HR Block 2012 Annual Report Download - page 66

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appropriate data is being utilized to determine the level of risk within the portfolio. All criteria are obtained at
the time of origination and are only subsequently updated if the loan is refinanced.
Credit quality indicators at April 30, 2012 include the following:
(in 000s)
Credit Quality Indicators Purchased from SCC All Other Total Portfolio
Occupancy status:
Owner occupied $ 181,705 $ 113,879 $ 295,584
Non-owner occupied 70,152 63,576 133,728
$ 251,857 $ 177,455 $ 429,312
Documentation level:
Full documentation $ 80,377 $ 129,565 $ 209,942
Limited documentation 7,333 18,750 26,083
Stated income 142,005 18,039 160,044
No documentation 22,142 11,101 33,243
$ 251,857 $ 177,455 $ 429,312
Internal risk rating:
High $ 87,010 $ – $ 87,010
Medium 164,847 – 164,847
Low – 177,455 177,455
$ 251,857 $ 177,455 $ 429,312
Loans given our internal risk rating of “high” were originated by SCC, generally have no documentation or are
stated income, and are non-owner occupied. Loans given our internal risk rating of “medium” were generally full
documentation or stated income, with loan-to-value at origination of more than 80%, and have credit scores at
origination below 700. Loans given our internal risk rating of “low” were generally full documentation, with
loan-to-value at origination of less than 80% and have credit scores greater than 700.
Our mortgage loans held for investment include concentrations of loans to borrowers in certain states, which
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. Approximately 58% of our mortgage loan
portfolio consists of loans to borrowers located in the states of Florida, California, New York and Wisconsin.
Detail of the aging of the mortgage loans in our portfolio as of April 30, 2012 is as follows:
(in 000s)
Less than 60
Days Past Due
60 – 89 Days
Past Due
90+ Days
Past Due(1)
Total
Past Due Current Total
Purchased from SCC $18,520 $6,627 $85,303 $110,450 $141,407 $251,857
All other 7,722 827 14,311 22,860 154,595 177,455
$26,242 $7,454 $99,614 $133,310 $296,002 $429,312
(1) We do not accrue interest on loans past due 90 days or more.
Information related to our non-accrual loans is as follows:
(in 000s)
As of April 30, 2012 2011
Loans:
Purchased from SCC $ 88,347 $ 143,358
Other 16,626 14,106
104,973 157,464
TDRs:
Purchased from SCC 3,166 2,849
Other 1,270 329
4,436 3,178
Total non-accrual loans $ 109,409 $ 160,642
52
H&R BLOCK 2012 Form 10K