Breaking Down Hilltop Holdings Inc. (HTH) Financial Health: Key Insights for Investors

Are you keeping a close watch on Hilltop Holdings Inc. (HTH) and wondering about its financial stability? In 2024, Hilltop Holdings Inc. reported income to common stockholders of $113.2 million, or $1.74 per diluted share, compared to $109.6 million, or $1.69 per diluted share, for the full year 2023. How did key metrics like mortgage loan origination volume, which reached $2.3 billion in Q4 2024, impact the overall financial picture? With total assets at $16.3 billion at the end of 2024 and a book value per common share of $33.71, let's delve into the insights that matter most for investors.

Hilltop Holdings Inc. (HTH) Revenue Analysis

Analyzing Hilltop Holdings Inc.'s (HTH) financial health requires a close look at its revenue streams. A diversified financial services company, Hilltop Holdings generates revenue from several key areas, including banking, mortgage origination, and investment advisory services. Understanding where the company's money comes from and how these sources have changed over time provides critical insights for investors. For additional context, you might find this resource helpful: Breaking Down Hilltop Holdings Inc. (HTH) Financial Health: Key Insights for Investors

Here’s a breakdown of what to consider:

• Breakdown of Primary Revenue Sources: Hilltop Holdings' revenue is derived primarily from its banking operations through PlainsCapital Bank, mortgage origination activities via PrimeLending, and investment advisory services. Additional revenue comes from broker-dealer operations and other financial services.
• Year-Over-Year Revenue Growth Rate: Examining historical trends in revenue growth is essential. Investors should look at the percentage increase or decrease in revenue from year to year to gauge the company's performance and identify any patterns or fluctuations.
• Contribution of Different Business Segments: Understanding how each business segment contributes to the overall revenue is crucial. For example, it's important to know what percentage of total revenue comes from banking versus mortgage origination or investment advisory services.
• Analysis of Significant Changes in Revenue Streams: Any major shifts in revenue sources should be closely analyzed. These changes could be due to market conditions, strategic decisions made by the company, or other external factors.

To provide a clearer picture, let's consider a hypothetical (but structurally consistent with available data) breakdown of Hilltop Holdings' revenue for the fiscal year 2024:

In this hypothetical scenario for fiscal year 2024, banking operations contribute the largest share of revenue at 52%, followed by mortgage origination at 30%. Investment advisory services and other financial services make up the remaining portions. Monitoring these percentages and their year-over-year changes can reveal important trends about the company’s strategic focus and market performance.

Hilltop Holdings Inc. (HTH) Profitability Metrics

Analyzing Hilltop Holdings Inc.'s profitability involves examining gross profit, operating profit, and net profit margins to understand the company's financial health and operational efficiency. Trends in these metrics over time provide insights into the company's performance and its ability to manage costs and generate profits.

Here's a breakdown of key profitability metrics:

• Gross Profit Margin: Measures the percentage of revenue remaining after deducting the cost of goods sold. A higher gross profit margin indicates greater efficiency in managing production costs.
• Operating Profit Margin: Represents the percentage of revenue remaining after deducting operating expenses. This metric reflects the company's efficiency in managing its core business operations.
• Net Profit Margin: Shows the percentage of revenue remaining after all expenses, including taxes and interest, are deducted. It is a key indicator of overall profitability.

A comparison of Hilltop Holdings Inc.'s profitability ratios with industry averages can reveal how well the company is performing relative to its peers. Higher ratios generally indicate better performance and efficiency.

Operational efficiency is crucial for maintaining and improving profitability. Effective cost management and positive gross margin trends are indicators of a company's ability to control expenses and increase revenue.

To provide a clearer picture, a table summarizing these metrics with sample data is presented below:

These figures are examples and should be replaced with Hilltop Holdings Inc.'s actual financial data for an accurate analysis. Understanding these metrics helps investors assess the company's financial health and make informed decisions. For more insights into the company's strategic direction, review Mission Statement, Vision, & Core Values of Hilltop Holdings Inc. (HTH).

Hilltop Holdings Inc. (HTH) Debt vs. Equity Structure

Understanding how Hilltop Holdings Inc. (HTH) finances its operations and growth is crucial for investors. The balance between debt and equity plays a significant role in assessing the company's financial health and risk profile. This section provides an overview of Hilltop Holdings Inc.'s debt levels, its debt-to-equity ratio, and how it manages its capital structure.

As of the fiscal year 2024, Hilltop Holdings Inc. demonstrates the following debt characteristics:

• Long-term Debt: Specific figures for long-term debt are essential to understanding Hilltop Holdings Inc.'s long-term financial obligations.
• Short-term Debt: Details on short-term debt provide insight into the company's immediate liabilities and liquidity.

The debt-to-equity ratio is a key metric in evaluating Hilltop Holdings Inc.'s financial leverage. It indicates the proportion of debt the company uses to finance its assets relative to the value of shareholders' equity. A lower ratio generally suggests a more conservative financial structure.

For the most recent fiscal year, Hilltop Holdings Inc.'s debt-to-equity ratio is a critical indicator of its financial strategy. Here's a comparative perspective:

• Hilltop Holdings Inc.'s Debt-to-Equity Ratio: It is important to compare this ratio with industry averages to determine whether Hilltop Holdings Inc. is more or less leveraged than its peers.
• Industry Standards: Understanding the typical debt-to-equity ratios within the financial services sector provides context for evaluating Hilltop Holdings Inc.'s financial positioning.

Recent activities related to debt, such as new issuances, credit ratings, or refinancing, can significantly impact Hilltop Holdings Inc.'s financial stability and investor confidence. Recent financial activities include:

• Debt Issuances: Any new debt issued by Hilltop Holdings Inc. and the terms of those issuances.
• Credit Ratings: Current credit ratings from agencies like Standard & Poor's, Moody's, or Fitch.
• Refinancing Activities: Any recent refinancing efforts to restructure existing debt and potentially lower interest rates.

Balancing debt financing and equity funding is a strategic decision that reflects Hilltop Holdings Inc.'s approach to growth and risk management. A company can use different strategies to optimize its capital structure:

• Strategic Use of Debt: How Hilltop Holdings Inc. uses debt to fund growth initiatives or strategic acquisitions.
• Equity Funding: Instances where the company has raised capital through equity offerings and the impact on shareholder value.

For additional insights into Hilltop Holdings Inc. and its investors, check out: Exploring Hilltop Holdings Inc. (HTH) Investor Profile: Who’s Buying and Why?

Hilltop Holdings Inc. (HTH) Liquidity and Solvency

Understanding Hilltop Holdings Inc.'s (HTH) financial health requires a close examination of its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations.

One way to assess liquidity is by calculating the current and quick ratios. These ratios provide insight into whether Hilltop Holdings Inc. has enough liquid assets to cover its short-term liabilities. For example, as of December 31, 2024, Hilltop Holdings Inc. reported total current assets of $6.28 billion and total current liabilities of $5.64 billion. The current ratio, calculated as current assets divided by current liabilities, is approximately 1.11. A current ratio above 1.0 generally indicates that a company has enough short-term assets to cover its short-term liabilities. However, a very high ratio could suggest that the company is not efficiently using its assets.

The quick ratio, which excludes inventories from current assets, provides a more conservative measure of liquidity. For Hilltop Holdings Inc., the quick ratio would offer a view of immediate liquidity, focusing on assets that can be quickly converted to cash.

Analyzing working capital trends is also crucial. Working capital, calculated as current assets minus current liabilities, indicates the company's operational liquidity. Monitoring changes in working capital over time can reveal whether the company's ability to meet its short-term obligations is improving or deteriorating. As of December 31, 2024, Hilltop Holdings Inc. had a working capital of $636.4 million. A positive working capital balance suggests that the company has sufficient liquid assets to cover its short-term liabilities.

Cash flow statements provide a comprehensive view of all cash inflows and outflows. Key trends to watch for include:

• Operating Cash Flow: Cash generated from the company's core business operations.
• Investing Cash Flow: Cash used for investments in assets, such as property, plant, and equipment.
• Financing Cash Flow: Cash from financing activities, such as borrowing or issuing stock.

For the year 2024, Hilltop Holdings Inc. reported net cash provided by operating activities of $177.2 million. This indicates the company's ability to generate cash from its core business operations. The net cash used for investing activities was $100.5 million, reflecting investments in the company's asset base. Finally, net cash used for financing activities was $146.4 million, which includes activities related to debt and equity.

Here is a summary of Hilltop Holdings Inc.'s (HTH) cash flow statement for the year 2024:

Potential liquidity concerns could arise if Hilltop Holdings Inc. experiences a significant decline in operating cash flow or an increase in short-term debt. Strengths include a consistently positive operating cash flow and a manageable level of debt.

To gain further insight into Hilltop Holdings Inc.'s (HTH) strategic direction, refer to Mission Statement, Vision, & Core Values of Hilltop Holdings Inc. (HTH).

Hilltop Holdings Inc. (HTH) Valuation Analysis

Assessing whether Hilltop Holdings Inc. (HTH) is overvalued or undervalued requires a look at several key financial metrics and market indicators.

Here's a breakdown of HTH's valuation:

• Price-to-Earnings (P/E) Ratio:

HTH's P/E ratio for 2024 is 16.45. For 2025, the estimated P/E ratio is 18.59. Historically, HTH's P/E ratio has fluctuated, with a 3-year average of 17.1, a 5-year average of 12.55, and a 10-year average of 13.52. When compared to its peers, HTH's P/E ratio is higher than some (like ACGL at 8.07) but lower than others. The current P/E ratio suggests that HTH is trading at a higher valuation than its peer average of 10.84.

• Price-to-Book (P/B) Ratio:

HTH's Price/Book ratio is 0.9x. The company's book value per share increased to $33.71 at the end of December 2024. The Price-to-Book ratio indicates how the market values Hilltop Holdings relative to its book value.

• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

HTH's EV/EBITDA (TTM) is 5.42.

• Stock Price Trends:

Over the last 12 months, Hilltop Holdings' stock price has decreased by 5.83%. As of April 17, 2025, the stock price was around $28.61. The 52-week high is $35.32, while the 52-week low is $26.67.

Here's a look at how HTH's stock price has changed over the last year:

• Current Price (April 17, 2025): Approximately $28.61
• 52-Week High: $35.32
• 52-Week Low: $26.67

• Dividend Yield and Payout Ratios:

Hilltop Holdings has a current dividend yield of approximately 2.26%. The annualized dividend payment is $0.69 per share. The dividend payout ratio is around 39.7%. The company has a history of consistent dividend payments, with nine consecutive years of dividend payments.

Here's a summary of HTH's dividend information:

• Annualized Dividend: $0.69 per share
• Dividend Yield: Approximately 2.26%
• Payout Ratio: 39.7%

Recent dividend payments include:

• February 13, 2025: $0.18 per share
• November 8, 2024: $0.17 per share
• August 16, 2024: $0.17 per share

• Analyst Consensus:

The analyst consensus on Hilltop Holdings Inc. is a 'Hold.' The average price target from analysts is $33.00, representing a potential increase of 16.12% from the current price of $28.42. The highest price target is $34.00, and the lowest is $32.00.

Here’s a summary of analyst ratings:

• Consensus: Hold
• Average Price Target: $33.00

For more insights into Hilltop Holdings Inc.'s values, explore: Mission Statement, Vision, & Core Values of Hilltop Holdings Inc. (HTH).

Based on these metrics, Hilltop Holdings Inc. appears to be fairly valued, with potential for moderate upside according to analyst price targets. However, investors should consider these factors in conjunction with their own research and risk tolerance.

Hilltop Holdings Inc. (HTH) Risk Factors

Hilltop Holdings Inc. (HTH) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and volatile market conditions. Understanding these factors is crucial for investors assessing the company's stability and future prospects. Breaking Down Hilltop Holdings Inc. (HTH) Financial Health: Key Insights for Investors

One of the primary risks Hilltop Holdings faces is intense competition within the financial services industry. This includes competition in mortgage origination, commercial banking, and wealth management. Increased competition can lead to pressure on pricing, reduced margins, and the potential loss of market share. Maintaining a competitive edge requires continuous innovation, efficient operations, and strong customer relationships.

Regulatory changes also pose a significant risk. Financial institutions are subject to extensive and evolving regulations, including those related to capital requirements, lending practices, and consumer protection. Changes in these regulations can increase compliance costs, restrict business activities, and require adjustments to operational strategies. For example, changes in mortgage lending regulations could affect Hilltop's mortgage origination business.

Market conditions, including interest rate fluctuations and economic downturns, can substantially impact Hilltop's financial performance. Rising interest rates can reduce demand for mortgages, affecting the mortgage origination segment. Economic downturns can increase credit losses in the banking segment and reduce assets under management in the wealth management segment. These factors can lead to decreased revenue and profitability.

Operational and strategic risks are also evident in recent filings. These include:

• Credit Risk: The potential for borrowers to default on loans, particularly in the commercial banking segment, is a persistent concern. Effective credit risk management is essential to mitigate potential losses.
• Interest Rate Risk: Fluctuations in interest rates can impact net interest income and the value of interest-earning assets. Managing this risk requires careful monitoring and hedging strategies.
• Liquidity Risk: Ensuring sufficient liquidity to meet obligations is critical. Factors such as deposit outflows and unexpected funding needs can create liquidity challenges.
• Cybersecurity Risk: The increasing threat of cyberattacks poses a risk to the security of data and systems. A successful cyberattack could result in financial losses, reputational damage, and regulatory penalties.

Hilltop Holdings employs various mitigation strategies to address these risks. These may include:

• Diversification: Diversifying its business across different segments (mortgage origination, banking, wealth management) can help reduce the impact of adverse conditions in any one segment.
• Risk Management Systems: Implementing robust risk management systems to identify, measure, and control risks is crucial. This includes credit risk models, interest rate risk simulations, and cybersecurity protocols.
• Compliance Programs: Maintaining strong compliance programs to adhere to regulatory requirements is essential. This includes ongoing training, monitoring, and audits.
• Capital Management: Maintaining adequate capital levels to absorb potential losses and support growth is a key strategy.

Here's a hypothetical overview of potential risk mitigation actions:

By proactively addressing these risks, Hilltop Holdings can better protect its financial health and enhance its long-term prospects.

Hilltop Holdings Inc. (HTH) Growth Opportunities

Hilltop Holdings Inc. (HTH) demonstrates promising future growth prospects driven by several key factors. These include strategic initiatives, market expansions, and competitive advantages.

Key growth drivers for Hilltop Holdings Inc. (HTH):

• Product Innovations: Continuous improvement and diversification of financial products and services to meet evolving customer needs.
• Market Expansions: Strategic expansion into new geographic markets and customer segments.
• Acquisitions: Pursuing strategic acquisitions to enhance market presence and capabilities.

Hilltop Holdings Inc. (HTH) is focused on several strategic initiatives aimed at driving future growth:

• Technological Investments: Enhancing digital banking platforms and technology infrastructure to improve customer experience and operational efficiency.
• Strategic Partnerships: Forming alliances to broaden service offerings and market reach.
• Capital Management: Efficiently managing capital to support growth initiatives and shareholder returns.

A critical component of assessing Hilltop Holdings Inc.'s (HTH) future involves analyzing its competitive advantages, which enable it to stand out in the financial services sector.

• Diversified Business Model: A mix of banking, mortgage origination, and wealth management services provides stability and multiple revenue streams.
• Strong Regional Presence: A solid footprint in key markets allows for targeted growth and customer loyalty.
• Experienced Leadership: A seasoned management team guides strategic direction and operational execution.

While specific revenue growth projections and earnings estimates require up-to-date financial analysis, the factors mentioned above collectively position Hilltop Holdings Inc. (HTH) for continued growth. Investors should refer to the latest financial reports and analyst forecasts for detailed quantitative projections. For more insights into the company's guiding principles, refer to Mission Statement, Vision, & Core Values of Hilltop Holdings Inc. (HTH).