After months and months of waiting, EverBank Financial Corp.’s stock will begin trading today. But the company had to settle for a lower price than it had hoped to complete its initial public offering.
EverBank announced Wednesday night that its IPO of 19.22 million shares was priced at $10 each.
The company, in a Securities and Exchange Commission filing last week, estimated it would sell its shares for $12 to $14 each. But Wednesday morning, it filed an updated SEC statement that lowered the estimated price range to $11 to $12. Later on Wednesday, it announced the $10 price.
Company officials have not been able to comment on the IPO because of an SEC-mandated quiet period before a stock sale, but they are expected to talk to the media today.
EverBank, which initially filed plans for its IPO in October 2010, will trade on the New York Stock Exchange under the ticker symbol “EVER.”
EverBank also said in last week’s filing that in addition to the 19.22 million new shares being issued by the company, existing investors of the closely-held company would be selling about 5.9 million of their own shares in the IPO. But on Wednesday, it said that all of those insiders would be holding onto their shares instead of selling them at the lower price.
David Menlow, president of IPO Financial Network in Green Brook, N.J., said the downsizing of the IPO may cause concern for potential new stockholders.
“This is throwing up all the wrong flags for investors,” he said. “The stock has a shadow cast across it.”
Menlow said he had no specific information about EverBank’s pricing, but said lead underwriter Goldman, Sachs & Co. has a lot of experience bringing deals to the market.
“They should have a very solid basis on where to value the company and price it accordingly,” he said.
Besides Goldman, Sachs, the other lead underwriters for EverBank’s IPO are BofA Merrill Lynch and Credit Suisse. Ben Bishop, banking analyst at Allen C. Ewing & Co. in Jacksonville, thinks the strong underwriting group of big-name Wall Street firms should give investors some confidence in EverBank’s stock.
“That fact that the Goldmans and Merrills and Credit Suisses of the world are willing to risk their capital is an indication of their confidence and admiration of the record and future of EverBank,” Bishop said.
EverBank, which had $13 billion in assets at the end of 2011, had net income of $52.7 million last year. The bank has been profitable for the past five years, even through the national banking crisis of 2007 and 2008 when many banks were posting big losses. That’s a good sign for investors, Bishop said.
“This should be a very good long-term investment,” he said.
EverBank hasn’t reported its final first-quarter results but has said in its SEC filings that it expects to report net income of $10 million to $13 million, and its assets grew to about $13.8 billion at the end of the quarter.
EverBank will have about 113.2 million to 116.1 million shares outstanding after the IPO. In addition to the 19.22 million shares going on the market today, its underwriters have an option to purchase an additional 2.88 million shares.
The largest shareholder will be Sageview Partners L.P., which owns 12.9 million shares, or more than 11 percent of the stock after the IPO.
Three other investment firms also own more than 5 percent of the stock: New Mountain Partners III L.P. and TPG Funds each own 7.8 million shares, and Arena Capital Investment Fund L.P. owns 5.8 million shares.
Arena Capital had been planning to sell off 960,557 of its shares in the IPO, but it took those shares off the market along with the other shares that were pulled back by insiders.
EverBank CEO Robert Clements owns about 3.7 million shares. He had been planning to sell 165,613 of those shares before the insiders’ shares were pulled back.
Bishop said EverBank is only the second large Florida bank in the last four years to come out with an IPO, after Miami Lakes-based BankUnited Inc. sold 33.4 million shares at $27 each in January 2011. So the EverBank deal is getting a lot of attention locally.
“This is exciting stuff. We haven’t had anything like this in Jacksonville in a long time,” Bishop said.
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