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EverBank Financial finally set a price for a planned $225 million capital raise after sitting on its initial public offering for half a year.
April 24 -
As one of the 14 mortgage servicers directed by regulators to tighten foreclosure practices, EverBank may be forced to delay its IPO — which in turn casts doubts on its growth strategy.
April 28
As EverBank Financial prepares to bring in a slew of new investors with a planned initial public offering, some of its shareholders are looking to lighten their holdings.
That's enough to make investment banker Christopher Whalen pause. "As an investor, why would I buy in when all these other people are leaving?" says Whalen, a senior managing director of Tangent Capital Partners in New York. "I would want to know why all the proceeds are not going into the bank. I would not be sanguine about it."
On Tuesday, the $13 billion-asset company in Jacksonville, Fla., set pricing on its IPO in documents filed roughly a year and a half after filing its initial registration statement.
The company plans to offer 19.2 million shares,
Whalen said he is also concerned about the company's future credit quality. Whalen's other firm, Institutional Risk Analytics, has EverBank rated at as "A," based on Dec. 31, 2011, data, compared with "A+" a year earlier.
Whalen says the current rating reflects low chargeoff amounts. "It is still an A-rated bank, but our stress index is based on current performance," Whalen says. "I wonder what it will be a year from now? My guess is lower."
EverBank's credit quality is a bit tricky, as the company reports two sets of numbers that are drastically different. The company reported nonperforming assets and troubled-debt restructurings of $335 million at yearend. But nonperforming assets jump to $2 billion after adding government-insured loans and those covered by loss-share arrangements with the Federal Deposit Insurance Corp. from failed bank deals, or double what they were a year earlier. EverBank said in its recent filing that it excludes loans where it is expecting payment.
Still, it is pass, Whalen says. "Because of the trends in some of the key asset quality metrics, I would tend to not to be a buyer of this offering and would want to see the bank stabilize some of these indicators," he says.
