Hilltop Holdings (HTH) Q2 Earnings Miss Estimates, Up Y/Y

Hilltop Holdings Inc. (NYSE:HTH) reported second-quarter 2016 operating earnings per share of 32 cents, which missed the Zacks Consensus Estimate of 38 cents. Earnings were up 6.67% year over year led by higher non-interest income and a decline in total interest expense.

Net interest income dipped 0.3% year over year to $100.4 million. Non-interest income increased 14.8% year over year to $346 million.

Hilltop incurred provision for loan losses of $28.9 million compared with $0.2 million in the year-ago quarter. Total interest expenses came in at $13.8 million, down 7.9% from the year-ago quarter. Non-interest expenses increased 4% year over year to $367.4 million due to higher employee and compensation benefits.

Financial Update

As of Jun 30, 2016, Hilltop’s cash and due from banks was $584 million, almost unchanged year over year.

As of Jun 30, 2016, total shareholders’ equity was $1.8 billion, up 7.1% year over year. Total assets were $13.1 billion as of the same date, up 4.8% from $12.5 billion as of Jun 30, 2015.

Total liabilities increased 4.6% year over year to $11.3 billion as of Jun 30, 2016. Total deposits increased 4.4% year over year to $7.1 billion.

Hilltop’s annualized return on average assets and return on average equity at the end of the reported quarter were 1.05% and 7.07%, respectively, compared with 0.97% and 7.12% as of Jun 30, 2015.

Profitability Metrics

As of Jun 30, 2016, Hilltop’s book value was $18.20 per share, up 8.2% year over year. Net interest margin increased to 3.77% at the end of the second quarter from 3.67% as of Mar 31, 2016.

Zacks Rank and Other Stocks

Hilltop presently carries a Zacks Rank #4 (Sell). Some better-ranked stocks include CenterState Banks, Inc. (NASDAQ:CSFL) , Southern National Bancorp of Virginia Inc. (NASDAQ:SONA) and Trustmark Corporation (NASDAQ:TRMK) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).