Oct 10, 2012 (Marketwire via COMTEX) --H&R Block, Inc. (NYSE: HRB)
In a regulatory filing yesterday with the Securities and Exchange Commission, H&R Block, Inc. (NYSE: HRB) announced it is exploring strategic alternatives for H&R Block Bank that could result in H&R Block, Inc. no longer being regulated by the Federal Reserve as a savings and loan holding company. In June 2012, the Federal Reserve announced 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.
"Evaluating strategic alternatives for H&R Block Bank demonstrates management's continued commitment to deliver on a shareholder-friendly capital allocation strategy," said Bill Cobb, H&R Block's President and Chief Executive Officer.
These proposed capital requirements, if enacted, would require H&R Block, Inc. to retain significant additional capital. The company believes the regulatory constraints that would result from these proposed rules and the manner in which the company believes they will be implemented are inconsistent with its strategic plans, operational needs, and growth objectives. In light of this, the company is utilizing Goldman, Sachs & Co. (Goldman Sachs) to explore strategic alternatives for H&R Block Bank that could result in H&R Block, Inc. ceasing to be regulated by the Federal Reserve as a savings and loan holding company.
"We are a tax preparation company that offers financial products and related services as an added value to our clients, but operating within the regulatory constraints of these proposed rules would be cumbersome," added Cobb. "At this point, we're working with Goldman Sachs on a number of alternatives to find the best long-term solution for our company and the implementation of our financial services strategy. We will have the ability to offer existing financial products and related services to our clients in fiscal 2013 and we do not expect this to materially impact our fiscal 2013 earnings or our ability to execute against our strategy in the upcoming tax season."
H&R Block, Inc. (NYSE: HRB) is the world's largest tax services provider, having prepared more than 600 million tax returns worldwide since 1955. In fiscal 2012, H&R Block had annual revenues of $2.9 billion and prepared 25.6 million tax returns worldwide. Tax return preparation services are provided in company-owned and franchise retail tax offices by nearly 100,000 professional tax preparers, and through H&R Block At Home™ digital products. H&R Block Bank provides affordable banking products and services. For more information, visit the H&R Block Online Press Center.
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