Hilltop Holdings Inc. HTH reported first-quarter 2015 operating earnings per share (EPS) of $1.13, beating the Zacks Consensus Estimate of 35 cents by a whopping 222.9%. Earnings also improved by a significant 334.6% over 26 cents earned in the year-ago quarter.
The improvement was driven by purchase accounting associated with the SWS Group, Inc. ("SWS") acquisition, and improved operating earnings from the company’s subsidiaries. Moreover, loan growth in the key markets of PlainsCapital Bank also contributed to the upside.
Net interest income increased 9.5% year over year to $94.2 million, primarily attributable to the inclusion of operations that were acquired related to the SWS Merger within the broker-dealer segment. However, non-interest income soared 108.3% to $354.4 million. The upside reflected the recognition of a preliminary bargain purchase gain associated with the SWS Merger.
Hilltop incurred provision for loan losses of $2.7 million in the reported quarter, down from $3.2 million a year ago. Total interest expenses increased 122.8% to $14.3 million from $6.4 million in the prior-year quarter, while non-interest expenses rose 47.9% to $314.5 million from $212.6 million a year ago.
Financial Update
As of Mar 31, 2015, Hilltop’s cash and due from banks was $694.1 million, down from $782.5 million at 2014 end. The securities portfolio surged to $1.4 billion at Mar 31, 2015, from $1.1 billion at 2014 end.
As of Mar 31, 2015, total shareholder equity was $1.8 billion, up from $1.5 billion at 2014 end. Moreover, total assets appreciated to $12.6 billion as of Mar 31, 2015, from $9.2 billion on Dec 31, 2014.
Meanwhile, total liabilities increased to $10.8 billion from $7.8 billion at 2014 end. Total deposits increased to $7.1 billion from $6.4 billion at 2014 end. The company held free cash of $58.9 million at the end of the first quarter.
Profitability Metrics
As of Mar 2015, Hilltop’s book value was $16.63 per share, up from $14.93 as of Dec 31, 2014. Net interest margin deteriorated to 3.53% in the first quarter of 2015 from 4.62% in the year-ago quarter. However, return on average shareholders’ equity improved to 27.27% in the reported quarter from 7.65% in the year-earlier quarter.
Hilltop’s risk-based Tier 1 capital ratio was 20.26% as of Mar 31, 2015 compared with 19.02% at the end of 2014. Moreover, PlainsCapital Bank’s risk-based Tier 1 capital ratio was 16.46% at quarter end, up from 13.74% on Dec 31, 2014.
Zacks Rank
Currently, Hilltop sports a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Investors interested in financial stocks could also consider FCB Financial Holdings, Inc. FCB, Fidelity Southern Corporation LION and First Bancorp FBP all of which have the same Zacks Rank as Hilltop.
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
Be the first to comment