Hilltop Holdings(US:HTH)2025-04-28 20:30Financial 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]