NOTE 5: MORTGAGE LOANS HELD FOR INVESTMENT

The composition of our mortgage loan portfolio is as follows:



(dollars in 000s)
As of	January 31, 2015					January 31, 2014					April 30, 2014
	Amount			% of Total		Amount			% of Total		Amount			% of Total
Adjustable-rate loans	$	135,481		54	%	$	158,369		54	%	$	149,480		54	%
Fixed-rate loans	117,484			46	%	132,956			46	%	127,943			46	%
	252,965			100	%	291,325			100	%	277,423			100	%
Unamortized deferred fees and costs	2,073					2,387					2,277
Less: Allowance for loan losses	(9,375		)			(11,563		)			(11,272		)
	$	245,663				$	282,149				$	268,428

Our loan loss allowance as a percent of mortgage loans was 3.7% as of January 31, 2015, compared to 4.0% as of January 31, 2014 and 4.1% as of April 30, 2014.

Activity in the allowance for loan losses for the nine months ended January 31, 2015 and 2014 is as follows:



(in 000s)
Nine months ended January 31,	2015			2014
Balance at beginning of the period	$	11,272		$	14,314
Provision	1,090			7,224
Recoveries	1,155			3,250
Charge-offs	(4,142		)	(13,225		)
Balance at end of the period	$	9,375		$	11,563

When determining our allowance for loan losses, we evaluate loans less than 60 days past due on a pooled basis, while loans we consider impaired, including those loans more than 60 days past due or modified as a troubled debt restructuring (TDR), are evaluated individually. The balance of these loans and the related allowance is as follows:



(in 000s)
As of	January 31, 2015				January 31, 2014				April 30, 2014
	Portfolio Balance		Related Allowance		Portfolio Balance		Related Allowance		Portfolio Balance		Related Allowance
Pooled (less than 60 days past due)	$	144,144	$	3,629	$	169,404	$	4,979	$	158,496	$	4,508
Impaired:
Individually (TDRs)	38,782		4,083		44,635		4,371		43,865		4,346
Individually (60 days or more past due)	70,039		1,663		77,286		2,213		75,062		2,418
	$	252,965	$	9,375	$	291,325	$	11,563	$	277,423	$	11,272

Detail of our mortgage loans held for investment and the related allowance as of January 31, 2015 is as follows:



(dollars in 000s)
	Outstanding Principal Balance		Loan Loss Allowance				% 30+ Days Past Due
	Outstanding Principal Balance		Amount		% of Principal		% 30+ Days Past Due
Purchased from SCC	$	145,812	$	7,292	5.0	%	28.4	%
All other	107,153		2,083		1.9	%	6.8	%
	$	252,965	$	9,375	3.7	%	19.2	%

Credit quality indicators as of January 31, 2015 include the following:



(in 000s)
Credit Quality Indicators	Purchased from SCC		All Other		Total Portfolio
Occupancy status:
Owner occupied	$	107,581	$	70,670	$	178,251
Non-owner occupied	38,231		36,483		74,714
	$	145,812	$	107,153	$	252,965
Documentation level:
Full documentation	$	47,314	$	76,095	$	123,409
Limited documentation	4,607		11,745		16,352
Stated income	82,252		11,857		94,109
No documentation	11,639		7,456		19,095
	$	145,812	$	107,153	$	252,965
Internal risk rating:
High	$	41,216	$	—	$	41,216
Medium	104,596		—		104,596
Low	—		107,153		107,153
	$	145,812	$	107,153	$	252,965

Loans given our internal risk rating of "high" generally had no documentation or were based on stated income. Loans given our internal risk rating of "medium" generally had full documentation or were based on stated income, with loan-to-value ratios at origination of more than 80%, and were made to borrowers with credit scores below 700 at origination. Loans given our internal risk rating of "low" generally had loan-to-value ratios at origination of less than 80% and were made to borrowers with credit scores greater than 700 at origination.

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 52% of our mortgage loan portfolio consists of loans to borrowers located in the states of Florida, California and New York.

Detail of the aging of the mortgage loans in our portfolio as of January 31, 2015 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	$	11,305	$	238	$	45,864	$	57,407	$	88,405	$	145,812
All other	5,416		302		7,408		13,126		94,027		107,153
	$	16,721	$	540	$	53,272	$	70,533	$	182,432	$	252,965


⁽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	January 31, 2015		January 31, 2014		April 30, 2014
Loans:
Purchased from SCC	$	59,452	$	64,573	$	61,767
Other	11,117		12,325		12,528
	70,569		76,898		74,295
TDRs:
Purchased from SCC	4,928		4,221		4,648
Other	817		957		951
	5,745		5,178		5,599
Total non-accrual loans	$	76,314	$	82,076	$	79,894

Information related to impaired loans is as follows:



(in 000s)
	Balance With Allowance		Balance With No Allowance		Total Impaired Loans		Related Allowance
As of January 31, 2015:
Purchased from SCC	$	24,318	$	67,320	$	91,638	$	4,772
Other	3,388		13,797		17,185		974
	$	27,706	$	81,117	$	108,823	$	5,746
As of January 31, 2014:
Purchased from SCC	$	28,037	$	73,873	$	101,910	$	5,341
Other	5,030		14,982		20,012		1,243
	$	33,067	$	88,855	$	121,922	$	6,584
As of April 30, 2014:
Purchased from SCC	$	27,924	$	71,075	$	98,999	$	3,239
Other	5,176		14,752		19,928		3,525
	$	33,100	$	85,827	$	118,927	$	6,764

Information related to the allowance for impaired loans is as follows:



(in 000s)
As of	January 31, 2015		January 31, 2014		April 30, 2014
Portion of total allowance for loan losses allocated to impaired loans and TDR loans:
Based on collateral value method	$	1,663	$	2,213	$	2,418
Based on discounted cash flow method	4,083		4,371		4,346
	$	5,746	$	6,584	$	6,764

Information related to activities of our non-performing assets is as follows:



(in 000s)
Nine months ended January 31,	2015		2014
Average impaired loans:
Purchased from SCC	$	96,767	$	116,061
All other	18,683		22,607
	$	115,450	$	138,668