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Jun 30, 2024
Hilltop Q2 2024 Earnings Report
Hilltop Holdings' financial performance was solid, marked by strategic balance sheet management and improved profitability in key segments.
Key Takeaways
Hilltop Holdings reported a net income of $22.9 million and EPS of $0.31. The company experienced growth in noninterest income and managed to reduce noninterest expenses. PlainsCapital Bank and PrimeLending showed pre-tax income, while HilltopSecurities also contributed positively with a pre-tax income of $7.2 million.
PlainsCapital Bank's pre-tax income was $32.8 million, with net interest margin increasing due to loan portfolio repricing and return of higher cost brokered deposits.
PrimeLending's pre-tax income reached $1.4 million, driven by higher gain-on-sale margins and origination volume growth.
HilltopSecurities generated $7.2 million in pre-tax income, supported by a net revenue of $104.3 million.
Hilltop returned $21 million to shareholders through dividends and share repurchases.
Hilltop
Hilltop
Forward Guidance
Hilltop Holdings provided outlook for 2024, expecting stable bank loans, deposit growth decline of 0% - 3%, NII decline of 6% - 10%, mortgage origination volume of $8B - $10B, broker dealer fees decrease 0% - 5%, non-variable expenses decline 1% - 3%, provision / average loans HFI of 20 – 40 bps, and effective tax rate of 22% – 24%.
Positive Outlook
- Full year average Bank loans (excluding retained mortgages and mortgage warehouse lending) remain stable with prior year levels
- Expect to retain $0 – $20 million per month of originated mortgages
- Mortgage origination noninterest income is expected to remain relatively stable with prior year
- Non-variable expenses are expected to decline by 1% – 3%
- Variable expenses are projected to follow revenue contribution from fee businesses
Challenges Ahead
- Expecting a decline of 0% – 3% in deposit growth due to elevated market pricing and competition
- Migration of NIB deposits expected to continue into IB products
- Expecting NIB to comprise 25% – 28% of total deposits at year-end 2024
- NII is expected to decline by 6% – 10% due to higher average deposits costs in 2024
- Broker Dealer fees are anticipated to decrease by 0% – 5%