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The group of private-equity firms that bought EverBank had been in search of an exit

Florida-based EverBank Financial has reached a deal to pursue a reverse merger with a smaller bank in the Pacific Northwest, WaFd WAFD 0.89%increase; up pointing triangle, the companies said.

The deal would create a regional bank with some $75 billion in assets.

WaFd, which recently changed its name from Washington Federal Bank, has a market value of around $2.7 billion and around $28 billion in assets. EverBank has a valuation of around $3.9 billion, the companies said.

EverBank was bought by a group of private-equity firms in 2023. It has assets of around $47 billion.

WaFd would remain a publicly traded company in the deal, change its name to EverBank Financial and trade under the ticker “EVBK.”

The private-equity firms that bought EverBank from the pension fund TIAA had been exploring either selling or taking EverBank public, The Wall Street Journal previously reported. Those firms included Stone Point Capital, Warburg Pincus, Reverence Capital Partners, Sixth Street and Bayview Asset Management.

The group of investors and TIAA, which kept a stake in the 2023 sale, would collectively own around 59.2% of the combined company after the deal with WaFd.

The combined bank would be within the ranks of the top 50 in the U.S. by assets. Industry executives increasingly say scale matters more than ever.

That was one of the first things WaFd CEO Brent Beardall and EverBank CEO Greg Seibly talked about when they had dinner together to discuss a potential transaction.

“You’ve got to be bigger to be able to survive,” Seibly said in an interview. A lot of banks are “staring down the same thing.”

EverBank operates mostly as a digital bank, with a few dozen branches, primarily in Florida and California. Based in Seattle, WaFd has more than 200 branches across Washington, Oregon and other Western states.

“The strength on one side complements a gap on the other side,” Seibly said.