H&R Block Takes Next Step in Bank Transaction

H&R Block Takes Next Step in Bank Transaction 
KANSAS CITY, MO -- (Marketwired) -- 07/11/13 --  H&R Block, Inc.

--  Agreement reached to sell assets and transfer liabilities of H&R
    Block Bank to Republic Bank and Trust Company
--  Agreement subject to regulatory approvals as well as final negotiation
    of agreements for Republic Bank to provide H&R Block-branded
    financial services products
--  Upon completion of the transaction, H&R Block Bank will cease to
    exist and its charter will be surrendered
--  Transaction expected to result in limited one-time charges to H&R
    Block in Fiscal 2014

H&R Block, Inc. (NYSE: HRB), the world's largest consumer tax services
provider, today announced that H&R Block Bank has entered into a
definitive purchase and assumption agreement with Republic Bank and
Trust Company ("Republic") to sell certain assets and transfer
certain liabilities of H&R Block Bank to Republic. The agreement is
subject to regulatory approvals as well as the negotiation of
additional agreements under which Republic would act as the bank for
H&R Block's core financial services products: Refund Transfers,
Emerald Advance(R) lines of credit, and the Emerald Prepaid
"We're pleased to take this important step in the process of exiting
our bank and finding the right bank to continue offering our
best-in-class financial services products," stated Bill Cobb, H&R
Block's president and chief executive officer. "We are committed to
continuing our long-term strategy of providing tax and related
financial solutions to our clients, and this agreement will help us
accomplish our goals." 
Both H&R Block Bank and Republic are applying for required regulatory
approvals. After obtaining regulatory approvals, and the fulfillment
of closing conditions, H&R Block Bank will complete the transaction,
merge with and into its parent, Block Financial, LLC, and surrender
its bank charter.  
"Our hope is to complete the transaction and have the financial
services agreements with Republic in place in time to execute tax
season 2014 with Republic," stated Cobb. "If regulatory approval is
not received in time to accomplish this, we have contingency plans in
place to offer financial services products through H&R Block Bank for
tax season 2014." 
The transaction and related costs are expected to result in one-time
expenses to H&R Block of approximately $0.03 to $0.04 in fiscal year
2014 (based on current fully diluted shares outstanding), contingent
on the timing of regulatory approval.  
H&R Block expects the net financial impact of the service agreement
with Republic to be dilutive by approximately $0.06 to $0.09 per
share (based on current fully diluted shares outstanding), on an
annual basis. Results will vary depending on the volumes of financial
services products sold. 
H&R Block announced in October 2012 that it was seeking strategic
alternatives for H&R Block Bank that would result in H&R Block, Inc.
no longer being regulated by the Federal Reserve Bank as a savings
and loan holding company. This decision was prompted by proposed
rules that would impose higher capital requirements on savings and
loan holding companies such as H&R Block, Inc. The Federal Reserve
proposed the rules in order to implement changes required by the
Dodd-Frank Act. 
"The proposed rules would require us to hold significant levels of
additional capital, which does not properly align with our
capital-light business model," stated Greg Macfarlane, H&R Block's
chief financial officer. "We believe it is in the best strategic
interests of our company and our shareholders to cease being
regulated as a savings and loan holding company and are taking the
appropriate steps to do so." 
Goldman, Sachs & Co. and First Annapolis Consulting, Inc. acted as
financial advisors to H&R Block for the transaction, and Stinson
Morrison Hecker LLP and Morrison & Foerster LLP acted as H&R Block's
legal counsel.  
Additional information regarding the agreement with Republic, the
transaction process, related contingencies, and the timing of the
transaction is included in a Form 8-K filed today with the Securities
and Exchange Commission. There can be no assurances regarding the
ability to obtain all required regulatory and other approvals, the
ability of the parties to negotiate and execute the additional
required agreements as expected, or the terms and conditions of the
additional agreements. 
Conference Call
 At 9:00 a.m. Eastern on July 12, 2013, the company
will host a conference call for analysts, institutional investors,
and shareholders to discuss the agreements and planned exit of H&R
Block Bank. To access the call, please dial the number below
approximately 5 to 10 minutes prior to the scheduled starting time: 
U.S./Canada (877) 809-6980 or International (706) 758-0071 
Conference ID: 15501731 
The call will also be webcast in a listen-only format for the media
and public. The link to the webcast can be accessed directly at
A replay of the call will be available beginning at 11:30 a.m.
Eastern on July 12, 2013, and continuing until August 12, 2013, by
dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406
(International). The conference ID is 15501731. The webcast will be
available for replay July 13, 2013 at http://investors.hrblock.com. 
About H&R Block
 H&R Block, Inc. (NYSE: HRB) is the world's largest
consumer tax services provider. More than 625 million tax returns
have been prepared worldwide by and through H&R Block since 1955. In
fiscal 2013, H&R Block had annual revenues of $2.9 billion with 25.4
million tax returns prepared worldwide. Tax return preparation
services are provided in company-owned and franchise retail tax
offices by over 80,000 professional tax preparers and associates, and
through H&R Block At Home(TM) digital products. H&R Block Bank
provides affordable banking products and services. For more
information, visit the H&R Block Online Press Center. 
Forward-Looking Statements 
 This press release may contain
forward-looking statements within the meaning of the securities laws.
Forward-looking statements can be identified by the fact that they do
not relate strictly to historical or current facts. They often
include words or variation of words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," "projects,"
"forecasts," "targets," "would," "will," "should," "could" or "may"
or other similar expressions. Forward-looking statements provide
management's current expectations or predictions of future
conditions, events or results. All statements that address operating
performance, events or developments that we expect or anticipate will
occur in the future are forward-looking statements. They may include
estimates of revenues, income, earnings per share, capital
expenditures, dividends, liquidity, capital structure or other
financial items, descriptions of management's plans or objectives for
future operations, products or services, or descriptions of
assumptions underlying any of the above. All forward-looking
statements speak only as of the date they are made and reflect the
company's good faith beliefs, assumptions and expectations, but they
are not guarantees of future performance or events. Furthermore, the
company disclaims any obligation to publicly update or revise any
forward-looking statement to reflect changes in underlying
assumptions, factors, or expectations, new information, data or
methods, future events or other c
hanges, except as required by law.
By their nature, forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those suggested by the forward-looking statements. Factors that
might cause such differences include, but are not limited to, a
variety of economic, competitive and regulatory factors, many of
which are beyond the company's control and which are described in our
Annual Report on Form 10-K for the fiscal year ended April 30, 2013
in the section entitled "Risk Factors," as well as additional factors
we may describe from time to time in other filings with the
Securities and Exchange Commission. In addition, there can be no
assurances regarding the ability to obtain all required regulatory
and other approvals, the ability of the parties to negotiate and
execute the additional required agreements as expected, or the terms
and conditions of the additional agreements. You should understand
that it is not possible to predict or identify all such factors and,
consequently, you should not consider any such list to be a complete
set of all potential risks or uncertainties.  
For Further Information
Investor Relations:
Colby Brown
(816) 854-4559
Media Relations:
Gene King
(816) 854-4672
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