Hilltop Holdings Inc. (HTH) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals solid financial performance with increased net income, improved loan origination, and strategic share repurchases. Despite some uncertainties, such as muted mortgage demand and economic conditions, the company's optimistic guidance and strategic investments in technology and client-facing resources are positive indicators. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
Key Financial Performance
Net Income $38 million or $0.64 per diluted share, with a return on average assets of 1% and return on average equity of 7.1%. Year-over-year changes were not explicitly mentioned.
PlainsCapital Bank Pretax Income $47 million with a 1.2% return on average assets. Net interest income increased by $8 million year-over-year due to a favorable 3.38% net interest margin and a robust loan pipeline.
PrimeLending Pretax Loss $2 million, an improvement driven by year-over-year increases in loan origination volumes and gain on sale margins, as well as cost structure enhancements implemented in 2025.
HilltopSecurities Pretax Income $15 million on net revenue of $116 million, with a pretax margin of 12.7%. Fixed income services net revenue increased by 58% year-over-year, contributing to a 60% improvement in pretax income.
Common Equity Tier 1 Capital Ratio 19.1%, with tangible book value per share increasing to $31.97. $11.8 million was returned to stockholders through dividends, and $47.5 million in shares were repurchased.
Allowance for Credit Losses Declined by $2.5 million to $89 million, attributed to improved credit quality, positive credit rating migration, payoffs, and new loan growth.
Net Interest Income $112 million, a 6.7% increase year-over-year, driven by lower deposit costs and 5% year-over-year average HFI loan growth at PlainsCapital Bank.
Total Deposits $10.6 billion on average, declining by less than 1% quarter-over-quarter. Ending balance deposits declined by $347 million due to seasonal distributions.
Noninterest Income $188 million, with mortgage-related income and fees increasing by $5 million year-over-year due to 16% growth in loan origination volumes. Revenue from principal transactions, commissions, and fees increased by $11.2 million.
Noninterest Expenses $248 million, declining by $3 million year-over-year due to streamlining operations and improved productivity offsetting inflationary pressures.
Average HFI Loans $8.3 billion, growing by $218 million or 2.7% quarter-over-quarter, with solid activity in commercial loan pipelines.
Net Charge-Offs $4.3 million, primarily from $3.6 million in auto note finance credits. Nonperforming assets increased modestly due to one commercial real estate credit.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Net interest margin expansion: PlainsCapital Bank reported a favorable 3.38% net interest margin, supported by a robust loan pipeline and active deposit portfolio management. This led to an $8 million increase in net interest income compared to Q1 2025.
Loan origination growth: PrimeLending experienced a 16% year-over-year increase in loan origination volumes, contributing to improved financial results despite ongoing challenges in the mortgage market.
Fixed income services growth: HilltopSecurities' fixed income services delivered $14 million in net revenue, a 58% increase compared to Q1 2025, driven by strong sales volumes.
Cost structure enhancements: PrimeLending implemented cost structure enhancements in 2025, which contributed to narrowing its operating loss in Q1 2026.
Deposit cost management: Hilltop achieved a 20 basis point decline in total interest-bearing deposit costs, reflecting prudent management of deposit levels and costs.
Streamlined operations: Efforts to streamline operations and improve productivity have resulted in stable noninterest expenses, offsetting inflationary pressures.
Loan portfolio growth strategy: PlainsCapital Bank aims to grow core loans and deposits by recruiting talented bankers and expanding its customer base with value-enhancing products and services.
Mortgage retention strategy: Hilltop plans to retain $10 million to $30 million of mortgages originated by PrimeLending per month to support loan portfolio growth.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Credit Risks: The company faces credit risks, including a $1.8 million provision expense driven by a stressed auto note credit and $3.6 million in net charge-offs related to the auto note finance credits. Additionally, there is a modest increase in nonperforming assets due to negative migration of a commercial real estate credit.
Interest Rate Volatility: Persistent volatility in long-term interest rates creates uncertainty around mortgage production volumes and profitability, particularly for PrimeLending. This is compounded by the interest rate lock-in effect and affordability challenges for homebuyers.
Macroeconomic and Geopolitical Uncertainty: The macroeconomic environment, including geopolitical conflicts such as the Iran conflict, higher energy prices, and inflation, could negatively impact credit quality, mortgage demand, and overall economic conditions.
Competitive Pressures: The company faces competitive pressures in deposit pricing and treasury management services, which could escalate and impact interest-bearing deposit costs and customer retention.
Seasonal Volatility in Deposits: Seasonal distributions from public entity and commercial clients have led to a decline in deposit balances, which could impact liquidity and funding stability.
Mortgage Business Profitability: PrimeLending's profitability remains under pressure due to structural challenges in the housing market, including affordability issues and the impact of prevailing mortgage rates.
Volatility in Fixed Income and Structured Finance: HilltopSecurities' fixed income services and structured finance businesses are subject to volatility from interest rates, market liquidity, and production trends, which could impact revenue stability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Core Loan Growth: The bank is poised to deliver continued core loan growth by organically recruiting talented bankers and expanding the existing customer base with value-enhancing products and services.
Core Deposits: Core deposits are expected to grow year-over-year, with modest seasonal volatility anticipated.
Operating Environment for PlainsCapital Bank: A healthy Texas economy and a constructive yield curve are expected to provide a favorable operating environment.
Mortgage Business Outlook: Spring and summer months are expected to drive elevated origination volumes, but persistent volatility in long-term interest rates creates uncertainty around second and third quarter production. Overall volumes are anticipated to be materially impacted by prevailing mortgage rates.
Mortgage Production Volume: The company maintains its mortgage production volume expectation at $9 billion to $10 billion for the year.
Gain on Sale Margins: Gain on sale margins are expected to remain relatively stable at current levels.
Net Interest Income (NII) and Net Interest Margin (NIM): Future NII and NIM are expected to benefit from a continued mix shift towards core loans and away from excess cash levels. Estimates reflect expectations of two additional Federal Reserve rate reductions in 2026.
Deposit Growth: Deposits are expected to stabilize and grow throughout the second half of 2026.
Noninterest Expenses: Expenses, excluding variable compensation, are expected to remain relatively stable due to ongoing efforts to streamline operations and improve productivity.
Average HFI Loan Growth: Full-year average HFI loan growth is expected to range between 4% and 6%.
Mortgage Retention: The company expects to retain between $10 million and $30 million in mortgages per month in the coming quarters.
Credit Monitoring: The company is closely monitoring credit portfolios for potential impacts from higher interest rates, international conflicts, and higher energy prices.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Dividends: During the period, we returned $11.8 million to stockholders through dividends.
Share Repurchase: Repurchased $47.5 million in shares.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What is the reason for the increase in the NII range guidance?
A:The increase in the NII range guidance is due to solid loan growth, improved deposit beta of 74% through the cycle, and favorable loan yields of about 6.5% during the quarter.
Q:Will the company continue share buybacks, and what is the priority of M&A in capital allocation?
A:The company plans to continue share buybacks with an authorization of $125 million for the year, depending on market conditions. M&A remains a priority if there is a strategic fit or a financially compelling transaction.
Q:What are the expectations for mortgage volume for the remainder of the year?
A:The company is keeping its mortgage volume guidance unchanged but notes muted demand in March and after overseas conflicts. They are cautiously optimistic and may move to the lower end of the guidance range depending on market recovery.
Q:What are the rate assumptions for the NII guidance and other business segments?
A:The company assumes two additional rate cuts across all businesses. If no cuts occur, NII could increase by $8 million to $10 million, with a slightly improved revenue perspective in HilltopSecurities.
Q:What drove the net interest margin (NIM) performance this quarter, and how sustainable is it?
A:The NIM performance was driven by lower interest-bearing deposit costs and a 74% deposit beta. The company expects NIM to remain flat or modestly down, considering competitive intensity and potential Fed rate changes.
Q:What are the factors influencing the non-variable expenses guide of 0% to 2% growth?
A:The guide includes normal inflationary increases in personnel and technology costs, investments in client-facing resources, and technology advancements like AI. The company aims to maintain stable expenses while making strategic investments.
Q:What is the impact of deposit competition, and how does the company view consumer health through 2026?
A:Deposit competition remains robust but rational. The company has not observed irrationally high rates from competitors. They did not provide specific insights into consumer health through 2026.
Q:Review of Unclear Management Responses
A:The company avoided providing specific insights into consumer health through 2026, offering only general comments on deposit competition.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bank PrimeLending
Conference Dunn
DDA volume
HilltopSecurities income
HilltopSecurities revenue
Jordan conference
PrimeLending loss
PrimeLending volatility
Texas economy
Wealth fee
affordability interest
asset core
asset result
backdrop Texas
balance backdrop
banker platform
base value
basis firm
basis volatility
combination increase
competency value
core deposit
core loan
curve environment
cycle HilltopSecurities
decline finance
deposit PrimeLending
deposit portfolio
economy shape
effect spring
enhancement profitability
environment HilltopSecurities
environment PlainsCapital
environment line
expense auto
fee transaction
fee wealth
finance strength
firm scale
homebuyers volume
preface presentation
profitability mortgage
HTH Transcript
Hilltop Holdings Inc. (HTH) Q1 2026 Earnings Call Transcript
Positive4-24
The earnings call reveals solid financial performance with increased net income, improved loan origination, and strategic share repurchases. Despite some uncertainties, such as muted mortgage demand and economic conditions, the company's optimistic guidance and strategic investments in technology and client-facing resources are positive indicators. The market cap suggests a moderate reaction, leading to a positive stock price movement prediction.
Hilltop Holdings Inc. (HTH) Q4 2025 Earnings Call Transcript
Positive1-30
The earnings call presents a strong financial performance with increased revenues in key areas, a high capital ratio, and positive shareholder return plans. The Q&A section confirms a stable outlook for 2026 with strategic growth plans and confidence in core business lines. Despite some uncertainties in rate impacts and competitive pressures, the overall sentiment is positive, supported by strong earnings, optimistic guidance, and significant shareholder returns, suggesting a stock price increase of 2% to 8%.
Hilltop Holdings Inc. (HTH) Q3 2025 Earnings Call Transcript
Unknown10-24
The earnings call summary presents a mixed picture. Financial performance shows some positive aspects like increased net interest income and credit loss reversal, but challenges in mortgage business and pretax loss for PrimeLending weigh negatively. The Q&A reveals cautious sentiment, with no increase in NII guidance and some subprime exposure concerns. Share buybacks and M&A exploration are positives, but lack of clarity on certain issues tempers enthusiasm. Considering the market cap, the stock price is likely to remain neutral in the short term.
Hilltop Holdings Inc. (HTH) Q2 2025 Earnings Call Transcript
Unknown7-25
The earnings call summary indicates mixed signals: strong financial performance in some areas, like net interest income growth and credit loss reversal, but challenges in mortgage origination. The Q&A reveals concerns about elevated expenses, unclear guidance, and potential risks. Despite positive factors like share repurchases and improved asset quality, the lack of clear guidance and expected NII decline tempers enthusiasm. With a market cap of $1.97 billion, the stock reaction is likely muted, resulting in a neutral prediction.
HTH Slides
HTH Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
