EverBank Financial Corp Announces Third Quarter 2012 Financial Results

EverBank Financial Corp Announces Third Quarter 2012 Financial Results

JACKSONVILLE, Fla.--(BUSINESS WIRE)-- EverBank Financial Corp (NYSE: EVER  ) (“EverBank”, "we", "our" or the “Company”) announced today its financial results for the quarter ended September 30, 2012.

Adjusted diluted earnings per share was $0.30 in the third quarter 2012, an 11% increase from $0.27 in the third quarter 2011. GAAP diluted earnings per share was $0.19, a 138% increase from $0.08 in the third quarter 2011.1

“We are pleased to see that our asset and deposit generation platforms produced solid earnings per share and growth across all channels in the third quarter,” said Robert M. Clements, Chairman and Chief Executive Officer. “Our recent acquisition of Business Property Lending closed on schedule and we have started integrating the operations into EverBank. We remain enthusiastic about the strategic growth and diversification benefits we believe this business will bring to EverBank and its shareholders.”

Key Highlights

  • Total loans and leases were $11.4 billion at September 30, 2012, up $0.5 billion, or 5%, for the quarter and up $3.4 billion, or 42%, year over year.
  • Loans and leases generated were $3.3 billion for the third quarter 2012, an increase of 19% for the quarter and 89% year over year.
  • Asset quality improved as adjusted nonperforming assets were 1.29% of total assets at September 30, 2012, compared to 1.46% in the second quarter of 2012 and 1.73% for the third quarter of 2011. Annualized net charge-offs to average loans and leases held for investment were 0.25% for the three months ended September 30, 2012, compared to 0.34% in the second quarter of 2012 and 1.03% for the third quarter of 2011.1
  • Deposits were $11.8 billion at September 30, 2012, up $1.0 billion, or 9%, from the second quarter 2012 and up $1.6 billion, or 16%, as compared to the third quarter of 2011.
  • GAAP net income was $22.2 million for the third quarter of 2012, compared to $11.2 million for the second quarter 2012 and $7.8 million in the third quarter of 2011.
  • Adjusted net income was $36.2 million for the third quarter of 2012, compared to $36.5 million for the second quarter 2012 and $25.6 million for the third quarter of 2011.1
  • Tangible book value per common share was $10.29 at September 30, 2012, and excluding accumulated other comprehensive loss was $11.18.
  • On October 1, 2012, we closed our acquisition of Business Property Lending, Inc. ("BPL") from GE Capital Corporation with total net assets of approximately $2.4 billion.

"The mortgage banking environment continued to strengthen in the third quarter with origination volumes increasing 12% compared to the second quarter.” said W. Blake Wilson, President and Chief Operating Officer. “Our increased investment in marketing yielded strong core deposit growth as we positioned the balance sheet to close the BPL acquisition. We also continued to invest in our retail lending strategy which we believe positions us well to capitalize on improving trends in purchase mortgage transactions.”

   
1   A reconciliation of Non-GAAP financial measures can be found in the financial tables attached hereto.

Balance Sheet

Continued Balance Sheet Growth

Total assets increased by $1.5 billion, or 10%, to $16.5 billion at September 30, 2012, from $15.0 billion at June 30, 2012, and by $4.0 billion, or 32%, from $12.6 billion at September 30, 2011. Our interest-earning assets for the third quarter 2012 were largely comprised of:

  • Residential loans held for investment which increased by 33% to $8.2 billion from the third quarter of 2011. During the quarter, we transferred $1.9 billion of GNMA pool buyout loans from loans held for sale to loans held for investment due to our intention to hold the loans for the foreseeable future;
  • Commercial and commercial real estate loans which increased by 101% to $2.3 billion, from the third quarter of 2011;
  • Commercial leases which increased by 43% to $0.7 billion, from the third quarter of 2011; and
  • Investment securities which decreased by 24% to $2.0 billion, from the third quarter of 2011.

During the third quarter we accumulated a cash balance of $1.6 billion and slowed our retention of organic assets in preparation for funding the BPL acquisition which closed on October 1, 2012.

Loan Origination Activities

Organic generation of residential loans, commercial loans and leases totaled $3.3 billion for the third quarter of 2012. Retained organic production totaled $1.0 billion for the quarter, an increase of 29% and 92% compared to second quarter 2012 and third quarter 2011, respectively.

Deposit and Other Funding Sources

Total deposits grew by $1.0 billion, or 9%, to $11.8 billion at September 30, 2012, from $10.8 billion at June 30, 2012, and by $1.6 billion, or 16%, from $10.2 billion at September 30, 2011. At September 30, 2012, our deposits were comprised of the following:

  • Non-interest bearing accounts were $1.5 billion, or 12%, of total deposits;
  • Interest-bearing checking accounts were $2.4 billion, or 21%, of total deposits;
  • Savings and money market accounts were $4.3 billion, or 36%, of total deposits;
  • Global markets money market and time accounts were $1.2 billion, or 10%, of total deposits; and
  • Time deposit accounts, excluding global markets, were $2.4 billion, or 20%, of total deposits.

Total other borrowings were $2.8 billion at September 30, 2012, compared to $2.5 billion at June 30, 2012. Our core deposit growth and increase in other borrowings were part of the balance sheet positioning we undertook to fund the BPL acquisition.

Credit Quality

Our adjusted nonperforming assets were 1.29% of total assets at September 30, 2012, a decrease from 1.46% at June 30, 2012. We recorded provision for loan and lease losses of $4.4 million during the third quarter of 2012, a decrease of $1.4 million, or 24%, when compared to the second quarter of 2012. Net charge-offs during the third quarter of 2012 declined to $5.3 million, from $6.6 million in the second quarter of 2012, a decline of 20%. On an annualized basis, net charge-offs were 0.25% of total average loans and leases held for investment outstanding for the third quarter of 2012, compared to 0.34% for the second quarter of 2012 and 1.03% for the third quarter of 2011.

During the third quarter of 2012, a national bank regulatory agency issued guidance that could require certain loans on our balance sheet to be accounted for as nonperforming assets, regardless of their actual and expected performance. At September 30, 2012, loans with a total outstanding balance of $31.5 million and an estimated collateral value of $26.5 million, in addition to troubled debt restructurings ("TDRs") with a total outstanding balance of $13.2 million and an estimated collateral value of $11.8 million, could potentially be impacted by the guidance. Approximately 78% of these loans affected are current, with 63% having made 24 consecutive payments, and 86% are less than sixty days past due. Approximately 71% of these TDRs are current and 96% are less than 60 days past due. First lien mortgages represent 87% of the total impacted loan balances. EverBank is finalizing the impact of this new guidance and may incur a pre-tax charge of $6.0 million to $8.0 million during the fourth quarter of 2012.

Originated Loan Repurchase Activity

During the third quarter of 2012, we experienced charge-offs of $4.7 million and recorded a provision of $1.7 million on repurchase obligations for loans sold or securitized. Our reserve declined from $34.0 million in the second quarter to $31.0 million in the third quarter. We continue to be well reserved with approximately 10 quarters of coverage based on the average quarterly loss rate over the trailing four quarters. Trends continue to be stable with severities declining over the last twelve months to 45% in third quarter 2012, compared to 54% in the third quarter 2011. We continue to believe that our 0.09% total loss rate is indicative of our disciplined underwriting guidelines and risk management culture.

Capital Strength

Total shareholders' equity was $1.3 billion at September 30, 2012, compared to $1.2 billion at June 30, 2012. The bank’s Tier 1 leverage ratio was 8.0% and total risk-based capital ratio was 16.1% at September 30, 2012. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines.

During the third quarter, we issued, via a private placement, approximately 4.0 million shares of common stock at a price of $12.065 per share in connection with the conversion of $48.7 million from a cash escrow into a common stock escrow related to our 2010 Tygris Commercial Finance Group, Inc. acquisition. The newly issued shares will remain in escrow pursuant to the terms of the original escrow agreement.

Income Statement Highlights

Net Interest Income

For the third quarter of 2012, net interest income increased $1.2 million to $126.2 million, from $125.0 million for the second quarter of 2012. This increase was attributable to higher commercial lending volumes driven by our warehouse finance and lender finance businesses and resulted in a $4.7 million increase in interest income during the quarter. Interest expense increased by $3.5 million during the quarter as the Company increased deposits and borrowings to execute on its balance sheet positioning in advance of the BPL acquisition.

Net interest margin decreased to 3.66% for the third quarter from 3.86% in the second quarter. The change in net interest margin was primarily driven by the growth in floating rate, short duration assets through increased levels of warehouse finance and lender finance originations combined with an increase in interest expense on deposits and borrowings. During the third quarter, we entered into commitments for fixed rate advances to support the acquisition of BPL.

Noninterest Income

Noninterest income for the third quarter of 2012 increased by $23.2 million, or 31%, to $97.3 million compared to the second quarter of 2012. This increase was driven by production revenues and gain on sale of loans which increased by $16.5 million, or 21%, to $96.3 million. The increase in noninterest income also reflects a $9.6 million improvement in the net loan servicing loss from $21.8 million for the second quarter to $12.2 million for the third quarter of 2012. Net loan servicing loss includes a non-cash mortgage servicing rights ("MSR") valuation allowance of $18.2 million, compared to a valuation allowance of $30.1 million in the second quarter of 2012, as well as MSR amortization expense of $36.3 million, compared to amortization of $34.1 million in the second quarter of 2012. These changes were primarily related to an extension of the historic low interest rate environment which resulted in strong residential origination volumes of $2.5 billion and elevated servicing pay-off activity.

Noninterest Expense

Noninterest expense for the third quarter of 2012 increased by $8.2 million, or 5%, to $184.0 million from $175.8 million in the second quarter. Salaries, commissions and employee benefits increased by $9.1 million, or 12%, with $5.1 million attributed to hiring activity and investments in retail lending. Approximately 10% of our noninterest expense is variable and tied to mortgage origination levels. General and administrative expense, excluding credit-related expenses, decreased by $6.5 million, or 12%, from the second quarter as decreases in professional fees and other expenses were partially offset by increased advertising and marketing expense.

We continued to invest in our retail lending strategy during the third quarter. We added approximately 150 FTEs and have added approximately 350 FTEs in our retail channel year to date. Noninterest expense directly related to our retail expansion was $14.6 million for the third quarter and $27.1 million year to date. Loan production volume from our retail channel was $513 million in the third quarter, an increase of $248 million, or 94%, from second quarter and $422 million, or 465%, from the first quarter. We continue to capitalize on the changing industry landscape and are well positioned to benefit from a return to purchase driven origination volumes.

Credit-related expenses for the third quarter increased $4.3 million, or 21%, to $25.1 million from $20.8 million in the second quarter 2012. Key drivers of the increase include increased investments and related expenses to our GNMA pool buyout loans and an increase in foreclosure and REO expense related to the Bank of Florida portfolio, offset by lower repurchase reserve expenses.

Income Tax Expense

Our effective tax rate for the third quarter of 2012 was 37%, compared to 37% for the third quarter of 2011.

Segment Analysis

  • Banking and Wealth Management adjusted pre-tax income was $52.0 million, including other credit-related expenses, foreclosure and OREO expenses of $19.3 million.
  • Mortgage Banking adjusted pre-tax income was $37.3 million, including other credit-related expenses, foreclosure and OREO expenses of $5.7 million.
  • Corporate Services had an adjusted pre-tax loss of $31.5 million.

Dividend

On October 23, 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.02 per common share, payable on November 20, 2012, to stockholders of record as of November 5, 2012.

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; 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 lease and loan charge-offs; legislative or regulatory actions affecting or concerning mortgage loan modification and refinancing; 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; concentration of mass-affluent customers and jumbo mortgages; hedging strategies; risks related to securities held in our securities portfolio; delinquencies on our equipment leases and reductions in the resale value of leased equipment; 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.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, October 25, 2012 to discuss its third quarter 2012 results. The dial-in number for the conference call is 1-877-941-1427 and the international dial-in number is 1-480-629-9664, passcode is 4568196. 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.

For those unable to participate in the conference call, a replay will be available from October 25, 2012 until November 1, 2012. The replay dial-in number is 1-877-870-5176 and the international replay dial-in number is 1-858-384-5517, replay passcode is 4568196.

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 $16.5 billion in assets and $11.8 billion in deposits as of September 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 nationwide. 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)

 

September 30,
2012

December 31,
2011

Assets
Cash and due from banks $ 53,357 $ 31,441
Interest-bearing deposits in banks 1,566,612   263,540  
Total cash and cash equivalents 1,619,969 294,981
Investment securities:
Available for sale, at fair value 1,722,556 1,903,922
Held to maturity (fair value of $177,228 and $194,350 as of September 30, 2012 and December 31, 2011, respectively) 170,804 189,518
Other investments 126,151   98,392  
Total investment securities 2,019,511 2,191,832
Loans held for sale (includes $1,025,467 and $777,280 carried at fair value as of September 30, 2012 and December 31, 2011, respectively) 1,403,205 2,725,286
Loans and leases held for investment:
Covered by loss share or indemnification agreements 671,420 841,146
Not covered by loss share or indemnification agreements 9,385,306   5,678,135  
Loans and leases held for investment, net of unearned income 10,056,726 6,519,281
Allowance for loan and lease losses (76,469 ) (77,765 )
Total loans and leases held for investment, net 9,980,257 6,441,516
Equipment under operating leases, net 55,532 56,399
Mortgage servicing rights (MSR), net 381,773 489,496
Deferred income taxes, net 183,943 151,634
Premises and equipment, net 64,789 43,738
Other assets 800,461   646,796  
Total Assets $ 16,509,440   $ 13,041,678  
Liabilities
Deposits:
Noninterest-bearing $ 1,475,204 $ 1,234,615
Interest-bearing 10,340,722   9,031,148  
Total deposits 11,815,926 10,265,763
Other borrowings 2,823,927 1,257,879
Trust preferred securities 103,750 103,750
Accounts payable and accrued liabilities 507,815   446,621  
Total Liabilities 15,251,418 12,074,013
Commitments and Contingencies (Note 15)
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 September 30, 2012) (Note 10) 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 September 30, 2012) (Note 10) 1
Common Stock, $0.01 par value (500,000,000 and 150,000,000 shares authorized at September 30, 2012 and December 31, 2011, respectively; 120,624,500 and 75,094,375 issued and outstanding at September 30, 2012 and December 31, 2011, respectively) 1,206 751
Additional paid-in capital 812,823 561,247
Retained earnings 550,724 513,413
Accumulated other comprehensive income (loss) (AOCI) (106,731 ) (107,749 )
Total Shareholders’ Equity 1,258,022   967,665  
Total Liabilities and Shareholders’ Equity $ 16,509,440   $ 13,041,678  
 
   

EverBank Financial Corp and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)

(Dollars in thousands, except per share data)

 
Three Months Ended September 30, Nine Months Ended September 30,
2012   2011 2012   2011
Interest Income
Interest and fees on loans and leases $ 140,230 $ 116,899 $ 400,824 $ 358,419
Interest and dividends on investment securities 20,879 27,201 62,127 82,778
Other interest income 152   197   338   1,312  
Total interest income 161,261 144,297 463,289 442,509
Interest Expense
Deposits 22,491 23,959 63,884 75,559
Other borrowings 12,576   9,469   32,604   29,478  
Total interest expense 35,067   33,428   96,488   105,037  
Net Interest Income 126,194 110,869 366,801 337,472
Provision for Loan and Lease Losses 4,359   12,258   21,471   39,292  
Net Interest Income after Provision for Loan and Lease Losses 121,835 98,611 345,330 298,180
Noninterest Income
Loan servicing fee income 42,341 48,390 130,380 144,023
Amortization and impairment of mortgage servicing rights (54,521 ) (44,053 ) (163,281 ) (88,270 )
Net loan servicing income (loss) (12,180 ) 4,337 (32,901 ) 55,753
Gain on sale of loans 85,748 20,921 203,851 39,854
Loan production revenue 10,528 6,518 27,817 18,513
Deposit fee income 4,671 7,803 16,738 19,398
Other lease income 7,103 7,095 24,588 22,163
Other 1,429   6,683   4,522   16,461  
Total noninterest income 97,299 53,357 244,615 172,142
Noninterest Expense
Salaries, commissions and other employee benefits expense 85,399 57,757 228,266 171,451
Equipment expense 17,574 13,608 50,411 36,077
Occupancy expense 6,619 5,237 17,985 14,808
General and administrative expense 74,377   62,983   221,911   184,199  
Total noninterest expense 183,969   139,585   518,573   406,535  
Income before Provision for Income Taxes 35,165 12,383 71,372 63,787
Provision for Income Taxes 12,987   4,625   26,176   24,818  
Net Income $ 22,178   $ 7,758   $ 45,196   $ 38,969  
Less: Net Income Allocated to Participating Preferred Stock   (1,598 ) (8,564 ) (8,420 )
Net Income Allocated to Common Shareholders $ 22,178   $ 6,160   $ 36,632   $ 30,549  
Basic Earnings Per Share $ 0.19 $ 0.08 $ 0.37 $ 0.41
Diluted Earnings Per Share $ 0.19 $ 0.08 $ 0.37 $ 0.40
Dividends Declared Per Share $ 0.02 $ $ 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 Non-Performing Asset Ratio, Tangible Shareholders’ Equity, Adjusted Tangible Shareholders’ Equity, Tangible Assets, and Adjusted Efficiency Ratios 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 allow for a better evaluation and transparency of 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)

September 30,
2012

June 30,
2012

March 31,
2012

December 31,
2011

September 30,
2011

Net income $ 22,178 $ 11,172 $ 11,846 $ 13,760 $ 7,758
Transaction expense, net of tax 1,268 2,363 821 802 2,108
Non-recurring regulatory related expense, net of tax 1,326 3,780 3,063 3,529 2,643
Increase in Bank of Florida non-accretable discount, net of tax 111 463 2,135 2,208 298
MSR impairment, net of tax 11,302   18,684   9,389   11,638   12,824  
Adjusted net income $ 36,185   $ 36,462   $ 27,254   $ 31,937   $ 25,631  
 
Tangible Equity, Adjusted Tangible Equity and Tangible Assets    
(dollars in thousands)

September 30,
2012

June 30, 2012 March 31, 2012

December 31,
2011

September 30,
2011

Shareholders’ equity $ 1,258,022 $ 1,181,369 $ 994,689 $ 967,665 $ 973,708
Less:
Goodwill 10,238 10,238 10,238 10,238 10,238
Intangible assets 6,348   6,700   7,052   7,404   7,756  
Tangible equity $ 1,241,436 $ 1,164,431 $ 977,399 $ 950,023 $ 955,714
Less:
Accumulated other comprehensive loss (106,731 ) (113,094 ) (89,196 ) (107,749 ) (87,303 )
Adjusted tangible equity $ 1,348,167   $ 1,277,525   $ 1,066,595   $ 1,057,772   $ 1,043,017  
Total assets $ 16,509,440 $ 15,040,824 $ 13,774,821 $ 13,041,678 $ 12,550,764
Less:
Goodwill 10,238 10,238 10,238 10,238 10,238
Intangible assets 6,348   6,700   7,052   7,404   7,756  
Tangible assets $ 16,492,854   $ 15,023,886   $ 13,757,531   $ 13,024,036   $ 12,532,770  
 
Regulatory Capital (bank level)                    
(dollars in thousands)

September 30,
2012

June 30,
2012

March 31,
2012

December 31,
2011

September 30,
2011

Shareholders’ equity $ 1,339,669 $ 1,263,687 $ 1,099,404 $ 1,070,887 $ 1,078,080
Less: Goodwill and other intangibles (16,586 ) (16,938 ) (17,290 ) (17,642 ) (17,994 )
Disallowed servicing asset (33,366 ) (36,650 ) (40,783 ) (38,925 ) (36,570 )
Disallowed deferred tax asset (69,412 ) (70,357 ) (71,302 ) (71,803 ) (72,147 )
Add: Accumulated losses on securities and cash flow hedges 103,238   110,101   86,981   105,682   85,525  
Tier 1 capital 1,323,543 1,249,843 1,057,010 1,048,199 1,036,894
Less: Low-level recourse and residual interests (20,424 ) (21,587 ) (20,431 )
Add: Allowance for loan and lease losses 76,469   77,393   78,254   77,765   83,826  
Total regulatory capital $ 1,400,012   $ 1,327,236   $ 1,114,840   $ 1,104,377   $ 1,100,289  
Adjusted total assets $ 16,488,067 $ 15,022,729 $ 13,731,482 $ 13,081,401 $ 12,550,738
Risk-weighted assets 8,701,164 8,424,290 7,311,556 7,043,371 7,007,339
 
 
EverBank Financial Corp and Subsidiaries
Non-Performing Assets (1)                  
(dollars in thousands)

September 30,
2012

 

June 30,
2012

 

March 31,
2012

 

December 31,
2011

 

September 30,
2011

Non-accrual loans and leases:
Residential mortgages $ 75,355 $ 66,956 $ 74,810 $ 81,594 $ 74,194
Commercial and commercial real estate 85,306 95,882 89,576 104,829 92,966
Lease financing receivables 2,018 1,295 1,861 2,385 1,745
Home equity lines 4,492 4,256 3,771 4,251 3,803
Consumer and credit card 479   573   571   419   471  
Total non-accrual loans and leases 167,650 168,962 170,589 193,478 173,179
Accruing loans 90 days or more past due 1,973   1,800   5,119   6,673   4,808  
Total non-performing loans (NPL) 169,623 170,762 175,708 200,151 177,987
Other real estate owned (OREO) 43,612   49,248   49,304   42,664   39,431  
Total non-performing assets (NPA) 213,235 220,010 225,012 242,815 217,418
Troubled debt restructurings (TDR) less than 90 days past due 82,030   93,184   92,954   92,628   89,129  
Total NPA and TDR (1) $ 295,265   $ 313,194   $ 317,966   $ 335,443   $ 306,547  
 
Total NPA and TDR $ 295,265 $ 313,194 $ 317,966 $ 335,443 $ 306,547
Government-insured 90 days or more past due still accruing 1,684,550 1,647,567 1,530,665 1,570,787 883,478

Bank of Florida loans accounted for under ASC 310-30:

90 days or more past due 117,506 140,797 146,379 149,743 159,767
OREO 18,557   20,379   22,852   19,456   19,616  
Total regulatory NPA and TDR $ 2,115,878   $ 2,121,937   $ 2,017,862   $ 2,075,429   $ 1,369,408  
Adjusted credit quality ratios excluding government-insured loans and loans accounted for under ASC 310-30: (1)
NPL to total loans 1.49 % 1.57 % 1.80 % 2.18 % 2.23 %
NPA to total assets 1.29 % 1.46 % 1.63 % 1.86 % 1.73 %
NPA and TDR to total assets 1.79 % 2.08 % 2.31 % 2.57 % 2.44 %
Credit quality ratios including government-insured loans and loans accounted for under ASC 310-30:
NPL to total loans 17.32 % 18.00 % 18.95 % 20.95 % 15.28 %
NPA to total assets 12.32 % 13.49 % 13.97 % 15.20 % 10.20 %
NPA and TDR to total assets 12.82 % 14.11 % 14.65 % 15.91 % 10.91 %
 

(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 September 30, 2012, we expected 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
Wealth
Management
  Mortgage
Banking
  Corporate
Services
  Eliminations   Consolidated
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 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  
Efficiency Ratios:
GAAP basis:
including foreclosure, OREO expenses and other credit-related expenses 59.1 % 82.3 %
excluding foreclosure, OREO expenses and other credit-related expenses 44.8 % 71.1 %
Adjusted basis:
including foreclosure, OREO expenses and other credit-related expenses 59.1 % 74.4 %
excluding foreclosure, OREO expenses and other credit-related expenses 44.8 % 64.0 %
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 %
 
         
Banking and
Wealth
Management
Mortgage
Banking
Corporate
Services
Eliminations Consolidated
Three Months Ended September 30, 2011
Net interest income $ 104,266 $ 8,255 $ (1,652 ) $ $ 110,869
Provision for loan and lease losses 13,119   (861 )     12,258  
Net interest income after provision for loan and lease losses 91,147 9,116 (1,652 ) 98,611
Noninterest income 24,403 28,956 (2 ) 53,357
Noninterest expense:
Foreclosure and OREO expense (2,328 ) 5,660 1 3,333
Other credit-related expenses 2,748 11,135 13,883
All other noninterest expense 50,931   42,046   29,392     122,369  
Income (loss) before income tax 64,199   (20,769 ) (31,047 )   12,383  
Adjustment items (pre-tax):
Increase in Bank of Florida non-accretable discount 482 482
MSR impairment 20,684 20,684
Transaction and non-recurring regulatory related expense   2,432   5,233     7,665  
Adjusted income (loss) before income tax 64,681   2,347   (25,814 )   41,214  
Total assets as of September 30, 2011 11,033,090   1,618,689   140,260   (241,275 ) 12,550,764  
Efficiency Ratios:
GAAP basis:
including foreclosure, OREO expenses and other credit-related expenses 39.9 % 85.0 %
excluding foreclosure, OREO expenses and other credit-related expenses 39.6 % 74.5 %
Adjusted basis:
including foreclosure, OREO expenses and other credit-related expenses 39.9 % 71.3 %
excluding foreclosure, OREO expenses and other credit-related expenses 39.6 % 62.0 %
 



EverBank Financial Corp
Media Contact
Michael Cosgrove, 904-623-2029
Michael.Cosgrove@EverBank.com
or
Investor Relations
877-755-6722
Investor.Relations@EverBank.com

KEYWORDS:   United States  North America  Florida

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