|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
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)
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Large accelerated filer
|
þ
|
|
Accelerated filer
|
¨
|
|
|
|
|
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
Class
|
Outstanding at June 30, 2015
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Common Stock, $0.20 par value
|
425,882,829 shares
|
|
Part I. Financial Information
|
|
|
|
|
Item 1.
|
Financial Statements
|
|
2
|
|
Item 1.
|
Notes to the Financial Statements
|
|
9
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
36
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
|
58
|
|
Item 4.
|
Controls and Procedures
|
|
61
|
|
PART II. Other Information
|
|
|
||
Item 1.
|
Legal Proceedings
|
|
62
|
|
Item 1A.
|
Risk Factors
|
|
63
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
63
|
|
Item 3.
|
Defaults Upon Senior Securities
|
|
63
|
|
Item 4.
|
Mine Safety Disclosures
|
|
63
|
|
Item 5.
|
Other Information
|
|
63
|
|
Item 6.
|
Exhibits
|
|
64
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
1,278,863
|
|
|
$
|
2,359,780
|
|
Available-for-sale investments at fair value (cost of $175,158 and $167,740, respectively)
|
|
173,845
|
|
|
168,934
|
|
||
Loans held for investment (net of allowance for losses of $91,866 and $83,842, respectively)
|
|
10,422,908
|
|
|
9,509,786
|
|
||
Other interest-earning assets
|
|
55,260
|
|
|
77,283
|
|
||
Accrued interest receivable
|
|
562,239
|
|
|
469,697
|
|
||
Premises and equipment, net
|
|
80,432
|
|
|
78,470
|
|
||
Acquired intangible assets, net
|
|
2,485
|
|
|
3,225
|
|
||
Tax indemnification receivable
|
|
228,910
|
|
|
240,311
|
|
||
Other assets
|
|
70,019
|
|
|
64,757
|
|
||
Total assets
|
|
$
|
12,874,961
|
|
|
$
|
12,972,243
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
||||
Deposits
|
|
$
|
10,340,605
|
|
|
$
|
10,540,555
|
|
Income taxes payable, net
|
|
185,849
|
|
|
191,499
|
|
||
Upromise related liabilities
|
|
283,584
|
|
|
293,004
|
|
||
Other liabilities
|
|
102,750
|
|
|
117,227
|
|
||
Total liabilities
|
|
10,912,788
|
|
|
11,142,285
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Equity
|
|
|
|
|
||||
Preferred stock, par value $0.20 per share, 20 million shares authorized
|
|
|
|
|
||||
Series A: 3.3 million and 3.3 million shares issued, respectively, at stated value of $50 per share
|
|
165,000
|
|
|
165,000
|
|
||
Series B: 4 million and 4 million shares issued, respectively, at stated value of $100 per share
|
|
400,000
|
|
|
400,000
|
|
||
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 430 million and 425 million shares issued, respectively
|
|
86,003
|
|
|
84,961
|
|
||
Additional paid-in capital
|
|
1,120,923
|
|
|
1,090,511
|
|
||
Accumulated other comprehensive loss (net of tax benefit of $7,171 and $7,186, respectively)
|
|
(11,448
|
)
|
|
(11,393
|
)
|
||
Retained earnings
|
|
240,967
|
|
|
113,066
|
|
||
Total SLM Corporation stockholders' equity before treasury stock
|
|
2,001,445
|
|
|
1,842,145
|
|
||
Less: Common stock held in treasury at cost: 4 million and 1 million shares, respectively
|
|
(39,272
|
)
|
|
(12,187
|
)
|
||
Total equity
|
|
1,962,173
|
|
|
1,829,958
|
|
||
Total liabilities and equity
|
|
$
|
12,874,961
|
|
|
$
|
12,972,243
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest income:
|
|
|
|
|
|
|
|
|
||||||||
Loans
|
|
$
|
195,287
|
|
|
$
|
162,238
|
|
|
$
|
393,143
|
|
|
$
|
322,273
|
|
Investments
|
|
2,386
|
|
|
2,236
|
|
|
5,106
|
|
|
3,204
|
|
||||
Cash and cash equivalents
|
|
801
|
|
|
1,099
|
|
|
1,581
|
|
|
1,965
|
|
||||
Total interest income
|
|
198,474
|
|
|
165,573
|
|
|
399,830
|
|
|
327,442
|
|
||||
Interest expense:
|
|
|
|
|
|
|
|
|
||||||||
Deposits
|
|
29,482
|
|
|
21,034
|
|
|
59,052
|
|
|
43,624
|
|
||||
Other interest expense
|
|
735
|
|
|
—
|
|
|
1,567
|
|
|
41
|
|
||||
Total interest expense
|
|
30,217
|
|
|
21,034
|
|
|
60,619
|
|
|
43,665
|
|
||||
Net interest income
|
|
168,257
|
|
|
144,539
|
|
|
339,211
|
|
|
283,777
|
|
||||
Less: provisions for loan losses
|
|
15,558
|
|
|
1,014
|
|
|
32,176
|
|
|
40,173
|
|
||||
Net interest income after provisions for loan losses
|
|
152,699
|
|
|
143,525
|
|
|
307,035
|
|
|
243,604
|
|
||||
Noninterest income:
|
|
|
|
|
|
|
|
|
||||||||
Gains on sales of loans, net
|
|
76,874
|
|
|
1,928
|
|
|
76,874
|
|
|
35,816
|
|
||||
Gains (losses) on derivatives and hedging activities, net
|
|
1,602
|
|
|
(9,458
|
)
|
|
4,894
|
|
|
(10,222
|
)
|
||||
Other
|
|
10,912
|
|
|
15,229
|
|
|
18,919
|
|
|
23,365
|
|
||||
Total noninterest income
|
|
89,388
|
|
|
7,699
|
|
|
100,687
|
|
|
48,959
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
|
38,572
|
|
|
31,667
|
|
|
79,775
|
|
|
61,334
|
|
||||
Other operating expenses
|
|
51,227
|
|
|
28,812
|
|
|
91,211
|
|
|
62,744
|
|
||||
Total operating expenses
|
|
89,799
|
|
|
60,479
|
|
|
170,986
|
|
|
124,078
|
|
||||
Acquired intangible asset amortization expense
|
|
370
|
|
|
1,156
|
|
|
740
|
|
|
2,995
|
|
||||
Restructuring and other reorganization expenses
|
|
744
|
|
|
13,520
|
|
|
5,401
|
|
|
13,749
|
|
||||
Total expenses
|
|
90,913
|
|
|
75,155
|
|
|
177,127
|
|
|
140,822
|
|
||||
Income before income tax expense
|
|
151,174
|
|
|
76,069
|
|
|
230,595
|
|
|
151,741
|
|
||||
Income tax expense
|
|
60,158
|
|
|
31,941
|
|
|
91,880
|
|
|
60,599
|
|
||||
Net income
|
|
91,016
|
|
|
44,128
|
|
|
138,715
|
|
|
91,142
|
|
||||
Less: net loss attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(434
|
)
|
||||
Net income attributable to SLM Corporation
|
|
91,016
|
|
|
44,128
|
|
|
138,715
|
|
|
91,576
|
|
||||
Preferred stock dividends
|
|
4,870
|
|
|
3,228
|
|
|
9,693
|
|
|
3,228
|
|
||||
Net income attributable to SLM Corporation common stock
|
|
$
|
86,146
|
|
|
$
|
40,900
|
|
|
$
|
129,022
|
|
|
$
|
88,348
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.21
|
|
Average common shares outstanding
|
|
425,688
|
|
|
422,805
|
|
|
425,061
|
|
|
424,751
|
|
||||
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
Average common and common equivalent shares outstanding
|
|
432,742
|
|
|
430,750
|
|
|
432,523
|
|
|
432,689
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
|
$
|
91,016
|
|
|
$
|
44,128
|
|
|
$
|
138,715
|
|
|
$
|
91,142
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on investments
|
|
(3,180
|
)
|
|
2,749
|
|
|
(2,507
|
)
|
|
4,155
|
|
||||
Unrealized gains on cash flow hedges
|
|
18,156
|
|
|
—
|
|
|
2,467
|
|
|
—
|
|
||||
Total unrealized gains (losses)
|
|
14,976
|
|
|
2,749
|
|
|
(40
|
)
|
|
4,155
|
|
||||
Income tax (expense) benefit
|
|
(5,840
|
)
|
|
(962
|
)
|
|
(15
|
)
|
|
(1,496
|
)
|
||||
Other comprehensive income (loss), net of tax benefit (expense)
|
|
9,136
|
|
|
1,787
|
|
|
(55
|
)
|
|
2,659
|
|
||||
Comprehensive income
|
|
100,152
|
|
|
45,915
|
|
|
138,660
|
|
|
93,801
|
|
||||
Less: comprehensive loss attributable to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(434
|
)
|
||||
Total comprehensive income attributable to SLM Corporation
|
|
$
|
100,152
|
|
|
$
|
45,915
|
|
|
$
|
138,660
|
|
|
$
|
94,235
|
|
|
|
|
|
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
|
|
|
|
|
|
Common Stock Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
|
Preferred Stock Shares
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Total SLM Corporation Equity
|
||||||||||||||||||
Balance at December 31, 2014
|
|
7,300,000
|
|
|
424,804,125
|
|
|
(1,365,277
|
)
|
|
423,438,848
|
|
|
$
|
565,000
|
|
|
$
|
84,961
|
|
|
$
|
1,090,511
|
|
|
$
|
(11,393
|
)
|
|
$
|
113,066
|
|
|
$
|
(12,187
|
)
|
|
$
|
1,829,958
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,715
|
|
|
—
|
|
|
138,715
|
|
|||||||
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||||
Total comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138,660
|
|
|||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Preferred Stock, series A ($.87 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,750
|
)
|
|
—
|
|
|
(5,750
|
)
|
|||||||
Preferred Stock, series
B
($.50 per share)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,943
|
)
|
|
—
|
|
|
(3,943
|
)
|
|||||||
Dividend equivalent units related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,121
|
|
|
—
|
|
|
(1,121
|
)
|
|
—
|
|
|
—
|
|
|||||||
Issuance of common shares
|
|
—
|
|
|
5,208,074
|
|
|
|
|
5,208,074
|
|
|
—
|
|
|
1,042
|
|
|
12,307
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,349
|
|
||||||||
Tax benefit related to employee stock-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,774
|
|
|||||||
Stock-based compensation expense
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,210
|
|
|||||||
Shares repurchased related to employee stock-based compensation plans
|
|
—
|
|
|
—
|
|
|
(2,764,093
|
)
|
|
(2,764,093
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,085
|
)
|
|
(27,085
|
)
|
|||||||
Balance at June 30, 2015
|
|
7,300,000
|
|
|
430,012,199
|
|
|
(4,129,370
|
)
|
|
425,882,829
|
|
|
$
|
565,000
|
|
|
$
|
86,003
|
|
|
$
|
1,120,923
|
|
|
$
|
(11,448
|
)
|
|
$
|
240,967
|
|
|
$
|
(39,272
|
)
|
|
$
|
1,962,173
|
|
|
|
Six Months Ended
|
||||||
|
|
June, 30
|
||||||
|
|
2015
|
|
2014
|
||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
138,715
|
|
|
$
|
91,142
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
||||
Provisions for loan losses
|
|
32,176
|
|
|
40,173
|
|
||
Income tax expense
|
|
91,880
|
|
|
60,599
|
|
||
Amortization of brokered deposit placement fee
|
|
5,352
|
|
|
5,222
|
|
||
Amortization of asset-backed commercial paper upfront fee
|
|
1,202
|
|
|
—
|
|
||
Amortization of deferred loan origination costs and fees, net
|
|
1,558
|
|
|
847
|
|
||
Net amortization of discount on investments
|
|
883
|
|
|
236
|
|
||
Depreciation of premises and equipment
|
|
3,436
|
|
|
2,598
|
|
||
Amortization of acquired intangibles
|
|
740
|
|
|
2,275
|
|
||
Stock-based compensation expense
|
|
11,210
|
|
|
8,468
|
|
||
Unrealized (gains)/losses on derivative and hedging activities, net
|
|
(3,219
|
)
|
|
8,025
|
|
||
Gains on sale of loans, net
|
|
(76,874
|
)
|
|
(35,816
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Net decrease in loans held for sale
|
|
55
|
|
|
6,183
|
|
||
Origination of loans held for sale
|
|
(55
|
)
|
|
(6,183
|
)
|
||
Increase in accrued interest receivable
|
|
(191,011
|
)
|
|
(175,919
|
)
|
||
Decrease (increase) in other interest-earning assets
|
|
22,023
|
|
|
(41,062
|
)
|
||
Decrease in tax indemnification receivable
|
|
11,401
|
|
|
—
|
|
||
(Increase) in other assets
|
|
(25,214
|
)
|
|
(19,182
|
)
|
||
Decrease in income tax payable, net
|
|
(97,545
|
)
|
|
(199,782
|
)
|
||
Decrease in accrued interest payable
|
|
(352
|
)
|
|
(2,931
|
)
|
||
(Decrease) increase in payable due to entity that is a subsidiary of Navient
|
|
(6,542
|
)
|
|
11,109
|
|
||
(Decrease) increase in other liabilities
|
|
(3,707
|
)
|
|
12,140
|
|
||
Total adjustments
|
|
(222,603
|
)
|
|
(323,000
|
)
|
||
Total net cash used in operating activities
|
|
(83,888
|
)
|
|
(231,858
|
)
|
||
Investing activities
|
|
|
|
|
||||
Loans acquired and originated
|
|
(2,070,373
|
)
|
|
(1,921,390
|
)
|
||
Net proceeds from sales of loans held for investment
|
|
785,481
|
|
|
755,746
|
|
||
Proceeds from claim payments
|
|
67,769
|
|
|
91,089
|
|
||
Net decrease in loans held for investment
|
|
445,610
|
|
|
285,496
|
|
||
Purchases of available-for-sale securities
|
|
(26,237
|
)
|
|
(47,087
|
)
|
||
Proceeds from sales and maturities of available-for-sale securities
|
|
17,936
|
|
|
3,712
|
|
||
Total net cash used in investing activities
|
|
(779,814
|
)
|
|
(832,434
|
)
|
||
Financing activities
|
|
|
|
|
||||
Asset-backed commercial paper upfront placement fee
|
|
(104
|
)
|
|
—
|
|
||
Net decrease in certificates of deposit
|
|
(140,693
|
)
|
|
(836,822
|
)
|
||
Net (decrease) increase in other deposits
|
|
(72,499
|
)
|
|
763,160
|
|
||
Net decrease in deposits with entity that is a subsidiary of Navient
|
|
—
|
|
|
(5,633
|
)
|
||
Special cash contribution from Navient
|
|
—
|
|
|
472,718
|
|
||
Net capital contributions from entity that is a subsidiary of Navient
|
|
—
|
|
|
15,408
|
|
||
Excess tax benefit from the exercise of stock-based awards
|
|
5,774
|
|
|
—
|
|
||
Preferred stock dividends paid
|
|
(9,693
|
)
|
|
(3,228
|
)
|
||
Net cash (used in) provided by financing activities
|
|
(217,215
|
)
|
|
405,603
|
|
||
Net decrease in cash and cash equivalents
|
|
(1,080,917
|
)
|
|
(658,689
|
)
|
Cash and cash equivalents at beginning of period
|
|
2,359,780
|
|
|
2,182,865
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
1,278,863
|
|
|
$
|
1,524,176
|
|
Cash disbursements made for:
|
|
|
|
|
||||
Interest
|
|
$
|
52,789
|
|
|
$
|
42,819
|
|
Income taxes paid
|
|
$
|
91,472
|
|
|
$
|
199,782
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
||||
|
|
2015
|
|
2014
|
||||
Private Education Loans
|
|
$
|
9,312,937
|
|
|
$
|
8,311,376
|
|
Deferred origination costs
|
|
19,632
|
|
|
13,845
|
|
||
Allowance for loan losses
|
|
(87,310
|
)
|
|
(78,574
|
)
|
||
Total Private Education Loans, net
|
|
9,245,259
|
|
|
8,246,647
|
|
||
|
|
|
|
|
||||
FFELP Loans
|
|
1,178,876
|
|
|
1,264,807
|
|
||
Unamortized acquisition costs, net
|
|
3,329
|
|
|
3,600
|
|
||
Allowance for loan losses
|
|
(4,556
|
)
|
|
(5,268
|
)
|
||
Total FFELP Loans, net
|
|
1,177,649
|
|
|
1,263,139
|
|
||
|
|
|
|
|
||||
Loans held for investment, net
|
|
$
|
10,422,908
|
|
|
$
|
9,509,786
|
|
2.
|
Loans Held for Investment (Continued)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
|
Average Balance
|
|
Weighted Average Interest Rate
|
||||||||||||
Private Education Loans
|
|
$
|
9,361,711
|
|
|
7.96
|
%
|
|
$
|
7,357,599
|
|
|
8.22
|
%
|
|
$
|
9,407,888
|
|
|
8.01
|
%
|
|
$
|
7,388,484
|
|
|
8.18
|
%
|
FFELP Loans
|
|
1,194,309
|
|
|
3.22
|
|
|
1,378,206
|
|
|
3.32
|
|
|
1,214,384
|
|
|
3.20
|
|
|
1,391,327
|
|
|
3.26
|
|
||||
Total portfolio
|
|
$
|
10,556,020
|
|
|
|
|
$
|
8,735,805
|
|
|
|
|
$
|
10,622,272
|
|
|
|
|
$
|
8,779,811
|
|
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Three Months Ended June 30, 2015
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
4,569
|
|
|
$
|
85,236
|
|
|
$
|
89,805
|
|
Total provision
|
|
466
|
|
|
15,092
|
|
|
15,558
|
|
|||
Net charge-offs:
|
|
|
|
|
|
|
||||||
Charge-offs
|
|
(479
|
)
|
|
(13,278
|
)
|
|
(13,757
|
)
|
|||
Recoveries
|
|
—
|
|
|
1,780
|
|
|
1,780
|
|
|||
Net charge-offs
|
|
(479
|
)
|
|
(11,498
|
)
|
|
(11,977
|
)
|
|||
Loan sales
(1)
|
|
—
|
|
|
(1,520
|
)
|
|
(1,520
|
)
|
|||
Ending Balance
|
|
$
|
4,556
|
|
|
$
|
87,310
|
|
|
$
|
91,866
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
32,446
|
|
|
$
|
32,446
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
4,556
|
|
|
$
|
54,864
|
|
|
$
|
59,420
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
187,143
|
|
|
$
|
187,143
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,178,876
|
|
|
$
|
9,125,794
|
|
|
$
|
10,304,670
|
|
Net charge-offs as a percentage of average loans in repayment (annualized)
(2)
|
|
0.22
|
%
|
|
0.81
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.39
|
%
|
|
0.94
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
(2)
|
|
0.54
|
%
|
|
1.54
|
%
|
|
|
||||
Allowance coverage of net charge-offs (annualized)
|
|
2.38
|
|
|
1.90
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,178,876
|
|
|
$
|
9,312,937
|
|
|
|
||
Average loans in repayment
(2)
|
|
$
|
861,453
|
|
|
$
|
5,712,559
|
|
|
|
||
Ending loans in repayment
(2)
|
|
$
|
836,545
|
|
|
$
|
5,666,645
|
|
|
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
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
|
|
|||
Net charge-offs:
|
|
|
|
|
|
|
||||||
Charge-offs
(1)
|
|
(654
|
)
|
|
—
|
|
|
(654
|
)
|
|||
Recoveries
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net charge-offs
|
|
(654
|
)
|
|
—
|
|
|
(654
|
)
|
|||
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
|
|
Net charge-offs as a percentage of average loans in repayment (annualized)
(3)
|
|
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
(3)
|
|
0.66
|
%
|
|
1.23
|
%
|
|
|
||||
Allowance coverage of net charge-offs (annualized)
|
|
2.40
|
|
|
—
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,360,107
|
|
|
$
|
7,482,794
|
|
|
|
||
Average loans in repayment
(3)
|
|
$
|
973,894
|
|
|
$
|
4,322,356
|
|
|
|
||
Ending loans in repayment
(3)
|
|
$
|
947,972
|
|
|
$
|
4,425,573
|
|
|
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Allowance for Loan Losses
|
||||||||||
|
|
Six Months Ended June 30, 2015
|
||||||||||
|
|
FFELP Loans
|
|
Private Education
Loans
|
|
Total
|
||||||
Allowance for Loan Losses
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
5,268
|
|
|
$
|
78,574
|
|
|
$
|
83,842
|
|
Total provision
|
|
901
|
|
|
31,275
|
|
|
32,176
|
|
|||
Net charge-offs:
|
|
|
|
|
|
|
||||||
Charge-offs
|
|
(1,613
|
)
|
|
(22,005
|
)
|
|
(23,618
|
)
|
|||
Recoveries
|
|
—
|
|
|
3,168
|
|
|
3,168
|
|
|||
Net charge-offs
|
|
(1,613
|
)
|
|
(18,837
|
)
|
|
(20,450
|
)
|
|||
Loan sales
(1)
|
|
—
|
|
|
(3,702
|
)
|
|
(3,702
|
)
|
|||
Ending Balance
|
|
$
|
4,556
|
|
|
$
|
87,310
|
|
|
$
|
91,866
|
|
Allowance:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
32,446
|
|
|
$
|
32,446
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
4,556
|
|
|
$
|
54,864
|
|
|
$
|
59,420
|
|
Loans:
|
|
|
|
|
|
|
||||||
Ending balance: individually evaluated for impairment
|
|
$
|
—
|
|
|
$
|
187,143
|
|
|
$
|
187,143
|
|
Ending balance: collectively evaluated for impairment
|
|
$
|
1,178,876
|
|
|
$
|
9,125,794
|
|
|
$
|
10,304,670
|
|
Net charge-offs as a percentage of average loans in repayment (annualized)
(2)
|
|
0.37
|
%
|
|
0.66
|
%
|
|
|
||||
Allowance as a percentage of the ending total loan balance
|
|
0.39
|
%
|
|
0.94
|
%
|
|
|
||||
Allowance as a percentage of the ending loans in repayment
(2)
|
|
0.54
|
%
|
|
1.54
|
%
|
|
|
||||
Allowance coverage of net charge-offs (annualized)
|
|
1.41
|
|
|
2.32
|
|
|
|
||||
Ending total loans, gross
|
|
$
|
1,178,876
|
|
|
$
|
9,312,937
|
|
|
|
||
Average loans in repayment
(2)
|
|
$
|
880,953
|
|
|
$
|
5,667,912
|
|
|
|
||
Ending loans in repayment
(2)
|
|
$
|
836,545
|
|
|
$
|
5,666,645
|
|
|
|
3.
|
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
|
)
|
|||
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)
(3)
|
|
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
(3)
|
|
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
(3)
|
|
$
|
994,290
|
|
|
$
|
4,354,878
|
|
|
|
||
Ending loans in repayment
(3)
|
|
$
|
947,972
|
|
|
$
|
4,425,573
|
|
|
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Allowance
|
||||||
|
|
|
|
|
|
|
||||||
June 30, 2015
|
|
|
|
|
|
|
||||||
TDR Loans
|
|
$
|
189,585
|
|
|
$
|
187,143
|
|
|
$
|
32,446
|
|
|
|
|
|
|
|
|
||||||
December 31, 2014
|
|
|
|
|
|
|
||||||
TDR Loans
|
|
$
|
60,278
|
|
|
$
|
59,402
|
|
|
$
|
9,815
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||||||
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
TDR Loans
|
|
$
|
155,763
|
|
|
$
|
3,206
|
|
|
$
|
2,267
|
|
|
$
|
31
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||||||
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
|
Average
Recorded
Investment
|
|
Interest
Income
Recognized
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
TDR Loans
|
|
$
|
121,690
|
|
|
$
|
5,116
|
|
|
$
|
1,295
|
|
|
$
|
31
|
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
June 30,
|
|
December 31,
|
||||||||||
|
|
2015
|
|
2014
|
||||||||||
|
|
Balance
|
|
%
|
|
Balance
|
|
%
|
||||||
TDR loans in in-school/grace/deferment
(1)
|
|
$
|
1,761
|
|
|
|
|
$
|
2,915
|
|
|
|
||
TDR loans in forbearance
(2)
|
|
56,008
|
|
|
|
|
18,620
|
|
|
|
||||
TDR loans in repayment and percentage of each status:
|
|
|
|
|
|
|
|
|
||||||
Loans current
|
|
116,609
|
|
|
90.1
|
%
|
|
34,554
|
|
|
91.2
|
%
|
||
Loans delinquent 31-60 days
(3)
|
|
7,561
|
|
|
5.8
|
|
|
1,953
|
|
|
5.2
|
|
||
Loans delinquent 61-90 days
(3)
|
|
4,092
|
|
|
3.2
|
|
|
983
|
|
|
2.6
|
|
||
Loans delinquent greater than 90 days
(3)
|
|
1,112
|
|
|
0.9
|
|
|
377
|
|
|
1.0
|
|
||
Total TDR loans in repayment
|
|
129,374
|
|
|
100.0
|
%
|
|
37,867
|
|
|
100.0
|
%
|
||
Total TDR loans, gross
|
|
$
|
187,143
|
|
|
|
|
$
|
59,402
|
|
|
|
(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.
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||||||||||||||
|
|
Modified Loans
(1)
|
|
Charge-offs
|
|
Payment-
Default
|
|
Modified Loans
(1)
|
|
Charge-offs
|
|
Payment-
Default
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TDR Loans
|
|
$
|
75,183
|
|
|
$
|
1,740
|
|
|
$
|
8,394
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
68
|
|
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||
|
|
June 30, 2015
|
|
June 30, 2014
|
||||||||||||||||||||
|
|
Modified Loans
(1)
|
|
Charge-offs
|
|
Payment-
Default
|
|
Modified Loans
(1)
|
|
Charge-offs
|
|
Payment-
Default
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TDR Loans
|
|
$
|
139,091
|
|
|
$
|
2,388
|
|
|
$
|
13,177
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
68
|
|
(1)
|
Represents the principal balance of loans that have been modified during the period and resulted in a TDR.
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Private Education Loans
|
||||||||||||
|
|
Credit Quality Indicators
|
||||||||||||
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||
Credit Quality Indicators:
|
|
Balance
(1)
|
|
% of Balance
|
|
Balance
(1)
|
|
% of Balance
|
||||||
|
|
|
|
|
|
|
|
|
||||||
Cosigners:
|
|
|
|
|
|
|
|
|
||||||
With cosigner
|
|
$
|
8,341,122
|
|
|
90
|
%
|
|
$
|
7,465,339
|
|
|
90
|
%
|
Without cosigner
|
|
971,815
|
|
|
10
|
|
|
846,037
|
|
|
10
|
|
||
Total
|
|
$
|
9,312,937
|
|
|
100
|
%
|
|
$
|
8,311,376
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||||
FICO at Origination:
|
|
|
|
|
|
|
|
|
||||||
Less than 670
|
|
$
|
614,918
|
|
|
6
|
%
|
|
$
|
558,801
|
|
|
7
|
%
|
670-699
|
|
1,371,546
|
|
|
15
|
|
|
1,227,860
|
|
|
15
|
|
||
700-749
|
|
2,970,077
|
|
|
32
|
|
|
2,626,238
|
|
|
32
|
|
||
Greater than or equal to 750
|
|
4,356,396
|
|
|
47
|
|
|
3,898,477
|
|
|
46
|
|
||
Total
|
|
$
|
9,312,937
|
|
|
100
|
%
|
|
$
|
8,311,376
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
||||||
Seasoning
(2)
:
|
|
|
|
|
|
|
|
|
||||||
1-12 payments
|
|
$
|
3,052,670
|
|
|
33
|
%
|
|
$
|
2,373,117
|
|
|
29
|
%
|
13-24 payments
|
|
1,545,880
|
|
|
17
|
|
|
1,532,042
|
|
|
18
|
|
||
25-36 payments
|
|
773,371
|
|
|
8
|
|
|
755,143
|
|
|
9
|
|
||
37-48 payments
|
|
380,153
|
|
|
4
|
|
|
411,493
|
|
|
5
|
|
||
More than 48 payments
|
|
256,692
|
|
|
3
|
|
|
212,438
|
|
|
3
|
|
||
Not yet in repayment
|
|
3,304,171
|
|
|
35
|
|
|
3,027,143
|
|
|
36
|
|
||
Total
|
|
$
|
9,312,937
|
|
|
100
|
%
|
|
$
|
8,311,376
|
|
|
100
|
%
|
(1)
|
Balance represents gross Private Education Loans.
|
(2)
|
Number of months in active repayment for which a scheduled payment was due.
|
3.
|
Allowance for Loan Losses (Continued)
|
|
|
|
Private Education Loans
|
|
||||||||||||
|
|
June 30,
|
|
December 31,
|
|
||||||||||
|
|
2015
|
|
2014
|
|
||||||||||
|
|
Balance
|
|
%
|
|
Balance
|
|
%
|
|
||||||
Loans in-school/grace/deferment
(1)
|
|
$
|
3,304,171
|
|
|
|
|
$
|
3,027,143
|
|
|
|
|
||
Loans in forbearance
(2)(3)
|
|
342,121
|
|
|
|
|
135,018
|
|
|
|
|
||||
Loans in repayment and percentage of each status:
|
|
|
|
|
|
|
|
|
|
||||||
Loans current
|
|
5,570,389
|
|
|
98.3
|
%
|
|
5,045,600
|
|
|
98.0
|
%
|
|
||
Loans delinquent 31-60 days
(4)
|
|
57,884
|
|
|
1.0
|
|
|
63,873
|
|
|
1.2
|
|
|
||
Loans delinquent 61-90 days
(4)
|
|
28,306
|
|
|
0.5
|
|
|
29,041
|
|
|
0.6
|
|
|
||
Loans delinquent greater than 90 days
(4)
|
|
10,066
|
|
|
0.2
|
|
|
10,701
|
|
|
0.2
|
|
|
||
Total loans in repayment
|
|
5,666,645
|
|
|
100.0
|
%
|
|
5,149,215
|
|
|
100.0
|
%
|
|
||
Total loans, gross
|
|
9,312,937
|
|
|
|
|
8,311,376
|
|
|
|
|
||||
Deferred origination costs
|
|
19,632
|
|
|
|
|
13,845
|
|
|
|
|
||||
Total loans
|
|
9,332,569
|
|
|
|
|
8,325,221
|
|
|
|
|
||||
Allowance for loan losses
|
|
(87,310
|
)
|
|
|
|
(78,574
|
)
|
|
|
|
||||
Total loans, net
|
|
$
|
9,245,259
|
|
|
|
|
$
|
8,246,647
|
|
|
|
|
||
Percentage of loans in repayment
|
|
|
|
60.8
|
%
|
|
|
|
62.0
|
%
|
|
||||
Delinquencies as a percentage of loans in repayment
|
|
|
|
1.7
|
%
|
|
|
|
2.0
|
%
|
|
||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
|
|
5.7
|
%
|
|
|
|
2.6
|
%
|
|
(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)
|
On June 1, 2015, the FDIC published FIL-23-2015, which encouraged lenders to provide aid to customers affected by the floods in Texas in the spring of 2015. A one-time,
two
month disaster forbearance was granted to all student loan customers resident in the impacted area. This doubled our forbearance rate in June. Substantially all of the borrowers were current at the time the forbearance was granted.
|
(4)
|
The period of delinquency is based on the number of days scheduled payments are contractually past due.
|
3.
|
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, 2015
|
|
$
|
539,283
|
|
|
$
|
362
|
|
|
$
|
2,156
|
|
December 31, 2014
|
|
$
|
445,710
|
|
|
$
|
443
|
|
|
$
|
3,517
|
|
|
|
June 30,
|
|
December 31,
|
|
||||
|
|
2015
|
|
2014
|
|
||||
Deposits - interest bearing
|
|
$
|
10,339,437
|
|
|
$
|
10,539,953
|
|
|
Deposits - non interest bearing
|
|
1,168
|
|
|
602
|
|
|
||
Total deposits
|
|
$
|
10,340,605
|
|
|
$
|
10,540,555
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
|
||||||||||
|
|
Amount
|
|
Qtr.-End Weighted Average Stated Rate
(1)
|
|
Amount
|
|
Year-End Weighted Average Stated Rate
(1)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Money market
|
|
$
|
4,470,832
|
|
|
1.15
|
%
|
|
$
|
4,527,448
|
|
|
1.15
|
%
|
|
Savings
|
|
687,236
|
|
|
0.82
|
|
|
703,687
|
|
|
0.81
|
|
|
||
Certificates of deposit
|
|
5,181,369
|
|
|
1.05
|
|
|
5,308,818
|
|
|
1.00
|
|
|
||
Deposits - interest bearing
|
|
$
|
10,339,437
|
|
|
|
|
$
|
10,539,953
|
|
|
|
|
|
7.
|
Derivative Financial Instruments (Continued)
|
|
|
|
|
Cash Flow Hedges
|
|
Fair Value Hedges
|
|
Trading
|
|
Total
|
||||||||||||||||||||||||
|
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
Fair Values
(1)
|
Hedged Risk Exposure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative Assets:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
Interest rate
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,076
|
|
|
$
|
5,012
|
|
|
$
|
1,113
|
|
|
$
|
226
|
|
|
$
|
15,189
|
|
|
$
|
5,238
|
|
Derivative Liabilities:
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
Interest rate
|
|
(18,974
|
)
|
|
(21,435
|
)
|
|
(734
|
)
|
|
(5,883
|
)
|
|
(2
|
)
|
|
(1,370
|
)
|
|
(19,710
|
)
|
|
(28,688
|
)
|
||||||||
Total net derivatives
|
|
|
$
|
(18,974
|
)
|
|
$
|
(21,435
|
)
|
|
$
|
13,342
|
|
|
$
|
(871
|
)
|
|
$
|
1,111
|
|
|
$
|
(1,144
|
)
|
|
$
|
(4,521
|
)
|
|
$
|
(23,450
|
)
|
(1)
|
Fair values reported are exclusive of collateral held and pledged and accrued interest. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements, and classified in other assets or other liabilities depending on whether in a net positive or negative position.
|
(2)
|
The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
|
|
|
Other Assets
|
|
Other Liabilities
|
||||||||||||
|
|
June 30,
|
|
December 31,
|
|
June 30,
|
|
December 31,
|
||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Gross position
|
|
$
|
15,189
|
|
|
$
|
5,238
|
|
|
$
|
(19,710
|
)
|
|
$
|
(28,688
|
)
|
Impact of master netting agreement
|
|
(5,959
|
)
|
|
(4,045
|
)
|
|
5,959
|
|
|
4,045
|
|
||||
Derivative values with impact of master netting agreements (as carried on balance sheet)
|
|
9,230
|
|
|
1,193
|
|
|
(13,751
|
)
|
|
(24,643
|
)
|
||||
Cash collateral (held) pledged
(1)
|
|
(5,796
|
)
|
|
(900
|
)
|
|
51,087
|
|
|
72,478
|
|
||||
Net position
|
|
$
|
3,434
|
|
|
$
|
293
|
|
|
$
|
37,336
|
|
|
$
|
47,835
|
|
(1)
|
Cash collateral amount calculations include outstanding accrued interest payable/receivable.
|
7.
|
Derivative Financial Instruments (Continued)
|
|
|
|
|
Cash Flow
|
|
Fair Value
|
|
Trading
|
|
Total
|
||||||||||||||||||||||||
|
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
|
June
30,
|
|
December
31,
|
||||||||||||||||
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||
Notional Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
|
|
$
|
1,110,612
|
|
|
$
|
1,106,920
|
|
|
$
|
2,957,443
|
|
|
$
|
3,044,492
|
|
|
$
|
1,008,917
|
|
|
$
|
973,539
|
|
|
$
|
5,076,972
|
|
|
$
|
5,124,951
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
||||||||
Hedge ineffectiveness gains (losses) recorded in earnings
(1)
|
|
$
|
489
|
|
|
$
|
(8,049
|
)
|
|
$
|
915
|
|
|
$
|
(8,172
|
)
|
Realized gains recorded in interest expense
|
|
7,490
|
|
|
4,573
|
|
|
14,982
|
|
|
10,246
|
|
||||
Total
|
|
$
|
7,979
|
|
|
$
|
(3,476
|
)
|
|
$
|
15,897
|
|
|
$
|
2,074
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
||||||||
Hedge ineffectiveness gains (losses) recorded in earnings
(1)
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
(270
|
)
|
|
$
|
—
|
|
Realized losses recorded in interest expense
|
|
(5,392
|
)
|
|
—
|
|
|
(10,746
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(5,358
|
)
|
|
$
|
—
|
|
|
$
|
(11,016
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
Trading
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
||||||||
Interest reclassification
|
|
$
|
970
|
|
|
$
|
(2,427
|
)
|
|
$
|
1,993
|
|
|
$
|
(1,967
|
)
|
Change in fair value of future interest payments recorded in earnings
|
|
109
|
|
|
1,018
|
|
|
2,256
|
|
|
(83
|
)
|
||||
Total
(1)
|
|
1,079
|
|
|
(1,409
|
)
|
|
4,249
|
|
|
(2,050
|
)
|
||||
Total
|
|
$
|
3,700
|
|
|
$
|
(4,885
|
)
|
|
$
|
9,130
|
|
|
$
|
24
|
|
(1)
|
Amounts included in "gains (losses) on derivatives and hedging activities, net" in the consolidated statements of income.
|
7.
|
Derivative Financial Instruments (Continued)
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Amount of loss recognized in other comprehensive income
|
|
$
|
12,764
|
|
|
$
|
—
|
|
|
$
|
(8,279
|
)
|
|
$
|
—
|
|
Less: amount of loss reclassified in interest expense
(1)
|
|
(5,392
|
)
|
|
—
|
|
|
(10,746
|
)
|
|
—
|
|
||||
Total change in other comprehensive income for unrealized losses on derivatives
|
|
$
|
18,156
|
|
|
$
|
—
|
|
|
$
|
2,467
|
|
|
$
|
—
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Shares and per share amounts in actuals)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Shares repurchased related to employee stock-based compensation plans
(1)(2)
|
|
1,374,997
|
|
|
358,771
|
|
|
2,764,093
|
|
|
358,771
|
|
||||
Average purchase price per share
|
|
$
|
10.14
|
|
|
$
|
8.62
|
|
|
$
|
9.80
|
|
|
$
|
8.62
|
|
Common shares issued
(3)
|
|
2,077,235
|
|
|
504,929
|
|
|
5,208,074
|
|
|
504,929
|
|
(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)
|
At the present time, we do not have a publicly announced repurchase plan or program.
|
(3)
|
Common shares issued under our various compensation and benefit plans.
|
8.
|
Stockholders' Equity (Continued)
|
|
|
|
Three
Months
Ended
|
|
Six
Months
Ended
|
||||
|
|
June 30,
|
|
June 30,
|
||||
|
|
2014
|
|
2014
|
||||
Capital contributions:
|
|
|
|
|
||||
Loan origination activities
|
|
$
|
7,184
|
|
|
$
|
32,452
|
|
Loan sales
|
|
—
|
|
|
45
|
|
||
Corporate overhead activities
|
|
3,461
|
|
|
21,216
|
|
||
Other
|
|
491,936
|
|
|
492,368
|
|
||
Total capital contributions
|
|
502,581
|
|
|
546,081
|
|
||
Corporate push-down
|
|
(761
|
)
|
|
4,977
|
|
||
Net change in income tax accounts
|
|
—
|
|
|
15,659
|
|
||
Net change in receivable/payable
|
|
(39,655
|
)
|
|
(87,277
|
)
|
||
Other
|
|
—
|
|
|
(31
|
)
|
||
Total net transfers from the entity that is now a subsidiary of Navient
|
|
$
|
462,165
|
|
|
$
|
479,409
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(In thousands, except per share data)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to SLM Corporation
|
|
$
|
91,016
|
|
|
$
|
44,128
|
|
|
$
|
138,715
|
|
|
$
|
91,576
|
|
Preferred stock dividends
|
|
4,870
|
|
|
3,228
|
|
|
9,693
|
|
|
3,228
|
|
||||
Net income attributable to SLM Corporation common stock
|
|
$
|
86,146
|
|
|
$
|
40,900
|
|
|
$
|
129,022
|
|
|
$
|
88,348
|
|
Denominator:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares used to compute basic EPS
|
|
425,688
|
|
|
422,805
|
|
|
425,061
|
|
|
424,751
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Dilutive effect of stock options, restricted stock and restricted stock units and Employee Stock Purchase Plan ("ESPP")
(1)(2)
|
|
7,054
|
|
|
7,945
|
|
|
7,462
|
|
|
7,938
|
|
||||
Weighted average shares used to compute diluted EPS
|
|
432,742
|
|
|
430,750
|
|
|
432,523
|
|
|
432,689
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
$
|
0.30
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
(1)
|
Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, 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, 2015 and 2014, securities covering approximately
2
million and
4
million shares, respectively, and for the six months ended June 30, 2015 and 2014, securities covering approximately
2
million and
3
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, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mortgage-backed securities
|
|
$
|
—
|
|
|
$
|
173,845
|
|
|
$
|
—
|
|
|
$
|
173,845
|
|
|
$
|
—
|
|
|
$
|
168,934
|
|
|
$
|
—
|
|
|
$
|
168,934
|
|
Derivative instruments
|
|
—
|
|
|
15,189
|
|
|
—
|
|
|
15,189
|
|
|
—
|
|
|
5,238
|
|
|
—
|
|
|
5,238
|
|
||||||||
Total
|
|
$
|
—
|
|
|
$
|
189,034
|
|
|
$
|
—
|
|
|
$
|
189,034
|
|
|
$
|
—
|
|
|
$
|
174,172
|
|
|
$
|
—
|
|
|
$
|
174,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
(19,710
|
)
|
|
$
|
—
|
|
|
$
|
(19,710
|
)
|
|
$
|
—
|
|
|
$
|
(28,688
|
)
|
|
$
|
—
|
|
|
$
|
(28,688
|
)
|
Total
|
|
$
|
—
|
|
|
$
|
(19,710
|
)
|
|
$
|
—
|
|
|
$
|
(19,710
|
)
|
|
$
|
—
|
|
|
$
|
(28,688
|
)
|
|
$
|
—
|
|
|
$
|
(28,688
|
)
|
10.
|
Fair Value Measurements (Continued)
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
|
Fair
Value
|
|
Carrying
Value
|
|
Difference
|
|
Fair
Value
|
|
Carrying
Value
|
|
Difference
|
||||||||||||
Earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for investment, net
|
|
$
|
11,435,475
|
|
|
$
|
10,422,908
|
|
|
$
|
1,012,567
|
|
|
$
|
10,228,399
|
|
|
$
|
9,509,786
|
|
|
$
|
718,613
|
|
Cash and cash equivalents
|
|
1,278,863
|
|
|
1,278,863
|
|
|
—
|
|
|
2,359,780
|
|
|
2,359,780
|
|
|
—
|
|
||||||
Available for sale investments
|
|
173,845
|
|
|
173,845
|
|
|
—
|
|
|
168,934
|
|
|
168,934
|
|
|
—
|
|
||||||
Accrued interest receivable
|
|
562,239
|
|
|
562,239
|
|
|
—
|
|
|
469,697
|
|
|
469,697
|
|
|
—
|
|
||||||
Tax indemnification receivable
|
|
228,910
|
|
|
228,910
|
|
|
—
|
|
|
240,311
|
|
|
240,311
|
|
|
—
|
|
||||||
Derivative instruments
|
|
15,189
|
|
|
15,189
|
|
|
—
|
|
|
5,238
|
|
|
5,238
|
|
|
—
|
|
||||||
Total earning assets
|
|
$
|
13,694,521
|
|
|
$
|
12,681,954
|
|
|
$
|
1,012,567
|
|
|
$
|
13,472,359
|
|
|
$
|
12,753,746
|
|
|
$
|
718,613
|
|
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money-market and savings accounts
|
|
$
|
5,159,236
|
|
|
$
|
5,159,236
|
|
|
$
|
—
|
|
|
$
|
5,231,736
|
|
|
$
|
5,231,736
|
|
|
$
|
—
|
|
Certificates of deposit
|
|
5,175,185
|
|
|
5,181,369
|
|
|
6,184
|
|
|
5,313,645
|
|
|
5,308,818
|
|
|
(4,827
|
)
|
||||||
Accrued interest payable
|
|
15,731
|
|
|
15,731
|
|
|
—
|
|
|
16,082
|
|
|
16,082
|
|
|
—
|
|
||||||
Derivative instruments
|
|
19,710
|
|
|
19,710
|
|
|
—
|
|
|
28,688
|
|
|
28,688
|
|
|
—
|
|
||||||
Total interest-bearing liabilities
|
|
$
|
10,369,862
|
|
|
$
|
10,376,046
|
|
|
$
|
6,184
|
|
|
$
|
10,590,151
|
|
|
$
|
10,585,324
|
|
|
$
|
(4,827
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Excess of net asset fair value over carrying value
|
|
|
|
|
|
$
|
1,018,751
|
|
|
|
|
|
|
$
|
713,786
|
|
12.
|
Regulatory Capital (Continued)
|
|
|
|
|
|
Well Capitalized Regulatory Requirements
|
|||||||||
|
|
Amount
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
As of June 30, 2015:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,587,562
|
|
12.5
|
%
|
|
$
|
634,691
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,587,562
|
|
15.2
|
%
|
|
$
|
838,239
|
|
>
|
8.0
|
%
|
Total Capital (to Risk-Weighted Assets)
|
|
$
|
1,679,428
|
|
16.0
|
%
|
|
$
|
1,047,799
|
|
>
|
10.0
|
%
|
Common Equity Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,587,562
|
|
15.2
|
%
|
|
$
|
681,069
|
|
>
|
6.5
|
%
|
As of December 31, 2014:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,413,988
|
|
11.5
|
%
|
|
$
|
614,709
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,413,988
|
|
15.0
|
%
|
|
$
|
565,148
|
|
>
|
6.0
|
%
|
Total Capital (to Risk-Weighted Assets)
|
|
$
|
1,497,830
|
|
15.9
|
%
|
|
$
|
941,913
|
|
>
|
10.0
|
%
|
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 and percentages)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to SLM Corporation common stock
|
|
$
|
86
|
|
|
$
|
41
|
|
|
$
|
129
|
|
|
$
|
88
|
|
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
Weighted average shares used to compute diluted earnings per share
|
|
433
|
|
|
431
|
|
|
433
|
|
|
433
|
|
||||
Return on assets
|
|
2.8
|
%
|
|
1.6
|
%
|
|
2.2
|
%
|
|
1.7
|
%
|
||||
Operating efficiency ratio
(1)
|
|
37.2
|
%
|
|
40.8
|
%
|
|
42.1
|
%
|
|
43.4
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other Operating Statistics
|
|
|
|
|
|
|
|
|
||||||||
Ending Private Education Loans, net
|
|
$
|
9,245
|
|
|
$
|
7,436
|
|
|
$
|
9,245
|
|
|
$
|
7,436
|
|
Ending FFELP Loans, net
|
|
1,178
|
|
|
1,358
|
|
|
1,178
|
|
|
1,358
|
|
||||
Ending total education loans, net
|
|
$
|
10,423
|
|
|
$
|
8,794
|
|
|
$
|
10,423
|
|
|
$
|
8,794
|
|
|
|
|
|
|
|
|
|
|
||||||||
Average education loans
|
|
$
|
10,556
|
|
|
$
|
8,736
|
|
|
$
|
10,622
|
|
|
$
|
8,780
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Our efficiency ratio is calculated as operating expense, excluding restructuring and other reorganization expenses, divided by net interest income after provision for loan losses and other income.
|
•
|
Complete the build-out of our Enterprise Risk Management (“ERM”) team under the Chief Risk Officer and conduct our initial internal stress testing exercises in preparation for our initial 2016 regulatory required stress testing and report. During the first six months of 2015, the ERM function has updated enterprise-wide governance framework; launched a risk self-assessment process for responsible managers; and recruited key positions to the ERM team. In the second half of 2015, we expect to fully implement each of these ongoing initiatives, as well as focus on enhancing governance of our financial models to support the submission of the Bank’s first stress testing submission to the FDIC in 2016.
|
•
|
Continue to invest in our Internal Audit function, which will provide the Bank with confidence in the strength of its overall control environment and ensure the sustainability of the strong risk culture. During the first six months of 2015, the Internal Audit function implemented several new automated systems, including electronic work papers, computer-assisted auditing tools and data analytics capabilities; added four additional professional staff; and significantly increased relevant certifications of its staff.
|
•
|
Continue to make significant changes and enhancements to our compliance management system and program and related consumer protection processes and procedures. Our redesigned SCRA processes and procedures have now received the approval of the DOJ. In 2014, we engaged a third-party firm to conduct independent audits of certain key consumer protection processes and procedures, including our compliance management system. To-date, we have received no high-risk findings. In 2015, the third-party firm will continue to conduct additional independent audits over the remainder of those processes and procedures.
|
•
|
In 2015, we will further enhance our internal controls over financial reporting through adoption of the COSO 2013 framework.
|
|
|
Three Months
Ended June 30,
|
|
Increase
(Decrease)
|
|
Six Months
Ended June 30,
|
|
Increase
(Decrease)
|
||||||||||||||||||||||
(In millions, except per share data)
|
|
2015
|
|
2014
|
|
$
|
|
%
|
|
2015
|
|
2014
|
|
$
|
|
%
|
||||||||||||||
Interest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans
|
|
$
|
195
|
|
|
$
|
162
|
|
|
$
|
33
|
|
|
20
|
%
|
|
$
|
393
|
|
|
$
|
322
|
|
|
$
|
71
|
|
|
22
|
%
|
Investments
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
3
|
|
|
2
|
|
|
67
|
|
||||||
Cash and cash equivalents
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Total interest income
|
|
198
|
|
|
165
|
|
|
33
|
|
|
20
|
|
|
400
|
|
|
327
|
|
|
73
|
|
|
22
|
|
||||||
Total interest expense
|
|
30
|
|
|
21
|
|
|
9
|
|
|
43
|
|
|
61
|
|
|
44
|
|
|
17
|
|
|
39
|
|
||||||
Net interest income
|
|
168
|
|
|
144
|
|
|
24
|
|
|
16
|
|
|
339
|
|
|
283
|
|
|
56
|
|
|
20
|
|
||||||
Less: provisions for loan losses
|
|
15
|
|
|
1
|
|
|
14
|
|
|
1,400
|
|
|
32
|
|
|
40
|
|
|
(8
|
)
|
|
(20
|
)
|
||||||
Net interest income after provisions for loan losses
|
|
153
|
|
|
143
|
|
|
10
|
|
|
7
|
|
|
307
|
|
|
243
|
|
|
64
|
|
|
26
|
|
||||||
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Gains on sales of loans, net
|
|
77
|
|
|
2
|
|
|
75
|
|
|
3,750
|
|
|
77
|
|
|
36
|
|
|
41
|
|
|
114
|
|
||||||
Gains (losses) on derivatives and hedging activities, net
|
|
2
|
|
|
(9
|
)
|
|
11
|
|
|
(122
|
)
|
|
5
|
|
|
(10
|
)
|
|
15
|
|
|
(150
|
)
|
||||||
Other income
|
|
10
|
|
|
15
|
|
|
(5
|
)
|
|
(33
|
)
|
|
19
|
|
|
23
|
|
|
(4
|
)
|
|
(17
|
)
|
||||||
Total noninterest income
|
|
89
|
|
|
8
|
|
|
81
|
|
|
1,013
|
|
|
101
|
|
|
49
|
|
|
52
|
|
|
106
|
|
||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating expenses
|
|
90
|
|
|
60
|
|
|
30
|
|
|
50
|
|
|
171
|
|
|
124
|
|
|
47
|
|
|
38
|
|
||||||
Acquired intangible asset amortization expense
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
(100
|
)
|
|
1
|
|
|
3
|
|
|
(2
|
)
|
|
(67
|
)
|
||||||
Restructuring and other reorganization expenses
|
|
1
|
|
|
14
|
|
|
(13
|
)
|
|
(93
|
)
|
|
5
|
|
|
14
|
|
|
(9
|
)
|
|
(64
|
)
|
||||||
Total expenses
|
|
91
|
|
|
75
|
|
|
16
|
|
|
21
|
|
|
177
|
|
|
141
|
|
|
36
|
|
|
26
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Income before income tax expense
|
|
151
|
|
|
76
|
|
|
75
|
|
|
99
|
|
|
231
|
|
|
151
|
|
|
80
|
|
|
53
|
|
||||||
Income tax expense
|
|
60
|
|
|
32
|
|
|
28
|
|
|
88
|
|
|
92
|
|
|
60
|
|
|
32
|
|
|
53
|
|
||||||
Net income
|
|
91
|
|
|
44
|
|
|
47
|
|
|
107
|
|
|
139
|
|
|
91
|
|
|
48
|
|
|
53
|
|
||||||
Preferred stock dividends
|
|
5
|
|
|
3
|
|
|
2
|
|
|
67
|
|
|
10
|
|
|
3
|
|
|
7
|
|
|
233
|
|
||||||
Net income attributable to SLM Corporation common stock
|
|
$
|
86
|
|
|
$
|
41
|
|
|
$
|
45
|
|
|
110
|
%
|
|
$
|
129
|
|
|
$
|
88
|
|
|
$
|
41
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
|
100
|
%
|
|
$
|
0.30
|
|
|
$
|
0.21
|
|
|
$
|
0.09
|
|
|
43
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Diluted earnings per common share attributable to SLM Corporation
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.11
|
|
|
122
|
%
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
50
|
%
|
•
|
Net interest income increased by $24 million in the quarter compared with the year-ago quarter primarily due to a $2 billion increase in average Private Education Loans outstanding and a 17 basis point increase in net interest margin. Net interest margin increased primarily as a result of an increase in the ratio of higher yielding Private Education Loans relative to our other interest earning assets, which more than offset a 23 basis point increase in our cost of funds. Cost of funds increased primarily as a result of additional costs associated with interest rate swaps hedging our fixed-rate loan portfolio that were not in place in second quarter 2014.
|
•
|
Provisions for loan losses increased $14 million compared with the year-ago quarter. This increase was primarily the result of a $14 million benefit recognized in second quarter 2014 from the 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, net, increased $75 million because we recorded a $77 million gain from the sale of $738 million of loans in second quarter 2015 compared with $2 million in the prior year quarter.
|
•
|
Gains (losses) on derivatives and hedging activities, net, resulted in a net gain of $2 million in the second quarter 2015 compared with a net loss of $9 million in the year-ago quarter. The primary factors affecting the change were interest rates and whether the derivatives qualified for hedge accounting treatment. In second quarter 2015, more derivatives used to economically hedge risk qualified for hedge accounting treatment than in the year-ago quarter.
|
•
|
Other income declined $5 million in second quarter 2015 compared with the prior year quarter because in second quarter 2014 we recorded $6 million related to the divestiture of our ownership interest in NGI Group Holdings LLC (“NGI”), an insurance brokerage joint venture, and an increase in the tax indemnity receivable from Navient. Excluding those two items, other income increased $1 million as a result of servicing revenue earned related to loans sold in the latter half of 2014 and the first half of 2015 for which we retained servicing rights.
|
•
|
Second-quarter 2015 operating expenses (including acquired intangible asset amortization expense) were $90 million compared with $61 million in the year-ago quarter. The increase in operating expenses is primarily due to the higher costs of establishing a stand-alone company and higher loan volume. Second quarter 2014 also benefited from an $8 million reduction in our litigation reserve.
|
•
|
Second-quarter 2015 restructuring and other reorganization expenses were $1 million compared with $14 million in the year-ago quarter. The decrease is the result of the wind-down of our separation efforts related to the Spin-Off.
|
•
|
Income tax expense increased $28 million compared with the year-ago quarter. The increase was largely attributable to the $738 million Private Education Loan sale completed in the quarter. The decline in the second quarter effective tax rate to 39.7 percent from 42.1 percent in the year-ago quarter was primarily the result of additional expense related to uncertain tax positions recorded in second quarter 2014.
|
•
|
Net interest income increased by $56 million in the first six months of 2015 compared with the year-ago period primarily due to a $2 billion increase in average Private Education Loans outstanding and a 14 basis point increase in net interest margin. Net interest margin increased primarily as a result of an increase in the ratio of higher yielding Private Education Loans relative to our other interest earning assets, which more than offset an 18 basis point increase
|
•
|
Provisions for loan losses decreased $8 million compared with the year-ago period. This decrease was primarily the result of a significant reduction in credit impaired loans sold from approximately $294 million in first half of 2014 to $15 million in first half 2015, the effect of our change in the loss emergence period from a two-year period to one year that occurred in second quarter 2014, as well as improved credit performance and collections on the underlying Private Education Loan and FFELP Loan portfolios. When credit impaired loans are sold for a loss, that loss is recorded as a charge-off. Offsetting the above benefits was an $20 million increase in loans classified as troubled debt restructurings for which we hold life-of-loan allowance. Prior period amounts also included the effect of the change in our charge-off policy.
|
•
|
Gains on sales of loans, net, increased $41 million, as there were fewer loan sales in the first six months of 2014.
|
•
|
Gains (losses) on derivatives and hedging activities, net, resulted in a net gain of $5 million in the first six months of 2015 compared with a net loss of $10 million in the year-ago period. The primary factors affecting the change were interest rates and whether the derivatives qualified for hedge accounting treatment. In the first half of 2015, more derivatives used to economically hedge risk qualified for hedge accounting treatment than in the year-ago period.
|
•
|
Other income declined $4 million in the first six months of 2015 compared with the year-ago period primarily because in second quarter 2014 we recorded $6 million related to the divestiture of NGI and an increase in the tax indemnity receivable from Navient.
|
•
|
First-half 2015 operating expenses (including acquired intangible asset amortization expense) were $172 million compared with $127 million in the year-ago period. The increase in operating expenses is primarily due to the higher costs of establishing a stand-alone company and higher loan volume.
|
•
|
First-half 2015 restructuring and other reorganization expenses were $5 million compared with $14 million in the year-ago period. The decrease is primarily the result of the wind-down of our separation efforts related to the Spin-Off.
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Hedge ineffectiveness gains (losses)
|
|
$
|
523
|
|
|
$
|
(8,049
|
)
|
|
$
|
645
|
|
|
$
|
(8,172
|
)
|
Unrealized gains (losses) on instruments not in a hedging relationship
|
|
109
|
|
|
1,018
|
|
|
2,256
|
|
|
(83
|
)
|
||||
Interest reclassification
|
|
970
|
|
|
(2,427
|
)
|
|
1,993
|
|
|
(1,967
|
)
|
||||
Gains (losses) on derivatives and hedging activities, net
|
|
$
|
1,602
|
|
|
$
|
(9,458
|
)
|
|
$
|
4,894
|
|
|
$
|
(10,222
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
(Dollars in thousands, except per share amounts)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
“
Core Earnings
”
adjustments to GAAP:
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income attributable to SLM Corporation
|
|
$
|
91,016
|
|
|
$
|
44,128
|
|
|
$
|
138,715
|
|
|
$
|
91,576
|
|
Preferred stock dividends
|
|
4,870
|
|
|
3,228
|
|
|
9,693
|
|
|
3,228
|
|
||||
GAAP net income attributable to SLM Corporation common stock
|
|
$
|
86,146
|
|
|
$
|
40,900
|
|
|
$
|
129,022
|
|
|
$
|
88,348
|
|
|
|
|
|
|
|
|
|
|
||||||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Net impact of derivative accounting
(1)
|
|
(632
|
)
|
|
7,031
|
|
|
(2,901
|
)
|
|
8,255
|
|
||||
Net tax effect
(2)
|
|
252
|
|
|
(2,708
|
)
|
|
1,157
|
|
|
(3,180
|
)
|
||||
Total “Core Earnings” adjustments to GAAP
|
|
(380
|
)
|
|
4,323
|
|
|
(1,744
|
)
|
|
5,075
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
“Core Earnings” attributable to SLM Corporation common stock
|
|
$
|
85,766
|
|
|
$
|
45,223
|
|
|
$
|
127,278
|
|
|
$
|
93,423
|
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP diluted earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
Derivative adjustments, net of tax
|
|
0.00
|
|
|
0.01
|
|
|
0.00
|
|
|
0.02
|
|
||||
“Core Earnings” diluted earnings per common share
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
$
|
0.29
|
|
|
$
|
0.22
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
|
Balance
|
|
Rate
|
||||||||||||
Average Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Private Education Loans
|
|
$
|
9,361,711
|
|
|
7.96
|
%
|
|
$
|
7,357,599
|
|
|
8.22
|
%
|
|
$
|
9,407,888
|
|
|
8.01
|
%
|
|
$
|
7,388,484
|
|
|
8.18
|
%
|
FFELP Loans
|
|
1,194,309
|
|
|
3.22
|
|
|
1,378,206
|
|
|
3.32
|
|
|
1,214,384
|
|
|
3.20
|
|
|
1,391,327
|
|
|
3.26
|
|
||||
Other investments
|
|
397,944
|
|
|
2.41
|
|
|
376,199
|
|
|
2.38
|
|
|
402,221
|
|
|
2.56
|
|
|
248,642
|
|
|
2.58
|
|
||||
Cash and other short-term investments
|
|
1,341,110
|
|
|
0.24
|
|
|
1,777,683
|
|
|
0.25
|
|
|
1,309,424
|
|
|
0.24
|
|
|
1,549,076
|
|
|
0.26
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total interest-earning assets
|
|
12,295,074
|
|
|
6.47
|
%
|
|
10,889,687
|
|
|
6.10
|
%
|
|
12,333,917
|
|
|
6.54
|
%
|
|
10,577,529
|
|
|
6.24
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest-earning assets
|
|
611,833
|
|
|
|
|
523,420
|
|
|
|
|
609,665
|
|
|
|
|
474,720
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total assets
|
|
$
|
12,906,907
|
|
|
|
|
$
|
11,413,107
|
|
|
|
|
$
|
12,943,582
|
|
|
|
|
$
|
11,052,249
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Average Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brokered deposits
|
|
$
|
6,556,724
|
|
|
1.21
|
%
|
|
$
|
5,321,361
|
|
|
0.95
|
%
|
|
$
|
6,620,323
|
|
|
1.20
|
%
|
|
$
|
5,544,470
|
|
|
1.03
|
%
|
Retail and other deposits
|
|
3,819,273
|
|
|
0.95
|
|
|
3,662,559
|
|
|
0.92
|
|
|
3,818,810
|
|
|
0.94
|
|
|
3,370,996
|
|
|
0.92
|
|
||||
Other interest-bearing liabilities
(1)
|
|
2,796
|
|
|
206.19
|
|
|
2,211
|
|
|
0.16
|
|
|
2,513
|
|
|
271.03
|
|
|
3,673
|
|
|
2.57
|
|
||||
Total interest-bearing liabilities
|
|
10,378,793
|
|
|
1.17
|
%
|
|
8,986,131
|
|
|
0.94
|
%
|
|
10,441,646
|
|
|
1.17
|
%
|
|
8,919,139
|
|
|
0.99
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-interest-bearing liabilities
|
|
595,816
|
|
|
|
|
783,500
|
|
|
|
|
613,676
|
|
|
|
|
720,289
|
|
|
|
||||||||
Equity
|
|
1,932,298
|
|
|
|
|
1,643,476
|
|
|
|
|
1,888,260
|
|
|
|
|
1,412,821
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total liabilities and equity
|
|
$
|
12,906,907
|
|
|
|
|
$
|
11,413,107
|
|
|
|
|
$
|
12,943,582
|
|
|
|
|
$
|
11,052,249
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest margin
|
|
|
|
5.49
|
%
|
|
|
|
5.32
|
%
|
|
|
|
5.55
|
%
|
|
|
|
5.41
|
%
|
(1)
|
Includes the amortization expense of transaction costs related to our asset-backed commercial paper education loan funding facility, of which nothing has been drawn as of June 30, 2015.
|
(Dollars in thousands)
|
|
Increase
(Decrease)
|
|
Change Due To
(1)
|
||||||||
|
Rate
|
|
Volume
|
|||||||||
Three Months Ended June 30, 2015 vs. 2014
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
32,901
|
|
|
$
|
10,637
|
|
|
$
|
22,253
|
|
Interest expense
|
|
9,183
|
|
|
5,484
|
|
|
3,576
|
|
|||
Net interest income
|
|
$
|
23,718
|
|
|
$
|
5,153
|
|
|
$
|
18,677
|
|
|
|
|
|
|
|
|
||||||
Six Months Ended June 30, 2015 vs. 2014
|
|
|
|
|
|
|
||||||
Interest income
|
|
$
|
72,388
|
|
|
$
|
16,019
|
|
|
$
|
56,361
|
|
Interest expense
|
|
16,954
|
|
|
8,719
|
|
|
8,131
|
|
|||
Net interest income
|
|
$
|
55,434
|
|
|
$
|
7,300
|
|
|
$
|
48,230
|
|
(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, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Total education loan portfolio:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
In-school
(1)
|
|
$
|
2,325,642
|
|
|
$
|
829
|
|
|
$
|
2,326,471
|
|
|
$
|
2,548,721
|
|
|
$
|
1,185
|
|
|
$
|
2,549,906
|
|
Grace, repayment and other
(2)
|
|
6,987,295
|
|
|
1,178,047
|
|
|
8,165,342
|
|
|
5,762,655
|
|
|
1,263,622
|
|
|
7,026,277
|
|
||||||
Total, gross
|
|
9,312,937
|
|
|
1,178,876
|
|
|
10,491,813
|
|
|
8,311,376
|
|
|
1,264,807
|
|
|
9,576,183
|
|
||||||
Deferred origination costs and unamortized premium
|
|
19,632
|
|
|
3,329
|
|
|
22,961
|
|
|
13,845
|
|
|
3,600
|
|
|
17,445
|
|
||||||
Allowance for loan losses
|
|
(87,310
|
)
|
|
(4,556
|
)
|
|
(91,866
|
)
|
|
(78,574
|
)
|
|
(5,268
|
)
|
|
(83,842
|
)
|
||||||
Total education loan portfolio
|
|
$
|
9,245,259
|
|
|
$
|
1,177,649
|
|
|
$
|
10,422,908
|
|
|
$
|
8,246,647
|
|
|
$
|
1,263,139
|
|
|
$
|
9,509,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
% of total
|
|
89
|
%
|
|
11
|
%
|
|
100
|
%
|
|
87
|
%
|
|
13
|
%
|
|
100
|
%
|
(Dollars in thousands)
|
|
Three Months Ended
June 30, 2015
|
|
Three Months Ended
June 30, 2014
|
|
Six Months Ended
June 30, 2015
|
|
Six Months Ended
June 30, 2014
|
||||||||||||||||||||
Private Education Loans
|
|
$
|
9,361,711
|
|
|
89
|
%
|
|
$
|
7,357,599
|
|
|
84
|
%
|
|
$
|
9,407,888
|
|
|
89
|
%
|
|
$
|
7,388,484
|
|
|
84
|
%
|
FFELP Loans
|
|
1,194,309
|
|
|
11
|
|
|
1,378,206
|
|
|
16
|
|
|
1,214,384
|
|
|
12
|
|
|
1,391,327
|
|
|
16
|
|
||||
Total portfolio
|
|
$
|
10,556,020
|
|
|
100
|
%
|
|
$
|
8,735,805
|
|
|
100
|
%
|
|
$
|
10,622,272
|
|
|
100
|
%
|
|
$
|
8,779,811
|
|
|
100
|
%
|
|
|
Three Months Ended June 30, 2015
|
|
Three Months Ended June 30, 2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
9,701,152
|
|
|
$
|
1,207,862
|
|
|
$
|
10,909,014
|
|
|
$
|
7,208,356
|
|
|
$
|
1,394,563
|
|
|
$
|
8,602,919
|
|
Acquisitions and originations
|
|
407,224
|
|
|
—
|
|
|
407,224
|
|
|
396,941
|
|
|
—
|
|
|
396,941
|
|
||||||
Capitalized interest and deferred origination cost premium amortization
|
|
37,060
|
|
|
10,335
|
|
|
47,395
|
|
|
25,440
|
|
|
10,393
|
|
|
35,833
|
|
||||||
Sales
|
|
(702,221
|
)
|
|
—
|
|
|
(702,221
|
)
|
|
(74,952
|
)
|
|
(59
|
)
|
|
(75,011
|
)
|
||||||
Loan consolidation to third parties
|
|
(6,955
|
)
|
|
(11,323
|
)
|
|
(18,278
|
)
|
|
(2,927
|
)
|
|
(10,116
|
)
|
|
(13,043
|
)
|
||||||
Repayments and other
|
|
(191,001
|
)
|
|
(29,225
|
)
|
|
(220,226
|
)
|
|
(116,633
|
)
|
|
(37,035
|
)
|
|
(153,668
|
)
|
||||||
Ending balance
|
|
$
|
9,245,259
|
|
|
$
|
1,177,649
|
|
|
$
|
10,422,908
|
|
|
$
|
7,436,225
|
|
|
$
|
1,357,746
|
|
|
$
|
8,793,971
|
|
|
|
Six Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
8,246,647
|
|
|
$
|
1,263,139
|
|
|
$
|
9,509,786
|
|
|
$
|
6,506,642
|
|
|
$
|
1,424,735
|
|
|
$
|
7,931,377
|
|
Acquisitions and originations
|
|
2,070,373
|
|
|
—
|
|
|
2,070,373
|
|
|
1,913,926
|
|
|
7,470
|
|
|
1,921,396
|
|
||||||
Capitalized interest and deferred origination cost premium amortization
|
|
75,787
|
|
|
21,122
|
|
|
96,909
|
|
|
53,197
|
|
|
25,463
|
|
|
78,660
|
|
||||||
Sales
|
|
(708,607
|
)
|
|
—
|
|
|
(708,607
|
)
|
|
(713,046
|
)
|
|
(7,654
|
)
|
|
(720,700
|
)
|
||||||
Loan consolidation to third parties
|
|
(11,488
|
)
|
|
(21,804
|
)
|
|
(33,292
|
)
|
|
(9,520
|
)
|
|
(18,088
|
)
|
|
(27,608
|
)
|
||||||
Repayments and other
|
|
(427,453
|
)
|
|
(84,808
|
)
|
|
(512,261
|
)
|
|
(314,974
|
)
|
|
(74,180
|
)
|
|
(389,154
|
)
|
||||||
Ending balance
|
|
$
|
9,245,259
|
|
|
$
|
1,177,649
|
|
|
$
|
10,422,908
|
|
|
$
|
7,436,225
|
|
|
$
|
1,357,746
|
|
|
$
|
8,793,971
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||||||||||||||
(Dollars in thousands)
|
|
2015
|
|
%
|
|
2014
|
|
%
|
|
2015
|
|
%
|
|
2014
|
|
%
|
||||||||||||
Smart Option - interest only
(1)
|
|
$
|
89,404
|
|
|
23
|
%
|
|
$
|
87,389
|
|
|
23
|
%
|
|
$
|
507,126
|
|
|
25
|
%
|
|
$
|
459,498
|
|
|
24
|
%
|
Smart Option - fixed pay
(1)
|
|
111,574
|
|
|
29
|
|
|
107,990
|
|
|
29
|
|
|
619,237
|
|
|
30
|
|
|
586,380
|
|
|
31
|
|
||||
Smart Option - deferred
(1)
|
|
182,372
|
|
|
48
|
|
|
181,765
|
|
|
48
|
|
|
919,285
|
|
|
45
|
|
|
854,970
|
|
|
45
|
|
||||
Smart Option - principal and interest
|
|
362
|
|
|
—
|
|
|
218
|
|
|
—
|
|
|
934
|
|
|
—
|
|
|
938
|
|
|
—
|
|
||||
Total Private Education Loan originations
|
|
$
|
383,712
|
|
|
100
|
%
|
|
$
|
377,362
|
|
|
100
|
%
|
|
$
|
2,046,582
|
|
|
100
|
%
|
|
$
|
1,901,786
|
|
|
100
|
%
|
|
|
Three Months Ended June 30,
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
85,236
|
|
|
$
|
4,569
|
|
|
$
|
89,805
|
|
|
$
|
71,453
|
|
|
$
|
6,181
|
|
|
$
|
77,634
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charge-offs
|
|
(13,278
|
)
|
|
(479
|
)
|
|
(13,757
|
)
|
|
—
|
|
|
(654
|
)
|
|
(654
|
)
|
||||||
Loan sales
|
|
(1,520
|
)
|
|
—
|
|
|
(1,520
|
)
|
|
(17,467
|
)
|
|
—
|
|
|
(17,467
|
)
|
||||||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recoveries
|
|
1,780
|
|
|
—
|
|
|
1,780
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Provision for loan losses
|
|
15,092
|
|
|
466
|
|
|
15,558
|
|
|
329
|
|
|
685
|
|
|
1,014
|
|
||||||
Ending balance
|
|
$
|
87,310
|
|
|
$
|
4,556
|
|
|
$
|
91,866
|
|
|
$
|
54,315
|
|
|
$
|
6,212
|
|
|
$
|
60,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Troubled debt restructuring
(1)
|
|
$
|
189,585
|
|
|
$
|
—
|
|
|
$
|
189,585
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
4,508
|
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
||||||||||||||||||||
(Dollars in thousands)
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
|
Private
Education
Loans
|
|
FFELP
Loans
|
|
Total
Portfolio
|
||||||||||||
Beginning balance
|
|
$
|
78,574
|
|
|
$
|
5,268
|
|
|
$
|
83,842
|
|
|
$
|
61,763
|
|
|
$
|
6,318
|
|
|
$
|
68,081
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Charge-offs
|
|
(22,005
|
)
|
|
(1,613
|
)
|
|
(23,618
|
)
|
|
—
|
|
|
(1,297
|
)
|
|
(1,297
|
)
|
||||||
Loan sales
|
|
(3,702
|
)
|
|
—
|
|
|
(3,702
|
)
|
|
(46,430
|
)
|
|
—
|
|
|
(46,430
|
)
|
||||||
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Recoveries
|
|
3,168
|
|
|
—
|
|
|
3,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Provision for loan losses
|
|
31,275
|
|
|
901
|
|
|
32,176
|
|
|
38,982
|
|
|
1,191
|
|
|
40,173
|
|
||||||
Ending balance
|
|
$
|
87,310
|
|
|
$
|
4,556
|
|
|
$
|
91,866
|
|
|
$
|
54,315
|
|
|
$
|
6,212
|
|
|
$
|
60,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Troubled debt restructuring
(1)
|
|
$
|
189,585
|
|
|
$
|
—
|
|
|
$
|
189,585
|
|
|
$
|
4,508
|
|
|
$
|
—
|
|
|
$
|
4,508
|
|
(1)
|
Represents the recorded investment of loans classified as troubled debt restructuring.
|
|
|
Private Education Loans
|
||||||||||||
|
|
June 30,
|
||||||||||||
|
|
2015
|
|
2014
|
||||||||||
(Dollars in thousands)
|
|
Balance
|
|
%
|
|
Balance
|
|
%
|
||||||
Loans in-school/grace/deferment
(1)
|
|
$
|
3,304,171
|
|
|
|
|
$
|
3,017,257
|
|
|
|
||
Loans in forbearance
(2)(3)
|
|
342,121
|
|
|
|
|
39,964
|
|
|
|
||||
Loans in repayment and percentage of each status:
|
|
|
|
|
|
|
|
|
||||||
Loans current
|
|
5,570,389
|
|
|
98.3
|
%
|
|
4,396,772
|
|
|
99.3
|
%
|
||
Loans delinquent 31-60 days
(4)
|
|
57,884
|
|
|
1.0
|
|
|
21,381
|
|
|
0.5
|
|
||
Loans delinquent 61-90 days
(4)
|
|
28,306
|
|
|
0.5
|
|
|
5,987
|
|
|
0.1
|
|
||
Loans delinquent greater than 90 days
(4)
|
|
10,066
|
|
|
0.2
|
|
|
1,433
|
|
|
0.1
|
|
||
Total loans in repayment
|
|
5,666,645
|
|
|
100.0
|
%
|
|
4,425,573
|
|
|
100.0
|
%
|
||
Total loans, gross
|
|
9,312,937
|
|
|
|
|
7,482,794
|
|
|
|
||||
Deferred origination costs
|
|
19,632
|
|
|
|
|
7,746
|
|
|
|
||||
Total loans
|
|
9,332,569
|
|
|
|
|
7,490,540
|
|
|
|
||||
Allowance for loan losses
|
|
(87,310
|
)
|
|
|
|
(54,315
|
)
|
|
|
||||
Total Private Education Loans, net
|
|
$
|
9,245,259
|
|
|
|
|
$
|
7,436,225
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||||||
Percentage of loans in repayment
|
|
|
|
60.8
|
%
|
|
|
|
59.1
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||
Delinquencies as a percentage of loans in repayment
|
|
|
|
1.7
|
%
|
|
|
|
0.7
|
%
|
||||
|
|
|
|
|
|
|
|
|
||||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
|
|
5.7
|
%
|
|
|
|
0.9
|
%
|
(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)
|
On June 1, 2015, the FDIC published FIL-23-2015, which encouraged lenders to provide aid to customers affected by the floods in Texas in the spring of 2015. A one-time,
two
month disaster forbearance was granted to all student loan customers resident in the impacted area. This doubled our forbearance rate in June. Substantially all of the borrowers were current at the time the forbearance was granted.
|
(4)
|
The period of delinquency is based on the number of days scheduled payments are contractually past due.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Allowance at beginning of period
|
|
$
|
85,236
|
|
|
$
|
71,453
|
|
|
$
|
78,574
|
|
|
$
|
61,763
|
|
Provision for Private Education Loan losses
|
|
15,092
|
|
|
329
|
|
|
31,275
|
|
|
38,982
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Charge-offs
(1)
|
|
(13,278
|
)
|
|
—
|
|
|
(22,005
|
)
|
|
—
|
|
||||
Recoveries
|
|
1,780
|
|
|
—
|
|
|
3,168
|
|
|
—
|
|
||||
Net charge-offs
|
|
(11,498
|
)
|
|
—
|
|
|
(18,837
|
)
|
|
—
|
|
||||
Loan sales
(2)
|
|
(1,520
|
)
|
|
(17,467
|
)
|
|
(3,702
|
)
|
|
(46,430
|
)
|
||||
Allowance at end of period
|
|
$
|
87,310
|
|
|
$
|
54,315
|
|
|
$
|
87,310
|
|
|
$
|
54,315
|
|
|
|
|
|
|
|
|
|
|
||||||||
Allowance as a percentage of ending total loans
|
|
0.94
|
%
|
|
0.73
|
%
|
|
0.94
|
%
|
|
0.73
|
%
|
||||
Allowance as a percentage of ending loans in repayment
|
|
1.54
|
%
|
|
1.23
|
%
|
|
1.54
|
%
|
|
1.23
|
%
|
||||
Net charge-offs as a percentage of average loans in repayment (annualized)
|
|
0.81
|
%
|
|
—
|
%
|
|
0.66
|
%
|
|
—
|
%
|
||||
Delinquencies as a percentage of loans in repayment
|
|
1.70
|
%
|
|
0.65
|
%
|
|
1.70
|
%
|
|
0.65
|
%
|
||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
5.69
|
%
|
|
0.90
|
%
|
|
5.69
|
%
|
|
0.90
|
%
|
||||
Percentage of loans with a cosigner
|
|
89.6
|
%
|
|
89.7
|
%
|
|
89.6
|
%
|
|
89.7
|
%
|
||||
Average FICO at origination
|
|
747
|
|
|
745
|
|
|
747
|
|
|
745
|
|
||||
Ending total loans
(3)
|
|
$
|
9,312,937
|
|
|
$
|
7,482,794
|
|
|
$
|
9,312,937
|
|
|
$
|
7,482,794
|
|
Average loans in repayment
|
|
$
|
5,712,559
|
|
|
$
|
4,322,356
|
|
|
$
|
5,667,912
|
|
|
$
|
4,354,878
|
|
Ending loans in repayment
|
|
$
|
5,666,645
|
|
|
$
|
4,425,573
|
|
|
$
|
5,666,645
|
|
|
$
|
4,425,573
|
|
(1)
|
Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient, prior to being charged off. Therefore, many of our historical credit indicators and period-over-period trends are not indicative of future performance. Because we now retain more delinquent loans, we believe it could take up to two years from the date of the Spin-Off before our credit performance indicators provide meaningful period-over-period comparisons.
|
(2)
|
Represents fair value write-downs on loans sold.
|
(3)
|
Ending total loans represents gross Private Education Loans.
|
(Dollars in millions)
June 30, 2015
|
|
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
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,304
|
|
|
$
|
3,304
|
|
Loans in forbearance
|
|
221
|
|
|
58
|
|
|
34
|
|
|
19
|
|
|
10
|
|
|
—
|
|
|
342
|
|
|||||||
Loans in repayment - current
|
|
2,778
|
|
|
1,470
|
|
|
728
|
|
|
355
|
|
|
241
|
|
|
—
|
|
|
5,572
|
|
|||||||
Loans in repayment - delinquent 31-60 days
|
|
32
|
|
|
12
|
|
|
6
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
58
|
|
|||||||
Loans in repayment - delinquent 61-90 days
|
|
17
|
|
|
4
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|
—
|
|
|
28
|
|
|||||||
Loans in repayment - delinquent greater than 90 days
|
|
7
|
|
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||||
Total
|
|
$
|
3,055
|
|
|
$
|
1,545
|
|
|
$
|
772
|
|
|
$
|
380
|
|
|
$
|
257
|
|
|
$
|
3,304
|
|
|
9,313
|
|
|
Deferred origination costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|||||||||||||
Allowance for loan losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(87
|
)
|
|||||||||||||
Total Private Education Loans, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,245
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance
|
|
7.23
|
%
|
|
3.75
|
%
|
|
4.40
|
%
|
|
5.00
|
%
|
|
3.89
|
%
|
|
—
|
%
|
|
5.69
|
%
|
(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
|
|
0.97
|
%
|
|
0.75
|
%
|
|
0.97
|
%
|
|
0.78
|
%
|
|
—
|
%
|
|
—
|
%
|
|
0.90
|
%
|
(Dollars in thousands
|
|
Signature and
Other
|
|
Smart Option
|
|
Career
Training
|
|
Total
|
||||||||
$ in repayment
|
|
$
|
144,096
|
|
|
$
|
5,507,415
|
|
|
$
|
15,134
|
|
|
$
|
5,666,645
|
|
$ in total
|
|
$
|
299,101
|
|
|
$
|
8,997,976
|
|
|
$
|
15,860
|
|
|
$
|
9,312,937
|
|
|
|
Accrued Interest Receivable
|
||||||||||
(Dollars in thousands)
|
|
Total Interest Receivable
|
|
Greater Than
90 Days
Past Due
|
|
Allowance for
Uncollectible
Interest
|
||||||
June 30, 2015
|
|
$
|
539,283
|
|
|
$
|
362
|
|
|
$
|
2,156
|
|
December 31, 2014
|
|
$
|
445,710
|
|
|
$
|
443
|
|
|
$
|
3,517
|
|
June 30, 2014
|
|
$
|
434,847
|
|
|
$
|
69
|
|
|
$
|
3,633
|
|
(Dollars in thousands)
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
Sources of primary liquidity:
|
|
|
|
|
||||
Unrestricted cash and liquid investments:
|
|
|
|
|
||||
Holding Company and other non-bank subsidiaries
|
|
$
|
17,548
|
|
|
$
|
7,677
|
|
Sallie Mae Bank
(1)
|
|
1,261,315
|
|
|
2,352,103
|
|
||
Available-for-sale investments
|
|
173,845
|
|
|
168,934
|
|
||
Total unrestricted cash and liquid investments
|
|
$
|
1,452,708
|
|
|
$
|
2,528,714
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
||||||||||||
(Dollars in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Sources of primary liquidity:
|
|
|
|
|
|
|
|
|
||||||||
Unrestricted cash and liquid investments:
|
|
|
|
|
|
|
|
|
||||||||
Holding Company and other non-bank subsidiaries
|
|
$
|
16,780
|
|
|
$
|
50,467
|
|
|
$
|
15,480
|
|
|
$
|
4,858
|
|
Sallie Mae Bank
(1)
|
|
1,264,466
|
|
|
1,705,493
|
|
|
1,250,666
|
|
|
1,542,794
|
|
||||
Available-for-sale investments
|
|
170,346
|
|
|
138,251
|
|
|
170,008
|
|
|
125,752
|
|
||||
Total unrestricted cash and liquid investments
|
|
$
|
1,451,592
|
|
|
$
|
1,894,211
|
|
|
$
|
1,436,154
|
|
|
$
|
1,673,404
|
|
|
|
June 30,
|
|
December 31,
|
|
||||
(Dollars in thousands)
|
|
2015
|
|
2014
|
|
||||
Deposits - interest bearing
|
|
$
|
10,339,437
|
|
|
$
|
10,539,953
|
|
|
Deposits - non interest bearing
|
|
1,168
|
|
|
602
|
|
|
||
Total deposits
|
|
$
|
10,340,605
|
|
|
$
|
10,540,555
|
|
|
|
|
June 30, 2015
|
|
December 31, 2014
|
|
||||||||||
(Dollars in thousands)
|
|
Amount
|
|
Qtr.-End Weighted Average Stated Rate
(1)
|
|
Amount
|
|
Year-End Weighted Average Stated Rate
(1)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Money market
|
|
$
|
4,470,832
|
|
|
1.15
|
%
|
|
$
|
4,527,448
|
|
|
1.15
|
%
|
|
Savings
|
|
687,236
|
|
|
0.82
|
|
|
703,687
|
|
|
0.81
|
|
|
||
Certificates of deposit
|
|
5,181,369
|
|
|
1.05
|
|
|
5,308,818
|
|
|
1.00
|
|
|
||
Deposits - interest bearing
|
|
$
|
10,339,437
|
|
|
|
|
$
|
10,539,953
|
|
|
|
|
|
(Dollars in thousands)
|
|
SLM Corporation
and Sallie Mae Bank
Contracts
|
||
Exposure, net of collateral
|
|
$
|
53,086
|
|
Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3
|
|
47.67
|
%
|
|
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s Baa
|
|
—
|
%
|
|
|
|
|
Well Capitalized Regulatory Requirements
|
|||||||||
(Dollars in thousands)
|
|
Amount
|
Ratio
|
|
Amount
|
|
Ratio
|
||||||
As of June 30, 2015:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,587,562
|
|
12.5
|
%
|
|
$
|
634,691
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,587,562
|
|
15.2
|
%
|
|
$
|
838,239
|
|
>
|
8.0
|
%
|
Total Capital (to Risk-Weighted Assets)
|
|
$
|
1,679,428
|
|
16.0
|
%
|
|
$
|
1,047,799
|
|
>
|
10.0
|
%
|
Common Equity Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,587,562
|
|
15.2
|
%
|
|
$
|
681,069
|
|
>
|
6.5
|
%
|
As of December 31, 2014:
|
|
|
|
|
|
|
|
||||||
Tier I Capital (to Average Assets)
|
|
$
|
1,413,988
|
|
11.5
|
%
|
|
$
|
614,709
|
|
>
|
5.0
|
%
|
Tier I Capital (to Risk-Weighted Assets)
|
|
$
|
1,413,988
|
|
15.0
|
%
|
|
$
|
565,148
|
|
>
|
6.0
|
%
|
Total Capital (to Risk-Weighted Assets)
|
|
$
|
1,497,830
|
|
15.9
|
%
|
|
$
|
941,913
|
|
>
|
10.0
|
%
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk
|
•
|
Earnings at Risk (“EAR”), which measures the impact of hypothetical changes in interest rates on net interest income; and
|
•
|
Economic Value of Equity (“EVE”), which measures the sensitivity or change in the economic value of equity to changes in interest rates.
|
|
June 30,
|
||||||
|
2015
|
|
2014
|
||||
|
+300 Basis
Points
|
|
+100 Basis
Points
|
|
+300 Basis
Points
|
|
+100 Basis
Points
|
|
|
|
|
|
|
|
|
EAR - Shock
|
+6.9%
|
|
+2.2%
|
|
+13.1%
|
|
+4.2%
|
EAR - Ramp
|
+5.7%
|
|
+1.8%
|
|
+8.2%
|
|
+2.4%
|
EVE
|
-5.7%
|
|
-2.5%
|
|
+2.7%
|
|
+0.6%
|
(Dollars in billions)
Index
|
|
Frequency of
Variable
Resets
|
|
Assets
|
|
Funding
(1)
|
|
Funding
Gap
|
||||||
3-month Treasury bill
|
|
weekly
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
3-month LIBOR
|
|
quarterly
|
|
—
|
|
|
0.4
|
|
|
(0.4
|
)
|
|||
1-month LIBOR
|
|
monthly
|
|
7.6
|
|
|
4.4
|
|
|
3.2
|
|
|||
1-month LIBOR
|
|
daily
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|||
Non-Discrete reset
(2)
|
|
daily/weekly
|
|
1.3
|
|
|
2.6
|
|
|
(1.3
|
)
|
|||
Fixed Rate
(3)
|
|
|
|
2.8
|
|
|
5.5
|
|
|
(2.7
|
)
|
|||
Total
|
|
|
|
$
|
12.9
|
|
|
$
|
12.9
|
|
|
$
|
—
|
|
(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, liquid MMDA's swapped to fixed rates and stockholders' equity.
|
|
Weighted
|
|
|
Average
|
|
(Averages in Years)
|
Life
|
|
Earning assets
|
|
|
Education loans
|
6.23
|
|
Cash and investments
|
0.77
|
|
Total earning assets
|
5.55
|
|
|
|
|
Deposits
|
|
|
Short-term deposits
|
0.05
|
|
Long-term deposits
|
2.77
|
|
Total deposits
|
0.97
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
(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, 2015
|
1,073
|
|
|
$
|
10.08
|
|
|
—
|
|
|
—
|
|
May 1 - May 31, 2015
|
260
|
|
|
$
|
10.39
|
|
|
—
|
|
|
—
|
|
June 1 - June 30, 2015
|
42
|
|
|
$
|
10.18
|
|
|
—
|
|
|
—
|
|
Total second-quarter 2015
|
1,375
|
|
|
$
|
10.14
|
|
|
—
|
|
|
|
(1)
|
All shares purchased are the shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding obligations in connection with exercises 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
|
Item 6.
|
Exhibits
|
|
|
3.1
|
Amended and Restated By-Laws of the Company, effective June 25, 2015.
|
|
|
10.1
|
Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement — 2015.†
|
|
|
10.2
|
Amendment to the Sallie Mae Supplemental 401(K) Savings Plan, effective June 25, 2015.†
|
|
|
10.3
|
Amendment to the SLM Corporation Deferred Compensation Plan for Directors, effective June 25, 2015.†
|
|
|
10.4
|
Amendment to the SLM Corporation Deferred Compensation Plan for Key Employees, effective June 25, 2015.†
|
|
|
10.5
|
Amendment to the SLM Corporation Change in Control Severance Plan for Senior Officers, effective June 25, 2015.†
|
|
|
10.6
|
Amendment to the SLM Corporation Executive Severance Plan for Senior Officers, effective June 25, 2015.†
|
|
|
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)
|
|
|
|
Years Ended December 31,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||
'
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2014
|
|
2015
|
||||||||||||||
Income (loss) before income tax expense (benefit)
|
|
$
|
(122,669
|
)
|
|
$
|
87,848
|
|
|
$
|
341,871
|
|
|
$
|
416,528
|
|
|
$
|
333,752
|
|
|
$
|
151,741
|
|
|
$
|
230,595
|
|
Add: Fixed charges
|
|
146,256
|
|
|
107,896
|
|
|
84,708
|
|
|
91,182
|
|
|
98,404
|
|
|
44,053
|
|
|
62,356
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total earnings
|
|
$
|
23,587
|
|
|
$
|
195,744
|
|
|
$
|
426,579
|
|
|
$
|
507,710
|
|
|
$
|
432,156
|
|
|
$
|
195,794
|
|
|
$
|
292,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Interest expense
|
|
$
|
143,927
|
|
|
$
|
105,385
|
|
|
$
|
82,911
|
|
|
$
|
89,085
|
|
|
$
|
95,815
|
|
|
$
|
43,665
|
|
|
$
|
60,619
|
|
Rental expense, net of income
|
|
2,329
|
|
|
2,511
|
|
|
1,797
|
|
|
2,097
|
|
|
2,589
|
|
|
388
|
|
|
1,737
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total fixed charges
|
|
146,256
|
|
|
107,896
|
|
|
$
|
84,708
|
|
|
91,182
|
|
|
98,404
|
|
|
44,053
|
|
|
62,356
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Preferred stock dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,933
|
|
|
3,228
|
|
|
9,693
|
|
|||||||
Total fixed charges and preferred stock dividends
|
|
$
|
146,256
|
|
|
$
|
107,896
|
|
|
$
|
84,708
|
|
|
$
|
91,182
|
|
|
$
|
111,337
|
|
|
$
|
47,281
|
|
|
$
|
72,049
|
|
Ratio of earnings to fixed charges
(1) (2)
|
|
—
|
|
|
1.81
|
|
|
5.04
|
|
|
5.57
|
|
|
4.39
|
|
|
4.44
|
|
|
4.70
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ratio of earnings to fixed charges and preferred stock dividends
(1) (2)
|
|
—
|
|
|
1.81
|
|
|
5.04
|
|
|
5.57
|
|
|
3.88
|
|
|
4.14
|
|
|
4.07
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $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 22, 2015
|
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 22, 2015
|
(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 22, 2015
|
(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 22, 2015
|