While a Federal Reserve Board official indicated last week that EverBank Financial Corp. would be fined for its role in the nationwide foreclosure mess, EverBank says it “has not formally been a target” of federal and state government investigations into mortgage practices.
But it also says if there is an investigation, it could result in fines or other penalties.
Jacksonville-based EverBank isn’t actually talking about this. The company hasn’t commented on anything since filing for an initial public offering (that is still pending) almost 17 months ago, because of a Securities and Exchange Commission-mandated quiet period.
But its latest IPO update filed with the SEC last week does address the possibility of penalties related to its mortgage practices.
In April 2011, the largest U.S. mortgage servicers, including EverBank were ordered to revise their practices after a “horizontal review” of foreclosure procedures.
Last month, the Fed announced a total of $766.5 million in fines against the five largest mortgage servicers.
In a congressional hearing last week, Suzanne Killian, senior associate director of the Fed’s division of consumer and community affairs, said the eight other big servicers supervised by the Fed, including EverBank, also are facing fines.
“The Federal Reserve believes that monetary sanctions in those cases are appropriate and plans to announce monetary penalties against them,” Killian said, according to a transcript of her testimony posted on the Fed’s website.
One day after her testimony, EverBank filed its updated IPO registration statement and mentioned the investigations by government agencies into “various mortgage related practices of certain servicers included in the horizontal review.”
“To date, EverBank has not formally been a target of these investigations. If such an investigation were to occur, it could result in material fines, penalties, equitable remedies (including requiring default servicing or other process changes), other enforcement actions or additional litigation, and could result in significant legal costs in responding to governmental investigations and additional litigation,” it said.
EverBank’s IPO has been hanging out there for a long time since the company first filed plans in November 2010. The company has never commented on the timing, but there has been talk that the IPO has been held up until the government investigations into foreclosure practices can be resolved. Unfortunately, neither last week’s updated filing nor Killian’s comments indicated when these investigations might end. So who knows when the IPO might happen?
EverBank’s earnings down in 2011
More tidbits from the updated filing:
EverBank reported adjusted 2011 earnings of $107.6 million, down from $127 million in 2010 but up from $53.5 million in 2009.
Total assets grew by about $1 billion last year to $13.04 billion and its total capital was $968 million as of Dec. 31. The latest filing still does not say how much stock EverBank plans to sell in its IPO.
There is one other interesting note in the filing. EverBank says it intends to pay cash dividends after the IPO but that it “is subject to certain regulatory restrictions that may limit its ability to pay dividends.” The bank will need Fed approval before paying dividends.
As we saw two weeks ago when the Fed announced results of its “stress test” of major banks, the Fed won’t allow banks to pay dividends unless it believes the banks have enough capital to withstand a major downturn in the economy.
EverBank was not included in that stress test.
Remy moving ahead with IPO
Speaking of delayed IPOs, Remy International Inc. recently filed an updated registration statement with the SEC for the first time since May.
Remy is an Indiana-based automobile parts manufacturer that is 47 percent owned by Jacksonville-based Fidelity National Financial Inc.
Fidelity, of course, is mainly a title insurance company but uses its excess cash to make opportunistic investments in other businesses (like restaurants).
Fidelity acquired its stake in Remy as the company emerged from Chapter 11 bankruptcy in 2007.
Remy lost money in 2008 but has been profitable since, including earnings before preferred stock dividends of $71.9 million on revenue of $1.2 billion last year, according to the latest filing.
Fidelity Chairman Bill Foley, who also is chairman of Remy, originally said in January 2011 that Fidelity wanted to take Remy public and it initially filed for the IPO in March 2011. But the company hasn’t said anything about Remy’s IPO recently.
The filings don’t say how much stock Remy will sell or what Fidelity’s stake in the company will be after the IPO.
Shoe Carnival beats expectations
Remember Wayne Weaver? He’s the guy who wouldn’t draft Tim Tebow for the Jaguars.
But seriously, things are going well for Weaver’s other business since he sold the Jaguars. Shoe Carnival Inc.’s stock soared higher Thursday after the footwear chain’s fourth-quarter earnings beat analysts’ expectations, and the company forecast better-than-expected first-quarter earnings this year.
Weaver is chairman of Evansville, Ind.-based Shoe Carnival and its largest shareholder with 26.8 percent of the stock.
Shoe Carnival reported net income of 24 cents a share for the fourth quarter ended Jan. 28, 9 cents lower than the previous year. But that was 3 cents higher than the average forecast of analysts surveyed by Thomson Financial.
Also, Shoe Carnival projected first-quarter earnings of 75 cents to 78 cents, higher than the average Thomson forecast of 70 cents.
That sent Shoe Carnival’s stock up by $5.61 to $32.11 on Thursday.
While spring earnings look better than expected, Avondale Partners analyst Mark Montagna said the fall season also is looking good for Shoe Carnival, helped by new interest in colorful merchandise.
“Shoe Carnival stated that any time retail soft goods see color as a major trend, that increased sales of footwear follows. They stated that this level of color is unparalleled in many years. The color is hitting every category of footwear. They expect the trend of color in athletic (shoes) to build even greater through the fall,” Montagna said in a research note.
He also sees an increase in boot sales after some disappointing results last fall.
“Fall boots are an area of significant optimism and they have no doubt the customer perception of newness in boots for fall 2012 will be greater than their perception of the newness of fall 2011 boots,” Montagna said.
Trailer Bridge going silent
As Trailer Bridge Inc. emerges from bankruptcy later this week, we won’t be hearing as much about them anymore.
The Jacksonville-based marine and truck freight company expects to formally emerge from bankruptcy Friday after its Chapter 11 reorganization plan was confirmed 10 days ago by U.S. Bankruptcy Judge Jerry Funk.
Its plan calls for nearly all of its stock to be issued to the company’s senior noteholders in exchange for reducing its debt.
Once that new stock is issued, there will be a limited trading market for it, if there is any market at all, and there will be few shareholders.
Trailer Bridge said in an SEC filing last week that it plans to file a form “that will terminate its reporting obligations” on or about March 30. That means it will no longer be filing SEC reports.
Trailer Bridge’s current shares will be canceled as of Friday. Existing stockholders will be given the option of receiving 15 cents in cash per share or receiving pro-rated shares of the new stock.
The total amount of shares issued to existing stockholders will be at most 9 percent of the company’s stock. Most stockholders are expected to opt for the cash.