(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | |||||||||||
Emerging growth company |
Part I. Financial Information | |||||||||||
Item 1. | |||||||||||
Item 1. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
PART II. Other Information | |||||||||||
Item 1. | |||||||||||
Item 1A. | |||||||||||
Item 2. | |||||||||||
Item 3. | |||||||||||
Item 4. | |||||||||||
Item 5. | |||||||||||
Item 6. |
CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||||||||
September 30, | December 31, | |||||||||||||
(Dollars in thousands, except share and per share amounts) | 2023 | 2022 | ||||||||||||
Assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Investments: | ||||||||||||||
Trading investments at fair value (cost of $ | ||||||||||||||
Available-for-sale investments at fair value (cost of $ | ||||||||||||||
Other investments | ||||||||||||||
Total investments | ||||||||||||||
Loans held for investment (net of allowance for losses of $ | ||||||||||||||
Loans held for sale | ||||||||||||||
Restricted cash | ||||||||||||||
Other interest-earning assets | ||||||||||||||
Accrued interest receivable | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Goodwill and acquired intangible assets, net | ||||||||||||||
Income taxes receivable, net | ||||||||||||||
Tax indemnification receivable | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Deposits | $ | $ | ||||||||||||
Long-term borrowings | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies | ||||||||||||||
Equity | ||||||||||||||
Preferred stock, par value $ | ||||||||||||||
Series B: | ||||||||||||||
Common stock, par value $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss (net of tax benefit of ($ | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Total SLM Corporation stockholders’ equity before treasury stock | ||||||||||||||
Less: Common stock held in treasury at cost: | ( | ( | ||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||
Loans | $ | $ | $ | $ | ||||||||||||||||||||||
Investments | ||||||||||||||||||||||||||
Cash and cash equivalents | ||||||||||||||||||||||||||
Total interest income | ||||||||||||||||||||||||||
Interest expense: | ||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||
Interest expense on short-term borrowings | ||||||||||||||||||||||||||
Interest expense on long-term borrowings | ||||||||||||||||||||||||||
Total interest expense | ||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||
Less: provisions for credit losses | ||||||||||||||||||||||||||
Net interest income after provisions for credit losses | ||||||||||||||||||||||||||
Non-interest income: | ||||||||||||||||||||||||||
Gains (losses) on sales of loans, net | ( | |||||||||||||||||||||||||
Gains (losses) on securities, net | ( | |||||||||||||||||||||||||
Gains (losses) on derivatives and hedging activities, net | ( | |||||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Total non-interest income | ||||||||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Compensation and benefits | ||||||||||||||||||||||||||
FDIC assessment fees | ||||||||||||||||||||||||||
Other operating expenses | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Acquired intangible assets amortization expense | ||||||||||||||||||||||||||
Total non-interest expenses | ||||||||||||||||||||||||||
Income before income tax expense | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Preferred stock dividends | ||||||||||||||||||||||||||
Net income attributable to SLM Corporation common stock | $ | $ | $ | $ | ||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Average common shares outstanding | ||||||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Average common and common equivalent shares outstanding | ||||||||||||||||||||||||||
Declared dividends per common share | $ | $ | $ | $ |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | ||||||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||
Unrealized gains (losses) on investments | ( | ( | ( | |||||||||||||||||||||||
Unrealized gains (losses) on cash flow hedges | ( | ( | ||||||||||||||||||||||||
Total unrealized gains (losses) | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax (expense) benefit | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax (expense) benefit | ( | ( | ( | ( | ||||||||||||||||||||||
Total comprehensive income | $ | $ | $ | $ |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Preferred Stock Shares | Issued | Treasury | Outstanding | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Series B ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend equivalent units related to employee stock-based compensation plans | — | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased related to employee stock-based compensation plans | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Preferred Stock Shares | Issued | Treasury | Outstanding | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Series B ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased related to employee stock-based compensation plans | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Preferred Stock Shares | Issued | Treasury | Outstanding | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Series B ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend equivalent units related to employee stock-based compensation plans | — | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased related to employee stock-based compensation plans | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share amounts) | Preferred Stock Shares | Issued | Treasury | Outstanding | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock, Series B ($ | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock repurchased | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased related to employee stock-based compensation plans | — | — | ( | ( | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | ( | $ | $ | $ | $ | ( | $ | $ | ( | $ |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||||||||
Nine Months Ended September 30, | ||||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||
Operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||||
Provisions for credit losses | ||||||||||||||
Income tax expense | ||||||||||||||
Amortization of brokered deposit placement fee | ||||||||||||||
Amortization of Secured Borrowing Facility upfront fee | ||||||||||||||
Amortization of deferred loan origination costs and loan premium/(discounts), net | ||||||||||||||
Net amortization of discount on investments | ( | |||||||||||||
Increase in tax indemnification receivable | ( | ( | ||||||||||||
Depreciation of premises and equipment | ||||||||||||||
Acquired intangible assets amortization expense | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Unrealized (gains) losses on derivatives and hedging activities, net | ( | |||||||||||||
Gains on sales of loans, net | ( | ( | ||||||||||||
(Gains) losses on securities, net | ( | |||||||||||||
Acquisition transaction costs, net | ||||||||||||||
Other adjustments to net income, net | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Increase in accrued interest receivable | ( | ( | ||||||||||||
Increase in trading investments | ( | |||||||||||||
Increase in non-marketable securities | ( | ( | ||||||||||||
Decrease (increase) in other interest-earning assets | ( | |||||||||||||
Increase in other assets | ( | ( | ||||||||||||
Decrease in income taxes payable, net | ( | ( | ||||||||||||
Increase in accrued interest payable | ||||||||||||||
Decrease in other liabilities | ( | ( | ||||||||||||
Total adjustments | ( | ( | ||||||||||||
Total net cash (used in) provided by operating activities | ( | |||||||||||||
Investing activities | ||||||||||||||
Loans acquired and originated | ( | ( | ||||||||||||
Net proceeds from sales of loans held for investment and loans held for sale | ||||||||||||||
Proceeds from FFELP Loan claim payments | ||||||||||||||
Net decrease in loans held for investment and loans held for sale (other than loans acquired and originated, and loan sales) | ||||||||||||||
Purchases of available-for-sale securities | ( | ( | ||||||||||||
Proceeds from sales and maturities of available-for-sale securities | ||||||||||||||
Purchase of subsidiary, net of cash acquired | ( | ( | ||||||||||||
Total net cash (used in) provided by investing activities | ( | |||||||||||||
Financing activities | ||||||||||||||
Brokered deposit placement fee | ( | ( | ||||||||||||
Net increase (decrease) in certificates of deposit | ( | |||||||||||||
Net increase (decrease) in other deposits | ( | |||||||||||||
Issuance costs for collateralized borrowings | ( | ( | ||||||||||||
Borrowings collateralized by loans in securitization trusts - issued | ||||||||||||||
Borrowings collateralized by loans in securitization trusts - repaid | ( | ( | ||||||||||||
Issuance costs for unsecured debt offering | ( | |||||||||||||
Fees paid on Secured Borrowing Facility | ( | ( | ||||||||||||
Common stock dividends paid | ( | ( | ||||||||||||
Preferred stock dividends paid | ( | ( | ||||||||||||
Common stock repurchased | ( | ( | ||||||||||||
Total net cash provided by (used in) financing activities | ( |
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
Cash disbursements made for: | ||||||||||||||
Interest | $ | $ | ||||||||||||
Income taxes paid | $ | $ | ||||||||||||
Income taxes refunded | $ | ( | $ | ( | ||||||||||
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
As of September 30, 2023 (dollars in thousands) | Amortized Cost | Allowance for credit losses(1) | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Utah Housing Corporation bonds | ( | |||||||||||||||||||||||||||||||
U.S. government-sponsored enterprises and Treasuries | ( | |||||||||||||||||||||||||||||||
Other securities | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
As of December 31, 2022 (dollars in thousands) | Amortized Cost | Allowance for credit losses(1) | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||||
Available-for-sale: | ||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||
Utah Housing Corporation bonds | ( | |||||||||||||||||||||||||||||||
U.S. government-sponsored enterprises and Treasuries | ( | |||||||||||||||||||||||||||||||
Other securities | ( | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ( | $ |
2. | Investments (Continued) |
(Dollars in thousands) | Less than 12 months | 12 months or more | Total | |||||||||||||||||||||||||||||||||||
Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||||||||||||||||
As of September 30, 2023: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Utah Housing Corporation bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored enterprises and Treasuries | ( | ( | ||||||||||||||||||||||||||||||||||||
Other securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
As of December 31, 2022: | ||||||||||||||||||||||||||||||||||||||
Mortgage-backed securities | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Utah Housing Corporation bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. government-sponsored enterprises and Treasuries | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Other securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total | $ | ( | $ | $ | ( | $ | $ | ( | $ |
2. | Investments (Continued) |
As of September 30, 2023 Year of Maturity (dollars in thousands) | Amortized Cost | Estimated Fair Value | ||||||||||||
2023 | $ | $ | ||||||||||||
2024 | ||||||||||||||
2025 | ||||||||||||||
2026 | ||||||||||||||
2027 | ||||||||||||||
2038 | ||||||||||||||
2039 | ||||||||||||||
2042 | ||||||||||||||
2043 | ||||||||||||||
2044 | ||||||||||||||
2045 | ||||||||||||||
2046 | ||||||||||||||
2047 | ||||||||||||||
2048 | ||||||||||||||
2049 | ||||||||||||||
2050 | ||||||||||||||
2051 | ||||||||||||||
2052 | ||||||||||||||
2053 | ||||||||||||||
2054 | ||||||||||||||
2055 | ||||||||||||||
2056 | ||||||||||||||
2058 | ||||||||||||||
Total | $ | $ |
2. | Investments (Continued) |
3. | Loans Held for Investment (Continued) |
September 30, | December 31, | |||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||
Private Education Loans: | ||||||||||||||
Fixed-rate | $ | $ | ||||||||||||
Variable-rate | ||||||||||||||
Total Private Education Loans, gross | ||||||||||||||
Deferred origination costs and unamortized premium/(discount) | ||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Total Private Education Loans, net | ||||||||||||||
FFELP Loans | ||||||||||||||
Deferred origination costs and unamortized premium/(discount) | ||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Total FFELP Loans, net | ||||||||||||||
Loans held for investment, net | $ | $ |
2023 | 2022 | |||||||||||||||||||||||||
Three Months Ended September 30, (dollars in thousands) | Average Balance | Weighted Average Interest Rate | Average Balance | Weighted Average Interest Rate | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
FFELP Loans | ||||||||||||||||||||||||||
Total portfolio | $ | $ |
2023 | 2022 | |||||||||||||||||||||||||
Nine Months Ended September 30, (dollars in thousands) | Average Balance | Weighted Average Interest Rate | Average Balance | Weighted Average Interest Rate | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
FFELP Loans | ||||||||||||||||||||||||||
Total portfolio | $ | $ |
5. | Allowance for Credit Losses (Continued) |
Three Months Ended September 30, 2023 (dollars in thousands) | FFELP Loans | Private Education Loans | Total | |||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||
Beginning balance | $ | $ | $ | |||||||||||||||||
Transfer from unfunded commitment liability(1) | ||||||||||||||||||||
Provisions: | ||||||||||||||||||||
Provision for current period | ||||||||||||||||||||
Total provisions(2) | ||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||
Charge-offs | ( | ( | ( | |||||||||||||||||
Recoveries | ||||||||||||||||||||
Net charge-offs | ( | ( | ( | |||||||||||||||||
Ending Balance | $ | $ | $ | |||||||||||||||||
Allowance(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Loans(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Accrued interest to be capitalized(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized)(4) | % | % | ||||||||||||||||||
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) | % | % | ||||||||||||||||||
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) | % | % | ||||||||||||||||||
Allowance coverage of net charge-offs (annualized) | ||||||||||||||||||||
Ending total loans, gross | $ | $ | ||||||||||||||||||
Average loans in repayment(4) | $ | $ | ||||||||||||||||||
Ending loans in repayment(4) | $ | $ | ||||||||||||||||||
Accrued interest to be capitalized on loans in repayment(6) | $ | $ |
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||
Three Months Ended September 30, 2023 (dollars in thousands) | ||||||||
Private Education Loan provisions for credit losses: | ||||||||
Provisions for loan losses | $ | |||||||
Provisions for unfunded loan commitments | ||||||||
Total Private Education Loan provisions for credit losses | ||||||||
Other impacts to the provisions for credit losses: | ||||||||
FFELP Loans | ||||||||
Total | ||||||||
Provisions for credit losses reported in consolidated statements of income | $ |
5. | Allowance for Credit Losses (Continued) |
Three Months Ended September 30, 2022 (dollars in thousands) | FFELP Loans | Private Education Loans | Credit Cards | Total | ||||||||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Transfer from unfunded commitment liability(1) | ||||||||||||||||||||||||||
Provisions: | ||||||||||||||||||||||||||
Provision for current period | ||||||||||||||||||||||||||
Loan sale reduction to provision | ( | ( | ||||||||||||||||||||||||
Loans transferred from held-for-sale | ( | ( | ||||||||||||||||||||||||
Total provisions(2) | ( | |||||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||
Net charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Allowance(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Loans(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Accrued interest to be capitalized(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized)(4) | % | % | % | |||||||||||||||||||||||
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) | % | % | % | |||||||||||||||||||||||
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) | % | % | % | |||||||||||||||||||||||
Allowance coverage of net charge-offs (annualized) | ||||||||||||||||||||||||||
Ending total loans, gross | $ | $ | $ | |||||||||||||||||||||||
Average loans in repayment(4) | $ | $ | $ | |||||||||||||||||||||||
Ending loans in repayment(4) | $ | $ | $ | |||||||||||||||||||||||
Accrued interest to be capitalized on loans in repayment(6) | $ | $ | $ |
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||
Three Months Ended September 30, 2022 (dollars in thousands) | ||||||||
Private Education Loan provisions for credit losses: | ||||||||
Provisions for loan losses | $ | |||||||
Provisions for unfunded loan commitments | ||||||||
Total Private Education Loan provisions for credit losses | ||||||||
Other impacts to the provisions for credit losses: | ||||||||
FFELP Loans | ||||||||
Credit Cards | ( | |||||||
Total | ( | |||||||
Provisions for credit losses reported in consolidated statements of income | $ |
5. | Allowance for Credit Losses (Continued) |
Nine Months Ended September 30, 2023 (dollars in thousands) | FFELP Loans | Private Education Loans | Total | |||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||
Beginning balance | $ | $ | $ | |||||||||||||||||
Transfer from unfunded commitment liability(1) | ||||||||||||||||||||
Provisions: | ||||||||||||||||||||
Provision for current period | ||||||||||||||||||||
Loan sale reduction to provision | ( | ( | ||||||||||||||||||
Total provisions(2) | ||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||
Charge-offs | ( | ( | ( | |||||||||||||||||
Recoveries | ||||||||||||||||||||
Net charge-offs | ( | ( | ( | |||||||||||||||||
Ending Balance | $ | $ | $ | |||||||||||||||||
Allowance(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Loans(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Accrued interest to be capitalized(3): | ||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | |||||||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized)(4) | % | % | ||||||||||||||||||
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) | % | % | ||||||||||||||||||
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) | % | % | ||||||||||||||||||
Allowance coverage of net charge-offs (annualized) | ||||||||||||||||||||
Ending total loans, gross | $ | $ | ||||||||||||||||||
Average loans in repayment(4) | $ | $ | ||||||||||||||||||
Ending loans in repayment(4) | $ | $ | ||||||||||||||||||
Accrued interest to be capitalized on loans in repayment(6) | $ | $ |
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||
Nine Months Ended September 30, 2023 (dollars in thousands) | ||||||||
Private Education Loan provisions for credit losses: | ||||||||
Provisions for loan losses | $ | |||||||
Provisions for unfunded loan commitments | ||||||||
Total Private Education Loan provisions for credit losses | ||||||||
Other impacts to the provisions for credit losses: | ||||||||
FFELP Loans | ||||||||
Total | ||||||||
Provisions for credit losses reported in consolidated statements of income | $ |
5. | Allowance for Credit Losses (Continued) |
Nine Months Ended September 30, 2022 (dollars in thousands) | FFELP Loans | Private Education Loans | Credit Cards | Total | ||||||||||||||||||||||
Allowance for Credit Losses | ||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Transfer from unfunded commitment liability(1) | ||||||||||||||||||||||||||
Provisions: | ||||||||||||||||||||||||||
Provision for current period | ||||||||||||||||||||||||||
Loan sale reduction to provision | ( | ( | ||||||||||||||||||||||||
Loans transferred from held-for-sale | ( | ( | ||||||||||||||||||||||||
Total provisions(2) | ( | ( | ||||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||
Net charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||
Ending Balance | $ | $ | $ | $ | ||||||||||||||||||||||
Allowance(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Loans(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Accrued interest to be capitalized(3): | ||||||||||||||||||||||||||
Ending balance: collectively evaluated for impairment | $ | $ | $ | $ | ||||||||||||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized)(4) | % | % | % | |||||||||||||||||||||||
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) | % | % | % | |||||||||||||||||||||||
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) | % | % | % | |||||||||||||||||||||||
Allowance coverage of net charge-offs (annualized) | ||||||||||||||||||||||||||
Ending total loans, gross | $ | $ | $ | |||||||||||||||||||||||
Average loans in repayment(4) | $ | $ | $ | |||||||||||||||||||||||
Ending loans in repayment(4) | $ | $ | $ | |||||||||||||||||||||||
Accrued interest to be capitalized on loans in repayment(6) | $ | $ | $ |
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||
Nine Months Ended September 30, 2022 (dollars in thousands) | ||||||||
Private Education Loan provisions for credit losses: | ||||||||
Provisions for loan losses | $ | ( | ||||||
Provisions for unfunded loan commitments | ||||||||
Total Private Education Loan provisions for credit losses | ||||||||
Other impacts to the provisions for credit losses: | ||||||||
FFELP Loans | ||||||||
Credit Cards | ||||||||
Total | ||||||||
Provisions for credit losses reported in consolidated statements of income | $ |
5. | Allowance for Credit Losses (Continued) |
5. | Allowance for Credit Losses (Continued) |
Loan Modifications Made to Borrowers Experiencing Financial Difficulty | ||||||||||||||||||||||||||
Three Months Ended September 30, 2023 (dollars in thousands) | Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | ||||||||||||||||||||||||
Loan Type: | Amortized Cost Basis | % of Total Class of Financing Receivable | Amortized Cost Basis | % of Total Class of Financing Receivable | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
Total | $ | % | $ | % | ||||||||||||||||||||||
Loan Modifications Made to Borrowers Experiencing Financial Difficulty | ||||||||||||||||||||||||||
Three Months Ended September 30, 2022 (dollars in thousands) | Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | ||||||||||||||||||||||||
Loan Type: | Amortized Cost Basis | % of Total Class of Financing Receivable | Amortized Cost Basis | % of Total Class of Financing Receivable | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
Total | $ | % | $ | % | ||||||||||||||||||||||
5. | Allowance for Credit Losses (Continued) |
Loan Modifications Made to Borrowers Experiencing Financial Difficulty | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 (dollars in thousands) | Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | ||||||||||||||||||||||||
Loan Type: | Amortized Cost Basis | % of Total Class of Financing Receivable | Amortized Cost Basis | % of Total Class of Financing Receivable | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
Total | $ | % | $ | % | ||||||||||||||||||||||
Loan Modifications Made to Borrowers Experiencing Financial Difficulty | ||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 (dollars in thousands) | Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | ||||||||||||||||||||||||
Loan Type: | Amortized Cost Basis | % of Total Class of Financing Receivable | Amortized Cost Basis | % of Total Class of Financing Receivable | ||||||||||||||||||||||
Private Education Loans | $ | % | $ | % | ||||||||||||||||||||||
Total | $ | % | $ | % | ||||||||||||||||||||||
Three Months Ended September 30, 2023 | ||||||||||||||||||||
Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | |||||||||||||||||||
Loan Type | Financial Effect | Loan Type | Financial Effect | |||||||||||||||||
Private Education Loans | Reduced average contractual rate from | Private Education Loans | Added a weighted average Reduced average contractual rate from | |||||||||||||||||
Three Months Ended September 30, 2022 | ||||||||||||||||||||
Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | |||||||||||||||||||
Loan Type | Financial Effect | Loan Type | Financial Effect | |||||||||||||||||
Private Education Loans | Reduced average contractual rate from | Private Education Loans | Added a weighted average Reduced average contractual rate from | |||||||||||||||||
5. | Allowance for Credit Losses (Continued) |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||
Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | |||||||||||||||||||
Loan Type | Financial Effect | Loan Type | Financial Effect | |||||||||||||||||
Private Education Loans | Reduced average contractual rate from | Private Education Loans | Added a weighted average Reduced average contractual rate from | |||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||
Interest Rate Reduction | Combination - Interest Rate Reduction and Term Extension | |||||||||||||||||||
Loan Type | Financial Effect | Loan Type | Financial Effect | |||||||||||||||||
Private Education Loans | Reduced average contractual rate from | Private Education Loans | Added a weighted average Reduced average contractual rate from | |||||||||||||||||
Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Modified Loans(1)(2) | Payment Default(4) | Charge-Offs(5) | Modified Loans(1)(2) | Payment Default(4) | Charge-Offs(5) | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
5. | Allowance for Credit Losses (Continued) |
Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Modified Loans(1)(3) | Payment Default(4) | Charge-Offs(5) | Modified Loans(1)(3) | Payment Default(4) | Charge-Offs(5) | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Payment Status (Amortized Cost Basis) | ||||||||||||||||||||||||||||||||||||||
At September 30, 2023 (dollars in thousands) | Deferment(1) | Current(2)(3) | 30-59 Days Past Due(2)(3) | 60-89 Days Past Due(2)(3) | 90 Days or Greater Past Due(2)(3) | Total | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Payment Status (Amortized Cost Basis) | ||||||||||||||||||||||||||||||||||||||
At December 31, 2022 (dollars in thousands) | Deferment(1) | Current(2)(3) | 30-59 Days Past Due(2)(3) | 60-89 Days Past Due(2)(3) | 90 Days or Greater Past Due(2)(3) | Total | ||||||||||||||||||||||||||||||||
Loan Type: | ||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
5. | Allowance for Credit Losses (Continued) |
As of September 30, 2023 (dollars in thousands) | Private Education Loans Held for Investment - Credit Quality Indicators | |||||||||||||||||||||||||||||||||||||||||||||||||
Year of Origination Approval | 2023(1) | 2022(1) | 2021(1) | 2020(1) | 2019(1) | 2018 and Prior(1) | Total(1) | % of Balance | ||||||||||||||||||||||||||||||||||||||||||
Cosigners: | ||||||||||||||||||||||||||||||||||||||||||||||||||
With cosigner | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Without cosigner | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
FICO at Origination Approval(2): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 670 | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
670-699 | ||||||||||||||||||||||||||||||||||||||||||||||||||
700-749 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than or equal to 750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
FICO Refreshed(2)(3): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 670 | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
670-699 | ||||||||||||||||||||||||||||||||||||||||||||||||||
700-749 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than or equal to 750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Seasoning(4): | ||||||||||||||||||||||||||||||||||||||||||||||||||
1-12 payments | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
13-24 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
25-36 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
37-48 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
More than 48 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
Not yet in repayment | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
2023 Current period(5) gross charge-offs | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
2023 Current period(5) recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
2023 Current period(5) net charge-offs | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Total accrued interest by origination vintage | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the third-quarter 2023. (4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5)Current period refers to period from January 1, 2023 through September 30, 2023. | ||||||||||||||||||||||||||||||||||||||||||||||||||
5. | Allowance for Credit Losses (Continued) |
As of December 31, 2022 (dollars in thousands) | Private Education Loans Held for Investment - Credit Quality Indicators | |||||||||||||||||||||||||||||||||||||||||||||||||
Year of Origination Approval | 2022(1) | 2021(1) | 2020(1) | 2019(1) | 2018(1) | 2017 and Prior(1) | Total(1) | % of Balance | ||||||||||||||||||||||||||||||||||||||||||
Cosigners: | ||||||||||||||||||||||||||||||||||||||||||||||||||
With cosigner | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Without cosigner | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
FICO at Origination Approval(2): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 670 | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
670-699 | ||||||||||||||||||||||||||||||||||||||||||||||||||
700-749 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than or equal to 750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
FICO Refreshed(2)(3): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Less than 670 | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
670-699 | ||||||||||||||||||||||||||||||||||||||||||||||||||
700-749 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Greater than or equal to 750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
Seasoning(4): | ||||||||||||||||||||||||||||||||||||||||||||||||||
1-12 payments | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
13-24 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
25-36 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
37-48 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
More than 48 payments | ||||||||||||||||||||||||||||||||||||||||||||||||||
Not yet in repayment | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | % | ||||||||||||||||||||||||||||||||||||||||||
2022 Current period(5) gross charge-offs | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
2022 Current period(5) recoveries | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 Current period(5) net charge-offs | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||
Total accrued interest by origination vintage | $ | $ | $ | $ | $ | $ | $ |
5. | Allowance for Credit Losses (Continued) |
Private Education Loans Held for Investment - Delinquencies by Origination Vintage | ||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2023 (dollars in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 and Prior | Total | |||||||||||||||||||||||||||||||||||||
Loans in-school/grace/deferment(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Loans in forbearance(2) | ||||||||||||||||||||||||||||||||||||||||||||
Loans in repayment: | ||||||||||||||||||||||||||||||||||||||||||||
Loans current | ||||||||||||||||||||||||||||||||||||||||||||
Loans delinquent 30-59 days(3) | ||||||||||||||||||||||||||||||||||||||||||||
Loans delinquent 60-89 days(3) | ||||||||||||||||||||||||||||||||||||||||||||
Loans 90 days or greater past due(3) | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans in repayment | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans, gross | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans deferred origination costs and unamortized premium/(discount) | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans allowance for losses | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Private Education Loans, net | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Percentage of Private Education Loans in repayment | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance | % | % | % | % | % | % | % |
5. | Allowance for Credit Losses (Continued) |
Private Education Loans Held for Investment - Delinquencies by Origination Vintage | ||||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2022 (dollars in thousands) | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 and Prior | Total | |||||||||||||||||||||||||||||||||||||
Loans in-school/grace/deferment(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Loans in forbearance(2) | ||||||||||||||||||||||||||||||||||||||||||||
Loans in repayment: | ||||||||||||||||||||||||||||||||||||||||||||
Loans current | ||||||||||||||||||||||||||||||||||||||||||||
Loans delinquent 30-59 days(3) | ||||||||||||||||||||||||||||||||||||||||||||
Loans delinquent 60-89 days(3) | ||||||||||||||||||||||||||||||||||||||||||||
Loans 90 days or greater past due(3) | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans in repayment | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans, gross | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans deferred origination costs and unamortized premium/(discount) | ||||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans allowance for losses | ( | ( | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||
Private Education Loans, net | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Percentage of Private Education Loans in repayment | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance | % | % | % | % | % | % | % |
5. | Allowance for Credit Losses (Continued) |
Private Education Loans | ||||||||||||||||||||
Accrued Interest Receivable | ||||||||||||||||||||
(Dollars in thousands) | Total Interest Receivable | 90 Days or Greater Past Due | Allowance for Uncollectible Interest(1)(2) | |||||||||||||||||
September 30, 2023 | $ | $ | $ | |||||||||||||||||
December 31, 2022 | $ | $ | $ | |||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Three Months Ended September 30, (dollars in thousands) | Allowance | Unfunded Commitments | Allowance | Unfunded Commitments | |||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | |||||||||||||||||||
Provision/New commitments - net(1) | |||||||||||||||||||||||
Other provision items | ( | ||||||||||||||||||||||
Transfer - funded loans(2) | ( | ( | ( | ( | |||||||||||||||||||
Ending Balance | $ | $ | $ | $ | |||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
Nine Months Ended September 30, (dollars in thousands) | Allowance | Unfunded Commitments | Allowance | Unfunded Commitments | |||||||||||||||||||
Beginning Balance | $ | $ | $ | $ | |||||||||||||||||||
Provision/New commitments - net(1) | |||||||||||||||||||||||
Other provision items | ( | ||||||||||||||||||||||
Transfer - funded loans(2) | ( | ( | ( | ( | |||||||||||||||||||
Ending Balance | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Weighted Average Useful Life (in years)(1) | Cost Basis | Accumulated Amortization | Net | Cost Basis | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||||||
Tradename and trademarks(2) | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||
Customer relationships(2) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Developed technology(2) | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Partner relationships | ( | |||||||||||||||||||||||||||||||||||||||||||
Total acquired intangible assets | $ | $ | ( | $ | $ | $ | ( | $ |
September 30, | December 31, | |||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||
Deposits - interest-bearing | $ | $ | ||||||||||||
Deposits - non-interest-bearing | ||||||||||||||
Total deposits | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Amount | Qtr.-End Weighted Average Stated Rate(1) | Amount | Year-End Weighted Average Stated Rate(1) | ||||||||||||||||||||||
Money market | $ | % | $ | % | ||||||||||||||||||||||
Savings | ||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||
Deposits - interest bearing | $ | $ |
8. | Deposits (Continued) |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
One year or less | $ | $ | ||||||||||||
After one year to two years | ||||||||||||||
After two years to three years | ||||||||||||||
After three years to four years | ||||||||||||||
After four years to five years | ||||||||||||||
After five years | ||||||||||||||
Total | $ | $ |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Short-Term | Long-Term | Total | Short-Term | Long-Term | Total | ||||||||||||||||||||||||||||||||
Unsecured borrowings: | ||||||||||||||||||||||||||||||||||||||
Unsecured debt (fixed-rate) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Total unsecured borrowings | ||||||||||||||||||||||||||||||||||||||
Secured borrowings: | ||||||||||||||||||||||||||||||||||||||
Private Education Loan term securitizations: | ||||||||||||||||||||||||||||||||||||||
Fixed-rate | ||||||||||||||||||||||||||||||||||||||
Variable-rate | ||||||||||||||||||||||||||||||||||||||
Total Private Education Loan term securitizations | ||||||||||||||||||||||||||||||||||||||
Secured Borrowing Facility | ||||||||||||||||||||||||||||||||||||||
Total secured borrowings | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
9. | Borrowings (Continued) |
Issue | Date Issued | Total Issued | Weighted Average Cost of Funds(1) | Weighted Average Life (in years) | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Private Education Loans: | ||||||||||||||||||||||||||
2022-C | August 2022 | $ | SOFR plus | |||||||||||||||||||||||
Total notes issued in 2022 | $ | |||||||||||||||||||||||||
Total loan and accrued interest amount securitized at inception in 2022(2) | $ | |||||||||||||||||||||||||
2023-A | March 2023 | $ | SOFR plus | |||||||||||||||||||||||
2023-C | August 2023 | SOFR plus | ||||||||||||||||||||||||
Total notes issued in 2023 | $ | |||||||||||||||||||||||||
Total loan and accrued interest amount securitized at inception in 2023(3) | $ |
9. | Borrowings (Continued) |
As of September 30, 2023 (dollars in thousands) | Debt Outstanding | Carrying Amount of Assets Securing Debt Outstanding | ||||||||||||||||||||||||||||||||||||||||||
Short-Term | Long-Term | Total | Loans | Restricted Cash | Other Assets(1) | Total | ||||||||||||||||||||||||||||||||||||||
Secured borrowings: | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loan term securitizations | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Secured Borrowing Facility | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
As of December 31, 2022 (dollars in thousands) | Debt Outstanding | Carrying Amount of Assets Securing Debt Outstanding | ||||||||||||||||||||||||||||||||||||||||||
Short-Term | Long-Term | Total | Loans | Restricted Cash | Other Assets(1) | Total | ||||||||||||||||||||||||||||||||||||||
Secured borrowings: | ||||||||||||||||||||||||||||||||||||||||||||
Private Education Loan term securitizations | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Secured Borrowing Facility | ||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ |
9. | Borrowings (Continued) |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Debt Interests(1) | Equity Interests(2) | Total Exposure | Debt Interests(1) | Equity Interests(2) | Total Exposure | ||||||||||||||||||||||||||||||||
Private Education Loan term securitizations | $ | $ | $ | $ | $ | $ |
10. | Derivative Financial Instruments (Continued) |
Impact of Derivatives on the Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flow Hedges | Fair Value Hedges | Trading | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||
Fair Values(1) | Hedged Risk Exposure | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Assets:(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest rate | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities:(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | Interest rate | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Total net derivatives | $ | ( | $ | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Liabilities | |||||||||||||||||||||||||
September 30, | December 31, | September 30, | December 31, | |||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Gross position(1) | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
Impact of master netting agreement | ( | ( | ||||||||||||||||||||||||
Derivative values with impact of master netting agreements (as carried on balance sheet) | ( | |||||||||||||||||||||||||
Cash collateral pledged(2) | ||||||||||||||||||||||||||
Net position | $ | $ | $ | ( | $ |
Notional Values | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Flow | Fair Value | Trading | Total | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net total notional | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
10. | Derivative Financial Instruments (Continued) |
(Dollars in thousands) | Carrying Amount of the Hedged Assets/(Liabilities) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) | ||||||||||||||||||||||||
Line Item in the Balance Sheet in Which the Hedged Item is Included: | September 30, | December 31, | September 30, | December 31, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Deposits | $ | ( | $ | ( | $ | $ |
Impact of Derivatives on the Consolidated Statements of Income | ||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Fair Value Hedges | ||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||
Interest recognized on derivatives | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||
Hedged items recorded in interest expense | ( | ( | ||||||||||||||||||||||||
Derivatives recorded in interest expense | ( | ( | ||||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||
Cash Flow Hedges | ||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense | $ | $ | $ | $ | ( | |||||||||||||||||||||
Total | $ | $ | $ | $ | ( | |||||||||||||||||||||
Trading | ||||||||||||||||||||||||||
Interest rate swaps: | ||||||||||||||||||||||||||
Change in fair value of future interest payments recorded in earnings | $ | $ | $ | $ | ( | |||||||||||||||||||||
Total | ( | |||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
10. | Derivative Financial Instruments (Continued) |
Impact of Derivatives on the Statements of Changes in Stockholders’ Equity | ||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Amount of gain (loss) recognized in other comprehensive income (loss) | $ | $ | $ | $ | ||||||||||||||||||||||
Less: amount of gain (loss) reclassified in interest expense | ( | |||||||||||||||||||||||||
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit | $ | ( | $ | $ | ( | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Shares and per share amounts in actuals) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Common stock repurchased under repurchase programs(1) | ||||||||||||||||||||||||||
Average purchase price per share(2) | $ | $ | $ | $ | ||||||||||||||||||||||
Shares repurchased related to employee stock-based compensation plans(3) | ||||||||||||||||||||||||||
Average purchase price per share | $ | $ | $ | $ | ||||||||||||||||||||||
Common shares issued(4) |
11. | Stockholders’ Equity (Continued) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Numerator: | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Preferred stock dividends | ||||||||||||||||||||||||||
Net income attributable to SLM Corporation common stock | $ | $ | $ | $ | ||||||||||||||||||||||
Denominator: | ||||||||||||||||||||||||||
Weighted average shares used to compute basic EPS | ||||||||||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||||||
Dilutive effect of stock options, restricted stock, restricted stock units, performance stock units, and Employee Stock Purchase Plan (“ESPP”) (1)(2) | ||||||||||||||||||||||||||
Weighted average shares used to compute diluted EPS | ||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Fair Value Measurements on a Recurring Basis | ||||||||||||||||||||||||||||||||||||||||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Trading investments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Available-for-sale investments | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | $ | $ | ( |
13. | Fair Value Measurements (Continued) |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Fair Value | Carrying Value | Difference | Fair Value | Carrying Value | Difference | ||||||||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||||||||||||
Loans held for investment, net: | ||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
FFELP Loans | ||||||||||||||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | — | — | ||||||||||||||||||||||||||||||||||||
Trading investments | — | — | ||||||||||||||||||||||||||||||||||||
Available-for-sale investments | — | — | ||||||||||||||||||||||||||||||||||||
Accrued interest receivable | ||||||||||||||||||||||||||||||||||||||
Tax indemnification receivable | — | — | ||||||||||||||||||||||||||||||||||||
Derivative instruments | — | — | ||||||||||||||||||||||||||||||||||||
Total earning assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Money-market and savings accounts | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Certificates of deposit | ||||||||||||||||||||||||||||||||||||||
Long-term borrowings | ||||||||||||||||||||||||||||||||||||||
Accrued interest payable | — | — | ||||||||||||||||||||||||||||||||||||
Derivative instruments | — | — | ||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Excess of net asset fair value over carrying value | $ | $ |
Adjusted Transition Amounts | Phase-In Amounts for the Year Ended | Phase-In Amounts for the Nine Months Ended | Remaining Adjusted Transition Amounts to be Phased-In | |||||||||||||||||||||||
(Dollars in thousands) | December 31, 2021 | December 31, 2022 | September 30, 2023 | September 30, 2023 | ||||||||||||||||||||||
Retained earnings | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||||||||||||||
Liability for unfunded commitments | ( | ( | ||||||||||||||||||||||||
Deferred tax asset | ( | ( |
14. | Regulatory Capital (Continued) |
(Dollars in thousands) | Actual | U.S. Basel III Minimum Requirements Plus Buffer(1)(2) | |||||||||||||||||||||
Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
As of September 30, 2023(3): | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Tier 1 Capital (to Average Assets) | $ | % | $ | > | % | ||||||||||||||||||
As of December 31, 2022(3): | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | % | $ | > | % | ||||||||||||||||||
Tier 1 Capital (to Average Assets) | $ | % | $ | > | % |
(In thousands, except per share data and percentages) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Net income attributable to SLM Corporation common stock | $ | 24,723 | $ | 72,641 | $ | 399,969 | $ | 540,494 | ||||||||||||||||||
Diluted earnings per common share | $ | 0.11 | $ | 0.29 | $ | 1.69 | $ | 2.03 | ||||||||||||||||||
Weighted average shares used to compute diluted earnings per common share | 228,800 | 253,716 | 236,593 | 266,065 | ||||||||||||||||||||||
Return on assets(1) | 0.4 | % | 1.0 | % | 1.9 | % | 2.6 | % | ||||||||||||||||||
Other Operating Statistics (Held for Investment) | ||||||||||||||||||||||||||
Ending Private Education Loans, net | $ | 20,348,308 | $ | 18,980,852 | $ | 20,348,308 | $ | 18,980,852 | ||||||||||||||||||
Ending FFELP Loans, net | 550,873 | 641,450 | 550,873 | 641,450 | ||||||||||||||||||||||
Ending total education loans, net | $ | 20,899,181 | $ | 19,622,302 | $ | 20,899,181 | $ | 19,622,302 | ||||||||||||||||||
Average education loans | $ | 21,213,165 | $ | 20,614,487 | $ | 21,615,968 | $ | 21,359,026 | ||||||||||||||||||
(1) We calculate and report our Return on Assets as the ratio of (a) GAAP net income numerator (annualized) to (b) the GAAP total average assets denominator. | ||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | Three Months Ended September 30, | Increase (Decrease) | Nine Months Ended September 30, | Increase (Decrease) | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | $ | % | 2023 | 2022 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
Interest income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Loans | $ | 581 | $ | 483 | $ | 98 | 20 | % | $ | 1,732 | $ | 1,388 | $ | 344 | 25 | % | ||||||||||||||||||||||||||||||||||
Investments | 13 | 10 | 3 | 30 | 37 | 24 | 13 | 54 | ||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 58 | 26 | 32 | 123 | 155 | 36 | 119 | 331 | ||||||||||||||||||||||||||||||||||||||||||
Total interest income | 652 | 520 | 132 | 25 | 1,924 | 1,448 | 476 | 33 | ||||||||||||||||||||||||||||||||||||||||||
Total interest expense | 268 | 150 | 118 | 79 | 747 | 341 | 406 | 119 | ||||||||||||||||||||||||||||||||||||||||||
Net interest income | 385 | 370 | 15 | 4 | 1,176 | 1,107 | 69 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Less: provisions for credit losses | 198 | 208 | (10) | (5) | 330 | 336 | (6) | (2) | ||||||||||||||||||||||||||||||||||||||||||
Net interest income after provisions for credit losses | 187 | 162 | 25 | 15 | 846 | 771 | 75 | 10 | ||||||||||||||||||||||||||||||||||||||||||
Non-interest income: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gains on sales of loans, net | — | 75 | (75) | (100) | 125 | 325 | (200) | (62) | ||||||||||||||||||||||||||||||||||||||||||
Gains (losses) on securities, net | 1 | 1 | — | — | 2 | (2) | 4 | 200 | ||||||||||||||||||||||||||||||||||||||||||
Other income | 23 | 19 | 4 | 21 | 63 | 52 | 11 | 21 | ||||||||||||||||||||||||||||||||||||||||||
Total non-interest income | 24 | 95 | (71) | (75) | 190 | 375 | (185) | (49) | ||||||||||||||||||||||||||||||||||||||||||
Non-interest expenses: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 167 | 150 | 17 | 11 | 476 | 414 | 62 | 15 | ||||||||||||||||||||||||||||||||||||||||||
Acquired intangible assets amortization expense | 3 | 2 | 1 | 50 | 7 | 5 | 2 | 40 | ||||||||||||||||||||||||||||||||||||||||||
Total non-interest expenses | 170 | 152 | 18 | 12 | 483 | 419 | 64 | 15 | ||||||||||||||||||||||||||||||||||||||||||
Income before income tax expense | 41 | 105 | (64) | (61) | 553 | 727 | (174) | (24) | ||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 11 | 30 | (19) | (63) | 140 | 181 | (41) | (23) | ||||||||||||||||||||||||||||||||||||||||||
Net income | 29 | 75 | (46) | (61) | 413 | 546 | (133) | (24) | ||||||||||||||||||||||||||||||||||||||||||
Preferred stock dividends | 5 | 2 | 3 | 150 | 13 | 6 | 7 | 117 | ||||||||||||||||||||||||||||||||||||||||||
Net income attributable to SLM Corporation common stock | $ | 25 | $ | 73 | $ | (48) | (66) | % | $ | 400 | $ | 540 | $ | (140) | (26) | % | ||||||||||||||||||||||||||||||||||
Basic earnings per common share | $ | 0.11 | $ | 0.29 | $ | (0.18) | (62) | % | $ | 1.71 | $ | 2.05 | $ | (0.34) | (17) | % | ||||||||||||||||||||||||||||||||||
Diluted earnings per common share | $ | 0.11 | $ | 0.29 | $ | (0.18) | (62) | % | $ | 1.69 | $ | 2.03 | $ | (0.34) | (17) | % | ||||||||||||||||||||||||||||||||||
Declared dividends per common share | $ | 0.11 | $ | 0.11 | $ | — | — | % | $ | 0.33 | $ | 0.33 | $ | — | — | % |
Nine Months Ended September 30, | ||||||||
(Dollars in thousands) | 2022 | |||||||
Unrealized gains (losses) on instruments not in a hedging relationship | $ | (248) | ||||||
Interest reclassification | 243 | |||||||
Gains (losses) on derivatives and hedging activities, net | $ | (5) |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands, except per share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Non-GAAP “Core Earnings” adjustments to GAAP: | ||||||||||||||||||||||||||
GAAP net income | $ | 29,365 | $ | 75,172 | $ | 412,948 | $ | 546,057 | ||||||||||||||||||
Preferred stock dividends | 4,642 | 2,531 | 12,979 | 5,563 | ||||||||||||||||||||||
GAAP net income attributable to SLM Corporation common stock | $ | 24,723 | $ | 72,641 | $ | 399,969 | $ | 540,494 | ||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||
Net impact of derivative accounting(1) | — | — | — | 248 | ||||||||||||||||||||||
Net tax expense(2) | — | — | — | 60 | ||||||||||||||||||||||
Total non-GAAP “Core Earnings” adjustments to GAAP | — | — | — | 188 | ||||||||||||||||||||||
Non-GAAP “Core Earnings” attributable to SLM Corporation common stock | $ | 24,723 | $ | 72,641 | $ | 399,969 | $ | 540,682 | ||||||||||||||||||
GAAP diluted earnings per common share | $ | 0.11 | $ | 0.29 | $ | 1.69 | $ | 2.03 | ||||||||||||||||||
Derivative adjustments, net of tax | — | — | — | — | ||||||||||||||||||||||
Non-GAAP “Core Earnings” diluted earnings per common share | $ | 0.11 | $ | 0.29 | $ | 1.69 | $ | 2.03 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | ||||||||||||||||||||||||||||||||||||||||||
Average Assets | ||||||||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | 20,649,663 | 10.96 | % | $ | 19,958,763 | 9.43 | % | $ | 21,032,541 | 10.80 | % | $ | 20,685,372 | 8.82 | % | ||||||||||||||||||||||||||||||||||
FFELP Loans | 563,502 | 7.35 | 655,724 | 5.03 | 583,427 | 7.10 | 673,654 | 4.18 | ||||||||||||||||||||||||||||||||||||||||||
Credit Cards | — | — | 29,443 | 4.77 | 14,835 | 14.02 | 28,219 | 4.24 | ||||||||||||||||||||||||||||||||||||||||||
Taxable securities | 2,549,512 | 2.06 | 2,539,115 | 1.60 | 2,539,391 | 1.93 | 2,552,487 | 1.27 | ||||||||||||||||||||||||||||||||||||||||||
Cash and other short-term investments | 4,328,383 | 5.32 | 4,625,523 | 2.27 | 4,169,291 | 4.98 | 4,077,340 | 1.21 | ||||||||||||||||||||||||||||||||||||||||||
Total interest-earning assets | 28,091,060 | 9.21 | % | 27,808,568 | 7.42 | % | 28,339,485 | 9.08 | % | 28,017,072 | 6.91 | % | ||||||||||||||||||||||||||||||||||||||
Non-interest-earning assets | 367,179 | 687,518 | 271,866 | 597,283 | ||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 28,458,239 | $ | 28,496,086 | $ | 28,611,351 | $ | 28,614,355 | ||||||||||||||||||||||||||||||||||||||||||
Average Liabilities and Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Brokered deposits | $ | 9,231,432 | 3.32 | % | $ | 9,905,248 | 2.23 | % | $ | 9,641,234 | 3.15 | % | $ | 9,813,559 | 1.67 | % | ||||||||||||||||||||||||||||||||||
Retail and other deposits | 11,892,198 | 4.66 | 10,970,838 | 1.89 | 11,734,137 | 4.29 | 11,047,661 | 1.15 | ||||||||||||||||||||||||||||||||||||||||||
Other interest-bearing liabilities(1) | 5,411,629 | 3.73 | 5,453,219 | 3.09 | 5,352,499 | 3.59 | 5,550,092 | 2.96 | ||||||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 26,535,259 | 4.00 | % | 26,329,305 | 2.27 | % | 26,727,870 | 3.74 | % | 26,411,312 | 1.72 | % | ||||||||||||||||||||||||||||||||||||||
Non-interest-bearing liabilities | 116,645 | 188,532 | 71,137 | 106,363 | ||||||||||||||||||||||||||||||||||||||||||||||
Equity | 1,806,335 | 1,978,249 | 1,812,344 | 2,096,680 | ||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and equity | $ | 28,458,239 | $ | 28,496,086 | $ | 28,611,351 | $ | 28,614,355 | ||||||||||||||||||||||||||||||||||||||||||
Net interest margin | 5.43 | % | 5.27 | % | 5.55 | % | 5.28 | % |
(Dollars in thousands) | Increase | Change Due To(1) | ||||||||||||||||||
Rate | Volume | |||||||||||||||||||
Three Months Ended September 30, 2023 vs. 2022 | ||||||||||||||||||||
Interest income | $ | 132,339 | $ | 127,006 | $ | 5,333 | ||||||||||||||
Interest expense | 117,221 | 116,034 | 1,187 | |||||||||||||||||
Net interest income | $ | 15,118 | $ | 11,337 | $ | 3,781 | ||||||||||||||
(Dollars in thousands) | Increase | Change Due To(1) | ||||||||||||||||||
Rate | Volume | |||||||||||||||||||
Nine Months Ended September 30, 2023 vs. 2022 | ||||||||||||||||||||
Interest income | $ | 475,773 | $ | 458,926 | $ | 16,847 | ||||||||||||||
Interest expense | 406,796 | 402,664 | 4,132 | |||||||||||||||||
Net interest income | $ | 68,977 | $ | 56,116 | $ | 12,861 | ||||||||||||||
As of September 30, 2023 (dollars in thousands) | Private Education Loans | FFELP Loans | Total Loans Held for Investment | |||||||||||||||||
Total loan portfolio: | ||||||||||||||||||||
In-school(1) | $ | 4,055,137 | $ | 57 | $ | 4,055,194 | ||||||||||||||
Grace, repayment and other(2) | 17,625,730 | 554,252 | 18,179,982 | |||||||||||||||||
Total, gross | 21,680,867 | 554,309 | 22,235,176 | |||||||||||||||||
Deferred origination costs and unamortized premium/(discount) | 78,673 | 1,380 | 80,053 | |||||||||||||||||
Allowance for credit losses | (1,411,232) | (4,816) | (1,416,048) | |||||||||||||||||
Total loans held for investment portfolio, net | $ | 20,348,308 | $ | 550,873 | $ | 20,899,181 | ||||||||||||||
% of total | 97 | % | 3 | % | 100 | % |
As of December 31, 2022 (dollars in thousands) | Private Education Loans | FFELP Loans | Total Loans Held for Investment | |||||||||||||||||
Total loan portfolio: | ||||||||||||||||||||
In-school(1) | $ | 3,659,323 | $ | 57 | $ | 3,659,380 | ||||||||||||||
Grace, repayment and other(2) | 16,644,365 | 608,993 | 17,253,358 | |||||||||||||||||
Total, gross | 20,303,688 | 609,050 | 20,912,738 | |||||||||||||||||
Deferred origination costs and unamortized premium/(discount) | 69,656 | 1,549 | 71,205 | |||||||||||||||||
Allowance for credit losses | (1,353,631) | (3,444) | (1,357,075) | |||||||||||||||||
Total loans held for investment portfolio, net | $ | 19,019,713 | $ | 607,155 | $ | 19,626,868 | ||||||||||||||
% of total | 97 | % | 3 | % | 100 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Private Education Loans | $ | 20,649,663 | 97 | % | $ | 19,958,763 | 97 | % | $ | 21,032,541 | 97 | % | $ | 20,685,372 | 97 | % | ||||||||||||||||||||||||||||||||||
FFELP Loans | 563,502 | 3 | 655,724 | 3 | 583,427 | 3 | 673,654 | 3 | ||||||||||||||||||||||||||||||||||||||||||
Total portfolio | $ | 21,213,165 | 100 | % | $ | 20,614,487 | 100 | % | $ | 21,615,968 | 100 | % | $ | 21,359,026 | 100 | % |
Three Months Ended September 30, 2023 (dollars in thousands) | Private Education Loans | FFELP Loans | Total Loans Held for Investment, net | |||||||||||||||||
Beginning balance | $ | 18,648,904 | $ | 570,614 | $ | 19,219,518 | ||||||||||||||
Acquisitions and originations: | ||||||||||||||||||||
Fixed-rate | 2,353,735 | — | 2,353,735 | |||||||||||||||||
Variable-rate | 114,313 | — | 114,313 | |||||||||||||||||
Total acquisitions and originations | 2,468,048 | — | 2,468,048 | |||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 100,151 | 5,268 | 105,419 | |||||||||||||||||
Loan consolidations to third parties | (234,781) | (7,874) | (242,655) | |||||||||||||||||
Allowance | (50,937) | (394) | (51,331) | |||||||||||||||||
Repayments and other | (583,077) | (16,741) | (599,818) | |||||||||||||||||
Ending balance | $ | 20,348,308 | $ | 550,873 | $ | 20,899,181 |
Three Months Ended September 30, 2022 (dollars in thousands) | Private Education Loans | FFELP Loans | Credit Cards | Total Loans Held for Investment, net | ||||||||||||||||||||||
Beginning balance | $ | 18,511,250 | $ | 663,452 | $ | 26,626 | $ | 19,201,328 | ||||||||||||||||||
Acquisitions and originations: | ||||||||||||||||||||||||||
Fixed-rate | 1,740,029 | — | — | 1,740,029 | ||||||||||||||||||||||
Variable-rate | 616,333 | — | 21,122 | 637,455 | ||||||||||||||||||||||
Total acquisitions and originations | 2,356,362 | — | 21,122 | 2,377,484 | ||||||||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 91,637 | 6,096 | (41) | 97,692 | ||||||||||||||||||||||
Sales | (976,888) | — | — | (976,888) | ||||||||||||||||||||||
Transfer to loans held-for-sale | — | — | (28,458) | (28,458) | ||||||||||||||||||||||
Loan consolidations to third parties | (290,727) | (16,163) | — | (306,890) | ||||||||||||||||||||||
Allowance | (115,683) | 118 | 2,393 | (113,172) | ||||||||||||||||||||||
Repayments and other | (595,099) | (12,053) | (21,642) | (628,794) | ||||||||||||||||||||||
Ending balance | $ | 18,980,852 | $ | 641,450 | $ | — | $ | 19,622,302 |
Nine Months Ended September 30, 2023 (dollars in thousands) | Private Education Loans | FFELP Loans | Total Loans Held for Investment, net | |||||||||||||||||
Beginning balance | $ | 19,019,713 | $ | 607,155 | $ | 19,626,868 | ||||||||||||||
Acquisitions and originations: | ||||||||||||||||||||
Fixed-rate | 4,946,020 | — | 4,946,020 | |||||||||||||||||
Variable-rate | 628,326 | — | 628,326 | |||||||||||||||||
Total acquisitions and originations | 5,574,346 | — | 5,574,346 | |||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 339,118 | 16,872 | 355,990 | |||||||||||||||||
Sales | (1,964,945) | — | (1,964,945) | |||||||||||||||||
Loan consolidations to third parties | (731,656) | (23,033) | (754,689) | |||||||||||||||||
Allowance | (57,600) | (1,372) | (58,972) | |||||||||||||||||
Repayments and other | (1,830,668) | (48,749) | (1,879,417) | |||||||||||||||||
Ending balance | $ | 20,348,308 | $ | 550,873 | $ | 20,899,181 |
Nine Months Ended September 30, 2022 (dollars in thousands) | Private Education Loans | FFELP Loans | Credit Cards | Total Loans Held for Investment, net | ||||||||||||||||||||||
Beginning balance | $ | 19,625,374 | $ | 692,954 | $ | 22,955 | $ | 20,341,283 | ||||||||||||||||||
Acquisitions and originations: | ||||||||||||||||||||||||||
Fixed-rate | 3,528,370 | — | — | 3,528,370 | ||||||||||||||||||||||
Variable-rate | 1,643,194 | — | 63,331 | 1,706,525 | ||||||||||||||||||||||
Total acquisitions and originations | 5,171,564 | — | 63,331 | 5,234,895 | ||||||||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 303,049 | 18,709 | (195) | 321,563 | ||||||||||||||||||||||
Sales | (3,085,758) | — | — | (3,085,758) | ||||||||||||||||||||||
Transfer to loans held-for-sale | — | — | (28,458) | (28,458) | ||||||||||||||||||||||
Loan consolidations to third parties | (1,126,636) | (33,880) | — | (1,160,516) | ||||||||||||||||||||||
Allowance | (31,450) | 266 | 2,281 | (28,903) | ||||||||||||||||||||||
Repayments and other | (1,875,291) | (36,599) | (59,914) | (1,971,804) | ||||||||||||||||||||||
Ending balance | $ | 18,980,852 | $ | 641,450 | $ | — | $ | 19,622,302 |
Three Months Ended September 30, | ||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | % | 2022 | % | ||||||||||||||||||||||
Smart Option - interest only(1) | $ | 449,141 | 18 | % | $ | 464,602 | 20 | % | ||||||||||||||||||
Smart Option - fixed pay(1) | 821,722 | 34 | 770,183 | 33 | ||||||||||||||||||||||
Smart Option - deferred(1) | 1,005,987 | 41 | 939,835 | 40 | ||||||||||||||||||||||
Graduate Loan(2) | 174,563 | 7 | 176,114 | 7 | ||||||||||||||||||||||
Parent Loan(3) | — | — | 217 | — | ||||||||||||||||||||||
Total Private Education Loan originations | $ | 2,451,413 | 100 | % | $ | 2,350,951 | 100 | % | ||||||||||||||||||
Percentage of loans with a cosigner | 90.1 | % | 88.6 | % | ||||||||||||||||||||||
Average FICO at approval(4) | 749 | 747 | ||||||||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||||||||||
(Dollars in thousands) | 2023 | % | 2022 | % | ||||||||||||||||||||||
Smart Option - interest only(1) | $ | 1,024,261 | 18 | % | $ | 995,603 | 19 | % | ||||||||||||||||||
Smart Option - fixed pay(1) | 1,837,397 | 33 | 1,679,130 | 33 | ||||||||||||||||||||||
Smart Option - deferred(1) | 2,258,488 | 41 | 2,025,277 | 39 | ||||||||||||||||||||||
Graduate Loan(2) | 423,833 | 8 | 424,807 | 8 | ||||||||||||||||||||||
Parent Loan(3) | 38 | — | 30,439 | 1 | ||||||||||||||||||||||
Total Private Education Loan originations | $ | 5,544,017 | 100 | % | $ | 5,155,256 | 100 | % | ||||||||||||||||||
Percentage of loans with a cosigner | 88.0 | % | 86.6 | % | ||||||||||||||||||||||
Average FICO at approval(4) | 747 | 747 | ||||||||||||||||||||||||
Three Months Ended September 30, (dollars in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
Private Education Loans | FFELP Loans | Total Portfolio | Private Education Loans | FFELP Loans | Credit Cards | Total Portfolio | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 1,360,294 | $ | 4,422 | $ | 1,364,716 | $ | 1,074,744 | $ | 3,929 | $ | 2,393 | $ | 1,081,066 | ||||||||||||||||||||||||||||||
Transfer from unfunded commitment liability(1) | 101,687 | — | 101,687 | 168,377 | — | — | 168,377 | |||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | (104,865) | (272) | (105,137) | (109,350) | (147) | (2,062) | (111,559) | |||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 9,693 | — | 9,693 | 11,400 | — | 2 | 11,402 | |||||||||||||||||||||||||||||||||||||
Provisions for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||
Provision, current period | 44,423 | 666 | 45,089 | 95,482 | 29 | 2,039 | 97,550 | |||||||||||||||||||||||||||||||||||||
Loan sale reduction to provision | — | — | — | (50,226) | — | — | (50,226) | |||||||||||||||||||||||||||||||||||||
Loans transferred to held-for-sale | — | — | — | — | — | (2,372) | (2,372) | |||||||||||||||||||||||||||||||||||||
Total provisions for credit losses(2) | 44,423 | 666 | 45,089 | 45,256 | 29 | (333) | 44,952 | |||||||||||||||||||||||||||||||||||||
Ending balance | $ | 1,411,232 | $ | 4,816 | $ | 1,416,048 | $ | 1,190,427 | $ | 3,811 | $ | — | $ | 1,194,238 | ||||||||||||||||||||||||||||||
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||||||||
Three Months Ended September 30, (dollars in thousands) | ||||||||||||||
2023 | 2022 | |||||||||||||
Private Education Loan provisions for credit losses: | ||||||||||||||
Provisions for loan losses | $ | 44,423 | $ | 45,256 | ||||||||||
Provisions for unfunded loan commitments | 152,934 | 162,646 | ||||||||||||
Total Private Education Loan provisions for credit losses | 197,357 | 207,902 | ||||||||||||
Other impacts to the provisions for credit losses: | ||||||||||||||
FFELP Loans | 666 | 29 | ||||||||||||
Credit Cards | — | (333) | ||||||||||||
Total | 666 | (304) | ||||||||||||
Provisions for credit losses reported in consolidated statements of income | $ | 198,023 | $ | 207,598 |
Nine Months Ended September 30, (dollars in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||
Private Education Loans | FFELP Loans | Total Portfolio | Private Education Loans | FFELP Loans | Credit Cards | Total Portfolio | ||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | 1,353,631 | $ | 3,444 | $ | 1,357,075 | $ | 1,158,977 | $ | 4,077 | $ | 2,281 | $ | 1,165,335 | ||||||||||||||||||||||||||||||
Transfer from unfunded commitment liability(1) | 278,388 | — | 278,388 | 303,591 | — | — | 303,591 | |||||||||||||||||||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | (314,500) | (853) | (315,353) | (299,699) | (376) | (2,549) | (302,624) | |||||||||||||||||||||||||||||||||||||
Plus: | ||||||||||||||||||||||||||||||||||||||||||||
Recoveries | 33,385 | — | 33,385 | 30,410 | — | 5 | 30,415 | |||||||||||||||||||||||||||||||||||||
Provisions for credit losses: | ||||||||||||||||||||||||||||||||||||||||||||
Provision, current period | 196,859 | 2,225 | 199,084 | 168,473 | 110 | 2,635 | 171,218 | |||||||||||||||||||||||||||||||||||||
Loan sale reduction to provision | (136,531) | — | (136,531) | (171,325) | — | — | (171,325) | |||||||||||||||||||||||||||||||||||||
Loans transferred to held-for-sale | — | — | — | — | — | (2,372) | (2,372) | |||||||||||||||||||||||||||||||||||||
Total provisions for credit losses(2) | 60,328 | 2,225 | 62,553 | (2,852) | 110 | 263 | (2,479) | |||||||||||||||||||||||||||||||||||||
Ending balance | $ | 1,411,232 | $ | 4,816 | $ | 1,416,048 | $ | 1,190,427 | $ | 3,811 | $ | — | $ | 1,194,238 | ||||||||||||||||||||||||||||||
Consolidated Statements of Income Provisions for Credit Losses Reconciliation | ||||||||||||||
Nine Months Ended September 30, (dollars in thousands) | ||||||||||||||
2023 | 2022 | |||||||||||||
Private Education Loan provisions for credit losses: | ||||||||||||||
Provisions for loan losses | $ | 60,328 | $ | (2,852) | ||||||||||
Provisions for unfunded loan commitments | 267,311 | 338,672 | ||||||||||||
Total Private Education Loan provisions for credit losses | 327,639 | 335,820 | ||||||||||||
Other impacts to the provisions for credit losses: | ||||||||||||||
FFELP Loans | 2,225 | 110 | ||||||||||||
Credit Cards | — | 263 | ||||||||||||
Total | 2,225 | 373 | ||||||||||||
Provisions for credit losses reported in consolidated statements of income | $ | 329,864 | $ | 336,193 |
Private Education Loans Held for Investment | 2023 | 2022 | ||||||||||||||||||||||||
September 30, (dollars in thousands) | Balance | % | Balance | % | ||||||||||||||||||||||
Loans in-school/grace/deferment(1) | $ | 5,961,879 | $ | 5,356,860 | ||||||||||||||||||||||
Loans in forbearance(2) | 213,843 | 201,047 | ||||||||||||||||||||||||
Loans in repayment and percentage of each status: | ||||||||||||||||||||||||||
Loans current | 14,938,462 | 96.3 | % | 14,002,955 | 96.3 | % | ||||||||||||||||||||
Loans delinquent 30-59 days(3) | 283,621 | 1.8 | 255,241 | 1.8 | ||||||||||||||||||||||
Loans delinquent 60-89 days(3) | 153,449 | 1.0 | 151,812 | 1.0 | ||||||||||||||||||||||
Loans 90 days or greater past due(3) | 129,613 | 0.9 | 136,548 | 0.9 | ||||||||||||||||||||||
Total Private Education Loans in repayment | 15,505,145 | 100.0 | % | 14,546,556 | 100.0 | % | ||||||||||||||||||||
Total Private Education Loans, gross | 21,680,867 | 20,104,463 | ||||||||||||||||||||||||
Private Education Loans deferred origination costs and unamortized premium/(discount) | 78,673 | 66,816 | ||||||||||||||||||||||||
Total Private Education Loans | 21,759,540 | 20,171,279 | ||||||||||||||||||||||||
Private Education Loans allowance for losses | (1,411,232) | (1,190,427) | ||||||||||||||||||||||||
Private Education Loans, net | $ | 20,348,308 | $ | 18,980,852 | ||||||||||||||||||||||
Percentage of Private Education Loans in repayment | 71.5 | % | 72.4 | % | ||||||||||||||||||||||
Delinquencies as a percentage of Private Education Loans in repayment | 3.7 | % | 3.7 | % | ||||||||||||||||||||||
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance | 1.4 | % | 1.4 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Beginning balance | $ | 1,360,294 | $ | 1,074,744 | $ | 1,353,631 | $ | 1,158,977 | ||||||||||||||||||
Transfer from unfunded commitment liability(1) | 101,687 | 168,377 | 278,388 | 303,591 | ||||||||||||||||||||||
Provision for credit losses: | ||||||||||||||||||||||||||
Provision, current period | 44,423 | 95,482 | 196,859 | 168,473 | ||||||||||||||||||||||
Loan sale reduction to provision | — | (50,226) | (136,531) | (171,325) | ||||||||||||||||||||||
Total provision | 44,423 | 45,256 | 60,328 | (2,852) | ||||||||||||||||||||||
Net charge-offs: | ||||||||||||||||||||||||||
Charge-offs | (104,865) | (109,350) | (314,500) | (299,699) | ||||||||||||||||||||||
Recoveries | 9,693 | 11,400 | 33,385 | 30,410 | ||||||||||||||||||||||
Net charge-offs | (95,172) | (97,950) | (281,115) | (269,289) | ||||||||||||||||||||||
Ending balance | $ | 1,411,232 | $ | 1,190,427 | $ | 1,411,232 | $ | 1,190,427 | ||||||||||||||||||
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized | 6.15 | % | 5.63 | % | 6.15 | % | 5.63 | % | ||||||||||||||||||
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(2)(3) | 8.84 | % | 7.98 | % | 8.84 | % | 7.98 | % | ||||||||||||||||||
Allowance coverage of net charge-offs (annualized) | 3.71 | 3.04 | 3.77 | 3.32 | ||||||||||||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized)(2) | 2.53 | % | 2.67 | % | 2.44 | % | 2.37 | % | ||||||||||||||||||
Delinquencies as a percentage of ending loans in repayment(2) | 3.65 | % | 3.74 | % | 3.65 | % | 3.74 | % | ||||||||||||||||||
Loans in forbearance as a percentage of ending loans in repayment and forbearance(2) | 1.36 | % | 1.36 | % | 1.36 | % | 1.36 | % | ||||||||||||||||||
Ending total loans, gross | $ | 21,680,867 | $ | 20,104,463 | $ | 21,680,867 | $ | 20,104,463 | ||||||||||||||||||
Average loans in repayment(2) | $ | 15,023,993 | $ | 14,674,437 | $ | 15,358,596 | $ | 15,173,465 | ||||||||||||||||||
Ending loans in repayment(2) | $ | 15,505,145 | $ | 14,546,556 | $ | 15,505,145 | $ | 14,546,556 | ||||||||||||||||||
Accrued interest to be capitalized | $ | 1,283,388 | $ | 1,056,983 | $ | 1,283,388 | $ | 1,056,983 | ||||||||||||||||||
Accrued interest to be capitalized on loans in repayment(3) | $ | 464,807 | $ | 371,388 | $ | 464,807 | $ | 371,388 |
As of September 30, 2023 (dollars in millions) | Private Education Loans Held for Investment Aged by Number of Months in Active Repayment Status | Not Yet in Repayment | Total | |||||||||||||||||||||||||||||||||||||||||
0 to 12 | 13 to 24 | 25 to 36 | 37 to 48 | More than 48 | ||||||||||||||||||||||||||||||||||||||||
Loans in-school/grace/deferment | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 5,962 | $ | 5,962 | ||||||||||||||||||||||||||||||
Loans in forbearance | 118 | 35 | 24 | 15 | 22 | — | 214 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - current | 5,147 | 3,180 | 1,898 | 1,504 | 3,209 | — | 14,938 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - delinquent 30-59 days | 86 | 55 | 40 | 31 | 72 | — | 284 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - delinquent 60-89 days | 48 | 28 | 22 | 14 | 40 | — | 152 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - 90 days or greater past due | 33 | 26 | 20 | 14 | 37 | — | 130 | |||||||||||||||||||||||||||||||||||||
Total | $ | 5,432 | $ | 3,324 | $ | 2,004 | $ | 1,578 | $ | 3,380 | $ | 5,962 | 21,680 | |||||||||||||||||||||||||||||||
Deferred origination costs and unamortized premium/(discount) | 79 | |||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (1,411) | |||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans, net | $ | 20,348 | ||||||||||||||||||||||||||||||||||||||||||
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance | 0.75 | % | 0.22 | % | 0.15 | % | 0.10 | % | 0.14 | % | — | % | 1.36 | % |
As of September 30, 2022 (dollars in millions) | Private Education Loans Held for Investment Aged by Number of Months in Active Repayment Status | Not Yet in Repayment | Total | |||||||||||||||||||||||||||||||||||||||||
0 to 12 | 13 to 24 | 25 to 36 | 37 to 48 | More than 48 | ||||||||||||||||||||||||||||||||||||||||
Loans in-school/grace/deferment | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 5,357 | $ | 5,357 | ||||||||||||||||||||||||||||||
Loans in forbearance | 117 | 33 | 20 | 13 | 18 | — | 201 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - current | 4,918 | 2,659 | 2,032 | 1,418 | 2,975 | — | 14,002 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - delinquent 30-59 days | 88 | 45 | 38 | 24 | 60 | — | 255 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - delinquent 60-89 days | 53 | 27 | 22 | 16 | 34 | — | 152 | |||||||||||||||||||||||||||||||||||||
Loans in repayment - 90 days or greater past due | 44 | 27 | 21 | 14 | 31 | — | 137 | |||||||||||||||||||||||||||||||||||||
Total | $ | 5,220 | $ | 2,791 | $ | 2,133 | $ | 1,485 | $ | 3,118 | $ | 5,357 | 20,104 | |||||||||||||||||||||||||||||||
Deferred origination costs and unamortized premium/(discount) | 67 | |||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses | (1,190) | |||||||||||||||||||||||||||||||||||||||||||
Total Private Education Loans, net | $ | 18,981 | ||||||||||||||||||||||||||||||||||||||||||
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance | 0.79 | % | 0.22 | % | 0.14 | % | 0.09 | % | 0.12 | % | — | % | 1.36 | % |
As of September 30, 2023 (dollars in thousands) | Signature and Other | Parent Loan(1) | Smart Option | Career Training(2) | Graduate Loan | Total | ||||||||||||||||||||||||||||||||
$ in repayment(3) | $ | 220,485 | $ | 219,046 | $ | 13,869,402 | $ | 2,495 | $ | 1,193,717 | $ | 15,505,145 | ||||||||||||||||||||||||||
$ in total | $ | 309,164 | $ | 220,082 | $ | 19,433,762 | $ | 2,519 | $ | 1,715,340 | $ | 21,680,867 |
As of December 31, 2022 (dollars in thousands) | Signature and Other | Parent Loan(1) | Smart Option | Career Training(2) | Graduate Loan | Total | ||||||||||||||||||||||||||||||||
$ in repayment(3) | $ | 216,513 | $ | 261,316 | $ | 13,599,750 | $ | 4,565 | $ | 1,047,406 | $ | 15,129,550 | ||||||||||||||||||||||||||
$ in total | $ | 308,884 | $ | 262,602 | $ | 18,218,925 | $ | 4,602 | $ | 1,508,675 | $ | 20,303,688 |
Private Education Loans | ||||||||||||||||||||
Accrued Interest Receivable | ||||||||||||||||||||
(Dollars in thousands) | Total Interest Receivable | 90 Days or Greater Past Due | Allowance for Uncollectible Interest(1)(2) | |||||||||||||||||
September 30, 2023 | $ | 1,429,225 | $ | 6,756 | $ | 8,516 | ||||||||||||||
December 31, 2022 | $ | 1,177,562 | $ | 6,609 | $ | 8,121 | ||||||||||||||
September 30, 2022 | $ | 1,201,159 | $ | 6,515 | $ | 7,783 |
(Dollars in thousands) | September 30, 2023 | December 31, 2022 | ||||||||||||
Sources of primary liquidity: | ||||||||||||||
Unrestricted cash and liquid investments: | ||||||||||||||
Holding Company and other non-bank subsidiaries | $ | 3,093 | $ | — | ||||||||||
Sallie Mae Bank(1) | 3,545,132 | 4,617,533 | ||||||||||||
Available-for-sale investments | 1,926,971 | 2,012,901 | ||||||||||||
Total unrestricted cash and liquid investments | $ | 5,475,196 | $ | 6,630,434 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Sources of primary liquidity: | ||||||||||||||||||||||||||
Unrestricted cash and liquid investments: | ||||||||||||||||||||||||||
Holding Company and other non-bank subsidiaries | $ | 3,609 | $ | 1,391 | $ | 5,840 | $ | 7,661 | ||||||||||||||||||
Sallie Mae Bank(1) | 4,130,488 | 4,432,386 | 3,969,493 | 3,868,795 | ||||||||||||||||||||||
Available-for-sale investments | 1,954,661 | 2,229,465 | 1,984,226 | 2,291,946 | ||||||||||||||||||||||
Total unrestricted cash and liquid investments | $ | 6,088,758 | $ | 6,663,242 | $ | 5,959,559 | $ | 6,168,402 |
September 30, | December 31, | |||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||
Deposits - interest-bearing | $ | 21,550,108 | $ | 21,446,647 | ||||||||||
Deposits - non-interest-bearing | 637 | 1,424 | ||||||||||||
Total deposits | $ | 21,550,745 | $ | 21,448,071 |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
(Dollars in thousands) | Amount | Qtr.-End Weighted Average Stated Rate(1) | Amount | Year-End Weighted Average Stated Rate(1) | ||||||||||||||||||||||
Money market | $ | 10,241,232 | 4.75 | % | $ | 10,977,242 | 3.75 | % | ||||||||||||||||||
Savings | 930,590 | 4.35 | 982,586 | 3.15 | ||||||||||||||||||||||
Certificates of deposit | 10,378,286 | 3.58 | 9,486,819 | 2.57 | ||||||||||||||||||||||
Deposits - interest bearing | $ | 21,550,108 | $ | 21,446,647 |
As of September 30, 2023 (dollars in thousands) | SLM Corporation and Sallie Mae Bank Contracts | |||||||
Total exposure, net of collateral | $ | 10,836 | ||||||
Exposure to counterparties with credit ratings, net of collateral | $ | 10,836 | ||||||
Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3 | — | % | ||||||
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3 | — | % |
Adjusted Transition Amounts | Phase-In Amounts for the Year Ended | Phase-In Amounts for the Nine Months Ended | Remaining Adjusted Transition Amounts to be Phased-In | |||||||||||||||||||||||
(Dollars in thousands) | December 31, 2021 | December 31, 2022 | September 30, 2023 | September 30, 2023 | ||||||||||||||||||||||
Retained earnings | $ | 836,351 | $ | (209,088) | $ | (209,088) | $ | 418,175 | ||||||||||||||||||
Allowance for credit losses | 1,038,145 | (259,536) | (259,536) | 519,073 | ||||||||||||||||||||||
Liability for unfunded commitments | 104,377 | (26,094) | (26,094) | 52,189 | ||||||||||||||||||||||
Deferred tax asset | 306,171 | (76,542) | (76,542) | 153,087 |
Actual | U.S. Basel III Minimum Requirements Plus Buffer(1)(2) | ||||||||||||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
As of September 30, 2023(3): | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | $ | 2,935,903 | 11.7 | % | $ | 1,763,562 | > | 7.0 | % | ||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | $ | 2,935,903 | 11.7 | % | $ | 2,141,468 | > | 8.5 | % | ||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 3,258,771 | 12.9 | % | $ | 2,645,343 | > | 10.5 | % | ||||||||||||||
Tier 1 Capital (to Average Assets) | $ | 2,935,903 | 10.1 | % | $ | 1,166,116 | > | 4.0 | % | ||||||||||||||
As of December 31, 2022(3): | |||||||||||||||||||||||
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | $ | 3,040,662 | 12.9 | % | $ | 1,645,807 | > | 7.0 | % | ||||||||||||||
Tier 1 Capital (to Risk-Weighted Assets) | $ | 3,040,662 | 12.9 | % | $ | 1,998,480 | > | 8.5 | % | ||||||||||||||
Total Capital (to Risk-Weighted Assets) | $ | 3,338,645 | 14.2 | % | $ | 2,468,711 | > | 10.5 | % | ||||||||||||||
Tier 1 Capital (to Average Assets) | $ | 3,040,662 | 10.3 | % | $ | 1,185,280 | > | 4.0 | % |
September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | Short-Term | Long-Term | Total | Short-Term | Long-Term | Total | ||||||||||||||||||||||||||||||||
Unsecured borrowings: | ||||||||||||||||||||||||||||||||||||||
Unsecured debt (fixed-rate) | $ | — | $ | 991,396 | $ | 991,396 | $ | — | $ | 988,986 | $ | 988,986 | ||||||||||||||||||||||||||
Total unsecured borrowings | — | 991,396 | 991,396 | — | 988,986 | 988,986 | ||||||||||||||||||||||||||||||||
Secured borrowings: | ||||||||||||||||||||||||||||||||||||||
Private Education Loan term securitizations: | ||||||||||||||||||||||||||||||||||||||
Fixed-rate | — | 3,807,493 | 3,807,493 | — | 3,462,363 | 3,462,363 | ||||||||||||||||||||||||||||||||
Variable-rate | — | 716,643 | 716,643 | — | 783,765 | 783,765 | ||||||||||||||||||||||||||||||||
Total Private Education Loan term securitizations | — | 4,524,136 | 4,524,136 | — | 4,246,128 | 4,246,128 | ||||||||||||||||||||||||||||||||
Secured Borrowing Facility | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total secured borrowings | — | 4,524,136 | 4,524,136 | — | 4,246,128 | 4,246,128 | ||||||||||||||||||||||||||||||||
Total | $ | — | $ | 5,515,532 | $ | 5,515,532 | $ | — | $ | 5,235,114 | $ | 5,235,114 |
2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, | +300 Basis Points | +100 Basis Points | -100 Basis Points | -300 Basis Points | +300 Basis Points | +100 Basis Points | -100 Basis Points | -300 Basis Points | |||||||||||||||||||||||||||||||||||||||
EAR - Shock | -2.5% | -0.8% | +0.5% | +1.5% | +1.8% | +0.6% | -0.7% | N/A | |||||||||||||||||||||||||||||||||||||||
EAR - Ramp | -2.2% | -0.7% | +0.6% | +1.6% | +1.0% | +0.3% | -0.4% | N/A | |||||||||||||||||||||||||||||||||||||||
EVE | -25.1% | -8.7% | +8.8% | +26.5% | -6.0% | -2.0% | +1.8% | N/A |
As of September 30, 2023 (dollars in millions) Index | Frequency of Variable Resets | Assets | Funding (1) | Funding Gap | ||||||||||||||||||||||
Fed Funds Effective Rate | daily/weekly/monthly | $ | — | $ | 944.8 | $ | (944.8) | |||||||||||||||||||
SOFR Rate | daily/weekly/monthly | 8,282.4 | 4,991.2 | 3,291.2 | ||||||||||||||||||||||
3-month SOFR | quarterly | — | 251.1 | (251.1) | ||||||||||||||||||||||
3-month Treasury bill | weekly | 87.5 | — | 87.5 | ||||||||||||||||||||||
Prime | monthly | 0.5 | — | 0.5 | ||||||||||||||||||||||
Non-Discrete reset(2) | daily/weekly | 3,775.8 | 3,788.3 | (12.5) | ||||||||||||||||||||||
Fixed-Rate(3) | 17,127.0 | 19,297.8 | (2,170.8) | |||||||||||||||||||||||
Total | $ | 29,273.2 | $ | 29,273.2 | $ | — |
As of September 30, 2023 (averages in years) | Weighted Average Life | ||||
Earning assets | |||||
Education loans | 5.01 | ||||
Cash and investments | 1.46 | ||||
Total earning assets | 4.23 | ||||
Deposits | |||||
Short-term deposits | 0.78 | ||||
Long-term deposits | 2.11 | ||||
Total deposits | 1.11 | ||||
Borrowings | |||||
Long-term borrowings | 3.38 | ||||
Total borrowings | 3.38 |
(In thousands, except per share data) | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)(3) | Approximate Dollar Value of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs(2) | |||||||||||||||||||
Period: | |||||||||||||||||||||||
July 1 - July 31, 2023 | — | $ | — | — | $ | 326,000 | |||||||||||||||||
August 1 - August 31, 2023 | 10 | $ | 16.18 | — | $ | 326,000 | |||||||||||||||||
September 1 - September 30, 2023 | 1 | $ | 13.62 | — | $ | 326,000 | |||||||||||||||||
Total third-quarter 2023 | 11 | $ | 16.14 | — |
10.1 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
101.SCH | XBRL Taxonomy Extension Schema Document. | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SLM CORPORATION (Registrant) | |||||||||||
By: | /S/ STEVEN J. MCGARRY | ||||||||||
Steven J. McGarry Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ JONATHAN W. WITTER | ||
Jonathan W. Witter | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
October 25, 2023 |
/s/ STEVEN J. MCGARRY | ||
Steven J. McGarry | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
October 25, 2023 |
/s/ JONATHAN W. WITTER | ||
Jonathan W. Witter | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
October 25, 2023 |
/s/ STEVEN J. MCGARRY | ||
Steven J. McGarry | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial Officer) | ||
October 25, 2023 |
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands, shares in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trading investments, cost | $ 42,196 | $ 47,554 |
Available-for sale investments at fair value, cost | 2,524,634 | 2,554,332 |
Allowance for credit losses | $ 1,416,048 | $ 1,357,075 |
Preferred stock, par or stated value (in dollars per share) | $ 0.20 | $ 0.20 |
Preferred stock, shares authorized (in shares) | 20.0 | 20.0 |
Preferred stock, shares issued (in shares) | 2.5 | 2.5 |
Preferred stock, liquidation preference (in dollars per share) | $ 100 | $ 100 |
Common stock, par value (in dollars per share) | $ 0.20 | $ 0.20 |
Common stock, shares authorized (in shares) | 1,125.0 | 1,125.0 |
Common stock, shares issued (in shares) | 438.2 | 435.1 |
Tax benefit on accumulated other comprehensive loss | $ 32,548 | $ 30,160 |
Common stock held in treasury (in shares) | 211.9 | 194.4 |
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Interest income: | ||||
Loans | $ 581,080 | $ 483,327 | $ 1,732,206 | $ 1,387,411 |
Investments | 13,268 | 10,260 | 36,636 | 24,252 |
Cash and cash equivalents | 57,902 | 26,324 | 154,911 | 36,317 |
Total interest income | 652,250 | 519,911 | 1,923,753 | 1,447,980 |
Interest expense: | ||||
Deposits | 209,921 | 105,468 | 584,859 | 215,473 |
Interest expense on short-term borrowings | 3,576 | 3,054 | 9,893 | 8,902 |
Interest expense on long-term borrowings | 54,125 | 41,879 | 152,674 | 116,255 |
Total interest expense | 267,622 | 150,401 | 747,426 | 340,630 |
Net interest income | 384,628 | 369,510 | 1,176,327 | 1,107,350 |
Less: provisions for credit losses | 198,023 | 207,598 | 329,864 | 336,193 |
Net interest income after provisions for credit losses | 186,605 | 161,912 | 846,463 | 771,157 |
Non-interest income: | ||||
Gains (losses) on sales of loans, net | (5) | 74,978 | 124,740 | 324,856 |
Gains (losses) on securities, net | 1,490 | 891 | 1,988 | (2,021) |
Gains (losses) on derivatives and hedging activities, net | 0 | 0 | 0 | (5) |
Other income | 22,753 | 19,234 | 63,275 | 52,451 |
Total non-interest income | 24,238 | 95,103 | 190,003 | 375,281 |
Operating expenses: | ||||
Compensation and benefits | 83,577 | 65,003 | 249,459 | 202,995 |
FDIC assessment fees | 12,283 | 4,592 | 33,663 | 11,501 |
Other operating expenses | 71,542 | 80,369 | 192,983 | 199,204 |
Total operating expenses | 167,402 | 149,964 | 476,105 | 413,700 |
Acquired intangible assets amortization expense | 2,834 | 2,328 | 7,351 | 5,478 |
Total non-interest expenses | 170,236 | 152,292 | 483,456 | 419,178 |
Income before income tax expense | 40,607 | 104,723 | 553,010 | 727,260 |
Income tax expense | 11,242 | 29,551 | 140,062 | 181,203 |
Net income | 29,365 | 75,172 | 412,948 | 546,057 |
Preferred stock dividends | 4,642 | 2,531 | 12,979 | 5,563 |
Net income attributable to SLM Corporation common stock | $ 24,723 | $ 72,641 | $ 399,969 | $ 540,494 |
Basic earnings per common share (in dollars per share) | $ 0.11 | $ 0.29 | $ 1.71 | $ 2.05 |
Average common shares outstanding (in shares) | 226,120 | 251,266 | 234,170 | 263,098 |
Diluted earnings per common share (in dollars per share) | $ 0.11 | $ 0.29 | $ 1.69 | $ 2.03 |
Average common and common equivalent shares outstanding (in shares) | 228,800 | 253,716 | 236,593 | 266,065 |
Declared dividends per common share (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.33 | $ 0.33 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 29,365 | $ 75,172 | $ 412,948 | $ 546,057 |
Other comprehensive income (loss): | ||||
Unrealized gains (losses) on investments | (17,686) | (68,701) | 3,358 | (197,930) |
Unrealized gains (losses) on cash flow hedges | (5,767) | 29,823 | (13,191) | 98,248 |
Total unrealized gains (losses) | (23,453) | (38,878) | (9,833) | (99,682) |
Income tax (expense) benefit | 5,702 | 9,400 | 2,388 | 24,102 |
Other comprehensive income (loss), net of tax (expense) benefit | (17,751) | (29,478) | (7,445) | (75,580) |
Total comprehensive income | $ 11,614 | $ 45,694 | $ 405,503 | $ 470,477 |
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Common stock dividend (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.33 | $ 0.33 |
Series B Preferred Stock | ||||
Preferred stock dividend rate (in dollars per share) | $ 1.85 | $ 1.01 | $ 5.17 | $ 2.22 |
Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The accompanying unaudited, consolidated financial statements of SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” or “us”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete consolidated financial statements. The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”). Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. Business Combination On July 21, 2023, we completed the acquisition of several key assets of Scholly, Inc. (“Scholly”). Scholly is engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products which offer custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers. The addition of Scholly assets will support our mission of providing students with the confidence needed to successfully navigate the higher education journey. The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standard Codification 805, “Business Combinations,” whereby as of the acquisition date, the acquired tangible assets and liabilities were recorded at their estimated fair values. The identifiable intangible assets were recorded at fair values as determined by an independent appraiser. The purchase price allocation for Scholly resulted in an excess purchase price over fair value of net assets acquired, or goodwill, of $5 million. Certain amounts are provisional and are subject to change, including final working capital adjustments and goodwill. The results of operations of Scholly have been included in our consolidated financial statements since the acquisition date. We have not disclosed the pro forma impact of this acquisition to the results of operations for the three and nine months ended September 30, 2023, as the pro forma impact was deemed immaterial. Transaction costs associated with the Scholly acquisition were approximately $1 million and were expensed as incurred within “Other operating expenses” in the consolidated statements of income. Identifiable intangible assets at the acquisition date included definite life intangible assets with an aggregate fair value of approximately $11 million, including tradename and trademarks, developed technology, customer relationships, and partner relationships. The intangible assets will be amortized over a period of to four years based on the estimated economic benefit derived from each of the underlying assets. See Note 7, “Goodwill and Acquired Intangible Assets,” for additional details.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Trading Investments We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. At December 31, 2022 we had a $5 million investment in a convertible debt security classified as a trading investment. In March 2023, this security, and the related accrued interest, was converted into equity securities classified as investments in non-marketable securities. At September 30, 2023 and December 31, 2022, we had $53 million and $56 million, respectively, classified as trading investments. Available-for-Sale Investments The amortized cost and fair value of securities available for sale are as follows:
(1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes unrealized losses related to non-credit factors. The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:
At September 30, 2023 and December 31, 2022, 226 of 230 and 191 of 194, respectively, of our available-for-sale securities were in an unrealized loss position. Impairment For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of these criteria are met, the security’s amortized cost basis is written down to fair value through net income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security. Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal Home Loan Banks, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. Our Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors Service or AA+ by Standard and Poor’s. We have the intent and ability to hold these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on this qualitative analysis, we have determined that no credit impairment exists. We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to these investments and do not consider a credit impairment to exist. As of September 30, 2023, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.
Some of the mortgage-backed securities and a portion of the government securities have been pledged to the Federal Reserve Bank (the “FRB”) as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $582 million and $547 million par value of securities pledged to this borrowing facility at September 30, 2023 and December 31, 2022, respectively, as discussed further in Notes to Consolidated Financial Statements, Note 9, “Borrowings” in this Form 10-Q. Other Investments Investments in Non-Marketable Securities We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or similar securities of the same issuer, or when observable prices are not available, use market data of similar entities, in determining any changes in the value of the securities. In March 2023 our $5 million investment in a convertible debt security, classified as a trading investment, and the related accrued interest were converted into equity securities and were reclassified to investments in non-marketable securities. As of September 30, 2023, and December 31, 2022, our total investment in these securities was $14 million and $8 million, respectively. Low Income Housing Tax Credit Investments We invest in affordable housing projects that qualify for the low-income housing tax credit (“LIHTC”), which is designed to promote private development of low-income housing. These investments generate a return mostly through realization of federal tax credits and tax benefits from net operating losses on the underlying properties. Total carrying value of the LIHTC investments was $74 million at September 30, 2023 and $80 million at December 31, 2022. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $34 million at September 30, 2023 and $46 million at December 31, 2022. Related to these investments, we recognized tax credits and other tax benefits through tax expense of $1 million at September 30, 2023 and $9 million at December 31, 2022. Tax credits and other tax benefits are recognized as part of our annual effective tax rate used to determine tax expense in a given quarter. Accordingly, the portion of a year’s expected tax benefits recognized in any given quarter may differ from 25 percent.
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Loans Held for Investment |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Investment | Loans Held for Investment Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”). We use “Credit Cards” to refer to the suite of Credit Cards that we previously held. At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. For additional information, see Notes to Consolidated Financial Statements, Note 4, “Loans Held for Sale” in this Form 10-Q. Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight Financing Rate. As of September 30, 2023, 35 percent of all of our Private Education Loans were indexed to SOFR. As of December 30, 2022, 45 percent of all of our Private Education Loans were indexed to LIBOR, the London interbank offered rate, or SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school. FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims. In the first nine months of 2023, we recognized $128 million in gains from the sale of approximately $2.10 billion of Private Education Loans, including $1.96 billion of principal and $144 million in capitalized interest, to an unaffiliated third party. In the first nine months of 2022, we recognized $325 million in gains from the sale of approximately $3.29 billion of our Private Education Loans, including $3.08 billion of principal and $213 million in capitalized interest, to unaffiliated third parties. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 9, “Borrowings - Unconsolidated VIEs” in this Form 10-Q. Loans held for investment are summarized as follows:
The estimated weighted average life of education loans in our portfolio was approximately 5.0 years and 5.0 years at September 30, 2023 and December 31, 2022, respectively. The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:
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Loans Held for Sale |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Held for Sale | Loans Held for Investment Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”). We use “Credit Cards” to refer to the suite of Credit Cards that we previously held. At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. For additional information, see Notes to Consolidated Financial Statements, Note 4, “Loans Held for Sale” in this Form 10-Q. Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight Financing Rate. As of September 30, 2023, 35 percent of all of our Private Education Loans were indexed to SOFR. As of December 30, 2022, 45 percent of all of our Private Education Loans were indexed to LIBOR, the London interbank offered rate, or SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school. FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims. In the first nine months of 2023, we recognized $128 million in gains from the sale of approximately $2.10 billion of Private Education Loans, including $1.96 billion of principal and $144 million in capitalized interest, to an unaffiliated third party. In the first nine months of 2022, we recognized $325 million in gains from the sale of approximately $3.29 billion of our Private Education Loans, including $3.08 billion of principal and $213 million in capitalized interest, to unaffiliated third parties. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 9, “Borrowings - Unconsolidated VIEs” in this Form 10-Q. Loans held for investment are summarized as follows:
The estimated weighted average life of education loans in our portfolio was approximately 5.0 years and 5.0 years at September 30, 2023 and December 31, 2022, respectively. The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:
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Allowance for Credit Losses |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses | Allowance for Credit Losses Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb lifetime expected credit losses in the held for investment loan portfolios. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for credit losses is appropriate to cover lifetime losses expected to be incurred in the loan portfolios. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses, — Allowance for FFELP Loan Losses” in our 2022 Form 10-K for a more detailed discussion. Allowance for Credit Losses Metrics
(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.
(3) For the three months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the three months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance). Allowance for Credit Losses In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, home price index, and median family income in determining the adequacy of the allowance for credit losses. Prior to this change, we used forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for these inputs from Moody’s Analytics. Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurring. We determine which forecasts we will include in our estimation of the allowance for credit losses and the associated weightings for each of these inputs. At September 30, 2022, December 31, 2022, and September 30, 2023, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively. Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses. In the second quarter of 2023, we changed how we collect on defaulted loans. Previously, we used a mix of in-house collectors and sales to third parties. We will continue to sell a segment of defaulted loans immediately after charge-off but will no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead will continue our collection efforts using in-house collectors and collection agencies. This improved our estimate of recovery rates for the nine months ended September 30, 2023. When we estimate the timing and amount of future recoveries on charged-off loans, we no longer include expectations of future sales on retained defaulted loans. We continue to monitor how we collect on defaulted loans and may modify the approach from time to time based on performance, industry conventions, and/or regulatory feedback. Provisions for credit losses in the nine months ended September 30, 2023 decreased by $6 million compared with the year-ago period. During the nine months ended September 30, 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were offset by $137 million in negative provisions recorded as a result of the $2.10 billion Private Education Loan sales during the first nine months of 2023 and an increase in recovery rates (as a result of the change in our defaulted loan recovery program noted above). In the year-ago period, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to $3.29 billion in Private Education Loans sold in the first nine months of 2022. As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of these metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans and accrued interest to be capitalized and of ending loans in repayment and accrued interest to be capitalized on loans in repayment; and delinquency and forbearance percentages. Loan Modifications to Borrowers Experiencing Financial Difficulty The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur. We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes and increase the collectability of the loans. These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. When we give a borrower facing financial difficulty an interest rate reduction, we currently temporarily reduce the contractual interest rate on a loan to 4.0 percent for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. The combination of these two loan term changes helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate. Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim. For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Credit Losses,” and Note 7, “Allowance for Credit Losses” in our 2022 Form 10-K. Under our current forbearance practices, temporary forbearance of payments is generally granted in -to-two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). See Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in our 2022 Form 10-K. If the loan has been previously restructured, we consider the cumulative effect of past restructurings made within the 12-month period before the current restructuring when determining whether a delay in payment resulting from the current restructuring is insignificant. Due to our current forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of forbearances will exceed the significance threshold and, therefore, we do not consider the forbearances as loan modifications. The limitations on granting of forbearances described above apply to hardship forbearances. We offer other administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are either required by law (such as by the Servicemembers Civil Relief Act) or are considered separate from our active loss mitigation programs and therefore are not considered to be loan modifications requiring disclosure. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. For purposes of this disclosure, we do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below. The following tables show the amortized cost basis at the end of the respective reporting periods of the loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.
The following tables describe the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:
Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses, and — Allowance for FFELP Loan Losses” in our 2022 Form 10-K for a more detailed discussion. For the current period presented, the following table provides loan modifications for which a payment default occurred in the relevant period presented and within 12 months of the loan receiving a loan modification. Additionally, for the current period presented, the table summarizes charge-offs occurring in the relevant period presented and within 12 months of the loan receiving a loan modification. The charge-offs and payment defaults for the year-ago period are presented for loans receiving a loan modification during the reporting period rather than within 12 months of the loan receiving a loan modification, as the effective date of adoption for the Financial Accounting Standards Board’s Accounting Standards Update (“ASU”) No. 2022-02, Troubled Debt Restructurings and Vintage Disclosures, was January 1, 2022. We define payment default as 60 days or more past due for purposes of this disclosure.
(1) Represents period-end amortized cost basis of loans that have been modified and for which a payment default occurred in the relevant period presented and within 12 months of receiving a modification (or within the reporting period, for the loans shown in in the year-ago period, as the case may be). (2) For the three months ended September 30, 2023, the modified loans include $12.4 million of interest rate reduction and term extension loan modifications and $2.1 million of interest rate reduction only loan modifications. For the three months ended September 30, 2022, the modified loans include $8.5 million of interest rate reduction and term extension loan modifications and $1.0 million of interest rate reduction only loan modifications. (3) For the nine months ended September 30, 2023, the modified loans include $23.0 million of interest rate reduction and term extension loan modifications and $3.4 million of interest rate reduction only loan modifications. For the nine months ended September 30, 2022, the modified loans include $11.4 million of interest rate reduction and term extension loan modifications and $1.2 million of interest rate reduction only loan modifications. (4) Represents the unpaid principal balance at the time of payment default. (5) Represents the unpaid principal balance at the time of charge off. We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following tables depict the performance of loans that have been modified during the respective reporting periods (first nine months of 2023 and full year 2022, respectively).
(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted. (2) Loans in repayment include loans on which borrowers are making full principal and interest payments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (3) The period of delinquency is based on the number of days scheduled payments are contractually past due. Private Education Loans Held for Investment - Key Credit Quality Indicators FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest in the event of default; therefore, there are no key credit quality indicators associated with FFELP Loans. For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination approval, stratified by key credit quality indicators.
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the fourth-quarter 2022. (4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5)Current period refers to January 1, 2022 through December 31, 2022. Delinquencies - Private Education Loans Held for Investment The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval. 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 (but, for purposes of the following tables, do not include those loans while they are in forbearance).
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). (2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures. (3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). (2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures. (3)The period of delinquency is based on the number of days scheduled payments are contractually past due. Accrued Interest Receivable The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest on loans making full interest payments. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school, and the current expected credit losses on accrued interest that will be capitalized is included in our allowance for credit losses.
(1)The allowance for uncollectible interest at September 30, 2023 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment ($146 million of accrued interest receivable) that is not expected to be capitalized. The accrued interest receivable that is expected to be capitalized ($1.3 billion) is reserved in the allowance for credit losses. (2)The allowance for uncollectible interest at December 31, 2022 represents the expected losses related to the portion of accrued interest receivable on those loans in repayment ($240 million of accrued interest receivable) that was not expected to be capitalized. The accrued interest receivable that was expected to be capitalized ($937 million) was reserved in the allowance for credit losses.
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Unfunded Loan Commitments |
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Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unfunded Loan Commitments | Unfunded Loan Commitments When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses, — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2022 Form 10-K for additional information. At September 30, 2023, we had $2.4 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2023/2024 academic year. 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.
(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. The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments. We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments. The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to period based upon the loan characteristics of the underlying commitments.
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Goodwill and Acquired Intangible Assets |
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Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill We recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of the acquisition of the assets primarily used or held for use of Epic Research Education Services, LLC, which does business as Nitro College (“Nitro”), in the first quarter of 2022 and the acquisition of the key assets of Scholly in the third quarter of 2023. Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. At September 30, 2023, we had $56 million in total goodwill. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Business Combination,” for additional details on our acquisition of Scholly and Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Business Combination” in our 2022 Form 10-K for additional details on our acquisition of Nitro. Acquired Intangible Assets Our intangible assets include acquired tradename and trademarks, customer relationships, developed technology, and partner relationships. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Acquired intangible assets include the following:
(1) The weighted average useful life of acquired intangible assets is at acquisition; 9.5 years is the weighted average useful life of the acquired intangible assets related to the Nitro acquisition and 3.9 years is related to the Scholly acquisition. (2) Tradename and trademarks, customer relationships, and developed technology at September 30, 2023 include $6 million, $3 million, and $1 million, respectively related to the Scholly acquisition. We recorded amortization of acquired intangible assets totaling approximately $3 million and $7 million in the three and nine months ended September 30, 2023, respectively, and approximately $2 million and $5 million in the three and nine months ended September 30, 2022, respectively. We will continue to amortize our intangible assets with definite useful lives over their remaining estimated useful lives. We estimate amortization expense associated with these intangible assets will be approximately $10 million, $12 million, $11 million, $10 million, and $8 million in 2023, 2024, 2025, 2026, and 2027, respectively.
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Deposits |
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Banking and Thrift, Other Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits The following table summarizes total deposits at September 30, 2023 and December 31, 2022.
Our total deposits of $21.6 billion were comprised of $10.4 billion in brokered deposits and $11.2 billion in retail and other deposits at September 30, 2023, compared to total deposits of $21.4 billion, which were comprised of $9.9 billion in brokered deposits and $11.5 billion in retail and other deposits, at December 31, 2022. Interest-bearing deposits as of September 30, 2023 and December 31, 2022 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposits (“MMDAs”), and retail and brokered certificates of deposit (“CDs”). Interest-bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.5 billion and $8.0 billion of our deposit total as of September 30, 2023 and December 31, 2022, respectively. Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $3 million and $3 million in the three months ended September 30, 2023 and 2022, respectively, and placement fee expense of $9 million and $10 million in the nine months ended September 30, 2023 and 2022, respectively. Fees paid to third-party brokers related to brokered CDs were $4 million and $4 million for the three months ended September 30, 2023 and 2022, respectively, and fees paid to third-party brokers related to brokered CDs were $7 million and $8 million for the nine months ended September 30, 2023 and 2022, respectively. Interest bearing deposits at September 30, 2023 and December 31, 2022 are summarized as follows:
(1) Includes the effect of interest rate swaps in effective hedge relationships. Certificates of deposit remaining maturities are summarized as follows:
As of September 30, 2023 and December 31, 2022, there were $494 million and $615 million, respectively, of deposits exceeding Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accrued interest on deposits was $73 million and $59 million at September 30, 2023 and December 31, 2022, respectively. The omnibus accounts are structured in such a way that entitles the individual depositor pass-through deposit insurance (subject to FDIC rules and limitations), and the majority of these deposits have contractual minimum balances and maturity terms.
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Borrowings |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowings | Borrowings Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securitization (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Notes to Consolidated Financial Statements, Note 12, “Borrowings” in our 2022 Form 10-K. The following table summarizes our borrowings at September 30, 2023 and December 31, 2022.
Short-term Borrowings On May 16, 2023, we amended our Secured Borrowing Facility to extend the maturity of the facility. The amount that can be borrowed under the facility is $2 billion. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until May 15, 2024. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 15, 2025 (or earlier, if certain material adverse events occur). At both September 30, 2023, and December 31, 2022, there were no secured borrowings outstanding under the Secured Borrowing Facility. Long-term Borrowings Secured Financings 2023 Transactions On March 15, 2023, we executed our $579 million SMB Private Education Loan Trust 2023-A term ABS transaction, which was accounted for as a secured financing. We sold $579 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $572 million of gross proceeds. The Class A and Class B notes had a weighted average life of 5.06 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.53 percent. On September 30, 2023, $609 million of our Private Education Loans, including $563 million of principal and $46 million in capitalized interest, were encumbered because of this transaction. On August 16, 2023, we executed our $568 million SMB Private Education Loan Trust 2023-C term ABS transaction, which was accounted for as a secured financing. We sold $568 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $568 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.93 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.69 percent. On September 30, 2023, $637 million of our Private Education Loans, including $590 million of principal and $47 million in capitalized interest, were encumbered because of this transaction. Secured Financings at Issuance The following table summarizes our secured financings issued in the year ended December 31, 2022 and in the nine months ended September 30, 2023.
(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs. (2) At September 30, 2023, $565 million of our Private Education Loans, including $527 million of principal and $38 million in capitalized interest, were encumbered related to these transactions. (3) At September 30, 2023, $1.24 billion of our Private Education Loans, including $1.15 billion of principal and $94 million in capitalized interest, were encumbered related to these transactions. Consolidated Funding Vehicles We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.
(1) Other assets primarily represent accrued interest receivable. Unconsolidated VIEs Private Education Loan Securitizations Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own five percent of the securities issued by the trusts to meet risk retention requirements. We were not required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an insignificant amount of the VIE’s expected residual returns. 2023-B Transaction On May 24, 2023, we closed an SMB Private Education Loan Trust 2023-B term ABS transaction (the “2023-B Transaction”), in which an unaffiliated third party sold to the trust approximately $2 billion of Private Education Loans that the third-party seller previously purchased from us on May 3, 2023. Sallie Mae Bank sponsored the 2023-B Transaction, is the servicer and administrator, and was the seller of an additional $105 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2023-B Transaction and we recorded a $5 million gain on sale associated with this transaction. In connection with the 2023-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2023-B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. The table below provides a summary of our exposure related to our unconsolidated VIEs.
(1) Vertical risk retention interest classified as available-for-sale investment. (2) Vertical risk retention interest classified as trading investment. Other Borrowing Sources We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at September 30, 2023. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing and is payable daily. We did not utilize these lines of credit in the nine months ended September 30, 2023 or in the year ended December 31, 2022. We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At September 30, 2023 and December 31, 2022, the value of our pledged collateral at the FRB totaled $1.6 billion and $2.2 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the nine months ended September 30, 2023 or in the year ended December 31, 2022.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Risk Management Strategy We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this strategy as a prudent management of interest rate risk. Please refer to Notes to Consolidated Financial Statements, Note 13, “Derivative Financial Instruments” in our 2022 Form 10-K for a full discussion of our risk management strategy. Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the Chicago Mercantile Exchange (“CME”) and the London Clearing House (“LCH”). All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of September 30, 2023, $1.8 billion notional of our derivative contracts were cleared on the CME and $0.1 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 91.7 percent and 8.3 percent, respectively, of our total notional derivative contracts of $1.9 billion at September 30, 2023. For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of September 30, 2023 was $(50) million and $(6) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses). Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero. At September 30, 2023 and December 31, 2022, we had a net positive exposure (derivative gain/loss positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $11 million and $12 million, respectively. Summary of Derivative Financial Statement Impact The following tables summarize the fair values and notional amounts of all derivative instruments at September 30, 2023 and December 31, 2022, and their impact on earnings and other comprehensive income for the nine months ended September 30, 2023 and September 30, 2022. Please refer to Notes to Consolidated Financial Statements, Note 13, “Derivative Financial Instruments” in our 2022 Form 10-K for a full discussion of cash flow hedges, fair value hedges, and trading activities.
(1) Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position. (2) The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract. (2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.
As of September 30, 2023 and December 31, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate deposits. During the next 12 months, we estimate that $46 million will be reclassified as a decrease to interest expense. Cash Collateral As of September 30, 2023, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was no cash collateral held by us related to derivative exposure between us and our derivatives counterparties at September 30, 2023 and December 31, 2022, respectively. Collateral held is recorded in “Other Liabilities” on the consolidated balance sheets. Cash collateral pledged by us related to derivative exposure between us and our derivatives counterparties was $11 million and $11 million at September 30, 2023 and December 31, 2022, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.
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Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity The following table summarizes our common share repurchases and issuances.
(1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 2021 Share Repurchase Program. There was $326 million of capacity remaining under the 2022 Share Repurchase Program at September 30, 2023. (2) Average purchase price per share includes purchase commission costs and excise taxes. (3) Comprised of 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. (4) Common shares issued under our various compensation and benefit plans. The closing price of our common stock on the NASDAQ Global Select Market on September 29, 2023 was $13.62. Common Stock Dividends In both September 2023 and September 2022, we paid a common stock dividend of $0.11 per common share. Share Repurchases On January 27, 2021, we announced a share repurchase program (the “2021 Share Repurchase Program”), which was effective upon announcement and expired on January 26, 2023, and originally permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion. In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program. This was in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion. Under the 2021 Share Repurchase Program, we repurchased 2.0 million shares of common stock for $38 million in the nine months ended September 30, 2022. We have utilized all capacity under the 2021 Share Repurchase Program. On January 26, 2022, we announced a new share repurchase program (the “2022 Share Repurchase Program”), which was effective upon announcement and expires on January 25, 2024, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion. Under the 2022 Share Repurchase Program, we did not repurchase shares of common stock in the three months ended September 30, 2023, and we repurchased 16.4 million shares of common stock for $257 million in the nine months ended September 30, 2023. Under the 2022 Share Repurchase Program, we also repurchased 1.2 million shares of common stock for $17 million in the three months ended September 30, 2022, and 28.7 million shares of common stock for $515 million in the nine months ended September 30, 2022. We had $326 million of capacity remaining under the 2022 Share Repurchase Program at September 30, 2023. So long as there is unexpired capacity under a given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions. The timing and volume of any repurchases under the 2022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the program or at all. Share Repurchases under Rule 10b5-1 trading plansDuring the three months ended September 30, 2023, we did not repurchase shares of our common stock under any share repurchase program. During the three months ended September 30, 2022, we repurchased 1.2 million shares of our common stock at a total cost of $17 million, and during the nine months ended September 30, 2023 and 2022, we repurchased 16.4 million and 30.7 million shares, respectively, of our common stock at a total cost of $257 million and $553 million, respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs.
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Earnings per Common Share |
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Earnings per Common Share | Earnings per Common Share Basic earnings per common share (“EPS”) are calculated using the weighted average number of shares of common stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows.
(1) Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method. (2) For the three months ended September 30, 2023 and 2022, securities covering approximately 1 million shares and 1 million shares, respectively, and for the nine months ended September 30, 2023 and 2022, securities covering approximately 1 million and 1 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements We use estimates of fair value in applying various accounting standards for our consolidated financial statements. We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for determining fair value and the hierarchical framework, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Fair Value Measurement” in our 2022 Form 10-K. During the nine months ended September 30, 2023, there were no significant transfers of financial instruments between levels or changes in our methodology or assumptions used to value our financial instruments. The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis.
The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.
Please refer to Notes to Consolidated Financial Statements, Note 17, “Fair Value Measurements” in our 2022 Form 10-K for a full discussion of the methods and assumptions used to estimate the fair value of each class of financial instruments.
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Regulatory Capital |
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Banking and Thrift, Other Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital | Regulatory Capital Sallie Mae Bank (the “Bank”) is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors. The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent. To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent. Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. On January 1, 2022, 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes. On January 1, 2023, an additional 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes. On January 1 of 2024 and 2025, the adjusted transition amounts will continue to be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used. At September 30, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:
The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale investments and swap valuations from Common Equity Tier 1 Capital. At September 30, 2023 and December 31, 2022, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $158 million and $160 million, net of tax of $51 million and $52 million, respectively. The capital ratios would remain above the well capitalized thresholds if the unrealized loss became fully recognized into capital.
(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer. (2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework. (3) For both September 30, 2023 and December 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022 and 2023. Bank Dividends The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Bank declared $100 million and $400 million in dividends to the Company for the three and nine months ended September 30, 2023, respectively, and $241 million and $642 million in dividends to the Company for the three and nine months ended September 30, 2022, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. In the future, we expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under its share repurchase programs.
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Commitments, Contingencies and Guarantees |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Commitments When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period that we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At September 30, 2023, we had $2.4 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2023/2024 academic year. At September 30, 2023, we had a $114 million reserve recorded in “Other Liabilities” to cover expected losses that may occur during the one-year loss emergence period on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in our 2022 Form 10-K and Note 6, “Unfunded Loan Commitments” in this Form 10-Q for additional information. Regulatory Matters For additional information regarding our regulatory matters, see Notes to Consolidated Financial Statements, Note 21, “Commitments, Contingencies and Guarantees” in our 2022 Form 10-K. Contingencies In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries. It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests. We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves. Based on current knowledge, management does not believe there are loss contingencies, if any, arising from pending investigations, litigation, or regulatory matters for which reserves should be established.
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Subsequent Event |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Fourth-Quarter 2023 Loan Sales On October 13, 2023, we sold approximately $1 billion of our Private Education Loans, including approximately $921 million in principal and approximately $78 million in capitalized interest to an unaffiliated third party. The gain on sale of loans sold expressed as a percentage was in the low to mid single-digits and will be recognized in the fourth-quarter 2023 consolidated statements of income. The transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date. We will continue to service these loans pursuant to the terms of the applicable transaction documents.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
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Pay vs Performance Disclosure | ||||
Net income | $ 29,365 | $ 75,172 | $ 412,948 | $ 546,057 |
Insider Trading Arrangements |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Significant Accounting Policies (Policies) |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited, consolidated financial statements of SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” or “us”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete consolidated financial statements. The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results for the year ending December 31, 2023 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).
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Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
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Business Combination | The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standard Codification 805, “Business Combinations,” whereby as of the acquisition date, the acquired tangible assets and liabilities were recorded at their estimated fair values. The identifiable intangible assets were recorded at fair values as determined by an independent appraiser. |
Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost and Fair Value of Securities Available-for-Sale | The amortized cost and fair value of securities available for sale are as follows:
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Schedule of Available-for-Sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:
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Schedule of Amortized Cost and Fair Value of Securities by Contractual Maturities | As of September 30, 2023, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.
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Loans Held for Investment (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loans Held for Investment | Loans held for investment are summarized as follows:
The average balance (net of unamortized premium/(discount)) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:
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Allowance for Credit Losses (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allowance for Credit Losses and Recorded Investments in Loans | Allowance for Credit Losses Metrics
(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.
(3) For the three months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the three months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance). 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.
(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.
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Schedule of Amortized Cost Basis of Financing Receivables | The following tables show the amortized cost basis at the end of the respective reporting periods of the loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.
The following tables describe the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:
(1) Represents period-end amortized cost basis of loans that have been modified and for which a payment default occurred in the relevant period presented and within 12 months of receiving a modification (or within the reporting period, for the loans shown in in the year-ago period, as the case may be). (2) For the three months ended September 30, 2023, the modified loans include $12.4 million of interest rate reduction and term extension loan modifications and $2.1 million of interest rate reduction only loan modifications. For the three months ended September 30, 2022, the modified loans include $8.5 million of interest rate reduction and term extension loan modifications and $1.0 million of interest rate reduction only loan modifications. (3) For the nine months ended September 30, 2023, the modified loans include $23.0 million of interest rate reduction and term extension loan modifications and $3.4 million of interest rate reduction only loan modifications. For the nine months ended September 30, 2022, the modified loans include $11.4 million of interest rate reduction and term extension loan modifications and $1.2 million of interest rate reduction only loan modifications. (4) Represents the unpaid principal balance at the time of payment default. (5) Represents the unpaid principal balance at the time of charge off.
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Age Analysis of Past Due Loans Delinquencies | The following tables depict the performance of loans that have been modified during the respective reporting periods (first nine months of 2023 and full year 2022, respectively).
(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted. (2) Loans in repayment include loans on which borrowers are making full principal and interest payments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (3) The period of delinquency is based on the number of days scheduled payments are contractually past due. The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval. 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 (but, for purposes of the following tables, do not include those loans while they are in forbearance).
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). (2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures. (3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). (2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures. (3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
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Schedule of Private Education Loan Portfolio Stratified by Key Credit Quality Indicators | The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination approval, stratified by key credit quality indicators.
(1)Balance represents gross Private Education Loans held for investment. (2)Represents the higher credit score of the cosigner or the borrower. (3)Represents the FICO score updated as of the fourth-quarter 2022. (4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due. (5)Current period refers to January 1, 2022 through December 31, 2022.
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Schedule of Accrued Interest Receivable | The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest on loans making full interest payments. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school, and the current expected credit losses on accrued interest that will be capitalized is included in our allowance for credit losses.
(1)The allowance for uncollectible interest at September 30, 2023 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment ($146 million of accrued interest receivable) that is not expected to be capitalized. The accrued interest receivable that is expected to be capitalized ($1.3 billion) is reserved in the allowance for credit losses. (2)The allowance for uncollectible interest at December 31, 2022 represents the expected losses related to the portion of accrued interest receivable on those loans in repayment ($240 million of accrued interest receivable) that was not expected to be capitalized. The accrued interest receivable that was expected to be capitalized ($937 million) was reserved in the allowance for credit losses.
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Unfunded Loan Commitments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Allowance for Credit Losses and Recorded Investments in Loans | Allowance for Credit Losses Metrics
(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.
(3) For the three months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the three months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
(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.
(3) For the nine months ended September 30, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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 (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance). 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.
(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.
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Goodwill and Acquired Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Intangible Assets | Acquired intangible assets include the following:
(1) The weighted average useful life of acquired intangible assets is at acquisition; 9.5 years is the weighted average useful life of the acquired intangible assets related to the Nitro acquisition and 3.9 years is related to the Scholly acquisition. (2) Tradename and trademarks, customer relationships, and developed technology at September 30, 2023 include $6 million, $3 million, and $1 million, respectively related to the Scholly acquisition.
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Deposits (Tables) |
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Banking and Thrift, Other Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deposits | The following table summarizes total deposits at September 30, 2023 and December 31, 2022.
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Schedule of Interest Bearing Deposits | Interest bearing deposits at September 30, 2023 and December 31, 2022 are summarized as follows:
(1) Includes the effect of interest rate swaps in effective hedge relationships.
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Schedule of Certificates of Deposit Maturities | Certificates of deposit remaining maturities are summarized as follows:
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Borrowings (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following table summarizes our borrowings at September 30, 2023 and December 31, 2022.
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Schedule of Securities Financing Transactions | The following table summarizes our secured financings issued in the year ended December 31, 2022 and in the nine months ended September 30, 2023.
(1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs. (2) At September 30, 2023, $565 million of our Private Education Loans, including $527 million of principal and $38 million in capitalized interest, were encumbered related to these transactions. (3) At September 30, 2023, $1.24 billion of our Private Education Loans, including $1.15 billion of principal and $94 million in capitalized interest, were encumbered related to these transactions.
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Schedule of Variable Interest Entities | We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.
(1) Other assets primarily represent accrued interest receivable. The table below provides a summary of our exposure related to our unconsolidated VIEs.
(1) Vertical risk retention interest classified as available-for-sale investment. (2) Vertical risk retention interest classified as trading investment.
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Derivative Financial Instruments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Derivatives on the Consolidated Balance Sheet | The following tables summarize the fair values and notional amounts of all derivative instruments at September 30, 2023 and December 31, 2022, and their impact on earnings and other comprehensive income for the nine months ended September 30, 2023 and September 30, 2022. Please refer to Notes to Consolidated Financial Statements, Note 13, “Derivative Financial Instruments” in our 2022 Form 10-K for a full discussion of cash flow hedges, fair value hedges, and trading activities.
(1) Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position. (2) The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract. (2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.
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Schedule of Offsetting Assets | The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract. (2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.
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Schedule of Offsetting Liabilities | The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract. (2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.
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Schedule of Notional Amounts of Outstanding Derivative Positions |
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Schedule of Cumulative Basis Adjustments for Fair Value Hedges | As of September 30, 2023 and December 31, 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
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Schedule of Impact of Derivatives on the Consolidated Statements of Income |
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Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) |
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Stockholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Share Repurchases | The following table summarizes our common share repurchases and issuances.
(1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 2021 Share Repurchase Program. There was $326 million of capacity remaining under the 2022 Share Repurchase Program at September 30, 2023. (2) Average purchase price per share includes purchase commission costs and excise taxes. (3) Comprised of 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. (4) Common shares issued under our various compensation and benefit plans.
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Earnings per Common Share (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows.
(1) Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method. (2) For the three months ended September 30, 2023 and 2022, securities covering approximately 1 million shares and 1 million shares, respectively, and for the nine months ended September 30, 2023 and 2022, securities covering approximately 1 million and 1 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation of Financial Instruments that are Marked-to-Market on Recurring Basis | The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis.
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Fair Values of Financial Assets and Liabilities, Including Derivative Financial Instruments | The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.
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Regulatory Capital (Tables) |
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Schedule of Compliance with Regulatory Capital Requirements Under Banking Regulations | At September 30, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows:
The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale investments and swap valuations from Common Equity Tier 1 Capital. At September 30, 2023 and December 31, 2022, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $158 million and $160 million, net of tax of $51 million and $52 million, respectively. The capital ratios would remain above the well capitalized thresholds if the unrealized loss became fully recognized into capital.
(1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer. (2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework. (3) For both September 30, 2023 and December 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022 and 2023.
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Significant Accounting Policies (Details) - USD ($) $ in Millions |
2 Months Ended | 9 Months Ended | |
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Jul. 21, 2023 |
Sep. 30, 2023 |
Sep. 30, 2023 |
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Business Acquisition [Line Items] | |||
Goodwill | $ 56 | $ 56 | |
Scholly, Inc. | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 5 | ||
Acquisition transaction costs | $ 1 | ||
Identifiable intangible assets aggregate fair value at acquisition date | $ 11 | ||
Weighted average useful life of acquired intangible assets | 3 years 10 months 24 days | ||
Scholly, Inc. | Minimum | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of acquired intangible assets | 2 years | ||
Scholly, Inc. | Maximum | |||
Business Acquisition [Line Items] | |||
Weighted average useful life of acquired intangible assets | 4 years |
Loans Held for Investment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Jul. 01, 2006 |
Jun. 30, 2006 |
Sep. 30, 1993 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Percent of private loans indexed to LIBOR | 35.00% | 35.00% | 45.00% | |||||
Tier 1 of government guarantee (at least) | 97.00% | 97.00% | 97.00% | |||||
Tier 2 of government guarantee | 98.00% | |||||||
Tier 3 of government guarantee | 100.00% | |||||||
Gain on sales of loans, net | $ (5) | $ 74,978 | $ 124,740 | $ 324,856 | ||||
Estimated weighted average life of student loans | 5 years | 5 years | ||||||
Private Education Loans | ||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||
Gain on sales of loans, net | $ 128,000 | 325,000 | ||||||
Proceeds from sale of loans receivable | 2,100,000 | 3,290,000 | ||||||
Net proceeds from sales of loans held for investment, principal | 1,960,000 | 3,080,000 | ||||||
Net proceeds from sales of loans held for investment, capitalized interest | $ 144,000 | $ 213,000 |
Loans Held for Investment - Student Loan Portfolio Average Balances (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Average Balance | $ 21,213,165 | $ 20,614,487 | $ 21,615,968 | $ 21,359,026 |
Private Education Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Average Balance | $ 20,649,663 | $ 19,958,763 | $ 21,032,541 | $ 20,685,372 |
Weighted Average Interest Rate | 10.96% | 9.43% | 10.80% | 8.82% |
FFELP Loans | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Average Balance | $ 563,502 | $ 655,724 | $ 583,427 | $ 673,654 |
Weighted Average Interest Rate | 7.35% | 5.03% | 7.10% | 4.18% |
Loans Held for Sale (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale | $ 0 | $ 0 | $ 29,448 | |||
Loss on sale of loan | 5 | $ (74,978) | (124,740) | $ (324,856) | ||
Credit Cards | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Loans held for sale | $ 0 | $ 0 | $ 29,000 | |||
Financing receivable allowance for credit loss, transfer to held-to-sale | 2,400 | |||||
Charge-off | $ 1,500 | |||||
Loss on sale of loan | $ 4,000 |
Allowance for Credit Losses - Accrued Interest Receivable (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Receivables [Abstract] | ||
Total Interest Receivable | $ 1,429,225 | $ 1,177,562 |
90 Days or Greater Past Due | 6,756 | 6,609 |
Allowance for Uncollectible Interest | 8,516 | 8,121 |
Accrued interest receivable not expected to be capitalized | 146,000 | 240,000 |
Accrued interest receivable expected to be capitalized reserved | $ 1,300,000 | $ 937,000 |
Unfunded Loan Commitments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Credit Loss [Abstract] | ||||
Contractual obligation | $ 2,400,000 | $ 2,400,000 | ||
Allowance | ||||
Beginning balance | 62,600 | $ 113,525 | 124,924 | $ 72,713 |
Provision/New commitments - net | 115,605 | 192,559 | 220,303 | 339,705 |
Other provision items | 37,329 | (29,913) | 47,008 | (1,033) |
Transfer - funded loans | (101,687) | (168,377) | (278,388) | (303,591) |
Ending balance | 113,847 | 107,794 | 113,847 | 107,794 |
Unfunded Commitments | ||||
Beginning balance | 1,562,856 | 1,413,840 | 1,995,808 | 1,776,976 |
Provision/New commitments - net | 3,258,234 | 3,148,434 | 5,912,418 | 5,584,129 |
Other provision items | 0 | 0 | 0 | 0 |
Transfer - funded loans | (2,451,203) | (2,345,348) | (5,538,339) | (5,144,179) |
Ending balance | $ 2,369,887 | $ 2,216,926 | $ 2,369,887 | $ 2,216,926 |
Goodwill and Acquired Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill | $ 56,000 | $ 56,000 | ||
Acquired intangible assets amortization expense | 2,834 | $ 2,328 | 7,351 | $ 5,478 |
Expected amortization, remainder of 2023 | 10,000 | 10,000 | ||
Expected amortization of 2024 | 12,000 | 12,000 | ||
Expected amortization of 2025 | 11,000 | 11,000 | ||
Expected amortization of 2026 | 10,000 | 10,000 | ||
Expected amortization of 2027 | $ 8,000 | $ 8,000 |
Deposits - Summary of Total Deposits (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Banking and Thrift, Other Disclosure [Abstract] | ||
Deposits - interest-bearing | $ 21,550,108 | $ 21,446,647 |
Deposits - non-interest-bearing | 637 | 1,424 |
Total deposits | $ 21,550,745 | $ 21,448,071 |
Deposits - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Banking and Thrift, Other Disclosure [Abstract] | |||||
Deposits | $ 21,550,745 | $ 21,550,745 | $ 21,448,071 | ||
Brokered deposits | 10,400,000 | 10,400,000 | 9,900,000 | ||
Retail and other deposits | 11,200,000 | 11,200,000 | 11,500,000 | ||
Stable interest-bearing deposits, total | 7,500,000 | 7,500,000 | 8,000,000 | ||
Brokered deposit placement fee | 3,000 | $ 3,000 | 9,000 | $ 10,000 | |
Third party broker fees paid | 4,000 | $ 4,000 | 7,000 | $ 8,000 | |
Deposits exceeding FDIC insurance limits | 494,000 | 494,000 | 615,000 | ||
Accrued interest on deposits | $ 73,000 | $ 73,000 | $ 59,000 |
Deposits - Interest Bearing Deposits (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amount | ||
Money market | $ 10,241,232 | $ 10,977,242 |
Savings | 930,590 | 982,586 |
Certificates of deposit | 10,378,286 | 9,486,819 |
Deposits - interest bearing | $ 21,550,108 | $ 21,446,647 |
Qtr.-End Weighted Average Stated Rate | ||
Money market | 4.75% | 3.75% |
Savings | 4.35% | 3.15% |
Certificates of deposit | 3.58% | 2.57% |
Deposits - Schedule of Remaining Maturities of Certificates of Deposit (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Banking and Thrift, Other Disclosure [Abstract] | ||
One year or less | $ 3,436,186 | $ 3,224,573 |
After one year to two years | 4,079,381 | 2,954,257 |
After two years to three years | 2,359,064 | 1,904,919 |
After three years to four years | 248,301 | 1,031,881 |
After four years to five years | 255,354 | 324,375 |
After five years | 0 | 46,814 |
Total | $ 10,378,286 | $ 9,486,819 |
Borrowings - Summary of Exposure Related To Unconsolidated VIEs (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|---|---|---|
Debt Instrument [Line Items] | ||||||
Estimated Fair Value | $ 2,315,978 | $ 2,342,089 | ||||
Total Exposure | 113,847 | $ 62,600 | 124,924 | $ 107,794 | $ 113,525 | $ 72,713 |
Variable Interest Entity, Not Primary Beneficiary | Private Education Loan term securitizations | ||||||
Debt Instrument [Line Items] | ||||||
Estimated Fair Value | 389,006 | 329,188 | ||||
Equity Interests | 52,561 | 50,786 | ||||
Total Exposure | $ 441,567 | $ 379,974 |
Derivative Financial Instruments - Narrative (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2023
USD ($)
counterparty
|
Dec. 31, 2022
USD ($)
|
|
Derivative [Line Items] | ||
Number of central counterparties | counterparty | 2 | |
Notional value | $ 1,931,320,000 | $ 2,842,846,000 |
Derivative, fair value, amount offset against collateral, net | 11,000,000 | 12,000,000 |
Estimated accumulated other comprehensive income to be reclassified in next 12 months | 46,000,000 | |
Cash collateral held relative to derivative exposure | 0 | 0 |
Cash collateral pledged | 11,000,000 | $ 11,000,000 |
CME | ||
Derivative [Line Items] | ||
Notional value | $ 1,800,000,000 | |
Percent of total notional derivative contracts | 91.70% | |
Amount of variation margin included as settlement | $ (50,000,000) | |
LCH | ||
Derivative [Line Items] | ||
Notional value | $ 100,000,000 | |
Percent of total notional derivative contracts | 8.30% | |
Amount of variation margin included as settlement | $ (6,000,000) |
Derivative Financial Instruments - Offsetting Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Assets | ||
Gross position | $ 17 | $ 972 |
Impact of master netting agreement | (17) | (567) |
Derivative values with impact of master netting agreements (as carried on balance sheet) | 0 | 405 |
Cash collateral pledged | 11,087 | 11,162 |
Net position | 11,087 | 11,567 |
Other Liabilities | ||
Gross position | (268) | (567) |
Impact of master netting agreement | 17 | 567 |
Derivative values with impact of master netting agreements (as carried on balance sheet) | (251) | 0 |
Cash collateral pledged | 0 | 0 |
Net position | $ (251) | $ 0 |
Derivative Financial Instruments - Notional Values (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Values | $ 1,931,320 | $ 2,842,846 |
Trading | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 0 | 0 |
Cash Flow | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 1,229,011 | 1,314,660 |
Fair Value | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 702,309 | 1,528,186 |
Interest rate swaps | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 1,931,320 | 2,842,846 |
Interest rate swaps | Trading | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 0 | 0 |
Interest rate swaps | Cash Flow | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | 1,229,011 | 1,314,660 |
Interest rate swaps | Fair Value | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Values | $ 702,309 | $ 1,528,186 |
Derivative Financial Instruments - Schedule of Hedged Items Recorded in Statement of Financial Position (Details) - Deposits - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Carrying Amount of the Hedged Assets/(Liabilities) | $ (681,292) | $ (1,494,087) |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) | $ 20,755 | $ 31,259 |
Derivative Financial Instruments - Impact of Derivatives on Consolidated Statements of Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Cash Flow Hedges | ||||
Interest expense | $ 267,622 | $ 150,401 | $ 747,426 | $ 340,630 |
Trading | ||||
Total | $ 6,031 | $ 706 | $ 15,923 | $ 20,140 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Gains (losses) on derivatives and hedging activities, net | Gains (losses) on derivatives and hedging activities, net | Gains (losses) on derivatives and hedging activities, net | Gains (losses) on derivatives and hedging activities, net |
Designated as Hedging Instrument | ||||
Fair Value Hedges | ||||
Interest recognized on derivatives | $ (6,701) | $ (1,783) | $ (19,086) | $ 24,418 |
Hedged items recorded in interest expense | (4,346) | 14,143 | (10,504) | 86,899 |
Derivatives recorded in interest expense | 4,265 | (14,425) | 10,596 | (86,896) |
Trading | ||||
Total | (6,782) | (2,065) | (18,994) | 24,421 |
Designated as Hedging Instrument | Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | Reclassification out of Accumulated Other Comprehensive Income | ||||
Cash Flow Hedges | ||||
Interest expense | 12,813 | 2,771 | 34,917 | (4,033) |
Trading | ||||
Trading | ||||
Change in fair value of future interest payments recorded in earnings | 0 | 0 | 0 | (248) |
Total | $ 0 | $ 0 | $ 0 | $ (248) |
Derivative Financial Instruments - Impact of Derivatives on Consolidated Statement of Changes in Stockholders' Equity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Amount of gain (loss) recognized in other comprehensive income (loss) | $ 7,046 | $ 32,594 | $ 21,726 | $ 94,215 |
Less: amount of gain (loss) reclassified in interest expense | 12,813 | 2,771 | 34,917 | (4,033) |
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit | $ (5,767) | $ 29,823 | $ (13,191) | $ 98,248 |
Stockholders' Equity - Common Stock Repurchased (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Equity [Abstract] | ||||
Common stock repurchased (in shares) | 0 | 1,191,544 | 16,389,696 | 30,721,944 |
Average purchase price per share (in dollars per share) | $ 0 | $ 14.14 | $ 15.71 | $ 18.00 |
Shares repurchased related to employee stock-based compensation plans (in shares) | 10,687 | 448 | 1,088,330 | 1,131,351 |
Average purchase price per share (in dollars per share) | $ 16.14 | $ 13.99 | $ 15.45 | $ 18.36 |
Common shares issued (in shares) | 200,886 | 4,682 | 3,073,639 | 3,093,392 |
Remaining authority under the share repurchase program | $ 326 | $ 326 |
Regulatory Capital - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 01, 2020 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Jun. 30, 2023 |
Jan. 01, 2023 |
Jun. 30, 2022 |
Jan. 01, 2022 |
Dec. 31, 2021 |
|
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||||||||||
Allowance for credit losses | $ 1,416,048 | $ 1,194,238 | $ 1,416,048 | $ 1,194,238 | $ 1,357,075 | $ 1,364,716 | $ 1,081,066 | $ 1,165,335 | |||
Liability for unfunded commitments | 113,847 | 107,794 | 113,847 | 107,794 | 124,924 | $ 62,600 | $ 113,525 | $ 72,713 | |||
Retained earnings | 3,485,575 | 3,485,575 | 3,163,640 | ||||||||
Unrealized loss | 158,000 | 160,000 | |||||||||
Unrealized loss, tax benefit | 51,000 | 52,000 | |||||||||
Dividends | 100,000 | $ 241,000 | 400,000 | $ 642,000 | |||||||
Adjustments | |||||||||||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||||||||||
Period of deferment | 2 years | ||||||||||
Percentage amount deferred per year | 25.00% | ||||||||||
Percentage amount phased in during year | 25.00% | 25.00% | |||||||||
Allowance for credit losses | $ 1,100,000 | (259,536) | (259,536) | (259,536) | |||||||
Liability for unfunded commitments | 116,000 | (26,094) | (26,094) | (26,094) | |||||||
Deferred tax asset | 306,000 | (76,542) | (76,542) | (76,542) | |||||||
Retained earnings | $ 953,000 | $ (209,088) | $ (209,088) | $ (209,088) |
Commitments, Contingencies and Guarantees (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation | $ 2,400 |
Other liabilities reserve | $ 114 |
Loss emergence period | 1 year |
Subsequent Events (Details) - Private Education Loans - Subsequent Event $ in Millions |
Oct. 13, 2023
USD ($)
|
---|---|
Subsequent Event [Line Items] | |
Sale of financing receivables | $ 1,000 |
Principal amount of financing receivables sold | 921 |
Capitalized interest amount of financing receivables sold | $ 78 |
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