JACKSONVILLE, Fla.--(BUSINESS WIRE)--EverBank Financial Corp (NYSE: EVER) announced today its financial results for the second quarter ended June 30, 2016.
The Company also announced today that as a result of an ongoing review of its strategic alternatives it is in advanced negotiations with a well-respected financial services company regarding a transaction in which EverBank Financial Corp would be acquired and EverBank Financial Corp's common stockholders would receive $19.50 per share in cash. In addition, the transaction contemplates that each share of EverBank Financial Corp's Series A Preferred Stock would receive cash in an amount equal to the liquidation preference plus accrued and unpaid dividends. There can be no certainty that these negotiations will result in a definitive agreement or that the terms will not vary from those currently under discussion or that the review of EverBank Financial Corp's other strategic alternatives will result in any action. The Company does not intend to make any additional comments or statements regarding these matters until such time, if at all, that it has reached a definitive agreement for a transaction. EverBank Financial Corp further noted that it had entered into an agreement with the financial services company to negotiate exclusively with it regarding a transaction and such exclusivity agreement expires at 11:59 p.m. on August 8. In light of the foregoing, the Company will not conduct its previously scheduled conference call to discuss second quarter 2016 results.
GAAP net income available to common shareholders was $19.0 million for the second quarter 2016, compared to $25.4 million for the first quarter 2016 and $39.0 million for the second quarter 2015. GAAP diluted earnings per share in the second quarter 2016 were $0.15 compared to $0.20 in the first quarter 2016 and $0.31 in the second quarter 2015. Adjusted net income available to common shareholders was $40.5 million for the second quarter 2016, compared to $39.8 million for the first quarter 2016 and $43.9 million for the second quarter 2015.1 Adjusted diluted earnings per common share were $0.32 in the second quarter 2016 compared to $0.32 in the first quarter 2016 and $0.35 in the second quarter 2015.1
Second Quarter 2016 Key Highlights
- Total assets of $27.4 billion, an increase of 13% year over year.
- Portfolio loans held for investment (HFI) of $23.2 billion, an increase of 17% year over year.
- Total deposits of $18.8 billion, an increase of 14% year over year.
- Adjusted return on average equity (ROE)1 of 9.4% for the quarter. GAAP ROE of 4.4%.
- Tangible common equity per common share was $13.24 at June 30, 2016, an increase of 2% year over year.1
- Adjusted non-performing assets to total assets1 of 0.52% at June 30, 2016. Annualized net charge-offs to average total loans and leases held for investment of 0.09% for the quarter.
- Consolidated common equity Tier 1 capital ratio of 9.7% and bank Tier 1 leverage ratio of 8.1% at June 30, 2016.
Balance Sheet
Total assets were $27.4 billion at June 30, 2016, an increase of $0.7 billion, or 3%, compared to the prior quarter and an increase of $3.2 billion, or 13%, year over year. Compared to the prior quarter, loans held for sale (HFS) increased $348 million, or 31%, to $1.5 billion and loans HFI increased $463 million, or 2%, to $23.2 billion.
Portfolio Loans HFI
The following table presents total portfolio loans and leases HFI by product type:
| ($ in millions) |
Jun 30, 2016 |
Mar 31, 2016 |
Jun 30, 2015 |
% Change (Q/Q) | % Change (Y/Y) | |||||||||||||
| Consumer Banking: | ||||||||||||||||||
| Residential loans | $ | 6,962 | $ | 7,254 | $ | 6,899 | (4 | )% | 1 | % | ||||||||
| Government insured pool buyouts | 4,403 | 4,396 | 3,824 | — | % | 15 | % | |||||||||||
| Total residential mortgages | 11,365 | 11,650 | 10,724 | (2 | )% | 6 | % | |||||||||||
| Home equity lines and other | 1,074 | 918 | 242 | 17 | % | 343 | % | |||||||||||
| Total Consumer Banking | 12,439 | 12,568 | 10,966 | (1 | )% | 13 | % | |||||||||||
| Commercial Banking: | ||||||||||||||||||
| Commercial real estate and other commercial | 3,831 | 3,884 | 3,732 | (1 | )% | 3 | % | |||||||||||
| Mortgage warehouse finance | 3,035 | 2,603 | 2,156 | 17 | % | 41 | % | |||||||||||
| Lender finance | 1,451 | 1,300 | 914 | 12 | % | 59 | % | |||||||||||
| Commercial and commercial real estate | 8,317 | 7,787 | 6,802 | 7 | % | 22 | % | |||||||||||
| Equipment financing receivables | 2,462 | 2,401 | 2,147 | 3 | % | 15 | % | |||||||||||
| Total Commercial Banking | 10,780 | 10,188 | 8,948 | 6 | % | 20 | % | |||||||||||
| Total Loans HFI | $ | 23,219 | $ | 22,756 | $ | 19,914 | 2 | % | 17 | % | ||||||||
Total consumer banking loans HFI decreased $130 million, or 1%, compared to the prior quarter and increased $1.5 billion, or 13%, year over year to $12.4 billion. Total residential mortgages decreased $285 million, or 2%, compared to the prior quarter to $11.4 billion driven by sales of longer duration residential loans. Home equity lines and other increased $156 million, or 17%, compared to the prior quarter to $1.1 billion.
Total commercial banking loans and leases HFI increased $592 million, or 6%, compared to the prior quarter and $1.8 billion, or 20%, year over year to $10.8 billion. Mortgage warehouse finance increased $432 million, or 17%, compared to the prior quarter to $3.0 billion, lender finance increased $150 million, or 12%, to $1.5 billion, equipment financing receivables increased $62 million, or 3%, to $2.5 billion and commercial real estate and other commercial loans decreased $52 million, or 1%, to $3.8 billion.
Loan Origination Activities
The following table presents total organic loan and lease origination information by product type:
| ($ in millions) |
Jun 30, 2016 |
Mar 31, 2016 |
Jun 30, 2015 |
% Change (Q/Q) | % Change (Y/Y) | |||||||||||||
| Consumer originations | ||||||||||||||||||
| Conventional loans | $ | 1,522 | $ | 1,073 | $ | 1,259 | 42 | % | 21 | % | ||||||||
| Prime jumbo loans | 883 | 725 | 1,458 | 22 | % | (39 | )% | |||||||||||
| 2,406 | 1,797 | 2,718 | 34 | % | (11 | )% | ||||||||||||
| Commercial originations | ||||||||||||||||||
| Commercial and commercial real estate | 358 | 365 | 466 | (2 | )% | (23 | )% | |||||||||||
| Equipment financing receivables | 318 | 300 | 293 | 6 | % | 8 | % | |||||||||||
| 676 | 665 | 759 | 2 | % | (11 | )% | ||||||||||||
| Total originations | $ | 3,081 | $ | 2,462 | $ | 3,477 | 25 | % | (11 | )% | ||||||||
Total originations were $3.1 billion for the second quarter of 2016, an increase of 25% compared to the prior quarter and a decrease of 11% year over year. Consumer originations were $2.4 billion for the second quarter 2016, an increase of 34% compared to the prior quarter and a decrease of 11% year over year. Commercial originations were $676 million for the second quarter of 2016, an increase of 2% compared to the prior quarter and a decrease of 11% year over year.
Deposits and Other Funding
The following table presents total deposit balances by account type and segment:
| ($ in millions) |
Jun 30, 2016 |
Mar 31, 2016 |
Jun 30, 2015 |
% Change (Q/Q) | % Change (Y/Y) | |||||||||||||
| Noninterest-bearing demand | $ | 1,510 | $ | 1,499 | $ | 1,153 | 1 | % | 31 | % | ||||||||
| Interest-bearing demand | 3,696 | 3,695 | 3,626 | — | % | 2 | % | |||||||||||
| Savings and money market accounts, excluding market-based | 6,478 | 6,893 | 5,211 | (6 | )% | 24 | % | |||||||||||
| Global market-based accounts | 701 | 712 | 784 | (2 | )% | (11 | )% | |||||||||||
| Time, excluding market-based | 6,427 | 6,198 | 5,709 | 4 | % | 13 | % | |||||||||||
| Total deposits | $ | 18,812 | $ | 18,996 | $ | 16,484 | (1 | )% | 14 | % | ||||||||
| Consumer deposits | $ | 14,788 | $ | 14,685 | $ | 13,084 | 1 | % | 13 | % | ||||||||
| Commercial deposits | 4,024 | 4,311 | 3,400 | (7 | )% | 18 | % | |||||||||||
| Total deposits | $ | 18,812 | $ | 18,996 | $ | 16,484 | (1 | )% | 14 | % | ||||||||
Total deposits were $18.8 billion at June 30, 2016, a decrease of $185 million, or 1%, compared to the prior quarter and an increase of $2.3 billion, or 14%, year over year.
Total other borrowings were $6.0 billion at June 30, 2016, an increase of 17% compared to $5.1 billion in the prior quarter and an increase of 15% compared to $5.2 billion at June 30, 2015.
Capital Strength
Total shareholders' equity was $1.9 billion at June 30, 2016, unchanged compared to the prior quarter and an increase of 2% year over year. As of June 30, 2016, our consolidated common equity Tier 1 capital ratio was 9.7% and the bank’s Tier 1 leverage and total risk-based capital ratios were 8.1% and 12.6%, respectively. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines.
Credit Quality
Adjusted non-performing assets1 were 0.52% of total assets at June 30, 2016, compared to 0.53% for the prior quarter and 0.44% at June 30, 2015. Net charge-offs during the second quarter of 2016 were $5 million, an increase of $2 million compared to the prior quarter and an increase of $1 million year over year. On an annualized basis, net charge-offs were 0.09% of total average loans and leases HFI for the quarter, compared to 0.07% for the prior quarter and 0.10% for the second quarter of 2015.
Income Statement Highlights
Revenue
Revenue for the second quarter of 2016 was $197 million, a decrease of $7 million, or 3%, compared to $204 million in the first quarter of 2016. Excluding the change in valuation allowance on our mortgage servicing rights (MSR) and other one-time items, revenue would have been $232 million in the second quarter of 2016, an increase of 3% compared to the prior quarter.
Net Interest Income
Net interest income was $177 million for the second quarter of 2016, an increase of $4 million, or 2%, compared to the prior quarter. Average interest-earning assets increased $711 million, or 3%, compared to the prior quarter driven by a $907 million, or 4%, increase in average loans and leases HFI. Total average interest-bearing liabilities increased $373 million, or 2%, compared to the prior quarter driven by a $349 million, or 6%, increase in average borrowings.
Net interest margin decreased to 2.80% for the second quarter of 2016 from 2.82% in the first quarter of 2016, driven by a 0.04% decline in the interest-earning asset yield to 3.81% and a 0.01% increase in the average cost of total interest-bearing liabilities to 1.15%.
Noninterest Income
Noninterest income for the second quarter of 2016 was $19 million, a decrease of $11 million, or 36%, compared to the prior quarter as increased gain on sale of loans and other income was offset by lower levels of net loan servicing income. Net loan servicing income decreased $17 million compared to the prior quarter to a loss of $31 million driven primarily by the change in valuation allowance on our MSR, which included impairment of $37 million in the second quarter compared to impairment of $23 million in the prior quarter. Excluding the impact of the valuation allowance, net loan servicing income for the first quarter would have been $6 million, a decrease of $2 million, or 28%, compared to the prior quarter.
Gain on sale of loans was $32 million, an increase of $3 million, or 11%, compared to the prior quarter, driven by higher agency funding activity. Other income was $6 million, an increase of $4 million, or 176%, compared to the prior quarter.
Noninterest Expense
Noninterest expense for the second quarter of 2016 was $156 million, an increase of $6 million, or 4%, compared to the prior quarter. Salaries, commissions and employee benefits were $95 million, an increase of $3 million, or 4%, compared to the prior quarter driven by commission expense on increased residential originations. General and administrative expense was $38 million, an increase of $2 million, or 6%, compared to the prior quarter driven by higher legal and professional fees and credit-related expenses.
EverBank's efficiency ratio in the second quarter of 2016 was 79%, compared to 73% in the prior quarter. Excluding the impact of our MSR valuation allowance recovery or impairment, transaction and other non-recurring expenses, EverBank's adjusted efficiency ratio1 was 67% for the first quarter compared to 66% in prior quarter.
Dividends
On July 22, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on August 22, 2016, to stockholders of record as of August 11, 2016. Also on July 22, 2016, the Company's Board of Directors declared a quarterly cash dividend of $421.875, payable on October 5, 2016, for each share of 6.75% Series A Non-Cumulative Perpetual Preferred Stock held as of September 20, 2016.
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 $27.4 billion in assets and $18.8 billion in deposits as of June 30, 2016. 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 https://about.everbank/investors.
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: the risk that a transaction may not be entered into and the risk that the transaction may not be completed in a timely manner or at all, each of which may adversely affect our business and the price of our common stock; the effect of the announcement or pendency of the transaction on our business relationships, operating results, and business generally; risks related to diverting management’s attention from our ongoing business operations; the 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; 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, mortgage warehouse finance customers, 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 and dispositions; 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; fluctuations in our stock price; 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.
1 A reconciliation of Non-GAAP financial measures can be found in the financial tables attached hereto.
|
EverBank Financial Corp and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (Dollars in thousands, except per share data) |
||||||||
|
June 30, |
December 31, |
|||||||
| Assets | ||||||||
| Cash and due from banks | $ | 62,512 | $ | 55,300 | ||||
| Interest-bearing deposits in banks | 559,434 | 527,151 | ||||||
| Total cash and cash equivalents | 621,946 | 582,451 | ||||||
| Investment securities: | ||||||||
| Available for sale, at fair value | 461,141 | 555,019 | ||||||
| Held to maturity (fair value of $109,575 and $105,448 as of June 30, 2016 and December 31, 2015, respectively) | 104,205 | 103,746 | ||||||
| Other investments | 271,606 | 265,431 | ||||||
| Total investment securities | 836,952 | 924,196 | ||||||
| Loans held for sale (includes $1,325,149 and $1,307,741 carried at fair value as of June 30, 2016 and December 31, 2015, respectively) | 1,485,747 | 1,509,268 | ||||||
| Loans and leases held for investment: | ||||||||
| Loans and leases held for investment, net of unearned income | 23,218,614 | 22,227,492 | ||||||
| Allowance for loan and lease losses | (84,250 | ) | (78,137 | ) | ||||
| Total loans and leases held for investment, net | 23,134,364 | 22,149,355 | ||||||
| Mortgage servicing rights (MSR), net | 274,356 | 335,280 | ||||||
| Premises and equipment, net | 48,486 | 51,599 | ||||||
| Other assets | 952,459 | 1,048,877 | ||||||
| Total Assets | $ | 27,354,310 | $ | 26,601,026 | ||||
| Liabilities | ||||||||
| Deposits: | ||||||||
| Noninterest-bearing | $ | 1,510,198 | $ | 1,141,357 | ||||
| Interest-bearing | 17,301,564 | 17,100,685 | ||||||
| Total deposits | 18,811,762 | 18,242,042 | ||||||
| Other borrowings | 6,022,000 | 5,877,000 | ||||||
| Trust preferred securities and subordinated notes payable | 360,079 | 276,170 | ||||||
| Accounts payable and accrued liabilities | 303,110 | 337,493 | ||||||
| Total Liabilities | 25,496,951 | 24,732,705 | ||||||
| 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 June 30, 2016 and December 31, 2015) | 150,000 | 150,000 | ||||||
| Common Stock, $0.01 par value (500,000,000 shares authorized; 125,324,413 and 125,020,843 issued and outstanding at June 30, 2016 and December 31, 2015, respectively) | 1,253 | 1,250 | ||||||
| Additional paid-in capital | 879,169 | 874,806 | ||||||
| Retained earnings | 935,670 | 906,278 | ||||||
| Accumulated other comprehensive income (loss) (AOCI) | (108,733 | ) | (64,013 | ) | ||||
| Total Shareholders’ Equity | 1,857,359 | 1,868,321 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 27,354,310 | $ | 26,601,026 | ||||
|
EverBank Financial Corp and Subsidiaries Condensed Consolidated Statements of Income (unaudited) (Dollars in thousands, except per share data) |
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|
Three Months Ended |
Six Months Ended June 30, |
|||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Interest Income | ||||||||||||||||
| Interest and fees on loans and leases | $ | 236,168 | $ | 210,347 | $ | 467,227 | $ | 405,196 | ||||||||
| Interest and dividends on investment securities | 6,965 | 7,447 | 14,369 | 15,469 | ||||||||||||
| Other interest income | 385 | 159 | 781 | 319 | ||||||||||||
| Total Interest Income | 243,518 | 217,953 | 482,377 | 420,984 | ||||||||||||
| Interest Expense | ||||||||||||||||
| Deposits | 39,078 | 30,219 | 78,168 | 59,983 | ||||||||||||
| Other borrowings | 27,000 | 18,709 | 52,988 | 36,538 | ||||||||||||
| Total Interest Expense | 66,078 | 48,928 | 131,156 | 96,521 | ||||||||||||
| Net Interest Income | 177,440 | 169,025 | 351,221 | 324,463 | ||||||||||||
| Provision for Loan and Lease Losses | 6,012 | 7,932 | 14,931 | 16,932 | ||||||||||||
| Net Interest Income after Provision for Loan and Lease Losses | 171,428 | 161,093 | 336,290 | 307,531 | ||||||||||||
| Noninterest Income | ||||||||||||||||
| Loan servicing fee income | 22,814 | 29,569 | 46,255 | 63,701 | ||||||||||||
| Amortization of mortgage servicing rights | (16,550 | ) | (19,006 | ) | (31,281 | ) | (39,305 | ) | ||||||||
| Recovery (impairment) of mortgage servicing rights | (36,872 | ) | 15,727 | (59,414 | ) | (27,625 | ) | |||||||||
| Net loan servicing income (loss) | (30,608 | ) | 26,290 | (44,440 | ) | (3,229 | ) | |||||||||
| Gain on sale of loans | 31,973 | 40,588 | 60,724 | 83,211 | ||||||||||||
| Loan production revenue | 6,729 | 6,195 | 11,989 | 11,582 | ||||||||||||
| Deposit fee income | 1,953 | 3,052 | 5,055 | 7,102 | ||||||||||||
| Other lease income | 3,316 | 2,082 | 7,683 | 6,162 | ||||||||||||
| Other | 5,805 | 5,607 | 7,910 | 11,507 | ||||||||||||
| Total Noninterest Income | 19,168 | 83,814 | 48,921 | 116,335 | ||||||||||||
| Noninterest Expense | ||||||||||||||||
| Salaries, commissions and other employee benefits expense | 94,922 | 95,769 | 186,562 | 187,755 | ||||||||||||
| Equipment expense | 16,052 | 15,258 | 31,969 | 31,303 | ||||||||||||
| Occupancy expense | 7,266 | 7,156 | 13,530 | 13,012 | ||||||||||||
| General and administrative expense | 37,600 | 59,785 | 73,209 | 101,940 | ||||||||||||
| Total Noninterest Expense | 155,840 | 177,968 | 305,270 | 334,010 | ||||||||||||
| Income before Provision for Income Taxes | 34,756 | 66,939 | 79,941 | 89,856 | ||||||||||||
| Provision for Income Taxes | 13,201 | 25,372 | 30,462 | 34,059 | ||||||||||||
| Net Income | $ | 21,555 | $ | 41,567 | $ | 49,479 | $ | 55,797 | ||||||||
| Less: Net Income Allocated to Preferred Stock | (2,531 | ) | (2,531 | ) | (5,062 | ) | (5,062 | ) | ||||||||
| Net Income Allocated to Common Shareholders | $ | 19,024 | $ | 39,036 | $ | 44,417 | $ | 50,735 | ||||||||
| Basic Earnings Per Common Share | $ | 0.15 | $ | 0.31 | $ | 0.35 | $ | 0.41 | ||||||||
| Diluted Earnings Per Common Share | $ | 0.15 | $ | 0.31 | $ | 0.35 | $ | 0.40 | ||||||||
| Dividends Declared Per Common Share | $ | 0.06 | $ | 0.04 | $ | 0.12 | $ | 0.08 | ||||||||
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 Efficiency Ratio, Adjusted Return on Equity, Tangible Shareholders’ Equity, Tangible Common Shareholders' Equity, Tangible Common Equity Per Common Share, Tangible Assets and Adjusted Non-Performing Asset Ratio 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) |
Jun 30, 2016 |
Mar 31, 2016 |
Dec 31, 2015 |
Sep 30, 2015 |
Jun 30, 2015 |
|||||||||||||||
| Net income | $ | 21,555 | $ | 27,924 | $ | 45,146 | $ | 29,583 | $ | 41,567 | ||||||||||
| Gain on repurchase of trust preferred securities, net of tax | (916 | ) | — | — | — | — | ||||||||||||||
| Transaction expense and non-recurring regulatory related expense, net of tax | 187 | (43 | ) | (1,849 | ) | (784 | ) | 3,745 | ||||||||||||
| Increase (decrease) in Bank of Florida non-accretable discount, net of tax | (201 | ) | (14 | ) | — | (51 | ) | 159 | ||||||||||||
| MSR impairment (recovery), net of tax | 22,861 | 13,976 | (55 | ) | 2,758 | (9,751 | ) | |||||||||||||
| Restructuring cost, net of tax | (442 | ) | 438 | 2,219 | (222 | ) | 10,667 | |||||||||||||
| Adjusted net income | $ | 43,044 | $ | 42,281 | $ | 45,461 | $ | 31,284 | $ | 46,387 | ||||||||||
| Adjusted net income allocated to preferred stock | 2,531 | 2,531 | 2,531 | 2,532 | 2,531 | |||||||||||||||
| Adjusted net income allocated to common shareholders | $ | 40,513 | $ | 39,750 | $ | 42,930 | $ | 28,752 | $ | 43,856 | ||||||||||
| Adjusted net earnings per common share, basic | $ | 0.32 | $ | 0.32 | $ | 0.34 | $ | 0.23 | $ | 0.35 | ||||||||||
| Adjusted net earnings per common share, diluted | $ | 0.32 | $ | 0.32 | $ | 0.34 | $ | 0.23 | $ | 0.35 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| (units in thousands) | ||||||||||||||||||||
| Basic | 125,294 | 125,125 | 124,983 | 124,823 | 124,348 | |||||||||||||||
| Diluted | 126,612 | 126,045 | 126,980 | 127,099 | 126,523 | |||||||||||||||
| Adjusted Efficiency Ratio | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| (dollars in thousands) |
Jun 30, 2016 |
Mar 31, 2016 |
Dec 31, 2015 |
Sep 30, 2015 |
Jun 30, 2015 |
|||||||||||||||
| Net interest income | $ | 177,440 | $ | 173,781 | $ | 175,040 | $ | 168,840 | $ | 169,025 | ||||||||||
| Noninterest income | 19,168 | 29,753 | 57,850 | 41,195 | 83,814 | |||||||||||||||
| Total revenue | 196,608 | 203,534 | 232,890 | 210,035 | 252,839 | |||||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Gain on repurchase of trust preferred securities | (1,478 | ) | — | — | — | — | ||||||||||||||
| MSR impairment (recovery) | 36,872 | 22,542 | (89 | ) | 4,450 | (15,727 | ) | |||||||||||||
| Restructuring cost | (129 | ) | — | 160 | — | 96 | ||||||||||||||
| Adjusted total revenue | $ | 231,873 | $ | 226,076 | $ | 232,961 | $ | 214,485 | $ | 237,208 | ||||||||||
| Noninterest expense | $ | 155,840 | $ | 149,430 | $ | 152,861 | $ | 151,506 | $ | 177,968 | ||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Transaction expense and non-recurring regulatory related expense | (302 | ) | 69 | 2,981 | 1,264 | (6,041 | ) | |||||||||||||
| Restructuring cost | 584 | (706 | ) | (3,419 | ) | 360 | (17,108 | ) | ||||||||||||
| Adjusted noninterest expense | $ | 156,122 | $ | 148,793 | $ | 152,423 | $ | 153,130 | $ | 154,819 | ||||||||||
| GAAP efficiency ratio | 79 | % | 73 | % | 66 | % | 72 | % | 70 | % | ||||||||||
| Adjusted efficiency ratio | 67 | % | 66 | % | 65 | % | 71 | % | 65 | % | ||||||||||
| EverBank Financial Corp and Subsidiaries | |||||||||||||||||||||||||
| Regulatory Capital (bank level) | |||||||||||||||||||||||||
| (dollars in thousands) |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Jun 30, |
||||||||||||||||||||
| Shareholders’ equity | $ | 2,124,090 | $ | 2,123,612 | $ | 2,050,456 | $ | 2,002,848 | $ | 2,000,597 | |||||||||||||||
| Less: | Goodwill and other intangibles | (47,318 | ) | (47,401 | ) | (47,143 | ) | (47,198 | ) | (47,253 | ) | ||||||||||||||
| Disallowed servicing asset | — | (8,618 | ) | (17,719 | ) | (26,699 | ) | (31,625 | ) | ||||||||||||||||
| Disallowed deferred tax asset | — | — | — | — | — | ||||||||||||||||||||
| Add: | Accumulated losses on securities and cash flow hedges | 107,834 | 95,611 | 62,887 | 71,202 | 47,179 | |||||||||||||||||||
| Tier 1 capital | (A) | 2,184,606 | 2,163,204 | 2,048,481 | 2,000,153 | 1,968,898 | |||||||||||||||||||
| Add: | Allowance for loan and lease losses | 84,994 | 84,134 | 78,789 | 72,653 | 67,196 | |||||||||||||||||||
| Total regulatory capital | (B) | $ | 2,269,600 | $ | 2,247,338 | $ | 2,127,270 | $ | 2,072,806 | $ | 2,036,094 | ||||||||||||||
| Adjusted total assets | (C) | $ | 26,946,525 | $ | 26,232,737 | $ | 25,281,658 | $ | 24,428,171 | $ | 23,000,873 | ||||||||||||||
| Risk-weighted assets | (D) | 17,998,277 | 17,362,622 | 17,133,084 | 16,336,138 | 15,464,920 | |||||||||||||||||||
| Tier 1 leverage ratio | (A | )/(C) | 8.1 | % | 8.2 | % | 8.1 | % | 8.2 | % | 8.6 | % | |||||||||||||
| Tier 1 risk-based capital ratio | (A | )/(D) | 12.1 | % | 12.5 | % | 12.0 | % | 12.2 | % | 12.7 | % | |||||||||||||
| Total risk-based capital ratio | (B | )/(D) | 12.6 | % | 12.9 | % | 12.4 | % | 12.7 | % | 13.2 | % | |||||||||||||
| Regulatory Capital (EFC consolidated) | |||||||||||||||||||||||||
| (dollars in thousands) |
Jun 30, 2016 |
Mar 31, 2016 |
Dec 31, 2015 |
Sep 30, 2015 |
Jun 30, 2015 |
||||||||||||||||||||
| Shareholders’ equity | $ | 1,857,359 | $ | 1,855,903 | $ | 1,868,321 | $ | 1,822,869 | $ | 1,819,821 | |||||||||||||||
| Less: | Preferred stock | (150,000 | ) | (150,000 | ) | (150,000 | ) | (150,000 | ) | (150,000 | ) | ||||||||||||||
| Goodwill and other intangibles | (47,318 | ) | (47,401 | ) | (47,143 | ) | (47,198 | ) | (47,253 | ) | |||||||||||||||
| Disallowed servicing asset | (16,132 | ) | (33,609 | ) | (30,959 | ) | (39,838 | ) | (44,798 | ) | |||||||||||||||
| Disallowed deferred tax asset | — | — | — | — | — | ||||||||||||||||||||
| Add: | Accumulated losses on securities and cash flow hedges | 108,733 | 96,789 | 64,013 | 72,716 | 48,659 | |||||||||||||||||||
| Common tier 1 capital | (E) | 1,752,642 | 1,721,682 | 1,704,232 | 1,658,549 | 1,626,429 | |||||||||||||||||||
| Add: | Preferred stock | 150,000 | 150,000 | 150,000 | 150,000 | 150,000 | |||||||||||||||||||
| Add: | Additional tier 1 capital (trust preferred securities) | 98,750 | 103,750 | 103,750 | 103,750 | 103,750 | |||||||||||||||||||
| Tier 1 capital | (F) | 2,001,392 | 1,975,432 | 1,957,982 | 1,912,299 | 1,880,179 | |||||||||||||||||||
| Add: | Subordinated notes payable | 84,994 | 261,417 | 172,420 | 172,353 | 172,702 | |||||||||||||||||||
| Add: | Allowance for loan and lease losses | 261,329 | 84,134 | 78,789 | 72,653 | 67,196 | |||||||||||||||||||
| Total regulatory capital | (G) | $ | 2,347,715 | $ | 2,320,983 | $ | 2,209,191 | $ | 2,157,305 | $ | 2,120,077 | ||||||||||||||
| Adjusted total assets | (H) | $ | 26,917,493 | $ | 26,220,573 | $ | 25,286,802 | $ | 24,429,012 | $ | 22,997,941 | ||||||||||||||
| Risk-weighted assets | (I) | 17,990,693 | 17,349,099 | 17,131,756 | 16,327,166 | 15,454,736 | |||||||||||||||||||
| Common equity tier 1 ratio | (E | )/(I) | 9.7 | % | 9.9 | % | 9.9 | % | 10.2 | % | 10.5 | % | |||||||||||||
| Tier 1 leverage ratio | (F | )/(H) | 7.4 | % | 7.5 | % | 7.7 | % | 7.8 | % | 8.2 | % | |||||||||||||
| Tier 1 risk-based capital ratio | (F | )/(I) | 11.1 | % | 11.4 | % | 11.4 | % | 11.7 | % | 12.2 | % | |||||||||||||
| Total risk-based capital ratio | (G | )/(I) | 13.0 | % | 13.4 | % | 12.9 | % | 13.2 | % | 13.7 | % | |||||||||||||
| EverBank Financial Corp and Subsidiaries | ||||||||||||||||||||
| Tangible Equity, Tangible Common Equity, Tangible Common Equity Per Common Share and Tangible Assets | ||||||||||||||||||||
| (dollars in thousands except share and per share amounts) |
Jun 30, |
Mar 31, |
Dec 31, |
Sep 30, |
Jun 30, |
|||||||||||||||
| Shareholders’ equity | $ | 1,857,359 | $ | 1,855,903 | $ | 1,868,321 | $ | 1,822,869 | $ | 1,819,821 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 46,859 | 46,859 | 46,859 | 46,859 | 46,859 | |||||||||||||||
| Intangible assets | 1,355 | 1,535 | 1,772 | 2,124 | 2,651 | |||||||||||||||
| Tangible equity | 1,809,145 | 1,807,509 | 1,819,690 | 1,773,886 | 1,770,311 | |||||||||||||||
| Less: | ||||||||||||||||||||
| Perpetual preferred stock | 150,000 | 150,000 | 150,000 | 150,000 | 150,000 | |||||||||||||||
| Tangible common equity | $ | 1,659,145 | $ | 1,657,509 | $ | 1,669,690 | $ | 1,623,886 | $ | 1,620,311 | ||||||||||
| Common shares outstanding at period end | 125,324,413 | 125,247,099 | 125,020,843 | 124,954,523 | 124,611,940 | |||||||||||||||
| Book value per common share | $ | 13.62 | $ | 13.62 | $ | 13.74 | $ | 13.39 | $ | 13.40 | ||||||||||
| Tangible common equity per common share | 13.24 | 13.23 | 13.36 | 13.00 | 13.00 | |||||||||||||||
| Total assets | $ | 27,354,310 | $ | 26,641,399 | $ | 26,601,026 | $ | 25,214,743 | $ | 24,120,491 | ||||||||||
| Less: | ||||||||||||||||||||
| Goodwill | 46,859 | 46,859 | 46,859 | 46,859 | 46,859 | |||||||||||||||
| Intangible assets | 1,355 | 1,535 | 1,772 | 2,124 | 2,651 | |||||||||||||||
| Tangible assets | $ | 27,306,096 | $ | 26,593,005 | $ | 26,552,395 | $ | 25,165,760 | $ | 24,070,981 | ||||||||||
| Non-Performing Assets(1) | ||||||||||||||||||||
| (dollars in thousands) |
Jun 30, 2016 |
Mar 31, 2016 |
Dec 31, 2015 |
Sep 30, 2015 |
Jun 30, 2015 |
|||||||||||||||
| Non-accrual loans and leases: | ||||||||||||||||||||
| Consumer Banking: | ||||||||||||||||||||
| Residential mortgages | $ | 27,580 | $ | 28,644 | $ | 32,218 | $ | 27,322 | $ | 26,500 | ||||||||||
| Home equity lines and other | 6,678 | 6,151 | 3,339 | 4,191 | 2,169 | |||||||||||||||
| Commercial Banking: | ||||||||||||||||||||
| Commercial and commercial real estate | 65,962 | 66,945 | 71,913 | 78,801 | 48,082 | |||||||||||||||
| Equipment financing receivables | 28,833 | 26,676 | 17,407 | 13,661 | 12,417 | |||||||||||||||
| Total non-accrual loans and leases | 129,053 | 128,416 | 124,877 | 123,975 | 89,168 | |||||||||||||||
| Accruing loans 90 days or more past due | — | — | — | — | — | |||||||||||||||
| Total non-performing loans (NPL) | 129,053 | 128,416 | 124,877 | 123,975 | 89,168 | |||||||||||||||
| Other real estate owned (OREO) | 13,477 | 14,072 | 17,253 | 15,491 | 16,826 | |||||||||||||||
| Total non-performing assets (NPA) | 142,530 | 142,488 | 142,130 | 139,466 | 105,994 | |||||||||||||||
| Troubled debt restructurings (TDR) less than 90 days past due | 14,760 | 15,814 | 16,425 | 16,558 | 14,693 | |||||||||||||||
| Total NPA and TDR(1) | $ | 157,290 | $ | 158,302 | $ | 158,555 | $ | 156,024 | $ | 120,687 | ||||||||||
| Total NPA and TDR | $ | 157,290 | $ | 158,302 | $ | 158,555 | $ | 156,024 | $ | 120,687 | ||||||||||
| Government insured 90 days or more past due still accruing | 3,211,913 | 3,255,744 | 3,199,978 | 2,814,506 | 2,901,184 | |||||||||||||||
| Loans accounted for under ASC 310-30: | ||||||||||||||||||||
| 90 days or more past due | 4,130 | 4,858 | 5,148 | 4,871 | 4,571 | |||||||||||||||
| Total regulatory NPA and TDR | $ | 3,373,333 | $ | 3,418,904 | $ | 3,363,681 | $ | 2,975,401 | $ | 3,026,442 | ||||||||||
| Adjusted credit quality ratios excluding government insured loans and loans accounted for under ASC 310-30: (1) | ||||||||||||||||||||
| NPL to total loans | 0.52 | % | 0.54 | % | 0.53 | % | 0.56 | % | 0.42 | % | ||||||||||
| NPA to total assets | 0.52 | % | 0.53 | % | 0.53 | % | 0.55 | % | 0.44 | % | ||||||||||
| NPA and TDR to total assets | 0.58 | % | 0.59 | % | 0.60 | % | 0.62 | % | 0.50 | % | ||||||||||
| Credit quality ratios including government insured loans and loans accounted for under ASC 310-30: | ||||||||||||||||||||
| NPL to total loans | 13.59 | % | 14.23 | % | 14.08 | % | 13.21 | % | 14.14 | % | ||||||||||
| NPA to total assets | 12.28 | % | 12.77 | % | 12.58 | % | 11.73 | % | 12.49 | % | ||||||||||
| NPA and TDR to total assets | 12.33 | % | 12.83 | % | 12.64 | % | 11.80 | % | 12.55 | % | ||||||||||
|
(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) |
Consumer |
Commercial |
Corporate |
Eliminations | Consolidated | |||||||||||||||
| Three Months Ended June 30, 2016 | ||||||||||||||||||||
| Net interest income | $ | 99,370 | $ | 83,141 | $ | (5,071 | ) | $ | — | $ | 177,440 | |||||||||
| Provision for loan and lease losses | 1,068 | 4,944 | — | — | 6,012 | |||||||||||||||
| Net interest income after provision for loan and lease losses | 98,302 | 78,197 | (5,071 | ) | — | 171,428 | ||||||||||||||
| Noninterest income | 5,225 | 12,389 | 1,554 | — | 19,168 | |||||||||||||||
| Noninterest expense | 93,485 | 33,790 | 28,565 | — | 155,840 | |||||||||||||||
| Income (loss) before income tax | 10,042 | 56,796 | (32,082 | ) | — | 34,756 | ||||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Gain on repurchase of trust preferred securities | — | — | (1,478 | ) | — | (1,478 | ) | |||||||||||||
| Transaction expense and non-recurring regulatory related expense | 148 | — | 154 | — | 302 | |||||||||||||||
| Increase (decrease) in Bank of Florida non-accretable discount | — | (324 | ) | — | — | (324 | ) | |||||||||||||
| MSR impairment (recovery) | 36,872 | — | — | — | 36,872 | |||||||||||||||
| Restructuring cost | (1,538 | ) | 759 | 66 | — | (713 | ) | |||||||||||||
| OTTI losses on investment securities (Volcker Rule) | — | — | — | — | — | |||||||||||||||
| Adjusted income (loss) before income tax | $ | 45,524 | $ | 57,231 | $ | (33,340 | ) | $ | — | $ | 69,415 | |||||||||
| Total assets as of June 30, 2016 | $ | 16,514,624 | $ | 11,037,749 | $ | 259,250 | $ | (457,313 | ) | $ | 27,354,310 | |||||||||
| Total deposits as of June 30, 2016 | 14,787,822 | 4,023,940 | — | — | 18,811,762 | |||||||||||||||
| Three Months Ended March 31, 2016 | ||||||||||||||||||||
| Net interest income | $ | 97,520 | $ | 80,568 | $ | (4,307 | ) | $ | — | $ | 173,781 | |||||||||
| Provision for loan and lease losses | 3,334 | 5,585 | — | — | 8,919 | |||||||||||||||
| Net interest income after provision for loan and lease losses | 94,186 | 74,983 | (4,307 | ) | — | 164,862 | ||||||||||||||
| Noninterest income | 15,579 | 14,035 | 139 | — | 29,753 | |||||||||||||||
| Noninterest expense | 88,073 | 32,986 | 28,371 | — | 149,430 | |||||||||||||||
| Income (loss) before income tax | 21,692 | 56,032 | (32,539 | ) | — | 45,185 | ||||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Transaction expense and non-recurring regulatory related expense | (328 | ) | — | 259 | — | (69 | ) | |||||||||||||
| Increase (decrease) in Bank of Florida non-accretable discount | — | (22 | ) | — | — | (22 | ) | |||||||||||||
| MSR impairment (recovery) | 22,542 | — | — | — | 22,542 | |||||||||||||||
| Restructuring cost | 118 | 379 | 209 | — | 706 | |||||||||||||||
| OTTI losses on investment securities (Volcker Rule) | — | — | — | — | — | |||||||||||||||
| Adjusted income (loss) before income tax | $ | 44,024 | $ | 56,389 | $ | (32,071 | ) | $ | — | $ | 68,342 | |||||||||
| Total assets as of March 31, 2016 | $ | 16,294,379 | $ | 10,486,284 | $ | 298,701 | $ | (437,965 | ) | $ | 26,641,399 | |||||||||
| Total deposits as of March 31, 2016 | 14,685,281 | 4,311,196 | — | — | 18,996,477 | |||||||||||||||
| Three Months Ended June 30, 2015 | ||||||||||||||||||||
| Net interest income | $ | 92,355 | $ | 78,266 | $ | (1,596 | ) | $ | — | $ | 169,025 | |||||||||
| Provision for loan and lease losses | 3,584 | 4,348 | — | — | 7,932 | |||||||||||||||
| Net interest income after provision for loan and lease losses | 88,771 | 73,918 | (1,596 | ) | — | 161,093 | ||||||||||||||
| Noninterest income | 71,116 | 12,564 | 134 | — | 83,814 | |||||||||||||||
| Noninterest expense | 121,095 | 28,979 | 27,894 | — | 177,968 | |||||||||||||||
| Income (loss) before income tax | 38,792 | 57,503 | (29,356 | ) | — | 66,939 | ||||||||||||||
| Adjustment items (pre-tax): | ||||||||||||||||||||
| Transaction expense and non-recurring regulatory related expense | 5,791 | — | 250 | — | 6,041 | |||||||||||||||
| Increase (decrease) in Bank of Florida non-accretable discount | 354 | (97 | ) | — | — | 257 | ||||||||||||||
| MSR impairment (recovery) | (15,727 | ) | — | — | — | (15,727 | ) | |||||||||||||
| Restructuring cost | 17,143 | — | 61 | — | 17,204 | |||||||||||||||
| OTTI losses on investment securities (Volcker Rule) | — | — | — | — | — | |||||||||||||||
| Adjusted income (loss) before income tax | $ | 46,353 | $ | 57,406 | $ | (29,045 | ) | $ | — | $ | 74,714 | |||||||||
| Total assets as of June 30, 2015 | $ | 15,139,729 | $ | 9,093,639 | $ | 283,285 | $ | (396,162 | ) | $ | 24,120,491 | |||||||||
| Total deposits as of June 30, 2015 | 13,083,912 | 3,399,615 | — | — | 16,483,527 | |||||||||||||||
