TIAA Confirms Deal to Buy EverBank for $2.5 Billion

TIAA has reached a deal to buy EverBank Financial Corp. for $2.5 billion in cash, an agreement that comes about two weeks after the Florida-based lender said it was in talks to be acquired.

In an unusual move, EverBank had said late last month that it was in talks for buyout at $19.50 a share—matching the terms outlined Monday—but it didn't identity the bidder at that time. The Wall Street Journal and other outlets have since reported that TIAA was the interested party.

Its offer marks a 26% premium over where shares traded ahead of media reports about the talks. The stock edged up 2.7% to $19.15 premarket.

Buying EverBank would give TIAA $27.4 billion in assets and $18.8 billion in deposits. EverBank focuses on online and mobile banking but also has some offices. While EverBank is based in Florida, it holds loans and deposits from across the U.S. and focuses on making big mortgages called jumbo loans that banks increasingly find attractive.

EverBank was established in 1998 and has grown through a series of acquisitions, including Tygris Commercial Finance Group in 2009, Bank of Florida in 2010 in an FDIC-assisted transaction, and MetLife Inc.'s warehouse finance business. It went public in 2012.

Meanwhile, TIAA, which already has a small online bank, has managed retirement assets for employees of universities and nonprofits for decades.

Midsize lenders are among the most active deal makers in the financial industry these days. Smaller banks face pressure to grow or try to sell themselves, as low interest rates sap profits and regulatory costs mount. By becoming larger, they can spread costs over a broader base of customers and assets.

Certain stockholders and executives with the power to vote about 22% of EverBank's shares outstanding have entered into agreements with TIAA to vote in favor of the deal, which is expected to close in the first half of 2017.

Write to Rachel Louise Ensign at [e-mail] and Telis Demos at [e-mail]

(END) Dow Jones Newswires

August 08, 2016 08:25 ET (12:25 GMT)

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