EverBank-WaFd Merger Could Reshape the Regional Banking Landscape

EverBank-WaFd Merger Could Reshape the Regional Banking Landscape

Vardah Gill

Fri, September 11, 2026 at 6:07 PM GMT+3 5 min read

• WAFD -0.38%

EverBank Financial has agreed to merge with WaFd, Inc. (NASDAQ:WAFD) in a $3.9 billion reverse merger to create a regional bank with about $75 billion in assets. As part of the deal, EverBank will merge into WaFd, which will remain the publicly traded company but take the EverBank Financial Corp. name. The new company will trade on Nasdaq under the EVBK ticker.

The deal brings together EverBank's digital banking platform and specialty lending business with WaFd's network of more than 200 branches across the Western U.S. Together, the two banks would create a much larger regional institution with a broader customer base, stronger funding sources, and greater scale.

Photo by Scott Graham on Unsplash

Bull and Bear Case- EverBank

EverBank could gain a lot from the merger, particularly through access to a public-market listing, a larger deposit base, and WaFd, Inc. (NASDAQ:WAFD)'s extensive branch network in the Western U.S. The combined bank would have about $75 billion in assets, giving EverBank more room to expand its commercial and consumer banking operations while relying less on wholesale funding. The deal would also help diversify EverBank's loan portfolio. Reuters reports that more than 40% of EverBank's roughly $37 billion loan portfolio is currently linked to nonbank financial companies, but that figure would fall to about 28% after the merger.

That diversification could become especially valuable as private-equity and private-credit markets face a more difficult environment. EverBank's digital banking and specialty lending capabilities could also work well alongside WaFd's established commercial relationships and physical branch presence. Management expects the combined company to achieve meaningful cost savings and eventually generate a pro forma return on tangible common equity of around 15% once the expected synergies are fully realized.

On the other hand, the biggest issue for EverBank is its significant exposure to nonbank financial companies, including businesses connected to private equity, at a time when those markets are becoming more challenging. Reuters has pointed to slower private-credit activity and growing difficulties for private-equity firms looking to exit investments, which could create additional credit and growth risks for EverBank. While the bank has built a strong track record in this area, maintaining that performance could become more difficult if credit conditions weaken.

EverBank shareholders will also own about 59.2% of the combined company, so they are not simply cashing out; they will remain exposed to the risks involved in integrating the two banks. The transaction also still needs regulatory and shareholder approval, and the expected cost savings and diversification benefits may take time to show up.

Bull and Bear Case- WaFd

WaFd, Inc. (NASDAQ:WAFD) could see a meaningful boost in both earnings and scale from the transaction. Reuters reports that the merger is expected to lift WaFd shareholders' 2027 earnings per share by about 29%, while the dilution to tangible book value is expected to be recovered in less than two years. The combined bank would have roughly $75 billion in assets, putting it among the larger regional banks in the U.S. That added scale could strengthen WaFd's competitive position as size and efficiency become increasingly important in the banking industry.

WaFd would also gain EverBank's nationwide digital platform, specialty commercial lending capabilities, and affluent customer base. At the same time, WaFd's branch network and existing commercial relationships would give the combined company a stronger physical presence. The merger could also create more opportunities in areas such as wealth management and fee-based businesses, while giving the bank a more diversified funding and revenue base.

The trade-off for WaFd, Inc. (NASDAQ:WAFD) shareholders is that they will have a much smaller ownership stake in the combined company. Their ownership will fall to roughly 40.8%, meaning they are giving up control of the regional bank they know in exchange for exposure to a much larger institution. That also means their future returns will depend more heavily on EverBank's specialty lending business and management's ability to successfully bring the two banks together.

The projected 29% increase in 2027 EPS is attractive, but it depends on the company actually delivering the expected synergies and financial benefits. The combined bank will also continue to have considerable exposure to commercial lending and nonbank financial customers. If credit quality deteriorates, integration costs come in higher than expected, regulators delay the transaction, or management fails to achieve the planned efficiencies, the expected earnings benefit could be significantly smaller.

Conclusion

The EverBank-WaFd merger looks strategically compelling for both banks, although the benefits are different for each side. EverBank gets access to a public listing, a stronger retail deposit base, a large branch network, and greater diversification away from its reliance on nonbank financial borrowers.

WaFd, Inc. (NASDAQ:WAFD), meanwhile, gets a larger and potentially faster-growing platform with a significant expected boost to earnings and greater scale. For WaFd shareholders, the clearest near-term attraction is the projected 29% increase in 2027 EPS.

EverBank's opportunity is more about transformation over the longer term, as its digital banking and specialty lending capabilities are combined with WaFd's deposits, branches, and commercial relationships. The main risks for both companies are execution, regulatory approval, integration costs, and a potential deterioration in private-credit or commercial lending markets.

Overall, the deal appears more immediately attractive from an earnings perspective for WaFd shareholders, while EverBank arguably has the bigger strategic opportunity to reshape and diversify its business over time.

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This article is originally published at Insider Monkey.