Hilltop (HTH) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 rose to $42.1 million ($0.65 per diluted share), up from $27.7 million ($0.42 per share) in Q1 2024, driven by a significant merchant bank investment gain and improved efficiency.

• Return on average assets was 1.13% and return on average equity was 7.82%, both up year-over-year.

• PlainsCapital Bank delivered $40.1 million pre-tax income; PrimeLending posted a pre-tax loss of $8.3 million; HilltopSecurities generated $9.2 million pre-tax income.

• Nonrecurring after-tax income of $28.7 million, or $0.44 per share, from a merchant banking investment sale and insurance recovery.

• Board declared a $0.18 per share dividend and repurchased 1,046,540 shares for $33.3 million at an average price of $31.80 per share.

Financial highlights

• Net interest income was $105.1 million, up 1% year-over-year; noninterest income rose 17% to $213.3 million, including a $30.5 million pre-tax gain from a merchant bank investment sale.

• Noninterest expenses were $251.5 million, up 1% year-over-year; efficiency ratio improved to 79.0%.

• Book value per share increased to $34.29, and tangible book value per share to $30.02.

• Allowance for credit losses at 1.33% of loans HFI; provision for credit losses was $9.3 million.

• End-of-period assets were $15.8 billion; loans HFI $7.9 billion; deposits $10.8 billion.

Outlook and guidance

• Full-year average bank loans expected to grow 0–3%; average deposits projected to increase 2–5%.

• Net interest income expected to rise 0–2%, assuming two Fed rate cuts in 2025.

• Mortgage origination volume forecast at $8–$9.5 billion; broker-dealer fees to grow 1–4%.

• Provision expense expected at 25–40 bps of average loans HFI; effective tax rate 22–24%.

• Management expects continued economic headwinds, including interest rate volatility, inflation, and geopolitical risks.