Meta Financial Group, Inc., Sioux Falls, S.D., reached an agreement to sell its community bank division to Central Bank, Storm Lake, Iowa.
Central Bank will receive MetaBank’s community bank branches in Iowa and South Dakota, which will be rebranded as Central Bank, as well as deposits and their fixed assets, representing about $270 million of deposits and approximately $265 million of loans.
MetaBank will retain about $935 million of loans associated with its community bank sector that will run-off over time and will be serviced by Central after the acquisition.
“[The merger] will allow both companies to focus on their core businesses and provide the highest level of service and value to the customers, employees and shareholders,” said Brad Hanson, president and CEO of Meta Financial Group.
“This transaction aligns with Meta’s strategy to focus on improving yields from our national lending platforms, growing deposits in our payments division and improving efficiencies by streamlining operations; while serving key markets often overlooked by traditional banks,” Hanson said.
The transaction is expected to close in the first quarter of 2020. It’s also expected to result in a pre-tax net gain of about $18.5 million for the $6 billion holding company, which it intends to deploy into appropriate share repurchases and other corporate purposes.
In addition to the divestment of the company’s community banking sect, it also disposed of assets related to a previously disclosed ag relationship that were held in “other real estate owned,” which represented 46 basis points of non-performing assets as of September.
Central Bank agreed to offer employment to all current MetaBank community bank employees pursuant to the terms of the agreement.
“MetaBank employs experienced and valued bankers who represent our vision of community banking,” said John Brown, president and CFO of the $900 million Central.
“We look forward to working together to make a stronger community bank, bringing new opportunities to our communities, customers and employees,” Brown said.