Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2015

Allowance for Credit Losses and Recorded Investments in Loans

Allowance for Loan Losses Metrics



	Allowance for Loan Losses
	Three Months Ended March 31, 2015
	FFELP Loans			Private Education Loans			Total
Allowance for Loan Losses
Beginning balance	$	5,268		$	78,574		$	83,842
Total provision	435			16,183			16,618
Net charge-offs:
Charge-offs	(1,134		)	(8,727		)	(9,861		)
Recoveries	—			1,387			1,387
Net charge-offs	(1,134		)	(7,340		)	(8,474		)
Loan sales⁽¹⁾	—			(2,181		)	(2,181		)
Ending Balance	$	4,569		$	85,236		$	89,805
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	20,105		$	20,105
Ending balance: collectively evaluated for impairment	$	4,569		$	65,131		$	69,700
Loans:
Ending balance: individually evaluated for impairment	$	—		$	122,120		$	122,120
Ending balance: collectively evaluated for impairment	$	1,208,977		$	9,646,641		$	10,855,618
Net charge-offs as a percentage of average loans in repayment (annualized)⁽²⁾	0.50		%	0.51		%
Allowance as a percentage of the ending total loan balance	0.38		%	0.87		%
Allowance as a percentage of the ending loans in repayment⁽²⁾	0.52		%	1.42		%
Allowance coverage of net charge-offs (annualized)	1.01			2.90
Ending total loans, gross	$	1,208,977		$	9,768,761
Average loans in repayment⁽²⁾	$	898,360		$	5,705,067
Ending loans in repayment⁽²⁾	$	872,579		$	5,995,121

____________

⁽¹⁾ Represents fair value write-downs on loans sold.

⁽²⁾ Loans in repayment includes in-school loans making interest only and fixed payments as well as loans that have entered full principal and interest repayment status after any applicable grace period.



	Allowance for Loan Losses
	Three Months Ended March 31, 2014
	FFELP Loans			Private Education Loans			Total
Allowance for Loan Losses
Beginning balance	$	6,318		$	61,763		$	68,081
Total provision	506			38,653			39,159
Charge-offs⁽¹⁾	(643		)	—			(643		)
Loan sales⁽²⁾	—			(28,963		)	(28,963		)
Ending Balance	$	6,181		$	71,453		$	77,634
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	6,181		$	71,453		$	77,634
Loans:
Ending balance: individually evaluated for impairment	$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	$	1,396,776		$	7,274,718		$	8,671,494
Charge-offs as a percentage of average loans in repayment (annualized)⁽³⁾	0.25		%	—		%
Allowance as a percentage of the ending total loan balance	0.44		%	0.98		%
Allowance as a percentage of the ending loans in repayment⁽³⁾	0.62		%	1.67		%
Allowance coverage of charge-offs (annualized)	2.40			—
Ending total loans, gross	$	1,396,776		$	7,274,718
Average loans in repayment⁽³⁾	$	1,023,329		$	4,329,157
Ending loans in repayment⁽³⁾	$	997,538		$	4,278,969

____________

⁽¹⁾ Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient prior to being charged-off.

⁽²⁾ Represents fair value write-downs on loans sold.

⁽³⁾ Loans in repayment includes in-school loans making interest only and fixed payments as well as loans that have entered full principal and interest repayment status after any applicable grace period.

Impaired Financing Receivables

At March 31, 2015 and December 31, 2014, all of our TDR loans had a related allowance recorded. The following table provides the recorded investment, unpaid principal balance and related allowance for our TDR loans.



	Recorded Investment		Unpaid Principal Balance		Allowance

March 31, 2015
TDR Loans	$	123,702	$	122,120	$	20,105

December 31, 2014
TDR Loans	$	60,278	$	59,402	$	9,815

Average Recorded Investment And Interest Income Recognized For Troubled Debt Restructuring Loans

The following table provides the average recorded investment and interest income recognized for our TDR loans.



	Three Months Ended
	March 31, 2015
	Average Recorded Investment		Interest Income Recognized

TDR Loans	$	88,120	$	2,396

Age Analysis of Past Due Loans Delinquencies

The following tables provide information regarding the loan status of our Private Education Loans and the aging of our past due Private Education Loans. Loans in repayment includes in-school loans making interest only and fixed payments as well as loans that have entered full principal and interest repayment status after any applicable grace period.



	Private Education Loans
	March 31,					December 31,
	2015					2014
	Balance			%		Balance			%
Loans in-school/grace/deferment⁽¹⁾	$	3,603,478				$	3,027,143
Loans in forbearance⁽²⁾	170,162					135,018
Loans in repayment and percentage of each status:
Loans current	5,896,132			98.4	%	5,045,600			98.0	%
Loans delinquent 31-60 days⁽³⁾	54,883			0.9		63,873			1.2
Loans delinquent 61-90 days⁽³⁾	31,202			0.5		29,041			0.6
Loans delinquent greater than 90 days⁽³⁾	12,904			0.2		10,701			0.2
Total loans in repayment	5,995,121			100.0	%	5,149,215			100.0	%
Total loans, gross	9,768,761					8,311,376
Deferred origination costs	17,627					13,845
Total loans	9,786,388					8,325,221
Allowance for loan losses	(85,236		)			(78,574		)
Total loans, net	$	9,701,152				$	8,246,647
Percentage of loans in repayment				61.4	%				62.0	%
Delinquencies as a percentage of loans in repayment				1.7	%				2.0	%
Loans in forbearance as a percentage of loans in repayment and forbearance				2.8	%				2.6	%


⁽¹⁾	Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).


⁽²⁾	Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.


⁽³⁾	The period of delinquency is based on the number of days scheduled payments are contractually past due.

The following table provides information regarding the loan status of TDR loans and the aging of TDR loans that are past due.



	March 31,				December 31,
	2015				2014
	Balance		%		Balance		%
TDR loans in in-school/grace/deferment⁽¹⁾	$	1,481			$	2,915
TDR loans in forbearance⁽²⁾	40,128				18,620
TDR loans in repayment and percentage of each status:
Loans current	73,944		91.8	%	34,554		91.2	%
Loans delinquent 31-60 days⁽³⁾	3,921		4.9		1,953		5.2
Loans delinquent 61-90 days⁽³⁾	1,873		2.3		983		2.6
Loans delinquent greater than 90 days⁽³⁾	773		1.0		377		1.0
Total TDR loans in repayment	80,511		100.0	%	37,867		100.0	%
Total TDR loans, gross	$	122,120			$	59,402

_____


⁽¹⁾	Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).


⁽²⁾	Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.


⁽³⁾	The period of delinquency is based on the number of days scheduled payments are contractually past due.

Modified Loans Accounts For Troubled Debt Restructuring

The following table provides the amount of modified loans that resulted in a TDR in the periods presented. Additionally, the table summarizes charge-offs occurring in the TDR portfolio, as well as TDRs for which a payment default occurred in the current period and within 12 months of the loan first being designated as a TDR. We define payment default as 60 day past due for this disclosure. The majority of our loans that are considered TDRs involve a temporary forbearance of payments and do not change the contractual interest rate of the loan.



	Three Months Ended
	March 31, 2015
	Modified Loans		Charge-offs		Payment-Default

TDR Loans	$	122,120	$	930	$	4,785

Private Education Loan Portfolio Stratified by Key Credit Quality Indicators

The following table highlights the gross principal balance of our Private Education Loan portfolio stratified by key credit quality indicators.



	Private Education Loans
	Credit Quality Indicators
	March 31, 2015				December 31, 2014
Credit Quality Indicators:	Balance⁽¹⁾		% of Balance		Balance⁽¹⁾		% of Balance

Cosigners:
With cosigner	$	8,804,812	90	%	$	7,465,339	90	%
Without cosigner	963,949		10		846,037		10
Total	$	9,768,761	100	%	$	8,311,376	100	%

FICO at Origination:
Less than 670	$	638,195	6	%	$	558,801	7	%
670-699	1,431,436		15		1,227,860		15
700-749	3,103,824		32		2,626,238		32
Greater than or equal to 750	4,595,306		47		3,898,477		46
Total	$	9,768,761	100	%	$	8,311,376	100	%

Seasoning⁽²⁾:
1-12 payments	$	3,031,655	31	%	$	2,373,117	29	%
13-24 payments	1,650,103		17		1,532,042		18
25-36 payments	812,674		8		755,143		9
37-48 payments	412,865		4		411,493		5
More than 48 payments	257,986		3		212,438		3
Not yet in repayment	3,603,478		37		3,027,143		36
Total	$	9,768,761	100	%	$	8,311,376	100	%


⁽¹⁾	Balance represents gross Private Education Loans.


⁽²⁾	Number of months in active repayment for which a scheduled payment was due.

Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans greater than 90 days past due as compared to our allowance for uncollectible interest. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due portfolio for all periods presented.



	Private Education Loan
	Accrued Interest Receivable
	Total Interest Receivable		Greater than 90 days Past Due		Allowance for Uncollectible Interest

March 31, 2015	$	512,501	$	473	$	2,634
December 31, 2014	$	445,710	$	443	$	3,517