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EverBank Financial Corp Announces Second Quarter 2012 Financial Results And Initiation Of Quarterly Dividend

About EverBank Financial Corp

EverBank Financial Corp provides a diverse range of financial products and services directly to clients nationwide through multiple business channels. Headquartered in Jacksonville, Florida, EverBank has $15.0 billion in assets and $10.8 billion in deposits as of June 30, 2012. With an emphasis on value, innovation and service, EverBank offers a broad selection of banking, lending and investing products to consumers and businesses. EverBank provides services to customers through the internet, over the phone, through the mail and at its Florida-based financial centers. More information on EverBank can be found at www.abouteverbank.com/ir.

   

EverBank Financial Corp and Subsidiaries

Condensed Consolidated Balance Sheets (unaudited)

(Dollars in thousands, except per share data)

 

June 30, 2012

December 31, 2011

Assets
Cash and due from banks $ 39,689 $ 31,441
Interest-bearing deposits in banks 478,543   263,540  
Total cash and cash equivalents 518,232 294,981
Investment securities:
Available for sale, at fair value 1,850,526 1,903,922
Held to maturity (fair value of $196,382 and $194,350 as of June 30, 2012 and December 31, 2011, respectively) 190,615 189,518
Other investments 133,282   98,392  
Total investment securities 2,174,423 2,191,832
Loans held for sale (includes $1,105,985 and $777,280 carried at fair value as of June 30, 2012 and December 31, 2011, respectively) 3,178,597 2,725,286
Loans and leases held for investment:
Covered by loss share or indemnification agreements 727,708 841,146
Not covered by loss share or indemnification agreements 7,057,722   5,678,135  
Loans and leases held for investment, net of unearned income 7,785,430 6,519,281
Allowance for loan and lease losses (77,393 ) (77,765 )
Total loans and leases held for investment, net 7,708,037 6,441,516
Equipment under operating leases, net 61,811 56,399
Mortgage servicing rights (MSR), net 415,962 489,496
Deferred income taxes, net 163,561 151,634
Premises and equipment, net 52,037 43,738
Other assets 768,164   646,796  
Total Assets $ 15,040,824   $ 13,041,678  
Liabilities
Deposits:
Noninterest-bearing $ 1,356,769 $ 1,234,615
Interest-bearing 9,446,974   9,031,148  
Total deposits 10,803,743 10,265,763
Other borrowings 2,503,636 1,257,879
Trust preferred securities 103,750 103,750
Accounts payable and accrued liabilities 448,326   446,621  
Total Liabilities 13,859,455 12,074,013
Commitments and Contingencies (Note 14)
Shareholders’ Equity
Series A 6% Cumulative Convertible Preferred Stock, $0.01 par value (1,000,000 shares authorized and 186,744 shares issued and outstanding at December 31, 2011; no shares authorized, issued or outstanding at June 30, 2012) (Note 9) 2
Series B 4% Cumulative Convertible Preferred Stock, $0.01 par value (liquidation preference of $1,000 per share; 1,000,000 shares authorized inclusive of Series A Preferred Stock and 136,544 shares issued and outstanding at December 31, 2011; no shares authorized, issued or outstanding at June 30, 2012) (Note 9) 1
Common Stock, $0.01 par value (500,000,000 and 150,000,000 shares authorized at June 30, 2012 and December 31, 2011, respectively; 116,479,658 and 75,094,375 issued and outstanding at June 30, 2012 and December 31, 2011, respectively) 1,165 751
Additional paid-in capital 762,422 561,247
Retained earnings 530,876 513,413
Accumulated other comprehensive income (loss) (AOCI) (113,094 ) (107,749 )
Total Shareholders’ Equity 1,181,369   967,665  
Total Liabilities and Shareholders’ Equity $ 15,040,824   $ 13,041,678  
 
   

EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 
Three Months Ended Six Months Ended
June 30, June 30,
2012   2011 2012   2011
Interest Income
Interest and fees on loans and leases $ 135,816 $ 118,527 $ 260,594 $ 241,520
Interest and dividends on investment securities 20,699 29,333 41,248 55,577
Other interest income 82   273   186   1,115  
Total interest income 156,597 148,133 302,028 298,212
Interest Expense
Deposits 20,419 25,410 41,393 51,600
Other borrowings 11,194   9,813   20,028   20,009  
Total interest expense 31,613   35,223   61,421   71,609  
Net Interest Income 124,984 112,910 240,607 226,603
Provision for Loan and Lease Losses 5,757   9,004   17,112   27,034  
Net Interest Income after Provision for Loan and Lease Losses 119,227 103,906 223,495 199,569
Noninterest Income
Loan servicing fee income 42,483 46,757 88,039 95,633
Amortization and impairment of mortgage servicing rights (64,277 ) (21,429 ) (108,760 ) (44,217 )
Net loan servicing income (loss) (21,794 ) 25,328 (20,721 ) 51,416
Gain on sale of loans 69,926 5,456 118,103 18,933
Loan production revenue 9,852 5,588 17,289 11,995
Deposit fee income 5,828 6,435 12,067 11,595
Other lease income 8,822 8,336 17,485 15,068
Other 1,489   1,790   3,093   9,778  
Total noninterest income 74,123 52,933 147,316 118,785
Noninterest Expense
Salaries, commissions and other employee benefits expense 76,277 56,321 142,867 113,694
Equipment expense 16,889 11,709 32,837 22,469
Occupancy expense 6,017 5,031 11,366 9,571
General and administrative expense 76,600   48,650   147,534   121,216  
Total noninterest expense 175,783   121,711   334,604   266,950  
Income before Provision for Income Taxes 17,567 35,128 36,207 51,404
Provision for Income Taxes 6,395   13,333   13,189   20,193  
Net Income $ 11,172   $ 21,795   $ 23,018   $ 31,211  
Less: Net Income Allocated to Participating Preferred Stock (1,685 ) (4,417 ) (7,664 ) (6,824 )
Net Income Allocated to Common Shareholders $ 9,487   $ 17,378   $ 15,354   $ 24,387  
Basic Earnings Per Share $ 0.09 $ 0.23 $ 0.17 $ 0.33
Diluted Earnings Per Share $ 0.09 $ 0.23 $ 0.17 $ 0.32
 

         
Adjusted Net Income    
Three Months Ended
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)   2012   2012   2011   2011   2011
Net income $ 11,172 $ 11,846 $ 13,760 $ 7,758 $ 21,795
Transaction and non-recurring regulatory related expense, net of tax 6,143 3,884 4,331 4,751 2,136
Increase in Bank of Florida non-accretable discount, net of tax 463 2,135 2,208 298 -
Early adoption of TDR guidance and policy change, net of tax - - - - 1,561
MSR impairment, net of tax     18,684       9,389       11,638       12,824       -  
Adjusted net income   $ 36,462     $ 27,254     $ 31,937     $ 25,631     $ 25,492  
 
Tangible Equity, Adjusted Tangible Equity and Tangible Assets
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)   2012   2012   2011   2011   2011
Shareholders' equity $ 1,181,369 $ 994,689 $ 967,665 $ 973,708 $ 1,027,685
Less:
Goodwill 10,238 10,238 10,238 10,238 10,238
Intangible assets     6,700       7,052       7,404       7,756       8,081  
Tangible equity $ 1,164,431 $ 977,399 $ 950,023 $ 955,714 $ 1,009,366
Less:
Accumulated other comprehensive loss     (113,094 )     (89,196 )     (107,749 )     (87,303 )     (24,728 )
Adjusted tangible equity   $ 1,277,525     $ 1,066,595     $ 1,057,772     $ 1,043,017     $ 1,034,094  
 
Total assets $ 15,040,824 $ 13,774,821 $ 13,041,678 $ 12,550,764 $ 12,520,174
Less:
Goodwill 10,238 10,238 10,238 10,238 10,238
Intangible assets     6,700       7,052       7,404       7,756       8,081  
Tangible assets   $ 15,023,886     $ 13,757,531     $ 13,024,036     $ 12,532,770     $ 12,501,855  
 
Regulatory Capital (bank level)
June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)   2012   2012   2011   2011   2011
Shareholders' equity $ 1,263,687 $ 1,099,404 $ 1,070,887 $ 1,078,080 $ 1,130,104
Less: Goodwill and other intangibles (16,938 ) (17,290 ) (17,642 ) (17,994 ) (18,319 )
Disallowed servicing asset (36,650 ) (40,783 ) (38,925 ) (36,570 ) (31,927 )
Disallowed deferred tax asset (70,357 ) (71,302 ) (71,803 ) (72,147 ) (74,522 )
Add: Accumulated losses on securities and cash flow hedges     110,101       86,981       105,682       85,525       25,051  
Tier 1 capital 1,249,843 1,057,010 1,048,199 1,036,894 1,030,387
Less: Low-level recourse and residual interests - (20,424 ) (21,587 ) (20,431 ) (19,079 )
Add: Allowance for loan and lease losses     77,393       78,254       77,765       83,826       80,419  
Total regulatory capital   $ 1,327,236     $ 1,114,840     $ 1,104,377     $ 1,100,289     $ 1,091,727  
 
Adjusted total assets $ 15,022,729 $ 13,731,482 $ 13,081,401 $ 12,550,738 $ 12,438,222
Risk-weighted assets     8,424,290       7,311,556       7,043,371       7,007,339       6,648,103  
 
 
Non-Performing Assets (1)  
  June 30, March 31, December 31, September 30, June 30,
(dollars in thousands)   2012   2012   2011   2011   2011
Non-accrual loans and leases:
Residential mortgages $ 66,956 $ 74,810 $ 81,594 $ 74,194 $ 65,130
Commercial and commercial real estate 95,882 89,576 104,829 92,966 88,086
Lease financing receivables 1,295 1,861 2,385 1,745 1,986
Home equity lines 4,256 3,771 4,251 3,803 2,730
Consumer and credit card     573     571     419     471     641
Total non-accrual loans and leases 168,962 170,589 193,478 173,179 158,573
Accruing loans 90 days or more past due     1,800     5,119     6,673     4,808     4,584
Total non-performing loans (NPL) 170,762 175,708 200,151 177,987 163,157
Other real estate owned (OREO)     49,248     49,304     42,664     39,431     42,081
Total non-performing assets (NPA) 220,010 225,012 242,815 217,418 205,238
Troubled debt restructurings (TDR) less than 90 days past due     93,184     92,954     92,628     89,129     79,242
Total NPA and TDR (1)   $ 313,194   $ 317,966   $ 335,443   $ 306,547   $ 284,480
 
Total NPA and TDR $ 313,194 $ 317,966 $ 335,443 $ 306,547 $ 284,480
Government-insured 90 days or more past due still accruing 1,647,567 1,530,665 1,570,787 883,478 762,461
Bank of Florida loans accounted for under ASC 310-30:
90 days or more past due 140,797 146,379 149,743 159,767 190,544
OREO     20,379     22,852     19,456     19,616     22,566
Total regulatory NPA and TDR   $ 2,121,937   $ 2,017,862   $ 2,075,429   $ 1,369,408   $ 1,260,051
 
Adjusted credit quality ratios excluding government-insured loans and loans accounted for under ASC 310-30: (1)
 
NPL to total loans 1.57 % 1.80 % 2.18 % 2.23 % 2.16
NPA to total assets 1.46 1.63 1.86 1.73 1.64
NPA and TDR to total assets 2.08 2.31 2.57 2.44 2.27
 
Credit quality ratios including government-insured loans and loans accounted for under ASC 310-30:
 
NPL to total loans 18.00 % 18.95 % 20.95 % 15.28 % 14.77
NPA to total assets 13.49 13.97 15.20 10.20 9.43
NPA and TDR to total assets 14.11 14.65 15.91 10.91 10.06
                       
 
(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 acquired in the Bank of Florida acquisition accounted for under ASC 310-30 because as of June 30, 2012, we expected to fully collect the carrying value of such loans and foreclosed property.
 
         
Business Segments Selected Financial Information
Banking and
Wealth Mortgage Corporate
(dollars in thousands)   Management   Banking   Services   Eliminations   Consolidated
Three Months Ended June 30, 2012
Net interest income $ 114,801 $ 11,790 $ (1,607 ) $ - $ 124,984
Provision for loan and lease losses     5,041       716       -       -       5,757  
Net interest income after provision for loan and lease losses 109,760 11,074 (1,607 ) - 119,227
Noninterest income 25,605 48,524 (6 ) - 74,123
Noninterest expense:
Foreclosure and OREO expense 12,378 2,591 - - 14,969
Other credit-related expenses 1,604 4,193 9 - 5,806
All other noninterest expense     61,564       60,686       32,758       -       155,008  
Income (loss) before income tax     59,819       (7,872 )     (34,380 )     -       17,567  
 
Adjustment items (pre-tax):
Increase in Bank of Florida non-accretable discount 747 - - - 747
MSR impairment - 30,135 - - 30,135
Transaction and non-recurring regulatory related expense     -       5,461       4,448       -       9,909  
Adjusted income (loss) before income tax     60,566       27,724       (29,932 )     -       58,358  
Total assets as of June 30, 2012     13,327,046       1,902,152       124,406       (312,780 )     15,040,824  
 
Efficiency Ratios:
GAAP basis:
including foreclosure, OREO expenses and other credit-related expenses 53.8 % 88.3 %
excluding foreclosure, OREO expenses and other credit-related expenses 43.8 % 77.9 %
Adjusted basis:
including foreclosure, OREO expenses and other credit-related expenses 53.8 % 72.4 %
excluding foreclosure, OREO expenses and other credit-related expenses     43.8 %                 63.3 %
 
Three Months Ended March 31, 2012
Net interest income $ 106,545 $ 10,496 $ (1,418 ) $ - $ 115,623
Provision for loan and lease losses     10,315       1,040       -       -       11,355  
Net interest income after provision for loan and lease losses 96,230 9,456 (1,418 ) - 104,268
Noninterest income 25,228 47,873 92 - 73,193
Noninterest expense:
Foreclosure and OREO expense 7,962 2,997 - - 10,959
Other credit-related expenses (183 ) 11,990 3 - 11,810
All other noninterest expense     51,846       56,864       27,342       -       136,052  
Income (loss) before income tax     61,833       (14,522 )     (28,671 )     -       18,640  
 
Adjustment items (pre-tax):
Increase in Bank of Florida non-accretable discount 3,444 - - - 3,444
MSR impairment - 15,144 - - 15,144
Transaction and non-recurring regulatory related expense     -       4,722       1,542       -       6,264  
Adjusted income (loss) before income tax     65,277       5,344       (27,129 )     -       43,492  
Total assets as of March 31, 2012     12,494,752       1,438,744       92,381       (251,056 )     13,774,821  
 
Efficiency Ratios:
GAAP basis:
including foreclosure, OREO expenses and other credit-related expenses 45.2 % 84.1 %
excluding foreclosure, OREO expenses and other credit-related expenses 39.3 % 72.1 %
Adjusted basis:
including foreclosure, OREO expenses and other credit-related expenses 45.2 % 74.8 %
excluding foreclosure, OREO expenses and other credit-related expenses     39.3 %                 63.6 %
 
Three Months Ended June 30, 2011
Net interest income $ 105,107 $ 9,487 $ (1,684 ) $ - $ 112,910
Provision for loan and lease losses     8,235       769       -       -       9,004  
Net interest income after provision for loan and lease losses 96,872 8,718 (1,684 ) - 103,906
Noninterest income 15,728 37,204 1 - 52,933
Noninterest expense:
Foreclosure and OREO expense 4,639 4,125 - - 8,764
Other credit-related expenses 1,634 7,922 - - 9,556
All other noninterest expense     39,941       35,910       27,540       -       103,391  
Income (loss) before income tax     66,386       (2,035 )     (29,223 )     -       35,128  
 
Adjustment items (pre-tax):
Early adoption of TDR guidance and policy change 2,517 - - - 2,517
Transaction and non-recurring regulatory related expense     -       946       2,496       -       3,442  
Adjusted income (loss) before income tax     68,903       (1,089 )     (26,727 )     -       41,087  
Total assets as of June 30, 2011     11,140,910       1,482,997       130,615       (234,348 )     12,520,174  
 
Efficiency Ratios:
GAAP basis:
including foreclosure, OREO expenses and other credit-related expenses 38.2 % 73.4 %
excluding foreclosure, OREO expenses and other credit-related expenses 33.1 % 62.3 %
Adjusted basis:
including foreclosure, OREO expenses and other credit-related expenses 38.2 % 71.3 %
excluding foreclosure, OREO expenses and other credit-related expenses     33.1 %                 60.3 %
 




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