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

Shares of Hilltop Holdings Inc. HTH gained 1.9% in after-market hours on better-than-expected results. Its fourth-quarter 2024 earnings of 55 cents per share handily beat the Zacks Consensus Estimate of 28 cents. Moreover, the bottom line rose 25% from the prior-year quarter.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Results benefited from higher non-interest income and a reversal of provisions. Higher deposits and an improvement in capital ratios were the other positives. However, a decline in net interest income (NII), lower loans and a rise in expenses were spoilsports.Net income attributable to common stockholders was $35.5 million, up 23.9% year over year. Our estimate for the metric was $17 million.In 2024, earnings per share were $1.74, which increased 3% from the previous year and handily surpassed the Zacks Consensus Estimate of $1.47. Net income available to common stockholders was $113.2 million, up 3.3% year over year.Hilltop Holdings’ Revenues Increase, Expenses RiseNet revenues in the fourth quarter were $301.1 million, which rose 3.7% year over year. Further, the top line surpassed the Zacks Consensus Estimate of $284.4 million.In 2024, total revenues were $1.19 billion, down marginally year over year. The top line marginally beat the Zacks Consensus Estimate of $1.17 billion.NII declined 5.2% year over year to $105.5 million. Our estimate for the metric was $107 million.Net interest margin (NIM) (taxable-equivalent basis) was 2.74%, down 24 basis points (bps) year over year. We had expected NIM to be 2.67%.Non-interest income was $195.6 million, up 9.3% year over year. The increase was driven by a rise in all the components except mortgage loan origination fees. We had projected the metric to be $174.8 million.Non-interest expenses rose 4.7% from the prior-year quarter to $262.8 million. We projected total non-interest expenses of $256.8 million.As of Dec. 31, 2024, net loans held for investment were $7.8 billion, down marginally sequentially. Total deposits were $11.1 billion, up 2.5% from the end of the previous quarter. Our estimates for net loans held for investment and total deposits were $7.7 billion and $10.5 billion, respectively.Hilltop Holdings’ Credit Quality: Mixed BagIn the fourth quarter of 2024, Hilltop Holdings recorded a reversal of provision for credit losses of $5.9 million, compared with a provision of $1.3 million from the prior-year quarter.As of Dec. 31, 2024, non-performing assets, as a percentage of total assets, were 0.56%, which increased 11 bps from the year-ago quarter.HTH’s Profitability Ratios & Capital Ratios ImproveReturn on average assets at the end of the reported quarter was 0.92%, up from the prior-year quarter’s 0.75%. The return on average stockholders’ equity was 6.50%, which increased from 5.46%.The common equity tier 1 capital ratio was 21.23% as of Dec. 31, 2024, up from 19.32% in the corresponding period of 2023. The total capital ratio was 24.40%, up from the year-ago period’s 22.34%.Our Take on Hilltop HoldingsHilltop Holdings’ solid balance sheet, business restructuring efforts and improving fee income, along with relatively high rates and decent loan demand, will aid the top line. However, subdued Mortgage Origination segment performance and deteriorating asset quality are woes.Hilltop Holdings Inc. Price, Consensus and EPS Surprise Hilltop Holdings Inc. price-consensus-eps-surprise-chart | Hilltop Holdings Inc. QuoteHilltop Holdings currently carries a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performances of Other BanksProsperity Bancshares Inc.’s PB fourth-quarter 2024 adjusted earnings per share (EPS) of $1.37 beat the Zacks Consensus Estimate of $1.33. Moreover, the bottom line compared favorably with adjusted earnings of $1.19 in the prior-year quarter.PB’s results benefited from an increase in NII and adjusted non-interest income. Further, a rise in deposits was another positive. During the quarter, provisions remained nil. However, a rise in adjusted expenses was a major headwind. Also, a lower loan balance was another negative.East West Bancorp, Inc.’s EWBC fourth-quarter 2024 adjusted EPS of $2.08 lagged the Zacks Consensus Estimate of $2.17. Nonetheless, the bottom line increased 4% from the prior-year quarter’s level.EWBC’s results were primarily aided by an increase in NII and non-interest income, alongside lower non-interest expenses. Also, deposit and loan balances increased sequentially in the quarter. However, higher provisions were a headwind.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hilltop Holdings Inc. (HTH): Free Stock Analysis Report Prosperity Bancshares, Inc. (PB): Free Stock Analysis Report East West Bancorp, Inc. (EWBC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks