UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
 
(Mark One)
☑    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20212022
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-13251
 
SLM Corporation
(Exact name of registrant as specified in its charter)
Delaware52-2013874
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
300 Continental DriveNewark,Delaware19713
(Address of principal executive offices)(Zip Code)
(302) 451-0200
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $.20 per shareSLMThe NASDAQ Global Select Market
Floating Rate Non-Cumulative Preferred Stock, Series B, par value $.20 per shareSLMBPThe NASDAQ Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ☑    No  ¨☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ☑    No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☑ Accelerated filer☐
Non-accelerated filer☐(Do not check if a smaller reporting company)Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No þ☑ 
As of March 31, 2021,2022, there were 328,351,576271,083,556 shares of common stock outstanding.





SLM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS
INDEX


Part I. Financial Information
Item 1.
3
Item 1.
10
Item 2.
51
Item 3.
84
Item 4.
88
PART II. Other Information
Item 1.
89
Item 1A.
90
Item 2.
90
Item 3.
90
Item 4.
90
Item 5.
91
Item 6.
91


2

SLM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
March 31,December 31,
20212020
Assets
Cash and cash equivalents$6,207,001 $4,455,292 
Investments:
Trading investments at fair value (cost of $26,219 and $12,551)30,594 16,923 
Available-for-sale investments at fair value (cost of $2,116,279 and $1,986,957, respectively)2,115,885 1,996,634 
Other investments79,679 80,794 
Total investments2,226,158 2,094,351 
Loans held for investment (net of allowance for losses of $1,179,021 and $1,361,723, respectively)20,368,287 19,183,143 
Loans held for sale0 2,885,640 
Restricted cash164,708 154,417 
Other interest-earning assets23,592 42,874 
Accrued interest receivable1,264,960 1,387,305 
Premises and equipment, net155,425 154,670 
Income taxes receivable, net169,655 374,706 
Tax indemnification receivable15,678 18,492 
Other assets32,541 19,533 
Total assets$30,628,005 $30,770,423 
Liabilities
Deposits$22,803,143 $22,666,039 
Long-term borrowings4,918,670 5,189,217 
Other liabilities297,728 352,332 
Total liabilities28,019,541 28,207,588 
Commitments and contingencies00
Equity
Preferred stock, par value $0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $100 per share251,070 251,070 
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 431.1 million and 456.7 million shares issued, respectively86,211 91,346 
Additional paid-in capital1,052,904 1,331,247 
Accumulated other comprehensive loss (net of tax benefit of ($7,680) and ($10,908), respectively)(24,077)(34,200)
Retained earnings2,350,986 1,722,365 
Total SLM Corporation stockholders’ equity before treasury stock3,717,094 3,361,828 
Less: Common stock held in treasury at cost: 102.7 million and 81.4 million shares, respectively(1,108,630)(798,993)
Total equity2,608,464 2,562,835 
Total liabilities and equity$30,628,005 $30,770,423 

See accompanying notes to consolidated financial statements.
3

SLM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
 March 31,
 20212020
Interest income:
Loans$431,804 $555,277 
Investments2,728 2,517 
Cash and cash equivalents1,626 17,139 
Total interest income436,158 574,933 
Interest expense:
Deposits66,598 135,112 
Interest expense on short-term borrowings3,202 4,217 
Interest expense on long-term borrowings35,244 35,488 
Total interest expense105,044 174,817 
Net interest income331,114 400,116 
Less: provisions for credit losses(225,767)61,258 
Net interest income after provisions for credit losses556,881 338,858 
Non-interest income:
Gains on sales of loans, net399,111 238,935 
Gains on derivatives and hedging activities, net28 45,672 
Other income14,288 7,487 
Total non-interest income413,427 292,094 
Non-interest expenses:
Operating expenses:
Compensation and benefits71,581 84,222 
FDIC assessment fees5,188 8,890 
Other operating expenses47,730 54,186 
Total operating expenses124,499 147,298 
Restructuring expenses1,077 0 
Total non-interest expenses125,576 147,298 
Income before income tax expense844,732 483,654 
Income tax expense203,525 121,481 
Net income641,207 362,173 
Preferred stock dividends1,201 3,464 
Net income attributable to SLM Corporation common stock$640,006 $358,709 
Basic earnings per common share attributable to SLM Corporation$1.77 $0.88 
Average common shares outstanding361,042 409,786 
Diluted earnings per common share attributable to SLM Corporation$1.75 $0.87 
Average common and common equivalent shares outstanding366,240 412,755 
Declared dividends per common share attributable to SLM Corporation$0.03 $0.03 

See accompanying notes to consolidated financial statements.
4

SLM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months Ended
 March 31,
 20212020
Net income$641,207 $362,173 
Other comprehensive income (loss):
Unrealized gains (losses) on investments(10,071)4,803 
Unrealized gains (losses) on cash flow hedges23,423 (45,694)
Total unrealized gains (losses)13,352 (40,891)
Income tax (expense) benefit(3,229)9,984 
Other comprehensive income (loss), net of tax (expense) benefit10,123 (30,907)
Total comprehensive income$651,330 $331,266 

















See accompanying notes to consolidated financial statements.
5


SLM CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share and per share amounts)
(Unaudited)


Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20194,000,000 453,599,926 (32,506,562)421,093,364 $400,000 $90,720 $1,307,630 $(12,367)$1,850,512 $(324,659)$3,311,836 
Cumulative adjustment for the adoption of ASU No. 2016-13 (CECL)— — — — — — — — (952,639)— (952,639)
Balance at January 1, 20204,000,000 453,599,926 (32,506,562)421,093,364 400,000 90,720 1,307,630 (12,367)897,873 (324,659)2,359,197 
Net income— — — — — — — — 362,173 — 362,173 
Other comprehensive loss, net of tax— — — — — — — (30,907)— — (30,907)
Total comprehensive income— — — — — — — — — — 331,266 
Cash dividends declared:
Common stock ($0.03 per share)— — — — — — — — (12,595)— (12,595)
Preferred Stock, Series B ($0.87 per share)— — — — — — — — (3,464)— (3,464)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — 265 — (265)— 0 
Issuance of common shares— 2,837,562 — 2,837,562 — 568 2,304 — — — 2,872 
Stock-based compensation expense— — — — — — 13,610 — 0 — 13,610 
Common stock repurchased— — (47,736,847)(47,736,847)— — (96,923)— — (461,244)(558,167)
Shares repurchased related to employee stock-based compensation plans— — (1,105,119)(1,105,119)— — — — — (12,136)(12,136)
Balance at March 31, 20204,000,000 456,437,488 (81,348,528)375,088,960 $400,000 $91,288 $1,226,886 $(43,274)$1,243,722 $(798,039)$2,120,583 










See accompanying notes to consolidated financial statements.
6

SLM CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In thousands, except share and per share amounts)
(Unaudited)



Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20202,510,696 456,729,251 (81,441,252)375,287,999 $251,070 $91,346 $1,331,247 $(34,200)$1,722,365 $(798,993)$2,562,835 
Net income— — — — — — — — 641,207 — 641,207 
Other comprehensive income, net of tax— — — — — — — 10,123 — — 10,123 
Total comprehensive income— — — — — — — — — — 651,330 
Cash dividends declared:
Common stock ($0.03 per share)— — — — — — — — (10,906)— (10,906)
Preferred Stock, Series B ($0.48 per share)— — — — — — — — (1,201)— (1,201)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — 463 — (479)— (16)
Issuance of common shares— 2,826,387 — 2,826,387 — 565 1,496 — — — 2,061 
Stock-based compensation expense— — — — — — 11,124 — — — 11,124 
Common stock repurchased and cancelled— (28,502,460)— (28,502,460)— (5,700)(466,110)— — — (471,810)
Common stock repurchased— — (20,200,370)(20,200,370)— — 174,684 — — (295,324)(120,640)
Shares repurchased related to employee stock-based compensation plans— — (1,059,980)(1,059,980)— — — — — (14,313)(14,313)
Balance at March 31, 20212,510,696 431,053,178 (102,701,602)328,351,576 $251,070 $86,211 $1,052,904 $(24,077)$2,350,986 $(1,108,630)$2,608,464 









See accompanying notes to consolidated financial statements.

7

SLM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS OF CASH FLOWS
(In thousands)INDEX
(Unaudited)
Part I. Financial Information
Item 1.
3
Item 1.
10
Item 2.
47
Item 3.
73
Item 4.
76
PART II. Other Information
Item 1.
77
Item 1A.
77
Item 2.
77
Item 3.
77
Item 4.
77
Item 5.
77
Item 6.
78


 Three Months Ended
March 31,
 20212020
Operating activities
Net income$641,207 $362,173 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provisions for credit losses(225,767)61,258 
Income tax expense203,525 121,481 
Amortization of brokered deposit placement fee4,307 5,193 
Amortization of Secured Borrowing Facility upfront fee773 526 
Amortization of deferred loan origination costs and loan premium/(discounts), net4,016 12,241 
Net amortization of discount on investments2,161 610 
Unrealized gain on investments0 1,191 
Reduction (increase) in tax indemnification receivable2,814 (169)
Depreciation of premises and equipment3,715 3,855 
Stock-based compensation expense11,124 13,610 
Unrealized (gains) losses on derivatives and hedging activities, net10,872 (43,195)
Gains on sales of loans, net(399,111)(238,935)
Other adjustments to net income, net2,578 1,574 
Changes in operating assets and liabilities:
Increase in accrued interest receivable(183,168)(236,282)
Increase in non-marketable securities(317)0 
Decrease (increase) in other interest-earning assets19,282 (40,404)
Increase in other assets(51,667)(32,874)
Decrease in income taxes payable, net(270)(710)
(Decrease) increase in accrued interest payable(9,081)18,610 
Increase in other liabilities8,759 134,661 
Total adjustments(595,455)(217,759)
Total net provided by operating activities45,752 144,414 
Investing activities
Loans acquired and originated(2,076,635)(2,310,173)
Net proceeds from sales of loans held for investment3,436,391 3,283,408 
Proceeds from claim payments4,602 11,314 
Net decrease in loans held for investment1,021,353 1,177,589 
Purchases of available-for-sale securities(200,716)(62,752)
Proceeds from sales and maturities of available-for-sale securities205,367 18,836 
Total net cash provided by investing activities2,390,362 2,118,222 
Financing activities
Brokered deposit placement fee0 (1,762)
Net (decrease) increase in certificates of deposit(686,344)69,971 
Net increase (decrease) in other deposits850,408 (55,044)
Borrowings collateralized by loans in securitization trusts - issued0 633,532 
Borrowings collateralized by loans in securitization trusts - repaid(272,123)(281,086)
Issuance costs for unsecured debt offering(325)0 
Repayment of borrowings under Secured Borrowing Facility0 (289,230)
Fees paid on Secured Borrowing Facility(2,833)(3,183)
Common stock dividends paid(10,906)(12,595)
Preferred stock dividends paid(1,201)(3,464)
Common stock repurchased(550,790)(558,167)
Net cash used in financing activities(674,114)(501,028)
Net increase in cash, cash equivalents and restricted cash1,762,000 1,761,608 
2 SLM CORPORATION
8

Cash, cash equivalents and restricted cash at beginning of period4,609,709 5,720,760 
Cash, cash equivalents and restricted cash at end of period$6,371,709 $7,482,368 
Cash disbursements made for:
Interest$76,491 $151,017 
Income taxes paid$887 $3,630 
Income taxes refunded$(1,049)$(2,890)
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents$6,207,001 $7,292,929 
Restricted cash164,708 189,439 
Total cash, cash equivalents and restricted cash$6,371,709 $7,482,368 


CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31,December 31,
(Dollars in thousands, except share and per share amounts)20222021
Assets
Cash and cash equivalents$3,262,595 $4,334,603 
Investments:
Trading investments at fair value (cost of $33,985 and $29,049, respectively)38,820 37,465 
Available-for-sale investments at fair value (cost of $2,440,204 and $2,535,568, respectively)2,341,551 2,517,956 
Other investments139,108 140,037 
Total investments2,519,479 2,695,458 
Loans held for investment (net of allowance for losses of $1,227,362 and $1,165,335, respectively)21,291,675 20,341,283 
Restricted cash187,960 210,741 
Other interest-earning assets9,327 9,655 
Accrued interest receivable1,259,145 1,205,667 
Premises and equipment, net148,154 150,516 
Goodwill and acquired intangible assets, net125,267 — 
Income taxes receivable, net215,217 239,578 
Tax indemnification receivable8,155 8,047 
Other assets24,855 26,351 
Total assets$29,051,829 $29,221,899 
Liabilities
Deposits$21,194,026 $20,828,124 
Long-term borrowings5,552,497 5,930,990 
Other liabilities261,099 313,074 
Total liabilities27,007,622 27,072,188 
Commitments and contingencies00
Equity
Preferred stock, par value $0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $100 per share251,070 251,070 
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 434.6 million and 432.0 million shares issued, respectively86,922 86,403 
Additional paid-in capital1,086,852 1,074,384 
Accumulated other comprehensive loss (net of tax benefit of ($12,601) and ($5,707), respectively)(39,514)(17,897)
Retained earnings2,913,544 2,817,134 
Total SLM Corporation stockholders’ equity before treasury stock4,298,874 4,211,094 
Less: Common stock held in treasury at cost: 163.5 million and 153.1 million shares, respectively(2,254,667)(2,061,383)
Total equity2,044,207 2,149,711 
Total liabilities and equity$29,051,829 $29,221,899 






See accompanying notes to consolidated financial statements.
SLM CORPORATION 3



CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share amounts)		Three Months Ended
March 31,
20222021
Interest income:
Loans$458,044 $431,804 
Investments5,479 2,728 
Cash and cash equivalents1,515 1,626 
Total interest income465,038 436,158 
Interest expense:
Deposits49,537 66,598 
Interest expense on short-term borrowings2,875 3,202 
Interest expense on long-term borrowings37,594 35,244 
Total interest expense90,006 105,044 
Net interest income375,032 331,114 
Less: provisions for credit losses98,050 (225,767)
Net interest income after provisions for credit losses276,982 556,881 
Non-interest income:
Gains on sales of loans, net9,881 399,111 
Gains (losses) on derivatives and hedging activities, net(5)28 
Other income12,049 14,288 
Total non-interest income21,925 413,427 
Non-interest expenses:
Operating expenses:
Compensation and benefits71,981 71,581 
FDIC assessment fees5,684 5,188 
Other operating expenses54,341 47,730 
Total operating expenses132,006 124,499 
Acquired intangible assets amortization expense733 — 
Restructuring expenses— 1,077 
Total non-interest expenses132,739 125,576 
Income before income tax expense166,168 844,732 
Income tax expense37,356 203,525 
Net income128,812 641,207 
Preferred stock dividends1,275 1,201 
Net income attributable to SLM Corporation common stock$127,537 $640,006 
Basic earnings per common share$0.46 $1.77 
Average common shares outstanding276,977 361,042 
Diluted earnings per common share$0.45 $1.75 
Average common and common equivalent shares outstanding280,654 366,240 
Declared dividends per common share$0.11 $0.03 





See accompanying notes to consolidated financial statements.
4 SLM CORPORATION



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)		Three Months Ended
March 31,
20222021
Net income$128,812 $641,207 
Other comprehensive income (loss):
Unrealized losses on investments(81,041)(10,071)
Unrealized gains on cash flow hedges52,530 23,423 
Total unrealized gains (losses)(28,511)13,352 
Income tax (expense) benefit6,894 (3,229)
Other comprehensive income (loss), net of tax (expense) benefit(21,617)10,123 
Total comprehensive income$107,195 $651,330 






















See accompanying notes to consolidated financial statements.
SLM CORPORATION 5




CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20202,510,696 456,729,251 (81,441,252)375,287,999 $251,070 $91,346 $1,331,247 $(34,200)$1,722,365 $(798,993)$2,562,835 
Net income— — — — — — — — 641,207 — 641,207 
Other comprehensive income, net of tax— — — — — — — 10,123 — — 10,123 
Total comprehensive income— — — — — — — — — — 651,330 
Cash dividends declared:
Common stock ($0.03 per share)— — — — — — — — (10,906)— (10,906)
Preferred Stock, Series B ($0.48 per share)— — — — — — — — (1,201)— (1,201)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — 463 — (479)— (16)
Issuance of common shares— 2,826,387 — 2,826,387 — 565 1,496 — — — 2,061 
Stock-based compensation expense— — — — — — 11,124 — — — 11,124 
Common stock repurchased and cancelled— (28,502,460)— (28,502,460)— (5,700)(466,110)— — — (471,810)
Common stock repurchased— — (20,200,370)(20,200,370)— — 174,684 — — (295,324)(120,640)
Shares repurchased related to employee stock-based compensation plans— — (1,059,980)(1,059,980)— — — — — (14,313)(14,313)
Balance at March 31, 20212,510,696 431,053,178 (102,701,602)328,351,576 $251,070 $86,211 $1,052,904 $(24,077)$2,350,986 $(1,108,630)$2,608,464 













See accompanying notes to consolidated financial statements.
6 SLM CORPORATION



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20212,510,696 432,013,372 (153,056,639)278,956,733 $251,070 $86,403 $1,074,384 $(17,897)$2,817,134 $(2,061,383)$2,149,711 
Net income— — — — — — — — 128,812 — 128,812 
Other comprehensive loss, net of tax— — — — — — — (21,617)— — (21,617)
Total comprehensive income— — — — — — — — — — 107,195 
Cash dividends declared:
Common stock ($0.11 per share)— — — — — — — — (30,493)— (30,493)
Preferred Stock, Series B ($0.51 per share)— — — — — — — — (1,275)— (1,275)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — 618 — (634)— (16)
Issuance of common shares— 2,594,817 — 2,594,817 — 519 (71)— — — 448 
Stock-based compensation expense— — — — — — 11,921 — — — 11,921 
Common stock repurchased— — (9,533,392)(9,533,392)— — — — — (175,943)(175,943)
Shares repurchased related to employee stock-based compensation plans— — (934,602)(934,602)— — — — — (17,341)(17,341)
Balance at March 31, 20222,510,696 434,608,189 (163,524,633)271,083,556 $251,070 $86,922 $1,086,852 $(39,514)$2,913,544 $(2,254,667)$2,044,207 
















See accompanying notes to consolidated financial statements.


SLM CORPORATION 7


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
(Dollars in thousands)20222021
Operating activities
Net income$128,812 $641,207 
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for credit losses98,050 (225,767)
Income tax expense37,356 203,525 
Amortization of brokered deposit placement fee3,425 4,307 
Amortization of Secured Borrowing Facility upfront fee569 773 
Amortization of deferred loan origination costs and loan premium/(discounts), net4,455 4,016 
Net amortization of discount on investments965 2,161 
Reduction (increase) in tax indemnification receivable(108)2,814 
Depreciation of premises and equipment4,189 3,715 
Acquired intangible assets amortization expense733 — 
Stock-based compensation expense11,921 11,124 
Unrealized (gains) losses on derivatives and hedging activities, net315 10,872 
Gains on sales of loans, net(9,881)(399,111)
Acquisition transaction costs, net2,511 — 
Other adjustments to net income, net7,235 2,578 
Changes in operating assets and liabilities:
Increase in accrued interest receivable(185,294)(183,168)
Increase in non-marketable securities(992)(317)
Decrease in other interest-earning assets328 19,282 
Increase in other assets(17,529)(51,667)
Decrease in income taxes payable, net(4,243)(270)
Increase (decrease) in accrued interest payable14,779 (9,081)
Increase (decrease) in other liabilities(34,808)8,759 
Total adjustments(66,024)(595,455)
Total net cash provided by operating activities62,788 45,752 
Investing activities
Loans acquired and originated(2,215,958)(2,076,635)
Net proceeds from sales of loans held for investment45,729 3,436,391 
Proceeds from FFELP Loan claim payments5,594 4,602 
Net decrease in loans held for investment (other than loan sales)1,153,297 1,021,353 
Purchases of available-for-sale securities(536,633)(200,716)
Proceeds from sales and maturities of available-for-sale securities686,806 205,367 
Purchase of subsidiary, net of cash acquired(127,702)— 
Total net cash (used in) provided by investing activities(988,867)2,390,362 
Financing activities
Brokered deposit placement fee(2,207)— 
Net decrease in certificates of deposit(127,815)(686,344)
Net increase in other deposits543,767 850,408 
Borrowings collateralized by loans in securitization trusts - repaid(381,005)(272,123)
Issuance costs for unsecured debt offering(360)(325)
Fees paid on Secured Borrowing Facility— (2,833)
Common stock dividends paid(30,493)(10,906)
Preferred stock dividends paid(1,275)(1,201)
Common stock repurchased(169,322)(550,790)
Total net cash used in financing activities(168,710)(674,114)
Net increase (decrease) in cash, cash equivalents and restricted cash(1,094,789)1,762,000 
Cash, cash equivalents and restricted cash at beginning of period4,545,344 4,609,709 
Cash, cash equivalents and restricted cash at end of period$3,450,555 $6,371,709 
8 SLM CORPORATION

Cash disbursements made for:
Interest$68,458 $76,491 
Income taxes paid$5,066 $887 
Income taxes refunded$(916)$(1,049)
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents$3,262,595 $6,207,001 
Restricted cash187,960 164,708 
Total cash, cash equivalents and restricted cash$3,450,555 $6,371,709 




















See accompanying notes to consolidated financial statements.
SLM CORPORATION 9




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, unless otherwise noted)

1. Significant Accounting Policies

Basis of Presentation
The accompanying unaudited, consolidated financial statements of SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” or “us”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all the information and footnotes required by GAAP for complete consolidated financial statements. The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three months ended March 31, 20212022 are not necessarily indicative of the results for the year ending December 31, 20212022 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 20202021 (the “2020“2021 Form 10-K”).
Consolidation
The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions.
We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performanceperformance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
Business Combination
On March 4, 2022, we completed the previously announced acquisition of the assets primarily used or held for use of Epic Research Education Services, LLC, which does business as Nitro College (“Nitro”). Nitro provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation. The addition of Nitro will support our mission of providing students with the confidence needed to successfully navigate the higher education journey. Strategically, we expect the acquisition of the Nitro assets, including its employees and intellectual property, to immediately expand our digital marketing capabilities, reduce the cost to acquire customer accounts, and accelerate our progress to become a broader education solutions provider for students before, during, and immediately after college.
The acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standard Codification 805, “Business Combinations,” whereby as of the acquisition date, the acquired tangible assets and liabilities were recorded at their estimated fair values. The identifiable intangible assets were recorded at fair values as determined by an independent appraiser. The final purchase price allocation for Nitro resulted in an excess purchase price over fair value of net assets acquired, or goodwill, of $51 million. Certain amounts are provisional and are subject to change, including final working capital adjustments and goodwill.
The results of operations of Nitro have been included in our consolidated financial statements since the acquisition date. We have not disclosed the pro forma impact of this acquisition to the results of operations for the three months ended March 31, 2022, as the pro forma impact was deemed immaterial. Transaction costs associated with the Nitro acquisition were approximately $3 million and were expensed as incurred within “Other operating expenses” in the consolidated statements of income.
Identifiable intangible assets at the acquisition date included definite life intangible assets with an aggregate fair value of approximately $75 million, including tradename and trademarks, customer relationships, and developed technology. The intangible assets will be amortized over a period of three to 10 years based on the estimated economic benefit derived from each of the underlying assets.
See Note 6, “Goodwill and Acquired Intangible Assets,” for additional details.

10SLM CORPORATION

1.Significant Accounting Policies (Continued)


Recently Issued and Adopted Accounting Pronouncements
On March 31, 2022, the FASB issued Accounting Standards Update (“ASU”) No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures” (“ASU No. 2022-02”), which eliminates the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The enhanced disclosures are required to be provided for modifications made starting in the period of adoption. Information about modifications in periods before adoption is not required to be provided.
ASU No. 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination. For entities that have adopted the amendments in ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
Early adoption of the amendments in ASU No. 2022-02 is permitted if an entity has adopted CECL. The amendments should be applied prospectively. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method. We have elected to early adopt in all aspects ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption did not affect our consolidated financial statements. For additional information, see Note 4, "Allowance for Credit Losses".


SLM CORPORATION 11




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
2. Investments
Trading Investments
From time to time weWe periodically sell Private Education Loans through securitization transactions where we are required to retain a 5 percent vertical risk retention interest (i.e., 5 percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. At March 31, 20212022 and December 31, 2020,2021, we had $31$39 million and $17$37 million, respectively, classified as trading investments.
Available-for-Sale Investments
The amortized cost and fair value of securities available for sale are as follows:

March 31, 2021
Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
As of March 31, 2022
(dollars in thousands)		As of March 31, 2022
(dollars in thousands)		Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:Available-for-sale:Available-for-sale:
Mortgage-backed securitiesMortgage-backed securities$348,080 $0 $3,492 $(6,545)$345,027 Mortgage-backed securities$400,647 $— $74 $(29,641)$371,080 
Utah Housing Corporation bondsUtah Housing Corporation bonds8,375 0 80 (15)8,440 Utah Housing Corporation bonds4,926 — — (77)4,849 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries1,560,848 0 2,581 (146)1,563,283 U.S. government-sponsored enterprises and Treasuries1,799,080 — — (63,830)1,735,250 
Other securitiesOther securities198,976 0 769 (610)199,135 Other securities235,551 — — (5,179)230,372 
TotalTotal$2,116,279 $0 $6,922 $(7,316)$2,115,885 Total$2,440,204 $— $74 $(98,727)$2,341,551 
December 31, 2020
Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
As of December 31, 2021
(dollars in thousands)		As of December 31, 2021
(dollars in thousands)		Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:Available-for-sale:Available-for-sale:
Mortgage-backed securitiesMortgage-backed securities$308,913 $0 $6,095 $(134)$314,874 Mortgage-backed securities$376,313 $— $1,857 $(7,073)$371,097 
Utah Housing Corporation bondsUtah Housing Corporation bonds12,357 0 210 0 12,567 Utah Housing Corporation bonds6,943 — 18 — 6,961 
U.S. government-sponsored enterprises1,596,890 0 3,395 0 1,600,285 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries1,958,943 — 603 (11,893)1,947,653 
Other securitiesOther securities68,797 0 462 (351)68,908 Other securities193,369 — 439 (1,563)192,245 
TotalTotal$1,986,957 $0 $10,162 $(485)$1,996,634 Total$2,535,568 $— $2,917 $(20,529)$2,517,956 

___________
(1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes unrealized losses related to non-credit factors.

1112 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
2.Investments (Continued)
The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:
Less than 12 months12 months or moreTotal
Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value
As of March 31, 2021:

(Dollars in thousands)
(Dollars in thousands)		Less than 12 months12 months or moreTotal
Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value
As of March 31, 2022:As of March 31, 2022:
Mortgage-backed securitiesMortgage-backed securities$(6,545)$242,386 $0 $0 $(6,545)$242,386 Mortgage-backed securities$(12,056)$188,447 $(17,585)$176,659 $(29,641)$365,106 
Utah Housing Corporation bondsUtah Housing Corporation bonds(15)4,357 0 0 (15)4,357 Utah Housing Corporation bonds(77)4,849 — — (77)4,849 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries(146)114,870 0 0 (146)114,870 U.S. government-sponsored enterprises and Treasuries(61,996)1,647,055 (1,834)63,176 (63,830)1,710,231 
Other securitiesOther securities(339)89,603 (271)12,776 (610)102,379 Other securities(3,266)137,845 (1,913)36,752 (5,179)174,597 
TotalTotal$(7,045)$451,216 $(271)$12,776 $(7,316)$463,992 Total$(77,395)$1,978,196 $(21,332)$276,587 $(98,727)$2,254,783 
As of December 31, 2020:
As of December 31, 2021:As of December 31, 2021:
Mortgage-backed securitiesMortgage-backed securities$(134)$46,011 $0 $0 $(134)$46,011 Mortgage-backed securities$(5,534)$261,404 $(1,540)$36,587 $(7,074)$297,991 
Utah Housing Corporation bondsUtah Housing Corporation bonds0 0 0 0 0 0 Utah Housing Corporation bonds— — — — — — 
U.S. government-sponsored enterprises0 0 0 0 0 0 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries(11,892)1,199,367 — — (11,892)1,199,367 
Other securitiesOther securities(351)30,441 0 0 (351)30,441 Other securities(1,563)132,884 — — (1,563)132,884 
TotalTotal$(485)$76,452 $0 $0 $(485)$76,452 Total$(18,989)$1,593,655 $(1,540)$36,587 $(20,529)$1,630,242 

At March 31, 20212022 and December 31, 2020, 402021, 158 of 175186 and 1460 of 163,180, respectively, of our available-for-sale debt securities were in an unrealized loss position.
Impairment
For available-for-sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, the security’s amortized cost basis is written down to fair value through income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security.
Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal Home Loan Bank, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. Our
12




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
2.Investments (Continued)
Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Standard and Poor’sMoody’s Investors Service or AA+ by Moody’s Investors Service.Standard and Poor’s. The decline in value from December 31, 20202021 to March 31, 20212022 was driven by the current interest rate environment and is not credit related. We have the intent and ability to hold these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on this qualitative analysis, we have determined that no credit impairment exists.
From time to time weWe periodically sell Private Education Loans through securitization transactions where we are required to retain a 5 percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to these investments and do not consider a credit impairment to exist.
SLM CORPORATION 13

2.Investments (Continued)
As of March 31, 2021,2022, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.
Year of MaturityAmortized CostEstimated Fair Value
2021$293,759 $294,232 
As of March 31, 2022
Year of Maturity
(dollars in thousands)		As of March 31, 2022
Year of Maturity
(dollars in thousands)		Amortized CostEstimated Fair Value
202220221,018,268 1,019,960 2022$194,309 $193,447 
20232023148,822 149,166 2023162,595 159,383 
20242024100,000 99,925 2024597,268 577,077 
20252025297,077 293,021 
20262026547,832 512,323 
2038203876 88 203873 76 
203920391,601 1,773 2039873 916 
204220424,201 4,206 20422,912 2,768 
204320437,415 7,711 20435,415 5,336 
2044204410,133 10,610 20447,015 6,959 
204520458,870 9,179 20456,158 6,018 
2046204614,414 14,797 20469,374 9,085 
2047204718,646 18,992 20479,957 9,751 
204820484,362 4,545 20482,427 2,437 
2049204936,368 37,683 204918,261 17,902 
20502050174,919 170,740 2050127,490 116,445 
2051205175,449 73,143 2051174,646 159,542 
2052205240,972 38,693 
20532053134,414 134,289 2053132,336 128,621 
2054205464,562 64,846 2054103,214 101,751 
TotalTotal$2,116,279 $2,115,885 Total$2,440,204 $2,341,551 

Some of our securities have been pledged to the Federal Reserve Bank (the “FRB”) as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $786$720 million and $815$888 million par value of securities pledged to this borrowing facility at March 31, 20212022 and December 31, 2020,2021, respectively, as discussed further in Notes to Consolidated Financial Statements, Note 8, “Borrowings.”


13




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
2.Investments (Continued)
Other Investments
Investments in Non-Marketable Securities
We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or similar securities of the same issuer in determining any changes in the value of the securities. As of March 31, 20212022 and December 31, 2020,2021, our total investment in these securities was $26$69 million and $26$69 million, respectively.
Low Income Housing Tax Credit Investments
We invest in affordable housing projects that qualify for the low incomelow-income housing tax credit (“LIHTC”), which is designed to promote private development of low incomelow-income housing. These investments generate a return mostly through realization of federal tax credits.credits and tax benefits from net operating losses on the underlying properties. Total carrying value of the LIHTC investments was $52$66 million at March 31, 20212022 and $54$68 million at December 31, 2020.2021. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $15$28 million at March 31, 20212022 and $19$30 million at December 31, 2020.2021.
Related to these investments, we recognized tax credits and other tax benefits through tax expense of less than $1 million at March 31, 20212022 and $6$7 million at December 31, 2020.2021. Tax credits and other tax benefits are recognized as
14 SLM CORPORATION

2.Investments (Continued)
part of our annual effective tax rate used to determine tax expense in a given quarter. Accordingly, the portion of a year’s expected tax benefits recognized in any given quarter may differ from 25 percent.


3. Loans Held for Investment
Loans held for investment consist of Private Education Loans, FFELP Loans, Personal Loans, and Credit Cards. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP”). We use “Credit Cards” to refer to our suite of Credit Cards with bonus rewards. We use “Personal Loans” to mean those unsecured loans to individuals that may be used for non-educational purposes. In the third quarter of 2020, we sold our entire Personal Loan portfolio.
Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to LIBOR, the London interbank offered rate, or another index inSOFR, the future.Secured Overnight Financing Rate. As of March 31, 20212022 and December 31, 2020,2021, 5451 percent and 5552 percent, respectively, of all of our Private Education Loans were indexed to LIBOR.LIBOR or SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school.
FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims.
In the first quarter of 2022, we recognized $10 million in gains from the sale of approximately $95 million of our Private Education Loans, including $89 million of principal and $6 million in capitalized interest, to an unaffiliated third party. In the first quarter of 2021, we recognized a $399 million gainin gains from the sale of approximately $3.16 billion of our Private Education Loans, including $2.97 billion of principal and $193 million in capitalized interest, to an unaffiliated third party. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings - Unconsolidated VIEs.”

14SLM CORPORATION 15




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
3.Loans Held for Investment (Continued)
servicing agreements executed in connection with the sales. For additional information see Notes to Consolidated Financial Statements, Note 8, “Borrowings.”
Loans held for investment are summarized as follows:
March 31,December 31,March 31,December 31,
20212020
(Dollars in thousands)(Dollars in thousands)20222021
Private Education Loans:Private Education Loans:Private Education Loans:
Fixed-rateFixed-rate$9,504,760 $8,950,216 Fixed-rate$10,685,053 $9,920,547 
Variable-rateVariable-rate11,237,080 10,779,121 Variable-rate11,050,316 10,796,316 
Total Private Education Loans, grossTotal Private Education Loans, gross20,741,840 19,729,337 Total Private Education Loans, gross21,735,369 20,716,863 
Deferred origination costs and unamortized premium/(discount)Deferred origination costs and unamortized premium/(discount)64,468 63,475 Deferred origination costs and unamortized premium/(discount)71,907 67,488 
Allowance for credit lossesAllowance for credit losses(1,173,375)(1,355,844)Allowance for credit losses(1,221,053)(1,158,977)
Total Private Education Loans, netTotal Private Education Loans, net19,632,933 18,436,968 Total Private Education Loans, net20,586,223 19,625,374 
FFELP LoansFFELP Loans727,664 737,593 FFELP Loans682,273 695,216 
Deferred origination costs and unamortized premium/(discount)Deferred origination costs and unamortized premium/(discount)1,954 1,993 Deferred origination costs and unamortized premium/(discount)1,770 1,815 
Allowance for credit lossesAllowance for credit losses(4,318)(4,378)Allowance for credit losses(3,999)(4,077)
Total FFELP Loans, netTotal FFELP Loans, net725,300 735,208 Total FFELP Loans, net680,044 692,954 
Credit Cards (fixed-rate)Credit Cards (fixed-rate)11,309 12,238 Credit Cards (fixed-rate)27,547 25,014 
Deferred origination costs and unamortized premium/(discount)Deferred origination costs and unamortized premium/(discount)73 230 Deferred origination costs and unamortized premium/(discount)171 222 
Allowance for credit lossesAllowance for credit losses(1,328)(1,501)Allowance for credit losses(2,310)(2,281)
Total Credit Cards, netTotal Credit Cards, net10,054 10,967 Total Credit Cards, net25,408 22,955 
Loans held for investment, netLoans held for investment, net$20,368,287 $19,183,143 Loans held for investment, net$21,291,675 $20,341,283 
 
The estimated weighted average life of education loans in our portfolio was approximately 4.64.8 years and 5.44.7 years at March 31, 20212022 and December 31, 2020,2021, respectively.
15




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
3.Loans Held for Investment (Continued)
The average balance and the respective weighted average interest rates of loans in our portfolio are summarized as follows:

Three Months Ended20222021
March 31,
20212020
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Three Months Ended March 31,
(dollars in thousands)
Three Months Ended March 31,
(dollars in thousands)
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education LoansPrivate Education Loans$20,984,491 8.22 %$23,502,844 8.86 %Private Education Loans$21,858,270 8.38 %$20,984,491 8.22 %
FFELP LoansFFELP Loans734,289 3.41 776,326 4.29 FFELP Loans690,540 3.51 734,289 3.41 
Personal Loans0 0 973,671 12.11 
Credit CardsCredit Cards11,841 0.78 5,286 (4.72)Credit Cards26,622 3.95 11,841 0.78 
Total portfolioTotal portfolio$21,730,621 $25,258,127 Total portfolio$22,575,432 $21,730,621 


Certain Collection Tools - Private Education Loans
We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations, achieve better student outcomes, and increase the collectability of the loan. These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers.
Forbearance allows a borrower to temporarily not make scheduled payments or to make smaller than scheduled payments, in each case for a specified period of time. Using forbearance extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is capitalized to principal when the loan re-enters repayment status (except as described below in the case of disaster forbearance).
We grant forbearance through our servicing centers to borrowers who are current in their payments and through our collections centers to certain borrowers who are delinquent. Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter payment requirements for delinquent borrowers. We view the population of borrowers that use forbearance positively because the borrowers are either proactively reaching out to us to obtain assistance in managing their obligations or are working with our collections center to bring their loans current.
Forbearance may be granted through our servicing centers to customers who are exiting their grace period, and to other customers who are current in their payments, to provide temporary payment relief. In these circumstances, a customer’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time. At the end of the forbearance period, the customer will enter repayment status as current and is expected to begin making scheduled monthly payments. Currently, we generally grant forbearance in our servicing centers if a borrower who is current requests it for increments of up to three months at a time, for up to 12 months.
Forbearance may also be granted through our collections centers to customers who are delinquent in their payments. If specific payment requirements are met, the forbearance can cure the delinquency and the customer is returned to a current repayment status. Forbearance as a collection tool is used most effectively when applying historical experience and our
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
3.Loans Held for Investment (Continued)
judgment to a customer’s unique situation. We leverage updated customer information and other decision support tools to best determine who will be granted forbearance based on our expectations as to a customer’s ability and willingness to repay their obligation. This strategy is aimed at assisting customers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans. In all instances, we require one or more payments before granting forbearance to delinquent borrowers.
The COVID-19 pandemic is having far reaching, negative impacts on individuals, businesses, and, consequently, the overall economy. Specifically, COVID-19 has materially disrupted business operations throughout the country, resulting in significantly higher levels of unemployment or underemployment. As a result, we expect many of our individual customers will experience financial hardship, making it difficult, if not impossible, to meet their payment obligations to us without temporary assistance. We are monitoring key metrics as early warning indicators of financial hardship, including changes in weekly unemployment claims, enrollment in auto-debit payments, requests for new forbearances, enrollment in hardship payment plans, and early delinquency metrics.
As a result of the negative impact on employment from COVID-19, our customers are experiencing higher levels of financial hardship, which led initially to higher levels of forbearance. We expect such higher levels of financial hardship to lead to higher levels of delinquencies and defaults in the future, as borrowers who had received disaster forbearance from us re-enter repayment status. We expect that, left unabated, this deterioration in forbearance, delinquency, and default rates will persist until such time as the economy and employment return to relatively normal levels. For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At March 31, 2021, $784 million of Private Education Loans were granted this extended period of time. See Note 5, “Allowance for Credit Losses — Delinquencies — Private Education Loans Held for Investment” for an additional breakout of these loans.
We assist customers with an array of payment programs during periods of financial hardship as standard operating convention, including: forbearance, which defers payments during a short-term hardship; our Graduated Repayment Plan (“GRP”), which is an interest-only payment for 12 months; or a loan modification that, in the event of long-term hardship, reduces the interest rate on a loan to 4 percent for 24 months and/or permanently extends the maturity date of the loan. Historically, we have utilized disaster forbearance for material events, including hurricanes, wildfires, and floods. Disaster forbearance defers payments for as much as 90 days upon enrollment. We have invoked this same disaster forbearance program to assist our customers through COVID-19 and offer this program across our operations, including through mobile app and self-service channels such as chat and interactive voice response. Customers who receive a disaster forbearance will not progress in delinquency and will not be assessed late fees or other fees. During a disaster forbearance, a customer’s credit file will continue to reflect the status of the loan as it was immediately prior to granting the disaster forbearance. During the period of the disaster forbearance, interest will continue to accrue, but is not capitalized to the loan balance after the loan returns to repayment status. The first wave of disaster forbearance was granted primarily in 90-day increments.As these forbearances ended, we reduced the disaster forbearance to one-month increments and implemented additional discussions between our servicing agents and borrowers to encourage borrowers/cosigners to enter repayment. If the financial hardship extends beyond 90 days, additional assistance will be available for eligible customers. For example, for borrowers exiting disaster forbearance and not eligible for GRP, we may allow them to make interest only payments for 12 months before reverting to full principal and interest payments.
Management continually monitors our credit administration practices and may periodically modify these practices based upon performance, industry conventions, and/or regulatory feedback. In light of these considerations, we previously announced that we plan to implement certain changes to our credit administration practices in the future. As discussed below, however, we postponed until the fourth quarter of 2020 the implementation of the announced credit administration practices changes due to the COVID-19 pandemic.
Specifically, we previously announced that we plan to revise our credit administration practices limiting the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
3.Loans Held for Investment (Continued)
granted. For example, we currently grant forbearance to borrowers without requiring any period of prior principal and interest payments, meaning that, if a borrower satisfies all eligibility requirements, forbearance increments may be granted consecutively. We previously announced that, beginning in the second quarter of 2020, we would phase in a required six-month period between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. We announced this required period will not apply, however, to forbearances granted during the first six months following a borrower’s grace period and will not be required for a borrower to receive a contractual interest rate reduction. In addition, we announced we would limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years.
As previously announced, prior to full implementation of the credit administration practices changes described above, management will conduct a controlled testing program on randomly selected borrowers to measure the impact of the changes on our customers, our credit operations, and key credit metrics. The testing commenced in October 2019 for some of the planned changes on a very small percentage of our total portfolio and we originally expected to expand the number of borrowers in repayment who would be subject to the new credit administration practices. However, due to the COVID-19 pandemic, we postponed our efforts so that we can be more flexible in dealing with our customers’ financial hardship. In October 2020, we began to roll out in a methodical approach the implementation of the credit administration practices changes and related testing. Management now expects to have completed implementation of the planned credit administration practices changes in the third quarter of 2021. However, we may modify or delay the contemplated practice changes, the proposed timeline, or the method of implementation as we learn more about the impacts of the program on our customers.
We also offer rate and term modifications to customers experiencing more severe hardship. Currently, we temporarily reduce the contractual interest rate on a loan to 4.0 percent for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. As part of demonstrating the ability and willingness to pay, the customer must make three consecutive monthly payments at the reduced payment to qualify for the program. The combination of the rate reduction and maturity extension helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate. At March 31, 2021 and December 31, 2020, 8.1 percent and 7.8 percent, respectively, of our loans then currently in full principal and interest repayment status were subject to interest rate reductions made under our rate modification program. We currently have no plans to change the basic elements of the rate and term modifications we offer to our customers experiencing more severe hardship.
While there are limitations to our estimate of the future impact of the credit administration practices changes described above, absent the effect of any mitigating measures, and based on an analysis of borrower behavior under our current credit administration practices, which may not be indicative of how borrowers will behave under revised credit administration practices, we expect that the credit administration practices changes described above will accelerate defaults and could increase life of loan defaults in our Private Education Loan held for investment portfolio by approximately 4 percent to 14 percent. Among the measures that we are planning to implement and expect may partly offset or moderate any acceleration of or increase in defaults will be greater focus on the risk assessment process to ensure borrowers are mapped to the appropriate program, better utilization of existing programs (e.g., GRP and rate modifications), and the introduction of a new program offering short-term payment reductions (permitting interest-only payments for up to six months) for certain early stage delinquencies.
The full impact of these changes to our collections practices described above may only be realized over the longer term, however. In particular, when we calculate the allowance for credit losses under CECL, which became effective on January 1, 2020, our loan loss reserves increased materially because we expect the life of loan defaults on our overall Private Education Loan portfolio to increase, in part as a result of the planned changes to our credit administration practices. As we progress with the controlled testing program of the planned changes to our credit administration practices, we expect to learn more about how our borrowers are reacting to these changes and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
4. Loans Held for Sale
We had 0 loans held for sale and $2.9 billion in loans held for sale at March 31, 2021 and December 31, 2020, respectively. At December 31, 2020, we reversed $206 million through the provisions for credit losses for the allowance related to those loans held for sale, when the loans were transferred from held for investment to held for sale.
During the first quarter of 2021, we sold $3.16 billion of our Private Education Loans, including $2.97 billion of principal and $193 million in capitalized interest, to an unaffiliated third party. The transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. These sales resulted in our recognizing a gain of $399 million in the first quarter of 2021. For additional information, see Notes to Consolidated Financial Statements, Note 3, “Loans Held for Investment,” and Note 8, “Borrowings.”


5. Allowance for Credit Losses
Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb lifetime expected credit losses in the held for investment loan portfolios. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for credit losses is appropriate to cover lifetime losses expected to be incurred in the loan portfolios. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses - 2021 and 2020 — Allowance for Private Education Loan Losses - 2021 and 2020, — Allowance for FFELP Loan Losses - 2021 and 2020, and — Allowance for Credit Card Loans”Loans - 2021 and 2020” in our 20202021 Form 10-K for a more detailed discussion.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

Allowance for Credit Losses Metrics
 Allowance for Credit Losses
 Three Months Ended March 31, 2021
FFELP
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,378 $1,355,844 $1,501 $1,361,723 
Transfer from unfunded commitment liability(1)
0 126,880 0 126,880 
Provisions:
Provision for current period29 (254,942)(86)(254,999)
Loan sale reduction to provision0 (8,858)0 (8,858)
Loan transfer from held-for-sale0 1,887 0 1,887 
Total provisions(2)
29 (261,913)(86)(261,970)
Net charge-offs:
Charge-offs(89)(55,139)(88)(55,316)
Recoveries0 7,703 1 7,704 
Net charge-offs(89)(47,436)(87)(47,612)
Loan sales0 0 0 0 
Ending Balance$4,318 $1,173,375 $1,328 $1,179,021 
Allowance:
Ending balance: individually evaluated for impairment$0 $95,536 $0 $95,536 
Ending balance: collectively evaluated for impairment$4,318 $1,077,839 $1,328 $1,083,485 
Loans:
Ending balance: individually evaluated for impairment$0 $1,225,604 $0 $1,225,604 
Ending balance: collectively evaluated for impairment$727,664 $19,516,236 $11,309 $20,255,209 
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.06 %1.29 %2.92 %
Allowance as a percentage of the ending total loan balance0.59 %5.66 %11.74 %
Allowance as a percentage of the ending loans in repayment(3)
0.80 %7.94 %11.74 %
Allowance coverage of net charge-offs (annualized)12.13 6.18 3.82 
Ending total loans, gross$727,664 $20,741,840 $11,309 
Average loans in repayment(3)
$554,510 $14,743,508 $11,909 
Ending loans in repayment(3)
$540,903 $14,777,939 $11,309 

____________
Three Months Ended March 31, 2022
(dollars in thousands)		FFELP
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,077 $1,158,977 $2,281 $1,165,335 
Transfer from unfunded commitment liability(1)
— 94,686 — 94,686 
Provisions:
Provision for current period21 48,460 137 48,618 
Loan sale reduction to provision— (5,247)— (5,247)
Total provisions(2)
21 43,213 137 43,371 
Net charge-offs:
Charge-offs(99)(83,856)(111)(84,066)
Recoveries— 8,033 3 8,036 
Net charge-offs(99)(75,823)(108)(76,030)
Ending Balance$3,999 $1,221,053 $2,310 $1,227,362 
Allowance:
Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairment$3,999 $1,221,053 $2,310 $1,227,362 
Loans:
Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairment$682,273 $21,735,369 $27,547 $22,445,189 
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.07 %1.89 %1.63 %
Allowance as a percentage of the ending total loan balance0.59 %5.62 %8.39 %
Allowance as a percentage of the ending loans in repayment(3)
0.75 %7.59 %8.39 %
Allowance coverage of net charge-offs (annualized)10.10 4.03 5.35 
Ending total loans, gross$682,273 $21,735,369 $27,547 
Average loans in repayment(3)
$543,303 $16,013,289 $26,551 
Ending loans in repayment(3)
$535,080 $16,095,157 $27,547 

(1) See Note 6,5, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2) Below is a reconciliation of the provisionprovisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended March 31, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$43,213 
Provisions for unfunded loan commitments54,679 
Total Private Education Loan provisions for credit losses97,892 
Other impacts to the provisions for credit losses:
FFELP Loans21 
Credit Cards137 
Total158 
Provisions for credit losses reported in consolidated statements of income$98,050 

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(3) 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.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

Three Months Ended March 31, 2021
(dollars in thousands)		FFELP 
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,378 $1,355,844 $1,501 $1,361,723 
Transfer from unfunded commitment liability(1)
— 126,880 — 126,880 
Provisions:
Provision for current period29 (254,942)(86)(254,999)
Loan sale reduction to provision— (8,858)— (8,858)
Loans transferred from held-for-sale— 1,887 — 1,887 
Total provisions(2)
29 (261,913)(86)(261,970)
Net charge-offs:
Charge-offs(89)(55,139)(88)(55,316)
Recoveries— 7,703 1 7,704 
Net charge-offs(89)(47,436)(87)(47,612)
Ending Balance$4,318 $1,173,375 $1,328 $1,179,021 
Allowance:
Ending balance: individually evaluated for impairment$— $95,536 $— $95,536 
Ending balance: collectively evaluated for impairment$4,318 $1,077,839 $1,328 $1,083,485 
Loans:
Ending balance: individually evaluated for impairment$— $1,225,604 $— $1,225,604 
Ending balance: collectively evaluated for impairment$727,664 $19,516,236 $11,309 $20,255,209 
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.06 %1.29 %2.92 %
Allowance as a percentage of the ending total loan balance0.59 %5.66 %11.74 %
Allowance as a percentage of the ending loans in repayment(3)
0.80 %7.94 %11.74 %
Allowance coverage of net charge-offs (annualized)12.13 6.18 3.82 
Ending total loans, gross$727,664 $20,741,840 $11,309 
Average loans in repayment(3)
$554,510 $14,743,508 $11,909 
Ending loans in repayment(3)
$540,903 $14,777,939 $11,309 
(1) See Note 5, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2) Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended
 March 31, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$(261,913)
Provisions for unfunded loan commitments36,203 
Total Private Education Loan provisions for credit losses(225,710)
Other impacts to the provisions for credit losses:
FFELP Loans29 
Credit Cards(86)
Total(57)
Provisions for credit losses reported in consolidated statements of income$(225,767)

(3) 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.


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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)


 Allowance for Credit Losses
 Three Months Ended March 31, 2020
FFELP 
Loans		Private Education
Loans		Personal
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$1,633 $374,300 $65,877 $102 $441,912 
Day 1 adjustment for the adoption of CECL2,852 1,060,830 79,183 188 1,143,053 
Balance at January 1, 20204,485 1,435,130 145,060 290 1,584,965 
Transfer from unfunded commitment liability(1)
0 142,075 0 0 142,075 
Provisions:
Provision for current period37 143,862 25,318 291 169,508 
Loan sale reduction to provision0 (161,793)0 0 (161,793)
Total provisions(2)
37 (17,931)25,318 291 7,715 
Net charge-offs:
Charge-offs(226)(51,469)(19,247)(7)(70,949)
Recoveries0 7,976 1,542 0 9,518 
Net charge-offs(226)(43,493)(17,705)(7)(61,431)
Ending Balance$4,296 $1,515,781 $152,673 $574 $1,673,324 
Allowance:
Ending balance: individually evaluated for impairment$0 $150,822 $0 $0 $150,822 
Ending balance: collectively evaluated for impairment$4,296 $1,364,959 $152,673 $574 $1,522,502 
Loans:
Ending balance: individually evaluated for impairment$0 $1,518,763 $0 $0 $1,518,763 
Ending balance: collectively evaluated for impairment$766,954 $20,107,984 $899,704 $7,234 $21,781,876 
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.15 %1.05 %7.27 %0.52 %
Allowance as a percentage of the ending total loan balance0.56 %7.01 %16.97 %7.93 %
Allowance as a percentage of the ending loans in repayment(3)
0.74 %10.11 %16.97 %7.93 %
Allowance coverage of net charge-offs (annualized)4.75 8.71 2.16 20.50 
Ending total loans, gross$766,954 $21,626,747 $899,704 $7,234 
Average loans in repayment(3)
$600,534 $16,521,356 $973,772 $5,364 
Ending loans in repayment(3)
$581,997 $14,988,345 $899,704 $7,234 
____________
(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2)Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended 
 March 31, 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses$(17,931)
Provisions for unfunded loan commitments53,543 
Total Private Education Loan provisions for credit losses35,612 
Other impacts to the provisions for credit losses:
Personal Loans25,318 
FFELP Loans37 
Credit Cards291 
Total25,646 
Provisions for credit losses reported in consolidated statements of income$61,258 

(3) 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.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

Allowance for Credit Losses - Forecast Assumptions
In determining the adequacy of the allowance for credit losses, we include forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for these two inputs from Moody’s Analytics. Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurring. We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs. At both January 1, 2020 (the initial adoption date of the Financial Accounting Standards Board’s Accounting Standards Update No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” or “CECL”),March 31, 2021, December 31, 2021, and March 31, 2021,2022, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent and 30 percent, respectively. Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.
Provisions for credit losses in the current quarter decreasedthree months ended March 31, 2022 increased by $287$324 million compared with the year-ago quarter.period. During the first quarter of 2021,three months ended March 31, 2022, the provisionsprovision for credit losses line item was primarily affected by improvements in theincreased commitments and additional management overlays, which were partially offset by improved economic forecasts coupled with a benefit fromand faster forecasted prepayment speeds. These benefits were offset by additional provision from the new loan commitments made during the first quarter of 2021. rates.
During the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans. These faster estimated prepayment speeds during the two-year reasonable and supportable period reflectreflected the significant improvement in economic forecasts, as well as the implementation of an updated prepayment speed model. We experienced higher prepayments during the COVID-19 pandemic, when unemployment rates were elevated, than we would have expected based upon our experience during past financial crises. To address this fundamental change, we increased our long-term expectations
Loan Modifications to Borrowers Experiencing Financial Difficulty
The allowance for credit losses incorporates an estimate of prepayment speeds.lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur.
Troubled Debt Restructurings (“TDRs”)
All of our loans are collectively assessed for impairment, except for loans classified as TDRs (where we conduct individual assessments of impairment). We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loan.loans. These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative.
When we give a borrower facing financial difficulty an interest rate reduction, we temporarily reduce the contractual interest rate on a loan (currently to 4.0 percentpercent) for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. The combination of these two2 loan term changes helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate. At March 31, 2021 and March 31, 2020, 8.1 percent and 8.5 percent, respectively, of our loans then currently in full principal and interest repayment status were subject to interest rate reductions made under our rate modification program.
Once a loan qualifies for TDR status, it remains a TDR for allowance purposes for the remainder of its life. As of both March 31, 2021 and December 31, 2020, approximately 47 percent of TDRs were classified as such due to their forbearance status. For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Loan Losses 2020,” and Note 7, “Allowance for Credit Losses” in our 2020 Form 10-K.
Within the Private Education Loan portfolio, we deem loans greater than 90 days past due areas nonperforming. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim.
For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Credit Losses - 2021 and 2020,” and Note 7, “Allowance for Credit Losses” in our 2021 Form 10-K.

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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)
At March 31, 2021 and December 31, 2020, all of our TDR loans had a related allowance recorded. The following table provides the recorded investment, unpaid principal balance and related allowance for our TDR loans.
Recorded InvestmentUnpaid Principal BalanceAllowance
March 31, 2021
TDR Loans$1,263,651 $1,225,604 $95,536 
December 31, 2020
TDR Loans$1,312,805 $1,274,590 $104,265 


The following table provides the average recorded investment and interest income recognized for our TDR loans.

Three Months Ended 
 March 31,
20212020
Average
Recorded
Investment		Interest
Income
Recognized		Average
Recorded
Investment		Interest
Income
Recognized
TDR Loans$1,288,333 $21,489 $1,615,764 $26,488 


25




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

Under our current forbearance practices, temporary forbearance of payments is generally granted in one-to-two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). See Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in our 2021 Form 10-K. In the first quarter of 2022, we adopted ASU No. 2022-02 (see Note 1, “Significant Accounting Policies” in this Form 10-Q). Under this new amendment, if the debt has been previously restructured, an entity must consider the cumulative effect of past restructurings made within the 12-month period before the current restructuring when determining whether a delay in payment resulting from the current restructuring is insignificant. Due to our current forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of forbearances will exceed the significance threshold and, therefore, we do not consider the forbearances as loan modifications.
The limitations on granting of forbearances described above apply to hardship forbearances. We offer other administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are either required by law (such as by the Servicemembers Civil Relief Act) or are considered separate from our active loss mitigation programs and therefore are not considered to be loan modifications under ASU No. 2022-02. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. For purposes of this disclosure, we do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below.
The following table shows the amortized cost basis at the end of the reporting period of the loans to borrowers experiencing financial difficulty that were modified during the period from January 1, 2022 (the effective date of our adoption of ASU No. 2022-02) through the end of the reporting period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
At March 31, 2022
(dollars in thousands)		Interest Rate ReductionCombination - Interest Rate Reduction and Term Extension
Loan Type:Amortized Cost Basis% of Total Class of Financing ReceivableAmortized Cost Basis% of Total Class of Financing Receivable
Private Education Loans$7,679 0.04 %$79,597 0.37 %
Total$7,679 0.04 %$79,597 0.37 %

The following table describes the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty:

Interest Rate ReductionCombination - Interest Rate
Reduction and Term Extension
Loan TypeFinancial EffectLoan TypeFinancial Effect
Private Education LoansReduced average contractual rate from 10.09% to 4.00%Private Education Loans
Added a weighted average 10.51 years to the life of loans

Reduced average contractual rate from 9.43% to 4.00%


SLM CORPORATION 21

4.Allowance for Credit Losses (Continued)

When a Private Education Loan reaches 120 days delinquent, the loan is charged off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Allowance for Credit Losses - 2021 and 2020 — Allowance for Private Education Loan Losses - 2021 and 2020, — Allowance for FFELP Loan Losses - 2021 and 2020, and — Allowance for Credit Card Loans - 2021 and 2020” in our 2021 Form 10-K for a more detailed discussion.
The following table provides information regarding the loan statusamount of financing receivables whose borrowers were experiencing financial difficulty and aginghad a payment default and were modified during the period from January 1, 2022 (the effective date of TDR loans. Forour adoption of ASU No. 2022-02) through the periods presented below, we updated our delinquency bucket periods to conform withend of the delinquency bucket periods defined by the Federal Financial Institutions Examination Council (“FFIEC”).reporting period. We define payment default as 60 days past due for purposes of this disclosure.
At March 31, 2022
(dollars in thousands)
Modified Loans(1)
Payment Default
Loan Type:
Private Education Loans$290 $287 
Total$290 $287 
(1) Represents amortized cost basis of loans that have been modified.

 March 31,December 31,
 20212020
Balance%Balance%
TDR loans in in-school/grace/deferment(1)
$93,850 $88,750 
TDR loans in forbearance(2)
68,609 76,704 
TDR loans in repayment(3) and percentage of each status:
Loans current966,201 90.9 %971,880 87.7 %
Loans delinquent 30-59 days(4)
39,541 3.7 59,249 5.3 
Loans delinquent 60-89 days(4)
29,892 2.8 43,576 3.9 
Loans 90 days or greater past due(4)
27,511 2.6 34,431 3.1 
Total TDR loans in repayment(3)
1,063,145 100.0 %1,109,136 100.0 %
Total TDR loans, gross$1,225,604 $1,274,590 
We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that have been modified during the period from January 1, 2022 (the effective date of our adoption of ASU No. 2022-02) through the end of the reporting period.
        _____
Payment Status (Amortized Cost Basis)
At March 31, 2022
(dollars in thousands)
Deferment(1)
Current(2)(3)
30-59 Days
Past Due(2)(3)
60-89 Days
Past Due(2)(3)
90 Days or Greater
 Past Due(2)(3)
Loan Type:
Private Education Loans$649 $84,992 $1,295 $255 $85 
Total$649 $84,992 $1,295 $255 $85 
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).
(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)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 statuspayments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(4)(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.

26



22 SLM CORPORATION

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

The following table provides the amount of modified loans (which include forbearance and reductions in interest rates) that became TDRs in the periods presented. Additionally, for the periods presented, the table summarizes charge-offs occurring in the TDR portfolio, as well as TDRs for which a payment default occurred in the relevant period presented and within 12 months of the loan first being designated as a TDR. We define payment default as 60 days past due for this disclosure.

Three Months Ended 
 March 31, 2021		Three Months Ended 
 March 31, 2020
Modified Loans(1)
Charge-offsPayment-
Default
Modified Loans(1)
Charge-offsPayment-
Default
TDR Loans$3,717 $17,948 $4,869 $132,815 $19,375 $30,725 

_____
(1)Represents the principal balance of loans that have been modified during the period and resulted in a TDR.


Private Education Loans Held for Investment - Key Credit Quality Indicators
FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest in the event of default; therefore, there are no key credit quality indicators associated with FFELP Loans.
For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination, stratified by key credit quality indicators.









As of March 31, 2022
(dollars in thousands)		Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination
2022(1)
2021(1)
2020(1)
2019(1)
2018(1)
2017 and Prior(1)
Total(1)
% of Balance
Cosigners:
With cosigner$664,611 $4,368,829 $3,450,387 $2,626,952 $1,898,677 $6,087,363 $19,096,819 88 %
Without cosigner117,001 671,963 533,219 411,385 275,611 629,371 2,638,550 12 
Total$781,612 $5,040,792 $3,983,606 $3,038,337 $2,174,288 $6,716,734 $21,735,369 100 %
FICO at Origination(2):
Less than 670$58,976 $333,682 $231,772 $241,643 $183,391 $561,766 $1,611,230 7 %
670-699111,251 669,450 543,884 468,705 343,601 1,141,747 3,278,638 15 
700-749251,606 1,591,862 1,290,542 999,922 723,591 2,257,304 7,114,827 33 
Greater than or equal to 750359,779 2,445,798 1,917,408 1,328,067 923,705 2,755,917 9,730,674 45 
Total$781,612 $5,040,792 $3,983,606 $3,038,337 $2,174,288 $6,716,734 $21,735,369 100 %
FICO Refreshed(2)(3):
Less than 670$72,244 $472,669 $310,819 $292,706 $245,690 $964,669 $2,358,797 11 %
670-699115,446 670,147 453,846 343,831 236,812 738,916 2,558,998 12 
700-749249,052 1,561,528 1,203,084 911,247 631,484 1,855,009 6,411,404 29 
Greater than or equal to 750344,870 2,336,448 2,015,857 1,490,553 1,060,302 3,158,140 10,406,170 48 
Total$781,612 $5,040,792 $3,983,606 $3,038,337 $2,174,288 $6,716,734 $21,735,369 100 %
Seasoning(4):
1-12 payments$417,858 $3,015,407 $597,296 $506,047 $384,057 $873,302 $5,793,967 27 %
13-24 payments— — 2,190,940 331,049 188,777 663,245 3,374,011 16 
25-36 payments— — 188 1,483,980 285,486 613,350 2,383,004 11 
37-48 payments— — — — 921,378 708,204 1,629,582 7 
More than 48 payments— — — — — 3,148,853 3,148,853 14 
Not yet in repayment363,754 2,025,385 1,195,182 717,261 394,590 709,780 5,405,952 25 
Total$781,612 $5,040,792 $3,983,606 $3,038,337 $2,174,288 $6,716,734 $21,735,369 100 %
2022 Current period(5) gross charge-offs
$— $(1,618)$(7,397)$(12,931)$(12,579)$(49,331)$(83,856)
2022 Current period(5) recoveries
— 107 507 989 1,030 5,400 8,033 
2022 Current period(5) net charge-offs
$— $(1,511)$(6,890)$(11,942)$(11,549)$(43,931)$(75,823)
Total accrued interest by origination vintage$9,778 $180,992 $269,425 $271,083 $190,288 $320,007 $1,241,573 
        
(1)Balance represents gross Private Education Loans held for investment.
(2)Represents the higher credit score of the cosigner or the borrower.
(3)Represents the FICO score updated as of the first-quarter 2022.
(4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due.
(5)Current period refers to period from January 1, 2022 through March 31, 2022.


27SLM CORPORATION 23




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)
Private Education Loans Held for Investment - Credit Quality Indicators
March 31, 2021
As of December 31, 2021
(dollars in thousands)		As of December 31, 2021
(dollars in thousands)		Private Education Loans Held for Investment - Credit Quality Indicators
Year of OriginationYear of Origination
2021(1)
2020(1)
2019(1)
2018(1)
2017(1)
2016 and Prior(1)
Total(1)
% of BalanceYear of Origination
2021(1)
2020(1)
2019(1)
2018(1)
2017(1)
2016 and Prior(1)
Total(1)
% of Balance
Cosigners:Cosigners:Cosigners:
With cosignerWith cosigner$640,909 $3,954,261 $3,331,066 $2,431,585 $2,137,418 $5,799,561 $18,294,800 88 %With cosigner$3,263,892 $3,604,553 $2,778,262 $2,025,463 $1,765,719 $4,753,775 $18,191,664 88 %
Without cosignerWithout cosigner109,163 623,156 531,211 359,769 259,981 563,760 2,447,040 12 Without cosigner558,469 561,730 438,263 294,597 212,514 459,626 2,525,199 12 
TotalTotal$750,072 $4,577,417 $3,862,277 $2,791,354 $2,397,399 $6,363,321 $20,741,840 100 %Total$3,822,361 $4,166,283 $3,216,525 $2,320,060 $1,978,233 $5,213,401 $20,716,863 100 %
FICO at Origination(2):
FICO at Origination(2):
FICO at Origination(2):
Less than 670Less than 670$46,437 $253,657 $283,992 $217,921 $189,704 $505,347 $1,497,058 7 %Less than 670$248,368 $238,005 $251,157 $193,123 $166,048 $428,416 $1,525,117 7 %
670-699670-699103,191 607,789 576,077 423,618 388,607 1,061,435 3,160,717 15 670-699508,264 564,497 493,237 363,313 329,807 884,981 3,144,099 15 
700-749700-749243,607 1,472,919 1,260,902 921,338 799,597 2,138,263 6,836,626 33 700-7491,210,833 1,348,269 1,057,001 770,452 660,270 1,753,709 6,800,534 33 
Greater than or equal to 750Greater than or equal to 750356,837 2,243,052 1,741,306 1,228,477 1,019,491 2,658,276 9,247,439 45 Greater than or equal to 7501,854,896 2,015,512 1,415,130 993,172 822,108 2,146,295 9,247,113 45 
TotalTotal$750,072 $4,577,417 $3,862,277 $2,791,354 $2,397,399 $6,363,321 $20,741,840 100 %Total$3,822,361 $4,166,283 $3,216,525 $2,320,060 $1,978,233 $5,213,401 $20,716,863 100 %
FICO Refreshed(2)(3):
FICO Refreshed(2)(3):
FICO Refreshed(2)(3):
Less than 670Less than 670$64,349 $313,569 $325,235 $290,041 $283,988 $952,223 $2,229,405 11 %Less than 670$326,613 $279,578 $273,652 $235,684 $233,022 $739,268 $2,087,817 10 %
670-699670-699107,242 573,430 473,331 322,446 271,224 707,135 2,454,808 12 670-699506,021 475,674 365,133 256,400 209,536 570,605 2,383,369 12 
700-749700-749241,091 1,442,851 1,186,242 813,884 684,467 1,715,802 6,084,337 29 700-7491,209,493 1,285,015 978,763 682,024 568,766 1,448,692 6,172,753 30 
Greater than or equal to 750Greater than or equal to 750337,390 2,247,567 1,877,469 1,364,983 1,157,720 2,988,161 9,973,290 48 Greater than or equal to 7501,780,234 2,126,016 1,598,977 1,145,952 966,909 2,454,836 10,072,924 48 
TotalTotal$750,072 $4,577,417 $3,862,277 $2,791,354 $2,397,399 $6,363,321 $20,741,840 100 %Total$3,822,361 $4,166,283 $3,216,525 $2,320,060 $1,978,233 $5,213,401 $20,716,863 100 %
Seasoning(4):
Seasoning(4):
Seasoning(4):
1-12 payments1-12 payments$419,655 $2,510,639 $426,229 $396,679 $392,391 $718,899 $4,864,492 24 %1-12 payments$2,265,811 $594,850 $515,328 $385,246 $340,242 $501,269 $4,602,746 22 %
13-24 payments13-24 payments0 267,856 2,034,191 254,139 221,863 599,435 3,377,484 16 13-24 payments—2,287,737362,674203,674211,064479,5403,544,68917 
25-36 payments25-36 payments0 0 146,616 1,343,321 250,078 581,741 2,321,756 11 25-36 payments—1731,565,203312,049164,575482,3692,524,36912 
37-48 payments37-48 payments0 0 0 93,298 978,808 618,454 1,690,560 8 37-48 payments———983,434295,206464,5631,743,2038 
More than 48 paymentsMore than 48 payments0 0 0 0 64,660 3,029,214 3,093,874 15 More than 48 payments————671,1382,726,3043,397,44216 
Not yet in repaymentNot yet in repayment330,417 1,798,922 1,255,241 703,917 489,599 815,578 5,393,674 26 Not yet in repayment1,556,5501,283,523773,320435,657296,008559,3564,904,41425 
TotalTotal$750,072 $4,577,417 $3,862,277 $2,791,354 $2,397,399 $6,363,321 $20,741,840 100 %Total$3,822,361 $4,166,283 $3,216,525 $2,320,060 $1,978,233 $5,213,401 $20,716,863 100 %
2021 Current period(5) gross charge-offs
2021 Current period(5) gross charge-offs
$(6)$(911)$(4,483)$(8,116)$(8,793)$(32,830)$(55,139)
2021 Current period(5) gross charge-offs
$(1,183)$(8,604)$(23,866)$(32,741)$(37,186)$(126,011)$(229,591)
2021 Current period(5) recoveries
2021 Current period(5) recoveries
0 43 452 1,009 1,133 5,066 7,703 
2021 Current period(5) recoveries
35 540 2,092 3,693 4,450 18,684 29,494 
2021 Current period(5) net charge-offs
2021 Current period(5) net charge-offs
$(6)$(868)$(4,031)$(7,107)$(7,660)$(27,764)$(47,436)
2021 Current period(5) net charge-offs
$(1,148)$(8,064)$(21,774)$(29,048)$(32,736)$(107,327)$(200,097)
Total accrued interest by origination vintageTotal accrued interest by origination vintage$8,317 $147,329 $291,579 $258,813 $206,734 $335,703 $1,248,475 Total accrued interest by origination vintage$109,233 $247,418 $270,242 $198,816 $131,685 $229,729 $1,187,123 
______
(1)Balance represents gross Private Education Loans.
(2)Represents the higher credit score of the cosigner or the borrower.
(3)Represents the FICO score updated as of the first-quarter 2021.
(4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due.
(5)Current period refers to period from January 1, 2021 through March 31, 2021.
28




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)
Private Education Loans Held for Investment Credit Quality Indicators
December 31, 2020
Year of Origination
2020(1)
2019(1)
2018(1)
2017(1)
2016(1)
2015 and Prior(1)
Total(1)
% of Balance
Cosigners:
With cosigner$2,915,328 $3,467,219 $2,556,400 $2,262,635 $1,977,952 $4,198,748 $17,378,282 88 %
Without cosigner527,437 559,629 384,111 277,159 211,270 391,449 2,351,055 12 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
FICO at Origination(2):
Less than 670$195,214 $290,711 $225,276 $197,948 $162,413 $369,609 $1,441,171 7 %
670-699464,785 594,950 441,357 407,394 351,303 771,477 3,031,266 16 
700-7491,111,373 1,310,390 967,802 846,983 740,028 1,533,517 6,510,093 33 
Greater than or equal to 7501,671,393 1,830,797 1,306,076 1,087,469 935,478 1,915,594 8,746,807 44 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
FICO Refreshed(2)(3):
Less than 670$240,154 $331,229 $301,784 $298,195 $293,077 $734,599 $2,199,038 11 %
670-699438,665 493,135 336,966 283,906 231,759 504,779 2,289,210 12 
700-7491,102,666 1,248,806 871,677 734,222 603,160 1,220,468 5,780,999 29 
Greater than or equal to 7501,661,280 1,953,678 1,430,084 1,223,471 1,061,226 2,130,351 9,460,090 48 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
Seasoning(4):
1-12 payments$2,068,517 $600,038 $469,143 $472,258 $381,197 $507,343 $4,498,496 23 %
13-24 payments1632,096,635383,977223,332217,379425,3453,346,83117 
25-36 payments001,353,567370,250181,940439,3372,345,09412 
37-48 payments000965,476351,433402,5521,719,4619 
More than 48 payments0000729,5102,310,9053,040,41515 
Not yet in repayment1,374,0851,330,175733,824508,478327,763504,7154,779,04024 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
2020 gross charge-offs(5)
$(1,087)$(10,940)$(27,000)$(35,851)$(36,416)$(94,032)$(205,326)
2020 recoveries(5)
42 636 2,274 3,585 4,284 13,200 24,021 
2020 net charge-offs(5)
$(1,045)$(10,304)$(24,726)$(32,266)$(32,132)$(80,832)$(181,305)
Total accrued interest by origination vintage$90,438 $265,688 $252,251 $209,178 $141,094 $210,247 $1,168,896 

______
(1)Balance represents gross Private Education Loans.Loans held for investment.
(2)Represents the higher credit score of the cosigner or the borrower.
(3)Represents the FICO score updated as of the fourth-quarter 2020.2021.
(4)Number of months in active repayment (whether interest only payment, fixed payment, or full principal and interest payment status) for which a scheduled payment was due.
(5)ForCurrent period fromrefers to January 1, 20202021 through December 31, 2020.2021.

2924 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)
Delinquencies - Private Education Loans Held for Investment

The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following tables, do not include those loans while they are in forbearance). For the periods presented below, we updated our delinquency bucket periods to conform with the delinquency bucket periods defined by the FFIEC.

Private Education Loans Held for Investment Delinquencies by Origination VintagePrivate Education Loans Held for Investment - Delinquencies by Origination Vintage
As of March 31, 2022
(dollars in thousands)		As of March 31, 2022
(dollars in thousands)		202220212020201920182017 and PriorTotal
March 31, 2021
202120202019201820172016 and PriorTotal
Loans in-school/grace/deferment(1)(2)
$330,417 $1,798,922 $1,255,241 $703,917 $489,599 $815,578 $5,393,674 
Loans in forbearance(1)(3)
1,186 21,471 89,409 93,513 103,807 260,841 570,227 
Loans in repayment(1):
Loans in-school/grace/deferment(1)
Loans in-school/grace/deferment(1)
$363,754 $2,025,385 $1,195,182 $717,261 $394,590 $709,780 $5,405,952 
Loans in forbearance(2)
Loans in forbearance(2)
441 15,123 37,237 35,259 30,585 115,615 234,260 
Loans in repayment:Loans in repayment:
Loans currentLoans current418,103 2,747,747 2,491,380 1,955,468 1,755,863 5,102,866 14,471,427 Loans current415,657 2,972,685 2,690,157 2,205,417 1,674,303 5,571,861 15,530,080 
Loans delinquent 30-59 days(4)
366 6,587 14,015 19,145 24,043 88,587 152,743 
Loans delinquent 60-89 days(4)
0 1,747 7,654 11,064 13,166 52,759 86,390 
Loans 90 days or greater past due(4)
0 943 4,578 8,247 10,921 42,690 67,379 
Loans delinquent 30-59 days(3)
Loans delinquent 30-59 days(3)
1,760 17,435 28,523 34,956 33,362 144,499 260,535 
Loans delinquent 60-89 days(3)
Loans delinquent 60-89 days(3)
— 6,557 18,618 25,590 23,023 95,272 169,060 
Loans 90 days or greater past due(3)
Loans 90 days or greater past due(3)
— 3,607 13,889 19,854 18,425 79,707 135,482 
Total Private Education Loans in repaymentTotal Private Education Loans in repayment418,469 2,757,024 2,517,627 1,993,924 1,803,993 5,286,902 14,777,939 Total Private Education Loans in repayment417,417 3,000,284 2,751,187 2,285,817 1,749,113 5,891,339 16,095,157 
Total Private Education Loans, grossTotal Private Education Loans, gross750,072 4,577,417 3,862,277 2,791,354 2,397,399 6,363,321 20,741,840 Total Private Education Loans, gross781,612 5,040,792 3,983,606 3,038,337 2,174,288 6,716,734 21,735,369 
Private Education Loans deferred origination costs and unamortized premium/(discount)Private Education Loans deferred origination costs and unamortized premium/(discount)5,487 19,922 12,925 7,977 6,153 12,004 64,468 Private Education Loans deferred origination costs and unamortized premium/(discount)9,615 20,732 14,883 8,753 5,380 12,544 71,907 
Total Private Education LoansTotal Private Education Loans755,559 4,597,339 3,875,202 2,799,331 2,403,552 6,375,325 20,806,308 Total Private Education Loans791,227 5,061,524 3,998,489 3,047,090 2,179,668 6,729,278 21,807,276 
Private Education Loans allowance for lossesPrivate Education Loans allowance for losses(35,515)(252,247)(239,917)(169,296)(140,894)(335,506)(1,173,375)Private Education Loans allowance for losses(54,769)(308,664)(230,000)(187,181)(122,741)(317,698)(1,221,053)
Private Education Loans, netPrivate Education Loans, net$720,044 $4,345,092 $3,635,285 $2,630,035 $2,262,658 $6,039,819 $19,632,933 Private Education Loans, net$736,458 $4,752,860 $3,768,489 $2,859,909 $2,056,927 $6,411,580 $20,586,223 
Percentage of Private Education Loans in repaymentPercentage of Private Education Loans in repayment55.8 %60.2 %65.2 %71.4 %75.2 %83.1 %71.2 %Percentage of Private Education Loans in repayment53.4 %59.5 %69.1 %75.2 %80.4 %87.7 %74.1 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repaymentDelinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.1 %0.3 %1.0 %1.9 %2.7 %3.5 %2.1 %Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.4 %0.9 %2.2 %3.5 %4.3 %5.4 %3.5 %
Loans in forbearance as a percentage of loans in repayment and forbearanceLoans in forbearance as a percentage of loans in repayment and forbearance0.3 %0.8 %3.4 %4.5 %5.4 %4.7 %3.7 %Loans in forbearance as a percentage of loans in repayment and forbearance0.1 %0.5 %1.3 %1.5 %1.7 %1.9 %1.4 %
_______
(1)For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At March 31, 2021, the loans in the “in-school/grace/deferment” category above include $273 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At March 31, 2021, the loans in the “in forbearance” category above include $29 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At March 31, 2021, the loans in the “in repayment” category above include $482 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period.
(2)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).
(3)(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.
(4)(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
30SLM CORPORATION 25




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)

Private Education Loans Held for Investment Delinquencies by Origination VintagePrivate Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2021
(dollars in thousands)		As of December 31, 2021
(dollars in thousands)		202120202019201820172016 and PriorTotal
December 31, 2020
202020192018201720162015 and PriorTotal
Loans in-school/grace/deferment(1)(2)
$1,374,085 $1,330,175 $733,824 $508,478 $327,763 $504,715 $4,779,040 
Loans in forbearance(1)(3)
16,159 92,677 110,319 118,946 109,073 198,302 645,476 
Loans in repayment(1):
Loans in-school/grace/deferment(1)
Loans in-school/grace/deferment(1)
$1,556,550 $1,283,523 $773,320 $435,657 $296,008 $559,356 $4,904,414 
Loans in forbearance(2)
Loans in forbearance(2)
11,951 55,844 52,364 43,613 41,355 96,110 301,237 
Loans in repayment:Loans in repayment:
Loans currentLoans current2,043,033 2,573,228 2,045,012 1,850,539 1,685,572 3,701,564 13,898,948 Loans current2,234,876 2,786,646 2,321,728 1,772,651 1,570,815 4,319,057 15,005,773 
Loans delinquent 30-59 days(4)
6,400 16,983 26,934 30,771 33,040 91,400 205,528 
Loans delinquent 60-89 days(4)
2,628 9,143 15,026 18,121 19,064 55,661 119,643 
Loans 90 days or greater past due(4)
460 4,642 9,396 12,939 14,710 38,555 80,702 
Loans delinquent 30-59 days(3)
Loans delinquent 30-59 days(3)
15,148 29,146 46,616 43,197 41,695 132,757 308,559 
Loans delinquent 60-89 days(3)
Loans delinquent 60-89 days(3)
3,194 7,441 14,044 14,310 16,425 61,533 116,947 
Loans 90 days or greater past due(3)
Loans 90 days or greater past due(3)
642 3,683 8,453 10,632 11,935 44,588 79,933 
Total Private Education Loans in repaymentTotal Private Education Loans in repayment2,052,521 2,603,996 2,096,368 1,912,370 1,752,386 3,887,180 14,304,821 Total Private Education Loans in repayment2,253,860 2,826,916 2,390,841 1,840,790 1,640,870 4,557,935 15,511,212 
Total Private Education Loans, grossTotal Private Education Loans, gross3,442,765 4,026,848 2,940,511 2,539,794 2,189,222 4,590,197 19,729,337 Total Private Education Loans, gross3,822,361 4,166,283 3,216,525 2,320,060 1,978,233 5,213,401 20,716,863 
Private Education Loans deferred origination costs and unamortized premium/(discount)Private Education Loans deferred origination costs and unamortized premium/(discount)21,129 13,933 8,671 6,708 5,721 7,313 63,475 Private Education Loans deferred origination costs and unamortized premium/(discount)22,169 16,067 9,575 5,918 4,588 9,171 67,488 
Total Private Education LoansTotal Private Education Loans3,463,894 4,040,781 2,949,182 2,546,502 2,194,943 4,597,510 19,792,812 Total Private Education Loans3,844,530 4,182,350 3,226,100 2,325,978 1,982,821 5,222,572 20,784,351 
Private Education Loans allowance for lossesPrivate Education Loans allowance for losses(210,875)(298,776)(218,136)(184,265)(150,150)(293,642)(1,355,844)Private Education Loans allowance for losses(248,102)(239,507)(195,223)(129,678)(99,982)(246,485)(1,158,977)
Private Education Loans, netPrivate Education Loans, net$3,253,019 $3,742,005 $2,731,046 $2,362,237 $2,044,793 $4,303,868 $18,436,968 Private Education Loans, net$3,596,428 $3,942,843 $3,030,877 $2,196,300 $1,882,839 $4,976,087 $19,625,374 
Percentage of Private Education Loans in repaymentPercentage of Private Education Loans in repayment59.6 %64.7 %71.3 %75.3 %80.0 %84.7 %72.5 %Percentage of Private Education Loans in repayment59.0 %67.9 %74.3 %79.3 %82.9 %87.4 %74.9 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repaymentDelinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.5 %1.2 %2.4 %3.2 %3.8 %4.8 %2.8 %Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.8 %1.4 %2.9 %3.7 %4.3 %5.2 %3.3 %
Loans in forbearance as a percentage of loans in repayment and forbearanceLoans in forbearance as a percentage of loans in repayment and forbearance0.8 %3.4 %5.0 %5.9 %5.9 %4.9 %4.3 %Loans in forbearance as a percentage of loans in repayment and forbearance0.5 %1.9 %2.1 %2.3 %2.5 %2.1 %1.9 %

_______
(1)For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At December 31, 2020, the loans in the “in-school/grace/deferment” category above include $401 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At December 31, 2020, the loans in the “in forbearance” category above include $30 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period. At December 31, 2020, the loans in the “in repayment” category above include $609 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who received such extension of time from us to re-enroll before beginning their grace period.
(2)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).
(3)(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.
(4)(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
3126 SLM CORPORATION




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.4.Allowance for Credit Losses (Continued)


 Accrued Interest Receivable

The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans greater than 90 days or greater past due as compared to our allowance for uncollectible interest on loans making full interest payments. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school. The allowance for this portion of interest is included in our loan loss reserve. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due Private Education Loan portfolio for all periods presented.
 Private Education Loans
Accrued Interest Receivable
Total Interest Receivable90 Days and Greater Past DueAllowance for Uncollectible Interest
March 31, 2021$1,248,475 $3,695 $4,405 
December 31, 2020$1,168,895 $4,354 $4,467 

32

 Private Education Loans
Accrued Interest Receivable
(Dollars in thousands)Total Interest Receivable90 Days or Greater Past DueAllowance for Uncollectible Interest
March 31, 2022$1,241,574 $6,292 $5,505 
December 31, 2021$1,187,123 $3,635 $4,937 



SLM CORPORATION 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
6.

5. Unfunded Loan Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020, — Off-Balance Sheet Exposure for Contractual Loan Commitments”Commitments - 2021 and 2020” in our 20202021 Form 10-K for additional information.
At March 31, 2021,2022, we had $457$562 million of outstanding contractual loan commitments that we expect to fund during the remainder of the 2020/20212021/2022 academic year. The tables below summarize the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance.
Three Months Ended March 31,
20212020
AllowanceUnfunded CommitmentsAllowanceUnfunded Commitments
Beginning Balance$110,044 $1,673,018 $2,481 $1,910,603 
Day 1 adjustment for the adoption of CECL0 0 115,758 0 
Balance at January 1110,044 1,673,018 118,239 1,910,603 
Provision/New commitments - net(1)
40,197 843,161 49,561 834,946 
Other provision items(3,994)0 3,982 0 
Transfer - funded loans(2)
(126,880)(2,058,726)(142,075)(2,295,742)
Ending Balance$19,367 $457,453 $29,707 $449,807 
________________             
20222021
Three Months Ended March 31,
(dollars in thousands)		AllowanceUnfunded CommitmentsAllowanceUnfunded Commitments
Beginning Balance$72,713 $1,776,976 $110,044 $1,673,018 
Provision/New commitments - net(1)
47,454 968,830 40,197 843,161 
Other provision items7,226 — (3,994)— 
Transfer - funded loans(2)
(94,686)(2,184,058)(126,880)(2,058,726)
Ending Balance$32,707 $561,748 $19,367 $457,453 
(1)     Net of expirations of commitments unused.
(2)     When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses.

The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments. We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments. The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to period based upon the loan characteristics of the underlying commitments.

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28 SLM CORPORATION


6. Goodwill and Acquired Intangible Assets
Goodwill
We recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of the Nitro acquisition in the first quarter of 2022. Goodwill is not amortized but is tested periodically for impairment. We plan to test goodwill for impairment annually in the fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. At March 31, 2022 we had $51 million in total Goodwill. See Note 2, “Significant Accounting Policies” for additional details on our acquisition of Nitro.
Acquired Intangible Assets
Our intangible assets include acquired tradename and trademarks, customer relationships, and developed technology. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Acquired intangible assets include the following:

March 31, 2022
(Dollars in thousands)
Useful Life
(in years)(1)
Cost BasisAccumulated AmortizationNet
Tradename and trademarks10$68,470 $(515)$67,955 
Customer relationships55,670 (186)5,484 
Developed technology31,260 (32)1,228 
Total acquired intangible assets$75,400 $(733)$74,667 

(1)The weighted average useful life of acquired intangible assets related to the Nitro acquisition is 9.51 years.
We recorded amortization of acquired intangible assets totaling approximately $1 million in the three months ended March 31, 2022. There was no amortization of acquired intangible assets recorded in the three months ended March 31, 2021. We will continue to amortize our intangible assets with definite useful lives over their remaining estimated useful lives. We estimate amortization expense associated with these intangible assets will be approximately $8 million, $9 million, $8 million, $8 million and $7 million in 2022, 2023, 2024, 2025 and 2026, respectively.
SLM CORPORATION 29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)

7. Deposits

The following table summarizes total deposits at March 31, 20212022 and December 31, 2020.2021.
March 31,December 31,
20212020
Deposits - interest bearing$22,801,323 $22,664,899 
Deposits - non-interest bearing1,820 1,140 
Total deposits$22,803,143 $22,666,039 

March 31,December 31,
(Dollars in thousands)20222021
Deposits - interest bearing$21,192,004 $20,826,692 
Deposits - non-interest bearing2,022 1,432 
Total deposits$21,194,026 $20,828,124 

Our total deposits of $22.8$21.2 billion were comprised of $12.1$10.0 billion in brokered deposits and $11.2 billion in retail and other deposits at March 31, 2022, compared to total deposits of $20.8 billion, which were comprised of $10.1 billion in brokered deposits and $10.7 billion in retail and other deposits, at March 31, 2021, compared to total deposits of $22.7 billion, which were comprised of $11.9 billion in brokered deposits and $10.8 billion in retail and other deposits, at December 31, 2020.2021.
Interest bearing deposits as of March 31, 20212022 and December 31, 20202021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposits (“MMDAs”), and retail and brokered certificates of deposit (“CDs”). Interest bearing deposits include deposits from Educational 529 and Health Savings plans that diversify our funding sources and additional deposits we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.9$7.8 billion and $7.1$7.3 billion of our deposit total as of March 31, 20212022 and December 31, 2020,2021, respectively.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $4$3 million and $5$4 million in the three months ended March 31, 20212022 and 2020,2021, respectively. Fees paid to third-party brokers related to brokered CDs were NaN and $2 million for the three months ended March 31, 2021 and 2020, respectively.2022. There were no related fees paid in the three months ended March 31, 2021.

Interest bearing deposits at March 31, 20212022 and December 31, 20202021 are summarized as follows:
 March 31, 2021December 31, 2020
Amount
Qtr.-End Weighted Average Stated Rate(1)
Amount
Year-End Weighted Average Stated Rate(1)
Money market$10,951,595 0.68 %$10,159,657 0.83 %
Savings955,547 0.42 907,976 0.55 
Certificates of deposit10,894,181 1.24 11,597,266 1.34 
Deposits - interest bearing$22,801,323 $22,664,899 
____________
 March 31, 2022December 31, 2021
(Dollars in thousands)Amount
Qtr.-End Weighted Average Stated Rate(1)
Amount
Year-End Weighted Average Stated Rate(1)
Money market$10,984,116 0.79 %$10,473,569 0.69 %
Savings968,059 0.43 959,122 0.43 
Certificates of deposit9,239,829 1.37 9,394,001 1.20 
Deposits - interest bearing$21,192,004 $20,826,692 
    (1) Includes the effect of interest rate swaps in effective hedge relationships.


As of March 31, 2021,2022, and December 31, 2020,2021, there were $751$532 million and $571$743 million, respectively, of deposits exceeding FDICFederal Deposit Insurance Corporation (“FDIC”) insurance limits. Accrued interest on deposits was $61$42 million and $50$35 million at March 31, 20212022 and December 31, 2020,2021, respectively.

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30 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
8. Borrowings

Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securitization (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Notes to Consolidated Financial Statements, Note 11, “Borrowings” in our 20202021 Form 10-K. The following table summarizes our borrowings at March 31, 20212022 and December 31, 2020.2021.

March 31, 2021December 31, 2020
Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$0 $693,099 $693,099 $0 $692,879 $692,879 
Total unsecured borrowings0 693,099 693,099 0 692,879 692,879 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate0 3,109,329 3,109,329 0 3,261,233 3,261,233 
Variable-rate0 1,116,242 1,116,242 0 1,235,105 1,235,105 
Total Private Education Loan term securitizations0 4,225,571 4,225,571 0 4,496,338 4,496,338 
Secured Borrowing Facility0 0 0 0 0 0 
Total secured borrowings0 4,225,571 4,225,571 0 4,496,338 4,496,338 
Total$0 $4,918,670 $4,918,670 $0 $5,189,217 $5,189,217 

Short-term Borrowings
Secured Borrowing Facility
On February 17, 2021, we amended our Secured Borrowing Facility to extend the maturity of the facility. The amount that can be borrowed under the facility is $2 billion. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay and reborrow funds, until February 16, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on February 16, 2023 (or earlier, if certain material adverse events occur). At both March 31, 2021 and December 31, 2020, there were 0 secured borrowings outstanding under the Secured Borrowing Facility.
35




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
8.Borrowings (Continued)
March 31, 2022December 31, 2021
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $986,591 $986,591 $— $986,138 $986,138 
Total unsecured borrowings— 986,591 986,591 — 986,138 986,138 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,608,606 3,608,606 — 3,897,996 3,897,996 
Variable-rate— 957,300 957,300 — 1,046,856 1,046,856 
Total Private Education Loan term securitizations— 4,565,906 4,565,906 — 4,944,852 4,944,852 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,565,906 4,565,906 — 4,944,852 4,944,852 
Total$— $5,552,497 $5,552,497 $— $5,930,990 $5,930,990 

Long-term Borrowings
Secured Financings at Issuance
The following table summarizes our secured financings issued in 2020 and2021. There were no secured financings issued in 2021 throughthe three months ended March 31, 2021:2022.

IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
Private Education:
2020-AFebruary 2020$636,000 1-month LIBOR plus 0.88%4.18
2020-BAugust 2020707,000 1-month LIBOR plus 1.30%4.14
Total notes issued in 2020$1,343,000 
Total loan and accrued interest amount securitized at inception in 2020(2)
$1,463,230 
IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
(Dollars in thousands)
Private Education Loans:
2021-BMay 2021$531,000 1-month LIBOR plus 0.77%4.26
2021-DAugust 2021527,000 1-month LIBOR plus 0.69%4.22
2021-ENovember 2021534,000 1-month LIBOR plus 0.69%4.15
Total notes issued in 2021$1,592,000 
Total loan and accrued interest amount securitized at inception in 2021(2)
$1,656,263 
____________
(1) Represents LIBOR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.
(2) At March 31, 2021, $1.292022, $1.46 billion of our Private Education Loans, including $1.20$1.37 billion of principal and $86$87 million in capitalized interest, were encumbered related to these transactions.

SLM CORPORATION 31


8.Borrowings (Continued)

Consolidated Funding Vehicles

We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings.

March 31, 2021
Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$0 $4,225,571 $4,225,571 $5,343,243 $164,708 $355,949 $5,863,900 
Secured Borrowing Facility0 0 0 0 0 2,496 2,496 
Total$0 $4,225,571 $4,225,571 $5,343,243 $164,708 $358,445 $5,866,396 
____
(1) Other assets primarily represent accrued interest receivable.
36

As of March 31, 2022
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,565,906 $4,565,906 $5,650,067 $187,960 $333,325 $6,171,352 
Secured Borrowing Facility— — — — — 298 298 
Total$— $4,565,906 $4,565,906 $5,650,067 $187,960 $333,623 $6,171,650 


.
As of December 31, 2021
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,994,852 $4,994,852 $6,029,034 $210,741 $357,982 $6,597,757 
Secured Borrowing Facility— — — — — 867 867 
Total$�� $4,994,852 $4,994,852 $6,029,034 $210,741 $358,849 $6,598,624 

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
8.Borrowings (Continued)
December 31, 2020
Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$0 $4,496,338 $4,496,338 $5,661,123 $154,417 $356,967 $6,172,507 
Secured Borrowing Facility0 0 0 0 0 436 436 
Total$0 $4,496,338 $4,496,338 $5,661,123 $154,417 $357,403 $6,172,943 
____
(1) Other assets primarily represent accrued interest receivable.

Unconsolidated VIEs
Private Education Loan Securitizations
Our unconsolidatedUnconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties in the first quarters of 2020 and 2021.parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own 5 percent of the securities issued by the trusts to meet risk retention requirements. We were not required to consolidate these entities because while as servicer we may have a significant impact on economic performance, the risk of absorbing losses that could be significant is low.
2021-A2022-A Transaction
On February 9, 2021,March 16, 2022, we closed an SMB Private Education Loan Trust 2021-A2022-A term ABS transaction (the “2021-A“2022-A Transaction”), in which thean unaffiliated third-party sold to the trust approximately $2.5 billion$973 million of Private Education Loans that the third-party seller previously purchased from us on January 8,November 17, 2021. In the 2021-A2022-A Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $130$95 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2021-A2022-A Transaction and we recorded an $18a $10 million gain on sale associated with this transaction. In connection with the 2021-A2022-A Transaction settlement, we retained a 5 percent vertical risk retention interest (i.e., 5 percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2021-A2022-A Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings.




32 SLM CORPORATION


8.Borrowings (Continued)

The table below provides a summary of our exposure related to our unconsolidated VIEs.
March 31, 2021December 31, 2020
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$199,135 $30,594 $229,729 $68,908 $16,923 $85,831 

____
March 31, 2022December 31, 2021
(Dollars in thousands)
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$230,372 $38,820 $269,192 $192,245 $37,465 $229,710 

(1) Vertical risk retention interest classified as available-for-sale investment.
(2) Vertical risk retention interest classified as trading investment.

37




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
8.Borrowings (Continued)
Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at March 31, 2021.2022. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing and is payable daily. We did not utilize these lines of credit in the three months ended March 31, 20212022 or in the year ended December 31, 2020.2021.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At March 31, 20212022 and December 31, 2020,2021, the value of our pledged collateral at the FRB totaled $3.2$2.9 billion and $3.8$3.3 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the three months ended March 31, 20212022 or in the year ended December 31, 2020.2021.


38SLM CORPORATION 33




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9. Derivative Financial Instruments
Risk Management Strategy
We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this strategy as a prudent management of interest rate risk. Please refer to Notes to Consolidated Financial Statements, Note 12, “Derivative Financial Instruments” in our 20202021 Form 10-K for a full discussion of our risk management strategy.
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. TwoNaN of the central counterparties we use are the Chicago Mercantile Exchange (“CME”) and the London Clearing House (“LCH”). All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of March 31, 2021, $8.22022, $4.8 billion notional of our derivative contracts were cleared on the CME and $0.4$0.3 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 95.694.3 percent and 4.45.7 percent, respectively, of our total notional derivative contracts of $8.6$5.1 billion at March 31, 2021.2022.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of March 31, 20212022 was $(157)$(64) million and $15$(0.4) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).
Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero. At March 31, 20212022 and December 31, 2020,2021, we had a net positive exposure (derivative gain positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $24$9 million and $43$9 million, respectively.

Summary of Derivative Financial Statement Impact
The following tables summarize the fair values and notional amounts of all derivative instruments at March 31, 20212022 and December 31, 2020,2021, and their impact on earnings and other comprehensive income for the three months ended March 31, 20212022 and March 31, 2020.2021. Please refer to Notes to Consolidated Financial Statements, Note 12, “Derivative Financial Instruments” in our 20202021 Form 10-K for a full discussion of cash flow hedges, fair value hedges, and trading activities.

3934 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.Derivative Financial Instruments (Continued)
Impact of Derivatives on the Consolidated Balance Sheets
Impact of Derivatives on the Consolidated Balance SheetsImpact of Derivatives on the Consolidated Balance Sheets
Cash Flow HedgesFair Value HedgesTradingTotal
Cash Flow HedgesFair Value HedgesTradingTotalMarch 31,December 31,March 31,December 31,March 31,December 31,March 31,December 31,
March 31,December
31,		March 31,December
31,		March 31,December
31,		March 31,December
31,
20212020202120202021202020212020
(Dollars in thousands)(Dollars in thousands)20222021202220212022202120222021
Fair Values(1)
Fair Values(1)
Hedged Risk Exposure
Fair Values(1)
Hedged Risk Exposure
Derivative Assets:(2)
Derivative Assets:(2)
Derivative Assets:(2)
Interest rate swapsInterest rate swapsInterest rate$809 $0 $245 $594 $0 $135 $1,054 $729 Interest rate swapsInterest rate$169 $— $— $— $— $5 $169 $5 
OtherOtherOther— — — — — 1,317 — 1,317 
Derivative Liabilities:(2)
Derivative Liabilities:(2)
Derivative Liabilities:(2)
Interest rate swapsInterest rate swapsInterest rate0 (287)0 0 (451)0 (451)(287)Interest rate swapsInterest rate(43)(231)(220)(21)— — (263)(252)
Total net derivativesTotal net derivatives$809 $(287)$245 $594 $(451)$135 $603 $442 Total net derivatives$126 $(231)$(220)$(21)$— $1,322 $(94)$1,070 
 ___________
(1)Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position.
(2)The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
Other AssetsOther Liabilities
March 31,December 31,March 31,December 31,
(Dollars in thousands)2022202120222021
Gross position(1)
$169 $1,322 $(263)$(252)
Impact of master netting agreement(169)(5)169 5 
Derivative values with impact of master netting agreements (as carried on balance sheet)— 1,317 (94)(247)
Cash collateral pledged(2)
9,327 9,655 — — 
Net position$9,327 $10,972 $(94)$(247)

Other AssetsOther Liabilities
March 31,December 31,March 31,December 31,
2021202020212020
Gross position(1)
$1,054 $729 $(451)$(287)
Impact of master netting agreement(451)(176)451 176 
Derivative values with impact of master netting agreements (as carried on balance sheet)603 553 0 (111)
Cash collateral pledged(2)
23,592 42,874 0 0 
Net position$24,195 $43,427 $0 $(111)
__________
(1)Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract.
(2)Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts.


Cash FlowFair ValueTradingTotal
March 31,December 31,March 31,December 31,March 31,December 31,March 31,December 31,
20212020202120202021202020212020
Notional ValuesNotional ValuesNotional Values
Cash FlowFair ValueTradingTotal
(Dollars in thousands)(Dollars in thousands)March 31,December 31,March 31,December 31,March 31,December 31,March 31,December 31,
20222021202220212022202120222021
Interest rate swapsInterest rate swaps$1,535,718 $1,018,976 $4,637,654 $4,845,543 $2,393,364 $2,693,364 $8,566,736 $8,557,883 Interest rate swaps$1,407,412 $1,438,144 $3,678,960 $3,915,999 $— $181,953 $5,086,372 $5,536,096 
OtherOther— — — — — 1,053,760 — 1,053,760 
Net total notionalNet total notional$1,407,412 $1,438,144 $3,678,960 $3,915,999 $— $1,235,713 $5,086,372 $6,589,856 


40SLM CORPORATION 35




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.Derivative Financial Instruments (Continued)
As of March 31, 20212022 and December 31, 2020,2021, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
(Dollars in thousands)(Dollars in thousands)Carrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
Line Item in the Balance Sheet in Which the Hedged Item is Included:Line Item in the Balance Sheet in Which the Hedged Item is Included:March 31,December 31,March 31,December 31,
Line Item in the Balance Sheet in Which the Hedged Item is Included:Carrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)2022202120222021
March 31,December 31,March 31,December 31,
2021202020212020
DepositsDeposits$(4,754,979)$(4,992,867)$(122,959)$(154,235)Deposits$(3,675,421)$(3,963,268)$484 $(50,784)


Impact of Derivatives on the Consolidated Statements of Income
Impact of Derivatives on the Consolidated Statements of IncomeImpact of Derivatives on the Consolidated Statements of Income
Three Months Ended 
 March 31,		Three Months Ended 
 March 31,
20212020
(Dollars in thousands)(Dollars in thousands)20222021
Fair Value HedgesFair Value HedgesFair Value Hedges
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Interest recognized on derivativesInterest recognized on derivatives$22,610 $4,623 Interest recognized on derivatives$17,287 $22,610 
Hedged items recorded in interest expenseHedged items recorded in interest expense31,275 (143,248)Hedged items recorded in interest expense51,268 31,275 
Derivatives recorded in interest expenseDerivatives recorded in interest expense(31,251)144,183 Derivatives recorded in interest expense(51,319)(31,251)
TotalTotal$22,634 $5,558 Total$17,236 $22,634 
Cash Flow HedgesCash Flow HedgesCash Flow Hedges
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expenseAmount of gain (loss) reclassified from accumulated other comprehensive income into interest expense$(5,269)$(1,528)Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense$(4,541)$(5,269)
TotalTotal$(5,269)$(1,528)Total$(4,541)$(5,269)
TradingTradingTrading
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Change in fair value of future interest payments recorded in earningsChange in fair value of future interest payments recorded in earnings$(10,864)$42,312 Change in fair value of future interest payments recorded in earnings$(248)$(10,864)
TotalTotal(10,864)42,312 Total(248)(10,864)
TotalTotal$6,501 $46,342 Total$12,447 $6,501 

    
4136 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.Derivative Financial Instruments (Continued)

Impact of Derivatives on the Statements of Changes in Stockholders’ Equity
Three Months Ended
March 31,
20212020
Amount of gain (loss) recognized in other comprehensive income (loss)$18,154 $(47,222)
Less: amount of gain (loss) reclassified in interest expense(5,269)(1,528)
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit$23,423 $(45,694)

Impact of Derivatives on the Statements of Changes in Stockholders’ Equity
Three Months Ended
March 31,
(Dollars in thousands)20222021
Amount of gain (loss) recognized in other comprehensive income (loss)$47,989 $18,154 
Less: amount of gain (loss) reclassified in interest expense(4,541)(5,269)
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit$52,530 $23,423 
    
Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate deposits. During the next 12 months, we estimate that $20$5 million will be reclassified as an increasea decrease to interest expense.
Cash Collateral
As of March 31, 2021,2022, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was 0no cash collateral held related to derivative exposure between us and our derivatives counterparties at March 31, 20212022 and December 31, 2020,2021, respectively. Cash collateral pledged related to derivative exposure between us and our derivatives counterparties was $24$9 million and $43$10 million at March 31, 20212022 and December 31, 2020,2021, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.

42SLM CORPORATION 37




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
10. Stockholders’ Equity

The following table summarizes our common share repurchases and issuances.

 Three Months Ended 
 March 31,
(Shares and per share amounts in actuals)20212020
Common stock repurchased under repurchase programs(1)(2)(3)
48,702,830 47,736,847 
Average purchase price per share(4)
$15.75 $9.66 
Shares repurchased related to employee stock-based compensation plans(5)
1,059,980 1,105,119 
Average purchase price per share$13.50 $10.98 
Common shares issued(6)
2,826,387 2,837,562 
Three Months Ended
March 31,

(Shares and per share amounts in actuals)		20222021
Common stock repurchased under repurchase programs(1)(2)(3)
9,533,392 48,702,830 
Average purchase price per share(4)
$18.46 $15.75 
Shares repurchased related to employee stock-based compensation plans(5)
934,602 1,059,980 
Average purchase price per share$18.55 $13.50 
Common shares issued(6)
2,594,817 2,826,387 
 
__________________
(1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 20202021 Share Repurchase Program. There was $734 million$1.1 billion of capacity remaining under the 20212022 Share Repurchase Program at March 31, 2021.2022.
(2) For the three months ended March 31, 2021, and 2020, the amount includes 13 million shares and 45 million shares, respectively, related to the completion of the accelerated share repurchase agreement described below.in the first quarter of 2021. See Notes to Consolidated Financial Statements, Note 13, “Stockholders’ Equity” in our 2021 Form 10-K for additional information.
(3) For the three months ended March 31, 2021, the amount includes 28.5 million shares related to the settlement of our common stock tender offer described below.in the first quarter of 2021. See Notes to Consolidated Financial Statements, Note 13, “Stockholders’ Equity” in our 2021 Form 10-K for additional information.
(4) Average purchase price per share includes purchase commission costs.
(5) Comprised of shares withheld from stock option exercises and vesting of restricted stock for employees’ tax withholding obligations and shares tendered by employees to satisfy option exercise costs.
(6)  Common shares issued under our various compensation and benefit plans.
 

The closing price of our common stock on the NASDAQ Global Select Market on March 31, 20212022 was $17.97.$18.36.

Dividend and Share RepurchasesCommon Stock Dividends

In bothMarch 2022, we paid a common stock dividend of $0.11 per common share. In March 2021, and March 2020, we paid a common stock dividend of $0.03 per common share.
The January 22, 2020 share repurchase program (the “2020 Share Repurchase Program”), which was effective upon announcement and expires on January 21, 2022, permitted us to repurchase from time to time shares of common stock up to an aggregate repurchase price not to exceed $600 million. Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an accelerated share repurchase agreement (“ASR”) with a third-party financial institution under which we paid $525 million for an upfront delivery of our common stock and a forward agreement. On March 11, 2020, the third-party financial institution delivered to us approximately 45 million shares. The final total actual number of shares of common stock delivered to us pursuant to the forward agreement was based generally upon a volume-weighted average price at which the shares of our common stock traded during the regular trading sessions on the NASDAQ Global Select Market during the term of the ASR. The transactions were accounted for as equity transactions and were included in treasury stock when the shares were received, at which time there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share. On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share of $9.01. Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares of common stock for $75 million in the three months ended March 31, 2021. We have now utilized all capacity under the 2020 Share Repurchase Program.
43




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
10.Stockholders’ Equity (Continued)
Share Repurchases
On January 27, 2021, we announced a share repurchase program (the “2021 Share Repurchase Program”), which was effective upon announcement and expires on January 26, 2023, and permitsoriginally permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion. Under the 2021 Share Repurchase Program, we repurchased 31 million shares of common stock for $517 million in the three months ended March 31, 2021. (Those amounts include the shares repurchased under the Tender Offer described below.common stock tender offer that settled in the first quarter of 2021.) There
In October 2021, our Board of Directors approved a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program. This is in addition to the original $1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $1.5 billion. Under the 2021 Share Repurchase Program, we repurchased 2.0 million shares of common stock for $38 million in the three months ended March 31, 2022. We have now utilized all capacity under the 2021 Share Repurchase Program.
On January 26, 2022, we announced a new share repurchase program (the “2022 Share Repurchase Program”), which was $734effective upon announcement and expires on January 25, 2024, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $1.25 billion. Under the 2022 Share
38 SLM CORPORATION

10.Stockholders’ Equity (Continued)
Repurchase Program, we repurchased 7.5 million shares of common stock for $138 million in the three months ended March 31, 2022. We had $1.1 billion of capacity remaining under the 20212022 Share Repurchase Program at March 31, 2021.2022.
RepurchasesSo long as there is unexpired capacity under our sharea given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions. The timing and volume of any repurchases under the 20212022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of its share repurchase programsthe program or at all.
Common Stock Tender Offer
On February 2, 2021, we announced the commencement of a “modified Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer. This cancellation decreased the balances of common stock by $6 million and of additional paid-in capital by $466 million, respectively.
Share Repurchases under our Rule 10b5-1 trading planplans
During the first quarter ofthree months ended March 31, 2022 and 2021, we repurchased 9.5 million shares and 6.8 million shares, respectively, of our common stock at a total cost of $176 million and $121 million, respectively, under a Rule 10b5-1 trading planplans authorized under our share repurchase programs.


44SLM CORPORATION 39




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
11. Earnings per Common Share

Basic earnings per common share (“EPS”) are calculated using the weighted average number of shares of common stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows.
Three Months Ended
 March 31,
(In thousands, except per share data)20212020
Numerator:
Net income$641,207 $362,173 
Preferred stock dividends1,201 3,464 
Net income attributable to SLM Corporation common stock$640,006 $358,709 
Denominator:
Weighted average shares used to compute basic EPS361,042 409,786 
Effect of dilutive securities:
Dilutive effect of stock options, restricted stock, restricted stock units, performance stock units and Employee Stock Purchase Plan (“ESPP”) (1)(2)
5,198 2,969 
Weighted average shares used to compute diluted EPS366,240 412,755 
Basic earnings per common share attributable to SLM Corporation$1.77 $0.88 
Diluted earnings per common share attributable to SLM Corporation$1.75 $0.87 

Three Months Ended
March 31,

(Dollars in thousands, except per share data)		20222021
Numerator:
Net income$128,812 $641,207 
Preferred stock dividends1,275 1,201 
Net income attributable to SLM Corporation common stock$127,537 $640,006 
Denominator:
Weighted average shares used to compute basic EPS276,977 361,042 
Effect of dilutive securities:
Dilutive effect of stock options, restricted stock, restricted stock units, performance stock units, and Employee Stock Purchase Plan (“ESPP”) (1)(2)
3,677 5,198 
Weighted average shares used to compute diluted EPS280,654 366,240 
Basic earnings per common share$0.46 $1.77 
Diluted earnings per common share$0.45 $1.75 


             ________________ 
            
(1)     Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method.
(2)      For the three months ended March 31, 20212022 and 2020,2021, securities covering approximately 13 million shares and 21 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
 

4540 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
12. Fair Value Measurements

We use estimates of fair value in applying various accounting standards for our consolidated financial statements.

We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for determining fair value and the hierarchical framework, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Fair Value Measurement” in our 20202021 Form 10-K.

During the three months ended March 31, 2021,2022, there were no significant transfers of financial instruments between levels or changes in our methodology or assumptions used to value our financial instruments.

The following table summarizes the valuation of our financial instruments that are marked to fair value on a recurring basis.

Fair Value Measurements on a Recurring Basis Fair Value Measurements on a Recurring Basis
March 31, 2021December 31, 2020 March 31, 2022December 31, 2021
(Dollars in thousands)(Dollars in thousands)Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 
Assets
Assets:Assets:
Trading investmentsTrading investments$0 $0 $30,594 $30,594 $0 $0 $16,923 $16,923 Trading investments$— $— $38,820 $38,820 $— $— $37,465 $37,465 
Available-for-sale investmentsAvailable-for-sale investments0 2,115,885 0 2,115,885 0 1,996,634 0 1,996,634 Available-for-sale investments— 2,341,551 — 2,341,551 — 2,517,956 — 2,517,956 
Derivative instrumentsDerivative instruments0 1,054 0 1,054 0 729 0 729 Derivative instruments— 169 — 169 — 1,322 — 1,322 
TotalTotal$0 $2,116,939 $30,594 $2,147,533 $0 $1,997,363 $16,923 $2,014,286 Total$— $2,341,720 $38,820 $2,380,540 $— $2,519,278 $37,465 $2,556,743 
Liabilities
Liabilities:Liabilities:
Derivative instrumentsDerivative instruments$0 $(451)$0 $(451)$0 $(287)$0 $(287)Derivative instruments$— $(263)$— $(263)$— $(252)$— $(252)
TotalTotal$0 $(451)$0 $(451)$0 $(287)$0 $(287)Total$— $(263)$— $(263)$— $(252)$— $(252)




 
46SLM CORPORATION 41




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
12.Fair Value Measurements (Continued)

The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.

March 31, 2021December 31, 2020 March 31, 2022December 31, 2021
Fair
Value		Carrying
Value		DifferenceFair
Value		Carrying
Value		Difference
(Dollars in thousands)(Dollars in thousands)Fair
Value		Carrying
Value		DifferenceFair
Value		Carrying
Value		Difference
Earning assets:Earning assets:Earning assets:
Loans held for investment, net:Loans held for investment, net:Loans held for investment, net:
Private Education LoansPrivate Education Loans$22,889,920 $19,632,933 $3,256,987 $22,124,171 $18,436,968 $3,687,203 Private Education Loans$24,125,657 $20,586,223 $3,539,434 $22,919,836 $19,625,374 $3,294,462 
FFELP LoansFFELP Loans738,579 725,300 13,279 748,657 735,208 13,449 FFELP Loans692,507 680,044 12,463 705,644 692,954 12,690 
Credit CardsCredit Cards11,332 10,054 1,278 12,249 10,967 1,282 Credit Cards27,581 25,408 2,173 25,037 22,955 2,082 
Loans held for sale0 0 0 3,226,029 2,885,640 340,389 
Cash and cash equivalentsCash and cash equivalents6,207,001 6,207,001 — 4,455,292 4,455,292 — Cash and cash equivalents3,262,595 3,262,595 — 4,334,603 4,334,603 — 
Trading investmentsTrading investments30,594 30,594 — 16,923 16,923 — Trading investments38,820 38,820 — 37,465 37,465 — 
Available-for-sale investmentsAvailable-for-sale investments2,115,885 2,115,885 — 1,996,634 1,996,634 — Available-for-sale investments2,341,551 2,341,551 — 2,517,956 2,517,956 — 
Accrued interest receivableAccrued interest receivable1,373,593 1,264,960 108,633 1,527,816 1,387,305 140,511 Accrued interest receivable1,368,425 1,259,145 109,280 1,306,410 1,205,667 100,743 
Tax indemnification receivableTax indemnification receivable15,678 15,678 — 18,492 18,492 — Tax indemnification receivable8,155 8,155 — 8,047 8,047 — 
Derivative instrumentsDerivative instruments1,054 1,054 — 729 729 — Derivative instruments169 169 — 1,322 1,322 — 
Total earning assetsTotal earning assets$33,383,636 $30,003,459 $3,380,177 $34,126,992 $29,944,158 $4,182,834 Total earning assets$31,865,460 $28,202,110 $3,663,350 $31,856,320 $28,446,343 $3,409,977 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Money-market and savings accountsMoney-market and savings accounts$11,961,848 $11,907,142 $(54,706)$11,136,560 $11,067,633 $(68,927)Money-market and savings accounts$11,915,011 $11,952,175 $37,164 $11,457,490 $11,432,691 $(24,799)
Certificates of depositCertificates of deposit11,048,527 10,894,181 (154,346)11,799,223 11,597,266 (201,957)Certificates of deposit9,171,506 9,239,829 68,323 9,451,528 9,394,001 (57,527)
Long-term borrowingsLong-term borrowings5,117,766 4,918,670 (199,096)5,398,309 5,189,217 (209,092)Long-term borrowings5,483,809 5,552,497 68,688 6,000,174 5,930,990 (69,184)
Accrued interest payableAccrued interest payable79,231 79,231 — 60,272 60,272 — Accrued interest payable61,379 61,379 — 46,600 46,600 — 
Derivative instrumentsDerivative instruments451 451 — 287 287 — Derivative instruments263 263 — 252 252 — 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$28,207,823 $27,799,675 $(408,148)$28,394,651 $27,914,675 $(479,976)Total interest-bearing liabilities$26,631,968 $26,806,143 $174,175 $26,956,044 $26,804,534 $(151,510)
Excess of net asset fair value over carrying valueExcess of net asset fair value over carrying value$2,972,029 $3,702,858 Excess of net asset fair value over carrying value$3,837,525 $3,258,467 

Please refer to Notes to Consolidated Financial Statements, Note 16, “Fair Value Measurements” in our 20202021 Form 10-K for a full discussion of the methods and assumptions used to estimate the fair value of each class of financial instruments.

4742 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
13. Regulatory Capital
    
Sallie Mae Bank (the “Bank”) is subject to various regulatory capital requirements administered by the FDIC and the Utah Department of Financial Institutions (“UDFI”).Institutions. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial condition.position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.

The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.

To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.

On August 26, 2020,Under regulations issued by the FDIC and other federal banking agencies, published a final rule that provides those banking organizations that adoptedadopt CECL during the 2020 calendar year, withincluding the optionBank, may elect to delay for 2two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. We haveThe Bank has elected to use this option. The final rule is substantially similar to an interim final rule issued on March 27, 2020. Under this final rule, because we have elected to use the deferral option,Therefore, the regulatory capital impact of ourthe Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, will be deferred for 2 years. In addition, from January 1, 2020 through the end of the two-year deferral period,and 25 percent of the ongoing impact of CECL on ourthe Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes will be added to(collectively, the deferred transition amounts (“adjusted“adjusted transition amounts”) and, were deferred for the 2-year period. At the conclusion of the 2-yeartwo-year period (i.e., beginningending January 1, 2022),2022. From January 1, 2022 to January 1, 2025, the adjusted transition amounts will be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. OurThe Bank’s January 1, 2020 CECL transition amounts increased theour allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
At March 31, 2022, the adjusted transition amounts, reflecting changes over the phase-in period, that will be deferred for regulatory capital purposes are as follows:
Transition AmountsAdjustments for the Year EndedAdjustments for the Year EndedAdjustments
 for the
Three Months Ended		Adjusted Transition Amounts
(Dollars in thousands)January 1, 2020December 31, 2020December 31, 2021March 31, 2022March 31, 2022
Retained earnings$952,639 $(57,859)$(58,429)$(209,088)$627,263 
Allowance for credit losses1,143,053 (55,811)(49,097)(259,536)778,609 
Liability for unfunded commitments115,758 (2,048)(9,333)(26,094)78,283 
Deferred tax asset306,171 — — (76,542)229,629 


48SLM CORPORATION 43




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
13.Regulatory Capital (Continued)

The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated.


Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
AmountRatioAmountRatio
As of March 31, 2021:
(Dollars in thousands)(Dollars in thousands)Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
AmountRatioAmountRatio
As of March 31, 2022(3):
As of March 31, 2022(3):
Common Equity Tier 1 Capital (to Risk-Weighted Assets)Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,164,962 13.5 %$1,637,155 >7.0 %Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,155,469 12.9 %$1,710,526 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)Tier 1 Capital (to Risk-Weighted Assets)$3,164,962 13.5 %$1,987,974 >8.5 %Tier 1 Capital (to Risk-Weighted Assets)$3,155,469 12.9 %$2,077,067 >8.5 %
Total Capital (to Risk-Weighted Assets)Total Capital (to Risk-Weighted Assets)$3,230,743 13.8 %$2,455,732 >10.5 %Total Capital (to Risk-Weighted Assets)$3,462,126 14.2 %$2,565,789 >10.5 %
Tier 1 Capital (to Average Assets)Tier 1 Capital (to Average Assets)$3,164,962 10.0 %

$1,271,568 >4.0 %Tier 1 Capital (to Average Assets)$3,155,469 10.5 %

$1,199,485 >4.0 %
As of December 31, 2020:
As of December 31, 2021:As of December 31, 2021:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,579,005 14.0 %$1,794,780 >7.0 %Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,314,657 14.1 %$1,643,132 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)Tier 1 Capital (to Risk-Weighted Assets)$3,579,005 14.0 %$2,179,375 >8.5 %Tier 1 Capital (to Risk-Weighted Assets)$3,314,657 14.1 %$1,995,232 >8.5 %
Total Capital (to Risk-Weighted Assets)Total Capital (to Risk-Weighted Assets)$3,849,820 15.0 %$2,692,169 >10.5 %Total Capital (to Risk-Weighted Assets)$3,410,183 14.5 %$2,464,699 >10.5 %
Tier 1 Capital (to Average Assets)Tier 1 Capital (to Average Assets)$3,579,005 11.3 %$1,264,424 >4.0 %Tier 1 Capital (to Average Assets)$3,314,657 11.1 %$1,198,808 >4.0 %

________________             
(1)     Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.
(2)    The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework.
(3)    For March 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above.

Bank Dividends

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Bank declared $1.0 billion in dividends and $541$108 million in dividends to the Company for the three months ended March 31, 20212022, and $1.0 billion in dividends to the Company for the three months ended March 31, 2020, respectively,2021, with the proceeds primarily used to fund the 2022, 2021, and 2020 Share Repurchase Programs and stock dividends. In the future, we expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under its share repurchase programs.
4944 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
14. Commitments, Contingencies and Guarantees
Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period that we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At March 31, 2021,2022, we had $457$562 million of outstanding contractual loan commitments which we expect to fund during the remainder of the 2020/20212021/2022 academic year. At March 31, 2021,2022, we had a $19$33 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020 — Off-Balance Sheet Exposure for Contractual Loan Commitments”Commitments - 2021 and 2020” in our 20202021 Form 10-K and Note 6,5, “Unfunded Loan Commitments” in this Form 10-Q for additional information.
Regulatory Matters
For additional information regarding our regulatory matters, see Notes to Consolidated Financial Statements, Note 20, “Commitments, Contingencies and Guarantees” in our 20202021 Form 10-K.
Contingencies
In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries.
It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.
We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves.
Based on current knowledge, management does not believe there are loss contingencies, if any, arising from pending investigations, litigation, or regulatory matters for which reserves should be established.

50SLM CORPORATION 45

15. Subsequent Event

2022 Loan Sales
On April 27, 2022, we sold approximately $2.0 billion of our Private Education Loans, including approximately $1.9 billion in principal and approximately $130 million in capitalized interest to an unaffiliated third party. The gain on sale of loans sold expressed as a percentage was in the low double-digits and will be recognized in the second-quarter 2022 consolidated statements of income. The transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date. We will continue to service these loans pursuant to the terms of the applicable transaction documents.
46 SLM CORPORATION

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in connection with SLM Corporation’s Annual Report on Form 10-K for the year ended December 31, 20202021 (filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2021)24, 2022) (the “2020“2021 Form 10-K”), and subsequent reports filed with the SEC. Definitions for capitalized terms used in this report not defined herein can be found in the 20202021 Form 10-K.

References in this Form 10-Q to “we,” “us,” “our,” “Sallie Mae,” “SLM,” and the “Company” refer to SLM Corporation and its subsidiaries, except as otherwise indicated or unless the context otherwise requires.
    
This report contains “forward-looking” statements and information based on management’s current expectations as of the date of this report. Statements that are not historical facts, including statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements. This includes, but is not limited to: statements regarding future developments surrounding COVID-19 or any other pandemic, including, without limitation, statements regarding the potential impact of COVID-19 or any other pandemic on the Company’s business, results of operations, financial condition, and/or cash flows; our expectation and ability to pay a quarterly cash dividend on our common stock in the future, subject to the determination by our Board of Directors, and based on an evaluation of our earnings, financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks, and uncertainties; the Company’s 20212022 guidance; the Company’s three-year horizon outlook; the Company’s expectation and ability to execute loan sales and share repurchases; the Company’s projections regarding originations, net charge-offs, non-interest expenses, earnings, balance sheet position, and other metrics; and any estimates related to accounting standard changes.changes; and any estimates related to the impact of credit administration practices changes, including the results of simulations or other behavioral observations. 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 our 20202021 Form 10-K and subsequent filings with the SEC; the societal, business, and legislative/regulatory impact of pandemics and other public heath crises; 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, including any regarding the measurement of our allowance for credit losses and the related provision expense; any adverse outcomes in any significant litigation to which we are a party; credit risk associated with our exposure to third-parties, including counterparties to our 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). We could also be affected by, among other things: changes in our funding costs and availability; reductions to our credit ratings; cybersecurity incidents, cyberattacks, and other failures or breaches of our operating systems or infrastructure, including those of third-party vendors; damage to our reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting programs and the adverse effects of such initiatives on our 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 our customers; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of our earning assets versus our funding arrangements; rates of prepayment on the loans that we own; changes in general economic conditions and our ability to successfully effectuate any acquisitions; and other strategic initiatives. The preparation of our consolidated financial statements also requires us 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 quarterly report on Form 10-Q are qualified by these cautionary statements and are made only as of the date of this report. We do not undertake any obligation to update or revise these forward-looking statements to conform such statements to actual results or changes in our expectations.    

We report financial results on a GAAP basis and also provide certain non-GAAP core earnings performance measures. The difference between our non-GAAP “Core Earnings” and GAAP results for the periods presented were the unrealized, mark-to-fair value gains/losses on derivative contracts (excluding current period accruals on the derivative instruments), net of tax. These are recognized in GAAP, but not in non-GAAP “Core Earnings” results. We provide non-GAAP “Core Earnings” measures because this is one of several measures management uses when making management decisions regarding our performance and the allocation of corporate resources. Our non-GAAP “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 “—Key Financial Measures” and “—‘Non-GAAP Core Earnings’ ” in this Form 10-Q for the
51SLM CORPORATION 47

Form 10-Q for the quarter ended March 31, 20212022 for a further discussion and a complete reconciliation between GAAP net income and non-GAAP “Core Earnings.”
Through this discussion and analysis, we intend to provide the reader with some narrative context for how our management views our consolidated financial statements, additional context within which to assess our operating results, and information on the quality and variability of our earnings, liquidity, and cash flows.
Impact of COVID-19 on Sallie Mae
During the first quarterIn April 2022, we returned to our offices, with most employees working under a hybrid model of 2020, the outbreak of coronavirus 2019 or COVID-19 (“COVID-19”) began to spread worldwide and has caused significant disruptions to the U.S. and world economies. On March 11, 2020, the World Health Organization declared the COVID-19 outbreak to be a pandemic. Beginning on March 15, 2020, many businesses closed or reduced hours throughout the U.S. to combat the spread of COVID-19. Throughout 2020, all 50 states reported cases of COVID-19 and each implemented various containment efforts, including lockdowns on non-essential businesses and work from home regimes. As a result of these measures, in early 2020 the unemployment rate increased dramatically. In response, we offered disaster forbearance to those customers who contacted us and were negatively affected by COVID-19. The second half of 2020 saw improvements in economic and consumer trends, but continued waves of new cases of COVID-19 created continued uncertaintysome days in the economic environment. However, at the end of the fourth quarter of 2020office and into the first quarter of 2021, the rollout of new vaccines and the ratification of two additional stimulus laws have resulted in lower infection rates and significant improvement in the outlook of the economy. The improved outlook in the economy has contributed to faster prepayment rates and lower expected credit losses.other days working from home.
For further discussion of the impact of the coronavirus 2019 or COVID-19 (“COVID-19”) pandemic on the Company, see Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae” in the 20202021 Form 10-K.
The COVID-19 crisis is unprecedented and has had a significant impact on the economic environment globally and in the U.S. There is a significant amount of uncertainty as to the length and breadth of the impact to the U.S. economy and, consequently, on us. Economists expect the impact of COVID-19 on the U.S. economy to continue to be significant well into 2021.2022 and beyond. See Part I, Item 1A. “Risk Factors”Factors — Pandemic Risk” in the 20202021 Form 10-K for additional discussion regarding the risks associated with COVID-19.


52


Selected Financial Information and Ratios
 Three Months Ended 
 March 31,
(In thousands, except per share data and percentages) 
20212020
Net income attributable to SLM Corporation common stock$640,006 $358,709 
Diluted earnings per common share attributable to SLM Corporation$1.75 $0.87 
Weighted average shares used to compute diluted earnings per share366,240 412,755 
Return on assets(1)
8.3 %4.6 %
Other Operating Statistics (Held for Investment)
Ending Private Education Loans, net$19,632,933 $20,176,233 
Ending FFELP Loans, net725,300 764,771 
Ending total education loans, net$20,358,233 $20,941,004 
Ending Personal Loans, net$— $747,444 
Ending Credit Cards, net$10,054 $7,403 
Average education loans$21,718,780 $24,279,170 
Average Personal Loans$— $973,671 
Average Credit Cards$11,841 $5,286 
__________
(1) We calculate and report our Return on Assets as the ratio of (a) GAAP net income numerator (annualized) to (b) the GAAP total average assets denominator.
(In thousands,
except per share data and percentages) 		Three Months Ended 
 March 31,
20222021
Net income attributable to SLM Corporation common stock$127,537 $640,006 
Diluted earnings per common share$0.45 $1.75 
Weighted average shares used to compute diluted earnings per common share280,654 366,240 
Return on assets(1)
1.8 %8.3 %
Other Operating Statistics (Held for Investment)
Ending Private Education Loans, net$20,586,223 $19,632,933 
Ending FFELP Loans, net680,044 725,300 
Ending total education loans, net$21,266,267 $20,358,233 
Ending Credit Cards, net$25,408 $10,054 
Average education loans$22,548,810 $21,718,780 
Average Credit Cards$26,622 $11,841 
(1) We calculate and report our Return on Assets as the ratio of (a) GAAP net income numerator (annualized) to (b) the GAAP total average assets denominator.
 

Overview
The following discussion and analysis presents a review of our business and operations as of and for the three months ended March 31, 2021.2022.
Key Financial Measures
Our operating results are primarily driven by net interest income from our Private Education Loan portfolio, gains and losses on loan sales, provision expense for credit losses, and operating expenses. The growth of our business and the strength of our financial condition are primarily driven by our ability to achieve our annual Private Education Loan origination goals while sustaining credit quality and maintaining cost-efficient funding sources to support our originations. A
48 SLM CORPORATION

brief summary of our key financial measures (net interest income; loan sales and secured financings,financings; allowance for credit losses; charge-offs and delinquencies; operating expenses; non-GAAP “Core Earnings;” Private Education Loan originations; and funding sources) can be found in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20202021 Form 10-K.
Non-GAAP “Core Earnings”
We prepare financial statements in accordance with GAAP. However, we also produce and report our after-tax earnings on a separate basis that we refer to as “Core Earnings.” The difference between our non-GAAP “Core Earnings” and GAAP results for periods presented generally is driven by the unrealized, mark-to-fair value gains (losses) on derivative contracts recognized in GAAP, but not in non-GAAP “Core Earnings.”
Non-GAAP “Core Earnings” recognizes the difference in accounting treatment based upon whether a derivative qualifies for hedge accounting treatment. We enter into derivative instruments to economically hedge interest rate and cash flow risk associated with our portfolio. We believe that our derivatives are effective economic hedges and, as such, are a critical element of our interest rate risk management strategy. Those derivative instruments that qualify for hedge accounting treatment have their related cash flows recorded in interest income or interest expense along with the hedged item. Some of our derivatives do not qualify for hedge accounting treatment and the stand-alone derivative must be marked-to-fair value in the income statement with no consideration for the corresponding change in fair value of the hedged item. These gains and losses, recorded in “Gains (losses) on derivatives and hedging activities, net,” are primarily caused by interest rate volatility and changing credit spreads during the period as well as the volume and term of derivatives not receiving hedge accounting treatment. Cash flows on derivative instruments that do not qualify for hedge accounting are not recorded in interest income and interest expense; they are recorded in non-interest income: “Gains (losses) on derivatives and hedging activities, net.”
The adjustments required to reconcile from our non-GAAP “Core Earnings” results to our GAAP results of operations, net of tax, relate to differing treatments for those derivative instruments used to hedge our economic risks that do not qualify for hedge accounting treatment. The amount recorded in “Gains (losses) on derivatives and hedging activities, net” includes (i) the accrual of the current payment on the interest rate swaps that do not qualify for hedge accounting treatment, and (ii) the change in fair values related to future expected cash flows for derivatives that do not qualify for hedge accounting treatment. For purposes of non-GAAP “Core Earnings,” we include in GAAP earnings the current period accrual amounts (interest reclassification) on the swaps and exclude the change in fair values for those derivatives not qualifying for hedge accounting treatment. Non-GAAP “Core Earnings” is meant to represent what earnings would have been had these derivatives qualified for hedge accounting and there was no ineffectiveness.
Non-GAAP “Core Earnings” are not a substitute for reported results under GAAP. We provide a non-GAAP “Core Earnings” basis of presentation because (i) earnings per share computed on a non-GAAP “Core Earnings” basis is one of several measures we utilize in establishing management incentive compensation, and (ii) we believe it better reflects the financial results for derivatives that are economic hedges of interest rate risk, but which do not qualify for hedge accounting treatment.
GAAP provides a uniform, comprehensive basis of accounting. Our non-GAAP “Core Earnings” basis of presentation differs from GAAP in the way it treats derivatives as described above.

The following table shows the amount in “Gains (losses) on derivatives and hedging activities, net” that relates to the interest reclassification on the derivative contracts.

Three Months Ended 
 March 31,
(Dollars in thousands)20222021
Unrealized gains (losses) on instruments not in a hedging relationship$(248)$(10,863)
Interest reclassification243 10,891 
Gains (losses) on derivatives and hedging activities, net$(5)$28 


SLM CORPORATION 49

The following table reflects adjustments associated with our derivative activities.

Three Months Ended 
 March 31,
(Dollars in thousands, except per share amounts)20222021
Non-GAAP “Core Earnings” adjustments to GAAP:
GAAP net income$128,812 $641,207 
Preferred stock dividends1,275 1,201 
GAAP net income attributable to SLM Corporation common stock$127,537 $640,006 
Adjustments:
Net impact of derivative accounting(1)
248 10,863 
Net tax expense(2)
60 2,627 
Total non-GAAP “Core Earnings” adjustments to GAAP188 8,236 
Non-GAAP “Core Earnings” attributable to SLM Corporation common stock$127,725 $648,242 
GAAP diluted earnings per common share$0.45 $1.75 
Derivative adjustments, net of tax0.01 0.02 
Non-GAAP “Core Earnings” diluted earnings per common share$0.46 $1.77 

(1) Derivative Accounting: Non-GAAP “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, but include current period accruals on the derivative instruments. 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) Non-GAAP “Core Earnings” tax rate is based on the effective tax rate at the Bank where the derivative instruments are held.


The following table reflects our provisions for credit losses and total portfolio net charge-offs:
Three Months Ended 
 March 31,
(Dollars in thousands)20222021
Provisions for credit losses$98,050 $(225,767)
Total portfolio net charge-offs$(76,030)$(47,612)

We evaluate management’s performance internally using a measure that starts with non-GAAP “Core Earnings” net income as disclosed above for a period, and further adjusting it by increasing it by the impact of GAAP provisions for credit losses, and decreasing it by the total portfolio net charge-offs recorded in that period, net of the tax impact of these adjustments.

50 SLM CORPORATION

LIBOR Transition
Following announcements by the United Kingdom's Financial Conduct Authority (“UKFCA”), which regulates LIBOR, and ICE Benchmark Administration Limited, the administrator of LIBOR, publication of 1-week and 2-month USD LIBOR and all tenors for other currencies ceased after December 31, 2021. While publication of the remaining USD settings is expected to cease after June 30, 2023, U.S. banking and other global financial services regulators have directed regulated institutions to cease entering into new LIBOR-based contracts as soon as practicable and in any event by the end of 2021.
In 2020, we launched a formal cross-functional replacement project with the goal of ensuring a smooth transition to a replacement index for our LIBOR-based assets and obligations with minimal negative impact on our customers, investors, and the Company’s business, financial condition, and results of operations.
The project team monitors developments, assesses impacts, proposes plans and, with the approval of an executive committee, implements changes. The Chief Financial Officer and/or project team reports status regularly to our Board of Directors. In 2020, we began accepting certain deposits based on SOFR. In the second quarter of 2021, we began issuing variable-rate Private Education Loans that are indexed to SOFR. In 2022, subject to market conditions and investor demand, we expect to begin issuing ABS that are indexed to SOFR and to renew the Secured Borrowing Facility with an index based on SOFR.
Substantially all our assets, liabilities, and off-balance sheet items referencing LIBOR are comprised of Private Education Loans originated before April 2021, deposits, variable-rate ABS, and derivatives. In addition, our Series B Preferred Stock is indexed to LIBOR. We plan to transition these exposures to LIBOR by changing them to an alternative reference rate, either through modification or replacement, by June 30, 2023, although we may accelerate the transition of our legacy Private Education Loans depending upon a number of considerations, including regulatory guidance. Approximately $309 million of our variable-rate ABS (those issued before November 2017) do not have fallback provisions for an alternative reference rate and we intend to rely upon the safe harbors provided by recently passed federal legislation to transition these ABS to an alternative reference rate. Generally, the safe harbors will shield parties from liability and damages for transitioning certain USD LIBOR-indexed contracts (generally, those that do not have provisions for an alternative reference rate) to a benchmark replacement rate based on SOFR and selected by the Federal Reserve Board. We have evaluated the potential basis risk associated with a mismatch in variable-rate assets and liabilities, including any mismatches related to (i) legacy assets and liabilities that remain indexed to LIBOR up to June 2023 and newly issued assets and liabilities that are, or will be, indexed to SOFR and (ii) term SOFR-indexed assets and liabilities and average SOFR assets and liabilities. In all such cases, we have determined the basis risk is immaterial on an aggregate basis.

SLM CORPORATION 51

The chart below depicts our current LIBOR exposure at March 31, 2022.

As of March 31, 2022
(dollars in thousands)		LIBOR
Exposure
Private Education Loans$9,181,658 
FFELP Loans578,594 
Available-for-sale investments63,019 
Total Assets$9,823,271 
Deposits$3,951,933 
Private Education Loan term securitizations - no contractual fallback309,247 
Private Education Loan term securitizations - alternative reference rate fallback649,823 
Total Liabilities4,911,003 
Total Equity (preferred stock)251,070 
Total Liabilities and Equity$5,162,073 
Off-Balance Sheet:
Pay LIBOR derivative notional$3,678,960 
Receive LIBOR derivative notional1,407,412 
Total derivative notional5,086,372 
Secured Borrowing Facility2,000,000 
Total Off-Balance Sheet$7,086,372 

See Part I, Item 1A. “Risk Factors” in the 2021 Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.

52 SLM CORPORATION

Strategic Imperatives
In the third quarter of 2020, we introduced the following five strategic imperatives, which we believe willTo further focus our business and increase shareholder value:
•Maximizevalue, we continue to advance our strategic imperatives. Our focus remains on maximizing the profitability and growth of our core business. Our goal is to build upon our position as the leading lender in the private student loan market to maximize profitabilitybusiness, while harnessing and growth. We will seek to expand our share ofoptimizing the market through initiatives to increase the volume of applications, approval rate on the applications we receive, and ultimate funding rate for customers. We will endeavor to accomplish this without diminishing our risk/return appetite
53

and, in some cases, by enhancing it. We will also seek to improve the efficiency of our marketing and customer acquisition strategies through the implementation of robust direct to consumer marketing technologies. Finally, we will endeavor to drive greater efficiency and operating leverage through continued efficiency efforts and leveraging past investments in systems and platforms.
•Optimize the valuepower of our brand and our attractive client base. Our well-known brand, which is synonymous with student lending, is a strong asset. Our goal, however, is to improve upon it and make it a beloved brand that will strengthen our position in the private student loan industry. We will endeavor to do this by improving our current products and our servicing experience. We will focus on improving our already high customer satisfaction scores by simplifying our customer touch points. In addition, we plancontinue to improve the presentation of our free products that help students and families plan and pay for college, such as our cost of college calculators and our scholarship search engine. A very large number of people who currently visit our website are not our borrowers. We would likeseek to deepen our relationship with those customers to enhance our brand, improve our core business, and potentially develop new growth opportunities in the future.
•Betterbetter inform the external narrative about student lending. The marketplace presents both reallending and perceived riskSallie Mae. We also strive to private student lending. We will engage with bipartisan policymakers to help them better understand the role of private lenders and how Sallie Mae provides tools, resources, and responsible financing to help students and families access and complete college.
•Maintainmaintain a rigorous and predictable capital allocation and return program to create shareholder value. Our goal isWe are focused on driving a mission-led culture that continues to remain very disciplined by generating high returns on equity in our core business and by returning capitalmake Sallie Mae a great place to shareholders when it cannot be deployed in a way that generates high returns and supports our core private student lending business.work. We expect toalso continue to sell loans at premiums attractive to usstrengthen our risk and use the capital releasedcompliance function, enhance and gains generated to repurchase shares ofbuild upon our common stock, if we believe the stock is undervalued by reasonable measures. Our focus on loan sales to generate capital to return to shareholders is likely to continue throughout the phase-in of the regulatory capital implications of CECL, after which period of time we intend to generate significant excess capital organically for shareholders.
•Drive a mission-led culture. We believe,risk management framework, and research affirms, mission-led companies generate superior outcomes for customers, employees, shareholders,assess and other key stakeholders. To drive performance, we will continue to align and advance a culture tied directly to our mission: to power confidence as students begin their unique journey.monitor enterprise-wide risk.
During the first quarterthree months of 2021,2022, we continued makingmade the following progress on the above corporate strategic imperatives.
New Servicing Call Center PlatformAcquisition of Nitro College
On March 4, 2022, we completed the previously announced acquisition of Nitro, which provides resources that help students and Rebranded Online Resource Tools
In late March 2021, we migrated our servicing call centerfamilies evaluate how to a new integrated platform thatresponsibly pay for college and manage their financial responsibilities after graduation. The addition of Nitro will further our goal to deliver exceptional customer experiences. This new platform will also allow us to streamline our processes and provide efficiencies, thereby creating more customer-centric capabilities for our team members. We also relaunched our online resource (www.payingforcollegeresource.com) to provide a centralized and simplified site that provides information onbring innovative products, tools, and resources for school counselors as they assistto help students and families plan and pay for college.
Introduced new www.SallieMakesSense.com websiteconfidently navigate their higher education journey.
We launched www.SallieMakesSense.comexpect the acquisition of Nitro to help educate and inform policymakers, influencers, media, and others about whoenhance future strategic growth opportunities for Sallie Mae is today and illustrateto immediately expand our digital marketing capabilities, reduce the important role we continuecost to play inacquire customer accounts, and accelerate our progress to become a broader education solutions provider helping students to, through, and families planimmediately after college. For additional information on this transaction, see Notes to Consolidated Financial Statements, Note 1, “Significant Accounting Policies — Business Combination,” and pay for college. In addition to key statisticsNote 6, “Goodwill and information about the success of our customers, and the important role of private student lenders, the site also highlights the various tools and resources we provide families to make an informed decision about higher education. It also features content on the higher education landscape and our work in helping students complete their education.Acquired Intangible Assets.”
2021 Loan Sales and 2021-A Securitization2022-A Transaction
During the first quarterthree months of 2021,2022, we sold $3.16 billion$95 million of our Private Education Loans, including $2.97 billion$89 million in principal and $193$6 million in capitalized interest, to an unaffiliated third party. This sale was part of a larger transaction in which the unaffiliated third-party sold to SMB Private Education Loan Trust 2022-A approximately $973 million of Private Education Loans that the third-party seller previously purchased from us on November 17, 2021. The transactionsale of the $95 million of Private Education Loans qualified for sale treatment and removed the balance of thethose loans from our balance sheet on the respective settlement dates.date of the 2022-A Transaction. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. These salesThe sale resulted in our recognizing a
54

gain of $399$10 million during the first quarter of 2021.three months ended March 31, 2022. For additional information regarding this transaction,these transactions, see Notes to Consolidated Financial Statements, Note 4, “Loans Held for Sale” and Note 8, “Borrowings.“Borrowings — Unconsolidated VIEs - 2022-A Transaction.”
Final Settlement of ASR
On January 26, 2021, we completed our ASR with a third-party financial institution and we received an additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share of $9.01. For additional information regarding this ASR, see Notes to Consolidated Financial Statements, Note 10, “Stockholders’ Equity.”
Common Stock Tender Offer
On February 2, 2021, we announced the commencement of a “modified Dutch Auction” tender offer to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer.
Share Repurchases under our Rule 10b5-1 trading plan
During the first quarter of 2021,three months ended March 31, 2022, we repurchased 6.89.5 million shares of our common stock at a total cost of $121$176 million under a Rule 10b5-1 trading plan authorized under our share repurchase programs.
Secured Borrowing Facility
On February 17, 2021, we amended and extended the maturity of the Secured Borrowing Facility, discussed in Notes to Consolidated Financial Statements, Note 8, “Borrowings.”  The Secured Borrowing Facility is a $2 billion secured borrowing facility, under which the full $2 billion is available for us to draw. Under the amended Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay and reborrow funds, until February 16, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on February 16, 2023 (or earlier, if certain material adverse events occur).

55SLM CORPORATION 53

Results of Operations
We present the results of operations below on a consolidated basis in accordance with GAAP.
 
GAAP Consolidated Statements of Income (Unaudited)
 Three Months Ended 
 March 31,
Increase
(Decrease)
(In millions, except per share data)20212020$%
Interest income:
Loans$432 $555 $(123)(22)%
Investments3 3 — — 
Cash and cash equivalents1 17 (16)(94)
Total interest income436 575 (139)(24)
Total interest expense105 175 (70)(40)
Net interest income331 400 (69)(17)
Less: provisions for credit losses(226)61 (287)(470)
Net interest income after provisions for credit losses557 339 218 64 
Non-interest income:
Gains on sales of loans, net399 239 160 67 
Gains on derivatives and hedging activities, net— 46 (46)(100)
Other income14 7 7 100 
Total non-interest income413 292 121 41 
Non-interest expenses:
Total operating expenses125 147 (22)(15)
Restructuring expenses1 — 1 100 
Total non-interest expenses126 147 (21)(14)
Income before income tax expense844 484 360 74 
Income tax expense203 121 82 68 
Net income641 362 279 77 
Preferred stock dividends1 3 (2)(67)
Net income attributable to SLM Corporation common stock$640 $359 $281 78 %
Basic earnings per common share attributable to SLM Corporation$1.77 $0.88 $0.89 101 %
Diluted earnings per common share attributable to SLM Corporation$1.75 $0.87 $0.88 101 %
Declared dividends per common share attributable to SLM Corporation$0.03 $0.03 $— — %

(Dollars in millions,
except per share amounts)		Three Months Ended 
 March 31,
Increase
(Decrease)
20222021$%
Interest income:
Loans$458 $432 $26 6 %
Investments5 3 2 67 
Cash and cash equivalents2 1 1 100 
Total interest income465 436 29 7 
Total interest expense90 105 (15)(14)
Net interest income375 331 44 13 
Less: provisions for credit losses98 (226)324 143 
Net interest income after provisions for credit losses277 557 (280)(50)
Non-interest income:
Gains on sales of loans, net10 399 (389)(97)
Other income12 14 (2)(14)
Total non-interest income22 413 (391)(95)
Non-interest expenses:
Total operating expenses132 125 7 6 
Acquired intangible assets amortization expense1 — 1 100 
Restructuring expenses— 1 (1)(100)
Total non-interest expenses133 126 7 6 
Income before income tax expense166 844 (678)(80)
Income tax expense37 203 (166)(82)
Net income129 641 (512)(80)
Preferred stock dividends1 1 — — 
Net income attributable to SLM Corporation common stock$128 $640 $(512)(80)%
Basic earnings per common share$0.46 $1.77 $(1.31)(74)%
Diluted earnings per common share$0.45 $1.75 $(1.30)(74)%
Declared dividends per common share$0.11 $0.03 $0.08 267 %

5654 SLM CORPORATION

 GAAP Consolidated Earnings Summary
Three Months Ended March 31, 20212022 Compared with Three Months Ended March 31, 20202021
For the three months ended March 31, 2021,2022, net income was $641$129 million, or $1.75$0.45 diluted earnings per common share, compared with net income of $362$641 million, or $0.87$1.75 diluted earnings per common share, for the three months ended March 31, 2020.2021.
The primary drivers of changes in net income for the current quarter compared with the year-ago quarter are as follows:
•Net interest income decreasedincreased by $69$44 million in the current quarter compared with the year-ago quarter primarily due to a $3.5 billion reductionan $845 million increase in average loans outstanding and a 68-basisan 89-basis point decreaseincrease in theour net interest margin. The declineOur net interest margin increased because of a combination of factors, including a $3.3 billion reduction in average loans outstanding was due to the sale of our Personal Loan portfolio that occurred in the third quarter of 2020 and the sale of $3.16 billion of Private Education Loans in the first quarter of 2021. Ourlow-yielding average cash and other short-term investments, an increase in the yield on our loans and average taxable securitiesother interest-earning assets, and lower cost of funds. Historically, the yields on interest-earnings assets reprice more quickly than our cost of funds. As such, as rates increased by $875 million and $1.5 billion, respectively,in the first quarter of 2022, we saw the yields on our interest-earning assets increase while our cost of funds remained relatively flat compared with the prior yearfourth quarter of 2021, and lower than the year-ago quarter. The lower yields on these investments, which declined significantly from the year-ago quarter, coupled with their larger balances, were the primary causehigher level of the decline in the net interest margin. Yields on cash and other short-term investments and taxable securities are much lower than yields on consumer loans. This reducesin 2021 was primarily the weighted average yield on our interest-earning assets and our net interest margin.result of the $3.16 billion Private Education Loan sale that occurred in the first quarter of 2021.
•ProvisionsProvision for credit losses in the current quarter decreased by $287was $98 million, compared with a $226 million negative provision in the year-ago quarter. During the first quarter of 2021,2022, the provision for credit losses was primarily affected by improvements in the economic forecasts coupled with a benefit from faster forecasted prepayment speeds. These benefits were offset by additional provision from the new loan commitments made during the first quarter of 2021.and additional management overlays, which were partially offset by improved economic forecasts and faster prepayment rates. In the year-ago quarter, the provision for credit losses was favorably affected by improved economic forecasts and faster prepayments speeds. During the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans. TheseThe faster estimated prepaymentprepayments speeds during the two-year reasonable and supportable period reflectreflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model. We experienced higher prepayments duringmodel in the COVID-19 pandemic, when unemployment rates were elevated, than we would have expected based upon our experience during past financial crises. To address this fundamental change, we increased our long-term expectationsfirst quarter of prepayment speeds.2021.
•Gains on sales of loans were $399$10 million in the current quarter, compared with $239$399 million in the year-ago quarter. The increasedecrease in gains on sales of loans was primarily the result of improved pricing on the saleselling $95 million of loansPrivate Education Loans in the first quarter of 20212022, compared with the year-ago quarter, and, to a lesser extent, $130 millionsale of $3.16 billion of Private Education Loans in additional loan sales in the first quarter of 2021 when compared with the year-ago quarter.
•Gains on derivatives and hedging activities, net, were de minimisOther income was $12 million in the first quarter of 2021,2022, compared with a net gain of $46$14 million in the year-ago quarter. The decrease in other income compared with the year-ago quarter was favorably impacted byprimarily the result of a significant$2 million decrease in interest rates caused by the economic fallout from the COVID-19 pandemic, which made our receive fixed/pay variable interest rate swaps that are not designated as accounting hedges, but are economic hedges, to increase in value.third-party servicing fees.
•Other income was $14First-quarter 2022 total operating expenses were $132 million, in the first quarter of 2021, compared with $7$125 million in the year-ago quarter. The increase in other income compared with the year-ago period was primarily the result of a $12 million increase in third-party servicing fees, offset by $4 million in lower revenue related to our Upromise subsidiary, which we sold in the second quarter of 2020. Third-party servicing fees increased because we sold a total of $6 billion in loans in the first quarters of 2020 and 2021 where we retained servicing rights.
•First-quarter 2021 total operating expenses were $125 million, compared with $147 million in the year-ago quarter. The decrease in total operating expenses was primarily driven by lowertransaction costs related to our acquisition of Nitro, higher personnel costs, lower FDIC assessments, and lower Credit Card marketing costs.higher initiative spending.
•During the first quarter of 2022, we recorded approximately $1 million in amortization of acquired intangible assets related to our acquisition of Nitro. For additional information, see Notes to Consolidated Financial Statements, Note 6, “Goodwill and Acquired Intangible Assets.”
•First-quarter 20212022 income tax expense was $203$37 million, compared with $121$203 million in the year-ago quarter. Our effective income tax rate decreased to 24.122.5 percent in the first quarter of 20212022 from 25.124.1 percent in the year-ago quarter. The decrease in the effective tax rate infor the first quarter of 20212022 was primarily due to an increase in thea tax benefit related to stock compensation and a decrease in non-deductible expenses.



compensation.
57SLM CORPORATION 55

“Core Earnings”
We prepare financial statements in accordance with GAAP. However, we also produce and report our after-tax earnings on a separate basis that we refer to as “Core Earnings.” The difference between our non-GAAP “Core Earnings” and GAAP results for periods presented generally is driven by the unrealized, mark-to-fair value gains (losses) on derivative contracts recognized in GAAP, but not in “Core Earnings.”
“Core Earnings” recognizes the difference in accounting treatment based upon whether a derivative qualifies for hedge accounting treatment. We enter into derivative instruments to economically hedge interest rate and cash flow risk associated with our portfolio. We believe that our derivatives are effective economic hedges and, as such, are a critical element of our interest rate risk management strategy. Those derivative instruments that qualify for hedge accounting treatment have their related cash flows recorded in interest income or interest expense along with the hedged item. Some of our derivatives do not qualify for hedge accounting treatment and the stand-alone derivative must be marked-to-fair value in the income statement with no consideration for the corresponding change in fair value of the hedged item. These gains and losses, recorded in “Gains (losses) on derivatives and hedging activities, net,” are primarily caused by interest rate volatility and changing credit spreads during the period as well as the volume and term of derivatives not receiving hedge accounting treatment. Cash flows on derivative instruments that do not qualify for hedge accounting are not recorded in interest income and interest expense; they are recorded in non-interest income: “Gains (losses) on derivatives and hedging activities, net.”
The adjustments required to reconcile from our “Core Earnings” results to our GAAP results of operations, net of tax, relate to differing treatments for those derivative instruments used to hedge our economic risks that do not qualify for hedge accounting treatment. The amount recorded in “Gains (losses) on derivatives and hedging activities, net” includes (i) the accrual of the current payment on the interest rate swaps that do not qualify for hedge accounting treatment and (ii) the change in fair values related to future expected cash flows for derivatives that do not qualify for hedge accounting treatment. For purposes of “Core Earnings,” we include in GAAP earnings the current period accrual amounts (interest reclassification) on the swaps and exclude the change in fair values for those derivatives not qualifying for hedge accounting treatment. “Core Earnings” is meant to represent what earnings would have been had these derivatives qualified for hedge accounting and there was no ineffectiveness.
“Core Earnings” are not a substitute for reported results under GAAP. We provide a “Core Earnings” basis of presentation because (i) earnings per share computed on a “Core Earnings” basis is one of several measures we utilize in establishing management incentive compensation, and (ii) we believe it better reflects the financial results for derivatives that are economic hedges of interest rate risk, but which do not qualify for hedge accounting treatment.
GAAP provides a uniform, comprehensive basis of accounting. Our “Core Earnings” basis of presentation differs from GAAP in the way it treats derivatives as described above.
The following table shows the amount in “Gains (losses) on derivatives and hedging activities, net” that relates to the interest reclassification on the derivative contracts.
Three Months Ended 
 March 31,
(Dollars in thousands)20212020
Unrealized gains (losses) on instruments not in a hedging relationship$(10,863)$42,312 
Interest reclassification10,891 3,360 
Gains on derivatives and hedging activities, net$28 $45,672 



58


The following table reflects adjustments associated with our derivative activities.
Three Months Ended 
 March 31,
(Dollars in thousands, except per share amounts)20212020
“Core Earnings” adjustments to GAAP:
GAAP net income$641,207 $362,173 
Preferred stock dividends1,201 3,464 
GAAP net income attributable to SLM Corporation common stock$640,006 $358,709 
Adjustments:
Net impact of derivative accounting(1)
10,863 (42,312)
Net tax expense (benefit)(2)
2,627 (10,330)
Total “Core Earnings” adjustments to GAAP8,236 (31,982)
“Core Earnings” attributable to SLM Corporation common stock$648,242 $326,727 
GAAP diluted earnings per common share$1.75 $0.87 
Derivative adjustments, net of tax0.02 (0.08)
“Core Earnings” diluted earnings per common share$1.77 $0.79 
______
(1) Derivative Accounting: “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, but include current period accruals on the derivative instruments. 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.


The following table reflects our provisions for credit losses and total portfolio net charge-offs:


Three Months Ended 
 March 31,
(Dollars in thousands)20212020
Provisions for credit losses$(225,767)$61,258 
Total portfolio net charge-offs$(47,612)$(61,431)

We evaluate management’s performance internally using a measure that starts with “Core Earnings” net income as disclosed above for a period, and further adjusting it by increasing it by the impact of GAAP provisions for credit losses, and decreasing it by the total portfolio net charge-offs recorded in that period, net of the tax impact of these adjustments.

59

Financial Condition
Average Balance Sheets
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.
 Three Months Ended March 31,
 20212020
(Dollars in thousands)BalanceRateBalanceRate
Average Assets    
Private Education Loans$20,984,491 8.22 %$23,502,844 8.86 %
FFELP Loans734,289 3.41 776,326 4.29 
Personal Loans— — 973,671 12.11 
Credit Cards11,841 0.78 5,286 (4.72)
Taxable securities1,995,662 0.50 506,883 2.03 
Cash and other short-term investments6,789,310 0.14 5,914,515 1.17 
Total interest-earning assets30,515,593 5.80 %31,679,525 7.30 %
 
Non-interest-earning assets736,592 291,609 
 
Total assets$31,252,185 $31,971,134 
 
Average Liabilities and Equity
Brokered deposits$11,899,664 1.52 %$13,709,268 2.33 %
Retail and other deposits10,683,618 0.82 10,632,054 2.11 
Other interest-bearing liabilities(1)
5,193,925 3.03 4,876,861 3.27 
Total interest-bearing liabilities27,777,207 1.53 %29,218,183 2.41 %
 
Non-interest-bearing liabilities666,764 212,835 
Equity2,808,214 2,540,116 
Total liabilities and equity$31,252,185 $31,971,134 
 
Net interest margin4.40 %5.08 %
 Three Months Ended March 31,
 20222021
(Dollars in thousands)BalanceRateBalanceRate
Average Assets    
Private Education Loans$21,858,270 8.38 %$20,984,491 8.22 %
FFELP Loans690,540 3.51 734,289 3.41 
Credit Cards26,622 3.95 11,841 0.78 
Taxable securities2,646,397 0.84 1,995,662 0.50 
Cash and other short-term investments3,535,198 0.20 6,789,310 0.14 
Total interest-earning assets28,757,027 6.56 %30,515,593 5.80 %
 
Non-interest-earning assets472,002 736,592 
 
Total assets$29,229,029 $31,252,185 
 
Average Liabilities and Equity
Brokered deposits$10,131,989 1.25 %$11,899,664 1.52 %
Retail and other deposits11,058,963 0.66 10,683,618 0.82 
Other interest-bearing liabilities(1)
5,779,749 2.87 5,193,925 3.03 
Total interest-bearing liabilities26,970,701 1.35 %27,777,207 1.53 %
 
Non-interest-bearing liabilities97,582 666,764 
Equity2,160,746 2,808,214 
Total liabilities and equity$29,229,029 $31,252,185 
 
Net interest margin5.29 %4.40 %
 
_________________
(1)  Includes the average balance of our unsecured borrowings, as well as secured borrowings and amortization expense of transaction costs related to our term asset-backed securitizations and our Secured Borrowing Facility.




6056 SLM CORPORATION

Rate/Volume Analysis

The following rate/volume analysis shows the relative contribution of changes in interest rates and asset volumes to changes in interest income, interest expense, and net interest income.

(Dollars in thousands)Decrease
Change Due To(1)
Rate 
Volume
Three Months Ended March 31, 2021 vs. 2020   
Interest income$(138,775)$(114,682)$(24,093)
Interest expense(69,773)(59,767)(10,006)
Net interest income$(69,002)$(51,057)$(17,945)
(Dollars in thousands)Increase (Decrease)
Change Due To(1)
Rate 
Volume
Three Months Ended March 31, 2022 vs. 2021   
Interest income$28,880 $54,678 $(25,798)
Interest expense(15,038)(12,079)(2,959)
Net interest income$43,918 $63,592 $(19,674)
         _________________
(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.
Summary of Our Loans Held for Investment Portfolio
Ending Loans Held for Investment Balances, net

March 31, 2021
(Dollars in thousands)
Private
Education
Loans
FFELP
Loans		Credit CardsTotal Loans Held for Investment
Total loan portfolio:   
In-school(1)
$3,978,449$35$—$3,978,484
Grace, repayment and other(2)(3)
16,763,391727,62911,30917,502,329
Total, gross20,741,840727,66411,30921,480,813
Deferred origination costs and unamortized premium/(discount)64,4681,9547366,495
Allowance for credit losses(1,173,375)(4,318)(1,328)(1,179,021)
Total loans held for investment portfolio, net$19,632,933$725,300$10,054$20,368,287
    
% of total96 %4 %— %100 %
As of March 31, 2022
(dollars in thousands)
Private
Education
Loans
FFELP
Loans		Credit CardsTotal Loans Held for Investment
Total loan portfolio:   
In-school(1)
$4,033,213$90$—$4,033,303
Grace, repayment and other(2)
17,702,156682,18327,54718,411,886
Total, gross21,735,369682,27327,54722,445,189
Deferred origination costs and unamortized premium/(discount)71,9071,77017173,848
Allowance for credit losses(1,221,053)(3,999)(2,310)(1,227,362)
Total loans held for investment portfolio, net$20,586,223$680,044$25,408$21,291,675
    
% of total97 %3 %— %100 %
____________
As of December 31, 2021
(dollars in thousands)
Private
Education
Loans
FFELP
Loans		Credit
Cards		Total Loans Held for Investment
Total loan portfolio:   
In-school(1)
$3,544,030 $82 $— $3,544,112 
Grace, repayment and other(2)
17,172,833 695,134 25,014 17,892,981 
Total, gross20,716,863 695,216 25,014 21,437,093 
Deferred origination costs and unamortized premium/(discount)67,488 1,815 222 69,525 
Allowance for credit losses(1,158,977)(4,077)(2,281)(1,165,335)
Total loans held for investment portfolio, net$19,625,374 $692,954 $22,955 $20,341,283 
   
% of total97 %3 %— %100 %
(1)Loans for customers still attending school and who are not yet required to make payments on the loans. At March 31, 2021, the loans in the “in-school” category include $181 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, currently are not required to make any payments. For further discussion, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Financial Results” in the 2020 Form 10-K. 

(2)At March 31, 2021, the loans in the “grace, repayment and other” category include (a) $92 million of Private Education Loans whose borrowers are in a grace or deferred status and who did not return to school in the fall of 2020, who received an extension of time from us to re-enroll before beginning their grace period and, therefore, currently are not required to make any payments, and (b) $511 million of Private Education Loans whose borrowers are in a forbearance or repayment status and who did not return to school in the fall of 2020 and who received an extension of time from us to re-enroll before beginning their grace period. For further discussion, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Financial Results” in the 2020 Form 10-K. 

(3)Includes loans in deferment or forbearance. 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.




61SLM CORPORATION 57


December 31, 2020
(Dollars in thousands)Private
Education
Loans		FFELP
Loans		Credit CardsTotal Loans Held for Investment
Total loan portfolio:
In-school(1)
$3,582,394$81 $— $3,582,475 
Grace, repayment and other(2)(3)
16,146,943737,512 12,238 16,896,693 
Total, gross19,729,337737,593 12,238 20,479,168 
Deferred origination costs and unamortized premium/(discount)63,4751,993 230 65,698 
Allowance for credit losses(1,355,844)(4,378)(1,501)(1,361,723)
Total loans held for investment portfolio, net$18,436,968$735,208 $10,967 $19,183,143
 
% of total96 %4 %— %100 %
    ____________
(1)Loans for customers still attending school and who are not yet required to make payments on the loans. At December 31, 2020, the loans in the “in-school” category include $254 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments. For further discussion, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Financial Results” in the 2020 Form 10-K. 

(2)At December 31, 2020, the loans in the “grace, repayment and other” category include (a) $147 million of Private Education Loans whose borrowers were in a grace or deferred status and who did not return to school in the fall of 2020, who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments, and (b) $639 million of Private Education Loans whose borrowers were in a forbearance or repayment status and who did not return to school in the fall of 2020 and who received an extension of time from us to re-enroll before beginning their grace period. For further discussion, see Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Financial Results” in the 2020 Form 10-K..” 

(3)Includes loans in deferment or forbearance. 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.



Average Loans Held for Investment Balances (net of unamortized premium/discount)

Three Months Ended 
 March 31,
(Dollars in thousands)20222021
Private Education Loans$21,858,270 97 %$20,984,491 97 %
FFELP Loans690,540 3 734,289 3 
Credit Cards26,622 — 11,841 — 
Total portfolio$22,575,432 100 %$21,730,621 100 %
Three Months Ended 
 March 31,
(Dollars in thousands)20212020
Private Education Loans$20,984,491 97 %$23,502,844 93 %
FFELP Loans734,289 3 776,326 3 
Personal Loans— — 973,671 4 
Credit Cards11,841 — 5,286 — 
Total portfolio$21,730,621 100 %$25,258,127 100 %


Loans Held for Investment, Net — Activity

Three Months Ended March 31, 2022
(dollars in thousands)		 Private
Education
Loans		FFELP
Loans		Credit
Cards		Total Loans
Held for
Investment, net
Beginning balance$19,625,374 $692,954 $22,955 $20,341,283 
Acquisitions and originations:
Fixed-rate1,357,719 — — 1,357,719 
Variable-rate836,916 — 21,323 858,239 
Total acquisitions and originations2,194,635 — 21,323 2,215,958 
Capitalized interest and deferred origination cost premium amortization114,691 6,567 (80)121,178 
Sales(89,058)— — (89,058)
Loan consolidations to third-parties(499,431)(8,683)— (508,114)
Allowance(62,076)78 (29)(62,027)
Repayments and other(697,912)(10,872)(18,761)(727,545)
Ending balance$20,586,223 $680,044 $25,408 $21,291,675 



62

Loans Held for Investment, Net Activity
Three Months Ended March 31, 2021
(Dollars in thousands) Private
Education
Loans		FFELP
Loans		Credit
Cards
Total Loans
Held for
Investment, net(1)
Beginning balance$18,436,968 $735,208 $10,967 $19,183,143 
Acquisitions and originations:
Fixed-rate1,015,787 — — 1,015,787 
Variable-rate1,052,088 — 8,760 1,060,848 
Total acquisitions and originations2,067,875 — 8,760 2,076,635 
Capitalized interest and deferred origination cost premium amortization85,470 7,629 (185)92,914 
Sales(125,792)— — (125,792)
Transfer from loans held for sale25,040 — — 25,040 
Loan consolidations to third-parties(389,209)(6,670)— (395,879)
Allowance182,469 60 173 182,702 
Repayments and other(649,888)(10,927)(9,661)(670,476)
Ending balance$19,632,933 $725,300 $10,054 $20,368,287 

Three Months Ended March 31, 2020
(Dollars in thousands)
 Private
Education
Loans(1)
FFELP
Loans		Personal
Loans		Credit
Cards
Total Loans
Held for
Investment, net(1)
Beginning balance$22,896,515 $783,816 $983,643 $3,818 $24,667,792 
Day 1 CECL Adjustment to Allowance(1,060,830)(2,852)(79,183)(188)(1,143,053)
Balance at January 1, 202021,835,685 780,964 904,460 3,630 23,524,739 
Acquisitions and originations:
Fixed-rate1,468,698 — 41 — 1,468,739 
Variable-rate833,672 — — 7,762 841,434 
Total acquisitions and originations2,302,370 — 41 7,762 2,310,173 
Capitalized interest and deferred origination cost premium amortization117,877 7,411 (100)(71)125,117 
Sales(2,925,478)— — — (2,925,478)
Loan consolidations to third-parties(1)
(452,206)(5,709)— — (457,915)
Allowance(80,652)189 (7,612)(284)(88,359)
Repayments and other(1)
(621,363)(18,084)(149,345)(3,634)(792,426)
Ending balance$20,176,233 $764,771 $747,444 $7,403 $21,695,851 

_________
(1)In our Form 10-Qs for the first three fiscal quarters of 2020: (i) the “loan consolidations to third-parties” line item incorrectly included consolidation activity for loans we serviced but did not own, and (ii) the “repayments and other” line item did not correctly reflect the total of all scheduled repayments and voluntary prepayments made on loans in repayment that we owned and held for investment. The “ending balance” line item, which includes the effects of those two line items, was reflected correctly in the Form 10-Qs. The “loan consolidations to third-parties” line item was overstated in the Form 10-Q for the three months ended March 31, 2020 by $13 million. The “repayments and other” line item was understated in the Form 10-Q for the three months ended March 31, 2020 by $13 million. In order to correctly reflect the activity that occurred in the first quarter of 2020 regarding those line items for loans we owned and held for investment, the “loan consolidations to third-parties” line item above reflects a reduction of $13 million to the line item amount to reflect the aggregate overstatement for the first quarter of 2020, and the “repayments and other” line item above reflects an increase of $13 million to the line item amount to reflect the aggregate understatement for the first quarter of 2020.


63

Three Months Ended March 31, 2021
(dollars in thousands)		 Private
Education
Loans		FFELP
Loans		Credit
Cards		Total Loans
Held for
Investment, net
Beginning balance$18,436,968 $735,208 $10,967 $19,183,143 
Acquisitions and originations:
Fixed-rate1,015,787 — — 1,015,787 
Variable-rate1,052,088 — 8,760 1,060,848 
Total acquisitions and originations2,067,875 — 8,760 2,076,635 
Capitalized interest and deferred origination cost premium amortization85,470 7,629 (185)92,914 
Sales(125,792)— — (125,792)
Transfer from loans held-for-sale25,040 — — 25,040 
Loan consolidations to third-parties(389,209)(6,670)— (395,879)
Allowance182,469 60 173 182,702 
Repayments and other(649,888)(10,927)(9,661)(670,476)
Ending balance$19,632,933 $725,300 $10,054 $20,368,287 

“Loan consolidations to third-parties” and “Repayments and other” are both significantly affected by the volume of loans in our held for investment portfolio in full principal and interest repayment status. Loans in full principal and interest repayment status in our Private Education Loans held for investment portfolio at March 31, 2021 decreased2022 increased by 52 percent compared with March 31, 2020,2021, and now total 4442 percent of our Private Education Loans held for investment portfolio at March 31, 2021.2022.
58 SLM CORPORATION

“Loan consolidations to third-parties” for the three months ended March 31, 20212022 total 4.55.7 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at March 31, 2021,2022, or 2.02.4 percent of our total Private Education Loans held for investment portfolio at March 31, 2021,2022, compared with the year-ago period of 5.04.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status, or 2.22.0 percent of our total Private Education Loans held for investment portfolio, respectively. The increase in consolidations is attributable to consolidators having ready access to funding for much of 2020 and early 2021 in spite of the COVID-19 pandemic impact on the economy. Historical experience has shown that loan consolidation activity is heightened in the period when the loan initially enters full principal and interest repayment status and then subsides over time.
The “Repayments and other” category includes all scheduled repayments, as well as voluntary prepayments, made on loans in repayment (including loans in full principal and interest repayment status) and also includes charge-offs. Consequently, this category can be significantly affected by the volume of loans in repayment.
Historically, voluntary prepayments and loan consolidations decrease when unemployment increases as borrowers and lenders look to conserve liquidity.
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.

 Three Months Ended 
 March 31,
(Dollars in thousands)2021%2020%
Smart Option - interest only(1)
$473,386 23 %$522,432 23 %
Smart Option - fixed pay(1)
613,325 30 656,594 29 
Smart Option - deferred(1)
773,702 37 880,581 38 
Smart Option - principal and interest3,504 — 3,245 — 
Graduate Loan162,483 8 188,820 8 
Parent Loan38,513 2 49,228 2 
Total Private Education Loan originations$2,064,913 100 %$2,300,900 100 %
Percentage of loans with a cosigner88.5 %88.1 %
Average FICO at approval(2)
751 746 
 Three Months Ended 
 March 31,
(Dollars in thousands)2022%2021%
Smart Option - interest only(1)
$430,329 20 %$475,442 23 %
Smart Option - fixed pay(1)
711,395 32 614,883 30 
Smart Option - deferred(1)
867,108 40 773,592 37 
Graduate Loan150,460 7 162,483 8 
Parent Loan(2)
29,365 1 38,513 2 
Total Private Education Loan originations$2,188,657 100 %$2,064,913 100 %
Percentage of loans with a cosigner88.0 %88.5 %
Average FICO at approval(3)
748 751 

____________
(1) Interest only, fixed pay and deferred describe the payment option while in school or in grace period. See Item 1. “Business - Our Business - Private Education Loans” in the 20202021 Form 10-K for a further discussion.
(2) In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination date will continue to be processed, with final disbursements under those loans to occur until mid-December 2022.
(3) Represents the higher credit score of the cosigner or the borrower.
64SLM CORPORATION 59

Allowance for Credit Losses
Allowance for Credit Losses Activity

 Three Months Ended March 31,
 20212020
(Dollars in thousands)Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Personal LoansCredit CardsTotal
Portfolio
Beginning balance$1,355,844 $4,378 $1,501 $1,361,723 $374,300 $1,633 $65,877 $102 $441,912 
Day 1 adjustment for adoption of CECL— — — — 1,060,830 2,852 79,183 188 1,143,053 
Balance at January 11,355,844 4,378 1,501 1,361,723 1,435,130 4,485 145,060 290 1,584,965 
Transfer from unfunded commitment liability(1)
126,880 — — 126,880 142,075 — — — 142,075 
Less:      
Charge-offs(55,139)(89)(88)(55,316)(51,469)(226)(19,247)(7)(70,949)
Loan sales— — — — — — — — — 
Plus:      
Recoveries7,703 — 1��7,704 7,976 — 1,542 — 9,518 
Provision for loan losses:
Provision, current period(254,942)29 (86)(254,999)143,862 37 25,318 291 169,508 
Loan sale reduction to provision(8,858)— — (8,858)(161,793)— — — (161,793)
Loans transferred from held-for-sale1,887 — — 1,887 — — — — — 
Total provisions for credit losses(2)
(261,913)29 (86)(261,970)(17,931)37 25,318 291 7,715 
Ending balance$1,173,375 $4,318 $1,328 $1,179,021 $1,515,781 $4,296 $152,673 $574 $1,673,324 
       
Troubled debt restructurings(3)
$1,225,604 $— $— $1,225,604 $1,518,763 $— $— $1,518,763 
Three Months Ended March 31,
(dollars in thousands)		20222021
Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio
Beginning balance$1,158,977 $4,077 $2,281 $1,165,335 $1,355,844 $4,378 $1,501 $1,361,723 
Transfer from unfunded commitment liability(1)
94,686 — — 94,686 126,880 — — 126,880 
Less:      
Charge-offs(83,856)(99)(111)(84,066)(55,139)(89)(88)(55,316)
Plus:      
Recoveries8,033 — 3 8,036 7,703 — 1 7,704 
Provisions for credit losses:
Provision, current period48,460 21 137 48,618 (254,942)29 (86)(254,999)
Loan sale reduction to provision(5,247)— — (5,247)(8,858)— — (8,858)
Loans transferred from held-for-sale— — — — 1,887 — — 1,887 
Total provisions for credit losses(2)
43,213 21 137 43,371 (261,913)29 (86)(261,970)
Ending balance$1,221,053 $3,999 $2,310 $1,227,362 $1,173,375 $4,318 $1,328 $1,179,021 
_________
(1) See Note 6,5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2)  Below is a reconciliation of the provision for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended March 31,
(Dollars in thousands)20212020
Private Education Loan provisions for credit losses:
Provisions for loan losses$(261,913)$(17,931)
Provisions for unfunded loan commitments36,203 53,543 
Total Private Education Loan provisions for credit losses(225,710)35,612 
Other impacts to the provisions for credit losses:
Personal Loans— 25,318 
FFELP Loans29 37 
Credit Cards(86)291 
Total(57)25,646 
Provisions for credit losses reported in consolidated statements of income$(225,767)$61,258 
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended March 31,
(dollars in thousands)
20222021
Private Education Loan provisions for credit losses:
Provisions for loan losses$43,213 $(261,913)
Provisions for unfunded loan commitments54,679 36,203 
Total Private Education Loan provisions for credit losses97,892 (225,710)
Other impacts to the provisions for credit losses:
FFELP Loans21 29 
Credit Cards137 (86)
Total158 (57)
Provisions for credit losses reported in consolidated statements of income$98,050 $(225,767)
(3)
Represents the unpaid principal balance of loans classified as troubled debt restructurings.
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Private Education Loan Allowance for Credit Losses
In establishing the allowance for Private Education Loan losses as of March 31, 2021,2022, we considered several factors with respect to our Private Education Loan portfolio, in particular, credit quality and delinquency, forbearance, and charge-off trends.
Private Education Loans held for investment in full principal and interest repayment status were 4442 percent of our total Private Education Loans held for investment portfolio at March 31, 2021,2022, compared with 4544 percent at March 31, 2020.2021.
For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “—Allowance for Credit Losses” and Notes to Consolidated Financial Statements, Note 3, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-Q and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Allowance for Credit Losses” and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in the 20202021 Form 10-K.
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The table below presents our Private Education Loans held for investment portfolio delinquency trends. 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 (but, for purposes of the following table, do not include those loans while they are in forbearance). For the periods presented below, we updated our delinquency bucket periods to conform with the delinquency bucket periods defined by the FFIEC.

Private Education Loans Held for Investment
 March 31,
 20212020
(Dollars in thousands)Balance%Balance%
Loans in-school/grace/deferment(1)(2)
$5,393,674 $5,648,477 
Loans in forbearance(1)(3)
570,227 989,925 
Loans in repayment(1) and percentage of each status:
Loans current14,471,427 97.9 %14,516,211 96.8 %
Loans delinquent 30-59 days(4)
152,743 1.0 254,625 1.7 
Loans delinquent 60-89 days(4)
86,390 0.6 135,896 0.9 
Loans 90 days or greater past due(4)
67,379 0.5 81,613 0.6 
Total Private Education Loans in repayment14,777,939 100.0 %14,988,345 100.0 %
Total Private Education Loans, gross20,741,840 21,626,747  
Private Education Loans deferred origination costs and unamortized premium/(discount)64,468 65,267  
Total Private Education Loans20,806,308 21,692,014  
Private Education Loans allowance for losses(1,173,375)(1,515,781) 
Private Education Loans, net$19,632,933 $20,176,233  
 
Percentage of Private Education Loans in repayment71.2 %69.3 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment2.1 %3.2 %
 
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance3.7 %6.2 %
    _________
Private Education Loans Held for Investment20222021
March 31, (dollars in thousands)Balance%Balance%
Loans in-school/grace/deferment(1)(2)
$5,405,952 $5,393,674 
Loans in forbearance(1)(3)
234,260 570,227 
Loans in repayment(1) and percentage of each status:
Loans current15,530,080 96.5 %14,471,427 97.9 %
Loans delinquent 30-59 days(4)
260,535 1.6 152,743 1.0 
Loans delinquent 60-89 days(4)
169,060 1.1 86,390 0.6 
Loans 90 days or greater past due(4)
135,482 0.8 67,379 0.5 
Total Private Education Loans in repayment16,095,157 100.0 %14,777,939 100.0 %
Total Private Education Loans, gross21,735,369 20,741,840  
Private Education Loans deferred origination costs and unamortized premium/(discount)71,907 64,468  
Total Private Education Loans21,807,276 20,806,308  
Private Education Loans allowance for losses(1,221,053)(1,173,375) 
Private Education Loans, net$20,586,223 $19,632,933  
 
Percentage of Private Education Loans in repayment74.1 %71.2 %
Delinquencies as a percentage of Private Education Loans in repayment3.5 %2.1 %
 
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance1.4 %3.7 %
(1)At March 31, 2021, the loans in the “in-school/grace/deferment” category above include $273 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or for other reasons, and who then received an extension of time from us to re-enroll before beginning their grace period. At March 31, 2021, the loans in the “in forbearance” category above include $29 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who then received an extension of time from us to re-enroll before beginning their grace period. At March 31, 2021, the loans in the “in repayment” category above include $482 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 and who then received an extension of time from us to re-enroll before beginning their grace period. This program ended in September 2021. For further discussion, see Part II, Item 77. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Financial Results” in the 20202021 Form 10-K. 
(2)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).
(3)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.
(4)The period of delinquency is based on the number of days scheduled payments are contractually past due.
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Delinquencies as a percentage of Private Education Loans (held for investment) in repayment decreasedincreased to 3.5 percent at March 31, 2022 from 2.1 percent at March 31, 2021, from 3.2 percent at March 31, 2020, and the forbearance rate decreased to 1.4 percent at March 31, 2022 from 3.7 percent at March 31, 2021 from 6.2 percent at March 31, 2020.2021. The delinquency rate on March 31, 20212022 was lowerhigher than the year-ago quarter due to several factors, including the suspension of payments on federalcredit administration practices changes we implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance, as well as certain loans which reducedwhose borrowers took a “gap year” during the payment burden by our borrowers, multiple stimulus packages signed into law during 2020 and the first quarter of 2021, and to a lesser extent, the disaster forbearance program we invoked to assist our customers.pandemic entering repayment in late 2021. The first wave of disaster forbearance was granted primarily in 90-day increments. When these disaster forbearances expired in June and July 2020, the loans were no longer considered in forbearance until the borrowers requested, and were granted, an additional forbearance. Many of these borrowers went back into repayment status at the end of their original three-month disaster forbearance. Other borrowers asked for additional forbearance and we began granting those in one-month increments. In the latter half of 2020, we saw ourlower forbearance rate decline fromwas the high levels we experienced inresult of the second of quarter 2020, as borrowers exited their original three-month disaster forbearance.aforementioned credit administration practices changes. See additional discussion related to collections activity and the COVID-19 pandemic in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae — Customers and Credit Performance” and “— Use of Forbearance and Rate Modifications as a Private Education Loan Tool” in the 20202021 Form 10-K.

6862 SLM CORPORATION

Changes in Allowance for Private Education Loan Losses
The following table summarizes changes in the allowance for Private Education Loan (held for investment) losses.
 Three Months Ended 
 March 31,
(Dollars in thousands)20212020
Beginning balance$1,355,844 $374,300 
Day 1 adjustment for adoption of CECL— 1,060,830 
Balance at January 11,355,844 1,435,130 
Transfer from unfunded commitment liability(1)
126,880 142,075 
Provisions for credit losses:
Provision, current period(254,942)143,862 
Loan sale reduction to provision(8,858)(161,793)
Loans transferred from held-for-sale1,887 — 
Total provision(261,913)(17,931)
Net charge-offs:
Charge-offs(55,139)(51,469)
Recoveries7,703 7,976 
Net charge-offs(47,436)(43,493)
Ending balance$1,173,375 $1,515,781 
 
Allowance as a percentage of the ending total loan balance5.66 %7.01 %
Allowance as a percentage of the ending loans in repayment(2)
7.94 %10.11 %
Allowance coverage of net charge-offs (annualized)6.18 8.71 
Net charge-offs as a percentage of average loans in repayment (annualized)(2)
1.29 %1.05 %
Delinquent loans in repayment as a percentage of ending loans in repayment(2)
2.07 %3.15 %
Loans in forbearance as a percentage of ending loans in repayment and forbearance(2)
3.72 %6.20 %
Ending total loans, gross$20,741,840 $21,626,747 
Average loans in repayment(2)
$14,743,508 $16,521,356 
Ending loans in repayment(2)
$14,777,939 $14,988,345 
_______
 Three Months Ended 
 March 31,
(Dollars in thousands)20222021
Beginning balance$1,158,977 $1,355,844 
Transfer from unfunded commitment liability(1)
94,686 126,880 
Provision for credit losses:
Provision, current period48,460 (254,942)
Loan sale reduction to provision(5,247)(8,858)
Loans transferred from held-for-sale— 1,887 
Total provision43,213 (261,913)
Net charge-offs:
Charge-offs(83,856)(55,139)
Recoveries8,033 7,703 
Net charge-offs(75,823)(47,436)
Ending balance$1,221,053 $1,173,375 
 
Allowance as a percentage of the ending total loan balance5.62 %5.66 %
Allowance as a percentage of the ending loans in repayment(2)
7.59 %7.94 %
Allowance coverage of net charge-offs (annualized)4.03 6.18 
Net charge-offs as a percentage of average loans in repayment (annualized)(2)
1.89 %1.29 %
Delinquencies as a percentage of ending loans in repayment(2)
3.51 %2.07 %
Loans in forbearance as a percentage of ending loans in repayment and forbearance(2)
1.43 %3.72 %
Ending total loans, gross$21,735,369 $20,741,840 
Average loans in repayment(2)
$16,013,289 $14,743,508 
Ending loans in repayment(2)
$16,095,157 $14,777,939 
(1) See Note 6,5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(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.
 
As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of these metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans and of ending loans in repayment; and delinquency and forbearance percentages.

Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool
We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations, achieve better student outcomes, and increase the collectability of the loan. These changes generally take the form of a temporary forbearance of payments, a temporary interest rate reduction, a temporary interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. Forbearance is granted
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prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers.
Forbearance allows a borrower to temporarily not make scheduled payments or to make smaller than scheduled payments, in each case for a specified period of time. Using forbearance extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is capitalized to principal when the loan re-enters repayment status (except as described below in the case of disaster forbearance).
We grant forbearance through our servicing centers to borrowers who are current in their payments and through our collections centers to certain borrowers who are delinquent. Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter payment requirements for delinquent borrowers. We view the population of borrowers that use forbearance positively because the borrowers are either proactively reaching out to us to obtain assistance in managing their obligations or are working with our collections center to bring their loans current.
Forbearance may be granted through our servicing centers to customers who are exiting their grace period and to other customers who are current in their payments, to provide temporary payment relief. In these circumstances, a customer’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time. At the end of the forbearance period, the customer will enter repayment status as current and is expected to begin making scheduled monthly payments. Currently, we generally grant forbearance in our servicing centers if a borrower who is current requests it for increments of up to three months at a time, for up to 12 months.
Forbearance may also be granted through our collections centers to customers who are delinquent in their payments. If specific payment requirements are met, the forbearance can cure the delinquency and the customer is returned to a current repayment status. Forbearance as a collection tool is used most effectively when applying historical experience and our judgment to a customer’s unique situation. We leverage updated customer information and other decision support tools to best determine who will be granted forbearance based on our expectations as to a customer’s ability and willingness to repay their obligation. This strategy is aimed at assisting customers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans. In all instances, we require one or more payments before granting forbearance to delinquent borrowers.
The COVID-19 pandemic is having far reaching, negative impacts on individuals, businesses, and, consequently, the overall economy. Specifically, COVID-19 has materially disrupted business operations throughout the country, resulting in significantly higher levels of unemployment or underemployment. As a result, we expect many of our individual customers will experience financial hardship, making it difficult, if not impossible, to meet their payment obligations to us without temporary assistance. We are monitoring key metrics as early warning indicators of financial hardship, including changes in weekly unemployment claims, enrollment in auto-debit payments, requests for new forbearances, enrollment in hardship payment plans, and early delinquency metrics.
As a result of the negative impact on employment from COVID-19, some of our customers are experiencing higher levels of financial hardship, which led initially to higher levels of forbearance. We expect such higher levels of financial hardship to lead to higher levels of delinquencies and defaults in the future, as borrowers who had received disaster forbearance from us re-enter repayment status. We expect that, left unabated, this deterioration in forbearance, delinquency, and default rates will persist until such time as the economy and employment return to relatively normal levels. For some students, going back to school in the fall was not an option because of the pandemic, or for other reasons. Therefore, some students are taking a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated from school, we provided an extension of time through fall 2021 to re-enroll, before beginning their grace period that occurs prior to entering full principal and interest repayment status. At March 31, 2021, $784 million of Private Education Loans were granted this extended period of time.
We assist customers with an array of payment programs during periods of financial hardship as standard operating convention, including: forbearance, which defers payments during a short-term hardship; our GRP, which is an interest-only payment for 12 months; or a loan modification that, in the event of long-term hardship, reduces the interest rate on a loan to 4 percent for 24 months and/or permanently extends the maturity date of the loan. Historically, we have utilized disaster forbearance for material events, including hurricanes, wildfires, and floods. Disaster forbearance defers payments for as much as 90 days upon enrollment. We have invoked this same disaster forbearance program to assist our customers through
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COVID-19 and offer this program across our operations, including through mobile app and self-service channels such as chat and interactive voice response. Customers who receive a disaster forbearance will not progress in delinquency and will not be assessed late fees or other fees. During a disaster forbearance, a customer’s credit file will continue to reflect the status of the loan as it was immediately prior to granting the disaster forbearance. During the period of the disaster forbearance, interest will continue to accrue, but is not capitalized to the loan balance after the loan returns to repayment status. The first wave of disaster forbearance was granted primarily in 90-day increments. As these forbearances ended, we reduced the disaster forbearance to one-month increments and implemented additional discussions between our servicing agents and borrowers to encourage borrowers/cosigners to enter repayment. If the financial hardship extends beyond 90 days, additional assistance will be available for eligible customers. For example, for borrowers exiting disaster forbearance and not eligible for GRP, we may allow them to make interest only payments for 12 months before reverting to full principal and interest payments.
Management continually monitors our credit administration practices and may periodically modify these practices based upon performance, industry conventions, and/or regulatory feedback. In light of these considerations, we previously announced that we plan to implement certain changes to our credit administration practices in the future. As discussed below, however, we postponed until the fourth quarter of 2020 the implementation of the announced credit administration practices changes due to the COVID-19 pandemic.
Specifically, we previously announced that we plan to revise our credit administration practices limiting the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted. For example, we currently grant forbearance to borrowers without requiring any period of prior principal and interest payments, meaning that, if a borrower satisfies all eligibility requirements, forbearance increments may be granted consecutively. We previously announced that, beginning in the second quarter of 2020, we would phase in a required six-month period between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. We announced this required period will not apply, however, to forbearances granted during the first six months following a borrower’s grace period and will not be required for a borrower to receive a contractual interest rate reduction. In addition, we announced we would limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years.
As previously announced, prior to full implementation of the credit administration practices changes described above, management will conduct a controlled testing program on randomly selected borrowers to measure the impact of the changes on our customers, our credit operations, and key credit metrics. The testing commenced in October 2019 for some of the planned changes on a very small percentage of our total portfolio and we originally expected to expand the number of borrowers in repayment who would be subject to the new credit administration practices. However, due to the COVID-19 pandemic, we postponed our efforts so that we can be more flexible in dealing with our customers’ financial hardship. In October 2020, we began to roll out in a methodical approach the implementation of the credit administration practices changes and related testing. Management now expects to have completed implementation of the planned credit administration practices changes in the third quarter of 2021. However, we may modify or delay the contemplated practice changes, the proposed timeline, or the method of implementation as we learn more about the impacts of the program on our customers.
We also offer rate and term modifications to customers experiencing more severe hardship. Currently, we temporarily reduce the contractual interest rate on a loan to 4.0 percent for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. As part of demonstrating the ability and willingness to pay, the customer must make three consecutive monthly payments at the reduced payment to qualify for the program. The combination of the rate reduction and maturity extension helps reduce the monthly payment due from the borrower and increases the likelihood the borrower will remain current during the interest rate modification period as well as when the loan returns to its original contractual interest rate. At March 31, 2021 and December 31, 2020, 8.1 percent and 7.8 percent, respectively, of our Private Education Loans held for investment then currently in full principal and interest repayment status were subject to interest rate reductions made under our rate modification program. We currently have no plans to change the basic elements of the rate and term modifications we offer to our customers experiencing more severe hardship.
While there are limitations to our estimate of the future impact of the credit administration practices changes described above, absent the effect of any mitigating measures, and based on an analysis of borrower behavior under our current credit administration practices, which may not be indicative of how borrowers will behave under revised credit administration practices, we expect that the credit administration practices changes described above will accelerate defaults and could increase life of loan defaults in our Private Education Loan held for investment portfolio by approximately 4 percent to 14 percent.
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Among the measures that we are planning to implement and expect may partly offset or moderate any acceleration of or increase in defaults will be greater focus on the risk assessment process to ensure borrowers are mapped to the appropriate program, better utilization of existing programs (e.g., GRP and rate modifications), and the introduction of a new program offering short-term payment reductions (permitting interest-only payments for up to six months) for certain early stage delinquencies.
The full impact of these changes to our collections practices described above may only be realized over the longer term, however. In particular, when we calculate the allowance for credit losses under CECL, which became effective on January 1, 2020, our loan loss reserves increased materially because we expect the life of loan defaults on our overall Private Education Loan portfolio to increase, in part as a result of the planned changes to our credit administration practices. As we progress with the controlled testing program of the planned changes to our credit administration practices, we expect to learn more about how our borrowers are reacting to these changes and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses.
The tables below show the composition and status of the Private Education Loan portfolio held for investment aged by number of months in active repayment status (months for which a scheduled monthly payment was due). Active repayment status includes 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. Our experience shows that the percentage of loans in forbearance status generally decreases the longer the loans have been in active repayment status. At March 31, 2021, loans in forbearance status as a percentage of total loans in repayment and forbearance were 2.6 percent2022, for Private Education Loans (held for investment) that have been in active repayment status for fewer than 25 months.months, loans in forbearance status as a percentage of loans in repayment and forbearance were 1.1 percent. Approximately 6975 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status fewer than 25 months.

(Dollars in millions)
March 31, 2021
Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48

As of March 31, 2022
(dollars in millions)

As of March 31, 2022
(dollars in millions)
Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/defermentLoans in-school/grace/deferment$— $— $— $— $— $5,394 $5,394 Loans in-school/grace/deferment$— $— $— $— $— $5,406 $5,406 
Loans in forbearanceLoans in forbearance316 78 62 46 68 — 570 Loans in forbearance141 35 23 15 20 — 234 
Loans in repayment - currentLoans in repayment - current4,421 3,244 2,220 1,614 2,973 — 14,472 Loans in repayment - current5,408 3,244 2,288 1,562 3,028 — 15,530 
Loans in repayment - delinquent 30-59 daysLoans in repayment - delinquent 30-59 days62 27 19 17 28 — 153 Loans in repayment - delinquent 30-59 days104 46 36 26 49 — 261 
Loans in repayment - delinquent 60-89 daysLoans in repayment - delinquent 60-89 days37 17 11 7 14 — 86 Loans in repayment - delinquent 60-89 days78 26 21 15 29 — 169 
Loans in repayment - 90 days and greater past due28 11 10 7 11 — 67 
Loans in repayment - 90 days or greater past dueLoans in repayment - 90 days or greater past due63 23 15 11 23 — 135 
TotalTotal$4,864 $3,377 $2,322 $1,691 $3,094 $5,394 20,742 Total$5,794 $3,374 $2,383 $1,629 $3,149 $5,406 21,735 
Deferred origination costs and unamortized premium/(discount)Deferred origination costs and unamortized premium/(discount)      64 Deferred origination costs and unamortized premium/(discount)      72 
Allowance for credit lossesAllowance for credit losses      (1,173)Allowance for credit losses      (1,221)
Total Private Education Loans, netTotal Private Education Loans, net      $19,633 Total Private Education Loans, net      $20,586 
     
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearanceLoans in forbearance as a percentage of total Private Education Loans in repayment and forbearance2.06 %0.51 %0.41 %0.30 %0.44 %— %3.72 %Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance0.86 %0.21 %0.15 %0.09 %0.12 %— %1.43 %
 
As of March 31, 2021
(dollars in millions)		Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/deferment$— $— $— $— $— $5,394 $5,394 
Loans in forbearance316 78 62 46 68 — 570 
Loans in repayment - current4,421 3,244 2,220 1,614 2,973 — 14,472 
Loans in repayment - delinquent 30-59 days62 27 19 17 28 — 153 
Loans in repayment - delinquent 60-89 days37 17 11 7 14 — 86 
Loans in repayment - 90 days or greater past due28 11 10 7 11 — 67 
Total$4,864 $3,377 $2,322 $1,691 $3,094 $5,394 20,742 
Deferred origination costs and unamortized premium/(discount)      64 
Allowance for credit losses      (1,173)
Total Private Education Loans, net      $19,633 
 
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance2.06 %0.51 %0.41 %0.30 %0.44 %— %3.72 %

7264 SLM CORPORATION

(Dollars in millions)
March 31, 2020
Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/deferment$— $— $— $— $— $5,648 $5,648 
Loans in forbearance438 169 133 106 144 — 990 
Loans in repayment - current4,835 3,099 2,271 1,725 2,586 — 14,516 
Loans in repayment - delinquent 30-59 days100 47 37 29 42 — 255 
Loans in repayment - delinquent 60-89 days61 24 19 13 19 — 136 
Loans in repayment - 90 days or greater past due40 13 11 7 11 — 82 
Total$5,474 $3,352 $2,471 $1,880 $2,802 $5,648 21,627 
Deferred origination costs and unamortized premium/(discount)      65 
Allowance for credit losses      (1,516)
Total Private Education Loans, net      $20,176 
 
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance2.74 %1.06 %0.83 %0.67 %0.90 %— %6.20 %

73



Private Education Loans Held for Investment Types
The following table provides information regarding the loans in repayment balance and total loan balance by Private Education Loan held for investment product type at March 31, 20212022 and December 31, 2020.2021.

As of March 31, 2022
(dollars in thousands)		Signature and
Other
Parent Loan(1)
Smart OptionCareer
Training		Graduate
Loan		Total
$ in repayment(2)
$220,117 $310,376 $14,625,889 $7,854 $930,921 $16,095,157 
$ in total$311,852 $311,491 $19,737,147 $8,015 $1,366,864 $21,735,369 
 
March 31, 2021
(Dollars in thousands)Signature and
Other		Parent LoanSmart OptionCareer
Training		Graduate
Loan		Total
$ in repayment(1)
$214,395 $303,453 $13,520,671 $11,560 $727,860 $14,777,939 
$ in total$322,733 $308,082 $18,970,635 $12,000 $1,128,390 $20,741,840 

December 31, 2020
(Dollars in thousands)Signature and
Other		Parent LoanSmart OptionCareer
Training		Graduate
Loan		Total
$ in repayment(1)
$215,439 $285,323 $13,130,229 $12,250 $661,580 $14,304,821 
$ in total$330,979 $289,572 $18,067,491 $12,797 $1,028,498 $19,729,337 
_______
As of December 31, 2021 (dollars in thousands)Signature and
Other
Parent Loan(1)
Smart OptionCareer
Training		Graduate
Loan		Total
$ in repayment(2)
$221,637 $301,422 $14,097,819 $9,354 $880,980 $15,511,212 
$ in total$318,055 $302,764 $18,789,771 $9,402 $1,296,871 $20,716,863 
(1) In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination date will continue to be processed, with final disbursements under those loans to occur until mid–December 2022.
(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.
74



Accrued Interest Receivable
The following table provides information regarding accrued interest receivable on our Private Education Loans held for investment. The table also discloses the amount of accrued interest on loans greater than 90 days or greater past due as compared to our allowance for uncollectible interest. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $25 monthly payment that is smaller than the interest accruing on that loan in that month. The accrued interest on these loans will be capitalized against the balance of the loans when the borrower exits the grace period upon separation from school. The allowance for uncollectible interest exceeds the amount of accrued interest on our 90 days past due portfolio for all periods presented.

Private Education LoansPrivate Education Loans
Accrued Interest Receivable
Accrued Interest Receivable
(Dollars in thousands)(Dollars in thousands)Total Interest Receivable90 Days and Greater Past DueAllowance for
Uncollectible
Interest		(Dollars in thousands)Total Interest Receivable90 Days or Greater Past DueAllowance for
Uncollectible
Interest
March 31, 2022March 31, 2022$1,241,574 $6,292 $5,505 
December 31, 2021December 31, 2021$1,187,123 $3,635 $4,937 
March 31, 2021March 31, 2021$1,248,475 $3,695 $4,405 March 31, 2021$1,248,475 $3,695 $4,405 
December 31, 2020$1,168,895 $4,354 $4,467 
March 31, 2020$1,258,751 $3,127 $3,479 
 

75SLM CORPORATION 65

Liquidity and Capital Resources
Funding and Liquidity Risk Management
Our primary liquidity needs include our ongoing ability to fund our businesses throughout market cycles, including during periods of financial stress, our ongoing ability to fund originations of Private Education Loans and other loans, and our ability to meet any outflows of our Bank deposits. To achieve these objectives, we analyze and monitor our liquidity needs, maintain excess liquidity and access to diverse funding sources, such as deposits at the Bank, issuance of secured debt primarily through asset-backed securitizations, and other financing facilities, and loan sales. It is our policy to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned loan sales under all but the most dire emergency conditions. Our liquidity management is governed by policies approved by our Board of Directors. Oversight of these policies is performed in the Asset and Liability Committee, a management-level committee.
These policies take into account the volatility of cash flow forecasts, expected asset and liability maturities, anticipated loan demand, and a variety of other factors to establish minimum liquidity guidelines.
OverKey risks associated with our liquidity relate to our ability to access the coursecapital markets and the markets for bank deposits at reasonable rates. This ability may be affected by our performance, competitive pressures, the macroeconomic environment, and the impact they have on the availability of 2019funding sources in the marketplace. We target maintaining sufficient on-balance sheet and intocontingent sources of liquidity to enable us to meet all contractual and contingent obligations under various stress scenarios, including severe macroeconomic stresses as well as specific stresses that test the first quarterresiliency of 2020,our balance sheet. As the Bank has grown, we significantly increased our overall liquidity position for risk management purposes and enhancedhave improved our liquidity stress testing regime. Loan salespractices to align more closely with the industry, which resulted in our adopting increased liquidity requirements. Beginning in the firstsecond quarter of 2021 further increased liquidity on our balance sheet, and2019, we currently believebegan to increase our liquidity position is stablelevels by increasing cash and marketable investments held as part of our ongoing efforts to enhance our ability to maintain a strong risk management position. By early 2020 and continuing through 2021, we held a significant liquidity buffer of cash and securities, which we expect to be ablemaintain through 2022. Due to fundthe seasonal nature of our business, operations into 2022. With respect to the ongoing impact of the COVID-19 pandemic, in 2020 we saw a flight to quality, common in times of financial distress, where investors seek safer places to invest their money, such as insured bank deposits and in securities such as U.S. Treasuries and government-sponsored debt and mortgage-backed securities. This trend, combined with federal actions undertaken in 2020 to restore liquidity in the financial markets and reduced lending activity across U.S. banking entities, has resulted in higher levels of deposit funding in the banking system. As a well-capitalized insured depository institution, we expect continued access to retail deposit markets. Maintaining our focus on earnings quality as well as prudent liquidity management, we have actively managed the cost of our retail deposits downward in response to the rapid downturn in short-term interest rates since the onset of the pandemic in February 2020. We carefully monitor deposit trends to ensure that retail deposit outflows, primarily in term CDs, are within the outflow targets our Asset and Liability Committee has approved. We have targeted moderate outflows in retail deposits to offset other funding inflows in the latter half of 2020 and the first quarter of 2021. Despite the financial stress of the pandemic, we were able to access the brokered deposit, asset-backed security, and unsecured debt markets throughout 2020 and in the first quarter of 2021. We manage our capital position through a rigorous capital stress testing regime. As a result, we believe that, given the high quality of our Private Education Loan portfolio, we have sufficient capital to withstand our current estimate of potential continued economic downturn. If circumstances surrounding COVID-19 change in a significantly more adverse way, however, it is possible our liquidity and regulatory capital position could be materially and adversely affected, which could materially and adversely impact our business operations and our overall financial condition.levels will likely vary from quarter to quarter.
Sources of Liquidity and Available Capacity
Ending Balances
(Dollars in thousands)(Dollars in thousands)March 31, 2021December 31, 2020(Dollars in thousands)March 31, 2022December 31, 2021
Sources of primary liquidity:Sources of primary liquidity:  Sources of primary liquidity:  
Unrestricted cash and liquid investments:Unrestricted cash and liquid investments:  Unrestricted cash and liquid investments:  
Holding Company and other non-bank subsidiariesHolding Company and other non-bank subsidiaries$6,230 $1,117 Holding Company and other non-bank subsidiaries$8,510 $2,588 
Sallie Mae Bank(1)
Sallie Mae Bank(1)
6,200,771 4,454,175 
Sallie Mae Bank(1)
3,254,085 4,332,015 
Available-for-sale investmentsAvailable-for-sale investments1,916,750 1,927,726 Available-for-sale investments2,111,180 2,325,711 
Total unrestricted cash and liquid investmentsTotal unrestricted cash and liquid investments$8,123,751 $6,383,018 Total unrestricted cash and liquid investments$5,373,775 $6,660,314 
____
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
7666 SLM CORPORATION

Average Balances
 Three Months Ended 
 March 31,
(Dollars in thousands)20222021
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries$9,674 $4,284 
Sallie Mae Bank(1)
3,308,624 6,582,708 
Available-for-sale investments2,452,193 1,837,361 
Total unrestricted cash and liquid investments$5,770,491 $8,424,353 
 Three Months Ended 
 March 31,
(Dollars in thousands)20212020
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries$4,284 $35,001 
Sallie Mae Bank(1)
6,582,708 5,633,891 
Available-for-sale investments1,837,361 487,398 
Total unrestricted cash and liquid investments$8,424,353 $6,156,290 
____
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
Deposits
The following table summarizes total deposits.
March 31,December 31,March 31,December 31,
(Dollars in thousands)(Dollars in thousands)20212020(Dollars in thousands)20222021
Deposits - interest bearingDeposits - interest bearing$22,801,323 $22,664,899 Deposits - interest bearing$21,192,004 $20,826,692 
Deposits - non-interest bearingDeposits - non-interest bearing1,820 1,140 Deposits - non-interest bearing2,022 1,432 
Total depositsTotal deposits$22,803,143 $22,666,039 Total deposits$21,194,026 $20,828,124 

Our total deposits of $22.8$21.2 billion were comprised of $12.1$10.0 billion in brokered deposits and $11.2 billion in retail and other deposits at March 31, 2022, compared to total deposits of $20.8 billion, which were comprised of $10.1 billion in brokered deposits and $10.7 billion in retail and other deposits, at March 31, 2021, compared to total deposits of $22.7 billion, which were comprised of $11.9 billion in brokered deposits and $10.8 billion in retail and other deposits, at December 31, 2020.2021.
Interest bearing deposits as of March 31, 20212022 and December 31, 20202021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity MMDAs, and retail and brokered CDs. Interest bearing deposits include deposits from Educational 529 and Health Savings plans that diversify our funding sources and additional deposits we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $7.9$7.8 billion and $7.1$7.3 billion of our deposit total as of March 31, 20212022 and December 31, 2020,2021, respectively.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $4$3 million and $5$4 million in the three months ended March 31, 20212022 and 2020,2021, respectively. Fees paid to third-party brokers related to brokered CDs were none and $2 million for the three months ended March 31, 2021 and 2020, respectively.

2022. There were no related fees paid in the three months ended March 31, 2021.
77SLM CORPORATION 67

Interest bearing deposits at March 31, 20212022 and December 31, 20202021 are summarized as follows:

 March 31, 2021December 31, 2020
(Dollars in thousands)Amount
Qtr.-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Money market$10,951,595 0.68 %$10,159,657 0.83 %
Savings955,547 0.42 907,976 0.55 
Certificates of deposit10,894,181 1.24 11,597,266 1.34 
Deposits - interest bearing$22,801,323 $22,664,899 
____________
 March 31, 2022December 31, 2021
(Dollars in thousands)Amount
Qtr.-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Money market$10,984,116 0.79 %$10,473,569 0.69 %
Savings968,059 0.43 959,122 0.43 
Certificates of deposit9,239,829 1.37 9,394,001 1.20 
Deposits - interest bearing$21,192,004 $20,826,692 
(1) Includes the effect of interest rate swaps in effective hedge relationships.

As of March 31, 2021,2022, and December 31, 2020,2021, there were $751$532 million and $571$743 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $61$42 million and $50$35 million at March 31, 20212022 and December 31, 2020,2021, respectively.

Counterparty Exposure
Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative counterparty will not be able to meet its obligations to us.
Excess cash is generally invested with the FRB on an overnight basis or in the FRB’s Term Deposit Facility, minimizing counterparty exposure on cash balances.
Our investment portfolio is primarily comprised of U.S. government-sponsored enterprises and Treasuries, and a small portfolio of mortgage-backed securities issued by government agencies and government-sponsored enterprises that are purchased to meet CRA targets. Additionally, our investing activity is governed by Board-approved limits on the amount that is allowed to be invested with any one issuer based on the credit rating of the issuer, further minimizing our counterparty exposure. Counterparty credit risk is considered when valuing investments and considering impairment.
Related to derivative transactions, protection against counterparty risk is generally provided by International Swaps and Derivatives Association, Inc. Credit Support Annexes (“CSAs”), or clearinghouses for over-the-counter derivatives. CSAs require a counterparty to post collateral if a potential default would expose the other party to a loss. All derivative contracts entered into by the Bank are covered under CSAs or clearinghouse agreements and require collateral to be exchanged based on the net fair value of derivatives with each counterparty. Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position, less any collateral held by us and plus collateral posted with the counterparty.
Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of March 31, 2021, $8.22022, $4.8 billion notional of our derivative contracts were cleared on the CME and $0.4$0.3 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 95.694.3 percent and 4.45.7 percent, respectively, of our total notional derivative contracts of $8.6$5.1 billion at March 31, 2021.2022.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of March 31, 20212022 was $(157)$(64) million and $15$(0.4) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses).
Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be
78

zero. At March 31, 20212022 and December 31, 2020,2021, we had a net positive exposure (derivative gain positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $24$9 million and $43$9 million, respectively.
68 SLM CORPORATION

We have liquidity exposure related to collateral movements between us and our derivative counterparties. Movements in the value of the derivatives, which are primarily affected by changes in interest rates, may require us to return cash collateral held or may require us to access primary liquidity to post collateral to counterparties.
The table below highlights exposure related to our derivative counterparties as of March 31, 2021.2022.

As of March 31, 2022
(Dollarsdollars in thousands)		SLM Corporation
and Sallie Mae Bank
Contracts
Total exposure, net of collateral$24,1959,233 
Exposure to counterparties with credit ratings, net of collateral$24,1959,233 
Percent of exposure to counterparties with credit ratings below S&P AA- or Moody’s Aa3— %
Percent of exposure to counterparties with credit ratings below S&P A- or Moody’s A3— %

Regulatory Capital
The Bank is subject to various regulatory capital requirements administered by federal and state banking authorities. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial condition. Under U.S. Basel III and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.
 Capital Management
The Bank intends to maintain at all times regulatory capital levels that meet both the minimum levels required under U.S. Basel III (including applicable buffers) and the levels necessary to be considered “well capitalized” under the FDIC’s prompt corrective action framework, in order to support asset growth and operating needs, address unexpected credit risks, and protect the interests of depositors and the Deposit Insurance Fund (the “DIF”) administered by the FDIC. The Bank’s Capital Policy requires management to monitor these capital standards and the Bank’s compliance with them. The Board of Directors and management periodically evaluate the quality of assets, the stability of earnings, and the adequacy of the allowance for credit losses for the Bank. The Company is a source of strength for the Bank and will provide additional capital if necessary.
We believe that current and projected capital levels are appropriate for 2021.2022. As of March 31, 2021,2022, the Bank’s risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully phased-in U.S. Basel III standards as well as the “well capitalized” standards under the prompt corrective action framework.
Under U.S. Basel III, the Bank is required to maintain the following minimum regulatory capital ratios: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.
79

On August 26, 2020,Under regulations issued by the FDIC and other federal banking agencies, published a final rule that provides those banking organizations that adoptedadopt CECL during the 2020 calendar year, withincluding the optionBank, may elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. We haveThe Bank has elected to use this option. The final rule is substantially similar to an interim final rule issued on March 27, 2020. Under this final rule, because we have elected to use the deferral option,Therefore, the regulatory capital impact of ourthe Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, will be deferred for two years. In addition, from January 1, 2020 through the end of the two-year deferral period,and 25 percent of the ongoing impact of CECL on ourthe Bank’s allowance for credit losses,
SLM CORPORATION 69

retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes will be added to(collectively, the deferred transition amounts (“adjusted“adjusted transition amounts”) and, were deferred for the two-year period. At the conclusion of the two-year period (i.e., beginningending January 1, 2022),2022. From January 1, 2022 to January 1, 2025, the adjusted transition amounts will be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. OurThe Bank’s January 1, 2020 CECL transition amounts increased theour allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
At March 31, 2021,2022, the adjusted transition amounts, subject toreflecting changes over the two-year phase-in period, that will be deferred for regulatory capital purposes are as follows:

Transition AmountsAdjustments for the Year EndedAdjustments for the Three Months EndedAdjusted Transition AmountsTransition AmountsAdjustments for the Year EndedAdjustments for the Year EndedAdjustments
 for the
Three Months Ended		Adjusted Transition Amounts
(Dollars in thousands)(Dollars in thousands)January 1, 2020December 31, 2020March 31, 2021March 31, 2021(Dollars in thousands)January 1, 2020December 31, 2020December 31, 2021March 31, 2022March 31, 2022
Retained earningsRetained earnings$952,639 $(57,859)$(68,344)$826,436 Retained earnings$952,639 $(57,859)$(58,429)$(209,088)$627,263 
Allowance for credit lossesAllowance for credit losses1,143,053 (55,811)(45,675)1,041,567 Allowance for credit losses1,143,053 (55,811)(49,097)(259,536)778,609 
Liability for unfunded commitmentsLiability for unfunded commitments115,758 (2,048)(22,670)91,040 Liability for unfunded commitments115,758 (2,048)(9,333)(26,094)78,283 
Deferred tax assetDeferred tax asset306,171 — — 306,171 Deferred tax asset306,171 — — (76,542)229,629 


80

The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated.

 Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
(Dollars in thousands)AmountRatioAmountRatio
As of March 30, 2022(3):
Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,155,469 12.9 %$1,710,526 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)$3,155,469 12.9 %$2,077,067 >8.5 %
Total Capital (to Risk-Weighted Assets)$3,462,126 14.2 %$2,565,789 >10.5 %
Tier 1 Capital (to Average Assets)$3,155,469 10.5 %

$1,199,485 >4.0 %
As of December 31, 2021:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,314,657 14.1 %$1,643,132 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)$3,314,657 14.1 %$1,995,232 >8.5 %
Total Capital (to Risk-Weighted Assets)$3,410,183 14.5 %$2,464,699 >10.5 %
Tier 1 Capital (to Average Assets)$3,314,657 11.1 %$1,198,808 >4.0 %
 Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
AmountRatioAmountRatio
As of March 31, 2021:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,164,962 13.5 %$1,637,155 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)$3,164,962 13.5 %$1,987,974 >8.5 %
Total Capital (to Risk-Weighted Assets)$3,230,743 13.8 %$2,455,732 >10.5 %
Tier 1 Capital (to Average Assets)$3,164,962 10.0 %

$1,271,568 >4.0 %
As of December 31, 2020:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)$3,579,005 14.0 %$1,794,780 >7.0 %
Tier 1 Capital (to Risk-Weighted Assets)$3,579,005 14.0 %$2,179,375 >8.5 %
Total Capital (to Risk-Weighted Assets)$3,849,820 15.0 %$2,692,169 >10.5 %
Tier 1 Capital (to Average Assets)$3,579,005 11.3 %$1,264,424 >4.0 %
________________            
             
(1)     Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer.
(2)    The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework.
(3)    For March 31, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above.
70 SLM CORPORATION

Dividends
The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends to the Company from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Bank declared $1.0 billion in dividends and $541$108 million in dividends to the Company for the three months ended March 31, 20212022, and $1.0 billion in dividends to the Company for the three months ended March 31, 2020, respectively,2021, with the proceeds primarily used to fund the 2022, 2021, and 2020 Share Repurchase Programs and stock dividends. In the future, we expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under its share repurchase programs.

81


Borrowings
Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program and our Secured Borrowing Facility. The issuing entities for those secured borrowings are VIEs and are consolidated for accounting purposes. The following table summarizes our borrowings at March 31, 20212022 and December 31, 2020,2021, respectively. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings.”

March 31, 2021December 31, 2020
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $693,099 $693,099 $— $692,879 $692,879 
Total unsecured borrowings— 693,099 693,099 — 692,879 692,879 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,109,329 3,109,329 — 3,261,233 3,261,233 
Variable-rate— 1,116,242 1,116,242 — 1,235,105 1,235,105 
Total Private Education Loan term securitizations— 4,225,571 4,225,571 — 4,496,338 4,496,338 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,225,571 4,225,571 — 4,496,338 4,496,338 
Total$— $4,918,670 $4,918,670 $— $5,189,217 $5,189,217 

Short-term borrowings
On February 17, 2021, we amended our Secured Borrowing Facility to extend the maturity of the facility. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the amended Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay and reborrow funds, until February 16, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on February 16, 2023 (or earlier, if certain material adverse events occur). At March 31, 2021 and December 31, 2020, there were no secured borrowings outstanding under the Secured Borrowing Facility.
March 31, 2022December 31, 2021
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $986,591 $986,591 $— $986,138 $986,138 
Total unsecured borrowings— 986,591 986,591 — 986,138 986,138 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,608,606 3,608,606 — 3,897,996 3,897,996 
Variable-rate— 957,300 957,300 — 1,046,856 1,046,856 
Total Private Education Loan term securitizations— 4,565,906 4,565,906 — 4,944,852 4,944,852 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,565,906 4,565,906 — 4,944,852 4,944,852 
Total$— $5,552,497 $5,552,497 $— $5,930,990 $5,930,990 
Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at March 31, 2021.2022. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing and is payable daily. We did not utilize these lines of credit in the three months ended March 31, 20212022 or in the year ended December 31, 2020.2021.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Window. The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At March 31, 20212022 and December 31, 2020,2021, the value of our pledged collateral at the FRB totaled $3.2$2.9 billion and $3.8$3.3 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the three months ended March 31, 20212022 or in the year ended December 31, 2020.2021.

82SLM CORPORATION 71

Contractual Loan Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At March 31, 2021,2022, we had $457$562 million of outstanding contractual loan commitments that we expect to fund during the remainder of the 2020/20212021/2022 academic year. At March 31, 2021,2022, we had a $19$33 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020 — Off-Balance Sheet Exposure for Contractual Loan Commitments - 2021 and 2020” in our 2021 Form 10-K and Note 5, “Unfunded Loan Commitments” in this Form 10-Q for additional information.

Critical Accounting Policies and Estimates
Management’s Discussion and Analysis of Financial Condition and Results of Operations addresses our consolidated financial statements, which have been prepared in accordance with GAAP. A discussion of our critical accounting policies, which include allowance for credit losses, and derivative accounting, can be found in our 20202021 Form 10-K. There were no significant changes to our critical accounting policies duringDuring the three months ended March 31, 2021.2022, we adopted ASU No. 2022-02, which affects the accounting and disclosure of TDRs, as discussed below.
Recently Issued and Adopted Accounting Pronouncements
On March 31, 2022, the FASB issued ASU No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures,” which eliminates the accounting guidance for TDRs while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The enhanced disclosures are required to be provided for modifications made starting in the period of adoption. Information about modifications in periods before adoption is not required to be provided.
ASU No. 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination. For entities that have adopted the amendments in ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“CECL”), the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
Early adoption of the amendments in ASU No. 2022-02 is permitted if an entity has adopted CECL. The amendments should be applied prospectively. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method. We have elected to early adopt ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption did not affect our consolidated financial statements. For additional information, see Notes to Consolidated Financial Statements, Note 4, "Allowance for Credit Losses".


8372 SLM CORPORATION

Item 3.     Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Sensitivity Analysis
Our interest rate risk management program seeks to manage and control interest rate risk, thereby reducing our exposure to fluctuations in interest rates and achieving consistent and acceptable levels of profit in any rate environment, and sustainable growth in net interest income over the long term. We evaluate and monitor interest rate risk through two primary methods:
•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.
A number of potential interest rate scenarios are simulated using our asset liability management system. The Bank is the primary source of interest rate risk within the Company. At present, a significant portion of the Bank’s earning assets and a large balance of deposits are indexed to 1-month LIBOR. Therefore, 1-month LIBOR is considered a core rate in our interest rate risk analysis. Other interest rate changes are correlated to changes in 1-month LIBOR and other rates are shocked in parallel for analytic purposes, with higher or lower correlations based on historical relationships.shock scenarios unless otherwise indicated. In addition, key rates are modeled with a floor, which indicates how low each specific rate is likely to move in practice. BeginningOn April 1, 2021, we began offering variable-rate Private Education Loans will be offered based on the 30-day average Secured Overnight Financing Rate (“SOFR”),SOFR, replacing 1-month LIBOR. As SOFR related exposure grows, SOFR will become a core rateLIBOR for analysis as well.new originations. Rates are adjusted up or down via a set of scenarios that includes both rate shocks and ramps. Rate shocks represent an immediate and sustained change in key rates, including both 1-month LIBOR and 30-day average SOFR, with the resulting changes in other indices correlated accordingly. Interest rate ramps represent a linear increase in 1-month LIBORthose key rates over the course of 12 months, with the resulting changes in other indices correlated accordingly.
The following tables summarize the potential effect on earnings over the next 24 months and the potential effect on market values of balance sheet assets and liabilities at March 31, 20212022 and 2020,2021, based upon a sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and 300 basis points while credit and funding spreads remain constant. EAR analysis assumes a static balance sheet, with maturities of each product replaced with assumed issuance of new products of the same type. The EVE sensitivity is applied only to financial assets and liabilities, including hedging instruments, that existed at the balance sheet date, and does not reflect any impact of new assets, liabilities, commitments, or hedging instruments that may arise in the future.
With current interest rates very low, a 100 or 300-basis point downward rate shock does not provide a meaningful indication of interest rate sensitivity, so results for those scenarios have not been presented. At March 31, 2021,2022, the full impact of a 100-basis point downward rate shock cannot be modeled for some instruments on our balance sheet, due to the precipitous fall in many short-term rates since February 2020.current low rate environment. The EAR results for March 31, 20212022 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. This position is nearly unchangedhas shifted slightly negative but demonstrates a very balanced position. The EVE metrics are very similar to results from one year ago. Similarly, the EVE metrics have changed slightly from one year ago, showing more negative valuation in the market value of equity in response to higher rates. However, use of a new model used to perform the analysis has resulted in modeled results showing higher sensitivity under the new methodology, all other things being equal. In terms of the risk profile in place at March 31, 2021, long-term rate sensitivity has increased only slightly since one year ago.
84


March 31,20222021
20212020
+300
Basis Points		+100
Basis Points		-100
Basis Points		+300
Basis Points		+100
Basis Points		-100
Basis Points
As of March 31,As of March 31,+300
Basis Points		+100
Basis Points		-100
Basis Points		+300
Basis Points		+100
Basis Points		-100
Basis Points
EAR - ShockEAR - Shock+4.0%+1.4%N/A+4.3%+1.3%+2.3%EAR - Shock-0.11%0.0%N/A+4.0%+1.4%N/A
EAR - RampEAR - Ramp+3.9%+1.4%N/A+3.7%+1.3%+1.8%EAR - Ramp-0.26%-0.1%N/A+3.9%+1.4%N/A
EVEEVE-13.7%-4.9%N/A-11.0%-4.2%-1.6%EVE-13.3%-4.5%N/A-13.7%-4.9%N/A
    
In the preceding tables, the interest rate sensitivity analysis reflects the balance sheet mix of fully variable LIBOR-basedLIBOR, SOFR, and Prime-based loans, and fully variable funding, including brokered CDs that have been converted to LIBOR through derivative transactions. The analysis assumes that retail MMDAs and retail savings balances, while relatively sensitive to interest rate changes, will not correlate 100 percent to the full interest rate shocks or ramps. Also considered is the impact of FFELP Loans, which receive floor income in low interest rate environments, and will therefore not reprice fully with interest rate shocks.
SLM CORPORATION 73

Although we believe that these measurements provide an estimate of our interest rate sensitivity, they do not account for potential changes in credit quality, balance sheet mix, and size of our balance sheet. They also do not account for other business developments that could affect net income, or for management actions that could affect net income or could be taken to change our risk profile. Accordingly, we can give no assurance that actual results would not differ materially from the estimated outcomes of our simulations. Further, such simulations do not represent our current view of expected future interest rate movements.



85

Asset and Liability Funding Gap
The table below presents our assets and liabilities (funding) arranged by underlying indices as of March 31, 2021.2022. In the following GAAP presentation, the funding gap only includes derivatives that qualify as effective hedges (those derivatives which are reflected in net interest income, as opposed to those reflected in the “gains (losses) on derivatives and hedging activities, net” line on the consolidated statements of income). The difference between the asset and the funding is the funding gap for the specified index. This represents at a high level our exposure to interest rate risk in the form of basis risk and repricing risk, which is the risk that the different indices may reset at different frequencies or may not move in the same direction or at the same magnitude. (Note that all fixed-rate assets and liabilities are aggregated into one line item, which does not capture the differences in time due to maturity.)


(Dollars in millions)
Index
Frequency of
Variable
Resets		Assets
Funding (1)
Funding
Gap
As of March 31, 2022
(dollars in millions)
Index
As of March 31, 2022
(dollars in millions)
Index
Frequency of
Variable
Resets		Assets
Funding (1)
Funding
Gap
Fed Funds Effective RateFed Funds Effective Ratedaily/weekly/monthly$— $1,254.5 $(1,254.5)Fed Funds Effective Ratedaily/weekly/monthly$— $691.9 $(691.9)
SOFRmonthly— 50.6 (50.6)
SOFR RateSOFR Ratemonthly1,867.8 1,255.3 612.5 
3-month Treasury bill3-month Treasury billweekly108.2 — 108.2 3-month Treasury billweekly103.7 — 103.7 
PrimePrimemonthly12.5 — 12.5 Primemonthly28.5 — 28.5 
3-month LIBOR3-month LIBORquarterly— 251.1 (251.1)3-month LIBORquarterly— 251.1 (251.1)
1-month LIBOR1-month LIBORmonthly11,314.8 9,220.3 2,094.5 1-month LIBORmonthly9,244.7 7,182.6 2,062.1 
1-month LIBOR1-month LIBORdaily619.4 526.5 92.9 1-month LIBORdaily578.6 — 578.6 
Non-Discrete reset(2)
Non-Discrete reset(2)
daily/weekly6,402.3 4,134.1 2,268.2 
Non-Discrete reset(2)
daily/weekly3,489.4 4,343.2 (853.8)
Fixed-Rate(3)
Fixed-Rate(3)
 12,170.8 15,190.9 (3,020.1)
Fixed-Rate(3)
 13,739.1 15,327.7 (1,588.6)
TotalTotal $30,628.0 $30,628.0 $— Total $29,051.8 $29,051.8 $— 
         ______________________
(1)     Funding (by index) includes the impact of all derivatives that qualify as effective 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 MMDAs swapped to fixed-rates and stockholders' equity.

The “Funding Gap” in the above table shows primarily mismatches in the Fed Funds Effective, SOFR, 1-Month LIBOR monthly, Non-Discrete reset, and fixed-rate categories. Changes in the Fed Funds Effective Rate, SOFR, 3-month LIBOR and 1-Month LIBOR daily categories are generally quite highly correlated and the rates should offset each other relatively effectively. The funding in the fixed-rate bucket includes $2.4$1.8 billion of equity and $0.4$0.3 billion of non-interest bearing liabilities. We consider the overall repricing risk to be moderate, which is supported by other analyses of interest rate sensitivity.
We use interest rate swaps and other derivatives to achieve our risk management objectives. Our asset liability management strategy is to match assets with debt (in combination with derivatives) that have the same underlying index and reset frequency or have interest rate characteristics that we believe are highly correlated. The use of funding with index types and reset frequencies that are different from our assets exposes us to interest rate risk in the form of basis and repricing risk. This could result in our cost of funds not moving in the same direction or with the same magnitude as the yield on our assets. While we believe this risk is low, as all of these indices are short-term with rate movements that are highly correlated over a long period of time, market disruptions (some currently impacting today’s market) can lead to a temporary divergence between indices, resulting in a negative impact to our earnings.

8674 SLM CORPORATION

Weighted Average Life
The following table reflects the weighted average lives of our earning assets and liabilities at March 31, 2021.2022.
As of March 31, 2022
(averages in years)		Weighted
Average
(Averages in Years)Life
Earning assets 
Education loans4.594.83 
Cash and investments0.541.62 
Total earning assets3.444.15 
Deposits
Short-term deposits0.440.98 
Long-term deposits1.982.63 
Total deposits0.771.33 
Borrowings
Long-term borrowings3.55 
Total borrowings3.55 


87SLM CORPORATION 75



Item 4.     Controls and Procedures

Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of March 31, 2021.2022. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of March 31, 2021,2022, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a)(i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (b)(ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended March 31, 20212022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

8876 SLM CORPORATION

PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
We and our subsidiaries and affiliates are subject to various claims, lawsuits, and other actions that arise in the normal course of business. It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.
For additional information regarding our legal proceedings, see Part I, Item 3. “Legal Proceedings” in our 20202021 Form 10-K.
89

Item 1A. Risk Factors
Our business activities involve a variety of risks. Readers should carefully consider the risk factors disclosed in Part I, Item 1A. “Risk Factors” of our 20202021 Form 10-K.


Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchases
The following table provides information relating to our purchase of shares of our common stock in the three months ended March 31, 2021. 2022.
 
(In thousands,
except per share data)
Total Number
of Shares
Purchased(1)
Average Price
Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(2)(3)  
Approximate Dollar
Value
of Shares That
May Yet Be
Purchased Under
Publicly Announced
Plans or
Programs(2)
Period:   
January 1 - January 31, 20221,190 $18.90 633 $1,276,000 
February 1 - February 28, 20222,374 $19.78 2,220 $1,232,000 
March 1 - March 31, 20226,904 $17.94 6,680 $1,113,000 
Total first-quarter 202210,468 $18.46 9,533  
(In thousands, except per share data)
Total Number
of Shares
Purchased(1)
Average Price
Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(2)(3)  
Approximate Dollar
Value
of Shares That
May Yet Be
Purchased Under
Publicly Announced
Plans or
Programs(2)
Period:   
January 1 - January 31, 202114,422 $13.09 13,376 $1,325,000 
February 1 - February 28, 202111 $15.07 — $1,325,000 
March 1 - March 31, 202135,330 $16.77 35,327 $734,000 
Total first-quarter 202149,763 $15.70 48,703  
_________
(1)      The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) 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, restricted stock units, and performance stock units.
(2)     On January 22, 2020, our Board of Directors authorized us to repurchase shares of our common stock up to an aggregate repurchase price not to exceed $600 million under the 2020 Share Repurchase Program. In the first quarter of 20212022, we utilized all remaining capacity under the 2020 Share Repurchase Program. On January 27, 2021, our Board of Directors authorized us to repurchase shares of our common stock up to an aggregate repurchase price not to exceed $1.25 billionthen remaining under the 2021 Share Repurchase Program. There was $734 millionAs of capacityMarch 31, 2022, we had $1.1 billion remaining under the 20212022 Share Repurchase Program at March 31, 2021.Program.
(3)    In the first quarter of 2021, we settled our ASR agreement and received a delivery of 13 million shares, and2022, we repurchased 28.5 million shares as a result of our Tender Offer. We also repurchased 6.89.5 million shares under our 10b5-1 trading plan.plans. See Note 10, “Stockholders’ Equity” to our consolidated financial statements in this Form 10-Q for further discussion.

The closing price of our common stock on the NASDAQ Global Select Market on March 31, 20212022 was $17.97.

$18.36.

Item 3.    Defaults Upon Senior Securities
Nothing to report.
Item 4.    Mine Safety Disclosures
Not applicable.

90

Item 5.    Other Information
Nothing to report.
SLM CORPORATION 77

Item 6.    Exhibits
The following exhibits are furnished or filed, as applicable:
10.1
10.2
10.3
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.
101.LABXBRL Taxonomy Extension Label Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
 



9178 SLM CORPORATION

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SLM CORPORATION
(Registrant)
By:
/S/ STEVEN J. MCGARRY
 
Steven J. McGarry
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Date: April 21, 202127, 2022

92SLM CORPORATION 79