Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

Last week, MetLife Inc. (MET - Analyst Report) agreed to vend its Warehouse Finance business to the financial firm EverBank Financial Corp. While the terms and conditions of the agreement remain undisclosed, the deal is expected to culminate by the first half of this year.

Both the parties have received all the regulatory approvals. Meanwhile, MetLife appointed K&L Gates LLP and Deutsche Bank Securities Inc. of Deutsche Bank AG (DB - Analyst Report) as its advisors. Besides, EverBank took the advice from law firms of Alston & Bird LLP and BuckleySandler LLP along with the investment banking firm of Goldman Sachs Group Inc. (GS - Analyst Report).

The acquisition of MetLife’s Warehouse Finance business is expected to be in line with EverBank’s long-term growth strategy of growing its mortgage business, whereby the acquisition is expected to be accretive to its assets by about $400 million.

Meanwhile, disposing the warehouse finance business will also deeply liberate MetLife from the stringent Federal regulations attached with its bank holding company status. Hence, management has been undertaking this step to re-focus on its core insurance operations. These efforts are expected to be accretive to earnings in the long run.

Accordingly, in early January this year, MetLife packed up its forward residential mortgage business, which originated under MetLife Home Loans. Furthermore, in an attempt to bow out of its banking company status, on December 28, 2011 MetLife had agreed to sell its bank deposits worth $7.5 billion to GE Capital – the financial services unit of General Electric Co. (GE - Analyst Report). The deal is expected to culminate by the end of the first half of 2012, subject to regulatory approvals.

Overall, we believe MetLife should continue to benefit from its diversified business mix as well as its leading brand. The company's capital position remains one of the sturdiest in the industry and is supported by fundamental growth, thereby giving tough competition to its peers such as Prudential Financial Inc. (PRU - Analyst Report) and American International Group Inc. (AIG - Analyst Report). Besides, the ALICO acquisition has already started to contribute to the company’s growth besides inflating the value of investment portfolio.

Although, low interest rate environment along with detrimental performance of MetLife Bank and U.S. auto-home are likely to impact the results in the upcoming quarters, the long-term upside potential remains intact. This opinion is also in line with the Zacks Rank #3, implying a short-term Hold and long-term Neutral recommendation on the stock. Meanwhile, MetLife is scheduled to release its fourth quarter 2011 financial results after the market closes on February 14, 2012.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%