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Hilltop Holdings Inc. Reports Operating Results (10-Q)

November 06, 2009 | About:
10qk

10qk

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Hilltop Holdings Inc. (HTH) filed Quarterly Report for the period ended 2009-09-30.

Affordable Residential Communities is a fully integrated self-administered self-managed equity real estate investment trust focused primarily on the acquisition renovation repositioning and operation of all-age manufactured home communities with headquarters in Denver Colo. ARC also rents and sells manufactured homes finances sales of manufactured homes and acts as an agent in the sale of homeowners' insurance and other related insurance products all exclusively to residents of its communities. Hilltop Holdings Inc. has a market cap of $674.4 million; its shares were traded at around $11.94 with and P/S ratio of 6.6.

Highlight of Business Operations:

For the nine months ended September 30, 2009, net loss attributable to common stockholders was $13.0 million, or $0.23 per share, as compared to net loss of $36.7 million, or $0.65 per share, for the same period in 2008. Net loss from operations accounted for $5.3 million of the net loss for the nine months ended September 30, 2009, compared to $29.0 million of the net loss for the nine months ended September 30, 2008.

by $42.2 million ($27.4 million net of tax). This decrease primarily relates to a $41.9 million loss on securities sold ($27.2 million net of tax) during the nine months ended September 30, 2009, for equity securities held at HTH for potential acquisition. The decrease in loss on investments for the nine months ended September 30, 2009 due to lower investment income in 2009 of $16.9 million ($11.0 million net of tax) primarily generated on the cash at HTH, a decrease in loss and loss adjustment expense of $12.2 million ($7.9 million net of tax), and an increase in earned premium of $3.2 million ($2.1 million net of tax) due to lower reinstatement premiums offset by higher reinsurance costs.

Revenue. Revenue for the three months ended September 30, 2009 was $32.7 million, as compared to $29.7 million for the same period in 2008. Net premiums earned were $29.1 million for the three months ended September 30, 2009, as compared to $22.7 million for 2008. Net premiums earned were favorable by $6.4 million due to the reinstatement premium booked in 2008 of $8.2 million for hurricanes Dolly, Gustav and Ike offset by higher reinsurance costs and direct premiums earned in 2009. Net investment income was $1.5 million for the three months ended September 2009, as compared to $6.7 million for the same period in 2008, primarily due to lower yields on HTH parent only cash of $4.7 million. We had a net realized gain on investments of $0.2 million in for the three

months ended September 30, 2009, as compared to a net loss of $1.1 million, due to an other-than-temporary impairment of $1.1 million for the same period in 2008. Other income was $1.9 million for the third quarter in 2009, as compared to $1.5 million for 2008. The increase in service fee income was primarily due to additional fees for policies that include wind coverage in hurricane prone areas. Net income before preferred stock dividends for the three months ended September 30, 2009, was $1.7 million due to the profitability of the insurance operations at NLASCO partially offset by losses from the parent, HTH.

Read the The complete ReportHTH is in the portfolios of Michael Price of MFP Investors LLC.

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