#1Hilltop Holdings. Hilltop Holdings Inc. Q2 2023 Earnings Presentation July 21, 2023#2Preface Corporate Headquarters 6565 Hillcrest Ave Dallas, TX 75205 Phone: 214-855-2177 www.hilltop-holdings.com Additional Information Please Contact: Erik Yohe Phone: 214-525-4634 Email: [email protected] FORWARD-LOOKING STATEMENTS "" This presentation and statements made by representatives of Hilltop Holdings Inc. ("Hilltop" or the "Company") during the course of this presentation include "forward- looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements anticipated in such statements. Forward-looking statements speak only as of the date they are made and, except as required by law, we do not assume any duty to update forward-looking statements. Such forward-looking statements include, but are not limited to, statements concerning such things as our outlook, our business strategy, our financial condition, our efforts to make strategic acquisitions, our revenue, our liquidity and sources of funding, market trends, operations and business, taxes, the impact of natural disasters or public health emergencies, such as the current coronavirus ("COVID-19") global pandemic, information technology expenses, 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, anticipated changes in our revenue, earnings, or taxes, 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, future benchmark rates and economic growth, anticipated investment yields, expected accretion of discount on loans in future periods, the collectability of loans, cybersecurity incidents, the outcome of litigation, and our other plans, objectives, strategies, expectations and intentions and other statements that are not statements of historical fact, and may be identified by words such as "anticipates," "believes," "building", "could," "estimates," "expects," "forecasts, "goal," "guidance", "intends," "may," "might," "outlook", "plan," "probable," "projects," "seeks," "should," "target," "view" or "would" or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: (i) disruptions to the economy and the U.S. banking system caused by recent bank failures, 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; (ii) the credit risks of lending activities, including our ability to estimate credit losses and increases to the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs; (iii) effectiveness of our data security controls in the face of cyber attacks; (iv) changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil; (v) risks associated with concentration in real estate related loans; (vi) changes in the interest rate environment; (vii) the effects of our indebtedness on our ability to manage our business successfully, including the restrictions imposed by the indenture governing our indebtedness; (viii) changes in state and federal laws, regulations or policies affecting one or more of our business segments, including changes in regulatory fees, deposit insurance premiums, capital requirements and the Dodd-Frank Wall Street Reform and Consumer Protection Act; (ix) cost and availability of capital; (x) changes in key management; (xi) 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; (xii) legal and regulatory proceedings; (xiii) risks associated with merger and acquisition integration; (xiv) legal, reputational, and financial risks resulting from cybersecurity incidents and (xv) our ability to use excess capital in an effective manner. For further discussion of such factors, see the risk factors described in our most recent Annual Report on Form 10-K, and subsequent Quarterly Reports on Form 10-Q and other reports, that we have filed with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement. The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying slides. Hilltop Holdings does not undertake an obligation to, and disclaims any duty to, update any of the information herein. Hilltop Holdings.#3Investor Highlights - Q2 2023 EPS - Diluted $0.28 Net Income $18.1MM PlainsCapital Bank PrimeLending HilltopSecurities ● ● ROAA 0.47% PlainsCapital Bank generated $39.8 million in pre-tax income during Q2 2023, a decrease of $11.5 million from Q2 2022 driven primarily by $9.9 million of higher provision expense ROAE 3.53% Average bank loans HFI¹ increased from Q1 2023 by $172 million, or 2%, while loan yields of 5.86% increased by 34 basis points from Q1 2023 Average bank deposits have increased from Q1 2023 by $300 million, or 3%, to $11.3 billion. Total cost of deposits at the bank was 2.36% during the period, a 72 basis point increase over Q1 2023 The bank's provision for credit losses was $14.9 million during the quarter. This was driven by a combination of deterioration in the economic outlook, negative credit migration and loan growth PrimeLending generated a $14.5 million pre-tax loss during Q2 2023, a decrease of $20.1 million from Q2 2022 Mortgage origination volume in Q2 2023 was $2.5 billion, a decline of 36% from Q2 2022; overall industry volume expected to decline by approximately 32% over the same period² Gain-on-sale of loans to third parties declined by 53 basis points from Q2 2022 to 207 basis points for Q2 2023 as interest rates have increased, volumes have declined, and pricing has remained very competitive 2022 Non-interest expense at PrimeLending declined by $34.5 million, or 26%, from Q2 2022. Excluding variable compensation, expenses declined by $14.2 million, or 19%, during the same period as actions have been made to resize the organization towards a smaller overall mortgage market HilltopSecurities generated a pre-tax income of $18.5 million during Q2 2023, an increase of $9.4 million from Q2 Total net revenue for Q2 2023 was $113.2 million, an increase of $13.0 million from Q2 2022 as improved revenues from sweep deposits and a strong TBA market have helped to offset challenging public finance and fixed income markets Notes: (1) Average Bank Loans HFI reflect consolidated loans held for investment excluding margin loans from the broker-dealer business. (2) Mortgage Bankers Association Forecast, June 20, 2023. 3 Within Wealth Management, money market and FDIC sweep accounts generated an increase in revenue of $10.5 million from prior year as balances benefited from higher short term interest rates Hilltop Holdings.#4Capital Highlights - Q2 2023 During the quarter, HTH returned $10.4 million of capital to shareholders in dividends. There were no share repurchases during the quarter Notes: (1) (2) 4 ● 20.22% $0.12 $26.93 Q2 2021 21.28% $0.12 $27.77 Capital Management and Tangible Book Value Growth 21.22% $0.12 $28.37 Q4 2021 21.27% $0.15 $27.47 Q1 2022 17.24% $0.15 $27.08 Q2 2022 17.45% $0.15 $27.13 18.23% $0.15 $27.18 Q3 2021 Q3 2022 Q4 2022 Tangible Book Value Per Share (Tangible Common Equity / Shares Outstanding)¹ 2 Common Equity Tier 1 risk based ratio 2 ➡Dividends per share Tangible common equity and tangible book value per common share (TBVPS) are non-GAAP financial measures. For a reconciliation of tangible common equity and tangible book value per share to the nearest GAAP measure, see the appendix. At period end. 17.99% $0.16 $27.36 Q12023 17.63% $0.16 $27.45 Q2 2023 TBVPS 11% Versus 6/30/22 11% CAGR Since 6/30/21 Hilltop Holdings. 1#5Hilltop Holdings - Q2 Financial Summary $ in Millions, except EPS Income Statement and Key Metrics Net interest income Noninterest income Noninterest expenses Efficiency ratio Pre-provision net revenue¹ 5 Net charge offs (recoveries) Net ACL build (release) Provision for (reversal of) credit losses Income before income taxes Net income Minority interest Income attributable to Hilltop Return on average assets Return on average equity EPS - Diluted EOP Shares outstanding (in thousands) Average assets EOP Assets EOP Loans HFI, net EOP Deposits Q2 2023 $118.3 190.7 267.0 86.4% 41.9 $2.9 12.0 14.8 27.1 19.9 1.8 $18.1 0.47% 3.53% $0.28 65,071 $16,919 17,138 8,245 11,164 Q1 2023 $121.7 162.5 250.5 88.1% 33.7 $0.4 1.9 2.3 31.4 27.8 2.0 $25.8 0.69% 5.12% $0.40 65,023 $16,303 17,029 8,095 11,097 Notes: (1) Pre-provision net revenue is calculated as the sum of net interest income and noninterest income less noninterest expense (except provision for loan losses). QoQ% (3%) 17% 7% 24% 536% (14%) (28%) (8%) (30%) (30%) 0% 4% 1% 2% 1% Q2 2022 $112.1 239.3 298.5 85.0% 52.8 $1.2 4.1 5.3 47.5 35.3 2.1 $33.3 0.80% 5.82% $0.45 64,576 $17,791 16,716 7,835 11,921 YoY% 6% (20%) (11%) (21%) 178% (43%) (44%) (13%) (45%) (38%) 1% (5%) 3% 5% (6%) Hilltop Holdings.#6Hilltop Holdings - Allowance for Credit Losses ($ in millions) ACL/Total Loans HFI ● ● ● $95.3 1.20% 6/30/2022 $91.8 1.16% 9/30/2022 $95.4 1.18% 12/31/2022 Allowance for Credit Losses at Period End Commentary $97.4 1.19% 3/31/2023 $7.7 Collective - Economic Conditions Applied Moody's Analytics June 2023 single macroeconomic alternative (S7) scenario for economic forecast Reserve builds (releases) driven by new loan production, higher rates and slower expected GDP growth in 2023-2024 ACL % of Loans HFI excluding broker-dealer margin loans and mortgage warehouse loans equated to 1.41% as of June 30, 2023 $5.2 Collective - Portfolio Changes $1.9 Specific Reserves ($2.9) Net Charge-Off $109.3 ($ in millions) Commercial real estate Commercial and industrial Construction and land development 1-4 family residential Consumer Broker-dealer Mortgage warehouse lending Total Reserve 1.31% 6/30/2023 6/30/23 Reserve Composition Reserve $71.5 $17.1 $7.4 $11.6 $0.6 $0.9 $0.2 $109.3 ACL/Loans HFI 2.18% 1.17% 0.68% 0.64% 2.31% 0.25% 0.05% 1.31% Hilltop Holdings.#7Hilltop Holdings - Commercial Real Estate Portfolio ($ in millions) Commercial Real Estate Portfolio ■CRE- Owner Occupied ■CRE - Non-Owner Occupied $1,406 43% CRE Allowance for Credit Losses (ACL) Allowance for Credit Losses $23.5 $ in millions CRE Non-Owner Occupied Office CRE Non-Owner Occupied Retail CRE Non-Owner Occupied Office and Retail All other CRE Non-Owner Occupied Total CRE Non-Owner Occupied Ending Balance $519.3 $341.9 $861.2 $1,009.0 $1,870.2 $1,870 57% Ending Balance at June 30, 2023 unless noted otherwise 7 $6.0 $29.5 $14.0 $43.6 ACL % Loans 4.5% 1.8% 3.4% 1.4% 2.3% ■ Office ■ Retail ■ Hotel/Motel Multifamily ■ Industrial Commercial Real Estate Non-Owner Occupied ■ Mini-Storage ■ Other ● ● ● ● ● 7% 9% ● 11% 13% Notes 14% Approximately 96% of all CRE exposure is in Texas Total CRE - Office Unpaid Principal Balance (UPB) of $833.8 million 28% 18% Average loan balance $1.5 million 28% of office loans are medical and dental related Total CRE- Retail UPB of $385.8 million Average loan balance of $1.8 million Hilltop Holdings.#8Hilltop Holdings - Net Interest Income & Margin ($ in millions) 8 $112.1 Q2 2022 2.76% Net Interest Income $123.5 $123.4 Q3 2022 Q4 2022 Q1 2023 3.19% Net Interest Margin $121.7 3.23% Q2 2022 Q3 2022 Q4 2022 3.28% $118.3 Q2 2023 3.03% Q1 2023 Q2 2023 Net Interest Margin Rollforward Q12023 Loans HFI Yield Increase Securities Portfolio Yield Increase Yield on Cash and Due Balances Other Cost of Deposits Borrowings Q2 2023 Key Drivers & Statistics Q2'22 ($ in millions, except as noted) HTH Consolidated Average Earning Assets ($B) Banking Accretion Income Loans HFI (Avg. Balance) Deposit (Avg. Balance) Cash and Due (Avg. Balance) Mortgage Loans Held for Sale (period end) $16.4 Q1'23 $1,492 $15.1 $3.0 $1.9 $7,302 $7,694 $12,465 $10,980 $2,585 $1,542 $1,040 3.28% 0.26% 0.06% 0.09% 0.01% (0.52%) (0.15%) 3.03% Q2'23 $15.7 $3.3 $7,865 $11,280 $1,797 $1,333 Hilltop Holdings.#9Hilltop Holdings – Q2 2023 Liquidity Update ($ in millions, at period end) FHLB Capacity a Available Liquidity¹ Investment Portfolio (available) Fed Deposits (excess daily requirements) Total Available liquidity from Fed discount window Total available Liquidity 16% 25% Through the Cycle Interest-Bearing Deposit Beta² 41% $ 44% 58% 3,945 1,688 1,424 7,057 Increased deposit rates in Q2 2023 to bring high balance deposit accounts more in line with peers 191 7,248 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Marginal beta expectations of 75% - 100% for any additional Fed rate changes Notes: (1) Available liquidity is net of utilization. (2) Deposit beta on PlainsCapital Bank deposits excluding HTS sweep and brokered deposits. ● Total available liquidity totaled ~$7.2 billion at June 30, 2023 Uninsured deposits, excluding collateralized deposits of $350.7 million, were $4.1 billion, or approximately 37% of total deposits ($ in billions) $12.3 0.2% Q2 2022 Current Themes Deposit Average Balance and Costs $11.7 0.4% $11.4 1.0% Q3 2022 Q4 2022 Deposit Avg Bal 1.3% $11.0 Q1 2023 Deposit Costs 1.9% $11.3 Q2 2023 Hilltop Holdings.#10Hilltop Holdings - Deposits ($ in billions) $11.9 $0.8 $4.6 $6.4 Q2 2022 Deposit Mix at Period End $11.4 $0.7 $4.5 $6.1 $11.3 40.0 $1.1 $4.0 $6.2 $11.1 $1.6 $3.8 $5.7 Q3 2022 Q4 2022 Q1 2023 ■Interest-Bearing Deposits Noninterest-Bearing Deposits ■Broker-Dealer Sweep Deposits Brokered Deposits Notes: The sum of the period amounts may not equal the total amounts due to rounding. Annualized. (1) (2) Other includes Savings and Brokered Deposits 10 $11.2 $0.4 $1.5 $3.5 $5.8 Q2 2023 Q2'22 Average Deposits ($B) $12.3 Cost of Interest-Bearing Deposits¹ 0.28% Cost of Total Deposits¹ 0.18% Key Drivers & Statistics 14% 26% Interest-Bearing Deposits by Type at 6/30/2023 4% Q1'23 $11.0 2.01% 1.32% 56% Q2'23 $11.3 2.84% 1.95% ■ Demand ■ Money Market Time Other ² Hilltop Holdings.#11Hilltop Holdings - Noninterest Income ($ in millions) 11 $239.3 $12.5 $87.7 $140.1 Noninterest Income $207.0 $12.2 $100.8 $98.2 $169.8 $11.9 $92.8 $71.4 ($0.9) ($4.2) ($6.3) Q2 2022 Q3 2022 Q4 2022 $162.5 $11.2 $90.6 $68.8 $190.7 $11.2 $100.0 $90.1 ($8.2) ($10.7) Q1 2023 Q2 2023 ■Corporate, other and eliminations Plains Capital Bank HilltopSecurities ■ PrimeLending Year-over-Year Noninterest Income ($MM) Q2 2022 Mortgage Production Income & Fees Securities and Investment Advisory Fees & Commissions Other Income Q2 2023 Key Drivers & Statistics Broker-Dealer TBA Lock Volume ($mm) Q2'22 $677 Mortgage Origination Volume ($B) $3.8 Net gains from mortgage loan sales (bps): 260 Loans sold to third parties Impact of loans sold to bank As reported 253 Q1'23 $1,188 $1.7 193 (7) 186 $239.3 (49.9) (5.1) 6.4 $190.7 Q2'23 $1,580 $2.5 207 (6) 201 Hilltop Holdings.#12Hilltop Holdings - Noninterest Expenses ($ in millions) 12 85.0% $298.5 $94.0 $204.5 Noninterest Expenses 87.4% $288.7 $86.9 $201.9 86.4% $253.4 $58.8 $194.6 88.1% $250.5 $56.4 $194.1 Q2 2022 Q3 2022 Q4 2022 Q1 2023 86.4% $267.0 $71.0 $195.9 Variable Compensation Expenses Other Than Variable Compensation Efficiency Ratio Q2 2023 Year-over-Year Noninterest Expense ($MM) Compensation and Benefits Occupancy and Equipment Professional Services Other Expenses Q2 2022 Banking Full-Service Branches Broker-Dealer Q2 2023 Key Drivers & Statistics Q2'22 Efficiency Ratio (Bank Only) Mortgage Variable Compensation ($mm) Variable Comp / Originated Volume Variable Compensation ($mm) Compensation / Net Revenue 58 50.4% $56.5 1.5% Q1'23 $298.5 (28.4) (1.2) (3.7) $25.6 1.5% 1.7 $267.0 59 48.4% Q2'23 59 51.2% $36.2 1.5% $37.5 $30.8 $34.8 64.3% 59.7% 57.7% Hilltop Holdings.#13Hilltop Holdings - Loans ($ in billions) $7.9 $0.3 $1.1 $0.5 $6.1 Loan Mix at Period End $7.9 $0.2 $1.2 $0.4 $6.1 $8.1 $0.2 $1.3 $0.4 $6.1 $8.2 $0.2 $1.4 $0.4 $6.2 $8.4 $0.3 $1.4 $0.4 $6.3 1 Average Loans HFI Balance ($B) Annualized Loan HFI Yield % 22% 13% Key Drivers & Statistics Q2'22 Q1'23 $7.8 $7.9 4.32% 5.79% Gross Loans HFI by Type at 6/30/23 4% 22% 22% 17% Q2'23 $8.0 6.21% ■CRE - Non-owner occupied ■CRE - Owner occupied Commercial and industrial Construction and land development 1-4 family residential & Consumer Margin loans at Broker-Dealer Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Mortgage Warehouse Lending 1-4 Family Prime Lending Retained Mortgages ■Broker-Dealer Loans Notes: ■All Other Loans (1) 1-4 Family PrimeLending Retained Mortgages are loans purchased at par by PlainsCapital Bank from PrimeLending. These are exclusive of the 1-4 family residential mortgages originated through PlainsCapital Bank. The sum of the period amounts may not equal the total amounts due to rounding. 13 Hilltop Holdings.#14Hilltop Holdings - Asset Quality % of Bank Loans 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% ($000) 5,000 4,000 3,000 2,000 1,000 0 (1,000) 2.5% 2.5% Q2 2022 0.07% 1,223 Criticized Loans 2.7% Q2 2022 2.6% Q3 2022 2.6% 0.15% 2,735 2.6% Q4 2022 Classified Special Mention Net Charge-Offs (Recoveries) 0.00% (21) 2.7% Q1 2023 2.7% 0.02% 419 0.15% 2,884 3.0% 3.0% Q2 2023 Q2 2023 0.40% 0.20% 0.00% -0.20% -0.40% -0.60% -0.80% -1.00% $75,000 $50,000 $25,000 5.0x 4.5X 4.0x 3.5X 3.0x 2.5X 2.0X 1.5X 1.0X $0 0.50% $37,197 Q2 2022 1.27% 2.7X Q2 2022 Non-Performing Assets 0.48% $36,260 Q3 2022 Total NPAS 1 1.21% 2.6x 0.43% Allowance for Credit Losses 0.39% $32,645 $30,580 Q4 2022 Q1 2023 Total NPAs/(Bank Loans HFI + OREO) 1.24% 3.1x 1.23% 3.5x 0.53% $42,437 Q2 2023 1 Q1 2023 ACL/Bank Loans HFI 1.36% 2.8x Q2 2023 1.00% 0.75% 0.50% 0.25% 0.00% 2.00% 1.50% Q3 2022 Q4 2022 ACL/Bank NPLs Q3 2022 Q4 2022 Q1 2023 INCOS -NCOS/Avg. Bank Loans HFI Notes: The sum of the period amounts may not equal the total amounts due to rounding. Figures represent bank asset quality metrics only (excludes Loans HFS and Broker Dealer Margin Loans). (1) Total NPAs included non-accrual loans, OREO and other repossessed assets. Effective January 1, 2023, we adopted Accounting Standards Update ("ASU") 2022-02 which eliminated the recognition and measurement guidance on troubled debt restructurings for creditors. Therefore, we no longer present troubled debt restructurings as a component of non-performing loans and assets. 14 Hilltop Holdings. 1.00% 0.50% 0.00%#15Hilltop Holdings – 2023 Outlook 15 Loan Growth (Full year average HFI loan growth) Deposit Growth (Full year average deposit growth) Net Interest Income Noninterest Income Noninterest Expense Provision Expense / (Reversal) Effective Tax Rate (GAAP) ● ● ● ● ● • NII growth 0% - 5% driven by higher interest rates Outlook assumes Fed Funds rate peaks during second half 2023 Interest-bearing deposit betas 55 – 65% (through the cycle) - ● ● ● Outlook Full year average bank loan growth 0% -2% (excluding retained mortgages from Prime Lending and mortgage warehouse lending) Expect to retain $0 – $20 million per quarter of mortgages from PrimeLending Full year average total deposits to decline 7% to 13% Mortgage gain on sale margins full year average 195-215 bps (third party sales) Full year mortgage origination volume $8 - $10 billion Broker Dealer fees increase 10% - 15% Non-variable expenses decrease 5% - 10% Variable expenses to follow revenue contribution from fee businesses Full year provision/ total loans HFI: 25 - 45 basis points 22 - 24% full year basis Hilltop Holdings.#16Appendix 16 Hilltop Holdings.#17PlainsCapital Bank - Q2 2023 Highlights Summary Results ($ in millions) Net Interest Income Provision for (reversal of) Credit Losses Noninterest Income Noninterest Expense Income Before Taxes 2.97% 3.42% Q2 2022 $101.3 Net Interest Margin 3.42% 5.0 12.5 57.3 $51.4 3.40% Q2 2023 $101.0 14.9 11.2 57.4 $39.8 3.11% Key Highlights ROAA Full Service Branches (period end) Net Interest Margin Assets ($B) (period end) Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Notes: (1) Efficiency Ratio is calculated as noninterest expense divided by the sum of net interest income and noninterest income. 17 50.4% Q2 2022 48.9% Efficiency Ratio¹ Q3 2022 48.9% Q2 2022 1.09% Q4 2022 58 2.97% $13.8 48.4% Q1 2023 Q2 2023 0.89% 59 3.11% $13.8 51.2% Q2 2023 Hilltop Holdings.#18PrimeLending - Q2 2023 Highlights Summary Results ($ in millions) Net Interest Income (Expense) Noninterest Income Noninterest Expense Income (Loss) Before Taxes ($ in billions) $3.8 Q2 2022 $3.0 Q3 2022 $2.0 Q2 2022 ($1.3) Mortgage Origination Volume Q4 2022 140.1 133.2 $5.6 $1.7 Q1 2023 Q2 2023 ($5.9) 90.1 98.7 ($14.5) $2.5 Q2 2023 Key Highlights Origination Volume ($mm) % Purchase Sales Volume ($mm) MSR Asset ($mm) (period end) (# in Basis points), 365 111 253 Q2 2022 350 131 218 Q3 2022 Notes: (1) Gain on Sale calculated as net gains from sale of loans divided by sales volume. Reported Gain on Sale reflects impact of loans retained by PlainsCapital Bank. 18 364 Gain on Sale and Origination Fee Trends Mortgage loan origination fees and other related income Reported Gain on Sale 172 192 Q2 2022 $3,809 Q4 2022 88% $3,873 $122 352 166 186 Q2 2023 $2,452 Q1 2023 94% $2,116 $95 370 169 201 Q2 2023 Hilltop Holdings.#19HilltopSecurities – Q2 2023 Highlights - Summary Results ($ in millions) Net Interest Income Provision for (Reversal of) Credit Losses Noninterest Income Noninterest Expense Income Before Taxes Key Highlights ($ in millions) Public Finance Services Fixed Income Services Wealth Management Retail Clearing Services Securities Lending Structured Finance Other Q2 2022 Net Revenues $12.6 0.3 Net Revenues by Business Line 87.7 90.8 $9.1 Q2 2022 $21.8 18.9 28.2 8.8 2.0 20.2 0.3 $100.2 Q2 2023 $13.2 (0.1) 100.0 94.9 $18.5 Q2 2023 $21.9 17.7 33.4 11.6 2.1 19.9 6.6 $113.2 Key Highlights ($ in millions) Compensation/Net Revenue (%) Pre-tax Margin % FDIC Insured Balances at PCB (period end) Other FDIC Insured Balances (period end) Public Finance Offerings TBA Lock Volume Q2 2022 64.3% 9.1% $758 $1,447 $11,171 $677 Q2 2023 57.7% 16.3% $1,464 $639 $12,737 $1,580 Notes: The sum of the period amounts may not equal the total amounts due to rounding. Presented net revenue by business line may differ slightly from 10-Q due to grouping of certain business lines into 'Other'. 19 Hilltop Holdings.#20Non-GAAP to GAAP Reconciliation and Management's Explanation of Non-GAAP Financial Measures Tangible Common Equity, is a non-GAAP financial measure. Tangible common equity is defined as our total stockholders' equity, excluding preferred stock, reduced by goodwill and other intangible assets. This is a measure used by management, investors and analysts to assess use of equity. Tangible book value per share, or TBVPS, is a non-GAAP financial measure. TBVPS represents Hilltop's tangible common equity at period-end divided by common shares outstanding at period-end. This is a measure used by management, investors and analysts to assess use of equity. Reconciliation of Tangible Common Equity and Tangible Book Value Per Share ($ '000, except per share amounts) Total Stockholders' Equity Less: Goodwill Other intangible assets, net Tangible Common Equity Shares outstanding as of period end Book Value Per Share (Common Stockholder's Equity / Shares Outstanding) Tangible Book Value Per Share (Tangible Common Equity / Shares Outstanding) 20 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 $2,476,371 $2,522,668 $2,470,281 267,447 17,705 $2,185,129 81,153 $30.44 Hilltop Consolidated $26.93 267,447 16,455 $31.36 267,447 $2,192,469 $2,239,937 78,959 78,965 $27.77 15,284 $31.95 $28.37 $2,463,933 267,447 14,233 $31.02 9/30/2022 12/31/2022 3/31/2023 $2,029,577 $2,031,811 $2,036,924 $2,056,711 $27.47 267,447 $2,182,253 $1,748,948 79,439 64,576 13,182 $31.43 $27.08 267,447 12,209 $1,752,155 64,591 $31.46 $27.13 267,447 11,317 267,447 $27.18 10,544 6/30/2023 $27.36 $2,063,599 267,447 $1,758,160 $1,778,720 $1,786,380 64,685 65,023 65,071 $31.49 $31.63 $31.71 9,772 $27.45 Hilltop Holdings.