HR Block 2013 Annual Report Download - page 48

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H&R Block 2013 Form 10-K 41
DEPOSITS – The following table shows HRB Bank’s average deposit balances and the average rate paid on those
deposits for fiscal years 2013, 2012 and 2011:
(dollars in 000s)
Year ended April 30, 2013 2012 2011
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Average
Balance
Average
Rate
Money market and savings $ 331,819 0.59% $ 306,053 0.71% $ 279,162 0.81%
Interest-bearing checking
accounts 12,027 0.17% 14,871 0.27%10,782 0.87%
IRAs 322,078 0.91% 334,022 1.00% 353,902 1.01%
Certificates of deposit 69,444 1.08% 50,647 2.33% 186,742 1.36%
735,368 0.77% 705,593 0.95% 830,588 1.02%
Non-interest-bearing deposits 330,727 320,566 310,781
$ 1,066,095 $1,026,159 $1,141,369
RATIOS – The following table shows certain of HRB Bank’s key ratios for fiscal years 2013, 2012 and 2011:
Year ended April 30, 2013 2012 2011
Return on average assets 3.0% 3.1% 1.4%
Net return on equity 10.2%10.0% 5.4%
Equity to assets ratio 33.9%34.8%30.8%
SHORT-TERM BORROWINGS– The following table shows HRB Bank’s short-term borrowings for fiscal years
2013, 2012 and 2011:
(dollars in 000s)
Year ended April 30, 2013 2012 2011
Balance Rate Balance Rate Balance Rate
Ending balance of FHLB advances $ — —% $ — —% $ 25,000 2.36%
Average balance of FHLB advances — —% 23,770 2.41%72,534 2.10%
We did not borrow from the FHLB during fiscal year 2013. The maximum amount of FHLB advances outstanding
during fiscal years 2012 and 2011 was $25.0 million and $75.0 million, respectively.
NEW ACCOUNTING PRONOUNCEMENTS
See Item 8, note 1 to the consolidated financial statements under “Intangible Assets and Goodwill” for a discussion of
recently issued accounting pronouncements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
General. We have a formal investment policy that strives to minimize the market risk exposure of our cash equivalents
and available-for-sale (AFS) securities, which are primarily affected by credit quality and movements in interest rates.
The guidelines in our investment policy focus on managing liquidity and preserving principal and earnings.
Our cash equivalents are primarily held for liquidity purposes and are comprised of high quality, short-term
investments, including money market funds. Because our cash and cash equivalents have a relatively short maturity,
our portfolio’s market value is relatively insensitive to interest rate changes.
Our AFS securities consist primarily of mortgage-backed securities held to meet the regulatory requirements of
HRB Bank.