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EverBank Financial Corp Announces Third Quarter 2013 Financial Results

Stocks in this article: EVER

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.

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