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Kroll affirms Meta Financial debt ratings

Kroll Bond Rating Agency on Jan. 11 affirmed Sioux Falls, S.D.-based Meta Financial Group Inc.'s BBB+ senior unsecured debt rating, BBB subordinated debt rating and K2 short-term debt rating.

It also affirmed subsidiary MetaBank's deposit and senior unsecured debt ratings of A-, subordinated debt rating of BBB+ and short-term deposit and debt ratings of K2.

The ratings are supported by Meta Financial's strong liquidity profile supplemented by the stable and low-cost funding provided by its prepaid card deposits. In addition, the company has diversified earnings streams, is growing its noninterest income and has managed to position itself as a competitive prepaid card issuer, according to Kroll.

The outlook for all long-term ratings is still "negative," with the possibility of revision to "stable" if the company's asset quality and earnings metrics are further stabilized, and if the company's shift in asset mix is successfully managed, including the effective integration of Troy, Mich.-based Crestmark Bancorp Inc.'s loan portfolio.