H&R Block Jumps Most in S&P 500 Index on Bank-Exit Deal
H&R Block Inc. (HRB), 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) will reduce earnings by about 6 cents to 9 cents a share on an annual basis. Goldman Sachs Group Inc. (GS) 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 editor responsible for this story: Dan Kraut at firstname.lastname@example.org