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 ~~September 30, 2021~~March 31, 2022

☐ 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)


Delaware			52-2013874
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

300 Continental Drive	Newark,	Delaware	19713
(Address of principal executive offices)			(Zip Code)

(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $.20 per share	SLM	The NASDAQ Global Select Market
Floating Rate Non-Cumulative Preferred Stock, Series B, par value $.20 per share	SLMBP	The 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 ~~September 30, 2021,~~March 31, 2022, there were ~~293,177,407~~271,083,556 shares of common stock outstanding.

~~SLM CORPORATION~~

~~CONSOLIDATED FINANCIAL STATEMENTS~~

~~INDEX~~


~~Part I. Financial Information~~
~~Item 1.~~	~~Financial Statements~~	3
~~Item 1.~~	~~Notes to the Financial Statements~~	12
~~Item 2.~~	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~	59
~~Item 3.~~	~~Quantitative and Qualitative Disclosures about Market Risk~~	96
~~Item 4.~~	~~Controls and Procedures~~	99
~~PART II. Other Information~~
~~Item 1.~~	~~Legal Proceedings~~	~~100~~
~~Item 1A.~~	~~Risk Factors~~	~~101~~
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	~~101~~
~~Item 3.~~	~~Defaults Upon Senior Securities~~	~~101~~
~~Item 4.~~	~~Mine Safety Disclosures~~	~~101~~
~~Item 5.~~	~~Other Information~~	~~102~~
~~Item 6.~~	~~Exhibits~~	~~102~~

~~SLM CORPORATION~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(In thousands, except share and per share amounts)~~

~~(Unaudited)~~

September 30, December 31,
2021 2020
Assets
Cash and cash equivalents $ 2,717,752 $ 4,455,292
Investments:
Trading investments at fair value (cost of $29,049 and $12,551) 36,792 16,923
Available-for-sale investments at fair value (cost of $2,506,087 and $1,986,957, respectively) 2,505,372 1,996,634
Other investments 140,725 80,794
Total investments 2,682,889 2,094,351
Loans held for investment (net of allowance for losses of $1,215,407 and $1,361,723, respectively) 21,281,527 19,183,143
Loans held for sale — 2,885,640
Restricted cash 175,473 154,417
Other interest-earning assets 11,890 42,874
Accrued interest receivable 1,403,146 1,387,305
Premises and equipment, net 153,334 154,670
Income taxes receivable, net 320,136 374,706
Tax indemnification receivable 12,486 18,492
Other assets 32,506 19,533
Total assets $ 28,791,139 $ 30,770,423
Liabilities
Deposits $ 20,890,860 $ 22,666,039
Short-term borrowings 199,583 —
Long-term borrowings 5,219,748 5,189,217
Other liabilities 349,687 352,332
Total liabilities 26,659,878 28,207,588
Commitments and contingencies 0 0
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 share 251,070 251,070
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 432.0 million and 456.7 million shares issued, respectively 86,403 91,346
Additional paid-in capital 1,068,059 1,331,247
Accumulated other comprehensive loss (net of tax benefit of ($6,288) and ($10,908), respectively) (19,703) (34,200)
Retained earnings 2,543,411 1,722,365
Total SLM Corporation stockholders’ equity before treasury stock 3,929,240 3,361,828
Less: Common stock held in treasury at cost: 138.8 million and 81.4 million shares, respectively (1,797,979) (798,993)
Total equity 2,131,261 2,562,835
Total liabilities and equity $ 28,791,139 $ 30,770,423

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF INCOME~~

~~(In thousands, except per share amounts)~~

~~(Unaudited)~~

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Interest income:
Loans $ 442,576 $ 477,833 $ 1,304,479 $ 1,513,279
Investments 3,366 3,327 9,262 9,086
Cash and cash equivalents 1,613 1,218 4,662 19,740
Total interest income 447,555 482,378 1,318,403 1,542,105
Interest expense:
Deposits 51,629 83,500 175,483 318,858
Interest expense on short-term borrowings 5,458 3,424 14,360 11,041
Interest expense on long-term borrowings 32,950 30,887 101,144 98,750
Total interest expense 90,037 117,811 290,987 428,649
Net interest income 357,518 364,567 1,027,416 1,113,456
Less: provisions for credit losses 138,442 (3,640) (17,648) 409,505
Net interest income after provisions for credit losses 219,076 368,207 1,045,064 703,951
Non-interest income:
Gains (losses) on sales of loans, net (10) (4) 402,780 238,562
Gains (losses) on derivatives and hedging activities, net 44 (15) 161 49,408
Other income 13,879 9,646 76,747 42,547
Total non-interest income 13,913 9,627 479,688 330,517
Non-interest expenses:
Operating expenses:
Compensation and benefits 66,229 62,743 200,426 219,413
FDIC assessment fees 6,521 1,455 17,634 17,508
Other operating expenses 67,899 63,292 175,098 179,424
Total operating expenses 140,649 127,490 393,158 416,345
Restructuring expenses 108 24,127 1,255 24,127
Total non-interest expenses 140,757 151,617 394,413 440,472
Income before income tax expense 92,232 226,217 1,130,339 593,996
Income tax expense 19,392 55,189 276,091 146,006
Net income 72,840 171,028 854,248 447,990
Preferred stock dividends 1,166 2,058 3,559 8,000
Net income attributable to SLM Corporation common stock $ 71,674 $ 168,970 $ 850,689 $ 439,990
Basic earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ 2.62 $ 1.14
Average common shares outstanding 299,890 375,094 324,148 386,587
Diluted earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ 2.59 $ 1.13
Average common and common equivalent shares outstanding 304,511 377,918 329,064 389,391
Declared dividends per common share attributable to SLM Corporation $ 0.03 $ — $ 0.09 $ 0.09

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(In thousands)~~

~~(Unaudited)~~

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Net income $ 72,840 $ 171,028 $ 854,248 $ 447,990
Other comprehensive income:
Unrealized gains (losses) on investments (2,539) 1,545 (10,256) 7,559
Unrealized gains (losses) on cash flow hedges 5,095 5,252 29,374 (42,785)
Total unrealized gains (losses) 2,556 6,797 19,118 (35,226)
Income tax (expense) benefit (619) (1,667) (4,621) 8,652
Other comprehensive income (loss), net of tax (expense) benefit 1,937 5,130 14,497 (26,574)
Total comprehensive income $ 74,777 $ 176,158 $ 868,745 $ 421,416

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENT S OF CHANGES IN EQUITY~~

~~(In thousands, except share and per share amounts)~~

~~(Unaudited)~~

Common Stock Shares
Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated
Other
Comprehensive
Income (Loss) Retained Earnings Treasury Stock Total Equity
Balance at June 30, 2020 4,000,000 456,585,223 (81,349,436) 375,235,787 $ 400,000 $ 91,317 $ 1,234,450 $ (44,071) $ 1,133,269 $ (798,046) $ 2,016,919
Net income — — — — — — — — 171,028 — 171,028
Other comprehensive income, net of tax — — — — — — — 5,130 — — 5,130
Total comprehensive income — — — — — — — — — — 176,158
Cash dividends declared:
Preferred Stock, Series B ($0.51 per share) — — — — — — — — (2,058) — (2,058)
Common stock dividend accrual adjustment — — — — — — — — 247 — 247
Issuance of common shares — 5,150 — 5,150 — 2 14 — — — 16
Stock-based compensation expense — — — — — — 9,018 — 168 — 9,186
Shares repurchased related to employee stock-based compensation plans — — (3,122) (3,122) — — — — — (22) (22)
Balance at September 30, 2020 4,000,000 456,590,373 (81,352,558) 375,237,815 $ 400,000 $ 91,319 $ 1,243,482 $ (38,941) $ 1,302,654 $ (798,068) $ 2,200,446

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY~~

~~(In thousands, except share and per share amounts)~~

~~(Unaudited)~~

Common Stock Shares
Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated
Other
Comprehensive
Income (Loss) Retained Earnings Treasury Stock Total Equity
Balance at June 30, 2021 2,510,696 431,508,098 (125,700,875) 305,807,223 $ 251,070 $ 86,302 $ 1,058,698 $ (21,640) $ 2,480,672 $ (1,551,724) $ 2,303,378
Net income — — — — — — — — 72,840 — 72,840
Other comprehensive income, net of tax — — — — — — — 1,937 — — 1,937
Total comprehensive income — — — — — — — — — — 74,777
Cash dividends declared:
Common stock ($0.03 per share) — — — — — — — — (8,934) — (8,934)
Preferred Stock, Series B ($0.46 per share) — — — — — — — — (1,166) — (1,166)
Dividend equivalent units related to employee stock-based compensation plans — — — — — — — — (1) — (1)
Issuance of common shares — 504,183 — 504,183 — 101 2,769 — — — 2,870
Stock-based compensation expense — — — — — — 6,686 — — — 6,686
Fees related to first-quarter 2021 common stock tender offer — — — — — — (94) — — — (94)
Common stock repurchased — — (13,018,585) (13,018,585) — — — — — (244,082) (244,082)
Shares repurchased related to employee stock-based compensation plans — — (115,414) (115,414) — — — — — (2,173) (2,173)
Balance at September 30, 2021 2,510,696 432,012,281 (138,834,874) 293,177,407 $ 251,070 $ 86,403 $ 1,068,059 $ (19,703) $ 2,543,411 $ (1,797,979) $ 2,131,261

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY~~

~~(In thousands, except share and per share amounts)~~

~~(Unaudited)~~

Common Stock Shares
Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated
Other
Comprehensive
Loss Retained Earnings Treasury Stock Total Equity
Balance at December 31, 2019 4,000,000 453,599,926 (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, 2020 4,000,000 453,599,926 (32,506,562) 421,093,364 400,000 90,720 1,307,630 (12,367) 897,873 (324,659) 2,359,197
Net income — — — — — — — — 447,990 — 447,990
Other comprehensive loss, net of tax — — — — — — — (26,574) — — (26,574)
Total comprehensive income — — — — — — — — — — 421,416
Cash dividends declared:
Common stock ($0.09 per share) — — — — — — — — (35,097) — (35,097)
Preferred Stock, Series B ($2.00 per share) — — — — — — — — (8,000) — (8,000)
Dividend equivalent units related to employee stock-based compensation plans — — — — — — 270 — (280) — (10)
Issuance of common shares — 2,990,447 — 2,990,447 — 599 2,298 — — — 2,897
Stock-based compensation expense — — — — — — 30,207 — 168 — 30,375
Common stock repurchased — — (47,736,847) (47,736,847) — — (96,923) — — (461,244) (558,167)
Shares repurchased related to employee stock-based compensation plans — — (1,109,149) (1,109,149) — — — — — (12,165) (12,165)
Balance at September 30, 2020 4,000,000 456,590,373 (81,352,558) 375,237,815 $ 400,000 $ 91,319 $ 1,243,482 $ (38,941) $ 1,302,654 $ (798,068) $ 2,200,446

~~See accompanying notes to consolidated financial statements.~~

~~SLM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY~~

~~(In thousands, except share and per share amounts)~~

~~(Unaudited)~~

Common Stock Shares
Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated
Other
Comprehensive
Income (Loss) Retained Earnings Treasury Stock Total Equity
Balance at December 31, 2020 2,510,696 456,729,251 (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 — — — — — — — — 854,248 — 854,248
Other comprehensive income, net of tax — — — — — — — 14,497 — — 14,497
Total comprehensive income — — — — — — — — — — 868,745
Cash dividends declared:
Common stock ($0.09 per share) — — — — — — — — (29,104) — (29,104)
Preferred Stock, Series B ($1.42 per share) — — — — — — — — (3,559) — (3,559)
Dividend equivalent units related to employee stock-based compensation plans — — — — — — 522 — (539) — (17)
Issuance of common shares — 3,785,490 3,785,490 — 757 4,134 — — — 4,891
Stock-based compensation expense — — — — — — 24,254 — — — 24,254
Common stock repurchased and cancelled — (28,502,460) — (28,502,460) — (5,700) (466,782) — — — (472,482)
Common stock repurchased — — (56,025,796) (56,025,796) — — 174,684 — — (978,883) (804,199)
Shares repurchased related to employee stock-based compensation plans — — (1,367,826) (1,367,826) — — — — — (20,103) (20,103)
Balance at September 30, 2021 2,510,696 432,012,281 (138,834,874) 293,177,407 $ 251,070 $ 86,403 $ 1,068,059 $ (19,703) $ 2,543,411 $ (1,797,979) $ 2,131,261

~~See accompanying notes to consolidated financial statements.~~

SLM CORPORATION

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(In thousands)~~

~~(Unaudited)~~

Nine Months Ended
September 30,
2021 2020
Operating activities
Net income $ 854,248 $ 447,990
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provisions for credit losses (17,648) 409,505
Income tax expense 276,091 146,006
Amortization of brokered deposit placement fee 11,932 14,881
Amortization of Secured Borrowing Facility upfront fee 1,845 2,159
Amortization of deferred loan origination costs and loan premium/(discounts), net 11,851 20,127
Net amortization of discount on investments 5,902 4,255
Unrealized gain on investments — (2,100)
Reduction (increase) in tax indemnification receivable 6,006 (698)
Depreciation of premises and equipment 11,445 11,386
Stock-based compensation expense 24,254 30,253
Unrealized (gains) losses on derivatives and hedging activities, net 21,434 (21,862)
Gains on sales of loans, net (402,780) (238,562)
Gain on sale of Upromise subsidiary, net — (11,331)
Other adjustments to net income, net (29,229) 5,389
Changes in operating assets and liabilities:
Increase in accrued interest receivable (556,143) (668,103)
Increase in non-marketable securities (9,415) —
Decrease (increase) in other interest-earning assets 30,983 (1,244)
Increase in other assets (110,841) (46,194)
Decrease in income taxes payable, net (230,072) (243,851)
Increase in accrued interest payable 4,153 38
Decrease in Upromise member accounts due to sale — (193,840)
Increase in other liabilities 860 126,645
Total adjustments (949,372) (657,141)
Total net cash used in operating activities (95,124) (209,151)
Investing activities
Loans acquired and originated (4,744,212) (4,736,304)
Net proceeds from sales of loans held for investment 3,436,075 3,875,984
Proceeds from claim payments 14,653 22,563
Net decrease in loans held for investment 2,835,850 2,954,660
Purchases of available-for-sale securities (1,159,667) (1,897,511)
Proceeds from sales and maturities of available-for-sale securities 799,193 376,580
Proceeds from sale of Upromise subsidiary, net — 16,922
Total net cash provided by investing activities 1,181,892 612,894
Financing activities
Brokered deposit placement fee (11,182) (4,810)
Net decrease in certificates of deposit (1,690,990) (1,802,541)
Net (decrease) increase in other deposits (12,172) 501,843
Borrowings collateralized by loans in securitization trusts - issued 1,053,633 1,337,543
Borrowings collateralized by loans in securitization trusts - repaid (830,026) (749,300)
Issuance costs for unsecured debt offering (325) —
Repayment of borrowings under Secured Borrowing Facility — (289,230)
Fees paid on Secured Borrowing Facility (2,846) (3,251)
Common stock dividends paid (29,104) (35,097)
Preferred stock dividends paid (3,559) (8,000)
CONSOLIDATED FINANCIAL STATEMENTS

INDEX


Part I. Financial Information
Item 1.	Financial Statements	3
Item 1.	Notes to the Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	73
Item 4.	Controls and Procedures	76
PART II. Other Information
Item 1.	Legal Proceedings	77
Item 1A.	Risk Factors	77
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	77
Item 4.	Mine Safety Disclosures	77
Item 5.	Other Information	77
Item 6.	Exhibits	78

102 SLM CORPORATION

Common stock repurchased (1,276,681) (558,167)
Total net cash used in financing activities (2,803,252) (1,611,010)
Net decrease in cash, cash equivalents and restricted cash (1,716,484) (1,207,267)
Cash, cash equivalents and restricted cash at beginning of period 4,609,709 5,720,760
Cash, cash equivalents and restricted cash at end of period $ 2,893,225 $ 4,513,493
Cash disbursements made for:
Interest $ 261,205 $ 402,151
Income taxes paid $ 237,882 $ 248,121
Income taxes refunded $ (7,610) $ (4,024)
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents $ 2,717,752 $ 4,351,045
Restricted cash 175,473 162,448
Total cash, cash equivalents and restricted cash $ 2,893,225 $ 4,513,493


CONSOLIDATED BALANCE SHEETS (Unaudited)
	March 31,		December 31,
(Dollars in thousands, except share and per share amounts)	2022		2021
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 investments	139,108		140,037
Total investments	2,519,479		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 cash	187,960		210,741
Other interest-earning assets	9,327		9,655
Accrued interest receivable	1,259,145		1,205,667
Premises and equipment, net	148,154		150,516
Goodwill and acquired intangible assets, net	125,267		—
Income taxes receivable, net	215,217		239,578
Tax indemnification receivable	8,155		8,047
Other assets	24,855		26,351
Total assets	$	29,051,829	$	29,221,899

Liabilities
Deposits	$	21,194,026	$	20,828,124

Long-term borrowings	5,552,497		5,930,990

Other liabilities	261,099		313,074
Total liabilities	27,007,622		27,072,188
Commitments and contingencies	0		0
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 share	251,070		251,070
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 434.6 million and 432.0 million shares issued, respectively	86,922		86,403
Additional paid-in capital	1,086,852		1,074,384
Accumulated other comprehensive loss (net of tax benefit of ($12,601) and ($5,707), respectively)	(39,514)		(17,897)
Retained earnings	2,913,544		2,817,134
Total SLM Corporation stockholders’ equity before treasury stock	4,298,874		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 equity	2,044,207		2,149,711
Total liabilities and equity	$	29,051,829	$	29,221,899

See accompanying notes to consolidated financial statements.

11SLM CORPORATION 3


CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands, except per share amounts)	Three Months Ended March 31,
	2022		2021
Interest income:
Loans	$	458,044	$	431,804
Investments	5,479		2,728
Cash and cash equivalents	1,515		1,626
Total interest income	465,038		436,158
Interest expense:
Deposits	49,537		66,598
Interest expense on short-term borrowings	2,875		3,202
Interest expense on long-term borrowings	37,594		35,244

Total interest expense	90,006		105,044
Net interest income	375,032		331,114
Less: provisions for credit losses	98,050		(225,767)
Net interest income after provisions for credit losses	276,982		556,881
Non-interest income:
Gains on sales of loans, net	9,881		399,111

Gains (losses) on derivatives and hedging activities, net	(5)		28
Other income	12,049		14,288
Total non-interest income	21,925		413,427
Non-interest expenses:
Operating expenses:
Compensation and benefits	71,981		71,581
FDIC assessment fees	5,684		5,188
Other operating expenses	54,341		47,730
Total operating expenses	132,006		124,499
Acquired intangible assets amortization expense	733		—
Restructuring expenses	—		1,077
Total non-interest expenses	132,739		125,576
Income before income tax expense	166,168		844,732
Income tax expense	37,356		203,525
Net income	128,812		641,207
Preferred stock dividends	1,275		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 outstanding	276,977		361,042
Diluted earnings per common share	$	0.45	$	1.75
Average common and common equivalent shares outstanding	280,654		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,
	2022		2021
Net income	$	128,812	$	641,207
Other comprehensive income (loss):
Unrealized losses on investments	(81,041)		(10,071)
Unrealized gains on cash flow hedges	52,530		23,423
Total unrealized gains (losses)	(28,511)		13,352
Income tax (expense) benefit	6,894		(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 Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Equity
Balance at December 31, 2020	2,510,696	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, 2021	2,510,696	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 Shares	Issued	Treasury	Outstanding	Preferred Stock		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock		Total Equity
Balance at December 31, 2021	2,510,696	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, 2022	2,510,696	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)	2022		2021
Operating activities
Net income	$	128,812	$	641,207
Adjustments to reconcile net income to net cash provided by operating activities:
Provisions for credit losses	98,050		(225,767)
Income tax expense	37,356		203,525
Amortization of brokered deposit placement fee	3,425		4,307
Amortization of Secured Borrowing Facility upfront fee	569		773
Amortization of deferred loan origination costs and loan premium/(discounts), net	4,455		4,016
Net amortization of discount on investments	965		2,161

Reduction (increase) in tax indemnification receivable	(108)		2,814
Depreciation of premises and equipment	4,189		3,715
Acquired intangible assets amortization expense	733		—
Stock-based compensation expense	11,921		11,124
Unrealized (gains) losses on derivatives and hedging activities, net	315		10,872
Gains on sales of loans, net	(9,881)		(399,111)

Acquisition transaction costs, net	2,511		—
Other adjustments to net income, net	7,235		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 assets	328		19,282

Increase in other assets	(17,529)		(51,667)
Decrease in income taxes payable, net	(4,243)		(270)
Increase (decrease) in accrued interest payable	14,779		(9,081)

Increase (decrease) in other liabilities	(34,808)		8,759
Total adjustments	(66,024)		(595,455)
Total net cash provided by operating activities	62,788		45,752
Investing activities
Loans acquired and originated	(2,215,958)		(2,076,635)
Net proceeds from sales of loans held for investment	45,729		3,436,391
Proceeds from FFELP Loan claim payments	5,594		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 securities	686,806		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 deposits	543,767		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 period	4,545,344		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 cash	187,960		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 ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the results for the year ending December 31, ~~2021~~2022 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, ~~2020~~2021 (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 performance; 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.

1210 SLM 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

We 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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we had ~~$37~~$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:

September 30, 2021
Amortized Cost
Allowance for credit losses(1)
Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Available-for-sale:
Mortgage-backed securities $ 368,545 $ — $ 2,636 $ (5,408) $ 365,773
Utah Housing Corporation bonds 6,943 — 108 — 7,051
U.S. government-sponsored enterprises and Treasuries 1,925,622 — 1,952 (1,125) 1,926,449
Other securities 204,977 — 1,475 (353) 206,099
Total $ 2,506,087 $ — $ 6,171 $ (6,886) $ 2,505,372
December 31, 2020
Amortized Cost
Allowance for credit losses(1)
Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Available-for-sale:
Mortgage-backed securities $ 308,913 $ — $ 6,095 $ (134) $ 314,874
Utah Housing Corporation bonds 12,357 — 210 — 12,567
U.S. government-sponsored enterprises 1,596,890 — 3,395 — 1,600,285
Other securities 68,797 — 462 (351) 68,908
Total $ 1,986,957 $ — $ 10,162 $ (485) $ 1,996,634


As of March 31, 2022 (dollars in thousands)	Amortized Cost		Allowance for credit losses(1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	400,647	$	—	$	74	$	(29,641)	$	371,080
Utah Housing Corporation bonds	4,926		—		—		(77)		4,849
U.S. government-sponsored enterprises and Treasuries	1,799,080		—		—		(63,830)		1,735,250
Other securities	235,551		—		—		(5,179)		230,372
Total	$	2,440,204	$	—	$	74	$	(98,727)	$	2,341,551

As of December 31, 2021 (dollars in thousands)	Amortized Cost		Allowance for credit losses(1)		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available-for-sale:
Mortgage-backed securities	$	376,313	$	—	$	1,857	$	(7,073)	$	371,097
Utah Housing Corporation bonds	6,943		—		18		—		6,961
U.S. government-sponsored enterprises and Treasuries	1,958,943		—		603		(11,893)		1,947,653
Other securities	193,369		—		439		(1,563)		192,245
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.

1312 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 months				12 months or more				Total
		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value
As of September 30, 2021:
(Dollars in thousands)														(Dollars in thousands)	Less than 12 months				12 months or more				Total
															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 securities	Mortgage-backed securities	$	(5,283)	$	277,142	$	(125)	$	5,869	$	(5,408)	$	283,011	Mortgage-backed securities	$	(12,056)	$	188,447	$	(17,585)	$	176,659	$	(29,641)	$	365,106
Utah Housing Corporation bonds	Utah Housing Corporation bonds	—		—		—		—		—		—		Utah Housing Corporation bonds	(77)		4,849		—		—		(77)		4,849
U.S. government-sponsored enterprises and Treasuries	U.S. government-sponsored enterprises and Treasuries	(1,125)		413,177		—		—		(1,125)		413,177		U.S. government-sponsored enterprises and Treasuries	(61,996)		1,647,055		(1,834)		63,176		(63,830)		1,710,231
Other securities	Other securities	(353)		47,401		—		—		(353)		47,401		Other securities	(3,266)		137,845		(1,913)		36,752		(5,179)		174,597
Total	Total	$	(6,761)	$	737,720	$	(125)	$	5,869	$	(6,886)	$	743,589	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 securities	Mortgage-backed securities	$	(134)	$	46,011	$	—	$	—	$	(134)	$	46,011	Mortgage-backed securities	$	(5,534)	$	261,404	$	(1,540)	$	36,587	$	(7,074)	$	297,991
Utah Housing Corporation bonds	Utah Housing Corporation bonds	—		—		—		—		—		—		Utah Housing Corporation bonds	—		—		—		—		—		—
U.S. government-sponsored enterprises		—		—		—		—		—		—
U.S. government-sponsored enterprises and Treasuries														U.S. government-sponsored enterprises and Treasuries	(11,892)		1,199,367		—		—		(11,892)		1,199,367
Other securities	Other securities	(351)		30,441		—		—		(351)		30,441		Other securities	(1,563)		132,884		—		—		(1,563)		132,884
Total	Total	$	(485)	$	76,452	$	—	$	—	$	(485)	$	76,452	Total	$	(18,989)	$	1,593,655	$	(1,540)	$	36,587	$	(20,529)	$	1,630,242

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, 38~~2021, 158 of ~~177~~186 and 1460 of ~~163,~~180, respectively, of our available-for-sale securities were in an unrealized loss position.

Impairment

For available-for-sale 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 Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors Service or AA+ by Standard and Poor’s. The decline in value from December 31, ~~2020~~2021 to ~~September 30, 2021~~March 31, 2022 was driven by the current interest

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


2.			~~Investments (Continued)~~

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.

We 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 ~~September 30, 2021,~~March 31, 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 Maturity		Amortized Cost		Estimated Fair Value
2021		$	16,029	$	16,045
As of March 31, 2022 Year of Maturity (dollars in thousands)						As of March 31, 2022 Year of Maturity (dollars in thousands)	Amortized Cost		Estimated Fair Value
2022	2022	850,772		851,858		2022	$	194,309	$	193,447
2023	2023	162,641		162,906		2023	162,595		159,383
2024	2024	448,293		447,649		2024	597,268		577,077
2025						2025	297,077		293,021
2026	2026	447,886		447,991		2026	547,832		512,323
2038	2038	74		80		2038	73		76
2039	2039	1,079		1,187		2039	873		916
2042	2042	3,421		3,443		2042	2,912		2,768
2043	2043	6,121		6,394		2043	5,415		5,336
2044	2044	7,826		8,164		2044	7,015		6,959
2045	2045	7,143		7,418		2045	6,158		6,018
2046	2046	10,898		11,170		2046	9,374		9,085
2047	2047	13,598		13,935		2047	9,957		9,751
2048	2048	2,966		3,070		2048	2,427		2,437
2049	2049	24,506		25,449		2049	18,261		17,902
2050	2050	148,550		145,645		2050	127,490		116,445
2051	2051	149,307		146,869		2051	174,646		159,542
2052						2052	40,972		38,693
2053	2053	148,730		149,218		2053	132,336		128,621
2054	2054	56,247		56,881		2054	103,214		101,751
Total	Total	$	2,506,087	$	2,505,372	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 ~~$645~~$720 million and ~~$815~~$888 million par value of securities pledged to this borrowing facility at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively, as discussed further in Notes to Consolidated Financial Statements, Note 8, “Borrowings.”

~~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. In the second quarter of 2021, we funded an additional investment, as part of a larger equity raise, in an issuer whose equity securities we purchased in the past. We used the valuation associated with the more recent equity raise to adjust the valuation of our previous investments, and, as a result, recorded a gain of $35 million on our earlier equity securities investments. This gain was recorded in “other income” in the consolidated statements of income for the nine months ended September 30, 2021. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, our total investment in these securities was $69 million and ~~$26~~$69 million, respectively.

Low Income Housing Tax Credit Investments

We invest in affordable housing projects that qualify for the low-income housing tax credit (“LIHTC”), which is designed to promote private development of low-income housing. These investments generate a return mostly through realization of federal tax credits and tax benefits from net operating losses on the underlying properties. Total carrying value of the LIHTC investments was ~~$69~~$66 million at ~~September 30, 2021~~March 31, 2022 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 ~~$33~~$28 million at ~~September 30, 2021~~March 31, 2022 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 ~~September 30, 2021~~March 31, 2022 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 SOFR, the Secured Overnight Financing Rate. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 5351 percent and 5552 percent, respectively, of all of our Private Education Loans were indexed to 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

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


3.			~~Loans Held for Investment (Continued)~~

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 ~~nine months~~quarter of ~~2021,~~2022, we recognized ~~a $403~~$10 million ~~gain~~in gains from the sale of approximately ~~$3.19~~$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 $399 million in gains from the sale of approximately $3.16 billion of our Private Education Loans, including ~~$2.99~~$2.97 billion of principal and ~~$195~~$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.~~“Borrowings - Unconsolidated VIEs.”

~~Loans held for investment are summarized as follows:~~

September 30, December 31,
2021 2020
Private Education Loans:
Fixed-rate $ 10,306,885 $ 8,950,216
Variable-rate 11,395,952 10,779,121
Total Private Education Loans, gross 21,702,837 19,729,337
Deferred origination costs and unamortized premium/(discount) 68,584 63,475
Allowance for credit losses (1,209,460) (1,355,844)
Total Private Education Loans, net 20,561,961 18,436,968
FFELP Loans 705,691 737,593
Deferred origination costs and unamortized premium/(discount) 1,870 1,993
Allowance for credit losses (4,206) (4,378)
Total FFELP Loans, net 703,355 735,208
Credit Cards (fixed-rate) 17,766 12,238
Deferred origination costs and unamortized premium/(discount) 186 230
Allowance for credit losses (1,741) (1,501)
Total Credit Cards, net 16,211 10,967
Loans held for investment, net $ 21,281,527 $ 19,183,143

~~The estimated weighted average life of education loans in our portfolio was approximately 4.7 years and 5.4 years at September 30, 2021 and December 31, 2020, respectively.~~

17SLM CORPORATION 15

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


3.			Loans Held for Investment (Continued)

Loans held for investment are summarized as follows:


	March 31,		December 31,
(Dollars in thousands)	2022		2021
Private Education Loans:
Fixed-rate	$	10,685,053	$	9,920,547
Variable-rate	11,050,316		10,796,316
Total Private Education Loans, gross	21,735,369		20,716,863
Deferred origination costs and unamortized premium/(discount)	71,907		67,488
Allowance for credit losses	(1,221,053)		(1,158,977)
Total Private Education Loans, net	20,586,223		19,625,374

FFELP Loans	682,273		695,216
Deferred origination costs and unamortized premium/(discount)	1,770		1,815
Allowance for credit losses	(3,999)		(4,077)
Total FFELP Loans, net	680,044		692,954

Credit Cards (fixed-rate)	27,547		25,014
Deferred origination costs and unamortized premium/(discount)	171		222
Allowance for credit losses	(2,310)		(2,281)
Total Credit Cards, net	25,408		22,955
Loans held for investment, net	$	21,291,675	$	20,341,283

The estimated weighted average life of education loans in our portfolio was approximately 4.8 years and 4.7 years at March 31, 2022 and December 31, 2021, respectively.

The average balance and the respective weighted average interest rates of loans in our portfolio are summarized as follows:

Three Months Ended
September 30,
2021 2020
Average Balance Weighted Average Interest Rate Average Balance Weighted Average Interest Rate
Private Education Loans $ 20,944,581 8.26 % $ 21,937,758 8.24 %
FFELP Loans 713,517 3.45 750,925 3.46
Personal Loans — — 527,204 12.86
Credit Cards 14,894 6.95 11,086 (6.58)
Total portfolio $ 21,672,992 $ 23,226,973


	2022				2021
Three Months Ended March 31, (dollars in thousands)	Average Balance		Weighted Average Interest Rate		Average Balance		Weighted Average Interest Rate
Private Education Loans	$	21,858,270	8.38	%	$	20,984,491	8.22	%
FFELP Loans	690,540		3.51		734,289		3.41
Credit Cards	26,622		3.95		11,841		0.78
Total portfolio	$	22,575,432			$	21,730,621

Nine Months Ended
September 30,
2021 2020
Average Balance Weighted Average Interest Rate Average Balance Weighted Average Interest Rate
Private Education Loans $ 20,860,973 8.23 % $ 22,342,353 8.48 %
FFELP Loans 723,656 3.43 762,863 3.86
Personal Loans — — 778,153 12.43
Credit Cards 12,821 4.97 8,588 (7.20)
Total portfolio $ 21,597,450 $ 23,891,957

~~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 and 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 not make scheduled payments 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 (added to principal) at the end of the forbearance. Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


3.			~~Loans Held for Investment (Continued)~~

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.

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 most instances, we require 1 payment before granting forbearance to delinquent borrowers.

Historically, we also have utilized disaster forbearance to assist borrowers affected by material events, including hurricanes, wildfires, floods, and the COVID-19 pandemic. We typically grant disaster forbearance to affected borrowers in increments of up to three months at a time, but the disaster forbearance granted generally does not apply toward the 12-month forbearance limit described below.

During COVID-19, our customers experienced higher levels of financial hardship, which initially led to higher levels of forbearance. We expect for some customers financial hardship may lead to higher levels of delinquencies and defaults in the future, as borrowers who had received disaster forbearance from us re-enter repayment status. Beginning in June 2021, we stopped granting disaster forbearance in response to the COVID-19 pandemic. As borrowers in the various delinquency buckets exit disaster forbearance and begin to enter repayment, we expect elevated levels of losses on this segment of our customers. We expect that, left unabated, this deterioration in delinquency and default rates may persist until economic conditions return to pre-pandemic levels.

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 certain planned changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted. Prior to implementation of the previously announced changes, borrowers could receive consecutive forbearance grants without intervening payments of principal and interest, if they satisfied all eligibility requirements.

We commenced testing in October 2019 for some of the previously announced planned changes on a very small percentage of our total portfolio and in March 2020 we began to expand the number of borrowers who would be subject to the new credit administration practices. However, due to the COVID-19 pandemic, in April 2020 we postponed our efforts so that we could be more flexible in dealing with our customers’ financial hardship. In October 2020, we re-initiated a multi-phased deployment of the previously announced credit administration practices changes. To date, we have implemented many changes. We also have decided to make additional changes in our credit administration practices, as described below, and expect to implement the additional changes as early as by the end of 2021.

~~Currently, we generally grant forbearance in increments of~~ ~~one~~ to two months at a time, for up to 12 months over the life of the loan, although disaster forbearance, certain assistance we grant to borrowers who are still in school, and our short-term extended repayment alternative currently do not apply toward the 12-month limit. We also currently require six months of

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


3.			~~Loans Held for Investment (Continued)~~

positive payment performance by a borrower (meaning the borrower must make payment in a cumulative amount equivalent to 6 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. This required period of positive payment performance does not apply, however, to forbearances granted during the first six months following a borrower’s grace period and is not required for a borrower to receive a contractual interest rate reduction. In addition, we currently 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. We have decided to make further changes in our credit administration practices, which we expect to implement as early as by the end of 2021, to (i) require 12 months of positive payment performance (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives, and (ii) count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.

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. We currently limit the granting of a permanent extension of the final maturity date of the loan under our loan modification program to 1 time over the life of the loan. We also currently permit 2 consecutive rate reductions to 4.0 percent so long as the borrower qualifies and makes 3 consecutive monthly payments at the reduced payment in connection with each rate reduction. We currently require six months of positive payment performance after the interest rate adjusts upward to its previous rate (at the end of the rate reduction periods) before the borrower may be eligible for a forbearance or certain other repayment alternatives, however. We have decided to further adjust certain requirements regarding our loan modification program, which we expect to implement as early as by the end of 2021, to (i) limit the number of interest rate reductions to twice over the life of the loan, and (ii) require 12 months of positive payment performance after the interest rate adjusts upward to its previous rate (at the end of the rate reduction periods) before the borrower may be eligible for forbearance or certain other repayment alternatives. At September 30, 2021 and December 31, 2020, 9.2 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.

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, we expect that the credit administration practices described above, including the described changes we expect to implement as early as by the end of 2021, will accelerate periodic defaults and could increase periodic defaults in our Private Education Loan held for investment portfolio by approximately 10.1 percent to 16.6 percent. Among the measures that we have implemented and may modify further 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 loss mitigation programs (e.g., Graduated Repayment Plan (“GRP”) and rate modifications), and the use of a 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 will only be realized over the long term. When we calculated the allowance for credit losses under CECL at September 30, 2021, 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 changes to our credit administration practices described above. As we progress with full implementation of the 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.

As discussed above, we will continue to monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback.

2016 SLM CORPORATION

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~

4. ~~Loans Held for Sale~~

We had no loans held for sale and $2.9 billion in loans held for sale at September 30, 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. During the second quarter of 2021, we sold $27 million of our Private Education Loans, including $25 million of principal and $2 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 $403 million in the first nine months of 2021. For additional information, see Notes to Consolidated Financial Statements, Note 3, “Loans Held for Investment,” and Note 8, “Borrowings.”

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~

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 ~~2020~~2021 Form 10-K for a more detailed discussion.

SLM CORPORATION 17


4.			Allowance for Credit Losses (Continued)

Allowance for Credit Losses Metrics


		Allowance for Credit Losses
		Three Months Ended September 30, 2021
		FFELP Loans			Private Education Loans			Credit Cards			Total
Three Months Ended March 31, 2022 (dollars in thousands)													Three Months Ended March 31, 2022 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
Allowance for Credit Losses	Allowance for Credit Losses												Allowance for Credit Losses
Beginning balance	Beginning balance	$	4,262		$	1,154,540		$	1,442		$	1,160,244	Beginning balance	$	4,077		$	1,158,977		$	2,281		$	1,165,335
Transfer from unfunded commitment liability(1)	Transfer from unfunded commitment liability(1)	—			110,613			—			110,613		Transfer from unfunded commitment liability(1)	—			94,686			—			94,686
Provisions:	Provisions:												Provisions:
Provision for current period	Provision for current period	50			(6,995)			415			(6,530)		Provision for current period	21			48,460			137			48,618
Loan sale reduction to provision	Loan sale reduction to provision	—			—			—			—		Loan sale reduction to provision	—			(5,247)			—			(5,247)

Total provisions(2)	Total provisions(2)	50			(6,995)			415			(6,530)		Total provisions(2)	21			43,213			137			43,371
Net charge-offs:	Net charge-offs:												Net charge-offs:
Charge-offs	Charge-offs	(106)			(56,000)			(119)			(56,225)		Charge-offs	(99)			(83,856)			(111)			(84,066)
Recoveries	Recoveries	—			7,302			3			7,305		Recoveries	—			8,033			3			8,036
Net charge-offs	Net charge-offs	(106)			(48,698)			(116)			(48,920)		Net charge-offs	(99)			(75,823)			(108)			(76,030)

Ending Balance	Ending Balance	$	4,206		$	1,209,460		$	1,741		$	1,215,407	Ending Balance	$	3,999		$	1,221,053		$	2,310		$	1,227,362
Allowance:	Allowance:												Allowance:
Ending balance: individually evaluated for impairment	Ending balance: individually evaluated for impairment	$	—		$	69,626		$	—		$	69,626	Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	Ending balance: collectively evaluated for impairment	$	4,206		$	1,139,834		$	1,741		$	1,145,781	Ending balance: collectively evaluated for impairment	$	3,999		$	1,221,053		$	2,310		$	1,227,362
Loans:	Loans:												Loans:
Ending balance: individually evaluated for impairment	Ending balance: individually evaluated for impairment	$	—		$	1,148,282		$	—		$	1,148,282	Ending balance: individually evaluated for impairment	$	—		$	—		$	—		$	—
Ending balance: collectively evaluated for impairment	Ending balance: collectively evaluated for impairment	$	705,691		$	20,554,555		$	17,766		$	21,278,012	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)	Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.08		%	1.29		%	3.07		%			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 balance	Allowance as a percentage of the ending total loan balance	0.60		%	5.57		%	9.80		%			Allowance as a percentage of the ending total loan balance	0.59		%	5.62		%	8.39		%
Allowance as a percentage of the ending loans in repayment(3)	Allowance as a percentage of the ending loans in repayment(3)	0.79		%	7.81		%	9.80		%			Allowance as a percentage of the ending loans in repayment(3)	0.75		%	7.59		%	8.39		%
Allowance coverage of net charge-offs (annualized)	Allowance coverage of net charge-offs (annualized)	9.92			6.21			3.75					Allowance coverage of net charge-offs (annualized)	10.10			4.03			5.35
Ending total loans, gross	Ending total loans, gross	$	705,691		$	21,702,837		$	17,766				Ending total loans, gross	$	682,273		$	21,735,369		$	27,547
Average loans in repayment(3)	Average loans in repayment(3)	$	540,018		$	15,108,802		$	15,098				Average loans in repayment(3)	$	543,303		$	16,013,289		$	26,551
Ending loans in repayment(3)	Ending loans in repayment(3)	$	530,476		$	15,490,132		$	17,766				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 ~~provision~~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.

~~SLM CORPORATION~~

~~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
~~September 30, 2021~~March 31, 2022 (dollars in thousands)

Private Education Loan provisions for credit losses:

Provisions for loan losses

~~(6,995)~~43,213

Provisions for unfunded loan commitments

~~144,972~~54,679

Total Private Education Loan provisions for credit losses

~~137,977~~97,892

Other impacts to the provisions for credit losses:

FFELP Loans

5021

Credit Cards

~~415~~137

Total

~~465~~158

Provisions for credit losses reported in consolidated statements of income

~~138,442~~98,050

(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.

2318 SLM CORPORATION

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.4.			Allowance for Credit Losses (Continued)

Allowance for Credit Losses
Three Months Ended September 30, 2020
FFELP
Loans Private Education
Loans Personal
Loans Credit Cards Total
Allowance for Credit Losses
Beginning balance $ 4,385 $ 1,760,559 $ 163,337 $ 1,042 $ 1,929,323
Transfer from unfunded commitment liability(1)
— 100,470 — — 100,470
Provisions:
Provision for current period 67 (81,710) (8,762) 391 (90,014)
Loan sale reduction to provision — — (42,916) — (42,916)
Total provisions(2)
67 (81,710) (51,678) 391 (132,930)
Net charge-offs:
Charge-offs (89) (55,298) (5,231) (48) (60,666)
Recoveries — 4,790 2,106 — 6,896
Net charge-offs (89) (50,508) (3,125) (48) (53,770)
Loan sales — — (108,534) — (108,534)
Ending Balance $ 4,363 $ 1,728,811 $ — $ 1,385 $ 1,734,559
Allowance:
Ending balance: individually evaluated for impairment $ — $ 138,663 $ — $ — $ 138,663
Ending balance: collectively evaluated for impairment $ 4,363 $ 1,590,148 $ — $ 1,385 $ 1,595,896
Loans:
Ending balance: individually evaluated for impairment $ — $ 1,495,161 $ — $ — $ 1,495,161
Ending balance: collectively evaluated for impairment $ 745,556 $ 21,119,166 $ — $ 11,540 $ 21,876,262
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.07 % 1.33 % — % 1.73 %
Allowance as a percentage of the ending total loan balance 0.59 % 7.64 % — % 12.00 %
Allowance as a percentage of the ending loans in repayment(3)
0.77 % 10.91 % — % 12.00 %
Allowance coverage of net charge-offs (annualized) 12.26 8.56 — 7.21
Ending total loans, gross $ 745,556 $ 22,614,327 $ — $ 11,540
Average loans in repayment(3)
$ 510,809 $ 15,182,703 $ — $ 11,103
Ending loans in repayment(3)
$ 564,442 $ 15,853,309 $ — $ 11,540

~~____________~~


Three Months Ended March 31, 2021 (dollars in thousands)	FFELP Loans			Private Education Loans			Credit Cards			Total
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 period	29			(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 balance	0.59		%	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 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 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.

~~SLM CORPORATION~~

~~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
~~September 30, 2020~~March 31, 2021 (dollars in thousands)

Private Education Loan provisions for credit losses:

Provisions for loan losses

~~(81,710)~~(261,913)

Provisions for unfunded loan commitments

~~129,290~~36,203

Total Private Education Loan provisions for credit losses

~~47,580~~ (225,710)

Other impacts to the provisions for credit losses:

~~Personal Loans~~

~~(51,678)~~

FFELP Loans

6729

Credit Cards

~~391~~ (86)

Total

~~(51,220)~~(57)

Provisions for credit losses reported in consolidated statements of income

~~(3,640)~~(225,767)

25SLM CORPORATION 19

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.4.			Allowance for Credit Losses (Continued)

Allowance for Credit Losses
Nine Months Ended
September 30, 2021
FFELP
Loans Private Education
Loans Credit Cards Total
Allowance for Credit Losses
Beginning balance $ 4,378 $ 1,355,844 $ 1,501 $ 1,361,723
Transfer from unfunded commitment liability(1)
— 262,049 — 262,049
Provisions:
Provision for current period 77 (260,923) 511 (260,335)
Loan sale reduction to provision — (10,335) — (10,335)
Loan transfer from held-for-sale — 1,887 — 1,887
Total provisions(2)
77 (269,371) 511 (268,783)
Net charge-offs:
Charge-offs (249) (161,039) (281) (161,569)
Recoveries — 21,977 10 21,987
Net charge-offs (249) (139,062) (271) (139,582)
Ending Balance $ 4,206 $ 1,209,460 $ 1,741 $ 1,215,407
Allowance:
Ending balance: individually evaluated for impairment $ — $ 69,626 $ — $ 69,626
Ending balance: collectively evaluated for impairment $ 4,206 $ 1,139,834 $ 1,741 $ 1,145,781
Loans:
Ending balance: individually evaluated for impairment $ — $ 1,148,282 $ — $ 1,148,282
Ending balance: collectively evaluated for impairment $ 705,691 $ 20,554,555 $ 17,766 $ 21,278,012
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.06 % 1.25 % 2.75 %
Allowance as a percentage of the ending total loan balance 0.60 % 5.57 % 9.80 %
Allowance as a percentage of the ending loans in repayment(3)
0.79 % 7.81 % 9.80 %
Allowance coverage of net charge-offs (annualized) 12.67 6.52 4.82
Ending total loans, gross $ 705,691 $ 21,702,837 $ 17,766
Average loans in repayment(3)
$ 547,394 $ 14,877,937 $ 13,136
Ending loans in repayment(3)
$ 530,476 $ 15,490,132 $ 17,766

~~____________~~

~~(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 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.

~~SLM CORPORATION~~

~~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
	Nine Months Ended September 30, 2021
~~Private Education Loan provisions for credit losses:~~
~~Provisions for loan losses~~	$	~~(269,371)~~
~~Provisions for unfunded loan commitments~~	~~251,135~~
~~Total Private Education Loan provisions for credit losses~~	~~(18,236)~~

~~Other impacts to the provisions for credit losses:~~
~~FFELP Loans~~	77
~~Credit Cards~~	~~511~~
~~Total~~	~~588~~
~~Provisions for credit losses reported in consolidated statements of income~~	$	~~(17,648)~~

~~(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.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.			~~Allowance for Credit Losses (Continued)~~

Allowance for Credit Losses
Nine Months Ended
September 30, 2020
FFELP
Loans Private Education
Loans Personal
Loans Credit Cards Total
Allowance for Credit Losses
Beginning balance $ 1,633 $ 374,300 $ 65,877 $ 102 $ 441,912
Day 1 adjustment for the adoption of CECL 2,852 1,060,830 79,183 188 1,143,053
Balance at January 1, 2020 4,485 1,435,130 145,060 290 1,584,965
Transfer from unfunded commitment liability(1)
— 279,555 — — 279,555
Provisions:
Provision for current period 277 296,167 40,485 1,191 338,120
Loan sale reduction to provision — (161,793) (42,916) — (204,709)
Total provisions(2)
277 134,374 (2,431) 1,191 133,411
Net charge-offs:
Charge-offs (399) (138,546) (39,079) (96) (178,120)
Recoveries — 18,298 4,984 — 23,282
Net charge-offs (399) (120,248) (34,095) (96) (154,838)
Loan sales — — (108,534) — (108,534)
Ending Balance $ 4,363 $ 1,728,811 $ — $ 1,385 $ 1,734,559
Allowance:
Ending balance: individually evaluated for impairment $ — $ 138,663 $ — $ — $ 138,663
Ending balance: collectively evaluated for impairment $ 4,363 $ 1,590,148 $ — $ 1,385 $ 1,595,896
Loans:
Ending balance: individually evaluated for impairment $ — $ 1,495,161 $ — $ — $ 1,495,161
Ending balance: collectively evaluated for impairment $ 745,556 $ 21,119,166 $ — $ 11,540 $ 21,876,262
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.10 % 1.05 % — % 1.51 %
Allowance as a percentage of the ending total loan balance 0.59 % 7.64 % — % 12.00 %
Allowance as a percentage of the ending loans in repayment(3)
0.77 % 10.91 % — % 12.00 %
Allowance coverage of net charge-offs (annualized) 8.20 10.78 — 10.82
Ending total loans, gross $ 745,556 $ 22,614,327 $ — $ 11,540
Average loans in repayment(3)
$ 546,443 $ 15,336,253 $ — $ 8,499
Ending loans in repayment(3)
$ 564,442 $ 15,853,309 $ — $ 11,540

~~____________~~

~~(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.

~~SLM CORPORATION~~

~~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
	Nine Months Ended September 30, 2020
~~Private Education Loan provisions for credit losses:~~
~~Provisions for loan losses~~	$	~~134,374~~
~~Provisions for unfunded loan commitments~~	~~276,094~~
~~Total Private Education Loan provisions for credit losses~~	~~410,468~~

~~Other impacts to the provisions for credit losses:~~
~~Personal Loans~~	~~(2,431)~~
~~FFELP Loans~~	~~277~~
~~Credit Cards~~	~~1,191~~
~~Total~~	~~(963)~~
~~Provisions for credit losses reported in consolidated statements of income~~	$	~~409,505~~

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.			~~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 ~~September 30, 2021,~~March 31, 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 ~~first nine~~three months ~~of 2021 decreased~~ended March 31, 2022 increased by ~~$427~~$324 million compared with the year-ago period. During the ~~first nine~~three months ~~of 2021,~~ended March 31, 2022, the provision for credit losses was primarily affected by ~~improvements in the~~increased commitments and additional management overlays, which were partially offset by improved economic forecasts ~~the use of the more balanced weightings of the various Moody’s Analytics scenarios described above,~~ and faster prepayment speeds, as compared to the year-ago period. For the nine months ended September 30, 2020, we recognized a significant increase in the provision for credit losses primarily in response to the COVID-19 pandemic and surge in COVID-19 infections that occurred in third quarter 2020. In response to the increase in COVID-19, at September 31, 2020, we were using Moody’s Analytics Base and S4 downturn scenarios, weighted 50 percent each, in determining the allowance for credit losses.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 ~~reflect~~reflected 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.

~~Troubled Debt Restructurings (“TDRs”)~~Loan Modifications to Borrowers Experiencing Financial Difficulty

~~All~~The allowance for credit losses incorporates an estimate of ~~our~~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 ~~collectively assessed~~experiencing financial difficulty is already included in the allowance for ~~impairment, except for loans classified~~credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as ~~TDRs (where we conduct individual assessments of impairment).~~ the loan modifications occur.

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 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 ~~percent~~percent) 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 ~~two~~2 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 September 30, 2021 and September 30, 2020, 9.2 percent and 8.8 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.

Once a loan qualifies for TDR status, it remains a TDR for allowance purposes for the remainder of its life. As of both September 30, 2021 and December 31, 2020, approximately 47 percent of TDRs were classified as such due to their forbearance status. For additional information, including the process we use for determining whether a loan will be classified as a TDR, 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.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.			~~Allowance for Credit Losses (Continued)~~

Within the Private Education Loan portfolio, we deem loans greater than 90 days past due ~~are~~as 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.

~~At September 30,~~For additional information, see Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies —Allowance for Credit Losses - 2021 and ~~December 31,~~ 2020, ~~all of~~” and Note 7, “Allowance for Credit Losses” in 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 Investment Unpaid Principal Balance Allowance
September 30, 2021
TDR Loans $ 1,185,820 $ 1,148,282 $ 69,626
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
September 30,
2021 2020
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
TDR Loans $ 1,208,333 $ 21,198 $ 1,554,741 $ 24,972
Nine Months Ended
September 30,
2021 2020
Average
Recorded
Investment Interest
Income
Recognized Average
Recorded
Investment Interest
Income
Recognized
TDR Loans $ 1,249,721 $ 64,177 $ 1,579,640 $ 75,530

2021 Form 10-K.

3120 SLM CORPORATION

~~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 Reduction				Combination - Interest Rate Reduction and Term Extension
Loan Type:	Amortized Cost Basis		% of Total Class of Financing Receivable		Amortized 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 Reduction

Combination - Interest Rate
Reduction and Term Extension

Loan Type

Financial Effect

Loan Type

Financial Effect

Private Education Loans

Reduced 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 status~~amount of financing receivables whose borrowers were experiencing financial difficulty and ~~aging~~had a payment default and were modified during the period from January 1, 2022 (the effective date of ~~TDR loans. For~~our adoption of ASU No. 2022-02) through the ~~periods presented below, we updated our delinquency bucket periods to conform with~~end 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.

September 30, December 31,
2021 2020
Balance % Balance %
TDR loans in in-school/grace/deferment(1)
$ 90,417 $ 88,750
TDR loans in forbearance(2)
48,892 76,704
TDR loans in repayment(3) and percentage of each status:
Loans current 917,756 91.0 % 971,880 87.7 %
Loans delinquent 30-59 days(4)
43,766 4.3 59,249 5.3
Loans delinquent 60-89 days(4)
24,984 2.5 43,576 3.9
Loans 90 days or greater past due(4)
22,467 2.2 34,431 3.1
Total TDR loans in repayment(3)
1,008,973 100.0 % 1,109,136 100.0 %
Total TDR loans, gross $ 1,148,282 $ 1,274,590



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.

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 status~~payments 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.

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
September 30,
2021 2020
Modified Loans(1)
Charge-offs Payment-
Default
Modified Loans(1)
Charge-offs Payment-
Default
TDR Loans $ 1,063 $ 14,807 $ 1,588 $ 30,990 $ 20,033 $ 19,788
Nine Months Ended
September 30,
2021 2020
Modified Loans(1)
Charge-offs Payment-
Default
Modified Loans(1)
Charge-offs Payment-
Default
TDR Loans $ 6,697 $ 48,643 $ 9,305 $ 200,471 $ 48,031 $ 68,790

~~_____~~

~~(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 cosigner	117,001		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	%
670-699	111,251		669,450		543,884		468,705		343,601		1,141,747		3,278,638		15
700-749	251,606		1,591,862		1,290,542		999,922		723,591		2,257,304		7,114,827		33
Greater than or equal to 750	359,779		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	%
670-699	115,446		670,147		453,846		343,831		236,812		738,916		2,558,998		12
700-749	249,052		1,561,528		1,203,084		911,247		631,484		1,855,009		6,411,404		29
Greater than or equal to 750	344,870		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 repayment	363,754		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.

33SLM CORPORATION 23

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


5.4.			Allowance for Credit Losses (Continued)


As of December 31, 2021 (dollars in thousands)	Private Education Loans Held for Investment - Credit Quality Indicators
Year of Origination	2021(1)		2020(1)		2019(1)		2018(1)		2017(1)		2016 and Prior(1)		Total(1)		% of Balance
Cosigners:
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 cosigner	558,469		561,730		438,263		294,597		212,514		459,626		2,525,199		12
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):
Less than 670	$	248,368	$	238,005	$	251,157	$	193,123	$	166,048	$	428,416	$	1,525,117	7	%
670-699	508,264		564,497		493,237		363,313		329,807		884,981		3,144,099		15
700-749	1,210,833		1,348,269		1,057,001		770,452		660,270		1,753,709		6,800,534		33
Greater than or equal to 750	1,854,896		2,015,512		1,415,130		993,172		822,108		2,146,295		9,247,113		45
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):
Less than 670	$	326,613	$	279,578	$	273,652	$	235,684	$	233,022	$	739,268	$	2,087,817	10	%
670-699	506,021		475,674		365,133		256,400		209,536		570,605		2,383,369		12
700-749	1,209,493		1,285,015		978,763		682,024		568,766		1,448,692		6,172,753		30
Greater than or equal to 750	1,780,234		2,126,016		1,598,977		1,145,952		966,909		2,454,836		10,072,924		48
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):
1-12 payments	$	2,265,811	$	594,850	$	515,328	$	385,246	$	340,242	$	501,269	$	4,602,746	22	%
13-24 payments	—		2,287,737		362,674		203,674		211,064		479,540		3,544,689		17
25-36 payments	—		173		1,565,203		312,049		164,575		482,369		2,524,369		12
37-48 payments	—		—		—		983,434		295,206		464,563		1,743,203		8
More than 48 payments	—		—		—		—		671,138		2,726,304		3,397,442		16
Not yet in repayment	1,556,550		1,283,523		773,320		435,657		296,008		559,356		4,904,414		25
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	$	(1,183)	$	(8,604)	$	(23,866)	$	(32,741)	$	(37,186)	$	(126,011)	$	(229,591)
2021 Current period(5) recoveries	35		540		2,092		3,693		4,450		18,684		29,494
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 vintage	$	109,233	$	247,418	$	270,242	$	198,816	$	131,685	$	229,729	$	1,187,123

Private Education Loans Held for Investment - Credit Quality Indicators
September 30, 2021
Year of Origination
2021(1)
2020(1)
2019(1)
2018(1)
2017(1)
2016 and Prior(1)
Total(1)
% of Balance
Cosigners:
With cosigner $ 2,740,609 $ 3,859,697 $ 3,131,422 $ 2,239,265 $ 1,938,613 $ 5,201,099 $ 19,110,705 88 %
Without cosigner 449,218 601,172 481,391 322,867 233,512 503,972 2,592,132 12
Total $ 3,189,827 $ 4,460,869 $ 3,612,813 $ 2,562,132 $ 2,172,125 $ 5,705,071 $ 21,702,837 100 %
FICO at Origination(2):
Less than 670 $ 206,260 $ 250,867 $ 275,722 $ 207,725 $ 177,237 $ 461,829 $ 1,579,640 7 %
670-699 423,163 598,066 548,962 396,081 358,145 961,855 3,286,272 15
700-749 1,010,429 1,439,849 1,184,965 848,391 725,425�� 1,917,552 7,126,611 33
Greater than or equal to 750 1,549,975 2,172,087 1,603,164 1,109,935 911,318 2,363,835 9,710,314 45
Total $ 3,189,827 $ 4,460,869 $ 3,612,813 $ 2,562,132 $ 2,172,125 $ 5,705,071 $ 21,702,837 100 %
FICO Refreshed(2)(3):
Less than 670 $ 262,997 $ 271,778 $ 282,320 $ 247,343 $ 249,302 $ 795,264 $ 2,109,004 10 %
670-699 425,798 510,906 411,306 278,497 229,881 622,290 2,478,678 11
700-749 1,003,524 1,393,710 1,117,756 759,346 624,787 1,584,356 6,483,479 30
Greater than or equal to 750 1,497,508 2,284,475 1,801,431 1,276,946 1,068,155 2,703,161 10,631,676 49
Total $ 3,189,827 $ 4,460,869 $ 3,612,813 $ 2,562,132 $ 2,172,125 $ 5,705,071 $ 21,702,837 100 %
Seasoning(4):
1-12 payments $ 1,837,837 $ 1,772,385 $ 397,777 $ 329,370 $ 311,956 $ 543,901 $ 5,193,226 24 %
13-24 payments — 1,027,243 1,487,280 221,972 220,104 532,905 3,489,504 16
25-36 payments — 42 619,601 996,813 189,051 527,481 2,332,988 11
37-48 payments — — — 397,585 777,883 513,718 1,689,186 8
More than 48 payments — — — — 250,029 2,892,624 3,142,653 14
Not yet in repayment 1,351,990 1,661,199 1,108,155 616,392 423,102 694,442 5,855,280 27
Total $ 3,189,827 $ 4,460,869 $ 3,612,813 $ 2,562,132 $ 2,172,125 $ 5,705,071 $ 21,702,837 100 %
2021 Current period(5) gross charge-offs
$ (372) $ (4,159) $ (14,794) $ (23,210) $ (26,696) $ (91,808) $ (161,039)
2021 Current period(5) recoveries
14 254 1,398 2,679 3,288 14,344 21,977
2021 Current period(5) net charge-offs
$ (358) $ (3,905) $ (13,396) $ (20,531) $ (23,408) $ (77,464) $ (139,062)
Total accrued interest by origination vintage $ 58,245 $ 250,412 $ 331,670 $ 259,988 $ 192,350 $ 293,762 $ 1,386,427
______
(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 third-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 September 30, 2021.

~~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 cosigner 527,437 559,629 384,111 277,159 211,270 391,449 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 %
670-699 464,785 594,950 441,357 407,394 351,303 771,477 3,031,266 16
700-749 1,111,373 1,310,390 967,802 846,983 740,028 1,533,517 6,510,093 33
Greater than or equal to 750 1,671,393 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 %
670-699 438,665 493,135 336,966 283,906 231,759 504,779 2,289,210 12
700-749 1,102,666 1,248,806 871,677 734,222 603,160 1,220,468 5,780,999 29
Greater than or equal to 750 1,661,280 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 payments 163 2,096,635 383,977 223,332 217,379 425,345 3,346,831 17
25-36 payments — — 1,353,567 370,250 181,940 439,337 2,345,094 12
37-48 payments — — — 965,476 351,433 402,552 1,719,461 9
More than 48 payments — — — — 729,510 2,310,905 3,040,415 15
Not yet in repayment 1,374,085 1,330,175 733,824 508,478 327,763 504,715 4,779,040 24
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)~~For~~Current period ~~from~~refers to January 1, ~~2020~~2021 through December 31, ~~2020.~~2021.

3524 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~~


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of March 31, 2022 (dollars in thousands)	2022			2021			2020			2019			2018			2017 and Prior			Total

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)	441			15,123			37,237			35,259			30,585			115,615			234,260
Loans in repayment:
Loans current	415,657			2,972,685			2,690,157			2,205,417			1,674,303			5,571,861			15,530,080
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)	—			6,557			18,618			25,590			23,023			95,272			169,060
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 repayment	417,417			3,000,284			2,751,187			2,285,817			1,749,113			5,891,339			16,095,157
Total Private Education Loans, gross	781,612			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)	9,615			20,732			14,883			8,753			5,380			12,544			71,907
Total Private Education Loans	791,227			5,061,524			3,998,489			3,047,090			2,179,668			6,729,278			21,807,276
Private Education Loans allowance for losses	(54,769)			(308,664)			(230,000)			(187,181)			(122,741)			(317,698)			(1,221,053)
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 repayment	53.4		%	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 repayment	0.4		%	0.9		%	2.2		%	3.5		%	4.3		%	5.4		%	3.5		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.1		%	0.5		%	1.3		%	1.5		%	1.7		%	1.9		%	1.4		%

(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods ~~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 Vintage
September 30, 2021
2021 2020 2019 2018 2017 2016 and Prior Total
Loans in-school/grace/deferment(1)
$ 1,351,990 $ 1,661,199 $ 1,108,155 $ 616,392 $ 423,102 $ 694,442 $ 5,855,280
Loans in forbearance(2)
3,673 32,584 54,337 53,675 57,093 156,063 357,425
Loans in repayment:
Loans current 1,830,182 2,743,889 2,404,326 1,840,620 1,636,992 4,659,532 15,115,541
Loans delinquent 30-59 days(3)
3,051 15,107 25,793 27,398 28,340 100,253 199,942
Loans delinquent 60-89 days(3)
650 5,787 12,784 14,313 15,251 52,727 101,512
Loans 90 days or greater past due(3)
281 2,303 7,418 9,734 11,347 42,054 73,137
Total Private Education Loans in repayment 1,834,164 2,767,086 2,450,321 1,892,065 1,691,930 4,854,566 15,490,132
Total Private Education Loans, gross 3,189,827 4,460,869 3,612,813 2,562,132 2,172,125 5,705,071 21,702,837
Private Education Loans deferred origination costs and unamortized premium/(discount) 16,763 17,970 11,357 6,901 5,275 10,318 68,584
Total Private Education Loans 3,206,590 4,478,839 3,624,170 2,569,033 2,177,400 5,715,389 21,771,421
Private Education Loans allowance for losses (173,374) (252,460) (220,891) (148,040) (118,966) (295,729) (1,209,460)
Private Education Loans, net $ 3,033,216 $ 4,226,379 $ 3,403,279 $ 2,420,993 $ 2,058,434 $ 5,419,660 $ 20,561,961
Percentage of Private Education Loans in repayment 57.5 % 62.0 % 67.8 % 73.8 % 77.9 % 85.1 % 71.4 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 0.2 % 0.8 % 1.9 % 2.7 % 3.2 % 4.0 % 2.4 %
Loans in forbearance as a percentage of loans in repayment and forbearance 0.2 % 1.2 % 2.2 % 2.8 % 3.3 % 3.1 % 2.3 %
for medical students or a grace period for bar exam preparation).

(2)~~_______~~Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.

(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.

SLM CORPORATION 25


4.			Allowance for Credit Losses (Continued)


	Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2021 (dollars in thousands)	2021			2020			2019			2018			2017			2016 and Prior			Total

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)	11,951			55,844			52,364			43,613			41,355			96,110			301,237
Loans in repayment:
Loans current	2,234,876			2,786,646			2,321,728			1,772,651			1,570,815			4,319,057			15,005,773
Loans delinquent 30-59 days(3)	15,148			29,146			46,616			43,197			41,695			132,757			308,559
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)	642			3,683			8,453			10,632			11,935			44,588			79,933
Total Private Education Loans in repayment	2,253,860			2,826,916			2,390,841			1,840,790			1,640,870			4,557,935			15,511,212
Total Private Education Loans, gross	3,822,361			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)	22,169			16,067			9,575			5,918			4,588			9,171			67,488
Total Private Education Loans	3,844,530			4,182,350			3,226,100			2,325,978			1,982,821			5,222,572			20,784,351
Private Education Loans allowance for losses	(248,102)			(239,507)			(195,223)			(129,678)			(99,982)			(246,485)			(1,158,977)
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 repayment	59.0		%	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 repayment	0.8		%	1.4		%	2.9		%	3.7		%	4.3		%	5.2		%	3.3		%
Loans in forbearance as a percentage of loans in repayment and forbearance	0.5		%	1.9		%	2.1		%	2.3		%	2.5		%	2.1		%	1.9		%

(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).

(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.

3626 SLM CORPORATION

~~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 Delinquencies by Origination Vintage
December 31, 2020
2020 2019 2018 2017 2016 2015 and Prior Total
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 current 2,043,033 2,573,228 2,045,012 1,850,539 1,685,572 3,701,564 13,898,948
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
Total Private Education Loans in repayment 2,052,521 2,603,996 2,096,368 1,912,370 1,752,386 3,887,180 14,304,821
Total Private Education Loans, gross 3,442,765 4,026,848 2,940,511 2,539,794 2,189,222 4,590,197 19,729,337
Private Education Loans deferred origination costs and unamortized premium/(discount) 21,129 13,933 8,671 6,708 5,721 7,313 63,475
Total Private Education Loans 3,463,894 4,040,781 2,949,182 2,546,502 2,194,943 4,597,510 19,792,812
Private Education Loans allowance for losses (210,875) (298,776) (218,136) (184,265) (150,150) (293,642) (1,355,844)
Private Education Loans, net $ 3,253,019 $ 3,742,005 $ 2,731,046 $ 2,362,237 $ 2,044,793 $ 4,303,868 $ 18,436,968
Percentage of Private Education Loans in repayment 59.6 % 64.7 % 71.3 % 75.3 % 80.0 % 84.7 % 72.5 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 0.5 % 1.2 % 2.4 % 3.2 % 3.8 % 4.8 % 2.8 %
Loans in forbearance as a percentage of loans in repayment and forbearance 0.8 % 3.4 % 5.0 % 5.9 % 5.9 % 4.9 % 4.3 %

~~_______~~

~~(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. This program ended in September 2021.

~~(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.~~

~~SLM CORPORATION~~

~~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 Receivable 90 Days and Greater Past Due Allowance for Uncollectible Interest
September 30, 2021 $ 1,386,427 $ 3,636 $ 4,351
December 31, 2020 $ 1,168,895 $ 4,354 $ 4,467


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest

March 31, 2022	$	1,241,574	$	6,292	$	5,505
December 31, 2021	$	1,187,123	$	3,635	$	4,937

38SLM CORPORATION 27

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~

6.5. Unfunded Loan Commitments

At ~~September 30, 2021,~~March 31, 2022, we had ~~$2.0 billion~~$562 million of outstanding contractual loan commitments that we expect to fund during the remainder of the 2021/2022 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 September 30,
2021 2020
Allowance Unfunded Commitments Allowance Unfunded Commitments
Beginning Balance $ 64,772 $ 1,161,696 $ 85,958 $ 1,119,042
Provision/New commitments - net(1)
129,904 2,885,024 157,337 2,542,390
Other provision items 15,068 — (28,047) —
Transfer - funded loans(2)
(110,613) (2,083,128) (100,470) (1,890,305)
Ending Balance $ 99,131 $ 1,963,592 $ 114,778 $ 1,771,127
Nine Months Ended September 30,
2021 2020
Allowance Unfunded Commitments Allowance Unfunded Commitments
Beginning Balance $ 110,044 $ 1,673,018 $ 2,481 $ 1,910,603
Day 1 adjustment for the adoption of CECL — — 115,758 —
Balance at January 1 110,044 1,673,018 118,239 1,910,603
Provision/New commitments - net(1)
218,304 4,963,789 279,008 4,542,560
Other provision items 32,831 — (2,914) —
Transfer - funded loans(2)
(262,048) (4,673,215) (279,555) (4,682,036)
Ending Balance $ 99,131 $ 1,963,592 $ 114,778 $ 1,771,127

~~________________~~


	2022				2021
Three Months Ended March 31, (dollars in thousands)	Allowance		Unfunded Commitments		Allowance		Unfunded 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 items	7,226		—		(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.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


6.			~~Unfunded Loan Commitments (Continued)~~

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.

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 Basis		Accumulated Amortization		Net
Tradename and trademarks	10	$	68,470	$	(515)	$	67,955
Customer relationships	5	5,670		(186)		5,484
Developed technology	3	1,260		(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

7. Deposits

The following table summarizes total deposits at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.


		September 30,		December 31,			March 31,		December 31,
		2021		2020
(Dollars in thousands)						(Dollars in thousands)	2022		2021
Deposits - interest bearing	Deposits - interest bearing	$	20,890,292	$	22,664,899	Deposits - interest bearing	$	21,192,004	$	20,826,692
Deposits - non-interest bearing	Deposits - non-interest bearing	568		1,140		Deposits - non-interest bearing	2,022		1,432
Total deposits	Total deposits	$	20,890,860	$	22,666,039	Total deposits	$	21,194,026	$	20,828,124

Our total deposits of ~~$20.9~~$21.2 billion were comprised of ~~$11.6~~$10.0 billion in brokered deposits and ~~$9.3~~$11.2 billion in retail and other deposits at ~~September 30, 2021,~~March 31, 2022, compared to total deposits of ~~$22.7~~$20.8 billion, which were comprised of ~~$11.9~~$10.1 billion in brokered deposits and ~~$10.8~~$10.7 billion in retail and other deposits, at December 31, ~~2020.~~2021.

Interest bearing deposits as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 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 ~~$7.0~~$7.8 billion and ~~$7.1~~$7.3 billion of our deposit total as of ~~September 30, 2021~~March 31, 2022 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 ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and placement fee expense of $12 million and $15 million in the nine months ended September 30, 2021 and 2020,~~ respectively. Fees paid to third-party brokers related to brokered CDs were ~~$10 million and~~ $2 million for the three months ended ~~September 30, 2021 and 2020, respectively, and~~March 31, 2022. There were no related fees paid ~~to third-party brokers related to brokered CDs were $11 million and $5 million for~~in the ~~nine~~three months ended ~~September 30, 2021 and 2020, respectively.~~March 31, 2021.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


7.			~~Deposits (Continued)~~

Interest bearing deposits at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are summarized as follows:

September 30, 2021 December 31, 2020
Amount
Qtr.-End Weighted Average Stated Rate(1)
Amount
Year-End Weighted Average Stated Rate(1)
Money market $ 10,082,114 0.71 % $ 10,159,657 0.83 %
Savings 956,571 0.44 907,976 0.55
Certificates of deposit 9,851,607 1.16 11,597,266 1.34
Deposits - interest bearing $ 20,890,292 $ 22,664,899

~~____________~~


	March 31, 2022				December 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	%
Savings	968,059		0.43		959,122		0.43
Certificates of deposit	9,239,829		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 ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, there were ~~$676~~$532 million and ~~$571~~$743 million, respectively, of deposits exceeding Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accrued interest on deposits was ~~$46~~$42 million and ~~$50~~$35 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

30 SLM CORPORATION

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 ~~2020~~2021 Form 10-K. The following table summarizes our borrowings at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~

September 30, 2021 December 31, 2020
Short-Term Long-Term Total Short-Term Long-Term Total
Unsecured borrowings:
Unsecured debt (fixed-rate) $ 199,583 $ 494,585 $ 694,168 $ — $ 692,879 $ 692,879
Total unsecured borrowings 199,583 494,585 694,168 — 692,879 692,879
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate — 3,698,662 3,698,662 — 3,261,233 3,261,233
Variable-rate — 1,026,501 1,026,501 — 1,235,105 1,235,105
Total Private Education Loan term securitizations — 4,725,163 4,725,163 — 4,496,338 4,496,338
Secured Borrowing Facility — — — — — —
Total secured borrowings — 4,725,163 4,725,163 — 4,496,338 4,496,338
Total $ 199,583 $ 5,219,748 $ 5,419,331 $ — $ 5,189,217 $ 5,189,217
2021.


	March 31, 2022						December 31, 2021
(Dollars in thousands)	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
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

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


8.			~~Borrowings (Continued)~~

~~Short-term Borrowings~~

~~Secured Borrowing Facility~~

On July 30, 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 May 17, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 2023 (or earlier, if certain material adverse events occur). At both September 30, 2021 and December 31, 2020, there were no secured borrowings outstanding under the Secured Borrowing Facility.

Long-term Borrowings

~~Secured Financings~~

~~2021 Transactions~~

On May 19, 2021, we executed our $531 million SMB Private Education Loan Trust 2021-B term ABS transaction, which was accounted for as a secured financing. We sold $531 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $529 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.26 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.77 percent. At September 30, 2021, $521 million of our Private Education Loans, including $484 million of principal and $37 million in capitalized interest, were encumbered because of this transaction.

On August 18, 2021, we executed our $527 million SMB Private Education Loan Trust 2021-D term ABS transaction, which was accounted for as a secured financing. We sold $527 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $525 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.22 years and priced at a weighted average LIBOR equivalent cost of 1-month LIBOR plus 0.69 percent. At September 30, 2021, $539 million of our Private Education Loans, including $501 million of principal and $38 million in capitalized interest, were encumbered because of this transaction.

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


8.			~~Borrowings (Continued)~~

Secured Financings at Issuance

The following table summarizes our secured financings issued in ~~2020 and~~2021. There were no secured financings issued in ~~2021 through September 30, 2021:~~the three months ended March 31, 2022.

Issue Date Issued Total Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
(in years)
Private Education:
2020-A February 2020 $ 636,000 1-month LIBOR plus 0.88% 4.18
2020-B August 2020 707,000 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
2021-B May 2021 $ 531,000 1-month LIBOR plus 0.77% 4.26
2021-D August 2021 527,000 1-month LIBOR plus 0.69% 4.22
Total notes issued in 2021 $ 1,058,000
Total loan and accrued interest amount securitized at inception in 2021 $ 1,104,248

Issue

Date Issued

Total Issued

Weighted Average Cost of Funds(1)

Weighted Average Life
(in years)

(Dollars in thousands)

Private Education Loans:

2021-B

May 2021

531,000

1-month LIBOR plus 0.77%

4.26

2021-D

August 2021

527,000

1-month LIBOR plus 0.69%

4.22

2021-E

November 2021

534,000

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 ~~September 30, 2021, $1.18~~March 31, 2022, $1.46 billion of our Private Education Loans, including ~~$1.10~~$1.37 billion of principal and ~~$84~~$87 million in capitalized interest, were encumbered related to these transactions.

43SLM CORPORATION 31

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


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.

September 30, 2021
Debt Outstanding Carrying Amount of Assets Securing Debt Outstanding
Short-Term Long-Term Total Loans Restricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations $ — $ 4,725,163 $ 4,725,163 $ 5,788,954 $ 175,472 $ 407,634 $ 6,372,060
Secured Borrowing Facility — — — — — 1,436 1,436
Total $ — $ 4,725,163 $ 4,725,163 $ 5,788,954 $ 175,472 $ 409,070 $ 6,373,496

~~____~~


As of March 31, 2022 (dollars in thousands)	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted 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

~~(1) Other assets primarily represent accrued interest receivable.~~

December 31, 2020
Debt Outstanding Carrying Amount of Assets Securing Debt Outstanding
Short-Term Long-Term Total Loans Restricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations $ — $ 4,496,338 $ 4,496,338 $ 5,661,123 $ 154,417 $ 356,967 $ 6,172,507
Secured Borrowing Facility — — — — — 436 436
Total $ — $ 4,496,338 $ 4,496,338 $ 5,661,123 $ 154,417 $ 357,403 $ 6,172,943

~~____~~.


As of December 31, 2021 (dollars in thousands)	Debt Outstanding						Carrying Amount of Assets Securing Debt Outstanding
	Short-Term		Long-Term		Total		Loans		Restricted 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

(1) Other assets primarily represent accrued interest receivable.

Unconsolidated VIEs

Private Education Loan Securitizations

Unconsolidated 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 quarter of 2020 and the first six months of 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-A~~2022-A Transaction

On ~~February 9, 2021,~~March 16, 2022, we closed an SMB Private Education Loan Trust ~~2021-A~~2022-A term ABS transaction (the ~~“2021-A~~“2022-A Transaction”), in which ~~the~~an 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-A~~2022-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-A~~2022-A Transaction and we recorded ~~an $18~~a $10 million gain on sale associated with this transaction. In connection with the ~~2021-A~~2022-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-A Transaction as available-for-sale~~

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


8.			~~Borrowings (Continued)~~

~~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.~~

~~2021-C Transaction~~

On May 27, 2021, we closed an SMB Private Education Loan Trust 2021-C term ABS transaction (the “2021-C Transaction”), in which the unaffiliated third-party sold to the trust approximately $505 million of Private Education Loans that the third-party seller previously purchased from us on January 8, 2021. In the 2021-C Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $27 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-C Transaction and we recorded an $4 million gain on sale associated with this transaction. In connection with the 2021-C 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-C2022-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.

September 30, 2021 December 31, 2020
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations $ 206,099 $ 36,792 $ 242,891 $ 68,908 $ 16,923 $ 85,831

~~____~~


	March 31, 2022						December 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.

Other Borrowing Sources

We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at ~~September 30, 2021.~~March 31, 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 ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the value of our pledged collateral at the FRB totaled ~~$2.7~~$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 ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 or in the year ended December 31, ~~2020.~~2021.

45SLM 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 ~~2020~~2021 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. NaN 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 ~~September 30, 2021, $5.9~~March 31, 2022, $4.8 billion notional of our derivative contracts were cleared on the CME and $0.3 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent ~~94.6~~94.3 percent and ~~5.4~~5.7 percent, respectively, of our total notional derivative contracts of ~~$6.2~~$5.1 billion at ~~September 30, 2021.~~March 31, 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 ~~September 30, 2021~~March 31, 2022 was ~~$(96)~~$(64) million and ~~$11~~$(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 ~~September 30, 2021~~March 31, 2022 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 ~~$12~~$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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and their impact on earnings and other comprehensive income for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~September 30, 2020.~~March 31, 2021. Please refer to Notes to Consolidated Financial Statements, Note 12, “Derivative Financial Instruments” in our ~~2020~~2021 Form 10-K for a full discussion of cash flow hedges, fair value hedges, and trading activities.

4634 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 Sheets																			Impact of Derivatives on the Consolidated Balance Sheets
																					Cash Flow Hedges				Fair Value Hedges				Trading				Total
			Cash Flow Hedges				Fair Value Hedges				Trading				Total						March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
			September 30,		December 31,		September 30,		December 31,		September 30,		December 31,		September 30,		December 31,
			2021		2020		2021		2020		2021		2020		2021		2020
(Dollars in thousands)																			(Dollars in thousands)		2022		2021		2022		2021		2022		2021		2022		2021
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 swaps	Interest rate swaps	Interest rate	$	—	$	—	$	489	$	594	$	38	$	135	$	527	$	729	Interest rate swaps	Interest rate	$	169	$	—	$	—	$	—	$	—	$	5	$	169	$	5
Other																			Other	Other	—		—		—		—		—		1,317		—		1,317
Derivative Liabilities:(2)	Derivative Liabilities:(2)																		Derivative Liabilities:(2)
Interest rate swaps	Interest rate swaps	Interest rate	(909)		(287)		—		—		—		—		(909)		(287)		Interest rate swaps	Interest rate	(43)		(231)		(220)		(21)		—		—		(263)		(252)
Total net derivatives	Total net derivatives		$	(909)	$	(287)	$	489	$	594	$	38	$	135	$	(382)	$	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 Assets Other Liabilities
September 30, December 31, September 30, December 31,
2021 2020 2021 2020
Gross position(1)
$ 527 $ 729 $ (909) $ (287)
Impact of master netting agreement (527) (176) 527 176
Derivative values with impact of master netting agreements (as carried on balance sheet) — 553 (382) (111)
Cash collateral pledged(2)
11,890 42,874 — —
Net position $ 11,890 $ 43,427 $ (382) $ (111)

~~__________~~


	Other Assets				Other Liabilities
	March 31,		December 31,		March 31,		December 31,
(Dollars in thousands)	2022		2021		2022		2021
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)

(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 Flow Fair Value Trading Total
September 30, December 31, September 30, December 31, September 30, December 31, September 30, December 31,
2021 2020 2021 2020 2021 2020 2021 2020
Notional Values
Interest rate swaps $ 1,469,867 $ 1,018,976 $ 4,007,008 $ 4,845,543 $ 766,726 $ 2,693,364 $ 6,243,601 $ 8,557,883


Notional Values
	Cash Flow				Fair Value				Trading				Total
(Dollars in thousands)	March 31,		December 31,		March 31,		December 31,		March 31,		December 31,		March 31,		December 31,
	2022		2021		2022		2021		2022		2021		2022		2021
Interest rate swaps	$	1,407,412	$	1,438,144	$	3,678,960	$	3,915,999	$	—	$	181,953	$	5,086,372	$	5,536,096
Other	—		—		—		—		—		1,053,760		—		1,053,760
Net total notional	$	1,407,412	$	1,438,144	$	3,678,960	$	3,915,999	$	—	$	1,235,713	$	5,086,372	$	6,589,856

47SLM CORPORATION 35

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


9.			Derivative Financial Instruments (Continued)

As of ~~September 30, 2021~~March 31, 2022 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)					2022		2021		2022		2021
		September 30,		December 31,		September 30,		December 31,
		2021		2020		2021		2020

Deposits	Deposits	$	(4,083,115)	$	(4,992,867)	$	(81,460)	$	(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 Income										Impact of Derivatives on the Consolidated Statements of Income
		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020
(Dollars in thousands)										(Dollars in thousands)	2022		2021

Fair Value Hedges	Fair Value Hedges									Fair Value Hedges
Interest rate swaps:	Interest rate swaps:									Interest rate swaps:
Interest recognized on derivatives	Interest recognized on derivatives	$	21,763	$	23,851	$	67,230	$	47,906	Interest recognized on derivatives	$	17,287	$	22,610
Hedged items recorded in interest expense	Hedged items recorded in interest expense	20,551		24,451		72,774		(116,500)		Hedged items recorded in interest expense	51,268		31,275
Derivatives recorded in interest expense	Derivatives recorded in interest expense	(20,602)		(24,458)		(72,787)		116,870		Derivatives recorded in interest expense	(51,319)		(31,251)
Total	Total	$	21,712	$	23,844	$	67,217	$	48,276	Total	$	17,236	$	22,634

Cash Flow Hedges	Cash Flow Hedges									Cash Flow Hedges
Interest rate swaps:	Interest rate swaps:									Interest rate swaps:
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	(5,228)	$	(5,176)	$	(15,791)	$	(10,922)	Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense	$	(4,541)	$	(5,269)
Total	Total	$	(5,228)	$	(5,176)	$	(15,791)	$	(10,922)	Total	$	(4,541)	$	(5,269)

Trading	Trading									Trading
Interest rate swaps:	Interest rate swaps:									Interest rate swaps:
Change in fair value of future interest payments recorded in earnings	Change in fair value of future interest payments recorded in earnings	$	(3,571)	$	(12,848)	$	(21,383)	$	21,611	Change in fair value of future interest payments recorded in earnings	$	(248)	$	(10,864)
Total	Total	(3,571)		(12,848)		(21,383)		21,611		Total	(248)		(10,864)
Total	Total	$	12,913	$	5,820	$	30,043	$	58,965	Total	$	12,447	$	6,501

4836 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~~


Impact of Derivatives on the Statements of Changes in Stockholders’ Equity										Impact of Derivatives on the Statements of Changes in Stockholders’ Equity
											Three Months Ended
		Three Months Ended				Nine Months Ended					March 31,
		September 30,				September 30,
		2021		2020		2021		2020
(Dollars in thousands)										(Dollars in thousands)	2022		2021

Amount of gain (loss) recognized in other comprehensive income (loss)	Amount of gain (loss) recognized in other comprehensive income (loss)	$	(133)	$	76	$	13,583	$	(53,707)	Amount of gain (loss) recognized in other comprehensive income (loss)	$	47,989	$	18,154
Less: amount of gain (loss) reclassified in interest expense	Less: amount of gain (loss) reclassified in interest expense	(5,228)		(5,176)		(15,791)		(10,922)		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	Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit	$	5,095	$	5,252	$	29,374	$	(42,785)	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 ~~$19~~$5 million will be reclassified as ~~an increase~~a decrease to interest expense.

Cash Collateral

As of ~~September 30, 2021,~~March 31, 2022, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was no cash collateral held related to derivative exposure between us and our derivatives counterparties at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Cash collateral pledged related to derivative exposure between us and our derivatives counterparties was ~~$12~~$9 million and ~~$43~~$10 million at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.

49SLM 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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(Shares and per share amounts in actuals)	(Shares and per share amounts in actuals)	2021		2020		2021		2020		(Shares and per share amounts in actuals)	2022		2021
Common stock repurchased under repurchase programs(1)(2)(3)	Common stock repurchased under repurchase programs(1)(2)(3)	13,018,585		—		84,528,256		47,736,847		Common stock repurchased under repurchase programs(1)(2)(3)	9,533,392		48,702,830
Average purchase price per share(4)	Average purchase price per share(4)	$	18.75	$	—	$	17.17	$	9.66	Average purchase price per share(4)	$	18.46	$	15.75
Shares repurchased related to employee stock-based compensation plans(5)	Shares repurchased related to employee stock-based compensation plans(5)	115,414		3,122		1,367,826		1,109,149		Shares repurchased related to employee stock-based compensation plans(5)	934,602		1,059,980
Average purchase price per share	Average purchase price per share	$	18.83	$	7.05	$	14.70	$	10.97	Average purchase price per share	$	18.55	$	13.50
Common shares issued(6)	Common shares issued(6)	504,183		5,150		3,785,490		2,990,447		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 ~~2020~~2021 Share Repurchase Program. There was ~~$51 million~~$1.1 billion of capacity remaining under the ~~2021~~2022 Share Repurchase Program at ~~September 30, 2021.~~March 31, 2022.

(2) For the ~~nine~~three months ended ~~September 30,~~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 ~~nine~~three months ended ~~September 30,~~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 ~~September 30, 2021~~March 31, 2022 was ~~$17.60.~~$18.36.

Common Stock Dividends

In ~~both September~~March 2022, we paid a common stock dividend of $0.11 per common share. In March 2021, ~~and September 2020,~~ we paid a common stock dividend of $0.03 per common share. ~~In both the nine months ended September 30, 2021 and 2020, we paid a common stock dividend of $0.09 per common share.~~

Share Repurchases

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

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars in thousands, unless otherwise noted)~~


~~10.~~			~~Stockholders’ Equity (Continued)~~

~~stock for $75 million in the three months ended March 31, 2021. We have now utilized all capacity under the 2020 Share Repurchase Program.~~

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 originally 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 ~~13.0~~31 million shares of common stock for ~~$244~~$517 million in the three months ended ~~September 30, 2021, and we repurchased 66.8 million shares of common stock for $1.2 billion in the nine months ended September 30,~~March 31, 2021. ~~(For the nine months ended September 30, 2021, those~~(Those amounts include the shares repurchased under the ~~Tender Offer described below.) There was $51 million~~common stock tender offer that settled in the first quarter of ~~capacity remaining under the 2021 Share Repurchase Program at September 30,~~ 2021.)

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, which expires on January 26, 2023.~~Program. This is in addition to the ~~$51~~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 effective 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 ~~2021~~2022 Share Repurchase Program at ~~September 30, 2021.~~March 31, 2022.

~~Repurchases~~So long as there is unexpired capacity under ~~our share~~a 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 ~~2021~~2022 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 programs~~the 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 ~~plan~~plans

During the three months ended ~~September 30,~~March 31, 2022 and 2021, we repurchased ~~13.0~~9.5 million shares and 6.8 million shares, respectively, of our common stock at a total cost of ~~$244~~$176 million and ~~during the nine months ended September 30, 2021, we repurchased 42.6~~$121 million, ~~shares of our common stock at a total cost of $804 million~~respectively, under a Rule 10b5-1 trading ~~plan~~plans authorized under our share repurchase programs.

51SLM 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 Nine Months Ended
September 30, September 30,
(In thousands, except per share data) 2021 2020 2021 2020
Numerator:
Net income $ 72,840 $ 171,028 $ 854,248 $ 447,990
Preferred stock dividends 1,166 2,058 3,559 8,000
Net income attributable to SLM Corporation common stock $ 71,674 $ 168,970 $ 850,689 $ 439,990
Denominator:
Weighted average shares used to compute basic EPS 299,890 375,094 324,148 386,587
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)
4,621 2,824 4,916 2,804
Weighted average shares used to compute diluted EPS 304,511 377,918 329,064 389,391
Basic earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ 2.62 $ 1.14
Diluted earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ 2.59 $ 1.13


	Three Months Ended March 31,
(Dollars in thousands, except per share data)	2022		2021
Numerator:
Net income	$	128,812	$	641,207
Preferred stock dividends	1,275		1,201
Net income attributable to SLM Corporation common stock	$	127,537	$	640,006
Denominator:
Weighted average shares used to compute basic EPS	276,977		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 EPS	280,654		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 ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ securities covering approximately 13 million shares and ~~2 million shares, respectively, and for the nine months ended September 30, 2021 and 2020, securities covering approximately~~ 1 million ~~shares and no~~ shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.

5240 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 ~~2020~~2021 Form 10-K.

During the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 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
		September 30, 2021								December 31, 2020									March 31, 2022								December 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 investments	Trading investments	$	—	$	—	$	36,792	$	36,792	$	—	$	—	$	16,923	$	16,923	Trading investments	$	—	$	—	$	38,820	$	38,820	$	—	$	—	$	37,465	$	37,465
Available-for-sale investments	Available-for-sale investments	—		2,505,372		—		2,505,372		—		1,996,634		—		1,996,634		Available-for-sale investments	—		2,341,551		—		2,341,551		—		2,517,956		—		2,517,956
Derivative instruments	Derivative instruments	—		527		—		527		—		729		—		729		Derivative instruments	—		169		—		169		—		1,322		—		1,322
Total	Total	$	—	$	2,505,899	$	36,792	$	2,542,691	$	—	$	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 instruments	Derivative instruments	$	—	$	(909)	$	—	$	(909)	$	—	$	(287)	$	—	$	(287)	Derivative instruments	$	—	$	(263)	$	—	$	(263)	$	—	$	(252)	$	—	$	(252)
Total	Total	$	—	$	(909)	$	—	$	(909)	$	—	$	(287)	$	—	$	(287)	Total	$	—	$	(263)	$	—	$	(263)	$	—	$	(252)	$	—	$	(252)

53SLM 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.


		September 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
		Fair Value		Carrying Value		Difference		Fair Value		Carrying Value		Difference
(Dollars in thousands)														(Dollars in thousands)	Fair Value		Carrying Value		Difference		Fair 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 Loans	Private Education Loans	$	24,299,804	$	20,561,960	$	3,737,844	$	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 Loans	FFELP Loans	716,277		703,355		12,922		748,657		735,208		13,449		FFELP Loans	692,507		680,044		12,463		705,644		692,954		12,690
Credit Cards	Credit Cards	17,791		16,212		1,579		12,249		10,967		1,282		Credit Cards	27,581		25,408		2,173		25,037		22,955		2,082
Loans held for sale		—		—		—		3,226,029		2,885,640		340,389

Cash and cash equivalents	Cash and cash equivalents	2,717,752		2,717,752		—		4,455,292		4,455,292		—		Cash and cash equivalents	3,262,595		3,262,595		—		4,334,603		4,334,603		—
Trading investments	Trading investments	36,792		36,792		—		16,923		16,923		—		Trading investments	38,820		38,820		—		37,465		37,465		—
Available-for-sale investments	Available-for-sale investments	2,505,372		2,505,372		—		1,996,634		1,996,634		—		Available-for-sale investments	2,341,551		2,341,551		—		2,517,956		2,517,956		—
Accrued interest receivable	Accrued interest receivable	1,542,907		1,403,146		139,761		1,527,816		1,387,305		140,511		Accrued interest receivable	1,368,425		1,259,145		109,280		1,306,410		1,205,667		100,743
Tax indemnification receivable	Tax indemnification receivable	12,486		12,486		—		18,492		18,492		—		Tax indemnification receivable	8,155		8,155		—		8,047		8,047		—
Derivative instruments	Derivative instruments	527		527		—		729		729		—		Derivative instruments	169		169		—		1,322		1,322		—
Total earning assets	Total earning assets	$	31,849,708	$	27,957,602	$	3,892,106	$	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 accounts	Money-market and savings accounts	$	11,082,540	$	11,038,685	$	(43,855)	$	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 deposit	Certificates of deposit	9,944,973		9,851,607		(93,366)		11,799,223		11,597,266		(201,957)		Certificates of deposit	9,171,506		9,239,829		68,323		9,451,528		9,394,001		(57,527)
Short-term borrowings		203,770		199,583		(4,187)		—		—		—

Long-term borrowings	Long-term borrowings	5,387,187		5,219,748		(167,439)		5,398,309		5,189,217		(209,092)		Long-term borrowings	5,483,809		5,552,497		68,688		6,000,174		5,930,990		(69,184)
Accrued interest payable	Accrued interest payable	64,425		64,425		—		60,272		60,272		—		Accrued interest payable	61,379		61,379		—		46,600		46,600		—
Derivative instruments	Derivative instruments	909		909		—		287		287		—		Derivative instruments	263		263		—		252		252		—
Total interest-bearing liabilities	Total interest-bearing liabilities	$	26,683,804	$	26,374,957	$	(308,847)	$	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 value	Excess of net asset fair value over carrying value					$	3,583,259					$	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 ~~2020~~2021 Form 10-K for a full discussion of the methods and assumptions used to estimate the fair value of each class of financial instruments.

5442 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 ~~adopted~~adopt CECL during the 2020 calendar year, ~~with~~including the ~~option~~Bank, 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 have~~The 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 ~~our~~the 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 ~~our~~the 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-year~~two-year period ~~(i.e., beginning~~ending 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. ~~Our~~The Bank’s January 1, 2020 CECL transition amounts increased ~~the~~our 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 Amounts		Adjustments for the Year Ended		Adjustments for the Year Ended		Adjustments for the Three Months Ended		Adjusted Transition Amounts
(Dollars in thousands)	January 1, 2020		December 31, 2020		December 31, 2021		March 31, 2022		March 31, 2022

Retained earnings	$	952,639	$	(57,859)	$	(58,429)	$	(209,088)	$	627,263
Allowance for credit losses	1,143,053		(55,811)		(49,097)		(259,536)		778,609
Liability for unfunded commitments	115,758		(2,048)		(9,333)		(26,094)		78,283
Deferred tax asset	306,171		—		—		(76,542)		229,629

55SLM 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)
		Amount		Ratio		Amount			Ratio
As of September 30, 2021:
(Dollars in thousands)											(Dollars in thousands)	Actual				U.S. Basel III Minimum Requirements Plus Buffer(1)(2)
												Amount		Ratio		Amount			Ratio
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)	$	3,255,466	13.1	%	$	1,736,176	>	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)	$	3,255,466	13.1	%	$	2,108,214	>	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)	$	3,408,359	13.7	%	$	2,604,265	>	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)	$	3,255,466	10.9	%	$	1,193,100	>	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 ~~$50~~$108 million in dividends to the Company for the three months ended March 31, 2022, and ~~$1.2~~$1.0 billion in dividends to the Company for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021, ~~respectively, and no dividends and $568 million in dividends to the Company for the three and nine months ended September 30, 2020, respectively,~~ 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.

5644 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 ~~September 30, 2021,~~March 31, 2022, we had ~~$2.0 billion~~$562 million of outstanding contractual loan commitments which we expect to fund during the remainder of the 2021/2022 academic year. At ~~September 30, 2021,~~March 31, 2022, we had a ~~$99~~$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 ~~2020~~2021 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 ~~2020~~2021 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.

57SLM CORPORATION 45

15. Subsequent Event

2022 Loan Sales

~~SLM CORPORATION~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Dollars~~On April 27, 2022, we sold approximately $2.0 billion of our Private Education Loans, including approximately $1.9 billion in ~~thousands, unless otherwise noted)~~

~~15. Subsequent Events~~

~~Increase~~principal and approximately $130 million in capitalized interest to ~~2021 Share Repurchase Program~~

~~In October 2021, our Board~~an unaffiliated third party. The gain on sale of ~~Directors approved~~loans sold expressed as a ~~$250 million increase~~percentage was in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expires on January 26, 2023. This is in addition to the $51 million of capacity remaining under the 2021 Share Repurchase Program at September 30, 2021. For additional details on our share repurchase programs, see Note 10, “Stockholders’ Equity” in this Form 10-Q .

~~Declaration of Fourth Quarter 2021 Dividend~~

~~A 2021 fourth-quarter dividend of $0.11 per share on our stock has been declared~~low double-digits and will be ~~paid~~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 ~~December 15, 2021~~the settlement date. We will continue to ~~shareholders~~service these loans pursuant to the terms of ~~record at~~ the ~~close of business on December 3, 2021.~~

applicable transaction documents.

5846 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, ~~2020~~2021 (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 ~~2020~~2021 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 ~~2021~~2022 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; any estimates related to accounting standard 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 ~~2020~~2021 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

59SLM CORPORATION 47

~~Form 10-Q for the~~ quarter ended ~~September 30, 2021~~March 31, 2022 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 quarter 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,~~April 2022, 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 uncertainty in the economic environment. However, at the end of the fourth quarter of 2020 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. We have continued to see improved trends in unemployment rates in 2021 despite the increase in COVID-19 infections from the Delta variant that occurred in the third quarter of 2021.

In the second quarter of 2021, we communicated our return to office plans to our team members. Based on the national and local guidelines, we developed a phased-in approach for returning to the office. Under this phased-in approach, we opened our offices in early July 2021 for employees who wanted to voluntarily come to the office. We had planned for a more substantial return to our campuses in early October; however, with the increase in new cases due to the COVID-19 Delta variant, we postponed a more fulsome returnreturned to our offices, ~~until the first quarter~~with most employees working under a hybrid model of 2022. The return to our offices will include enhanced safety protocols and processes to provide the best working environment for our team members and we will implement limited flexible work-from-home schedules for employees.

For the start of the 2021-2022 academic year, the majority of colleges, universities, and trade schools have returned to in-person classes while offering full residential options. While these schools have moved away from an emphasis on hybrid and online policies, some ~~regional reports indicate an increase in colleges maintaining online classes as a safety precaution, due to the recent uptick in COVID-19 variant infections.~~

~~For some students, going back to school~~days in the ~~fall of 2020 was not an option because of the pandemic or for~~office and other ~~reasons. Therefore, some students took a “gap year” before returning to school. In 2020, for those students that had unexpectedly separated~~days working from school, we had provided an extension of time, until the fall of 2021, to re-enroll before beginning their grace period that occurs upon separation from school and prior to entering full principal and interest repayment status. At December 31, 2020, $1.0 billion of Private Education Loans had been granted this extended period of time. Beginning September 30, 2021, we no longer granted this “gap year” extension.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 ~~2020~~2021 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 ~~2020~~2021 Form 10-K for additional discussion regarding the risks associated with COVID-19.

Selected Financial Information and Ratios


		Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share data and percentages)	(In thousands, except per share data and percentages)	2021			2020			2021			2020			(In thousands, except per share data and percentages)			Three Months Ended March 31,

(In thousands, except per share data and percentages)															(In thousands, except per share data and percentages)				2022				2021
	Net income attributable to SLM Corporation common stock	$	71,674		$	168,970		$	850,689		$	439,990				$	127,537			$	640,006
Diluted earnings per common share attributable to SLM Corporation		$	0.24		$	0.45		$	2.59		$	1.13
Weighted average shares used to compute diluted earnings per share		304,511			377,918			329,064			389,391
Diluted earnings per common share														Diluted earnings per common share				$	0.45			$	1.75
Weighted average shares used to compute diluted earnings per common share														Weighted average shares used to compute diluted earnings per common share			280,654				366,240
Return on assets(1)	Return on assets(1)	1.0		%	2.2		%	3.8		%	1.9		%	Return on assets(1)			1.8		%		8.3		%

Other Operating Statistics (Held for Investment)	Other Operating Statistics (Held for Investment)													Other Operating Statistics (Held for Investment)
Ending Private Education Loans, net	Ending Private Education Loans, net	$	20,561,961		$	20,955,922		$	20,561,961		$	20,955,922		Ending Private Education Loans, net			$	20,586,223			$	19,632,933
Ending FFELP Loans, net	Ending FFELP Loans, net	703,355			743,220			703,355			743,220			Ending FFELP Loans, net			680,044				725,300
Ending total education loans, net	Ending total education loans, net	$	21,265,316		$	21,699,142		$	21,265,316		$	21,699,142		Ending total education loans, net			$	21,266,267			$	20,358,233


Ending Credit Cards, net	Ending Credit Cards, net	$	16,211		$	10,629		$	16,211		$	10,629		Ending Credit Cards, net			$	25,408			$	10,054

Average education loans	Average education loans	$	21,658,098		$	22,688,683		$	21,584,629		$	23,105,216		Average education loans			$	22,548,810			$	21,718,780
Average Personal Loans		$	—		$	527,204		$	—		$	778,153
Average Credit Cards	Average Credit Cards	$	14,894		$	11,086		$	12,821		$	8,588		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.	(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.													(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 ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 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; 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 ~~2020~~2021 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)	2022		2021
Unrealized gains (losses) on instruments not in a hedging relationship	$	(248)	$	(10,863)
Interest reclassification	243		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)	2022		2021
Non-GAAP “Core Earnings” adjustments to GAAP:
GAAP net income	$	128,812	$	641,207
Preferred stock dividends	1,275		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 GAAP	188		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 tax	0.01		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)	2022		2021

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

~~On July 27, 2017,~~Following announcements by the United Kingdom's Financial Conduct Authority (“UKFCA”), which regulates LIBOR, ~~publicly announced that it intends to stop persuading or compelling banks on the London interbank market to submit LIBOR rates after 2021. On March 5, 2021,~~and ICE Benchmark Administration asLimited, the administrator of LIBOR, publication of 1-week and ~~the UKFCA, as regulator, announced LIBOR settings will no longer be published for 1 week and 2 month~~2-month USD LIBOR and all tenors for other currencies ceased after December 31, ~~2021, and for~~2021. While publication of the remaining USD settings is expected to cease after June 30, ~~2023. The UKFCA does not expect that any~~

~~LIBOR settings will become unrepresentative before those dates.~~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 ~~issuing~~accepting certain deposits based on SOFR. In the second quarter of 2021, we began ~~to issue~~issuing variable-rate Private Education Loans that ~~use~~are indexed to SOFR. In 2022, subject to market conditions and investor demand, we expect to begin issuing ABS that are indexed to SOFR ~~as a reference rate.~~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 ~~significantly reduce the number of contracts that~~transition these exposures to LIBOR by changing them to an alternative reference ~~LIBOR,~~rate, either through modification or replacement, by June ~~2023.~~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 Loans	578,594
Available-for-sale investments	63,019
Total Assets	$	9,823,271

Deposits	$	3,951,933
Private Education Loan term securitizations - no contractual fallback	309,247
Private Education Loan term securitizations - alternative reference rate fallback	649,823
Total Liabilities	4,911,003

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 notional	1,407,412
Total derivative notional	5,086,372

Secured Borrowing Facility	2,000,000

Total Off-Balance Sheet	$	7,086,372

See Part I, Item 1A. “Risk Factors” in the ~~2020~~2021 Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.

52 SLM CORPORATION

Strategic Imperatives

To further focus ~~and align~~ our business and increase shareholder value, we continue to advance our strategic imperatives. Our focus remains on maximizing the profitability and growth of our core private student loan business, while harnessing and optimizing the power of our brand and attractive client base. In addition, we continue to seek to better inform the external narrative about student lending and Sallie ~~Mae’s role in helping students and families responsibly plan and pay for college.~~Mae. We also strive to maintain a rigorous and predictable capital allocation and return program to create shareholder ~~value while also~~value. We are focused on driving a mission-led culture that continues to make Sallie Mae a great place to work.

~~A full description of these imperatives can be found in Part II, Item 7. “Management’s Discussion~~ We also continue to strengthen our risk and ~~Analysis of Financial Condition~~compliance function, enhance and ~~Results of Operations” in~~build upon our ~~2020 Form 10-K.~~risk management framework, and assess and monitor enterprise-wide risk.

During the first ~~nine~~three months of ~~2021,~~2022, we made the following progress on the above corporate strategic imperatives.

~~New Servicing Call Center Platform~~Acquisition 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 center~~families evaluate how to ~~a new integrated platform that~~responsibly 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 to provide a centralized and simplified site that provides information onbring innovative products, tools, and resources ~~for school counselors as they assist~~to help students and families ~~plan and pay for college. We are also creating a suite of confidence inspiring tools and resources as well as new, innovative partnerships that will provide significant value to our customers.~~

~~Introduced new www.SallieMakesSense.com website~~confidently navigate their higher education journey.

We ~~launched www.SallieMakesSense.com~~expect the acquisition of Nitro to ~~help educate and inform policymakers, influencers, media, and others about who~~enhance future strategic growth opportunities for Sallie Mae ~~is today~~ and ~~illustrate~~to immediately expand our digital marketing capabilities, reduce the ~~important role we continue~~cost to ~~play in~~acquire customer accounts, and accelerate our progress to become a broader education solutions provider helping students to, through, and ~~families plan~~immediately 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 providing key statistics~~Note 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 and 2021-C Transactions~~2022-A Transaction

During the first ~~nine~~three months of ~~2021,~~2022, we sold ~~$3.19 billion~~$95 million of our Private Education Loans, including ~~$2.99 billion~~$89 million in principal and ~~$195~~$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 ~~transaction~~sale of the $95 million of Private Education Loans qualified for sale treatment and removed the balance of ~~the~~those 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 sales~~The sale resulted in our recognizing a gain of ~~$403~~$10 million during the ~~first nine~~three months ~~of 2021.~~ended March 31, 2022. For additional information regarding these transactions, see Notes to Consolidated Financial Statements, Note ~~4, “Loans Held for Sale” and Note~~ 8, “Borrowings — Unconsolidated VIEs - ~~Unconsolidated VIEs.~~2022-A Transaction.”

~~2021-B Securitization~~

~~2021-D Securitization~~

~~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 ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, we repurchased ~~42.6~~9.5 million shares of our common stock at a total cost of ~~$804~~$176 million under a Rule 10b5-1 trading plan authorized under our share repurchase programs.

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, which expires on January 26, 2023. This is in addition to the $51 million of capacity remaining under the 2021 Share Repurchase Program at September 30, 2021.

~~Common Stock Dividend~~

~~A 2021 fourth-quarter dividend of $0.11 per share on our common stock has been declared and will be paid on December 15, 2021 to shareholders of record at the close of business on December 3, 2021.~~

~~Secured Borrowing Facility~~

On July 30, 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 May 17, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 2023 (or earlier, if certain material adverse events occur).

63SLM 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
September 30,
Increase
(Decrease)
Nine Months Ended
September 30,
Increase
(Decrease)
(In millions, except per share data) 2021 2020 $ % 2021 2020 $ %
Interest income:
Loans $ 443 $ 478 $ (35) (7) % $ 1,304 $ 1,513 $ (209) (14) %
Investments 3 3 — — 9 9 — —
Cash and cash equivalents 2 1 1 100 5 20 (15) (75)
Total interest income 448 482 (34) (7) 1,318 1,542 (224) (15)
Total interest expense 90 118 (28) (24) 291 429 (138) (32)
Net interest income 358 365 (7) (2) 1,027 1,113 (86) (8)
Less: provisions for credit losses 138 (4) 142 3,550 (18) 409 (427) (104)
Net interest income after provisions for credit losses 219 368 (149) (40) 1,045 704 341 48
Non-interest income:
Gains on sales of loans, net — — — — 403 239 164 69
Gains on derivatives and hedging activities, net — — — — — 49 (49) (100)
Other income 14 10 4 40 77 43 34 79
Total non-interest income 14 10 4 40 480 331 149 45
Non-interest expenses:
Total operating expenses 141 127 14 11 393 416 (23) (6)
Restructuring expenses — 24 (24) (100) 1 24 (23) (96)
Total non-interest expenses 141 152 (11) (7) 394 440 (46) (10)
Income before income tax expense 92 226 (134) (59) 1,130 594 536 90
Income tax expense 19 55 (36) (65) 276 146 130 89
Net income 73 171 (98) (57) 854 448 406 91
Preferred stock dividends 1 2 (1) (50) 4 8 (4) (50)
Net income attributable to SLM Corporation common stock $ 72 $ 169 $ (97) (57) % $ 850 $ 440 $ 410 93 %
Basic earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ (0.21) (47) % $ 2.62 $ 1.14 $ 1.48 130 %
Diluted earnings per common share attributable to SLM Corporation $ 0.24 $ 0.45 $ (0.21) (47) % $ 2.59 $ 1.13 $ 1.46 129 %
Declared dividends per common share attributable to SLM Corporation $ 0.03 $ — $ 0.03 100 % $ 0.09 $ 0.09 $ — — %


(Dollars in millions, except per share amounts)	Three Months Ended March 31,				Increase (Decrease)
	2022		2021		$		%
Interest income:
Loans	$	458	$	432	$	26	6	%
Investments	5		3		2		67
Cash and cash equivalents	2		1		1		100
Total interest income	465		436		29		7
Total interest expense	90		105		(15)		(14)
Net interest income	375		331		44		13
Less: provisions for credit losses	98		(226)		324		143
Net interest income after provisions for credit losses	277		557		(280)		(50)
Non-interest income:
Gains on sales of loans, net	10		399		(389)		(97)


Other income	12		14		(2)		(14)
Total non-interest income	22		413		(391)		(95)
Non-interest expenses:
Total operating expenses	132		125		7		6
Acquired intangible assets amortization expense	1		—		1		100
Restructuring expenses	—		1		(1)		(100)
Total non-interest expenses	133		126		7		6
Income before income tax expense	166		844		(678)		(80)
Income tax expense	37		203		(166)		(82)
Net income	129		641		(512)		(80)
Preferred stock dividends	1		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	%

6454 SLM CORPORATION

GAAP Consolidated Earnings Summary

Three Months Ended ~~September 30, 2021~~March 31, 2022 Compared with Three Months Ended ~~September 30, 2020~~March 31, 2021

For the three months ended ~~September 30, 2021,~~March 31, 2022, net income was ~~$73~~$129 million, or ~~$0.24~~$0.45 diluted earnings per common share, compared with net income of ~~$171~~$641 million, or ~~$0.45~~$1.75 diluted earnings per common share, for the three months ended ~~September 30, 2020.~~March 31, 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 ~~decreased~~increased by $7$44 million in the current quarter compared with the year-ago quarter primarily due to ~~a $1.6 billion reduction in average loans outstanding. The decline~~an $845 million increase 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 $3.19 billion of Private Education Loans during the first nine months of 2021. Offsetting the lower average loans outstanding was a 24-basis~~an 89-basis point increase in our net interest margin. Our net interest margin increased asbecause of a ~~result~~combination of ~~the cost of our interest-bearing liabilities decreasing by more than the decline~~factors, including a $3.3 billion reduction in low-yielding average cash and other short-term investments, an increase in the yield on our loans and other interest-earning ~~assets. When rates declined significantly during~~assets, and lower cost of funds. Historically, the ~~first nine months of 2020, as a result of the COVID-19 pandemic, our variable-rate~~yields on interest-earnings assets ~~repriced~~reprice more quickly than our interest-bearing liabilities. These interest-bearing liabilities continued to reprice downward during the latter half of 2020 and first nine months of 2021 to reflect the lower interest rate environment. As a result, the cost of funds. As such, as rates increased in the first quarter of 2022, we saw the yields on our ~~interest-bearing liabilities for~~interest-earning assets increase while our cost of funds remained relatively flat compared with the ~~third~~fourth quarter of 2021, ~~was 31 basis points~~and lower than ~~for~~ the ~~third~~year-ago quarter. The higher level of cash and other short-term investments in 2021 was primarily the result of the $3.16 billion Private Education Loan sale that occurred in the first quarter of ~~2020.~~2021.

•Provision for credit losses in the current quarter was ~~$138~~$98 million, compared with a $4$226 million negative provision in the year-ago quarter. During the ~~third~~first quarter of ~~2021,~~2022, the provision for credit losses was primarily affected by new loan commitments made during the quarter ~~an increase in provisions related to our continuing implementation of new credit administration practices (as described in Item 2. “Management’s Discussion~~ and ~~Analysis of Financial Condition~~additional management overlays, which were partially offset by improved economic forecasts and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” in this Form 10-Q) and other factors.faster prepayment rates. In the year-ago quarter, the provision for credit losses was favorably affected by improved economic forecasts ~~compared to the second quarter of 2020,~~and faster prepayments speeds, and a $43 million benefit from the sale of our Personal Loan portfolio. The benefit from the economic forecasts in the year-ago quarter was heavily influenced by a recalibration of the college graduate unemployment rate that occurred in the third quarter of 2020.

•Other income was $14 million in the third quarter of 2021, compared with $10 million in the year-ago quarter. The increase in other income compared with the year-ago quarter was primarily the result of a $4 million increase in third-party servicing fees. Third-party servicing fees increased because we sold a total of $3.19 billion in loans in the first nine months of 2021 where we retained servicing rights.

•Third-quarter 2021 total operating expenses were $141 million, compared with $127 million in the year-ago quarter. The increase in total operating expenses was primarily driven by higher personnel costs and increased costs associated with the growth in loans owned and serviced.

•In the third quarter of 2020, we implemented a restructuring plan that resulted in our recording a $24 million restructuring charge in the year-ago quarter. These expenses were primarily related to involuntary termination benefit arrangements, as well as certain other costs, such as legal and consulting fees, that were incremental and incurred as a direct result of our 2020 restructuring plan. There were de minimis restructuring expenses recorded in the current period.

•Third-quarter 2021 income tax expense was $19 million, compared with $55 million in the year-ago quarter. Our effective income tax rate decreased to 21.0 percent in the third quarter of 2021 from 24.4 percent in the year-ago quarter. The decrease in the effective rate for the third quarter of 2021 was primarily due to a tax benefit related to stock compensation and lower state tax expense.

~~Nine Months Ended September 30, 2021 Compared with Nine Months Ended September 30, 2020~~

For the nine months ended September 30, 2021, net income was $854 million, or $2.59 diluted earnings per common share, compared with net income of $448 million, or $1.13 diluted earnings per common share, for the nine months ended September 30, 2020.

~~The primary drivers of changes in net income for the first nine months of 2021 compared with the year-ago period are as follows:~~

•Net interest income decreased by $86 million in the first nine months of 2021 compared with the year-ago period primarily due to a $2.3 billion reduction in average loans outstanding and a 10 basis point decrease in the net interest margin. The decline 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 $3.19 billion of Private Education Loans in the first nine months of 2021. The decline in net interest margin was due to a combination of factors, including the sale of our higher-yielding Personal Loan portfolio in the third quarter of 2020 and an increase in our lower-yielding taxable securities portfolio. Our average taxable securities in the first nine months of 2021 increased by $632 million compared with the year-ago period. The lower yields on these investments, which declined significantly from the year-ago period, coupled with their larger balances, contributed to 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, which reduces the weighted average yield on our interest-earning assets and our net interest margin.

•Provisions for credit losses for the nine months ended September 30, 2021 was a negative provision of $18 million, compared with a provision of $409 million for the year-ago period. This decrease of $427 million in the first nine months of 2021 compared with the year-ago period was primarily the result of improving economic forecasts in 2021, a change in the economic scenarios used and their respective weightings when estimating our allowance for credit losses, and faster prepayment 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. ~~These~~The faster estimated ~~prepayment~~prepayments speeds ~~during the two-year reasonable and supportable period reflect~~reflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed ~~model.~~model in the first quarter of 2021.

•Gains on sales of loans ~~net~~ were ~~$403~~$10 million in the ~~first nine months of 2021,~~current quarter, compared with ~~$239~~$399 million in the year-ago ~~period.~~quarter. The ~~increase~~decrease in gains on sales of loans was primarily the result of ~~improved pricing on~~selling $95 million of Private Education Loans in the first quarter of 2022, compared with the sale of ~~loans in the first nine months~~$3.16 billion of ~~2021 compared with the year-ago period and, to a lesser extent, $157 million in additional loan sales in the first nine months of 2021 when compared with the year-ago period.~~

•~~Gains on derivatives and hedging activities, net, were de minimis in the first nine months of 2021, compared with a net gain of $49 million~~Private Education Loans in the year-ago period. The year-ago period was favorably impacted by a significant 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.quarter.

•Other income was ~~$77~~$12 million in the first ~~nine months~~quarter of ~~2021,~~2022, compared with ~~$43~~$14 million in the year-ago ~~period.~~quarter. The ~~increase~~decrease in other income compared with the year-ago ~~period~~quarter was primarily the result of a ~~$35~~$2 million ~~gain related to changes in the valuation of certain non-marketable securities, and a $21 million increase~~decrease in third-party servicing fees, offset by an $11 million gain from the sale of our Upromise subsidiary recognized in the year-ago period and $6 million in lower revenue related to our Upromise subsidiary. In addition, other income during the first nine months of 2021 was negatively affected by a $6 million reduction in the tax indemnification receivable related to uncertain tax positions. Third-party servicing fees increased because we sold $3.19 billion in loans in the first nine months of 2021 where we retained servicing rights.fees.

•~~For the nine months ended September 30, 2021,~~First-quarter 2022 total operating expenses were ~~$393~~$132 million, compared with ~~$416~~$125 million in the year-ago ~~period.~~quarter. The ~~decrease~~increase in total operating expenses was primarily driven by ~~lower~~transaction costs related to our acquisition of Nitro, higher personnel costs, ~~as a result of the corporate reorganization that occurred in the second half of 2020, the divestiture of our Upromise subsidiary, the sale of the Personal Loan portfolio,~~ and ~~lower~~higher initiative ~~spending and improved servicing efficiencies.~~spending.

•InDuring the ~~third~~first quarter of ~~2020,~~2022, we ~~implemented a restructuring plan that resulted~~recorded approximately $1 million in ~~our recording a $24 million restructuring charge in the nine months ended September 30, 2020. These expenses were primarily~~amortization of acquired intangible assets related to ~~involuntary termination benefit arrangements, as well as certain other costs, such as legal~~our acquisition of Nitro. For additional information, see Notes to Consolidated Financial Statements, Note 6, “Goodwill and ~~consulting fees, that were incremental and incurred as a direct result of our 2020 restructuring plan. There were de minimis restructuring expenses recorded in the current period.~~Acquired Intangible Assets.”

•~~Income~~First-quarter 2022 income tax expense ~~for the nine months ended September 30, 2021~~ was ~~$276~~$37 million, compared with ~~$146~~$203 million in the year-ago ~~period.~~quarter. Our effective income tax rate decreased to 22.5 percent in the first ~~nine months~~quarter of ~~2021 to 24.4~~2022 from 24.1 percent ~~from 24.6 percent~~

in the year-ago ~~period.~~quarter. The decrease in the in effective ~~income tax~~ rate ~~year to date is~~for the first quarter of 2022 was primarily due to a tax benefit related to stock ~~compensation expense.~~

~~“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.~~

compensation.

67SLM CORPORATION 55

~~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
September 30, Nine Months Ended
September 30,
(Dollars in thousands) 2021 2020 2021 2020
Unrealized gains (losses) on instruments not in a hedging relationship $ (3,571) $ (12,848) $ (21,383) $ 21,611
Interest reclassification 3,615 12,833 21,544 27,797
Gains (losses) on derivatives and hedging activities, net $ 44 $ (15) $ 161 $ 49,408

~~The following table reflects adjustments associated with our derivative activities.~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(Dollars in thousands, except per share amounts) 2021 2020 2021 2020
“Core Earnings” adjustments to GAAP:
GAAP net income $ 72,840 $ 171,028 $ 854,248 $ 447,990
Preferred stock dividends 1,166 2,058 3,559 8,000
GAAP net income attributable to SLM Corporation common stock $ 71,674 $ 168,970 $ 850,689 $ 439,990
Adjustments:
Net impact of derivative accounting(1)
3,571 12,848 21,383 (21,611)
Net tax expense (benefit)(2)
864 3,136 5,172 (5,276)
Total “Core Earnings” adjustments to GAAP 2,707 9,712 16,211 (16,335)
“Core Earnings” attributable to SLM Corporation common stock $ 74,381 $ 178,682 $ 866,900 $ 423,655
GAAP diluted earnings per common share $ 0.24 $ 0.45 $ 2.59 $ 1.13
Derivative adjustments, net of tax — 0.02 0.04 (0.04)
“Core Earnings” diluted earnings per common share $ 0.24 $ 0.47 $ 2.63 $ 1.09

~~______~~

(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
September 30, Nine Months Ended
September 30,
(Dollars in thousands) 2021 2020 2021 2020
Provisions for credit losses $ 138,442 $ (3,640) $ (17,648) $ 409,505
Total portfolio net charge-offs $ (48,920) $ (53,770) $ (139,582) $ (154,838)

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.

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 September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
		2021				2020				2021				2020					2022				2021
(Dollars in thousands)	(Dollars in thousands)	Balance		Rate		Balance		Rate		Balance		Rate		Balance		Rate		(Dollars in thousands)	Balance		Rate		Balance		Rate
Average Assets	Average Assets																	Average Assets
Private Education Loans	Private Education Loans	$	20,944,581	8.26	%	$	21,937,758	8.24	%	$	20,860,973	8.23	%	$	22,342,353	8.48	%	Private Education Loans	$	21,858,270	8.38	%	$	20,984,491	8.22	%
FFELP Loans	FFELP Loans	713,517		3.45		750,925		3.46		723,656		3.43		762,863		3.86		FFELP Loans	690,540		3.51		734,289		3.41
Personal Loans		—		—		527,204		12.86		—		—		778,153		12.43

Credit Cards	Credit Cards	14,894		6.95		11,086		(6.58)		12,821		4.97		8,588		(7.20)		Credit Cards	26,622		3.95		11,841		0.78
Taxable securities	Taxable securities	2,029,739		0.66		2,134,005		0.59		2,007,867		0.62		1,376,342		0.84		Taxable securities	2,646,397		0.84		1,995,662		0.50
Cash and other short-term investments	Cash and other short-term investments	4,477,634		0.16		4,934,477		0.13		5,574,427		0.13		5,665,861		0.49		Cash and other short-term investments	3,535,198		0.20		6,789,310		0.14
Total interest-earning assets	Total interest-earning assets	28,180,365		6.30	%	30,295,455		6.34	%	29,179,744		6.04	%	30,934,160		6.66	%	Total interest-earning assets	28,757,027		6.56	%	30,515,593		5.80	%

Non-interest-earning assets	Non-interest-earning assets	655,288				(13,559)				656,357				86,471				Non-interest-earning assets	472,002				736,592

Total assets	Total assets	$	28,835,653			$	30,281,896			$	29,836,101			$	31,020,631			Total assets	$	29,229,029			$	31,252,185

Average Liabilities and Equity	Average Liabilities and Equity																	Average Liabilities and Equity
Brokered deposits	Brokered deposits	$	10,706,147	1.26	%	$	12,409,614	1.61	%	$	11,281,800	1.38	%	$	13,051,185	1.93	%	Brokered deposits	$	10,131,989	1.25	%	$	11,899,664	1.52	%
Retail and other deposits	Retail and other deposits	10,377,808		0.66		10,849,616		1.22		10,533,660		0.73		10,747,941		1.62		Retail and other deposits	11,058,963		0.66		10,683,618		0.82
Other interest-bearing liabilities(1)	Other interest-bearing liabilities(1)	5,371,756		2.88		4,933,763		2.77		5,235,105		2.99		4,868,202		3.01		Other interest-bearing liabilities(1)	5,779,749		2.87		5,193,925		3.03
Total interest-bearing liabilities	Total interest-bearing liabilities	26,455,711		1.35	%	28,192,993		1.66	%	27,050,565		1.44	%	28,667,328		2.00	%	Total interest-bearing liabilities	26,970,701		1.35	%	27,777,207		1.53	%

Non-interest-bearing liabilities	Non-interest-bearing liabilities	159,371				36,829				323,184				129,102				Non-interest-bearing liabilities	97,582				666,764
Equity	Equity	2,220,571				2,052,074				2,462,352				2,224,201				Equity	2,160,746				2,808,214
Total liabilities and equity	Total liabilities and equity	$	28,835,653			$	30,281,896			$	29,836,101			$	31,020,631			Total liabilities and equity	$	29,229,029			$	31,252,185

Net interest margin	Net interest margin			5.03	%			4.79	%			4.71	%			4.81	%	Net interest margin			5.29	%			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.

7056 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)	(Dollars in thousands)	Decrease		Change Due To(1)				(Dollars in thousands)	Increase (Decrease)		Change Due To(1)
				Rate		Volume					Rate		Volume
Three Months Ended September 30, 2021 vs. 2020
Three Months Ended March 31, 2022 vs. 2021								Three Months Ended March 31, 2022 vs. 2021
Interest income	Interest income	$	(34,823)	$	(2,618)	$	(32,205)	Interest income	$	28,880	$	54,678	$	(25,798)
Interest expense	Interest expense	(27,774)		(21,188)		(6,586)		Interest expense	(15,038)		(12,079)		(2,959)
Net interest income	Net interest income	$	(7,049)	$	18,164	$	(25,213)	Net interest income	$	43,918	$	63,592	$	(19,674)

Nine Months Ended September 30, 2021 vs. 2020
Interest income		$	(223,702)	$	(138,155)	$	(85,547)
Interest expense		(137,662)		(114,177)		(23,485)
Net interest income		$	(86,040)	$	(23,114)	$	(62,926)

~~_________________~~

(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

September 30, 2021
(Dollars in thousands)
Private
Education
Loans
FFELP
Loans Credit Cards Total Loans Held for Investment
Total loan portfolio:
In-school(1)
$ 3,735,655 $ 71 $ — $ 3,735,726
Grace, repayment and other(2)
17,967,182 705,620 17,766 18,690,568
Total, gross 21,702,837 705,691 17,766 22,426,294
Deferred origination costs and unamortized premium/(discount) 68,584 1,870 186 70,640
Allowance for credit losses (1,209,460) (4,206) (1,741) (1,215,407)
Total loans held for investment portfolio, net $ 20,561,961 $ 703,355 $ 16,211 $ 21,281,527

% of total 97 % 3 % — % 100 %

~~____________~~


As of March 31, 2022 (dollars in thousands)	Private Education Loans			FFELP Loans			Credit Cards			Total Loans Held for Investment
Total loan portfolio:
In-school(1)	$	4,033,213		$	90		$	—		$	4,033,303
Grace, repayment and other(2)	17,702,156			682,183			27,547			18,411,886
Total, gross	21,735,369			682,273			27,547			22,445,189
Deferred origination costs and unamortized premium/(discount)	71,907			1,770			171			73,848
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 total	97		%	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, gross	20,716,863			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 total	97		%	3		%	—		%	100		%

(1)Loans for customers still attending school and who are not yet required to make payments on the loans.

(2) 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.

SLM CORPORATION 57

December 31, 2020
(Dollars in thousands) Private
Education
Loans FFELP
Loans Credit Cards Total Loans Held for Investment
Total loan portfolio:
In-school(1)
$ 3,582,394 $ 81 $ — $ 3,582,475
Grace, repayment and other(2)(3)
16,146,943 737,512 12,238 16,896,693
Total, gross 19,729,337 737,593 12,238 20,479,168
Deferred origination costs and unamortized premium/(discount) 63,475 1,993 230 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 total 96 % 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. This program ended in September 2021. For further discussion, see Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae” in this Form 10-Q.

~~(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. This program ended in September 2021. For further discussion, see Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae” in this Form 10-Q.

~~(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 September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021				2020				2021				2020				(Dollars in thousands)	2022				2021
Private Education Loans	Private Education Loans	$	20,944,581	97	%	$	21,937,758	95	%	$	20,860,973	97	%	$	22,342,353	94	%	Private Education Loans	$	21,858,270	97	%	$	20,984,491	97	%
FFELP Loans	FFELP Loans	713,517		3		750,925		3		723,656		3		762,863		3		FFELP Loans	690,540		3		734,289		3
Personal Loans		—		—		527,204		2		—		—		778,153		3
Credit Cards	Credit Cards	14,894		—		11,086		—		12,821		—		8,588		—		Credit Cards	26,622		—		11,841		—
Total portfolio	Total portfolio	$	21,672,992	100	%	$	23,226,973	100	%	$	21,597,450	100	%	$	23,891,957	100	%	Total portfolio	$	22,575,432	100	%	$	21,730,621	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-rate	1,357,719		—		—		1,357,719
Variable-rate	836,916		—		21,323		858,239
Total acquisitions and originations	2,194,635		—		21,323		2,215,958
Capitalized interest and deferred origination cost premium amortization	114,691		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

~~Loans Held for Investment, Net Activit~~y


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-rate	1,015,787		—		—		1,015,787
Variable-rate	1,052,088		—		8,760		1,060,848
Total acquisitions and originations	2,067,875		—		8,760		2,076,635
Capitalized interest and deferred origination cost premium amortization	85,470		7,629		(185)		92,914
Sales	(125,792)		—		—		(125,792)
Transfer from loans held-for-sale	25,040		—		—		25,040
Loan consolidations to third-parties	(389,209)		(6,670)		—		(395,879)
Allowance	182,469		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 September 30, 2021
(Dollars in thousands) Private
Education
Loans FFELP
Loans Credit
Cards Total Loans
Held for
Investment, net
Beginning balance $ 19,389,089 $ 714,609 $ 11,446 $ 20,115,144
Acquisitions and originations:
Fixed-rate 1,253,720 — — 1,253,720
Variable-rate 844,110 — 18,326 862,436
Total acquisitions and originations 2,097,830 — 18,326 2,116,156
Capitalized interest and deferred origination cost premium amortization 96,385 6,892 (43) 103,234
Loan consolidations to third-parties (408,414) (6,441) — (414,855)
Allowance (54,920) 56 (298) (55,162)
Repayments and other (558,009) (11,761) (13,220) (582,990)
Ending balance $ 20,561,961 $ 703,355 $ 16,211 $ 21,281,527

Three Months Ended September 30, 2020
(Dollars in thousands)
Private
Education
Loans(1)
FFELP
Loans Personal Loans Credit
Cards
Total Loans
Held for
Investment, net(1)
Beginning balance $ 19,792,515 $ 752,021 $ 609,051 $ 10,344 $ 21,163,931
Acquisitions and originations:
Fixed-rate 882,782 — — — 882,782
Variable-rate 1,019,613 — — 9,059 1,028,672
Total acquisitions and originations 1,902,395 — — 9,059 1,911,454
Capitalized interest and deferred origination cost premium amortization 107,189 7,625 (50) (252) 114,512
Sales — — (588,285) — (588,285)
Loan consolidations to third-parties(1)
(296,322) (4,952) — — (301,274)
Allowance 31,747 22 54,803 (343) 86,229
Repayments and other(1)
(581,602) (11,496) (75,519) (8,179) (676,796)
Ending balance $ 20,955,922 $ 743,220 $ — $ 10,629 $ 21,709,771

~~_________~~

~~(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 September 30, 2020 by $39 million. The “repayments and other” line item was understated in the Form 10-Q for the three months ended September 30, 2020 by $39 million. In order to correctly reflect the activity that occurred in the third 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 $39 million to the line item amount to reflect the aggregate overstatement for the third quarter of 2020, and the “repayments and other” line item above reflects an increase of $39 million to the line item amount to reflect the aggregate understatement for the third quarter of 2020.

Nine Months Ended September 30, 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-rate 2,570,579 — — 2,570,579
Variable-rate 2,134,149 — 39,484 2,173,633
Total acquisitions and originations 4,704,728 — 39,484 4,744,212
Capitalized interest and deferred origination cost premium amortization 297,149 21,022 (251) 317,920
Sales (150,928) — — (150,928)
Transfer from loans held for sale 25,040 — — 25,040
Loan consolidations to third-parties (1,135,141) (20,320) — (1,155,461)
Allowance 146,384 171 (239) 146,316
Repayments and other (1,762,239) (32,726) (33,750) (1,828,715)
Ending balance $ 20,561,961 $ 703,355 $ 16,211 $ 21,281,527

Nine Months Ended September 30, 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, 2020 21,835,685 780,964 904,460 3,630 23,524,739
Acquisitions and originations:
Fixed-rate 2,606,056 — 41 — 2,606,097
Variable-rate 2,103,322 — — 26,885 2,130,207
Total acquisitions and originations 4,709,378 — 41 26,885 4,736,304
Capitalized interest and deferred origination cost premium amortization 334,355 19,196 (253) (567) 352,731
Sales (2,925,478) — (588,285) — (3,513,763)
Loan consolidations to third-parties(1)
(988,299) (16,659) — — (1,004,958)
Allowance (293,682) 122 36,526 (1,095) (258,129)
Repayments and other(1)
(1,716,037) (40,403) (352,489) (18,224) (2,127,153)
Ending balance $ 20,955,922 $ 743,220 $ — $ 10,629 $ 21,709,771

~~_________~~

~~(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 nine months ended September 30, 2020 by $97 million. The “repayments and other” line item was understated in the Form 10-Q for the nine months ended September 30, 2020 by $97 million. In order to correctly reflect the activity that occurred in the first nine months 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 $97 million to the line item amount to reflect the aggregate overstatement for the first nine months of 2020, and the “repayments and other” line item above reflects an increase of $97 million to the line item amount to reflect the aggregate understatement for the first nine months of 2020.

“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 ~~September 30, 2021 decreased~~March 31, 2022 increased by 62 percent compared with ~~September 30, 2020,~~March 31, 2021, and now total 3642 percent of our Private Education Loans held for investment portfolio at ~~September 30, 2021.~~March 31, 2022.

58 SLM CORPORATION

“Loan consolidations to third-parties” for the three months ended ~~September 30, 2021~~March 31, 2022 total ~~5.5~~5.7 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at ~~September 30, 2021,~~March 31, 2022, or ~~2.0~~2.4 percent of our total Private Education Loans held for investment portfolio at ~~September 30, 2021,~~March 31, 2022, compared with the year-ago period of ~~3.7~~4.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status, or ~~1.6~~2.0 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 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 September 30,											Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021			%		2020			%		(Dollars in thousands)	2022			%		2021			%
Smart Option - interest only(1)	Smart Option - interest only(1)	$	411,644		20	%	$	451,835		24	%	Smart Option - interest only(1)	$	430,329		20	%	$	475,442		23	%
Smart Option - fixed pay(1)	Smart Option - fixed pay(1)	670,646			32		539,600			28		Smart Option - fixed pay(1)	711,395			32		614,883			30
Smart Option - deferred(1)	Smart Option - deferred(1)	790,532			38		677,661			36		Smart Option - deferred(1)	867,108			40		773,592			37
Smart Option - principal and interest		3,838			—		3,408			—
Graduate Loan	Graduate Loan	176,898			8		188,673			10		Graduate Loan	150,460			7		162,483			8
Parent Loan		34,401			2		34,468			2
Parent Loan(2)												Parent Loan(2)	29,365			1		38,513			2
Total Private Education Loan originations	Total Private Education Loan originations	$	2,087,959		100	%	$	1,895,645		100	%	Total Private Education Loan originations	$	2,188,657		100	%	$	2,064,913		100	%

Percentage of loans with a cosigner	Percentage of loans with a cosigner	87.8		%			87.7		%			Percentage of loans with a cosigner	88.0		%			88.5		%
Average FICO at approval(2)		749					752

Average FICO at approval(3)												Average FICO at approval(3)	748					751

Nine Months Ended
September 30,
(Dollars in thousands) 2021 % 2020 %
Smart Option - interest only(1)
$ 984,974 21 % $ 1,077,148 23 %
Smart Option - fixed pay(1)
1,444,831 31 1,323,344 28
Smart Option - deferred(1)
1,735,677 37 1,712,171 37
Smart Option - principal and interest 9,399 — 8,234 —
Graduate Loan 432,837 9 483,545 10
Parent Loan 77,958 2 89,314 2
Total Private Education Loan originations $ 4,685,676 100 % $ 4,693,756 100 %
Percentage of loans with a cosigner 86.7 % 86.4 %
Average FICO at approval(2)
750 748

~~____________~~

(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 ~~2020~~2021 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.

76SLM CORPORATION 59

Allowance for Credit Losses

Allowance for Credit Losses Activity

Three Months Ended September 30,
2021 2020
(Dollars in thousands) Private
Education
Loans FFELP
Loans Credit Cards Total
Portfolio Private
Education
Loans FFELP
Loans Personal Loans Credit Cards Total
Portfolio
Beginning balance $ 1,154,540 $ 4,262 $ 1,442 $ 1,160,244 $ 1,760,559 $ 4,385 $ 163,337 $ 1,042 $ 1,929,323
Transfer from unfunded commitment liability(1)
110,613 — — 110,613 100,470 — — — 100,470
Less:
Charge-offs (56,000) (106) (119) (56,225) (55,298) (89) (5,231) (48) (60,666)
Loan sales — — — — — — (108,534) — (108,534)
Plus:
Recoveries 7,302 — 3 7,305 4,790 — 2,106 — 6,896
Provision for loan losses:
Provision, current period (6,995) 50 415 (6,530) (81,710) 67 (8,762) 391 (90,014)
Loan sale reduction to provision — — — — — — (42,916) — (42,916)
Total provisions for credit losses(2)
(6,995) 50 415 (6,530) (81,710) 67 (51,678) 391 (132,930)
Ending balance $ 1,209,460 $ 4,206 $ 1,741 $ 1,215,407 $ 1,728,811 $ 4,363 $ — $ 1,385 $ 1,734,559

Troubled debt restructurings(3)
$ 1,148,282 $ — $ — $ 1,148,282 $ 1,495,161 $ — $ — $ — $ 1,495,161

~~_________~~


Three Months Ended March 31, (dollars in thousands)	2022								2021
	Private Education Loans		FFELP Loans		Credit Cards		Total Portfolio		Private Education Loans		FFELP Loans		Credit Cards		Total 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:
Recoveries	8,033		—		3		8,036		7,703		—		1		7,704
Provisions for credit losses:
Provision, current period	48,460		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 September 30,
(Dollars in thousands) 2021 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses $ (6,995) $ (81,710)
Provisions for unfunded loan commitments 144,972 129,290
Total Private Education Loan provisions for credit losses 137,977 47,580
Other impacts to the provisions for credit losses:
Personal Loans — (51,678)
FFELP Loans 50 67
Credit Cards 415 391
Total 465 (51,220)
Provisions for credit losses reported in consolidated statements of income $ 138,442 $ (3,640)

~~(3)~~ ~~Represents the unpaid principal balance of loans classified as troubled debt restructurings.~~


Consolidated Statements of Income Provisions for Credit Losses Reconciliation
Three Months Ended March 31, (dollars in thousands)
	2022		2021
Private Education Loan provisions for credit losses:
Provisions for loan losses	$	43,213	$	(261,913)
Provisions for unfunded loan commitments	54,679		36,203
Total Private Education Loan provisions for credit losses	97,892		(225,710)
Other impacts to the provisions for credit losses:
FFELP Loans	21		29
Credit Cards	137		(86)
Total	158		(57)
Provisions for credit losses reported in consolidated statements of income	$	98,050	$	(225,767)

Nine Months Ended September 30,
2021 2020
(Dollars in thousands) Private
Education
Loans FFELP
Loans Credit Cards Total
Portfolio Private
Education
Loans FFELP
Loans Personal Loans Credit Cards Total
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 1 1,355,844 4,378 1,501 1,361,723 1,435,130 4,485 145,060 290 1,584,965
Transfer from unfunded commitment liability(1)
262,049 — — 262,049 279,555 — — — 279,555
Less:
Charge-offs (161,039) (249) (281) (161,569) (138,546) (399) (39,079) (96) (178,120)
Loan sales — — — — — — (108,534) — (108,534)
Plus:
Recoveries 21,977 — 10 21,987 18,298 — 4,984 — 23,282
Provision for loan losses:
Provision, current period (260,923) 77 511 (260,335) 296,167 277 40,485 1,191 338,120
Loan sale reduction to provision (10,335) — — (10,335) (161,793) — (42,916) — (204,709)
Loans transferred from held-for-sale 1,887 — — 1,887 — — — — —
Total provisions for credit losses(2)
(269,371) 77 511 (268,783) 134,374 277 (2,431) 1,191 133,411
Ending balance $ 1,209,460 $ 4,206 $ 1,741 $ 1,215,407 $ 1,728,811 $ 4,363 $ — $ 1,385 $ 1,734,559

Troubled debt restructurings(3)
$ 1,148,282 $ — $ — $ 1,148,282 $ 1,495,161 $ — $ — $ 1,495,161

~~_________~~

~~(1)~~60 ~~See Note 6, “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.~~SLM CORPORATION

Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Nine Months Ended September 30,
(Dollars in thousands) 2021 2020
Private Education Loan provisions for credit losses:
Provisions for loan losses $ (269,371) $ 134,374
Provisions for unfunded loan commitments 251,135 276,094
Total Private Education Loan provisions for credit losses (18,236) 410,468
Other impacts to the provisions for credit losses:
Personal Loans — (2,431)
FFELP Loans 77 277
Credit Cards 511 1,191
Total 588 (963)
Provisions for credit losses reported in consolidated statements of income $ (17,648) $ 409,505

~~(3)~~ ~~Represents the unpaid principal balance of loans classified as troubled debt restructurings.~~

Private Education Loan Allowance for Credit Losses

In establishing the allowance for Private Education Loan losses as of ~~September 30, 2021,~~March 31, 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 3642 percent of our total Private Education Loans held for investment portfolio at ~~September 30, 2021,~~March 31, 2022, compared with 4344 percent at ~~September 30, 2020.~~March 31, 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 ~~2020~~2021 Form 10-K.

79SLM CORPORATION 61

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
September 30,
2021 2020
(Dollars in thousands) Balance % Balance %
Loans in-school/grace/deferment(1)(2)
$ 5,855,280 $ 6,055,561
Loans in forbearance(1) and percentage of each status
Loans in forbearance - current(3)
357,425 100.0 % 705,162 100.0 %
Loans in forbearance - loans delinquent 30-59 days(2)(3)
— — 274 —
Loans in forbearance - loans delinquent 60-89 days(2)(3)
— — 21 —
Loans in forbearance - loans 90 days or greater past due(2)(3)
— — — —
Total Private Education Loans in forbearance(2)
357,425 100.0 % 705,457 100.0 %
Loans in repayment(1) and percentage of each status:
Loans current 15,115,541 97.6 % 15,375,006 97.0 %
Loans delinquent 30-59 days(4)
199,942 1.3 265,251 1.7
Loans delinquent 60-89 days(4)
101,512 0.6 139,823 0.9
Loans 90 days or greater past due(4)
73,137 0.5 73,229 0.4
Total Private Education Loans in repayment 15,490,132 100.0 % 15,853,309 100.0 %
Total Private Education Loans, gross 21,702,837 22,614,327
Private Education Loans deferred origination costs and unamortized premium/(discount) 68,584 70,406
Total Private Education Loans 21,771,421 22,684,733
Private Education Loans allowance for losses (1,209,460) (1,728,811)
Private Education Loans, net $ 20,561,961 $ 20,955,922

Percentage of Private Education Loans in repayment 71.4 % 70.1 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 2.4 % 3.0 %
Delinquencies as a percentage of Private Education Loans in repayment and delinquent forbearance loans 2.4 % 3.0 %

Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance 2.3 % 4.3 %

~~_________~~


Private Education Loans Held for Investment	2022				2021
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 current	15,530,080		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 repayment	16,095,157		100.0	%	14,777,939		100.0	%
Total Private Education Loans, gross	21,735,369				20,741,840
Private Education Loans deferred origination costs and unamortized premium/(discount)	71,907				64,468
Total Private Education Loans	21,807,276				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 repayment			74.1	%			71.2	%

Delinquencies as a percentage of Private Education Loans in repayment			3.5	%			2.1	%



Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance			1.4	%			3.7	%

(1)At ~~September 30, 2020,~~March 31, 2021, the loans in the “in-school/grace/deferment” category above include ~~$379~~$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 ~~September 30, 2020,~~March 31, 2021, the loans in the “in forbearance” category above include ~~$11~~$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 ~~September 30, 2020,~~March 31, 2021, the loans in the “in repayment” category above include ~~$447~~$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 2.7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie ~~Mae”~~Mae — Financial Results” in ~~this~~the 2021 Form ~~10-Q.~~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.

Delinquencies as a percentage of Private Education Loans (held for investment) in repayment ~~and delinquent forbearance loans decreased~~increased to ~~2.4~~3.5 percent at ~~September 30, 2021~~March 31, 2022 from ~~3.0~~2.1 percent at ~~September 30, 2020,~~March 31, 2021, and the forbearance rate decreased to ~~2.3~~1.4 percent at ~~September 30, 2021~~March 31, 2022 from ~~4.3~~3.7 percent at ~~September 30, 2020.~~March 31, 2021. The delinquency rate on ~~September 30, 2021~~March 31, 2022 was ~~lower~~higher than the year-ago quarter due to several factors, including the ~~suspension of payments on federal loans which reduced the payment burden by our borrowers, multiple stimulus packages signed into law during 2020 and the first quarter of~~credit administration practices changes we implemented in 2021 and to a lesser extent, the disaster forbearance program we invoked to assist our customers. The first wave of disaster forbearance was granted primarily in 90-day increments. When those disaster forbearances expired in June and July 2020, the loans were no longer considered in forbearance until the borrowers requested, and were granted, anthat imposed additional ~~forbearance. Many of~~requirements for those borrowers ~~went back into~~requesting forbearance, as well as certain loans whose borrowers took a “gap year” during the pandemic entering repayment ~~status at~~in late 2021. The lower forbearance rate was the ~~end~~result of their original three-month disaster forbearance. Other borrowers asked for additional forbearance and we began granting those in one-month increments. We stopped providing COVID-19 related disaster forbearances in June 2021.the 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 ~~2020~~2021 Form 10-K.

8162 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
September 30, Nine Months Ended
September 30,
(Dollars in thousands) 2021 2020 2021 2020
Beginning balance $ 1,154,540 $ 1,760,559 $ 1,355,844 $ 374,300
Day 1 adjustment for adoption of CECL — — — 1,060,830
Adjusted beginning balance 1,154,540 1,760,559 1,355,844 1,435,130
Transfer from unfunded commitment liability(1)
110,613 100,470 262,049 279,555
Provisions for credit losses:
Provision, current period (6,995) (81,710) (260,923) 296,167
Loan sale reduction to provision — — (10,335) (161,793)
Loans transferred from held-for-sale — — 1,887 —
Total provision (6,995) (81,710) (269,371) 134,374
Net charge-offs:
Charge-offs (56,000) (55,298) (161,039) (138,546)
Recoveries 7,302 4,790 21,977 18,298
Net charge-offs (48,698) (50,508) (139,062) (120,248)
Ending balance $ 1,209,460 $ 1,728,811 $ 1,209,460 $ 1,728,811

Allowance as a percentage of the ending total loan balance 5.57 % 7.64 % 5.57 % 7.64 %
Allowance as a percentage of the ending loans in repayment(2)
7.81 % 10.91 % 7.81 % 10.91 %
Allowance coverage of net charge-offs (annualized) 6.21 8.56 6.52 10.78
Net charge-offs as a percentage of average loans in repayment (annualized)(2)
1.29 % 1.33 % 1.25 % 1.05 %
Delinquent loans in repayment as a percentage of ending loans in repayment(2)
2.42 % 3.02 % 2.42 % 3.02 %
Delinquencies as a percentage of ending loans in repayment and delinquent forbearance loans(2)
2.42 % 3.02 % 2.42 % 3.02 %
Loans in forbearance as a percentage of ending loans in repayment and forbearance(2)
2.26 % 4.26 % 2.26 % 4.26 %
Ending total loans, gross $ 21,702,837 $ 22,614,327 $ 21,702,837 $ 22,614,327
Average loans in repayment(2)
$ 15,108,802 $ 15,182,703 $ 14,877,937 $ 15,336,253
Ending loans in repayment(2)
$ 15,490,132 $ 15,853,309 $ 15,490,132 $ 15,853,309

~~_______~~


	Three Months Ended March 31,
(Dollars in thousands)	2022			2021
Beginning balance	$	1,158,977		$	1,355,844
Transfer from unfunded commitment liability(1)	94,686			126,880
Provision for credit losses:
Provision, current period	48,460			(254,942)
Loan sale reduction to provision	(5,247)			(8,858)
Loans transferred from held-for-sale	—			1,887
Total provision	43,213			(261,913)
Net charge-offs:
Charge-offs	(83,856)			(55,139)
Recoveries	8,033			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 balance	5.62		%	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.

82SLM CORPORATION 63

~~Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool~~

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 most instances, we require one payment before granting forbearance to delinquent borrowers.

Currently, we generally grant forbearance in increments of one to two months at a time, for up to 12 months over the life of the loan, although disaster forbearance, certain assistance we grant to borrowers who are still in school, and our short-term extended repayment alternative currently do not apply toward the 12-month limit. We also currently require six months of positive payment performance by a borrower (meaning the borrower must make payment in a cumulative amount equivalent to six monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. This required period of positive payment performance does not apply, however, to forbearances granted during the first six months following a borrower’s grace period and is not required for a borrower to receive a contractual interest rate reduction. In addition, we currently 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. We have decided to make further changes in our credit administration practices, which we expect to implement as early as by the end of 2021, to (i) require 12 months of positive payment performance (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives, and (ii) count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above.

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. We currently limit the granting of a permanent extension of the final maturity date of the loan under our loan modification program to one time over the life of the loan. We also currently permit two consecutive rate reductions to 4.0 percent so long as the borrower qualifies and makes three consecutive monthly payments at the reduced payment in connection with each rate reduction. We currently require six months of positive payment performance after the interest rate adjusts upward to its previous rate (at the end of the rate reduction periods) before the borrower may be eligible for a forbearance or certain other repayment alternatives, however. We have decided to further adjust certain requirements regarding our loan modification program, which we expect to implement as early as by the end of 2021, to (i) limit the number of interest rate reductions to twice over the life of the loan, and (ii) require 12 months of positive payment performance after the interest rate adjusts upward to its previous rate (at the end of the rate reduction periods) before the borrower may be eligible for forbearance or certain other repayment alternatives. At September 30, 2021 and December 31, 2020, 9.2 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.

Upon full implementation of the credit administration practices changes described above, we believe our collection and servicing practices will generally align with guidelines for student lending published by the Office of the Comptroller of the Currency.

result of the changes to our credit administration practices described above. As we progress with full implementation of the 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 ~~September 30, 2021, loans in forbearance status as a percentage of total loans in repayment and forbearance were 1.6 percent~~March 31, 2022, 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 7075 percent of our Private Education Loans (held for investment) in forbearance status have been in active repayment status fewer than 25 months. ~~For the periods presented below, we updated our delinquency bucket periods to conform with the delinquency bucket periods defined by the FFIEC.~~


(Dollars in millions) September 30, 2021		Private Education Loans Held for Investment Monthly Scheduled Payments Due															Not Yet in Repayment			Total
		0 to 12			13 to 24			25 to 36			37 to 48			More 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 12			13 to 24			25 to 36			37 to 48			More than 48
Loans in-school/grace/deferment	Loans in-school/grace/deferment	$	—		$	—		$	—		$	—		$	—		$	5,855		$	5,855		Loans in-school/grace/deferment	$	—		$	—		$	—		$	—		$	—		$	5,406		$	5,406
Loans in forbearance	Loans in forbearance	195			56			37			27			42			—			357			Loans in forbearance	141			35			23			15			20			—			234
Loans in repayment - current	Loans in repayment - current	4,853			3,364			2,244			1,625			3,030			—			15,116			Loans in repayment - current	5,408			3,244			2,288			1,562			3,028			—			15,530
Loans in repayment - delinquent 30-59 days	Loans in repayment - delinquent 30-59 days	74			37			28			21			40			—			200			Loans in repayment - delinquent 30-59 days	104			46			36			26			49			—			261
Loans in repayment - delinquent 60-89 days	Loans in repayment - delinquent 60-89 days	43			19			14			9			17			—			102			Loans in repayment - delinquent 60-89 days	78			26			21			15			29			—			169
Loans in repayment - 90 days and greater past due		28			14			10			7			14			—			73
Loans in repayment - 90 days or greater past due																							Loans in repayment - 90 days or greater past due	63			23			15			11			23			—			135
Total	Total	$	5,193		$	3,490		$	2,333		$	1,689		$	3,143		$	5,855		21,703			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)																			68			Deferred origination costs and unamortized premium/(discount)																			72
Allowance for credit losses	Allowance for credit losses																			(1,209)			Allowance for credit losses																			(1,221)
Total Private Education Loans, net	Total Private Education Loans, net																			$	20,562		Total Private Education Loans, net																			$	20,586

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance	Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance	1.23		%	0.35		%	0.24		%	0.17		%	0.27		%	—		%	2.26		%	Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance	0.86		%	0.21		%	0.15		%	0.09		%	0.12		%	—		%	1.43		%

(Dollars in millions)
September 30, 2020
Private Education Loans Held for Investment
Monthly Scheduled Payments Due Not Yet in
Repayment Total
0 to 12 13 to 24 25 to 36 37 to 48 More than 48
Loans in-school/grace/deferment $ — $ — $ — $ — $ — $ 6,056 $ 6,056
Loans in forbearance 351 113 88 63 90 — 705
Loans in repayment - current 5,345 3,223 2,356 1,719 2,732 — 15,375
Loans in repayment - delinquent 30-59 days 118 44 37 24 42 — 265
Loans in repayment - delinquent 60-89 days 63 25 19 13 20 — 140
Loans in repayment - 90 days or greater past due 33 12 10 7 11 — 73
Total $ 5,910 $ 3,417 $ 2,510 $ 1,826 $ 2,895 $ 6,056 22,614
Deferred origination costs and unamortized premium/(discount) 71
Allowance for credit losses (1,729)
Total Private Education Loans, net $ 20,956

Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance 2.12 % 0.68 % 0.53 % 0.38 % 0.55 % — % 4.26 %


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 12			13 to 24			25 to 36			37 to 48			More than 48
Loans in-school/grace/deferment	$	—		$	—		$	—		$	—		$	—		$	5,394		$	5,394
Loans in forbearance	316			78			62			46			68			—			570
Loans in repayment - current	4,421			3,244			2,220			1,614			2,973			—			14,472
Loans in repayment - delinquent 30-59 days	62			27			19			17			28			—			153
Loans in repayment - delinquent 60-89 days	37			17			11			7			14			—			86
Loans in repayment - 90 days or greater past due	28			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 forbearance	2.06		%	0.51		%	0.41		%	0.30		%	0.44		%	—		%	3.72		%

8664 SLM CORPORATION

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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

September 30, 2021
(Dollars in thousands) Signature and
Other Parent Loan Smart Option Career
Training Graduate
Loan Total
$ in repayment(1)
$ 227,775 $ 310,230 $ 14,120,968 $ 10,765 $ 820,394 $ 15,490,132
$ in total $ 324,811 $ 312,544 $ 19,786,611 $ 11,073 $ 1,267,798 $ 21,702,837


As of March 31, 2022 (dollars in thousands)	Signature and Other		Parent Loan(1)		Smart Option		Career 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

December 31, 2020
(Dollars in thousands) Signature and
Other Parent Loan Smart Option Career
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 Option		Career 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.

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 Loans

Accrued Interest Receivable
(Dollars in thousands) Total Interest Receivable 90 Days and Greater Past Due Allowance for
Uncollectible
Interest
September 30, 2021 $ 1,386,427 $ 3,636 $ 4,351
December 31, 2020 $ 1,168,895 $ 4,354 $ 4,467
September 30, 2020 $ 1,454,176 $ 4,096 $ 4,427


	Private Education Loans
	Accrued Interest Receivable
(Dollars in thousands)	Total Interest Receivable		90 Days or Greater Past Due		Allowance for Uncollectible Interest
March 31, 2022	$	1,241,574	$	6,292	$	5,505
December 31, 2021	$	1,187,123	$	3,635	$	4,937
March 31, 2021	$	1,248,475	$	3,695	$	4,405

87SLM 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.

Key risks associated with our liquidity relate to our ability to access the capital 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 funding sources in the marketplace. We target maintaining sufficient on-balance sheet and contingent 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 resiliency of our balance sheet. As the Bank has grown, we have improved our liquidity stress testing practices to align more closely with the industry, which ~~has~~ resulted in our adopting increased liquidity requirements. Beginning in the second quarter of 2019, we began to increase our liquidity levels by increasing cash and ~~cash equivalents 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 maintain through ~~2021.~~2022. Due to the seasonal nature of our business, our liquidity levels will likely vary from quarter to quarter.

Sources of Liquidity and Available Capacity

Ending Balances


(Dollars in thousands)	(Dollars in thousands)	September 30, 2021		December 31, 2020		(Dollars in thousands)	March 31, 2022		December 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 subsidiaries	Holding Company and other non-bank subsidiaries	$	2,784	$	1,117	Holding Company and other non-bank subsidiaries	$	8,510	$	2,588
Sallie Mae Bank(1)	Sallie Mae Bank(1)	2,714,968		4,454,175		Sallie Mae Bank(1)	3,254,085		4,332,015
Available-for-sale investments	Available-for-sale investments	2,299,273		1,927,726		Available-for-sale investments	2,111,180		2,325,711
Total unrestricted cash and liquid investments	Total unrestricted cash and liquid investments	$	5,017,025	$	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.

8866 SLM CORPORATION

Average Balances


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		2021		2020		(Dollars in thousands)	2022		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 subsidiaries	Holding Company and other non-bank subsidiaries	$	4,621	$	6,172	$	3,903	$	24,061	Holding Company and other non-bank subsidiaries	$	9,674	$	4,284
Sallie Mae Bank(1)	Sallie Mae Bank(1)	4,271,373		4,710,900		5,370,768		5,408,975		Sallie Mae Bank(1)	3,308,624		6,582,708
Available-for-sale investments	Available-for-sale investments	1,817,721		2,038,473		1,822,730		1,331,776		Available-for-sale investments	2,452,193		1,837,361
Total unrestricted cash and liquid investments	Total unrestricted cash and liquid investments	$	6,093,715	$	6,755,545	$	7,197,401	$	6,764,812	Total unrestricted cash and liquid investments	$	5,770,491	$	8,424,353

~~____~~

(1) This amount will be used primarily to originate Private Education Loans at the Bank.

Deposits

The following table summarizes total deposits.


		September 30,		December 31,			March 31,		December 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		(Dollars in thousands)	2022		2021
Deposits - interest bearing	Deposits - interest bearing	$	20,890,292	$	22,664,899	Deposits - interest bearing	$	21,192,004	$	20,826,692
Deposits - non-interest bearing	Deposits - non-interest bearing	568		1,140		Deposits - non-interest bearing	2,022		1,432
Total deposits	Total deposits	$	20,890,860	$	22,666,039	Total deposits	$	21,194,026	$	20,828,124

Interest bearing deposits as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 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 ~~$7.0~~$7.8 billion and ~~$7.1~~$7.3 billion of our deposit total as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively.

89SLM CORPORATION 67

Interest bearing deposits at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are summarized as follows:

September 30, 2021 December 31, 2020
(Dollars in thousands) Amount
Qtr.-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Money market $ 10,082,114 0.71 % $ 10,159,657 0.83 %
Savings 956,571 0.44 907,976 0.55
Certificates of deposit 9,851,607 1.16 11,597,266 1.34
Deposits - interest bearing $ 20,890,292 $ 22,664,899

~~____________~~


	March 31, 2022				December 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	%
Savings	968,059		0.43		959,122		0.43
Certificates of deposit	9,239,829		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 ~~September 30, 2021,~~March 31, 2022, and December 31, ~~2020,~~2021, there were ~~$676~~$532 million and ~~$571~~$743 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was ~~$46~~$42 million and ~~$50~~$35 million at ~~September 30, 2021~~March 31, 2022 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 ~~September 30, 2021, $5.9~~March 31, 2022, $4.8 billion notional of our derivative contracts were cleared on the CME and $0.3 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent ~~94.6~~94.3 percent and ~~5.4~~5.7 percent, respectively, of our total notional derivative contracts of ~~$6.2~~$5.1 billion at ~~September 30, 2021.~~March 31, 2022.

collateral held by us and plus collateral posted with counterparties) related to derivatives of ~~$12~~$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 ~~September 30, 2021.~~March 31, 2022.


As of March 31, 2022 (~~Dollars~~dollars in thousands)	SLM Corporation and Sallie Mae Bank Contracts
Total exposure, net of collateral	$	~~11,509~~9,233
Exposure to counterparties with credit ratings, net of collateral	$	~~11,509~~9,233
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 ~~September 30, 2021,~~March 31, 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.

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., beginning~~ending 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. ~~Our~~The Bank’s January 1, 2020 CECL transition amounts increased ~~the~~our 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 ~~September 30, 2021,~~March 31, 2022, the adjusted transition amounts, ~~subject to~~reflecting changes over the ~~two-year~~ phase-in period, that will be deferred for regulatory capital purposes are as follows:

Transition Amounts Adjustments for the Year Ended Adjustments for the Nine Months Ended Adjusted Transition Amounts
(Dollars in thousands) January 1, 2020 December 31, 2020 September 30, 2021 September 30, 2021
Retained earnings $ 952,639 $ (57,859) $ (39,308) $ 855,472
Allowance for credit losses 1,143,053 (55,811) (36,579) 1,050,663
Liability for unfunded commitments 115,758 (2,048) (2,729) 110,981
Deferred tax asset 306,171 — — 306,171


	Transition Amounts		Adjustments for the Year Ended		Adjustments for the Year Ended		Adjustments for the Three Months Ended		Adjusted Transition Amounts
(Dollars in thousands)	January 1, 2020		December 31, 2020		December 31, 2021		March 31, 2022		March 31, 2022

Retained earnings	$	952,639	$	(57,859)	$	(58,429)	$	(209,088)	$	627,263
Allowance for credit losses	1,143,053		(55,811)		(49,097)		(259,536)		778,609
Liability for unfunded commitments	115,758		(2,048)		(9,333)		(26,094)		78,283
Deferred tax asset	306,171		—		—		(76,542)		229,629

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)						Actual				U.S. Basel III Minimum Requirements Plus Buffer(1)(2)
		Amount		Ratio		Amount			Ratio
As of September 30, 2021:
(Dollars in thousands)											(Dollars in thousands)	Amount		Ratio		Amount			Ratio
As of March 30, 2022(3):											As of March 30, 2022(3):
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	3,255,466	13.1	%	$	1,736,176	>	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)	$	3,255,466	13.1	%	$	2,108,214	>	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)	$	3,408,359	13.7	%	$	2,604,265	>	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)	$	3,255,466	10.9	%	$	1,193,100	>	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.

70 SLM CORPORATION

Dividends

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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings.”

September 30, 2021 December 31, 2020
(Dollars in thousands) Short-Term Long-Term Total Short-Term Long-Term Total
Unsecured borrowings:
Unsecured debt (fixed-rate) $ 199,583 $ 494,585 $ 694,168 $ — $ 692,879 $ 692,879
Total unsecured borrowings 199,583 494,585 694,168 — 692,879 692,879
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate — 3,698,662 3,698,662 — 3,261,233 3,261,233
Variable-rate — 1,026,501 1,026,501 — 1,235,105 1,235,105
Total Private Education Loan term securitizations — 4,725,163 4,725,163 — 4,496,338 4,496,338
Secured Borrowing Facility — — — — — —
Total secured borrowings — 4,725,163 4,725,163 — 4,496,338 4,496,338
Total $ 199,583 $ 5,219,748 $ 5,419,331 $ — $ 5,189,217 $ 5,189,217

~~Short-term borrowings~~

On July 30, 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 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 May 17, 2022. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 2023 (or earlier, if certain material adverse events occur). At both September 30, 2021 and December 31, 2020, there were no secured borrowings outstanding under the Secured Borrowing Facility.


	March 31, 2022						December 31, 2021
(Dollars in thousands)	Short-Term		Long-Term		Total		Short-Term		Long-Term		Total
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 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 ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the value of our pledged collateral at the FRB totaled ~~$2.7~~$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 ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 or in the year ended December 31, ~~2020.~~2021.

94SLM 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 ~~September 30, 2021,~~March 31, 2022, we had ~~$2.0 billion~~$562 million of outstanding contractual loan commitments that we expect to fund during the remainder of the 2021/2022 academic year. At ~~September 30, 2021,~~March 31, 2022, we had a ~~$99~~$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 ~~2020~~2021 Form 10-K and Note 6,5, “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 ~~2020~~2021 Form 10-K. ~~There were no significant changes to our critical accounting policies during~~During the three months ended ~~September 30, 2021.~~March 31, 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.

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".

9572 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. 1-month LIBOR and other rates are shocked in parallel for 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. On April 1, 2021, we began offering variable-rate Private Education Loans based on the 30-day average SOFR, replacing 1-month ~~LIBOR.~~LIBOR for 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 those 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 ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ 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 ~~September 30, 2021,~~March 31, 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 current low rate environment. The EAR results for ~~September 30, 2021~~March 31, 2022 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. This position has ~~increased~~shifted slightly negative but demonstrates a very balanced position. The EVE metrics are very similar to results from one year ago, but is still well within our risk tolerances. Similarly, the EVE metrics have changed from one year ago, due to a higher level of fixed-rate liabilities relative to fixed-rate assets, partially offset by a negative valuation in the base market value of equity in response to higher discount rates than the year-ago period. In terms of the risk profile in place at September 30, 2021, long-term rate sensitivity has decreased since one year ago.

September 30,

2022

2021

2020

+300
Basis Points

+100
Basis Points

-100
Basis Points

+300
Basis Points

+100
Basis Points

-100
Basis Points

As of March 31,

+300
Basis Points

+100
Basis Points

-100
Basis Points

+300
Basis Points

+100
Basis Points

-100
Basis Points

EAR - Shock

+2.6%

+1.0%

N/A

-0.4%

-0.0%

N/A

EAR - Shock

-0.11%

0.0%

N/A

+4.0%

+1.4%

N/A

EAR - Ramp

+1.8%

+0.7%

N/A

-0.0%

+0.1%

N/A

EAR - Ramp

-0.26%

-0.1%

N/A

+3.9%

+1.4%

N/A

EVE

-9.3%

-2.8%

N/A

-15.6%

-5.2%

N/A

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, 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.

Asset and Liability Funding Gap

The table below presents our assets and liabilities (funding) arranged by underlying indices as of ~~September 30, 2021.~~March 31, 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
Fed Funds Effective Rate daily/weekly/monthly $ — $ 518.2 $ (518.2)
SOFR monthly 878.0 175.7 702.3
3-month Treasury bill weekly 105.7 — 105.7
Prime monthly 18.8 — 18.8
3-month LIBOR quarterly — 251.1 (251.1)
1-month LIBOR monthly 10,592.9 7,760.6 2,832.3
1-month LIBOR daily 600.0 527.7 72.3
Non-Discrete reset(2)
daily/weekly 2,930.0 4,107.9 (1,177.9)
Fixed-Rate(3)
13,665.7 15,449.9 (1,784.2)
Total $ 28,791.1 $ 28,791.1 $ —


As of March 31, 2022 (dollars in millions) Index	Frequency of Variable Resets	Assets		Funding (1)		Funding Gap
Fed Funds Effective Rate	daily/weekly/monthly	$	—	$	691.9	$	(691.9)
SOFR Rate	monthly	1,867.8		1,255.3		612.5
3-month Treasury bill	weekly	103.7		—		103.7
Prime	monthly	28.5		—		28.5
3-month LIBOR	quarterly	—		251.1		(251.1)
1-month LIBOR	monthly	9,244.7		7,182.6		2,062.1
1-month LIBOR	daily	578.6		—		578.6
Non-Discrete reset(2)	daily/weekly	3,489.4		4,343.2		(853.8)
Fixed-Rate(3)		13,739.1		15,327.7		(1,588.6)
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 ~~$1.9~~$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.

74 SLM CORPORATION

Weighted Average Life

The following table reflects the weighted average lives of our earning assets and liabilities at ~~September 30, 2021.~~

March 31, 2022.


As of March 31, 2022 (averages in years)			Weighted
			Average
~~(Averages in Years)~~			Life
Earning assets
Education loans			~~4.65~~4.83

Cash and investments			~~1.40~~1.62
Total earning assets			~~4.01~~4.15

Deposits
Short-term deposits			~~0.60~~0.98
Long-term deposits			2.63
Total deposits			~~1.08~~1.33

Borrowings
~~Short-term borrowings~~			~~0.51~~
Long-term borrowings			~~3.58~~3.55
Total borrowings			~~3.46~~3.55

98SLM 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 ~~September 30, 2021.~~March 31, 2022. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of ~~September 30, 2021,~~March 31, 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 ~~September 30, 2021~~March 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

9976 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 ~~2020~~2021 Form 10-K.

~~100~~

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 ~~2020~~2021 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 ~~September 30, 2021.~~March 31, 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:
July 1 - July 31, 2021 3,531 $ 19.85 3,531 $ 225,000
August 1 - August 31, 2021 4,636 $ 18.74 4,521 $ 141,000
September 1 - September 30, 2021 4,967 $ 17.98 4,967 $ 51,000
Total third-quarter 2021 13,134 $ 18.75 13,019


(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, 2022	1,190	$	18.90	633	$	1,276,000
February 1 - February 28, 2022	2,374	$	19.78	2,220	$	1,232,000
March 1 - March 31, 2022	6,904	$	17.94	6,680	$	1,113,000
Total first-quarter 2022	10,468	$	18.46	9,533

~~_________~~

(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 ~~2021~~2022, 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. ~~In October 2021, our Board~~As of Directors approved a $250 million increase in the amount of common stock that may be repurchased under our 2021 Share Repurchase Program, which expires on January 26, 2023. This is in addition to the $51 million of capacityMarch 31, 2022, we had $1.1 billion remaining under the ~~2021~~2022 Share Repurchase ~~Program at September 30, 2021.~~Program.

(3) In the ~~third~~first quarter of ~~2021,~~2022, we repurchased ~~13.0~~9.5 million shares under our 10b5-1 trading 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 ~~September 30, 2021~~March 31, 2022 was ~~$17.60.~~

$18.36.

Item 3. Defaults Upon Senior Securities

Nothing to report.

Item 4. Mine Safety Disclosures

Not applicable.

~~101~~

Item 5. Other Information

Nothing to report.

SLM CORPORATION 77

Item 6. Exhibits

The following exhibits are furnished or filed, as applicable:


10.1			Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Restricted Stock Unit Term Sheet.

10.2			Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Performance Stock Unit Term Sheet.

31.1			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			XBRL Taxonomy Extension Schema Document.

101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF			XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB			XBRL Taxonomy Extension Label Linkbase Document.

101.PRE			XBRL Taxonomy Extension Presentation Linkbase Document.

104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

~~102~~78 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: ~~October 20, 2021~~April 27, 2022

~~103~~SLM CORPORATION 79


Common stock repurchased	(1,276,681)		(558,167)
Total net cash used in financing activities	(2,803,252)		(1,611,010)
Net decrease in cash, cash equivalents and restricted cash	(1,716,484)		(1,207,267)
Cash, cash equivalents and restricted cash at beginning of period	4,609,709		5,720,760
Cash, cash equivalents and restricted cash at end of period	$	2,893,225	$	4,513,493
Cash disbursements made for:
Interest	$	261,205	$	402,151
Income taxes paid	$	237,882	$	248,121
Income taxes refunded	$	(7,610)	$	(4,024)
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents	$	2,717,752	$	4,351,045
Restricted cash	175,473		162,448
Total cash, cash equivalents and restricted cash	$	2,893,225	$	4,513,493


	Allowance for Credit Losses
	Three Months Ended September 30, 2020
	FFELP Loans			Private Education Loans			Personal Loans			Credit Cards			Total
Allowance for Credit Losses
Beginning balance	$	4,385		$	1,760,559		$	163,337		$	1,042		$	1,929,323


Transfer from unfunded commitment liability(1)	—			100,470			—			—			100,470
Provisions:
Provision for current period	67			(81,710)			(8,762)			391			(90,014)
Loan sale reduction to provision	—			—			(42,916)			—			(42,916)

Total provisions(2)	67			(81,710)			(51,678)			391			(132,930)
Net charge-offs:
Charge-offs	(89)			(55,298)			(5,231)			(48)			(60,666)
Recoveries	—			4,790			2,106			—			6,896
Net charge-offs	(89)			(50,508)			(3,125)			(48)			(53,770)
Loan sales	—			—			(108,534)			—			(108,534)
Ending Balance	$	4,363		$	1,728,811		$	—		$	1,385		$	1,734,559
Allowance:
Ending balance: individually evaluated for impairment	$	—		$	138,663		$	—		$	—		$	138,663
Ending balance: collectively evaluated for impairment	$	4,363		$	1,590,148		$	—		$	1,385		$	1,595,896
Loans:
Ending balance: individually evaluated for impairment	$	—		$	1,495,161		$	—		$	—		$	1,495,161
Ending balance: collectively evaluated for impairment	$	745,556		$	21,119,166		$	—		$	11,540		$	21,876,262
Net charge-offs as a percentage of average loans in repayment (annualized)(3)	0.07		%	1.33		%	—		%	1.73		%
Allowance as a percentage of the ending total loan balance	0.59		%	7.64		%	—		%	12.00		%
Allowance as a percentage of the ending loans in repayment(3)	0.77		%	10.91		%	—		%	12.00		%
Allowance coverage of net charge-offs (annualized)	12.26			8.56			—			7.21
Ending total loans, gross	$	745,556		$	22,614,327		$	—		$	11,540
Average loans in repayment(3)	$	510,809		$	15,182,703		$	—		$	11,103
Ending loans in repayment(3)	$	564,442		$	15,853,309		$	—		$	11,540


	Recorded Investment		Unpaid Principal Balance		Allowance

September 30, 2021
TDR Loans	$	1,185,820	$	1,148,282	$	69,626

December 31, 2020
TDR Loans	$	1,312,805	$	1,274,590	$	104,265


	Three Months Ended September 30, 2020
(Dollars in thousands)	Private Education Loans(1)		FFELP Loans		Personal Loans		Credit Cards		Total Loans Held for Investment, net(1)
Beginning balance	$	19,792,515	$	752,021	$	609,051	$	10,344	$	21,163,931
Acquisitions and originations:
Fixed-rate	882,782		—		—		—		882,782
Variable-rate	1,019,613		—		—		9,059		1,028,672
Total acquisitions and originations	1,902,395		—		—		9,059		1,911,454
Capitalized interest and deferred origination cost premium amortization	107,189		7,625		(50)		(252)		114,512
Sales	—		—		(588,285)		—		(588,285)

Loan consolidations to third-parties(1)	(296,322)		(4,952)		—		—		(301,274)

Allowance	31,747		22		54,803		(343)		86,229
Repayments and other(1)	(581,602)		(11,496)		(75,519)		(8,179)		(676,796)
Ending balance	$	20,955,922	$	743,220	$	—	$	10,629	$	21,709,771


	Nine Months Ended September 30, 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-rate	2,570,579		—		—		2,570,579
Variable-rate	2,134,149		—		39,484		2,173,633
Total acquisitions and originations	4,704,728		—		39,484		4,744,212
Capitalized interest and deferred origination cost premium amortization	297,149		21,022		(251)		317,920
Sales	(150,928)		—		—		(150,928)
Transfer from loans held for sale	25,040		—		—		25,040
Loan consolidations to third-parties	(1,135,141)		(20,320)		—		(1,155,461)

Allowance	146,384		171		(239)		146,316
Repayments and other	(1,762,239)		(32,726)		(33,750)		(1,828,715)
Ending balance	$	20,561,961	$	703,355	$	16,211	$	21,281,527


	Nine Months Ended September 30, 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, 2020	21,835,685		780,964		904,460		3,630		23,524,739
Acquisitions and originations:
Fixed-rate	2,606,056		—		41		—		2,606,097
Variable-rate	2,103,322		—		—		26,885		2,130,207
Total acquisitions and originations	4,709,378		—		41		26,885		4,736,304
Capitalized interest and deferred origination cost premium amortization	334,355		19,196		(253)		(567)		352,731
Sales	(2,925,478)		—		(588,285)		—		(3,513,763)
Loan consolidations to third-parties(1)	(988,299)		(16,659)		—		—		(1,004,958)
Allowance	(293,682)		122		36,526		(1,095)		(258,129)
Repayments and other(1)	(1,716,037)		(40,403)		(352,489)		(18,224)		(2,127,153)
Ending balance	$	20,955,922	$	743,220	$	—	$	10,629	$	21,709,771


	Transition Amounts		Adjustments for the Year Ended		Adjustments for the Nine Months Ended		Adjusted Transition Amounts
(Dollars in thousands)	January 1, 2020		December 31, 2020		September 30, 2021		September 30, 2021

Retained earnings	$	952,639	$	(57,859)	$	(39,308)	$	855,472
Allowance for credit losses	1,143,053		(55,811)		(36,579)		1,050,663
Liability for unfunded commitments	115,758		(2,048)		(2,729)		110,981
Deferred tax asset	306,171		—		—		306,171


(Dollars in millions) Index	Frequency of Variable Resets	Assets		Funding (1)		Funding Gap
Fed Funds Effective Rate	daily/weekly/monthly	$	—	$	518.2	$	(518.2)
SOFR	monthly	878.0		175.7		702.3
3-month Treasury bill	weekly	105.7		—		105.7
Prime	monthly	18.8		—		18.8
3-month LIBOR	quarterly	—		251.1		(251.1)
1-month LIBOR	monthly	10,592.9		7,760.6		2,832.3
1-month LIBOR	daily	600.0		527.7		72.3
Non-Discrete reset(2)	daily/weekly	2,930.0		4,107.9		(1,177.9)
Fixed-Rate(3)		13,665.7		15,449.9		(1,784.2)
Total		$	28,791.1	$	28,791.1	$	—


(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:
July 1 - July 31, 2021	3,531	$	19.85	3,531	$	225,000
August 1 - August 31, 2021	4,636	$	18.74	4,521	$	141,000
September 1 - September 30, 2021	4,967	$	17.98	4,967	$	51,000
Total third-quarter 2021	13,134	$	18.75	13,019