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Hilltop (HTH) Misses Q1 Earnings on Increased Expenses

Hilltop Holdings Inc . HTH reported first-quarter 2016 operating earnings per share of 28 cents, which missed the Zacks Consensus Estimate of 34 cents by 17.6%. Earnings declined 74.8% on a year-over-year basis. The underperformance was due to higher expenses and a decline in interest and non-interest income.

Net interest income dipped 0.6% year over year to $90.1 million. Non-interest income decreased 21.3% year over year to $277.7 million.

Hilltop incurred provision for loan losses of $3.4 million, which surged 26.8% year over year. Total interest expenses came in at $14.6 million, up 2.3% from the year-ago quarter. Non-interest expenses rose 3.4% year over year to $325.2 million.

Financial Update

As of Mar 31, 2016, Hilltop's cash and due from banks was $512 million, down 26.2% year over year. The securities portfolio at year-end 2015 was $1.3 billion, down 1.3% from $1.4 billion as of Mar 31, 2015.

As of Mar 31, 2016, total shareholders' equity was $1.76 billion, down 1.2% from $1.78 billion as of Mar 31, 2015. Total assets were $11.7 billion as of Mar 31, 2016, down 6.6% from $12.6 billion as of Mar 31, 2015.

Total liabilities declined 7.5% to $9.9 billion from $10.8 billion as of Mar 31, 2015. Total deposits declined 2% year over year to $6.9 billion.

Hilltop's annualized return on average assets and return on average equity in the first quarter of 2016 were 0.96% and 6.32%, respectively, compared with 3.64% and 26.76% as of Mar 31, 2015.

Profitability Metrics

As of Mar 31, 2016, Hilltop's book value was $17.84 per share, up 7.4% year over year. Annualized net interest margin increased to 3.7% at the end of the first quarter from 3.53% as of Mar 31, 2015. Return on average equity decreased to 6.32% from 26.76% in the year-ago period.

Hilltop's total capital ratio was 18.60% as of Mar 31, 2016, decreasing from 20.82% as of Mar 31, 2015.

Zacks Rank and Other Stocks

Hilltop presently carries a Zacks Rank #4 (Sell). Some better-ranked stocks include Access National Corp. ANCX , First NBC Bank Holding Co. FNBC and First Bancorp FBP . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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


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

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