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Shares of Hilltop Holdings Inc. HTH gained 2.5% in after-market hours on better-than-expected results. Its first-quarter 2025 earnings of 65 cents per share handily beat the Zacks Consensus Estimate of 28 cents. Moreover, the bottom line jumped 54.8% from the prior-year quarter.
The results benefited from higher net interest income (NII) and non-interest income. Also, higher loans and an improvement in capital ratios were the other positives. However, higher non-interest expenses and provisions alongside lower deposits were the spoilsports.
Net income attributable to common stockholders was $42.1 million, up 52.2% year over year. Our estimate for the metric was $17.9 million.
Hilltop Holdings’ Revenues Increase, Expenses Rise
Net revenues in the first quarter were $318.5 million, which rose 11.6% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $283.9 million.
NII increased 1.4% year over year to $105.1 million. Our estimate for the metric was $102.3 million.
Net interest margin (NIM) (taxable-equivalent basis) was 2.86%, down 1 basis point (bps) year over year. We had expected NIM to be 2.67%.
Non-interest income was $213.3 million, up 17.5% 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 $180.7 million.
Non-interest expenses rose marginally from the prior-year quarter to $251.5 million. We projected total non-interest expenses to be $253.4 million.
As of March 31, 2025, net loans held for investment were $7.9 billion, up marginally sequentially. Total deposits were $10.8 billion, down 2.1% from the end of the previous quarter. Our estimates for net loans held for investment and total deposits were $8.3 billion and $11.6 billion, respectively.
Hilltop Holdings’ Credit Quality Deteriorates
In the first quarter of 2025, Hilltop Holdings recorded a provision for credit losses of $9.3 million, compared with a reversal of credit losses of $2.9 million from the prior-year quarter.
As of March 31, 2025, non-performing assets, as a percentage of total assets, were 0.56%, which increased 13 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 1.13%, up from the prior-year quarter’s 0.74%. The return on average stockholders’ equity was 7.82%, which increased from 5.23%.
The common equity tier 1 capital ratio was 21.29% as of March 31, 2025, up from 19.73% in the corresponding period of 2024. The total capital ratio was 24.59%, up from the year-ago period’s 22.79%.