Hilltop (HTH) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $20.3 million ($0.31 per diluted share), up from $18.1 million in Q2 2023, with ROAA of 0.59% and ROAE of 3.84%.

• All business segments posted profitable pre-tax results, with PlainsCapital Bank leading at $32.8 million.

• Tangible book value per share rose to $28.63, and $21 million was returned to shareholders via dividends and buybacks.

• Board declared a $0.17 per share quarterly dividend, payable August 30, 2024.

• Repurchased 320,000 shares for $9.9 million; $55 million repurchase capacity remains through January 2025.

Financial highlights

• Net interest income was $103.7 million, down 12% year-over-year, mainly due to higher deposit costs.

• Noninterest income rose 1% year-over-year to $193.3 million; noninterest expense fell 3.9% to $256.5 million.

• Allowance for credit losses increased to $115 million, or 1.41% of loans, mainly due to downgrades in auto lending.

• Book value per share increased to $32.86 at June 30, 2024; tangible book value per share was $28.63.

• Return on average assets was 0.59% and return on average equity was 3.84%.

Outlook and guidance

• Loan growth expected to be challenged in the second half of 2024, with full-year average loans projected to remain stable, excluding mortgage warehouse lending.

• Deposit growth expected to decline 0–3% for 2024, with core deposits stable or modestly up, and NIB deposits to comprise 25–28% of total.

• Net interest income projected to decline 6–10% for 2024, with deposit costs as the key variable.

• Management expects continued economic headwinds, including uncertain interest rate movements, inflation, and competition for deposits.

• Mortgage origination noninterest income expected to remain stable; broker dealer fees to decrease up to 5%.