It’s official: TIAA completes acquisition of EverBank

(Courtesy of Jacksonville Business Journal)

TIAA notified the Securities and Exchange Commission on Friday that the acquisition of EverBank Financial Corp. and EverBank has been finalized.

The filing comes after the Federal Reserve Board approved the transaction June 7.

The New York-based financial services company, a leader in retirement options for educators, announced its $2.5 billion acquisition of EverBank in August 2016. It has given assurances that the headquarters will remain in Jacksonville.

EverBank CEO Robert Clements has said he will now retire.

Clements joined EverBank in 1994 and has served as Chairman and CEO since 1997. He managed the bank as it grew into the largest in Florida based on assets of more than $27 billion. Clements will continue to serve on the new bank’s board of directors.

Blake Wilson, EverBank’s president and chief operating officer, will serve as the new bank’s president and CEO. Wilson has been a part of EverBank’s executive team for the past 15 years.

Kathie Andrade, CEO of TIAA’s retail financial services business, will serve as chairman of the board of the new bank. She will also continue in her role as CEO of TIAA’s retail financial services.

The merged company possess $282.4 billion in total assets and deposits of approximately $23.3 billion.

The acquisition is seen as a catalyst for the growth of the bank.

“I think this is going to have a substantial and positive impact on the EverBank that we know today,” JaxUSA President Jerry Mallot said when the merger was announced. “The purchase was done intentionally with the opportunity for growth.”

Bank in Jacksonville makes most profitable list

(Courtesy of Jacksonville Business Journal)

BankUnited once again becomes the most profitable bank in the state of Florida, despite its profit declining from the previous quarter.

The Miami Lakes-based bank reported a profit in the first quarter in 2017 of $66.2 million, moving ahead of Raymond James Bank, which had been the most profitable bank in Florida for the previous two quarters, according to a report released this week by the Federal Deposit Insurance Corp.

Jacksonville-based EverBank came in third on the list.

BankUnited’s (NYSE: BKU) first quarter profit declined to $66.2 million from $67 million in the previous quarter, while Raymond James Bank declined to $59.3 million from $68.1 million during the same time period. Raymond James Bank is a subsidiary of Raymond James Financial Inc. (NYSE: RJF) in St. Petersburg.

The data released by the FDIC also showed that three of the five most profitable banks in Florida are based in South Florida.

Nationwide, commercial banks and savings institutions insured by the FDIC reported aggregate net income of $44 billion in the first quarter of 2017, up 12.7 percent or $5 billion from a year earlier. The nationwide increase in earnings was largely due to a 7.8 percent increase in net interest income and a 3.4 percent increase in noninterest income.

Of the 5,856 insured institutions reporting first quarter financial results, 57 percent reported year-over-year growth in quarterly earnings. The proportion of banks that were unprofitable in the first quarter fell to 4.1 percent from 5.1 percent a year earlier.

“Revenue and net income growth were strong, asset quality improved, and the number of unprofitable banks and ‘problem banks’ continued to fall,” said FDIC Chairman Martin J. Gruenberg in a statement. “Community banks reported another quarter of solid revenue and net income growth.”

Gruenberg added, “In the past two quarters, the industry has seen a slowdown in loan growth that is broad-based across major lending categories.”

The overall number of banks in the state of Florida decreased this quarter to 144 from 149 in the fourth quarter of 2016. Comparatively, back in September 2015, there were 168 banks in Florida, showing that banks in Florida are following a nationwide trend of consolidation.

Florida banks’ assets increased slightly from the previous quarter as total assets were up to $187.6 billion from $184.2 billion. Deposits also increased to $147.7 million from $143.6 million from the previous quarter.

The most profitable Florida-based banks in the first quarter were:

  • Miami Lakes-based BankUnited (NYSE: BKU), which reported a profit of $66.2 million.
  • St. Petersburg-based Raymond James Bank (NYSE: RJF), which reported a profit of $59.3 million.
  • Jacksonville-based EverBank (NYSE: EVER), which posted a profit of $42.4 million.
  • Weston-based Florida Community Bank (NYSE: FCB), which reported a profit of $39.7 million.
  • Miami-based City National Bank of Florida, which reported a profit of $24.3 million.

The least profitable Florida-based banks in the first quarter were:

  • Brandon-based Platinum bank, which reported a loss of $3.09 million. Platinum was acquired by CenterState Banks (NASDAQ: CSFL) on April 1, and the loss likely was related to closing costs for the deal.
  • Fort Walton Beach-based Beach Community Bank, which reported a loss of $1.04 million.
  • Mayo-based Lafayette State Bank, which reported a loss of $324,000.
  • Miami-based Brickell Bank, which reported a loss of $155,000.
  • Fort Walton Beach-based First City Bank of Florida, which reported a loss of $155,000.

Morgan Stanley to curb veteran adviser recruiting

(Courtesy of

The corporate logo of financial firm Morgan Stanley is pictured on the company's world headquarters in New York, U.S. April 17, 2017. REUTERS/Shannon Stapleton

The corporate logo of financial firm Morgan Stanley is pictured on the company’s world headquarters in New York, U.S. April 17, 2017.


Morgan Stanley, the biggest U.S. brokerage by head count, told brokers Tuesday that it is standing down from the expensive recruitment wars, following similar steps taken earlier this month by competitor Bank of America (BAC.N) Merrill Lynch.

Morgan Stanley, which has more than 15,000 brokers, will “significantly reduce experienced adviser recruiting,” according to a staff memo from Morgan Stanley co-heads Shelley O’Connor and Andy Saperstein that was viewed by Reuters. The news was reported earlier on Tuesday by the Wall Street Journal.

Merrill Lynch announced that, starting in June, it will no longer offer new prospects or recruits big upfront bonus checks to join its firm, a common and costly industry practice.

For years, brokerage executives have complained about the ceaseless competition among Wall Street firms to offer ever more lucrative recruitment packages to gain top advisers and their clients and assets.

The offers included a substantial sign-on check, plus a l bonus paid out over seven to 10 years based on sales and growth targets. They were used as the primary way to expand wealth management businesses, but critics said recruitment costs often outweighed returns.

Morgan Stanley will honor any approved recruitment offers made and in the “pipeline” by June 16 for brokers who are set to join the firm on or before Sept. 1, according to the memo.

UBS AG’s (UBSG.S) Wealth Management Americas last year announced plans to curb recruiting.

Jacksonville-based OnPay Solutions recognized with Fintech award

(Compliments of Jacksonville Business Journal)



OnPay Solutions, a nationally accredited AICPA service organization headquartered in Jacksonville, has been named by CIOReview as one of the “20 Most Promising Corporate Finance Tech Solution Providers” by an industry publication.

OnPay Solutions offers turn-key accounts payable payment automation solutions that integrates with any ERP and accounting or accounts payable workflow system. OnPay’s technology also greatly reduces accounts payable costs and fraud risk and can turn a company’s payables into rebates revenue.

 “OnPay Solutions is shortlisted as one of the 20 Most Promising Corporate Finance Tech Solution Providers 2017 by CIOReview magazine based on its expertise in providing innovative software solutions and the ability to delight customers and facilitating return on investments through strategic relationships, services and programs,” said Jeevan George, managing editor of CIOReview.

“By moving from costly paper check to automated electronic payment methods such as ACH, or single-issue virtual credit card for vendor payments, costs are reduced, time is saved, risk is minimized and efficiencies are maximized,” said president and CEO of OnPay Solutions Neal Anderson.

ePayments issued via OnPay Solutions’ systems provide greater security by directly linking a company’s accounting system to their bank for payments. OnPay is grateful for the honor, but they know there is work to be done.

“To us this award means we are being recognized for creating positive and streamlined change for organizations that can really make an impact,” COO of OnPay Solutions, Juliet Negrete-Anderson said. “Moving forward we must continue to talk to businesses about how they can better there business processes, reduce their costs, and reduce their fraud risks.”

Fidelity National Financial sells a subsidiary for $560M cash

(Courtesy of Jacksonville Business Journal)

Jacksonville-headquartered Fidelity National Financial announced Monday it had signed an agreement to sell one of its subsidiaries for $560 million in cash to a New York-based private equity firm.

Fidelity purchased One Digital Health and Benefits about four years ago. The Atlanta-based company then purchased two Jacksonville-headquartered companies: Compass Consulting Group and Prospective Risk Management in June 2015. The company maintains an office in Jacksonville at 4348 Southpoint Blvd.

The company that has agreed t purchase One Digital is New Mountain Capital LLC.

Fidelity said it would use the proceeds from the sale to pay off debt. After all option payments to shareholders and minority equity investors are paid, the company expects the sale to result in $330 million in cash.

“We are excited to monetize One Digital at an attractive price for our shareholders and recognize a cash monetization of approximately $330 million,” said Fidelity’s Chairman William P. Foley II. “We have seen tremendous growth in One Digital in our roughly 4 year ownership and are proud of the success One Digital and FNFV have enjoyed together. We believe that One Digital will continue to flourish under its new ownership.”

How on-demand insurance will shake up the industry

(Courtesy of Jacksonville Business Journal)

On April 6th, The Wall Street Journal reported that a fintech startup called Trov (“fintech” refers to any technology innovation in the financial services industry) had raised $45 million to bring on-demand services to the property and casualty insurance market.

Trov is an interesting case of how digital technology is disrupting traditional insurance markets. Unlike traditional homeowners’ or renters’ insurance, which provides blanket coverage, Trov enables customers to insure individual items “with the swipe of a credit card” and without talking to anyone.

At this time, Trov insures only consumer electronics and photography equipment, but they intend “to cover jewelry, sporting goods and other property that can be priced reliably.”

What are the implications to the insurance industry?

The CEO, Scott Walchek, sees his company unbundling coverage for single items the way Apple unbundled music albums with iTunes. If that is indeed the case, it would precipitate a disastrous decline in the insurance industry’s total revenue.

For comparison, total revenue of the U.S. music industry was $11.8 billion in 2003 when iTunes was introduced. Ten years later in 2012, total revenue had declined to $7.1 billion, down 39 percent. Trov may thrive, but traditional insurers will not.

While acquiring disruptive startups is an essential part of an overall innovation strategy for any established firm that can afford it, it’s not enough. It’s impossible to acquire all the latest greatest technologies. Companies must drive organic innovation and growth as well. Even Google with tens of billions of dollars of cash on hand for acquisitions is driving innovation internally, too.

What can insurers (and all of us) learn from this?

There are a number of significant hurdles that traditional insurers must clear to succeed at innovation, such as:

  • Acquiring new skills and capabilities in such things as digital technology and dynamic pricing
  • Regulatory hurdles
  • Understanding customer needs

One hurdle that is unnecessarily hindering innovation, however, is the misbelief that customers cannot tell us what they want. This misbelief keeps innovation a mysterious hit or miss event when, in fact, it can be executed as a predictable business process.

Customers can tell us what they want as long as we ask them what they want to accomplish rather than asking them for solution specifications. A skilled interviewer asking the right questions can easily identify that there is a segment of insurance customers who want to insure only a few items rather than pay more for blanket coverage.

The essential questions that every business leader must ask customers to determine are:

  • Why are you buying our product/service? What does it do for you?
  • What objectives does it enable you to accomplish?
  • What problems does it help you to prevent or resolve?
  • What metrics do you use to measure success?

Because customers can provide the answers to these questions, companies can uncover important unsatisfied needs, unmet needs that are opportunities for innovation. This is how leading companies are driving innovation and growth.

Despite claims to the contrary, consumers’ needs for insurance have not changed much over the decades. People still want to protect themselves from financial loss that could occur from the theft or damage of personal property.

What has and will continue to change, however, are the solutions that insurance companies develop to help customers accomplish their objectives. Solutions continually get better and better at satisfying consumers’ needs.

The only way for traditional insurers (and all of us) to thrive in this environment of tumultuous change is to relentlessly focus on helping target customers get their tasks done better than the competition.

Customers don’t care if the solution is a product, service, or technology; they just want to get their tasks done. As Theodore Levitt pointed out many years ago, every business must define its purpose according to the customer needs it satisfies, not the solutions it sells.

Macquarie expanding at Riverplace Tower

(Courtesy of Financial News and Daily Record)

Australia-based Macquarie Group is expanding onto another floor at Riverplace Tower on the Downtown Southbank.

The financial services company opened in Jacksonville in February 2016 on the fifth floor of the Southbank high-rise and had already leased the fourth story in anticipation of growth.


When Macquarie Group opened in February 2016 in Riverplace Tower, it showed an open floor plan designed for flexibility.

Now it’s moving into about half of that floor.

Brasfield & Gorrie LLC is the contractor for the $850,000 project to demolish the interior of 8,500 square feet of space. The city is reviewing a permit application.

The project includes demolition of all interior components including partitions, finishes, ceilings and more.

Riverplace Tower is at 1301 Riverplace Blvd.

A company spokesman in New York declined comment about the expansion, the number of employees in Jacksonville or plans to hire more.

Jobs posted online recently for Macquarie in Jacksonville include positions in tax accounting, financial control, financial accounting, product control, regulatory reporting, compliance analyst and financial analyst.

The global financial-services company started with 60 employees on the fifth floor and anticipated reaching 135 employees this year.

However, the two floors can accommodate 250.

“We are anticipating success,” said Glen Skarott, deputy group financial controller, as the office opened.

Skarott, based at the company’s headquarters in Sydney, Australia, started the Jacksonville operation. He led the site search that ended in Jacksonville after the company considered 17 cities in five countries.

Skarott, Macquarie executives and city and business leaders announced in July 2015 the company had chosen Jacksonville as a global banking shared-services office.

The team provides finance, accounting, tax and regulatory support and other services to Macquarie functions in the U.S. and in some European markets.

Its U.S. headquarters is in New York and it has offices around the country. The United States is a large growth market.

In coming to Jacksonville, Macquarie agreed to create 123 jobs by the end of this year and pay an average wage of $64,356, in addition to benefits.

Skarott said 800 applications were made for the initial Jacksonville jobs.

The first 60 employees comprised 40 local hires and 20 transfers from Macquarie Group offices in London, Hong Kong, India, New York, Houston and Sydney.

Jacksonville’s office was designed to comprise five teams: product control; legal entity control; regulatory reporting; tax reporting and compliance; and financial control.

Macquarie initially leased about 17,500 square feet on the fifth floor at Riverplace Tower. That space is set up for 125 employees, but could fit in more, Skarott said previously.

He said then that if Macquarie doesn’t need all of the fourth-floor space, it could sublease it, although Skarott said the preference was to use it.

For those first 123 jobs, the City Council approved taxpayer incentives of $393,600, comprising a Qualified Target Industry grant of up to $147,600 and a training grant up to $246,000.

Macquarie also requested $1.37 million from the state, consisting of the QTI match of up to $590,400, a Quick Action Closing Fund up to $500,000 and a Quick Response Training Grant up to $282,900.

Macquarie said it expects to invest $2.2 million into improving its leased space. Adding in IT, equipment and furniture boosts that to at least $3.1 million.

Last June, the company appointed Anthony Glenn to lead the Jacksonville office starting July 5.

At the time, Macquarie employed about 70 people in Jacksonville and was recruiting about 30 more finance professionals.

It also had invested more than $3 million into the Riverplace Tower offices.

Wells Fargo to launch pilot with Facebook Messenger

(Courtesy of Jacksonville Business Journal)

Wells Fargo & Co. is launching a pilot to test an artificial intelligence-driven experience through Facebook Messenger.

The San Francisco-based bank — the third-largest bank in Central Florida — has hinted at incorporating financial services into third-party environments for a while now. Steve Ellis, head of Wells Fargo’s Innovation Group, talked about implementing banking tools in Facebook Messenger with sister paper Charlotte Business Journal earlier this year.

“It all comes back to making it easier for customers to do business with you,” Ellis said at the time.

“Our goal is to deliver information ‘in the moment’ to help customers make better informed financial decisions,” Ellis said in a statement Tuesday. “AI technology allows us to take an experience that would have required our customers to navigate through several pages on our website, and turn it into a simple conversation in a chat environment. That’s a huge time- saving convenience for busy customers who are already frequent users of Messenger.”

Wells Fargo (NYSE: WFC) says it has provided assistance to customers through Facebook since 2009. In May 2016, the bank adopted Messenger and its main channel for addressing customer questions and problems.

Facebook users have been able to send and receive money on Messenger since 2015. The social-media platform announced April 11 users can now send and receive money between groups of people on Messenger, using Android phones or desktop computers. Facebook (NASDAQ:FB) did not immediately respond to a request for comment on the Wells Fargo pilot.

Most of Wells Fargo’s customer engagements now happen over Messenger, rather than on its public news feed.

The bank announced in February Ellis would lead a new team called the artificial intelligence enterprise solutions team. Since its sales scandal emerged last September, Tim Sloan, Wells Fargo’s new CEO, has said the bank is relying on technology to rebuild trust.

Most of the large banks in the U.S. are experimenting with artificial intelligence. Charlotte, N.C.-based Bank of America’s virtual assistant, called Erica, is expected to launch this summer.

Vale megadeal puts Morgan Stanley, Bradesco at the top of Brazil M&A

(Courtesy of

Morgan Stanley (MS.N) and Banco Bradesco BBI SA topped Brazil’s mergers and acquisitions rankings in the first quarter, buoyed by advisory roles in the $21 billion corporate reorganization of Vale SA (VALE5.SA), the world’s No.1 iron ore producer.

New York-based Morgan Stanley and Bradesco BBI, the investment-banking arm of Brazil’s No. 3 listed lender Banco Bradesco SA (BBDC4.SA), surpassed rivals in last quarter’s rankings by almost 10 times in terms of announced M&A volumes, Thomson Reuters deals intelligence data showed on Tuesday.

Both banks advised two of Vale’s main shareholders on the deal. Under the terms of the reorganization, Vale will become a company with no defined controlling shareholder within three years, a landmark step to help stifle state interference in the company.

The deal represents a milestone in a country long hobbled by corporate governance scandals and reorganizations that hurt minority investors. It comes as Brazil’s government is selling dozens of power and sanitation utilities, as well as assets of state-controlled oil company Petróleo Brasileiro SA (PETR4.SA).

Companies announced $27.121 billion worth of Brazil-related mergers from January to March, up six-fold from a year earlier, the data showed. Excluding Vale, the value of M&A deals reached $6.195 billion, less than half the amount seen in the same period four years ago, before the recession struck.

The number of deals in the first quarter fell 35 percent to 108 from a year earlier, the data showed.

Stricter legal and regulatory scrutiny has continued to put the brakes on M&A announcements this year, compounding the impact of the recession and political turmoil that has kept keeping buyers and sellers at odds over valuations.

According to Alessandro Zema and Eduardo Miras, co-heads of Brazil investment banking for Morgan Stanley, M&A deals should accelerate this year, even if increased debt and equity capital markets activity posed some competition for the segment.

Declining borrowing costs and a stable currency could spur Brazil’s recovery and the pace of takeovers through year-end, they said. More consolidation efforts could take place, as companies try to cut debt, improve their capital and tax structures, and become more efficient.

“It’s very hard for a strategic player or a financial sponsor to ignore Brazil because of the cycle,” Zema said. “The country’s economy offers relevant opportunities for global players in almost every segment of activity.”

According to Alessandro Farkuh, Bradesco BBI’s head of M&A, more strategic players will seek to enter Brazil as President Michel Temer’s administration passes pension, labor market and tax reforms aimed at restoring confidence in the economy.

“Activity will grow in a more robust manner once the macroeconomic uncertainties dissipate and players feel the outlook has turned much more predictable,” Farkuh said.

A challenge for buyers and sellers alike remains a lengthening M&A execution cycle. Still, growing interest from multinational companies and buyout firms in potential targets “is leading to a more adequate pricing of assets,” Bradesco BBI’s Farkuh said.

Even as the list of delayed deals kept growing last quarter, advisory work remains intense, forcing banks to shuffle staff from areas with lighter workloads to handle more M&A and debt restructuring transactions.

Morgan Stanley topped value rankings after working on four transactions worth $21.663 billion, followed by Bradesco BBI’s seven deals valued at $21.424 billion. Morgan Stanley last topped Brazil’s first-quarter M&A league tables in 2000.

Itaú Unibanco Holding SA’s (ITUB4.SA) investment bank led the number of deal rankings after working on 10 transactions.



UARTER 1-March 31) (Jan. UARTER

2017 1-March 2016


1 Morgan Stanley & $21.663 bln 4 14


2 Banco Bradesco BBI $21.424 bln 7 6


3 Banco BTG Pactual $1.875 bln 4 1


4 Citigroup Inc $1.656 bln 1 n.a.

5 Goldman Sachs $1.656 bln 2 n.a.

Group Inc

6 Itaú BBA SA $919.4 mln 10 2

7 Credit Suisse $706.4 mln 1 14

Group AG

8 JPMorgan Chase & $608.4 mln 2 14


9 Bank of America $517.9 mln 2 4

Merrill Lynch

10 PriceWaterhouseCoo $296.4 mln 2 14


SUBTOTAL WITH $26.123 bln 39 –


INDUSTRY TOTAL $27.121 bln 108 –


Here’s where Chase is opening new branches in Florida

(Courtesy of Jacksonsville Business Journal)

Chase will open 16 new branch offices in Florida this year, including in the Jacksonville area.

Chase, the U.S. consumer and commercial banking business of JPMorgan Chase & Co. (NYSE: JPM), also is entering the Gainesville and Ocala markets as part of its Florida expansion.

Other new branches are planned for Fort Myers, Tampa and Orlando.

While the number of branches industrywide, and at Chase, has been shrinking overall, a brick-and-mortar presence is critical to the bank’s growth, said Thasunda Duckett, CEO, consumer banking for JPMorgan Chase, during an investor day presentation on Feb. 28.

Chase had 5,258 branches overall at the end of 2016, down 3 percent from 5,413 branches in 2015, an investor presentation said (see below). But the average deposits per branch employee, a measure of efficiency, jumped 10 percent, from $11.4 million in 2015 to $12.5 million in 2016.

The company opens branches in higher growth areas and consolidates branches with lower servicing volume, Duckett said.

The bank will open four offices in Ocala and two in Gainesville by the end of year, the press release said. The new branches will offer a full range of services and the bank plans to hire local staff.

Jacksonville and Orlando each are in line for one new branch. Sarasota and Fort Myers will get two branches. One of the Fort Myers branches already has opened, a spokesman said.

Since the 2008 acquisition of Washington Mutual, Chase has added nearly 250 branches in Florida and now has 398 across the state. As of June 30, the most recent date for which information is available from the Federal Deposit Insurance Corp., Chase was the fourth largest retail bank in Florida with a 5.3 percent deposit market share.

In the seven-county Tampa Bay area, Chase had a 3.7 percent deposit market share as of June 30, and was the seventh-largest retail bank.

JPMorgan Chase employs nearly 14,000 people across Florida in all its lines of business and the firm contributed $10.7 million in nonprofits statewide in 2016.