Company Overview - Hilltop Holdings Inc. is a financial holding company founded in 1998 and headquartered in Dallas, TX, providing consumer and business banking services through PlainsCapital Bank [12] - The company offers a wide range of financial products and services through its broker-dealers and mortgage origination, employing nearly 3,640 people and operating approximately 316 locations across 47 states as of March 31, 2025 [12] Investment Ratings - Hilltop Holdings is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid position in the market [13] - The company has a Momentum Style Score of B, with shares increasing by 0.8% over the past four weeks [13] Earnings Estimates - For fiscal 2025, four analysts have revised their earnings estimates upwards in the last 60 days, with the Zacks Consensus Estimate increasing by $0.32 to $1.86 per share [13] - Hilltop Holdings boasts an average earnings surprise of 68.9%, suggesting strong performance relative to expectations [13] Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Hilltop Holdings is recommended for investors' short lists [14]

Company Overview - Hilltop Holdings Inc. is a financial holding company founded in 1998 and headquartered in Dallas, TX, providing consumer and business banking services through PlainsCapital Bank and offering a range of financial products through its broker-dealers and mortgage origination services [12]. Investment Ratings - Hilltop Holdings has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [13]. - The company has a Momentum Style Score of B, with shares increasing by 2.2% over the past four weeks [13]. Earnings Estimates - Four analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.32 to $1.86 per share [13]. - Hilltop Holdings boasts an average earnings surprise of 68.9%, suggesting strong performance relative to expectations [13]. Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Hilltop Holdings is recommended for investors' consideration [14].

Company Overview - Hilltop Holdings (HTH) is headquartered in Dallas and operates in the Finance sector, with a stock price change of 4.61% since the start of the year [3] - The company currently pays a dividend of $0.18 per share, resulting in a dividend yield of 2.4%, which is higher than the Banks - Southeast industry's yield of 2.38% and the S&P 500's yield of 1.6% [3] Dividend Performance - Hilltop Holdings has an annualized dividend of $0.72, reflecting a 5.9% increase from the previous year [4] - The company has increased its dividend 5 times over the last 5 years, with an average annual increase of 15.18% [4] - The current payout ratio is 37%, indicating that the company paid out 37% of its trailing 12-month EPS as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Hilltop Holdings' earnings in 2025 is $1.75 per share, with an expected increase of 0.57% from the previous year [5] Investment Appeal - Hilltop Holdings is considered an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Financial Performance - Net interest income for Q1 2025 was $105.1 million, an increase from $103.6 million in Q1 2024, representing a growth of 1.4%[250] - Total noninterest income rose to $213.3 million in Q1 2025, compared to $181.6 million in Q1 2024, marking an increase of 17.4%[250] - Net income attributable to Hilltop for Q1 2025 was $42.1 million, up from $27.7 million in Q1 2024, reflecting a growth of 52.2%[250] - Total consolidated income before taxes increased by 51% to $57.65 million in Q1 2025 from $38.09 million in Q1 2024[278] - Income applicable to common stockholders for the three months ended March 31, 2025, was $42.1 million, or $0.65 per diluted share, compared to $27.7 million, or $0.42 per diluted share, for the same period in 2024[286] Dividends and Stock Repurchase - The company declared total common dividends of $11.6 million during Q1 2025, with a quarterly cash dividend of $0.18 per common share announced for payment on May 22, 2025[253] - A new stock repurchase program was authorized, allowing the repurchase of up to $100 million of common stock, with $33.3 million spent to repurchase 1,046,540 shares at an average price of $31.80 per share in Q1 2025[254] Assets and Equity - Total assets as of March 31, 2025, were $15.8 billion, a decrease from $16.3 billion at the end of 2024[250] - The common equity to assets ratio improved to 13.91% as of March 31, 2025, compared to 13.46% at the end of 2024[250] - The leverage ratio at the end of the period was 12.86% for the three months ended March 31, 2025, compared to 12.49% for the same period in 2024[290] Credit Losses and Provisions - The allowance for credit losses increased to $106.2 million as of March 31, 2025, from $101.1 million at the end of 2024[250] - The provision for credit losses in the banking segment increased significantly by 428% to $9.37 million in Q1 2025 from a reversal of $2.85 million in Q1 2024[278] - The provision for credit losses during the three months ended March 31, 2025, was primarily driven by a build in the allowance related to loan portfolio changes and specific reserves[301] - The provision for credit losses for the three months ended March 31, 2025, included a provision of $1.7 million for individually evaluated loans and $7.7 million for collectively evaluated loans[437] Economic Outlook - The company anticipates continued economic uncertainties and challenges related to interest rate movements and funding costs throughout 2025[264] - The overall economic conditions and market uncertainties are expected to adversely impact operating results during the remainder of 2025[269] - The U.S. economic forecast predicts real GDP growth rates of 1.7% for 2025 and 1.2% for 2026, with an unemployment rate peaking at 5.5% in the first half of 2026[435][436] - Elevated borrowing costs are anticipated to reduce credit-sensitive spending, while tariffs and immigration policies are expected to weaken the economy[435] Segment Performance - The banking segment contributed $40.1 million to income before income taxes in Q1 2025, while the broker-dealer segment contributed $9.2 million, and the mortgage origination segment incurred losses of $8.3 million[257] - Noninterest income for the broker-dealer segment decreased by 7% to $96.94 million in Q1 2025 compared to $104.58 million in Q1 2024[278] - The broker-dealer segment's net revenue decreased to $108.5 million for the three months ended March 31, 2025, down from $116.8 million in the same period of 2024[339] - The mortgage origination segment reported a loss before income taxes of $8,282,000 in Q1 2025, an improvement from a loss of $16,450,000 in Q1 2024[355] Interest Income and Expenses - Net interest income for the banking segment decreased by 1% to $90.55 million in Q1 2025 compared to $91.61 million in Q1 2024[278] - Net interest margin for the three months ended March 31, 2025, was 2.86%, slightly down from 2.87% in the same period in 2024[290] - Net interest income decreased slightly due to reduced earnings on interest-earning assets, with average yield on interest-earning assets dropping 38 basis points from 5.58% to 5.20%[328] - The average rate paid on interest-bearing liabilities decreased 67 basis points from 3.90% to 3.23%[328] Noninterest Expenses - The banking segment's noninterest expense decreased by 7% to $51.93 million in Q1 2025 from $56.02 million in Q1 2024[278] - Noninterest expense in the broker-dealer segment increased to $99.3 million, up from $97.9 million in the same period of 2024[339] - Noninterest expenses decreased by 5.4% to $74,660 million from $78,898 million in 2024[382] Mortgage Origination - Total loan origination volume increased by 3.9% to $1,742,341 million for the three months ended March 31, 2025, compared to $1,676,486 million in the same period of 2024[367] - Mortgage loan originations decreased by 38 units, from 5,411 units in 2024 to 5,373 units in 2025[365] - The mortgage origination segment's loans held for sale decreased to $722.6 million as of March 31, 2025, from $809.8 million at December 31, 2024[427] Securities and Investments - The total securities portfolio increased to $2,814,983 as of March 31, 2025, from $2,659,661 at December 31, 2024[405] - The banking segment's securities portfolio was valued at $2.1 billion, consisting of trading securities of $0.7 million, available for sale securities of $1.4 billion, and held to maturity securities of $762.4 million[407] Credit Policies - The banking segment's credit policies emphasize strong underwriting and governance standards to mitigate potential losses[414] - The allowance for credit losses on the Bank's energy portfolio was $0.4 million, or 0.7% of loans held for investment, as of March 31, 2025[420]

Financial Data and Key Metrics Changes - Hilltop Holdings Inc. reported net income of $42 million, or $0.65 per diluted share, with a return on average assets of 1.1% and return on average equity of 7.8% for Q1 2025 [6][22] - The tangible book value per share increased from year-end 2024 by $0.53 to $30 per share [21] - Net interest income for the first quarter was $105 million, reflecting a year-over-year increase of $1.5 million or 1.4% [29] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $40 million pretax income on $13 billion of average assets, with a return on average assets of 0.96% [8] - PrimeLending reported a pretax loss of $8 million, with origination volumes under pressure due to elevated interest rates [12][13] - Hilltop Securities experienced a 34% year-over-year increase in net revenues from Public Finance Services, while structured finance net revenues declined by $8 million [15][16] Market Data and Key Metrics Changes - Average total deposits at the bank decreased by approximately $89 million or 1% versus the fourth quarter of 2024, with an ending balance decline of $233 million [31] - Average loans held for investment (HFI) remained stable at $7.9 billion, with expectations of loan growth between 0% to 3% for the full year [38][39] Company Strategy and Development Direction - The company plans to continue investing in its merchant banking platform while managing its fixed cost structure in response to market conditions [20][14] - Management is focused on right-sizing the mortgage business to align with current market conditions and is actively pursuing growth in its loan officer pool [76] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the ongoing volatility in the market due to interest rates and inflation, but remains optimistic about the company's balance sheet positioning [43] - The outlook for 2025 reflects current economic assessments, with expectations for modest growth in various segments despite market uncertainties [44] Other Important Information - The company recognized two nonrecurring items impacting consolidated results: a gain from the sale of Mosier Energy Solutions and an insurance recovery, contributing positively to net income [19][20] - The allowance for credit losses increased by $5 million to $106 million, reflecting negative migration in certain credit relationships [26] Q&A Session Summary Question: What was the size of the downgraded office credit? - The downgraded office credit was approximately $18 million, with improvements in classified loans driven by smaller credits migrating positively [50] Question: Can deposit costs decrease further? - Management indicated that while there is potential for deposit costs to decrease, they are balancing this with the need to grow customer deposits [52][54] Question: Will there be a reversal of seasonal deposit outflows in Q2 2025? - Seasonal outflows are expected to continue into Q2 due to tax season, but growth in core customer deposits is anticipated afterward [62][64] Question: How is the mortgage business positioned for future improvements? - Management believes the mortgage business will see slow but steady improvement, with efforts to right-size operations for the next 12 to 18 months [75] Question: What is the outlook for loan growth? - The loan growth outlook has been reduced, but the pipeline remains strong, with expectations for modest growth in the one to four family portfolio [78][79] Question: Will stock repurchases continue? - The company has $67 million available for stock repurchases and is evaluating market conditions for potential buybacks [81] Question: How much of the expense improvement was due to the insurance recovery? - The insurance recovery had a limited impact on overall expense improvement, as the company has focused on optimizing and stabilizing expenses [86]

Core Viewpoint - Hilltop Holdings Inc. reported better-than-expected first-quarter 2025 earnings, with a significant increase in net income and revenues, driven by higher net interest income and non-interest income, despite challenges from rising expenses and lower deposits [1][2][3]. Financial Performance - First-quarter 2025 earnings per share were 65 cents, exceeding the Zacks Consensus Estimate of 28 cents, and reflecting a 54.8% increase year-over-year [1] - Net income attributable to common stockholders was $42.1 million, up 52.2% from the prior year, surpassing the estimate of $17.9 million [2] - Net revenues reached $318.5 million, an 11.6% increase year-over-year, exceeding the Zacks Consensus Estimate of $283.9 million [3] - Non-interest income was $213.3 million, up 17.5% year-over-year, driven by increases across most components [4] Income and Expense Analysis - Net interest income increased by 1.4% year-over-year to $105.1 million, surpassing the estimate of $102.3 million [3] - Non-interest expenses rose slightly to $251.5 million, marginally below the projected $253.4 million [4] Loan and Deposit Trends - As of March 31, 2025, net loans held for investment were $7.9 billion, showing a slight sequential increase [5] - Total deposits were $10.8 billion, down 2.1% from the previous quarter, which was below the estimate of $11.6 billion [5] Credit Quality and Provisions - The company recorded a provision for credit losses of $9.3 million, compared to a reversal of credit losses of $2.9 million in the prior-year quarter [6] - Non-performing assets as a percentage of total assets increased to 0.56%, up 13 basis points year-over-year [6] Profitability and Capital Ratios - Return on average assets improved to 1.13%, up from 0.74% in the prior year [7] - Return on average stockholders' equity increased to 7.82%, compared to 5.23% in the previous year [7] - Common equity tier 1 capital ratio was 21.29%, up from 19.73% year-over-year, while the total capital ratio rose to 24.59% from 22.79% [7] Strategic Outlook - The company's restructuring efforts and improving fee income, along with favorable interest rates and decent loan demand, are expected to support revenue growth [8] - Challenges remain in the mortgage origination segment and asset quality, but a solid balance sheet allows for sustainable capital distributions [8]

Financial Data and Key Metrics Changes - Hilltop reported net income of $42 million or $0.65 per diluted share for Q1 2025, with a return on average assets of 1.1% and return on average equity of 7.8% [5][16] - The common equity Tier one capital ratio stood at 21%, and tangible book value per share increased from year-end 2024 by $0.53 to $30 per share [14][15] Business Line Data and Key Metrics Changes - PlainsCapital Bank generated $40 million of pretax income on $13 billion of average assets, representing a return on average assets of 0.96% [6] - PrimeLending reported a pretax loss of $8 million, with origination volume increasing year-over-year to $1.7 billion, but faced a decline in mortgage origination fees [10][11] - Hilltop Securities generated pretax income of $9 million on net revenue of $109 million, with Public Finance Services seeing a 34% year-over-year increase in net revenues [11][12] Market Data and Key Metrics Changes - Average total deposit balances at PlainsCapital Bank decreased by approximately $89 million or 1% compared to Q4 2024, but increased by nearly $300 million year-over-year [8][21] - The bank experienced a one basis point compression in net interest margin to 2.97% [9] Company Strategy and Development Direction - The company plans to continue investing in its merchant banking platform and maintain a focus on growing customer deposits while managing deposit costs [13][15] - Management is actively monitoring operating expenses at PrimeLending and has reduced the fixed expense base by 12% year-over-year [10] Management Comments on Operating Environment and Future Outlook - Management expressed concerns about the ongoing volatility in the mortgage origination market and the impact of interest rates on affordability for homebuyers [10][11] - The company expects to see a modest improvement in economic conditions but acknowledges potential volatility due to inflation and tariffs [19][29] Other Important Information - Hilltop recognized a preliminary gain of $23.6 million from the sale of its investment in Mosier Energy Solutions, impacting net income positively [13][16] - The company returned $12 million to stockholders through dividends and repurchased $33 million in shares during the quarter [15] Q&A Session Summary Question: What was the size of the downgraded office credit? - The downgraded office credit was approximately $18 million, with positive migration in classified loans driven by smaller credits [32] Question: Can deposit costs move lower and improve NIM? - Management indicated that deposit costs have been reduced significantly, and while further reductions are possible, NIM has stabilized [33][34] Question: Should we expect a reversal of seasonal deposit outflows in Q2? - Management expects core customer deposits to rebuild after the tax season, leading to growth in deposits through the remainder of the year [44][45] Question: How were businesses impacted by bond market volatility? - The municipal portfolio was most impacted by volatility, but management is working to recover from the trading challenges faced [52] Question: What is the outlook for mortgage business and loan growth? - Management anticipates a slow and steady improvement in the mortgage business, while also focusing on right-sizing operations for the current market [55][56] Question: How much of the expense improvement was due to the insurance recovery? - The insurance recovery had a limited impact on overall expense guidance, which remains stable due to ongoing optimization efforts [63][64]

Financial Highlights - Hilltop Holdings' Q1 2025 net income available to common stockholders was $35784000, resulting in diluted EPS of $06[5] - The company's Q1 2025 pre-tax income was $401 million[5] - Q1 2025 total revenue reached $1085 million[5] - Net revenue declined by $83 million from Q1 2024 to Q1 2025, influenced by lower revenue in Structured Finance and Fixed Income, partially offset by higher revenue in Public Finance and Wealth Management[5] - Hilltop Securities generated pre-tax income of $92 million in Q1 2025[5] Banking Performance (PlainsCapital Bank) - PlainsCapital Bank's Q1 2025 pre-tax income was $401 million[5] - The bank's net interest margin was 297% in Q1 2025[64] - PlainsCapital Bank's efficiency ratio was 512% in Q1 2025[63] Mortgage Origination (PrimeLending) - PrimeLending's mortgage origination volume was $17 billion in Q1 2025, consistent with Q1 2024[5, 65] - The reported gain on sale for PrimeLending was 224 basis points[29] Capital Management - During Q1 2025, Hilltop returned $449 million to stockholders through dividends and share repurchases[9] - $116 million in dividends[9] - $333 million in share repurchases[9] - Tangible book value per share increased from $3371 on December 31, 2024, to $3429 on March 31, 2025[7] Asset Quality - The allowance for credit losses (ACL) to total loans held for investment (HFI) was 133% as of March 31, 2025[14] - Non-performing assets (NPAs) totaled $89159000, representing 117% of total bank loans plus OREO[48]

Core Viewpoint - Hilltop Holdings reported quarterly earnings of $0.65 per share, significantly exceeding the Zacks Consensus Estimate of $0.28 per share, marking an earnings surprise of 132.14% [1][2] Financial Performance - The company achieved revenues of $318.46 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 12.18% and showing an increase from $285.24 million year-over-year [2] - Over the last four quarters, Hilltop Holdings has consistently surpassed consensus EPS estimates [2] Stock Performance - Hilltop Holdings shares have increased approximately 1.1% since the beginning of the year, contrasting with the S&P 500's decline of -8.6% [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.36 on revenues of $307.92 million, and for the current fiscal year, it is $1.54 on revenues of $1.23 billion [7] - The estimate revisions trend for Hilltop Holdings is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Banks - Southeast industry, to which Hilltop Holdings belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Hilltop Holdings Inc. reported income to common stockholders of $42.1 million, or $0.65 per diluted share, for Q1 2025, compared to $27.7 million, or $0.42 per diluted share, in Q1 2024, representing a 52.5% increase in income[1]. - Noninterest income for Q1 2025 was $213.3 million, a 17.5% increase from $181.6 million in Q1 2024[6]. - Net income attributable to Hilltop for the three months ended March 31, 2025, was $42.116 million, representing a 18.25% increase from $35.519 million in the previous quarter[8]. - Net interest income for the first quarter of 2025 was $105,757,000, an increase from $104,198,000 in the first quarter of 2024[14]. Credit Losses and Provisions - The provision for credit losses was $9.3 million in Q1 2025, compared to a reversal of credit losses of $2.9 million in Q1 2024, indicating a significant shift in credit loss expectations[4]. - Non-accrual loans decreased to $81,477,000 as of March 31, 2025, down from $88,149,000 in the previous quarter, representing a reduction of approximately 0.8%[13]. - Non-performing assets totaled $89,159,000 as of March 31, 2025, slightly down from $91,095,000 in the previous quarter, indicating a decrease of about 2.1%[13]. Assets and Deposits - Total assets decreased to $15.8 billion at March 31, 2025, down from $16.3 billion at December 31, 2024[6]. - Total deposits were $10.8 billion at March 31, 2025, compared to $11.1 billion at December 31, 2024, reflecting a decrease of 2.7%[6]. - Total assets as of March 31, 2025, were $15,934,658,000, a slight decrease from $15,997,647,000 in the previous quarter[14]. Returns and Margins - Hilltop's consolidated annualized return on average assets and return on average stockholders' equity for Q1 2025 were 1.13% and 7.82%, respectively, compared to 0.74% and 5.23% in Q1 2024[6]. - Return on average stockholders' equity improved to 7.82% from 6.50% in the previous quarter[9]. - The company reported a net interest margin of 2.84%, slightly up from 2.72% in the previous quarter[9]. - The net interest margin for the three months ended March 31, 2025, was 2.86%, compared to 2.87% for the same period in 2024[14]. Stock and Shareholder Actions - Hilltop's book value per common share increased to $34.29 at March 31, 2025, up from $33.71 at December 31, 2024[6]. - The company repurchased 1,046,540 shares of common stock for $33.3 million at an average price of $31.80 per share during Q1 2025[2]. - The dividend payout ratio decreased to 27.62% from 31.08% in the previous quarter, indicating a more conservative approach to dividend distribution[9]. Operational Highlights - The mortgage loan origination production volume remained stable at $1.7 billion for both Q1 2025 and Q1 2024[4]. - Total mortgage loan originations volume for the three months ended March 31, 2025, was $1.742 billion, a decrease of 22.6% from $2.253 billion in the previous quarter[9]. - Hilltop employed approximately 3,640 people and operated 316 locations across 47 states as of March 31, 2025[17]. - The company plans to continue focusing on expanding its business and consumer banking services throughout Texas and beyond[18]. Capital Ratios - PlainsCapital's Tier 1 capital ratio increased to 10.22% as of March 31, 2025, up from 9.99% in the previous quarter[12]. - Hilltop's Common Equity Tier 1 capital ratio reached 21.29% as of March 31, 2025, compared to 21.23% in the previous quarter[12]. Taxation - Hilltop's effective tax rate for Q1 2025 was 22.7%, slightly higher than 22.5% in the same period of 2024[6]. Interest Income - Total interest income for the three months ended March 31, 2025, was $192.799 million, a decrease of 7.57% from $208.590 million in the previous quarter[8]. - Net interest income after provision for credit losses was $95.779 million, compared to $111.336 million in the previous quarter, reflecting a decrease of 14%[8]. - Noninterest income increased to $213.340 million, up 9.06% from $195.590 million in the previous quarter[8]. Loan Sales - The company experienced a net gain from the sale of loans of $45.281 million, an increase from $43.553 million in the previous quarter[8].