Unfunded Loan Commitments (Tables)

9 Months Ended

Sep. 30, 2021

Allowance for credit losses and recorded investments in loans

Allowance for Credit Losses Metrics


	Allowance for Credit Losses
	Three Months Ended September 30, 2021
	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244
Transfer from unfunded commitment liability(1)	—			110,613			—			110,613
Provisions:
Provision for current period	50			(6,995)			415			(6,530)
Loan sale reduction to provision	—			—			—			—

Total provisions(2)	50			(6,995)			415			(6,530)
Net charge-offs:
Charge-offs	(106)			(56,000)			(119)			(56,225)
Recoveries	—			7,302			3			7,305
Net charge-offs	(106)			(48,698)			(116)			(48,920)

Ending Balance	$	4,206		$	1,209,460		$	1,741		$	1,215,407
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	69,626		$	—		$	69,626
Ending balance: collectively evaluated for impairment	$	4,206		$	1,139,834		$	1,741		$	1,145,781
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,148,282		$	—		$	1,148,282
Ending balance: collectively evaluated for impairment	$	705,691		$	20,554,555		$	17,766		$	21,278,012
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.08		%	1.29		%	3.07		%
Allowance as a percentage of the ending total loan balance	0.60		%	5.57		%	9.80		%
Allowance as a percentage of the ending loans in repayment(3)	0.79		%	7.81		%	9.80		%
Allowance coverage of net charge-offs (annualized)	9.92			6.21			3.75
Ending total loans, gross	$	705,691		$	21,702,837		$	17,766
Average loans in repayment(3)	$	540,018		$	15,108,802		$	15,098
Ending loans in repayment(3)	$	530,476		$	15,490,132		$	17,766

____________

(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 September 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(6,995)
Provisions for unfunded loan commitments	144,972
Total Private Education Loan provisions for credit losses	137,977

Other impacts to the provisions for credit losses:
FFELP Loans	50
Credit Cards	415
Total	465
Provisions for credit losses reported in consolidated statements of income	$	138,442

(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 September 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323


Transfer from unfunded commitment liability(1)	—			100,470			—			—			100,470
Provisions:
Provision for current period	67			(81,710)			(8,762)			391			(90,014)
Loan sale reduction to provision	—			—			(42,916)			—			(42,916)

Total provisions(2)	67			(81,710)			(51,678)			391			(132,930)
Net charge-offs:
Charge-offs	(89)			(55,298)			(5,231)			(48)			(60,666)
Recoveries	—			4,790			2,106			—			6,896
Net charge-offs	(89)			(50,508)			(3,125)			(48)			(53,770)
Loan sales	—			—			(108,534)			—			(108,534)
Ending Balance	$	4,363		$	1,728,811		$	—		$	1,385		$	1,734,559
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	138,663		$	—		$	—		$	138,663
Ending balance: collectively evaluated for impairment	$	4,363		$	1,590,148		$	—		$	1,385		$	1,595,896
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,495,161		$	—		$	—		$	1,495,161
Ending balance: collectively evaluated for impairment	$	745,556		$	21,119,166		$	—		$	11,540		$	21,876,262
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.07		%	1.33		%	—		%	1.73		%
Allowance as a percentage of the ending total loan balance	0.59		%	7.64		%	—		%	12.00		%
Allowance as a percentage of the ending loans in repayment(3)	0.77		%	10.91		%	—		%	12.00		%
Allowance coverage of net charge-offs (annualized)	12.26			8.56			—			7.21
Ending total loans, gross	$	745,556		$	22,614,327		$	—		$	11,540
Average loans in repayment(3)	$	510,809		$	15,182,703		$	—		$	11,103
Ending loans in repayment(3)	$	564,442		$	15,853,309		$	—		$	11,540

____________

(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 September 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(81,710)
Provisions for unfunded loan commitments	129,290
Total Private Education Loan provisions for credit losses	47,580

Other impacts to the provisions for credit losses:
Personal Loans	(51,678)
FFELP Loans	67
Credit Cards	391
Total	(51,220)
Provisions for credit losses reported in consolidated statements of income	$	(3,640)


	Allowance for Credit Losses
	Nine Months Ended September 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)	—			262,049			—			262,049
Provisions:
Provision for current period	77			(260,923)			511			(260,335)
Loan sale reduction to provision	—			(10,335)			—			(10,335)
Loan transfer from held-for-sale	—			1,887			—			1,887
Total provisions(2)	77			(269,371)			511			(268,783)
Net charge-offs:
Charge-offs	(249)			(161,039)			(281)			(161,569)
Recoveries	—			21,977			10			21,987
Net charge-offs	(249)			(139,062)			(271)			(139,582)

Ending Balance	$	4,206		$	1,209,460		$	1,741		$	1,215,407
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	69,626		$	—		$	69,626
Ending balance: collectively evaluated for impairment	$	4,206		$	1,139,834		$	1,741		$	1,145,781
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,148,282		$	—		$	1,148,282
Ending balance: collectively evaluated for impairment	$	705,691		$	20,554,555		$	17,766		$	21,278,012
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.06		%	1.25		%	2.75		%
Allowance as a percentage of the ending total loan balance	0.60		%	5.57		%	9.80		%
Allowance as a percentage of the ending loans in repayment(3)	0.79		%	7.81		%	9.80		%
Allowance coverage of net charge-offs (annualized)	12.67			6.52			4.82
Ending total loans, gross	$	705,691		$	21,702,837		$	17,766
Average loans in repayment(3)	$	547,394		$	14,877,937		$	13,136
Ending loans in repayment(3)	$	530,476		$	15,490,132		$	17,766

____________

(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
	Nine Months Ended September 30, 2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(269,371)
Provisions for unfunded loan commitments	251,135
Total Private Education Loan provisions for credit losses	(18,236)

Other impacts to the provisions for credit losses:
FFELP Loans	77
Credit Cards	511
Total	588
Provisions for credit losses reported in consolidated statements of income	$	(17,648)


	Allowance for Credit Losses
	Nine Months Ended September 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)	—			279,555			—			—			279,555
Provisions:
Provision for current period	277			296,167			40,485			1,191			338,120
Loan sale reduction to provision	—			(161,793)			(42,916)			—			(204,709)

Total provisions(2)	277			134,374			(2,431)			1,191			133,411
Net charge-offs:
Charge-offs	(399)			(138,546)			(39,079)			(96)			(178,120)
Recoveries	—			18,298			4,984			—			23,282
Net charge-offs	(399)			(120,248)			(34,095)			(96)			(154,838)
Loan sales	—			—			(108,534)			—			(108,534)
Ending Balance	$	4,363		$	1,728,811		$	—		$	1,385		$	1,734,559
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	138,663		$	—		$	—		$	138,663
Ending balance: collectively evaluated for impairment	$	4,363		$	1,590,148		$	—		$	1,385		$	1,595,896
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,495,161		$	—		$	—		$	1,495,161
Ending balance: collectively evaluated for impairment	$	745,556		$	21,119,166		$	—		$	11,540		$	21,876,262
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.10		%	1.05		%	—		%	1.51		%
Allowance as a percentage of the ending total loan balance	0.59		%	7.64		%	—		%	12.00		%
Allowance as a percentage of the ending loans in repayment(3)	0.77		%	10.91		%	—		%	12.00		%
Allowance coverage of net charge-offs (annualized)	8.20			10.78			—			10.82
Ending total loans, gross	$	745,556		$	22,614,327		$	—		$	11,540
Average loans in repayment(3)	$	546,443		$	15,336,253		$	—		$	8,499
Ending loans in repayment(3)	$	564,442		$	15,853,309		$	—		$	11,540

____________

(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
	Nine Months Ended September 30, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	134,374
Provisions for unfunded loan commitments	276,094
Total Private Education Loan provisions for credit losses	410,468

Other impacts to the provisions for credit losses:
Personal Loans	(2,431)
FFELP Loans	277
Credit Cards	1,191
Total	(963)
Provisions for credit losses reported in consolidated statements of income	$	409,505

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 September 30,
	2021				2020
	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments

Beginning Balance	$	64,772	$	1,161,696	$	85,958	$	1,119,042
Provision/New commitments - net(1)	129,904		2,885,024		157,337		2,542,390
Other provision items	15,068		—		(28,047)		—
Transfer - funded loans(2)	(110,613)		(2,083,128)		(100,470)		(1,890,305)
Ending Balance	$	99,131	$	1,963,592	$	114,778	$	1,771,127

	Nine Months Ended September 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)	218,304		4,963,789		279,008		4,542,560
Other provision items	32,831		—		(2,914)		—
Transfer - funded loans(2)	(262,048)		(4,673,215)		(279,555)		(4,682,036)
Ending Balance	$	99,131	$	1,963,592	$	114,778	$	1,771,127

________________

(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.