Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Preferred Stock

At December 31, 2015, we had outstanding 3.3 million shares of 6.97 percent Cumulative Redeemable Preferred Stock, Series A (the “Series A Preferred Stock”) and 4.0 million shares of Floating-Rate Non-Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”). In connection with the Spin-Off, the Company, by reason of a statutory merger, succeeded pre-Spin-Off SLM and issued Series A Preferred Stock and Series B Preferred Stock, on terms substantially similar to those of pre-Spin-Off SLM's respective series of preferred stock. Neither series has a maturity date but can be redeemed at our option. Redemption would include any accrued and unpaid dividends up to the redemption date. The shares have no preemptive or conversion rights and are not exchangeable for any of our other securities or property. Dividends on both series are not mandatory and are paid quarterly, when, as, and if declared by the Board of Directors. Holders of Series A Preferred Stock are entitled to receive cumulative, quarterly cash dividends at the annual rate of $3.485 per share. Holders of Series B Preferred Stock are entitled to receive quarterly dividends based on 3-month LIBOR plus 170 basis points per annum in arrears. Upon liquidation or dissolution of the Company, holders of the Series A and Series B Preferred Stock are entitled to receive $50 and $100 per share, respectively, plus an amount equal to accrued and unpaid dividends for the then current quarterly dividend period, if any, pro rata, and before any distribution of assets are made to holders of our common stock.

Common Stock

Our shareholders have authorized the issuance of 1.125 billion shares of common stock (par value of $.20). At December 31, 2015, 426 million shares were issued and outstanding and 52 million shares were unissued but encumbered for outstanding stock options, restricted stock units and dividend equivalent units for employee compensation and remaining authority for stock-based compensation plans.

Because of the carve-out accounting treatment, there were no common stock dividends recognized in these financial statements for the years ended December 31, 2015, 2014 and 2013. For additional information, see Note 2, “Significant Accounting Policies — Basis of Presentation.”

We currently do not intend to initiate a publicly announced share repurchase program. We only expect to repurchase common stock acquired in connection with taxes withheld resulting from award exercises and vesting under our employee stock-based compensation plans. The following table summarizes our common share repurchases and issuances associated with these programs.

	Years Ended December 31,
(Shares and per share amounts in actuals)	2015		2014		2013
Shares repurchased related to employee stock-based compensation plans(1)	3,008,913		1,365,277		6,365,002
Average purchase price per share	$	9.65	$	8.93	$	21.76
Common shares issued(2)	5,873,309		2,013,805		9,702,976

⁽¹⁾ Comprises shares withheld from stock option exercises and vesting of restricted stock for employees’ tax withholding obligations and shares tendered by employees to satisfy option exercise costs.

⁽²⁾ Common shares issued under our various compensation and benefit plans.

The closing price of our common stock on December 31, 2015 was $6.52.

Separation Adjustments Related to the Spin-Off of Navient

During 2015, we finalized the balances received as part of the Spin-Off transaction for the 2014 federal and state consolidated tax liability with Navient.  As a result, we recorded a $1.7 million adjustment to additional paid-in capital related to the 2014 tax returns.

Investment With Entities That Are Now Subsidiaries of Navient

Prior to the Spin-Off, there were transactions between us and affiliates of pre-Spin-Off SLM that are now subsidiaries of Navient. As part of the carve-out, these expenses were included in our results even though the actual payments for the expenses were paid by the aforementioned affiliates. As such, amounts equal to these payments have been treated as equity contributions in the table below. Certain payments made by us to these affiliates prior to the Spin-Off were treated as dividends.

Net transfers (to)/from the entity that is now a subsidiary of Navient are included within Navient's subsidiary investment on the consolidated statements of changes in equity. The components of the net transfers (to)/from the entity that is now a subsidiary of Navient are summarized below for the years ended December 31, 2014 and 2013. There were no transfers in the year ended December 31, 2015.

	Years Ended December 31,
	2014			2013
Capital contributions:
Loan origination activities	$	32,452		$	124,722
Loan sales	45			35
Corporate overhead activities	21,216			62,031
Special cash contribution	472,718			—
Other	19,650			2,004
Total capital contributions	546,081			188,792
Dividend	—			(120,000		)
Corporate push-down	4,977			3,093
Net change in income tax accounts	15,659			(134,219		)
Net change in receivable/payable	(87,277		)	(101,044		)
Other	(31		)	—
Total net transfers (to)/from the entity that is now a subsidiary of Navient	$	479,409		$	(163,378	)

Capital Contributions

During the years ended December 31, 2014 and 2013, pre-Spin-Off SLM contributed capital to the Bank by funding loan origination activities, purchases of loans in excess of the loans’ fair values, providing corporate overhead functions and other activities.

Capital contributed for loan origination activities reflects the fact that the loan origination function was conducted by a subsidiary of pre-Spin-Off SLM (now a subsidiary of Navient). The Bank did not pay for the costs incurred by pre-Spin-Off SLM in connection with these functions. The costs eligible to be capitalized are recorded on the respective balance sheets and the costs not eligible for capitalization have been recognized as expenses in the respective statements of income.

Certain general corporate overhead expenses of the Bank were incurred and paid for by pre-Spin-Off SLM.

Corporate Push-Down

The consolidated balance sheets include certain assets and liabilities that have historically been held at pre-Spin-Off SLM but which are specifically identifiable or otherwise allocable to the Company. The cash and cash equivalents held by pre-Spin-Off SLM at the corporate level were not allocated to the Bank for any of the periods presented.

Receivable/Payable with Affiliate

All significant intercompany payable/receivable balances between the Bank and pre-Spin-Off SLM are considered to be effectively settled for cash in the combined financial statements at the time the transaction is recorded.