Fletch posted this great summary of the Bofi conference call on the H&R Block delay.
…There wasn’t really a lot of meat, but here are a few of my notes, which paraphrase BOFI’s CEO’s comments:
1) The regulators have not expressed any concerns about the deal, rather they simply asked for more time for review.
2) If approved, the transaction will not close until after H&R Block’s tax season is over, so probably at least six months from now.
3) The delay in regulatory approval will not impact BOFI loan growth. The CEO expects both loan and deposit growth to continue at previous levels. In other words, BOFI will not have to slow down on the loan side in response to the delay in getting the $500 million in new deposits.
Who knows what actually is going on with regulatory approval. It could simply be that more time is required, but given that this is Block’s second go-around with trying to do this deal, maybe there’s more to it. We just don’t know.
This transaction would be a nice boost for BOFI, but it sounds like BOFI’s day to day business is doing just fine in the interim. Several analysts all asked a version of the same question, which basically was, “What changes should we make to our current earnings projections in the wake of the delay?” And the CEO essentially said, “None at all.” I look forward to (and expect) another strong quarter when results are announced the first week in November.
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