Market Overview

Small-Cap Corner: EverBank Financial


With all the attention paid to last week's Facebook (Nasdaq: FB) IPO, it's not surprising that some other recent newly public stocks have gotten lost in the shuffle. Such is life for EverBank Financial (NYSE: EVER). The Florida-based lender made a tepid debut earlier this month at $10 a share, down from an expected range of $11-$12 and well below the initial range of $12-14.

At least EverBank, the largest Florida-based lender, can say one thing Facebook cannot: It's above its IPO price today. Private equity firms TPG, Sageview Partners and New Mountain Partners are EverBank investors.

With a market cap of $1.2 billion, EverBank currently resides at the higher end of the small-cap spectrum, but the potential allure of the stock going forward could be the bank's ability to function as a backdoor weak dollar play. While EverBank does engage in typical banking endeavors, most customers and investors that are familiar with the company know that EverBank offers CDs and other deposit products that feature interest rates tied to select foreign currencies.

Want a CD with exposure to a high-yielding currency such as the Aussie Dollar? EverBank has a product for that. EverBank offers CD with exposure to pounds, yen, Swedish krona, francs and New Zealand dollars, among others. The bank also has basket products that include exposure to riskier currency fare such as Hungarian forints and Czech koruna.

From 2007 through the end of 2011, EverBank saw its assets under management more than double. At the end of 2011, the bank had $13 billion in assets and $10.3 billion in deposits, according to a recent news release.

For what it's worth, EverBank hasn't even public for a month and insiders are already buying shares. An SEC filing shows Director Merrick R. Kleeman bought 118,751 shares of EVER, for a cost of $10.66 each, for a total investment of $1.27M, Forbes reported.

Bottom line: EverBank's biggest near-term hurdle is clear. No matter how unique its product offerings are, this is a bank stock and it will be treated accordingly by the market. Remember, it was the large-cap banks that led the sector higher earlier this year, and unless small-cap and financial services are re-embraced at the same time in the near future, shares of EverBank could easily be plagued by glum performances of the firm's more notorious and larger rivals.

Posted-In: Long Ideas News Short Ideas Small Cap Analysis Offerings Forex Small Cap IPOs


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