Exclusive: TIAA in advanced talks to acquire EverBank - sources

(Reuters) - TIAA, the 98-year-old financial services firm seeking to expand in internet banking, has been in exclusive negotiations to acquire U.S. online lender EverBank Financial Corp Inc for $2.5 billion, people familiar with the matter said.

Shares rose 3.2 percent to $18.58 in mid-morning trade.

The deal would underscore TIAA’s ambitions to bolster TIAA Direct, its own internet bank launched four years ago. TIAA Direct offers consumer products from checking and saving accounts to mortgages and other loans.

Jacksonville, Florida-based EverBank said last week it was in advanced negotiations with a “well-respected financial services company” about selling itself for $19.50 per share in cash. It did not disclose the name of that company.

The sources asked not to be identified because the matter is confidential. EverBank declined to comment, while TIAA did not immediately respond to a request for comment.

Online banking has become more popular with millenials, who prefer to access their accounts digitally rather than in person. At the same time, banks have sought to simplify banking operations, minimize costs and improve customer relationships.

TIAA has sought to boost its digital operations, purchasing digital wealth management company MyVest in June.

TIAA was founded in 1918 by American tycoon and philanthropist Andrew Carnegie’s Carnegie Foundation as a financial services firm catering to people working at not-for-profit organizations in the academic, research, medical and cultural fields.

With about $854 billion in assets under management, TIAA serves 3.9 million active and retired employees.

In recent years, TIAA has sought to diversify beyond its core customer base. In 2014, it bought asset manager Nuveen Investments from Madison Dearborn Partners LLC for $6.25 billion, including debt.

In February, the firm, which had operated as TIAA-CREF, rebranded to TIAA.

Bank deal activity has picked up over the past year as lenders seek scale to boost revenues in the wake of low interest rates and increased regulatory costs.

Last month, F.N.B. Corp agreed to acquire Yadkin Financial Corp in a $1.4 billion all-stock merger. Earlier this year, Chemical Financial Corp announced a cash-and-stock merger with Talmer Bancorp, creating a community bank with $16 billion in assets.

EverBank had total assets of $27.4 billion and total deposits of $18.8 billion at the end of June, according to its recent earnings report. It went public in 2012.

Reporting by Lauren Hirsch and Olivia Oran in New York; Additional reporting by Mike Stone in New York; Editing by Jeffrey Benkoe