Banking and wealth management group MyState on Friday announced a statutory after-tax profit of A$15.2 million for the half year to December 2016 - an increase of 0.7 per cent on the previous corresponding half. Earnings per share of 17.3 cents were steady compared to the previous corresponding half, as was MyState's capital adequacy ratio of 13.0 per cent. The contributions from the group's various divisions were, however, more uneven than these top-line figures suggest.The crucial banking division's net profit of $12.7 million represented a decrease of 1.2 per cent over the previous corresponding period, although the group's loan book grew at an annualised rate of 14.3 per cent, or 2.4 times national system growth. MyState's housing loan settlements increased to $671 million for the half, up 26 per cent on the previous corresponding period. In an environment where the company continued to target the low LVR market (that is, 80 per cent or less), the proportion of its loan book rose from 68 per cent in the 2015/16 year to 72 per cent in 1H 2017.MyState managing director and chief executive officer, Melos Sulicich, said "90 per cent" of this growth came from the expanding broker channels in New South Wales and Victoria.The wealth management division's revenue from funds management, trustee services and financial planning remained steady at $8.4 million, in line with the previous half, but down on the prior corresponding period. While trustee services volumes were lower, the financial planning business strengthened its team and increased its complement of planners, resulting in higher revenue.The group's overall cost-to-income ratio increased 240 basis points to 66.4 per cent from 64.0 per cent in the previous corresponding half.Most of this was attributed to "significant M&A project costs," which Sulicich said were attributable to due diligence expenses for a deal that the company backed away from. A company presentation put this amount at $1.75 million.Sulicich noted that the costs straddled the previous and current financial years, and although he declined to elaborate, last August MyState confirmed via a statement to the ASX (and in response to media rumours) that it had "held discussions with a number of parties relating to possible acquisitions," and one of the parties was La Trobe Financial."At this stage no decision has been reached and there is no certainty that any transaction will eventuate. MyState will continue to keep the market fully informed in compliance with its continuous disclosure obligations," the August company statement continued.While M&A deals have been looked at in previous years, this is one cost that's unlikely to be repeated in the near term, Sulicich said. "Our real focus for now will be on driving out value from the technology investment we've made over the last couple of years."This work includes bedding down a new loan origination system for MyState and finalising the core banking system new core banking system for The Rock in the second half of 2017. Other aspects of MyState's "technology transformation" included the introduction of Android Pay, Apple Pay, and