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Mar 31, 2021
Hilltop Q1 2021 Earnings Report
Hilltop's financial performance significantly improved, driven by growth in net income and earnings per share.
Key Takeaways
Hilltop Holdings reported a strong first quarter in 2021, marked by significant growth in net income and diluted earnings per share. The company benefited from increased mortgage origination volume and gain-on-sale margins, as well as a reversal of provision for credit losses. Strong capital levels were maintained, and book value per share saw substantial growth.
Net income increased to $120.3 million, reflecting a substantial rise from the previous year.
Earnings per share (EPS) diluted rose to $1.46, showcasing strong profitability.
Mortgage origination volume increased by 71% compared to Q1 2020, contributing to revenue growth.
A $5.1 million reversal of provision for credit losses boosted banking pre-tax income.
Hilltop
Hilltop
Hilltop Revenue by Segment
Revenue by Segment
Banking Revenue
CapyFin.comBroker-Dealer Revenue
CapyFin.com Forward Guidance
Hilltop Holdings provided commentary on expected performance for the full year 2021, including loan and deposit growth, net interest income, noninterest income, noninterest expense, provision expense, and effective tax rate.
Positive Outlook
- Expects 0-3% HFI loan growth.
- Deposit growth expected to align with loan growth, excluding PPP and government stimulus.
- Deposit costs expected to improve slowly as Consumer CDs mature and reset.
- Non-variable expenses to remain stable with 2020 levels.
- Variable expenses will follow revenue contribution from fee businesses.
Challenges Ahead
- Loan yields expected to remain under pressure, excluding accelerated PPP fees.
- Purchase accounting accretion expected to decline by >40% versus 2020 levels.
- Gain on Sale margins pressured as volumes decline across the industry, expecting FY Average margin of 360 – 385 bps.
- Provision expense expected to be elevated in the second half of the year as charge-offs expected to increase.
- Mortgage volume shifting to a “purchase” focused market during last three quarters of 2021