Hilltop Holdings(HTH) - 2025 Q2 - Quarterly Results

Financial Performance Overview Hilltop Holdings reported strong Q2 2025 results, marked by increased profitability and effective capital management Second Quarter 2025 Financial Results Hilltop Holdings reported a significant increase in profitability for the second quarter of 2025, with net income to common stockholders reaching $36.1 million, or $0.57 per diluted share | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Income to Common Stockholders | $36.1 million | $20.3 million | | Diluted EPS | $0.57 | $0.31 | - Key drivers for the improved financial results compared to Q2 2024 include: a reversal of credit losses, an increase in net interest income within the banking segment, increased net revenues and noninterest expenses in the broker-dealer segment, and declines in net interest expense, noninterest income, and noninterest expense in the mortgage origination segment[1] Capital Management The company demonstrated a commitment to returning capital to shareholders by declaring a quarterly cash dividend of $0.18 per share and repurchasing $34.9 million of its common stock during the quarter - A quarterly cash dividend of $0.18 per common share was declared, payable on August 29, 2025[2] | Share Repurchase Activity | Value (USD) | | :--- | :--- | | Shares Repurchased in Q2 2025 | 1,157,396 | | Total Cost | $34.9 million | | Average Price per Share | $30.17 | - The stock repurchase program was increased by $35.0 million to a total of $135.0 million, with approximately $67 million of capacity available through January 2026, subject to Federal Reserve non-objection[3] CEO Commentary and Segment Highlights Chairman, President and CEO Jeremy B. Ford highlighted the company's solid performance, including a 1% return on average assets and the return of $47 million to stockholders - PlainsCapital Bank's net interest margin expanded by 19 basis points due to proactive deposit cost management and higher repricing of earning assets[5] - HilltopSecurities achieved a 5% year-over-year increase in net revenue and a pre-tax margin of 5.8%[5] - PrimeLending generated pre-tax income of $3.2 million on $2.4 billion of mortgage origination volume, including a one-time pre-tax benefit of $9.5 million from prior legal settlements[5] Key Financial Highlights and Metrics This section details Hilltop's consolidated and segment-specific financial performance, asset quality, and capital ratios for Q2 2025 Consolidated Performance Highlights Hilltop's consolidated performance in Q2 2025 showed significant improvement over the prior year, with a reversal of credit losses of $7.3 million compared to a $10.9 million provision in Q2 2024 - The company recorded a reversal of credit losses of $7.3 million in Q2 2025, a significant shift from the $10.9 million provision for credit losses in Q2 2024, primarily driven by changes in the U.S. economic outlook[5] | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Return on Average Assets (ROA) | 0.98% | 0.59% | | Return on Average Stockholders' Equity (ROE) | 6.62% | 3.84% | | Book Value per Common Share | $34.90 | $32.86 (at June 30, 2024) | - The consolidated net interest margin increased to 3.01% for Q2 2025, compared to 2.84% in Q1 2025[7] Segment Performance The Banking segment was the main contributor to profitability with $54.9 million in pre-tax income, while Broker-Dealer and Mortgage Origination segments also reported positive pre-tax income | Segment (Q2 2025) | Income (Loss) Before Taxes (USD) | | :--- | :--- | | Banking | $54,928,000 | | Broker-Dealer | $6,397,000 | | Mortgage Origination | $3,210,000 | - Mortgage loan origination volume was $2.4 billion in Q2 2025, consistent with the volume in Q2 2024[7] - The Broker-Dealer segment's pre-tax margin was 5.8% in Q2 2025, a decrease from 6.9% in Q2 2024[10] Asset Quality Asset quality improved during the quarter, with non-accrual loans decreasing to $72.7 million, or 0.80% of total loans, down from $81.5 million (0.93%) in the previous quarter | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Non-accrual loans | $72.7 million | $81.5 million | $105.7 million | | Non-accrual loans as a % of total loans | 0.80% | 0.93% | 1.12% | | Non-performing assets as a % of total assets | 0.53% | 0.56% | 0.70% | Capital Ratios Hilltop maintained robust capital levels as of June 30, 2025, with Tier 1 Leverage Ratio at 13.11% and CET1 Capital Ratio at 20.74%, both well above regulatory requirements | Capital Ratio (Hilltop Consolidated) | June 30, 2025 (%) | | :--- | :--- | | Tier 1 Leverage Ratio | 13.11% | | Common Equity Tier 1 Capital Ratio | 20.74% | | Total Capital (to risk-weighted assets) | 23.38% | Consolidated Financial Statements This section presents Hilltop's consolidated balance sheets, income statements, and net interest margin analysis for Q2 2025 Consolidated Balance Sheets As of June 30, 2025, Hilltop's total assets were $15.4 billion, a slight decrease from $15.8 billion at the end of the prior quarter | Balance Sheet Item | June 30, 2025 (USD Billions) | March 31, 2025 (USD Billions) | | :--- | :--- | :--- | | Total Assets | $15.4 | $15.8 | | Loans held for investment, net | $8.0 | $7.9 | | Total Deposits | $10.4 | $10.8 | | Total Stockholders' Equity | $2.2 | $2.2 | Consolidated Income Statements For the second quarter of 2025, the company generated $110.7 million in net interest income and $192.6 million in noninterest income, contributing to a net income of $36.1 million | Income Statement Item (Q2 2025) | Amount (USD Millions) | | :--- | :--- | | Net Interest Income | $110.7 | | Provision for (reversal of) credit losses | $(7.3) | | Total Noninterest Income | $192.6 | | Total Noninterest Expense | $261.2 | | Income Attributable to Hilltop | $36.1 | Net Interest Margin Analysis The taxable equivalent net interest margin (NIM) expanded to 3.04% in Q2 2025, up from 2.92% in Q2 2024, driven by a reduction in the cost of interest-bearing liabilities | Net Interest Margin Detail | Q2 2025 (%) | Q2 2024 (%) | | :--- | :--- | :--- | | Net Interest Margin (Taxable Equivalent) | 3.04% | 2.92% | | Net Interest Spread | 2.01% | 1.75% | | Yield on Interest-Earning Assets | 5.39% | 5.82% | | Rate on Interest-Bearing Liabilities | 3.38% | 4.07% | Supplementary Information This section provides details on the upcoming conference call and an overview of Hilltop Holdings' business operations Conference Call Information Hilltop Holdings will host a conference call and live webcast to discuss its second quarter 2025 financial results on Friday, July 25, 2025, at 8:00 AM Central Time - The conference call to review Q2 2025 results is scheduled for Friday, July 25, 2025, at 8:00 AM Central (9:00 AM Eastern)[17] About Hilltop Hilltop Holdings is a Dallas-based financial holding company operating primarily through its subsidiaries: PlainsCapital Bank, PrimeLending, and Hilltop Securities Inc - Hilltop is a financial holding company with key business lines in: - Banking: PlainsCapital Bank - Mortgage Lending: PrimeLending - Broker-Dealer: Hilltop Securities Inc. and Momentum Independent Network Inc.[18]