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Hilltop Holdings (HTH) Stock Up on Q1 Earnings Beat, Cost Down
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Shares of Hilltop Holdings Inc. (HTH - Free Report) rose 2% in after-hours trading following the release of better-than-expected first-quarter 2024 results. Earnings of 42 cents per share handily beat the Zacks Consensus Estimate of 28 cents. The bottom line improved 5% from the prior-year quarter.
Results benefited from higher non-interest income and a fall in expenses. Also, the solid profitability and capital ratios, along with provision benefit, provided support. However, a fall in net interest income (NII), coupled with a decline in loans and deposit balances, acted as spoilsports.
Net income attributable to common stockholders was $27.7 million, up 7.2% year over year.
Revenues Improve & Expenses Decline Marginally
Quarterly net revenues were $285.2 million, which improved marginally year over year. The top line surpassed the Zacks Consensus Estimate of $275.4 million.
NII declined 14.9% to $103.6 million. Our estimate for the metric was $109 million. Net interest margin (NIM) (taxable-equivalent basis) was 2.87%, down 41 basis points (bps). We had expected NIM to be 2.93%.
Non-interest income was $181.6 million, up 11.8% year over year. The growth was driven by a rise in all components except mortgage loan origination fees. We had projected the metric to be $166.2 million.
Non-interest expenses declined marginally to $250 million. We projected a total non-interest expense of $247.8 million.
As of Mar 31, 2024, net loans held for investment were $8 billion, a marginal decline sequentially. Total deposits were $10.9 billion, down 1.6%. Our estimates for net loans held for investment and total deposits were $8.1 billion and $11 billion, respectively.
Credit Quality: A Mixed Bag
In the first quarter of 2024, Hilltop Holdings recorded a provision benefit of $2.9 million against $2.3 million of provision for credit losses in the prior-year quarter.
As of Mar 31, 2024, non-performing assets, as a percentage of total assets, were 0.43%, which increased 25 bps from the year-ago quarter.
Profitability & Capital Ratios Improve
Return on average assets at the end of the reported quarter was 0.74%, up from the prior year quarter’s 0.69%. The return on average stockholders’ equity was 5.23%, which rose from 5.12%.
The common equity tier 1 capital ratio was 19.73% as of Mar 31, 2024, up from 17.99% in the corresponding period of 2023. The total capital ratio was 22.79%, up from the year-ago period’s 20.75%.
Share Repurchase Update
During the reported quarter, the company repurchased 0.32 million shares for $9.9 million at an average price of $31.04 per share.
Our Take
Hilltop Holdings has been benefiting from its efforts to improve non-interest income. Additionally, manageable expense levels and lower provisions for credit losses will aid financials. However, a decline in NII and lower loans and deposit balances are near-term concerns.
Hilltop Holdings Inc. Price, Consensus and EPS Surprise
BankUnited, Inc.’s (BKU - Free Report) first-quarter 2024 earnings of 64 cents per share surpassed the Zacks Consensus Estimate of 62 cents. In the prior-year quarter, the company had reported earnings of 70 cents. The just-reported quarter’s earnings included expenses related to FDIC special assessment.
BKU’s results were aided by an increase in non-interest income and deposits and a decline in provisions. However, lower NII and loan balance, along with higher expenses, were the undermining factors.
First Horizon Corporation’s (FHN - Free Report) first-quarter 2024 adjusted earnings per share of 35 cents surpassed the Zacks Consensus Estimate by a penny. However, the figure declined 22.2% year over year.
FHN’s results primarily benefited from the rise in fee income. However, a fall in NII and loan balances, coupled with a rise in operating expenses, was an undermining factor.
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Hilltop Holdings (HTH) Stock Up on Q1 Earnings Beat, Cost Down
Shares of Hilltop Holdings Inc. (HTH - Free Report) rose 2% in after-hours trading following the release of better-than-expected first-quarter 2024 results. Earnings of 42 cents per share handily beat the Zacks Consensus Estimate of 28 cents. The bottom line improved 5% from the prior-year quarter.
Results benefited from higher non-interest income and a fall in expenses. Also, the solid profitability and capital ratios, along with provision benefit, provided support. However, a fall in net interest income (NII), coupled with a decline in loans and deposit balances, acted as spoilsports.
Net income attributable to common stockholders was $27.7 million, up 7.2% year over year.
Revenues Improve & Expenses Decline Marginally
Quarterly net revenues were $285.2 million, which improved marginally year over year. The top line surpassed the Zacks Consensus Estimate of $275.4 million.
NII declined 14.9% to $103.6 million. Our estimate for the metric was $109 million.
Net interest margin (NIM) (taxable-equivalent basis) was 2.87%, down 41 basis points (bps). We had expected NIM to be 2.93%.
Non-interest income was $181.6 million, up 11.8% year over year. The growth was driven by a rise in all components except mortgage loan origination fees. We had projected the metric to be $166.2 million.
Non-interest expenses declined marginally to $250 million. We projected a total non-interest expense of $247.8 million.
As of Mar 31, 2024, net loans held for investment were $8 billion, a marginal decline sequentially. Total deposits were $10.9 billion, down 1.6%. Our estimates for net loans held for investment and total deposits were $8.1 billion and $11 billion, respectively.
Credit Quality: A Mixed Bag
In the first quarter of 2024, Hilltop Holdings recorded a provision benefit of $2.9 million against $2.3 million of provision for credit losses in the prior-year quarter.
As of Mar 31, 2024, non-performing assets, as a percentage of total assets, were 0.43%, which increased 25 bps from the year-ago quarter.
Profitability & Capital Ratios Improve
Return on average assets at the end of the reported quarter was 0.74%, up from the prior year quarter’s 0.69%. The return on average stockholders’ equity was 5.23%, which rose from 5.12%.
The common equity tier 1 capital ratio was 19.73% as of Mar 31, 2024, up from 17.99% in the corresponding period of 2023. The total capital ratio was 22.79%, up from the year-ago period’s 20.75%.
Share Repurchase Update
During the reported quarter, the company repurchased 0.32 million shares for $9.9 million at an average price of $31.04 per share.
Our Take
Hilltop Holdings has been benefiting from its efforts to improve non-interest income. Additionally, manageable expense levels and lower provisions for credit losses will aid financials. However, a decline in NII and lower loans and deposit balances are near-term concerns.
Hilltop Holdings Inc. Price, Consensus and EPS Surprise
Hilltop Holdings Inc. price-consensus-eps-surprise-chart | Hilltop Holdings Inc. Quote
Hilltop Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Banks
BankUnited, Inc.’s (BKU - Free Report) first-quarter 2024 earnings of 64 cents per share surpassed the Zacks Consensus Estimate of 62 cents. In the prior-year quarter, the company had reported earnings of 70 cents. The just-reported quarter’s earnings included expenses related to FDIC special assessment.
BKU’s results were aided by an increase in non-interest income and deposits and a decline in provisions. However, lower NII and loan balance, along with higher expenses, were the undermining factors.
First Horizon Corporation’s (FHN - Free Report) first-quarter 2024 adjusted earnings per share of 35 cents surpassed the Zacks Consensus Estimate by a penny. However, the figure declined 22.2% year over year.
FHN’s results primarily benefited from the rise in fee income. However, a fall in NII and loan balances, coupled with a rise in operating expenses, was an undermining factor.