Hilltop Holdings' Q2 Earnings Beat as Revenues Rise, Credit Costs Fall

Net income attributable to common stockholders was $36.5 million, up 1.2% year over year. Our estimate for the metric was $21.7 million.

Hilltop Holdings’ Revenues Increase, Expenses Rise

Net revenues in the second quarter were $315.8 million, up 4.1% year over year. The top line surpassed the Zacks Consensus Estimate of $300.8 million.

NII increased 4.7% year over year to $115.9 million. The net interest margin (NIM) (taxable-equivalent basis) was 3.23%, expanding 19 basis points (bps). Our estimates for NII and NIM were $114.4 million and 3.13%, respectively.

Non-interest income was $200 million, up 3.8%. The increase was driven by growth in principal transactions, commissions and fees, and investment banking, advisory and administrative fees. This was partly offset by lower mortgage-related revenues and other non-interest income. We had projected the metric to be $188.5 million.

Non-interest expenses rose 2.1% from the prior-year quarter to $266.7 million. The increase was mainly due to higher employees' compensation and benefits costs, professional services expenses and other expenses, partly offset by lower occupancy and equipment costs. We projected total non-interest expenses of $267.7 million.

As of June 30, 2026, net loans held for investment were $8.6 billion, up 2.9% sequentially. Total deposits were $10.5 billion, largely stable. Our estimates for net loans held for investment and total deposits were $8.51 billion and $10.77 billion, respectively.

Hilltop Holdings’ Credit Quality Improving

In the second quarter, Hilltop Holdings recorded a reversal of credit losses of $1 million compared with a reversal of $7.3 million in the prior-year quarter. Our estimate for the metric was $4.9 million.

As of June 30, 2026, non-performing assets, as a percentage of total assets, were 0.39%, which decreased 14 bps from the year-ago quarter. Non-accrual loans were $54.8 million, or 0.57% of total loans, down from $72.7 million, or 0.80%, as of June 30, 2025.

HTH’s Profitability Ratios Improve, Capital Ratios Decline

Return on average assets at the end of the reported quarter was 0.99%, up from the prior-year quarter’s 0.98%. The return on average stockholders’ equity was 6.89%, which increased from 6.62%.

The common equity tier 1 capital ratio was 18.34% as of June 30, 2026, down from 20.74% in the corresponding period of 2025. The total capital ratio was 20.63%, declining from the year-ago period’s 23.38%.

HTH’s Capital Distribution Update

In the reported quarter, the company repurchased 1.25 million shares for $47 million.

In July 2026, Hilltop Holdings increased its share repurchase authorization by $75 million to $200 million. Following repurchases completed in 2026, the company had approximately $106 million of available repurchase capacity through January 2027.

Concurrently, Hilltop Holdings announced a quarterly cash dividend of 22 cents per share, representing a hike of 10% from the prior payout. The dividend will be paid out on Aug. 21 to shareholders on record as of Aug. 7.

Our Viewpoint on Hilltop Holdings

Decent loan growth, a strong balance sheet and HTH's business restructuring efforts will likely aid the top line. This, along with favorable rate environment, will drive the company’s financials. However, weak mortgage banking business and uncertain operating backdrop are headwinds.

Hilltop Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of HTH’s Peer Banks

East West Bancorp, Inc.’s EWBC second-quarter 2026 earnings per share of $2.63 beat the Zacks Consensus Estimate of $2.61. The bottom line increased 17.4% from the prior-year quarter’s level.

The results were primarily aided by an increase in NII and non-interest income alongside lower provisions. Also, loan and deposit balances increased sequentially in the quarter to record levels. However, higher non-interest expenses acted as a spoilsport.

Hancock Whitney Corp.’s HWC second-quarter 2026 earnings per share of $1.55 matched the Zacks Consensus Estimate. The bottom line rose 17.4% from the prior-year quarter.

Results were supported by higher NII and non-interest income, along with a decline in provisions. Also, a sequential increase in loans and deposit balances was a positive. However, higher expenses were the undermining factor.

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