Unfunded Loan Commitments (Tables)

6 Months Ended

Jun. 30, 2021

Allowance for credit losses and recorded investments in loans

Allowance for Credit Losses Metrics


	Allowance for Credit Losses
	Three Months Ended June 30, 2021
	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,318		$	1,173,375		$	1,328		$	1,179,021
Transfer from unfunded commitment liability(1)	—			24,556			—			24,556
Provisions:
Provision for current period	(2)			1,014			182			1,194
Loan sale reduction to provision	—			(1,477)			—			(1,477)

Total provisions(2)	(2)			(463)			182			(283)
Net charge-offs:
Charge-offs	(54)			(49,900)			(74)			(50,028)
Recoveries	—			6,972			6			6,978
Net charge-offs	(54)			(42,928)			(68)			(43,050)

Ending Balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	80,495		$	—		$	80,495
Ending balance: collectively evaluated for impairment	$	4,262		$	1,074,045		$	1,442		$	1,079,749
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,192,743		$	—		$	1,192,743
Ending balance: collectively evaluated for impairment	$	716,958		$	19,285,014		$	12,784		$	20,014,756
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.04		%	1.16		%	2.29		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.64		%	11.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.78		%	7.79		%	11.28		%
Allowance coverage of net charge-offs (annualized)	19.73			6.72			5.30
Ending total loans, gross	$	716,958		$	20,477,757		$	12,784
Average loans in repayment(3)	$	546,306		$	14,743,360		$	11,855
Ending loans in repayment(3)	$	548,488		$	14,825,375		$	12,784

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2) Below is a reconciliation of the provision for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended June 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(463)
Provisions for unfunded loan commitments	69,960
Total Private Education Loan provisions for credit losses	69,497

Other impacts to the provisions for credit losses:
FFELP Loans	(2)
Credit Cards	182
Total	180
Provisions for credit losses reported in consolidated statements of income	$	69,677

(3) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period.


	Allowance for Credit Losses
	Three Months Ended June 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,296		$	1,515,781		$	152,673		$	574		$	1,673,324


Transfer from unfunded commitment liability(1)	—			37,010			—			—			37,010
Provisions:
Provision for current period	173			234,015			23,929			509			258,626
Loan sale reduction to provision	—			—			—			—			—

Total provisions(2)	173			234,015			23,929			509			258,626
Net charge-offs:
Charge-offs	(84)			(31,779)			(14,601)			(41)			(46,505)
Recoveries	—			5,532			1,336			—			6,868
Net charge-offs	(84)			(26,247)			(13,265)			(41)			(39,637)

Ending Balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	160,234		$	—		$	—		$	160,234
Ending balance: collectively evaluated for impairment	$	4,385		$	1,600,325		$	163,337		$	1,042		$	1,769,089
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,520,240		$	—		$	—		$	1,520,240
Ending balance: collectively evaluated for impairment	$	754,340		$	19,965,225		$	772,086		$	10,706		$	21,502,357
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.07		%	0.75		%	6.87		%	1.77		%
Allowance as a percentage of the ending total loan balance	0.58		%	8.19		%	21.16		%	9.73		%
Allowance as a percentage of the ending loans in repayment(3)	0.97		%	12.13		%	22.46		%	9.73		%
Allowance coverage of net charge-offs (annualized)	13.05			16.77			3.08			6.35
Ending total loans, gross	$	754,340		$	21,485,465		$	772,086		$	10,706
Average loans in repayment(3)	$	513,418		$	14,011,841		$	772,137		$	9,265
Ending loans in repayment(3)	$	452,617		$	14,512,723		$	727,214		$	10,706

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.

(2)Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Three Months Ended June 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	234,015
Provisions for unfunded loan commitments	93,261
Total Private Education Loan provisions for credit losses	327,276

Other impacts to the provisions for credit losses:
Personal Loans	23,929
FFELP Loans	173
Credit Cards	509
Total	24,611
Provisions for credit losses reported in consolidated statements of income	$	351,887


	Allowance for Credit Losses
	Six Months Ended June 30, 2021
	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,378		$	1,355,844		$	1,501		$	1,361,723
Transfer from unfunded commitment liability(1)	—			151,436			—			151,436
Provisions:
Provision for current period	27			(253,928)			96			(253,805)
Loan sale reduction to provision	—			(10,335)			—			(10,335)
Loan transfer from held-for-sale	—			1,887			—			1,887
Total provisions(2)	27			(262,376)			96			(262,253)
Net charge-offs:
Charge-offs	(143)			(105,039)			(162)			(105,344)
Recoveries	—			14,675			7			14,682
Net charge-offs	(143)			(90,364)			(155)			(90,662)

Ending Balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	80,495		$	—		$	80,495
Ending balance: collectively evaluated for impairment	$	4,262		$	1,074,045		$	1,442		$	1,079,749
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,192,743		$	—		$	1,192,743
Ending balance: collectively evaluated for impairment	$	716,958		$	19,285,014		$	12,784		$	20,014,756
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.05		%	1.23		%	2.59		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.64		%	11.28		%
Allowance as a percentage of the ending loans in repayment(3)	0.78		%	7.79		%	11.28		%
Allowance coverage of net charge-offs (annualized)	14.90			6.39			4.65
Ending total loans, gross	$	716,958		$	20,477,757		$	12,784
Average loans in repayment(3)	$	551,765		$	14,738,505		$	11,964
Ending loans in repayment(3)	$	548,488		$	14,825,375		$	12,784

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Six Months Ended June 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(262,376)
Provisions for unfunded loan commitments	106,163
Total Private Education Loan provisions for credit losses	(156,213)

Other impacts to the provisions for credit losses:
FFELP Loans	27
Credit Cards	96
Total	123
Provisions for credit losses reported in consolidated statements of income	$	(156,090)


	Allowance for Credit Losses
	Six Months Ended June 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	1,633		$	374,300		$	65,877		$	102		$	441,912
Day 1 adjustment for the adoption of CECL	2,852			1,060,830			79,183			188			1,143,053
Balance at January 1, 2020	4,485			1,435,130			145,060			290			1,584,965
Transfer from unfunded commitment liability(1)	—			179,085			—			—			179,085
Provisions:
Provision for current period	210			377,877			49,247			800			428,134
Loan sale reduction to provision	—			(161,793)			—			—			(161,793)

Total provisions(2)	210			216,084			49,247			800			266,341
Net charge-offs:
Charge-offs	(310)			(83,248)			(33,848)			(48)			(117,454)
Recoveries	—			13,508			2,878			—			16,386
Net charge-offs	(310)			(69,740)			(30,970)			(48)			(101,068)

Ending Balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	160,234		$	—		$	—		$	160,234
Ending balance: collectively evaluated for impairment	$	4,385		$	1,600,325		$	163,337		$	1,042		$	1,769,089
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,520,240		$	—		$	—		$	1,520,240
Ending balance: collectively evaluated for impairment	$	754,340		$	19,965,225		$	772,086		$	10,706		$	21,502,357
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.11		%	0.91		%	7.13		%	1.31		%
Allowance as a percentage of the ending total loan balance	0.58		%	8.19		%	21.16		%	9.73		%
Allowance as a percentage of the ending loans in repayment(3)	0.97		%	12.13		%	22.46		%	9.73		%
Allowance coverage of net charge-offs (annualized)	7.07			12.62			2.64			10.85
Ending total loans, gross	$	754,340		$	21,485,465		$	772,086		$	10,706
Average loans in repayment(3)	$	553,402		$	15,306,349		$	869,133		$	7,326
Ending loans in repayment(3)	$	452,617		$	14,512,723		$	727,214		$	10,706

____________

(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
	Six Months Ended June 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	216,084
Provisions for unfunded loan commitments	146,804
Total Private Education Loan provisions for credit losses	362,888

Other impacts to the provisions for credit losses:
Personal Loans	49,247
FFELP Loans	210
Credit Cards	800
Total	50,257
Provisions for credit losses reported in consolidated statements of income	$	413,145

The tables below summarize the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance.


	Three Months Ended June 30,
	2021				2020
	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments

Beginning Balance	$	19,367	$	457,453	$	29,707	$	449,807
Provision/New commitments - net(1)	48,203		1,235,604		72,111		1,165,224
Other provision items	21,757		—		21,150		—
Transfer - funded loans(2)	(24,555)		(531,361)		(37,010)		(495,989)
Ending Balance	$	64,772	$	1,161,696	$	85,958	$	1,119,042

	Six Months Ended June 30,
	2021				2020
	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments

Beginning Balance	$	110,044	$	1,673,018	$	2,481	$	1,910,603
Day 1 adjustment for the adoption of CECL	—		—		115,758		—
Balance at January 1	110,044		1,673,018		118,239		1,910,603
Provision/New commitments - net(1)	88,400		2,078,765		121,672		2,000,170
Other provision items	17,763		—		25,132		—
Transfer - funded loans(2)	(151,435)		(2,590,087)		(179,085)		(2,791,731)
Ending Balance	$	64,772	$	1,161,696	$	85,958	$	1,119,042

________________

(1) Net of expirations of commitments unused.

(2) When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses.