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Hilltop Holdings (HTH) Q1 Earnings Beat, Revenues Surge Y/Y

Hilltop Holdings Inc.’s HTH first-quarter 2021 earnings from continuing operations of $1.46 per share easily surpassed the Zacks Consensus Estimate of $1.09. Also, the bottom line reflects a significant rise from the prior-year quarter’s 51cents.

Results benefited from growth in revenues, partly offset by higher expenses. Further, loans and deposits balance improved during the quarter. Moreover, provision benefit and improving capital ratios were tailwinds.

Net income applicable to common stockholders was $120.3 million, up significantly from the $49.6 million recorded in the prior-year quarter.

Revenues Improve, Expenses Rise

Net revenues came in at $523.3 million, jumping 37% year over year. In addition, the figure surpassed the Zacks Consensus Estimate of $475 million.

Net interest income was $105.7 million, down 4.2% from the prior-year quarter. Net interest margin (taxable equivalent basis) was 2.69%, contracting 73 basis points (bps) from the prior-year quarter.

Non-interest income surged 53.7% from the year-ago quarter to $417.6 million. This upside resulted from an increase in all fee income components except securities commissions and fees.

Non-interest expenses flared up 30% from the year-ago quarter to $366.7 million. This rise was due to an increase in all cost components except for professional services.

Credit Quality Improves

Provisions for credit losses were a benefit of $5.1 million against the provision of $34.5 million in the prior-year quarter. Further, as of Mar 31, 2021, non-performing assets as a percentage of total assets was 0.56%, down 11 bps from the prior-year quarter.

Strong Balance-Sheet Position

As of Mar 31, 2021, Hilltop Holdings’ cash and due from banks were $1.56 billion, up 47.2% from the previous quarter. Net loans held for investment were $7.67 billion, up 1.6% from the prior-quarter end.

Further, total deposits were $11.73 billion, up 4.4% from the prior quarter. Total shareholders’ equity was $2.45 billion, up 4% sequentially.

Profitability & Capital Ratios Improve

Return on average assets at the end of the reported quarter was 2.90%, up from the prior-year quarter’s 1.47%. Also, return on average equity was 20.58%, up from the year-earlier quarter’s 9.38%.

Common equity tier 1 capital ratio was 19.63% as of Mar 31, 2021, up from 15.96% in the corresponding period of 2020. Additionally, total capital ratio was 22.96%, reflecting a rise from the year-ago period’s 17.00%.

Share Repurchase Update

During the first quarter, the company repurchased 149,878 shares at an average price of $33.01 per share.

Our Take

Hilltop Holdings’ deposit mix, along with its increased focus on improving fee income, will likely continue supporting the top line. The company's business-restructuring efforts to diversify operations as a profitable banking operation are commendable. However, mounting expenses and near-zero interest rates are concerns.

Hilltop Holdings Inc. Price, Consensus and EPS Surprise

Hilltop Holdings Inc. price-consensus-eps-surprise-chart | Hilltop Holdings Inc. Quote

Hilltop Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Banks

Zions Bancorporation’s ZION first-quarter 2021 net earnings per share of $1.90 topped the Zacks Consensus Estimate of $1.15. Also, the bottom line marked a significant improvement from the 4 cents earned in the year-ago quarter.

BOK Financial’s BOKF earnings per share of $2.10 handily surpassed the Zacks Consensus Estimate of $1.92. Further, the bottom line compared favorably with the prior-year quarter’s 88 cents.

First Horizon National Corporation’s FHN adjusted earnings per share of 51 cents beat the Zacks Consensus Estimate of 37 cents. In addition, the bottom line showed significant improvement from the prior-year quarter’s 5 cents.

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BOK Financial Corporation (BOKF): Free Stock Analysis Report
 
Hilltop Holdings Inc. (HTH): Free Stock Analysis Report
 
Zions Bancorporation, N.A. (ZION): Free Stock Analysis Report
 
First Horizon Corporation (FHN): Free Stock Analysis Report
 
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