Climate Change Data

Environmental Metrics

Climate Goals & Targets

Environmental Challenges

• the COVID-19 pandemic and the response of governmental authorities to the pandemic, which have had, and may continue to have, an adverse impact on the global economy and our business operations and performance
• the credit risks of lending activities, including our ability to estimate credit losses and the allowance for credit losses, as well as the effects of changes in the level of, and trends in, loan delinquencies and write-offs
• effectiveness of our data security controls in the face of cyber attacks
• changes in general economic, market and business conditions in areas or markets where we compete, including changes in the price of crude oil
• risks associated with concentration in real estate related loans
• changes in the interest rate environment and transitions away from London Interbank Offered Rate (“LIBOR”)
• the effects of our indebtedness on our ability to manage our business successfully, including the restrictions imposed by the indenture governing our indebtedness
• 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 (the “Dodd-Frank Act”)
• cost and availability of capital
• changes in key management
• competition in our banking, broker-dealer and mortgage origination segments from other banks and financial institutions as well as investment banking and financial advisory firms, mortgage bankers, asset-based nonbank lenders and government agencies
• legal and regulatory proceedings
• risks associated with merger and acquisition integration
• our ability to use excess capital in an effective manner

Mitigation Strategies

• taken a number of precautionary steps to safeguard our business and our employees from COVID-19, including, but not limited to, banking by appointment, implementing employee travel restrictions and telecommuting arrangements, while maintaining business continuity so that we can continue to deliver service to and meet the demands of our clients
• raised brokered and other wholesale funding to support the enhanced mortgage activity
• raised brokered deposits during 2020 that have a remaining balance of approximately $243 million at September 30, 2021, down from approximately $731 million at December 31, 2020
• additional deposits were swept from Hilltop Securities into the Bank
• began taking necessary actions, including negotiating certain of our agreements based on alternative benchmark rates that have been established
• PrimeLending has been originating conventional adjustable-rate mortgage, or ARM, loan products utilizing a SOFR rate with terms consistent with government-sponsored enterprise, or GSE, guidelines
• Bank’s management team continues to work with its commercial relationships that have LIBOR-based contracts maturing after 2021 to amend terms and establish an alternative benchmark rate
• continue to evaluate the impacts of the LIBOR phase-out and transition requirements as it pertains to contracts, models and systems

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Not disclosed

Environmental Achievements

• Not disclosed

Social Achievements

• Returned a majority of employees to office locations with hybrid options; promoted employee health and wellness through work-life balance, flexible schedules, and minimizing healthcare premiums; approximately 32% of staff had been with the company for ten years or more.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Cybersecurity risks; unpredictable economic, market, and business conditions; interest rate risk; rapid technological change; geographic concentration; adverse changes in real estate market values; economic impact of the COVID-19 pandemic; risk management process limitations; credit risk; dependence on computer and communication systems; climate change; dependence on dividends from subsidiaries; indebtedness; stringent capital requirements; risks associated with the securities industry; market fluctuations; risks associated with the mortgage origination segment; and legal claims and litigation.

Mitigation Strategies

• Significant resources devoted to maintaining and upgrading systems and networks; risk management techniques, strategies, and assessment methods refined; derivative financial instruments used to limit exposure to interest rate risk; underwriting and operational controls to detect and prevent fraud; fraud insurance; policies and procedures to comply with privacy provisions; cybersecurity risk insurance; and policies and procedures designed to prevent violations of rules and regulations.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed