Hilltop Holdings Inc. HTH reported second-quarter 2015 operating earnings per share of 30 cents that missed the Zacks Consensus Estimate by 25%. However, the result remained unchanged year over year. The lower-than-expected bottom-line stemmed from lower non-interest income coupled with higher non-interest expenses.
Net interest income increased 2.3% year over year to $100.7 million during the reported quarter. Non-interest income surged 48.3% year over year to $301.4 million during the same period.
Hilltop incurred provision for loan losses of $0.2 million in the reported quarter, down from $5.5 million a year ago. Total interest expenses more than doubled to approximately $15 million from about $6 million in the prior-year quarter. Non-interest expenses rose 40.6% year over year to $353.3 million.
Financial Update
As of Jun 30, 2015, Hilltop’s cash and due from banks was $583 million, significantly down from $782.5 million at the end of 2014. The securities portfolio increased to $1.34 billion as of Jun 30, 2015 from $1.11 billion at year-end 2014.
As of Jun 30, 2015, total shareholder equity was $1.67 billion, up from $1.46 billion at the end of 2014. Total assets appreciated to $12.48 billion as of Jun 30, 2015, from $9.24 billion as of Dec 31, 2014.
Meanwhile, total liabilities rose to $10.80 billion from $7.78 billion at year-end 2014. Total deposits increased to $6.80 billion from $6.37 billion at the end of 2014. The company held free cash of $78.8 million at the end of the second quarter.
Profitability Metrics
As of Jun 2015, Hilltop’s book value was $16.82 per share, up from $14.93 as of Dec 31, 2014. Annualized net interest margin deteriorated to 3.75% at the end of the second quarter from 5.18% a year ago. Return on average equity decreased to 7.12% compared with 7.99% reported in the year-ago period.
Hilltop’s total capital ratio was 19.29% as of Jun 30, 2015 compared with 18.79% in the year-ago quarter. Moreover, PlainsCapital Bank’s total capital ratio was 17.17% at the end of the reported quarter, up from 13.90% as of Jun 30, 2014.
Zacks Rank
Hilltop presently holds a Zacks Rank #2 (Buy). Other stocks from the same space that warrant a look are Atlantic Coast Financial Corporation ACFC, BNC Bancorp BNCN and CenterState Banks, Inc. CSFL. All of these stocks sport a Zacks Rank #1 (Strong Buy).
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