The team atEverBank Financial (
) wasted no time hitting the acquisition trail after taking the
company public May 3.
Last month, EverBank moved to further accelerate its
growth plans by closing on the purchase of Business Property
Lending, North America, a unit of GE Capital Real Estate, North
EverBank paidGeneral Electric (
) $2.41 billion for Business Property, which originates and
services commercial real estate loans for properties owned or
leased by small and midsize businesses nationwide.
The Jacksonville, Fla.-based EverBank offers an array of
banking, lending and investing products to consumers and
businesses. It markets and distributes its products and services
primarily through its integrated online financial portal, which
is augmented by a nationwide network of independent financial
advisers, 14 financial centers in targeted Florida markets and
other financial intermediaries.
A large share of its deposit base and growth is related to the
direct bank, though the branches are still an important part of
the overall banking business.
All of its channels are connected by technology-driven
centralized platforms, which provide operating leverage
throughout its business.
EverBank had $16.5 billion in assets and $11.8 billion in
deposits as of Sept. 30.
The Business Property buy included roughly $2.33 billion of
performing commercial loans, the origination and servicing
platforms, 110 employees and servicing rights on $2.9 billion in
loans securitized by GE Capital.
"This acquisition made a great deal of sense for our company
and we believe it will create real, durable long-term value for
us," said Chief Executive Rob Clements. "We view this acquisition
as another good example of EverBank's commitment to execute our
strategic growth plan, diversify our balance sheet and grow our
nationwide distribution capabilities."
The buy significantly expands EverBank's presence in this
market segment coast to coast, he adds, and brings a team of
highly seasoned lending professionals. It also brings a "robust
pipeline" upon which EverBank can expand. And it provides an
opportunity to expand customer relationships and offer products
and services from other parts of the company.
Now called EverBank Business Property Lending, the unit
provides commercial loans for properties owned or leased by small
and midsize businesses, as well as single and multicredit tenant
lease financing nationwide.
EverBank, which traces its roots to residential mortgage
servicing and origination, has made several strategic
acquisitions over the years. That includes the November 2002
purchase of CustomerOne Financial Network, which became the basis
for its online banking platform.
Business Property is one of three recent acquisitions that
complement EverBank's historical investment in residential
mortgage lending, says Clements. In April, EverBank bought
MetLife Warehouse Finance, which included roughly $350 million of
loans outstanding. The business, now called EverBank Mortgage
Warehouse Finance, provides funding for midsize, high-quality
mortgage lenders across the U.S.
Warehouse loans are short-term revolving facilities, primarily
securitized by agency and government collateral.
In February 2010, EverBank gained an equipment leasing
origination channel through the purchase of Tygris Finance Group,
Inc., a commercial finance and leasing company, which had $359.6
million of equity after purchase accounting adjustments.
All three of these acquired companies fit EverBank's business
model and allow the company to diversify its product mix,
"An important objective over the past several years is to
continue to invest in residential mortgage lending and diversify
into other product categories," he adds.
The Business Property buyout helps diversify EverBank's
business mix and gives it another avenue for growth in commercial
real estate loans, concurs Macquarie Capital analyst Thomas
He says EverBank's more recent acquisitions are businesses
that no longer made sense for their owners to hold .
"For EverBank, these acquisitions are opportunistic purchases
that are going to benefit the longer-term growth of its loans,"
Clements says management is focused on integrating recent
acquisitions and supporting existing channels.
"We're really experiencing strong growth in all our core
business channels," he said.
In the third quarter, adjusted diluted earnings rose 11% to 30
cents a share, topping forecasts from analysts polled by Thomson
Asset quality improved during the quarter. Adjusted
nonperforming assets were 1.29% of total assets, compared to
1.46% in the second quarter and 1.73% for the third quarter of
Deposits were $11.8 billion, a 9% increase from the prior
quarter and a 16% gain from a year earlier.
"The mortgage banking environment continued to strengthen in
the third quarter with origination volumes increasing 12%
compared to the second quarter," said President W. Blake Wilson
in a statement.
Clements said all of EverBank's core business lines performed
very well, and its recently acquired businesses also are seeing
Investors have taken notice. After a slow start following its
market debut, EverBank shares picked up steam over the summer,
says Alonso, and have seen a nice run-up in the fall. Its stock
price has shot up more than 40% since its market debut.
The reason its stock has performed so well? "EverBank is a
growth story in an industry with very few growth stories," said
He says while the rest of the industry is seeing average loan
growth of low-single-digits at best, EverBank will grow loans
almost 40% year over year this year.
"That makes people take notice," he said.
Analysts polled by Thomson Reuters expect full-year earnings
to grow 51% to $1.25 a share. They see a 10% rise in 2013.
"I think there's a lot of opportunity for what they have in
place to drive solid margins growth," said Alonso.
Clements says the climate for EverBank's business is very
"We're very pleased with our performance year to date, and
looking forward we think the environment will be favorable for
us," he adds.