Hilltop Holdings(US:HTH)2024-10-25 20:31Financial Performance - Net income for the three months ended September 30, 2024, was $32.9 million, a decrease of 16.2% from $39.3 million in the same period of 2023[186]. - Diluted earnings per common share for the three months ended September 30, 2024, was $0.46, compared to $0.57 in the same period of 2023, reflecting a decrease of 19.3%[185]. - Income applicable to common stockholders for the three months ended September 30, 2024, was $29.7 million, or $0.46 per diluted share, down from $37.0 million, or $0.57 per diluted share, in the same period of 2023[211]. - The efficiency ratio for Q3 2024 increased to 55.20% from 51.38% in Q3 2023, indicating a decline in profitability[232]. - Return on average stockholders' equity decreased to 5.51% for the three months ended September 30, 2024, down from 7.11% in the same period of 2023[214]. - Return on average assets for Q3 2024 was 1.14%, slightly down from 1.20% in Q3 2023[232]. Asset and Liability Management - Total assets decreased to $15.93 billion as of September 30, 2024, down from $16.47 billion at the end of 2023, representing a decline of 3.2%[190]. - Total liabilities as of September 30, 2024, were $13,573,402 thousand, a decrease from $14,500,839 thousand as of the same date in 2023[226]. - The total loans held for investment amounted to $7.98 billion as of September 30, 2024, with a total allowance for credit losses of $110.92 million[333]. - Interest-earning assets decreased from $15.19 billion in September 2023 to $14.68 billion in September 2024[217]. - The average interest-earning assets decreased to $12.15 billion in the nine months ended September 30, 2024, from $12.76 billion in the same period of 2023[234]. Credit Losses and Allowances - The allowance for credit losses was $110.9 million as of September 30, 2024, slightly down from $111.4 million at the end of 2023[186]. - The provision for credit losses for the three months ended September 30, 2024, was a reversal of $(1,440) thousand, compared to an expense of $675 thousand in the same period of 2023, reflecting a variance of $(2,115) thousand[226]. - The allowance for credit losses as a percentage of the total loan portfolio was 1.51% as of September 30, 2024, compared to 1.47% as of December 31, 2023[331]. - The total allowance for credit losses was $110,918 million as of September 30, 2024, compared to $111,413 million at the end of the previous period[344]. - The company experienced a reversal of credit losses of $2.5 million during the three months ended September 30, 2024, and $6.5 million during the nine months ended September 30, 2024[329]. Segment Performance - The banking segment contributed $48.1 million to income before income taxes for the three months ended September 30, 2024, while the mortgage origination segment incurred losses of $8.7 million[187]. - The mortgage origination segment reported a net loss of $4.4 million for the three months ended September 30, 2024, compared to a loss of $5.5 million in the same period of 2023, reflecting a 19% improvement[205]. - The broker-dealer segment generates a majority of its revenues from fees and commissions earned from investment advisory and securities brokerage services[202]. - Noninterest income increased by 2% to $200.4 million for the three months ended September 30, 2024, compared to $196.8 million in the same period of 2023[211]. - The corporate segment reported a significant increase in noninterest income, rising by 57% to $4.9 million for the three months ended September 30, 2024, compared to $3.2 million in the same period of 2023[209]. Economic Outlook and Market Conditions - The company anticipates that economic conditions, including changes in U.S. Treasury yields and mortgage interest rates, will continue to impact financial performance[191]. - The company expects inflationary pressures to continue, resulting in higher fixed costs during the remainder of 2024[223]. - The economic outlook indicates elevated borrowing costs and concerns about international conflicts, which may adversely impact business and consumer sentiment[327]. - The company expects ongoing economic headwinds to impact financial performance, influenced by factors such as U.S. Treasury yields and inflationary pressures[364]. - The company anticipates that competitive pressures and broader economic conditions will continue to influence deposit costs throughout 2024[228]. Capital Management - The board of directors declared a quarterly cash dividend of $0.17 per common share, payable on November 22, 2024[365]. - The board of directors authorized a new stock repurchase program of up to $75.0 million through January 2025, with $19.9 million spent to repurchase 640,042 shares at an average price of $31.04 per share during the nine months ended September 30, 2024[366]. - As of September 30, 2024, PlainsCapital's Tier 1 capital ratio was 10.34%, while Hilltop's was 12.95%, both exceeding the minimum capital requirements[371]. - Hilltop's Common Equity Tier 1 capital ratio was 20.48% as of September 30, 2024, significantly above the regulatory minimum of 7.0%[371]. - Total capital to risk-weighted assets for Hilltop was 23.68% as of September 30, 2024, well above the minimum requirement of 10.5%[371]. Stock and Shareholder Returns - Cash dividends declared per common share increased to $0.17 for the quarter, up from $0.16 in the previous quarter, with a total of $33.2 million paid in dividends during the nine months ended September 30, 2024[187]. - The company repurchased 640,042 shares of common stock at an average price of $31.04 per share, totaling $19.9 million under the stock repurchase program[188]. - The cumulative interest-bearing deposit pricing beta approximated 68%, indicating a significant response to changes in market interest rates[355]. Regulatory and Compliance - The company is subject to various regulatory capital requirements, and failure to meet these could adversely affect its financial condition[369]. - The bank's underwriting procedures are designed to ensure a return on stockholders' equity sufficient to maintain capital ratios that meet or exceed established regulations[323]. - The company is monitoring potential impairment indicators, including economic conditions and performance of its reporting segments[195].