- Real Estate
- Food & Drink
Jan. 10, 2018
Sioux Falls-based Meta Financial Group Inc. is acquiring a Michigan bank in a deal that will bring its assets to more than $6 billion.
Crestmark Bancorp Inc., the holding company for Crestmark Bank, will be acquired in an all-stock transaction. The company is a commercial lender specializing in providing diverse financial solutions to businesses.
The acquisition provides Meta with a national commercial and industrial lending platform and is intended to add an immediate pipeline of insurance premium financing business and provide opportunities for innovation and synergistic cross-selling among business lines, the company said in a statement.
“With this acquisition, we continue to deliver on our goal of growth and innovation through diversification,” said Tyler Haahr, chairman and CEO of Meta. “This transformational transaction will allow us to significantly add on balance sheet loans at attractive yields with the addition of Crestmark’s national lending platform. It also creates complementary cross-sell opportunities for our insurance premium finance business. Crestmark has built an enviable lending platform, and we believe the business is poised for rapid growth. We look forward to welcoming their tenured management team and talented workforce to Meta.”
Crestmark, through Crestmark Bank, is a commercial lender offering asset-based loans, equipment finance leases and government-guaranteed loans to small and midsize businesses across the U.S. Crestmark focuses on working with a broad range of industries, including manufacturing, transportation and health care.
Crestmark will operate as a division of Meta, and the deal is expected to add 10 percent earnings per share in 2019 with a tangible earn back period of approximately 2.2 years.
“The merger of Meta and Crestmark results in the complementary combination of a leading player in the payments industry and low-cost deposit generator with a premier, high-margin asset generator,” said W. David Tull, chairman and CEO of Crestmark. “The synergies will enable the combined entity to grow and prosper. Additionally, Crestmark will be able to leverage the power of Meta’s low-cost deposit franchise and larger balance sheet to capitalize on even more growth opportunities.”
The Crestmark transaction will build upon Meta’s previous lending acquisition of AFS/IBEX, which it purchased in December 2014. With this acquisition, Meta’s growing national lending offerings will help to offset much of the seasonality created by its other divisions. Meta Payment Systems specializes in payments products, particularly prepaid cards, which spike in sales at various times of the year such as holidays and tax season. Refund Advantage, EPS Financial and Specialty Consumer Services make up Meta’s tax-related financial solutions divisions, which also are seasonal.
Crestmark will continue to operate from its offices in Troy, Mich. Upon the closing of the transaction, Tull and one other mutually agreeable director will join the Meta board.
MetaBank had $5.2 billion in assets and $1.3 billion in total loans on Sept. 30, 2017. On a pro forma consolidated basis, the combined company would have had $6.4 billion in assets and $2.2 billion in loans and leases at the end of September 2017, with lending operations throughout the U.S.
Under the terms of the agreement, Crestmark shareholders will receive 2.65 shares of Meta common stock for each share of Crestmark common stock. The aggregate value of the acquisition consideration, based on the closing price of Meta shares on Jan. 8 of $91.35, is $320.6 million, or $242.08 per Crestmark share. Meta anticipates issuing 3.3 million shares to Crestmark shareholders.
The deal is subject to regulatory and shareholder approval and is expected to close in the second calendar quarter of 2018.
Today is forecast to be Cooler than yesterday. Thunderstorms early.
Tuesday 09/18 60%
High 70° / Low 64°
Chance of a Thunderstorm
Scattered thunderstorms this morning, then cloudy skies this afternoon. Storms may contain strong gusty winds. High near 70F. Winds NE at 10 to 15 mph. Chance of rain 60%.
Wednesday 09/19 90%
High 75° / Low 61°
Thunderstorms. High around 75F. Winds E at 10 to 15 mph. Chance of rain 90%. Locally heavy rainfall possible.
Thursday 09/20 80%
High 68° / Low 49°
Thunderstorms. High 68F. SSE winds shifting to W at 10 to 20 mph. Chance of rain 80%.
Sioux Falls-based Meta Financial Group is acquiring a Michigan bank that will bring its assets to more than $6 billion.
Have a business news item to share with us?