KBRA Affirms Ratings for EverBank Financial Corp and WaFd, Inc. Following Merger Announcement; Outlooks Revised to Developing

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”) following the recently announced merger agreement with Seattle, Washington-based WaFd, Inc. (NASDAQ: WAFD). In addition, 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 its subsidiary, EverBank, National Association. The Outlook for all long-term ratings is revised to Developing from Negative.

KBRA also affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, the preferred shares rating of BBB-, and the short-term debt rating of K2 for WaFd, Inc. In addition, 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 the bank subsidiary, WaFd Bank. The Outlook for all long-term ratings is revised to Developing from Stable.

Key Credit Considerations

On September 7, 2026, WaFd, Inc. (“WAFD”) and EverBank Financial Corp. (“EverBank”) announced a definitive agreement to combine in an approximately $3.9 billion, all-stock reverse merger, creating a ~$75 billion asset banking organization with ~$58 billion of loans and ~$59 billion of deposits. WAFD will be the legal acquirer and remain the publicly traded holding company, although it will be renamed EverBank Financial Corp. and trade under the ticker EVBK. EverBank will be the accounting acquirer, resulting in WAFD's assets and liabilities being subject to purchase accounting. At the bank level, WaFd Bank will merge into EverBank, N.A., which will remain an OCC-regulated national bank. The transaction is expected to close in 1Q27, subject to WAFD shareholder and customary regulatory approvals; EverBank shareholder approval has already been obtained.

The ratings reflect EverBank's established position as a national specialty commercial banking franchise, which is expected to be significantly enhanced by the pending merger with WAFD. The transaction meaningfully expands the company's scale (4th largest bank holding company headquartered in the Western U.S. among banks with less than $1 trillion in assets) and geographic reach (254 locations across 11 states) while combining EverBank's national specialty commercial lending and digital deposit platforms with WAFD's established Western U.S. branch franchise and relationship-based commercial banking capabilities.

The revision of EverBank’s Outlook to Developing from Negative reflects EverBank's comparatively modest capitalization and weaker funding profile relative to similarly rated peers, together with uncertainty around realization of the prospective profitability benefits from the WAFD merger and associated integration risks. While EverBank's standalone profitability has improved materially, with ROAA of 0.96% in 1H26, a comparatively low NIM and limited noninterest income remain earnings constraints. The merger strengthens the prospective earnings profile, through increased scale, balance sheet optimization, and ~$135 million of anticipated annual pre-tax cost savings, with management targeting ROAA of ~1.15% by 2028 and an efficiency ratio of ~45%. However, realization of these benefits remains subject to successful integration, despite substantial upfront integration planning and management's prior M&A experience. Only ~40% of anticipated cost savings are expected to be realized during 2027, with full realization targeted by 2H28.

Asset quality remains a relative credit strength, supported by EverBank's historically low credit losses and KBRA's constructive assessment of its underwriting and risk management processes. The pending merger provides meaningful diversification, particularly to EverBank's sizable NDFI exposure, which represented ~43% of standalone loans, the highest concentration among KBRA-rated peers, and is expected to decline to ~28% of pro forma loans. Nevertheless, the combined institution will retain meaningful exposure to specialty commercial lending, including several newer EverBank verticals that have not been tested through a full credit cycle, while management intends to continue repositioning lower-yielding residential assets toward higher-yielding commercial lending. Conversely, EverBank’s loan portfolio provides meaningful diversification to WAFD’s CRE exposure, with the combined company’s CRE concentration expected to decline to ~266% of total capital from 342% at WAFD standalone. Positively, WAFD also has a favorable historical credit profile, and the transaction incorporates a $313 million credit mark on WAFD's loan portfolio, equivalent to ~1.55% of projected loans at closing and approximately 1.4x WAFD's projected allowance, which we view as conservative.

The merger should provide greater funding diversification, although the combined company's funding profile is expected to remain weaker than similarly rated peers. EverBank's nationally sourced digital deposits provide considerable scale and demonstrated stability, but carry comparatively high costs, while WAFD contributes a more traditional, relationship-oriented branch deposit franchise with lower funding costs than EverBank’s digital platform; however, deposit cost of the combined franchise is expected to remain meaningfully above the rated peer average. At 2Q26, core deposits represented ~84% of EverBank's total funding compared with 71% for WAFD, noting that a meaningful portion of WAFD’s noncore funding is comprised of long-tenured relationship-based jumbo time deposits. The combined company would have ~$59 billion of deposits and a pro forma deposit cost of 2.73% based on 2Q26 balances, compared to EverBank’s reported 3.01% deposit cost in 1H26. Management intends to preserve WAFD's lower-cost relationship deposits, grow commercial and small-business deposits, and reduce the digital platform's proportion of total deposits over time from the ~30% pro forma contribution at close. Nonetheless, the combined company’s loan-to-core deposit ratio is expected to remain somewhat elevated relative to similarly rated peers, limiting near-term improvement in the funding profile. That said, the mark-to-market treatment of WAFD’s sizable residential mortgage portfolio ($7.6 billion at 2Q26) provides meaningful liquidity optionality should management elect to sell a portion of the portfolio, which remains under consideration.

Capitalization is expected to remain comparatively modest for the rating category following the transaction. EverBank's CET1 ratio of 10.3%, Tier 1 capital ratio of 12.0%, and total risk-based capital of 14.2% at 2Q26 were below peer averages following several years of capital deployment through special dividends, acquisitions, and organic balance sheet growth. The merger is expected to further reduce regulatory capital cushions initially, with management projecting pro forma closing ratios of approximately 9.8% CET1, 11.2% Tier 1 capital, and 12.6% total risk-based capital, as well as a TCE ratio of ~7.0%, inclusive of modeled transaction costs and balance sheet-related marks. However, stronger prospective earnings should support internal capital generation, with management estimating ~90 bps of annual CET1 generation before dividends and targeting a CET1 ratio of 10%–11% over time. KBRA views the expected capital profile as providing an adequate cushion relative to regulatory minimums, but comparatively limited financial flexibility given the size and complexity of the combined institution, ongoing commercial loan growth, and integration risks. Potential changes under the proposed Basel III framework could provide additional regulatory capital capacity, though KBRA does not currently incorporate this benefit given uncertainty around final implementation and the continued shift toward higher-risk-weighted commercial assets.

The revision of WAFD’s Outlook to Developing from Stable reflects the pending merger with EverBank and the expected convergence of WAFD’s credit profile with EverBank’s upon completion. EverBank shareholders will own ~59% of the combined company, represents the majority of combined assets and earnings, and its management team will hold several key leadership positions, including CEO, CFO, CRO, and CCO. While the transaction provides meaningful benefits to WAFD through increased scale, earnings diversification, and accelerated profitability improvement, the combined organization will also inherit EverBank's comparatively weaker capitalization and funding metrics and sizable specialty commercial lending exposures. Accordingly, WAFD's credit profile following closing is expected to align with EverBank's ratings and Outlook.

Rating Sensitivities

The Developing Outlook reflects KBRA's view that the likely direction of EverBank’s ratings is uncertain given the pending transaction. A rating downgrade is possible over the medium term if EverBank's profitability, core capitalization, and funding profile, inclusive of the pending merger with WAFD, remain below those of similarly rated peers. Downward rating pressure could also emerge in the event of material integration challenges, weaker-than-expected realization of projected earnings benefits, meaningful deterioration in asset quality, or more aggressive financial management. A rating upgrade is unlikely over the Outlook horizon; however, successful merger integration accompanied by sustained improvement in profitability, funding, and core capital ratios that more closely converge with similarly rated peers could support a revision of the Outlook to Stable.

As noted above, the Developing Outlook on WAFD’s ratings reflects the alignment of its credit profile with that of EverBank ahead of the proposed merger. Assuming all required approvals are received and the merger is completed, WAFD’s existing ratings would be withdrawn. In the event the transaction is terminated, KBRA would reassess WAFD’s ratings and Outlook based on its standalone credit profile.

To access ratings and relevant documents, click here.

Methodology