HR Block 2007 Annual Report Download - page 93

NOTE 4: MARKETABLE SECURITIES AVAILABLE-FOR-SALE
The amortized cost and fair value of securities classified as available-for-sale held in our continuing operations at April 30, 2007 and 2006 are
summarized below:
(in 000s)
2007 2006
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses(1) Value Cost Gains Losses(1) Value
Mortgage-backed
securities $35,122 $83$(121) $35,084 $– $– $– $ –
Municipal bonds 9,527 47 (6) 9,568 8,556 5 (53) 8,508
Common stock 3,845 747 (45) 4,547 3,998 382(100) 4,280
Trust preferred
securities 3,500 ––3,500 ––––
$51,994 $ 877 $(172) $52,699 $12,554 $ 387 $(153) $12,788
(1) At April 30, 2007, investments in common stock with a cost of $101,000 and gross unrealized losses of $11,000 had been in continuous loss position for more than twelve
months. At April 30, 2006, gross unrealized losses were in a continuous loss position for less than twelve months.
Proceeds from the sales of AFS securities of continuing operations maturities differ from contractual maturities due to the issuers’ rights to
were $3.5 million, $11.2 million and $9.8 million during fiscal years 2007, prepay certain obligations or the seller’s rights to call certain
2006 and 2005, respectively. Gross realized gains on those sales during obligations, the first call date, put date or auction date for municipal
fiscal years 2007, 2006 and 2005 were $0.3 million, $0.7 million and bonds and notes is considered the contractual maturity date.
$0.5 million, respectively; gross realized losses were $0.1 million, HRB Bank is required to maintain a restricted investment in FHLB
$0.2 million and $0.3 million, respectively. stock for regulatory purposes and borrowing availability. The cost of
65 m
Contractual maturities of AFS debt securities at April 30, 2007 occur this investment, $9.1 million, represents its redemption value, as these
at varying dates over the next three to eight years. Because expected investments do not have a ready market.
NOTE 5: MORTGAGE LOANS HELD FOR INVESTMENT
The characteristics of our mortgage loan portfolio as of April 30, 2007 had interest-only mortgage loans in its investment portfolio totaling
are as follows: $8.2 million. HRB Bank had no commitments to purchase mortgage
(dollars in 000s)
loans from third-party lenders at April 30, 2007.
Amount %of Total Activity in the allowance for loan losses for the year ended April 30,
2007 is as follows:
Adjustable-rate loans $1,039,376 77%
(in 000s)
Fixed-rate loans 311,516 23%
Balance, beginning of period $–
1,350,892 100%
Provision for loan losses 3,622
Unamortized deferred fees, costs and
Charge-offs (174)
purchase premiums 10,778
Recoveries –
Less allowance for loan losses (3,448)
$3,448
$1,358,222
Impaired loans at April 30, 2007 totaled $28.3 million. The portion of
The estimated fair value of mortgage loans held for investment at
our total allowance for loan losses allocated to impaired loans totaled
April 30, 2007 was $1.4 billion. The estimated fair value was calculated
$0.2 million at April 30, 2007.
by discounting scheduled cash flows through the estimated maturity
As of April 30, 2007, loans considered more than 90 days past due and
using estimated market discount rates that reflect the interest rate risk
non-accrual totaled $22.9 million. We had no loans more than 90 days
inherent in the loans, reduced by an allocation of the allowance for loan
past due still accruing interest.
losses.
As of April 30, 2007, accrued interest receivable on mortgage loans
held for investment totaled $9.0 million. At April 30, 2007, HRB Bank
H&R BLOCK 2007 Form 10K