Hilltop Q2 Earnings Shine on Lower Expenses, Shares Fall - Analyst Blog

By
A A A

Hilltop Holdings Inc. ( HTH ) reported second-quarter 2014 operating earnings per share of 30 cents, which surpassed both the Zacks Consensus Estimate of 27 cents and the year-ago quarter figure of 24 cents. Notably, net income soared 13.9% year over year to $27.1 million, primarily due to lower expenses and loan loss provisions.

With this result, the company's average four-quarter beat stands at 2.4%. However, shares dipped 0.6% following the announcement of mixed earnings results.


Hilltop Holdings Inc - Quarterly EPS (BNRI) | FindTheBest



Hilltop's total revenue grossed $307.7 million, decreasing 2.5% from $315.5 million in the year-ago quarter, although it exceededthe Zacks Consensus Estimate of $262 million.

Net interest income surged 37% year over year to $104.4 million, primarily driven by higher interest-bearing deposits and loan growth. However, non-interest income plummeted 15% to $203.3 million, reflecting fall in insurance premiums, mortgage loan origination fees as well as sunk advisory fees and commissions. 

Hilltop incurred provision for loan losses of $5.5 million in the reported quarter, down from $11.3 million in the year-ago quarter. The total interest expense declined 22.1% to $6.0 million from $7.7 million in the prior-year period, while non-interest expenses fell 3.5% to $251.2 million from $260.4 million in the year-ago period.

Financial Update

As on Jun 30, 2014, Hilltop held cash and due from banks of $674 million, down from $713.1 million at 2013-end, although the securities portfolio remained strong at $1.33 billion, up from $1.26 billion at 2013-end.

Total shareholder equity came in at $1.4 billion at Jun 2014-end, up from $1.3 billion at 2013-end. Moreover, total assets appreciated to $9.4 billion from $8.9 billion at 2013-end.

Meanwhile, total liabilities increased to $8.0 billion from $7.59 billion at 2013-end. Total deposits fell to $6.16 billion from $6.72 billion at 2013-end. At the end of Jun 2014, operating cash outflow surged to $291.7 million against cash flow of $14.6 million in the year-ago period. Nevertheless, the company held free cash of $158 million at Jun 2014-end.

At Jun 2014-end, Hilltop's insurance operations had a deposit in custody for various investments in State Insurance Departments with carrying values of $8.6 million, down from $9.4 million at 2013-end.

Profitability Metrics

At the end of Jun 2014, Hilltop's book value increased 12.9% year over year to $14.22 per share, whereas net interest margin improved to 5.18% from 4.33% in the year-ago quarter. Moreover, return on average shareholders' equity (ROE) rose to 7.99% from 7.29% in the year-ago period.

Hilltop's risk-based Tier 1 capital ratio was 18.11% at the end of Jun 2014, slightly down from 18.53% at 2013-end. Moreover, PlainsCapital Bank's risk-based Tier 1 capital ratio was pegged at 13.22% at the end of Jun 2014, marginally lower than 13.38% at the end of 2013.

Stocks to Consider

Hilltop now has a Zacks Rank #3 (Hold). Some better-ranked financial stocks like AmTrust Financial Services Inc. ( AFSI ), Endurance Specialty Holdings Ltd. ( ENH ) and White Mountains Insurance Group Ltd. ( WTM ), all sporting a Zacks Rank #1 (Strong Buy), and are worth consideration.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HILLTOP HLDGS (HTH): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

ENDURANCE SPLTY (ENH): Free Stock Analysis Report

WHITE MTN INS (WTM): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: HTH , AFSI , ENH , WTM

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

124,429,622
  • $47.87 ▲ 10.45%
86,937,934
  • $9.99 ▲ 6.28%
74,401,985
  • $7.92 ▲ 11.24%
43,464,235
  • $59.64 ▲ 0.69%
42,148,695
  • $130.28 ▲ 0.47%
41,471,941
  • $34.01 ▼ 0.64%
40,701,089
  • $11.99 ▼ 8.75%
39,983,675
  • $15.64 ▼ 0.32%
As of 4/24/2015, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com