Hilltop Holdings Inc. (HTH) reported third-quarter 2014 operating earnings per share (EPS) of 26 cents, which lagged the Zacks Consensus Estimate of 34 cents. With this result, the company’s average four-quarter miss stands at 7.5%. EPS was also significantly lower than the year-ago quarter figure of 43 cents.
Notably, net income plunged 38.7% year over year to $23.4 million, primarily due to higher non-interest expenses against lower non-interest income.
However, Hilltop’s total revenue grossed $305.4 million, climbing 3.6% from $294.8 million in the year-ago quarter. Top line also exceeded the Zacks Consensus Estimate of $282 million.
Net interest income jumped 17.1% year over year to $93.2 million, primarily driven by the FNB acquisition. However, non-interest income dipped 1.4% to $212.1 million, reflecting fall in mortgage loan origination fees in the reported quarter along with increased purchase gains from FNB acquisition recorded in the year-ago quarter. Meanwhile, advisory fees and commissions as well as insurance premiums witnessed improvement.
Hilltop incurred provision for loan losses of $4 million in the reported quarter, down from $10.7 million a year ago. Total interest expense slipped 3.8% to $7.5 million from $7.8 million in the prior-year period, while non-interest expenses shot up 17.6% to $254.7 million from $216.6 million in the year-ago period.
Financial Update
As on Sep 30, 2014, Hilltop held cash and due from banks of $635.9 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 $1.42 billion at Sep 2014-end, up from $1.31 billion at 2013-end. Moreover, total assets appreciated to $9.18 billion from $8.90 billion at 2013-end.
Meanwhile, total liabilities increased to $7.76 billion from $7.59 billion at 2013-end. Total deposits fell to $6.24 billion from $6.72 billion at 2013-end. The company held free cash of $153 million at Sep 2014-end, down from $158 million at Jun 2014-end.
Profitability Metrics
At the end of Sep 2014, Hilltop’s book value increased 11.6% year over year to $14.51 per share, while net interest margin deteriorated to 4.38% from 4.46% in the year-ago quarter. Moreover, return on average shareholders’ equity (ROE) also declined to 6.5% from 12.7% in the year-ago period.
Hilltop’s risk-based Tier 1 capital ratio was 18.57% at the end of Sep 2014, slightly up from 18.53% at 2013-end. Moreover, PlainsCapital Bank’s risk-based Tier 1 capital ratio was pegged at 13.48% at the end of Sep 2014, marginally higher than 13.38% at the end of 2013.
Zacks Rank
Currently, Hilltop carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Investors interested in financial stocks could also consider AmTrust Financial Services Inc. (AFSI), HCI Group Inc. (HCI) and White Mountains Insurance Group Ltd. (WTM), all of which sport a Zacks Rank #1 (Strong Buy).
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
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment