HR Block 2010 Annual Report Download - page 48

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A rollforward of HRB Bank’s allowance for loss on mortgage loans is as follows:
Year Ended April 30, 2010 2009 2008 2007
(dollars in 000s)
Balance at beginning of the year $ 84,073 $ 45,401 $ 3,448 $ –
Provision 47,750 63,897 42,004 3,622
Recoveries 88 54 999 –
Charge-offs (38,376) (25,279) (1,050) (174)
Balance at end of the year $ 93,535 $ 84,073 $ 45,401 $ 3,448
Ratio of net charge-offs to average loans outstanding during
the year 4.95% 2.80% 0.09% 0.02%
DEPOSITS – The following table shows HRB Bank’s average deposit balances and the average rate paid on those
deposits for fiscal years 2010, 2009 and 2008:
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Year Ended April 30, 2010 2009 2008
(dollars in 000s)
Money market and savings $ 400,920 0.50% $ 467,864 1.37% $ 653,126 4.92%
Interest-bearing checking accounts 13,677 0.61% 13,579 2.25% 141,328 4.31%
IRAs 377,973 1.02% 289,814 1.27% 101,085 4.12%
Certificates of deposit 227,094 1.86% 91,815 3.98% 9,297 5.45%
1,019,664 1.00% 863,072 1.63% 904,836 4.74%
Non-interest-bearing deposits 233,717 212,607 189,325
$ 1,253,381 $ 1,075,679 $ 1,094,161
RATIOS –The following table shows certain of HRB Bank’s key ratios for fiscal years 2010, 2009 and 2008:
Year Ended April 30, 2010 2009 2008
Pretax return on assets 2.12% (1.03)% 0.80%
Net return on equity 21.04% (6.67)% 3.32%
Equity to assets ratio 28.83% 12.44% 12.80%
During fiscal year 2009, HRB Bank shared the revenues and expenses of the H&R Block Prepaid Emerald
MasterCard»program with an affiliate, and as a result, transferred revenues and expenses of $49.4 million and
$13.4 million, respectively, to this affiliate. During fiscal year 2010, the agreement with the affiliate was terminated
and HRB Bank now retains the revenues and expenses of the program.
SHORT-TERM BORROWINGS –The following table shows HRB Bank’s short-term borrowings for fiscal years
2010, 2009 and 2008:
Balance Rate Balance Rate Balance Rate
Year Ended April 30, 2010 2009 2008
(dollars in 000s)
Ending balance of FHLB advances $ 50,000 1.92% $ 25,000 1.76% $ 25,000 2.64%
Average balance of FHLB advances 98,767 2.07% 103,885 4.92% 13,743 5.32%
The maximum amount of FHLB advances outstanding during fiscal years 2010, 2009 and 2008 was
$100.0 million, $129.0 million and $179.0 million, respectively.
NEW ACCOUNTING PRONOUNCEMENTS
See Item 8, note 1 to our consolidated financial statements for a discussion of recently issued accounting
pronouncements.
32 H&R BLOCK 2010 Form 10K