Axos Financial in San Diego has yet to reach a new deal with H&R Block as the bank prepares to lose an important exemption as part of the Durbin amendment.
The $11.6 billion-asset Axos, which faces a cap on interchange fees on July 1, said in a Monday regulatory filing that H&R Block can terminate their partnership if the bank does not strike a deal to compensate H&R Block for the lower fees.
"As of the date of this report, we have not agreed to the terms of such an amendment with H&R Block," the filing said. "While we intend to seek additional dialogue with H&R Block as to a suitable amendment, there can be no assurances that a mutually agreeable amendment will be reached."
Axos and H&R Block
Michael Perito, an analyst at Keefe, Bruyette & Woods, wrote in a Monday note to clients that negotiations are continuing and that he expects a new agreement under which Axos gives up some revenue.
"That said, if an agreement isn't reached before the summer, after the conclusion of tax season, our confidence in a new deal being reached would need to be re-evaluated," he wrote.
Perito said Axos had disclosed that about $25 million in annual pretax revenue is at risk because of the Durbin amendment. He also estimated that the H&R Block relationship represents $35 million to $40 million in annual revenue at Axos.
