Hilltop's Q4 Earnings Top Y/Y, Revs Up - Analyst Blog


Hilltop Holdings Inc. ( HTH ) reported fourth-quarter 2013 operating earnings per share of 34 cents. Although the result missed the Zacks Consensus Estimate by 4 cents, it improved substantially from 13 cents earned in the year-ago quarter. Consequently, net income soared to $29.5 million from $8.6 million in the year-ago quarter.

However, the market reaction remained moderate as the shares of Hilltop dipped almost 0.05% in the last two trading sessions following the announcement of the financial results.  

Hilltop's total revenues grossed $281.1 million, spiking 108.4% from the year-ago quarter equivalent of $134.9 million. However, total revenue lagged $294.8 million reported in the sequentially prior quarter. Net interest income rose to $88.6 million from $25.2 million in the year-ago quarter, while non-interest income jumped to $182.5 million from $109.7 million a year ago.

The year-over-year upside was primarily attributable to robust growth in both interest and non-interest income, along with lower provision for loan losses. These were partially offset by higher interest and non-interest expenses.

Hilltop incurred provision for loan losses of $2.2 million in the reported quarter, lower than $3.8 million in the year-ago quarter. Meanwhile, total interest expense surged to $10 million from $3.8 million in the prior-year period, whereas non-interest expenses radically amplified to $219.8 million from $115.9 million in the year-ago period.

Full-Year 2013 Highlights

For full year 2013, Hilltop generated net income of $121 million or $1.40 per share, remarkably rebounding from net loss of $5.9 million or 10 cents per share in 2012. Including special charges, reported net loss was $7.7 million in 2012.

Total revenue surged to $1.18 billion in 2013 from $263 million in 2012. Net premiums earned increased 7.4% year over year to $157.5 million.

Meanwhile, total interest and non-interest expenses grossed $944.6 million in 2013 versus $235.7 million in 2012. Provision for loan losses stood at $37.2 million, significantly higher than $3.8 million in 2012. Moreover, combined ratio improved to 102.6% from 108.8% in 2012.

Financial Update

As on Dec 31, 2013, Hilltop held cash and due from banks of $713.1 million, down from $722 million at 2012-end, along with a strong securities portfolio worth $1.26 billion, up from $1.08 billion at 2012-end.

Total shareholder equity stood at $1.31 billion at 2013-end, up from $1.15 billion at 2012-end. Moreover, total assets appreciated to $8.90 billion from $7.29 billion at 2012-end.

Meanwhile, total liabilities increased to $7.59 billion from $6.14 billion at 2012-end. Total deposits surged to $6.72 billion from $4.7 billion at 2012-end.

At the end of Dec 2013, operating cash flow stood at $396.7 million compared with $115.2 million at the end of 2012. Hilltop held over $164 million of free cash at the end of Dec 2013, lower than $205 million at 2012-end.

At Dec 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 2012-end.

Profitability Metrics

At the end of Dec 2013, Hilltop's book value increased 7.5% year over year to $13.27 per share. However, net interest margin dipped slightly to 4.47% from 4.64% in 2012. Return on average shareholders' equity (ROE) increased to 11% from a negative of 0.62% in 2012.

Hilltop's risk-based Tier 1 capital ratio stood at 18.53% at the end of Dec 2013, up from 17.72% at the end of 2012. Moreover, PlainsCapital Bank's risk-based Tier 1 capital ratio was pegged at 13.38% at the end of 2013, higher than 11.83% at the end of 2012.


While Hilltop carries a Zacks Rank #3 (Hold), some better-ranked financial stocks include American Financial Group Inc. ( AFG ), EMC Insurance Group Inc. ( EMCI ) and OneBeacon Insurance Group Ltd. ( OB ). All these stocks sport a Zacks Rank #1 (Strong Buy).

AMER FINL GROUP (AFG): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report

HILLTOP HLDGS (HTH): Free Stock Analysis Report

ONEBEACON INSUR (OB): 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: AFG , EMCI , HTH , OB



More from Zacks.com:

Related Videos

Save Money in the Kitchen
Save Money in the Kitchen           



Most Active by Volume

  • $17.88 ▲ 1.19%
  • $3.96 ▲ 3.13%
  • $14.83 ▲ 1.92%
  • $6.59 ▲ 5.44%
  • $19.75 ▲ 9.00%
  • $12.33 ▲ 8.44%
  • $34.33 ▲ 0.03%
    $5.56 unch
As of 7/28/2015, 04:15 PM

Find a Credit Card

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