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Hilltop Holdings Stock Rises as Q4 Earnings Beat on Higher Fee Income
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Shares of Hilltop Holdings Inc. (HTH - Free Report) gained 1.9% in after-market hours on better-than-expected results. Its fourth-quarter 2024 earnings of 55 cents per share handily beat the Zacks Consensus Estimate of 28 cents. Moreover, the bottom line rose 25% from the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results benefited from higher non-interest income and a reversal of provisions. Higher deposits and an improvement in capital ratios were the other positives. However, a decline in net interest income (NII), lower loans and a rise in expenses were spoilsports.
Net income attributable to common stockholders was $35.5 million, up 23.9% year over year. Our estimate for the metric was $17 million.
In 2024, earnings per share were $1.74, which increased 3% from the previous year and handily surpassed the Zacks Consensus Estimate of $1.47. Net income available to common stockholders was $113.2 million, up 3.3% year over year.
Net revenues in the fourth quarter were $301.1 million, which rose 3.7% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $284.4 million.
In 2024, total revenues were $1.19 billion, down marginally year over year. The top line marginally beat the Zacks Consensus Estimate of $1.17 billion.
NII declined 5.2% year over year to $105.5 million. Our estimate for the metric was $107 million.
Net interest margin (NIM) (taxable-equivalent basis) was 2.74%, down 24 basis points (bps) year over year. We had expected NIM to be 2.67%.
Non-interest income was $195.6 million, up 9.3% year over year. The increase was driven by a rise in all the components except mortgage loan origination fees. We had projected the metric to be $174.8 million.
Non-interest expenses rose 4.7% from the prior-year quarter to $262.8 million. We projected total non-interest expenses of $256.8 million.
As of Dec. 31, 2024, net loans held for investment were $7.8 billion, down marginally sequentially. Total deposits were $11.1 billion, up 2.5% from the end of the previous quarter. Our estimates for net loans held for investment and total deposits were $7.7 billion and $10.5 billion, respectively.
Hilltop Holdings’ Credit Quality: Mixed Bag
In the fourth quarter of 2024, Hilltop Holdings recorded a reversal of provision for credit losses of $5.9 million, compared with a provision of $1.3 million from the prior-year quarter.
As of Dec. 31, 2024, non-performing assets, as a percentage of total assets, were 0.56%, which increased 11 bps from the year-ago quarter.
HTH’s Profitability Ratios & Capital Ratios Improve
Return on average assets at the end of the reported quarter was 0.92%, up from the prior-year quarter’s 0.75%. The return on average stockholders’ equity was 6.50%, which increased from 5.46%.
The common equity tier 1 capital ratio was 21.23% as of Dec. 31, 2024, up from 19.32% in the corresponding period of 2023. The total capital ratio was 24.40%, up from the year-ago period’s 22.34%.
Our Take on Hilltop Holdings
Hilltop Holdings’ solid balance sheet, business restructuring efforts and improving fee income, along with relatively high rates and decent loan demand, will aid the top line. However, subdued Mortgage Origination segment performance and deteriorating asset quality are woes.
Hilltop Holdings Inc. Price, Consensus and EPS Surprise
Prosperity Bancshares Inc.’s (PB - Free Report) fourth-quarter 2024 adjusted earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.33. Moreover, the bottom line compared favorably with adjusted earnings of $1.19 in the prior-year quarter.
PB’s results benefited from an increase in NII and adjusted non-interest income. Further, a rise in deposits was another positive. During the quarter, provisions remained nil. However, a rise in adjusted expenses was a major headwind. Also, a lower loan balance was another negative.
East West Bancorp, Inc.’s (EWBC - Free Report) fourth-quarter 2024 adjusted EPS of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.
EWBC’s results were primarily aided by an increase in NII and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.
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Hilltop Holdings Stock Rises as Q4 Earnings Beat on Higher Fee Income
Shares of Hilltop Holdings Inc. (HTH - Free Report) gained 1.9% in after-market hours on better-than-expected results. Its fourth-quarter 2024 earnings of 55 cents per share handily beat the Zacks Consensus Estimate of 28 cents. Moreover, the bottom line rose 25% from the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results benefited from higher non-interest income and a reversal of provisions. Higher deposits and an improvement in capital ratios were the other positives. However, a decline in net interest income (NII), lower loans and a rise in expenses were spoilsports.
Net income attributable to common stockholders was $35.5 million, up 23.9% year over year. Our estimate for the metric was $17 million.
In 2024, earnings per share were $1.74, which increased 3% from the previous year and handily surpassed the Zacks Consensus Estimate of $1.47. Net income available to common stockholders was $113.2 million, up 3.3% year over year.
Hilltop Holdings’ Revenues Increase, Expenses Rise
Net revenues in the fourth quarter were $301.1 million, which rose 3.7% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $284.4 million.
In 2024, total revenues were $1.19 billion, down marginally year over year. The top line marginally beat the Zacks Consensus Estimate of $1.17 billion.
NII declined 5.2% year over year to $105.5 million. Our estimate for the metric was $107 million.
Net interest margin (NIM) (taxable-equivalent basis) was 2.74%, down 24 basis points (bps) year over year. We had expected NIM to be 2.67%.
Non-interest income was $195.6 million, up 9.3% year over year. The increase was driven by a rise in all the components except mortgage loan origination fees. We had projected the metric to be $174.8 million.
Non-interest expenses rose 4.7% from the prior-year quarter to $262.8 million. We projected total non-interest expenses of $256.8 million.
As of Dec. 31, 2024, net loans held for investment were $7.8 billion, down marginally sequentially. Total deposits were $11.1 billion, up 2.5% from the end of the previous quarter. Our estimates for net loans held for investment and total deposits were $7.7 billion and $10.5 billion, respectively.
Hilltop Holdings’ Credit Quality: Mixed Bag
In the fourth quarter of 2024, Hilltop Holdings recorded a reversal of provision for credit losses of $5.9 million, compared with a provision of $1.3 million from the prior-year quarter.
As of Dec. 31, 2024, non-performing assets, as a percentage of total assets, were 0.56%, which increased 11 bps from the year-ago quarter.
HTH’s Profitability Ratios & Capital Ratios Improve
Return on average assets at the end of the reported quarter was 0.92%, up from the prior-year quarter’s 0.75%. The return on average stockholders’ equity was 6.50%, which increased from 5.46%.
The common equity tier 1 capital ratio was 21.23% as of Dec. 31, 2024, up from 19.32% in the corresponding period of 2023. The total capital ratio was 24.40%, up from the year-ago period’s 22.34%.
Our Take on Hilltop Holdings
Hilltop Holdings’ solid balance sheet, business restructuring efforts and improving fee income, along with relatively high rates and decent loan demand, will aid the top line. However, subdued Mortgage Origination segment performance and deteriorating asset quality are woes.
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 #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Banks
Prosperity Bancshares Inc.’s (PB - Free Report) fourth-quarter 2024 adjusted earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.33. Moreover, the bottom line compared favorably with adjusted earnings of $1.19 in the prior-year quarter.
PB’s results benefited from an increase in NII and adjusted non-interest income. Further, a rise in deposits was another positive. During the quarter, provisions remained nil. However, a rise in adjusted expenses was a major headwind. Also, a lower loan balance was another negative.
East West Bancorp, Inc.’s (EWBC - Free Report) fourth-quarter 2024 adjusted EPS of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.
EWBC’s results were primarily aided by an increase in NII and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.