We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Hilltop Holdings (HTH) Q3 Earnings Beat, Revenues & Costs Fall
Read MoreHide Full Article
Hilltop Holdings Inc.’s (HTH - Free Report) third-quarter 2021 earnings from continuing operations of $1.15 per share handily outpaced the Zacks Consensus Estimate of 86 cents. The bottom line, however, reflects a 32% plunge from the prior-year quarter’s $1.69.
Results gained from a fall in expenses, a rise in net interest income, and higher provision benefit. Further, deposits balance improved during the quarter. However, lower non-interest income on the back of dismal mortgage banking performance and decline in loan balance were the major headwinds.
Net income applicable to common stockholders was $92.9 million, down 39.4% from the prior-year quarter.
Revenues Fall, Expenses Decline
Net revenues came in at $473 million, declining 21.8% year over year. However, the top line beat the Zacks Consensus Estimate of $428.1 million.
Net interest income grew 3.1% to $105.1 million. Yet, the net interest margin (taxable equivalent basis) was 2.54%, contracting 3 basis points (bps) from the prior-year quarter.
Non-interest income was $367.9 million, down 26.8%. This fall resulted from lower net gains from the sale of loans and other mortgage production income, mortgage loan origination fees, and other income.
Non-interest expenses fell 11.1% to $355.2 million. This decline was mainly due to a decrease in employees' compensation and benefits costs, and net occupancy and equipment costs.
As of Sep 30, 2021, net loans held for investment were $7.44 billion, down 1.1%. Total deposits were $11.73 billion, rising 3.4%.
Credit Quality Improves
Provisions for credit losses were a benefit of $5.8 million, up from 0.6 million in the prior-year quarter. Further, as of Sep 30, 2021, non-performing assets as a percentage of total assets were 0.47%, down 18 bps from the prior-year quarter.
Profitability Ratios Decline, Capital Ratios Improve
Return on average assets at the end of the reported quarter was 2.13%, down from the prior-year quarter’s 3.71%. Also, the return on average equity was 14.96%, down from 25.94%.
Common equity tier 1 capital ratio was 21.28% as of Sep 30, 2021, up from 19.85% in the corresponding period of 2020. Total capital ratio was 24%, reflecting a rise from the year-ago period’s 23.22%.
Share Repurchase Update
During the quarter, the company repurchased 2.2 million shares for $74 million.
Additionally, in October, the company authorized an additional $50 million buyback plan. Hence, as of Oct 28, Hilltop Holdings has nearly $76 million of available share repurchase capacity through January 2022.
Our Take
Hilltop Holdings’ restructuring efforts to diversify business as a profitable banking operation are commendable. However, pressure on margins due to near-zero interest rates is a concern as it might hurt the top line in the near term.
Hilltop Holdings Inc. Price, Consensus and EPS Surprise
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter.
Commerce Bancshares Inc.’s (CBSH - Free Report) third-quarter 2021 earnings per share of $1.05 surpassed the Zacks Consensus Estimate of $1.00. The bottom line, however, declined almost 1% from the prior-year quarter.
East West Bancorp’s (EWBC - Free Report) third-quarter 2021 earnings per share of $1.57 outpaced the Zacks Consensus Estimate of $1.50. The bottom line jumped 40.2% from the prior-year quarter’s 70 cents.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Hilltop Holdings (HTH) Q3 Earnings Beat, Revenues & Costs Fall
Hilltop Holdings Inc.’s (HTH - Free Report) third-quarter 2021 earnings from continuing operations of $1.15 per share handily outpaced the Zacks Consensus Estimate of 86 cents. The bottom line, however, reflects a 32% plunge from the prior-year quarter’s $1.69.
Results gained from a fall in expenses, a rise in net interest income, and higher provision benefit. Further, deposits balance improved during the quarter. However, lower non-interest income on the back of dismal mortgage banking performance and decline in loan balance were the major headwinds.
Net income applicable to common stockholders was $92.9 million, down 39.4% from the prior-year quarter.
Revenues Fall, Expenses Decline
Net revenues came in at $473 million, declining 21.8% year over year. However, the top line beat the Zacks Consensus Estimate of $428.1 million.
Net interest income grew 3.1% to $105.1 million. Yet, the net interest margin (taxable equivalent basis) was 2.54%, contracting 3 basis points (bps) from the prior-year quarter.
Non-interest income was $367.9 million, down 26.8%. This fall resulted from lower net gains from the sale of loans and other mortgage production income, mortgage loan origination fees, and other income.
Non-interest expenses fell 11.1% to $355.2 million. This decline was mainly due to a decrease in employees' compensation and benefits costs, and net occupancy and equipment costs.
As of Sep 30, 2021, net loans held for investment were $7.44 billion, down 1.1%. Total deposits were $11.73 billion, rising 3.4%.
Credit Quality Improves
Provisions for credit losses were a benefit of $5.8 million, up from 0.6 million in the prior-year quarter. Further, as of Sep 30, 2021, non-performing assets as a percentage of total assets were 0.47%, down 18 bps from the prior-year quarter.
Profitability Ratios Decline, Capital Ratios Improve
Return on average assets at the end of the reported quarter was 2.13%, down from the prior-year quarter’s 3.71%. Also, the return on average equity was 14.96%, down from 25.94%.
Common equity tier 1 capital ratio was 21.28% as of Sep 30, 2021, up from 19.85% in the corresponding period of 2020. Total capital ratio was 24%, reflecting a rise from the year-ago period’s 23.22%.
Share Repurchase Update
During the quarter, the company repurchased 2.2 million shares for $74 million.
Additionally, in October, the company authorized an additional $50 million buyback plan. Hence, as of Oct 28, Hilltop Holdings has nearly $76 million of available share repurchase capacity through January 2022.
Our Take
Hilltop Holdings’ restructuring efforts to diversify business as a profitable banking operation are commendable. However, pressure on margins due to near-zero interest rates is a concern as it might hurt the top line in the near term.
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
Hancock Whitney Corporation’s (HWC - Free Report) third-quarter 2021 adjusted earnings of $1.45 per share outpaced the Zacks Consensus Estimate of $1.29. The bottom line improved 61.1% from the prior-year quarter.
Commerce Bancshares Inc.’s (CBSH - Free Report) third-quarter 2021 earnings per share of $1.05 surpassed the Zacks Consensus Estimate of $1.00. The bottom line, however, declined almost 1% from the prior-year quarter.
East West Bancorp’s (EWBC - Free Report) third-quarter 2021 earnings per share of $1.57 outpaced the Zacks Consensus Estimate of $1.50. The bottom line jumped 40.2% from the prior-year quarter’s 70 cents.