Meta Financial Group, the holding company for the federally chartered savings bank MetaBank, will acquire Crestmark Bank in an all-stock transaction. Upon the closing of the transaction, Crestmark will operate as a division of MetaBank.

Crestmark will continue to operate from its offices in Troy, MI. Upon the closing of the transaction, W. David Tull, Crestmark’s chairman and CEO, and one other mutually agreeable director, will each join the Meta board, and Michael “Mick” Goik, president and COO of Crestmark, will become EVP of MetaBank and president of the Crestmark division of MetaBank.

This acquisition will provide 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. It is expected to be immediately accretive to 2018 earnings per share, excluding merger costs, approximately 10% earnings per share accretive for fiscal year 2019 and to have a tangible book value earn back period of approximately 2.2 years

“With this acquisition, we continue to deliver on our goal of growth and innovation through diversification,” said J. 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.”

“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 Tull. “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 are also seasonal.

Pursuant to the terms of the agreement, Crestmark will merge with and into Meta, and Crestmark Bank will merge with and into MetaBank. MetaBank had $5.2 billion in assets and $1.3 billion in total loans on September 30, 2017. On a pro forma consolidated basis, the combined company would have had approximately $6.4 billion in assets and $2.2 billion in loans and leases at the end of September 2017, with lending operations throughout the US. Under the terms of the agreement.

The transaction is expected to close in the second calendar quarter of 2018.

Raymond James is acting as financial advisor to Meta and delivered a fairness opinion to the Meta board of directors. Katten Muchin Rosenman is serving as legal counsel to Meta. Sandler O’Neill + Partners is acting as financial advisor to Crestmark. Dickinson Wright is serving as legal counsel to Crestmark.