EverBank Financial Corp Announces Fourth Quarter and Full Year 2015 Financial Results

EverBank Financial Corp (NYSE: EVER) announced today its financial results for the fourth quarter and the year ended December 31, 2015.

"We are pleased with our fourth quarter performance, which was driven by continued loan and deposit growth, increased revenue, stable expenses and solid asset quality," said Robert M. Clements, chairman and chief executive officer. "Our 2016 strategic initiatives are designed to capitalize on our flexible business model, selectively grow our balance sheet in this dynamic and competitive environment and maintain our strong credit and risk profile."

GAAP net income available to common shareholders was $42.6 million for the fourth quarter 2015, compared to $27.1 million for the third quarter 2015 and $35.5 million for the fourth quarter 2014. GAAP diluted earnings per share were $0.34 for the fourth quarter 2015, compared to $0.21 in the third quarter 2015 and $0.28 in the fourth quarter 2014. Adjusted net income available to common shareholders was $42.9 million for the fourth quarter 2015, compared to $28.8 million for the third quarter 2015 and $37.6 million for the fourth quarter 2014.1 Adjusted diluted earnings per common share in the fourth quarter 2015 were $0.34 compared to $0.23 in the third quarter 2015 and $0.30 in the fourth quarter 2014.1

For the year ended 2015, GAAP net income available to common shareholders was $120.4 million, compared to $138.0 million for the year ended 2014. GAAP diluted earnings per share were $0.95 in 2015, compared to $1.10 in 2014. Adjusted net income available to common shareholders was $154.6 million in 2015, compared to $141.1 million in 20141. Adjusted diluted earnings per common share were $1.22 in 2015, compared to $1.13 in 20141.

"Commercial banking results were strong with record commercial loan originations of $1.2 billion in the fourth quarter and continued commercial deposit growth," said W. Blake Wilson, president and chief operating officer. "We remain focused on driving operational efficiency across our business in 2016 and expect to execute on optimization strategies while still investing in and enhancing our overall client experience."

Fourth Quarter and Full Year 2015 Key Highlights

• Total assets of $26.6 billion at December 31, 2015, an increase of 5% compared to the prior quarter and 23% year over year.
• Portfolio loans held for investment (HFI) of $22.2 billion at December 31, 2015, an increase of 6% compared to the prior quarter and 25% year over year.
• Total originations of $3.3 billion in the quarter, flat compared to the prior quarter and up 8% year over year. Full year 2015 total originations of $13.1 billion, an increase of 19% year over year.
• Total deposits of $18.2 billion at December 31, 2015, an increase of 4% compared to the prior quarter and 18% year over year.
• Net interest margin of 2.90% for the quarter, flat compared to the prior quarter.
• Adjusted return on average equity (ROE) was 10.1% for the quarter and 9.3% for the full year.1 GAAP ROE was 10.0% for the quarter and 7.3% for the full year.
• Tangible common equity per common share1 of $13.36 at December 31, 2015, an increase of 7% year over year.
• Adjusted non-performing assets to total assets1 were 0.53% at December 31, 2015. Annualized net charge-offs to average total loans and leases held for investment were 0.07% for the quarter.
• Consolidated common equity Tier 1 capital ratio of 9.9% and bank Tier 1 leverage ratio of 8.1% as of December 31, 2015.
• Subsequent to quarter end, the Office of the Comptroller of the Currency announced that it had terminated EverBank’s 2011 consent order, as amended in 2013 and 2015, having determined that EverBank now complies with such order.

Balance Sheet

Diversified Asset Growth

Total assets were $26.6 billion at December 31, 2015, an increase of $1.4 billion, or 5%, compared to the prior quarter and an increase of $5.0 billion, or 23%, year over year. The strong sequential increase was driven by a $1.4 billion, or 6%, increase in portfolio loans HFI to $22.2 billion, resulting from both consumer and commercial loan growth.

Loans HFI for the fourth quarter of 2015, as compared to the third quarter of 2015 and fourth quarter of 2014, were comprised of:

Total consumer banking loans HFI increased $570 million, or 5%, compared to the prior quarter and $2.1 billion, or 21%, year over year, to $12.2 billion driven by residential loan growth and continued government insured pool buyout acquisition opportunities. Compared to the third quarter 2015, residential loans increased $137 million, or 2%, to $7.5 billion, government insured pool buyouts increased $268 million, or 7%, to $4.2 billion and home equity and other loans increased $165 million, or 49%, to $502 million.

Total commercial banking loans and leases HFI increased $780 million, or 8%, compared to the prior quarter and $2.3 billion, or 30%, year over year to $10.0 billion, driven by the continued growth in our commercial banking businesses. Compared to the third quarter 2015, commercial real estate and other commercial loans increased $294 million, or 8%, to $4.0 billion, mortgage warehouse finance outstanding balances increased $210 million, or 10%, to $2.4 billion, lender finance increased $163 million, or 15%, to $1.3 billion and equipment financing receivables increased $113 million, or 5%, to $2.4 billion.

Loan Origination Activities

The following table presents total organic loan and lease origination information by product type:

Total originations were $3.3 billion for the fourth quarter of 2015, unchanged compared to the prior quarter and an increase of 8% year over year. Retained originations were $2.2 billion for the fourth quarter 2015, an increase of 16% compared to the prior quarter and 28% year over year. For the full year 2015, total originations were $13.1 billion and retained originations were $7.6 billion, an increase of 19% and 26% year over year, respectively.

Commercial originations were $1.2 billion for the fourth quarter of 2015, an increase of 20% compared to the prior quarter driven by growth in lender finance and warehouse finance volumes, in addition to increased equipment finance originations. For the full year 2015, commercial originations were $3.6 billion, an increase of 40% year over year.

Consumer originations were $2.1 billion for the fourth quarter of 2015, a decrease of 9% compared to the prior quarter driven by seasonally lower conventional and jumbo volumes. For the full year 2015, consumer originations were $9.5 billion, an increase of 12% year over year.

Deposits

Total deposits were $18.2 billion at December 31, 2015, an increase of 4% compared to the prior quarter and 18% year over year. Commercial deposits were $4.2 billion, an increase of 3% compared to the prior quarter and 42% year over year, and represented 23% of total deposits at quarter end.

At December 31, 2015, as compared to the third quarter of 2015 and fourth quarter of 2014, our deposits were comprised of the following:

Total other borrowings were $5.9 billion at December 31, 2015, an increase of 11% compared to the prior quarter.

Capital Strength

Total shareholders' equity was $1.9 billion at December 31, 2015, an increase of 2% quarter over quarter and 7% year over year. As of December 31, 2015, our consolidated common equity Tier 1 capital ratio was 9.9% and the bank’s Tier 1 leverage and total risk-based capital ratios were 8.1% and 12.4%, respectively. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines. Our estimate of the fully phased-in Basel III consolidated common equity Tier 1 capital ratio was between 9.50% and 9.75% at December 31, 2015.

Credit Quality

Our adjusted non-performing assets were 0.53% of total assets at December 31, 2015, compared to 0.55% for the prior quarter and 0.46% at December 31, 20141. Net charge-offs during the fourth quarter of 2015 were $4 million, a decrease of $1 million compared to the prior quarter and year over year. On an annualized basis, net charge-offs were 0.07% of total average loans and leases held for investment, compared to 0.11% for the prior quarter and 0.12% for the fourth quarter of 2014.

Income Statement Highlights

Revenue

Revenue was $233 million for the fourth quarter of 2015, an increase of $23 million, or 11%, from $210 million in the prior quarter. Excluding the change in valuation allowance on our mortgage servicing rights (MSR) in the third quarter of 2015, revenue would have increased $18 million, or 9%, compared to the prior quarter.

Net Interest Income

Net interest income was $175 million for the fourth quarter of 2015, an increase of $6 million, or 4%, compared to the prior quarter. Average interest-earning assets increased $845 million, or 4%, compared to the prior quarter driven by a $736 million, or 4%, increase in average loans and leases HFI and a $182 million, or 10%, increase in average loans HFS. Total average interest-bearing liabilities increased $721 million, or 3%, compared to the prior quarter.

Net interest margin was 2.90% for the fourth quarter of 2015, unchanged from the prior quarter, driven by a 0.05% increase in the interest-earning asset yield to 3.90%, offset by a 0.05% increase in the average cost of total interest-bearing liabilities to 1.08%.

Noninterest Income

Noninterest income for the fourth quarter of 2015 was $58 million, an increase of $17 million, or 40%, compared to the prior quarter driven by increased gain on sale of loans and higher levels of net loan servicing income. Gain on sale of loans increased $7 million, or 37%, compared to the prior quarter to $25 million driven by increased levels of jumbo mortgage loans and commercial loans and leases sold. Net loan servicing income increased $6 million, or 100%, compared to the prior quarter to $12 million driven by the change in valuation allowance on our MSR, which included a $4 million impairment in the third quarter, and a $2 million decrease in amortization of MSR. Excluding the impact of the valuation allowance in the third quarter, net loan servicing income increased $2 million, or 15%, compared to the prior quarter.

Noninterest Expense

Noninterest expense for the fourth quarter of 2015 was $153 million, an increase of $1 million, or 1%, compared to the prior quarter. Salaries, commissions and employee benefits were $90 million, an increase of $1 million, or 1%, compared to the prior quarter. Occupancy and equipment expense was $23 million and general and administrative expense was $40 million, both flat compared to the prior quarter.

EverBank's efficiency ratio in the fourth quarter of 2015 was 66%, compared to 72% in the prior quarter. Excluding the impact of MSR valuation allowance recovery or impairment, transaction and other non-recurring expenses, EverBank's adjusted efficiency ratio was 65% for the fourth quarter compared to 71% in the prior quarter.1

Income Tax Expense

Our effective tax rate was 35% for the fourth quarter of 2015, compared to 38% for the prior quarter and the fourth quarter of 2014.

Dividends

On January 21, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on February 19, 2016, to stockholders of record as of February 10, 2016. Also on January 21, 2016, the Company's Board of Directors declared a quarterly cash dividend of $421.875, payable on April 5, 2016, for each share of 6.75% Series A Non-Cumulative Perpetual Preferred Stock held as of March 21, 2016.

Conference Call and Webcast

The Company will host a conference call at 8:30 a.m. Eastern Time on Wednesday, January 27, 2016 to discuss its fourth quarter and full year 2015 results. The dial-in number for the conference call is 1-855-209-8214 and the international dial-in number is 1-412-542-4103. A replay will be available following completion of the call and can be accessed by dialing 1-877-344-7529, or for international callers, 1-412-317-0088. The passcode for the replay is 10078396. The replay will be available through February 4, 2016. A live webcast of the conference call will also be available on the investor relations page of the Company's website at https://about.everbank/investors.

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 $26.6 billion in assets and $18.2 billion in deposits as of December 31, 2015. 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: 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 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; 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.

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:

View source version on businesswire.com: http://www.businesswire.com/news/home/20160127005305/en/