Fourth-Quarter GAAP Net Income Attributable
to Common Stock of $44 Million ($0.10 Per Diluted Share); Full-Year
GAAP Net Income Attributable to Common Stock of $273 Million ($0.62
Per Diluted Share)
Fourth-Quarter Core Earnings Attributable to
Common Stock, Excluding the Impact of the Tax Act, of $83 Million
($0.19 Per Diluted Share, an Increase of 22 Percent Compared to
Year-Ago Period); Full-Year Core Earnings Attributable to Common
Stock, Excluding the Impact of the Tax Act, of $317 Million ($0.72
Per Diluted Share, an Increase of 35 Percent Compared to Year-Ago
Period)
Private Education Loan Portfolio Grows to
$17.2 Billion, Up 22 Percent From Dec. 31, 2016
Sallie Mae (Nasdaq: SLM), formally SLM Corporation, today
released fourth-quarter and full-year 2017 financial results
reflecting GAAP net income attributable to the company’s common
stock of $44 million and $273 million, respectively. After
adjusting for the effects of the Tax Cuts and Jobs Act of 2017 (the
“Tax Act”), the financial results included core earnings
attributable to the company’s common stock of $83 million and $317
million for the fourth-quarter and full-year 2017, respectively,
reflecting core earnings per diluted share increases of 22 percent
and 35 percent, respectively, compared to the year-ago periods.
Absent the effect of the Tax Act, core earnings growth was driven
by a 22-percent increase in the private education loan portfolio,
an improved net interest margin, and operating efficiency
improvements. The Tax Act was signed into law on Dec. 22, 2017.
“We are pleased 2017 was another solid year as evidenced by
customer experience innovations, continued improvements in our net
interest margin, sound credit trends, increased operating
efficiency, and an expanding market share, which all contributed to
our strong earnings growth,” said Raymond J. Quinlan, chairman and
CEO. “Recent tax legislation will increase our earnings,
resulting in both higher profits and the opportunity to invest in
service upgrades, technological efficiencies, and diversified
product offerings, all of which will strengthen our franchise for
the future.”
For the fourth-quarter 2017, GAAP net income was $47 million,
compared with $70 million in the year-ago quarter. GAAP net income
attributable to the company’s common stock was $44 million ($0.10
diluted earnings per share) in the fourth-quarter 2017, compared
with $65 million ($0.15 diluted earnings per share) in the
year-ago quarter. The year-over-year decrease was primarily
attributable to the required accounting treatment for the effects
of the Tax Act.
The Tax Act lowered federal corporate tax rates from 35 percent
to 21 percent, beginning in 2018. Because the Tax Act was enacted
during the fourth-quarter 2017, the company was required to reflect
the application of the lower tax rate in future years to its
deferred tax assets, liabilities and indemnification receivables.
Therefore, at Dec. 31, 2017, the company recorded a provisional
estimate which resulted in a $15 million net increase in tax
expense and reduced non-interest income by $24 million to
reflect the effect of the lower tax rate. Absent the impact of the
Tax Act, GAAP net income would have been $86 million and GAAP
net income attributable to the company’s common stock would have
been $82 million ($0.19 diluted earnings per share) in the
fourth-quarter 2017. For a reconciliation of the effect of the Tax
Act on the GAAP Consolidated Statements of Income of the company,
see page 11 of this release.
For 2017, GAAP net income was $289 million, compared with $250
million in 2016. GAAP net income attributable to the company’s
common stock was $273 million ($0.62 diluted earnings per share) in
2017, compared with $229 million ($0.53 diluted earnings per
share) in 2016. Absent the impact of the Tax Act, GAAP net income
would have been $328 million, and GAAP net income attributable
to the company’s common stock would have been $312 million ($0.71
diluted earnings per share) in 2017.
Fourth-quarter 2017 results vs. fourth-quarter 2016
included:
- Private education loan originations of
$634 million, up 4 percent.
- Net interest income of $309 million, up
26 percent.
- Net interest margin of 6.00 percent, up
45 basis points.
- Average private education loans
outstanding of $17.3 billion, up 23 percent.
- Average yield on the private education
loan portfolio was 8.61 percent, up 53 basis points.
- Private education loan provision for
loan losses was $49 million, up from $43 million.
- Private education loans in forbearance
were 3.7 percent of private education loans in repayment and
forbearance, up from 3.5 percent.
- Private education loan delinquencies as
a percentage of private education loans in repayment were 2.4
percent, up from 2.1 percent.
Core earnings for the fourth-quarter 2017 were $47 million,
compared with $73 million in the year-ago quarter. Core earnings
attributable to the company’s common stock were $44 million ($0.10
diluted earnings per share) in the fourth-quarter 2017, compared
with $67 million ($0.15 diluted earnings per share) in the
year-ago quarter. Absent the impact of the Tax Act, core earnings
would have been $86 million, and core earnings attributable to the
company’s common stock would have been $83 million ($0.19
diluted earnings per share) in the fourth-quarter 2017.
Core earnings for 2017 were $294 million, compared with $252
million for 2016. Core earnings attributable to the company’s
common stock were $278 million ($0.63 diluted earnings per share)
for 2017, compared with $231 million ($0.53 diluted earnings per
share) for 2016. Absent the impact of the Tax Act, core earnings
would have been $333 million, and core earnings attributable to the
company’s common stock would have been $317 million ($0.72 diluted
earnings per share) for 2017.
Fourth-quarter 2017 and full-year 2017 GAAP results included $1
million and $8 million, respectively, of pre-tax losses from
derivative accounting treatment that are excluded from core
earnings results, vs. pre-tax losses of $4 million and
$3 million, respectively, in the year-ago periods.
Sallie Mae provides core earnings because it is one of several
measures used to evaluate management performance and allocate
corporate resources. The difference between core earnings and GAAP
net income is driven by mark-to-market unrealized gains and losses
on derivative contracts recognized in GAAP net income, but not in
core earnings results. Management believes its derivatives are
effective economic hedges, and, as such, they are a critical
element of the company’s interest rate risk management
strategy.
Total Non-Interest Income and Expenses
In the fourth-quarter 2017, to reflect the application of the
Tax Act’s lower rate in future years, the company reduced other
income by $24 million due to a lower valuation of tax
indemnification receivables. Unrelated to the Tax Act, the company
also reduced other income by $9 million due to the expiration of a
portion of indemnified uncertain tax positions. Tax expense was
reduced by corresponding amounts for both of these items. Absent
these two tax-related items, other income was $2 million lower than
in the fourth-quarter 2016 primarily due to reduced credit card
revenue from the company’s Upromise subsidiary.
Total non-interest expenses were $119 million in the
fourth-quarter 2017, compared with $98 million in the year-ago
quarter. Operating expenses grew 21 percent from the year-ago
quarter, and the non-GAAP operating efficiency ratio increased to
41.2 percent in the fourth-quarter 2017, from 37.9 percent in
the year-ago quarter. Absent the impact of the Tax Act and the
reduction in indemnified uncertain tax positions that, when
combined, reduced other income by $32 million, the non-GAAP
operating efficiency ratio would have been 37.1 percent for the
fourth-quarter 2017.
Excluding FDIC assessment fees, which grew 32 percent as a
result of a 22-percent increase in its private education loan
portfolio, non-interest expenses grew 20 percent from the
year-ago quarter. The increase in operating expenses was driven by
the growth in the portfolio and investments associated with the
development of the company’s graduate school loan program, the
personal loan product and investments in the brand to support the
core business and diversification efforts.
Total non-interest expenses were $449 million for 2017, compared
with $386 million for 2016. Full-year operating expenses grew 16
percent year-over-year, while the non-GAAP operating efficiency
ratio decreased to 39.6 percent in 2017 from 40.1 percent in
2016. Absent the impact of the Tax Act and the reduction in
indemnified uncertain tax positions that, when combined, reduced
other income by $35 million in 2017, the non-GAAP operating
efficiency ratio would have been 38.4 percent for 2017.
Income Tax Expense
Income tax expense increased to $66 million in the
fourth-quarter 2017 from $43 million in the year-ago quarter. The
effective income tax rate in fourth-quarter 2017 was 58.5 percent,
an increase from 38.0 percent in the year-ago quarter. The increase
in the effective tax rate was primarily the result of the one-time
revaluation of the company’s deferred tax assets and liabilities to
apply the Tax Act’s lower rate in future years. The company
recorded a provisional estimate which resulted in a $15 million net
increase in tax expense from the revaluation of an indemnified
liability (a $23 million reduction in expense) and all other
deferred tax assets and liabilities (a $38 million increase in
expense). Unrelated to the Tax Act, the company recorded a
$9 million decrease in tax expense due to the previously
mentioned expiration of a portion of indemnified uncertain tax
positions. Absent these three items, the company’s effective tax
rate for the fourth-quarter 2017 would have been 41.1 percent.
Income tax expense increased to $203 million in 2017 from $164
million in 2016. The company’s effective income tax rate increased
to 41.2 percent in 2017 from 39.6 percent in 2016.
The company expects its effective income tax rate to be
approximately 26 percent in 2018 as a result of the Tax Act.
Capital
The regulatory capital ratios of the company’s Sallie Mae Bank
subsidiary continue to exceed guidelines for institutions
considered “well capitalized.” At Dec. 31, 2017, Sallie Mae Bank’s
regulatory capital ratios were as follows:
Dec. 31,
2017
“Well Capitalized”Regulatory Requirements
Common Equity Tier 1 Capital (to Risk-Weighted Assets) 12.0 percent
6.5 percent Tier 1 Capital (to Risk-Weighted Assets) 12.0 percent
8.0 percent Total Capital (to Risk-Weighted Assets) 13.3 percent
10.0 percent Tier 1 Capital (to Average Assets) 11.2 percent 5.0
percent
Deposits
Deposits at the company totaled $15.5 billion ($8.2 billion in
brokered deposits and $7.3 billion in retail and other deposits) at
Dec. 31, 2017, compared with $13.4 billion ($7.1 billion in
brokered deposits and $6.3 billion in retail and other deposits) at
Dec. 31, 2016.
Guidance
The company expects 2018 results to be as follows:
- Full-year diluted core earnings per
share: $0.97 - $1.01.
- Full-year private education loan
originations of $5.0 billion.
- Full-year non-GAAP operating efficiency
ratio: 37 percent - 38 percent.
The company plans to make investments in 2018 that will
accelerate the diversification of its consumer lending platform
into the personal loan and credit card businesses. In addition, the
company will invest in several technology infrastructure projects,
including migrating infrastructure to the cloud. These investments
will total up to $30 million and are expected to add revenue and
improve efficiency in future years. The impact of these investments
is included in the guidance provided above.
***
Sallie Mae will host an earnings conference call tomorrow,
Jan. 18, 2018, at 8 a.m. EST. Sallie Mae executives will be on
hand to discuss various highlights of the quarter and to answer
questions related to Sallie Mae’s performance. Individuals
interested in participating in the call should dial 877-356-5689
(USA and Canada) or dial 706-679-0623 (international) and use
access code 4876499 starting at 7:45 a.m. EST. A live audio webcast
of the conference call may be accessed at
www.SallieMae.com/investors. A replay of the conference call will
be available approximately two hours after the call’s conclusion
and will remain available through Feb. 7, 2018, by dialing
855-859-2056 (USA and Canada) or 404-537-3406 (international) with
access code 4876499.
Presentation slides for the conference call may be accessed at
www.SallieMae.com/investors under the webcasts tab.
This press release contains “forward-looking statements” and
information based on management’s current expectations as of the
date of this release. Statements that are not historical facts,
including statements about the company’s beliefs, opinions or
expectations and statements that assume or are dependent upon
future events, are forward-looking statements. Forward-looking
statements are subject to risks, uncertainties, assumptions and
other factors that may cause actual results to be materially
different from those reflected in such forward-looking statements.
These factors include, among others, the risks and uncertainties
set forth in Item 1A “Risk Factors” and elsewhere in the
company’s Annual Report on Form 10-K for the year ended
Dec. 31, 2016 (filed with the Securities and Exchange
Commission (“SEC”) on Feb. 24, 2017) and subsequent filings with
the SEC; increases in financing costs; limits on liquidity;
increases in costs associated with compliance with laws and
regulations; failure to comply with consumer protection, banking
and other laws; changes in accounting standards and the impact of
related changes in significant accounting estimates; any adverse
outcomes in any significant litigation to which the company is a
party; credit risk associated with the company’s exposure to third
parties, including counterparties to the company’s derivative
transactions; and changes in the terms of education loans and the
educational credit marketplace (including changes resulting from
new laws and the implementation of existing laws). The company
could also be affected by, among other things: changes in its
funding costs and availability; reductions to its credit ratings;
failures or breaches of its operating systems or infrastructure,
including those of third-party vendors; damage to its reputation;
risks associated with restructuring initiatives, including failures
to successfully implement cost-cutting and restructuring
initiatives and the adverse effects of such initiatives on the
company’s business; changes in the demand for educational financing
or in financing preferences of lenders, educational institutions,
students and their families; changes in law and regulations with
respect to the student lending business and financial institutions
generally; changes in banking rules and regulations, including
increased capital requirements; increased competition from banks
and other consumer lenders; the creditworthiness of the company’s
customers; changes in the general interest rate environment,
including the rate relationships among relevant money-market
instruments and those of the company’s earning assets versus the
company’s funding arrangements; rates of prepayments on the loans
made by the company and its subsidiaries; changes in general
economic conditions and the company’s ability to successfully
effectuate any acquisitions; and other strategic initiatives. The
preparation of the company’s consolidated financial statements also
requires management to make certain estimates and assumptions,
including estimates and assumptions about future events. These
estimates or assumptions may prove to be incorrect. All
forward-looking statements contained in this release are qualified
by these cautionary statements and are made only as of the date of
this release. The company does not undertake any obligation to
update or revise these forward-looking statements to conform such
statements to actual results or changes in its expectations.
The company reports financial results on a GAAP basis and also
provides certain “Core Earnings” performance measures. The
difference between the company’s “Core Earnings” and GAAP results
for the periods presented were the unrealized, mark-to-market
gains/losses on derivative contracts (excluding current period
accruals on the derivative instruments), net of tax. These are
recognized in GAAP, but not in “Core Earnings” results. The company
provides “Core Earnings” measures because this is what management
uses when making management decisions regarding the company’s
performance and the allocation of corporate resources. The
company’s “Core Earnings” are not defined terms within GAAP and may
not be comparable to similarly titled measures reported by other
companies.
For additional information, see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — GAAP
Consolidated Earnings Summary -‘Core Earnings’ ” in the company’s
Form 10-Q for the quarter ended Sept. 30, 2017 for a further
discussion and the “‘Core Earnings’ to GAAP Reconciliation” table
in this press release for a complete reconciliation between GAAP
net income and “Core Earnings.”
In 2016, our non-GAAP operating efficiency ratio was calculated
for the periods presented as the ratio of (a) the total
non-interest expense numerator to (b) the net revenue denominator
(which consisted of net interest income, before provision for
credit losses, plus non-interest income).
In the first-quarter 2017, we began calculating and reporting
our non-GAAP operating efficiency ratio as the ratio of (a) the
total non-interest expense numerator to (b) the net revenue
denominator (which consists of the sum of net interest income,
before provision for credit losses, and non-interest income, and
the net impact of derivative accounting as defined in the “‘Core
Earnings’ to GAAP Reconciliation” table in this Press Release). We
believe this change will improve visibility into our management of
operating expenses over time and eliminate the variability in this
ratio that may be related to the changes in fair value of our
derivative contracts that we consider economic hedges and which do
not affect how we manage operating expenses. This change conforms
the treatment of our hedging activities in our operating efficiency
ratio to our non-GAAP “Core Earnings” measure. The impact of this
change on the non-GAAP operating efficiency ratio reported in each
of our prior quarterly and annual periods is immaterial. This ratio
provides useful information to investors because it is a measure
used by our management team to monitor our effectiveness in
managing operating expenses. Other companies may use similarly
titled non-GAAP financial measures that are calculated differently
from our ratio. Accordingly, our non-GAAP operating efficiency
ratio may not be comparable to similar measures used by other
companies.
The fourth-quarter 2017 and full-year 2017 financial results
reported in this press release reflect the required accounting
treatment for the estimated effects of the Tax Act. We also report
in this press release certain fourth-quarter 2017 and full-year
2017 financial statement items absent the effects of the Tax Act,
including a reconciliation on page 11 of this press release of the
effect of the Tax Act on the GAAP Consolidated Statements of
Income. (Estimated effects may be refined in future periods as
further information becomes available.) We believe this additional
disclosure will be helpful to investors by illustrating and
quantifying the impact of the required accounting treatment for the
effects of the Tax Act. In addition, management will use the
financial results absent the effect of the Tax Act as a basis for
making management decisions regarding the company’s performance in
2017. Our financial results absent the effect of the Tax Act are
unique to our company, are not defined terms within GAAP and may
not be comparable to adjustments made by, or to similarly captioned
measures reported by, other companies.
***
Sallie Mae (Nasdaq: SLM) is the nation’s saving,
planning, and paying for college company. Whether college is a long
way off or just around the corner, Sallie Mae offers products that
promote responsible personal finance, including private
education loans, Upromise rewards, scholarship search, college
financial planning tools, and online retail banking. Learn more
at SallieMae.com. Commonly known as Sallie Mae, SLM
Corporation and its subsidiaries are not sponsored by or agencies
of the United States of America.
Selected Financial Information and
Ratios
(Unaudited)
Quarters Ended Years Ended
December 31, December 31,
(In thousands,
except per share data and percentages)
2017 2016 2017 2016
Net income attributable to SLM Corporation common stock $
43,866 $ 64,736 $ 273,220 $ 229,123 Diluted earnings per common
share attributable to SLM Corporation $ 0.10 $ 0.15 $ 0.62 $ 0.53
Weighted average shares used to compute diluted earnings per share
438,932 435,419 438,551 432,919 Return on assets 0.9 % 1.5 % 1.4 %
1.5 % Non-GAAP operating efficiency ratio - old method(1) 41.3 %
38.6 % 39.9 % 40.2 % Non-GAAP operating efficiency ratio - new
method(2) 41.2 % 37.9 % 39.6 % 40.1 %
Other Operating
Statistics Ending Private Education Loans, net $ 17,244,830 $
14,113,409 $ 17,244,830 $ 14,113,409 Ending FFELP Loans, net
929,159 1,011,678 929,159
1,011,678 Ending total education loans, net $ 18,173,989
$ 15,125,087 $ 18,173,989 $ 15,125,087
Average education loans $ 18,258,153 $ 15,082,071 $
17,147,089 $ 13,811,081
_________ (1) In 2016, our non-GAAP operating efficiency ratio was
calculated for the periods presented as the ratio of (a) the total
non-interest expense numerator to (b) the net revenue denominator
(which consisted of net interest income, before provision for
credit losses, plus non-interest income). (2) In the
first-quarter 2017, we began calculating and reporting our non-GAAP
operating efficiency ratio as the ratio of (a) the total
non-interest expense numerator to (b) the net revenue denominator
(which consists of the sum of net interest income, before provision
for credit losses, and non-interest income, and the net impact of
derivative accounting as defined in the “‘Core Earnings’ to GAAP
Reconciliation” table in this Press Release). We believe this
change will improve visibility into our management of operating
expenses over time and eliminate the variability in this ratio that
may be related to the changes in fair value of our derivative
contracts that we consider economic hedges and which do not affect
how we manage operating expenses. This change conforms the
treatment of our hedging activities in our operating efficiency
ratio to our non-GAAP “Core Earnings” measure. The impact of this
change on the non-GAAP operating efficiency ratio reported in each
of our prior quarterly and annual periods is immaterial. This ratio
provides useful information to investors because it is a measure
used by our management team to monitor our effectiveness in
managing operating expenses. Other companies may use similarly
titled non-GAAP financial measures that are calculated differently
from our ratio. Accordingly, our non-GAAP operating efficiency
ratio may not be comparable to similar measures used by other
companies.
SLM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per
share amounts)
(Unaudited)
December 31, December 31,
2017 2016 Assets Cash and cash equivalents $
1,534,339 $ 1,918,793 Available-for-sale investments at fair value
(cost of $247,607 and $211,406, respectively) 244,088 208,603 Loans
held for investment (net of allowance for losses of $251,475 and
$184,701, respectively) 18,567,641 15,137,922 Restricted cash and
investments 101,836 53,717 Other interest-earning assets 21,586
49,114 Accrued interest receivable 967,482 766,106 Premises and
equipment, net 89,748 87,063 Tax indemnification receivable 168,011
259,532 Other assets 84,853 52,153
Total assets $ 21,779,584 $ 18,533,003
Liabilities Deposits $ 15,505,383 $ 13,435,667 Long-term
borrowings 3,275,270 2,167,979 Income taxes payable, net 102,285
184,324 Upromise related liabilities 243,080 256,041 Other
liabilities 179,310 141,934 Total
liabilities 19,305,328 16,185,945
Commitments and contingencies Equity
Preferred stock, par value $0.20 per share, 20 million shares
authorized: Series A: 0 and 3.3 million shares issued,
respectively, at stated value of $50 per share — 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: 443.5 million and
436.6 million shares issued, respectively 88,693 87,327 Additional
paid-in capital 1,222,277 1,175,564 Accumulated other comprehensive
income (loss) (net of tax expense (benefit) of $1,696 and ($5,364),
respectively) 2,748 (8,671 ) Retained earnings 868,182
595,322 Total SLM Corporation stockholders’
equity before treasury stock 2,581,900 2,414,542 Less: Common stock
held in treasury at cost: 11.1 million and 7.7 million shares,
respectively (107,644 ) (67,484 ) Total equity
2,474,256 2,347,058 Total liabilities and
equity $ 21,779,584 $ 18,533,003
SLM CORPORATION
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share
amounts)
(Unaudited)
Quarters Ended Years Ended
December 31, December 31, 2017
2016 2017 2016 Interest income:
Loans $ 392,399 $ 295,241 $ 1,413,505 $ 1,060,487 Investments 2,016
2,005 8,288 9,160 Cash and cash equivalents 5,081
2,767 15,510 7,599 Total
interest income 399,496 300,013 1,437,303 1,077,246
Interest
expense: Deposits 66,218 40,775 223,691 148,408 Interest
expense on short-term borrowings 2,107 1,495 6,341 7,322 Interest
expense on long-term borrowings 21,980 12,309
78,050 30,178 Total interest
expense 90,305 54,579 308,082
185,908 Net interest income 309,191 245,434
1,129,221 891,338 Less: provisions for credit losses 55,324
43,226 185,765 159,405
Net interest income after provisions for credit losses
253,867 202,208 943,456
731,933
Non-interest income (loss): Gains on
sales of loans, net — 230 — 230 Losses on derivatives and hedging
activities, net (940 ) (4,114 ) (8,266 ) (958 ) Other income (loss)
(21,066 ) 13,235 5,364
69,544 Total non-interest income (loss) (22,006 )
9,351 (2,902 ) 68,816
Non-interest expenses: Compensation and benefits 55,796
45,337 213,319 183,996 FDIC assessment fees 7,473 5,661 28,950
19,209 Other operating expenses 55,281 47,038
206,351 182,202 Total operating
expenses 118,550 98,036 448,620 385,407 Acquired intangible asset
amortization expense 118 159 469
906 Total non-interest expenses 118,668
98,195 449,089 386,313
Income before income tax expense 113,193 113,364 491,465
414,436 Income tax expense 66,190 43,122
202,531 164,109
Net
income 47,003 70,242 288,934 250,327 Preferred stock dividends
3,137 5,506 15,714
21,204 Net income attributable to SLM Corporation common
stock $ 43,866 $ 64,736 $ 273,220 $ 229,123
Basic earnings per common share attributable to SLM
Corporation $ 0.10 $ 0.15 $ 0.63 $ 0.54
Average common shares outstanding 431,980
428,368 431,216 427,876 Diluted
earnings per common share attributable to SLM Corporation $ 0.10
$ 0.15 $ 0.62 $ 0.53 Average common and
common equivalent shares outstanding 438,932
435,419 438,551 432,919
SLM CORPORATION
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Quarters Ended Years Ended
December 31, December 31, 2017
2016 2017 2016 Net income $ 47,003 $
70,242 $ 288,934 $ 250,327 Other comprehensive income (loss):
Unrealized losses on investments (50 ) (6,515 ) (716 ) (1,792 )
Unrealized gains on cash flow hedges 11,631
37,546 19,195 13,764 Total
unrealized gains 11,581 31,031 18,479 11,972 Income tax expense
(4,416 ) (11,889 ) (7,060 ) (4,584 )
Other comprehensive income, net of tax expense 7,165
19,142 11,419 7,388 Total
comprehensive income $ 54,168 $ 89,384 $ 300,353
$ 257,715
“Core Earnings” to GAAP Reconciliation
The following table reflects adjustments associated with our
derivative activities..
Quarters Ended Years Ended December
31, December 31,
(Dollars in
thousands, except per share amounts)
2017 2016 2017 2016
“Core Earnings” adjustments to GAAP: GAAP net income
$ 47,003 $ 70,242 $ 288,934 $ 250,327 Preferred stock dividends
3,137 5,506 15,714 21,204 GAAP net
income attributable to SLM Corporation common stock $ 43,866 $
64,736 $ 273,220 $ 229,123 Adjustments: Net impact of
derivative accounting(1) 706 4,386 8,197 3,127 Net tax effect(2)
270 1,682 3,131 1,199 Total “Core
Earnings” adjustments to GAAP 436 2,704 5,066
1,928 “Core Earnings” attributable to SLM Corporation
common stock $ 44,302 $ 67,440 $ 278,286 $ 231,051 GAAP
diluted earnings per common share $ 0.10 $ 0.15 $ 0.62 $ 0.53
Derivative adjustments, net of tax — — 0.01
— “Core Earnings” diluted earnings per common share $ 0.10 $
0.15 $ 0.63 $ 0.53 ______ (1) Derivative Accounting: “Core
Earnings” exclude periodic unrealized gains and losses caused by
the mark-to-market valuations on derivatives that do not qualify
for hedge accounting treatment under GAAP, as well as the periodic
unrealized gains and losses that are a result of ineffectiveness
recognized related to effective hedges under GAAP (but include
current period accruals on derivative instruments), net of tax.
Under GAAP, for our derivatives held to maturity, the cumulative
net unrealized gain or loss over the life of the contract will
equal $0. (2) “Core Earnings” tax rate is based on the
effective tax rate at the Bank where the derivative instruments are
held.
Reconciliation of the Effect of the Tax
Act on the GAAP Consolidated Statements of Income
Quarter Ended Year Ended
December 31, 2017 December 31, 2017
(Dollars in
thousands, except per share amounts)
AsReported
Tax ActAdjustments
Adjusted(Non-GAAP)
AsReported
Tax ActAdjustments
Adjusted(Non-GAAP)
Net interest income $ 309,191 $ — $ 309,191 $ 1,129,221 $ —
$ 1,129,221 Less: provisions for credit losses 55,324
— 55,324 185,765 —
185,765 Net interest income after provisions for credit
losses 253,867 — 253,867 943,456 — 943,456 Total
non-interest income (loss) (22,006 ) 23,532
(1)
1,526 (2,902 ) 23,532
(1)
20,630 Total non-interest expenses 118,668 —
118,668 449,089 —
449,089 Income before income tax expense 113,193 23,532 136,725
491,465 23,532 514,997 Income tax expense 66,190
(15,035 )
(2)
51,155 202,531 (15,035 )
(2)
187,496
Net income 47,003 38,567 85,570 288,934
38,567 327,501 Preferred stock dividends 3,137
— 3,137 15,714 —
15,714 Net income attributable to SLM Corporation common stock $
43,866 $ 38,567 $ 82,433 $ 273,220 $ 38,567
$ 311,787 Basic earnings per common share
attributable to SLM Corporation $ 0.10 $ 0.09 $ 0.19
$ 0.63 $ 0.09 $ 0.72 Average common shares
outstanding 431,980 — 431,980
431,216 — 431,216 Diluted
earnings per common share attributable to SLM Corporation $ 0.10
$ 0.09 $ 0.19 $ 0.62 $ 0.09 $ 0.71
Average common and common equivalent shares outstanding
438,932 — 438,932 438,551
— 438,551 ______ (1) Represents
the reduction in a tax-related indemnification receivable due to
the lower federal corporate tax rate set forth in the Tax Act.
(2) Represents the net reduction in deferred tax assets and
liabilities due to the lower federal corporate tax rate set forth
in the Tax Act.
Average Balance Sheets - GAAP
The following table reflects the rates earned on
interest-earning assets and paid on interest-bearing liabilities
and reflects our net interest margin on a consolidated basis.
Quarters Ended Years Ended December
31, December 31, 2017 2016
2017 2016
(Dollars in
thousands)
Balance Rate Balance Rate
Balance Rate Balance Rate
Average Assets Private Education Loans $ 17,318,182 8.61 % $
14,057,669 8.08 % $ 16,176,351 8.43 % $ 12,747,756 8.02 % FFELP
Loans 939,971 4.07 1,024,402 3.71 970,738 3.91 1,063,325 3.53
Personal and other loans 265,113 10.22 3,496 7.50 112,857 9.89
1,114 6.77 Taxable securities 316,378 2.52 479,384 1.65 326,757
2.53 407,860 2.24 Cash and other short-term investments 1,604,619
1.26 2,017,081 0.55 1,454,344
1.07 1,480,170 0.51 Total interest-earning
assets 20,444,263 7.75 % 17,582,032 6.79 % 19,041,047 7.55 %
15,700,225 6.86 % Non-interest-earning assets 1,331,197
816,337 1,104,598 772,167 Total
assets $ 21,775,460 $ 18,398,369 $ 20,145,645
$ 16,472,392
Average Liabilities and Equity
Brokered deposits $ 7,923,341 1.87 % $ 7,302,429 1.32 % $ 7,224,869
1.75 % $ 7,154,218 1.31 % Retail and other deposits 7,351,063 1.55
5,961,087 1.09 6,939,520 1.40 5,095,631 1.06 Other interest-bearing
liabilities(1) 3,261,087 2.94 2,205,726 2.51
2,932,681 2.88 1,476,740 2.58
Total interest-bearing liabilities 18,535,491 1.93 % 15,469,242
1.40 % 17,097,070 1.80 % 13,726,589 1.35 %
Non-interest-bearing liabilities 778,258 624,285 647,294 539,215
Equity 2,461,711 2,304,842 2,401,281 2,206,588
Total liabilities and equity $ 21,775,460 $
18,398,369 $ 20,145,645 $ 16,472,392
Net interest margin 6.00 % 5.55 % 5.93 % 5.68 % ______ (1)
Includes the average balance of our unsecured borrowing, as well as
secured borrowings and amortization expense of transaction costs
related to our term asset-backed securitizations and our
asset-backed commercial paper funding facility.
Earnings per Common Share
Quarters Ended Years Ended December 31,
December 31,
(In thousands,
except per share data)
2017 2016 2017 2016
Numerator: Net income $ 47,003 $ 70,242 $ 288,934 $ 250,327
Preferred stock dividends 3,137 5,506 15,714
21,204 Net income attributable to SLM Corporation common stock $
43,866 $ 64,736 $ 273,220 $ 229,123
Denominator: Weighted average shares used to compute basic
EPS 431,980 428,368 431,216 427,876 Effect of dilutive securities:
Dilutive effect of stock options, restricted stock, restricted
stock units and Employee Stock Purchase Plan (“ESPP”)(1)(2) 6,952
7,051 7,335 5,043 Weighted average shares used
to compute diluted EPS 438,932 435,419 438,551
432,919
Basic earnings per common share attributable to
SLM Corporation: $ 0.10 $ 0.15 $ 0.63 $
0.54
Diluted earnings per common share attributable to
SLM Corporation: $ 0.10 $ 0.15 $ 0.62 $
0.53 __________
(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 quarters ended December 31, 2017, and 2016, securities
covering 0 and less than 1 million shares, respectively, and for
the years ended December 31, 2017 and 2016, securities covering 0
and approximately 1 million shares, respectively, were outstanding
but not included in the computation of diluted earnings per share
because they were anti-dilutive.
Allowance for Loan Losses
Metrics
Quarter Ended December 31, 2017
(Dollars in
thousands)
FFELPLoans
Private EducationLoans
PersonalLoans
Total Allowance for Loan Losses: Beginning
balance $ 1,352 $ 227,167 $ 1,400 $ 229,919 Total provision 76
49,437 5,558 55,071 Net charge-offs: Charge-offs (296 ) (36,828 )
(339 ) (37,463 ) Recoveries — 5,419 9 5,428
Net charge-offs (296 ) (31,409 ) (330 ) (32,035 ) Loan
sales(1) — (1,480 ) (1,480 ) Ending Balance $ 1,132
$ 243,715 $ 6,628 $ 251,475 Allowance:
Ending balance: individually evaluated for impairment $ — $ 94,682
$ — $ 94,682 Ending balance: collectively evaluated for impairment
$ 1,132 $ 149,033 $ 6,628 $ 156,793 Loans: Ending balance:
individually evaluated for impairment $ — $ 990,351 $ — $ 990,351
Ending balance: collectively evaluated for impairment $ 927,660 $
16,441,816 $ 400,280 $ 17,769,756 Net charge-offs as a percentage
of average loans in repayment (annualized)(2) 0.17 % 1.07 % 0.50 %
Allowance as a percentage of the ending total loan balance 0.12 %
1.40 % 1.66 % Allowance as a percentage of the ending loans in
repayment(2) 0.15 % 2.00 % 1.66 % Allowance coverage of net
charge-offs (annualized) 0.96 1.94 5.02 Ending total loans, gross $
927,660 $ 17,432,167 $ 400,280 Average loans in repayment(2) $
711,614 $ 11,740,773 $ 264,876 Ending loans in repayment(2) $
746,456 $ 12,206,033 $ 400,280 ________
(1)
Represents fair value adjustments on loans
sold.
(2)
Loans in repayment include loans on which
borrowers are making interest only or fixed payments, as well as
loans that have entered full principal and interest repayment
status after any applicable grace period.
Quarter
Ended December 31, 2016
(Dollars in
thousands)
FFELP
Loans
Private Education
Loans
Personal
Loans
Total Allowance for Loan Losses: Beginning balance $
2,209 $ 162,630 $ — $ 164,839 Total provision 224 42,808 58 43,090
Net charge-offs: Charge-offs (262 ) (25,224 ) — (25,486 )
Recoveries — 3,284 —
3,284 Net charge-offs (262 ) (21,940 ) — (22,202 )
Loan sales(1) — (1,026 ) —
(1,026 ) Ending Balance $ 2,171 $ 182,472 $ 58
$ 184,701 Allowance: Ending balance: individually
evaluated for impairment $ — $ 86,930 $ — $ 86,930 Ending balance:
collectively evaluated for impairment $ 2,171 $ 95,542 $ 58 $
97,771 Loans: Ending balance: individually evaluated for impairment
$ — $ 612,606 $ — $ 612,606 Ending balance: collectively evaluated
for impairment $ 1,010,908 $ 13,639,069 $ 12,894 $ 14,662,871 Net
charge-offs as a percentage of average loans in repayment
(annualized)(2) 0.13 % 0.95 % — % Allowance as a percentage of the
ending total loan balance 0.21 % 1.28 % — % Allowance as a
percentage of the ending loans in repayment(2) 0.28 % 1.88 % — %
Allowance coverage of net charge-offs (annualized) 2.07 2.08 —
Ending total loans, gross $ 1,010,908 $ 14,251,675 $ — Average
loans in repayment(2) $ 788,196 $ 9,265,149 $ — Ending loans in
repayment(2) $ 786,332 $ 9,709,758 $ — ________
(1)
Represents fair value adjustments on loans sold.
(2)
Loans in repayment include loans on which borrowers are making
interest only or fixed payments, as well as loans that have entered
full principal and interest repayment status after any applicable
grace period.
Year Ended December 31, 2017
(Dollars in
thousands)
FFELP
Loans
Private Education
Loans
Personal
Loans
Total Allowance for Loan Losses: Beginning balance $
2,171 $ 182,472 $ 58 $ 184,701 Total provision (85 ) 178,542 7,138
185,595 Net charge-offs: Charge-offs (954 ) (130,063 ) (579 )
(131,596 ) Recoveries — 17,635
11 17,646 Net charge-offs (954 ) (112,428 )
(568 ) (113,950 ) Loan sales(1) — (4,871 )
— (4,871 ) Ending Balance $ 1,132 $
243,715 $ 6,628 $ 251,475 Allowance: Ending
balance: individually evaluated for impairment $ — $ 94,682 $ — $
94,682 Ending balance: collectively evaluated for impairment $
1,132 $ 149,033 $ 6,628 $ 156,793 Loans: Ending balance:
individually evaluated for impairment $ — $ 990,351 $ — $ 990,351
Ending balance: collectively evaluated for impairment $ 927,660 $
16,441,816 $ 400,280 $ 17,769,756 Net charge-offs as a percentage
of average loans in repayment(2) 0.13 % 1.03 % 0.47 % Allowance as
a percentage of the ending total loan balance 0.12 % 1.40 % 1.66 %
Allowance as a percentage of the ending loans in repayment(2) 0.15
% 2.00 % 1.66 % Allowance coverage of net charge-offs 1.19 2.17
11.67 Ending total loans, gross $ 927,660 $ 17,432,167 $ 400,280
Average loans in repayment(2) $ 745,039 $ 10,881,058 $ 119,606
Ending loans in repayment(2) $ 746,456 $ 12,206,033 $ 400,280
______
(1)
Represents fair value adjustments on loans sold.
(2)
Loans in repayment include loans on which borrowers are making
interest only or fixed payments, as well as loans that have entered
full principal and interest repayment status after any applicable
grace period.
Year Ended December 31,
2016
(Dollars in
thousands)
FFELPLoans
Private EducationLoans
PersonalLoans
Total Allowance for Loan Losses:
Beginning balance $ 3,691 $ 108,816 $ — $ 112,507 Total provision
(172 ) 159,511 58 159,397 Net charge-offs: Charge-offs (1,348 )
(90,203 ) — (91,551 ) Recoveries — 10,382 —
10,382 Net charge-offs (1,348 ) (79,821 ) — (81,169 ) Loan
sales(1) — (6,034 ) — (6,034 ) Ending Balance $ 2,171
$ 182,472 $ 58 $ 184,701 Allowance:
Ending balance: individually evaluated for impairment $ —
$
86,930
$ — $ 86,930 Ending balance: collectively evaluated for impairment
$ 2,171 $ 95,542 $ 58 $ 97,771 Loans: Ending balance: individually
evaluated for impairment $ — $ 612,606 $ — $ 612,606 Ending
balance: collectively evaluated for impairment $ 1,010,908 $
13,639,069 $ 12,894 $ 14,662,871 Net charge-offs as a percentage of
average loans in repayment(2) 0.17 % 0.96 % — % Allowance as a
percentage of the ending total loan balance 0.21 % 1.28 % — %
Allowance as a percentage of the ending loans in repayment(2) 0.28
% 1.88 % — % Allowance coverage of net charge-offs 1.61 2.29 —
Ending total loans, gross $ 1,010,908 $ 14,251,675 $ — Average
loans in repayment(2) $ 793,203 $ 8,283,036 $ — Ending loans in
repayment(2) $ 786,332 $ 9,709,758 $ —
______
(1) Represents fair value adjustments on loans sold.
(2) Loans in repayment include loans on which borrowers are making
interest only or fixed payments, as well as loans that have entered
full principal and interest repayment status after any applicable
grace period.
Private Education Loan Key Credit
Quality Indicators
Private Education Loans Credit Quality
Indicators December 31, 2017 December
31, 2016
(Dollars in
thousands)
Balance(1) % of Balance
Balance(1) % of Balance
Cosigners: With cosigner $ 15,658,539 90 % $ 12,816,512 90 %
Without cosigner 1,773,628 10 1,435,163 10
Total $ 17,432,167 100 % $ 14,251,675 100 %
FICO at Original Approval(2): Less than 670 $ 1,153,591 6 %
$ 920,132 6 %
670-699
2,596,959 15 2,092,722 15
700-749
5,714,554 33 4,639,958 33 Greater than or equal to 750 7,967,063
46 6,598,863 46 Total $ 17,432,167
100 % $ 14,251,675 100 % Seasoning(3): 1-12
payments $ 4,256,592 24 % $ 3,737,110 26 % 13-24 payments 3,229,465
19 2,841,107 20 25-36 payments 2,429,238 14 1,839,764 13 37-48
payments 1,502,327 9 917,633 7 More than 48 payments 1,256,813 7
726,106 5 Not yet in repayment 4,757,732 27 4,189,955
29 Total $ 17,432,167 100 % $ 14,251,675
100 %
______
(1) Balance represents gross Private Education Loans.
(2) Represents the higher credit score of the cosigner or the
borrower. (3) Number of months in active repayment (whether
interest only payment, fixed payment or full principal and interest
payment status) for which a scheduled payment was due.
Personal Loan Key Credit Quality
Indicators
Personal Loans Credit Quality Indicators
December 31, 2017 December 31, 2016
Credit Quality
Indicators:
Balance(1) % of Balance
Balance(1)
% of Balance
FICO at Original Approval: Less than 670 $ 32,156 8
%
$ 1,189 9 %
670-699
114,731 29 3,139 24
700-749
182,025 45 5,678 44 Greater than or equal to 750 71,368 18
2,888 23 Total $ 400,280 100 % $ 12,894
100 % Seasoning(2): 0-12 payments $ 400,280 100 % $
12,894 100 % 13-24 payments — — — — 25-36 payments — — — — 37-48
payments — — — — More than 48 payments — — — —
Total $ 400,280 100 % $ 12,894 100 %
______
(1) Balance represents gross Personal Loans. (2)
Number of months in active repayment for which a scheduled payment
was due.
Private Education Loan
Delinquencies
The following table provides information regarding the loan
status of our Private Education Loans. Loans in repayment include
loans making interest only or fixed payments as well as loans that
have entered full principal and interest repayment status after any
applicable grace period.
Private Education Loans
December 31, 2017 2016
(Dollars in
thousands)
Balance % Balance % Loans
in-school/grace/deferment(1) $ 4,757,732 $ 4,189,955 Loans in
forbearance(2) 468,402 351,962 Loans in repayment and percentage of
each status: Loans current 11,911,128 97.6 % 9,509,394 97.9 % Loans
delinquent 31-60 days(3) 179,002 1.5 124,773 1.3 Loans delinquent
61-90 days(3) 78,292 0.6 51,423 0.5 Loans delinquent greater than
90 days(3) 37,611 0.3 24,168 0.3 Total
loans in repayment 12,206,033 100.0 % 9,709,758 100.0
% Total loans, gross 17,432,167 14,251,675 Deferred origination
costs 56,378 44,206 Total loans 17,488,545 14,295,881
Allowance for losses (243,715 ) (182,472 ) Total loans, net $
17,244,830 $ 14,113,409 Percentage of loans in
repayment 70.0 % 68.1 % Delinquencies as a percentage of loans in
repayment 2.4 % 2.1 % Loans in forbearance as a percentage of loans
in repayment and forbearance 3.7 % 3.5 % _______
(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. Loans in full
principal and interest repayment status in our Private Education
Loan portfolio at December 31, 2017 increased by 38 percent
compared with December 31, 2016, and total 41 percent of our
Private Education Loan portfolio at December 31, 2017.
Summary of Our Loan Portfolio
Ending Loan Balances, net
December 31, 2017
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Total loan portfolio: In-school(1) $ 3,740,237 $ 257 $ — $
3,740,494 Grace, repayment and other(2) 13,691,930 927,403
400,280 15,019,613 Total, gross 17,432,167
927,660 400,280 18,760,107 Deferred origination costs and
unamortized premium 56,378 2,631 — 59,009 Allowance for loan losses
(243,715 ) (1,132 ) (6,628 ) (251,475 ) Total loan portfolio, net $
17,244,830 $ 929,159 $ 393,652 $ 18,567,641
% of total 93 % 5 % 2 % 100 % _______ (1)
Loans for customers still attending school and who are not yet
required to make payments on the loan. (2) Includes loans in
deferment or forbearance.
December 31, 2016
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Total loan portfolio: In-school(1) $ 3,371,870 $ 377 $ — $
3,372,247 Grace, repayment and other(2) 10,879,805 1,010,531
12,893 11,903,229 Total, gross 14,251,675
1,010,908 12,893 15,275,476 Deferred origination costs and
unamortized premium 44,206 2,941 47,147 Allowance for loan losses
(182,472 ) (2,171 ) (58 ) (184,701 ) Total loan portfolio, net $
14,113,409 $ 1,011,678 $ 12,835 $ 15,137,922
% of total 93 % 7 % — % 100 % _______ (1)
Loans for customers still attending school and who are not yet
required to make payments on the loan. (2) Includes loans in
deferment or forbearance.
Average Loan Balances (net of unamortized
premium/discount)
Quarters Ended Years Ended December
31, December 31,
(Dollars in
thousands)
2017 2016 2017 2016
Private Education Loans $ 17,318,182 94 % $
14,057,669 93 % $ 16,176,351 94 % $
12,747,756 92 % FFELP Loans 939,971 5 1,024,402 7
970,738 5 1,063,325 8 Personal Loans 265,113 1 —
— 112,857 1 — — Total
portfolio $ 18,523,266 100 % $ 15,082,071 100 % $
17,259,946 100 % $ 13,811,081 100 %
Loan Activity
Quarter Ended December 31, 2017
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Beginning balance $ 16,959,241 $ 950,524 $ 130,700 $ 18,040,465
Acquisitions and originations 638,634 — 290,387 929,021 Capitalized
interest and deferred origination cost premium amortization 240,593
6,141 — 246,734 Sales (1,495 ) — — (1,495 ) Loan consolidation to
third-parties (209,273 ) (6,692 ) — (215,965 ) Repayments and other
(382,870 ) (20,814 ) (27,435 ) (431,119 ) Ending balance $
17,244,830 $ 929,159 $ 393,652 $ 18,567,641
Quarter Ended December 31, 2016
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Beginning balance $ 13,725,959 $ 1,034,545 $ — $ 14,760,504
Acquisitions and originations 612,991 — 12,926 625,917 Capitalized
interest and deferred origination cost premium amortization 181,052
8,901 — 189,953 Sales (1,609 ) — — (1,609 ) Loan consolidation to
third-parties (104,493 ) (10,118 ) — (114,611 ) Repayments and
other (300,491 ) (21,650 ) (91 ) (322,232 ) Ending balance $
14,113,409 $ 1,011,678 $ 12,835 $ 15,137,922
Year Ended December 31, 2017
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Beginning balance $ 14,113,409 $ 1,011,678 $ 12,835 $ 15,137,922
Acquisitions and originations 4,818,843 — 424,889 5,243,732
Capitalized interest and deferred origination cost premium
amortization 462,030 31,396 — 493,426 Sales (6,992 ) — — (6,992 )
Loan consolidation to third-parties (630,877 ) (36,856 ) — (667,733
) Repayments and other (1,511,583 ) (77,059 ) (44,072 ) (1,632,714
) Ending balance $ 17,244,830 $ 929,159 $ 393,652
$ 18,567,641
Year Ended December 31,
2016
(Dollars in
thousands)
PrivateEducationLoans
FFELPLoans
PersonalLoans
TotalPortfolio
Beginning balance $ 10,515,505 $ 1,115,086 $ — $ 11,630,591
Acquisitions and originations 4,685,622 — 12,926 4,698,548
Capitalized interest and deferred origination cost premium
amortization 339,163 35,774 — 374,937 Sales (9,521 ) — — (9,521 )
Loan consolidation to third-parties (277,636 ) (45,014 ) — (322,650
) Repayments and other (1,139,724 ) (94,168 ) (91 ) (1,233,983 )
Ending balance $ 14,113,409 $ 1,011,678 $ 12,835
$ 15,137,922
Private Education Loan Originations
The following table summarizes our Private Education Loan
originations. Originations represent loans that were funded or
acquired during the period presented.
Quarters
Ended Years Ended December 31, December
31,
(Dollars in
thousands)
2017 % 2016 %
2017 %
2016 % Smart
Option - interest only(1) $ 157,032 25 % $ 156,508 26 % $ 1,214,927
25 % $ 1,189,517 25 % Smart Option - fixed pay(1) 186,370 29
177,771 29 1,380,892 29 1,403,421 30 Smart Option - deferred(1)
276,854 44 263,296 44 2,118,719 44 2,034,100 44 Smart Option -
principal and interest 1,333 — 1,319 — 8,234 — 7,953 — Parent Loan
12,315 2 8,794 1 77,388 2
31,272 1 Total Private Education Loan originations $
633,904 100 % $ 607,688 100 % $ 4,800,160 100
% $ 4,666,263 100 % Percentage of loans with a
cosigner 85 % 87 % 88 % 89 % Average FICO at approval(2) 746 748
747 748 _______ (1) Interest only, fixed pay and deferred
describe the payment option while in school or in grace period. (2)
Represents the higher credit score of the cosigner or the borrower.
Deposits
Interest bearing deposits are summarized as follows:
December 31, 2017 2016
(Dollars in
thousands)
Amount
Year-EndWeightedAverageStated
Rate(1)
Amount
Year-EndWeightedAverageStated
Rate(1)
Money market $ 7,731,966 1.80 % $ 7,129,404 1.22 % Savings
738,243 1.10 % 834,521 0.84 % Certificates of deposit 7,034,121
1.93 % 5,471,065 1.41 % Deposits - interest bearing $
15,504,330 $ 13,434,990 _____ (1) Includes the
effect of interest rate swaps in effective hedge relationships.
Regulatory Capital
(Dollars in
thousands)
Actual
“Well Capitalized”Regulatory
Requirements
Amount Ratio Amount
Ratio As of December 31, 2017: Common Equity
Tier 1 Capital (to Risk-Weighted Assets) $ 2,386,220 12.0 % $
1,289,682 ≥ 6.5 % Tier 1 Capital (to Risk-Weighted Assets) $
2,386,220 12.0 % $ 1,587,300 ≥ 8.0 % Total Capital (to
Risk-Weighted Assets) $ 2,634,301 13.3 % $ 1,984,126 ≥ 10.0 % Tier
1 Capital (to Average Assets) $ 2,386,220 11.2 % $ 1,067,779 ≥ 5.0
%
As of December 31, 2016: Common Equity Tier 1
Capital (to Risk-Weighted Assets) $ 2,011,583 12.6 % $ 1,038,638 ≥
6.5 % Tier 1 Capital (to Risk-Weighted Assets) $ 2,011,583 12.6 % $
1,278,323 ≥ 8.0 % Total Capital (to Risk-Weighted Assets) $
2,197,997 13.8 % $ 1,597,904 ≥ 10.0 % Tier 1 Capital (to Average
Assets) $ 2,011,583 11.1 % $ 907,565 ≥ 5.0 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180117006482/en/
Sallie MaeMedia:Martha Holler,
302-451-4900martha.holler@salliemae.comorRick
Castellano,
302-451-2541rick.castellano@salliemae.comorInvestors:Brian
Cronin, 302-451-0304brian.cronin@salliemae.com
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