HCSB Financial Corp. :HCFB-US: Earnings Analysis: 2016 By the Numbers : January 31, 2017

HCSB Financial Corp. reports financial results for the year ended December 31, 2016.

We analyze the earnings along side the following peers of HCSB Financial Corp. – United Financial Bancorp Inc, Hancock Holding Company and People’s United Financial, Inc. (UBNK-US, HBHC-US and PBCT-US) that have also reported for this period.


  • Net interest income margins widened from 79.44% to 84.52% compared to the same period last year.
  • Earnings growth due to the contribution of one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2016 2015 2014 2013 2012
Relevant Numbers (Annual)
Revenues 11.12 11.67 14.59 14.74 18.53
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 6.25 -0.25 -0.29 1.56 -9.74
Earnings Growth (YOY) 2639.02 15.46 -118.61 116.05 66.42
Net Margin 56.18 -2.11 -1.99 10.61 -52.59
EPS 0.07 -0.46 -0.37 0.24 -2.78
Return on Equity 54.13 N/A N/A N/A N/A
Return on Assets 1.69 -0.06 -0.07 0.35 -1.94

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Earnings Growth Analysis

The company’s earnings growth was influenced by the year-on-year improvement in net interest income margins from 79.44% to 84.52%. However, the company’s loan loss provisions have prevented it from fully capitalizing on these net interest income margin improvements. HCFB-US‘s net interest income after provisions margin showed no improvement. Loan loss provisions as a percentage of net interest income were 41.75% this period, and 0% a year ago.

Net Interest Income Margin Versus Loan Loss Provisions Margin

Quadrant label definitions. Hover to know more

High Risk; High Reward Loans, Risky Loan Portfolio, Conservative Loan Portfolio, Safer Loan Portfolio
Net Interest Income Margin History
Loan Loss Provisions Margin History


The company’s operating margins narrowed from -8.18% to -106.04%. In spite of this, the company’s earnings grew. This rise was influenced primarily by the presence of one-time items, which contributed to an improvement in pretax margins from -1.88% to 61.67%.

EBIT Margin History
PreTax Margin History
EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables

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Company Profile

HCSB Financial Corp. operates as bank holding company. The company, through its subsidiary, Horry County State Bank provides consumer and business banking services, concentrating on individuals and small and medium-sized businesses. It offers deposit products, cash management services, safe deposit boxes, travelers checks, direct deposit of payroll and social security checks, automatic drafts for various accounts, and credit card services. HCSB Financial was founded on June 10, 1999 and is headquartered in Loris, SC.

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