EX-99.1 2 ex991pressrelease93013.htm EXHIBIT Ex 99.1 Press Release 9.30.13
                    


EverBank Financial Corp Announces Third Quarter 2013 Financial Results

JACKSONVILLE, FL, October 31, 2013 - 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.
During the quarter, the Company also used excess cash to retire nearly $800 million in higher-cost wholesale borrowings which will increase net interest income and net interest margin in the future.
The above activities, combined with the exit from our wholesale broker mortgage business and our settlement with the OCC and Federal Reserve, position EverBank to better focus on our core clients and businesses.
"These initiatives will help to simplify our business and provide better visibility into the earnings power of our franchise. As a result of our strong capital and liquidity, we are well positioned for sustainable organic growth across our business channels," said W. Blake Wilson, President and Chief Operating Officer.

Balance Sheet
Loan Portfolio
Total portfolio loans held for investment ("HFI") were $12.6 billion at September 30, 2013, an increase of $2.5 billion, or 25%, year over year. Compared to the prior quarter, this represents a decrease of $0.3 billion, or 2%. Loans HFI for the third quarter 2013 were comprised of:
($ in millions)
Sep 30,
2013
 
Jun 30,
2013
 
Sep 30,
2012
Residential loans
$
4,624

 
$
4,237

 
$
4,127

Mortgage pool buyouts
2,075

 
2,349

 
2,680

Total residential
6,699

 
6,586

 
6,807

 
 
 
 
 
 
Commercial real estate
3,243

 
3,307

 
1,092

Lease financing receivables
1,093

 
1,015

 
742

Commercial
514

 
491

 
399

Total commercial finance & CRE
4,850

 
4,813

 
2,233

 
 
 
 
 
 
Warehouse finance
851

 
1,292

 
824

Other
163

 
176

 
193

Total HFI
$
12,563

 
$
12,867

 
$
10,057


During the third quarter, residential loans HFI increased by 9% compared to the prior quarter to $4.6 billion, driven by continued growth in our high quality prime jumbo hybrid ARM portfolio. Our commercial lending and leasing platforms represented approximately 45% of loans HFI in the third quarter compared to approximately 30% a year ago. Continued growth in our commercial finance and leasing portfolios were offset by lower warehouse finance balances experienced at quarter end.
Loan Origination Activities
Organic asset generation totaled $3.1 billion and retained organic originations totaled $1.1 billion for the third quarter of 2013, a decrease of 19% and 3%, respectively, from the prior quarter. Total commercial loans and leases originated during the quarter were $352 million, including leases of $177 million and commercial real estate originations of $122 million. Year to date, commercial originations totaled $1.3 billion, including leases of $515 million and commercial real estate originations of $341 million.
Residential loan originations were $2.7 billion for the third quarter of 2013, a decrease of 17% compared to the prior quarter and an increase of 7% year over year. Excluding the impact of our previously announced wholesale broker channel exit, origination volume was $2.4 billion, a decrease of 13% compared to the prior quarter and an


                    


increase of 25% year over year. Origination volume from our retail channel was $1.0 billion in the third quarter, a decrease of 15% from the prior quarter and a 100% increase year over year. Purchase transactions represented 40% of total volumes and 66% of retail volumes, compared to 32% and 49%, respectively, in the prior quarter. HARP volume was approximately 28% of total volume during the quarter compared to 17% in the prior quarter.
Our gain on sale margin decreased by 48 basis points during the quarter to 1.68%. Agency conforming loan originations sold into the secondary market generated a gain on sale margin of 2.86% during the third quarter of 2013 compared to 3.53% in the prior quarter and 3.65% during the third quarter of 2012. While we maintain the flexibility and capability to best execute our nonagency originations according to market conditions, we expect the majority of future nonagency loans will be originated for our portfolio and loans held for sale will consist of GSE-eligible conventional loans.
The following table presents total organic loan and lease origination information by product type:
($ in millions)
Sep 30,
2013
 
Jun 30,
2013
 
Sep 30,
2012
Residential origination volume


 


 
 
Conventional loans
$
1,933

 
$
2,203

 
$
2,126

Prime jumbo loans
767

 
1,048

 
405

 
2,700

 
3,251

 
2,531

Commercial origination volume
 
 
 
 
 
Commercial real estate
122

 
157

 
97

Lease financing receivables
177

 
187

 
134

Warehouse finance
7

 
69

 
192

Commercial
46

 
114

 
156

 
352

 
527

 
579

Total organic originations
$
3,052

 
$
3,778

 
$
3,110

Deposits
Total deposits were $13.6 billion at September 30, 2013, flat quarter over quarter, as lower time deposit balances offset higher levels of noninterest-bearing deposits. Year over year, total deposits grew by $1.8 billion, or 15%, from $11.8 billion. Time deposits, excluding market-based deposits represented 22% of total deposits in the third quarter compared to 23% in the prior quarter. Business deposits grew 4% compared to the prior quarter and represented 13% of total deposits.
At September 30, 2013, our deposits were comprised of the following:
($ in millions)
Sep 30,
2013
 
Jun 30,
2013
 
Sep 30,
2012
Noninterest-bearing demand
$
1,366

 
$
1,205

 
$
1,475

Interest-bearing demand
2,999

 
3,082

 
2,424

Savings and money market accounts
5,186

 
5,153

 
4,311

Global market-based accounts
1,041

 
1,051

 
1,231

Time, excluding market-based
3,036

 
3,179

 
2,375

Total deposits
$
13,628

 
$
13,670

 
$
11,816

 
 
 
 
 
 
Consumer deposits
11,864

 
11,974

 
10,278

Business deposits
1,764

 
1,696

 
1,538

Total deposits
$
13,628

 
$
13,670

 
$
11,816

Total other borrowings were $1.9 billion at September 30, 2013, a decrease of 30% quarter over quarter. This decrease resulted from the early extinguishment of $0.8 billion of Federal Home Loan Bank advances.


                    



Capital Strength
Total shareholders' equity was $1.6 billion at September 30, 2013, an increase of 3% quarter over quarter. The bank’s Tier 1 leverage ratio was 8.8% and total risk-based capital ratio was 14.5% at September 30, 2013. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines. Our current estimate of the fully phased-in Basel III Tier 1 common capital ratio at September 30, 2013 is between 9.5% - 10.0%.

Credit Quality
Our adjusted non-performing assets were 1.01% of total assets at September 30, 2013, compared to 0.92% for the prior quarter and 1.29% at September 30, 2012. Net charge-offs during the third quarter of 2013 were $10 million, an increase of $6 million compared to the prior quarter. On an annualized basis, net charge-offs were 0.30% of total average loans and leases held for investment, compared to 0.12% for the prior quarter and 0.25% for the third quarter of 2012. The sequential increase in net charge-offs was driven by both higher charge-off and lower recovery levels related primarily to Bank of Florida loans and non-core commercial real estate loans.

Originated Loan Repurchase Activity
During the third quarter of 2013, we experienced net realized losses on loan repurchases of $2.2 million and recorded a net recovery of provision of $0.7 million for repurchase obligations on loans sold or securitized. Our reserve declined from $22 million in the second quarter of 2013 to $19 million in the third quarter of 2013. We continue to be well reserved with approximately 5 quarters of coverage based on the average quarterly loss rate over the trailing four quarters.

Income Statement Highlights
Revenue
Revenue for the third quarter of 2013 was $282 million, a decrease of $6 million, or 2%, from $288 million in the second quarter of 2013. The decline was driven by lower gain on sale of loans income and lower interest income, offset by higher other income and net servicing income in addition to lower interest expense.
Net Interest Income
For the third quarter of 2013, net interest income was $139 million, a decrease of $2 million, or 2%, compared to the prior quarter. This decrease was attributed to lower interest income driven primarily by lower loans HFS and investment securities average balances. Offsetting these were higher commercial average yields and balances, as well as lower interest expense driven by a decline in total deposit cost resulting from lower yields introduced in June 2013.
Core net interest margin, which is net interest margin excluding the impact of Tygris excess accretion, decreased to 3.17% for the third quarter of 2013 from 3.21% in the second quarter of 2013.
Noninterest Income
Noninterest income for the third quarter of 2013 was $144 million, a decrease of $3 million, or 2%, compared to the prior quarter. This decrease was driven by a $24 million decline in gain on sale of loans income, offset by a $12 million increase in net loan servicing income and an $8 million increase in other income.
Noninterest Expense
Noninterest expense for the third quarter of 2013 increased by $12 million, or 6%, to $226 million from $214 million in the prior quarter. Adjusted for consent order expense of $32 million and non-recurring restructuring cost of $5 million, noninterest expense was $188 million in the quarter, a decrease of 3% compared to $194 million in the second quarter. General and administrative expense, excluding credit-related and consent order expense, increased $5 million, or 13%, from the second quarter due to a $6 million increase in other expense. Salaries, commissions


                    


and employee benefits decreased by $7 million, or 6%, due to lower variable costs related to origination activity levels.
Income Tax Expense
Our effective tax rate for the second and third quarter of 2013 was 38%, compared to 37% for the third quarter of 2012.

Segment Analysis for the Third Quarter of 2013
•
Banking and Wealth Management pre-tax income was $90 million, a 1% increase compared to the prior quarter driven by a 7% reduction in noninterest expense.
•
Mortgage Banking had a pre-tax loss of $14 million compared to pre-tax income of $10 million in the prior quarter, driven by lower noninterest income and higher noninterest expense.
•
Corporate Services had a pre-tax loss of $23 million, a 9% decrease compared to the prior quarter driven by lower noninterest expense.

Dividends
On October 22, 2013, the Company's Board of Directors declared a quarterly cash dividend of $0.03 per common share, payable on November 22, 2013, to stockholders of record as of November 12, 2013. Also on October 22, 2013, the Company's Board of Directors declared a quarterly cash dividend of $421.875, payable on January 6, 2014, for each share of 6.75% Series A Non-Cumulative Perpetual Preferred Stock held as of December 20, 2013.

Subsequent Event
In October 2013, EverBank, along with other mortgage servicers, received a letter from the OCC requesting, in connection with the April 2011 consent order, that EverBank provide the OCC with an action plan to identify errors and provide remediation to borrowers serviced by EverBank for the period from January 1, 2011 through the present day, that may have been harmed by the same errors identified in the Independent Foreclosure Review. EverBank is presently preparing its action plan for OCC review and will submit that action plan in November 2013. At the present time, the Company is unable to estimate any liability that may result from the action plan.

Conference Call and Webcast
The Company will host a conference call at 8:30 a.m. Eastern Time on Thursday, October 31, 2013 to discuss its third quarter 2013 results. The dial-in number for the conference call is 1-866-652-5200 and the international dial-in number is 1-412-317-6060, passcode is 10035214. 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.

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 $17.6 billion in assets and $13.6 billion in deposits as of September 30, 2013. 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 www.abouteverbank.com/ir.




                    


Media Contact                                                    Investor Relations
Michael Cosgrove                                                877.755.6722
904.623.2029                                                   Investor.Relations@EverBank.com
Michael.Cosgrove@EverBank.com


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; 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; limited ability to rely on brokered deposits as a part of our funding strategy; 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, 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.



                    


EverBank Financial Corp and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(Dollars in thousands, except per share data)
 
 
September 30, 2013
 
December 31,
 2012
Assets
 
 
 
 
Cash and due from banks
 
$
109,471

 
$
175,400

Interest-bearing deposits in banks
 
978,464

 
268,514

Total cash and cash equivalents
 
1,087,935

 
443,914

Investment securities:
 
 
 
 
Available for sale, at fair value
 
1,205,340

 
1,619,878

Held to maturity (fair value of $108,269 and $146,709 as of September 30, 2013 and December 31, 2012, respectively)
 
109,245

 
143,234

Other investments
 
106,450

 
158,172

Total investment securities
 
1,421,035

 
1,921,284

Loans held for sale (includes $1,047,086 and $1,452,236 carried at fair value as of September 30, 2013 and December 31, 2012, respectively)
 
1,059,947

 
2,088,046

Loans and leases held for investment:
 
 
 
 
Loans and leases held for investment, net of unearned income
 
12,562,967

 
12,505,089

Allowance for loan and lease losses
 
(66,991
)
 
(82,102
)
Total loans and leases held for investment, net
 
12,495,976

 
12,422,987

Equipment under operating leases, net
 
34,918

 
50,040

Mortgage servicing rights (MSR), net
 
501,494

 
375,859

Deferred income taxes, net
 
92,253

 
170,877

Premises and equipment, net
 
67,282

 
66,806

Other assets
 
851,249

 
703,065

Total Assets
 
$
17,612,089

 
$
18,242,878

Liabilities
 
 
 
 
Deposits:
 
 
 
 
Noninterest-bearing
 
$
1,365,655

 
$
1,445,783

Interest-bearing
 
12,262,021

 
11,696,605

Total deposits
 
13,627,676

 
13,142,388

Other borrowings
 
1,872,700

 
3,173,021

Trust preferred securities
 
103,750

 
103,750

Accounts payable and accrued liabilities
 
405,050

 
372,543

Total Liabilities
 
16,009,176

 
16,791,702

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 September 30, 2013 and December 31, 2012)
 
150,000

 
150,000

Common Stock, $0.01 par value (500,000,000 shares authorized; 122,544,510 and 120,987,955 issued and outstanding at September 30, 2013 and December 31, 2012, respectively)
 
1,225

 
1,210

Additional paid-in capital
 
830,758

 
811,085

Retained earnings
 
677,809

 
575,665

Accumulated other comprehensive income (loss) (AOCI)
 
(56,879
)
 
(86,784
)
Total Shareholders’ Equity
 
1,602,913

 
1,451,176

Total Liabilities and Shareholders’ Equity
 
$
17,612,089

 
$
18,242,878




                    


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,
 
 
2013
 
2012
 
2013
 
2012
Interest Income
 
 
 
 
 
 
 
 
Interest and fees on loans and leases
 
$
170,110

 
$
140,230

 
$
516,619

 
$
400,824

Interest and dividends on investment securities
 
13,376

 
20,879

 
44,439

 
62,127

Other interest income
 
493

 
152

 
1,108

 
338

Total Interest Income
 
183,979

 
161,261

 
562,166

 
463,289

Interest Expense
 
 
 
 
 
 
 
 
Deposits
 
24,437

 
22,491

 
77,827

 
63,884

Other borrowings
 
20,686

 
12,576

 
60,450

 
32,604

Total Interest Expense
 
45,123

 
35,067

 
138,277

 
96,488

Net Interest Income
 
138,856

 
126,194

 
423,889

 
366,801

Provision for Loan and Lease Losses
 
3,068

 
4,359

 
5,016

 
21,471

Net Interest Income after Provision for Loan and Lease Losses
 
135,788

 
121,835

 
418,873

 
345,330

Noninterest Income
 
 
 
 
 
 
 
 
Loan servicing fee income
 
50,713

 
42,341

 
140,068

 
130,380

Amortization of mortgage servicing rights
 
(30,438
)
 
(36,292
)
 
(101,461
)
 
(99,773
)
Recovery (impairment) of mortgage servicing rights
 
35,132

 
(18,229
)
 
80,259

 
(63,508
)
Net loan servicing income
 
55,407

 
(12,180
)
 
118,866

 
(32,901
)
Gain on sale of loans
 
51,397

 
85,748

 
209,545

 
203,851

Loan production revenue
 
10,514

 
10,528

 
30,066

 
27,817

Deposit fee income
 
4,952

 
4,671

 
15,167

 
16,738

Other lease income
 
6,506

 
7,103

 
19,388

 
24,588

Other
 
14,793

 
1,429

 
30,650

 
4,522

Total Noninterest Income
 
143,569

 
97,299

 
423,682

 
244,615

Noninterest Expense
 
 
 
 
 
 
 
 
Salaries, commissions and other employee benefits expense
 
111,144

 
85,399

 
340,080

 
228,266

Equipment expense
 
20,609

 
17,574

 
61,168

 
50,411

Occupancy expense
 
8,675

 
6,619

 
23,606

 
17,985

General and administrative expense
 
85,268

 
74,377

 
226,198

 
221,911

Total Noninterest Expense
 
225,696

 
183,969

 
651,052

 
518,573

Income before Provision for Income Taxes
 
53,661

 
35,165

 
191,503

 
71,372

Provision for Income Taxes
 
20,511

 
12,987

 
73,214

 
26,176

Net Income
 
$
33,150

 
$
22,178

 
$
118,289

 
$
45,196

Less: Net Income Allocated to Preferred Stock
 
(2,532
)
 
—

 
(7,594
)
 
(8,564
)
Net Income Allocated to Common Shareholders
 
$
30,618

 
$
22,178

 
$
110,695

 
$
36,632

Basic Earnings Per Common Share
 
$
0.25

 
$
0.19

 
$
0.91

 
$
0.37

Diluted Earnings Per Common Share
 
$
0.25

 
$
0.19

 
$
0.89

 
$
0.37

Dividends Declared Per Common Share
 
$
0.03

 
$
0.02

 
$
0.07

 
$
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 Return on Equity, Adjusted Non-Performing Asset Ratio, Tangible Shareholders’ Equity, Tangible Common Shareholders' Equity, Adjusted Tangible Common Shareholders’ Equity, and Tangible Assets 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)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
Net income
 
$
33,150

 
$
45,993

 
$
39,146

 
$
28,846

 
$
22,178

Transaction expense, net of tax
 
—

 
—

 
—

 
903

 
1,268

Non-recurring regulatory related expense, net of tax
 
20,203

 
12,042

 
11,425

 
9,564

 
1,326

Increase (decrease) in Bank of Florida non-accretable discount, net of tax
 
(439
)
 
(538
)
 
950

 
486

 
111

Adoption of TDR guidance and policy change, net of tax
 
—

 
—

 
—

 
3,709

 
—

MSR impairment (recovery), net of tax
 
(21,783
)
 
(20,194
)
 
(7,784
)
 
—

 
11,302

Restructuring expense, net of tax
 
3,242

 
—

 
—

 
—

 
—

Adjusted net income
 
$
34,373

 
$
37,303

 
$
43,737

 
$
43,508

 
$
36,185

Adjusted net income allocated to preferred stock
 
2,532

 
2,531

 
2,531

 
1,491

 
—

Adjusted net income allocated to common shareholders
 
$
31,841

 
$
34,772

 
$
41,206

 
$
42,017

 
$
36,185

Adjusted net earnings per common share, basic
 
$
0.26

 
$
0.28

 
$
0.34

 
$
0.35

 
$
0.31

Adjusted net earnings per common share, diluted
 
$
0.26

 
$
0.28

 
$
0.33

 
$
0.34

 
$
0.30

Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
 
   (units in thousands)
 
 
 
 
 
 
 
 
 
 
   Basic
 
122,509

 
122,281

 
121,583

 
120,773

 
118,038

   Diluted
 
124,124

 
124,034

 
123,439

 
122,807

 
119,591







                    


EverBank Financial Corp and Subsidiaries
 
Tangible Equity, Tangible Common Equity,
Adjusted Tangible Common Equity and Tangible Assets
(dollars in thousands)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
Shareholders’ equity
 
$
1,602,913

 
$
1,549,383

 
$
1,504,442

 
$
1,451,176

 
$
1,258,022

Less:
 
 
 
 
 
 
 
 
 
 
Goodwill
 
46,859

 
46,859

 
46,859

 
46,859

 
10,238

Intangible assets
 
6,340

 
6,867

 
7,394

 
7,921

 
6,348

Tangible equity
 
1,549,714

 
1,495,657

 
1,450,189

 
1,396,396

 
1,241,436

Less:
 
 
 
 
 
 
 
 
 
 
Perpetual preferred stock
 
150,000

 
150,000

 
150,000

 
150,000

 
—

Tangible common equity
 
1,399,714

 
1,345,657

 
1,300,189

 
1,246,396

 
1,241,436

Less:
 
 
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
(56,879
)
 
(80,389
)
 
(80,324
)
 
(86,784
)
 
(106,731
)
Adjusted tangible common equity
 
$
1,456,593

 
$
1,426,046

 
$
1,380,513

 
$
1,333,180

 
$
1,348,167

 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
17,612,089

 
$
18,362,872

 
$
18,306,488

 
$
18,242,878

 
$
16,509,440

Less:
 
 
 
 
 
 
 
 
 
 
Goodwill
 
46,859

 
46,859

 
46,859

 
46,859

 
10,238

Intangible assets
 
6,340

 
6,867

 
7,394

 
7,921

 
6,348

Tangible assets
 
$
17,558,890

 
$
18,309,146

 
$
18,252,235

 
$
18,188,098

 
$
16,492,854

 
 
 
 
 
 
 
 
 
 
 
Regulatory Capital (bank level)
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
Shareholders’ equity
 
$
1,648,152

 
$
1,598,419

 
$
1,560,001

 
$
1,518,934

 
$
1,339,669

Less:
Goodwill and other intangibles
 
(51,436
)
 
(51,807
)
 
(52,089
)
 
(54,780
)
 
(16,586
)
 
Disallowed servicing asset
 
(39,658
)
 
(36,182
)
 
(31,585
)
 
(32,378
)
 
(33,366
)
 
Disallowed deferred tax asset
 
(64,462
)
 
(65,406
)
 
(66,351
)
 
(67,296
)
 
(69,412
)
Add:
Accumulated losses on securities and cash flow hedges
 
54,392

 
78,181

 
77,073

 
83,477

 
103,238

Tier 1 capital
 
1,546,988

 
1,523,205

 
1,487,049

 
1,447,957

 
1,323,543

Add:
Allowance for loan and lease losses
 
66,991

 
73,469

 
77,067

 
82,102

 
76,469

Total regulatory capital
 
$
1,613,979

 
$
1,596,674

 
$
1,564,116

 
$
1,530,059

 
$
1,400,012

 
 
 
 
 
 
 
 
 
 
 
Adjusted total assets
 
$
17,510,528

 
$
18,287,359

 
$
18,234,886

 
$
18,141,856

 
$
16,488,067

Risk-weighted assets
 
11,120,048

 
11,656,698

 
11,406,725

 
11,339,415

 
8,701,164



                    


EverBank Financial Corp and Subsidiaries
Non-Performing Assets(1)
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
 
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
Non-accrual loans and leases:
 
 
 
 
 
 
 
 
 
 
Residential mortgages
 
$
60,066

 
$
64,230

 
$
69,876

 
$
73,752

 
$
75,355

Commercial and commercial real estate
 
76,662

 
60,636

 
63,924

 
76,289

 
85,306

Lease financing receivables
 
4,171

 
2,601

 
2,791

 
2,010

 
2,018

Home equity lines
 
4,164

 
4,368

 
4,513

 
4,246

 
4,492

Consumer and credit card
 
15

 
243

 
364

 
332

 
479

Total non-accrual loans and leases
 
145,078

 
132,078

 
141,468

 
156,629

 
167,650

Accruing loans 90 days or more past due
 
—

 
—

 
—

 
—

 
1,973

Total non-performing loans (NPL)
 
145,078

 
132,078

 
141,468

 
156,629

 
169,623

Other real estate owned (OREO)
 
32,108

 
36,528

 
39,576

 
40,492

 
43,612

Total non-performing assets (NPA)
 
177,186

 
168,606

 
181,044

 
197,121

 
213,235

Troubled debt restructurings (TDR) less than 90 days past due
 
79,664

 
82,236

 
88,888

 
90,094

 
82,030

Total NPA and TDR(1)
 
$
256,850

 
$
250,842

 
$
269,932

 
$
287,215

 
$
295,265

 
 
 
 
 
 
 
 
 
 
 
Total NPA and TDR
 
$
256,850

 
$
250,842

 
$
269,932

 
$
287,215

 
$
295,265

Government-insured 90 days or more past due still accruing
 
1,147,795

 
1,405,848

 
1,547,995

 
1,729,877

 
1,684,550

Loans accounted for under ASC 310-30:
 
 
 
 
 
 
 
 
 
 
90 days or more past due
 
45,104

 
54,054

 
67,630

 
79,984

 
117,506

OREO
 
21,240

 
21,194

 
22,955

 
16,528

 
18,557

Total regulatory NPA and TDR
 
$
1,470,989

 
$
1,731,938

 
$
1,908,512

 
$
2,113,604

 
$
2,115,878

Adjusted credit quality ratios excluding government-insured loans and loans accounted for under ASC 310-30: (1)
 
 
 
 
 
 
 
 
 
 
NPL to total loans
 
1.07
%
 
0.89
%
 
0.97
%
 
1.08
%
 
1.49
%
NPA to total assets
 
1.01
%
 
0.92
%
 
0.99
%
 
1.08
%
 
1.29
%
NPA and TDR to total assets
 
1.46
%
 
1.37
%
 
1.47
%
 
1.57
%
 
1.79
%
Credit quality ratios including government-insured loans and loans accounted for under ASC 310-30:
 
 
 
 
 
 
 
 
 
 
NPL to total loans
 
9.87
%
 
10.76
%
 
12.04
%
 
13.55
%
 
17.32
%
NPA to total assets
 
7.90
%
 
8.98
%
 
9.94
%
 
11.09
%
 
12.32
%
NPA and TDR to total assets
 
8.35
%
 
9.43
%
 
10.43
%
 
11.59
%
 
12.82
%
 
(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)
 
Banking and
Wealth
Management
 
Mortgage
Banking
 
Corporate
Services
 
Eliminations
 
Consolidated
Three Months Ended September 30, 2013
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
125,545

 
$
14,889

 
$
(1,578
)
 
$
—

 
$
138,856

Provision for loan and lease losses
 
1,216

 
1,852

 
—

 
—

 
3,068

Net interest income after provision for loan and lease losses
 
124,329

 
13,037

 
(1,578
)
 
—

 
135,788

Noninterest income
 
32,937

 
110,479

 
153

 
—

 
143,569

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
Foreclosure and OREO expense
 
6,354

 
1,870

 
—

 
—

 
8,224

Other credit-related expenses
 
533

 
3,099

 
—

 
—

 
3,632

All other noninterest expense
 
60,341

 
132,312

 
21,187

 
—

 
213,840

Income (loss) before income tax
 
90,038

 
(13,765
)
 
(22,612
)
 
—

 
53,661

Adjustment items (pre-tax):
 
 
 
 
 
 
 
 
 
 
Decrease in Bank of Florida non-accretable discount
 
(708
)
 
—

 
—

 
—

 
(708
)
MSR impairment (recovery)
 
—

 
(35,132
)
 
—

 
—

 
(35,132
)
Restructuring expense
 
1,901

 
2,527

 
799

 
—

 
5,227

Transaction and non-recurring regulatory related expense
 
—

 
32,437

 
148

 
—

 
32,585

Adjusted income (loss) before income tax
 
91,231

 
(13,933
)
 
(21,665
)
 
—

 
55,633

Total assets as of September 30, 2013
 
15,502,004

 
2,106,162

 
213,745

 
(209,822
)
 
17,612,089

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
127,072

 
$
15,719

 
$
(1,574
)
 
$
—

 
$
141,217

Provision for loan and lease losses
 
(1,320
)
 
1,349

 
—

 
—

 
29

Net interest income after provision for loan and lease losses
 
128,392

 
14,370

 
(1,574
)
 
—

 
141,188

Noninterest income
 
32,654

 
113,901

 
249

 
—

 
146,804

Noninterest expense:
 
 
 
 
 
 
 
 
 
 
Foreclosure and OREO expense
 
6,577

 
3,037

 
—

 
—

 
9,614

Other credit-related expenses
 
1,238

 
612

 
—

 
—

 
1,850

All other noninterest expense
 
64,155

 
114,275

 
23,646

 
—

 
202,076

Income (loss) before income tax
 
89,076

 
10,347

 
(24,971
)
 
—

 
74,452

Adjustment items (pre-tax):
 
 
 
 
 
 
 
 
 
 
Decrease in Bank of Florida non-accretable discount
 
(867
)
 
—

 
—

 
—

 
(867
)
MSR impairment (recovery)
 
—

 
(32,572
)
 
—

 
—

 
(32,572
)
Transaction and non-recurring regulatory related expense
 
—

 
18,012

 
1,410

 
—

 
19,422

Adjusted income (loss) before income tax
 
88,209

 
(4,213
)
 
(23,561
)
 
—

 
60,435

Total assets as of June 30, 2013
 
15,588,567

 
2,805,876

 
194,395

 
(225,966
)
 
18,362,872

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 (recovery)
 
—

 
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