HR Block 2013 Annual Report Download - page 47

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40 H&R Block 2013 Form 10-K
LOAN PORTFOLIO AND SUMMARY OF LOAN LOSS EXPERIENCE – The following table shows the
composition of HRB Bank’s mortgage loan portfolio and information on delinquent loans:
(in 000s)
As of April 30, 2013 2012 2011 2010 2009
Residential real estate
mortgages $ 349,841 $428,568 $ 569,610 $ 683,452 $ 821,583
Home equity lines of credit 170 174 183 232 254
$ 350,011 $428,742 $ 569,793 $ 683,684 $ 821,837
Loans and TDRs on non–accrual $ 89,230 $108,839 $ 155,645 $ 185,209 $ 222,382
Loans past due 90 days or more 74,992 99,044 149,501 153,703 121,685
Total TDRs 55,061 71,949 106,328 144,977 160,741
Interest income recorded on
non–accrual loans 4,025 5,682 6,311 7,452 4,927
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 states with a concentration of 5% or greater, for our portfolio
of mortgage loans held for investment as of April 30, 2013:
(dollars in 000s)
Loans
Purchased
from SCC
Loans
Purchased
from Other
Parties Total
Percent
of Total
Delinquency
Rate (30+ Days)
Florida $ 18,359 $ 47,966 $66,325 19% 15%
New York 57,949 7,619 65,568 19% 51%
California 30,423 8,703 39,126 11% 17%
Wisconsin 1,388 28,457 29,845 9% 5%
All others 89,889 59,258 149,147 43% 20%
Total $ 198,008 $ 152,003 $ 350,011 100%
A rollforward of HRB Bank’s allowance for loss on mortgage loans is as follows:
(dollars in 000s)
Year ended April 30, 2013 2012 2011 2010 2009
Balance at beginning of the year $ 26,444 $ 90,487 $ 93,535 $ 84,073 $ 45,401
Provision 13,250 23,875 35,200 47,750 63,897
Recoveries 3,253 252 272 88 54
Charge-offs and transfers (28,633) (88,170) (38,520) (38,376) (25,279)
Balance at end of the year $ 14,314 $ 26,444 $ 90,487 $ 93,535 $ 84,073
Ratio of net charge-offs to average loans
outstanding during the year 6.37% 19.61%5.96%4.95%2.80%
The increase in charge-offs during fiscal year 2012 was a result of the charge-off of $64.1 million in mortgage loans
more than 180 days past due in accordance with OCC regulations, as discussed in Item 8, note 1 to the consolidated
financial statements.