Note I - Income Taxes

Components of the provision for income taxes were as follows.

	Year ended February 28 (29),
(Dollar amounts in thousands)	2001		2000		1999
Federal expense - deferred	$	204,262	$	220,955	$	204,186
State expense - deferred		7,620		-		42,218
	$	211,882	$	220,955	$	246,404

	Year ended February 28 (29),
	2001	2000	1999
Statutory federal income tax rate	35.0%	35.0%	35.0%
State income and franchise taxes, net of federal tax effect	3.0	4.0	4.0
Change in expected state tax rate	(1.8)	(4.0)	-
Effective income tax rate	36.2%	35.0%	39.0%

  In Fiscal 2000, the Company initiated a corporate reorganization related to its servicing operations. Further refinements to the reorganization plan were made in Fiscal 2001. As a result of the reorganization, future state income tax liabilities are expected to be less than the amounts that were previously recorded as deferred income tax expense and liability in the Company's financial statements. The expected reduction in tax liabilities was reflected as a reduction in deferred state income tax expense in Fiscal 2000 and Fiscal 2001.

  The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities are presented below.

	February 28 (29),
(Dollar amounts in thousands)	2001		2000
Deferred income tax assets:
Net operating losses	$	154,069	$	139,288
State income and franchise taxes		57,958		53,625
Reserves, accrued expenses and other		66,376		48,336
Losses (gains) on available-for-sale securities		-		1,150
Total deferred income tax assets		278,403		242,399
Deferred income tax liabilities:
Mortgage servicing rights		1,722,960		1,493,297
Gains (losses) on available-for-sale securities		125,446		-
Gain on sale of subsidiary		-		21,413
Total deferred income tax liabilities		1,848,406		1,514,710
Deferred income taxes	$	1,570,003	$	1,272,311