquidity and Capital Resources ​ Hilltop is a financial holding company whose assets primarily consist of the stock of its subsidiaries and invested assets. Hilltop’s primary investment objectives, as a holding company, are to support capital deployment for organic growth and to preserve capital to be deployed through acquisitions, dividend payments and stock repurchases. At March 31, 2025, Hilltop had $268.1 million in cash and cash equivalents, a decrease of $152.4 million from $420.5 million at December 31, 2024. This decrease in cash and cash equivalents was primarily due to cash outflows from the redemption of our senior notes, $33.3 million in stock repurchases, $11.6 million in cash dividends declared and other general corporate expenses, partially offset by the receipt of $50.0 million of dividends from subsidiaries. Subject to regulatory restrictions, Hilltop has received, and may also continue to receive, dividends from its subsidiaries. If necessary or appropriate, we may also finance acquisitions with the proceeds from equity or debt issuances. We believe that Hilltop’s liquidity is sufficient for the foreseeable future, with current short-term liquidity needs including operating expenses, redemption of debt obligations, interest on debt obligations, dividend payments to stockholders and potential stock repurchases. ​ As discussed in more detail below, we have the ability to redeem the 2030 Subordinated Notes, in whole or in part, beginning in May 2025, while all of our outstanding Senior Notes previously scheduled to mature in April 2025 were redeemed on January 15, 2025 using cash on hand. ​ Economic Environment ​ As previously discussed, operational and financial headwinds during 2024 have had, and are expected to continue to have, an adverse impact on our operating results during the remainder of 2025. The extent of the impact of uncertain economic conditions on our financial performance during the remainder of 2025, will depend in part on developments outside of our control, including, among others, the timing and significance of further changes in U.S. Treasury yields and mortgage interest rates, changes in funding costs, inflationary pressures, changes in the political environment, the impact of tariffs and reciprocal tariffs, and international armed conflicts and their impact on supply chains. As demonstrated during the extreme volatility and disruptions in the capital and credit markets beginning in March 2020 resulting from the pandemic and banking sector-related uncertainty and concerns associated with liquidity primarily due to bank failures during early 2023 and their respective negative impacts on the economy, we will continue to monitor the economic environment and evaluate appropriate actions to enhance our financial flexibility, protect capital, minimize losses and ensure target liquidity levels. ​ Dividend Declaration ​ On April 24, 2025, our board of directors declared a quarterly cash dividend of $0.18 per common share, payable on May 22, 2025 to all common stockholders of record as of the close of business on May 8, 2025. 83 Table of Contents ​ Future dividends on our common stock are subject to the determination by the board of directors based on an evaluation of our earnings and financial condition, liquidity and capital resources, the general economic and regulatory climate, our ability to service any equity or debt obligations senior to our common stock and other factors. ​ Stock Repurchases ​ In January 2025, our board of directors authorized a new stock repurchase program through January 2026, pursuant to which we are authorized to repurchase, in the aggregate, up to $100.0 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, 2025, Hilltop paid $33.3 million to repurchase an aggregate of 1,046,540 shares of our common stock at an average price of $31.80 per share pursuant to the stock repurchase program. ​ Senior Notes due 2025 ​ On January 15, 2025 (three months prior to the maturity date of the Senior Notes) we redeemed, at our election, all of our outstanding Senior Notes at a redemption price equal to 100% of the principal amount of $150 million, plus accrued and unpaid interest to, but excluding, the Redemption Date using cash on hand, which also satisfied and discharged our obligations under the Senior Notes and the Senior Notes Indenture. ​ Subordinated Notes due 2030 and 2035 ​ On May 7, 2020, we completed a public offering of $50 million aggregate principal amount of 2030 Subordinated Notes and $150 million aggregate principal amount of 2035 Subordinated Notes that mature on May 15, 2030 and May 15, 2035, respectively. The price to the public for the Subordinated Notes was 100% of the principal amount of the Subordinated Notes. The net proceeds from the offering, after deducting underwriting discounts and fees and expenses of $3.4 million, were $196.6 million. ​ We may redeem the Subordinated Notes, in whole or in part, from time to time, subject to obtaining Federal Reserve approval, beginning with the interest payment date of May 15, 2025 for the 2030 Subordinated Notes and beginning with the interest payment date of May 15, 2030 for the 2035 Subordinated Notes at a redemption price equal to 100% of the principal amount of the Subordinated Notes being redeemed plus accrued and unpaid interest to but excluding the date of redemption. ​ The 2030 Subordinated Notes bear interest at a rate of 5.75% per year, payable semi-annually in arrears commencing on November 15, 2020. The interest rate for the 2030 Subordinated Notes will reset quarterly beginning May 15, 2025 to an interest rate, per year, equal to the then-current benchmark rate, which is expected to be three-month term SOFR rate, plus 5.68%, payable quarterly in arrears. The 2035 Subordinated Notes bear interest at a rate of 6.125% per year, payable semi-annually in arrears commencing on November 15, 2020. The interest rate for the 2035 Subordinated Notes will reset quarterly beginning May 15, 2030 to an interest rate, per year, equal to the then-current benchmark rate, which is expected to be three-month term SOFR rate plus 5.80%, payable quarterly in arrears. At March 31, 2025, $200.0 million of our Subordinated Notes was outstanding. ​ Regulatory Capital ​ We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements may prompt certain actions by regulators that, if undertaken, could have a direct material adverse effect on our financial condition and results of operations. Under capital adequacy and regulatory requirements, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. ​ In order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers, Basel III requires banking organizations to maintain a capital conservation buffer above minimum risk-based capital requirements measured relative to risk-weighted assets. ​ 84 Table of Contents The following table shows PlainsCapital’s and Hilltop’s actual capital amounts and ratios in accordance with Basel III compared to the regulatory minimum capital requirements including the conservation buffer ratio in effect at March 31, 2025 (dollars in thousands). Based on actual capital amounts and ratios shown in the following table, PlainsCapital’s ratios place it in the “well capitalized” (as defined) capital category under regulatory requirements. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Capital ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Requirements Including ​ To Be Well ​ ​ March 31, 2025 ​ ​ Conservation Buffer ​ Capitalized ​ Amount Ratio ​ Ratio Ratio Tier 1 capital (to average assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ $ 1,306,947 10.22 % ​ 4.0 % 5.0 % Hilltop ​ 2,027,974 12.86 % ​ 4.0 % N/A ​ Common equity Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ ​ 1,306,947 15.14 % ​ 7.0 % 6.5 % Hilltop ​ ​ 2,027,974 21.29 % ​ 7.0 % N/A ​ Tier 1 capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ 1,306,947 15.14 % ​ 8.5 % 8.0 % Hilltop ​ 2,027,974 21.29 % ​ 8.5 % N/A ​ Total capital (to risk-weighted assets): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PlainsCapital ​ 1,414,868 16.39 % ​ 10.5 % 10.0 % Hilltop ​ 2,342,124 24.59 % ​ 10.5 % N/A ​ ​ We discuss regulatory capital requirements in more detail in Note 16 to our consolidated financial statements, as well as under the caption “Government Supervision and Regulation — Corporate — Capital Adequacy Requirements and BASEL III” set forth in Part I, Item 1, of our 2024 Form 10-K. ​ Banking Segment ​ Within our banking segment, our primary uses of cash are for customer withdrawals and extensions of credit as well as our borrowing costs and other operating expenses. Historically, high-profile bank 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. Our corporate treasury group is responsible for continuously monitoring our deposit flows and balance sheet trends to ensure that our assets and liabilities are managed in a manner that will meet our short-term and long-term cash requirements. Our goal is to manage our liquidity position in a manner such that we can meet our customers’ short-term and long-term deposit withdrawals and anticipated and unanticipated increases in loan demand without penalizing earnings. Funds invested in short-term marketable instruments, the continuous maturing of other interest-earning assets, cash flows from self-liquidating investments such as mortgage-backed securities and collateralized mortgage obligations, the possible sale of available for sale securities and the ability to securitize certain types of loans provide sources of liquidity from an asset perspective. The liability base provides sources of liquidity through deposits and the maturity structure of short-term borrowed funds. For short-term liquidity needs, we utilize federal fund lines of credit with correspondent banks, securities sold under agreements to repurchase, borrowings from the Federal Reserve and borrowings under lines of credit with other financial institutions. For intermediate liquidity needs, we utilize advances from the FHLB. To supply liquidity over the longer term, we have access to brokered time deposits, term loans at the FHLB and borrowings under lines of credit with other financial institutions. ​ The above sources of liquidity allow the banking segment to meet increased liquidity demands without adversely affecting daily operations. The Bank’s borrowing capacity through access to secured funding sources is summarized in the following table (in millions). Available liquidity noted below does not include borrowing capacity available through the discount window at the Federal Reserve. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ December 31, ​ ​ 2025 ​ 2024 FHLB capacity ​ $ 4,106 ​ $ 4,284 Investment portfolio (available) ​ 1,394 ​ 1,397 Fed deposits (excess daily requirements) ​ ​ 1,536 ​ ​ 2,053 ​ ​ $ 7,036 ​ $ 7,734 ​ 85 Table of Contents During the first quarter of 2025, our deposit funding costs declined due to the decrease in the rate paid on interest-bearing deposits, partially offset by continued competition for liquidity to combat deposit outflows. We are actively managing our overall deposit funding costs. Future decisions on the cost of deposits will be determined based on 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, we anticipate that our cost of deposits will continue to trend modestly downward. At March 31, 2025, the Bank also accessed and included approximately $570 million of core deposits on its balance sheet from our Hilltop Securities FDIC-insured sweep program, while the Bank is not utilizing any of its FHLB borrowing capacity noted above through the use of short-term borrowings. ​ Within our banking segment, deposit flows 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. An economic recovery and improved commercial real estate investment outlook may result in an outflow of deposits at an accelerated pace as customers utilize such available funds for expanded operations and investment opportunities. The Bank regularly evaluates its deposit products and pricing structures relative to the market to maintain competitiveness over time. Currently, the Bank is facing continued competition from bank and non-bank competitors for its deposit base and expects that its interest expense on certain deposits will continue to be driven by various factors, including competition as well as economic and market area factors. ​ The Bank’s 15 largest depositors, excluding Hilltop and Hilltop Securities, collectively accounted for 13.45% of the Bank’s total deposits, and the Bank’s five largest depositors, excluding Hilltop and Hilltop Securities, collectively accounted for 7.28% of the Bank’s total deposits at March 31, 2025. The loss of one or more of our largest Bank customers, or a significant decline in our deposit balances due to ordinary course fluctuations related to these customers’ businesses, could adversely affect our liquidity and might require us to raise deposit rates to attract new deposits, purchase federal funds or borrow funds on a short-term basis to replace such deposits. ​ Broker-Dealer Segment ​ The Hilltop Broker-Dealers rely on their equity capital, short-term bank borrowings, interest-bearing and noninterest-bearing client credit balances, correspondent deposits, securities lending arrangements, repurchase agreement financing, commercial paper issuances and other payables to finance their assets and operations, subject to their respective compliance with broker-dealer net capital and customer protection rules. At March 31, 2025, Hilltop Securities had credit arrangements with two unaffiliated banks, with maximum aggregate commitments of up to $425.0 million. These credit arrangements are used to finance securities owned, securities held for correspondent accounts, receivables in customer margin accounts and underwriting activities. These credit arrangements are provided on an “as offered” basis and are not committed lines of credit. In addition, Hilltop Securities has committed revolving credit facilities with two unaffiliated banks, with aggregate availability of up to $125.0 million. At March 31, 2025, Hilltop Securities had no borrowings under its credit arrangements or under its credit facilities. ​ Hilltop Securities uses the net proceeds (after deducting related issuance expenses) from the sale of two commercial paper programs for general corporate purposes, including working capital and the funding of a portion of its securities inventories. The commercial paper notes (“CP Notes”) may be issued with maturities of 14 days to 270 days from the date of issuance. The CP Notes are issued under two separate programs. The Series 2019-2 CP Notes are issued in maximum aggregate amounts of $200 million. The CP Series 2024-1 CP Notes were initiated in December 2024 with the first issuances under this new program occurring in the first quarter of 2025. With these first issuances, there were no future issuances allowed under the Series 2019-1 CP Notes program. Until the final maturity of the Series 2019-1 CP Notes, expected in October 2025, the Series 2019-1 and Series 2024-1 CP notes are managed as a single program with a maximum aggregate amount of $300 million. The CP Notes are not redeemable prior to maturity or subject to voluntary prepayment and do not bear interest, but are sold at a discount to par. The CP Notes are secured by a pledge of collateral owned by Hilltop Securities. ​ As of March 31, 2025, the weighted average maturity of the CP Notes was 129 days at a rate of 5.02% with a weighted average remaining life of 65 days. At March 31, 2025, the aggregate amount outstanding under these secured arrangements was $240.0 million, which was collateralized by securities held for Hilltop Securities accounts valued at $264.2 million. ​ 86 Table of Contents Mortgage Origination Segment ​ PrimeLending funds the mortgage loans it originates through a warehouse line of credit maintained with the Bank, which had a total commitment of $1.2 billion, of which $704.0 million was drawn at March 31, 2025. PrimeLending sells substantially all mortgage loans it originates to various investors in the secondary market, historically with the majority with servicing released. As these mortgage loans are sold in the secondary market, PrimeLending pays down its warehouse line of credit with the Bank. In addition, PrimeLending has an available line of credit with an unaffiliated bank of up to $1.0 million, of which no borrowings were drawn at March 31, 2025. ​ PrimeLending owns a 100% membership interest in PrimeLending Ventures Management, LLC (“Ventures Management”), which holds a controlling ownership interest in and is the managing member of certain ABAs. At March 31, 2025, these ABAs had combined available lines of credit totaling $65.0 million, all of which was with the Bank, with outstanding borrowings of $35.1 million. ​ Other Material Contractual Obligations, Off-Balance Sheet Arrangements, Commitments and Guarantees ​ Since December 31, 2024, there have been no material changes in other material contractual obligations disclosed within the section captioned “Other Material Contractual Obligations, Off-Balance Sheet Arrangements, Commitments and Guarantees” set forth in Part II, Item 7 of our 2024 Form 10-K. ​ Additionally, in the normal course of business, we enter into various transactions, which, in accordance with GAAP, are not included in our consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in our consolidated balance sheets. ​ Banking Segment ​ We enter into contractual loan commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of our commitments to extend credit are contingent upon customers maintaining specific credit standards until the time of loan funding. We minimize our exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. We assess the credit risk associated with certain commitments to extend credit and have recorded a liability related to such credit risk in our consolidated financial statements. ​ Standby letters of credit are written conditional commitments issued by us to guarantee the performance of a customer to a third-party. In the event the customer does not perform in accordance with the terms of the agreement with the third-party, we would be required to fund the commitment. The maximum potential amount of future payments we could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, we would be entitled to seek recovery from the customer. Our policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements. ​ In the aggregate, the Bank had outstanding unused commitments to extend credit of $2.1 billion at March 31, 2025 and outstanding financial and performance standby letters of credit of $53.5 million at March 31, 2025. ​ Broker-Dealer Segment ​ The Hilltop Broker-Dealers execute, settle and finance various securities transactions that may expose the Hilltop Broker-Dealers to off-balance sheet risk in the event that a customer or counterparty does not fulfill its contractual obligations. Examples of such transactions include the sale of securities not yet purchased by customers or for the account of the Hilltop Broker-Dealers, use of derivatives to support certain non-profit housing organization clients, clearing agreements between the Hilltop Broker-Dealers and various clearinghouses and broker-dealers, secured financing arrangements that involve pledged securities, and when-issued underwriting and purchase commitments. ​ 87 Table of Contents Impact of Inflation and Changing Prices ​ Our consolidated financial statements included herein have been prepared in accordance with GAAP, which presently require us to measure financial position and operating results primarily in terms of historic dollars. Changes in the relative value of money due to inflation or recession are generally not considered. The primary effect of inflation on our operations is reflected in increased operating costs. Historically, changes in interest rates affect the financial condition of a financial institution to a far greater degree than changes in the inflation rate. Inflationary pressures have moderated in recent periods with the inflation rate coming down from its peak with the expectation that there will be continued moderation of inflation during the remainder of 2025. Furthermore, a prolonged period of inflation has, and could continue to cause our costs, including compensation, occupancy and software costs, to increase, which could adversely affect our results of operations and financial condition. ​ While interest rates are greatly influenced by changes in the inflation rate, they do not necessarily change at the same rate or in the same magnitude as the inflation rate. Interest rates are highly sensitive to many factors that are beyond our control, including changes in the expected rate of inflation, the influence of general and local economic conditions and the monetary and fiscal policies of the U.S. government, its agencies and various other governmental regulatory authorities. ​ Critical Accounting Estimates ​ We have identified certain accounting estimates which involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our accounting policies are more fully described in Note 1 to the consolidated financial statements. Actual amounts and values as of the balance sheet dates may be materially different than the amounts and values reported due to the inherent uncertainty in the estimation process. Also, future amounts and values could differ materially from those estimates due to changes in values and circumstances after the balance sheet date. The critical accounting estimates, as summarized below, which we believe to be the most critical in preparing our consolidated financial statements relate to allowance for credit losses and goodwill and identifiable intangible assets. Since December 31, 2024, there have been no changes in critical accounting estimates as further described under “Critical Accounting Estimates” in our 2024 Form 10-K. ​ Item 3. Quantitative and Qualitative Disclosures About Market Risk. ​ Our assessment of market risk as of March 31, 2025 indicates there are no material changes in the quantitative and qualitative disclosures from those previously reported in our 2024 Form 10-K, except as discussed below. ​ The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. Market risk represents the risk of loss that may result from changes in value of a financial instrument as a result of changes in interest rates, market prices and the credit perception of an issuer. The disclosure is not meant to be a precise indicator of expected future losses, but rather an indicator of reasonably possible losses, and therefore our actual results may differ from any of the following projections. This forward-looking information provides an indicator of how we view and manage our ongoing market risk exposures. ​ Banking Segment ​ The banking segment is engaged primarily in the business of investing funds obtained from deposits and borrowings in interest-earning loans and investments, and our primary component of market risk is sensitivity to changes in interest rates. Consequently, our earnings depend to a significant extent on our net interest income, which is the difference between interest income on loans and investments and our interest expense on deposi