H&R Block expects to shed its bank, a bit of its earnings and federal banking regulators no later than the end of September, the Kansas City-based tax preparer said Wednesday.
The sale of the H&R Block Bank to BofI Federal Bank also will free up capital that Block can use in other ways, for example to pay dividends or buy back its own shares. Banking regulations required Block to keep added capital as long as it owned the federally insured savings bank.
The tax preparation giant has been trying to sell the Kansas City-based bank since July 2013. It reached agreement at that time with prospective buyer Republic Bank & Trust Co. That deal, however, failed to get the approval of regulators.
Block said Wednesday that regulators approved the sale to San Diego-based BofI. The value of the transaction was not disclosed.
“This transaction is another positive step in our multi-year efforts to exit non-core businesses and is in the best interests of our company and our shareholders,” Bill Cobb, Block’s chief executive, said in the announcement.
BofI also will provide financial services under Block’s brand to customers, including Block’s Emerald prepaid MasterCard, refund transfers and Emerald Advance lines of credit.
Once completed, the sale will reduce H&R Block earnings between 8 and 10 cents a share. The company also expects charges related to the sale to clip 2 or 3 cents off per share earnings.
Shares in Block closed at $35.83, up $2.93.