Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

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.


	Fair Value Measurements on a Recurring Basis
	March 31, 2025								December 31, 2024
(Dollars in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Trading investments	$	—	$	2,436	$	51,296	$	53,732	$	—	$	—	$	53,262	$	53,262
Available-for-sale investments	—		1,654,505		2,472		1,656,977		—		1,930,537		2,689		1,933,226
Held for sale loans	—		—		—		—		—		—		—		—
Derivative instruments	—		—		—		—		—		—		—		—
Total	$	—	$	1,656,941	$	53,768	$	1,710,709	$	—	$	1,930,537	$	55,951	$	1,986,488

Liabilities:
Derivative instruments	$	—	$	(23)	$	—	$	(23)	$	—	$	(40)	$	—	$	(40)
Total	$	—	$	(23)	$	—	$	(23)	$	—	$	(40)	$	—	$	(40)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table summarizes the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.


	Three Months Ended March 31,
	2025						2024
	Investments						Investments
(Dollars in thousands)	Available For Sale - Debt Securities		Trading - Residual Interests		Total		Available For Sale - Debt Securities		Trading - Residual Interests		Total
Balance, beginning of period	$	2,689	$	53,262	$	55,951	$	—	$	54,481	$	54,481
Total gains/(losses):
Included in earnings (or changes in net assets)(1)	6		(521)		(515)		—		2,119		2,119
Included in other comprehensive income	3		—		3		—		—		—
Settlements	(226)		(1,445)		(1,671)		—		1,566		1,566
Transfers into level 3	—		—		—		—		—		—
Transfers out of level 3	—		—		—		—		—		—
Balance, end of period	$	2,472	$	51,296	$	53,768	$	—	$	58,166	$	58,166

Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period	$	3	$	—	$	3	$	—	$	—	$	—
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period(2)	$	—	$	(521)	$	(521)	$	—	$	2,119	$	2,119

(1) Included in earnings (or changes in net assets) is comprised of the amounts recorded in the specified line item in the consolidated statements of income:


	Three Months Ended March 31,
(Dollars in thousands)	2025		2024
Interest Income - Investments	$	6	$	—
Gains (losses) on securities, net	(521)		2,119
Total	$	(515)	$	2,119

(2) Recorded in "gains (losses) on securities, net" in the consolidated statements of income.

Fair Value Measurement Inputs and Valuation Techniques

The following table presents the significant unobservable inputs used in the recurring valuations of the level 3 financial instruments detailed above.

As of March 31, 2025
(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Average)

Debt Securities

2,472

Discounted cash flow

Constant Prepayment Rate

6.9%-11.0% (8.3%)

Probability of default

4.0%-17.0% (11.5%)

Residual Interests

51,296

Discounted cash flow

Constant Prepayment Rate

6.9%-11.0% (8.3%)

Probability of default

4.0%-17.0% (11.5%)

Total

53,768

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.


	March 31, 2025						December 31, 2024
(Dollars in thousands)	Fair Value		Carrying Value		Difference		Fair Value		Carrying Value		Difference
Earning assets:
Loans held for investment, net:
Private Education Loans	$	24,368,095	$	21,091,204	$	3,276,891	$	24,110,381	$	20,902,158	$	3,208,223



Cash and cash equivalents	3,695,076		3,695,076		—		4,700,366		4,700,366		—
Trading investments	53,732		53,732		—		53,262		53,262		—
Available-for-sale investments	1,656,977		1,656,977		—		1,933,226		1,933,226		—
Accrued interest receivable	1,675,035		1,553,979		121,056		1,663,474		1,546,590		116,884

Derivative instruments	—		—		—		—		—		—
Total earning assets	$	31,448,915	$	28,050,968	$	3,397,947	$	32,460,709	$	29,135,602	$	3,325,107
Interest-bearing liabilities:
Money-market and savings accounts	$	10,396,823	$	10,417,024	$	20,201	$	10,503,731	$	10,526,324	$	22,593
Certificates of deposit	9,682,121		9,653,528		(28,593)		10,593,666		10,540,428		(53,238)

Long-term borrowings	6,078,223		6,147,473		69,250		6,323,384		6,440,345		116,961
Accrued interest payable	81,504		81,504		—		108,488		108,488		—
Derivative instruments	23		23		—		40		40		—
Total interest-bearing liabilities	$	26,238,694	$	26,299,552	$	60,858	$	27,529,309	$	27,615,625	$	86,316

Excess of net asset fair value over carrying value					$	3,458,805					$	3,411,423

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details