EverBank's $3.9 billion reverse merger and acquisition of WAFD (WAFD.US) confirms the “survival of scale” trend in the US banking industry

The Zhitong Finance App learned that EverBank Financial, a digital bank headquartered in Florida, announced on Monday that it has agreed to reverse merger and acquire Seattle-headquartered WAFD (WAFD.US) at a price of 3.9 billion US dollars. The deal will form a regional bank with assets of about 75 billion US dollars.

According to the agreement, EverBank will be merged into WAFD, which will continue to trade on the NASDAQ as a listed company after changing its name to “EverBank Financial Corp” and changing its stock code to “EVBK.” After the transaction is completed, EverBank's current shareholders will hold approximately 59.2% of the combined company's shares, and WAFD shareholders will hold the remaining 40.8%.

The two sides expect the merger to be completed in early 2027, and is expected to drive WaFD's 2027 earnings per share increase by about 29%, and the dilution of tangible book value is expected to be recovered within two years.

Based on the size of assets, the combined banks will rank among the top 50 in the US banking industry. Industry executives are increasingly convinced that scale is more important than ever. This was one of the top questions raised by WAFD CEO Brent Beard and EverBank CEO Greg Sibley when they had dinner and discussed a potential deal.

“You have to get bigger to survive,” Sibley said in an interview. Many banks face “the same challenges.”

Business complementarity is another logical support for this merger. EverBank mainly operates as a digital bank, with only a few dozen branches, mainly in Florida and California. WaFD has more than 200 branches in Washington, Oregon, and other western states. “One side's strengths just make up for the other's shortcomings,” Seberley said.