Hilltop Holdings Inc.
) reported third-quarter 2013 operating earnings per share of 36
cents. The results surpassed the Zacks Consensus Estimate of 31
cents and also improved substantially from the loss of 7 cents
incurred in the year-ago quarter. Consequently, net income stood
at $31.8 million, rebounding from a net loss of $4.0 million in
the year-ago quarter.
Hilltop's total revenues stood at $277.3 million, spiking from
both the Zacks Consensus Estimate of $263 million and the
year-ago quarter figure of $40.9 million.
Net interest income
rose to $71.5 million from $1.2 million in the year-ago quarter,
jumped to $205.8 million from $39.6 million a year ago.
The year-over-year upside was primarily attributable to robust
growth in both interest and non-interest income, primarily due to
the inclusion of banking, mortgage origination and financial
advisory operations through the acquisition of PlainsCapital
Corp. in Nov 2012. However, total revenue lagged from $307.6
million reported in the sequentially prior quarter.
However, Hilltop incurred provision for loan losses of $10.7
million in the reported quarter, lower than $11.3 million in the
second-quarter 2013. Meanwhile, total interest expense surged
171% year over year to $7.8 million, whereas non-interest
expenses radically amplified to $216.6 million from $46.8 million
in the year-ago period.
Meanwhile, pre-tax income from insurance operations rebounded
to $4.3 million from a loss of $6.0 million in the year-ago
quarter. Higher premiums and lower loss and loss adjusted
expenses, which were partially offset by higher underwriting
expenses. Subsequently, combined ratio improved to 94.0% from
114.2% in the prior-year quarter.
As on Sep 30, 2013, Hilltop held cash and due from banks of
$976.2 million, down from $722 million as on Dec 31, 2012, along
with a strong securities portfolio worth $1.32 billion, up from
$1.08 billion at 2012-end.
Total shareholder equity stood at $1.21 billion at the end of
Sep 2013, up from $1.15 billion at 2012-end. Moreover, total
assets appreciated to $9.09 billion from $7.29 billion at
Meanwhile, total liabilities increased to $7.89 billion from
$6.14 billion at 2012-end. Total deposits surged to $6.94 billion
from $4.7 billion at 2012-end.
At the end of Sep 2013, operating cash flow stood at $462.7
million compared with cash outflow of $13.7 million at the end of
Sep 2012. Hilltop held over $177 million of free cash at the end
of Sep 2013, lower than $200 million at 2012-end.
At Sep 2013-end, Hilltop's insurance operations had a deposit
in custody for various investments in State Insurance Departments
with carrying values of $9.4 million, up from $9.3 million at
At the end of Sep 2013, Hilltop's book value increased 3.3%
from sequentially prior quarter to $13.00 per share.
Sequentially, net interest margin also improved to 4.45% from
4.33%. Return on average shareholders' equity (ROE) increased to
10.92% from 7.29% in the prior quarter.
However, Hilltop's risk-based Tier 1 capital ratio stood at
16.56% at the end of Sep 2013, down from 18.35% at the end of Jun
2013. Moreover, PlainsCapital Bank's risk-based Tier 1 capital
ratio was pegged at 12.76% at the end of Sep 2013, slightly lower
than 12.77% at the end of Jun 2013.
Along with Hilltop, other outperformers in the insurance
Hallmark Financial Services Inc.
CNA Financial Corp.
Endurance Specialty Holdings Ltd.
) carry a Zacks Rank #1 (Strong Buy).
CNA FINL CORP (CNA): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
HALLMARK FINL (HALL): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
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