JACKSONVILLE, Fla.--(BUSINESS WIRE)--EverBank Financial Corp (NYSE: EVER) announced today its financial results for the third quarter ended September 30, 2016.

GAAP net income available to common shareholders was $34.6 million for the third quarter 2016, compared to $19.0 million for the second quarter 2016 and $27.1 million for the third quarter 2015. GAAP diluted earnings per share in the third quarter 2016 were $0.27 compared to $0.15 in the second quarter 2016 and $0.21 in the third quarter 2015. Adjusted net income available to common shareholders was $51.6 million for the third quarter 2016, compared to $40.5 million for the second quarter 2016 and $28.8 million for the third quarter 2015.1Adjusted diluted earnings per common share were $0.40 in the third quarter 2016 compared to $0.32 in the second quarter 2016 and $0.23 in the third quarter 2015.1

Third Quarter 2016 Key Highlights

• Total assets of $28.7 billion, an increase of 14% year over year.
• Portfolio loans held for investment (HFI) of $23.9 billion, an increase of 15% year over year.
• Total deposits of $19.6 billion, an increase of 12% year over year.
• Net interest margin (NIM) of 2.81%.
• GAAP return on average equity (ROE) of 8.0% and adjusted ROE1 of 11.9% for the quarter.
• Tangible common equity per common share was $13.53 at September 30, 2016, an increase of 4% year over year.1
• Adjusted non-performing assets to total assets1 of 0.69% at September 30, 2016. Annualized net charge-offs to average total loans and leases held for investment of 0.10% for the quarter.
• Consolidated common equity Tier 1 capital ratio of 9.7% and bank Tier 1 leverage ratio of 7.9% at September 30, 2016.
• On August 8, 2016, Teachers Insurance and Annuity Association of America (TIAA) announced an agreement to acquire EverBank for $19.50 per share of common stock in cash pursuant to an agreement and plan of merger, dated August 7, 2016. In addition, holders of EverBank’s Series A Preferred Stock would receive cash in an amount equal to the liquidation preference plus accrued but unpaid dividends. The closing of the proposed merger is subject to the receipt of regulatory approval as well as the approval of EverBank’s stockholders.

Balance Sheet

Total assets were $28.7 billion at September 30, 2016, an increase of $1.3 billion, or 5%, compared to the prior quarter and an increase of $3.5 billion, or 14%, year over year. Compared to the prior quarter, loans held for sale (HFS) increased $627 million, or 42%, to $2.1 billion and loans HFI increased $714 million, or 3%, to $23.9 billion.

Capital Strength

Total shareholders' equity was $1.9 billion at September 30, 2016, an increase of 2% compared to the prior quarter and an increase of 4% year over year. As of September 30, 2016, our consolidated common equity Tier 1 capital ratio was 9.7% and the bank’s Tier 1 leverage and total risk-based capital ratios were 7.9% and 12.5%, respectively. As a result, the bank is considered "well-capitalized" under all applicable regulatory guidelines.

Credit Quality

Adjusted non-performing assets1 were 0.69% of total assets at September 30, 2016, compared to 0.52% for the prior quarter and 0.55% at September 30, 2015. Net charge-offs during the third quarter of 2016 were $6 million, an increase of $1 million compared to both the prior quarter and year over year. On an annualized basis, net charge-offs were 0.10% of total average loans and leases HFI for the quarter, compared to 0.09% for the prior quarter and 0.11% for the third quarter of 2015.

Income Statement Highlights

Revenue

Revenue for the third quarter of 2016 was $233 million, an increase of $36 million, or 18%, compared to $197 million in the second quarter of 2016. Excluding the change in valuation allowance on our mortgage servicing rights (MSR) and other one-time items, revenue would have been $256 million in the third quarter of 2016, an increase of 10% compared to the prior quarter.

Net Interest Income

Net interest income was $190 million for the third quarter of 2016, an increase of $12 million, or 7%, compared to the prior quarter. Average interest-earning assets increased $1.3 billion, or 5%, compared to the prior quarter driven primarily by a $1.0 billion, or 4%, increase in average loans and leases HFI. Total average interest-bearing liabilities increased $968 million, or 4%, compared to the prior quarter driven by a $743 million, or 13%, increase in average borrowings.

Net interest margin increased to 2.81% for the third quarter of 2016 from 2.80% in the second quarter of 2016, driven by stable interest-earning asset yields at 3.81% and a 0.04% decrease in the average cost of total interest-bearing liabilities to 1.11%.

Noninterest Income

Noninterest income for the third quarter of 2016 was $43 million, an increase of $24 million, or 126%, compared to the prior quarter, driven by increased gain on sale of loans and higher net loan servicing income. Net loan servicing income increased $12 million compared to the prior quarter to a loss of $19 million, driven primarily by the change in valuation allowance on our MSR, which included impairment of $23 million in the third quarter 2016 compared to impairment of $37 million in the prior quarter. Excluding the impact of the valuation allowance, net loan servicing income for the third quarter would have been $4 million, a decrease of $2 million, or 29%, compared to the prior quarter.

Gain on sale of loans was $43 million, an increase of $11 million, or 35%, compared to the prior quarter, driven primarily by higher agency funding activity.

Noninterest Expense

Noninterest expense for the third quarter of 2016 was $162 million, an increase of $6 million, or 4%, compared to the prior quarter. Salaries, commissions and employee benefits were $94 million, a decrease of $1 million, or 1%, compared to the prior quarter. General and administrative expense was $46 million, an increase of $8 million, or 21%, compared to the prior quarter, driven by higher legal and professional fees.

EverBank's efficiency ratio in the third quarter of 2016 was 69%, compared to 79% in the prior quarter. Excluding the impact of our MSR valuation allowance recovery or impairment, transaction and other non-recurring expenses, EverBank's adjusted efficiency ratio1 was 61% for the third quarter compared to 67% in prior quarter.

Dividends

On October 19, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on November 22, 2016, to stockholders of record as of November 10, 2016. Also on October 19, 2016, the Company's Board of Directors declared a quarterly cash dividend of $421.875, payable on January 5, 2017, for each share of 6.75% Series A Non-Cumulative Perpetual Preferred Stock held as of December 21, 2016.

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 $28.7 billion in assets and $19.6 billion in deposits as of September 30, 2016. 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.