JACKSONVILLE, Fla.--(BUSINESS WIRE)--EverBank Financial Corp (NYSE: EVER) announced today its financial results for the third quarter ended September 30, 2013.
GAAP diluted earnings per share was $0.25, a 32% increase from $0.19 in the third quarter 2012 and a 29% decrease from $0.35 in the second quarter 2013. Adjusted diluted earnings per share was $0.26, a 13% decrease from $0.30 in the third quarter 2012 and a 7% decrease from $0.28 in the second quarter 2013.1
“We are pleased with the solid results for the quarter which were driven by continued strong earnings contribution from our core banking franchise. During the quarter, we also completed several significant strategic initiatives that position EverBank for continued growth and success," said Robert M. Clements, Chairman and Chief Executive Officer.
The Company also announced today a series of transactions designed to optimize its servicing business by partnering with Walter Investment Management Corp., and its subsidiary, Green Tree Servicing LLC ("GTS"), on the sale and subservicing of $20.3 billion of unpaid principal balance ("UPB") of higher delinquency profile servicing and the sale of its default servicing platform.
"We are excited about the opportunity to partner with Green Tree on this transaction. The servicing of loans with higher-delinquency profiles has become a specialized business and Green Tree has demonstrated a strong track record of success in this market," Clements continued.
Third Quarter 2013 Key Highlights
- Tangible common equity per common share of $11.42 at September 30, 2013, an increase of 11% compared to the third quarter 2012.
- Net income of $33 million, an increase of 49% compared to the third quarter of 2012.
- Adjusted net income of $34 million, a decrease of 5% compared to the third quarter of 2012.
- Revenue of $282 million, an increase of 26% compared to the third quarter of 2012.
- Total organic asset generation of $3.1 billion, a decrease of 2% compared to the third quarter of 2012.
- Realized $35 million mortgage servicing rights valuation recovery.
- Return on equity ("ROE") was 8.7% and adjusted ROE was 9.0%.
- Strong liquidity and capital position with bank tier 1 leverage ratio of 8.8% and bank total risked-based capital ratio of 14.5%.
Strategic Business Activities
The Company entered into a series of agreements with GTS on October 30, 2013 which will enable EverBank to position its mortgage servicing business toward prime performing mortgages as well as improve its operating efficiency. The transaction includes the following:
- Sale of $13.4 billion of UPB of FNMA, FHLMC and private investor mortgage servicing rights. The sale is expected to close in the fourth quarter of 2013.
- Sale of EverBank’s default servicing platform. GTS will assume lease obligations on approximately 86,000 square feet of space at EverBank Center in Jacksonville and acquire the fixed assets associated with the default platform. The sale is expected to close in the first quarter of 2014.
-
Entered into a subservicing partnership agreement with GTS to
sub-service EverBank's Ginnie Mae and government loan servicing
portfolio with a UPB of approximately $6.9 billion. The subservicing
agreement will begin in the first quarter of 2014 concurrent with the
sale of the default servicing platform.
1 A reconciliation of Non-GAAP financial measures can be found in the financial tables attached hereto.
We expect the above transactions to positively impact the Company's future pre-tax income by $20 to $25 million. One time transaction costs are expected to be $10 to $15 million and recognized in the fourth quarter of 2013.
During the quarter, the Company also used excess cash to retire nearly $800 million in higher-cost wholesale borrowings which will increase net interest income and net interest margin in the future.
The above activities, combined with the exit from our wholesale broker mortgage business and our settlement with the OCC and Federal Reserve, position EverBank to better focus on our core clients and businesses.
"These initiatives will help to simplify our business and provide better visibility into the earnings power of our franchise. As a result of our strong capital and liquidity, we are well positioned for sustainable organic growth across our business channels," said W. Blake Wilson, President and Chief Operating Officer.
Balance Sheet
Loan Portfolio
Total portfolio loans held for investment ("HFI") were $12.6 billion at September 30, 2013, an increase of $2.5 billion, or 25%, year over year. Compared to the prior quarter, this represents a decrease of $0.3 billion, or 2%. Loans HFI for the third quarter 2013 were comprised of:
| ($ in millions) |
Sep 30,
2013 |
Jun 30,
2013 |
Sep 30,
2012 |
||||||||
| Residential loans | $ | 4,624 | $ | 4,237 | $ | 4,127 | |||||
| Mortgage pool buyouts | 2,075 | 2,349 | 2,680 | ||||||||
| Total residential | 6,699 | 6,586 | 6,807 | ||||||||
| Commercial real estate | 3,243 | 3,307 | 1,092 | ||||||||
| Lease financing receivables | 1,093 | 1,015 | 742 | ||||||||
| Commercial | 514 | 491 | 399 | ||||||||
| Total commercial finance & CRE | 4,850 | 4,813 | 2,233 | ||||||||
| Warehouse finance | 851 | 1,292 | 824 | ||||||||
| Other | 163 | 176 | 193 | ||||||||
| Total HFI | $ | 12,563 | $ | 12,867 | $ | 10,057 | |||||
During the third quarter, residential loans HFI increased by 9% compared to the prior quarter to $4.6 billion, driven by continued growth in our high quality prime jumbo hybrid ARM portfolio. Our commercial lending and leasing platforms represented approximately 45% of loans HFI in the third quarter compared to approximately 30% a year ago. Continued growth in our commercial finance and leasing portfolios were offset by lower warehouse finance balances experienced at quarter end.
Loan Origination Activities
Organic asset generation totaled $3.1 billion and retained organic originations totaled $1.1 billion for the third quarter of 2013, a decrease of 19% and 3%, respectively, from the prior quarter. Total commercial loans and leases originated during the quarter were $352 million, including leases of $177 million and commercial real estate originations of $122 million. Year to date, commercial originations totaled $1.3 billion, including leases of $515 million and commercial real estate originations of $341 million.
Residential loan originations were $2.7 billion for the third quarter of 2013, a decrease of 17% compared to the prior quarter and an increase of 7% year over year. Excluding the impact of our previously announced wholesale broker channel exit, origination volume was $2.4 billion, a decrease of 13% compared to the prior quarter and an increase of 25% year over year. Origination volume from our retail channel was $1.0 billion in the third quarter, a decrease of 15% from the prior quarter and a 100% increase year over year. Purchase transactions represented 40% of total volumes and 66% of retail volumes, compared to 32% and 49%, respectively, in the prior quarter. HARP volume was approximately 28% of total volume during the quarter compared to 17% in the prior quarter.
Our gain on sale margin decreased by 48 basis points during the quarter to 1.68%. Agency conforming loan originations sold into the secondary market generated a gain on sale margin of 2.86% during the third quarter of 2013 compared to 3.53% in the prior quarter and 3.65% during the third quarter of 2012. While we maintain the flexibility and capability to best execute our nonagency originations according to market conditions, we expect the majority of future nonagency loans will be originated for our portfolio and loans held for sale will consist of GSE-eligible conventional loans.
The following table presents total organic loan and lease origination information by product type:
| ($ in millions) |
Sep 30, 2013 |
Jun 30, 2013 |
Sep 30, 2012 |
||||||||
| Residential origination volume | |||||||||||
| Conventional loans | $ | 1,933 | $ | 2,203 | $ | 2,126 | |||||
| Prime jumbo loans | 767 | 1,048 | 405 | ||||||||
| 2,700 | 3,251 | 2,531 | |||||||||
| Commercial origination volume | |||||||||||
| Commercial real estate | 122 | 157 | 97 | ||||||||
| Lease financing receivables | 177 | 187 | 134 | ||||||||
| Warehouse finance | 7 | 69 | 192 | ||||||||
| Commercial | 46 | 114 | 156 | ||||||||
| 352 | 527 | 579 | |||||||||
| Total organic originations | $ | 3,052 | $ | 3,778 | $ | 3,110 | |||||
Deposits
Total deposits were $13.6 billion at September 30, 2013, flat quarter over quarter, as lower time deposit balances offset higher levels of noninterest-bearing deposits. Year over year, total deposits grew by $1.8 billion, or 15%, from $11.8 billion. Time deposits, excluding market-based deposits represented 22% of total deposits in the third quarter compared to 23% in the prior quarter. Business deposits grew 4% compared to the prior quarter and represented 13% of total deposits.
At September 30, 2013, our deposits were comprised of the following:
| ($ in millions) |
Sep 30, 2013 |
Jun 30, 2013 |
Sep 30, 2012 |
||||||||
| Noninterest-bearing demand | $ | 1,366 | $ | 1,205 | $ | 1,475 | |||||
| Interest-bearing demand | 2,999 | 3,082 | 2,424 | ||||||||
| Savings and money market accounts | 5,186 | 5,153 | 4,311 | ||||||||
| Global market-based accounts | 1,041 | 1,051 | 1,231 | ||||||||
| Time, excluding market-based | 3,036 | 3,179 | 2,375 | ||||||||
| Total deposits | $ | 13,628 | $ | 13,670 | $ | 11,816 | |||||
| Consumer deposits | 11,864 | 11,974 | 10,278 | ||||||||
| Business deposits | 1,764 | 1,696 | 1,538 | ||||||||
| Total deposits | $ | 13,628 | $ | 13,670 | $ | 11,816 | |||||
Total other borrowings were $1.9 billion at September 30, 2013, a decrease of 30% quarter over quarter. This decrease resulted from the early extinguishment of $0.8 billion of Federal Home Loan Bank advances.
Capital Strength
Total shareholders' equity was $1.6 billion at September 30, 2013, an increase of 3% quarter over quarter. The bank’s Tier 1 leverage ratio was 8.8% and total risk-based capital ratio was 14.5% at September 30, 2013. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines. Our current estimate of the fully phased-in Basel III Tier 1 common capital ratio at September 30, 2013 is between 9.5% - 10.0%.
Credit Quality
Our adjusted non-performing assets were 1.01% of total assets at September 30, 2013, compared to 0.92% for the prior quarter and 1.29% at September 30, 2012. Net charge-offs during the third quarter of 2013 were $10 million, an increase of $6 million compared to the prior quarter. On an annualized basis, net charge-offs were 0.30% of total average loans and leases held for investment, compared to 0.12% for the prior quarter and 0.25% for the third quarter of 2012. The sequential increase in net charge-offs was driven by both higher charge-off and lower recovery levels related primarily to Bank of Florida loans and non-core commercial real estate loans.
Originated Loan Repurchase Activity
During the third quarter of 2013, we experienced net realized losses on loan repurchases of $2.2 million and recorded a net recovery of provision of $0.7 million for repurchase obligations on loans sold or securitized. Our reserve declined from $22 million in the second quarter of 2013 to $19 million in the third quarter of 2013. We continue to be well reserved with approximately 5 quarters of coverage based on the average quarterly loss rate over the trailing four quarters.
Income Statement Highlights
Revenue
Revenue for the third quarter of 2013 was $282 million, a decrease of $6 million, or 2%, from $288 million in the second quarter of 2013. The decline was driven by lower gain on sale of loans income and lower interest income, offset by higher other income and net servicing income in addition to lower interest expense.
Net Interest Income
For the third quarter of 2013, net interest income was $139 million, a decrease of $2 million, or 2%, compared to the prior quarter. This decrease was attributed to lower interest income driven primarily by lower loans HFS and investment securities average balances. Offsetting these were higher commercial average yields and balances, as well as lower interest expense driven by a decline in total deposit cost resulting from lower yields introduced in June 2013.
Core net interest margin, which is net interest margin excluding the impact of Tygris excess accretion, decreased to 3.17% for the third quarter of 2013 from 3.21% in the second quarter of 2013.
Noninterest Income
Noninterest income for the third quarter of 2013 was $144 million, a decrease of $3 million, or 2%, compared to the prior quarter. This decrease was driven by a $24 million decline in gain on sale of loans income, offset by a $12 million increase in net loan servicing income and an $8 million increase in other income.
Noninterest Expense
Noninterest expense for the third quarter of 2013 increased by $12 million, or 6%, to $226 million from $214 million in the prior quarter. Adjusted for consent order expense of $32 million and non-recurring restructuring cost of $5 million, noninterest expense was $188 million in the quarter, a decrease of 3% compared to $194 million in the second quarter. General and administrative expense, excluding credit-related and consent order expense, increased $5 million, or 13%, from the second quarter due to a $6 million increase in other expense. Salaries, commissions and employee benefits decreased by $7 million, or 6%, due to lower variable costs related to origination activity levels.
Income Tax Expense
Our effective tax rate for the second and third quarter of 2013 was 38%, compared to 37% for the third quarter of 2012.
Segment Analysis for the Third Quarter of 2013
- Banking and Wealth Management pre-tax income was $90 million, a 1% increase compared to the prior quarter driven by a 7% reduction in noninterest expense.
- Mortgage Banking had a pre-tax loss of $14 million compared to pre-tax income of $10 million in the prior quarter, driven by lower noninterest income and higher noninterest expense.
- Corporate Services had a pre-tax loss of $23 million, a 9% decrease compared to the prior quarter driven by lower noninterest expense.
Dividends
On October 22, 2013, the Company's Board of Directors declared a quarterly cash dividend of $0.03 per common share, payable on November 22, 2013, to stockholders of record as of November 12, 2013. Also on October 22, 2013, the Company's Board of Directors declared a quarterly cash dividend of $421.875, payable on January 6, 2014, for each share of 6.75% Series A Non-Cumulative Perpetual Preferred Stock held as of December 20, 2013.
Subsequent Event
In October 2013, EverBank, along with other mortgage servicers, received a letter from the OCC requesting, in connection with the April 2011 consent order, that EverBank provide the OCC with an action plan to identify errors and provide remediation to borrowers serviced by EverBank for the period from January 1, 2011 through the present day, that may have been harmed by the same errors identified in the Independent Foreclosure Review. EverBank is presently preparing its action plan for OCC review and will submit that action plan in November 2013. At the present time, the Company is unable to estimate any liability that may result from the action plan.
Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, October 31, 2013 to discuss its third quarter 2013 results. The dial-in number for the conference call is 1-866-652-5200 and the international dial-in number is 1-412-317-6060, passcode is 10035214. A live webcast of the conference call will also be available on the investor relations page of the Company's website at www.abouteverbank.com/ir.
About EverBank Financial Corp
EverBank Financial Corp, through its wholly-owned subsidiary EverBank, provides a diverse range of financial products and services directly to clients nationwide through multiple business channels. Headquartered in Jacksonville, Florida, EverBank has $17.6 billion in assets and $13.6 billion in deposits as of September 30, 2013. With an emphasis on value, innovation and service, EverBank offers a broad selection of banking, lending and investing products to consumers and businesses nationwide. EverBank provides services to clients through the internet, over the phone, through the mail, at its Florida-based financial centers and at other business offices throughout the country. More information on EverBank can be found at www.abouteverbank.com/ir.
Forward Looking Statements
This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “could,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of those words or other comparable words are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the Company’s asset growth and earnings, industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: deterioration of general business and economic conditions, including the real estate and financial markets, in the United States and in the geographic regions and communities we serve; risks related to liquidity; our capital and liquidity requirements (including under regulatory capital standards, such as Basel III capital standards) and our ability to generate or raise capital; changes in interest rates that affect the pricing of our financial products, the demand for our financial services and the valuation of our financial assets and liabilities, mortgage servicing rights and mortgages held for sale; risk of higher loan and lease charge-offs; legislative or regulatory actions affecting or concerning mortgage loan modification and refinancing and foreclosure; our ability to comply with any supervisory actions to which we are or become subject as a result of examination by our regulators; concentration of our commercial real estate loan portfolio; higher than normal delinquency and default rates; limited ability to rely on brokered deposits as a part of our funding strategy; our ability to comply with the amended consent order and the terms and conditions of our settlement of the Independent Foreclosure Review; concentration of mass-affluent clients and jumbo mortgages; hedging strategies; the effectiveness of our derivatives to manage interest rate risk; delinquencies on our equipment leases and reductions in the resale value of leased equipment; increases in loan repurchase requests and our reserves for loan repurchases; changes in currency exchange rates or other political or economic changes in certain foreign countries; loss of key personnel; fraudulent and negligent acts by loan applicants, mortgage brokers, other vendors and our employees; changes in and compliance with laws and regulations that govern our operations; failure to establish and maintain effective internal controls and procedures; effects of changes in existing U.S. government or government-sponsored mortgage programs; changes in laws and regulations that may restrict our ability to originate or increase our risk of liability with respect to certain mortgage loans; risks related to the approval and consummation of anticipated acquisitions; risks related to the continuing integration of acquired businesses and any future acquisitions; environmental liabilities with respect to properties that we take title to upon foreclosure; and the inability of our banking subsidiary to pay dividends.
For additional factors that could materially affect our financial results, please refer to EverBank Financial Corp’s filings with the Securities and Exchange Commission, including but not limited to, the risks described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company undertakes no obligation to revise these statements following the date of this news release, except as required by law.
|
EverBank Financial Corp and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (Dollars in thousands, except per share data) |
||||||||
|
September 30, |
December 31, |
|||||||
| Assets | ||||||||
| Cash and due from banks | $ | 109,471 | $ | 175,400 | ||||
| Interest-bearing deposits in banks | 978,464 | 268,514 | ||||||
| Total cash and cash equivalents | 1,087,935 | 443,914 | ||||||
| Investment securities: | ||||||||
| Available for sale, at fair value | 1,205,340 | 1,619,878 | ||||||
| Held to maturity (fair value of $108,269 and $146,709 as of September 30, 2013 and December 31, 2012, respectively) | 109,245 | 143,234 | ||||||
| Other investments | 106,450 | 158,172 | ||||||
| Total investment securities | 1,421,035 | 1,921,284 | ||||||
| Loans held for sale (includes $1,047,086 and $1,452,236 carried at fair value as of September 30, 2013 and December 31, 2012, respectively) | 1,059,947 | 2,088,046 | ||||||
| Loans and leases held for investment: | ||||||||
| Loans and leases held for investment, net of unearned income | 12,562,967 | 12,505,089 | ||||||
| Allowance for loan and lease losses | (66,991 | ) | (82,102 | ) | ||||
| Total loans and leases held for investment, net | 12,495,976 | 12,422,987 | ||||||
| Equipment under operating leases, net | 34,918 | 50,040 | ||||||
| Mortgage servicing rights (MSR), net | 501,494 | 375,859 | ||||||
| Deferred income taxes, net | 92,253 | 170,877 | ||||||
| Premises and equipment, net | 67,282 | 66,806 | ||||||
| Other assets | 851,249 | 703,065 | ||||||
| Total Assets | $ | 17,612,089 | $ | 18,242,878 | ||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 1,365,655 | $ | 1,445,783 | ||||
| Interest-bearing | 12,262,021 | 11,696,605 | ||||||
| Total deposits | 13,627,676 | 13,142,388 | ||||||
| Other borrowings | 1,872,700 | 3,173,021 | ||||||
| Trust preferred securities | 103,750 | 103,750 | ||||||
| Accounts payable and accrued liabilities | 405,050 | 372,543 | ||||||
| Total Liabilities | 16,009,176 | 16,791,702 | ||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity | ||||||||
| Series A 6.75% Non-Cumulative Perpetual Preferred Stock, $0.01 par value (liquidation preference of $25,000 per share;10,000,000 shares authorized; 6,000 issued and outstanding at September 30, 2013 and December 31, 2012) | 150,000 | 150,000 | ||||||
| Common Stock, $0.01 par value (500,000,000 shares authorized; 122,544,510 and 120,987,955 issued and outstanding at September 30, 2013 and December 31, 2012, respectively) | 1,225 | 1,210 | ||||||
| Additional paid-in capital | 830,758 | 811,085 | ||||||
| Retained earnings | 677,809 | 575,665 | ||||||
| Accumulated other comprehensive income (loss) (AOCI) | (56,879 | ) | (86,784 | ) | ||||
| Total Shareholders’ Equity | 1,602,913 | 1,451,176 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 17,612,089 | $ | 18,242,878 | ||||
|
EverBank Financial Corp and Subsidiaries Condensed Consolidated Statements of Income (unaudited) (Dollars in thousands, except per share data) |
||||||||||||||||
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans and leases | $ | 170,110 | $ | 140,230 | $ | 516,619 | $ | 400,824 | ||||||||
| Interest and dividends on investment securities | 13,376 | 20,879 | 44,439 | 62,127 | ||||||||||||
| Other interest income | 493 | 152 | 1,108 | 338 | ||||||||||||
| Total Interest Income | 183,979 | 161,261 | 562,166 | 463,289 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 24,437 | 22,491 | 77,827 | 63,884 | ||||||||||||
| Other borrowings | 20,686 | 12,576 | 60,450 | 32,604 | ||||||||||||
| Total Interest Expense | 45,123 | 35,067 | 138,277 | 96,488 | ||||||||||||
| Net Interest Income | 138,856 | 126,194 | 423,889 | 366,801 | ||||||||||||
| Provision for Loan and Lease Losses | 3,068 | 4,359 | 5,016 | 21,471 | ||||||||||||
| Net Interest Income after Provision for Loan and Lease Losses | 135,788 | 121,835 | 418,873 | 345,330 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Loan servicing fee income | 50,713 | 42,341 | 140,068 | 130,380 | ||||||||||||
| Amortization of mortgage servicing rights | (30,438 | ) | (36,292 | ) | (101,461 | ) | (99,773 | ) | ||||||||
| Recovery (impairment) of mortgage servicing rights | 35,132 | (18,229 | ) | 80,259 | (63,508 | ) | ||||||||||
| Net loan servicing income | 55,407 | (12,180 | ) | 118,866 | (32,901 | ) | ||||||||||
| Gain on sale of loans | 51,397 | 85,748 | 209,545 | 203,851 | ||||||||||||
| Loan production revenue | 10,514 | 10,528 | 30,066 | 27,817 | ||||||||||||
| Deposit fee income | 4,952 | 4,671 | 15,167 | 16,738 | ||||||||||||
| Other lease income | 6,506 | 7,103 | 19,388 | 24,588 | ||||||||||||
| Other | 14,793 | 1,429 | 30,650 | 4,522 | ||||||||||||
| Total Noninterest Income | 143,569 | 97,299 | 423,682 | 244,615 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries, commissions and other employee benefits expense | 111,144 | 85,399 | 340,080 | 228,266 | ||||||||||||
| Equipment expense | 20,609 | 17,574 | 61,168 | 50,411 | ||||||||||||
| Occupancy expense | 8,675 | 6,619 | 23,606 | 17,985 | ||||||||||||
| General and administrative expense | 85,268 | 74,377 | 226,198 | 221,911 | ||||||||||||
| Total Noninterest Expense | 225,696 | 183,969 | 651,052 | 518,573 | ||||||||||||
| Income before Provision for Income Taxes | 53,661 | 35,165 | 191,503 | 71,372 | ||||||||||||
| Provision for Income Taxes | 20,511 | 12,987 | 73,214 | 26,176 | ||||||||||||
| Net Income | $ | 33,150 | $ | 22,178 | $ | 118,289 | $ | 45,196 | ||||||||
| Less: Net Income Allocated to Preferred Stock | (2,532 | ) | — | (7,594 | ) | (8,564 | ) | |||||||||
| Net Income Allocated to Common Shareholders | $ | 30,618 | $ | 22,178 | $ | 110,695 | $ | 36,632 | ||||||||
| Basic Earnings Per Common Share | $ | 0.25 | $ | 0.19 | $ | 0.91 | $ | 0.37 | ||||||||
| Diluted Earnings Per Common Share | $ | 0.25 | $ | 0.19 | $ | 0.89 | $ | 0.37 | ||||||||
| Dividends Declared Per Common Share | $ | 0.03 | $ | 0.02 | $ | 0.07 | $ | 0.02 | ||||||||
Non-GAAP Financial Measures
This press release contains financial information and performance measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Adjusted Net Income, Adjusted Earnings Per Share, Adjusted Return on Equity, Adjusted Non-Performing Asset Ratio, Tangible Shareholders’ Equity, Tangible Common Shareholders' Equity, Adjusted Tangible Common Shareholders’ Equity, and Tangible Assets are non-GAAP financial measures. The Company’s management uses these measures to evaluate the underlying performance and efficiency of its operations. The Company’s management believes these non-GAAP measures provide meaningful additional information about the operating performance of the Company’s business and facilitate a meaningful comparison of our results in the current period to those in prior periods and future periods because these non-GAAP measures exclude certain items that may not be indicative of our core operating results and business outlook. In addition, the Company’s management believes that certain of these non-GAAP measures represent a consistent benchmark against which to evaluate the Company’s growth, profitability and capital position. These non-GAAP measures are provided to enhance investors’ overall understanding of our current financial performance, and not as a substitute for, the Company’s reported results. Moreover, the manner in which we calculate these measures may differ from that of other companies reporting non-GAAP measures with similar names.
In the tables below, we have provided a reconciliation of, where applicable, the most comparable GAAP financial measures and ratios to the non-GAAP financial measures and ratios used in this press release, or a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated:
| EverBank Financial Corp and Subsidiaries | ||||||||||||||||||||
| Adjusted Net Income | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (dollars in thousands, except per share data) |
September 30, |
June 30, 2013 |
March 31, 2013 |
December 31, |
September 30, |
|||||||||||||||
| Net income | $ | 33,150 | $ | 45,993 | $ | 39,146 | $ | 28,846 | $ | 22,178 | ||||||||||
| Transaction expense, net of tax | — | — | — | 903 | 1,268 | |||||||||||||||
| Non-recurring regulatory related expense, net of tax | 20,203 | 12,042 | 11,425 | 9,564 | 1,326 | |||||||||||||||
| Increase (decrease) in Bank of Florida non-accretable discount, net of tax | (439 | ) | (538 | ) | 950 | 486 | 111 | |||||||||||||
| Adoption of TDR guidance and policy change, net of tax | — | — | — | 3,709 | — | |||||||||||||||
| MSR impairment (recovery), net of tax | (21,783 | ) | (20,194 | ) | (7,784 | ) | — | 11,302 | ||||||||||||
| Restructuring expense, net of tax | 3,242 | — | — | — | — | |||||||||||||||
| Adjusted net income | $ | 34,373 | $ | 37,303 | $ | 43,737 | $ | 43,508 | $ | 36,185 | ||||||||||
| Adjusted net income allocated to preferred stock | 2,532 | 2,531 | 2,531 | 1,491 | — | |||||||||||||||
| Adjusted net income allocated to common shareholders | $ | 31,841 | $ | 34,772 | $ | 41,206 | $ | 42,017 | $ | 36,185 | ||||||||||
| Adjusted net earnings per common share, basic | $ | 0.26 | $ | 0.28 | $ | 0.34 | $ | 0.35 | $ | 0.31 | ||||||||||
| Adjusted net earnings per common share, diluted | $ | 0.26 | $ | 0.28 | $ | 0.33 | $ | 0.34 | $ | 0.30 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| (units in thousands) | ||||||||||||||||||||
| Basic | 122,509 | 122,281 | 121,583 | 120,773 | 118,038 | |||||||||||||||
| Diluted | 124,124 | 124,034 | 123,439 | 122,807 | 119,591 | |||||||||||||||
| EverBank Financial Corp and Subsidiaries | |||||||||||||||||||||
|
Tangible Equity, Tangible Common Equity,
Adjusted Tangible Common Equity and Tangible Assets |
|||||||||||||||||||||
| (dollars in thousands) |
September 30, |
June 30, 2013 |
March 31, 2013 |
December 31, |
September 30, |
||||||||||||||||
| Shareholders’ equity | $ | 1,602,913 | $ | 1,549,383 | $ | 1,504,442 | $ | 1,451,176 | $ | 1,258,022 | |||||||||||
| Less: | |||||||||||||||||||||
| Goodwill | 46,859 | 46,859 | 46,859 | 46,859 | 10,238 | ||||||||||||||||
| Intangible assets | 6,340 | 6,867 | 7,394 | 7,921 | 6,348 | ||||||||||||||||
| Tangible equity | 1,549,714 | 1,495,657 | 1,450,189 | 1,396,396 | 1,241,436 | ||||||||||||||||
| Less: | |||||||||||||||||||||
| Perpetual preferred stock | 150,000 | 150,000 | 150,000 | 150,000 | — | ||||||||||||||||
| Tangible common equity | 1,399,714 | 1,345,657 | 1,300,189 | 1,246,396 | 1,241,436 | ||||||||||||||||
| Less: | |||||||||||||||||||||
| Accumulated other comprehensive loss | (56,879 | ) | (80,389 | ) | (80,324 | ) | (86,784 | ) | (106,731 | ) | |||||||||||
| Adjusted tangible common equity | $ | 1,456,593 | $ | 1,426,046 | $ | 1,380,513 | $ | 1,333,180 | $ | 1,348,167 | |||||||||||
| Total assets | $ | 17,612,089 | $ | 18,362,872 | $ | 18,306,488 | $ | 18,242,878 | $ | 16,509,440 | |||||||||||
| Less: | |||||||||||||||||||||
| Goodwill | 46,859 | 46,859 | 46,859 | 46,859 | 10,238 | ||||||||||||||||
| Intangible assets | 6,340 | 6,867 | 7,394 | 7,921 | 6,348 | ||||||||||||||||
| Tangible assets | $ | 17,558,890 | $ | 18,309,146 | $ | 18,252,235 | $ | 18,188,098 | $ | 16,492,854 | |||||||||||
| Regulatory Capital (bank level) | |||||||||||||||||||||
| (dollars in thousands) |
September 30, |
June 30, 2013 | March 31, 2013 |
December 31, |
September 30, |
||||||||||||||||
| Shareholders’ equity | $ | 1,648,152 | $ | 1,598,419 | $ | 1,560,001 | $ | 1,518,934 | $ | 1,339,669 | |||||||||||
| Less: | Goodwill and other intangibles | (51,436 | ) | (51,807 | ) | (52,089 | ) | (54,780 | ) | (16,586 | ) | ||||||||||
| Disallowed servicing asset | (39,658 | ) | (36,182 | ) | (31,585 | ) | (32,378 | ) | (33,366 | ) | |||||||||||
| Disallowed deferred tax asset | (64,462 | ) | (65,406 | ) | (66,351 | ) | (67,296 | ) | (69,412 | ) | |||||||||||
| Add: | Accumulated losses on securities and cash flow hedges | 54,392 | 78,181 | 77,073 | 83,477 | 103,238 | |||||||||||||||
| Tier 1 capital | 1,546,988 | 1,523,205 | 1,487,049 | 1,447,957 | 1,323,543 | ||||||||||||||||
| Add: | Allowance for loan and lease losses | 66,991 | 73,469 | 77,067 | 82,102 | 76,469 | |||||||||||||||
| Total regulatory capital | $ | 1,613,979 | $ | 1,596,674 | $ | 1,564,116 | $ | 1,530,059 | $ | 1,400,012 | |||||||||||
| Adjusted total assets | $ | 17,510,528 | $ | 18,287,359 | $ | 18,234,886 | $ | 18,141,856 | $ | 16,488,067 | |||||||||||
| Risk-weighted assets | 11,120,048 | 11,656,698 | 11,406,725 | 11,339,415 | 8,701,164 | ||||||||||||||||
| EverBank Financial Corp and Subsidiaries | ||||||||||||||||||||
| Non-Performing Assets(1) | ||||||||||||||||||||
| (dollars in thousands) |
September 30, |
June 30, 2013 | March 31, 2013 |
December 31, |
September 30, |
|||||||||||||||
| Non-accrual loans and leases: | ||||||||||||||||||||
| Residential mortgages | $ | 60,066 | $ | 64,230 | $ | 69,876 | $ | 73,752 | $ | 75,355 | ||||||||||
| Commercial and commercial real estate | 76,662 | 60,636 | 63,924 | 76,289 | 85,306 | |||||||||||||||
| Lease financing receivables | 4,171 | 2,601 | 2,791 | 2,010 | 2,018 | |||||||||||||||
| Home equity lines | 4,164 | 4,368 | 4,513 | 4,246 | 4,492 | |||||||||||||||
| Consumer and credit card | 15 | 243 | 364 | 332 | 479 | |||||||||||||||
| Total non-accrual loans and leases | 145,078 | 132,078 | 141,468 | 156,629 | 167,650 | |||||||||||||||
| Accruing loans 90 days or more past due | — | — | — | — | 1,973 | |||||||||||||||
| Total non-performing loans (NPL) | 145,078 | 132,078 | 141,468 | 156,629 | 169,623 | |||||||||||||||
| Other real estate owned (OREO) | 32,108 | 36,528 | 39,576 | 40,492 | 43,612 | |||||||||||||||
| Total non-performing assets (NPA) | 177,186 | 168,606 | 181,044 | 197,121 | 213,235 | |||||||||||||||
| Troubled debt restructurings (TDR) less than 90 days past due | 79,664 | 82,236 | 88,888 | 90,094 | 82,030 | |||||||||||||||
| Total NPA and TDR(1) | $ | 256,850 | $ | 250,842 | $ | 269,932 | $ | 287,215 | $ | 295,265 | ||||||||||
| Total NPA and TDR | $ | 256,850 | $ | 250,842 | $ | 269,932 | $ | 287,215 | $ | 295,265 | ||||||||||
| Government-insured 90 days or more past due still accruing | 1,147,795 | 1,405,848 | 1,547,995 | 1,729,877 | 1,684,550 | |||||||||||||||
| Loans accounted for under ASC 310-30: | ||||||||||||||||||||
| 90 days or more past due | 45,104 | 54,054 | 67,630 | 79,984 | 117,506 | |||||||||||||||
| OREO | 21,240 | 21,194 | 22,955 | 16,528 | 18,557 | |||||||||||||||
| Total regulatory NPA and TDR | $ | 1,470,989 | $ | 1,731,938 | $ | 1,908,512 | $ | 2,113,604 | $ | 2,115,878 | ||||||||||
| Adjusted credit quality ratios excluding government-insured loans and loans accounted for under ASC 310-30: (1) | ||||||||||||||||||||
| NPL to total loans | 1.07 | % | 0.89 | % | 0.97 | % | 1.08 | % | 1.49 | % | ||||||||||
| NPA to total assets | 1.01 | % | 0.92 | % | 0.99 | % | 1.08 | % | 1.29 | % | ||||||||||
| NPA and TDR to total assets | 1.46 | % | 1.37 | % | 1.47 | % | 1.57 | % | 1.79 | % | ||||||||||
| Credit quality ratios including government-insured loans and loans accounted for under ASC 310-30: | ||||||||||||||||||||
| NPL to total loans | 9.87 | % | 10.76 | % | 12.04 | % | 13.55 | % | 17.32 | % | ||||||||||
| NPA to total assets | 7.90 | % | 8.98 | % | 9.94 | % | 11.09 | % | 12.32 | % | ||||||||||
| NPA and TDR to total assets | 8.35 | % | 9.43 | % | 10.43 | % | 11.59 | % | 12.82 | % | ||||||||||
|
(1) We define non-performing assets, or NPA, as non-accrual loans, accruing loans past due 90 days or more and foreclosed property. Our NPA calculation excludes government-insured pool buyout loans for which payment is insured by the government. We also exclude loans and foreclosed property accounted for under ASC 310-30 because we expect to fully collect the carrying value of such loans and foreclosed property. |
||||||||||||||||||||
| EverBank Financial Corp and Subsidiaries | ||||||||||||||||||||
| Business Segments Selected Financial Information | ||||||||||||||||||||
| (dollars in thousands) |
Banking and |
Mortgage |
Corporate Services |
Eliminations | Consolidated | |||||||||||||||
| Three Months Ended September 30, 2013 | ||||||||||||||||||||
| Net interest income | $ | 125,545 | $ | 14,889 | $ | (1,578 | ) | $ | — | $ | 138,856 | |||||||||
| Provision for loan and lease losses | 1,216 | 1,852 | — | — | 3,068 | |||||||||||||||
| Net interest income after provision for loan and lease losses | 124,329 | 13,037 | (1,578 | ) | — | 135,788 | ||||||||||||||
| Noninterest income | 32,937 | 110,479 | 153 | — | 143,569 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Foreclosure and OREO expense | 6,354 | 1,870 | — | — | 8,224 | |||||||||||||||
| Other credit-related expenses | 533 | 3,099 | — | — | 3,632 | |||||||||||||||
| All other noninterest expense | 60,341 | 132,312 | 21,187 | — | 213,840 | |||||||||||||||
| Income (loss) before income tax | 90,038 | (13,765 | ) | (22,612 | ) | — | 53,661 | |||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Decrease in Bank of Florida non-accretable discount | (708 | ) | — | — | — | (708 | ) | |||||||||||||
| MSR impairment (recovery) | — | (35,132 | ) | — | — | (35,132 | ) | |||||||||||||
| Restructuring expense | 1,901 | 2,527 | 799 | — | 5,227 | |||||||||||||||
| Transaction and non-recurring regulatory related expense | — | 32,437 | 148 | — | 32,585 | |||||||||||||||
| Adjusted income (loss) before income tax | 91,231 | (13,933 | ) | (21,665 | ) | — | 55,633 | |||||||||||||
| Total assets as of September 30, 2013 | 15,502,004 | 2,106,162 | 213,745 | (209,822 | ) | 17,612,089 | ||||||||||||||
| Three Months Ended June 30, 2013 | ||||||||||||||||||||
| Net interest income | $ | 127,072 | $ | 15,719 | $ | (1,574 | ) | $ | — | $ | 141,217 | |||||||||
| Provision for loan and lease losses | (1,320 | ) | 1,349 | — | — | 29 | ||||||||||||||
| Net interest income after provision for loan and lease losses | 128,392 | 14,370 | (1,574 | ) | — | 141,188 | ||||||||||||||
| Noninterest income | 32,654 | 113,901 | 249 | — | 146,804 | |||||||||||||||
| Noninterest expense: | ||||||||||||||||||||
| Foreclosure and OREO expense | 6,577 | 3,037 | — | — | 9,614 | |||||||||||||||
| Other credit-related expenses | 1,238 | 612 | — | — | 1,850 | |||||||||||||||
| All other noninterest expense | 64,155 | 114,275 | 23,646 | — | 202,076 | |||||||||||||||
| Income (loss) before income tax | 89,076 | 10,347 | (24,971 | ) | — | 74,452 | ||||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Decrease in Bank of Florida non-accretable discount | (867 | ) | — | — | — | (867 | ) | |||||||||||||
| MSR impairment (recovery) | — | (32,572 | ) | — | — | (32,572 | ) | |||||||||||||
| Transaction and non-recurring regulatory related expense | — | 18,012 | 1,410 | — | 19,422 | |||||||||||||||
| Adjusted income (loss) before income tax | 88,209 | (4,213 | ) | (23,561 | ) | — | 60,435 | |||||||||||||
| Total assets as of June 30, 2013 | 15,588,567 | 2,805,876 | 194,395 | (225,966 | ) | 18,362,872 | ||||||||||||||
| Three Months Ended September 30, 2012 | |||||||||||||||||||
| Net interest income | $ | 114,587 | $ | 13,105 | $ | (1,498 | ) | $ | — | $ | 126,194 | ||||||||
| Provision for loan and lease losses | 3,547 | 812 | — | — | 4,359 | ||||||||||||||
| Net interest income after provision for loan and lease losses | 111,040 | 12,293 | (1,498 | ) | — | 121,835 | |||||||||||||
| Noninterest income | 20,608 | 76,693 | (2 | ) | — | 97,299 | |||||||||||||
| Noninterest expense: | |||||||||||||||||||
| Foreclosure and OREO expense | 17,463 | 2,176 | — | — | 19,639 | ||||||||||||||
| Other credit-related expenses | 1,879 | 3,544 | 2 | — | 5,425 | ||||||||||||||
| All other noninterest expense | 60,526 | 65,900 | 32,479 | — | 158,905 | ||||||||||||||
| Income (loss) before income tax | 51,780 | 17,366 | (33,981 | ) | — | 35,165 | |||||||||||||
| Adjustment items (pre-tax): | |||||||||||||||||||
| Increase in Bank of Florida non-accretable discount | 178 | — | — | — | 178 | ||||||||||||||
| MSR impairment (recovery) | — | 18,229 | — | — | 18,229 | ||||||||||||||
| Transaction and non-recurring regulatory related expense | — | 1,657 | 2,527 | — | 4,184 | ||||||||||||||
| Adjusted income (loss) before income tax | 51,958 | 37,252 | (31,454 | ) | — | 57,756 | |||||||||||||
| Total assets as of September 30, 2012 | 14,696,893 | 1,838,964 | 129,141 | (155,558 | ) | 16,509,440 | |||||||||||||
