Tags: US | Earns | H&R | Block

H&R Block Rallies as Fears on Loan Loss Reserves Ease

Friday, 03 Sep 2010 01:38 PM

Shares of H&R Block Inc. rose about 10 percent Friday, a day after the largest U.S. tax preparer said it did not have to set aside more money to meet the claims related to its former mortgage business.

"Since we established a reserve of $243 million in the Spring of 2008, we have not added to our aggregate reserves," Chief Executive Allen Bennett said in a call Thursday, after the company posted a narrower-than-expected quarterly loss.

The details the company gave on its mortgage portfolio have helped lift the concerns that were weighing on the stock, analyst David Burtzlaff of Stephens told Reuters.

For the May-July quarter, principle balance of mortgage loans reduced by about $32 million to $563 million, the company said. Mortgage servicing portfolio fell 34 percent to $33 billion at June 30.

The company, with a market value of $3.94 billion, exited its subprime mortgage origination and servicing business and brokerage operations in 2007, saying the businesses were losing money and non-core to its primary operations.

"HRB had traded off this week on elevated volume on mortgage putback concerns. It recouped the week's losses on management addressing these concerns by providing incremental points of data," Oppenheimer analyst Scott Schneeberger wrote in a note.

The Kansas, Missouri-based H&R Block's shares, which fell 6 percent since Monday, were up 8 percent at $13.58 Friday morning, making the stock one of the top gainers on the New York Stock Exchange. They touched a high of $13.79 earlier in the session.

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Shares of H R Block Inc. rose about 10 percent Friday, a day after the largest U.S. tax preparer said it did not have to set aside more money to meet the claims related to its former mortgage business. Since we established a reserve of $243 million in the Spring of 2008,...
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Friday, 03 Sep 2010 01:38 PM
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