Unfunded Loan Commitments (Tables)

12 Months Ended

Dec. 31, 2021

Credit Loss [Abstract]

Allowance for credit losses and recorded investments in loans

Allowance for Credit Losses Metrics

 

Year Ended December 31, 2021 (dollars in thousands)	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)	—			301,655			—			301,655
Provisions:
Provision for current period	20			(233,852)			1,124			(232,708)
Loan sale reduction to provision	—			(66,460)			—			(66,460)
Loans transferred to held-for-sale	—			1,887			—			1,887
Total provisions(2)	20			(298,425)			1,124			(297,281)
Net charge-offs:
Charge-offs	(321)			(229,591)			(356)			(230,268)
Recoveries	—			29,494			12			29,506
Net charge-offs	(321)			(200,097)			(344)			(200,762)
Ending Balance	$	4,077		$	1,158,977		$	2,281		$	1,165,335
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	47,712		$	—		$	47,712
Ending balance: collectively evaluated for impairment	$	4,077		$	1,111,265		$	2,281		$	1,117,623
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,057,665		$	—		$	1,057,665
Ending balance: collectively evaluated for impairment	$	695,216		$	19,659,198		$	25,014		$	20,379,428
Net charge-offs as a percentage of average loans in repayment(3)	0.06		%	1.33		%	2.24		%
Allowance as a percentage of the ending total loan balance	0.59		%	5.59		%	9.12		%
Allowance as a percentage of the ending loans in repayment(3)	0.74		%	7.47		%	9.12		%
Allowance coverage of net charge-offs	12.70			5.79			6.63
Ending total loans, gross	$	695,216		$	20,716,863		$	25,014
Average loans in repayment(3)	$	545,689		$	15,019,869		$	15,343
Ending loans in repayment(3)	$	553,980		$	15,511,212		$	25,014

(1) See Note 8, “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
Year Ended December 31, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(298,425)
Provisions for unfunded loan commitments	264,324
Total Private Education Loan provisions for credit losses	(34,101)
Other impacts to the provisions for credit losses:
FFELP Loans	20
Credit Cards	1,124
Total	1,144
Provisions for credit losses reported in consolidated statements of income	$	(32,957)

(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.

Year Ended December 31, 2020 (dollars in thousands)	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)	—			320,808			—			—			320,808
Provisions:
Provision for current period	412			148,673			40,485			1,328			190,898
Loan sale reduction to provision	—			(161,793)			(42,916)			—			(204,709)
Loans transferred to held-for-sale	—			(205,669)			—			—			(205,669)
Total provisions(2)	412			(218,789)			(2,431)			1,328			(219,480)
Net charge-offs:
Charge-offs	(519)			(205,326)			(39,079)			(119)			(245,043)
Recoveries	—			24,021			4,984			2			29,007
Net charge-offs	(519)			(181,305)			(34,095)			(117)			(216,036)
Loan sales	—			—			(108,534)			—			(108,534)
Ending Balance	$	4,378		$	1,355,844		$	—		$	1,501		$	1,361,723
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	104,265		$	—		$	—		$	104,265
Ending balance: collectively evaluated for impairment	$	4,378		$	1,251,579		$	—		$	1,501		$	1,257,458
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,274,590		$	—		$	—		$	1,274,590
Ending balance: collectively evaluated for impairment	$	737,593		$	18,454,747		$	—		$	12,238		$	19,204,578
Net charge-offs as a percentage of average loans in repayment(3)	0.09		%	1.17		%	—		%	1.26		%
Allowance as a percentage of the ending total loan balance	0.59		%	6.87		%	—		%	12.27		%
Allowance as a percentage of the ending loans in repayment(3)	0.76		%	9.48		%	—		%	12.27		%
Allowance coverage of net charge-offs	8.44			7.48			—			12.83
Ending total loans, gross	$	737,593		$	19,729,337		$	—		$	12,238
Average loans in repayment(3)	$	549,584		$	15,518,851		$	—		$	9,286
Ending loans in repayment(3)	$	573,361		$	14,304,821		$	—		$	12,238

(1) See Note 8, “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
Year Ended December 31, 2020 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	(218,789)
Provisions for unfunded loan commitments	312,613
Total Private Education Loan provisions for credit losses	93,824
Other impacts to the provisions for credit losses:
Personal Loans	(2,431)
FFELP Loans	412
Credit Cards	1,328
Total	(691)
Provisions for credit losses reported in consolidated statements of income	$	93,133

(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.

 

Year Ended December 31, 2019 (dollars in thousands)	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	977		$	277,943		$	62,201		$	—		$	341,121
Total provision	1,478			279,570			72,783			103			353,934
Net charge-offs:
Charge-offs	(822)			(208,978)			(74,313)			(1)			(284,114)
Recoveries	—			25,765			5,206			—			30,971
Net charge-offs	(822)			(183,213)			(69,107)			(1)			(253,143)
Ending Balance	$	1,633		$	374,300		$	65,877		$	102		$	441,912
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	186,697		$	—		$	—		$	186,697
Ending balance: collectively evaluated for impairment	$	1,633		$	187,603		$	65,877		$	102		$	255,215
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,581,966		$	—		$	—		$	1,581,966
Ending balance: collectively evaluated for impairment	$	783,306		$	21,607,625		$	1,049,007		$	3,884		$	23,443,822
Net charge-offs as a percentage of average loans in repayment(1)	0.13		%	1.17		%	6.07		%	0.13		%
Allowance as a percentage of the ending total loan balance	0.21		%	1.61		%	6.28		%	2.63		%
Allowance as a percentage of the ending loans in repayment(1)	0.26		%	2.23		%	6.28		%	2.63		%
Allowance coverage of net charge-offs	1.99			2.04			0.95			102.00
Ending total loans, gross	$	783,306		$	23,189,591		$	1,049,007		$	3,884
Average loans in repayment(1)	$	631,029		$	15,605,927		$	1,138,887		$	786
Ending loans in repayment(1)	$	617,646		$	16,787,670		$	1,049,007		$	3,884

(1)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.

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.

Years ended December 31, (dollars in thousands)	2021				2020				2019
	Allowance		Unfunded Commitments		Allowance		Unfunded Commitments		Allowance		Unfunded Commitments
Beginning Balance	$	110,044	$	1,673,018	$	2,481	$	1,910,603	$	2,165	$	2,010,744
Day 1 adjustment for the adoption of CECL	—		—		115,758		—		—		—
Balance at January 1	110,044		1,673,018		118,239		1,910,603		2,165		2,010,744
Provision/New commitments - net(1)	232,822		5,512,841		311,659		5,070,175		5,937		5,513,790
Other provision items	31,502		—		954		—		596		—
Transfer - funded loans(2)	(301,655)		(5,408,883)		(320,808)		(5,307,760)		(6,217)		(5,613,931)
Ending Balance	$	72,713	$	1,776,976	$	110,044	$	1,673,018	$	2,481	$	1,910,603

(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.