EVER-6.30.14-10Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
 
Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2014.
or
 
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from                to             
EverBank Financial Corp
(Exact name of registrant as specified in its charter)
Delaware
 
001-35533
 
52-2024090
(State of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)
 
 
 
501 Riverside Ave., Jacksonville, FL
 
 
 
32202
(Address of principal executive offices)
 
 
 
(Zip Code)
904-281-6000
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes Q    No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes Q  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer Q
 
Accelerated filer o
 
Non-accelerated filer o (Do not check if a smaller reporting company)
 
Smaller reporting company o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o  No Q
As of July 25, 2014, there were 122,930,169 shares of common stock outstanding.
 

Table of Contents

EverBank Financial Corp
Form 10-Q
Index
Part I - Financial Information
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
Part II - Other Information
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.

Table of Contents

Part I. Financial Information
Item 1. Financial Statements (unaudited)
EverBank Financial Corp and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)
(Dollars in thousands, except per share data)



 
June 30,
2014
 
December 31,
2013
Assets
 
 
 
Cash and due from banks
$
65,433

 
$
46,175

Interest-bearing deposits in banks
104,563

 
801,603

Total cash and cash equivalents
169,996

 
847,778

Investment securities:
 
 
 
Available for sale, at fair value
1,029,667

 
1,115,627

Held to maturity (fair value of $120,965 and $107,921 as of June 30, 2014 and December 31, 2013, respectively)
118,614

 
107,312

Other investments
186,818

 
128,063

Total investment securities
1,335,099

 
1,351,002

Loans held for sale (includes $829,946 and $672,371 carried at fair value as of June 30, 2014 and December 31, 2013, respectively)
1,704,406

 
791,382

Loans and leases held for investment:
 
 
 
Loans and leases held for investment, net of unearned income
15,294,644

 
13,252,724

Allowance for loan and lease losses
(56,728
)
 
(63,690
)
Total loans and leases held for investment, net
15,237,916

 
13,189,034

Equipment under operating leases, net
18,460

 
28,126

Mortgage servicing rights (MSR), net
437,595

 
506,680

Deferred income taxes, net
54,351

 
51,375

Premises and equipment, net
54,844

 
60,733

Other assets
741,153

 
814,874

Total Assets
$
19,753,820

 
$
17,640,984

Liabilities
 
 
 
Deposits:
 
 
 
Noninterest-bearing
$
1,055,556

 
$
1,076,631

Interest-bearing
12,819,119

 
12,184,709

Total deposits
13,874,675

 
13,261,340

Other borrowings
3,797,000

 
2,377,000

Trust preferred securities
103,750

 
103,750

Accounts payable and accrued liabilities
298,947

 
277,881

Total Liabilities
18,074,372

 
16,019,971

Commitments and Contingencies (Note 14)


 


Shareholders’ Equity
 
 
 
Series A 6.75% Non-Cumulative Perpetual Preferred Stock, $0.01 par value (liquidation preference of $25,000 per share;10,000,000 shares authorized; 6,000 issued and outstanding at June 30, 2014 and December 31, 2013)
150,000

 
150,000

Common Stock, $0.01 par value (500,000,000 shares authorized; 122,918,919 and 122,626,315 issued and outstanding at June 30, 2014 and December 31, 2013, respectively)
1,229

 
1,226

Additional paid-in capital
837,991

 
832,351

Retained earnings
744,164

 
690,051

Accumulated other comprehensive income (loss) (AOCI)
(53,936
)
 
(52,615
)
Total Shareholders’ Equity
1,679,448

 
1,621,013

Total Liabilities and Shareholders’ Equity
$
19,753,820

 
$
17,640,984


See notes to unaudited condensed consolidated financial statements.

3
Table of Contents
EverBank Financial Corp and Subsidiaries
Condensed Consolidated Statements of Income (unaudited)
(Dollars in thousands, except per share data)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Interest Income
 
 
 
 
 
 
 
Interest and fees on loans and leases
$
170,325

 
$
172,723

 
$
328,795

 
$
346,509

Interest and dividends on investment securities
9,818

 
14,813

 
19,649

 
31,063

Other interest income
110

 
317

 
272

 
615

Total Interest Income
180,253

 
187,853

 
348,716

 
378,187

Interest Expense
 
 
 
 
 
 
 
Deposits
23,442

 
26,567

 
46,049

 
53,390

Other borrowings
16,620

 
20,069

 
31,632

 
39,764

Total Interest Expense
40,062

 
46,636

 
77,681

 
93,154

Net Interest Income
140,191

 
141,217

 
271,035

 
285,033

Provision for Loan and Lease Losses
6,123

 
29

 
9,194

 
1,948

Net Interest Income after Provision for Loan and Lease Losses
134,068

 
141,188

 
261,841

 
283,085

Noninterest Income
 
 
 
 
 
 
 
Loan servicing fee income
40,417

 
47,192

 
87,034

 
89,355

Amortization of mortgage servicing rights
(19,026
)
 
(35,945
)
 
(39,598
)
 
(71,023
)
Recovery (impairment) of mortgage servicing rights
—

 
32,572

 
4,941

 
45,127

Net loan servicing income
21,391

 
43,819

 
52,377

 
63,459

Gain on sale of loans
47,703

 
75,837

 
81,554

 
158,148

Loan production revenue
5,347

 
10,063

 
9,926

 
19,552

Deposit fee income
4,533

 
4,290

 
7,868

 
10,215

Other lease income
3,806

 
6,471

 
8,711

 
12,882

Other
6,488

 
6,324

 
13,416

 
15,857

Total Noninterest Income
89,268

 
146,804

 
173,852

 
280,113

Noninterest Expense
 
 
 
 
 
 
 
Salaries, commissions and other employee benefits expense
95,259

 
118,457

 
192,953

 
228,936

Equipment expense
17,345

 
20,707

 
35,993

 
40,559

Occupancy expense
7,885

 
7,547

 
15,957

 
14,931

General and administrative expense
46,831

 
66,829

 
83,629

 
140,930

Total Noninterest Expense
167,320

 
213,540

 
328,532

 
425,356

Income before Provision for Income Taxes
56,016

 
74,452

 
107,161

 
137,842

Provision for Income Taxes
21,234

 
28,459

 
40,619

 
52,703

Net Income
$
34,782

 
$
45,993

 
$
66,542

 
$
85,139

Less: Net Income Allocated to Preferred Stock
(2,531
)
 
(2,531
)
 
(5,062
)
 
(5,062
)
Net Income Allocated to Common Shareholders
$
32,251

 
$
43,462

 
$
61,480

 
$
80,077

Basic Earnings Per Common Share
$
0.26

 
$
0.36

 
$
0.50

 
$
0.66

Diluted Earnings Per Common Share
$
0.26

 
$
0.35

 
$
0.49

 
$
0.65

Dividends Declared Per Common Share
$
0.03

 
$
0.02

 
$
0.06

 
$
0.04

See notes to unaudited condensed consolidated financial statements.

4
Table of Contents
EverBank Financial Corp and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (unaudited)
(Dollars in thousands)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net Income
$
34,782

 
$
45,993

 
$
66,542

 
$
85,139

Unrealized Gains (Losses) on Debt Securities
 
 
 
 
 
 
 
Reclassification of unrealized gains to noninterest income
(1,250
)
 
—

 
(1,250
)
 
—

Unrealized gains (losses) due to changes in fair value
(2,508
)
 
(23,500
)
 
(2,598
)
 
(22,796
)
Other-than-temporary impairment (OTTI) (noncredit portion), net of accretion
685

 
—

 
685

 
—

Tax effect
1,169

 
8,932

 
1,203

 
8,668

Change in unrealized gains (losses) on debt securities
(1,904
)
 
(14,568
)
 
(1,960
)
 
(14,128
)
Interest Rate Swaps
 
 
 
 
 
 
 
Net unrealized gains (losses) due to changes in fair value
(1,851
)
 
17,383

 
(7,475
)
 
21,766

Reclassification of net unrealized losses to interest expense
4,456

 
6,011

 
8,506

 
11,368

Tax effect
(990
)
 
(8,891
)
 
(392
)
 
(12,611
)
Change in interest rate swaps
1,615

 
14,503

 
639

 
20,523

Other Comprehensive Income (Loss)
(289
)
 
(65
)
 
(1,321
)
 
6,395

Comprehensive Income (Loss)
$
34,493

 
$
45,928

 
$
65,221

 
$
91,534


See notes to unaudited condensed consolidated financial statements.

5
Table of Contents
EverBank Financial Corp and Subsidiaries
Condensed Consolidated Statements of Shareholders' Equity (unaudited)
(Dollars in thousands)


 
Shareholders’ Equity
 
 
 
Preferred Stock
 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income (Loss), Net of Tax
 
Total Equity
Balance, January 1, 2014
$
150,000

 
$
1,226

 
$
832,351

 
$
690,051

 
$
(52,615
)
 
$
1,621,013

Net income
—

 
—

 
—

 
66,542

 
—

 
66,542

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
(1,321
)
 
(1,321
)
Issuance of common stock
—

 
3

 
1,263

 
—

 
—

 
1,266

Share-based grants (including income tax benefits)
—

 
—

 
4,377

 
—

 
—

 
4,377

Cash dividends on common stock
—

 
—

 
—

 
(7,367
)
 
—

 
(7,367
)
Cash dividends on preferred stock
—

 
—

 
—

 
(5,062
)
 
—

 
(5,062
)
Balance, June 30, 2014
$
150,000

 
$
1,229

 
$
837,991

 
$
744,164

 
$
(53,936
)
 
$
1,679,448

 
 
 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2013
$
150,000

 
$
1,210

 
$
811,085

 
$
575,665

 
$
(86,784
)
 
$
1,451,176

Net income
—

 
—

 
—

 
85,139

 
—

 
85,139

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
6,395

 
6,395

Issuance of common stock
—

 
14

 
10,456

 
—

 
—

 
10,470

Share-based grants (including income tax benefits)
—

 
—

 
6,141

 
—

 
—

 
6,141

Cash dividends on common stock
—

 
—

 
—

 
(4,875
)
 
—

 
(4,875
)
Cash dividends on preferred stock
—

 
—

 
—

 
(5,063
)
 
—

 
(5,063
)
Balance, June 30, 2013
$
150,000

 
$
1,224

 
$
827,682

 
$
650,866

 
$
(80,389
)
 
$
1,549,383


See notes to unaudited condensed consolidated financial statements.

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Table of Contents
EverBank Financial Corp and Subsidiaries
Condensed Consolidated Statements of Cash Flows (unaudited)
(Dollars in thousands)

 
Six Months Ended
June 30,
 
2014
 
2013
Operating Activities:
 
 
 
Net income
$
66,542

 
$
85,139

Adjustments to reconcile net income to net cash provided by (used in) operating activities:
 
 
 
Amortization of premiums and deferred origination costs
17,235

 
19,303

Depreciation and amortization of tangible and intangible assets
16,736

 
20,121

Reclassification of net loss on settlement of interest rate swaps
8,506

 
11,368

Amortization and impairment of mortgage servicing rights, net of recoveries
34,657

 
25,896

Deferred income taxes (benefit)
(2,180
)
 
27,120

Provision for loan and lease losses
9,194

 
1,948

Loss on other real estate owned (OREO)
1,164

 
2,855

Gain on sale of investments, net
(1,250
)
 
—

Share-based compensation expense
3,444

 
3,147

Payments for settlement of forward interest rate swaps
(32,445
)
 
(30,181
)
Other operating activities
(2,013
)
 
3

Changes in operating assets and liabilities:
 
 
 
Loans held for sale, including proceeds from sales and repayments
(129,886
)
 
(665,369
)
Other assets
150,866

 
68,592

Accounts payable and accrued liabilities
78,841

 
(2,982
)
Net cash provided by (used in) operating activities
219,411

 
(433,040
)
Investing Activities:
 
 
 
Investment securities available for sale:
 
 
 
Purchases
(77,699
)
 
(27,898
)
Proceeds from sales
3,875

 
—

Proceeds from prepayments and maturities
158,968

 
265,572

Investment securities held to maturity:
 
 
 
Purchases
(19,456
)
 
(19,260
)
Proceeds from prepayments and maturities
7,837

 
46,691

Purchases of other investments
(249,527
)
 
(57,050
)
Proceeds from sales of other investments
190,773

 
72,997

Net change in loans and leases held for investment
(3,082,569
)
 
(32,012
)
Purchases of premises and equipment, including equipment under operating leases
(12,414
)
 
(9,246
)
Purchases of mortgage servicing assets
(1,180
)
 
(41,377
)
Proceeds related to sale or settlement of other real estate owned
17,341

 
19,620

Proceeds from insured foreclosure claims
102,377

 
198,878

Proceeds from sale of mortgage servicing rights
37,738

 
—

Other investing activities
16,163

 
3,546

Net cash provided by (used in) investing activities
(2,907,773
)
 
420,461

Financing Activities:
 
 
 
Net increase (decrease) in nonmaturity deposits
(468,922
)
 
826,916

Net increase (decrease) in time deposits
1,069,732

 
(269,741
)
Net change in repurchase agreements
—

 
(142,322
)
Net change in short-term Federal Home Loan Bank (FHLB) advances
1,295,000

 
(475,500
)
Proceeds from long-term FHLB advances
200,000

 
225,000

Repayments of long-term FHLB advances, including early extinguishment
(75,000
)
 
(112,158
)
Proceeds from issuance of common stock
1,266

 
10,470

Other financing activities
(11,496
)
 
(4,413
)
Net cash provided by (used in) financing activities
2,010,580

 
58,252

Net change in cash and cash equivalents
(677,782
)
 
45,673

Cash and cash equivalents at beginning of period
847,778

 
443,914

Cash and cash equivalents at end of period
$
169,996

 
$
489,587


See Note 1 for disclosures related to supplemental noncash information.
See notes to unaudited condensed consolidated financial statements.

7
Table of Contents

EverBank Financial Corp and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
(Dollars in thousands, except per share data)


1.  Organization and Basis of Presentation
a) Organization — EverBank Financial Corp (the Company) is a savings and loan holding company with two direct operating subsidiaries, EverBank (EB) and EverBank Funding, LLC (EBF). EB is a federally chartered thrift institution with its home office located in Jacksonville, Florida. Its direct banking services are offered nationwide. In addition, EB operates financial centers in Florida and commercial and consumer lending centers across the United States. EB (a) accepts deposits from the general public; (b) originates, purchases, services, sells and securitizes residential real estate mortgage loans, commercial real estate loans and commercial loans and leases; (c) originates consumer and home equity loans; and (d) offers full-service securities brokerage and investment advisory services.
EB’s subsidiaries are:
•AMC Holding, Inc., the parent of CustomerOne Financial Network, Inc.;
•Tygris Commercial Finance Group, Inc. (Tygris), the parent of EverBank Commercial Finance, Inc.;
•EverInsurance, Inc.;
•Elite Lender Services, Inc.;
•EverBank Wealth Management, Inc.; and
•Business Property Lending, Inc.
On February 14, 2013, the Company formed EverBank Funding, LLC, a Delaware limited liability company, to facilitate the pooling and securitization of mortgage loans for issuance into the secondary market.
b) Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information or footnotes necessary for a complete presentation of financial position, results of operations, comprehensive income, and cash flows in conformity with generally accepted accounting principles. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and accompanying notes to the financial statements reported in the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 30, 2014, which represents the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013 amended for the change in reportable business segments described further in Note 16. Operating results for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The results of operations for acquired companies are included from their respective dates of acquisition. In management’s opinion, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position, results of operations, comprehensive income, and changes in cash flows have been made.
GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingencies in the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates by their nature are based on judgment and available information. Material estimates relate to the Company’s allowance for loan and lease losses, loans and leases acquired with evidence of credit deterioration, repurchase obligations, contingent liabilities, and the fair values of investment securities, loans held for sale, MSR and derivative instruments. Because of the inherent uncertainties associated with any estimation process and future changes in market and economic conditions, it is possible that actual results could differ significantly from those estimates.    
c) Supplemental Cash Flow Information - Noncash investing activities are presented in the following table:
 
Six Months Ended
June 30,
 
2014
 
2013
Supplemental Schedules of Noncash Activities:
 
 
 
Loans transferred to foreclosure claims
$
185,417

 
$
318,820

Loans transferred from held for sale to held for investment
38,785

 
745,262

Loans transferred from held for investment to held for sale
1,432,337

 
326,636

2.  Recent Accounting Pronouncements

Repurchase-to-Maturity Transactions — In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-11, Transfers and Servicing (Topic 860) - Repurchase-to-Maturity Transactions, Repurchase Financings and Disclosures, which changes the accounting for repurchase-to-maturity transactions. Repurchase-to-maturity transactions represent repurchase agreements where the maturity of the security transferred as collateral matches the maturity of the repurchase agreement. Under ASU 2014-11, repurchase-to-maturity transactions will be accounted for as secured borrowings similar to other repurchase agreements. ASU 2014-11 also modifies the accounting for repurchase financings which represent the concurrent transfer of a financial asset and the execution of a repurchase agreement with the same counterparty. Under ASU 2014-11, the transfer and repurchase agreement are accounted for separately with the repurchase agreement accounted for as a secured borrowing. ASU 2014-11 is effective for annual reporting periods beginning on or after December 15, 2014, and interim periods within those annual periods with early adoption permitted. Upon adoption, the accounting for all outstanding repurchase-to-maturity and repurchase financing transactions is to be adjusted through a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the pending adoption of ASU 2014-11 and its impact on its consolidated financial statements.

Revenue from Contracts with Customers — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Subtopic 606), which supersedes the guidance in former ASC (Accounting Standards Codification) 605, Revenue Recognition. ASU 2014-09 clarifies the principles for recognizing revenue in order to improve comparability of revenue recognition practices across entities and industries

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with certain scope exceptions including financial instruments, leases and guarantees. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. To satisfy this objective, ASU 2014-09 provides guidance intended to assist in the identification of contracts with customers and separate performance obligations within those contracts, the determination and allocation of the transaction price to those identified performance obligations and the recognition of revenue when a performance obligation has been satisfied. ASU 2014-09 also implements enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenues and cash flows from contracts with customers. ASU 2014-09 is effective for annual reporting periods beginning on or after December 15, 2016, and interim periods within those annual periods with early adoption prohibited. Upon adoption, ASU 2014-09 provides for transition through either a full retrospective approach requiring the restatement of all presented prior periods or a modified retrospective approach which allows for the new recognition standard to be applied to only those contracts that are not completed at the date of transition. If the modified retrospective approach is adopted, a cumulative-effect adjustment to retained earnings is performed with additional disclosures required including the amount by which each line item is affected by the transition as compared to the guidance in effect before adoption and an explanation of the reasons for significant changes in these amounts. The Company is currently evaluating the pending adoption of ASU 2014-09 and its impact on its consolidated financial statements and has not yet identified which transition method will be applied upon adoption.

Presentation of Residential Mortgage Loans Upon Foreclosure — In January 2014, the FASB issued ASU 2014-04, Receivables- Troubled Debt Restructurings by Creditors (Subtopic 310-40), which will eliminate diversity in practice regarding the timing of derecognition for residential mortgage loans when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. Under ASU 2014-04, physical possession of residential real estate property is achieved when either the creditor obtains legal title to the residential real estate property upon completion of a foreclosure or the borrower conveys all interest in the residential real estate property through completion of a deed in lieu of foreclosure in order to satisfy that loan. Once physical possession has been achieved, the loan is derecognized and the property recorded within other assets at the lower of cost or fair value (less estimated costs to sell). In addition, the guidance requires both interim and annual disclosure of both the amount of foreclosed residential real estate property held by the creditor and the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure. The additional disclosure requirements are effective for annual reporting periods beginning on or after December 15, 2014, and interim periods within those annual periods with retrospective disclosure necessary for all comparative periods presented. The adoption of this standard will result in additional disclosures but is not expected to have any impact on the Company’s consolidated financial statements or results of operations.
3.  Investment Securities
The amortized cost and fair value of investment securities with gross unrealized gains and losses were as follows as of June 30, 2014 and December 31, 2013:
 
Amortized Cost
 
Gross Unrealized Gains
 
Gross Unrealized Losses
 
Fair Value
 
Carrying Amount
June 30, 2014
 
 
 
 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
Residential collateralized mortgage obligations (CMO) securities - nonagency
$
1,019,143

 
$
10,878

 
$
2,669

 
$
1,027,352

 
$
1,027,352

Asset-backed securities (ABS)
2,140

 
—

 
430

 
1,710

 
1,710

Other
289

 
316

 
—

 
605

 
605

Total available for sale securities
$
1,021,572

 
$
11,194

 
$
3,099

 
$
1,029,667

 
$
1,029,667

Held to maturity:
 
 
 
 
 
 
 
 
 
Residential CMO securities - agency
$
35,651

 
$
1,190

 
$
1

 
$
36,840

 
$
35,651

Residential mortgage-backed securities (MBS) - agency
82,963

 
1,617

 
455

 
84,125

 
82,963

Total held to maturity securities
$
118,614

 
$
2,807

 
$
456

 
$
120,965

 
$
118,614

December 31, 2013
 
 

 
 
 
 
 
 
Available for sale:
 
 
 
 
 
 
 
 
 
Residential CMO securities - nonagency
$
1,097,293

 
$
15,253

 
$
3,275

 
$
1,109,271

 
$
1,109,271

Asset-backed securities
4,144

 
—

 
1,058

 
3,086

 
3,086

Other
2,933

 
337

 
—

 
3,270

 
3,270

Total available for sale securities
$
1,104,370

 
$
15,590

 
$
4,333

 
$
1,115,627

 
$
1,115,627

Held to maturity:
 
 
 
 
 
 
 
 
 
Residential CMO securities - agency
$
41,347

 
$
1,408

 
$
5

 
$
42,750

 
$
41,347

Residential MBS - agency
65,965

 
754

 
1,548

 
65,171

 
65,965

Total held to maturity securities
$
107,312

 
$
2,162

 
$
1,553

 
$
107,921

 
$
107,312

At June 30, 2014 and December 31, 2013, investment securities with a carrying value of $177,643 and $181,836, respectively, were pledged to secure other borrowings, securities sold under agreements to repurchase, and for other purposes as required or permitted by law.
For the three and six months ended June 30, 2014 gross gains of $1,250 were realized on available for sale investments with no gross losses having been realized. For the three and six months ended June 30, 2013, there were no gross gains or gross losses realized on available for sale investments. The cost of investments sold is calculated using the specific identification method.

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Table of Contents

The gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and the length of time individual securities have been in a continuous unrealized loss position, at June 30, 2014 and December 31, 2013 are as follows:
 
Less Than 12 Months
 
12 Months or Greater
 
Total
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
 
Fair Value
 
Unrealized Losses
June 30, 2014
 
 
 
 
 
 
 
 
 
 
 
Debt securities:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO securities - nonagency
$
167,182

 
$
2,224

 
$
26,864

 
$
445

 
$
194,046

 
$
2,669

Residential CMO securities - agency
—

 
—

 
183

 
1

 
183

 
1

Residential MBS - agency
4,071

 
103

 
22,399

 
352

 
26,470

 
455

Asset-backed securities
—

 
—

 
1,710

 
430

 
1,710

 
430

Total debt securities
$
171,253

 
$
2,327

 
$
51,156

 
$
1,228

 
$
222,409

 
$
3,555

December 31, 2013
 
 
 
 
 
 
 
 
 
 
 
Debt securities:
 
 
 
 
 
 
 
 
 
 
 
Residential CMO securities - nonagency
$
169,829

 
$
3,012

 
$
10,932

 
$
263

 
$
180,761

 
$
3,275

Residential CMO securities - agency
887

 
5

 
—

 
—

 
887

 
5

Residential MBS - agency
54,355

 
1,548

 
—

 
—

 
54,355

 
1,548

Asset-backed securities
—

 
—

 
3,086

 
1,058

 
3,086

 
1,058

Total debt securities
$
225,071

 
$
4,565

 
$
14,018

 
$
1,321

 
$
239,089

 
$
5,886

The Company had unrealized losses at June 30, 2014 and December 31, 2013 on residential CMO securities, residential agency MBS, and ABS. These unrealized losses are primarily attributable to weak market conditions. Based on the nature of the impairment, these unrealized losses are considered temporary. The Company does not intend to sell nor is it more likely than not that it will be required to sell these investments before their anticipated recovery.
At June 30, 2014, the Company had 39 debt securities in an unrealized loss position. A total of 23 were in an unrealized loss position for less than 12 months. These 23 securities consisted of 22 residential nonagency CMO securities and one residential agency MBS. The remaining 16 debt securities were in an unrealized loss position for 12 months or longer. These 16 securities consisted of six residential nonagency CMO securities, six residential agency MBS, three ABS, and one residential agency CMO security. Of the $3,555 in unrealized losses, $2,647 relate to debt securities that are rated investment grade with the remainder representing securities for which the Company believes it has both the intent and ability to hold to recovery.
At December 31, 2013, the Company had 36 debt securities in an unrealized loss position. A total of 29 were in an unrealized loss position for less than 12 months. These 29 securities consisted of 14 residential nonagency CMO securities, one residential agency CMO security and 14 residential agency MBS. The remaining seven debt securities were in an unrealized loss position for 12 months or longer. These seven securities consisted of three ABS and four nonagency residential CMO securities. Of the $5,886 in unrealized losses, $4,659 relate to debt securities that are rated investment grade with the remainder representing securities for which the Company believes it has both the intent and ability to hold to recovery.
When certain triggers indicate the likelihood of an other-than-temporary-impairment (OTTI) or the qualitative evaluation performed cannot support the expectation of recovering the entire amortized cost basis of an investment, the Company performs cash flow analyses that project prepayments, default rates and loss severities on the collateral supporting each security. If the net present value of the investment is less than the amortized cost, the difference is recognized in earnings as a credit-related impairment, while the remaining difference between the fair value and the amortized cost is recognized in AOCI.
For the three and six months ended June 30, 2014, the Company recognized non-credit OTTI in earnings of $685 on available for sale residential nonagency CMO securities with no OTTI recognized on held to maturity securities. These OTTI losses represented additional declines in fair value on securities originally OTTI at December 31, 2013 as a result of regulatory changes created by the Volcker rule, which classifies these investments as covered funds that cannot be held by an insured depository institution. As a result, management cannot assert at June 30, 2014 that the Company has the ability to hold these investments to recovery. There were no OTTI losses recognized on available for sale or held to maturity securities during the three and six months ended June 30, 2013.
During the three and six months ended June 30, 2014 and 2013, interest and dividend income on investment securities was comprised of the following:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Interest income on available for sale securities
$
7,972

 
$
13,420

 
$
16,777

 
$
28,285

Interest income on held to maturity securities
855

 
658

 
1,636

 
1,282

Other interest and dividend income
991

 
735

 
1,236

 
1,496

 
$
9,818

 
$
14,813

 
$
19,649

 
$
31,063

All investment interest income recognized by the Company during the three and six months ended June 30, 2014 and 2013 was fully taxable.

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Table of Contents

4.  Loans Held for Sale
Loans held for sale as of June 30, 2014 and December 31, 2013, consist of the following:
 
June 30,
2014
 
December 31,
2013
Mortgage warehouse (carried at fair value)
$
673,400


$
613,459

Other residential (carried at fair value)
156,546


58,912

   Total loans held for sale carried at fair value
829,946

 
672,371

Government insured pool buyouts
114,751


53,823

Other residential
759,709

 
8,939

Commercial and commercial real estate
—


56,249

  Total loans held for sale carried at lower of cost or market
874,460

 
119,011

Total loans held for sale
$
1,704,406


$
791,382

The Company typically transfers originated or acquired residential mortgage loans to various financial institutions, government agencies, or government-sponsored enterprises. In addition, the Company enters into loan securitization transactions related to certain conforming and non-conforming residential mortgage loans. In connection with the conforming loan transactions, loans are converted into mortgage-backed securities issued primarily by the Federal Home Loan Mortgage Corporation (FHLMC), the Federal National Mortgage Association (FNMA) and the Government National Mortgage Association (GNMA), and are subsequently sold to third party investors. For non-conforming transactions, the Company either sells whole loans to qualified institutional buyers or the Company’s special purpose wholly-owned subsidiary, EverBank Funding, LLC, issues certificates that are offered and sold to qualified institutional buyers. Typically, the Company accounts for these transfers as sales and either retains or releases the right to service the loans. The Company has elected the fair value option of accounting under U.S. GAAP for certain residential mortgage loans originated within the mortgage warehouse. Electing to use the fair value option of accounting allows a better offset of the changes in the fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting. These loans are initially recorded and carried at fair value, with changes in fair value recognized in gain on sale of loans. Loan origination fees are recorded when earned, and related costs are recognized when incurred.
In addition, the Company also may be exposed to limited liability related to recourse agreements and repurchase agreements made to its issuers and purchasers, which are included in commitments and contingencies in Note 14. Commitments and contingencies include amounts related to loans sold that the Company may be required to repurchase, or otherwise indemnify or reimburse the investor or insurer for losses incurred, due to material breach of contractual representations and warranties. Refer to Note 14 for the maximum exposure to loss for material breach of contractual representations and warranties.
Other residential loans held for sale carried at fair value represent preferred jumbo residential mortgage loans that the Company originated with the intent to market and sell in the secondary market either through third party sales or securitizations. The Company has elected the fair value option for these loans to provide a better offset of the changes in the fair values of the loans and the derivative instruments used to economically hedge them without the burden of complying with the requirements for hedge accounting.
Other residential loans held for sale that are carried at lower of cost or market value represent loans acquired or originated by the Company with the intention to hold these loans for a short duration and subsequently sell in the near term. Commercial and commercial real estate loans held for sale carried at the lower of cost or market represent the portion of certain commercial lines of credit that the Company has the intent to market and sell.
The following is a summary of cash flows related to transfers accounted for as sales for the three and six months ended June 30, 2014 and 2013:
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Proceeds received from agency securitizations
$
1,024,948

 
$
2,688,840

 
$
2,212,022

 
$
5,093,450

 
 
 
 
 
 
 
 
Proceeds received from nonsecuritizations sales - residential
524,874

 
335,426

 
601,261

 
677,308

Proceeds received from nonsecuritizations sales - commercial and commercial real estate
10,227

 
—

 
79,255

 
—

   Proceeds received from nonsecuritizations sales
$
535,101

 
$
335,426

 
$
680,516

 
$
677,308

 
 
 
 
 
 
 
 
Repurchased loans from agency securitizations
$
2,244

 
$
1,079

 
2,545

 
2,171

Repurchased loans from nonagency sales
2,926

 
4,939

 
4,078

 
10,216

The Company periodically transfers conforming residential GNMA mortgages in exchange for mortgage-backed securities.  As of June 30, 2014 and December 31, 2013, the Company retained $112,976 and $50,534, respectively, of these securities backed by the transferred loans and maintained effective control over these pools of transferred assets. Accordingly, the Company did not record these transfers as sales. These transferred assets were recorded in the condensed consolidated balance sheets as loans held for sale. The remaining securities were sold to unrelated third parties and were recorded as sales.
The gains and losses on the transfers which qualified as sales are recorded on the consolidated statements of income in gain on sale of loans, which includes the gain or loss on sale, change in fair value related to our fair value option loans, and the offsetting hedging positions.

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Table of Contents

In connection with these transfers, the Company recorded servicing assets in the amount of $10,552 and $22,104 for the three and six months ended June 30, 2014. All servicing assets are initially recorded at fair value using a Level 3 measurement technique. Refer to Note 7 for information relating to servicing activities and MSR.
During the three and six months ended June 30, 2014, the Company transferred $12,434 and $38,785 in residential mortgage loans from loans held for sale to loans held for investment at lower of cost or market. During the three and six months ended June 30, 2013, the Company transferred $721,220 and $745,660 in residential mortgage loans held for sale to loans held for investment at lower of cost or market. These transfers occurred as the Company changed its intent to hold these loans for the foreseeable future. A majority of these loans were originated residential preferred jumbo adjustable rate mortgages (ARM) which were intended to be sold in the secondary market at the time of originations, but as a result of changing economic conditions and the Company's capacity and desire to hold these loans on the balance sheet, the Company intends to hold these loans for the foreseeable future and has transferred these loans to the held for investment portfolio.
During the three and six months ended June 30, 2014, the Company transferred $1,291,105 and $1,432,337 of loans from held for investment to held for sale at lower of cost or market. Of transfers in the first six months of 2014, $343,542 relate to interest only loans sold during the period and $79,075 relate to troubled debt restructurings and non-performing loans sold during the period. These loans were selected for sale due to the increased Federal Deposit Insurance Corporation (FDIC) assessments associated with carrying mortgages deemed "non-traditional mortgages" and non-performing assets. The Company transferred $735,819 of longer duration preferred ARMs due to the decrease in balance sheet capacity as a result of third party loan purchases of $1,685,352 of shorter duration GNMA pool buyouts that were not previously forecasted. In addition, the Company transferred $242,256 of re-performing government insured loans that were eligible to be re-securitized. The Company also transferred $31,645 of commercial loans to help reduce its concentration in a certain segment of its commercial real estate portfolio. During the three and six months ended June 30, 2013, the Company transferred $224,652 and $326,636 of loans held for investment to held for sale at the lower of cost or market. The majority of these loans were government insured pool buyouts initially originated for the held for investment portfolio. These loans were transferred to held for sale as they re-performed and were eligible to be re-securitized into GNMA securities.
5.  Loans and Leases Held for Investment, Net
Loans and leases held for investment as of June 30, 2014 and December 31, 2013 are comprised of the following:
 
June 30,
2014
 
December 31,
2013
Residential mortgages
$
8,402,391

 
$
7,044,743

Commercial and commercial real estate
5,170,369

 
4,812,970

Equipment financing receivables
1,577,525

 
1,237,941

Home equity lines
138,886

 
151,916

Consumer and credit card
5,473

 
5,154

Total loans and leases held for investment, net of discounts
15,294,644

 
13,252,724

Allowance for loan and lease losses
(56,728
)
 
(63,690
)
Total loans and leases held for investment, net
$
15,237,916

 
$
13,189,034

As of June 30, 2014 and December 31, 2013, the carrying values presented above include net purchased loan and lease discounts and net deferred loan and lease origination costs as follows:
 
June 30,
2014
 
December 31,
2013
Net purchased loan and lease discounts
$
53,134

 
$
102,416

Net deferred loan and lease origination costs
69,849

 
54,107

During the six months ended June 30, 2014 the Company's significant purchases included acquisitions of credit impaired residential loans with a recorded investment of $1,724,252 and equipment financing receivables with a recorded investment of $86,042. Please see Note 4 for disclosure of our transfers and sales of financing receivables.
Acquired Credit Impaired (ACI) Loans and Leases — At acquisition, the Company estimates the fair value of acquired loans and leases by segregating the portfolio into pools with similar risk characteristics. Fair value estimates for acquired loans and leases require estimates of the amounts and timing of expected future principal, interest and other cash flows. For each pool, the Company uses certain loan and lease information, including outstanding principal balance, probability of default and the estimated loss in the event of default to estimate the expected future cash flows for each loan and lease pool.

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Table of Contents

Acquisition date details of loans and leases acquired with evidence of credit deterioration during the six months ended June 30, 2014 and 2013 are as follows:
 
June 30,
2014
 
June 30,
2013
Contractual payments receivable for acquired loans and leases at acquisition
$
2,967,742

 
$
345,890

Expected cash flows for acquired loans and leases at acquisition
1,820,898

 
193,549

Basis in acquired loans and leases at acquisition
1,724,252

 
179,027

Information pertaining to the ACI portfolio as of June 30, 2014 and December 31, 2013 is as follows:
 
Residential
 
Commercial and Commercial Real Estate
 
Total      
June 30, 2014
 
 
 
 
 
Carrying value, net of allowance
$
2,140,425

 
$
276,304

 
$
2,416,729

Outstanding unpaid principal balance (UPB)
2,183,758

 
277,579

 
2,461,337

Allowance for loan and lease losses, beginning of period
4,925

 
9,834

 
14,759

Allowance for loan and lease losses, end of period
4,683

 
8,025

 
12,708

December 31, 2013
 
 
 
 
 
Carrying value, net of allowance
$
646,470

 
$
331,771

 
$
978,241

Outstanding unpaid principal balance
696,222

 
339,179

 
1,035,401

Allowance for loan and lease losses, beginning of year
5,175

 
16,789

 
21,964

Allowance for loan and lease losses, end of year
4,925

 
9,834

 
14,759

The Company recorded a provision for loan loss of $459 and a reduction of provision for loan loss of $867 for the ACI portfolio for the six months ended June 30, 2014 and 2013, respectively. The adjustments to provision are the result of changes in expected cash flows on ACI loans.
The following is a summary of the accretable yield activity for the ACI loans during the six months ended June 30, 2014 and 2013:
 
Residential
 
Commercial and Commercial Real Estate
 
Total      
June 30, 2014
 
 
 
 
 
Balance, beginning of period
$
101,183

 
$
59,663

 
$
160,846

Additions
96,646

 
—

 
96,646

Accretion
(26,974
)
 
(10,606
)
 
(37,580
)
Reclassifications (from) to accretable yield
9,720

 
22,836

 
32,556

Balance, end of period
$
180,575

 
$
71,893

 
$
252,468

June 30, 2013
 
 
 
 
 
Balance, beginning of period
111,868

 
108,540

 
220,408

Additions
12,173

 
—

 
12,173

Accretion
(18,615
)
 
(17,072
)
 
(35,687
)
Reclassifications (from) to accretable yield
5,329

 
25,299

 
30,628

Balance, end of period
$
110,755

 
$
116,767

 
$
227,522

Covered Loans and Leases — Covered loans and leases are acquired and recorded at fair value at acquisition, exclusive of the indemnification agreement with former shareholders of Tygris. All loans and leases acquired through the purchase of Tygris are considered covered during the applicable indemnification period. The recorded investment of loans covered under the Tygris indemnification agreement are $12,677 and $24,330 at June 30, 2014 and December 31, 2013, respectively. As of June 30, 2014, the Company does not expect to receive cash payments under this indemnification agreement due to the performance of the underlying loans and leases.

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Table of Contents

6.  Allowance for Loan and Lease Losses
Changes in the allowance for loan and lease losses for the three and six months ended June 30, 2014 and 2013 are as follows:
Three Months Ended June 30, 2014
Residential Mortgages
 
Commercial
and Commercial Real Estate
 
Equipment Financing Receivables    
 
Home Equity Lines
 
Consumer and Credit Card
 
Total    
Balance, beginning of period
$
25,401

 
$
30,267

 
$
4,312

 
$
2,920

 
$
69

 
$
62,969

Transfers to loans held for sale
(5,049
)
 
—

 
—

 
(191
)
 
—

 
(5,240
)
Provision for loan and lease losses
1,628

 
2,390

 
1,995

 
27

 
83

 
6,123

Charge-offs
(1,810
)
 
(4,714
)
 
(938
)
 
(163
)
 
(20
)
 
(7,645
)
Recoveries
251

 
—

 
196

 
74

 
—

 
521

Balance, end of period
$
20,421

 
$
27,943

 
$
5,565

 
$
2,667

 
$
132

 
$
56,728

Three Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
30,185

 
$
38,535

 
$
3,590

 
$
4,582

 
$
175

 
$
77,067

Provision for loan and lease losses
1,654

 
(2,422
)
 
1,218

 
(387
)
 
(34
)
 
29

Charge-offs
(3,271
)
 
(2,781
)
 
(988
)
 
(627
)
 
(17
)
 
(7,684
)
Recoveries
117

 
3,549

 
253

 
120

 
18

 
4,057

Balance, end of period
$
28,685

 
$
36,881

 
$
4,073

 
$
3,688

 
$
142

 
$
73,469

Six Months Ended June 30, 2014
Residential Mortgages
 
Commercial
and Commercial Real Estate
 
Equipment Financing Receivables    
 
Home Equity Lines
 
Consumer and Credit Card
 
Total    
Balance, beginning of period
$
26,497

 
$
29,987

 
$
4,273

 
$
2,812

 
$
121

 
$
63,690

Transfers to loans held for sale
(5,049
)
 
—

 
—

 
(191
)
 
—

 
(5,240
)
   Provision for loan and lease losses
3,131

 
2,674

 
3,033

 
310

 
46

 
9,194

   Charge-offs
(4,975
)
 
(4,719
)
 
(2,127
)
 
(479
)
 
(35
)
 
(12,335
)
   Recoveries
817

 
1

 
386

 
215

 
—

 
1,419

Balance, end of period
$
20,421

 
$
27,943

 
$
5,565

 
$
2,667

 
$
132

 
$
56,728

Six Months Ended June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
33,631

 
$
39,863

 
$
3,181

 
$
5,265

 
$
162

 
$
82,102

   Provision for loan and lease losses
3,166

 
(2,746
)
 
2,256

 
(710
)
 
(18
)
 
1,948

   Charge-offs
(8,340
)
 
(4,228
)
 
(1,696
)
 
(1,116
)
 
(37
)
 
(15,417
)
   Recoveries
228

 
3,992

 
332

 
249

 
35

 
4,836

Balance, end of period
$
28,685

 
$
36,881

 
$
4,073

 
$
3,688

 
$
142

 
$
73,469


14
Table of Contents

The following tables provide a breakdown of the allowance for loan and lease losses and the recorded investment in loans and leases based on the method for determining the allowance as of June 30, 2014 and December 31, 2013:
June 30, 2014
Individually Evaluated for Impairment
 
Collectively Evaluated for Impairment
 
ACI Loans
 
Total
Allowance for Loan and Lease Losses
 
 
 
 
 
 
 
Residential mortgages
$
2,823

 
$
12,915

 
$
4,683

 
$
20,421

Commercial and commercial real estate
1,473

 
18,445

 
8,025

 
27,943

Equipment financing receivables
—

 
5,565

 
—

 
5,565

Home equity lines
—

 
2,667

 
—

 
2,667

Consumer and credit card
—

 
132

 
—

 
132

Total allowance for loan and lease losses
$
4,296

 
$
39,724

 
$
12,708

 
$
56,728

Loans and Leases Held for Investment at Recorded Investment
 
 
 
 
 
 
 
Residential mortgages
$
15,792

 
$
6,241,491

 
$
2,145,108

 
$
8,402,391

Commercial and commercial real estate
55,806

 
4,830,234

 
284,329

 
5,170,369

Equipment financing receivables
—

 
1,577,525

 
—

 
1,577,525

Home equity lines
—

 
138,886

 
—

 
138,886

Consumer and credit card
—

 
5,473

 
—

 
5,473

Total loans and leases held for investment
$
71,598

 
$
12,793,609

 
$
2,429,437

 
$
15,294,644

 
 
 
 
 
 
 
 
December 31, 2013
Individually Evaluated for Impairment
 
Collectively Evaluated for Impairment
 
ACI Loans
 
Total
Allowance for Loan and Lease Losses
 
 
 
 
 
 
 
Residential mortgages
$
9,134

 
$
12,438

 
$
4,925

 
$
26,497

Commercial and commercial real estate
248

 
19,905

 
9,834

 
29,987

Equipment financing receivables
—

 
4,273

 
—

 
4,273

Home equity lines
—

 
2,812

 
—

 
2,812

Consumer and credit card
—

 
121

 
—

 
121

Total allowance for loan and lease losses
$
9,382

 
$
39,549

 
$
14,759

 
$
63,690

Loans and Leases Held for Investment at Recorded Investment
 
 
 
 
 
 
 
Residential mortgages
$
90,472

 
$
6,302,876

 
$
651,395

 
$
7,044,743

Commercial and commercial real estate
22,747

 
4,448,618

 
341,605

 
4,812,970

Equipment financing receivables
—

 
1,237,941

 
—

 
1,237,941

Home equity lines
—

 
151,916

 
—

 
151,916

Consumer and credit card
—

 
5,154

 
—

 
5,154

Total loans and leases held for investment
$
113,219

 
$
12,146,505

 
$
993,000

 
$
13,252,724

The Company uses a risk grading matrix to monitor credit quality for commercial and commercial real estate loans. Risk grades are continuously monitored and updated by credit administration personnel based on current information and events. The Company monitors the credit quality of all other loan types based on performing status.

15
Table of Contents

The following tables present the recorded investment for loans and leases by credit quality indicator as of June 30, 2014 and December 31, 2013:
 
 
 
Non-performing    
 
 
 
 
 
Performing
 
Accrual
 
Nonaccrual
 
Total
 
 
June 30, 2014
 
 
 
 
 
 
 
 
 
Residential mortgages:
 
 
 
 
 
 
 
 
 
Residential (1)
$
5,190,370

 
$
—

 
$
14,673

 
$
5,205,043

 
 
Government insured pool buyouts (2) (3)
2,636,805

 
560,543

 
—

 
3,197,348

 
 
Equipment financing receivables
1,568,879

 
—

 
8,646

 
1,577,525

 
 
Home equity lines
136,983

 
—

 
1,903

 
138,886

 
 
Consumer and credit card
5,453

 
—

 
20

 
5,473

 
 
Total
$
9,538,490

 
$
560,543

 
$
25,242

 
$
10,124,275

 
 
 
 
 
 
 
 
 
 
 
 
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
June 30, 2014
 
 
 
 
 
 
 
 
 
Commercial and commercial real estate:
 
 
 
 
 
 
 
 
 
Mortgage warehouse finance
$
1,310,611

 
$
—

 
$
—

 
$
—

 
$
1,310,611

Lender finance
625,335

 
—

 
—

 
—

 
625,335

Other commercial finance
79,997

 
—

 
525

 
—

 
80,522

Commercial real estate
2,947,992

 
32,890

 
173,019

 
—

 
3,153,901

Total commercial and commercial real estate
$
4,963,935

 
$
32,890

 
$
173,544

 
$
—

 
$
5,170,369

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-performing
 
 
 
 
 
Performing
 
Accrual
 
Nonaccrual
 
Total
 
 
December 31, 2013
 
 
 
 
 
 
 
 
 
Residential mortgages:
 
 
 
 
 
 
 
 
 
Residential (1)
$
5,096,589

 
$
—

 
$
56,517

 
$
5,153,106

 
 
Government insured pool buyouts (2) (3)
1,219,719

 
671,918

 
—

 
1,891,637

 
 
Equipment financing receivables
1,233,414

 
—

 
4,527

 
1,237,941

 
 
Home equity lines
148,646

 
—

 
3,270

 
151,916

 
 
Consumer and credit card
5,117

 
—

 
37

 
5,154

 
 
Total
$
7,703,485

 
$
671,918

 
$
64,351

 
$
8,439,754

 
 
 
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
December 31, 2013
 
 
 
 
 
 
 
 
 
Commercial and commercial real estate:
 
 
 
 
 
 
 
 
 
Mortgage warehouse finance
$
944,219

 
$
—

 
$
—

 
$
—

 
$
944,219

Lender finance
592,621

 
—

 
—

 
—

 
592,621

Other commercial finance
84,639

 
135

 
1,106

 
—

 
85,880

Commercial real estate
2,989,493

 
34,012

 
166,745

 
—

 
3,190,250

Total commercial and commercial real estate
$
4,610,972

 
$
34,147

 
$
167,851

 
$
—

 
$
4,812,970

(1)
For the periods ended June 30, 2014 and December 31, 2013, performing residential mortgages included $6,135 and $7,879, respectively, of ACI loans greater than 90 days past due and still accruing.
(2)
For the periods ended June 30, 2014 and December 31, 2013, performing government insured pool buyouts included $1,819,917 and $350,312, respectively, of ACI loans greater than 90 days past due and still accruing.
(3)
Non-performing government insured pool buyouts represent loans that are 90 days or greater past due but remain on accrual status as the interest earned is insured and thus collectible from the insuring governmental agency.

16
Table of Contents

The following tables present an aging analysis of the recorded investment for loans and leases by class as of June 30, 2014 and December 31, 2013:
 
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