Recent Pullbank In Bofi Holding Creates Buying Opportunity

• BofI Holding, Inc. BOFI has seen a 38.4 percent increase in its share price year-to-date, while dropping over 10 percent in the last five days.
• Donald A. Worthington of Raymond James has upgraded the rating on BofI Holdings from Outperform to Strong Buy, while maintaining the price target at $145.
• The company has announced the completion the purchase and assumption agreement with H&R Block Bank, and has entered into a Program Management Agreement with the latter.

Worthington also mentioned that with the stock appears to have been significantly oversold with the recent pullback, and that there now is potential upside of 33 percent.

According to the Raymond James report, BofI Holdings has announced on September 1 that that it had “closed the definitive P&A agreement to purchase certain assets and assume all of the deposits of H&R Block Bank.”

The company had also announced having entered into a PMA with H&R Block Bank, under which BofI Holding will “provide H&R Block-branded financial services products offered through H&R Block’s retail and digital channels.”

The company expects the PMA to lead to net income growth of about $13-16 million annually, excluding the benefits of low-cost deposits worth $419 million and any benefits from cross-selling of mortgages and IRAs via H&R Block Bank’s distribution channels.