Delaware | 001-13251 | 52-2013874 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
300 Continental Drive, Newark, Delaware | 19713 |
(Address of principal executive offices) | (Zip Code) |
c | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
c | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
c | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
c | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
99.1* | Press Release, dated July 22, 2015. |
* | Furnished herewith. |
SLM CORPORATION | ||
Date: July 22, 2015 | By: | /s/ STEVEN J. MCGARRY |
Steven J. McGarry | ||
Executive Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1* | Press Release, dated July 22, 2015. |
* | Furnished herewith. |
![]() | NEWS RELEASE |
FOR IMMEDIATE RELEASE |
• | Private education loan originations of $384 million, up 2 percent. |
• | Net interest income of $168 million, up 16 percent. |
• | Net interest margin of 5.49 percent, up 17 basis points. |
• | Average private education loans outstanding of $9.4 billion, up 27 percent. |
• | Average yield on the private education loan portfolio was 7.96 percent, down 26 basis points. |
• | Private education loan provision for loan losses was $15 million, up $15 million. The year-ago quarter provision included a $14 million benefit from a change to the loss confirmation period and the charge-off policy as described below. |
• | Loans in forbearance were 5.69 percent of private education loans in repayment and forbearance. The increase in loans in forbearance in the quarter was driven by the company's efforts to respond to FDIC encouragement that lenders provide aid to customers affected by the floods in Texas in the spring of 2015. A one-time, two month disaster forbearance was granted to all student loan customers resident in the impacted area. |
• | Delinquencies as a percentage of private education loans in repayment were 1.70 percent. |
June 30, 2015 | Well Capitalized Regulatory Requirements | |||
Tier 1 leverage | 12.5 percent | 5.0 percent | ||
Tier 1 risk-based capital | 15.2 percent | 8.0 percent | ||
Total risk-based capital | 16.0 percent | 10.0 percent | ||
Common equity Tier 1 capital | 15.2 percent | 6.5 percent |
• | Full-year private education loan originations of $4.3 billion. |
• | Full-year operating expenses of $340 million, plus an additional $7 million of reorganization expenses. |
• | Full-year loan sales of $1.5 billion at a net premium of 10.5-percent over book value. |
• | Full-year provision for private education loan losses of $95 million. |
• | Full-year diluted core earnings per share between $.57 and $.59. |
Media: | Martha Holler, 302-451-4900, martha.holler@SallieMae.com |
Investors: | Brian Cronin, 302-451-0304, brian.cronin@SallieMae.com |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands, except per share data and percentages) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 86,146 | $ | 40,900 | $ | 129,022 | $ | 88,348 | ||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.20 | $ | 0.09 | $ | 0.30 | $ | 0.20 | ||||||||
Weighted average shares used to compute diluted earnings per share | 432,742 | 430,750 | 432,523 | 432,689 | ||||||||||||
Return on assets | 2.8 | % | 1.6 | % | 2.2 | % | 1.7 | % | ||||||||
Operating efficiency ratio(1) | 37.2 | % | 40.8 | % | 42.1 | % | 43.4 | % | ||||||||
Other Operating Statistics | ||||||||||||||||
Ending Private Education Loans, net | $ | 9,245,259 | $ | 7,436,225 | $ | 9,245,259 | $ | 7,436,225 | ||||||||
Ending FFELP Loans, net | 1,177,649 | 1,357,746 | 1,177,649 | 1,357,746 | ||||||||||||
Ending total education loans, net | $ | 10,422,908 | $ | 8,793,971 | $ | 10,422,908 | $ | 8,793,971 | ||||||||
Average education loans | $ | 10,556,020 | $ | 8,735,805 | $ | 10,622,272 | $ | 8,779,811 | ||||||||
_______ | ||||||||||||||||
(1) Our efficiency ratio is calculated as operating expense, excluding restructuring and other reorganization expenses, divided by net interest income after provisions for loan losses and other income. |
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,278,863 | $ | 2,359,780 | ||||
Available-for-sale investments at fair value (cost of $175,158 and $167,740, respectively) | 173,845 | 168,934 | ||||||
Loans held for investment (net of allowance for losses of $91,866 and $83,842, respectively) | 10,422,908 | 9,509,786 | ||||||
Other interest-earning assets | 55,260 | 77,283 | ||||||
Accrued interest receivable | 562,239 | 469,697 | ||||||
Premises and equipment, net | 80,432 | 78,470 | ||||||
Acquired intangible assets, net | 2,485 | 3,225 | ||||||
Tax indemnification receivable | 228,910 | 240,311 | ||||||
Other assets | 70,019 | 64,757 | ||||||
Total assets | $ | 12,874,961 | $ | 12,972,243 | ||||
Liabilities | ||||||||
Deposits | $ | 10,340,605 | $ | 10,540,555 | ||||
Income taxes payable, net | 185,849 | 191,499 | ||||||
Upromise related liabilities | 283,584 | 293,004 | ||||||
Other liabilities | 102,750 | 117,227 | ||||||
Total liabilities | 10,912,788 | 11,142,285 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock, par value $0.20 per share, 20 million shares authorized: | ||||||||
Series A: 3.3 million and 3.3 million shares issued, respectively, at stated value of $50 per share | 165,000 | 165,000 | ||||||
Series B: 4 million and 4 million shares issued, respectively, at stated value of $100 per share | 400,000 | 400,000 | ||||||
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 430 million and 425 million shares issued, respectively | 86,003 | 84,961 | ||||||
Additional paid-in capital | 1,120,923 | 1,090,511 | ||||||
Accumulated other comprehensive loss (net of tax benefit of $7,171 and $7,186, respectively) | (11,448 | ) | (11,393 | ) | ||||
Retained earnings | 240,967 | 113,066 | ||||||
Total SLM Corporation stockholders' equity before treasury stock | 2,001,445 | 1,842,145 | ||||||
Less: Common stock held in treasury at cost: 4 million and 1 million shares, respectively | (39,272 | ) | (12,187 | ) | ||||
Total equity | 1,962,173 | 1,829,958 | ||||||
Total liabilities and equity | $ | 12,874,961 | $ | 12,972,243 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 195,287 | $ | 162,238 | $ | 393,143 | $ | 322,273 | ||||||||
Investments | 2,386 | 2,236 | 5,106 | 3,204 | ||||||||||||
Cash and cash equivalents | 801 | 1,099 | 1,581 | 1,965 | ||||||||||||
Total interest income | 198,474 | 165,573 | 399,830 | 327,442 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 29,482 | 21,034 | 59,052 | 43,624 | ||||||||||||
Other interest expense | 735 | — | 1,567 | 41 | ||||||||||||
Total interest expense | 30,217 | 21,034 | 60,619 | 43,665 | ||||||||||||
Net interest income | 168,257 | 144,539 | 339,211 | 283,777 | ||||||||||||
Less: provisions for loan losses | 15,558 | 1,014 | 32,176 | 40,173 | ||||||||||||
Net interest income after provisions for loan losses | 152,699 | 143,525 | 307,035 | 243,604 | ||||||||||||
Noninterest income: | ||||||||||||||||
Gains on sales of loans, net | 76,874 | 1,928 | 76,874 | 35,816 | ||||||||||||
Gains (losses) on derivatives and hedging activities, net | 1,602 | (9,458 | ) | 4,894 | (10,222 | ) | ||||||||||
Other | 10,912 | 15,229 | 18,919 | 23,365 | ||||||||||||
Total noninterest income | 89,388 | 7,699 | 100,687 | 48,959 | ||||||||||||
Expenses: | ||||||||||||||||
Compensation and benefits | 38,572 | 31,667 | 79,775 | 61,334 | ||||||||||||
Other operating expenses | 51,227 | 28,812 | 91,211 | 62,744 | ||||||||||||
Total operating expenses | 89,799 | 60,479 | 170,986 | 124,078 | ||||||||||||
Acquired intangible asset impairment and amortization expense | 370 | 1,156 | 740 | 2,995 | ||||||||||||
Restructuring and other reorganization expenses | 744 | 13,520 | 5,401 | 13,749 | ||||||||||||
Total expenses | 90,913 | 75,155 | 177,127 | 140,822 | ||||||||||||
Income before income tax expense | 151,174 | 76,069 | 230,595 | 151,741 | ||||||||||||
Income tax expense | 60,158 | 31,941 | 91,880 | 60,599 | ||||||||||||
Net income | 91,016 | 44,128 | 138,715 | 91,142 | ||||||||||||
Less: net loss attributable to noncontrolling interest | — | — | — | (434 | ) | |||||||||||
Net income attributable to SLM Corporation | 91,016 | 44,128 | 138,715 | 91,576 | ||||||||||||
Preferred stock dividends | 4,870 | 3,228 | 9,693 | 3,228 | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 86,146 | $ | 40,900 | $ | 129,022 | $ | 88,348 | ||||||||
Basic earnings per common share attributable to SLM Corporation | $ | 0.20 | $ | 0.10 | $ | 0.30 | $ | 0.21 | ||||||||
Average common shares outstanding | 425,688 | 422,805 | 425,061 | 424,751 | ||||||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.20 | $ | 0.09 | $ | 0.30 | $ | 0.20 | ||||||||
Average common and common equivalent shares outstanding | 432,742 | 430,750 | 432,523 | 432,689 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
“Core Earnings” adjustments to GAAP: | ||||||||||||||||
GAAP net income attributable to SLM Corporation | $ | 91,016 | $ | 44,128 | $ | 138,715 | $ | 91,576 | ||||||||
Preferred stock dividends | 4,870 | 3,228 | 9,693 | 3,228 | ||||||||||||
GAAP net income attributable to SLM Corporation common stock | $ | 86,146 | $ | 40,900 | $ | 129,022 | $ | 88,348 | ||||||||
Adjustments: | ||||||||||||||||
Net impact of derivative accounting(1) | (632 | ) | 7,031 | (2,901 | ) | 8,255 | ||||||||||
Net tax effect(2) | 252 | (2,708 | ) | 1,157 | (3,180 | ) | ||||||||||
Total “Core Earnings” adjustments to GAAP | (380 | ) | 4,323 | (1,744 | ) | 5,075 | ||||||||||
“Core Earnings” attributable to SLM Corporation common stock | $ | 85,766 | $ | 45,223 | $ | 127,278 | $ | 93,423 | ||||||||
GAAP diluted earnings per common share | $ | 0.20 | $ | 0.09 | $ | 0.30 | $ | 0.20 | ||||||||
Derivative adjustments, net of tax | 0.00 | 0.01 | 0.00 | 0.02 | ||||||||||||
“Core Earnings” diluted earnings per common share | $ | 0.20 | $ | 0.10 | $ | 0.29 | $ | 0.22 |
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