Aligning with its long-term strategic plan to refocus on its retirement business and Nuveen, its asset manager, TIAA entered into a definitive agreement to sell TIAA Bank to new investors with experience in financial services. TIAA will retain a non-controlling ownership stake in the bank. Terms of the transaction are not being disclosed.
Under the agreement, which is subject to regulatory approvals, nearly all the bank’s current assets and business lines will be acquired by the new ownership, with the exception of TIAA Trust, which currently is part of TIAA Bank but is closely aligned with the wealth business that complements TIAA’s retirement organization and mission. TIAA will apply for a new, separate national trust bank charter, and the TIAA Trust business will become a subsidiary of TIAA.
The new investors that will each own non-controlling interests in the bank after the transaction closes are funds managed by Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management.
Proceeds from the bank sale will be returned to TIAA’s general account, which the company manages for the benefit of its retirement clients. After the transaction closes, TIAA and Nuveen will continue to have ongoing business relationships with the bank.
“As we refocus on retirement, we have decided now is the appropriate time for TIAA Bank to begin a new chapter under new ownership,” David Nason, chief operating officer of TIAA, said. “The changes we’re announcing are in the best interest of TIAA and our retirement clients and for our bank’s consumer and commercial clients and the incredible TIAA Bank associate team. TIAA is making this move from a position of strength, and we are confident the bank is well-positioned for future growth and success.”
The transaction is expected to close in 2023 after final regulatory approvals and the satisfaction of other closing conditions.
TIAA Bank’s headquarters and main base of operations will remain in Jacksonville, FL. The bank will operate under a new name, which will be announced when the transaction closes. TIAA and the bank’s new ownership anticipate a smooth transition for TIAA Bank consumer and commercial clients, with no expected changes to the bank’s products and services. The transaction will have no impact on TIAA retirement accounts.
“All of us at TIAA Bank are excited about the opportunities ahead for our clients, our associates and the communities where we work and live,” Steve Fischer, president and CEO of TIAA Bank, said. “As a part of TIAA, our bank has grown and welcomed new consumer and commercial clients across the country, and we plan to continue growing and building on our long tradition of exceptional client service and innovation in the years ahead.”
J.P. Morgan Securities acted as exclusive financial advisor to TIAA on this transaction, and Davis Polk & Wardwell acted as its legal counsel. Jefferies acted as lead financial advisor, Goldman Sachs served as financial advisor and Wachtell Lipton Rosen & Katz served as legal counsel to the new investors. Cleary Gottlieb Steen & Hamilton served as legal counsel to Sixth Street. Simpson Thacher & Bartlett served as legal counsel to Bayview Asset Management.