Hilltop Holdings Stock Rises as Q4 Earnings Beat on Higher Fee Income

Core Viewpoint - Hilltop Holdings Inc. reported better-than-expected fourth-quarter 2024 earnings, with a significant increase in net income and non-interest income, despite challenges in net interest income and loan balances [1][2][4]. Financial Performance - Fourth-quarter 2024 earnings per share were 55 cents, exceeding the Zacks Consensus Estimate of 28 cents, and rose 25% year-over-year [1][2]. - Net income attributable to common stockholders was $35.5 million, up 23.9% year-over-year, surpassing the estimate of $17 million [2]. - Total revenues for the fourth quarter were $301.1 million, a 3.7% increase year-over-year, exceeding the Zacks Consensus Estimate of $284.4 million [4]. Revenue and Income Breakdown - In 2024, total revenues were $1.19 billion, slightly down year-over-year but above the Zacks Consensus Estimate of $1.17 billion [4]. - Net interest income (NII) declined 5.2% year-over-year to $105.5 million, below the estimate of $107 million [4][5]. - Non-interest income increased by 9.3% year-over-year to $195.6 million, driven by growth in various components except mortgage loan origination fees [5]. Asset and Deposit Trends - As of December 31, 2024, net loans held for investment were $7.8 billion, showing a slight sequential decline [6]. - Total deposits increased by 2.5% from the previous quarter to $11.1 billion, surpassing the estimate of $10.5 billion [6]. Credit Quality and Provisions - The company recorded a reversal of provision for credit losses of $5.9 million in the fourth quarter, compared to a provision of $1.3 million in the prior-year quarter [7]. - Non-performing assets as a percentage of total assets increased to 0.56%, up 11 basis points from the year-ago quarter [7]. Profitability and Capital Ratios - Return on average assets improved to 0.92%, up from 0.75% in the prior-year quarter [8]. - Return on average stockholders' equity rose to 6.50%, compared to 5.46% in the previous year [8]. - The common equity tier 1 capital ratio increased to 21.23%, up from 19.32% year-over-year [8].