|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
c
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
52-2013874
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
300 Continental Drive, Newark, Delaware
|
19713
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
c
|
|
|
|
|
|
Non-accelerated filer
|
c
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
c
|
Class
|
Outstanding at June 30, 2014
|
Common Stock, $0.20 par value
|
422,936,478 shares
|
Part I. Financial Information
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
|
|
Item 1.
|
Notes to the Financial Statements
|
|
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
|
|
Item 4.
|
Controls and Procedures
|
|
|
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PART II. Other Information
|
|
|
||
Item 1.
|
Legal Proceedings
|
|
|
|
Item 1A.
|
Risk Factors
|
|
73
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
81
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
81
|
|
Item 4.
|
Mine Safety Disclosures
|
|
81
|
|
Item 5.
|
Other Information
|
|
81
|
|
Item 6.
|
Exhibits
|
|
87
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,524,176
|
|
|
$
|
2,182,865
|
|
Available-for-sale investments at fair value (cost of $150,117 and $106,977, respectively)
|
|
149,399
|
|
|
102,105
|
|
||
Loans held for investment (net of allowance for losses of $60,527 and $68,081, respectively)
|
|
8,793,971
|
|
|
7,931,377
|
|
||
Other interest-earning assets
|
|
45,417
|
|
|
4,355
|
|
||
Accrued interest receivable
|
|
453,461
|
|
|
356,283
|
|
||
Premises and equipment, net
|
|
77,833
|
|
|
74,188
|
|
||
Acquired intangible assets, net
|
|
4,241
|
|
|
6,515
|
|
||
Tax indemnification receivable
|
|
270,198
|
|
|
—
|
|
||
Other assets
|
|
60,643
|
|
|
48,976
|
|
||
Total assets
|
|
$
|
11,379,339
|
|
|
$
|
10,706,664
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Deposits
|
|
$
|
8,890,209
|
|
|
$
|
9,001,550
|
|
Income taxes payable, net
|
|
323,467
|
|
|
162,205
|
|
||
Upromise related liabilities
|
|
301,160
|
|
|
307,518
|
|
||
Other liabilities
|
|
126,239
|
|
|
69,248
|
|
||
Total liabilities
|
|
9,641,075
|
|
|
9,540,521
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
Preferred stock, par value $0.20 per share, 20 million shares authorized
|
|
|
|
|
||||
Series A: 3.3 million and 0 shares issued, respectively, at stated value of $50 per share
|
|
165,000
|
|
|
—
|
|
||
Series B: 4 million and 0 shares issued, respectively, at stated value of $100 per share
|
|
400,000
|
|
|
—
|
|
||
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 423 million and 0 shares issued, respectively
|
|
84,659
|
|
|
—
|
|
||
Additional paid-in capital
|
|
1,071,916
|
|
|
—
|
|
||
Navient's subsidiary investment
|
|
—
|
|
|
1,164,495
|
|
||
Accumulated other comprehensive (loss) income (net of tax (benefit) expense of ($354) and ($1,849), respectively)
|
|
(365
|
)
|
|
(3,024
|
)
|
||
Retained earnings
|
|
20,167
|
|
|
—
|
|
||
Total SLM Corporation stockholders' equity before treasury stock
|
|
1,741,377
|
|
|
1,161,471
|
|
||
Less: Common stock held in treasury at cost: 359 million and 0 shares, respectively
|
|
(3,113
|
)
|
|
—
|
|
||
Noncontrolling interest
|
|
—
|
|
|
4,672
|
|
||
Total equity
|
|
1,738,264
|
|
|
1,166,143
|
|
||
Total liabilities and equity
|
|
$
|
11,379,339
|
|
|
$
|
10,706,664
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
$
|
162,238
|
|
|
$
|
122,212
|
|
|
$
|
322,273
|
|
|
$
|
253,781
|
|
Investments
|
|
2,236
|
|
|
5,638
|
|
|
3,204
|
|
|
11,624
|
|
||||
Cash and cash equivalents
|
|
1,099
|
|
|
1,038
|
|
|
1,965
|
|
|
1,770
|
|
||||
Total interest income
|
|
165,573
|
|
|
128,888
|
|
|
327,442
|
|
|
267,175
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
21,034
|
|
|
21,439
|
|
|
43,624
|
|
|
44,008
|
|
||||
Other interest expense
|
|
—
|
|
|
32
|
|
|
41
|
|
|
49
|
|
||||
Total interest expense
|
|
21,034
|
|
|
21,471
|
|
|
43,665
|
|
|
44,057
|
|
||||
Net interest income
|
|
144,539
|
|
|
107,417
|
|
|
283,777
|
|
|
223,118
|
|
||||
Less: provisions for loan losses
|
|
1,014
|
|
|
(1,015
|
)
|
|
40,173
|
|
|
19,677
|
|
||||
Net interest income after provisions for loan losses
|
|
143,525
|
|
|
108,432
|
|
|
243,604
|
|
|
203,441
|
|
||||
Noninterest income:
|
|
|
|
|
|
|
|
|
||||||||
Gains on sales of loans to affiliates, net
|
|
1,928
|
|
|
73,441
|
|
|
35,816
|
|
|
148,663
|
|
||||
(Losses) gains on derivatives and hedging activities, net
|
|
(9,458
|
)
|
|
(52
|
)
|
|
(10,222
|
)
|
|
558
|
|
||||
Other
|
|
15,229
|
|
|
8,665
|
|
|
23,365
|
|
|
16,465
|
|
||||
Total noninterest income
|
|
7,699
|
|
|
82,054
|
|
|
48,959
|
|
|
165,686
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
31,667
|
|
|
26,821
|
|
|
61,334
|
|
|
56,585
|
|
||||
Other operating expenses
|
|
28,812
|
|
|
39,772
|
|
|
62,744
|
|
|
70,602
|
|
||||
Total operating expenses
|
|
60,479
|
|
|
66,593
|
|
|
124,078
|
|
|
127,187
|
|
||||
Acquired intangible asset impairment and amortization expense
|
|
1,156
|
|
|
714
|
|
|
2,995
|
|
|
1,428
|
|
||||
Restructuring and other reorganization expenses
|
|
13,520
|
|
|
84
|
|
|
13,749
|
|
|
107
|
|
||||
Total expenses
|
|
75,155
|
|
|
67,391
|
|
|
140,822
|
|
|
128,722
|
|
||||
Income before income tax expense
|
|
76,069
|
|
|
123,095
|
|
|
151,741
|
|
|
240,405
|
|
||||
Income tax expense
|
|
31,941
|
|
|
46,973
|
|
|
60,599
|
|
|
91,738
|
|
||||
Net income
|
|
44,128
|
|
|
76,122
|
|
|
91,142
|
|
|
148,667
|
|
||||
Less: net loss attributable to noncontrolling interest
|
|
—
|
|
|
(347
|
)
|
|
(434
|
)
|
|
(686
|
)
|
||||
Net income attributable to SLM Corporation
|
|
44,128
|
|
|
76,469
|
|
|
91,576
|
|
|
149,353
|
|
||||
Preferred stock dividends
|
|
3,228
|
|
|
—
|
|
|
3,228
|
|
|
—
|
|
||||
Net income attributable to SLM Corporation common stock
|
|
$
|
40,900
|
|
|
$
|
76,469
|
|
|
$
|
88,348
|
|
|
$
|
149,353
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share attributable to SLM Corporation
|
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
0.21
|
|
|
$
|
0.34
|
|
Average common shares outstanding
|
|
422,805
|
|
|
439,972
|
|
|
424,751
|
|
|
445,309
|
|
||||
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
0.20
|
|
|
$
|
0.33
|
|
Average common and common equivalent shares outstanding
|
|
430,750
|
|
|
448,064
|
|
|
432,689
|
|
|
453,231
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
|
$
|
44,128
|
|
|
$
|
76,122
|
|
|
$
|
91,142
|
|
|
$
|
148,667
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on investments
|
|
2,749
|
|
|
(15,625
|
)
|
|
4,155
|
|
|
37,769
|
|
||||
Total unrealized gains (losses) on investments
|
|
2,749
|
|
|
(15,625
|
)
|
|
4,155
|
|
|
37,769
|
|
||||
Income tax (expense) benefit
|
|
(962
|
)
|
|
5,955
|
|
|
(1,496
|
)
|
|
(14,327
|
)
|
||||
Other comprehensive income (loss), net of tax benefit (expense)
|
|
1,787
|
|
|
(9,670
|
)
|
|
2,659
|
|
|
23,442
|
|
||||
Comprehensive income
|
|
45,915
|
|
|
66,452
|
|
|
93,801
|
|
|
172,109
|
|
||||
Less: comprehensive loss attributable to noncontrolling interest
|
|
—
|
|
|
(347
|
)
|
|
(434
|
)
|
|
(686
|
)
|
||||
Total comprehensive income attributable to SLM Corporation
|
|
$
|
45,915
|
|
|
$
|
66,799
|
|
|
$
|
94,235
|
|
|
$
|
172,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Navient's Subsidiary Investment
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Total SLM Corporation Equity
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at March 31, 2013
|
|
$
|
1,056,783
|
|
|
$
|
47,460
|
|
|
|
$
|
1,104,243
|
|
|
$
|
5,685
|
|
|
$
|
1,109,928
|
|
Net income (loss)
|
|
76,469
|
|
|
—
|
|
|
|
76,469
|
|
|
(347
|
)
|
|
76,122
|
|
|||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
(9,670
|
)
|
|
|
(9,670
|
)
|
|
—
|
|
|
(9,670
|
)
|
|||||
Total comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
|
66,799
|
|
|
(347
|
)
|
|
66,452
|
|
|||||
Net transfers from affiliate
|
|
29,570
|
|
|
—
|
|
|
|
29,570
|
|
|
—
|
|
|
29,570
|
|
|||||
Balance at June 30, 2013
|
|
$
|
1,162,822
|
|
|
$
|
37,790
|
|
|
|
$
|
1,200,612
|
|
|
$
|
5,338
|
|
|
$
|
1,205,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Preferred Stock Shares
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Navient's Subsidiary Investment
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Total SLM Corporation Equity
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||||||||||||||
Balance at March 31, 2014
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,229,187
|
|
|
$
|
(2,152
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,227,035
|
|
|
$
|
4,238
|
|
|
$
|
1,231,273
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,725
|
|
|
—
|
|
|
23,403
|
|
|
—
|
|
|
44,128
|
|
|
—
|
|
|
44,128
|
|
||||||||||
Other comprehen-sive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,787
|
|
|
—
|
|
|
—
|
|
|
1,787
|
|
|
—
|
|
|
1,787
|
|
||||||||||
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,915
|
|
|
—
|
|
|
45,915
|
|
||||||||||
Net transfers from affiliate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462,165
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462,165
|
|
|
—
|
|
|
462,165
|
|
||||||||||
Separation adjustments related to Spin-Off of Navient Corporation
|
|
7,300,000
|
|
|
422,790,320
|
|
|
—
|
|
|
422,790,320
|
|
|
565,000
|
|
|
84,558
|
|
|
1,062,519
|
|
|
(1,712,077
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Sale of non-controlling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,238
|
)
|
|
(4,238
|
)
|
||||||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Preferred Stock, series A ($.87 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,917
|
)
|
|
—
|
|
|
(1,917
|
)
|
|
—
|
|
|
(1,917
|
)
|
||||||||||
Preferred Stock, series
B
($.49 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,311
|
)
|
|
—
|
|
|
(1,311
|
)
|
|
—
|
|
|
(1,311
|
)
|
||||||||||
Dividend equivalent units related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Issuance of common shares
|
|
—
|
|
|
504,929
|
|
|
—
|
|
|
504,929
|
|
|
—
|
|
|
101
|
|
|
2,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,445
|
|
|
—
|
|
|
2,445
|
|
||||||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
7,045
|
|
||||||||||
Shares repurchased related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
(358,771
|
)
|
|
(358,771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,113
|
)
|
|
(3,113
|
)
|
|
—
|
|
|
(3,113
|
)
|
||||||||||
Balance at June 30, 2014
|
|
7,300,000
|
|
|
423,295,249
|
|
|
(358,771
|
)
|
|
422,936,478
|
|
|
$
|
565,000
|
|
|
$
|
84,659
|
|
|
$
|
1,071,916
|
|
|
$
|
—
|
|
|
$
|
(365
|
)
|
|
$
|
20,167
|
|
|
$
|
(3,113
|
)
|
|
$
|
1,738,264
|
|
|
$
|
—
|
|
|
$
|
1,738,264
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Navient's Subsidiary Investment
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total SLM Corporation Equity
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2012
|
|
$
|
1,068,928
|
|
|
$
|
14,348
|
|
|
$
|
1,083,276
|
|
|
$
|
6,024
|
|
|
$
|
1,089,300
|
|
Net income (loss)
|
|
149,353
|
|
|
|
|
149,353
|
|
|
(686
|
)
|
|
148,667
|
|
||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
23,442
|
|
|
23,442
|
|
|
—
|
|
|
23,442
|
|
|||||
Total comprehensive (loss)
|
|
—
|
|
|
—
|
|
|
172,795
|
|
|
(686
|
)
|
|
172,109
|
|
|||||
Net transfers to affiliate
|
|
(55,459
|
)
|
|
—
|
|
|
(55,459
|
)
|
|
—
|
|
|
(55,459
|
)
|
|||||
Balance at June 30, 2013
|
|
$
|
1,162,822
|
|
|
$
|
37,790
|
|
|
$
|
1,200,612
|
|
|
$
|
5,338
|
|
|
$
|
1,205,950
|
|
|
|
|
|
Common Stock Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
Preferred Stock Shares
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Navient's Subsidiary Investment
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Total SLM Corporation Equity
|
|
Non-controlling interest
|
|
Total Equity
|
||||||||||||||||||||||||
Balance at December 31, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,164,495
|
|
|
$
|
(3,024
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,161,471
|
|
|
$
|
4,672
|
|
|
$
|
1,166,143
|
|
Net income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68,173
|
|
|
—
|
|
|
23,403
|
|
|
—
|
|
|
91,576
|
|
|
(434
|
)
|
|
91,142
|
|
||||||||||
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,659
|
|
|
—
|
|
|
—
|
|
|
2,659
|
|
|
—
|
|
|
2,659
|
|
||||||||||
Total comprehensive income (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94,235
|
|
|
(434
|
)
|
|
93,801
|
|
||||||||||
Net transfers from affiliate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
479,409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
479,409
|
|
|
—
|
|
|
479,409
|
|
||||||||||
Separation adjustments related to Spin-Off of Navient Corporation
|
|
7,300,000
|
|
|
422,790,320
|
|
|
—
|
|
|
422,790,320
|
|
|
565,000
|
|
|
84,558
|
|
|
1,062,519
|
|
|
(1,712,077
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Sale of non-controlling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,238
|
)
|
|
(4,238
|
)
|
||||||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Preferred Stock, series A ($.87 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,917
|
)
|
|
—
|
|
|
(1,917
|
)
|
|
—
|
|
|
(1,917
|
)
|
||||||||||
Preferred Stock, series
B
($.49 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,311
|
)
|
|
—
|
|
|
(1,311
|
)
|
|
—
|
|
|
(1,311
|
)
|
||||||||||
Dividend equivalent units related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Issuance of common shares
|
|
—
|
|
|
504,929
|
|
|
—
|
|
|
504,929
|
|
|
—
|
|
|
101
|
|
|
2,344
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,445
|
|
|
—
|
|
|
2,445
|
|
||||||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,045
|
|
|
—
|
|
|
7,045
|
|
||||||||||
Shares repurchased related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
(358,771
|
)
|
|
(358,771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,113
|
)
|
|
(3,113
|
)
|
|
—
|
|
|
(3,113
|
)
|
||||||||||
Balance at June 30, 2014
|
|
7,300,000
|
|
|
423,295,249
|
|
|
(358,771
|
)
|
|
422,936,478
|
|
|
$
|
565,000
|
|
|
$
|
84,659
|
|
|
$
|
1,071,916
|
|
|
$
|
—
|
|
|
$
|
(365
|
)
|
|
$
|
20,167
|
|
|
$
|
(3,113
|
)
|
|
$
|
1,738,264
|
|
|
$
|
—
|
|
|
$
|
1,738,264
|
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2014
|
|
2013
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
91,142
|
|
|
$
|
148,667
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
||||
Provision for loan losses
|
|
40,173
|
|
|
19,677
|
|
||
Tax provision
|
|
60,599
|
|
|
91,738
|
|
||
Amortization of FDIC fees
|
|
—
|
|
|
1,046
|
|
||
Amortization of brokered deposit placement fee
|
|
5,222
|
|
|
4,879
|
|
||
Amortization of deferred loan origination costs and fees, net
|
|
847
|
|
|
616
|
|
||
Net amortization (accretion) of discount on investments
|
|
236
|
|
|
(4,342
|
)
|
||
Depreciation of premises and equipment
|
|
1,642
|
|
|
1,694
|
|
||
Amortization and impairment of acquired intangibles
|
|
2,995
|
|
|
1,428
|
|
||
Stock-based compensation expense
|
|
8,468
|
|
|
9,229
|
|
||
Interest rate swap
|
|
8,025
|
|
|
(452
|
)
|
||
Gains on sale of loans to affiliates, net
|
|
(35,816
|
)
|
|
(148,663
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Net decrease in loans held for sale
|
|
6,183
|
|
|
2,521
|
|
||
Origination of loans held for sale
|
|
(6,183
|
)
|
|
(2,521
|
)
|
||
Increase in accrued interest receivable
|
|
(175,919
|
)
|
|
(119,723
|
)
|
||
Increase in other interest-earning assets
|
|
(41,062
|
)
|
|
(1,107
|
)
|
||
(Increase) decrease in other assets
|
|
(18,946
|
)
|
|
(17,888
|
)
|
||
Increase (decrease) in income tax payable
|
|
(199,782
|
)
|
|
(10,315
|
)
|
||
Decrease in accrued interest payable
|
|
(2,931
|
)
|
|
(1,498
|
)
|
||
Increase in payable due to Navient
|
|
11,109
|
|
|
5,892
|
|
||
Increase (decrease) in other liabilities
|
|
12,140
|
|
|
(41,204
|
)
|
||
Total adjustments
|
|
(323,000
|
)
|
|
(208,993
|
)
|
||
Total net cash provided by (used in) operating activities
|
|
(231,858
|
)
|
|
(60,326
|
)
|
||
Investing activities
|
|
|
|
|
||||
Loans acquired and originated
|
|
(32,796
|
)
|
|
(185,190
|
)
|
||
Net proceeds from sales of loans held for investment
|
|
755,746
|
|
|
1,825,406
|
|
||
Net increase in loans held for investment
|
|
(1,512,009
|
)
|
|
(1,465,830
|
)
|
||
Purchases of available-for-sale securities
|
|
(47,087
|
)
|
|
(15,966
|
)
|
||
Proceeds from sales and maturities of available-for-sale securities
|
|
3,712
|
|
|
10,996
|
|
||
Total net cash (used in) provided by investing activities
|
|
(832,434
|
)
|
|
169,416
|
|
||
Financing activities
|
|
|
|
|
||||
Net (decrease) in brokered certificates of deposit
|
|
(841,965
|
)
|
|
(521,740
|
)
|
||
Net (decrease) increase in NOW account deposits
|
|
(18,214
|
)
|
|
2,179
|
|
||
Net increase in High Yield Savings Deposits
|
|
647,864
|
|
|
414
|
|
||
Net increase in Retail Certificates of Deposit
|
|
5,143
|
|
|
13,335
|
|
||
Net increase in MMDA deposits
|
|
133,510
|
|
|
484,357
|
|
||
Net decrease in deposits with entity that is a subsidiary of Navient
|
|
(5,633
|
)
|
|
(110,486
|
)
|
||
Special cash contribution from Navient
|
|
472,718
|
|
|
—
|
|
||
Net capital contributions (to) from entity that is a subsidiary of Navient
|
|
15,408
|
|
|
76,262
|
|
||
Preferred stock dividends paid
|
|
(3,228
|
)
|
|
—
|
|
||
Dividend paid to entity that is a subsidiary of Navient
|
|
—
|
|
|
(120,000
|
)
|
||
Net cash provided by (used in) financing activities
|
|
405,603
|
|
|
(175,679
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(658,689
|
)
|
|
(66,589
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
2,182,865
|
|
|
1,599,082
|
|
Cash and cash equivalents at end of period
|
|
$
|
1,524,176
|
|
|
$
|
1,532,493
|
|
Cash disbursements made for:
|
|
|
|
|
||||
Interest
|
|
$
|
42,819
|
|
|
$
|
39,866
|
|
Income taxes paid
|
|
$
|
199,782
|
|
|
$
|
10,315
|
|
|
|
|
1.
|
Significant Accounting Policies (Continued)
|
|
1.
|
Significant Accounting Policies (Continued)
|
|
|
|
As of June 30, 2014
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Mortgage-backed securities
|
|
$
|
150,117
|
|
|
$
|
1,736
|
|
|
$
|
(2,454
|
)
|
|
$
|
149,399
|
|
Available for sale securities
|
|
$
|
150,117
|
|
|
$
|
1,736
|
|
|
$
|
(2,454
|
)
|
|
$
|
149,399
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
As of December 31, 2013
|
||||||||||||||
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Estimated Fair Value
|
||||||||
Mortgage-backed securities
|
|
$
|
106,977
|
|
|
$
|
706
|
|
|
$
|
(5,578
|
)
|
|
$
|
102,105
|
|
Available for sale securities
|
|
$
|
106,977
|
|
|
$
|
706
|
|
|
$
|
(5,578
|
)
|
|
$
|
102,105
|
|
2.
|
Investments (Continued)
|
|
Year of Maturity
|
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
2038
|
|
$
|
767
|
|
|
$
|
837
|
|
2039
|
|
13,186
|
|
|
14,111
|
|
||
2042
|
|
29,173
|
|
|
27,515
|
|
||
2043
|
|
76,126
|
|
|
75,974
|
|
||
2044
|
|
30,865
|
|
|
30,962
|
|
||
Total
|
|
$
|
150,117
|
|
|
$
|
149,399
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
Private Education Loans
|
|
$
|
7,482,794
|
|
|
$
|
6,563,342
|
|
Unearned discounts
|
|
7,746
|
|
|
5,063
|
|
||
Allowance for loan losses
|
|
(54,315
|
)
|
|
(61,763
|
)
|
||
Total Private Education Loans, net
|
|
7,436,225
|
|
|
6,506,642
|
|
||
|
|
|
|
|
||||
FFELP Loans
|
|
1,360,107
|
|
|
1,426,972
|
|
||
Unamortized acquisition costs, net
|
|
3,851
|
|
|
4,081
|
|
||
Allowance for loan losses
|
|
(6,212
|
)
|
|
(6,318
|
)
|
||
Total FFELP Loans, net
|
|
1,357,746
|
|
|
1,424,735
|
|
||
|
|
|
|
|
||||
Loans held for investment, net
|
|
$
|
8,793,971
|
|
|
$
|
7,931,377
|
|
3.
|
Loans Held for Investment (Continued)
|
|
|
|
Three Months Ended June 30, 2014
|
|
Three Months Ended June 30, 2013
|
||||||||||
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
||||||
Private Education Loans
|
|
$
|
7,350,825
|
|
|
8.23
|
%
|
|
$
|
5,533,745
|
|
|
8.2
|
%
|
FFELP Loans
|
|
1,374,291
|
|
|
3.33
|
|
|
1,087,954
|
|
|
3.32
|
|
||
Total portfolio
|
|
$
|
8,725,116
|
|
|
|
|
$
|
6,621,699
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2013
|
||||||||||
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
||||||
Private Education Loans
|
|
$
|
7,382,565
|
|
|
8.19
|
%
|
|
$
|
5,863,633
|
|
|
8.13
|
%
|
FFELP Loans
|
|
1,387,358
|
|
|
3.27
|
|
|
1,064,303
|
|
|
3.3
|
|
||
Total portfolio
|
|
$
|
8,769,923
|
|
|
|
|
$
|
6,927,936
|
|
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Three Months Ended June 30, 2014
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
6,181
|
|
|
$
|
71,453
|
|
|
$
|
77,634
|
|
Total provision
|
|
685
|
|
|
329
|
|
|
1,014
|
|
|||
Charge-offs
(1)
|
|
(654
|
)
|
|
—
|
|
|
(654
|
)
|
|||
Student loan sales
(2)
|
|
—
|
|
|
(17,467
|
)
|
|
(17,467
|
)
|
|||
Ending Balance
|
|
$
|
6,212
|
|
|
$
|
54,315
|
|
|
$
|
60,527
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
1,037
|
|
|
$
|
1,037
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
6,212
|
|
|
$
|
53,278
|
|
|
$
|
59,490
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
4,508
|
|
|
$
|
4,508
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,360,107
|
|
|
$
|
7,478,286
|
|
|
$
|
8,838,393
|
|
Charge-offs as a percentage of average loans in repayment (annualized)
|
|
0.07
|
%
|
|
—
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.46
|
%
|
|
0.73
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
|
|
0.66
|
%
|
|
1.23
|
%
|
|
|
||||
Allowance coverage of charge-offs (annualized)
|
|
2.40
|
|
|
—
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,360,107
|
|
|
$
|
7,482,794
|
|
|
|
||
Average loans in repayment
|
|
$
|
973,894
|
|
|
$
|
4,322,356
|
|
|
|
||
Ending loans in repayment
|
|
$
|
947,972
|
|
|
$
|
4,425,573
|
|
|
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Three Months Ended June 30, 2013
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
4,199
|
|
|
$
|
65,381
|
|
|
$
|
69,580
|
|
Total provision
|
|
951
|
|
|
(1,966
|
)
|
|
(1,015
|
)
|
|||
Charge-offs
(1)
|
|
(534
|
)
|
|
—
|
|
|
(534
|
)
|
|||
Student loan sales
(2)
|
|
—
|
|
|
(12,546
|
)
|
|
(12,546
|
)
|
|||
Ending Balance
|
|
$
|
4,616
|
|
|
$
|
50,869
|
|
|
$
|
55,485
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
4,616
|
|
|
$
|
50,869
|
|
|
$
|
55,485
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,162,476
|
|
|
$
|
5,383,128
|
|
|
$
|
6,545,604
|
|
Charge-offs as a percentage of average loans in repayment (annualized)
|
|
0.06
|
%
|
|
—
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.40
|
%
|
|
0.94
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
|
|
0.56
|
%
|
|
1.65
|
%
|
|
|
||||
Allowance coverage of charge-offs (annualized)
|
|
2.16
|
|
|
—
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,162,476
|
|
|
$
|
5,383,128
|
|
|
|
||
Average loans in repayment
|
|
$
|
825,038
|
|
|
$
|
3,243,513
|
|
|
|
||
Ending loans in repayment
|
|
$
|
824,523
|
|
|
$
|
3,081,929
|
|
|
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Six Months Ended June 30, 2014
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
6,318
|
|
|
$
|
61,763
|
|
|
$
|
68,081
|
|
Total provision
|
|
1,191
|
|
|
38,982
|
|
|
40,173
|
|
|||
Charge-offs
(1)
|
|
(1,297
|
)
|
|
—
|
|
|
(1,297
|
)
|
|||
Student loan sales
(2)
|
|
—
|
|
|
(46,430
|
)
|
|
(46,430
|
)
|
|||
Ending Balance
|
|
$
|
6,212
|
|
|
$
|
54,315
|
|
|
$
|
60,527
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
1,037
|
|
|
$
|
1,037
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
6,212
|
|
|
$
|
53,278
|
|
|
$
|
59,490
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
4,508
|
|
|
$
|
4,508
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,360,107
|
|
|
$
|
7,478,286
|
|
|
$
|
8,838,393
|
|
Charge-offs as a percentage of average loans in repayment (annualized)
|
|
0.13
|
%
|
|
—
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.46
|
%
|
|
0.73
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
|
|
0.66
|
%
|
|
1.23
|
%
|
|
|
||||
Allowance coverage of charge-offs (annualized)
|
|
2.40
|
|
|
—
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,360,107
|
|
|
$
|
7,482,794
|
|
|
|
||
Average loans in repayment
|
|
$
|
994,290
|
|
|
$
|
4,354,878
|
|
|
|
||
Ending loans in repayment
|
|
$
|
947,972
|
|
|
$
|
4,425,573
|
|
|
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Six Months Ended June 30, 2013
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
3,971
|
|
|
$
|
65,218
|
|
|
$
|
69,189
|
|
Total provision
|
|
1,399
|
|
|
18,278
|
|
|
19,677
|
|
|||
Charge-offs
(1)
|
|
(754
|
)
|
|
—
|
|
|
(754
|
)
|
|||
Student loan sales
(2)
|
|
—
|
|
|
(32,627
|
)
|
|
(32,627
|
)
|
|||
Ending Balance
|
|
$
|
4,616
|
|
|
$
|
50,869
|
|
|
$
|
55,485
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
4,616
|
|
|
$
|
50,869
|
|
|
$
|
55,485
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,162,476
|
|
|
$
|
5,383,128
|
|
|
$
|
6,545,604
|
|
Charge-offs as a percentage of average loans in repayment (annualized)
|
|
0.09
|
%
|
|
—
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.40
|
%
|
|
0.94
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
|
|
0.56
|
%
|
|
1.65
|
%
|
|
|
||||
Allowance coverage of charge-offs (annualized)
|
|
3.00
|
|
|
—
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,162,476
|
|
|
$
|
5,383,128
|
|
|
|
||
Average loans in repayment
|
|
$
|
825,038
|
|
|
$
|
3,670,291
|
|
|
|
||
Ending loans in repayment
|
|
$
|
824,523
|
|
|
$
|
3,081,929
|
|
|
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Private Education Loans
|
||||||||||||
|
|
Credit Quality Indicators
|
||||||||||||
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||
Credit Quality Indicators:
|
|
Balance
(1)
|
|
% of Balance
|
|
Balance
(1)
|
|
% of Balance
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Cosigners:
|
|
|
|
|
|
|
|
|
||||||
With cosigner
|
|
$
|
6,715,407
|
|
|
90
|
%
|
|
$
|
5,898,751
|
|
|
90
|
%
|
Without cosigner
|
|
767,387
|
|
|
10
|
|
|
664,591
|
|
|
10
|
|
||
Total
|
|
$
|
7,482,794
|
|
|
100
|
%
|
|
$
|
6,563,342
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||||
FICO at Origination:
|
|
|
|
|
|
|
|
|
||||||
Less than 670
|
|
$
|
510,193
|
|
|
7
|
%
|
|
$
|
461,412
|
|
|
7
|
%
|
670-699
|
|
1,108,321
|
|
|
15
|
|
|
1,364,286
|
|
|
21
|
|
||
700-749
|
|
2,357,153
|
|
|
31
|
|
|
1,649,192
|
|
|
25
|
|
||
Greater than or equal to 750
|
|
3,507,127
|
|
|
47
|
|
|
3,088,452
|
|
|
47
|
|
||
Total
|
|
$
|
7,482,794
|
|
|
100
|
%
|
|
$
|
6,563,342
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Seasoning
(2)
:
|
|
|
|
|
|
|
|
|
||||||
1-12 payments
|
|
$
|
2,465,454
|
|
|
33
|
%
|
|
$
|
1,840,538
|
|
|
28
|
%
|
13-24 payments
|
|
1,063,082
|
|
|
14
|
|
|
1,085,393
|
|
|
17
|
|
||
25-36 payments
|
|
512,958
|
|
|
7
|
|
|
669,685
|
|
|
10
|
|
||
37-48 payments
|
|
384,450
|
|
|
5
|
|
|
362,124
|
|
|
6
|
|
||
More than 48 payments
|
|
39,593
|
|
|
1
|
|
|
30,891
|
|
|
—
|
|
||
Not yet in repayment
|
|
3,017,257
|
|
|
40
|
|
|
2,574,711
|
|
|
39
|
|
||
Total
|
|
$
|
7,482,794
|
|
|
100
|
%
|
|
$
|
6,563,342
|
|
|
100
|
%
|
(1)
|
Balance represents gross Private Education Loans.
|
(2)
|
Number of months in active repayment for which a scheduled payment was due.
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Private Education Loan Delinquencies
|
|
||||||||||||
|
|
June 30,
|
|
December 31,
|
|
||||||||||
|
|
2014
|
|
2013
|
|
||||||||||
|
|
Balance
|
|
%
|
|
Balance
|
|
%
|
|
||||||
Loans in-school/grace/deferment
(1)
|
|
$
|
3,017,257
|
|
|
|
|
$
|
2,574,711
|
|
|
|
|
||
Loans in forbearance
(2)
|
|
39,964
|
|
|
|
|
16,314
|
|
|
|
|
||||
Loans in repayment and percentage of each status:
|
|
|
|
|
|
|
|
|
|
||||||
Loans current
|
|
4,396,772
|
|
|
99.3
|
%
|
|
3,933,143
|
|
|
99.0
|
%
|
|
||
Loans delinquent 31-60 days
(3)
|
|
21,381
|
|
|
0.5
|
|
|
28,854
|
|
|
0.7
|
|
|
||
Loans delinquent 61-90 days
(3)
|
|
5,987
|
|
|
0.1
|
|
|
10,280
|
|
|
0.3
|
|
|
||
Loans delinquent greater than 90 days
(3)
|
|
1,433
|
|
|
0.1
|
|
|
40
|
|
|
—
|
|
|
||
Total private education loans in repayment
|
|
4,425,573
|
|
|
100.0
|
%
|
|
3,972,317
|
|
|
100.0
|
%
|
|
||
Total private education loans, gross
|
|
7,482,794
|
|
|
|
|
6,563,342
|
|
|
|
|
||||
Private education loans unamortized discount
|
|
7,746
|
|
|
|
|
5,063
|
|
|
|
|
||||
Total private education loans
|
|
7,490,540
|
|
|
|
|
6,568,405
|
|
|
|
|
||||
Private education loans allowance for losses
|
|
(54,315
|
)
|
|
|
|
(61,763
|
)
|
|
|
|
||||
Private education loans, net
|
|
$
|
7,436,225
|
|
|
|
|
$
|
6,506,642
|
|
|
|
|
||
Percentage of private education loans in repayment
|
|
|
|
59.1
|
%
|
|
|
|
60.5
|
%
|
|
||||
Delinquencies as a percentage of private education loans in repayment
|
|
|
|
0.7
|
%
|
|
|
|
1.0
|
%
|
|
||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
|
|
0.9
|
%
|
|
|
|
0.4
|
%
|
|
(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.
|
4.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Private Education Loan
|
||||||||||
|
|
Accrued Interest Receivable
|
||||||||||
|
|
Total Interest Receivable
|
|
Greater than 90 days Past Due
|
|
Allowance for Uncollectible Interest
|
||||||
|
|
|
|
|
|
|
||||||
June 30, 2014
|
|
$
|
434,847
|
|
|
$
|
69
|
|
|
$
|
3,633
|
|
December 31, 2013
|
|
$
|
333,857
|
|
|
$
|
1
|
|
|
$
|
4,076
|
|
|
|
June 30,
|
|
December 31,
|
|
||||
|
|
2014
|
|
2013
|
|
||||
Deposits - interest bearing
|
|
$
|
9,503,559
|
|
|
$
|
9,239,554
|
|
|
Deposits - non-interest bearing
|
|
42,455
|
|
|
55,036
|
|
|
||
Total Sallie Mae Bank deposits
|
|
9,546,014
|
|
|
9,294,590
|
|
|
||
Less: money market deposits with subsidiaries
|
|
(655,805
|
)
|
|
(293,040
|
)
|
|
||
Total deposits
|
|
$
|
8,890,209
|
|
|
$
|
9,001,550
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
||||||||||
|
|
Amount
|
|
Qtr.-End Weighted Average Stated Rate
|
|
Amount
|
|
Year-End Weighted Average Stated Rate
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Money market
|
|
$
|
4,643,164
|
|
|
0.60
|
%
|
|
$
|
3,505,929
|
|
|
0.60
|
%
|
|
Savings
|
|
727,350
|
|
|
0.81
|
|
|
743,742
|
|
|
0.81
|
|
|
||
NOW
|
|
—
|
|
|
—
|
|
|
18,214
|
|
|
0.12
|
|
|
||
Certificates of deposit
|
|
4,133,045
|
|
|
1.09
|
|
|
4,971,669
|
|
|
1.39
|
|
|
||
Deposits - interest bearing
|
|
$
|
9,503,559
|
|
|
|
|
$
|
9,239,554
|
|
|
|
|
|
5.
|
Deposits (Continued)
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2014
|
|
2013
|
||||
|
|
|
|
|
||||
Money market
|
|
$
|
42,455
|
|
|
$
|
55,036
|
|
Deposits - noninterest bearing
|
|
$
|
42,455
|
|
|
$
|
55,036
|
|
|
|
|
June 30,
|
|
December 31,
|
|
||||
|
Location
|
|
2014
|
|
2013
|
|
||||
Fair Values:
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
Interest rate swaps (receive - fixed/pay - variable)
(1)
|
Other liabilities
|
|
$
|
(1,036
|
)
|
|
$
|
—
|
|
|
Interest rate swaps (receive - fixed/pay - variable)
|
Other assets
|
|
—
|
|
|
612
|
|
|
||
Interest rate swaps (receive - variable/pay - fixed)
|
Other liabilities
|
|
(8,423
|
)
|
|
—
|
|
|
||
Total fair value
|
|
|
$
|
(9,459
|
)
|
|
$
|
612
|
|
|
|
|
|
|
|
|
|
||||
Notional Amounts:
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
Interest rate swaps (receive - fixed/pay - variable)
(1)
|
|
|
$
|
2,811,060
|
|
|
$
|
2,664,755
|
|
|
Interest rate swaps (receive - variable/pay - fixed)
|
|
|
1,076,779
|
|
|
—
|
|
|
||
Total notional
|
|
|
$
|
3,887,839
|
|
|
$
|
2,664,755
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Location
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings impact:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest reclassification
|
Other noninterest income
|
|
$
|
(2,427
|
)
|
|
333
|
|
|
(1,967
|
)
|
|
627
|
|
|||
Hedge ineffectiveness
|
Other noninterest income
|
|
(7,031
|
)
|
|
(385
|
)
|
|
(8,255
|
)
|
|
(69
|
)
|
||||
Realized gains
|
Interest expense
|
|
4,573
|
|
|
7,504
|
|
|
10,246
|
|
|
15,508
|
|
||||
Total earnings impact
|
|
|
$
|
(4,885
|
)
|
|
$
|
7,452
|
|
|
$
|
24
|
|
|
$
|
16,066
|
|
(1)
|
Interest rate swaps are hedged against certificates of deposit.
|
(2)
|
"Other" includes embedded derivatives bifurcated from investment securities.
|
7.
|
Derivative Financial Instruments (Continued)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Shares and per share amounts in actuals)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Shares repurchased related to employee stock-based compensation plans
(1)
|
|
358,771
|
|
|
3,040,788
|
|
|
358,771
|
|
|
5,365,363
|
|
||||
Average purchase price per share
|
|
$
|
8.62
|
|
|
$
|
22.35
|
|
|
$
|
8.62
|
|
|
$
|
20.51
|
|
Common shares issued
(2)
|
|
504,929
|
|
|
4,115,424
|
|
|
504,929
|
|
|
8,273,219
|
|
(1)
|
Comprises 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.
|
(2)
|
Common shares issued under our various compensation and benefit plans.
|
8.
|
Stockholders' Equity (Continued)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Capital contributions:
|
|
|
|
|
|
|
|
|
||||||||
Loan origination activities
|
|
$
|
7,184
|
|
|
$
|
33,367
|
|
|
$
|
32,452
|
|
|
$
|
58,629
|
|
Loan sales
|
|
—
|
|
|
—
|
|
|
45
|
|
|
25
|
|
||||
Corporate overhead activities
|
|
3,461
|
|
|
15,731
|
|
|
21,216
|
|
|
33,115
|
|
||||
Other
|
|
491,936
|
|
|
617
|
|
|
492,368
|
|
|
734
|
|
||||
Total capital contributions
|
|
502,581
|
|
|
49,715
|
|
|
546,081
|
|
|
92,503
|
|
||||
Dividend
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120,000
|
)
|
||||
Corporate push-down
|
|
(761
|
)
|
|
(1,641
|
)
|
|
4,977
|
|
|
5,627
|
|
||||
Net change in income tax accounts
|
|
—
|
|
|
—
|
|
|
15,659
|
|
|
—
|
|
||||
Net change in receivable/payable
|
|
(39,655
|
)
|
|
(18,615
|
)
|
|
(87,277
|
)
|
|
(34,154
|
)
|
||||
Other
|
|
—
|
|
|
111
|
|
|
(31
|
)
|
|
565
|
|
||||
Total net transfers from/(to) the entity that is now a subsidiary of Navient
|
|
$
|
462,165
|
|
|
$
|
29,570
|
|
|
$
|
479,409
|
|
|
$
|
(55,459
|
)
|
8.
|
Stockholders' Equity (Continued)
|
|
|
|
Three Months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In thousands, except per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to SLM Corporation
|
|
$
|
44,128
|
|
|
$
|
76,469
|
|
|
$
|
91,576
|
|
|
$
|
149,353
|
|
Preferred stock dividends
|
|
3,228
|
|
|
—
|
|
|
3,228
|
|
|
—
|
|
||||
Net income attributable to SLM Corporation common stock
|
|
$
|
40,900
|
|
|
$
|
76,469
|
|
|
$
|
88,348
|
|
|
$
|
149,353
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to compute basic EPS
|
|
422,805
|
|
|
439,972
|
|
|
424,751
|
|
|
445,309
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Dilutive effect of stock options, restricted stock and restricted stock units
(1)
|
|
7,945
|
|
|
8,092
|
|
|
7,938
|
|
|
7,922
|
|
||||
Dilutive potential common shares
(2)
|
|
7,945
|
|
|
8,092
|
|
|
7,938
|
|
|
7,922
|
|
||||
Weighted average shares used to compute diluted EPS
|
|
430,750
|
|
|
448,064
|
|
|
432,689
|
|
|
453,231
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share attributable to SLM Corporation:
|
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
0.21
|
|
|
$
|
0.34
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share attributable to SLM Corporation:
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
0.20
|
|
|
$
|
0.33
|
|
(1)
|
Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, non-vested deferred compensation and restricted stock, restricted stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method.
|
(2)
|
For the three months ended June 30, 2014 and 2013, securities covering approximately
4
million and
4
million shares, respectively were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive. For the six months ended June 30, 2014 and 2013, securities covering approximately
3
million and
5
million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
|
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||||||||||||||
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
|
$
|
—
|
|
|
$
|
149,399
|
|
|
$
|
—
|
|
|
$
|
149,399
|
|
|
$
|
—
|
|
|
$
|
102,105
|
|
|
$
|
—
|
|
|
$
|
102,105
|
|
Derivative instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
—
|
|
|
612
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
149,399
|
|
|
$
|
—
|
|
|
$
|
149,399
|
|
|
$
|
—
|
|
|
$
|
102,717
|
|
|
$
|
—
|
|
|
$
|
102,717
|
|
|
|
Fair Value Measurements on a Recurring Basis
|
||||||||||||||||||||||||||||||
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
(9,459
|
)
|
|
$
|
—
|
|
|
$
|
(9,459
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
$
|
—
|
|
|
$
|
(9,459
|
)
|
|
$
|
—
|
|
|
$
|
(9,459
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
|
|
June 30, 2013
|
|
June 30, 2013
|
||||
Balance, beginning of period
|
|
$
|
589,103
|
|
|
$
|
532,155
|
|
Total gains/(losses) (realized and unrealized):
|
|
|
|
|
||||
Included in earnings
|
|
(12,461
|
)
|
|
42,026
|
|
||
Included in other comprehensive income
|
|
—
|
|
|
—
|
|
||
Included in earnings - accretion of discount
|
|
2,141
|
|
|
4,602
|
|
||
Proceeds from sale
|
|
—
|
|
|
—
|
|
||
Transfers in and/or out of level 3
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
|
$
|
578,783
|
|
|
$
|
578,783
|
|
Change in unrealized gains/(losses) relating to instruments still held at the reporting date
|
|
$
|
(12,461
|
)
|
|
$
|
42,026
|
|
10.
|
Fair Value Measurements (Continued)
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
|
Fair
Value
|
|
Carrying
Value
|
|
Difference
|
|
Fair
Value
|
|
Carrying
Value
|
|
Difference
|
||||||||||||
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for investment, net
|
|
$
|
9,394,480
|
|
|
$
|
8,793,971
|
|
|
$
|
600,509
|
|
|
$
|
8,439,068
|
|
|
$
|
7,931,377
|
|
|
$
|
507,691
|
|
Cash and cash equivalents
|
|
1,524,176
|
|
|
1,524,176
|
|
|
—
|
|
|
2,182,865
|
|
|
2,182,865
|
|
|
—
|
|
||||||
Available-for-sale investments
|
|
149,399
|
|
|
149,399
|
|
|
—
|
|
|
102,105
|
|
|
102,105
|
|
|
—
|
|
||||||
Accrued interest receivable
|
|
453,461
|
|
|
453,461
|
|
|
—
|
|
|
356,283
|
|
|
356,283
|
|
|
—
|
|
||||||
Derivative instruments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
612
|
|
|
612
|
|
|
—
|
|
||||||
Total earning assets
|
|
11,521,516
|
|
|
10,921,007
|
|
|
600,509
|
|
|
$
|
11,080,933
|
|
|
$
|
10,573,242
|
|
|
$
|
507,691
|
|
|||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money-market, savings and NOW accounts
|
|
4,757,164
|
|
|
4,757,164
|
|
|
—
|
|
|
$
|
4,029,881
|
|
|
$
|
4,029,881
|
|
|
$
|
—
|
|
|||
Certificates of deposit
|
|
4,148,223
|
|
|
4,133,045
|
|
|
(15,178
|
)
|
|
4,984,114
|
|
|
4,971,669
|
|
|
(12,445
|
)
|
||||||
Accrued interest payable
|
|
10,167
|
|
|
10,167
|
|
|
—
|
|
|
13,097
|
|
|
13,097
|
|
|
—
|
|
||||||
Derivative instruments
|
|
9,459
|
|
|
9,459
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total interest-bearing liabilities
|
|
$
|
8,925,013
|
|
|
$
|
8,909,835
|
|
|
(15,178
|
)
|
|
$
|
9,027,092
|
|
|
$
|
9,014,647
|
|
|
(12,445
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Excess of net asset fair value over carrying value
|
|
|
|
|
|
$
|
585,331
|
|
|
|
|
|
|
$
|
495,246
|
|
10.
|
Fair Value Measurements (Continued)
|
|
•
|
the obligation of each party to indemnify the other against liabilities retained or assumed by that party pursuant to the Separation and the Distribution Agreement and in connection with claims of third parties;
|
•
|
the allocation among the parties of rights and obligations under insurance policies;
|
•
|
the agreement of the Company and Navient (i) not to engage in certain competitive business activities for a period of five years, (ii) as to the effect of the non-competition provisions on post-spin merger and acquisition activities of the parties and (iii) regarding “first look” opportunities; and
|
•
|
the creation of a governance structure, including a separation oversight committee, by which matters related to the separation and other transactions contemplated by the Separation and Distribution Agreement will be monitored and managed.
|
12.
|
Arrangements with Navient Corporation (Continued)
|
|
•
|
Pursuant to a tax sharing agreement, Navient has agreed to indemnify us for $
283
million in deferred taxes that the Company will be legally responsible for but that relate to gains recognized by the Company’s predecessor on debt repurchases made prior to the Spin-Off. In addition, Navient has agreed to indemnify us for tax assessments incurred related to identified uncertain tax positions taken prior to the date of the Spin-off transaction.
|
•
|
Navient has responsibility to assume new or ongoing litigation matters relating to the conduct of most pre-Spin-Off SLM businesses operated or conducted prior to the Spin-Off.
|
•
|
At the time of this filing, the Bank remains subject to a Consent Order, Order to Pay Restitution and Order to Pay Civil Money Penalty dated May 13, 2014 issued by the FDIC (the “2014 FDIC Order”). The 2014 FDIC Order replaces a prior cease and desist order jointly issued in August 2008 by the FDIC and the Utah Department of Financial Institutions (“UDFI”) which was terminated on July 15, 2014. Specifically, on May 13, 2014, the Bank reached settlements with the FDIC and the Department of Justice regarding disclosures and assessments of certain late fees, as well as compliance with the Servicemembers Civil Relief Act (“SCRA”). Under the FDIC’s 2014 Order, the Bank agreed to pay $
3.3
million in fines and oversee the refund of up to $
30
million in late fees assessed on loans owned or originated by the Bank since its inception in November 2005. Navient is responsible for funding all liabilities, restitution and compensation under orders such as these, other than fines directly levied against the Bank.
|
12.
|
Arrangements with Navient Corporation (Continued)
|
|
|
|
Actual
|
|
Well Capitalized Regulatory Requirements
|
|||||||||
|
|
Amount
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
As of June 30, 2014:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,291,390
|
|
11.6
|
%
|
|
$
|
554,956
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk Weighted Assets)
|
|
$
|
1,291,390
|
|
15.2
|
%
|
|
$
|
509,071
|
|
>
|
6.0
|
%
|
Total Capital (to Risk Weighted Assets)
|
|
$
|
1,351,917
|
|
15.9
|
%
|
|
$
|
848,451
|
|
>
|
10.0
|
%
|
As of December 31, 2013:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,221,416
|
|
11.7
|
%
|
|
$
|
521,973
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk Weighted Assets)
|
|
$
|
1,221,416
|
|
16.4
|
%
|
|
$
|
446,860
|
|
>
|
6.0
|
%
|
Total Capital (to Risk Weighted Assets)
|
|
$
|
1,289,497
|
|
17.3
|
%
|
|
$
|
745,374
|
|
>
|
10.0
|
%
|
13.
|
Regulatory Capital (Continued)
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(In millions, except per share data)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to SLM Corporation
|
|
$
|
44
|
|
|
$
|
76
|
|
|
$
|
91
|
|
|
$
|
149
|
|
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
0.20
|
|
|
$
|
0.33
|
|
Weighted average shares used to compute diluted earnings per share
|
|
431
|
|
|
448
|
|
|
433
|
|
|
453
|
|
||||
Return on assets
|
|
1.55
|
%
|
|
3.31
|
%
|
|
1.69
|
%
|
|
3.23
|
%
|
||||
Operating efficiency ratio
(1)
|
|
35
|
%
|
|
32
|
%
|
|
33
|
%
|
|
29
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Operating Statistics
|
|
|
|
|
|
|
|
|
||||||||
Ending Private Education Loans, net
|
|
$
|
7,436
|
|
|
$
|
5,335
|
|
|
$
|
7,436
|
|
|
$
|
5,335
|
|
Ending FFELP Loans, net
|
|
1,358
|
|
|
1,160
|
|
|
1,358
|
|
|
1,160
|
|
||||
Ending total education loans, net
|
|
$
|
8,794
|
|
|
$
|
6,495
|
|
|
$
|
8,794
|
|
|
$
|
6,495
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average education loans
|
|
$
|
8,725
|
|
|
$
|
6,622
|
|
|
$
|
8,770
|
|
|
$
|
6,928
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Our efficiency ratio is calculated as operating expense, excluding restructuring costs, divided by total interest income and other income. See also
“
Key Financial Measures - Operating Expenses.
”
|
•
|
the obligation of each party to indemnify the other against liabilities retained or assumed by that party pursuant to the Separation and the Distribution Agreement and in connection with claims of third parties;
|
•
|
the allocation among the parties of rights and obligations under insurance policies;
|
•
|
the agreement of the Company and Navient (i) not to engage in certain competitive business activities for a period of five years, (ii) as to the effect of the non-competition provisions on post-spin merger and acquisition activities of the parties and (iii) regarding “first look” opportunities; and
|
•
|
the creation of a governance structure, including a separation oversight committee, by which matters related to the separation and other transactions contemplated by the Separation and Distribution Agreement will be monitored and managed.
|
•
|
Pursuant to a tax sharing agreement, Navient has agreed to indemnify us for $
283
million in deferred taxes that the Company will be legally responsible for but that relate to gains recognized by the Company’s predecessor on debt repurchases made prior to the Spin-Off. In addition, Navient has agreed to indemnify us for tax assessments incurred related to identified uncertain tax positions taken prior to the date of the Spin-off transaction.
|
•
|
Navient has responsibility to assume new or ongoing litigation matters relating to the conduct of most pre-Spin-Off SLM businesses operated or conducted prior to the Spin-Off.
|
•
|
At the time of this filing, the Bank remains subject to a Consent Order, Order to Pay Restitution and Order to Pay Civil Money Penalty dated May 13, 2014 issued by the FDIC (the “2014 FDIC Order”). The 2014 FDIC Order replaces a prior cease and desist order jointly issued in August 2008 by the FDIC and the Utah Department of Financial Institutions (“UDFI”) which was terminated on July 15, 2014. Specifically, on May 13, 2014, the Bank reached settlements with the FDIC and the Department of Justice regarding disclosures and assessments of certain late fees, as well as compliance with the Servicemembers Civil Relief Act (“SCRA”). Under the FDIC’s 2014 Order, the Bank agreed to pay $3.3 million in fines and oversee the refund of up to $30 million in late fees assessed on loans owned or originated by the Bank since its inception in November 2005. Navient is responsible for funding all liabilities, restitution and compensation under orders such as these, other than fines directly levied against the Bank.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Hedge ineffectiveness (losses) gains
|
|
$
|
(7,031
|
)
|
|
$
|
(385
|
)
|
|
$
|
(8,255
|
)
|
|
$
|
(69
|
)
|
Interest reclassification
|
|
(2,427
|
)
|
|
333
|
|
|
(1,967
|
)
|
|
627
|
|
||||
(Losses) gains on derivatives and hedging activities, net
|
|
$
|
(9,458
|
)
|
|
$
|
(52
|
)
|
|
$
|
(10,222
|
)
|
|
$
|
558
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands, except per share amounts)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
“
Core Earnings
”
adjustments to GAAP:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income
|
|
$
|
44,128
|
|
|
$
|
76,469
|
|
|
$
|
91,576
|
|
|
$
|
149,353
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Net impact of derivative accounting
(1)
|
|
7,031
|
|
|
385
|
|
|
8,255
|
|
|
69
|
|
||||
Net tax effect
(2)
|
|
(2,708
|
)
|
|
(142
|
)
|
|
(3,180
|
)
|
|
(26
|
)
|
||||
Total
“
Core Earnings
”
adjustments to GAAP
|
|
4,323
|
|
|
243
|
|
|
5,075
|
|
|
43
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
“
Core Earnings
”
|
|
$
|
48,451
|
|
|
$
|
76,712
|
|
|
$
|
96,651
|
|
|
$
|
149,396
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted earnings per common share
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
0.20
|
|
|
$
|
0.33
|
|
Derivative adjustments, net of tax
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
“
Core Earnings
”
diluted earnings per common share
|
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
0.22
|
|
|
$
|
0.33
|
|
|
|
Three Months
Ended June 30,
|
|
Increase
(Decrease)
|
|
Six Months
Ended June 30,
|
|
Increase
(Decrease)
|
||||||||||||||||||||||
(In millions, except per share data)
|
|
2014
|
|
2013
|
|
$
|
|
%
|
|
2014
|
|
2013
|
|
$
|
|
%
|
||||||||||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans
|
|
$
|
162
|
|
|
$
|
122
|
|
|
$
|
40
|
|
|
33
|
%
|
|
$
|
322
|
|
|
$
|
254
|
|
|
$
|
68
|
|
|
27
|
%
|
Investments
|
|
2
|
|
|
6
|
|
|
(4
|
)
|
|
(67
|
)
|
|
3
|
|
|
11
|
|
|
(8
|
)
|
|
(73
|
)
|
||||||
Cash and cash equivalents
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total interest income
|
|
165
|
|
|
129
|
|
|
36
|
|
|
28
|
|
|
327
|
|
|
267
|
|
|
60
|
|
|
22
|
|
||||||
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total interest expense
|
|
21
|
|
|
22
|
|
|
(1
|
)
|
|
(5
|
)
|
|
44
|
|
|
44
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income
|
|
144
|
|
|
107
|
|
|
37
|
|
|
35
|
|
|
283
|
|
|
223
|
|
|
60
|
|
|
27
|
|
||||||
Less: provisions for loan losses
|
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
(200
|
)
|
|
40
|
|
|
20
|
|
|
20
|
|
|
100
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net interest income after provisions for loan losses
|
|
143
|
|
|
108
|
|
|
35
|
|
|
32
|
|
|
243
|
|
|
203
|
|
|
40
|
|
|
20
|
|
||||||
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gains on sales of loans to affiliates, net
|
|
2
|
|
|
73
|
|
|
(71
|
)
|
|
(97
|
)
|
|
36
|
|
|
149
|
|
|
(113
|
)
|
|
(76
|
)
|
||||||
(Losses) gains on derivatives and hedging activities, net
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|
(100
|
)
|
|
(10
|
)
|
|
1
|
|
|
(11
|
)
|
|
(1,100
|
)
|
||||||
Other income
|
|
15
|
|
|
9
|
|
|
6
|
|
|
67
|
|
|
23
|
|
|
16
|
|
|
7
|
|
|
44
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total noninterest income
|
|
8
|
|
|
82
|
|
|
(74
|
)
|
|
(90
|
)
|
|
49
|
|
|
166
|
|
|
(117
|
)
|
|
(70
|
)
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating expenses
|
|
60
|
|
|
66
|
|
|
(6
|
)
|
|
(9
|
)
|
|
124
|
|
|
127
|
|
|
(3
|
)
|
|
(2
|
)
|
||||||
Acquired intangible asset impairment and amortization expense
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
2
|
|
|
1
|
|
|
50
|
|
||||||
Restructuring and other reorganization expenses
|
|
14
|
|
|
—
|
|
|
14
|
|
|
100
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|
100
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total expenses
|
|
75
|
|
|
67
|
|
|
8
|
|
|
12
|
|
|
141
|
|
|
129
|
|
|
12
|
|
|
9
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income before income tax expense
|
|
76
|
|
|
123
|
|
|
(47
|
)
|
|
(38
|
)
|
|
151
|
|
|
240
|
|
|
(89
|
)
|
|
(37
|
)
|
||||||
Income tax expense
|
|
32
|
|
|
47
|
|
|
(15
|
)
|
|
(32
|
)
|
|
60
|
|
|
92
|
|
|
(32
|
)
|
|
(35
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
44
|
|
|
76
|
|
|
(32
|
)
|
|
(42
|
)
|
|
91
|
|
|
148
|
|
|
(57
|
)
|
|
(39
|
)
|
||||||
Less: net loss attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
(100
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income attributable to SLM Corporation
|
|
44
|
|
|
76
|
|
|
(32
|
)
|
|
(42
|
)
|
|
91
|
|
|
149
|
|
|
(58
|
)
|
|
(39
|
)
|
||||||
Preferred stock dividends
|
|
3
|
|
|
—
|
|
|
3
|
|
|
100
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
100
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income attributable to SLM Corporation common stock
|
|
$
|
41
|
|
|
$
|
76
|
|
|
$
|
(35
|
)
|
|
(46
|
)%
|
|
$
|
88
|
|
|
$
|
149
|
|
|
$
|
(61
|
)
|
|
(41
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic earnings per common share attributable to SLM Corporation
|
|
$
|
0.10
|
|
|
$
|
0.17
|
|
|
$
|
(0.07
|
)
|
|
(41
|
)%
|
|
$
|
0.21
|
|
|
$
|
0.34
|
|
|
$
|
(0.13
|
)
|
|
(38
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
(0.08
|
)
|
|
(47
|
)%
|
|
$
|
0.20
|
|
|
$
|
0.33
|
|
|
$
|
(0.13
|
)
|
|
(39
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Net interest income increased by $37 million in the current quarter compared with the year-ago quarter primarily due to a $1.8 billion increase in average Private Education Loans outstanding.
|
•
|
Provisions for loan losses increased $2 million compared with the year-ago quarter. This increase was primarily the result of less loan sales in the second quarter of 2014 increasing the provision by $8 million quarter-over-quarter, higher sales of credit impaired loans increasing the provision by $5 million, and a $3 million increase due to loans entering repayment. This was partially offset by a $14 million benefit this quarter from the net effect of a change in our loss emergence period from two years to one year and a change in our charge-off policy.
|
•
|
Gains on sales of loans to affiliates decreased by $71 million as there were fewer sales to affiliates in the quarter.
|
•
|
Other income increased $6 million primarily from the divestiture of NGI and an increase in the tax indemnity receivable from Navient. On April 29, 2014, we divested our ownership interests in NGI, though we will continue to partner with NGI under an extended joint marketing agreement.
|
•
|
(Losses) gains on derivative and hedging activities, net, resulted in a net loss of $9 million in the second quarter 2014 compared with $0 in the year-ago quarter. The primary factors affecting the change were interest rates and whether the derivative qualified for hedge accounting treatment. In second quarter 2014, we had more derivatives used to economically hedge risk that did not qualify for hedge accounting treatment than we did in the year-ago quarter.
|
•
|
Second-quarter 2014 operating expenses were $60 million compared with $66 million in the year-ago quarter. The decrease in operating expenses is primarily the result of an $8 million reduction in our litigation reserve, partially offset by a $4 million increase in marketing expenses.
|
•
|
Second-quarter 2014 restructuring and other reorganization expenses were $14 million compared with $0 in the year-ago quarter. The increase is primarily the result of costs related to the Spin-Off.
|
•
|
Net interest income increased by $60 million primarily due to a $1.5 billion increase in average Private Education Loans outstanding.
|
•
|
Provisions for loan losses increased $20 million compared with the year-ago period primarily as a result of growth in loans entering repayment and sales of credit impaired loans to Navient during the period which were partially offset by a $14 million benefit from the net effect of a change in our loss emergence period from two years to one year and a change in our charge-off policy.
|
•
|
Gains on sales of loans to affiliates decreased by $113 million as a result of fewer loan sales to affiliates.
|
•
|
(Losses) gains on derivative and hedging activities, net, resulted in a net loss of $10 million in the first half of 2014 compared with a gain of $1 million in the year-ago period. The primary factors affecting the change were interest rates and whether the derivative qualified for hedge accounting treatment. In the first half of 2014 we had more derivatives used to economically hedge risk that did not qualify for hedge accounting treatment than we did in the year-ago period.
|
•
|
First-half 2014 operating expenses were $124 million compared with $127 million in the first half of 2013. The decrease in operating expenses is primarily the result of an $8 million reduction in our litigation reserve relating to the 2014 FDIC Order, which was partially offset by $7 million in increased marketing and servicing costs.
|
•
|
First-half 2014 restructuring and other reorganization expenses were $14 million compared with $0 in the first half of 2013. The increase is primarily the result of costs related to the Spin-Off.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Private Education Loan provision for loan losses
|
|
$
|
329
|
|
|
$
|
(1,966
|
)
|
|
$
|
38,982
|
|
|
$
|
18,278
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
||||||||||||
Average Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private Education Loans
|
|
$
|
7,350,825
|
|
|
8.23
|
%
|
|
$
|
5,533,745
|
|
|
8.20
|
%
|
|
$
|
7,382,565
|
|
|
8.19
|
%
|
|
$
|
5,863,633
|
|
|
8.13
|
%
|
FFELP Loans
|
|
1,374,291
|
|
|
3.33
|
|
|
1,087,954
|
|
|
3.32
|
|
|
1,387,358
|
|
|
3.27
|
|
|
1,064,303
|
|
|
3.30
|
|
||||
Taxable securities
|
|
376,199
|
|
|
2.38
|
|
|
653,098
|
|
|
3.44
|
|
|
248,642
|
|
|
2.58
|
|
|
628,471
|
|
|
3.71
|
|
||||
Cash and other short-term investments
|
|
1,777,683
|
|
|
0.25
|
|
|
1,496,399
|
|
|
0.29
|
|
|
1,549,076
|
|
|
0.26
|
|
|
1,244,492
|
|
|
0.30
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total interest-earning assets
|
|
10,878,998
|
|
|
6.10
|
%
|
|
8,771,196
|
|
|
5.89
|
%
|
|
10,567,641
|
|
|
6.25
|
%
|
|
8,800,899
|
|
|
6.12
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest-earning assets
|
|
534,109
|
|
|
|
|
505,532
|
|
|
|
|
484,608
|
|
|
|
|
540,463
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
|
$
|
11,413,107
|
|
|
|
|
$
|
9,276,728
|
|
|
|
|
$
|
11,052,249
|
|
|
|
|
$
|
9,341,362
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brokered deposits
|
|
$
|
5,319,031
|
|
|
0.95
|
%
|
|
$
|
4,873,915
|
|
|
1.25
|
%
|
|
$
|
5,543,419
|
|
|
1.03
|
%
|
|
$
|
4,989,395
|
|
|
1.28
|
%
|
Retail and other deposits
|
|
3,121,003
|
|
|
0.92
|
|
|
2,568,062
|
|
|
0.97
|
|
|
3,098,722
|
|
|
0.92
|
|
|
2,531,003
|
|
|
0.99
|
|
||||
Other interest-bearing liabilities
|
|
559,718
|
|
|
0.92
|
|
|
129,190
|
|
|
0.14
|
|
|
294,905
|
|
|
0.92
|
|
|
171,392
|
|
|
0.09
|
|
||||
Total interest-bearing liabilities
|
|
8,999,752
|
|
|
0.94
|
%
|
|
7,571,167
|
|
|
1.14
|
%
|
|
8,937,046
|
|
|
0.99
|
%
|
|
7,691,790
|
|
|
1.16
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest-bearing liabilities
|
|
769,879
|
|
|
|
|
546,456
|
|
|
|
|
702,382
|
|
|
|
|
520,289
|
|
|
|
||||||||
Equity
|
|
1,643,476
|
|
|
|
|
1,159,105
|
|
|
|
|
1,412,821
|
|
|
|
|
1,129,283
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total liabilities and equity
|
|
$
|
11,413,107
|
|
|
|
|
$
|
9,276,728
|
|
|
|
|
$
|
11,052,249
|
|
|
|
|
$
|
9,341,362
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest margin
|
|
|
|
5.08
|
%
|
|
|
|
4.64
|
%
|
|
|
|
5.18
|
%
|
|
|
|
4.82
|
%
|
(Dollars in thousands)
|
|
Increase
(Decrease)
|
|
Change Due To
(1)
|
||||||||
|
Rate
|
|
Volume
|
|||||||||
Three Months Ended June 30, 2014 vs. 2013
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
36,685
|
|
|
$
|
9,902
|
|
|
$
|
26,778
|
|
Interest expense
|
|
(437
|
)
|
|
(4,293
|
)
|
|
3,856
|
|
|||
Net interest income
|
|
$
|
37,122
|
|
|
$
|
14,195
|
|
|
$
|
22,927
|
|
|
|
|
|
|
|
|
||||||
Six Months Ended June 30, 2014 vs. 2013
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
60,267
|
|
|
$
|
14,332
|
|
|
$
|
45,928
|
|
Interest expense
|
|
(392
|
)
|
|
(6,420
|
)
|
|
6,028
|
|
|||
Net interest income
|
|
$
|
60,659
|
|
|
$
|
20,752
|
|
|
$
|
39,097
|
|
(1)
|
Changes in income and expense due to both rate and volume have been allocated in proportion to the relationship of the absolute dollar amounts of the change in each. The changes in income and expense are calculated independently for each line in the table. The totals for the rate and volume columns are not the sum of the individual lines.
|
|
|
June 30, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Total education loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-school
(1)
|
|
$
|
2,199,238
|
|
|
$
|
1,689
|
|
|
$
|
2,200,927
|
|
|
$
|
2,191,445
|
|
|
$
|
2,477
|
|
|
$
|
2,193,922
|
|
Grace, repayment and other
(2)
|
|
5,283,556
|
|
|
1,358,418
|
|
|
6,641,974
|
|
|
4,371,897
|
|
|
1,424,495
|
|
|
5,796,392
|
|
||||||
Total, gross
|
|
7,482,794
|
|
|
1,360,107
|
|
|
8,842,901
|
|
|
6,563,342
|
|
|
1,426,972
|
|
|
7,990,314
|
|
||||||
Unamortized premium/(discount)
|
|
7,746
|
|
|
3,851
|
|
|
11,597
|
|
|
5,063
|
|
|
4,081
|
|
|
9,144
|
|
||||||
Allowance for loan losses
|
|
(54,315
|
)
|
|
(6,212
|
)
|
|
(60,527
|
)
|
|
(61,763
|
)
|
|
(6,318
|
)
|
|
(68,081
|
)
|
||||||
Total education loan portfolio
|
|
$
|
7,436,225
|
|
|
$
|
1,357,746
|
|
|
$
|
8,793,971
|
|
|
$
|
6,506,642
|
|
|
$
|
1,424,735
|
|
|
$
|
7,931,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% of total
|
|
85
|
%
|
|
15
|
%
|
|
100
|
%
|
|
82
|
%
|
|
18
|
%
|
|
100
|
%
|
(Dollars in thousands)
|
|
Three Months Ended June 30, 2014
|
|
Three Months Ended June 30, 2013
|
||||||||||
Private Education Loans
|
|
$
|
7,350,825
|
|
|
84
|
%
|
|
$
|
5,533,745
|
|
|
84
|
%
|
FFELP Loans
|
|
1,374,291
|
|
|
16
|
|
|
1,087,954
|
|
|
16
|
|
||
Total portfolio
|
|
$
|
8,725,116
|
|
|
100
|
%
|
|
$
|
6,621,699
|
|
|
100
|
%
|
(Dollars in thousands)
|
|
Six Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2013
|
||||||||||
Private Education Loans
|
|
$
|
7,382,565
|
|
|
84
|
%
|
|
$
|
5,863,633
|
|
|
85
|
%
|
FFELP Loans
|
|
1,387,358
|
|
|
16
|
|
|
1,064,303
|
|
|
15
|
|
||
Total portfolio
|
|
$
|
8,769,923
|
|
|
100
|
%
|
|
$
|
6,927,936
|
|
|
100
|
%
|
|
|
Three Months Ended June 30, 2014
|
|
Three Months Ended June 30, 2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
7,208,356
|
|
|
$
|
1,394,563
|
|
|
$
|
8,602,919
|
|
|
$
|
5,832,126
|
|
|
$
|
1,077,836
|
|
|
$
|
6,909,962
|
|
Acquisitions and originations
|
|
396,941
|
|
|
—
|
|
|
396,941
|
|
|
387,822
|
|
|
107,571
|
|
|
495,393
|
|
||||||
Capitalized interest and premium/discount amortization
|
|
25,440
|
|
|
10,393
|
|
|
35,833
|
|
|
17,896
|
|
|
9,977
|
|
|
27,873
|
|
||||||
Sales
|
|
(74,952
|
)
|
|
(59
|
)
|
|
(75,011
|
)
|
|
(813,197
|
)
|
|
(50
|
)
|
|
(813,247
|
)
|
||||||
Repayments and other
|
|
(119,560
|
)
|
|
(47,151
|
)
|
|
(166,711
|
)
|
|
(89,416
|
)
|
|
(35,545
|
)
|
|
(124,961
|
)
|
||||||
Ending balance
|
|
$
|
7,436,225
|
|
|
$
|
1,357,746
|
|
|
$
|
8,793,971
|
|
|
$
|
5,335,231
|
|
|
$
|
1,159,789
|
|
|
$
|
6,495,020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
Six Months Ended June 30, 2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
6,506,642
|
|
|
$
|
1,424,735
|
|
|
$
|
7,931,377
|
|
|
$
|
5,447,700
|
|
|
$
|
1,039,754
|
|
|
$
|
6,487,454
|
|
Acquisitions and originations
|
|
1,913,926
|
|
|
7,470
|
|
|
1,921,396
|
|
|
1,789,446
|
|
|
159,171
|
|
|
1,948,617
|
|
||||||
Capitalized interest and premium/discount amortization
|
|
53,197
|
|
|
25,463
|
|
|
78,660
|
|
|
34,525
|
|
|
19,674
|
|
|
54,199
|
|
||||||
Sales
|
|
(713,046
|
)
|
|
(7,654
|
)
|
|
(720,700
|
)
|
|
(1,677,853
|
)
|
|
(127
|
)
|
|
(1,677,980
|
)
|
||||||
Repayments and other
|
|
(324,494
|
)
|
|
(92,268
|
)
|
|
(416,762
|
)
|
|
(258,587
|
)
|
|
(58,684
|
)
|
|
(317,271
|
)
|
||||||
Ending balance
|
|
$
|
7,436,225
|
|
|
$
|
1,357,746
|
|
|
$
|
8,793,971
|
|
|
$
|
5,335,231
|
|
|
$
|
1,159,788
|
|
|
$
|
6,495,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
71,453
|
|
|
$
|
6,181
|
|
|
$
|
77,634
|
|
|
$
|
65,381
|
|
|
$
|
4,199
|
|
|
$
|
69,580
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charge-offs
|
|
—
|
|
|
(654
|
)
|
|
(654
|
)
|
|
—
|
|
|
(534
|
)
|
|
(534
|
)
|
||||||
Student loan sales
|
|
(17,467
|
)
|
|
—
|
|
|
(17,467
|
)
|
|
(12,546
|
)
|
|
—
|
|
|
(12,546
|
)
|
||||||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for loan losses
|
|
329
|
|
|
685
|
|
|
1,014
|
|
|
(1,966
|
)
|
|
951
|
|
|
(1,015
|
)
|
||||||
Ending balance
|
|
$
|
54,315
|
|
|
$
|
6,212
|
|
|
$
|
60,527
|
|
|
$
|
50,869
|
|
|
$
|
4,616
|
|
|
$
|
55,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Troubled debt restructuring
(1)
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
61,763
|
|
|
$
|
6,318
|
|
|
$
|
68,081
|
|
|
$
|
65,218
|
|
|
$
|
3,971
|
|
|
$
|
69,189
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charge-offs
|
|
—
|
|
|
(1,297
|
)
|
|
(1,297
|
)
|
|
—
|
|
|
(754
|
)
|
|
(754
|
)
|
||||||
Student loan sales
|
|
(46,430
|
)
|
|
—
|
|
|
(46,430
|
)
|
|
(32,627
|
)
|
|
—
|
|
|
(32,627
|
)
|
||||||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Provision for loan losses
|
|
38,982
|
|
|
1,191
|
|
|
40,173
|
|
|
18,278
|
|
|
1,399
|
|
|
19,677
|
|
||||||
Ending balance
|
|
$
|
54,315
|
|
|
$
|
6,212
|
|
|
$
|
60,527
|
|
|
$
|
50,869
|
|
|
$
|
4,616
|
|
|
$
|
55,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Troubled debt restructuring
(1)
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents the recorded investment of loans classified as troubled debt restructuring.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Smart Option - interest only
(1)
|
|
$
|
86,136
|
|
|
$
|
85,183
|
|
|
$
|
454,801
|
|
|
$
|
447,181
|
|
Smart Option - fixed pay
(1)
|
|
106,781
|
|
|
103,347
|
|
|
580,954
|
|
|
536,249
|
|
||||
Smart Option - deferred
(1)
|
|
153,147
|
|
|
142,091
|
|
|
807,383
|
|
|
725,621
|
|
||||
Smart Option - principal and interest
|
|
213
|
|
|
347
|
|
|
921
|
|
|
544
|
|
||||
Other
|
|
26,628
|
|
|
31,286
|
|
|
40,301
|
|
|
48,199
|
|
||||
Total Private Education Loan originations
|
|
$
|
372,905
|
|
|
$
|
362,254
|
|
|
$
|
1,884,360
|
|
|
$
|
1,757,794
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Interest only, fixed pay and deferred describe the payment option while in school or in grace period. See “Private Education Loan Repayment Options” for further discussion.
|
|
|
June 30,
|
||||||||||||
|
|
2014
|
|
2013
|
||||||||||
(Dollars in thousands)
|
|
Balance
|
|
%
|
|
Balance
|
|
%
|
||||||
Loans in-school/grace/deferment
(1)
|
|
$
|
3,017,257
|
|
|
|
|
$
|
2,297,148
|
|
|
|
||
Loans in forbearance
(2)
|
|
39,964
|
|
|
|
|
4,199
|
|
|
|
||||
Loans in repayment and percentage of each status:
|
|
|
|
|
|
|
|
|
||||||
Loans current
|
|
4,396,772
|
|
|
99.3
|
%
|
|
3,054,707
|
|
|
99.2
|
%
|
||
Loans delinquent 31-60 days
(3)
|
|
21,381
|
|
|
0.5
|
|
|
18,520
|
|
|
0.6
|
|
||
Loans delinquent 61-90 days
(3)
|
|
5,987
|
|
|
0.1
|
|
|
8,462
|
|
|
0.2
|
|
||
Loans delinquent greater than 90 days
(3)
|
|
1,433
|
|
|
0.1
|
|
|
53
|
|
|
—
|
|
||
Total Private Education Loans in repayment
|
|
4,425,573
|
|
|
100.0
|
%
|
|
3,081,742
|
|
|
100.0
|
%
|
||
Total Private Education Loans, gross
|
|
7,482,794
|
|
|
|
|
5,383,089
|
|
|
|
||||
Private Education Loan unamortized discount
|
|
7,746
|
|
|
|
|
3,011
|
|
|
|
||||
Total Private Education Loans
|
|
7,490,540
|
|
|
|
|
5,386,100
|
|
|
|
||||
Private Education Loan allowance for losses
|
|
(54,315
|
)
|
|
|
|
(50,869
|
)
|
|
|
||||
Private Education Loans, net
|
|
$
|
7,436,225
|
|
|
|
|
$
|
5,335,231
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Percentage of Private Education Loans in repayment
|
|
|
|
59.1
|
%
|
|
|
|
57.2
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||
Delinquencies as a percentage of Private Education Loans in repayment
|
|
|
|
0.7
|
%
|
|
|
|
0.8
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
|
|
0.9
|
%
|
|
|
|
0.1
|
%
|
(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 their 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.
|
(4)
|
Based on number of months in an active repayment status for which a scheduled monthly payment was due.
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Allowance at beginning of period
|
|
$
|
71,453
|
|
|
$
|
65,381
|
|
|
$
|
61,763
|
|
|
$
|
65,218
|
|
Provision for Private Education Loan losses
|
|
329
|
|
|
(1,966
|
)
|
|
38,982
|
|
|
18,278
|
|
||||
Discount on delinquent student loan sales
|
|
(17,467
|
)
|
|
(12,546
|
)
|
|
(46,430
|
)
|
|
(32,627
|
)
|
||||
Allowance at end of period
|
|
$
|
54,315
|
|
|
$
|
50,869
|
|
|
$
|
54,315
|
|
|
$
|
50,869
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance as a percentage of ending total loans
|
|
0.73
|
%
|
|
0.94
|
%
|
|
0.73
|
%
|
|
0.94
|
%
|
||||
Allowance as a percentage of ending loans in repayment
|
|
1.23
|
%
|
|
1.65
|
%
|
|
1.23
|
%
|
|
1.65
|
%
|
||||
Delinquencies as a percentage of loans in repayment
|
|
0.7
|
%
|
|
0.8
|
%
|
|
0.7
|
%
|
|
0.8
|
%
|
||||
Loans in forbearances as a percentage of loans in repayment and forbearance
|
|
0.9
|
%
|
|
0.1
|
%
|
|
0.9
|
%
|
|
0.1
|
%
|
||||
Percentage of loans with a cosigner
|
|
89.7
|
%
|
|
89.2
|
%
|
|
89.7
|
%
|
|
89.2
|
%
|
||||
Average FICO at origination
|
|
745
|
|
|
745
|
|
|
745
|
|
|
745
|
|
||||
Ending total loans
(2)
|
|
$
|
7,482,794
|
|
|
$
|
5,383,128
|
|
|
$
|
7,482,794
|
|
|
$
|
5,383,128
|
|
Average loans in repayment
|
|
$
|
4,322,356
|
|
|
$
|
3,243,513
|
|
|
$
|
4,354,878
|
|
|
$
|
3,670,291
|
|
Ending loans in repayment
|
|
$
|
4,425,573
|
|
|
$
|
3,081,929
|
|
|
$
|
4,425,573
|
|
|
$
|
3,081,929
|
|
(1)
|
Includes loans that are required to make a payment for the first time.
|
(2)
|
Ending total loans represents gross Private Education Loans.
|
(Dollars in millions)
June 30, 2014
|
|
Monthly Scheduled Payments Due
|
|
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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,017
|
|
|
$
|
3,017
|
|
Loans in forbearance
|
|
24
|
|
|
8
|
|
|
5
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|||||||
Loans in repayment - current
|
|
2,425
|
|
|
1,050
|
|
|
505
|
|
|
378
|
|
|
39
|
|
|
—
|
|
|
4,397
|
|
|||||||
Loans in repayment - delinquent 31-60 days
|
|
12
|
|
|
4
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||||
Loans in repayment - delinquent 61-90 days
|
|
4
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
7
|
|
|||||||
Loans in repayment - delinquent greater than 90 days
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||
Total
|
|
$
|
2,466
|
|
|
$
|
1,063
|
|
|
$
|
513
|
|
|
$
|
384
|
|
|
$
|
40
|
|
|
$
|
3,017
|
|
|
7,483
|
|
|
Unamortized discount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(54
|
)
|
|||||||||||||
Total Private Education Loans, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
7,436
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
0.98
|
%
|
|
0.73
|
%
|
|
0.89
|
%
|
|
0.86
|
%
|
|
0.58
|
%
|
|
—
|
%
|
|
—
|
%
|
(Dollars in millions)
June 30, 2013
|
|
Monthly Scheduled Payments Due
|
|
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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,297
|
|
|
$
|
2,297
|
|
Loans in forbearance
|
|
2
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||||
Loans in repayment - current
|
|
1,577
|
|
|
830
|
|
|
595
|
|
|
40
|
|
|
12
|
|
|
—
|
|
|
3,054
|
|
|||||||
Loans in repayment - delinquent 31-60 days
|
|
10
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||||
Loans in repayment - delinquent 61-90 days
|
|
5
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Loans in repayment - delinquent greater than 90 days
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
|
$
|
1,594
|
|
|
$
|
837
|
|
|
$
|
602
|
|
|
$
|
40
|
|
|
$
|
12
|
|
|
$
|
2,297
|
|
|
5,382
|
|
|
Unamortized discount
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(51
|
)
|
|||||||||||||
Total Private Education Loans, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5,334
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
0.15
|
%
|
|
0.09
|
%
|
|
0.17
|
%
|
|
0.05
|
%
|
|
0.21
|
%
|
|
—
|
%
|
|
—
|
%
|
(Dollars in thousands
|
|
Signature and
Other
|
|
Smart Option
|
|
Career
Training
|
|
Total
|
||||||||
$ in repayment
|
|
$
|
125,208
|
|
|
$
|
4,283,202
|
|
|
$
|
17,163
|
|
|
$
|
4,425,573
|
|
$ in total
|
|
$
|
276,244
|
|
|
$
|
7,189,239
|
|
|
$
|
17,311
|
|
|
$
|
7,482,794
|
|
Payment method by enrollment status:
|
|
|
|
|
|
|
|
|
||||||||
In-school/grace
|
|
Deferred
(1)
|
|
|
Deferred
(1)
,
interest-only or fixed
$25/month
|
|
|
Interest-only or fixed
$25/month
|
|
|
|
|||||
Repayment
|
|
Level principal and
interest or graduated
|
|
|
Level principal and
interest
|
|
|
Level principal and
interest
|
|
|
|
(1)
|
“Deferred” includes loans for which no payments are required and interest charges are capitalized into the loan balance.
|
|
|
Accrued Interest Receivable
|
||||||||||
(Dollars in thousands)
|
|
Total Interest Receivable
|
|
Greater Than
90 Days
Past Due
|
|
Allowance for
Uncollectible
Interest
|
||||||
June 30, 2014
|
|
$
|
434,847
|
|
|
$
|
69
|
|
|
$
|
3,633
|
|
December 31, 2013
|
|
$
|
333,857
|
|
|
$
|
1
|
|
|
$
|
4,076
|
|
June 30, 2013
|
|
$
|
280,267
|
|
|
$
|
3
|
|
|
$
|
3,490
|
|
(Dollars in thousands)
|
|
June 30, 2014
|
|
December 31, 2013
|
||||
Sources of primary liquidity:
|
|
|
|
|
||||
Unrestricted cash and liquid investments:
|
|
|
|
|
||||
Holding Company and other non-bank subsidiaries
|
|
$
|
8,664
|
|
|
$
|
1,052
|
|
Sallie Mae Bank
(1)
|
|
1,515,512
|
|
|
2,181,813
|
|
||
Available-for-sale investments
|
|
149,399
|
|
|
102,105
|
|
||
Total unrestricted cash and liquid investments
|
|
$
|
1,673,575
|
|
|
$
|
2,284,970
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Sources of primary liquidity:
|
|
|
|
|
|
|
|
|
||||||||
Unrestricted cash and liquid investments:
|
|
|
|
|
|
|
|
|
||||||||
Holding Company and other non-bank subsidiaries
|
|
$
|
50,467
|
|
|
$
|
1,246
|
|
|
$
|
4,858
|
|
|
$
|
996
|
|
Sallie Mae Bank
(1)
|
|
1,705,493
|
|
|
1,626,773
|
|
|
1,542,794
|
|
|
1,399,305
|
|
||||
Available-for-sale investments
|
|
138,251
|
|
|
648,392
|
|
|
125,752
|
|
|
618,288
|
|
||||
Total unrestricted cash and liquid investments
|
|
$
|
1,894,211
|
|
|
$
|
2,276,411
|
|
|
$
|
1,673,404
|
|
|
$
|
2,018,589
|
|
(1)
|
This amount will be used primarily to originate student loans at the Bank. See discussion below on restrictions on the Bank to pay dividends.
|
|
|
June 30,
|
|
December 31,
|
|
||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
|
||||
Deposits - interest bearing
|
|
$
|
9,503,559
|
|
|
$
|
9,239,554
|
|
|
Deposits - non-interest bearing
|
|
42,455
|
|
|
55,036
|
|
|
||
Total Sallie Mae Bank deposits
|
|
9,546,014
|
|
|
9,294,590
|
|
|
||
Less money market deposits with subsidiaries
|
|
(655,805
|
)
|
|
(293,040
|
)
|
|
||
Total deposits
|
|
$
|
8,890,209
|
|
|
$
|
9,001,550
|
|
|
|
|
June 30, 2014
|
|
December 31, 2013
|
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Year-End Weighted Average Stated Rate
|
|
Amount
|
|
Year-End Weighted Average Stated Rate
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Money market
|
|
$
|
4,643,164
|
|
|
0.60
|
%
|
|
$
|
3,505,929
|
|
|
0.60
|
%
|
|
Savings
|
|
727,350
|
|
|
0.81
|
|
|
743,742
|
|
|
0.81
|
|
|
||
NOW
|
|
—
|
|
|
—
|
|
|
18,214
|
|
|
0.12
|
|
|
||
Certificates of deposit
|
|
4,133,045
|
|
|
1.09
|
|
|
4,971,669
|
|
|
1.39
|
|
|
||
Deposits - interest bearing
|
|
$
|
9,503,559
|
|
|
|
|
$
|
9,239,554
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
(Dollars in thousands)
|
|
2014
|
|
2013
|
||||
|
|
|
|
|
||||
Money market
|
|
$
|
42,455
|
|
|
$
|
55,036
|
|
Deposits - noninterest bearing
|
|
$
|
42,455
|
|
|
$
|
55,036
|
|
(Dollars in thousands)
|
|
SLM Corporation
and Sallie Mae Bank
Contracts
|
||
Exposure, net of collateral
|
|
$
|
2,256
|
|
Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3
|
|
8
|
%
|
|
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s Baa
|
|
8
|
%
|
|
|
Actual
|
|
Well Capitalized Regulatory Requirements
|
|||||||||
(Dollars in thousands)
|
|
Amount
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
As of June 30, 2014:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,291,390
|
|
11.6
|
%
|
|
$
|
554,956
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk Weighted Assets)
|
|
$
|
1,291,390
|
|
15.2
|
%
|
|
$
|
509,071
|
|
>
|
6.0
|
%
|
Total Capital (to Risk Weighted Assets)
|
|
$
|
1,351,917
|
|
15.9
|
%
|
|
$
|
848,451
|
|
>
|
10.0
|
%
|
As of December 31, 2013:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,221,416
|
|
11.7
|
%
|
|
$
|
521,973
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk Weighted Assets)
|
|
$
|
1,221,416
|
|
16.4
|
%
|
|
$
|
446,860
|
|
>
|
6.0
|
%
|
Total Capital (to Risk Weighted Assets)
|
|
$
|
1,289,497
|
|
17.3
|
%
|
|
$
|
745,374
|
|
>
|
10.0
|
%
|
|
|
June 30,
|
|
||
(Dollars in thousands)
|
|
2014
|
|
||
One year or less
|
|
$
|
948,769
|
|
|
One to 3 years
|
|
1,790,342
|
|
|
|
3 to 5 years
|
|
963,536
|
|
|
|
Over 5 years
|
|
—
|
|
|
|
Total contractual cash obligations
|
|
$
|
3,702,647
|
|
|
1.
|
Derivatives
- When determining the fair value of derivatives, we take into account counterparty credit risk for positions where we are exposed to the counterparty on a net basis by assessing exposure net of collateral held. The net exposure for each counterparty is adjusted based on market information available for that specific counterparty, including spreads from credit default swaps. Additionally, when the counterparty has exposure to us related to our derivatives, we fully collateralize the exposure, minimizing the adjustment necessary to the derivative valuations for our own credit risk. A major indicator of market inactivity is the widening of the bid/ask spread in these markets. In general, the widening of counterparty credit spreads and reduced liquidity for derivative instruments as indicated by wider bid/ask spreads will reduce the fair value of derivatives.
|
2.
|
Education Loans
- Our Private Education Loans and FFELP Loans are accounted for at cost or at the lower of cost or fair value if the loan is held-for-sale. The fair values of our student loans are disclosed in Note 10, “Fair Value Measurements.” For both Private Education Loans and FFELP Loans accounted for at cost, fair value is determined by modeling loan level cash flows using stated terms of the assets and internally-developed assumptions to determine aggregate portfolio yield, net present value and average life. The significant assumptions used to project cash flows are prepayment speeds, default rates, cost of funds, the amount funded by deposits versus equity, and required return on equity. Significant inputs into the models are not generally market observable. They are either derived internally through a combination of historical experience and management’s qualitative expectation of future performance (in the case of prepayment speeds, default rates, and capital assumptions) or are obtained through external broker quotes (as in the case of cost of funds). When possible, market transactions are used to validate the model. In most cases, these are either infrequent or not observable. For FFELP Loans classified as held-for-sale and accounted for at the lower of cost or market, the fair value is based on the committed sales price of the various loan purchase programs established by the U.S. Department of Education (“ED”).
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
June 30, 2014
|
|
June 30, 2013
|
||||||||
|
+300 Basis
Points
|
|
+100 Basis
Points
|
|
+300 Basis
Points
|
|
+100 Basis
Points
|
||||
|
|
|
|
|
|
|
|
||||
EAR - Shock
|
13.1
|
%
|
|
4.2
|
%
|
|
10.5
|
%
|
|
3.4
|
%
|
EAR - Ramp
|
8.2
|
%
|
|
2.4
|
%
|
|
7.0
|
%
|
|
2.3
|
%
|
EVE
|
(3.2
|
)%
|
|
(3.3
|
)%
|
|
(2.4
|
)%
|
|
(0.9
|
)%
|
(Dollars in billions)
Index
|
|
Frequency of
Variable
Resets
|
|
Assets
|
|
Funding
(1)
|
|
Funding
Gap
|
||||||
3-month Treasury bill
|
|
weekly
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
1-month LIBOR
|
|
daily
|
|
0.9
|
|
|
—
|
|
|
0.9
|
|
|||
1-month LIBOR
|
|
weekly
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|||
1-month LIBOR
|
|
monthly
|
|
6.4
|
|
|
3.3
|
|
|
3.1
|
|
|||
Non-Discrete reset
(2)
|
|
daily/weekly
|
|
1.7
|
|
|
2.8
|
|
|
(1.1
|
)
|
|||
Fixed Rate
(3)
|
|
|
|
2.0
|
|
|
2.3
|
|
|
(0.3
|
)
|
|||
Total
|
|
|
|
$
|
11.4
|
|
|
$
|
8.9
|
|
|
$
|
2.5
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Funding (by index) includes all derivatives that qualify as hedges.
|
(2)
|
Assets include restricted and unrestricted cash equivalents and other overnight type instruments. Funding includes liquid retail deposits and the obligation to return cash collateral held related to derivatives exposures.
|
(3)
|
Assets include receivables and other assets (including premiums and reserves). Funding includes unswapped time deposits.
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
•
|
Pursuant to a tax sharing agreement, Navient has agreed to indemnify us for $283 million in deferred taxes that the Company will be legally responsible for but that relate to gains recognized by the Company’s predecessor on debt repurchases made prior to the Spin-Off.
|
•
|
Navient has responsibility to assume new or ongoing litigation matters relating to the conduct of most pre-Spin-Off SLM businesses operated or conducted prior to the Spin-Off.
|
•
|
Under the terms of the Separation and Distribution Agreement, Navient is responsible for funding all liabilities under the recently agreed regulatory orders with the FDIC and the Department of Justice, other than fines directly levied against the Bank in connection with these matters. Under the Department of Justice order, Navient is solely responsible for reimbursing SCRA benefits and related compensation on behalf of both its subsidiary, Navient Solutions, Inc., and the Bank.
|
•
|
Actual or anticipated fluctuations in our operating results
|
•
|
Our smaller market capitalization as compared to pre-Spin-Off SLM
|
•
|
Changes in earnings estimated by securities analysts or our ability to meet those estimates
|
•
|
Our policy of paying no common stock dividends
|
•
|
The operating and stock price performance of comparable companies
|
•
|
Changes to the regulatory and legal environment under which we and our subsidiaries operate
|
•
|
Domestic and worldwide economic conditions
|
•
|
Significant sales of our preferred stock, or the expectation of these sales or expectations of same
|
•
|
Lack of credit agency ratings or FDIC insurance
|
•
|
Movements in interest rates and spreads that negatively affect return
|
•
|
Call and redemption features
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
(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)
|
|
Approximate Dollar
Value
of Shares That
May Yet Be
Purchased Under
Publicly Announced
Plans or
Programs
(2)
|
|||||
Period:
|
|
|
|
|
|
|
|
|||||
April 1 - April 30, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
May 1 - May 31, 2014
|
47
|
|
|
$
|
8.87
|
|
|
—
|
|
|
—
|
|
June 1 - June 30, 2014
|
312
|
|
|
$
|
8.58
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Total second-quarter 2014
|
359
|
|
|
$
|
8.62
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All shares purchased are pursuant to the shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercise of stock options, and tax withholding obligations in connection with exercise of stock options and vesting of restricted stock and restricted stock units.
|
(2)
|
At the present time the Company does not have a publicly announced share repurchase plan or program.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Location
|
Function
|
Related Business Area(s)
|
Approximate
Square Feet
|
Newark, DE
|
Headquarters
|
Consumer Lending; Business Services; FFELP Loans; Other
|
160,000
|
Indianapolis, IN
|
Loan Servicing Center
|
Business Services
|
50,000
|
Location
|
Function
|
Related Business Area(s)
|
Approximate
Square Feet
|
Reston, VA
|
Administrative Offices
|
Consumer Lending; Business Services; FFELP Loans; Other
|
18,000
|
Newton, MA
|
Upromise
|
Business Services
|
18,000
|
Salt Lake City, UT
|
Sallie Mae Bank
|
Consumer Lending
|
11,400
|
Item 6.
|
Exhibits
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of SLM Corporation
|
|
|
|
10.1
|
|
Employment Agreement, dated April 21, 2014 between Laurent C. Lutz and the Company†
|
|
|
|
10.2
|
|
Sallie Mae Employee Stock Purchase Plan, Amended and Restated as of June 25, 2014†
|
|
|
|
10.3
|
|
Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement - 2014†
|
|
|
|
12.1
|
|
Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends.
|
|
|
|
31.1
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance 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.
|
†
|
Management Contract or Compensatory Plan or Arrangement
|
|
|
||
SLM CORPORATION
(Registrant)
|
|||
|
|
||
By:
|
/
S
/ STEVEN J. MCGARRY
|
||
|
Steven J. McGarry
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
(a)
|
The Plan shall be administered by the Nominations, Governance, and Compensation Committee of the Board of Directors (the "Committee") or such other committee as the Committee may delegate. In addition to its duties with respect to the Plan, the Committee shall have full authority, consistent with the Plan, to interpret the Plan, to promulgate such rules and regulations with respect to the Plan as it deems desirable, to delegate its responsibilities hereunder to appropriate persons and to make all other determinations necessary or desirable for the administration of the Plan. All decisions, determinations and interpretations of the Committee shall be binding upon all persons.
|
(a)
|
The rights to purchase stock ("Options") that are granted under this Plan shall constitute non-qualified stock options that are not intended to qualify under Section 423 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”). However, the Plan is intended to comply with Section 409A of the Code and will be interpreted in a manner intended to comply with Section 409A of the Code.
|
(b)
|
Entry Date. The term "Entry Date" shall mean the first day of each Plan Year, except that for eligible employees hired
|
(a)
|
any individual whose services are performed for the Employer pursuant to a contract between the Employer and another entity, and whom the Employer treats as a leased employee;
|
(a)
|
any individual that the Employer treats as an independent contractor;
|
(a)
|
temporary employees;
|
(a)
|
members of the Boards of Directors of the Corporation and of the Employers, unless otherwise eligible as described above; and
|
(b)
|
International employees.
|
•
|
100 percent of the Restricted Stock is subject to a risk of forfeiture and is non-transferable on the Grant Date.
|
•
|
Upon the first anniversary of the Grant Date (the “Vesting Event”), 100 percent of the Restricted Stock will vest and become transferable unless vested earlier as set forth below.
|
•
|
The Restricted Stock will vest and become transferable prior to the Vesting Event upon any of the following events: (i) the Grantee’s death or Disability or (ii) upon a Change in Control.
|
•
|
100 percent of the Restricted Stock will be forfeited if the Grantee is no longer a director of the Corporation’s Board of Directors prior to the Vesting Event for reasons other than death, Disability (as defined below) or a Change in Control.
|
•
|
The Restricted Stock will be held in an account in the Grantee’s name at the Corporation’s transfer agent, currently Computershare. The Grantee is entitled to vote the shares of Restricted Stock.
|
•
|
Dividends declared on unvested shares of Restricted Stock will not be paid currently. Instead, amounts equal to such dividends will be credited to an account established on behalf of the Grantee and such amounts will be deemed to be invested in additional shares of the Corporation’s common stock (“Dividend Equivalents”). Such Dividend Equivalents will be subject to the same vesting schedule to which the Restricted Stock is subject. At the time that the underlying Restricted Stock vests, the amount of Dividend Equivalents allocable to such Restricted Stock will also vest and will be settled in shares of the Corporation’s common stock (provided that any fractional share amount shall be paid in cash). Dividend Equivalents declared on unvested shares of Restricted Stock are not subject to income tax until vesting, at which time they are taxed as ordinary income.
|
•
|
The Corporation may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any transfer or sale by the Grantee of any shares of Common Stock, including without limitation (a) restrictions under an insider trading policy and (b) restrictions that may be necessary in the absence of an effective registration statement under the Securities Act of 1933, as amended, covering the shares of the Corporation’s common stock. The sale of the shares must also comply with other applicable laws and regulations governing the sale of such shares.
|
•
|
As an essential term of this award, the Grantee consents to the collection, use and transfer, in electronic or other form, of personal data as described herein for the exclusive purpose of implementing, administering and managing the Grantee’s participation in the Plan. By accepting this award, the Grantee acknowledges that the Corporation holds certain personal information about the Grantee, including, but not limited to, name, home address and telephone number, date of birth, social security number or other identification number, salary, tax rates and amounts, nationality, job title, any shares of stock held in the Corporation, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding, for the purpose of implementing, administering and managing the Plan (“Data”). The Grantee
|
•
|
The Corporation may, in its sole discretion, decide to deliver any documents related to any awards granted under the Plan by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Corporation or another third party designated by the Corporation, and such consent shall remain in effect throughout the Grantee’s term of service with the Corporation and thereafter until withdrawn in writing by the Grantee.
|
•
|
“Disability” means the absence of the Grantee from the Corporation’s Board of Director’s duties for 180 consecutive days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Corporation or its insurers and reasonably acceptable to the Grantee or the Grantee’s legal representative.
|
•
|
The Grantee hereby agrees to accept as binding, conclusive, and final all decisions and interpretations of the Board and, where applicable, the Committee concerning any questions arising under this Agreement or the Plan.
|
•
|
Nothing in the Plan, in this Agreement or any other instrument executed pursuant thereto or hereto shall confer upon the Grantee any right to continued service on the Board.
|
•
|
The Board and/or the Committee reserve the right to unilaterally amend this Agreement to reflect any changes in applicable law or financial accounting standards.
|
•
|
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.
|
•
|
In the event of any conflict between the provisions of this Agreement and the provisions of the Plan, the terms of the Plan control, except as expressly stated otherwise herein. This Agreement and the Plan together set forth the entire agreement and understanding between the parties as to the subject matter hereof and supersede all prior oral and written and all contemporaneous or
|
•
|
In the event that any provision of this Agreement is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of this Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision. The headings in this Agreement are solely for convenience of reference, and shall not constitute a part of this Agreement, nor shall they affect its meaning, construction or effect. The Grantee shall cooperate and take such actions as may be reasonably requested by the Corporation in order to carry out the provisions and purposes of the Agreement. The Grantee is responsible for complying with all laws applicable to the Grantee, including federal and state securities reporting laws.
|
|
|
Years Ended
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
'
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2013
|
|
2014
|
||||||||||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
(123,671
|
)
|
|
$
|
(122,669
|
)
|
|
$
|
87,848
|
|
|
$
|
341,871
|
|
|
$
|
416,528
|
|
|
$
|
240,405
|
|
|
$
|
151,741
|
|
Add: Fixed charges
|
|
169,719
|
|
|
146,256
|
|
|
107,896
|
|
|
84,708
|
|
|
91,182
|
|
|
45,091
|
|
|
44,053
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total earnings
|
|
$
|
46,048
|
|
|
$
|
23,587
|
|
|
$
|
195,744
|
|
|
$
|
426,579
|
|
|
$
|
507,710
|
|
|
$
|
285,496
|
|
|
$
|
195,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
|
$
|
167,055
|
|
|
$
|
143,927
|
|
|
$
|
105,385
|
|
|
$
|
82,911
|
|
|
$
|
89,085
|
|
|
$
|
44,057
|
|
|
$
|
43,665
|
|
Rental expense, net of income
|
|
2,664
|
|
|
2,329
|
|
|
2,511
|
|
|
1,797
|
|
|
2,097
|
|
|
1,034
|
|
|
388
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total fixed charges
|
|
169,719
|
|
|
146,256
|
|
|
107,896
|
|
|
$
|
84,708
|
|
|
91,182
|
|
|
45,091
|
|
|
44,053
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Preferred stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,228
|
|
|||||||
Total fixed charges and preferred stock dividends
|
|
$
|
169,719
|
|
|
$
|
146,256
|
|
|
$
|
107,896
|
|
|
$
|
84,708
|
|
|
$
|
91,182
|
|
|
$
|
45,091
|
|
|
$
|
47,281
|
|
Ratio of earnings to fixed charges
(1) (2) (3)
|
|
—
|
|
|
—
|
|
|
1.81
|
|
|
5.04
|
|
|
5.57
|
|
|
6.33
|
|
|
4.44
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ratio of earnings to fixed charges and preferred stock dividends
(1) (2) (3)
|
|
—
|
|
|
—
|
|
|
1.81
|
|
|
5.04
|
|
|
5.57
|
|
|
6.33
|
|
|
4.14
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For purposes of computing these ratios, earnings represent income (loss) before income tax expense plus fixed charges. Fixed charges represent interest expensed and capitalized plus one-third (the proportion deemed representative of the interest factor) of rents, net of income from subleases.
|
(2)
|
Due to a pre-tax loss from operations of $123,671 for the year ended December 31, 2009, the ratio coverage was less than 1:1. We would have needed to generate $123,671 million of additional earnings in the year ended December 31, 2009 for the ratio coverage to equal 1:1.
|
(3)
|
Due to a pre-tax loss from operations of $122,669 for the year ended December 31, 2010, the ratio coverage was less than 1:1. We would have needed to generate $122,669 million of additional earnings in the year ended December 31, 2010 for the ratio coverage to equal 1:1.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SLM Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Raymond J. Quinlan
|
Raymond J. Quinlan
|
Executive Chairman and Chief Executive Officer
|
(Principal Executive Officer)
|
July 23, 2014
|
1.
|
I have reviewed this quarterly report on Form 10-Q of SLM Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ STEVEN J. MCGARRY
|
Steven J. McGarry
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
July 23, 2014
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ RAYMOND J. QUINLAN
|
Raymond J. Quinlan
|
Executive Chairman and Chief Executive Officer
|
(Principal Executive Officer)
|
July 23, 2014
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
/s/ STEVEN J. MCGARRY
|
Steven J. McGarry
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
July 23, 2014
|