Momentum - Third Quarter 2018

A Hilltop Holdings Publication

National Lloyds

Celebrating 70 Years: Carving Out a Niche in Insurance In 1948, the baby boom was leading to an increase in the need for houses across America. This led to a subsequent need for more property and casualty insurance, and in Texas, it led to the creation of National Lloyds.

Turning 70 this year, Dallas-based National Lloyds has refined its approach into a niche area focused on underserved markets. Today, the company specializes in providing innovative and affordable property and casualty insurance solutions tailored to meet the specific needs of policyholders in the lower-value home and manufactured home communities.

In 1948, National Lloyds started serving hardworking Texans who shared the dream of homeownership.

Seven decades later it continues to do so, together with its affiliates American Summit Insurance Company and Nalico General Agency, a full-service agency.

The wholly owned affiliates and general agency are part and parcel of the National Lloyds family, and their respective agents practice the same commitment to service that is the trademark of the National Lloyds brand.

For the company’s network of 4,200 independent agents National Lloyds' depth of product offerings translates to added value for their customers.

Focusing on building meaningful relationships with independent agents, policy holders and industry partners—such as manufactured housing dealers—enables National Lloyds to develop a deep understanding of their unique needs. Because those needs change, the company continually develops and recalibrates its products, technology, and support teams to provide customized insurance at competitive rates.

© 2018 Hilltop Holdings Inc. Product of the Marketing & Communications Department

Homeowner Policies

National Lloyds’ approach to underwriting policies for homes valued up to $250,000 takes into account that no two homes are the same and no two customers are either, which is why policies are designed to be easily customizable to meet a homeowner’s coverage and budgetary needs.

3rd Quarter 2018

MOMENTUM

Dwelling Policies

Whether a customer owns one rental property or 50, National Lloyds offers dwelling policies for homes valued up to $250,000, covering property damage, liability, loss of use, and more. No matter if a dwelling is owned outright or mortgaged, National Lloyds works with real estate investors to help safeguard their assets and preserve their wealth, underwriting affordable policies with convenient payment options that account for cash-flow needs and other variables.

Manufactured Home Policies

Nalico General Agency is a major player in the mobile, modular, and factorybuilt home insurance space. Along with specialized policies for individual homeowners, Nalico operates a pointof-sale business, partnering directly with manufactured home dealers to aid their specific customers’ needs.

Catering to niche insurance communities has proved to be a winning strategy for National Lloyds, bolstering the company’s growth by carving out a strategic space in the industry.

National Lloyds’ extensive knowledge of underserved audiences and its subsequent product offerings, coupled with competitive rates, have enabled the company to build enduring relationships with customers and industry partners, while providing its network of independent agents a foundation upon which to build their own successful businesses.

IN THIS ISSUE

Bank Acquisition Marks Houston Growth Setting a New Standard in Water Infrastructure Funding ...and more

PrimeLending

Making Wishes Come True Last month, PrimeLending and the MakeA-Wish North Texas chapter granted the wish of 14-year-old Eli, who is battling soft tissue sarcoma. Eli’s wish was for a custom-designed backyard club house, a place where he could hang out with friends and play video games.

PrimeLending associates raised more than $10,000 dollars to build his ultimate backyard escape through an employee-driven fundraising campaign designed to grant wish requests for deserving children.

In Pursuit of Greatness Good may be good enough for some, but most of us want more than that. Something inside us wants to be better than good. We want to be part of a team whose members, even years later, will be remembered for what they accomplished. We want to go for greatness! At Hilltop Holdings, our passion is to enable greatness in people and organizations everywhere.

Spotlighted in this issue are key examples of what makes our company great—our team of top performers and the distinctive contributions they make to Hilltop Holdings, and the industries, customers, and communities we serve. They do more than “business as usual;” they fulfill a unique, meaningful mission that sets them and us apart from the crowd... in our collective pursuit of greatness.

Jeremy B. Ford Co-CEO and President

Alan B. White Co-CEO and Vice Chairman

Born out of a conversation last spring with Make-A-Wish representatives in Dallas where PrimeLending is headquartered, the “unique retreats” campaign struck the right chord.

PrimeLending was looking for a cause-related partnership that provided volunteer and fundraising opportunities for the more than 3,000 employees across the U.S. to participate.

Working with Make-A-Wish offices in their areas, PrimeLending branches throughout the country can identify wish requests for fun, imaginative play spaces or magical retreats tailored to a particular child. In May, PrimeLending employees in the Pacific

Hilltop and PlainsCapital Bank will lease approximately 68,000 square feet of office space on the top four floors of the building. An approximately 4,000-square-foot PlainsCapital Bank branch will be located on the first floor.

Hilltop will occupy just over half of the building’s rentable space and expects to move in during the fourth quarter of 2019. The remaining space

Company chairman and Hilltop’s largest shareholder Gerald J. Ford is an investing partner in the real estate development along with an unaffiliated third-party investor. The building expects to pursue LEED Silver certification.

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“Our team members are always looking for opportunities to give back,” said Sherri White, PrimeLending human resources manager.

“Whether working through a national charity or providing local, boots-on-the-ground efforts,

efforts working with veterans, military service members and community heroes throughout Central Minnesota.

will be leased for commercial office, retail, and restaurant use.

Hilltop invested approximately $24 million in the project—$5 million for its stake in the building and approximately $19 million for its stake in the land. Total building costs are projected to be around $60 million. Construction on the 1.7-acre building site, located at the northwest corner of the Southern Methodist University campus, began at the end of last year.

Northwest region worked with the MakeA-Wish Oregon chapter to grant the wish of three-year-old Alicia, a leukemia patient, raising funds to build her dream playhouse in the backyard of her family’s home.

we know that communities flourish when the needs of those who live there are met.”

The campaign lends itself to a lot of interpretations of what a unique retreat can be, from an outside dwelling to a child’s room or even renovations inside their home for special needs accommodations. Furthermore, it ties in well with PrimeLending’s mortgage lending business, especially the company’s construction lending division.

Work with Heroes Comes from the Heart

Construction Underway for New Corporate HQ Hilltop Holdings is getting a new home. The sixstory, 119,000-square-foot Class A commercial office building currently under construction in Dallas' University Park will serve as the headquarters for both the holding company and its largest subsidiary, PlainsCapital Bank.

The building will be named Hilltop Plaza, and construction is expected to be completed in the second half of 2019.

PrimeLending associates and Make-A-Wish North Texas present Eli his new backyard clubhouse.

Patience Svor Senior Loan Originator PrimeLending

When Homes for Heroes announced its affiliate award winners for 2017, PrimeLending’s Patience Svor, senior loan originator (NMLS: 339046), was recognized among the top ten mortgage lending specialists in the nation for her

Minneapolis-based Homes for Heroes is the largest nationwide network of real estate professionals committed to honoring community heroes. Born out of the events of 9/11, the Homes for Heroes program offers discounts to military personnel, veterans, firefighters, law enforcement officers, medical professionals, and teachers when buying, selling, or refinancing a home. Affiliated realtors and lenders donate a percentage of their commissions and fees, which are given back to the hero with whom they are working. Last year, Homes for Heroes collectively gave back $9.5 million to heroes nationwide. More than half of Svor’s closings in 2017 were affiliated with the Homes for Heroes program.

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Svor has been involved with Homes for Heroes since first learning of it in 2013. Her fervent support of the organization and its mission stems from the generations of military service woven into her family tree—a point of pride and tradition.

A wife, sister, daughter, and granddaughter of military veterans, she understands the needs and sacrifices that come with public service.

As a seasoned mortgage lender, she also understands the stresses that can come with buying a home.

“Working with the people who serve our country and communities, often selflessly, is near and dear to me,” said Svor. “To be able to help a hero and their family navigate their mortgage through the Homes for Heroes program and be able to give back to them at the same time is an opportunity for me to say thank you for their service.”

Hilltop Holdings

PrimeLending

New eClosing Solution Changing Home Lending The same technology that has revolutionized other industries and made work faster, smarter, and easier across the board is taking the $1.5 trillion U.S. mortgage market from dated to digital. While digital mortgages are not a new concept, to date they have been limited to completing mortgage applications online.

However, that’s changing as new technology solutions are emerging that allow consumers to access, verify, sign, and submit closing documents electronically.

This past June, PrimeLending celebrated its first “hybrid” electronic closing (eClosing) in Texas—a process in which the homebuyer was only required to sign a handful of documents in person, with the rest of the process completed electronically and in less than 30 minutes. It was a big step for PrimeLending, but not the last. In August, PrimeLending pushed forward and executed two more hybrid eClosings, this time with the inclusion of electronic promissory notes or eNotes, further expediting the closing process for the respective borrowers.

“These were monumental events for us, representing years of investment and development,” said Nisa Reyes Howard, PrimeLending executive vice president and director of compliance. “Working with our industry partners, PrimeLending now has an eClosing solution that allows us to realize the benefits of an end-to-end digital mortgage in driving safer, more transparent, and more efficient home lending.”

Paperwork has long dominated the mortgage experience, with loan files easily exceeding hundreds of pages. Borrowers often have to track down years of financial records and make numerous in-person trips to their lender’s office. Industry advancements in electronic platforms that digitally connect homebuyers to their financial data—including bank and credit card information, tax forms, and more—have helped streamline the application process and document collection, substantially simplifying the verification process for lenders. Digitizing the closing piece of the mortgage process proved a bit more challenging, as it involved finding solutions on how best to support eNotes,

as well as addressing regulatory requirements regarding in-person notarization.

With the advancements being made in its eClosing solution and eMortgage platform, PrimeLending is helping lead the way in the digital mortgage arena—a progressive move for the mortgage business, says Howard, and a sign that technology in the mortgage space is catching up to other industries.

What are eClosings and eMortgages?

Simply put, an eClosing is the electronic execution of some or all mortgage loan closing instruments—including key documents, such as the promissory note and the deed—in a secure digital environment. A “hybrid” eClosing is one in which a borrower electronically signs the ancillary closing documents but ink signs the promissory note and the deed, along with all other documents requiring in-person notarization. A hybrid eClosing that includes an eNote, where the borrower electronically signs the ancillary documents and the promissory note but ink signs the deed and all other notarized documents, is considered by the industry to be an eMortgage, as it encompasses an end-to-end platform from the application to the signing of the note. The lender then stores the eNote in an electronic vault (eVault).

The implementation of eClosings and eMortgages is still a new frontier for mortgage lenders, settlement and title companies, and home buyers, but it’s without question where the industry is headed. In 2015, the Consumer Financial Protection Bureau conducted a fourmonth pilot to explore the costs and benefits of eClosings. Following the publication of the study, a number of mortgage industry vendors began developing eClosing solutions— PrimeLending among them.

“At first, we focused on the borrower-facing solution, but we soon realized that much more needed to be done on the back end,” said Howard.

PrimeLending worked with its document vendor, Docutech, as well as the Federal National Mortgage Association (Fannie Mae), Federal

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Home Loan Mortgage Corporation (Freddie Mac), and the Mortgage Electronic Registration System (MERS) to leverage available technology and develop appropriate systems that would securely support eNote and eVault platforms. Prior to the rollout of the eClosing solution, PrimeLending employed extensive testing to evaluate the system’s responsiveness and ability to provide scalable solutions. The rollout will continue to be implemented in measured steps, with PrimeLending identifying several more branches where it can test and track the hybrid eClosing and eNote solution through the remainder of the year.

Reaping the benefits Navigating the loan process can be a taxing, time-consuming experience for borrowers and lenders alike. By leveraging automation and workflow intelligence in this manner, PrimeLending continues to strive to provide customers with a more streamlined lending experience. It also allows them to better position PrimeLending to address security and compliance issues, eliminate inefficiencies, accelerate the loan process, shorten funding times, and drive down overall costs… to the delight of everyone involved.

While the availability of eClosings and eMortgages is still limited at PrimeLending and nationally within the industry, it’s expanding as more industry players, government agencies, and county and state municipalities are able to support the digital components tied to electronic funding, settlement, title recording, storage, and regulatory compliance.

“There is a competitive advantage to being able to offer eClosing capabilities to borrowers,” said Howard. “Our goal of an end-to-end electronic mortgage is to make home financing simpler, easier, and intuitively user-friendly from application to closing. As PrimeLending and others in the industry continue to implement and prioritize digitization, there’s no doubt we’ll see a drastically improved mortgage ecosystem.”

Investing in Opportunities This past spring, Hilltop Holdings unveiled its new merchant bank, Hilltop Opportunity Partners. Led by industry veterans Mark Plunkett and Peter Lynch, Hilltop Opportunity Partners focuses on long- and short-term, nonmajority interest investments across a variety of sectors and capital structures.

Utilizing a portion of Hilltop’s excess capital, the merchant bank invests in middle market companies outside of the banking industry that range from $5 million to $25 million. Larger or smaller opportunities are considered on a case-by-case basis. Hilltop Opportunity Partners has already completed a $10 million preferred equity investment in AFN, LLC, an Illinois-based, award-winning leader in freight brokerage, third-party logistics, and transportation management services.

The new merchant bank presents opportunities for Hilltop to make strategic investments that extend beyond solely leveraging capital. It provides exposure to a broad range of markets, business trends, and innovative products as well as access to cutting-edge technologies and partnerships with up-and-coming industry leaders.

“We established Hilltop Opportunity Partners to provide Hilltop with an effective platform to identify and execute on attractive non-bank opportunities for capital deployment,” said

Hilltop Opportunity Partners: Mark Plunket and Peter Lynch

Jeremy B. Ford, president and Co-CEO of Hilltop. “We’re excited about this new venture, and under the experienced leadership of Mark and Peter, we look forward to expanding this business as opportunities arise.”

Prior to joining Hilltop, Plunkett co-founded and ran Hilliard Street Capital, a Blackstone and Bridger seeded long/short equity fund, and served as a partner with Atlas Capital. He has also worked for the Washington, D.C.-based Carlyle Group; Hicks, Muse, Tate, and Furst in Mexico City; and Cardinal Investment Company in Dallas. Plunkett earned a B.B.A. and B.S. from Southern Methodist University and

New CHRO Named Dudley Strawn was promoted to chief human resources officer (CHRO) of Hilltop in June.

Since 2013, Strawn served as executive vice president and CHRO of Hilltop subsidiary PrimeLending, overseeing a wide range of human resources operations, including: production and business recruiting, onboarding, employee and business partner relations, compensation and commissions, business training, and culture initiatives. In his new role, Strawn is working closely with the human resources leaders across Hilltop’s family of companies to develop an enterprise-wide human resources strategic vision and provide leadership for the

organization’s human resources initiatives.

Prior to his tenure at PrimeLending, Strawn amassed nearly 20 years of experience in human resources management and leadership, holding increasingly senior positions with notable financial services companies including First Horizon National Corporation, MetLife Bank/ MetLife Home Loans, and Fairway Independent Mortgage Company.

Strawn reports directly to Hilltop Executive Vice President and Chief Administrative Officer Darren Parmenter.

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received his M.B.A. from Harvard Business School. He also is a U.S. Fulbright Scholar.

Lynch previously served as a vice president at Argenta Partners, a private equity firm focused on control-only equity investments.

Prior to that, he worked with the mergers and acquisitions team at Rabobank International in New York City and J.P. Morgan’s offices in Buenos Aires, Argentina, and Santiago, Chile.

Lynch earned a B.A. in economics from the University of Pennsylvania.

HilltopSecurities

PlainsCapital Bank ON THE COVER

Acquisition Marks Houston Growth

Charity Begins in Business

Hilltop's financial strength serves as a tremendous resource for PlainsCapital Bank, providing vital access to capital and empowering the Bank’s strategic growth. This was evidenced in 2013, when Hilltop acquired Texas-based First National Bank’s sizable South Texas branch network and combined it with PlainsCapital, enabling the Bank to expand into new markets throughout the Rio Grande Valley, as well as the Texas Gulf Coast region, including Corpus Christi and Houston. Home to the country’s fourthlargest city, Houston is a key growth market for PlainsCapital Bank. Last month, Hilltop completed another acquisition on behalf of PlainsCapital, acquiring Houston-based The Bank of River Oaks.

The 2016 merger of HilltopSecurities’ legacy companies created tremendous business opportunities for the firm. While HilltopSecurities is focused on growth and delivering innovation and industry-leading services to customers, the firm recognizes the importance of how everything it does impacts the world around it. That concern sits at the heart of the company’s focus on corporate citizenship and community service and is core to who the firm is. Following the completion of the 2016 merger, HilltopSecurities launched a company-wide initiative to build and elevate it’s corporate citizenship efforts, leveraging the firm’s network of innovative, passionate people to create positive change in the communities it serves.

Since entering the Houston market five years ago, PlainsCapital has been focused on strategically growing its presence in the Bayou City. The $85 million all-cash deal converted The Bank of River Oaks’ three locations into PlainsCapital branches, bringing the Bank’s total number of Houston locations to five and more than doubling PlainsCapital’s area portfolio with the addition of approximately $342 million in total loans and $369 million in total deposits.

According to Jeremy B. Ford, president and

co-CEO of Hilltop, the transaction brings together two like-minded Texas-based community banks recognized for their straightforward approach to banking and commitment to localized decision making.

“The successful completion of this acquisition is a significant step forward as we seek to expand our commercial efforts in the Houston market,” said Ford. “The Bank of River Oaks has built a strong loan portfolio and we are focused on continuing that growth in this important market.”

Following the initial announcement in February, the acquisition was approved by The Bank of River Oaks shareholders on May 10. Regulatory approvals were received in July. With the closing of the transaction, The Bank of River Oaks Chairman R. Andy Lane Jr. assumed the role of PlainsCapital’s Houston Region Chairman.

“PlainsCapital Bank and The Bank of River Oaks share a service-focused culture and a commitment to relationship-driven banking that allow us to smoothly combine our operations,” said Lane. “We look forward to providing our customers with additional technology and lending solutions as part of PlainsCapital.”

The Bank of River Oaks was founded in Houston in 2005 with local expertise in commercial lending, private banking, and healthcare lending.

In addition to Lane, its leadership team was comprised of Jerry Brewer, who led the bank’s private banking business, and Mark Troth, who oversaw healthcare lending. In their new roles, Brewer and Troth serve as PlainsCapital Bank branch presidents in Houston.

“We are excited to welcome The Bank of River Oaks customers and employees to the PlainsCapital family as we increase our presence in this key market,” said Alan B. White, Hilltop co-CEO and PlainsCapital Bank chairman. “They have an excellent team of professionals who share our values and have built an impressive local franchise that we expect to continue to flourish as part of PlainsCapital Bank.”

PlainsCapital’s newly expanded Houston branch network encompasses two locations in the Kirby Grove area, one location in the Galleria/ River Oaks area, a location in the Medical Center District, and a location in the South Central area of downtown.

Earlier this month, HilltopSecurites sponsored and participated in the Fallen Heroes 5K Memorial Run in New Jersey honoring the courageous first responders from 9/11. The event highlights the myriad of ways HilltopSecurities actively seeks to contribute to the well-being of communities across the country. From sponsoring backto-school supply drives and holiday donation campaigns to pitching in to assist with Hurricane Harvey relief efforts in the wake of last year’s devastating storm, HilltopSecurities’ wideranging efforts demonstrate how and where a company can devote its resources to the benefit of customers, employees, and the community.

The heavy spring rains that canceled this year’s annual Red Balloon Run & Ride, benefiting Dallas-

HilltopSecurities employees at Carry The Load event in Dallas

based Children’s Health—the eighth-largest pediatric health care provider in the nation— didn’t quell the enthusiasm of HilltopSecurities’ employees who participated in the firm’s company-wide fundraising event, generating a cumulative $70,000 for the pediatric hospital network. Close on the heels of the Children’s Health campaign, HilltopSecurities associates banded together in support of Carry the Load’s national Memorial Day weekend fundraising initiative, collecting $52,000 toward the continuum of care for military, law enforcement, firefighter, and rescue personnel and their families.

Employees also took part in Carry the Load relays and rallies across the country, including the nonprofit organization’s flagship event, the Dallas Memorial March.

“The host of charitable causes and partnerships in which HilltopSecurities is involved says a lot about how our employees exemplify the core values of our firm,” said Bob Peterson, HilltopSecurities president and COO. “Every year, they come together to support a variety of great causes and make HilltopSecurities shine bright in the communities we serve.”

Rhodes Appointed New CIO HilltopSecurities has promoted David Rhodes to chief information officer (CIO). Rhodes most recently served as Information Technology (IT) managing director. In his new role, he will direct all of the firm’s IT efforts, including end user support and web and application development. He will report to HilltopSecurities Chief Administrative Officer John R. Muschalek.

Pictured left to right: Mark Troth, PlainsCapital Bank Medical Center President; Jeremy B. Ford, Co-CEO of Hilltop Holdings; Jerry Schaffner, President and CEO of PlainsCapital Bank; Andy Lane, PlainsCapital Bank Houston Region Chairman; Alan B. White, Co-CEO of Hilltop Holdings; Jerry Brewer, PlainsCapital Bank Riverway President and Erik Yohe, Hilltop Holdings SVP of Corporate Development.

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David Rhodes joined HilltopSecurities (then FirstSouthwest) in 2011, as Senior Vice President, director of application development, where he led the rewrite of the firm’s web-based investment portfolio accounting, pricing, and analytical software—programs used by a number of the

firm’s bank clients.

Prior to joining HilltopSecurities, Rhodes served in various supervisory roles with Caris Life Sciences, McKesson Corporation, and Capital Institution Services, Inc. Rhodes is replacing HilltopSecurities’ former Chief Information Officer Jeff Hammill, who, for the past 12 years, led the firm’s (then FirstSouthwest) IT department through several acquisitions, as well as the 2016 merger with Southwest Securities.

Hammill will continue to work on special projects for HilltopSecurities until he retires at the end of this year.

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David Rhodes Chief Information Officer HilltopSecurities

PlainsCapital Bank

PlainsCapital Bank

Supporting Education in a Big Way

Connecting with Businesses on All Levels

Helping people and communities flourish is PlainsCapital Bank’s mission, and education is critical to the development of vibrant communities. Given the vital role education can have on an individual’s long-term financial security, especially in today’s changing labor market, it’s imperative that schools produce graduates with the skills and knowledge they need to be successful in the workforce.

PlainsCapital Bank recognizes that when it comes to helping improve the state of public education in Texas, private support and partnerships can make a big difference. Since its founding 30 years ago, PlainsCapital has been committed to programs and partnerships that provide support for schools and teachers as a means of advancing student achievement.

While bank customers increasingly utilize online and mobile banking features, they still rely on brick-and-mortar locations for a range of services. Reflecting that demand, PlainsCapital Bank recently unveiled a new modern banking center in North Texas.

Across the state, PlainsCapital is involved in public schools, supporting initiatives that help both teachers and students obtain critical supplies, tools, and resources to support academic endeavors. These are market, branch, and employee-driven initiatives, many of which are legacy projects with years of history and the roll-up-your-sleeves involvement

PlainsCapital South Texas employees get in the spirit to support back-to-school supply drives.

that employees get excited about. One of the Bank’s longest school partnerships is with the Lubbock Independent School District’s Partners In Education program. Since 1994, PlainsCapital has sponsored a low-income elementary school, developing a number of volunteer-driven initiatives over the years, including the annual Back-to-School Open House and Cookout, Holiday Gift-Giving Campaign for students, and end-of-year teacher appreciation luncheon.

PlainsCapital also works with organizations that provide students with resources and support networks to help them successfully transition from elementary and middle school to high school and beyond. The Bank's ongoing partnerships with the Boys and Girls Clubs to support afterschool initiatives and its active involvement with Junior Achievement programs are two examples. Working with organizations to develop innovative educational curriculum is a priority for the Bank. Partnering with the Texas Council on Economic Education (TCEE), PlainsCapital funded the development of a financial literacy curriculum for Texas middle schoolers, in addition to helping sponsor TCEE’s statewide programs, student competitions, and developmental opportunities for teachers.

PlainsCapital's annual sponsorship of Alderson Elementary's Back-to-School Open House and Cookout in Lubbock

PlainsCapital also recognizes the numerous obstacles to pursuing education many students and families face today. The Bank has a long history of supporting Texas higher education,

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funneling millions of dollars to public campuses over the years, and supporting colleges and universities to fund scholarships and endowment programs that provide students with avenues to pursue academic pathways.

PlainsCapital recently donated $100,000 to Texas A&M-Corpus Christi to create an endowed scholarship in finance for the College of Business. The Bank also made a sizeable donation of $1 million to the University of Texas Rio Grande Valley (UTRGV) to bolster the College of Business and Entrepreneurship and the College of Sciences, as well as support UTRGV’s newly-opened School of Medicine, the first and only medical school located in South Texas.

PlainsCapital’s commitment to making a difference is illustrated in the wide range of ways the Bank has combined forces with schools and organizations to benefit students, teachers, and entire communities. The Bank’s strategic focus on improving the quality of education provided in public schools and its commitment to helping more students gain access to higher education has a direct impact on the overall education landscape in Texas. At the foundation of these initiatives and partnerships is a belief that they provide young people with the tools, resources, and education to equip them for future opportunities and help them realize their dreams.

Located in the burgeoning I-30 corridor between Dallas and Fort Worth, the new Arlington facility encompasses nearly 10,000 square feet of banking and commercial lending space and features state-of-the-art technology services, including an interactive, drive-thru video terminal, enabling customers to video conference with a remote PlainsCapital teller.

Offering the same services customers would find at the Bank’s teller desks, the personal teller machines enable PlainsCapital to serve the needs of its customers outside of the branch’s scheduled hours of operation, as well

as functioning as a regular ATM for 24/7 cash withdrawals, transfers, and deposits.

“We believe there should be a complementary balance between the digital and physical banking experiences we provide our customers,” said Jerry Schaffner, PlainsCapital Bank president and CEO. “While our branch network plays a significant role in our overall business strategy, we are also committed to providing the latest banking technologies to further expand our service offerings.”

The Arlington branch was one of the first locations to receive the video terminals.

Additional interactive teller machines are currently being rolled out at select locations across the state and are planned for new branches going forward.

PlainsCapital Bank Arlington

PlainsCapital Announces Executive Promotions for 2018

Bill Lines Executive Vice President Chief Information Officer

Joe Pitch Executive Vice President Victory Park

Tye Barton Executive Vice President Treasury Management

Jason Dudley Executive Vice President Frisco The Star

Mark Magee Executive Vice President Senior Credit Officer

Jeff Flenar Executive Vice President Special Assets

Perry Tipton Executive Vice President Lubbock Market

Rob Eggemeyer Executive Vice President Preston Center

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PlainsCapital Bank announced the promotion of eight executive officers for 2018. At the corporate level, Bill Lines was promoted to executive vice president and chief information officer, Tye Barton was promoted to executive vice president of treasury management, Jeff Flenar was promoted to executive vice president of special assets, and Mark Magee was promoted to executive vice president and senior credit officer for the Rio Grande Valley and Coastal Bend regions.

In the Dallas-area market, Jason Dudley was promoted to executive vice president of commercial lending at Frisco The Star, Rob Eggemeyer was promoted to executive vice president of commercial lending at Dallas Preston Center, and Joe Pitch was promoted to executive vice president of commercial lending at Dallas Victory Park.

Rounding out the list of promotions, veteran banker Perry Tipton was promoted to executive vice president of public relations and culture for the Lubbock market.

HilltopSecurities

HilltopSecurities

Advancing Communities One Drop at a Time

itself. Conservation and reuse projects as well as desalinating groundwater and sea water, building new pipelines and treatment plants, developing reservoirs and purchasing water rights are some of the measures identified to address the issue. The estimated capital cost to design, construct, and implement the approximately 5,500 strategies recommended in the State Water Plan by 2070 is $63 billion. $27 billion of that cost—authorized at the time the legislation was passed—will need to be supported with financial assistance.

Essentially serving as a water infrastructure bank, the SWIFT program is designed to make projects affordable for water providers across the state.

Hilltop Co-CEO Alan B. White, HilltopSecurities Chairman and CEO Hill A. Feinberg and HilltopSecurities Vice Chairman, Head of Finance David Medanich are joined by HilltopSecurities' TWDB team leaders Regional Managing Director Anne Burger Entrekin and Managing Director Richard Fox.

Imagine a day without water. No water coming out of the tap to drink. No water to flush toilets, put out fires, or irrigate crops.

While unimaginable to most people, there are communities in the U.S. that have been forced to live without water. One has only to look at the man-made tragedy in Flint, Michigan, or the water scarcity in California for examples.

Aging and underfunded water infrastructure, coupled with uncontrollable natural disasters like drought, is stressing water and wastewater systems across the country. The good news is that a majority of people widely support investing in the nation’s water supply systems.1 Texas is leading the way with its ground-breaking State Water Implementation Fund for Texas (SWIFT) Program.

In 2013, on the heels of one of the worst droughts in the state’s history, Texas voters approved the authorization of SWIFT, enabling the Texas Water Development Board (TWDB)—the agency charged with developing the state’s water resources and overseeing the State Water Plan—to offer financial support to cities, towns, counties, water districts and utilities authorities

Aging and underfunded water infrastructure, coupled with uncontrollable natural disasters like drought, is stressing water and wastewater systems across the country. to help fund State Water Plan projects. Working collaboratively with the TWDB, members of HilltopSecurities’ municipal advisory practice devised an innovative programming and financing structure for SWIFT that is setting a new standard in water infrastructure funding— innovation that is a recognized hallmark of HilltopSecurities.

“Nothing like this exists anywhere else in the country,” said Anne Burger Entrekin, regional managing director with HilltopSecurities.

“It’s the first program of its kind that is tied to long-term, 50-year planning with actual

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subsidized project funding for participants. All of the financial assistance structures built into the SWIFT program are designed to create ‘right-size’ projects for Texas municipalities and water providers, enabling the infrastructure to happen today while being more cost-effective overall.”

Water is not an endless resource, and the state’s leadership in partnership with the TWDB recognizes the importance of developing a water strategy that ensures there is plenty to go around well into the future. With water, Texas is able to continue attracting companies, employees, families, and tourists. Without water, the state loses the ability to power businesses, homes, and communities.

Texas could face significant water shortages over the next 50 years if steps are not taken to conserve and develop additional water supplies. The state's population is expected to increase 73 percent between 2020 and 2070, from 29.5 million to 51 million people. Without implementing new management strategies, Texas may not have enough water to sustain

The SWIFT program provides important incentives to help water providers implement their projects sooner rather than later.

Essentially serving as a water infrastructure bank, the program offers cost-effective financing on State Water Plan projects in the form of low-interest loans and subsidies. Added flexible financing options—like extended repayment terms, payment deferrals, and incremental repurchase options for projects where the state takes an ownership interest during the early years—make it easier for water providers to absorb the cost. Program participants subsequently save hundreds of millions of dollars, as compared to going to the open market on their own for funding.

In addition, HilltopSecurities’ strategy of leveraging the revenue bond issuances with the program’s one-time $2 billion transfer from the state’s Rainy Day Fund, along with the TWDB’s proven 60-year track record of managing these types of programs, enabled SWIFT to achieve AAA ratings, further lowering the borrowing costs for participants. To date, the program is projected to have saved water providers in Texas more than $825 million in financing costs for the debt issues done.

communities across Texas for decades to come.”

“We are at our best when we combine our business strength with our desire to solve our clients’ most pressing financial challenges to advance communities,” Hill A. Feinberg, HilltopSecurities Chairman and CEO. HilltopSecurities’ work on behalf of the TWDB is just one example of the problem-solving power that makes the Dallas-based firm unique. Ranked the number one public advisory firm2 in the nation, HilltopSecurities has firmly established itself in the public finance arena, with a portfolio that boasts some of the country’s leading public works projects, including Dallas-Fort Worth International Airport and the Alaskan Oil Pipeline. With the breadth and depth of experience the firm has amassed over its 72-year history, HilltopSecurities is ideally positioned to confront the big issues facing its clients and develop solutions.

“SWIFT is an example of how transformative our work can be in the lives of so many,” said Entrekin. “The infrastructure that is being developed from this program will make sustainable water more achievable for

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“We’re honored to be able to work with people who help move society forward,” said HilltopSecurities Chairman and CEO Hill A. Feinberg. “We are at our best when we combine our business strength with our desire to solve our clients’ most pressing financial challenges to advance communities.”

For HilltopSecurities, advancing communities is about helping clients stay ahead of a changing world, approaching project engagement from the perspective of how it interfaces with the long-term needs of the client and communities it impacts to create viable success.

Since its inception in 1946, HilltopSecurities has provided financial services for municipal issuers, institutions, broker-dealers, registered investment advisors, and individuals alike, many of whom are leaders in their fields and sectors and economic and community drivers.

“Our legacy of building thriving client relationships stems from our adaptive culture that is always moving forward,” said Feinberg.

“We believe it’s the ideal environment for those who believe in creating a better future.”

1. Value of Water Campaign, Key Findings from National Public Opinion Poll, May 2017 2. Ipreo MuniAnalytics based on number of issuances for 2017

HilltopSecurities

HilltopSecurities

Advancing Communities One Drop at a Time

itself. Conservation and reuse projects as well as desalinating groundwater and sea water, building new pipelines and treatment plants, developing reservoirs and purchasing water rights are some of the measures identified to address the issue. The estimated capital cost to design, construct, and implement the approximately 5,500 strategies recommended in the State Water Plan by 2070 is $63 billion. $27 billion of that cost—authorized at the time the legislation was passed—will need to be supported with financial assistance.

Essentially serving as a water infrastructure bank, the SWIFT program is designed to make projects affordable for water providers across the state.

Hilltop Co-CEO Alan B. White, HilltopSecurities Chairman and CEO Hill A. Feinberg and HilltopSecurities Vice Chairman, Head of Finance David Medanich are joined by HilltopSecurities' TWDB team leaders Regional Managing Director Anne Burger Entrekin and Managing Director Richard Fox.

Imagine a day without water. No water coming out of the tap to drink. No water to flush toilets, put out fires, or irrigate crops.

While unimaginable to most people, there are communities in the U.S. that have been forced to live without water. One has only to look at the man-made tragedy in Flint, Michigan, or the water scarcity in California for examples.

Aging and underfunded water infrastructure, coupled with uncontrollable natural disasters like drought, is stressing water and wastewater systems across the country. The good news is that a majority of people widely support investing in the nation’s water supply systems.1 Texas is leading the way with its ground-breaking State Water Implementation Fund for Texas (SWIFT) Program.

In 2013, on the heels of one of the worst droughts in the state’s history, Texas voters approved the authorization of SWIFT, enabling the Texas Water Development Board (TWDB)—the agency charged with developing the state’s water resources and overseeing the State Water Plan—to offer financial support to cities, towns, counties, water districts and utilities authorities

Aging and underfunded water infrastructure, coupled with uncontrollable natural disasters like drought, is stressing water and wastewater systems across the country. to help fund State Water Plan projects. Working collaboratively with the TWDB, members of HilltopSecurities’ municipal advisory practice devised an innovative programming and financing structure for SWIFT that is setting a new standard in water infrastructure funding— innovation that is a recognized hallmark of HilltopSecurities.

“Nothing like this exists anywhere else in the country,” said Anne Burger Entrekin, regional managing director with HilltopSecurities.

“It’s the first program of its kind that is tied to long-term, 50-year planning with actual

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subsidized project funding for participants. All of the financial assistance structures built into the SWIFT program are designed to create ‘right-size’ projects for Texas municipalities and water providers, enabling the infrastructure to happen today while being more cost-effective overall.”

Water is not an endless resource, and the state’s leadership in partnership with the TWDB recognizes the importance of developing a water strategy that ensures there is plenty to go around well into the future. With water, Texas is able to continue attracting companies, employees, families, and tourists. Without water, the state loses the ability to power businesses, homes, and communities.

Texas could face significant water shortages over the next 50 years if steps are not taken to conserve and develop additional water supplies. The state's population is expected to increase 73 percent between 2020 and 2070, from 29.5 million to 51 million people. Without implementing new management strategies, Texas may not have enough water to sustain

The SWIFT program provides important incentives to help water providers implement their projects sooner rather than later.

Essentially serving as a water infrastructure bank, the program offers cost-effective financing on State Water Plan projects in the form of low-interest loans and subsidies. Added flexible financing options—like extended repayment terms, payment deferrals, and incremental repurchase options for projects where the state takes an ownership interest during the early years—make it easier for water providers to absorb the cost. Program participants subsequently save hundreds of millions of dollars, as compared to going to the open market on their own for funding.

In addition, HilltopSecurities’ strategy of leveraging the revenue bond issuances with the program’s one-time $2 billion transfer from the state’s Rainy Day Fund, along with the TWDB’s proven 60-year track record of managing these types of programs, enabled SWIFT to achieve AAA ratings, further lowering the borrowing costs for participants. To date, the program is projected to have saved water providers in Texas more than $825 million in financing costs for the debt issues done.

communities across Texas for decades to come.”

“We are at our best when we combine our business strength with our desire to solve our clients’ most pressing financial challenges to advance communities,” Hill A. Feinberg, HilltopSecurities Chairman and CEO. HilltopSecurities’ work on behalf of the TWDB is just one example of the problem-solving power that makes the Dallas-based firm unique. Ranked the number one public advisory firm2 in the nation, HilltopSecurities has firmly established itself in the public finance arena, with a portfolio that boasts some of the country’s leading public works projects, including Dallas-Fort Worth International Airport and the Alaskan Oil Pipeline. With the breadth and depth of experience the firm has amassed over its 72-year history, HilltopSecurities is ideally positioned to confront the big issues facing its clients and develop solutions.

“SWIFT is an example of how transformative our work can be in the lives of so many,” said Entrekin. “The infrastructure that is being developed from this program will make sustainable water more achievable for

7

“We’re honored to be able to work with people who help move society forward,” said HilltopSecurities Chairman and CEO Hill A. Feinberg. “We are at our best when we combine our business strength with our desire to solve our clients’ most pressing financial challenges to advance communities.”

For HilltopSecurities, advancing communities is about helping clients stay ahead of a changing world, approaching project engagement from the perspective of how it interfaces with the long-term needs of the client and communities it impacts to create viable success.

Since its inception in 1946, HilltopSecurities has provided financial services for municipal issuers, institutions, broker-dealers, registered investment advisors, and individuals alike, many of whom are leaders in their fields and sectors and economic and community drivers.

“Our legacy of building thriving client relationships stems from our adaptive culture that is always moving forward,” said Feinberg.

“We believe it’s the ideal environment for those who believe in creating a better future.”

1. Value of Water Campaign, Key Findings from National Public Opinion Poll, May 2017 2. Ipreo MuniAnalytics based on number of issuances for 2017

PlainsCapital Bank

PlainsCapital Bank

Supporting Education in a Big Way

Connecting with Businesses on All Levels

Helping people and communities flourish is PlainsCapital Bank’s mission, and education is critical to the development of vibrant communities. Given the vital role education can have on an individual’s long-term financial security, especially in today’s changing labor market, it’s imperative that schools produce graduates with the skills and knowledge they need to be successful in the workforce.

PlainsCapital Bank recognizes that when it comes to helping improve the state of public education in Texas, private support and partnerships can make a big difference. Since its founding 30 years ago, PlainsCapital has been committed to programs and partnerships that provide support for schools and teachers as a means of advancing student achievement.

While bank customers increasingly utilize online and mobile banking features, they still rely on brick-and-mortar locations for a range of services. Reflecting that demand, PlainsCapital Bank recently unveiled a new modern banking center in North Texas.

Across the state, PlainsCapital is involved in public schools, supporting initiatives that help both teachers and students obtain critical supplies, tools, and resources to support academic endeavors. These are market, branch, and employee-driven initiatives, many of which are legacy projects with years of history and the roll-up-your-sleeves involvement

PlainsCapital South Texas employees get in the spirit to support back-to-school supply drives.

that employees get excited about. One of the Bank’s longest school partnerships is with the Lubbock Independent School District’s Partners In Education program. Since 1994, PlainsCapital has sponsored a low-income elementary school, developing a number of volunteer-driven initiatives over the years, including the annual Back-to-School Open House and Cookout, Holiday Gift-Giving Campaign for students, and end-of-year teacher appreciation luncheon.

PlainsCapital also works with organizations that provide students with resources and support networks to help them successfully transition from elementary and middle school to high school and beyond. The Bank's ongoing partnerships with the Boys and Girls Clubs to support afterschool initiatives and its active involvement with Junior Achievement programs are two examples. Working with organizations to develop innovative educational curriculum is a priority for the Bank. Partnering with the Texas Council on Economic Education (TCEE), PlainsCapital funded the development of a financial literacy curriculum for Texas middle schoolers, in addition to helping sponsor TCEE’s statewide programs, student competitions, and developmental opportunities for teachers.

PlainsCapital's annual sponsorship of Alderson Elementary's Back-to-School Open House and Cookout in Lubbock

PlainsCapital also recognizes the numerous obstacles to pursuing education many students and families face today. The Bank has a long history of supporting Texas higher education,

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funneling millions of dollars to public campuses over the years, and supporting colleges and universities to fund scholarships and endowment programs that provide students with avenues to pursue academic pathways.

PlainsCapital recently donated $100,000 to Texas A&M-Corpus Christi to create an endowed scholarship in finance for the College of Business. The Bank also made a sizeable donation of $1 million to the University of Texas Rio Grande Valley (UTRGV) to bolster the College of Business and Entrepreneurship and the College of Sciences, as well as support UTRGV’s newly-opened School of Medicine, the first and only medical school located in South Texas.

PlainsCapital’s commitment to making a difference is illustrated in the wide range of ways the Bank has combined forces with schools and organizations to benefit students, teachers, and entire communities. The Bank’s strategic focus on improving the quality of education provided in public schools and its commitment to helping more students gain access to higher education has a direct impact on the overall education landscape in Texas. At the foundation of these initiatives and partnerships is a belief that they provide young people with the tools, resources, and education to equip them for future opportunities and help them realize their dreams.

Located in the burgeoning I-30 corridor between Dallas and Fort Worth, the new Arlington facility encompasses nearly 10,000 square feet of banking and commercial lending space and features state-of-the-art technology services, including an interactive, drive-thru video terminal, enabling customers to video conference with a remote PlainsCapital teller.

Offering the same services customers would find at the Bank’s teller desks, the personal teller machines enable PlainsCapital to serve the needs of its customers outside of the branch’s scheduled hours of operation, as well

as functioning as a regular ATM for 24/7 cash withdrawals, transfers, and deposits.

“We believe there should be a complementary balance between the digital and physical banking experiences we provide our customers,” said Jerry Schaffner, PlainsCapital Bank president and CEO. “While our branch network plays a significant role in our overall business strategy, we are also committed to providing the latest banking technologies to further expand our service offerings.”

The Arlington branch was one of the first locations to receive the video terminals.

Additional interactive teller machines are currently being rolled out at select locations across the state and are planned for new branches going forward.

PlainsCapital Bank Arlington

PlainsCapital Announces Executive Promotions for 2018

Bill Lines Executive Vice President Chief Information Officer

Joe Pitch Executive Vice President Victory Park

Tye Barton Executive Vice President Treasury Management

Jason Dudley Executive Vice President Frisco The Star

Mark Magee Executive Vice President Senior Credit Officer

Jeff Flenar Executive Vice President Special Assets

Perry Tipton Executive Vice President Lubbock Market

Rob Eggemeyer Executive Vice President Preston Center

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PlainsCapital Bank announced the promotion of eight executive officers for 2018. At the corporate level, Bill Lines was promoted to executive vice president and chief information officer, Tye Barton was promoted to executive vice president of treasury management, Jeff Flenar was promoted to executive vice president of special assets, and Mark Magee was promoted to executive vice president and senior credit officer for the Rio Grande Valley and Coastal Bend regions.

In the Dallas-area market, Jason Dudley was promoted to executive vice president of commercial lending at Frisco The Star, Rob Eggemeyer was promoted to executive vice president of commercial lending at Dallas Preston Center, and Joe Pitch was promoted to executive vice president of commercial lending at Dallas Victory Park.

Rounding out the list of promotions, veteran banker Perry Tipton was promoted to executive vice president of public relations and culture for the Lubbock market.

HilltopSecurities

PlainsCapital Bank ON THE COVER

Acquisition Marks Houston Growth

Charity Begins in Business

Hilltop's financial strength serves as a tremendous resource for PlainsCapital Bank, providing vital access to capital and empowering the Bank’s strategic growth. This was evidenced in 2013, when Hilltop acquired Texas-based First National Bank’s sizable South Texas branch network and combined it with PlainsCapital, enabling the Bank to expand into new markets throughout the Rio Grande Valley, as well as the Texas Gulf Coast region, including Corpus Christi and Houston. Home to the country’s fourthlargest city, Houston is a key growth market for PlainsCapital Bank. Last month, Hilltop completed another acquisition on behalf of PlainsCapital, acquiring Houston-based The Bank of River Oaks.

The 2016 merger of HilltopSecurities’ legacy companies created tremendous business opportunities for the firm. While HilltopSecurities is focused on growth and delivering innovation and industry-leading services to customers, the firm recognizes the importance of how everything it does impacts the world around it. That concern sits at the heart of the company’s focus on corporate citizenship and community service and is core to who the firm is. Following the completion of the 2016 merger, HilltopSecurities launched a company-wide initiative to build and elevate it’s corporate citizenship efforts, leveraging the firm’s network of innovative, passionate people to create positive change in the communities it serves.

Since entering the Houston market five years ago, PlainsCapital has been focused on strategically growing its presence in the Bayou City. The $85 million all-cash deal converted The Bank of River Oaks’ three locations into PlainsCapital branches, bringing the Bank’s total number of Houston locations to five and more than doubling PlainsCapital’s area portfolio with the addition of approximately $342 million in total loans and $369 million in total deposits.

According to Jeremy B. Ford, president and

co-CEO of Hilltop, the transaction brings together two like-minded Texas-based community banks recognized for their straightforward approach to banking and commitment to localized decision making.

“The successful completion of this acquisition is a significant step forward as we seek to expand our commercial efforts in the Houston market,” said Ford. “The Bank of River Oaks has built a strong loan portfolio and we are focused on continuing that growth in this important market.”

Following the initial announcement in February, the acquisition was approved by The Bank of River Oaks shareholders on May 10. Regulatory approvals were received in July. With the closing of the transaction, The Bank of River Oaks Chairman R. Andy Lane Jr. assumed the role of PlainsCapital’s Houston Region Chairman.

“PlainsCapital Bank and The Bank of River Oaks share a service-focused culture and a commitment to relationship-driven banking that allow us to smoothly combine our operations,” said Lane. “We look forward to providing our customers with additional technology and lending solutions as part of PlainsCapital.”

The Bank of River Oaks was founded in Houston in 2005 with local expertise in commercial lending, private banking, and healthcare lending.

In addition to Lane, its leadership team was comprised of Jerry Brewer, who led the bank’s private banking business, and Mark Troth, who oversaw healthcare lending. In their new roles, Brewer and Troth serve as PlainsCapital Bank branch presidents in Houston.

“We are excited to welcome The Bank of River Oaks customers and employees to the PlainsCapital family as we increase our presence in this key market,” said Alan B. White, Hilltop co-CEO and PlainsCapital Bank chairman. “They have an excellent team of professionals who share our values and have built an impressive local franchise that we expect to continue to flourish as part of PlainsCapital Bank.”

PlainsCapital’s newly expanded Houston branch network encompasses two locations in the Kirby Grove area, one location in the Galleria/ River Oaks area, a location in the Medical Center District, and a location in the South Central area of downtown.

Earlier this month, HilltopSecurites sponsored and participated in the Fallen Heroes 5K Memorial Run in New Jersey honoring the courageous first responders from 9/11. The event highlights the myriad of ways HilltopSecurities actively seeks to contribute to the well-being of communities across the country. From sponsoring backto-school supply drives and holiday donation campaigns to pitching in to assist with Hurricane Harvey relief efforts in the wake of last year’s devastating storm, HilltopSecurities’ wideranging efforts demonstrate how and where a company can devote its resources to the benefit of customers, employees, and the community.

The heavy spring rains that canceled this year’s annual Red Balloon Run & Ride, benefiting Dallas-

HilltopSecurities employees at Carry The Load event in Dallas

based Children’s Health—the eighth-largest pediatric health care provider in the nation— didn’t quell the enthusiasm of HilltopSecurities’ employees who participated in the firm’s company-wide fundraising event, generating a cumulative $70,000 for the pediatric hospital network. Close on the heels of the Children’s Health campaign, HilltopSecurities associates banded together in support of Carry the Load’s national Memorial Day weekend fundraising initiative, collecting $52,000 toward the continuum of care for military, law enforcement, firefighter, and rescue personnel and their families.

Employees also took part in Carry the Load relays and rallies across the country, including the nonprofit organization’s flagship event, the Dallas Memorial March.

“The host of charitable causes and partnerships in which HilltopSecurities is involved says a lot about how our employees exemplify the core values of our firm,” said Bob Peterson, HilltopSecurities president and COO. “Every year, they come together to support a variety of great causes and make HilltopSecurities shine bright in the communities we serve.”

Rhodes Appointed New CIO HilltopSecurities has promoted David Rhodes to chief information officer (CIO). Rhodes most recently served as Information Technology (IT) managing director. In his new role, he will direct all of the firm’s IT efforts, including end user support and web and application development. He will report to HilltopSecurities Chief Administrative Officer John R. Muschalek.

Pictured left to right: Mark Troth, PlainsCapital Bank Medical Center President; Jeremy B. Ford, Co-CEO of Hilltop Holdings; Jerry Schaffner, President and CEO of PlainsCapital Bank; Andy Lane, PlainsCapital Bank Houston Region Chairman; Alan B. White, Co-CEO of Hilltop Holdings; Jerry Brewer, PlainsCapital Bank Riverway President and Erik Yohe, Hilltop Holdings SVP of Corporate Development.

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David Rhodes joined HilltopSecurities (then FirstSouthwest) in 2011, as Senior Vice President, director of application development, where he led the rewrite of the firm’s web-based investment portfolio accounting, pricing, and analytical software—programs used by a number of the

firm’s bank clients.

Prior to joining HilltopSecurities, Rhodes served in various supervisory roles with Caris Life Sciences, McKesson Corporation, and Capital Institution Services, Inc. Rhodes is replacing HilltopSecurities’ former Chief Information Officer Jeff Hammill, who, for the past 12 years, led the firm’s (then FirstSouthwest) IT department through several acquisitions, as well as the 2016 merger with Southwest Securities.

Hammill will continue to work on special projects for HilltopSecurities until he retires at the end of this year.

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David Rhodes Chief Information Officer HilltopSecurities

Hilltop Holdings

PrimeLending

New eClosing Solution Changing Home Lending The same technology that has revolutionized other industries and made work faster, smarter, and easier across the board is taking the $1.5 trillion U.S. mortgage market from dated to digital. While digital mortgages are not a new concept, to date they have been limited to completing mortgage applications online.

However, that’s changing as new technology solutions are emerging that allow consumers to access, verify, sign, and submit closing documents electronically.

This past June, PrimeLending celebrated its first “hybrid” electronic closing (eClosing) in Texas—a process in which the homebuyer was only required to sign a handful of documents in person, with the rest of the process completed electronically and in less than 30 minutes. It was a big step for PrimeLending, but not the last. In August, PrimeLending pushed forward and executed two more hybrid eClosings, this time with the inclusion of electronic promissory notes or eNotes, further expediting the closing process for the respective borrowers.

“These were monumental events for us, representing years of investment and development,” said Nisa Reyes Howard, PrimeLending executive vice president and director of compliance. “Working with our industry partners, PrimeLending now has an eClosing solution that allows us to realize the benefits of an end-to-end digital mortgage in driving safer, more transparent, and more efficient home lending.”

Paperwork has long dominated the mortgage experience, with loan files easily exceeding hundreds of pages. Borrowers often have to track down years of financial records and make numerous in-person trips to their lender’s office. Industry advancements in electronic platforms that digitally connect homebuyers to their financial data—including bank and credit card information, tax forms, and more—have helped streamline the application process and document collection, substantially simplifying the verification process for lenders. Digitizing the closing piece of the mortgage process proved a bit more challenging, as it involved finding solutions on how best to support eNotes,

as well as addressing regulatory requirements regarding in-person notarization.

With the advancements being made in its eClosing solution and eMortgage platform, PrimeLending is helping lead the way in the digital mortgage arena—a progressive move for the mortgage business, says Howard, and a sign that technology in the mortgage space is catching up to other industries.

What are eClosings and eMortgages?

Simply put, an eClosing is the electronic execution of some or all mortgage loan closing instruments—including key documents, such as the promissory note and the deed—in a secure digital environment. A “hybrid” eClosing is one in which a borrower electronically signs the ancillary closing documents but ink signs the promissory note and the deed, along with all other documents requiring in-person notarization. A hybrid eClosing that includes an eNote, where the borrower electronically signs the ancillary documents and the promissory note but ink signs the deed and all other notarized documents, is considered by the industry to be an eMortgage, as it encompasses an end-to-end platform from the application to the signing of the note. The lender then stores the eNote in an electronic vault (eVault).

The implementation of eClosings and eMortgages is still a new frontier for mortgage lenders, settlement and title companies, and home buyers, but it’s without question where the industry is headed. In 2015, the Consumer Financial Protection Bureau conducted a fourmonth pilot to explore the costs and benefits of eClosings. Following the publication of the study, a number of mortgage industry vendors began developing eClosing solutions— PrimeLending among them.

“At first, we focused on the borrower-facing solution, but we soon realized that much more needed to be done on the back end,” said Howard.

PrimeLending worked with its document vendor, Docutech, as well as the Federal National Mortgage Association (Fannie Mae), Federal

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Home Loan Mortgage Corporation (Freddie Mac), and the Mortgage Electronic Registration System (MERS) to leverage available technology and develop appropriate systems that would securely support eNote and eVault platforms. Prior to the rollout of the eClosing solution, PrimeLending employed extensive testing to evaluate the system’s responsiveness and ability to provide scalable solutions. The rollout will continue to be implemented in measured steps, with PrimeLending identifying several more branches where it can test and track the hybrid eClosing and eNote solution through the remainder of the year.

Reaping the benefits Navigating the loan process can be a taxing, time-consuming experience for borrowers and lenders alike. By leveraging automation and workflow intelligence in this manner, PrimeLending continues to strive to provide customers with a more streamlined lending experience. It also allows them to better position PrimeLending to address security and compliance issues, eliminate inefficiencies, accelerate the loan process, shorten funding times, and drive down overall costs… to the delight of everyone involved.

While the availability of eClosings and eMortgages is still limited at PrimeLending and nationally within the industry, it’s expanding as more industry players, government agencies, and county and state municipalities are able to support the digital components tied to electronic funding, settlement, title recording, storage, and regulatory compliance.

“There is a competitive advantage to being able to offer eClosing capabilities to borrowers,” said Howard. “Our goal of an end-to-end electronic mortgage is to make home financing simpler, easier, and intuitively user-friendly from application to closing. As PrimeLending and others in the industry continue to implement and prioritize digitization, there’s no doubt we’ll see a drastically improved mortgage ecosystem.”

Investing in Opportunities This past spring, Hilltop Holdings unveiled its new merchant bank, Hilltop Opportunity Partners. Led by industry veterans Mark Plunkett and Peter Lynch, Hilltop Opportunity Partners focuses on long- and short-term, nonmajority interest investments across a variety of sectors and capital structures.

Utilizing a portion of Hilltop’s excess capital, the merchant bank invests in middle market companies outside of the banking industry that range from $5 million to $25 million. Larger or smaller opportunities are considered on a case-by-case basis. Hilltop Opportunity Partners has already completed a $10 million preferred equity investment in AFN, LLC, an Illinois-based, award-winning leader in freight brokerage, third-party logistics, and transportation management services.

The new merchant bank presents opportunities for Hilltop to make strategic investments that extend beyond solely leveraging capital. It provides exposure to a broad range of markets, business trends, and innovative products as well as access to cutting-edge technologies and partnerships with up-and-coming industry leaders.

“We established Hilltop Opportunity Partners to provide Hilltop with an effective platform to identify and execute on attractive non-bank opportunities for capital deployment,” said

Hilltop Opportunity Partners: Mark Plunket and Peter Lynch

Jeremy B. Ford, president and Co-CEO of Hilltop. “We’re excited about this new venture, and under the experienced leadership of Mark and Peter, we look forward to expanding this business as opportunities arise.”

Prior to joining Hilltop, Plunkett co-founded and ran Hilliard Street Capital, a Blackstone and Bridger seeded long/short equity fund, and served as a partner with Atlas Capital. He has also worked for the Washington, D.C.-based Carlyle Group; Hicks, Muse, Tate, and Furst in Mexico City; and Cardinal Investment Company in Dallas. Plunkett earned a B.B.A. and B.S. from Southern Methodist University and

New CHRO Named Dudley Strawn was promoted to chief human resources officer (CHRO) of Hilltop in June.

Since 2013, Strawn served as executive vice president and CHRO of Hilltop subsidiary PrimeLending, overseeing a wide range of human resources operations, including: production and business recruiting, onboarding, employee and business partner relations, compensation and commissions, business training, and culture initiatives. In his new role, Strawn is working closely with the human resources leaders across Hilltop’s family of companies to develop an enterprise-wide human resources strategic vision and provide leadership for the

organization’s human resources initiatives.

Prior to his tenure at PrimeLending, Strawn amassed nearly 20 years of experience in human resources management and leadership, holding increasingly senior positions with notable financial services companies including First Horizon National Corporation, MetLife Bank/ MetLife Home Loans, and Fairway Independent Mortgage Company.

Strawn reports directly to Hilltop Executive Vice President and Chief Administrative Officer Darren Parmenter.

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received his M.B.A. from Harvard Business School. He also is a U.S. Fulbright Scholar.

Lynch previously served as a vice president at Argenta Partners, a private equity firm focused on control-only equity investments.

Prior to that, he worked with the mergers and acquisitions team at Rabobank International in New York City and J.P. Morgan’s offices in Buenos Aires, Argentina, and Santiago, Chile.

Lynch earned a B.A. in economics from the University of Pennsylvania.

PrimeLending

Making Wishes Come True Last month, PrimeLending and the MakeA-Wish North Texas chapter granted the wish of 14-year-old Eli, who is battling soft tissue sarcoma. Eli’s wish was for a custom-designed backyard club house, a place where he could hang out with friends and play video games.

PrimeLending associates raised more than $10,000 dollars to build his ultimate backyard escape through an employee-driven fundraising campaign designed to grant wish requests for deserving children.

In Pursuit of Greatness Good may be good enough for some, but most of us want more than that. Something inside us wants to be better than good. We want to be part of a team whose members, even years later, will be remembered for what they accomplished. We want to go for greatness! At Hilltop Holdings, our passion is to enable greatness in people and organizations everywhere.

Spotlighted in this issue are key examples of what makes our company great—our team of top performers and the distinctive contributions they make to Hilltop Holdings, and the industries, customers, and communities we serve. They do more than “business as usual;” they fulfill a unique, meaningful mission that sets them and us apart from the crowd... in our collective pursuit of greatness.

Jeremy B. Ford Co-CEO and President

Alan B. White Co-CEO and Vice Chairman

Born out of a conversation last spring with Make-A-Wish representatives in Dallas where PrimeLending is headquartered, the “unique retreats” campaign struck the right chord.

PrimeLending was looking for a cause-related partnership that provided volunteer and fundraising opportunities for the more than 3,000 employees across the U.S. to participate.

Working with Make-A-Wish offices in their areas, PrimeLending branches throughout the country can identify wish requests for fun, imaginative play spaces or magical retreats tailored to a particular child. In May, PrimeLending employees in the Pacific

Hilltop and PlainsCapital Bank will lease approximately 68,000 square feet of office space on the top four floors of the building. An approximately 4,000-square-foot PlainsCapital Bank branch will be located on the first floor.

Hilltop will occupy just over half of the building’s rentable space and expects to move in during the fourth quarter of 2019. The remaining space

Company chairman and Hilltop’s largest shareholder Gerald J. Ford is an investing partner in the real estate development along with an unaffiliated third-party investor. The building expects to pursue LEED Silver certification.

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“Our team members are always looking for opportunities to give back,” said Sherri White, PrimeLending human resources manager.

“Whether working through a national charity or providing local, boots-on-the-ground efforts,

efforts working with veterans, military service members and community heroes throughout Central Minnesota.

will be leased for commercial office, retail, and restaurant use.

Hilltop invested approximately $24 million in the project—$5 million for its stake in the building and approximately $19 million for its stake in the land. Total building costs are projected to be around $60 million. Construction on the 1.7-acre building site, located at the northwest corner of the Southern Methodist University campus, began at the end of last year.

Northwest region worked with the MakeA-Wish Oregon chapter to grant the wish of three-year-old Alicia, a leukemia patient, raising funds to build her dream playhouse in the backyard of her family’s home.

we know that communities flourish when the needs of those who live there are met.”

The campaign lends itself to a lot of interpretations of what a unique retreat can be, from an outside dwelling to a child’s room or even renovations inside their home for special needs accommodations. Furthermore, it ties in well with PrimeLending’s mortgage lending business, especially the company’s construction lending division.

Work with Heroes Comes from the Heart

Construction Underway for New Corporate HQ Hilltop Holdings is getting a new home. The sixstory, 119,000-square-foot Class A commercial office building currently under construction in Dallas' University Park will serve as the headquarters for both the holding company and its largest subsidiary, PlainsCapital Bank.

The building will be named Hilltop Plaza, and construction is expected to be completed in the second half of 2019.

PrimeLending associates and Make-A-Wish North Texas present Eli his new backyard clubhouse.

Patience Svor Senior Loan Originator PrimeLending

When Homes for Heroes announced its affiliate award winners for 2017, PrimeLending’s Patience Svor, senior loan originator (NMLS: 339046), was recognized among the top ten mortgage lending specialists in the nation for her

Minneapolis-based Homes for Heroes is the largest nationwide network of real estate professionals committed to honoring community heroes. Born out of the events of 9/11, the Homes for Heroes program offers discounts to military personnel, veterans, firefighters, law enforcement officers, medical professionals, and teachers when buying, selling, or refinancing a home. Affiliated realtors and lenders donate a percentage of their commissions and fees, which are given back to the hero with whom they are working. Last year, Homes for Heroes collectively gave back $9.5 million to heroes nationwide. More than half of Svor’s closings in 2017 were affiliated with the Homes for Heroes program.

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Svor has been involved with Homes for Heroes since first learning of it in 2013. Her fervent support of the organization and its mission stems from the generations of military service woven into her family tree—a point of pride and tradition.

A wife, sister, daughter, and granddaughter of military veterans, she understands the needs and sacrifices that come with public service.

As a seasoned mortgage lender, she also understands the stresses that can come with buying a home.

“Working with the people who serve our country and communities, often selflessly, is near and dear to me,” said Svor. “To be able to help a hero and their family navigate their mortgage through the Homes for Heroes program and be able to give back to them at the same time is an opportunity for me to say thank you for their service.”

A Hilltop Holdings Publication

National Lloyds

Celebrating 70 Years: Carving Out a Niche in Insurance In 1948, the baby boom was leading to an increase in the need for houses across America. This led to a subsequent need for more property and casualty insurance, and in Texas, it led to the creation of National Lloyds.

Turning 70 this year, Dallas-based National Lloyds has refined its approach into a niche area focused on underserved markets. Today, the company specializes in providing innovative and affordable property and casualty insurance solutions tailored to meet the specific needs of policyholders in the lower-value home and manufactured home communities.

In 1948, National Lloyds started serving hardworking Texans who shared the dream of homeownership.

Seven decades later it continues to do so, together with its affiliates American Summit Insurance Company and Nalico General Agency, a full-service agency.

The wholly owned affiliates and general agency are part and parcel of the National Lloyds family, and their respective agents practice the same commitment to service that is the trademark of the National Lloyds brand.

For the company’s network of 4,200 independent agents National Lloyds' depth of product offerings translates to added value for their customers.

Focusing on building meaningful relationships with independent agents, policy holders and industry partners—such as manufactured housing dealers—enables National Lloyds to develop a deep understanding of their unique needs. Because those needs change, the company continually develops and recalibrates its products, technology, and support teams to provide customized insurance at competitive rates.

© 2018 Hilltop Holdings Inc. Product of the Marketing & Communications Department

Homeowner Policies

National Lloyds’ approach to underwriting policies for homes valued up to $250,000 takes into account that no two homes are the same and no two customers are either, which is why policies are designed to be easily customizable to meet a homeowner’s coverage and budgetary needs.

3rd Quarter 2018

MOMENTUM

Dwelling Policies

Whether a customer owns one rental property or 50, National Lloyds offers dwelling policies for homes valued up to $250,000, covering property damage, liability, loss of use, and more. No matter if a dwelling is owned outright or mortgaged, National Lloyds works with real estate investors to help safeguard their assets and preserve their wealth, underwriting affordable policies with convenient payment options that account for cash-flow needs and other variables.

Manufactured Home Policies

Nalico General Agency is a major player in the mobile, modular, and factorybuilt home insurance space. Along with specialized policies for individual homeowners, Nalico operates a pointof-sale business, partnering directly with manufactured home dealers to aid their specific customers’ needs.

Catering to niche insurance communities has proved to be a winning strategy for National Lloyds, bolstering the company’s growth by carving out a strategic space in the industry.

National Lloyds’ extensive knowledge of underserved audiences and its subsequent product offerings, coupled with competitive rates, have enabled the company to build enduring relationships with customers and industry partners, while providing its network of independent agents a foundation upon which to build their own successful businesses.

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