4. Member Loans at Amortized Cost

The outstanding balance of Member Loans at amortized cost are as follows:


	September 30, 2011			March 31, 2011
Principal balance	$	3,200,483		$	5,746,644
Deferred origination costs/(revenue), net		(181,185	)		(163,481	)

Net loans		3,019,298			5,583,163
Allowance for loan losses		(252,725	)		(329,885	)

Member Loans at amortized cost, net	$	2,766,573		$	5,253,278


Ratio of allowance for loan losses to net loans		8.4	%		5.9	%

An analysis of the allowance for loan losses follows:


	Six Months Ended September 30,
	2011			2010

Balance at beginning of period	$	329,885		$	781,758
Charge-offs		(232,304	)		(507,375	)
Provision for loan losses		155,144			273,720

Balance at end of period	$	252,725		$	548,103

The fair value of Member Loans at amortized cost is equivalent to their net carrying value.

As of September 30, 2011, our aggregate allowance for loan losses was $252,725, which represented 8.4% of Member Loans at amortized cost. As of March 31, 2011, our aggregate allowance for loan losses was $329,885, which represented 5.9% of Member Loans at amortized cost.

Loan loss provisions were $80,240 and $91,706 for the three months ended September 30, 2011 and 2010, respectively, and $155,144 and $273,720 for the six months ended September 2011 and 2010, respectively. Loan loss provisions arise only from Member Loans at amortized cost, not from Member Loans at fair value. For the six months ended September 30, 2011, we charged off a total of 89 Member Loans at amortized cost with an aggregate principal balance of $232,304 and for the six months ended September 30, 2010, we charged off a total of 135 Member Loans at amortized cost with an aggregate principal balance of $507,375.

At September 30, 2011, we had 32 Member Loans at amortized cost classified as impaired with a total outstanding principal balance of $128,928 and specific allowances totaling $91,998. At March 31, 2011, we had 43 Member Loans at amortized cost classified as impaired with a total outstanding principal balance of $118,171 and specific allowances totaling $66,685. Each impaired loan at each period end had a specific allowance.

The average balances of impaired Member Loans at amortized cost and the interest income recognized during the three and six month periods ended September 30, 2011, are as follows:


	Three Months Ended		Six Months Ended
	September 30, 2011		September 30, 2011
Average principal balance of impaired loans during the period	$	86,226	$	102,199
Interest income received and recognized	$	1,098	$	2,672

At September 30, 2011, we had 12 impaired Member Loans at amortized cost representing $57,178 of outstanding principal balance that were on nonaccrual status and at March 31, 2011, we had 16 impaired Member Loans at amortized cost representing $36,615 of outstanding principal balance that were on nonaccrual status. If such nonaccrual loans reach 150 days delinquency, the outstanding principal balance will be written off.