H&R Block Inc. said its thrift's revenue in its fiscal fourth quarter, which ended April 30, jumped 46% from a year earlier, to $53.1 million, primarily because of growth in its prepaid card and credit line offerings.
Overall pretax income from the consumer finance business fell to $15,000, from $14.2 million a year earlier, in part because of credit provisions, the Kansas City, Mo., tax preparation company Monday.
H&R Block's held-for-investment portfolio of mortgages fell 29%, to $966.3 million as of April 30. The company said it "anticipates continuing strong runoff … through prepayments and other payments."
During the tax season the number of prepaid Emerald cards increased 30%, to more than 2.6 million, H&R Block said.
The cards are designed to be loaded with proceeds from tax refunds or refund anticipation products.
The company said it approved just under a million Emerald Advance credit lines in its last fiscal year, and "approximately 91% of these customers returned to H&R Block for paid tax preparation." H&R Block offers lines of up to $500 from December through early January.
If the borrower pays as agreed, the line of credit can be increased and used year-round.
For the quarter, H&R Block posted a $543.6 million profit, compared with a $85.6 million loss a year earlier. It reduced its losses from discontinued operations by 78.2%, to $147.6 million.
"The losses reflect provisions for loan repurchase obligations, impairments of residual interests," and expenses related to its exit from its subprime mortgage business, H&R Block said.
