HR Block 2011 Annual Report Download - page 43

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The following table shows the cost basis, scheduled maturities and average yields for HRB Bank’s investment
portfolio at April 30, 2011:
Cost
Basis
Balance
Due
Average
Yield
Balance
Due
Average
Yield
Balance
Due
Average
Yield
Less Than One Year After Ten Years Total
(dollars in 000s)
Mortgage-backed securities $157,970 $ – – % $157,970 2.32% $157,970 2.32%
Federal funds sold 8,727 8,727 0.08% – – % 8,727 0.08%
FHLB stock 3,315 3,315 2.88% – – % 3,315 2.88%
$170,012 $12,042 $157,970 $170,012
LOAN PORTFOLIO AND SUMMARY OF LOAN LOSS EXPERIENCE –The following table shows the
composition of HRB Bank’s mortgage loan portfolio as of April 30, 2011, 2010, 2009, 2008 and 2007, and
information on delinquent loans:
As of April 30, 2011 2010 2009 2008 2007
(in 000s)
Residential real estate mortgages $ 569,610 $ 683,452 $ 821,583 $ 1,004,283 $ 1,350,612
Home equity lines of credit 183 232 254 357 280
$ 569,793 $ 683,684 $ 821,837 $ 1,004,640 $ 1,350,892
Loans and TDRs on non-accrual $ 155,645 $ 185,209 $ 222,382 $ 110,759 $ 22,909
Loans past due 90 days or more 149,501 153,703 121,685 73,600 22,909
Total TDRs 106,328 144,977 160,741 37,159 –
Concentrations of loans to borrowers located in a single state may result in increased exposure to loss as a result
of changes in real estate values and underlying economic or market conditions related to a particular geographical
location. The table below presents outstanding loans by state for our portfolio of mortgage loans held for
investment as of April 30, 2011:
Loans
Purchased
from SCC
Loans
Purchased
from Other
Parties Total
Percent
of Total
Delinquency
Rate (30+
Days)
(dollars in 000s)
Florida $ 47,378 $ 68,499 $ 115,877 20% 33%
California 67,662 12,219 79,881 14% 32%
New York 88,004 10,101 98,105 17% 46%
Wisconsin 1,998 44,551 46,549 8% 8%
All others 149,949 79,432 229,381 41% 26%
Total $ 354,991 $ 214,802 $ 569,793 100%
A rollforward of HRB Bank’s allowance for loss on mortgage loans is as follows:
Year Ended April 30, 2011 2010 2009 2008 2007
(dollars in 000s)
Balance at beginning of the year $ 93,535 $ 84,073 $ 45,401 $ 3,448 $ –
Provision 35,200 47,750 63,897 42,004 3,622
Recoveries 272 88 54 999 –
Charge-offs and transfers (38,520) (38,376) (25,279) (1,050) (174)
Balance at end of the year $ 90,487 $ 93,535 $ 84,073 $ 45,401 $ 3,448
Ratio of net charge-offs to average loans
outstanding during the year 5.96% 4.95% 2.80% 0.09% 0.02%
H&R BLOCK 2011 Form 10K 31