IPO activity has been a little scarce lately, particularly since Facebook's
Other companies' cast-offs are treasures to EverBank
GE has been parsing and selling bits of its financial arm for some time, as its investors encourage its exit from the banking business. The decision to go further and sell larger slices has complemented EverBank's desire to expand and to increase its asset base. The $2.5 billion acquisition will provide EverBank with GE Capital's $2.4 billion commercial loan portfolio, as well as servicing rights on another $3 billion worth of loans.
Companies anxious to shed their loan businesses have been a real boon for EverBank. A month before going public on May 2, the company closed on a deal with MetLife
EverBank's ambition makes it a good candidate for long-term growth, in my opinion. The bank is expanding quickly but seems to be choosing its acquisitions wisely, purchasing from companies that desire to exit the loan business for reasons other than a simple profit motive. For example, though GE's shareholders have been nervous about the company's huge banking presence, the mortgages that were sold to EverBank were performing loans. In fact, the division was quite profitable for GE, and its commercial lending facility was doing quite nicely as of late.
In addition, it looks as if the Internet-based banking business might be ready to pop. Although many still feel the connection to brick-and-mortar bank branches, I think that as more people come to rely on Internet and mobile banking, convenience will eventually win out over nostalgia. Meanwhile, online banks are creating bridges for their customers. For example, Capital One Financial
Will EverBank need such a real-world presence? Perhaps not, as it already has a network of independent financial advisors all over the country, as well as financial centers in its home state of Florida. The bank's strategy seems to be working, and as long as EverBank keeps to its current expansion plan, I can't see much downside to this company.
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