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HTH's Q4 Earnings Beat on Higher NII & Fee Income, Dividend Hiked
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Key Takeaways
Hilltop Holdings reported Q4 EPS of $0.69, up 25.5% and well above the estimate of $0.46.
HTH saw revenue rise 9.6% with gains in both NII and non-interest income, despite higher expenses.
The company hiked its dividend 11% and unveiled a $125M stock repurchase plan through January 2027.
Hilltop Holdings Inc.’s (HTH - Free Report) fourth-quarter 2025 earnings of 69 cents per share handily surpassed the Zacks Consensus Estimate of 46 cents. The bottom line also jumped 25.5% from the prior-year quarter.
Results primarily benefited from higher net interest income (NII) and non-interest income. An improvement in the loan and deposit balance was another positive. However, a rise in non-interest expenses and a higher provision for credit losses were the spoilsports.
Net income attributable to common stockholders was $41.6 million, up 17.1% year over year. Our estimate for the metric was $19.4 million.
For 2025, earnings per share of $2.64 easily outpaced the consensus estimate of $1.93 and increased 51.7% year over year. Net income attributable to common stockholders was $165.6 million, up 46.3%. Our estimate for net income attributable to common stockholders was $143.4 million.
Hilltop Holdings’ Revenues Improve, Expenses Rise
Net revenues in the fourth quarter were $329.9 million, up 9.6% year over year. The top line beat the Zacks Consensus Estimate of $302.8 million.
For 2025, net revenues increased 7.8% year over year to $1.28 billion. The top line surpassed the Zacks Consensus Estimate of $1.24 billion.
NII increased 6.7% year over year to $112.5 million. The net interest margin (NIM) (taxable-equivalent basis) was 3.04%, expanding 30 basis points (bps). Our estimates for NII and NIM were $101.9 million and 2.87%, respectively.
Non-interest income was $217.4 million, up 11.1%. The rise was driven by an increase in all components, except for mortgage loan origination fees. We had projected the metric to be $191.8 million.
Non-interest expenses rose 2.3% from the prior-year quarter to $268.9 million. The increase was mainly due to higher employees' compensation and benefits costs. We projected total non-interest expenses of $269.6 million.
As of Dec. 31, 2025, net loans held for investment were $8.2 billion, up 1.1% sequentially. Total deposits were $10.9 billion, up 1.9%. Our estimates for net loans held for investment and total deposits were $8 billion and $11.1 billion, respectively.
Hilltop Holdings’ Credit Quality: A Mixed Bag
In the fourth quarter of 2025, Hilltop Holdings recorded a provision for credit losses of $7.8 million against a reversal of credit losses of $5.9 million in the prior-year quarter. The provision was mainly due to “a build in the allowance related to specific reserves and higher net charge-offs” as well as changes in the economic expectations.
As of Dec. 31, 2025, non-performing assets, as a percentage of total assets, were 0.39%, which decreased 17 bps from the year-ago quarter.
HTH’s Profitability Ratios Improve, Capital Ratios Worsen
Return on average assets at the end of the reported quarter was 1.09%, up from the prior-year quarter’s 0.92%. The return on average stockholders’ equity was 7.60%, which increased from 6.50%.
The common equity tier 1 capital ratio was 19.70% as of Dec. 31, 2025, down from 21.23% in the corresponding period of 2024. The total capital ratio was 22.20%, down from the year-ago period’s 24.40%.
HTH’s Capital Distribution Update
In the reported quarter, the company repurchased 1.8 million shares for $60.8 million at an average price of $33.77 per share.
Additionally, Hilltop’s board authorized a new stock repurchase program through January 2027, under which the company may repurchase up to $125.0 million of its outstanding common stock.
Further, HTH announced a quarterly cash dividend of 20 cents per share, representing an 11% increase from the prior payout. The dividend will be paid out on Feb. 27 to shareholders of record as of Feb. 13.
Our Take on Hilltop Holdings
HTH’s business restructuring efforts and improving fee income, along with relatively decent loan demand, will aid the top line. However, subdued Mortgage Origination segment performance and weak asset quality are worrisome.
Hilltop Holdings Inc. Price, Consensus and EPS Surprise
Prosperity Bancshares, Inc.’s (PB - Free Report) fourth-quarter 2025 earnings of $1.49 surpassed the Zacks Consensus Estimate of $1.45. The bottom line grew 8.8% year over year.
Results benefited from an increase in NII, non-interest income, alongside nil provisions and lower expenses. Further, a higher deposit balance was positive for Prosperity Bancshares. However, a decline in loan balance was a concern.
UMB Financial Corp.’s (UMBF - Free Report) fourth-quarter 2025 operating earnings per share of $3.08 increased sharply from $2.49 in the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $2.71.
UMB Financial delivered a strong quarterly performance, supported by robust organic loan and deposit growth across its legacy footprint and continued benefits from the integration of its January 2025 acquisition of Heartland Financial USA, Inc. Results were driven by solid growth in NII and steady fee income momentum. However, higher non-interest expenses and some pressure on asset quality partly offset the positives.
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HTH's Q4 Earnings Beat on Higher NII & Fee Income, Dividend Hiked
Key Takeaways
Hilltop Holdings Inc.’s (HTH - Free Report) fourth-quarter 2025 earnings of 69 cents per share handily surpassed the Zacks Consensus Estimate of 46 cents. The bottom line also jumped 25.5% from the prior-year quarter.
Results primarily benefited from higher net interest income (NII) and non-interest income. An improvement in the loan and deposit balance was another positive. However, a rise in non-interest expenses and a higher provision for credit losses were the spoilsports.
Net income attributable to common stockholders was $41.6 million, up 17.1% year over year. Our estimate for the metric was $19.4 million.
For 2025, earnings per share of $2.64 easily outpaced the consensus estimate of $1.93 and increased 51.7% year over year. Net income attributable to common stockholders was $165.6 million, up 46.3%. Our estimate for net income attributable to common stockholders was $143.4 million.
Hilltop Holdings’ Revenues Improve, Expenses Rise
Net revenues in the fourth quarter were $329.9 million, up 9.6% year over year. The top line beat the Zacks Consensus Estimate of $302.8 million.
For 2025, net revenues increased 7.8% year over year to $1.28 billion. The top line surpassed the Zacks Consensus Estimate of $1.24 billion.
NII increased 6.7% year over year to $112.5 million. The net interest margin (NIM) (taxable-equivalent basis) was 3.04%, expanding 30 basis points (bps). Our estimates for NII and NIM were $101.9 million and 2.87%, respectively.
Non-interest income was $217.4 million, up 11.1%. The rise was driven by an increase in all components, except for mortgage loan origination fees. We had projected the metric to be $191.8 million.
Non-interest expenses rose 2.3% from the prior-year quarter to $268.9 million. The increase was mainly due to higher employees' compensation and benefits costs. We projected total non-interest expenses of $269.6 million.
As of Dec. 31, 2025, net loans held for investment were $8.2 billion, up 1.1% sequentially. Total deposits were $10.9 billion, up 1.9%. Our estimates for net loans held for investment and total deposits were $8 billion and $11.1 billion, respectively.
Hilltop Holdings’ Credit Quality: A Mixed Bag
In the fourth quarter of 2025, Hilltop Holdings recorded a provision for credit losses of $7.8 million against a reversal of credit losses of $5.9 million in the prior-year quarter. The provision was mainly due to “a build in the allowance related to specific reserves and higher net charge-offs” as well as changes in the economic expectations.
As of Dec. 31, 2025, non-performing assets, as a percentage of total assets, were 0.39%, which decreased 17 bps from the year-ago quarter.
HTH’s Profitability Ratios Improve, Capital Ratios Worsen
Return on average assets at the end of the reported quarter was 1.09%, up from the prior-year quarter’s 0.92%. The return on average stockholders’ equity was 7.60%, which increased from 6.50%.
The common equity tier 1 capital ratio was 19.70% as of Dec. 31, 2025, down from 21.23% in the corresponding period of 2024. The total capital ratio was 22.20%, down from the year-ago period’s 24.40%.
HTH’s Capital Distribution Update
In the reported quarter, the company repurchased 1.8 million shares for $60.8 million at an average price of $33.77 per share.
Additionally, Hilltop’s board authorized a new stock repurchase program through January 2027, under which the company may repurchase up to $125.0 million of its outstanding common stock.
Further, HTH announced a quarterly cash dividend of 20 cents per share, representing an 11% increase from the prior payout. The dividend will be paid out on Feb. 27 to shareholders of record as of Feb. 13.
Our Take on Hilltop Holdings
HTH’s business restructuring efforts and improving fee income, along with relatively decent loan demand, will aid the top line. However, subdued Mortgage Origination segment performance and weak asset quality are worrisome.
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
Prosperity Bancshares, Inc.’s (PB - Free Report) fourth-quarter 2025 earnings of $1.49 surpassed the Zacks Consensus Estimate of $1.45. The bottom line grew 8.8% year over year.
Results benefited from an increase in NII, non-interest income, alongside nil provisions and lower expenses. Further, a higher deposit balance was positive for Prosperity Bancshares. However, a decline in loan balance was a concern.
UMB Financial Corp.’s (UMBF - Free Report) fourth-quarter 2025 operating earnings per share of $3.08 increased sharply from $2.49 in the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $2.71.
UMB Financial delivered a strong quarterly performance, supported by robust organic loan and deposit growth across its legacy footprint and continued benefits from the integration of its January 2025 acquisition of Heartland Financial USA, Inc. Results were driven by solid growth in NII and steady fee income momentum. However, higher non-interest expenses and some pressure on asset quality partly offset the positives.