EverBank Financial Corp. (EVER) in Jacksonville, Fla., has agreed to sell its default mortgage servicing platform, along with more than $20 billion in rights, to a subsidiary of Walter Investment Management.
EverBank plans to sell private-investor mortgage-servicing rights with unpaid principal balance of $13.4 billion to Walter subsidiary Green Tree Servicing, it said Thursday. Green Tree also agreed to acquire subservicing rights on EverBank's Ginnie Mae and government loans with unpaid principal of about $6.9 billion. Finally, Green Tree agreed to buy EverBank's default loan-servicing platform and to take over the lease on space in EverBank's headquarters in Jacksonville.
EverBank expects to record a pre-tax gain on the transactions of $20 million to $25 million, and a one-time transaction charge of $10 million to $15 million. It expects to close all three transactions by the second quarter of 2014.
"These initiatives will help to simplify our business and provide better visibility into the earnings power of our franchise," said EverBank Chief Operating Officer W. Blake Wilson in the news release. "As a result of our strong capital and liquidity, we are well positioned for sustainable organic growth across our business channels."
EverBank has been working to focus on its core business and settle outstanding liabilities. In July, it announced that it would sell its wholesale mortgage business. In August, it agreed to pay $43 million to settle allegations that it improperly foreclosed on homeowners.
EverBank also announced third-quarter profit of $33.2 million on Thursday, up 49% from the same period in 2012. Its earnings per share were 25 cents, beating the average forecasts of analysts polled by Bloomberg by 12 cents.
EverBank's earnings surge was driven by a $35 million recovery in the value of its mortgage servicing rights, compared to an $18.2 million impairment charge in the third quarter of 2012. Its loan-servicing fee income rose by 20%, to $50.7 million.
Net interest income rose 10%, to $138.9 million, as its total assets grew by 7%, to $17.6 billion. The bank made a $3.1 million provision for loan losses, down 30% from a year earlier.
EverBank also retired $800 million in debt in the third quarter, which it said will increase its net interest margin going forward.