Hilltop Holdings, Inc. :HTH-US: Earnings Analysis: 2016 By the Numbers : January 31, 2017

Hilltop Holdings, Inc. reports financial results for the year ended December 31, 2016.

We analyze the earnings along side the following peers of Hilltop Holdings, Inc. – Flagstar Bancorp, Inc., Travelers Companies, Inc. and HomeStreet, Inc. (FBC-US, TRV-US and HMST-US) that have also reported for this period.


  • Net interest income margins narrowed from 27.04% to 23.60% compared to the same period last year.
  • Net loan assets changed 8.85% compared to same period last year and 8.85% from previous period, total deposits changed 1.60% compared to same period last year and 1.60% from previous period.
  • Earnings grew despite decline in operating margins and pre-tax margins compared to same period last year.

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 1684.5 1511.23 1144.22 1112.47 259.27
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 145.89 210.02 111.1 124.67 -5.59
Earnings Growth (YOY) -30.53 89.03 -10.88 2329.43 14.38
Net Margin 8.66 13.9 9.71 11.21 -2.16
EPS 1.48 2.09 1.17 1.4 -0.1
Return on Equity 8.08 13.01 7.6 9.79 -0.65
Return on Assets 1.19 1.99 1.22 1.52 -0.13

Access our Ratings and Scores for Hilltop Holdings, Inc.

Earnings Growth Analysis

HTH-US‘s year-on-year decline in earnings was influenced by a weakening of net interest income margins from 27.04% to 23.60% as well as issues with loan loss provisions. As a result, net interest income after provisions margins went from 26.20% to 21.19% in this period. For comparison, net interest income margins were 27.04% and net interest income after provisions margins 26.20% in the last period. In addition, loan loss provisions as a percentage of net interest income were 10.22% this period and 3.11% 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

Net Loans and Total Deposits

A financial institution’s core operations represented by Net Interest Income and Net Interest Income after Provisions are dependent on both the growth and quality of its deposits as well as the growth and quality of its loans. A firm could boost its interest income in the short-term by just increasing its loan assets with less concern about their quality – but this would eventually lead to greater loan loss provisions. Similarly a drive to increase deposits could result in higher interest expenses and eventually effect the firm’s equity. It is thus important to understand net interest income performance in context to loan loss provisions, loan assets and deposits.

Loan Assets Growth Rate History (HY YOY)
Total Deposits Growth Rate History (HY YOY)

The firm’s decline in net interest income margins came despite the relative increase in the level of net loan assets. In addition, total deposits as a percentage of equity went from 4.00% to 3.77%. On an absolute basis, net loan assets changed 8.85% compared to the same period last year and 8.85% from the previous period. Total deposits changed 1.60% compared to the same period last year and 1.60% from the previous period.


Despite a decline in operating’s margins as well as a decline in pretax margins, the company’s earnings rose.

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

Access our Ratings and Scores for Hilltop Holdings, Inc.

Company Profile

Hilltop Holdings, Inc. engages in the provision of banking, mortgage origination, financial advisory, and insurance services. It operates through the following segments: Banking, Broker-Dealer, Mortgage Origination, and Insurance. The Banking segment includes business banking, personal banking, and wealth and investment management. The Broker-Dealer segment includes the following lines of business: public finance, capital markets, retail, structured finance, clearing services, and securities lending. The Mortgage Origination segment, through the Bank’s subsidiary, PrimeLending, handles loan processing, underwriting and closings in-house. The Insurance segment operates through NLC, which provides fire and limited homeowners insurance for low value dwellings and manufactured homes. The company was founded in July 1998 and is headquartered in Dallas, TX.

CapitalCube does not own any shares in the stocks mentioned and focuses solely on providing unique fundamental research and analysis on approximately 50,000 stocks and ETFs globally. Try any of our analysis, screener or portfolio premium services free for 7 days. To get a quick preview of our services, check out our free quick summary analysis of HTH-US.