Hilltop Holdings Q3 Earnings Beat on Y/Y Increase in Revenues

Core Insights - Hilltop Holdings Inc. (HTH) reported third-quarter 2025 earnings of 74 cents per share, exceeding the Zacks Consensus Estimate of 49 cents, with a year-over-year increase of 60.9% [1][9] - The company's net income attributable to common stockholders was $45.8 million, reflecting a 54.3% increase year over year, surpassing the estimate of $27.9 million [2] - Key drivers of revenue growth included higher net interest income (NII) and non-interest income, while increased non-interest expenses posed a challenge [1][9] Revenue and Income - Net revenues for the third quarter reached $330.2 million, an 8.1% increase year over year, exceeding the Zacks Consensus Estimate of $308.3 million [3] - NII rose by 7% year over year to $112.4 million, slightly above the estimate of $111 million, with a net interest margin (NIM) of 3.09%, expanding 24 basis points year over year [3] - Non-interest income was $217.8 million, up 8.7% year over year, driven by increases across all components except mortgage loan origination fees, surpassing the projected $197 million [4] Expenses and Loans - Non-interest expenses increased by 2.9% year over year to $271.9 million, higher than the projected $264.7 million [4] - As of September 30, 2025, net loans held for investment were $8.1 billion, up 2.1% sequentially, while total deposits reached $10.7 billion, a 2.7% increase from the previous quarter [5] Credit Quality - The company recorded a reversal of credit losses of $2.5 million in the third quarter, compared to $1.3 million in the prior-year quarter [6] - Non-performing assets as a percentage of total assets decreased to 0.49%, down 10 basis points from the year-ago quarter [6] Profitability and Capital Ratios - Return on average assets improved to 1.20%, up from 0.84% in the prior-year quarter, while return on average stockholders' equity rose to 8.35% from 5.51% [7] - Common equity tier 1 capital ratio was 20.33%, down from 20.48% in the corresponding period of 2024, and total capital ratio decreased to 22.90% from 23.68% year over year [7] Share Repurchase - In the reported quarter, the company repurchased shares worth $55.1 million at an average price of $32.36 per share, with an increase in the repurchase authorization to $185 million approved by the board in October [10] Overall Assessment - The company's restructuring efforts and improving fee income, along with decent loan demand, are expected to support revenue growth, although concerns remain regarding the performance of the mortgage origination segment and asset quality [11]