Hilltop Holdings Inc

Hilltop Holdings reported a 5.6% year-over-year increase in net interest income to $227.9 million for the first half of 2026, driven by strength in its banking segment and lower funding costs. In the second quarter alone, NII rose 4.7% year over year and 3.4% sequentially to $115.9 million, with the consolidated net interest margin expanding to 3.21% from 3.13% in the prior quarter. Net loans held for investment grew to $8.6 billion as of June 30, up 8% year over year and 3% sequentially, prompting management to raise its 2026 average loan growth expectation to 5-7% from 4-6%. However, management expects NIM to remain around current levels or decline modestly in the second half, with NII likely staying relatively stable, suggesting the pace of growth may moderate. Among peers, Cullen/Frost Bankers saw NII rise 4.8% to $886.3 million in the first half, while Prosperity Bancshares recorded a 22.2% increase to $651.7 million, aided by acquisitions and margin expansion.

Hilltop Holdings exceeded Wall Street expectations in its second quarter, driven by robust loan pipeline execution and net interest margin expansion at PlainsCapital Bank. Revenue rose 7.5% year-on-year to $316.7 million, beating analyst estimates of $306.2 million, while adjusted earnings per share of $0.63 surpassed the $0.49 consensus. CEO Jeremy Blue Ford highlighted the bank's strong loan pipeline and pull-through rate, and CFO William Furr noted new loan yields in the 6.5% to 7.0% range despite competitive pricing pressures. The broker-dealer segment saw improved results from structured finance and wealth management, though the mortgage business continued to face headwinds. Management expects the loan-to-deposit ratio to normalize around 85% and is prioritizing organic growth while balancing share repurchases and potential M&A.

Hilltop reported second-quarter 2026 net income attributable to common stockholders of $36.5 million, or $0.63 per diluted share, as growth at its banking and broker-dealer operations offset continued pressure in mortgage banking. PlainsCapital Bank generated $51 million in pretax income with a net interest margin of 3.42%, while HilltopSecurities posted $12 million in pretax income on net revenue of $124 million, a 13% increase from a year earlier. PrimeLending recorded a $2 million pretax loss amid a difficult mortgage market, though the company has reduced its fixed costs by about $10 million on an annualized basis. Consolidated net interest income rose 5% year over year to $116 million, and the company increased its full-year average loan growth forecast to a range of 5% to 7%, excluding mortgage warehouse lending and mortgages retained from PrimeLending. Hilltop returned $11.6 million to shareholders through dividends and repurchased $47 million in shares, while the board raised the quarterly dividend by 10% to $0.22 per share and added $75 million to the share repurchase authorization.