Safe and Sound

EverBank

Jacksonville, FL
4
Star Rating
Founded in 1998, EverBank is an FDIC-insured bank headquartered in Jacksonville, FL. Regulatory filings show the bank having equity of $2.30 billion on assets of $27.77 billion, as of March 31, 2017.

With 2,860 full-time employees in 14 offices in multiple states, the bank holds loans and leases worth $24.75 billion, including real estate loans of $18.28 billion. U.S. bank customers currently have $19.43 billion in deposits with the bank.

Overall, Bankrate believes that, as of March 31, 2017, EverBank exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Keep reading for a look at how the bank did on the three major criteria Bankrate used to score American banks.

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SAFE AND SOUND?

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THE INSTITUTION'S SCORE

Capital Score

Capital is a key measurement of an institution's financial strength. It acts as a buffer against losses and provides protection for accountholders when a bank is struggling financially. When looking at safety and soundness, the more capital, the better.

On our test to measure capital adequacy, EverBank received a score of 6 out of a possible 30 points, falling short of the national average of 13.38.

A bank's Tier 1 capital ratio is a widely used measure of this buffer. EverBank's Tier 1 capital ratio was 13.34 percent, above the 6 percent level considered adequate by regulators, but under the national average of 25.16 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, EverBank held equity amounting to 8.28 percent of its assets, which was lower than the national average of 12.10 percent.

Asset Quality Score

This test is intended to estimate how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as past-due mortgages.

A bank with lots of these types of assets could eventually have to use capital to cover losses, decreasing its equity buffer. Many of those assets are also likely to be in non-accrual status and thus aren't earning interest for the bank, pushing down earnings and increasing the risk of a future failure.

EverBank finished below the national average of 37.62 on Bankrate's test of asset quality, racking up 36 out of a possible 40 points .

The percentage of problem assets a bank holds compared to its total assets is a widely used indicator of asset quality.As of March 31, 2017, 16.46 percent of EverBank's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.04 percent.

Banks keep a reserve to deal with troubled assets known as an "allowance for loan and lease losses." The size of that reserve can be a handy indicator when evaluating a bank's ability to manage problem assets, especially when compared to the total amount of at-risk loans. Unfortunately, the FDIC did not provide information on EverBank's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. A bank can retain its earnings, expanding its capital cushion, or put them to work addressing problematic loans, likely making the bank better able to withstand financial shocks. Obviously, banks that are losing money are less able to do those things.

EverBank scored 16 out of a possible 30 on Bankrate's test of earnings, failing to reach the national average of 16.52.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, basically) by total equity. The most recent annualized quarterly return on equity for EverBank was 7.44 percent, below the national average of 9.28 percent.

For the twelve months ended March 31, 2017, the bank earned net income of $42.4 million on total equity of $2.30 billion. The bank experienced an annualized return on average assets, or ROA, of 0.61 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.14 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.