KBRA Affirms Ratings for EverBank Financial Corp; Revises Outlook to Negative

KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Jacksonville, Florida-based EverBank Financial Corp ("EverBank" or "the company"). Additionally, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for lead subsidiary, EverBank, National Association. The Outlook for all long-term ratings is revised to Negative from Stable.

Key Credit Considerations

The ratings reflect EverBank's established position as a national specialty commercial banking franchise with $47 billion in assets as of 2Q26, supported by a diversified digital deposit platform and a branch-light retail network with financial centers concentrated in California, Florida, and New York. Since 2023, management has executed on its strategy of improving EverBank's long-term profitability by repositioning the balance sheet toward higher-yielding commercial lending businesses, entering the California retail banking market with the acquisition of Sterling Bank in 2Q25.

The Negative Outlook largely reflects KBRA's quantitative assessment of EverBank's profitability, capitalization, and funding profiles, and the likelihood that the associated metrics are likely to remain below similarly rated peers over the Outlook horizon despite continued strategic repositioning. We note that ROAA has improved materially to 0.96% in 1H26, reflecting modest NIM expansion, favorable credit costs, and expense discipline. However, a comparatively low NIM and limited noninterest income are earnings headwinds. Management forecasts ROAA slightly above 1% through 2028, suggesting a modest improvement in the financial profile, but the gap to peers remains meaningful due to improved peer performance.

Asset quality is a relative credit strength, supported by low annualized NCOs of 0.02%, NPAs of 0.57%, and appropriate reserve coverage at 2Q26. Additionally, KBRA has a constructive assessment of EverBank's underwriting and risk management processes. We note, however, the company's NDFI loan exposure has increased to 44% of total loans and 368% of risk-based capital, which is the highest such concentration among rated peers. While the company has built a pristine track record in many portions of this portfolio – including mortgage warehouse and corporate debt finance – other verticals are newer and have not been tested through the various parts of the credit cycle.

While deposit costs and wholesale funding reliance have moderated from recent highs, they are expected to remain elevated compared to peers, reflecting reliance on price sensitive nationally sourced consumer deposits and some brokered balances. Likewise, core deposits continue to grow, but strong loan growth has modestly outpaced deposit generation, resulting in a loan-to-deposit ratio in the high-90% range.

Core capital is comfortably above regulatory minimums, and is supported by EverBank's non-cumulative perpetual preferred shares issued to minority owner TIAA at the company's 2023 change of control. However, capital has been managed lower since 2023 through special dividends, the Sterling Bank acquisition, and organic balance sheet growth. At 2Q26, the company reported a CET1 ratio of 10.2% and Tier 1 Capital ratio of 11.9%, both lower than peer average. Management's strategic plan projects stable to slightly lower capital metrics, including CET1 near 10% and Tier 1 Capital of 11%-11.5% through 2028, which provide less financial flexibility compared to similarly rated peers.

Rating Sensitivities

The Negative Outlook reflects KBRA’s view that a rating downgrade is possible over the medium term, if EverBank’s profitability, core capitalization, and funding profile are sustained below those of similarly rated peers while the loan portfolio’s concentration remains meaningfully above peers. A rating upgrade is unlikely, but sustained improvement in profitability, funding, and core capital ratios over time, more closely converging with similarly rated peers, could lead to a revision of the Outlook to Stable. Ratings will also remain sensitive to loan portfolio concentrations, underwriting, and asset quality performance.

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