Bloomberg News

H&R Block Shares Advance on Deal to Sell Bank: Chicago Mover

July 12, 2013

H&R Block Jumps Most in S&P 500 on Bank-Exit Deal

H&R Block Inc. said late yesterday that the deal with Kentucky’s Republic Bancorp Inc. will reduce earnings by about 6 cents to 9 cents a share on an annual basis. Photographer: Scott Eells/Bloomberg

H&R Block Inc. (HRB:US), the biggest U.S. tax preparer, gained the most in five weeks after announcing a deal to sell bank assets in an effort to exit Federal Reserve oversight.

H&R Block jumped 69 cents, or 2.3 percent to $30.63 at 4:02 p.m. in New York. The Kansas City, Missouri-based company has surged 65 percent this year.

The tax preparer said late yesterday that the deal with Kentucky’s Republic Bancorp Inc. (RBCAA:US) will reduce earnings by about 6 cents to 9 cents a share on an annual basis. Goldman Sachs Group Inc. (GS:US) was hired last year to evaluate options for H&R Block’s banking unit amid new Fed rules requiring savings and loans to hold more capital.

H&R Block will “trade off some profit for capital-allocation freedom,” Michael Millman of Millman Research Associates said in a note to investors yesterday.

A Republic subsidiary will assume about $470 million in customer deposits if regulators approve the deal, the Louisville-based bank said yesterday in a separate statement. The companies also are negotiating an agreement under which Republic would provide H&R Block-branded financial services to the tax firm’s customers.

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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Companies Mentioned

  • HRB
    (H&R Block Inc)
    • $31.01 USD
    • -0.03
    • -0.1%
  • RBCAA
    (Republic Bancorp Inc/KY)
    • $23.69 USD
    • -0.10
    • -0.42%
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