Attached files
| file | filename |
|---|---|
| 8-K - 8-K - TIAA FSB Holdings, Inc. | a8-kearningsrelease33114.htm |
| EX-99.2 - SUPPLEMENTAL TABLES - TIAA FSB Holdings, Inc. | ex992quarterlyfinancialtab.htm |
| EX-99.1 - PRESS RELEASE - TIAA FSB Holdings, Inc. | ex991pressrelease33114.htm |
EVERBANK FINANCIAL CORP 1ST QUARTER EARNINGS SUPPLEMENT April 30, 2014
2 DISCLAIMER THIS PRESENTATION HAS BEEN PREPARED BY EVERBANK FINANCIAL CORP ("EVERBANK" OR THE “COMPANY”) SOLELY FOR INFORMATIONAL PURPOSES BASED ON ITS OWN INFORMATION, AS WELL AS INFORMATION FROM PUBLIC SOURCES. THIS PRESENTATION HAS BEEN PREPARED TO ASSIST INTERESTED PARTIES IN MAKING THEIR OWN EVALUATION OF EVERBANK AND DOES NOT PURPORT TO CONTAIN ALL OF THE INFORMATION THAT MAY BE RELEVANT. IN ALL CASES, INTERESTED PARTIES SHOULD CONDUCT THEIR OWN INVESTIGATION AND ANALYSIS OF EVERBANK AND THE DATA SET FORTH IN THIS PRESENTATION AND OTHER INFORMATION PROVIDED BY OR ON BEHALF OF EVERBANK. EXCEPT AS OTHERWISE INDICATED, THIS PRESENTATION SPEAKS AS OF THE DATE HEREOF. THE DELIVERY OF THIS PRESENTATION SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE WILL BE NO CHANGE IN THE AFFAIRS OF THE COMPANY AFTER THE DATE HEREOF. CERTAIN OF THE INFORMATION CONTAINED HEREIN MAY BE DERIVED FROM INFORMATION PROVIDED BY INDUSTRY SOURCES. EVERBANK BELIEVES THAT SUCH INFORMATION IS ACCURATE AND THAT THE SOURCES FROM WHICH IT HAS BEEN OBTAINED ARE RELIABLE. EVERBANK CANNOT GUARANTEE THE ACCURACY OF SUCH INFORMATION, HOWEVER, AND HAS NOT INDEPENDENTLY VERIFIED SUCH INFORMATION. THIS PRESENTATION MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS AS DEFINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, AND SUCH STATEMENTS ARE INTENDED TO BE COVERED BY THE SAFE HARBOR PROVIDED BY THE SAME. 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 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. ACCORDINGLY, YOU ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT. ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE AS OF THE DATE MADE, ACTUAL RESULTS MAY PROVE TO BE MATERIALLY DIFFERENT FROM THE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. UNLESS OTHERWISE REQUIRED BY LAW, EVERBANK ALSO DISCLAIMS ANY OBLIGATION TO UPDATE ITS VIEW OF ANY SUCH RISKS OR UNCERTAINTIES OR TO ANNOUNCE PUBLICLY THE RESULT OF ANY REVISIONS TO THE FORWARD-LOOKING STATEMENTS MADE IN THIS PRESENTATION. INTERESTED PARTIES SHOULD NOT PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENT AND SHOULD CONSIDER THE UNCERTAINTIES AND RISKS DISCUSSED UNDER THE HEADINGS “RISK FACTORS” AND “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” IN EVERBANK’S ANNUAL REPORT ON FORM 10-K AND SUBSEQUENT QUARTERLY REPORTS ON FORM 10-Q AND IN OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. 1ST QUARTER EARNINGS SUPPLEMENT
• Completed sale of approximately $10bn of unpaid principal balance (UPB) of mortgage servicing rights to Green Tree Servicing LLC • Expect to transfer default servicing platform May 1, 2014 SOLID EARNINGS AND ROE • GAAP EPS of $0.23, up 77% linked-quarter (LQ) and down 23% year-over-year (YoY) • ROE of 7.9%, Adjusted ROE of 7.5% • Noninterest expense (NIE) of $161mm, down 18% LQ and down 24% YoY • Continue to expect $650mm of NIE for 2014 3 KEY HIGHLIGHTS – 1Q14 Note: A reconciliation of non-GAAP financial measures can be found in the appendix. STRONG ASSET GENERATION VOLUME • Total organic asset generation of $2.0bn for the quarter • $1.1bn retained organic asset generation - $4.6bn annualized SOLID BALANCE SHEET AND CAPITAL POSITION • Loans and leases held for investment (HFI) up $0.6bn, or 5%, LQ • Total deposits flat LQ at $13.3bn and down $0.4bn, or 3%, YoY • Tangible common equity per common share of $11.78, up 11% YoY • Tier 1 common equity ratio: 12.2% • Tier 1 leverage (bank): 9.1% • Total risk-based (bank): 14.3% • Estimated common equity tier 1 capital ratio under fully phased-in Basel III: 10.0 – 10.5% EXECUTED KEY STRATEGIC INITIATIVES 1ST QUARTER EARNINGS SUPPLEMENT NET INTEREST MARGIN GROWTH • Core NIM increased 6bps to 3.36% from 3.30% in 4Q13 • NIM increased to 3.41% from 3.37% in 4Q13
12,178 12,794 12,496 13,189 13,801 2,417 2,000 1,060 791 597 5.02% 4.94% 4.82% 4.75% 4.59% 1Q13 2Q13 3Q13 4Q13 1Q14 HFI HFS Average Loan HFI Yield 53% 52% 54% 54% 56% 30% 30% 30% 30% 28% 7% 8% 9% 9% 9% 10% 10% 7% 7% 7% 1Q13 2Q13 3Q13 4Q13 1Q14 Residential HFI Commercial Commercial Finance Warehouse Finance 4 LOANS END OF PERIOD LOANS ($MM) QUARTER HIGHLIGHTS 12,178 12,794 13,189 13,801 LOAN HFI COMPOSITION ($MM) • Loans HFI up $612mm, or 5%, LQ and up $1.6bn, or 13%, YoY • Residential loans up 8% LQ and up 21% YoY • Commercial loans and leases up 1% LQ and up 5% YoY • Yield on average loans HFI of 4.59%, down 16bps, LQ • Residential lending strategy has resulted in more prime jumbo ARMs being originated to the portfolio 14,794 13,556 13,980 14,398 14,595 12,496 1ST QUARTER EARNINGS SUPPLEMENT
5 DEPOSITS AVERAGE DEPOSITS AND RATES ($MM) QUARTER HIGHLIGHTS 1Q14 DEPOSIT COMPOSITION • Average deposits down $503mm, or 4%, LQ and down $791mm, or 6%, YoY • Noninterest-bearing deposits down 21% LQ and down 21% YoY • Interest checking deposits down 1% LQ and up 6% YoY • Global market deposits down 3% LQ and down 14% YoY • MMDA & savings deposits down 1% LQ and up 9% YoY • Time deposits down 4% LQ and down 24% YoY • Cost of deposits increased 1bp LQ and decreased 8bps YoY to 0.71% 8% 22% 8% 38% 24% Noninterest-bearing Interest Checking Global Market MMDA & Savings Time Deposits 12,446 12,481 12,390 12,170 11,952 1,377 1,393 1,515 1,366 1,081 0.79% 0.76% 0.70% 0.70% 0.71% 1Q13 2Q13 3Q13 4Q13 1Q14 Interest-bearing Noninterest-bearing Cost of deposits 13,874 13,905 13,536 13,033 13,824 1ST QUARTER EARNINGS SUPPLEMENT
6 NET INTEREST INCOME NET INTEREST INCOME ($MM) QUARTER HIGHLIGHTS • Net interest income down $4mm, or 3%, LQ and down $13mm, or 9%, YoY • Average interest-earning assets down 2% LQ and down 9% YoY • Core NIM increased 6bps LQ to 3.36% • Future net interest income is expected to benefit from increased commercial and prime jumbo residential origination volumes added to balance sheet 3.42% 3.33% 3.24% 3.37% 3.41% 1Q13 2Q13 3Q13 4Q13 1Q14 Net Interest Income Net Interest Margin $141 $139 $135 $131 $144 CORE NIM ($mm) 1Q13 4Q13 1Q14 Average interest-earning assets 17,050$ 15,889$ 15,581$ Net interest income 144 135 131 Repo ed IM 3.42% 3.37% 3.41% Net interest income 144$ 135$ 131$ Less: Discount accretion from Tygris acquisition 6 3 2 Adjusted net interest income 137$ 132$ 129$ Core NIM 3.27% 3.30% 3.36% 1ST QUARTER EARNINGS SUPPLEMENT
7 NONINTEREST INCOME AND EXPENSE NONINTEREST EXPENSE • Noninterest expense decreased $36mm, or 18%, LQ • Salaries, commissions and other employee benefits declined $4mm, or 4%, LQ • General and administrative down $22mm, or 38%, LQ • FTE declined 7% during the quarter • Expect ~700 additional reduction post-transfer of default servicing platform QUARTER HIGHLIGHTS NONINTEREST INCOME QUARTER HIGHLIGHTS • Noninterest income down $11mm, or 12%, LQ and down $49mm, or 37%, YoY • MSR amortization of $21mm, down $4mm LQ • Sold servicing portfolio will contribute to a decline in amortization • Loan servicing fee income down $2mm, or 4%, LQ • Recovery of MSR valuation allowance of $5mm 1ST QUARTER EARNINGS SUPPLEMENT ($mm) 1Q13 4Q13 1Q14 Salaries, commissions and other employee benefits expense 110$ 102$ 98$ Equipment expense 20 25 19 Occupancy expense 7 11 8 General and administrative expense 74 59 37 Total noninterest expense 212$ 197$ 161$ FTE 3,955 4,062 3,774 ($mm) 1Q13 4Q13 1Q14 Loan servicing fee income 42$ 49$ 47$ MSR amortization (35) (25) (21) Valuation allowance 13 15 5 Net loan servicing inco 20 38 31 Loan production and gain on sale income 92 39 38 Deposit, lease and other income 22 19 15 Noninterest income 133$ 96$ 85$
8 BANKING AND WEALTH MANAGEMENT SEGMENT HIGHLIGHTS SEGMENT EARNINGS RETAINED ASSET VOLUME ($MM) 17% 49% 67% 55% 71% 13% 15% 11% 17% 11% 32% 24% 21% 28% 18% 38% 12% 1% 1Q13 2Q13 3Q13 4Q13 1Q14 Residential Commercial Commercial Finance Warehouse Finance $502 $1,058 $1,0721 $1,5511 • Net interest income down $1mm, or 1%, LQ and down $6mm, or 4%, YoY • Provision for loan and lease losses down $4mm, or 82%, LQ and up $1mm YoY • $3mm of prior quarter related to non-performing commercial loan sale • Retained asset volumes decreased 27% LQ and increased 127% YoY • Continue to expect retained asset generation of $4 - $5bn annually (1) Beginning in 3Q13, commercial finance and warehouse finance retained asset volume defined as new customer volume during the quarter. $1,1401 1ST QUARTER EARNINGS SUPPLEMENT ($mm) 1Q13 4Q13 1Q14 Net interest income 132$ 128$ 127$ Provision for loan and lease losses 0 5 1 Net interest income after provision 132 123 126 Noninterest income 28 19 15 Noninterest expense: Credit-related expenses 6 5 2 All other noninterest xpense 78 53 47 Pre-tax income 76$ 84$ 91$
1Q13 4Q13 1Q14 Retail 32% 67% 70% Consumer Direct 4% 4% 5% Third Party 24% 53% 44% Total 19% 43% 46% 1Q13 % 4Q13 % 1Q14 % Retail 0.8$ 29% 0.9$ 44% 0.8$ 46% Consumer Direct 1.0 35% 0.6 32% 0.4 24% Third Party 1.0 36% 0.5 24% 0.5 30% Total 2.9$ 100% 2.0$ 100% 1.7$ 100% Retail Consumer Direct Correspondent Total 9 MORTGAGE BANKING SEGMENT HIGHLIGHTS SEGMENT EARNINGS KEY METRICS • Net interest income after provision down $3mm, or 45%, LQ and down $7mm, or 66%, YoY • Noninterest income decreased $7mm, or 9%, LQ as a result of lower gain on sale revenue and servicing income • Noninterest expense decreased $29mm, or 25%, LQ largely due to lower consent order and credit-related expenses ORIGINATION DATA UPB Originated ($bn) Purchase Activity (%) (1) Includes wholesale volume of $0.7bn, $0.0bn and $0.0bn, respectively (1) ($mm) 1Q13 4Q13 1Q14 Net interest income after provision 11$ 7$ 4$ Noninterest income 105 77 70 Noninterest expens : Foreclosure and OREO expense 2 6 7 Other credit-rel ted exp ns s 2 7 (1) All other noninterest expense 100 103 81 Pre-tax income (loss) 13$ (32)$ (13)$ 1ST QUARTER EARNINGS SUPPLEMENT 1Q13 4Q13 1Q14 Mortgage lending volume $2.9bn $2.0bn $1.7bn Gain on sale margin 303bps 288bps 299bps Servicing UPB $50.8bn $61.0bn $60.7bn Average servicing f e 30bps 29bps 29bps Applications $3.1bn $2.4bn $1.5bn Rate locks $1.9bn $1.3bn $1.5bn etail onsumer Direct Correspon ent otal
0.99% 0.92% 1.01% 0.65% 0.62% 1Q13 2Q13 3Q13 4Q13 1Q14 0.23% 0.12% 0.30% 0.20% 0.12% 1Q13 2Q13 3Q13 4Q13 1Q14 10 ASSET QUALITY ADJUSTED NPA / TOTAL ASSET BUILD HIGHLIGHTS NCO / AVERAGE LOANS HFI ADJUSTED NPA / TOTAL ASSETS • Net charge-offs to average loans HFI decreased 8bps LQ to 0.12% driven by lower charge-offs and higher recoveries during the quarter • Adjusted NPAs to total assets decreased 3bps LQ due to lower residential NPAs • Over 65% of our non-FHA residential LHFI was originated after 2010 • Average LTV of 67% and average FICO of over 760 • Residential portfolio, excluding government insured, delinquency of 0.7% Adjusted NPA ratio excludes loans and leases with enhanced credit protection 6.47% 0.62% (0.06)% (5.79)% Regulatory NPAs / Assets Impact Ex. Gov't Insured Loans Impact Ex. ACI Loans Adjusted NPAs / Assets Note: A reconciliation of Non-GAAP financial measures can be found in the appendix (1) Acquired credit-impaired loans and leases accounted for under ASC 310-30 or by analogy (1) 1ST QUARTER EARNINGS SUPPLEMENT
APPENDIX
12 CREDIT – ORIGINATED MORTGAGE REPURCHASE RESERVE SUMMARY STATISTICS BY VINTAGE RESERVE TRENDS RESERVE ROLLFORWARD HIGHLIGHTS • LTD realized losses of 10bps for the whole portfolio and expected total lifetime realized losses of 16bps • 2006 – 2008 quality of production was strong • 2006 – 2008 vintages were primarily sold to the large agency aggregators 1ST QUARTER EARNINGS SUPPLEMENT Losses to date ($mm) '04 - '05 '06 - '08 '09 - '13 Total Total Sold UPB $11,334 $11,978 $36,536 $59,848 Request Rate 0.41% 2.61% 0.30% 0.83% Requests Received 212 1,500 511 2,223 Pending Requests 29 290 54 373 Resolved Requests 183 1,210 457 1,850 Repurchase Rate 39% 40% 28% 37% Loans Repurchased 72 480 127 679 Average Loan size ($000) 222 209 227 222 Loss Severity 12% 48% 26% 38% Losses Recognized $1.9 $47.8 $7.6 $57.3 Losses Recognized (bps) 1.7 39.9 2.1 9.6 '04 - '05 '06 - '08 '09 - '13 Total $2,357 $450 $31,594 $34,401 8,977 11,528 4,942 25,447 $11,334 $11,978 $36,536 $59,848 0.41% 2.61% 0.32% 0.83% 0.07% 0.42% 0.07% 0.15% 39% 40% 28% 37% 0% 21% 24% 21% 12% 48% 26% 38% 47% 46% 18% 32% Loss Severity Life Time Last 12 Months Last 12 Months epurchase Rates Life Time Last 12 Months Life Time Sold UPB ($mm) Agency Agency Aggregator Total Sold UPB Request Rates ($mm) 1Q13 Q13 3Q13 4Q13 1Q14 Pending Reserves - BoP $ 27 $ 25 $ 22 $ 19 $ 20 Provisions - New Sales 1 1 1 1 - Provisions - Changes in Existing Reserves (0) (1) (2) 1 4 Charge Offs (3) (3) (2) (1) - Pending Reserves - EoP $ 25 $ 22 $ 19 $ 20 $ 24
13 NON-GAAP RECONCILIATIONS QUARTERLY ADJUSTED NET INCOME 1ST QUARTER EARNINGS SUPPLEMENT Three Months Ended March 31, December 31, September 30, June 30, March 31, (dollars and shares in thousands) 2014 2013 2013 2013 2013 Net income 32,760$ 18,451$ 33,150$ 45,993$ 39,146$ Non-recurring regulatory related expense, net of tax 465 4,807 20,203 12,042 11,425 Increase (decrease) in Bank of Florida non-accretable discount, net of tax 311 (68) (439) (538) 950 MSR impairment (recovery), net of tax (3,063) (9,109) (21,783) (20,194) (7,784) Restructuring expense, net of tax 630 16,090 3,242 - - OTTI credit losses on investment securities (Volcker Rule), net of tax - 2,045 - - - Adjusted net income 30,103$ 32,216$ 34,373$ 37,303$ 43,737$ Adjusted net income allocated to preferred stock 2,531 2,531 2,532 2,531 2,531 Adjusted net income allocated to common shareholders 27,572$ 29,685$ 31,841$ 34,772$ 41,206$ Adjusted net earnings per common share, diluted 0.22$ 0.24$ 0.26$ 0.28$ 0.33$ Weighted average common shares outstanding, diluted 125,038 124,420 124,124 124,034 123,439 TANGIBLE COMMON EQUITY March 31, December 31, September 30, June 0, March 31, (dollars in thousands) 2014 2013 2013 2013 2013 Sharehold rs' equity 1,647,639 1,621,013$ 1,602,913$ 1,549,383$ ,5 4,442$ Less: Goodwill 46,859 46,859 46,859 46,859 46,859 Intangible assets 5,286 5,813 6,340 6,867 7,394 Tangible equity 1,595,494$ 1,568,341$ 1,549,714$ 1,495,657$ 1,450,189$ Less: Perpetual preferred stock 150,000 150,000 150,000 150,000 150,000 Tangible common equity 1,445,494$ 1,418,341$ 1,399,714$ 1,345,657$ 1,300,189$ Weighted average common shares outstanding, basic 122,684 122,595 122,509 122,281 121,583
14 NON-GAAP RECONCILIATIONS NON-PERFORMING ASSETS (NPAs) (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. 1ST QUARTER EARNINGS SUPPLEMENT March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2014 2013 2013 2013 2013 Total non-accrual loans and leases 80,660$ 85,910$ 145,078$ 132,078$ 141,468$ Accruing loans 90 days or more past due - - - - - Total non-performing loans (NPL) 80,660 85,910 145,078 132,078 141,468 Other real estate owned (OREO) 29,333 29,034 32,108 36,528 39,576 Total non-performing assets (NPA) 109,993 114,944 177,186 168,606 181,044 Troubled debt restructurings (TDR) less than 90 days past due 73,455 76,913 79,664 82,236 88,888 Total NPA and TDR (1) 183,448$ 191,857$ 256,850$ 250,842$ 269,932$ Total NPA and TDR 183,448$ 191,857$ 256,850$ 250,842$ 269,932$ Government-insured 90 days or more past due still accruing 1,021,276 1,039,541 1,147,795 1,405,848 1,547,995 Loans accounted for under ASC 310-30: 90 days or more past due 9,915 10,083 45,104 54,054 67,630 OREO - - 21,240 21,194 22,955 Total regulatory NPA and TDR 1,214,639$ 1,241,481$ 1,470,989$ 1,731,938$ 1,908,512$ Adjusted credit quality ratios excluding government-insured loans and loans accounted for under ASC 310-30: (1) NPA to total assets 0.62% 0.65% 1.01% 0.92% 0.99% Credit quality ratios including government-insured loans and loans accounted for under ASC 310-30: NPA to total assets 6.47% 6.60% 7.90% 8.98% 9.94%
15 NON-GAAP RECONCILIATIONS REGULATORY CAPITAL (BANK LEVEL) 1ST QUARTER EARNINGS SUPPLEMENT March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2014 2013 2013 2013 2013 Shareholders' equity 1,686,414$ 1,662,164$ 1,648,152$ 1,598,419$ 1,560,001$ Less: Goodwill and other intangibles (50,700) (51,072) (51,436) (51,807) (52,089) Disallowed servicing asset (26,419) (20,469) (39,658) (36,182) (31,585) Disallowed deferred tax asset (62,682) (63,749) (64,462) (65,406) (66,351) Add: ccumulated losses on securities and cash flow hedges 51,507 50,608 54,392 78,181 77,073 Tier 1 capital 1,598,120 1,577,482 1,546,988 1,523,205 1,487,049 Add: Allowance for loan and lease losses 62,969 63,690 66,991 73,469 77,067 Total regulatory capital 1,661,089$ 1,641,172$ 1,613,979$ 1,596,674$ 1,564,116$ Adjusted total assets 17,539,708$ 17,554,236$ 17,510,528$ 18,287,359$ 18,234,886$ Risk-weighted assets 11,597,320 11,467,411 11,070,048 11,656,698 11,406,725