Category: HTH

HTH – Hilltop Holdings (HTH) Q2 Earnings Beat, Revenues & Costs Decline

Hilltop Holdings Inc.’s (HTH Free Report) second-quarter 2021 earnings from continuing operations of $1.21 per share easily surpassed the Zacks Consensus Estimate of $1.09. Also, the bottom line reflects a 12% rise from the prior-year quarter’s $1.08.

Results benefited from fall in expenses, partly offset by the decline in revenues. Nonetheless, deposits balance improved during the second quarter. Provision benefit and improving capital ratios also acted as tailwinds.

Net income applicable to common stockholders was $99.1 million, down 22.9% from the $128.5 million recorded in the prior-year quarter.

Revenues Fall, Expenses Decline

Net revenues came in at $447.8 million, declining 21.8% year over year. In addition, the figure missed the Zacks Consensus Estimate of $503.4 million.

Net interest income climbed 3.2% from the year-ago quarter to $107.9 million. Yet, net interest margin (taxable equivalent basis) was 2.63%, contracting 18 basis points (bps) from the prior-year quarter.

Non-interest income was $339.9 million, down 27.4% from the prior-year quarter. This fall resulted from the decrease in net gains from sale of loans and other mortgage production income, declining mortgage loan origination fees and other income.

Non-interest expenses shrunk 7.3% from the year-ago quarter to $343.4 million. This drop was due to a decrease in employees’ compensation and benefits costs, and decline in the net occupancy and equipment cost.

Credit Quality Improves

Provisions for credit losses were a benefit of $28.7 million against the provision of $66 million seen in the prior-year quarter. Further, as of Jun 30, 2021, non-performing assets as a percentage of total assets was 0.51%, down 6 bps from the prior-year quarter.

Balance Sheet Position

As of Jun 30, 2021, Hilltop Holdings’ cash and due from banks were $1.37 billion, down 12.3% from the previous quarter. Net loans held for investment were $7.53 billion, down 1.8% from the prior-quarter end.

However, total deposits were $11.73 billion, marginally upward from the prior quarter. Total shareholders’ equity was $2.5 billion, up 2% sequentially.

Profitability Decline, Capital Ratios Improve

Return on average assets at the end of the reported quarter was 2.29%, down from the prior-year quarter’s 3.30%. Also, return on average equity was 16.42%, down from the year-earlier quarter’s 23.32%.

Common equity tier 1 capital ratio was 20.22% as of Jun 30, 2021, up from 18.46% witnessed in the corresponding period of 2020. Additionally, total capital ratio was 23.48%, reflecting a rise from the year-ago period’s 21.82%.

Share Repurchase Update

During the second quarter, the company repurchased 1,240,843 shares at an average price of $35.85 per share.

Our Take

Hilltop Holdings’ restructuring efforts to diversify business as a profitable banking operation are commendable. However, pressure on margins, due to near-zero interest rates, is a concern as it might hurt the top line in the near term.

Hilltop Holdings currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Zions Bancorporation’s (ZION Free Report) second-quarter 2021 net earnings per share of $2.08 topped the Zacks Consensus Estimate of $1.25. The bottom line marked a significant improvement from the 34 cents earned in the year-ago quarter.

BOK Financial’s (BOKF Free Report) earnings per share of $2.40 handily surpassed the Zacks Consensus Estimate of $1.84. The bottom line compared favorably with the prior-year quarter’s 92 cents.

First Horizon National (FHN Free Report) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of $0.43. The figure also compared favorably with the year-earlier quarter’s earnings of $0.20 per share.

HTH – Hilltop Holdings (HTH) Beats Q2 Earnings Estimates

Hilltop Holdings (HTH Free Report) came out with quarterly earnings of $1.21 per share, beating the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 11.01%. A quarter ago, it was expected that this insurance holding compnay would post earnings of $1.09 per share when it actually produced earnings of $1.46, delivering a surprise of 33.94%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Hilltop Holdings, which belongs to the Zacks Banks – Southeast industry, posted revenues of $447.82 million for the quarter ended June 2021, missing the Zacks Consensus Estimate by 11.04%. This compares to year-ago revenues of $572.68 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Hilltop Holdings shares have added about 21.9% since the beginning of the year versus the S&P 500’s gain of 16%.

What’s Next for Hilltop Holdings?

While Hilltop Holdings has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Hilltop Holdings was favorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.76 on $441.45 million in revenues for the coming quarter and $3.71 on $1.87 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks – Southeast is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

HTH – Hilltop Holdings (HTH) Surpasses Q1 Earnings and Revenue Estimates

Hilltop Holdings (HTH Free Report) came out with quarterly earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.09 per share. This compares to earnings of $0.51 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 33.94%. A quarter ago, it was expected that this insurance holding compnay would post earnings of $1.28 per share when it actually produced earnings of $1.30, delivering a surprise of 1.56%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Hilltop Holdings, which belongs to the Zacks Banks – Southeast industry, posted revenues of $523.27 million for the quarter ended March 2021, surpassing the Zacks Consensus Estimate by 10.15%. This compares to year-ago revenues of $382.05 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Hilltop Holdings shares have added about 18.4% since the beginning of the year versus the S&P 500’s gain of 10.1%.

What’s Next for Hilltop Holdings?

While Hilltop Holdings has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Hilltop Holdings was favorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.98 on $469.13 million in revenues for the coming quarter and $3.10 on $1.76 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks – Southeast is currently in the top 6% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

HTH – Hilltop Holdings (HTH) Surpasses Q4 Earnings and Revenue Estimates

Hilltop Holdings (HTH Free Report) came out with quarterly earnings of $1.30 per share, beating the Zacks Consensus Estimate of $1.28 per share. This compares to earnings of $0.54 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 1.56%. A quarter ago, it was expected that this insurance holding compnay would post earnings of $0.89 per share when it actually produced earnings of $1.69, delivering a surprise of 89.89%.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Hilltop Holdings, which belongs to the Zacks Banks – Southeast industry, posted revenues of $555.30 million for the quarter ended December 2020, surpassing the Zacks Consensus Estimate by 5.88%. This compares to year-ago revenues of $410.56 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings call.

Hilltop Holdings shares have added about 17.8% since the beginning of the year versus the S&P 500’s gain of 2.5%.

What’s Next for Hilltop Holdings?

While Hilltop Holdings has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Hilltop Holdings was favorable. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.93 on $431.90 million in revenues for the coming quarter and $2.59 on $1.67 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Banks – Southeast is currently in the top 6% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

HTH – Why Is Hilltop Holdings (HTH) Up 7.2% Since Last Earnings Report?

It has been about a month since the last earnings report for Hilltop Holdings (HTH Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Hilltop Holdings due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Hilltop Holdings Q3 Earnings & Revenues Beat Estimates

Hilltop Holdings’ third-quarter 2020 earnings from continuing operations of $1.69 per share comfortably beat the Zacks Consensus Estimate of 89 cents. Also, the bottom line compares favorably with the prior-year quarter’s earnings of 81 cents.

Results reflect an improvement in revenues aided by growth in non-interest income and a healthy balance-sheet position. Further, provision benefit was a tailwind. However, fall in net interest income and higher expenses were major headwinds.

Net income applicable to common stockholders was $153.3 million, up 93.1% from the prior-year quarter.

Revenues Improve, Costs Rise

Net revenues came in at $604.6 million, increasing 44.3% year over year. Moreover, the revenue figure surpassed the Zacks Consensus Estimate of $469.6 million.

Net interest income was $101.9 million, down 9.5% from the prior-year quarter. Net interest margin (taxable equivalent basis) came in at 2.57%, contracting 89 basis points (bps) from the prior-year quarter.

Non-interest income surged 64% from the year-ago quarter to $502.7 million. This was largely driven by a rise in all fee income components, except securities commissions and fees.

Non-interest expenses flared up 24.3% from the year-ago quarter to $399.3 million. This upswing mainly resulted from rise in employees’ compensation and benefits costs and other costs.

Credit Quality Improves

Provision for loan losses witnessed a reversal of $602,000 compared with the provision of credit losses of $47,000 in the prior-year quarter. The reversal of credit losses mainly reflected changes in reserves on margin loans within the broker-dealer segment.

Non-performing assets as a percentage of total assets were 0.64%, down 27 bps. Also, non-performing loans were $82.1 million as of Sep 30, 2020, up significantly from the $35.5 million recorded in the comparable period of 2019.

Balance Sheet: A Mixed Bag

As of Sep 30, 2020, Hilltop Holdings’ cash and due from banks was $1.3 billion, down 22.3% from the prior quarter. Total shareholders’ equity was $2.4 billion, up 6.4% sequentially.

As of Sep 30, 2020, net loans held for investment inched up 1.3% sequentially to $7.8 billion. However, total deposits were $11.3 billion, down 3.3% from the prior quarter.

Profitability & Capital Ratio Improve

Return on average assets at the end of the reported quarter was 3.71%, up from the prior-year quarter’s 2.26%. Also, return on average equity was 25.94%, up from the year-earlier quarter’s 15.55%.

Common equity tier 1 capital ratio was 19.85% as of Sep 30, 2020, up from 16.15% in the corresponding period of 2019. Moreover, total capital ratio was 23.22%, reflecting a rise from the prior-year quarter’s 16.95%.

2020 Outlook

Management expects average loans held for investment (HFI) to grow, mainly driven by Payment Protection Program (PPP) loans. Construction & industrial (C&I) and commercial real estate (CRE) loan demand expected to remain soft into 2021.

Customer deposit inflows are likely to continue, though at a slower pace than third-quarter 2020. Further, brokered deposits are expected to decline $300-$500 million by year-end.

Purchase account accretion (PAA) is expected to decline 25-35% on a year-over-year basis. The company expects revenues from purchase loan accretion to decline as the previously purchased portfolio continue to run off. Further, the same will average $2-$4 million per quarter over the coming quarters.

Further, NII is expected to decline due to fall in interest rates, weak loan demand and a relatively flat yield curve.

Mortgage volumes are anticipated to stabilize gradually in the remainder of 2020. The gain on sale margins in mortgage business will remain elevated during the fourth quarter and likely be within the 430-450 bps range through year end.

In terms of non-interest expenses, non-variable expenses are expected to be stable, while variable expenses will depend on the revenues generated from fee businesses.

The company expects a further increase in credit reserves given the changes in the economic backdrop.

Effective tax rate (GAAP basis) is anticipated to be 22-24%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 85.07% due to these changes.

VGM Scores

At this time, Hilltop Holdings has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren’t focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hilltop Holdings has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.