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ACQUISITIONS | 12 Months Ended
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Sep. 30, 2018
Business Combinations [Abstract] |
ACQUISITIONS | ACQUISITIONS CRESTMARK BANCORP, INC On August 1, 2018, the Company completed the Crestmark Acquisition. Crestmark previously provided business-to-business commercial financing. With this acquisition, the Company acquired all assets and assumed all liabilities of Crestmark at a purchase price of $295.8 million paid in stock. The aggregate value of the acquisition was based upon the issuance of 9,919,512 shares of Meta common stock and the closing price of Meta shares on July 31, 2018 of $29.82. The Company recorded goodwill of $204.5 million associated with the acquisition. Goodwill resulted from expected operational synergies and expanded product lines. See Note 20 to the Consolidated Financial Statements for further information on goodwill. The Company has included the financial results of Crestmark in its Consolidated Financial Statements as of the acquisition date. The Crestmark Acquisition has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the acquisition date. The Company made significant estimates and exercised judgment in estimating fair values and accounting for the acquired assets and liabilities. The Company recognized $9.0 million in transaction-related expenses during fiscal 2018. The transaction expenses are reflected on the Consolidated Statements of Operations primarily under legal and consulting. The following table represents the approximate fair value of the assets acquired and liabilities assumed of Crestmark on the Consolidated Statements of Financial Condition as of August 1, 2018:
| As of August 1, 2018
| (Dollars in Thousands)
Fair value of consideration paid |
Cash paid | $ | 6 |
Stock issued | 295,767 |
Total consideration paid | 295,773 |
Fair value of assets acquired |
Cash and cash equivalents | 58,858 |
Investment & MBS securities | 25,349 |
Loan and lease receivables held for sale | 17,494 |
Loan and lease receivables held for investment | 1,046,010 |
Federal Home Loan Bank stock, at cost | 33 |
Accrued interest receivable | 5,381 |
Premises, furniture, and equipment | 18,458 |
Rental equipment | 98,977 |
Foreclosed real estate and repossessed assets | 1,209 |
Intangible assets | 28,253 |
Other assets | 22,170 |
Total assets | 1,322,192 |
Fair value of liabilities assumed |
Time certificates of deposits | 295,590 |
Wholesale certificates of deposits | 825,076 |
Total deposits | 1,120,666 |
Short-term debt | 11,642 |
Long-term debt | 3,609 |
Accrued interest payable | 3,581 |
Accrued expenses and other liabilities | 88,301 |
Total liabilities assumed | 1,227,799 |
Fair value of non-controlling interest assumed |
Non-controlling interest | 3,167 |
Total non-controlling interest | 3,167 |
Fair value of net assets acquired | 91,226 |
Goodwill resulting from acquisition | 204,547 |
Crestmark was consolidated into the Company's Consolidated Financial Statements starting on August 1, 2018. The aggregate net interest income and net income of Crestmark consolidated into the Company's financial statements since the date of acquisition was $19.1 million and $9.7 million, respectively, for the year ended September 30, 2018. The following financial information presents the Company's results as if the Crestmark Acquisition on August 1, 2018 had occurred on October 1, 2016:
| Twelve Months Ended
| September 30,
(Dollars in Thousands Except Share and Per Share Data) | 2018 |  | 2017
Net interest income | $ | 206,822 |  |  | $ | 181,184 |
Net income attributable to parent | 74,640 |  |  | 64,390 |
Basic earnings per share | 1.91 |  |  | 1.71 |
Diluted earnings per share | 1.91 |  |  | 1.70 |
These pro forma results are based on estimates and assumptions, which the Company believes are reasonable. They are not the results that would have been realized had the Crestmark Acquisition actually occurred on October 1, 2016 and are not necessarily indicative of the Company's Consolidated Statements of Operations in future periods. The pro forma results include adjustments related to purchase accounting, primarily related to amortization of intangibles created and accretion of loan discount. SCS On December 14, 2016, the Company, through MetaBank, completed the acquisition of substantially all of the assets and specified liabilities of Specialty Consumer Services LP ("SCS"). The assets acquired by MetaBank in the SCS acquisition include the SCS trade name, propriety underwriting model and loan management system and other assets. SCS primarily provides consumer tax advance and other consumer credit services through its loan management services and other financial products. Under the terms of the purchase agreement, the aggregate purchase price paid at closing, which was based upon the December 14, 2016 tangible book value of SCS, was approximately $7.5 million in cash and the issuance of 339,984 shares of Meta common stock. In addition, contingent cash consideration of $17.5 million was paid out in the third quarter of fiscal 2017 and equity contingent consideration of 793,293 shares of Meta common stock was paid in the fourth quarter of fiscal 2017 following the achievement of specified performance benchmarks (described more fully below). The Company acquired assets with approximate fair values of $28.3 million of intangible assets, including customer relationships, trademark, and non-compete agreements, and negligible other assets, resulting in goodwill of $31.4 million. Subject to the equity earn-out terms of the purchase agreement, SCS was eligible to receive up to an aggregate of 793,293 shares of Meta common stock within 20 days after the applicable equity earn-out statement was deemed final if certain targets achieved. The equity earn-out measurements were as follows; 1) if, as of an equity earn-out measurement date, the anticipated 2018 measured gross profit met or exceeded the statement amount, MetaBank would deliver to SCS a stated number of shares of Meta common stock; 2) if, as of an equity earn-out measurement date, the aggregate anticipated loan volume under all 2018 eligible contracts was greater than or equal to the agreed upon volume amount, then MetaBank would deliver to SCS a stated number of shares of Meta common stock; and 3) if, as of an equity earn-out measurement date, each agreement specified in the contract was in effect and none of such agreements was amended or modified as of such time (except as approved in writing by the President of MetaBank, in his or her sole discretion), then MetaBank would deliver to SCS a stated number of shares of Meta l common stock. None of the equity earn-out payments was contingent on the achievement of any of the other equity earn-out targets. Upon the determined equity earn-out measurement date, MetaBank determined that each of the three earn-out measurement targets was achieved and the Company issued an aggregate of 793,293 shares of Meta common stock in the fourth quarter of fiscal 2017. Subject to the cash earn-out terms of the purchase agreement, MetaBank agreed to pay to SCS an amount equal to 100% of the 2017 measured business gross profit up to a maximum of $17.5 million within 20 days after the date on which each determination of the cash earn-out payment was deemed final. During the third quarter of fiscal 2017, MetaBank paid out the $17.5 million of contingent cash consideration to SCS based upon the measured business gross profit. The Company has included the financial results of SCS in its Consolidated Financial Statements subsequent to the acquisition date. The fair value of the liability for the cash contingent consideration was approximately $17.3 million and was included in other liabilities in the Company's Consolidated Statements of Financial Condition. The fair value of the equity contingent consideration was approximately $24.1 million at closing and was included in additional paid-in capital in the Company's Consolidated Statements of Financial Condition. The respective fair values of the liability and equity were estimated using an option-based income valuation method with significant inputs that were not observable in the market and thus represent a Level 3 fair value measurement as defined in the FASB's Accounting Standards Codification ("ASC") 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company's probability assessments of the expected future cash flows related to the Company's acquisition of SCS during the earn-out period. The following table represents the approximate fair value of assets acquired from and liabilities recorded of SCS on the Consolidated Statements of Financial Condition as of December 14, 2016.
| As of December 14, 2016
| (Dollars in Thousands)
Fair value of consideration paid |
Cash | $ | 7,548 |
Stock issued | 10,789 |
Paid Consideration | 18,337 |
Contingent consideration - cash | 17,252 |
Contingent consideration - equity | 24,142 |
Contingent consideration payable | 41,394 |
Total consideration paid | 59,731 |
Fair value of assets acquired |  |
Intangible assets | 28,310 |
Other assets | 2 |
Total assets | 28,312 |
Fair value of net assets acquired | 28,312 |
Goodwill resulting from acquisition | $ | 31,419 |
The SCS transaction has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the transaction date. The Company made significant estimates and exercised judgment in estimating fair values and accounting for such acquired assets and liabilities. Upon receipt of final fair value estimates on certain assets, liabilities, and contingent considerations, which must be within one year of the acquisition date, the Company made final adjustments to the purchase price allocation and retrospectively adjusted the recorded goodwill. The Company recognized goodwill of $31.4 million as of December 14, 2016, which was calculated as the excess of both the adjusted consideration exchanged and the liabilities recorded as compared to the fair value of identifiable assets acquired. Goodwill resulted from expected operational synergies and expanded product lines and is expected to be deductible for tax purposes. See Note 20 to the Consolidated Financial Statements for further information on goodwill. The Company recognized $0.8 million of pre-tax transaction related expenses during the fiscal year ended 2017. The transaction expenses are reflected on the Consolidated Statements of Operations primarily under legal and consulting. EPS FINANCIAL On November 1, 2016, the Company, through MetaBank, completed the acquisition of substantially all of the assets and certain liabilities of EPS Financial, LLC ("EPS") from privately-held Drake Enterprises, Ltd. ("Drake"). The assets acquired by MetaBank in the EPS acquisition include the EPS trade name, operating platform, and other assets. EPS is a leading provider of comprehensive tax-related financial transaction solutions for over 10,000 ERO's nationwide, offering a one-stop-shop for all tax preparer financial transactions. These solutions include a full-suite of refund settlement products, prepaid payroll card solutions and merchant services. Under the terms of the purchase agreement, the aggregate purchase price, which was based upon the November 1, 2016 tangible book value of EPS, included the payment of $21.9 million in cash, after adjustments, and the issuance of 1,107,537 shares of Meta common stock. The Company acquired assets with approximate fair values of $17.9 million of intangible assets, including customer relationships, trademark, and non-compete agreements, and $0.1 million of other assets, resulting in $30.4 million of goodwill. The following table represents the approximate fair value of assets acquired and liabilities assumed of EPS on the Consolidated Statements of Financial Condition as of November 1, 2016:
| As of November 1, 2016
| (Dollars in Thousands)
Fair value of consideration paid |
Cash | $ | 21,877 |
Stock issued | 26,507 |
Total consideration paid | 48,384 |
Fair value of assets acquired |
Intangible assets | 17,930 |
Other assets | 79 |
Total assets | 18,009 |
Fair value of net assets acquired | 18,009 |
Goodwill resulting from acquisition | $ | 30,375 |
The Company has included the financial results of EPS in its Consolidated Financial Statements subsequent to the acquisition date. The EPS transaction has been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the transaction date. The Company made significant estimates and exercised judgment in estimating fair values and accounting for such acquired assets and liabilities. The Company recognized goodwill of $30.4 million as of November 1, 2016, which is calculated as the excess of both the consideration exchanged and the liabilities assumed, which were negligible, as compared to the fair value of identifiable assets acquired. Goodwill resulted from expected operational synergies and expanded product lines and is expected to be deductible for tax purposes. See Note 20 to the Consolidated Financial Statements for further information on goodwill. The Company recognized $0.5 million of pre-tax transaction-related expenses during fiscal 2017. The transaction expenses are reflected on the Consolidated Statements of Operations primarily under legal and consulting.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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