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, 20212022
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-13251
 
SLM Corporation
(Exact name of registrant as specified in its charter)
 
Delaware52-2013874
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
300 Continental DriveNewark,Delaware19713
(Address of principal executive offices)(Zip Code)
(302) 451-0200
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $.20 per shareSLMThe NASDAQ Global Select Market
Floating Rate Non-Cumulative Preferred Stock, Series B, par value $.20 per shareSLMBPThe NASDAQ Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ☑    No  ¨☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  þ☑    No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer☑ Accelerated filer☐
Non-accelerated filer☐(Do not check if a smaller reporting company)Smaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No þ☑ 
As of September 30, 2021,2022, there were 293,177,407250,196,830 shares of common stock outstanding.





SLM CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS
INDEX

Part I. Financial Information
Item 1.
3
Item 1.
12
Item 2.
59
Item 3.
96
Item 4.
99
PART II. Other Information
Item 1.
100
Item 1A.
101
Item 2.
101
Item 3.
101
Item 4.
101
Item 5.
102
Item 6.
102


2

SLM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
September 30,December 31,
20212020
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 investments140,725 80,794 
Total investments2,682,889 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 cash175,473 154,417 
Other interest-earning assets11,890 42,874 
Accrued interest receivable1,403,146 1,387,305 
Premises and equipment, net153,334 154,670 
Income taxes receivable, net320,136 374,706 
Tax indemnification receivable12,486 18,492 
Other assets32,506 19,533 
Total assets$28,791,139 $30,770,423 
Liabilities
Deposits$20,890,860 $22,666,039 
Short-term borrowings199,583 — 
Long-term borrowings5,219,748 5,189,217 
Other liabilities349,687 352,332 
Total liabilities26,659,878 28,207,588 
Commitments and contingencies00
Equity
Preferred stock, par value $0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $100 per share251,070 251,070 
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 432.0 million and 456.7 million shares issued, respectively86,403 91,346 
Additional paid-in capital1,068,059 1,331,247 
Accumulated other comprehensive loss (net of tax benefit of ($6,288) and ($10,908), respectively)(19,703)(34,200)
Retained earnings2,543,411 1,722,365 
Total SLM Corporation stockholders’ equity before treasury stock3,929,240 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 equity2,131,261 2,562,835 
Total liabilities and equity$28,791,139 $30,770,423 

See accompanying notes to consolidated financial statements.
3

SLM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

Three Months EndedNine Months Ended
 September 30,September 30,
 2021202020212020
Interest income:
Loans$442,576 $477,833 $1,304,479 $1,513,279 
Investments3,366 3,327 9,262 9,086 
Cash and cash equivalents1,613 1,218 4,662 19,740 
Total interest income447,555 482,378 1,318,403 1,542,105 
Interest expense:
Deposits51,629 83,500 175,483 318,858 
Interest expense on short-term borrowings5,458 3,424 14,360 11,041 
Interest expense on long-term borrowings32,950 30,887 101,144 98,750 
Total interest expense90,037 117,811 290,987 428,649 
Net interest income357,518 364,567 1,027,416 1,113,456 
Less: provisions for credit losses138,442 (3,640)(17,648)409,505 
Net interest income after provisions for credit losses219,076 368,207 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, net44 (15)161 49,408 
Other income13,879 9,646 76,747 42,547 
Total non-interest income13,913 9,627 479,688 330,517 
Non-interest expenses:
Operating expenses:
Compensation and benefits66,229 62,743 200,426 219,413 
FDIC assessment fees6,521 1,455 17,634 17,508 
Other operating expenses67,899 63,292 175,098 179,424 
Total operating expenses140,649 127,490 393,158 416,345 
Restructuring expenses108 24,127 1,255 24,127 
Total non-interest expenses140,757 151,617 394,413 440,472 
Income before income tax expense92,232 226,217 1,130,339 593,996 
Income tax expense19,392 55,189 276,091 146,006 
Net income72,840 171,028 854,248 447,990 
Preferred stock dividends1,166 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 outstanding299,890 375,094 324,148 386,587 
Diluted earnings per common share attributable to SLM Corporation$0.24 $0.45 $2.59 $1.13 
Average common and common equivalent shares outstanding304,511 377,918 329,064 389,391 
Declared dividends per common share attributable to SLM Corporation$0.03 $— $0.09 $0.09 

See accompanying notes to consolidated financial statements.
4

SLM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Three Months EndedNine Months Ended
 September 30,September 30,
 2021202020212020
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 hedges5,095 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) benefit1,937 5,130 14,497 (26,574)
Total comprehensive income$74,777 $176,158 $868,745 $421,416 

















See accompanying notes to consolidated financial statements.
5


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

Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at June 30, 20204,000,000 456,585,223 (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, 20204,000,000 456,590,373 (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.
6

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


Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at June 30, 20212,510,696 431,508,098 (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, 20212,510,696 432,012,281 (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.



7

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

Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20194,000,000 453,599,926 (32,506,562)421,093,364 $400,000 $90,720 $1,307,630 $(12,367)$1,850,512 $(324,659)$3,311,836 
Cumulative adjustment for the adoption of ASU No. 2016-13 (CECL)
— — — — — — — — (952,639)— (952,639)
Balance at January 1, 20204,000,000 453,599,926 (32,506,562)421,093,364 400,000 90,720 1,307,630 (12,367)897,873 (324,659)2,359,197 
Net income— — — — — — — — 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, 20204,000,000 456,590,373 (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.

8


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

Common Stock Shares
Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20202,510,696 456,729,251 (81,441,252)375,287,999 $251,070 $91,346 $1,331,247 $(34,200)$1,722,365 $(798,993)$2,562,835 
Net income— — — — — — — — 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, 20212,510,696 432,012,281 (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.

9

SLM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 Nine Months Ended
September 30,
 20212020
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 expense276,091 146,006 
Amortization of brokered deposit placement fee11,932 14,881 
Amortization of Secured Borrowing Facility upfront fee1,845 2,159 
Amortization of deferred loan origination costs and loan premium/(discounts), net11,851 20,127 
Net amortization of discount on investments5,902 4,255 
Unrealized gain on investments— (2,100)
Reduction (increase) in tax indemnification receivable6,006 (698)
Depreciation of premises and equipment11,445 11,386 
Stock-based compensation expense24,254 30,253 
Unrealized (gains) losses on derivatives and hedging activities, net21,434 (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 assets30,983 (1,244)
Increase in other assets(110,841)(46,194)
Decrease in income taxes payable, net(230,072)(243,851)
Increase in accrued interest payable4,153 38 
Decrease in Upromise member accounts due to sale— (193,840)
Increase in other liabilities860 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 investment3,436,075 3,875,984 
Proceeds from claim payments14,653 22,563 
Net decrease in loans held for investment2,835,850 2,954,660 
Purchases of available-for-sale securities(1,159,667)(1,897,511)
Proceeds from sales and maturities of available-for-sale securities799,193 376,580 
Proceeds from sale of Upromise subsidiary, net— 16,922 
Total net cash provided by investing activities1,181,892 612,894 
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 - issued1,053,633 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.
3
Item 1.
12
Item 2.
53
Item 3.
83
Item 4.
86
PART II. Other Information
Item 1.
87
Item 1A.
87
Item 2.
87
Item 3.
87
Item 4.
87
Item 5.
87
Item 6.
88


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 period4,609,709 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 cash175,473 162,448 
Total cash, cash equivalents and restricted cash$2,893,225 $4,513,493 


CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30,December 31,
(Dollars in thousands, except share and per share amounts)20222021
Assets
Cash and cash equivalents$4,846,754 $4,334,603 
Investments:
Trading investments at fair value (cost of $46,051 and $29,049, respectively)52,450 37,465 
Available-for-sale investments at fair value (cost of $2,643,540 and $2,535,568, respectively)2,427,540 2,517,956 
Other investments136,803 140,037 
Total investments2,616,793 2,695,458 
Loans held for investment (net of allowance for losses of $1,194,238 and $1,165,335, respectively)19,622,302 20,341,283 
Loans held for sale28,880 — 
Restricted cash177,917 210,741 
Other interest-earning assets11,025 9,655 
Accrued interest receivable1,223,647 1,205,667 
Premises and equipment, net144,031 150,516 
Goodwill and acquired intangible assets, net120,570 — 
Income taxes receivable, net305,836 239,578 
Tax indemnification receivable8,392 8,047 
Other assets32,941 26,351 
Total assets$29,139,088 $29,221,899 
Liabilities
Deposits$21,276,748 $20,828,124 
Long-term borrowings5,522,311 5,930,990 
Other liabilities357,801 313,074 
Total liabilities27,156,860 27,072,188 
Commitments and contingencies
Equity
Preferred stock, par value $0.20 per share, 20 million shares authorized:
Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $100 per share251,070 251,070 
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 435.1 million and 432.0 million shares issued, respectively87,022 86,403 
Additional paid-in capital1,101,761 1,074,384 
Accumulated other comprehensive loss (net of tax benefit of ($29,809) and ($5,707), respectively)(93,477)(17,897)
Retained earnings3,270,896 2,817,134 
Total SLM Corporation stockholders’ equity before treasury stock4,617,272 4,211,094 
Less: Common stock held in treasury at cost: 184.9 million and 153.1 million shares, respectively(2,635,044)(2,061,383)
Total equity1,982,228 2,149,711 
Total liabilities and equity$29,139,088 $29,221,899 






See accompanying notes to consolidated financial statements.
SLM CORPORATION 3



CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(Dollars in thousands, except per share amounts)		Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
2022202120222021
Interest income:
Loans$483,327 $442,576 $1,387,411 $1,304,479 
Investments10,260 3,366 24,252 9,262 
Cash and cash equivalents26,324 1,613 36,317 4,662 
Total interest income519,911 447,555 1,447,980 1,318,403 
Interest expense:
Deposits105,468 51,629 215,473 175,483 
Interest expense on short-term borrowings3,054 5,458 8,902 14,360 
Interest expense on long-term borrowings41,879 32,950 116,255 101,144 
Total interest expense150,401 90,037 340,630 290,987 
Net interest income369,510 357,518 1,107,350 1,027,416 
Less: provisions for credit losses207,598 138,442 336,193 (17,648)
Net interest income after provisions for credit losses161,912 219,076 771,157 1,045,064 
Non-interest income:
Gains (losses) on sales of loans, net74,978 (10)324,856 402,780 
Gains (losses) on derivatives and hedging activities, net— 44 (5)161 
Other income20,125 13,879 50,430 76,747 
Total non-interest income95,103 13,913 375,281 479,688 
Non-interest expenses:
Operating expenses:
Compensation and benefits65,003 66,229 202,995 200,426 
FDIC assessment fees4,592 6,521 11,501 17,634 
Other operating expenses80,369 67,899 199,204 175,098 
Total operating expenses149,964 140,649 413,700 393,158 
Acquired intangible assets amortization expense2,328 — 5,478 — 
Restructuring expenses— 108 — 1,255 
Total non-interest expenses152,292 140,757 419,178 394,413 
Income before income tax expense104,723 92,232 727,260 1,130,339 
Income tax expense29,551 19,392 181,203 276,091 
Net income75,172 72,840 546,057 854,248 
Preferred stock dividends2,531 1,166 5,563 3,559 
Net income attributable to SLM Corporation common stock$72,641 $71,674 $540,494 $850,689 
Basic earnings per common share$0.29 $0.24 $2.05 $2.62 
Average common shares outstanding251,266 299,890 263,098 324,148 
Diluted earnings per common share$0.29 $0.24 $2.03 $2.59 
Average common and common equivalent shares outstanding253,716 304,511 266,065 329,064 
Declared dividends per common share$0.11 $0.03 $0.33 $0.09 





See accompanying notes to consolidated financial statements.
4 SLM CORPORATION



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(Dollars in thousands)		Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
2022202120222021
Net income$75,172 $72,840 $546,057 $854,248 
Other comprehensive income (loss):
Unrealized losses on investments(68,701)(2,539)(197,930)(10,256)
Unrealized gains on cash flow hedges29,823 5,095 98,248 29,374 
Total unrealized gains (losses)(38,878)2,556 (99,682)19,118 
Income tax (expense) benefit9,400 (619)24,102 (4,621)
Other comprehensive income (loss), net of tax (expense) benefit(29,478)1,937 (75,580)14,497 
Total comprehensive income$45,694 $74,777 $470,477 $868,745 






















See accompanying notes to consolidated financial statements.
SLM CORPORATION 5




CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at June 30, 20212,510,696 431,508,098 (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, 20212,510,696 432,012,281 (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.
6 SLM CORPORATION



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at June 30, 20222,510,696 435,102,082 (183,717,942)251,384,140 $251,070 $87,021 $1,095,296 $(63,999)$3,225,610 $(2,618,188)$1,976,810 
Net income— — — — — — — — 75,172 — 75,172 
Other comprehensive loss, net of tax— — — — — — — (29,478)— — (29,478)
Total comprehensive income— — — — — — — — — — 45,694 
Cash dividends declared:
Common stock ($0.11 per share)— — — — — — — — (27,643)— (27,643)
Preferred Stock, Series B ($1.01 per share)— — — — — — — — (2,531)— (2,531)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — (539)— (1)— (540)
Issuance of common shares— 4,682 — 4,682 — 1 539 — — — 540 
Stock-based compensation expense— — — — — — 6,465 — 289 — 6,754 
Common stock repurchased— — (1,191,544)(1,191,544)— — — — — (16,849)(16,849)
Shares repurchased related to employee stock-based compensation plans— — (448)(448)— — — — — (7)(7)
Balance at September 30, 20222,510,696 435,106,764 (184,909,934)250,196,830 $251,070 $87,022 $1,101,761 $(93,477)$3,270,896 $(2,635,044)$1,982,228 

















See accompanying notes to consolidated financial statements.

SLM CORPORATION 7



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Income (Loss)		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20202,510,696 456,729,251 (81,441,252)375,287,999 $251,070 $91,346 $1,331,247 $(34,200)$1,722,365 $(798,993)$2,562,835 
Net income— — — — — — — — 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, 20212,510,696 432,012,281 (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.

8 SLM CORPORATION



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)
Common Stock Shares
(In thousands, except share and per share amounts)Preferred Stock SharesIssuedTreasuryOutstandingPreferred StockCommon StockAdditional Paid-In CapitalAccumulated
Other
Comprehensive
Loss		Retained EarningsTreasury StockTotal Equity
Balance at December 31, 20212,510,696 432,013,372 (153,056,639)278,956,733 $251,070 $86,403 $1,074,384 $(17,897)$2,817,134 $(2,061,383)$2,149,711 
Net income— — — — — — — — 546,057 — 546,057 
Other comprehensive loss, net of tax— — — — — — — (75,580)— — (75,580)
Total comprehensive income— — — — — — — — — — 470,477 
Cash dividends declared:
Common stock ($0.33 per share)— — — — — — — — (86,219)— (86,219)
Preferred Stock, Series B ($2.22 per share)— — — — — — — — (5,563)— (5,563)
Dividend equivalent units related to employee stock-based compensation plans— — — — — — 245 — (802)— (557)
Issuance of common shares— 3,093,392 3,093,392 — 619 371 — — — 990 
Stock-based compensation expense— — — — — — 26,761 — 289 — 27,050 
Common stock repurchased— — (30,721,944)(30,721,944)— — — — — (552,887)(552,887)
Shares repurchased related to employee stock-based compensation plans— — (1,131,351)(1,131,351)— — — — — (20,774)(20,774)
Balance at September 30, 20222,510,696 435,106,764 (184,909,934)250,196,830 $251,070 $87,022 $1,101,761 $(93,477)$3,270,896 $(2,635,044)$1,982,228 

















See accompanying notes to consolidated financial statements.
SLM CORPORATION 9


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended 
 September 30,
(Dollars in thousands)20222021
Operating activities
Net income$546,057 $854,248 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Provisions for credit losses336,193 (17,648)
Income tax expense181,203 276,091 
Amortization of brokered deposit placement fee9,757 11,932 
Amortization of Secured Borrowing Facility upfront fee1,930 1,845 
Amortization of deferred loan origination costs and loan premium/(discounts), net11,619 11,851 
Net amortization of discount on investments802 5,902 
(Increase) reduction in tax indemnification receivable(345)6,006 
Depreciation of premises and equipment12,840 11,445 
Acquired intangible assets amortization expense5,478 — 
Stock-based compensation expense27,152 24,254 
Unrealized (gains) losses on derivatives and hedging activities, net247 21,434 
Gains on sales of loans, net(324,856)(402,780)
Acquisition transaction costs, net2,602 — 
Other adjustments to net income, net13,174 (29,229)
Changes in operating assets and liabilities:
Increase in accrued interest receivable(580,704)(556,143)
Increase in trading investments(5,064)— 
Increase in non-marketable securities(2,050)(9,415)
(Increase) decrease in other interest-earning assets(1,370)30,983 
Decrease (increase) in other assets(20,725)(110,841)
Decrease in income taxes payable, net(217,909)(230,072)
Increase in accrued interest payable25,307 4,153 
(Decrease) increase in other liabilities(15,471)860 
Total adjustments(540,190)(949,372)
Total net cash provided by (used in) operating activities5,867 (95,124)
Investing activities
Loans acquired and originated(5,234,895)(4,744,212)
Net proceeds from sales of loans held for investment3,460,758 3,436,075 
Proceeds from FFELP Loan claim payments22,587 14,653 
Net decrease in loans held for investment (other than loan sales)2,833,822 2,835,850 
Purchases of available-for-sale securities(753,129)(1,159,667)
Proceeds from sales and maturities of available-for-sale securities812,712 799,193 
Purchase of subsidiary, net of cash acquired(127,654)— 
Total net cash provided by investing activities1,014,201 1,181,892 
Financing activities
Brokered deposit placement fee(8,147)(11,182)
Net decrease in certificates of deposit(77,938)(1,690,990)
Net increase (decrease) in other deposits611,851 (12,172)
Issuance costs for collateralized borrowings(40)— 
Borrowings collateralized by loans in securitization trusts - issued572,640 1,053,633 
Borrowings collateralized by loans in securitization trusts - repaid(988,505)(830,026)
Issuance costs for unsecured debt offering(375)(325)
Fees paid on Secured Borrowing Facility(2,838)(2,846)
Common stock dividends paid(86,219)(29,104)
Preferred stock dividends paid(5,563)(3,559)
Common stock repurchased(555,607)(1,276,681)
10 SLM CORPORATION

Total net cash used in financing activities(540,741)(2,803,252)
Net increase (decrease) in cash, cash equivalents and restricted cash479,327 (1,716,484)
Cash, cash equivalents and restricted cash at beginning of period4,545,344 4,609,709 
Cash, cash equivalents and restricted cash at end of period$5,024,671 $2,893,225 
Cash disbursements made for:
Interest$285,626 $261,205 
Income taxes paid$219,975 $237,882 
Income taxes refunded$(2,023)$(7,610)
Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets:
Cash and cash equivalents$4,846,754 $2,717,752 
Restricted cash177,917 175,473 
Total cash, cash equivalents and restricted cash$5,024,671 $2,893,225 



















See accompanying notes to consolidated financial statements.
SLM CORPORATION 11




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, 20212022 are not necessarily indicative of the results for the year ending December 31, 20212022 or for any other period. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 20202021 (the “2020“2021 Form 10-K”).
Consolidation
The consolidated financial statements include the accounts of the Company and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions.
We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic 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. The acquisition of the Nitro assets, including its employees and intellectual property, has expanded our digital marketing capabilities, reduced the cost to acquire customer accounts, and accelerated 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 and nine months ended September 30, 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 Notes to Consolidated Financial Statements, Note 7, “Goodwill and Acquired Intangible Assets” in this Form 10-Q for additional details.

12SLM 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 all aspects of ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption was immaterial to our consolidated financial statements. For additional information, see Notes to Consolidated Financial Statements, Note 5, "Allowance for Credit Losses," in this Form 10-Q.


SLM CORPORATION 13




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 off-balance sheet securitization transactions where we are required to retain a 5five percent vertical risk retention interest (i.e., 5five 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.
In the third quarter of 2022 we invested $5 million in a debt security classified as a trading investment and recorded the initial investment at cost. The investment will subsequently be measured at fair value with changes in market value recorded through earnings.
At September 30, 20212022 and December 31, 2020,2021, we had $37$52 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 GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:
Mortgage-backed securities$368,545 $— $2,636 $(5,408)$365,773 
Utah Housing Corporation bonds6,943 — 108 — 7,051 
U.S. government-sponsored enterprises and Treasuries1,925,622 — 1,952 (1,125)1,926,449 
Other securities204,977 — 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 GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:
Mortgage-backed securities$308,913 $— $6,095 $(134)$314,874 
Utah Housing Corporation bonds12,357 — 210 — 12,567 
U.S. government-sponsored enterprises1,596,890 — 3,395 — 1,600,285 
Other securities68,797 — 462 (351)68,908 
Total$1,986,957 $— $10,162 $(485)$1,996,634 

As of September 30, 2022
(dollars in thousands)		Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:
Mortgage-backed securities$394,753 $— $1 $(71,682)$323,072 
Utah Housing Corporation bonds3,584 — — (279)3,305 
U.S. government-sponsored enterprises and Treasuries1,928,886 — — (124,239)1,804,647 
Other securities316,317 — — (19,801)296,516 
Total$2,643,540 $— $1 $(216,001)$2,427,540 
As of December 31, 2021
(dollars in thousands)		Amortized Cost
Allowance for credit losses(1)
Gross Unrealized GainsGross Unrealized LossesEstimated Fair Value
Available-for-sale:
Mortgage-backed securities$376,313 $— $1,857 $(7,073)$371,097 
Utah Housing Corporation bonds6,943 — 18 — 6,961 
U.S. government-sponsored enterprises and Treasuries1,958,943 — 603 (11,893)1,947,653 
Other securities193,369 — 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.

1314 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
2.Investments (Continued)
The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position:
Less than 12 months12 months or moreTotal
Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value
As of September 30, 2021:

(Dollars in thousands)
(Dollars in thousands)		Less than 12 months12 months or moreTotal
Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value		Gross
Unrealized
Losses		Estimated
Fair Value
As of September 30, 2022:As of September 30, 2022:
Mortgage-backed securitiesMortgage-backed securities$(5,283)$277,142 $(125)$5,869 $(5,408)$283,011 Mortgage-backed securities$(21,060)$126,053 $(50,622)$196,946 $(71,682)$322,999 
Utah Housing Corporation bondsUtah Housing Corporation bonds— — — — — — Utah Housing Corporation bonds(279)3,305 — — (279)3,305 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries(1,125)413,177 — — (1,125)413,177 U.S. government-sponsored enterprises and Treasuries(84,320)1,430,124 (39,919)374,523 (124,239)1,804,647 
Other securitiesOther securities(353)47,401 — — (353)47,401 Other securities(15,459)264,836 (4,342)31,680 (19,801)296,516 
TotalTotal$(6,761)$737,720 $(125)$5,869 $(6,886)$743,589 Total$(121,118)$1,824,318 $(94,883)$603,149 $(216,001)$2,427,467 
As of December 31, 2020:
As of December 31, 2021:As of December 31, 2021:
Mortgage-backed securitiesMortgage-backed securities$(134)$46,011 $— $— $(134)$46,011 Mortgage-backed securities$(5,534)$261,404 $(1,540)$36,587 $(7,074)$297,991 
Utah Housing Corporation bondsUtah Housing Corporation bonds— — — — — — Utah Housing Corporation bonds— — — — — — 
U.S. government-sponsored enterprises— — — — — — 
U.S. government-sponsored enterprises and TreasuriesU.S. government-sponsored enterprises and Treasuries(11,892)1,199,367 — — (11,892)1,199,367 
Other securitiesOther securities(351)30,441 — — (351)30,441 Other securities(1,563)132,884 — — (1,563)132,884 
TotalTotal$(485)$76,452 $— $— $(485)$76,452 Total$(18,989)$1,593,655 $(1,540)$36,587 $(20,529)$1,630,242 

At September 30, 20212022 and December 31, 2020, 382021, 190 of 177191 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 net 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, 20202021 to September 30, 20212022 was driven by the current interest
14




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 5five 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 15

2.Investments (Continued)
As of September 30, 2021,2022, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments.
Year of MaturityAmortized CostEstimated Fair Value
2021$16,029 $16,045 
As of September 30, 2022
Year of Maturity
(dollars in thousands)		As of September 30, 2022
Year of Maturity
(dollars in thousands)		Amortized CostEstimated Fair Value
20222022850,772 851,858 2022$124,994 $124,744 
20232023162,641 162,906 2023162,549 157,988 
20242024448,293 447,649 2024697,586 660,951 
20252025297,572 282,163 
20262026447,886 447,991 2026548,076 484,902 
2027202798,109 93,900 
2038203874 80 203872 73 
203920391,079 1,187 2039831 810 
204220423,421 3,443 20422,742 2,347 
204320436,121 6,394 20434,834 4,285 
204420447,826 8,164 20445,597 5,047 
204520457,143 7,418 20455,699 5,002 
2046204610,898 11,170 20468,170 7,138 
2047204713,598 13,935 20478,718 7,750 
204820482,966 3,070 20482,154 2,050 
2049204924,506 25,449 204916,820 14,799 
20502050148,550 145,645 2050119,167 95,297 
20512051149,307 146,869 2051165,761 131,838 
2052205257,773 49,940 
20532053148,730 149,218 2053117,467 107,891 
2054205456,247 56,881 205492,527 85,057 
20552055106,322 103,568 
TotalTotal$2,506,087 $2,505,372 Total$2,643,540 $2,427,540 

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$627 million and $815$888 million par value of securities pledged to this borrowing facility at September 30, 20212022 and December 31, 2020,2021, respectively, as discussed further in Notes to Consolidated Financial Statements, Note 8,9, “Borrowings.”


15




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 quarterAs 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 endedboth September 30, 2021. As of September 30, 20212022 and December 31, 2020,2021, our total investment in these securities was $69 million and $26 million, respectively.million.
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$62 million at September 30, 20212022 and $54$68 million at December 31, 2020.2021. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $33$27 million at September 30, 20212022 and $19$30 million at December 31, 2020.2021.
16 SLM CORPORATION

2.Investments (Continued)
Related to these investments, we recognized tax credits and other tax benefits through tax expense of more than $1 million at September 30, 20212022 and $6$7 million at December 31, 2020.2021. Tax credits and other tax benefits are recognized as 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”At September 30, 2022, we transferred our Credit Card portfolio to mean those unsecured loans held for sale as we plan to individuals that may be usedsell our Credit Card portfolio. For additional information, see Notes to Consolidated Financial Statements, Note 4, “Loans Held for non-educational purposes. In the third quarter of 2020, we sold our entire Personal Loan portfolio.Sale.”
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, 20212022 and December 31, 2020,2021, 5347 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
16




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 of 2022, we recognized $325 million in gains from the sale of approximately $3.29 billion of our Private Education Loans, including $3.08 billion of principal and $213 million in capitalized interest, to unaffiliated third parties. In the first nine months of 2021, we recognized a $403 million gainin gains from the sale of approximately $3.19 billion of our Private Education Loans, including $2.99 billion of principal and $195 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.9, “Borrowings - Unconsolidated VIEs.”
Loans held for investment are summarized as follows:
September 30,December 31,
20212020
Private Education Loans:
Fixed-rate$10,306,885 $8,950,216 
Variable-rate11,395,952 10,779,121 
Total Private Education Loans, gross21,702,837 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, net20,561,961 18,436,968 
FFELP Loans705,691 737,593 
Deferred origination costs and unamortized premium/(discount)1,870 1,993 
Allowance for credit losses(4,206)(4,378)
Total FFELP Loans, net703,355 735,208 
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, net16,211 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.
SLM CORPORATION 17




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:
September 30,December 31,
(Dollars in thousands)20222021
Private Education Loans:
Fixed-rate$10,693,123 $9,920,547 
Variable-rate9,411,340 10,796,316 
Total Private Education Loans, gross20,104,463 20,716,863 
Deferred origination costs and unamortized premium/(discount)66,816 67,488 
Allowance for credit losses(1,190,427)(1,158,977)
Total Private Education Loans, net18,980,852 19,625,374 
FFELP Loans643,614 695,216 
Deferred origination costs and unamortized premium/(discount)1,647 1,815 
Allowance for credit losses(3,811)(4,077)
Total FFELP Loans, net641,450 692,954 
Credit Cards (fixed-rate)— 25,014 
Deferred origination costs and unamortized premium/(discount)— 222 
Allowance for credit losses— (2,281)
Total Credit Cards, net— 22,955 
Loans held for investment, net$19,622,302 $20,341,283 
The estimated weighted average life of education loans in our portfolio was approximately 5.0 years and 4.7 years at September 30, 2022 and December 31, 2021, respectively.

The average balance (net of unamortized premium/discount) and the respective weighted average interest rates of loans held for investment in our portfolio are summarized as follows:
Three Months Ended
September 30,
20212020
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$20,944,581 8.26 %$21,937,758 8.24 %
FFELP Loans713,517 3.45 750,925 3.46 
Personal Loans— — 527,204 12.86 
Credit Cards14,894 6.95 11,086 (6.58)
Total portfolio$21,672,992 $23,226,973 


20222021
Three Months Ended September 30,
(dollars in thousands)		Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$19,958,763 9.43 %$20,944,581 8.26 %
FFELP Loans655,724 5.03 713,517 3.45 
Credit Cards— — 14,894 6.95 
Total portfolio$20,614,487 $21,672,992 

Nine Months Ended
September 30,
20212020
Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$20,860,973 8.23 %$22,342,353 8.48 %
FFELP Loans723,656 3.43 762,863 3.86 
Personal Loans— — 778,153 12.43 
Credit Cards12,821 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.
18








18 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
19

20222021
Nine Months Ended September 30,
(dollars in thousands)		Average BalanceWeighted Average Interest RateAverage BalanceWeighted Average Interest Rate
Private Education Loans$20,685,372 8.82 %$20,860,973 8.23 %
FFELP Loans673,654 4.18 723,656 3.43 
Credit Cards— — 12,821 4.97 
Total portfolio$21,359,026 $21,597,450 



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.

20




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$29 million in loans held for sale at September 30, 20212022 and no loans held for sale at December 31, 2020, respectively.2021. The balance at September 30, 2022 was comprised of our Credit Card loan portfolio. At December 31, 2020,September 30, 2022, we reversed $206$2.4 million through the provisions for credit losses for the allowance related to thosethese loans, held for sale, when the loans were transferred from held for investment to held for sale.
During At September 30, 2022, we wrote down this loan portfolio to its estimated fair value through a charge-off to the first quarterallowance for credit losses 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.”$1.5 million.


21




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 20202021 Form 10-K for a more detailed discussion.

SLM CORPORATION 19

5.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 CardsTotal
Three Months Ended September 30, 2022
(dollars in thousands)		Three Months Ended September 30, 2022
(dollars in thousands)		FFELP
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit LossesAllowance for Credit LossesAllowance for Credit Losses
Beginning balanceBeginning balance$4,262 $1,154,540 $1,442 $1,160,244 Beginning balance$3,929 $1,074,744 $2,393 $1,081,066 
Transfer from unfunded commitment liability(1)
Transfer from unfunded commitment liability(1)
— 110,613 — 110,613 
Transfer from unfunded commitment liability(1)
— 168,377 — 168,377 
Provisions:Provisions:Provisions:
Provision for current periodProvision for current period50 (6,995)415 (6,530)Provision for current period29 95,482 2,039 97,550 
Loan sale reduction to provisionLoan sale reduction to provision— — — — Loan sale reduction to provision— (50,226)— (50,226)
Loans transferred to held-for-saleLoans transferred to held-for-sale— — (2,372)(2,372)
Total provisions(2)
Total provisions(2)
50 (6,995)415 (6,530)
Total provisions(2)
29 45,256 (333)44,952 
Net charge-offs:Net charge-offs:Net charge-offs:
Charge-offsCharge-offs(106)(56,000)(119)(56,225)Charge-offs(147)(109,350)(2,062)(111,559)
RecoveriesRecoveries— 7,302 3 7,305 Recoveries— 11,400 2 11,402 
Net charge-offsNet charge-offs(106)(48,698)(116)(48,920)Net charge-offs(147)(97,950)(2,060)(100,157)
Ending BalanceEnding Balance$4,206 $1,209,460 $1,741 $1,215,407 Ending Balance$3,811 $1,190,427 $— $1,194,238 
Allowance:Allowance:Allowance:
Ending balance: individually evaluated for impairmentEnding balance: individually evaluated for impairment$— $69,626 $— $69,626 Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairmentEnding balance: collectively evaluated for impairment$4,206 $1,139,834 $1,741 $1,145,781 Ending balance: collectively evaluated for impairment$3,811 $1,190,427 $— $1,194,238 
Loans:Loans:Loans:
Ending balance: individually evaluated for impairmentEnding balance: individually evaluated for impairment$— $1,148,282 $— $1,148,282 Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairmentEnding balance: collectively evaluated for impairment$705,691 $20,554,555 $17,766 $21,278,012 Ending balance: collectively evaluated for impairment$643,614 $20,104,463 $— $20,748,077 
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)
0.11 %2.67 %— %
Allowance as a percentage of the ending total loan balanceAllowance as a percentage of the ending total loan balance0.60 %5.57 %9.80 %Allowance as a percentage of the ending total loan balance0.59 %5.92 %— %
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)
0.78 %8.18 %— %
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)6.48 3.04 — 
Ending total loans, grossEnding total loans, gross$705,691 $21,702,837 $17,766 Ending total loans, gross$643,614 $20,104,463 $— 
Average loans in repayment(3)
Average loans in repayment(3)
$540,018 $15,108,802 $15,098 
Average loans in repayment(3)
$518,226 $14,674,437 $— 
Ending loans in repayment(3)
Ending loans in repayment(3)
$530,476 $15,490,132 $17,766 
Ending loans in repayment(3)
$489,920 $14,546,556 $— 
____________
(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 provisionprovisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended September 30, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$45,256 
Provisions for unfunded loan commitments162,646 
Total Private Education Loan provisions for credit losses207,902 
Other impacts to the provisions for credit losses:
FFELP Loans29 
Credit Cards(333)
Total(304)
Provisions for credit losses reported in consolidated statements of income$207,598 

(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 (but, for purposes of the table, do not include those loans while they are in forbearance).
22
20 SLM CORPORATION




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

Three Months Ended September 30, 2021
(dollars in thousands)		FFELP 
Loans		Private
 Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,262 $1,154,540 $1,442 $1,160,244 
Transfer from unfunded commitment liability(1)
— 110,613 — 110,613 
Provisions:
Provision for current period50 (6,995)415 (6,530)
Loan sale reduction to provision— — — — 
Total provisions(2)
50 (6,995)415 (6,530)
Net charge-offs:
Charge-offs(106)(56,000)(119)(56,225)
Recoveries— 7,302 3 7,305 
Net charge-offs(106)(48,698)(116)(48,920)
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)
0.08 %1.29 %3.07 %
Allowance as a percentage of the ending total loan balance0.60 %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)9.92 6.21 3.75 
Ending total loans, gross$705,691 $21,702,837 $17,766 
Average loans in repayment(3)
$540,018 $15,108,802 $15,098 
Ending loans in repayment(3)
$530,476 $15,490,132 $17,766 
(1) See Note 6, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively.
(2) Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended
 September 30, 2021 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$(6,995)
Provisions for unfunded loan commitments144,972 
Total Private Education Loan provisions for credit losses137,977 
Other impacts to the provisions for credit losses:
FFELP Loans50 
Credit Cards415 
Total465 
Provisions for credit losses reported in consolidated statements of income$138,442 
(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 (but, for purposes of the table, do not include those loans while they are in forbearance).

SLM CORPORATION 21

5.Allowance for Credit Losses (Continued)


Nine Months Ended September 30, 2022
(dollars in thousands)		FFELP
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,077 $1,158,977 $2,281 $1,165,335 
Transfer from unfunded commitment liability(1)
— 303,591 — 303,591 
Provisions:
Provision for current period110 168,473 2,635 171,218 
Loan sale reduction to provision— (171,325)— (171,325)
Loans transferred to held-for-sale— — (2,372)(2,372)
Total provisions(2)
110 (2,852)263 (2,479)
Net charge-offs:
Charge-offs(376)(299,699)(2,549)(302,624)
Recoveries— 30,410 5 30,415 
Net charge-offs(376)(269,289)(2,544)(272,209)
Ending Balance$3,811 $1,190,427 $— $1,194,238 
Allowance:
Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairment$3,811 $1,190,427 $— $1,194,238 
Loans:
Ending balance: individually evaluated for impairment$— $— $— $— 
Ending balance: collectively evaluated for impairment$643,614 $20,104,463 $— $20,748,077 
Net charge-offs as a percentage of average loans in repayment (annualized)(3)
0.09 %2.37 %— %
Allowance as a percentage of the ending total loan balance0.59 %5.92 %— %
Allowance as a percentage of the ending loans in repayment(4)
0.78 %8.18 %— %
Allowance coverage of net charge-offs (annualized)7.60 3.32 — 
Ending total loans, gross$643,614 $20,104,463 $— 
Average loans in repayment(3)
$532,275 $15,173,465 $— 
Ending loans in repayment(3)
$489,920 $14,546,556 $— 

(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.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Nine Months Ended September 30, 2022 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$(2,852)
Provisions for unfunded loan commitments338,672 
Total Private Education Loan provisions for credit losses335,820 
Other impacts to the provisions for credit losses:
FFELP Loans110 
Credit Cards263 
Total373 
Provisions for credit losses reported in consolidated statements of income$336,193 

(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.


period (but, for purposes of the table, do not include those loans while they are in forbearance).
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)

 Allowance for Credit Losses
 Three Months Ended September 30, 2020
FFELP 
Loans		Private Education
Loans		Personal
Loans		Credit CardsTotal
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 period67 (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 balance0.59 %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 
____________
Nine Months Ended September 30, 2021
(dollars in thousands)		FFELP 
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,378 $1,355,844 $1,501 $1,361,723 
Transfer from unfunded commitment liability(1)
— 262,049 — 262,049 
Provisions:
Provision for current period77 (260,923)511 (260,335)
Loan sale reduction to provision— (10,335)— (10,335)
Loans transferred 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 balance0.60 %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 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.
24




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
Private Education Loan provisions for credit losses:
Provisions for loan losses$(81,710)
Provisions for unfunded loan commitments129,290 
Total Private Education Loan provisions for credit losses47,580 
Other impacts to the provisions for credit losses:
Personal Loans(51,678)
FFELP Loans67 
Credit Cards391 
Total(51,220)
Provisions for credit losses reported in consolidated statements of income$(3,640)

(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.



25




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, 2021
FFELP
Loans		Private Education
Loans		Credit CardsTotal
Allowance for Credit Losses
Beginning balance$4,378 $1,355,844 $1,501 $1,361,723 
Transfer from unfunded commitment liability(1)
— 262,049 — 262,049 
Provisions:
Provision for current period77 (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 balance0.60 %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.
26




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 (dollars in thousands)
Private Education Loan provisions for credit losses:
Provisions for loan losses$(269,371)
Provisions for unfunded loan commitments251,135 
Total Private Education Loan provisions for credit losses(18,236)
Other impacts to the provisions for credit losses:
FFELP Loans77 
Credit Cards511 
Total588 
Provisions for credit losses reported in consolidated statements of income$(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.


27




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 CardsTotal
Allowance for Credit Losses
Beginning balance$1,633 $374,300 $65,877 $102 $441,912 
Day 1 adjustment for the adoption of CECL2,852 1,060,830 79,183 188 1,143,053 
Balance at January 1, 20204,485 1,435,130 145,060 290 1,584,965 
Transfer from unfunded commitment liability(1)
— 279,555 — — 279,555 
Provisions:
Provision for current period277 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 balance0.59 %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.
28




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 commitments276,094 
Total Private Education Loan provisions for credit losses410,468 
Other impacts to the provisions for credit losses:
Personal Loans(2,431)
FFELP Loans277 
Credit Cards1,191 
Total(963)
Provisions for credit losses reported in consolidated statements of income$409,505 

(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.


period (but, for purposes of the table, do not include those loans while they are in forbearance).
29SLM CORPORATION 23




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, among other macroeconomic inputs, college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for these twoall macroeconomic 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 the 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”),September 30, 2021, December 31, 2021, and September 30, 2021,2022, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively. Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses.
Provisions for credit losses in the first nine months of 2021 decreasedended September 30, 2022 increased by $427$354 million compared with the year-ago period. During the nine months ended September 30, 2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by a negative provision recorded related to $3.29 billion in Private Education Loans sold in 2022. During the first nine months of 2021, the provision for credit losses was primarily affected by improvements in the 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.speeds. 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.
Duringaddition, during the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans. These faster estimated prepayment speeds during the two-year reasonable and supportable period reflectreflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model.model in the first quarter of 2021. 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”)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.
AllCharge-offs increased in both the three and nine months ended September 30, 2022 compared to the respective year-ago periods because of the credit administration practices changes we implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance. Also contributing to the increase were elevated losses on loans whose borrowers took a “gap year” during the pandemic and entered full principal and interest repayment status starting in late 2021, and the overall strain on our collections team arising from increased collections activity and staffing shortages driven by tight labor markets. The increased charge-offs caused the allowance coverage of net charge-offs (annualized) ratio to decline for the three and nine months ended September 30, 2022 compared with the respective year-ago periods.
Loan Modifications to Borrowers Experiencing Financial Difficulty
The allowance for credit losses incorporates an estimate of 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 assessedexperiencing financial difficulty is already included in the allowance for impairment, except for loans classifiedcredit 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 percentpercent) for a two-year period and, in the vast majority of cases, permanently extend the final maturity date of the loan. The combination of these two 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.
3024 SLM CORPORATION




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 areas nonperforming. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim.
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” and Note 7, “Allowance for Credit Losses” in our 2021 Form 10-K.
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 TDR loans had2021 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 related allowance recorded. The following table providesdelay in payment resulting from the recorded investment, unpaid principal balancecurrent 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, related allowance for our TDR loans.
Recorded InvestmentUnpaid Principal BalanceAllowance
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 

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 requiring disclosure 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 providesshows the average recorded investmentamortized 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 income recognized for our TDR loans.payments.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Three Months Ended September 30, 2022
(dollars in thousands)		Interest Rate ReductionCombination - Interest Rate Reduction and Term Extension
Loan Type:Amortized Cost Basis% of Total Class of Financing ReceivableAmortized Cost Basis% of Total Class of Financing Receivable
Private Education Loans$9,750 0.05 %$79,765 0.40 %
Total$9,750 0.05 %$79,765 0.40 %

Three Months Ended 
 September 30,
20212020
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,
20212020
Average
Recorded
Investment		Interest
Income
Recognized		Average
Recorded
Investment		Interest
Income
Recognized
TDR Loans$1,249,721 $64,177 $1,579,640 $75,530 


31

Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Nine Months Ended September 30, 2022
(dollars in thousands)		Interest Rate ReductionCombination - Interest Rate Reduction and Term Extension
Loan Type:Amortized Cost Basis% of Total Class of Financing ReceivableAmortized Cost Basis% of Total Class of Financing Receivable
Private Education Loans$25,065 0.12 %$237,588 1.18 %
Total$25,065 0.12 %$237,588 1.18 %



SLM CORPORATION 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)

The following table provides information regardingtables describes the loan status and agingfinancial effect of TDR loans. For the periods presented below, we updated our delinquency bucket periodsmodifications made to conform with the delinquency bucket periods defined by the Federal Financial Institutions Examination Council (“FFIEC”).
 September 30,December 31,
 20212020
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 current917,756 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 
        _____
(1)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).
(2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
(3)Loans in repayment include loans on whichwhose 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 table, do not include those loans while they are in forbearance).
(4)The period of delinquency is based on the number of days scheduled payments are contractually past due.experiencing financial difficulty:

32
Three Months Ended September 30, 2022
Interest Rate ReductionCombination - Interest Rate
Reduction and Term Extension
Loan TypeFinancial EffectLoan TypeFinancial Effect
Private Education LoansReduced average contractual rate from 11.31% to 4.00%Private Education Loans
Added a weighted average 10.24 years to the life of loans

Reduced average contractual rate from 10.87% to 4.00%


Nine Months Ended September 30, 2022
Interest Rate ReductionCombination - Interest Rate
Reduction and Term Extension
Loan TypeFinancial EffectLoan TypeFinancial Effect
Private Education LoansReduced average contractual rate from 10.76% to 4.00%Private Education Loans
Added a weighted average 10.38 years to the life of loans

Reduced average contractual rate from 10.17% to 4.00%

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 the amount of financing receivables whose borrowers were experiencing financial difficulty and had a payment default and 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. We define payment default as 60 days past due for purposes of this disclosure.
Three Months Ended
September 30, 2022		Nine Months Ended
September 30, 2022
(Dollars in thousands)
Modified Loans(1)(2)
Payment Default
Modified Loans(1)(2)
Payment Default
Loan Type:
Private Education Loans$9,467 $9,289 $12,660 $12,463 
Total$9,467 $9,289 $12,660 $12,463 
(1) Represents amortized cost basis of loans that have been modified.
(2) For the three months ended September 30, 2022, the modified loans include $8.5 million of interest rate reduction and term extension loan modifications and $1.0 million of interest rate reduction only loan modifications. For the nine months ended September 30, 2022, the modified loans include $11.4 million of interest rate reduction and term extension loan modifications and $1.2 million of interest rate reduction only loan modifications.

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
26 SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.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,
20212020
Modified Loans(1)
Charge-offsPayment-
Default
Modified Loans(1)
Charge-offsPayment-
Default
TDR Loans$1,063 $14,807 $1,588 $30,990 $20,033 $19,788 
Nine Months Ended 
 September 30,
20212020
Modified Loans(1)
Charge-offsPayment-
Default
Modified Loans(1)
Charge-offsPayment-
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 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 September 30, 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$5,575 $236,477 $10,335 $5,835 $4,431 
Total$5,575 $236,477 $10,335 $5,835 $4,431 
(1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and resultedare 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 in a TDR.repayment include loans on which borrowers are making full principal and interest payments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance).
(3) The period of delinquency is based on the number of days scheduled payments are contractually past due.


SLM CORPORATION 27

5.Allowance for Credit Losses (Continued)

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 September 30, 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$3,047,398 $3,994,466 $2,273,147 $1,903,962 $1,443,011 $4,871,685 $17,533,669 87 %
Without cosigner491,319 618,831 392,461 333,419 224,139 510,625 2,570,794 13 
Total$3,538,717 $4,613,297 $2,665,608 $2,237,381 $1,667,150 $5,382,310 $20,104,463 100 %
FICO at Origination(2):
Less than 670$271,510 $308,184 $161,273 $180,403 $146,085 $460,074 $1,527,529 8 %
670-699490,170 615,019 364,369 348,359 266,501 922,131 3,006,549 15 
700-7491,106,786 1,457,396 859,924 739,722 554,847 1,813,627 6,532,302 32 
Greater than or equal to 7501,670,251 2,232,698 1,280,042 968,897 699,717 2,186,478 9,038,083 45 
Total$3,538,717 $4,613,297 $2,665,608 $2,237,381 $1,667,150 $5,382,310 $20,104,463 100 %
FICO Refreshed(2)(3):
Less than 670$330,446 $431,998 $233,480 $239,180 $206,833 $811,604 $2,253,541 11 %
670-699494,948 594,535 292,414 246,158 179,979 589,077 2,397,111 12 
700-7491,092,230 1,402,767 778,630 649,713 466,824 1,458,193 5,848,357 29 
Greater than or equal to 7501,621,093 2,183,997 1,361,084 1,102,330 813,514 2,523,436 9,605,454 48 
Total$3,538,717 $4,613,297 $2,665,608 $2,237,381 $1,667,150 $5,382,310 $20,104,463 100 %
Seasoning(4):
1-12 payments$1,961,724 $1,921,089 $323,754 $305,985 $224,662 $482,794 $5,220,008 26 %
13-24 payments— 946,963 1,028,413 169,959 156,320 489,470 2,791,125 14 
25-36 payments— — 583,318 909,963 130,692 508,953 2,132,926 11 
37-48 payments— — 42 362,762 639,349 483,212 1,485,365 7 
More than 48 payments— — — — 231,269 2,886,910 3,118,179 16 
Not yet in repayment1,576,993 1,745,245 730,081 488,712 284,858 530,971 5,356,860 26 
Total$3,538,717 $4,613,297 $2,665,608 $2,237,381 $1,667,150 $5,382,310 $20,104,463 100 %
2022 Current period(5) gross charge-offs
$(696)$(13,397)$(33,009)$(44,122)$(42,589)$(165,886)$(299,699)
2022 Current period(5) recoveries
40 928 2,901 4,092 4,049 18,400 30,410 
2022 Current period(5) net charge-offs
$(656)$(12,469)$(30,108)$(40,030)$(38,540)$(147,486)$(269,289)
Total accrued interest by origination vintage$72,446 $292,512 $222,265 $217,871 $149,759 $246,305 $1,201,158 
        
(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 third-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 September 30, 2022.


3328 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.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 cosigner558,469 561,730 438,263 294,597 212,514 459,626 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 %
670-699508,264 564,497 493,237 363,313 329,807 884,981 3,144,099 15 
700-7491,210,833 1,348,269 1,057,001 770,452 660,270 1,753,709 6,800,534 33 
Greater than or equal to 7501,854,896 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 %
670-699506,021 475,674 365,133 256,400 209,536 570,605 2,383,369 12 
700-7491,209,493 1,285,015 978,763 682,024 568,766 1,448,692 6,172,753 30 
Greater than or equal to 7501,780,234 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—2,287,737362,674203,674211,064479,5403,544,68917 
25-36 payments—1731,565,203312,049164,575482,3692,524,36912 
37-48 payments———983,434295,206464,5631,743,2038 
More than 48 payments————671,1382,726,3043,397,44216 
Not yet in repayment1,556,5501,283,523773,320435,657296,008559,3564,904,41425 
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 cosigner449,218 601,172 481,391 322,867 233,512 503,972 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 %
670-699423,163 598,066 548,962 396,081 358,145 961,855 3,286,272 15 
700-7491,010,429 1,439,849 1,184,965 848,391 725,425��1,917,552 7,126,611 33 
Greater than or equal to 7501,549,975 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 %
670-699425,798 510,906 411,306 278,497 229,881 622,290 2,478,678 11 
700-7491,003,524 1,393,710 1,117,756 759,346 624,787 1,584,356 6,483,479 30 
Greater than or equal to 7501,497,508 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 repayment1,351,990 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.
34




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)
Private Education Loans Held for Investment - Credit Quality Indicators
December 31, 2020
Year of Origination
2020(1)
2019(1)
2018(1)
2017(1)
2016(1)
2015 and Prior(1)
Total(1)
% of Balance
Cosigners:
With cosigner$2,915,328 $3,467,219 $2,556,400 $2,262,635 $1,977,952 $4,198,748 $17,378,282 88 %
Without cosigner527,437 559,629 384,111 277,159 211,270 391,449 2,351,055 12 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
FICO at Origination(2):
Less than 670$195,214 $290,711 $225,276 $197,948 $162,413 $369,609 $1,441,171 7 %
670-699464,785 594,950 441,357 407,394 351,303 771,477 3,031,266 16 
700-7491,111,373 1,310,390 967,802 846,983 740,028 1,533,517 6,510,093 33 
Greater than or equal to 7501,671,393 1,830,797 1,306,076 1,087,469 935,478 1,915,594 8,746,807 44 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
FICO Refreshed(2)(3):
Less than 670$240,154 $331,229 $301,784 $298,195 $293,077 $734,599 $2,199,038 11 %
670-699438,665 493,135 336,966 283,906 231,759 504,779 2,289,210 12 
700-7491,102,666 1,248,806 871,677 734,222 603,160 1,220,468 5,780,999 29 
Greater than or equal to 7501,661,280 1,953,678 1,430,084 1,223,471 1,061,226 2,130,351 9,460,090 48 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
Seasoning(4):
1-12 payments$2,068,517 $600,038 $469,143 $472,258 $381,197 $507,343 $4,498,496 23 %
13-24 payments1632,096,635383,977223,332217,379425,3453,346,83117 
25-36 payments——1,353,567370,250181,940439,3372,345,09412 
37-48 payments———965,476351,433402,5521,719,4619 
More than 48 payments————729,5102,310,9053,040,41515 
Not yet in repayment1,374,0851,330,175733,824508,478327,763504,7154,779,04024 
Total$3,442,765 $4,026,848 $2,940,511 $2,539,794 $2,189,222 $4,590,197 $19,729,337 100 %
2020 gross charge-offs(5)
$(1,087)$(10,940)$(27,000)$(35,851)$(36,416)$(94,032)$(205,326)
2020 recoveries(5)
42 636 2,274 3,585 4,284 13,200 24,021 
2020 net charge-offs(5)
$(1,045)$(10,304)$(24,726)$(32,266)$(32,132)$(80,832)$(181,305)
Total accrued interest by origination vintage$90,438 $265,688��$252,251 $209,178 $141,094 $210,247 $1,168,896 

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

35SLM CORPORATION 29




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.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 September 30, 2022
(dollars in thousands)		202220212020201920182017 and PriorTotal
Loans in-school/grace/deferment(1)
$1,576,993 $1,745,245 $730,081 $488,712 $284,858 $530,971 $5,356,860 
Loans in forbearance(2)
4,034 19,309 21,994 24,534 24,589 106,587 201,047 
Loans in repayment:
Loans current1,950,830 2,802,675 1,854,054 1,654,125 1,293,502 4,447,769 14,002,955 
Loans delinquent 30-59 days(3)
4,690 25,836 28,361 32,374 28,952 135,028 255,241 
Loans delinquent 60-89 days(3)
1,542 13,268 17,592 19,004 18,721 81,685 151,812 
Loans 90 days or greater past due(3)
628 6,964 13,526 18,632 16,528 80,270 136,548 
Total Private Education Loans in repayment1,957,690 2,848,743 1,913,533 1,724,135 1,357,703 4,744,752 14,546,556 
Total Private Education Loans, gross3,538,717 4,613,297 2,665,608 2,237,381 1,667,150 5,382,310 20,104,463 
Private Education Loans deferred origination costs and unamortized premium/(discount)20,938 16,761 9,719 5,935 3,867 9,596 66,816 
Total Private Education Loans3,559,655 4,630,058 2,675,327 2,243,316 1,671,017 5,391,906 20,171,279 
Private Education Loans allowance for losses(260,520)(296,638)(153,743)(135,939)(91,886)(251,701)(1,190,427)
Private Education Loans, net$3,299,135 $4,333,420 $2,521,584 $2,107,377 $1,579,131 $5,140,205 $18,980,852 
Percentage of Private Education Loans in repayment55.3 %61.8 %71.8 %77.1 %81.4 %88.2 %72.4 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.4 %1.6 %3.1 %4.1 %4.7 %6.3 %3.7 %
Loans in forbearance as a percentage of loans in repayment and forbearance0.2 %0.7 %1.1 %1.4 %1.8 %2.2 %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
202120202019201820172016 and PriorTotal
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 current1,830,182 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 repayment1,834,164 2,767,086 2,450,321 1,892,065 1,691,930 4,854,566 15,490,132 
Total Private Education Loans, gross3,189,827 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 Loans3,206,590 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 repayment57.5 %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 repayment0.2 %0.8 %1.9 %2.7 %3.2 %4.0 %2.4 %
Loans in forbearance as a percentage of loans in repayment and forbearance0.2 %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.
30 SLM CORPORATION

5.Allowance for Credit Losses (Continued)
Private Education Loans Held for Investment - Delinquencies by Origination Vintage
As of December 31, 2021
(dollars in thousands)		202120202019201820172016 and PriorTotal
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 current2,234,876 2,786,646 2,321,728 1,772,651 1,570,815 4,319,057 15,005,773 
Loans delinquent 30-59 days(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 repayment2,253,860 2,826,916 2,390,841 1,840,790 1,640,870 4,557,935 15,511,212 
Total Private Education Loans, gross3,822,361 4,166,283 3,216,525 2,320,060 1,978,233 5,213,401 20,716,863 
Private Education Loans deferred origination costs and unamortized premium/(discount)22,169 16,067 9,575 5,918 4,588 9,171 67,488 
Total Private Education Loans3,844,530 4,182,350 3,226,100 2,325,978 1,982,821 5,222,572 20,784,351 
Private Education Loans allowance for 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 repayment59.0 %67.9 %74.3 %79.3 %82.9 %87.4 %74.9 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment0.8 %1.4 %2.9 %3.7 %4.3 %5.2 %3.3 %
Loans in forbearance as a percentage of loans in repayment and forbearance0.5 %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).
(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.
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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
202020192018201720162015 and PriorTotal
Loans in-school/grace/deferment(1)(2)
$1,374,085 $1,330,175 $733,824 $508,478 $327,763 $504,715 $4,779,040 
Loans in forbearance(1)(3)
16,159 92,677 110,319 118,946 109,073 198,302 645,476 
Loans in repayment(1):
Loans current2,043,033 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 repayment2,052,521 2,603,996 2,096,368 1,912,370 1,752,386 3,887,180 14,304,821 
Total Private Education Loans, gross3,442,765 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 Loans3,463,894 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 repayment59.6 %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 repayment0.5 %1.2 %2.4 %3.2 %3.8 %4.8 %2.8 %
Loans in forbearance as a percentage of loans in repayment and forbearance0.8 %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.
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
5.Allowance for Credit Losses (Continued)


 Accrued Interest Receivable

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

 Private Education Loans
Accrued Interest Receivable
Total Interest Receivable90 Days and Greater Past DueAllowance for Uncollectible Interest
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 Receivable90 Days or Greater Past DueAllowance for Uncollectible Interest
September 30, 2022$1,201,159 $6,515 $7,783 
December 31, 2021$1,187,123 $3,635 $4,937 



3832 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
6. Unfunded Loan Commitments
When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020, — Off-Balance Sheet Exposure for Contractual Loan Commitments”Commitments - 2021 and 2020” in our 20202021 Form 10-K for additional information.
At September 30, 2021,2022, we had $2.0$2.2 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2021/20222022/2023 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,
20212020
AllowanceUnfunded CommitmentsAllowanceUnfunded 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 items15,068 — (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,
20212020
AllowanceUnfunded CommitmentsAllowanceUnfunded 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 1110,044 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 items32,831 — (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 
________________             
20222021
Three Months Ended September 30,
(dollars in thousands)		AllowanceUnfunded CommitmentsAllowanceUnfunded Commitments
Beginning Balance$113,525 $1,413,840 $64,772 $1,161,696 
Provision/New commitments - net(1)
192,559 3,148,434 129,904 2,885,024 
Other provision items(29,913)— 15,068 — 
Transfer - funded loans(2)
(168,377)(2,345,348)(110,613)(2,083,128)
Ending Balance$107,794 $2,216,926 $99,131 $1,963,592 
20222021
Nine Months Ended September 30,
(dollars in thousands)		AllowanceUnfunded CommitmentsAllowanceUnfunded Commitments
Beginning Balance$72,713 $1,776,976 $110,044 $1,673,018 
Provision/New commitments - net(1)
339,705 5,584,129 218,304 4,963,789 
Other provision items(1,033)— 32,831 — 
Transfer - funded loans(2)
(303,591)(5,144,179)(262,048)(4,673,215)
Ending Balance$107,794 $2,216,926 $99,131 $1,963,592 
(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.


39



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.

SLM CORPORATION 33

7. 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 September 30, 2022 we had $51 million in total goodwill. See Notes to Consolidated Financial Statements, Note 1, “Significant Accounting Policies” in this Form 10-Q 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:

September 30, 2022
(Dollars in thousands)
Useful Life
(in years)(1)
Cost BasisAccumulated AmortizationNet
Tradename and trademarks10$68,470 $(3,994)$64,476 
Customer relationships55,670 (1,239)4,431 
Developed technology31,260 (245)1,015 
Total acquired intangible assets$75,400 $(5,478)$69,922 
(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 $2 million and $5 million in the three and nine months ended September 30, 2022, respectively. There was no amortization of acquired intangible assets recorded in the three and nine months ended September 30, 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.
34 SLM CORPORATION

8. Deposits

The following table summarizes total deposits at September 30, 20212022 and December 31, 2020.2021.

September 30,December 31,
20212020
Deposits - interest bearing$20,890,292 $22,664,899 
Deposits - non-interest bearing568 1,140 
Total deposits$20,890,860 $22,666,039 
September 30,December 31,
(Dollars in thousands)20222021
Deposits - interest-bearing$21,276,181 $20,826,692 
Deposits - non-interest-bearing567 1,432 
Total deposits$21,276,748 $20,828,124 

Our total deposits of $20.9$21.3 billion were comprised of $11.6$10.2 billion in brokered deposits and $9.3$11.1 billion in retail and other deposits at September 30, 2021,2022, 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 bearingInterest-bearing deposits as of September 30, 20212022 and December 31, 20202021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity money market deposits (“MMDAs”), and retail and brokered certificates of deposit (“CDs”). Interest bearingInterest-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$8.0 billion and $7.1$7.3 billion of our deposit total as of September 30, 20212022 and December 31, 2020,2021, respectively.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $4$3 million and $5$4 million in the three months ended September 30, 20212022 and 2020,2021, respectively, and placement fee expense of $12$10 million and $15$12 million in the nine months ended September 30, 20212022 and 2020,2021, respectively. Fees paid to third-party brokers related to brokered CDs were $10$4 million and $2$10 million for the three months ended September 30, 20212022 and 2020,2021, respectively, and fees paid to third-party brokers related to brokered CDs were $11$8 million and $5$11 million for the nine months ended September 30, 20212022 and 2020,2021, respectively.

40




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
7.Deposits (Continued)
Interest bearing deposits at September 30, 20212022 and December 31, 20202021 are summarized as follows:
 
 September 30, 2021December 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 %
Savings956,571 0.44 907,976 0.55 
Certificates of deposit9,851,607 1.16 11,597,266 1.34 
Deposits - interest bearing$20,890,292 $22,664,899 
____________
 September 30, 2022December 31, 2021
(Dollars in thousands)Amount
Qtr.-End Weighted Average Stated Rate(1)
Amount
Year-End Weighted Average Stated Rate(1)
Money market$11,053,370 2.57 %$10,473,569 0.69 %
Savings947,870 2.14 959,122 0.43 
Certificates of deposit9,274,941 2.29 9,394,001 1.20 
Deposits - interest bearing$21,276,181 $20,826,692 
    (1) Includes the effect of interest rate swaps in effective hedge relationships.


As of September 30, 2021,2022 and December 31, 2020,2021, there were $676$538 million and $571$743 million, respectively, of deposits exceeding Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accrued interest on deposits was $46$48 million and $50$35 million at September 30, 20212022 and December 31, 2020,2021, respectively.

SLM CORPORATION 35
8.

9. Borrowings

Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term asset-backed securitization (“ABS”) program and our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”). For additional information regarding our borrowings, see Notes to Consolidated Financial Statements, Note 11, “Borrowings” in our 20202021 Form 10-K. The following table summarizes our borrowings at September 30, 20212022 and December 31, 2020.
September 30, 2021December 31, 2020
Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$199,583 $494,585 $694,168 $— $692,879 $692,879 
Total unsecured borrowings199,583 494,585 694,168 — 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.


41

September 30, 2022December 31, 2021
(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:
Unsecured debt (fixed-rate)$— $988,182 $988,182 $— $986,138 $986,138 
Total unsecured borrowings— 988,182 988,182 — 986,138 986,138 
Secured borrowings:
Private Education Loan term securitizations:
Fixed-rate— 3,673,627 3,673,627 — 3,897,996 3,897,996 
Variable-rate— 860,502 860,502 — 1,046,856 1,046,856 
Total Private Education Loan term securitizations— 4,534,129 4,534,129 — 4,944,852 4,944,852 
Secured Borrowing Facility— — — — — — 
Total secured borrowings— 4,534,129 4,534,129 — 4,944,852 4,944,852 
Total$— $5,522,311 $5,522,311 $— $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,May 17, 2022, 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, 2022.16, 2023. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 202316, 2024 (or earlier, if certain material adverse events occur). At both September 30, 20212022, and December 31, 2020,2021, there were no secured borrowings outstanding under the Secured Borrowing Facility.

36 SLM CORPORATION


9.Borrowings (Continued)
Long-term Borrowings
Secured Financings
20212022 Transactions
On May 19, 2021,August 9, 2022, we executed our $531$575 million SMB Private Education Loan Trust 2021-B2022-C term ABS transaction, which was accounted for as a secured financing. We sold $531$575 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $529$575 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.264.69 years and priced at a weighted average LIBORSOFR equivalent cost of 1-month LIBORSOFR plus 0.771.76 percent. AtOn September 30, 2021, $5212022, $658 million of our Private Education Loans, including $484$613 million of principal and $37$45 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.











42




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 and2021. There was one secured financing issued in 2021 throughthe nine months ended September 30, 2021:2022.

IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
Private Education:
2020-AFebruary 2020$636,000 1-month LIBOR plus 0.88%4.18
2020-BAugust 2020707,000 1-month LIBOR plus 1.30%4.14
Total notes issued in 2020$1,343,000 
Total loan and accrued interest amount securitized at inception in 2020(2)
$1,463,230 
2021-BMay 2021$531,000 1-month LIBOR plus 0.77%4.26
2021-DAugust 2021527,000 1-month LIBOR plus 0.69%4.22
Total notes issued in 2021$1,058,000 
Total loan and accrued interest amount securitized at inception in 2021$1,104,248 
IssueDate IssuedTotal Issued
Weighted Average Cost of Funds(1)
Weighted Average Life
 (in years)
(Dollars in thousands)
Private Education Loans:
2021-BMay 2021$531,000 1-month LIBOR plus 0.77%4.26
2021-DAugust 2021527,000 1-month LIBOR plus 0.69%4.22
2021-ENovember 2021534,000 1-month LIBOR plus 0.69%4.15
Total notes issued in 2021$1,592,000 
Total loan and accrued interest amount securitized at inception in 2021(2)
$1,656,263 
2022-CAugust 2022$575,000 SOFR plus 1.76%4.69
Total notes issued in 2022$575,000 
Total loan and accrued interest amount securitized at inception in 2022(3)
$674,387 
____________
(1) Represents LIBOR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs.
(2) At September 30, 2021, $1.182022, $1.33 billion of our Private Education Loans, including $1.10$1.25 billion of principal and $84 million in capitalized interest, were encumbered related to these transactions.

(3)
43

 At September 30, 2022, $658 million of our Private Education Loans, including $613 million of principal and $45 million in capitalized interest, were encumbered related to these transactions.



SLM CORPORATION 37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
8.9.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 OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted 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 September 30, 2022
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,534,129 $4,534,129 $5,665,062 $177,917 $345,436 $6,188,415 
Secured Borrowing Facility— — — — — 1,775 1,775 
Total$— $4,534,129 $4,534,129 $5,665,062 $177,917 $347,211 $6,190,190 
(1) Other assets primarily represent accrued interest receivable.
December 31, 2020
Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $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 $6,172,943 
____
As of December 31, 2021
(dollars in thousands)		Debt OutstandingCarrying Amount of Assets Securing Debt Outstanding
Short-TermLong-TermTotalLoansRestricted Cash
Other
Assets(1)
Total
Secured borrowings:
Private Education Loan term securitizations$— $4,994,852 $4,994,852 $6,029,034 $210,741 $357,982 $6,597,757 
Secured Borrowing Facility— — — — — 867 867 
Total$— $4,994,852 $4,994,852 $6,029,034 $210,741 $358,849 $6,598,624 

(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 5five percent of the securities issued by the trusts to meet risk retention requirements. We were not required to consolidate these entities because our servicer/administrator decision-maker fees are not variable interests and our other interests in the VIE, which are in the form of our five percent vertical interest, do not absorb more than an insignificant amount of the VIE’s expected losses or receive more than an insignificant amount of the VIE’s expected residual returns.
2021-A2022-A Transaction
On February 9, 2021,March 16, 2022, we closed an SMB Private Education Loan Trust 2021-A2022-A term ABS transaction (the “2021-A“2022-A Transaction”), in which thean unaffiliated third-party sold to the trust approximately $2.5 billion$973 million of Private Education Loans that the third-party seller previously purchased from us on January 8,November 17, 2021. In the 2021-A2022-A Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $130$95 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2021-A2022-A Transaction and we recorded an $18a $10 million gain on sale associated with this transaction. In connection with the 2021-A2022-A Transaction settlement, we retained a 5five percent vertical risk retention interest (i.e., 5five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2021-A2022-A Transaction as available-for-sale
44




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
38 SLM CORPORATION


9.Borrowings (Continued)

2022-B Transaction
On May 27, 2021,2022, we closed an SMB Private Education Loan Trust 2021-C2022-B term ABS transaction (the “2021-C“2022-B Transaction”), in which thean unaffiliated third-party sold to the trust approximately $505 million$2.0 billion of Private Education Loans that the third-party seller previously purchased from us on January 8, 2021.April 27, 2022. In the 2021-C2022-B Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $27$107 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-C2022-B Transaction and we recorded an $4$11 million gain on sale associated with this transaction. In connection with the 2021-C2022-B Transaction settlement, we retained a 5five percent vertical risk retention interest (i.e., 5five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2021-C2022-B 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.
The table below provides a summary of our exposure related to our unconsolidated VIEs.
September 30, 2021December 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 

____
September 30, 2022December 31, 2021
(Dollars in thousands)
Debt Interests(1)
Equity Interests(2)
Total Exposure
Debt Interests(1)
Equity Interests(2)
Total Exposure
Private Education Loan term securitizations$296,516 $47,386 $343,902 $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, 2021.2022. 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 months ended September 30, 20212022 or in the year ended December 31, 2020.2021.
We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At September 30, 20212022 and December 31, 2020,2021, the value of our pledged collateral at the FRB totaled $2.7$2.6 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 months ended September 30, 20212022 or in the year ended December 31, 2020.2021.


45SLM CORPORATION 39




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.10. Derivative Financial Instruments
Risk Management Strategy
We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this strategy as a prudent management of interest rate risk. Please refer to Notes to Consolidated Financial Statements, Note 12, “Derivative Financial Instruments” in our 20202021 Form 10-K for a full discussion of our risk management strategy.
Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. NaNTwo 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, $5.92022, $3.2 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 94.693.0 percent and 5.47.0 percent, respectively, of our total notional derivative contracts of $6.2$3.5 billion at September 30, 2021.2022.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of September 30, 20212022 was $(96)$(56) million and $11$(7) 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, 20212022 and December 31, 2020,2021, we had a net positive exposure (derivative gaingain/loss positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $12 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, 20212022 and December 31, 2020,2021, and their impact on earnings and other comprehensive income for the nine months ended September 30, 20212022 and September 30, 2020.2021. Please refer to Notes to Consolidated Financial Statements, Note 12, “Derivative Financial Instruments” in our 20202021 Form 10-K for a full discussion of cash flow hedges, fair value hedges, and trading activities.

4640 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.10.Derivative Financial Instruments (Continued)
Impact of Derivatives on the Consolidated Balance Sheets
Impact of Derivatives on the Consolidated Balance SheetsImpact of Derivatives on the Consolidated Balance Sheets
Cash Flow HedgesFair Value HedgesTradingTotal
Cash Flow HedgesFair Value HedgesTradingTotalSeptember 30,December 31,September 30,December 31,September 30,December 31,September 30,December 31,
September 30,December
31,		September 30,December
31,		September 30,December
31,		September 30,December
31,
20212020202120202021202020212020
(Dollars in thousands)(Dollars in thousands)20222021202220212022202120222021
Fair Values(1)
Fair Values(1)
Hedged Risk Exposure
Fair Values(1)
Hedged Risk Exposure
Derivative Assets:(2)
Derivative Assets:(2)
Derivative Assets:(2)
Interest rate swapsInterest rate swapsInterest rate$— $— $489 $594 $38 $135 $527 $729 Interest rate swapsInterest rate$2,172 $— $— $— $— $5 $2,172 $5 
OtherOtherOther— — — — — 1,317 — 1,317 
Derivative Liabilities:(2)
Derivative Liabilities:(2)
Derivative Liabilities:(2)
Interest rate swapsInterest rate swapsInterest rate(909)(287)— — — — (909)(287)Interest rate swapsInterest rate— (231)(1,051)(21)— — (1,051)(252)
Total net derivativesTotal net derivatives$(909)$(287)$489 $594 $38 $135 $(382)$442 Total net derivatives$2,172 $(231)$(1,051)$(21)$— $1,322 $1,121 $1,070 
 ___________
(1)Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position.
(2)The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification:
Other AssetsOther Liabilities
September 30,December 31,September 30,December 31,
2021202020212020
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 AssetsOther Liabilities
September 30,December 31,September 30,December 31,
(Dollars in thousands)2022202120222021
Gross position(1)
$2,172 $1,322 $(1,051)$(252)
Impact of master netting agreement(1,051)(5)1,051 5 
Derivative values with impact of master netting agreements (as carried on balance sheet)1,121 1,317 — (247)
Cash collateral pledged(2)
11,025 9,655 — — 
Net position$12,146 $10,972 $— $(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 FlowFair ValueTradingTotal
September 30,December 31,September 30,December 31,September 30,December 31,September 30,December 31,
20212020202120202021202020212020
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 FlowFair ValueTradingTotal
(Dollars in thousands)September 30,December 31,September 30,December 31,September 30,December 31,September 30,December 31,
20222021202220212022202120222021
Interest rate swaps$1,345,688 $1,438,144 $2,130,049 $3,915,999 $— $181,953 $3,475,737 $5,536,096 
Other— — — — — 1,053,760 — 1,053,760 
Net total notional$1,345,688 $1,438,144 $2,130,049 $3,915,999 $— $1,235,713 $3,475,737 $6,589,856 


47SLM CORPORATION 41




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.10.Derivative Financial Instruments (Continued)
As of September 30, 20212022 and December 31, 2020,2021, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
(Dollars in thousands)(Dollars in thousands)Carrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
Line Item in the Balance Sheet in Which the Hedged Item is Included:Line Item in the Balance Sheet in Which the Hedged Item is Included:September 30,December 31,September 30,December 31,
Line Item in the Balance Sheet in Which the Hedged Item is Included:Carrying Amount of the Hedged Assets/(Liabilities)Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)2022202120222021
September 30,December 31,September 30,December 31,
2021202020212020
DepositsDeposits$(4,083,115)$(4,992,867)$(81,460)$(154,235)Deposits$(2,090,825)$(3,963,268)$36,114 $(50,784)


Impact of Derivatives on the Consolidated Statements of Income

Impact of Derivatives on the Consolidated Statements of IncomeImpact of Derivatives on the Consolidated Statements of Income
Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,		Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
2021202020212020
(Dollars in thousands)(Dollars in thousands)2022202120222021
Fair Value HedgesFair Value HedgesFair Value Hedges
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Interest recognized on derivativesInterest recognized on derivatives$21,763 $23,851 $67,230 $47,906 Interest recognized on derivatives$(1,783)$21,763 $24,418 $67,230 
Hedged items recorded in interest expenseHedged items recorded in interest expense20,551 24,451 72,774 (116,500)Hedged items recorded in interest expense14,143 20,551 86,899 72,774 
Derivatives recorded in interest expenseDerivatives recorded in interest expense(20,602)(24,458)(72,787)116,870 Derivatives recorded in interest expense(14,425)(20,602)(86,896)(72,787)
TotalTotal$21,712 $23,844 $67,217 $48,276 Total$(2,065)$21,712 $24,421 $67,217 
Cash Flow HedgesCash Flow HedgesCash Flow Hedges
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expenseAmount of gain (loss) reclassified from accumulated other comprehensive income into interest expense$(5,228)$(5,176)$(15,791)$(10,922)Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense$2,771 $(5,228)$(4,033)$(15,791)
TotalTotal$(5,228)$(5,176)$(15,791)$(10,922)Total$2,771 $(5,228)$(4,033)$(15,791)
TradingTradingTrading
Interest rate swaps:Interest rate swaps:Interest rate swaps:
Change in fair value of future interest payments recorded in earningsChange in fair value of future interest payments recorded in earnings$(3,571)$(12,848)$(21,383)$21,611 Change in fair value of future interest payments recorded in earnings$— $(3,571)$(248)$(21,383)
TotalTotal(3,571)(12,848)(21,383)21,611 Total— (3,571)(248)(21,383)
TotalTotal$12,913 $5,820 $30,043 $58,965 Total$706 $12,913 $20,140 $30,043 

    
4842 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
9.10.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’ EquityImpact of Derivatives on the Statements of Changes in Stockholders’ Equity
Three Months EndedNine Months Ended
Three Months EndedNine Months EndedSeptember 30,September 30,
September 30,September 30,
2021202020212020
(Dollars in thousands)(Dollars in thousands)2022202120222021
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)$32,594 $(133)$94,215 $13,583 
Less: amount of gain (loss) reclassified in interest expenseLess: amount of gain (loss) reclassified in interest expense(5,228)(5,176)(15,791)(10,922)Less: amount of gain (loss) reclassified in interest expense2,771 (5,228)(4,033)(15,791)
Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefitTotal 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$29,823 $5,095 $98,248 $29,374 
    
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$38 million will be reclassified as an increasea decrease to interest expense.
Cash Collateral
As of September 30, 2021,2022, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was no cash collateral held by us related to derivative exposure between us and our derivatives counterparties at September 30, 20212022 and December 31, 2020,2021, respectively. Cash collateral pledged by us related to derivative exposure between us and our derivatives counterparties was $12$11 million and $43$10 million at September 30, 20212022 and December 31, 2020,2021, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets.

49SLM CORPORATION 43




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
10.11. 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 
 September 30,		Nine Months Ended 
 September 30,
(Shares and per share amounts in actuals)(Shares and per share amounts in actuals)2021202020212020
(Shares and per share amounts in actuals)		2022202120222021
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)
1,191,544 13,018,585 30,721,944 84,528,256 
Average purchase price per share(4)
Average purchase price per share(4)
$18.75 $— $17.17 $9.66 
Average purchase price per share(4)
$14.14 $18.75 $18.00 $17.17 
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)
448 115,414 1,131,351 1,367,826 
Average purchase price per shareAverage purchase price per share$18.83 $7.05 $14.70 $10.97 Average purchase price per share$13.99 $18.83 $18.36 $14.70 
Common shares issued(6)
Common shares issued(6)
504,183 5,150 3,785,490 2,990,447 
Common shares issued(6)
4,682 504,183 3,093,392 3,785,490 
 
__________________
(1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 20202021 Share Repurchase Program. There was $51$736 million of capacity remaining under the 20212022 Share Repurchase Program at September 30, 2021.2022.
(2) For the nine months ended September 30, 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 months ended September 30, 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, 20212022 was $17.60.$13.99.

Common Stock Dividends

In bothSeptember 2022, we paid a common stock dividend of $0.11 per common share. In September 2021, and September 2020, we paid a common stock dividend of $0.03 per common share. In both the nine months ended September 30,2022 and 2021, and 2020, we paid a common stock dividend of $0.33 per common share and $0.09 per common share.share, respectively.

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
50




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 million shares of common stock for $244 million in the three months ended September 30,31, 2021, and we repurchased 66.8 million shares of common stock for $1.2 billion in the nine months ended September 30, 2021. (For the nine months ended September 30, 2021, those amounts include the shares repurchased under the Tender Offer described below.) There was $51 millioncommon 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 iswas in addition to the $51original $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 nine months ended September 30, 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 Repurchase Program, we repurchased 1.2 million shares of common stock for $17 million in the three months ended
44 SLM CORPORATION

11.Stockholders’ Equity (Continued)
September 30, 2022, and 28.7 million shares of common stock for $515 million in the nine months ended September 30, 2022. We had $736 million of capacity remaining under the 20212022 Share Repurchase Program at September 30, 2021.2022.
RepurchasesSo long as there is unexpired capacity under our sharea given repurchase program, repurchases under the programs may occur from time to time and through a variety of methods, including tender offers, open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, or other similar transactions. The timing and volume of any repurchases under the 20212022 Share Repurchase Program will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of its share repurchase programsthe program or at all.
Common Stock Tender Offer
On February 2, 2021, we announced the commencement of a “modified Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $1 billion in aggregate purchase price of our outstanding shares of common stock, par value $0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer. This cancellation decreased the balances of common stock by $6 million and of additional paid-in capital by $466 million, respectively.
Share Repurchases under our Rule 10b5-1 trading planplans
During the three months ended September 30, 2022 and 2021, we repurchased 1.2 million shares and 13.0 million shares, respectively, of our common stock at a total cost of $17 million and $244 million, respectively, and during the nine months ended September 30, 2022 and 2021, we repurchased 30.7 million shares and 42.6 million shares, respectively, of our common stock at a total cost of $553 million and $804 million, respectively, under a Rule 10b5-1 trading planplans authorized under our share repurchase programs.


51SLM CORPORATION 45




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
11.12. 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 EndedNine Months Ended
 September 30,September 30,
(In thousands, except per share data)2021202020212020
Numerator:
Net income$72,840 $171,028 $854,248 $447,990 
Preferred stock dividends1,166 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 EPS299,890 375,094 324,148 386,587 
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 EPS304,511 377,918 329,064 389,391 
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 
 September 30,		Nine Months Ended 
 September 30,

(Dollars in thousands, except per share data)		2022202120222021
Numerator:
Net income$75,172 $72,840 $546,057 $854,248 
Preferred stock dividends2,531 1,166 5,563 3,559 
Net income attributable to SLM Corporation common stock$72,641 $71,674 $540,494 $850,689 
Denominator:
Weighted average shares used to compute basic EPS251,266 299,890 263,098 324,148 
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)
2,450 4,621 2,967 4,916 
Weighted average shares used to compute diluted EPS253,716 304,511 266,065 329,064 
Basic earnings per common share$0.29 $0.24 $2.05 $2.62 
Diluted earnings per common share$0.29 $0.24 $2.03 $2.59 


________________ 
            
(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, 20212022 and 2020,2021, securities covering approximately 1 million shares and 21 million shares, respectively, and for the nine months ended September 30, 20212022 and 2020,2021, securities covering approximately 1 million shares and no1 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
 

5246 SLM CORPORATION




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

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

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

During the nine months ended September 30, 2021,2022, there were no significant transfers of financial instruments between levels or changes in our methodology or assumptions used to value our financial instruments.

The following table summarizes the valuation of our financial instruments that are marked to fair value on a recurring basis.
Fair Value Measurements on a Recurring Basis Fair Value Measurements on a Recurring Basis
September 30, 2021December 31, 2020 September 30, 2022December 31, 2021
(Dollars in thousands)(Dollars in thousands)Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total 
Assets
Assets:Assets:
Trading investmentsTrading investments$— $— $36,792 $36,792 $— $— $16,923 $16,923 Trading investments$— $— $52,450 $52,450 $— $— $37,465 $37,465 
Available-for-sale investmentsAvailable-for-sale investments— 2,505,372 — 2,505,372 — 1,996,634 — 1,996,634 Available-for-sale investments— 2,427,540 — 2,427,540 — 2,517,956 — 2,517,956 
Derivative instrumentsDerivative instruments— 527 — 527 — 729 — 729 Derivative instruments— 2,172 — 2,172 — 1,322 — 1,322 
TotalTotal$— $2,505,899 $36,792 $2,542,691 $— $1,997,363 $16,923 $2,014,286 Total$— $2,429,712 $52,450 $2,482,162 $— $2,519,278 $37,465 $2,556,743 
Liabilities
Liabilities:Liabilities:
Derivative instrumentsDerivative instruments$— $(909)$— $(909)$— $(287)$— $(287)Derivative instruments$— $(1,051)$— $(1,051)$— $(252)$— $(252)
TotalTotal$— $(909)$— $(909)$— $(287)$— $(287)Total$— $(1,051)$— $(1,051)$— $(252)$— $(252)




 
53SLM CORPORATION 47




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

The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments.
September 30, 2021December 31, 2020 September 30, 2022December 31, 2021
Fair
Value		Carrying
Value		DifferenceFair
Value		Carrying
Value		Difference
(Dollars in thousands)(Dollars in thousands)Fair
Value		Carrying
Value		DifferenceFair
Value		Carrying
Value		Difference
Earning assets:Earning assets:Earning assets:
Loans held for investment, net:Loans held for investment, net:Loans held for investment, net:
Private Education LoansPrivate Education Loans$24,299,804 $20,561,960 $3,737,844 $22,124,171 $18,436,968 $3,687,203 Private Education Loans$20,932,120 $18,980,852 $1,951,268 $22,919,836 $19,625,374 $3,294,462 
FFELP LoansFFELP Loans716,277 703,355 12,922 748,657 735,208 13,449 FFELP Loans653,268 641,450 11,818 705,644 692,954 12,690 
Credit CardsCredit Cards17,791 16,212 1,579 12,249 10,967 1,282 Credit Cards— — — 25,037 22,955 2,082 
Loans held for saleLoans held for sale— — — 3,226,029 2,885,640 340,389 Loans held for sale28,880 28,880 — — — — 
Cash and cash equivalentsCash and cash equivalents2,717,752 2,717,752 — 4,455,292 4,455,292 — Cash and cash equivalents4,846,754 4,846,754 — 4,334,603 4,334,603 — 
Trading investmentsTrading investments36,792 36,792 — 16,923 16,923 — Trading investments52,450 52,450 — 37,465 37,465 — 
Available-for-sale investmentsAvailable-for-sale investments2,505,372 2,505,372 — 1,996,634 1,996,634 — Available-for-sale investments2,427,540 2,427,540 — 2,517,956 2,517,956 — 
Accrued interest receivableAccrued interest receivable1,542,907 1,403,146 139,761 1,527,816 1,387,305 140,511 Accrued interest receivable1,262,493 1,223,647 38,846 1,306,410 1,205,667 100,743 
Tax indemnification receivableTax indemnification receivable12,486 12,486 — 18,492 18,492 — Tax indemnification receivable8,392 8,392 — 8,047 8,047 — 
Derivative instrumentsDerivative instruments527 527 — 729 729 — Derivative instruments2,172 2,172 — 1,322 1,322 — 
Total earning assetsTotal earning assets$31,849,708 $27,957,602 $3,892,106 $34,126,992 $29,944,158 $4,182,834 Total earning assets$30,214,069 $28,212,137 $2,001,932 $31,856,320 $28,446,343 $3,409,977 
Interest-bearing liabilities:Interest-bearing liabilities:Interest-bearing liabilities:
Money-market and savings accountsMoney-market and savings accounts$11,082,540 $11,038,685 $(43,855)$11,136,560 $11,067,633 $(68,927)Money-market and savings accounts$11,885,984 $12,001,240 $115,256 $11,457,490 $11,432,691 $(24,799)
Certificates of depositCertificates of deposit9,944,973 9,851,607 (93,366)11,799,223 11,597,266 (201,957)Certificates of deposit8,977,283 9,274,941 297,658 9,451,528 9,394,001 (57,527)
Short-term borrowings203,770 199,583 (4,187)— — — 
Long-term borrowingsLong-term borrowings5,387,187 5,219,748 (167,439)5,398,309 5,189,217 (209,092)Long-term borrowings5,163,501 5,522,311 358,810 6,000,174 5,930,990 (69,184)
Accrued interest payableAccrued interest payable64,425 64,425 — 60,272 60,272 — Accrued interest payable71,907 71,907 — 46,600 46,600 — 
Derivative instrumentsDerivative instruments909 909 — 287 287 — Derivative instruments1,051 1,051 — 252 252 — 
Total interest-bearing liabilitiesTotal interest-bearing liabilities$26,683,804 $26,374,957 $(308,847)$28,394,651 $27,914,675 $(479,976)Total interest-bearing liabilities$26,099,726 $26,871,450 $771,724 $26,956,044 $26,804,534 $(151,510)
Excess of net asset fair value over carrying valueExcess of net asset fair value over carrying value$3,583,259 $3,702,858 Excess of net asset fair value over carrying value$2,773,656 $3,258,467 

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

5448 SLM CORPORATION




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

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

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

On August 26, 2020,Under regulations issued by the FDIC and other federal banking agencies, published a final rule that provides those banking organizations that adoptedadopt CECL during the 2020 calendar year, withincluding the optionBank, may elect to delay for 2two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. We haveThe Bank has elected to use this option. The final rule is substantially similar to an interim final rule issued on March 27, 2020. Under this final rule, because we have elected to use the deferral option,Therefore, the regulatory capital impact of ourthe Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, will be deferred for 2 years. In addition, from January 1, 2020 through the end of the two-year deferral period,and 25 percent of the ongoing impact of CECL on ourthe Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes will be added to(collectively, the deferred transition amounts (“adjusted“adjusted transition amounts”) and, were deferred for the 2-year period. At the conclusion of the 2-yeartwo-year period (i.e., beginningending January 1, 2022),2022. From January 1, 2022 to January 1, 2025, the adjusted transition amounts will be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. OurThe Bank’s January 1, 2020 CECL transition amounts increased theour allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
At September 30, 2022, the adjusted transition amounts, reflecting changes over the phase-in period, that will be deferred for regulatory capital purposes are as follows:
Transition AmountsAdjustments for the Year EndedAdjustments for the Year EndedAdjustments
 for the
Nine Months Ended		Adjusted Transition Amounts
(Dollars in thousands)January 1, 2020December 31, 2020December 31, 2021September 30, 2022September 30, 2022
Retained earnings$952,639 $(57,859)$(58,429)$(209,088)$627,263 
Allowance for credit losses1,143,053 (55,811)(49,097)(259,536)778,609 
Liability for unfunded commitments115,758 (2,048)(9,333)(26,094)78,283 
Deferred tax asset306,171 — — (76,542)229,629 


55SLM CORPORATION 49




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

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

Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
AmountRatioAmountRatio
As of September 30, 2021:
(Dollars in thousands)(Dollars in thousands)Actual
U.S. Basel III Minimum
Requirements Plus Buffer(1)(2)
AmountRatioAmountRatio
As of September 30, 2022(3):
As of September 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)$3,098,799 13.3 %$1,626,628 >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)$3,098,799 13.3 %$1,975,191 >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)$3,391,178 14.6 %$2,439,942 >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)$3,098,799 10.6 %

$1,170,406 >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 September 30, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022.

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$241 million and $642 million in dividends to the Company for the three and nine months ended September 30, 2022, respectively, and $50 million and $1.2 billion in dividends to the Company for the three and nine months ended September 30, 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 Programsshare 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.
5650 SLM CORPORATION




SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, unless otherwise noted)
14.15. 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, 2021,2022, we had $2.0$2.2 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2021/20222022/2023 academic year. At September 30, 2021,2022, we had a $99$108 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020 — Off-Balance Sheet Exposure for Contractual Loan Commitments”Commitments - 2021 and 2020” in our 20202021 Form 10-K and Note 6, “Unfunded Loan Commitments” in this Form 10-Q for additional information.
Regulatory Matters
For additional information regarding our regulatory matters, see Notes to Consolidated Financial Statements, Note 20, “Commitments, Contingencies and Guarantees” in our 20202021 Form 10-K.
Contingencies
In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries.
It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests.
We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves.
Based on current knowledge, management does not believe there are loss contingencies, if any, arising from pending investigations, litigation, or regulatory matters for which reserves should be established.

57SLM CORPORATION 51


16. Subsequent Event


2022-D Transaction
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(DollarsOn October 19, 2022, we closed an SMB Private Education Loan Trust 2022-D term ABS transaction (the “2022-D Transaction”), in thousands, unless otherwise noted)
15. Subsequent Events
Increasewhich an unaffiliated third-party sold to 2021 Share Repurchase Program
the trust approximately $1.0 billion of Private Education Loans that the third-party seller previously purchased from us on September 15, 2022. In October 2021,the 2022-D Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $54 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our Boardbalance sheet on the settlement date of Directors approvedthe 2022-D transaction. The gain on sale of loans sold expressed as a $250 million increasepercentage 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 declaredsingle-digits and will be paid on December 15, 2021 to shareholdersrecognized in the fourth-quarter 2022 consolidated statements of record at the close of business on December 3, 2021.

income.
5852 SLM CORPORATION

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

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

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

We report financial results on a GAAP basis and also provide certain non-GAAP core earnings performance measures. The difference between our non-GAAP “Core Earnings” and GAAP results for the periods presented were the unrealized, mark-to-fair value gains/losses on derivative contracts (excluding current period accruals on the derivative instruments), net of tax. These are recognized in GAAP, but not in non-GAAP “Core Earnings” results. We provide non-GAAP “Core Earnings” measures because this is one of several measures management uses when making management decisions regarding our performance and the allocation of corporate resources. Our non-GAAP “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. For additional information, see “—Key Financial Measures” and “—‘CoreNon-GAAP ‘Core Earnings’ ” in this Form 10-Q for the
59SLM CORPORATION 53

Form 10-Q for the quarter ended September 30, 20212022 for a further discussion and a complete reconciliation between GAAP net income and non-GAAP “Core Earnings.”
Through this discussion and analysis, we intend to provide the reader with some narrative context for how our management views our consolidated financial statements, additional context within which to assess our operating results, and information on the quality and variability of our earnings, liquidity, and cash flows.
Impact of COVID-19 on Sallie Mae
During the first 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 quarterwith 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 schooldays in the fall of 2020 was not an option because of the pandemic or foroffice and other reasons. Therefore, some students took a “gap year” before returning to school. In 2020, for those students that had unexpectedly separateddays 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.II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Impact of COVID-19 on Sallie Mae” in the 20202021 Form 10-K.
The COVID-19 crisis is unprecedented and has had a significant impact on the economic environment globally and in the U.S. There is a significant amount of uncertainty as to the length and breadth of the impact to the U.S. economy and, consequently, on us. Economists expect the impact of COVID-19 on the U.S. economy to continue to be significant well into 2021.2022 and beyond. See Part I, Item 1A. “Risk Factors”Factors — Pandemic Risk” in the 20202021 Form 10-K for additional discussion regarding the risks associated with COVID-19.


60


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)
2021202020212020(In thousands,
except per share data and percentages) 		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) 		2022202120222021
Net income attributable to SLM Corporation common stock$71,674 $168,970 $850,689 $439,990 $72,641 $71,674 $540,494 $850,689 
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 share304,511 377,918 329,064 389,391 
Diluted earnings per common shareDiluted earnings per common share$0.29 $0.24 $2.03 $2.59 
Weighted average shares used to compute diluted earnings per common shareWeighted average shares used to compute diluted earnings per common share253,716 304,511 266,065 329,064 
Return on assets(1)
Return on assets(1)
1.0 %2.2 %3.8 %1.9 %
Return on assets(1)
1.0 %1.0 %2.6 %3.8 %
Other Operating Statistics (Held for Investment)Other Operating Statistics (Held for Investment)  Other Operating Statistics (Held for Investment)  
Ending Private Education Loans, netEnding Private Education Loans, net$20,561,961 $20,955,922 $20,561,961 $20,955,922 Ending Private Education Loans, net$18,980,852 $20,561,961 $18,980,852 $20,561,961 
Ending FFELP Loans, netEnding FFELP Loans, net703,355 743,220 703,355 743,220 Ending FFELP Loans, net641,450 703,355 641,450 703,355 
Ending total education loans, netEnding total education loans, net$21,265,316 $21,699,142 $21,265,316 $21,699,142 Ending total education loans, net$19,622,302 $21,265,316 $19,622,302 $21,265,316 
    
Ending Credit Cards, net$16,211 $10,629 $16,211 $10,629 
Ending Credit Cards, net(2)
Ending Credit Cards, net(2)
$— $16,211 $— $16,211 
Average education loansAverage education loans$21,658,098 $22,688,683 $21,584,629 $23,105,216 Average education loans$20,614,487 $21,658,098 $21,359,026 $21,584,629 
Average Personal Loans$— $527,204 $— $778,153 
Average Credit Cards$14,894 $11,086 $12,821 $8,588 
__________
Average Credit Cards(2)
Average Credit Cards(2)
$— $14,894 $— $12,821 
(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.
(2) Credit Card loans were transferred to loans held-for-sale at September 30, 2022.(2) Credit Card loans were transferred to loans held-for-sale at September 30, 2022.
 

54 SLM CORPORATION


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, 2021.2022.
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 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 20202021 Form 10-K.
Non-GAAP “Core Earnings”
We prepare financial statements in accordance with GAAP. However, we also produce and report our after-tax earnings on a separate basis that we refer to as “Core Earnings.” The difference between our non-GAAP “Core Earnings” and GAAP results for periods presented generally is driven by the unrealized, mark-to-fair value gains (losses) on derivative contracts recognized in GAAP, but not in non-GAAP “Core Earnings.”
Non-GAAP “Core Earnings” recognizes the difference in accounting treatment based upon whether a derivative qualifies for hedge accounting treatment. We enter into derivative instruments to economically hedge interest rate and cash flow risk associated with our portfolio. We believe that our derivatives are effective economic hedges and, as such, are a critical element of our interest rate risk management strategy. Those derivative instruments that qualify for hedge accounting treatment have their related cash flows recorded in interest income or interest expense along with the hedged item. Some of our derivatives do not qualify for hedge accounting treatment and the stand-alone derivative must be marked-to-fair value in the income statement with no consideration for the corresponding change in fair value of the hedged item. These gains and losses, recorded in “Gains (losses) on derivatives and hedging activities, net,” are primarily caused by interest rate volatility and changing credit spreads during the period as well as the volume and term of derivatives not receiving hedge accounting treatment. Cash flows on derivative instruments that do not qualify for hedge accounting are not recorded in interest income and interest expense; they are recorded in non-interest income: “Gains (losses) on derivatives and hedging activities, net.”
The adjustments required to reconcile from our non-GAAP “Core Earnings” results to our GAAP results of operations, net of tax, relate to differing treatments for those derivative instruments used to hedge our economic risks that do not qualify for hedge accounting treatment. The amount recorded in “Gains (losses) on derivatives and hedging activities, net” includes (i) the accrual of the current payment on the interest rate swaps that do not qualify for hedge accounting treatment, and (ii) the change in fair values related to future expected cash flows for derivatives that do not qualify for hedge accounting treatment. For purposes of non-GAAP “Core Earnings,” we include in GAAP earnings the current period accrual amounts (interest reclassification) on the swaps and exclude the change in fair values for those derivatives not qualifying for hedge accounting treatment. Non-GAAP “Core Earnings” is meant to represent what earnings would have been had these derivatives qualified for hedge accounting and there was no ineffectiveness.
Non-GAAP “Core Earnings” are not a substitute for reported results under GAAP. We provide a non-GAAP “Core Earnings” basis of presentation because (i) earnings per share computed on a non-GAAP “Core Earnings” basis is one of several measures we utilize in establishing management incentive compensation, and (ii) we believe it better reflects the financial results for derivatives that are economic hedges of interest rate risk, but which do not qualify for hedge accounting treatment.
GAAP provides a uniform, comprehensive basis of accounting. Our non-GAAP “Core Earnings” basis of presentation differs from GAAP in the way it treats derivatives as described above.

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

SLM CORPORATION 55

Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
(Dollars in thousands)2022202120222021
Unrealized gains (losses) on instruments not in a hedging relationship$— $(3,571)$(248)$(21,383)
Interest reclassification— 3,615 243 21,544 
Gains (losses) on derivatives and hedging activities, net$— $44 $(5)$161 

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)2022202120222021
Non-GAAP “Core Earnings” adjustments to GAAP:
GAAP net income$75,172 $72,840 $546,057 $854,248 
Preferred stock dividends2,531 1,166 5,563 3,559 
GAAP net income attributable to SLM Corporation common stock$72,641 $71,674 $540,494 $850,689 
Adjustments:
Net impact of derivative accounting(1)
— 3,571 248 21,383 
Net tax expense(2)
— 864 60 5,172 
Total non-GAAP “Core Earnings” adjustments to GAAP— 2,707 188 16,211 
Non-GAAP “Core Earnings” attributable to SLM Corporation common stock$72,641 $74,381 $540,682 $866,900 
GAAP diluted earnings per common share$0.29 $0.24 $2.03 $2.59 
Derivative adjustments, net of tax— — — 0.04 
Non-GAAP “Core Earnings” diluted earnings per common share$0.29 $0.24 $2.03 $2.63 

(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 
 September 30,		Nine Months Ended 
 September 30,
(Dollars in thousands)2022202120222021
Provisions for credit losses$207,598 $138,442 $336,193 $(17,648)
Total portfolio net charge-offs$(100,157)$(48,920)$(272,209)$(139,582)

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.

56 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 month2-month USD LIBOR and all tenors for other currencies ceased after December 31, 2021, and for2021. While publication of the remaining USD settings is expected to cease after June 30, 2023. The UKFCA does not expect that any
61

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 issuingaccepting certain deposits based on SOFR. In May 2022, we renewed the secondSecured Borrowing Facility with an index based on SOFR and, in the third quarter of 2021,2022, we began issuing ABS that are indexed to issue variable-rateSOFR.
Substantially all our assets, liabilities, and off-balance sheet items referencing LIBOR are comprised of Private Education Loans that use SOFR as a reference rate.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 thattransition 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 $228 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 57

The chart below depicts our current LIBOR exposure at September 30, 2022.

As of September 30, 2022
(dollars in thousands)		LIBOR
Exposure
Private Education Loans$6,833,357 
FFELP Loans544,795 
Available-for-sale investments52,726 
Total Assets$7,430,878 
Deposits$1,871,135 
Private Education Loan term securitizations - no contractual fallback227,645 
Private Education Loan term securitizations - alternative reference rate fallback634,422 
Total Liabilities2,733,202 
Total Equity (preferred stock)251,070 
Total Liabilities and Equity$2,984,272 
Off-Balance Sheet:
Pay LIBOR derivative notional$2,130,049 
Receive LIBOR derivative notional1,345,688 
Total derivative notional3,475,737 
Total Off-Balance Sheet$3,475,737 

See Part I, Item 1A. “Risk Factors” in the 20202021 Form 10-K for additional discussion regarding the risks associated with the transition from LIBOR.

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 alsovalue. 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 Conditioncompliance function, enhance and Results of Operations” inbuild upon our 2020 Form 10-K.risk management framework, and assess and monitor enterprise-wide risk.
During the first nine months of 2021,2022, we made the following progress on the above corporate strategic imperatives.
New Servicing Call Center PlatformAcquisition of Nitro College
On March 4, 2022, we completed the previously announced acquisition of Nitro, which provides resources that help students and Rebranded Online Resource Tools
In late March 2021, we migrated our servicing call centerfamilies evaluate how to a new integrated platform thatresponsibly pay for college and manage their financial responsibilities after graduation. The addition of Nitro will further our goal to deliver exceptional customer experiences. This new platform will also allow us to streamline our processes and provide efficiencies, thereby creating more customer-centric capabilities for our team members. We also relaunched our online resource to provide a centralized and simplified site that provides information onbring innovative products, tools, and resources for school counselors as they assistto help students and families plan and payconfidently navigate their higher education journey.
The acquisition of Nitro enhances future strategic growth opportunities 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
We launched www.SallieMakesSense.com to help educate and inform policymakers, influencers, media, and others about who Sallie Mae is today and illustrateexpands our digital marketing capabilities, reduces the important role we continuecost to play inacquire customer accounts, and accelerates our progress to become a broader education solutions provider helping students to, through, and families planimmediately after college. For additional information on this transaction, see Notes to Consolidated Financial Statements, Note 1, “Significant Accounting Policies — Business Combination,” and pay for college. In addition to providing key statisticsNote 7, “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
58 SLM CORPORATION

2022 Loan Sales and 2021-A2022-A and 2021-C2022-B Transactions
During the first nine months of 2021,2022, we sold $3.19$3.29 billion of our Private Education Loans, including $2.99$3.08 billion in principal and $195$213 million in capitalized interest, to an unaffiliated third party.parties. The transactiontransactions 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$325 million during the first nine months of 2021.2022. For additional information regarding these transactions, see Notes to Consolidated Financial Statements, Note 4,3, “Loans Held for Sale”Investment” and Note 8,9, “Borrowings - Unconsolidated VIEs.VIEs in this Form 10-Q.”
62


2021-B2022-C Securitization
On May 19, 2021,August 9, 2022, we executed our $531$575 million SMB Private Education Loan Trust 2021-B2022-C term ABS transaction, which was accounted for as a secured financing. We sold $531$575 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $529$575 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.264.69 years and priced at a weighted average LIBORSOFR equivalent cost of 1-month LIBORSOFR plus 0.771.76 percent.
2021-D Securitization
On August 18, 2021, we executedSeptember 30, 2022, $658 million of our $527 million SMB Private Education Loan Trust 2021-D term ABS transaction, which was accounted for as a secured financing. We sold $527Loans, including $613 million of notes to third partiesprincipal and retained a 100 percent$45 million in capitalized interest, in the residual certificates issued in the securitization, raising approximately $525 millionwere encumbered because 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.
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 months ended September 30, 2021, we repurchased 42.6 million shares of our common stock at a total cost of $804 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.transaction.
Secured Borrowing Facility
On July 30, 2021,May 17, 2022, we amended and extendedour 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 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.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, 2022.16, 2023. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 202316, 2024 (or earlier, if certain material adverse events occur).
Disposition of Credit Card Business
We plan to exit and sell our credit card business to focus resources on our core business strategies. We will process completed credit card applications received through the end of December 2022. At September 30, 2022, we had $29 million in Credit Card receivables in loans held for sale.
Share Repurchases under our Rule 10b5-1 trading plan
During the nine months ended September 30, 2022, we repurchased 30.7 million shares of our common stock at a total cost of $553 million under Rule 10b5-1 trading plans authorized under our share repurchase programs.

63SLM CORPORATION 59

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)20212020$%20212020$%
Interest income:
Loans$443 $478 $(35)(7)%$1,304 $1,513 $(209)(14)%
Investments3 3 — — 9 9 — — 
Cash and cash equivalents2 1 1 100 5 20 (15)(75)
Total interest income448 482 (34)(7)1,318 1,542 (224)(15)
Total interest expense90 118 (28)(24)291 429 (138)(32)
Net interest income358 365 (7)(2)1,027 1,113 (86)(8)
Less: provisions for credit losses138 (4)142 3,550 (18)409 (427)(104)
Net interest income after provisions for credit losses219 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 income14 10 4 40 77 43 34 79 
Total non-interest income14 10 4 40 480 331 149 45 
Non-interest expenses:
Total operating expenses141 127 14 11 393 416 (23)(6)
Restructuring expenses— 24 (24)(100)1 24 (23)(96)
Total non-interest expenses141 152 (11)(7)394 440 (46)(10)
Income before income tax expense92 226 (134)(59)1,130 594 536 90 
Income tax expense19 55 (36)(65)276 146 130 89 
Net income73 171 (98)(57)854 448 406 91 
Preferred stock dividends1 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 
 September 30,
Increase
(Decrease)
Nine Months Ended 
 September 30,
Increase
(Decrease)
20222021$%20222021$%
Interest income:
Loans$483 $443 $40 9 %$1,388 $1,304 $84 6 %
Investments10 3 7 233 24 9 15 167 
Cash and cash equivalents26 2 24 1,200 36 5 31 620 
Total interest income520 448 72 16 1,448 1,318 130 10 
Total interest expense150 90 60 67 341 291 50 17 
Net interest income370 358 12 3 1,107 1,027 80 8 
Less: provisions for credit losses208 138 70 51 336 (18)354 1,967 
Net interest income after provisions for credit losses162 219 (57)(26)771 1,045 (274)(26)
Non-interest income:
Gains on sales of loans, net75 — 75 100 325 403 (78)(19)
Other income20 14 6 43 50 77 (27)(35)
Total non-interest income95 14 81 579 375 480 (105)(22)
Non-interest expenses:
Total operating expenses150 141 9 6 414 393 21 5 
Acquired intangible assets amortization expense2 — 2 100 5 — 5 100 
Restructuring expenses— — — — — 1 (1)(100)
Total non-interest expenses152 141 11 8 419 394 25 6 
Income before income tax expense105 92 13 14 727 1,130 (403)(36)
Income tax expense30 19 11 58 181 276 (95)(34)
Net income75 73 2 3 546 854 (308)(36)
Preferred stock dividends2 1 1 100 6 4 2 50 
Net income attributable to SLM Corporation common stock$73 $72 $1 1 %$540 $850 $(310)(36)%
Basic earnings per common share$0.29 $0.24 $0.05 21 %$2.05 $2.62 $(0.57)(22)%
Diluted earnings per common share$0.29 $0.24 $0.05 21 %$2.03 $2.59 $(0.56)(22)%
Declared dividends per common share$0.11 $0.03 $0.08 267 %$0.33 $0.09 $0.24 267 %

6460 SLM CORPORATION

 GAAP Consolidated Earnings Summary
Three Months Ended September 30, 20212022 Compared with Three Months Ended September 30, 20202021
For the three months ended September 30, 2021,2022, net income was $73$75 million, or $0.24$0.29 diluted earnings per common share, compared with net income of $171$73 million, or $0.45$0.24 diluted earnings per common share, for the three months ended September 30, 2020.2021.
The primary drivers of changes in net income for the current quarter compared with the year-ago quarter are as follows:
•Net interest income decreasedincreased by $7$12 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 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 point increase in our net interest margin.margin, which more than offset a $1.0 billion reduction in our average Private Education Loans and FFELP Loans outstanding. Average Private Education Loans outstanding declined $986 million as a result of a $1.0 billion Private Education Loan sale that occurred during the third quarter of 2022. Our net interest margin increased as a result ofin the current quarter from the year-ago quarter primarily due to our interest-earning assets repricing faster than our cost of funds as interest rates increased over the past year. Historically, during a period of rising interest rates, our interest-bearing liabilities decreasing by more thannet interest margin will typically increase because the decline in the yieldyields on our interest-earning assets. When rates declined significantly during the first nine months of 2020, as a result of the COVID-19 pandemic, our variable-rate assets repricedreprice 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, and during a period of declining interest rates we typically see our interest-bearing liabilities for the third quarter of 2021 was 31 basis points lower than for the third quarter of 2020.net interest margin decrease.
•Provision for credit losses in the current quarter was $138$208 million, compared with a $4$138 million negative provision in the year-ago quarter. During the third quarter of 2021,2022, the provision for credit losses was primarily affected by slower than expected prepayment rates, new loan commitments made during the period, and additional management overlays, which were partially offset by a negative provision recorded as a result of a $1.0 billion Private Education Loan sale that occurred during the quarter. In the year-ago quarter, an increase inthe provision for credit losses was affected by provisions for new loan commitments and increased provisions related to our continuing implementation of new credit administration practices (as described in 2021. See additional discussion related to collections activity in Part II, Item 2.7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” in thisthe 2021 Form 10-Q) and other factors. In10-K.
•Gains on sales of loans were $75 million in the year-agocurrent quarter as a result of selling $1.0 billion of Private Education Loans in the provision for credit losses was favorably affected by improved economic forecasts compared to the second quarter of 2020, faster prepayments speeds, and a $43 million benefit from the sale of our Personal Loan portfolio. The benefit from the economic forecastsquarter. There were no loan sales 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.quarter.
•Other income was $14$20 million in the third quarter of 2021,2022, compared with $10$14 million in the year-ago quarter. The increase in other income compared withIn the year-agothird quarter of 2022, there was primarily the result of a $4 million increase in third-party servicing fees. Third-partyfees from the year-ago quarter and a $1 million increase in Private Education Loan late fees from the year-ago quarter. The increase in third-party servicing fees increased becausewas due to an additional $4.3 billion of loans that we sold a total of $3.19 billion in loans induring the first nine months of 2021past year where we retained servicing rights.continue to service on behalf of the owners of the loans.
•Third-quarter 20212022 total operating expenses were $141$150 million, compared with $127$141 million in the year-ago quarter. The increase in total operating expenses was primarily driven by higher personnelmarketing costs, staffing, and increased costs associated with the growth in loans owned and serviced.initiative spending, partially offset by lower FDIC assessment fees.
•InDuring the third quarter of 2020,2022, we implemented a restructuring plan that resultedrecorded $2 million in amortization of acquired intangible assets related to our recording a $24 million restructuring chargeacquisition of Nitro in the year-ago quarter. These expenses were primarily relatedfirst quarter of 2022. For additional information, see Notes to involuntary termination benefit arrangements, as well as certain other costs, such as legalConsolidated Financial Statements, Note 7, “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.”
•Third-quarter 20212022 income tax expense was $19$30 million, compared with $55$19 million in the year-ago quarter. Our effective income tax rate decreasedincreased to 21.028.2 percent in the third quarter of 20212022 from 24.421.0 percent in the year-ago quarter. The decreaseincrease in the effective rate for the third quarter of 20212022 was primarily due to alower than expected tax benefit related to stock compensation and lower state tax expense.credits in 2022.

65SLM CORPORATION 61

Nine Months Ended September 30, 20212022 Compared with Nine Months Ended September 30, 20202021
For the nine months ended September 30, 2021,2022, net income was $854$546 million, or $2.59$2.03 diluted earnings per common share, compared with net income of $448$854 million, or $1.13$2.59 diluted earnings per common share, for the nine months ended September 30, 2020.2021.
The primary drivers of changes in net income for the first nine months of 20212022 compared with the year-ago periodfirst nine months of 2021 are as follows:
•Net interest income decreasedincreased by $86$80 million in the first nine months of 20212022 compared with the year-ago period primarily due to a $2.357-basis point increase in our net interest margin, which more than offset a $1.2 billion reduction in average loans outstanding and a 10 basis point decreaseinterest-earning assets. Our net interest margin increased in the net interest margin. The declinecurrent period from the year-ago period because of a combination of factors, including a $1.5 billion reduction in low-yielding average loans outstanding was due to the sale of our Personal Loan portfolio that occurred in the third quarter of 2020cash and other short-term investments, and the saleyield on our interest-earning assets increasing faster than our cost of funds. Historically, the yields on interest-earnings assets reprice more quickly than our cost of funds. As such, as rates increased over the past year, we saw the yields on our interest-earning assets increase 87 basis points, while our cost of funds increased 28 basis points, compared with the first nine months of 2021. The higher level of cash and other short-term investments in 2021 was primarily the result of the $3.19 billion of Private Education LoansLoan sale that occurred 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
•Provision for credit losses in the first nine months of 2021 increased by $6322022 was $336 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 forin the year-ago period. This decrease of $427 million inDuring the first nine months of 2021 compared with2022, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to $3.29 billion in Private Education Loans sold in 2022. In the year-ago period, the provision for credit losses was primarily the result of improvingfavorably affected by improved economic forecasts in 2021, a change in the economic scenarios used and their respective weightings when estimating our allowance for credit losses, and faster prepaymentprepayments speeds. DuringIn addition, during the first quarter of 2021, we increased our estimates of future prepayment speeds during both the two-year reasonable and supportable period as well as the remaining term of the underlying loans. TheseThe faster estimated prepayment speeds during the two-year reasonable and supportable period reflectreflected the significant improvement in economic forecasts as well as the implementation of an updated prepayment speed model.model in the first quarter of 2021.
•Gains on sales of loans net were $403$325 million in the first nine months of 2021,2022, compared with $239$403 million in the year-ago period. The increaseHigher interest rates in 2022 compared with 2021 caused the decrease in gains on sales of loans was primarily the result of improved pricing on the sale of loans in the first nine months 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 when2022, 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 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.
•Other income was $77$50 million in the first nine months of 2021,2022, compared with $43$77 million in the year-ago period. The increasedecrease in other income compared with the year-ago period was primarily the result of a $35 million gain recorded in the year-ago period related to changes in the valuation of certain non-marketable securities, and a $21 million increase 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.securities. In addition, other income duringin 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 inIn the first nine months of 2021 where2022, we retainedrecorded a $5 million mark-to-fair value loss on our trading investments, offset by a $5 million increase in third-party servicing rights.fees versus the year-ago period.
•ForTotal operating expenses for the first nine months ended September 30, 2021, total operating expensesof 2022 were $393$414 million, compared with $416$393 million in the year-ago period. The decreaseincrease in total operating expenses was primarily driven by lowertransaction 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 lowermarketing and initiative spending and improved servicing efficiencies.spending.
•InDuring the thirdfirst nine months of 2022, we recorded $5 million in amortization of acquired intangible assets related to our acquisition of Nitro in the first quarter of 2020, we implemented a restructuring plan that resulted in our recording a $24 million restructuring charge in the nine months ended September 30, 2020. These expenses were primarily related2022. For additional information, see Notes to involuntary termination benefit arrangements, as well as certain other costs, such as legalConsolidated Financial Statements, Note 7, “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 tax expense for the first nine months ended September 30, 2021 of 2022was $276$181 million, compared with $146$276 million in the year-ago period. Our effective income tax rate decreasedwas 24.9 percent for the nine months ending September 30, 2022, compared with 24.4 percent for the year-ago period. The increase in the effective rate for the first nine months of 20212022 was primarily due to 24.4 percent from 24.6 percenta lower than expected tax credits in 2022.
6662 SLM CORPORATION

in the year-ago period. The decrease in the in effective income tax rate year to date is primarily due to a tax benefit related to stock compensation expense.

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












67

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)2021202020212020
Unrealized gains (losses) on instruments not in a hedging relationship$(3,571)$(12,848)$(21,383)$21,611 
Interest reclassification3,615 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)2021202020212020
“Core Earnings” adjustments to GAAP:
GAAP net income$72,840 $171,028 $854,248 $447,990 
Preferred stock dividends1,166 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 GAAP2,707 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.



68

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)2021202020212020
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.

69

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 September 30,Nine Months Ended September 30,
2021202020212020 2022202120222021
(Dollars in thousands)(Dollars in thousands)BalanceRateBalanceRateBalanceRateBalanceRate(Dollars in thousands)BalanceRateBalanceRateBalanceRateBalanceRate
Average AssetsAverage Assets    Average Assets    
Private Education LoansPrivate 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$19,958,763 9.43 %$20,944,581 8.26 %$20,685,372 8.82 %$20,860,973 8.23 %
FFELP LoansFFELP Loans713,517 3.45 750,925 3.46 723,656 3.43 762,863 3.86 FFELP Loans655,724 5.03 713,517 3.45 673,654 4.18 723,656 3.43 
Personal Loans— — 527,204 12.86 — — 778,153 12.43 
Credit CardsCredit Cards14,894 6.95 11,086 (6.58)12,821 4.97 8,588 (7.20)Credit Cards29,443 4.77 14,894 6.95 28,219 4.24 12,821 4.97 
Taxable securitiesTaxable securities2,029,739 0.66 2,134,005 0.59 2,007,867 0.62 1,376,342 0.84 Taxable securities2,539,115 1.60 2,029,739 0.66 2,552,487 1.27 2,007,867 0.62 
Cash and other short-term investmentsCash and other short-term investments4,477,634 0.16 4,934,477 0.13 5,574,427 0.13 5,665,861 0.49 Cash and other short-term investments4,625,523 2.27 4,477,634 0.16 4,077,340 1.21 5,574,427 0.13 
Total interest-earning assetsTotal interest-earning assets28,180,365 6.30 %30,295,455 6.34 %29,179,744 6.04 %30,934,160 6.66 %Total interest-earning assets27,808,568 7.42 %28,180,365 6.30 %28,017,072 6.91 %29,179,744 6.04 %
Non-interest-earning assetsNon-interest-earning assets655,288 (13,559)656,357 86,471 Non-interest-earning assets687,518 655,288 597,283 656,357 
Total assetsTotal assets$28,835,653 $30,281,896 $29,836,101 $31,020,631 Total assets$28,496,086 $28,835,653 $28,614,355 $29,836,101 
Average Liabilities and EquityAverage Liabilities and EquityAverage Liabilities and Equity
Brokered depositsBrokered deposits$10,706,147 1.26 %$12,409,614 1.61 %$11,281,800 1.38 %$13,051,185 1.93 %Brokered deposits$9,905,248 2.23 %$10,706,147 1.26 %$9,813,559 1.67 %$11,281,800 1.38 %
Retail and other depositsRetail and other deposits10,377,808 0.66 10,849,616 1.22 10,533,660 0.73 10,747,941 1.62 Retail and other deposits10,970,838 1.89 10,377,808 0.66 11,047,661 1.15 10,533,660 0.73 
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)
5,453,219 3.09 5,371,756 2.88 5,550,092 2.96 5,235,105 2.99 
Total interest-bearing liabilitiesTotal interest-bearing liabilities26,455,711 1.35 %28,192,993 1.66 %27,050,565 1.44 %28,667,328 2.00 %Total interest-bearing liabilities26,329,305 2.27 %26,455,711 1.35 %26,411,312 1.72 %27,050,565 1.44 %
Non-interest-bearing liabilitiesNon-interest-bearing liabilities159,371 36,829 323,184 129,102 Non-interest-bearing liabilities188,532 159,371 106,363 323,184 
EquityEquity2,220,571 2,052,074 2,462,352 2,224,201 Equity1,978,249 2,220,571 2,096,680 2,462,352 
Total liabilities and equityTotal liabilities and equity$28,835,653 $30,281,896 $29,836,101 $31,020,631 Total liabilities and equity$28,496,086 $28,835,653 $28,614,355 $29,836,101 
Net interest marginNet interest margin5.03 %4.79 %4.71 %4.81 %Net interest margin5.27 %5.03 %5.28 %4.71 %
 
_________________
(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.




70SLM CORPORATION 63

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 September 30, 2022 vs. 2021Three Months Ended September 30, 2022 vs. 2021   
Interest incomeInterest income$(34,823)$(2,618)$(32,205)Interest income$72,356 $78,333 $(5,977)
Interest expenseInterest expense(27,774)(21,188)(6,586)Interest expense60,364 60,797 (433)
Net interest incomeNet interest income$(7,049)$18,164 $(25,213)Net interest income$11,992 $16,757 $(4,765)
Nine Months Ended September 30, 2021 vs. 2020   
Nine Months Ended September 30, 2022 vs. 2021Nine Months Ended September 30, 2022 vs. 2021   
Interest incomeInterest income$(223,702)$(138,155)$(85,547)Interest income$129,577 $183,748 $(54,171)
Interest expenseInterest expense(137,662)(114,177)(23,485)Interest expense49,643 56,665 (7,022)
Net interest incomeNet interest income$(86,040)$(23,114)$(62,926)Net interest income$79,934 $122,102 $(42,168)
         _________________
(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.
64 SLM CORPORATION

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 CardsTotal Loans Held for Investment
Total loan portfolio:   
In-school(1)
$3,735,655$71$—$3,735,726
Grace, repayment and other(2)
17,967,182705,62017,76618,690,568
Total, gross21,702,837705,69117,76622,426,294
Deferred origination costs and unamortized premium/(discount)68,5841,87018670,640
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 total97 %3 %— %100 %
____________
As of September 30, 2022
(dollars in thousands)
Private
Education
Loans
FFELP
Loans		Total Loans Held for Investment
Total loan portfolio:   
In-school(1)
$3,554,254$57$3,554,311
Grace, repayment and other(2)
16,550,209643,55717,193,766
Total, gross20,104,463643,61420,748,077
Deferred origination costs and unamortized premium/(discount)66,8161,64768,463
Allowance for credit losses(1,190,427)(3,811)(1,194,238)
Total loans held for investment portfolio, net$18,980,852$641,450$19,622,302
    
% of total97 %3 %100 %

As of December 31, 2021
(dollars in thousands)
Private
Education
Loans
FFELP
Loans		Credit
Cards		Total Loans Held for Investment
Total loan portfolio:   
In-school(1)
$3,544,030 $82 $— $3,544,112 
Grace, repayment and other(2)
17,172,833 695,134 25,014 17,892,981 
Total, gross20,716,863 695,216 25,014 21,437,093 
Deferred origination costs and unamortized premium/(discount)67,488 1,815 222 69,525 
Allowance for credit losses(1,158,977)(4,077)(2,281)(1,165,335)
Total loans held for investment portfolio, net$19,625,374 $692,954 $22,955 $20,341,283 
   
% of total97 %3 %— %100 %
(1)Loans for customers still attending school and who are not yet required to make payments on the loans.

(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.period (but, for purposes of the table, do not include those loans while they are in forbearance).


71

December 31, 2020
(Dollars in thousands)Private
Education
Loans		FFELP
Loans		Credit CardsTotal Loans Held for Investment
Total loan portfolio:
In-school(1)
$3,582,394$81 $— $3,582,475 
Grace, repayment and other(2)(3)
16,146,943737,512 12,238 16,896,693 
Total, gross19,729,337737,593 12,238 20,479,168 
Deferred origination costs and unamortized premium/(discount)63,4751,993 230 65,698 
Allowance for credit losses(1,355,844)(4,378)(1,501)(1,361,723)
Total loans held for investment portfolio, net$18,436,968$735,208 $10,967 $19,183,143
 
% of total96 %4 %— %100 %
    ____________
(1)Loans for customers still attending school and who are not yet required to make payments on the loans. At December 31, 2020, the loans in the “in-school” category include $254 million of Private Education Loans whose borrowers did not return to school in the fall of 2020 because of the pandemic, or other reasons, and who received an extension of time from us to re-enroll before beginning their grace period and, therefore, were not then required to make any payments. 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,
(Dollars in thousands)2021202020212020
Private Education Loans$20,944,581 97 %$21,937,758 95 %$20,860,973 97 %$22,342,353 94 %
FFELP Loans713,517 3 750,925 3 723,656 3 762,863 3 
Personal Loans— — 527,204 2 — — 778,153 3 
Credit Cards14,894 — 11,086 — 12,821 — 8,588 — 
Total portfolio$21,672,992 100 %$23,226,973 100 %$21,597,450 100 %$23,891,957 100 %

Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
(Dollars in thousands)2022202120222021
Private Education Loans$19,958,763 97 %$20,944,581 97 %$20,685,372 97 %$20,860,973 97 %
FFELP Loans655,724 3 713,517 3 673,654 3 723,656 3 
Credit Cards— — 14,894 — — — 12,821 — 
Total portfolio$20,614,487 100 %$21,672,992 100 %$21,359,026 100 %$21,597,450 100 %


72

Loans Held for Investment, Net Activity

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-rate1,253,720 — — 1,253,720 
Variable-rate844,110 — 18,326 862,436 
Total acquisitions and originations2,097,830 — 18,326 2,116,156 
Capitalized interest and deferred origination cost premium amortization96,385 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 LoansCredit
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-rate882,782 — — — 882,782 
Variable-rate1,019,613 — — 9,059 1,028,672 
Total acquisitions and originations1,902,395 — — 9,059 1,911,454 
Capitalized interest and deferred origination cost premium amortization107,189 7,625 (50)(252)114,512 
Sales— — (588,285)— (588,285)
Loan consolidations to third-parties(1)
(296,322)(4,952)— — (301,274)
Allowance31,747 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.

73SLM CORPORATION 65


Loans Held for Investment, Net
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-rate2,570,579 — — 2,570,579 
Variable-rate2,134,149 — 39,484 2,173,633 
Total acquisitions and originations4,704,728 — 39,484 4,744,212 
Capitalized interest and deferred origination cost premium amortization297,149 21,022 (251)317,920 
Sales(150,928)— — (150,928)
Transfer from loans held for sale25,040 — — 25,040 
Loan consolidations to third-parties(1,135,141)(20,320)— (1,155,461)
Allowance146,384 171 (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 
— Activity

 
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)
Three Months Ended September 30, 2022
(dollars in thousands)		Three Months Ended September 30, 2022
(dollars in thousands)		 Private
Education
Loans		FFELP
Loans		Credit
Cards		Total Loans
Held for
Investment, net
Beginning balanceBeginning balance$22,896,515 $783,816 $983,643 $3,818 $24,667,792 Beginning balance$18,511,250 $663,452 $26,626 $19,201,328 
Day 1 CECL Adjustment to Allowance(1,060,830)(2,852)(79,183)(188)(1,143,053)
Balance at January 1, 202021,835,685 780,964 904,460 3,630 23,524,739 
Acquisitions and originations:Acquisitions and originations:Acquisitions and originations:
Fixed-rateFixed-rate2,606,056 — 41 — 2,606,097 Fixed-rate1,740,029 — — 1,740,029 
Variable-rateVariable-rate2,103,322 — — 26,885 2,130,207 Variable-rate616,333 — 21,122 637,455 
Total acquisitions and originationsTotal acquisitions and originations4,709,378 — 41 26,885 4,736,304 Total acquisitions and originations2,356,362 — 21,122 2,377,484 
Capitalized interest and deferred origination cost premium amortizationCapitalized interest and deferred origination cost premium amortization334,355 19,196 (253)(567)352,731 Capitalized interest and deferred origination cost premium amortization91,637 6,096 (41)97,692 
SalesSales(2,925,478)— (588,285)— (3,513,763)Sales(976,888)— — (976,888)
Loan consolidations to third-parties(1)
(988,299)(16,659)— — (1,004,958)
Transfer to loans held-for-saleTransfer to loans held-for-sale— — (28,458)(28,458)
Loan consolidations to third-partiesLoan consolidations to third-parties(290,727)(16,163)— (306,890)
AllowanceAllowance(293,682)122 36,526 (1,095)(258,129)Allowance(115,683)118 2,393 (113,172)
Repayments and other(1)
(1,716,037)(40,403)(352,489)(18,224)(2,127,153)
Repayments and otherRepayments and other(595,099)(12,053)(21,642)(628,794)
Ending balanceEnding balance$20,955,922 $743,220 $— $10,629 $21,709,771 Ending balance$18,980,852 $641,450 $— $19,622,302 

_________
(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.

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-rate1,253,720 — — 1,253,720 
Variable-rate844,110 — 18,326 862,436 
Total acquisitions and originations2,097,830 — 18,326 2,116,156 
Capitalized interest and deferred origination cost premium amortization96,385 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 


7466 SLM CORPORATION



Nine Months Ended September 30, 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-rate3,528,370 — — 3,528,370 
Variable-rate1,643,194 — 63,331 1,706,525 
Total acquisitions and originations5,171,564 — 63,331 5,234,895 
Capitalized interest and deferred origination cost premium amortization303,049 18,709 (195)321,563 
Sales(3,085,758)— — (3,085,758)
Transfer to loans held-for-sale— — (28,458)(28,458)
Loan consolidations to third-parties(1,126,636)(33,880)— (1,160,516)
Allowance(31,450)266 2,281 (28,903)
Repayments and other(1,875,291)(36,599)(59,914)(1,971,804)
Ending balance$18,980,852 $641,450 $— $19,622,302 

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-rate2,570,579 — — 2,570,579 
Variable-rate2,134,149 — 39,484 2,173,633 
Total acquisitions and originations4,704,728 — 39,484 4,744,212 
Capitalized interest and deferred origination cost premium amortization297,149 21,022 (251)317,920 
Sales(150,928)— — (150,928)
Transfer from loans held-for-sale25,040 — — 25,040 
Loan consolidations to third-parties(1,135,141)(20,320)— (1,155,461)
Allowance146,384 171 (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 

“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, 20212022 decreased by 61 percent compared with September 30, 2020,2021, and now total 3639 percent of our Private Education Loans held for investment portfolio at September 30, 2021.2022.
“Loan consolidations to third-parties” for the three months ended September 30, 20212022 total 5.53.9 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status at September 30, 2021,2022, or 2.01.5 percent of our total Private Education Loans held for investment portfolio at September 30, 2021,2022, compared with the year-ago period of 3.75.5 percent of our Private Education Loans held for investment portfolio in full principal and interest repayment status, or 1.62.0 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. In addition, in higher interest rate environments, such as occurred in the third quarter of 2022, we typically experience reduced loan consolidated activity.
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.
75SLM CORPORATION 67


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 
 September 30,
(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)
$464,602 20 %$412,877 20 %
Smart Option - fixed pay(1)
Smart Option - fixed pay(1)
670,646 32 539,600 28 
Smart Option - fixed pay(1)
770,183 33 672,068 32 
Smart Option - deferred(1)
Smart Option - deferred(1)
790,532 38 677,661 36 
Smart Option - deferred(1)
939,835 40 791,716 38 
Smart Option - principal and interest3,838 — 3,408 — 
Graduate Loan176,898 8 188,673 10 
Parent Loan34,401 2 34,468 2 
Graduate Loan(2)
Graduate Loan(2)
176,114 7 176,898 8 
Parent Loan(3)
Parent Loan(3)
217 — 34,400 2 
Total Private Education Loan originationsTotal Private Education Loan originations$2,087,959 100 %$1,895,645 100 %Total Private Education Loan originations$2,350,951 100 %$2,087,959 100 %
Percentage of loans with a cosignerPercentage of loans with a cosigner87.8 %87.7 %Percentage of loans with a cosigner88.6 %87.8 %
Average FICO at approval(2)
749 752 
Average FICO at approval(4)
Average FICO at approval(4)
747 749 
Nine Months Ended 
 September 30,
(Dollars in thousands)(Dollars in thousands)2022%2021%
Smart Option - interest only(1)
Smart Option - interest only(1)
$995,603 19 %$988,838 21 %
Smart Option - fixed pay(1)
Smart Option - fixed pay(1)
1,679,130 33 1,448,614 31 
Smart Option - deferred(1)
Smart Option - deferred(1)
2,025,277 39 1,737,430 37 
Graduate Loan(2)
Graduate Loan(2)
424,807 8 432,837 9 
Parent Loan(3)
Parent Loan(3)
30,439 1 77,957 2 
Total Private Education Loan originationsTotal Private Education Loan originations$5,155,256 100 %$4,685,676 100 %
Percentage of loans with a cosignerPercentage of loans with a cosigner86.6 %86.7 %
Average FICO at approval(4)
Average FICO at approval(4)
747 750 

 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 interest9,399 — 8,234 — 
Graduate Loan432,837 9 483,545 10 
Parent Loan77,958 2 89,314 2 
Total Private Education Loan originations$4,685,676 100 %$4,693,756 100 %
Percentage of loans with a cosigner86.7 %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 20202021 Form 10-K for a further discussion.
(2) For the three months ended September 30, 2022, the Graduate Loan originations include $0.1 million of Parent Loans and $10.7 million of Smart Option Loans where the student was in a graduate status. For the three months ended September 30, 2021, the Graduate Loan originations include $2.3 million of Parent Loans and $9.8 million of Smart Option Loans where the student was in a graduate status. For the nine months ended September 30, 2022, the Graduate Loan originations include $1.8 million of Parent Loans and $24.5 million of Smart Option Loans where the student was in a graduate status. For the nine months ended September 30, 2021, the Graduate Loan originations include $4.8 million of Parent Loans and $20.2 million of Smart Option Loans where the student was in a graduate status.
(3) 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.
(4) Represents the higher credit score of the cosigner or the borrower.
7668 SLM CORPORATION

Allowance for Credit Losses
Allowance for Credit Losses Activity

 Three Months Ended September 30,
 20212020
(Dollars in thousands)Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Personal LoansCredit CardsTotal
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:      
Recoveries7,302 — 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 September 30,
(dollars in thousands)		20222021
Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio
Beginning balance$1,074,744 $3,929 $2,393 $1,081,066 $1,154,540 $4,262 $1,442 $1,160,244 
Transfer from unfunded commitment liability(1)
168,377 — — 168,377 110,613 — — 110,613 
Less:      
Charge-offs(109,350)(147)(2,062)(111,559)(56,000)(106)(119)(56,225)
Plus:      
Recoveries11,400 — 2 11,402 7,302 — 3 7,305 
Provisions for credit losses:
Provision, current period95,482 29 2,039 97,550 (6,995)50 415 (6,530)
Loan sale reduction to provision(50,226)— — (50,226)— — — — 
Loans transferred to held-for-sale— — (2,372)(2,372)— — — — 
Total provisions for credit losses(2)
45,256 29 (333)44,952 (6,995)50 415 (6,530)
Ending balance$1,190,427 $3,811 $— $1,194,238 $1,209,460 $4,206 $1,741 $1,215,407 

(1) 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.
(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		Consolidated Statements of Income
Provisions for Credit Losses Reconciliation		Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Three Months Ended September 30,
(Dollars in thousands)20212020
Three Months Ended September 30,
(dollars in thousands)		Three Months Ended September 30,
(dollars in thousands)
20222021
Private Education Loan provisions for credit losses:Private Education Loan provisions for credit losses:Private Education Loan provisions for credit losses:
Provisions for loan lossesProvisions for loan losses$(6,995)$(81,710)Provisions for loan losses$45,256 $(6,995)
Provisions for unfunded loan commitmentsProvisions for unfunded loan commitments144,972 129,290 Provisions for unfunded loan commitments162,646 144,972 
Total Private Education Loan provisions for credit lossesTotal Private Education Loan provisions for credit losses137,977 47,580 Total Private Education Loan provisions for credit losses207,902 137,977 
Other impacts to the provisions for credit losses:Other impacts to the provisions for credit losses:Other impacts to the provisions for credit losses:
Personal Loans— (51,678)
FFELP LoansFFELP Loans50 67 FFELP Loans29 50 
Credit CardsCredit Cards415 391 Credit Cards(333)415 
TotalTotal465 (51,220)Total(304)465 
Provisions for credit losses reported in consolidated statements of incomeProvisions for credit losses reported in consolidated statements of income$138,442 $(3,640)Provisions for credit losses reported in consolidated statements of income$207,598 $138,442 
(3)
Represents the unpaid principal balance of loans classified as troubled debt restructurings.
77SLM CORPORATION 69


  
Nine Months Ended September 30,
20212020
(Dollars in thousands)Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Personal LoansCredit CardsTotal
Portfolio
Nine Months Ended September 30,
(dollars in thousands)		Nine Months Ended September 30,
(dollars in thousands)		20222021
Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio		Private
Education
Loans		FFELP
Loans		Credit CardsTotal
Portfolio
Beginning balanceBeginning balance$1,355,844 $4,378 $1,501 $1,361,723 $374,300 $1,633 $65,877 $102 $441,912 Beginning balance$1,158,977 $4,077 $2,281 $1,165,335 $1,355,844 $4,378 $1,501 $1,361,723 
Day 1 adjustment for adoption of CECL— — — — 1,060,830 2,852 79,183 188 1,143,053 
Balance at January 11,355,844 4,378 1,501 1,361,723 1,435,130 4,485 145,060 290 1,584,965 
Transfer from unfunded commitment liability(1)
Transfer from unfunded commitment liability(1)
262,049 — — 262,049 279,555 — — — 279,555 
Transfer from unfunded commitment liability(1)
303,591 — — 303,591 262,049 — — 262,049 
Less:Less:      Less:      
Charge-offsCharge-offs(161,039)(249)(281)(161,569)(138,546)(399)(39,079)(96)(178,120)Charge-offs(299,699)(376)(2,549)(302,624)(161,039)(249)(281)(161,569)
Loan sales— — — — — — (108,534)— (108,534)
Plus:Plus:      Plus:      
RecoveriesRecoveries21,977 — 10 21,987 18,298 — 4,984 — 23,282 Recoveries30,410 — 5 30,415 21,977 — 10 21,987 
Provision for loan losses:
Provisions for credit losses:Provisions for credit losses:
Provision, current periodProvision, current period(260,923)77 511 (260,335)296,167 277 40,485 1,191 338,120 Provision, current period168,473 110 2,635 171,218 (260,923)77 511 (260,335)
Loan sale reduction to provisionLoan sale reduction to provision(10,335)— — (10,335)(161,793)— (42,916)— (204,709)Loan sale reduction to provision(171,325)— — (171,325)(10,335)— — (10,335)
Loans transferred from held-for-sale1,887 — — 1,887 — — — — — 
Loans transferred (to) from held-for-saleLoans transferred (to) from held-for-sale— — (2,372)(2,372)1,887 — — 1,887 
Total provisions for credit losses(2)
Total provisions for credit losses(2)
(269,371)77 511 (268,783)134,374 277 (2,431)1,191 133,411 
Total provisions for credit losses(2)
(2,852)110 263 (2,479)(269,371)77 511 (268,783)
Ending balanceEnding balance$1,209,460 $4,206 $1,741 $1,215,407 $1,728,811 $4,363 $— $1,385 $1,734,559 Ending balance$1,190,427 $3,811 $— $1,194,238 $1,209,460 $4,206 $1,741 $1,215,407 
      
Troubled debt restructurings(3)
$1,148,282 $— $— $1,148,282 $1,495,161 $— $— $1,495,161 
_________
(1) 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.
(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
Nine Months Ended September 30,
(Dollars in thousands)20212020
Private Education Loan provisions for credit losses:
Provisions for loan losses$(269,371)$134,374 
Provisions for unfunded loan commitments251,135 276,094 
Total Private Education Loan provisions for credit losses(18,236)410,468 
Other impacts to the provisions for credit losses:
Personal Loans— (2,431)
FFELP Loans77 277 
Credit Cards511 1,191 
Total588 (963)
Provisions for credit losses reported in consolidated statements of income$(17,648)$409,505 
(3) Represents the unpaid principal balance of loans classified as troubled debt restructurings.
Consolidated Statements of Income
Provisions for Credit Losses Reconciliation
Nine Months Ended September 30,
(dollars in thousands)
20222021
Private Education Loan provisions for credit losses:
Provisions for loan losses$(2,852)$(269,371)
Provisions for unfunded loan commitments338,672 251,135 
Total Private Education Loan provisions for credit losses335,820 (18,236)
Other impacts to the provisions for credit losses:
FFELP Loans110 77 
Credit Cards263 511 
Total373 588 
Provisions for credit losses reported in consolidated statements of income$336,193 $(17,648)
7870 SLM CORPORATION

Private Education Loan Allowance for Credit Losses
In establishing the allowance for Private Education Loan losses as of September 30, 2021,2022, we considered several factors with respect to our Private Education Loan portfolio, in particular, credit quality and delinquency, forbearance, and charge-off trends.
Private Education Loans held for investment in full principal and interest repayment status were 3639 percent of our total Private Education Loans held for investment portfolio at September 30, 2021,2022, compared with 4336 percent at September 30, 2020.2021.
For a more detailed discussion of our policy for determining the collectability of Private Education Loans and maintaining our allowance for Private Education Loans, see “—Allowance for Credit Losses” and Notes to Consolidated Financial Statements, Note 3, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in this Form 10-Q and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Allowance for Credit Losses” and Notes to Consolidated Financial Statements, Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans” in the 20202021 Form 10-K.
79SLM CORPORATION 71

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,
 20212020
(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 current15,115,541 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 repayment15,490,132 100.0 %15,853,309 100.0 %
Total Private Education Loans, gross21,702,837 22,614,327  
Private Education Loans deferred origination costs and unamortized premium/(discount)68,584 70,406  
Total Private Education Loans21,771,421 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 repayment71.4 %70.1 %
Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment2.4 %3.0 %
Delinquencies as a percentage of Private Education Loans in repayment and delinquent forbearance loans2.4 %3.0 %
 
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance2.3 %4.3 %

_________
Private Education Loans Held for Investment20222021
September 30, (dollars in thousands)Balance%Balance%
Loans in-school/grace/deferment(1)
$5,356,860 $5,855,280 
Loans in forbearance(2)
201,047 357,425 
Loans in repayment and percentage of each status:
Loans current14,002,955 96.3 %15,115,541 97.6 %
Loans delinquent 30-59 days(3)
255,241 1.8 199,942 1.3 
Loans delinquent 60-89 days(3)
151,812 1.0 101,512 0.6 
Loans 90 days or greater past due(3)
136,548 0.9 73,137 0.5 
Total Private Education Loans in repayment14,546,556 100.0 %15,490,132 100.0 %
Total Private Education Loans, gross20,104,463 21,702,837  
Private Education Loans deferred origination costs and unamortized premium/(discount)66,816 68,584  
Total Private Education Loans20,171,279 21,771,421  
Private Education Loans allowance for losses(1,190,427)(1,209,460) 
Private Education Loans, net$18,980,852 $20,561,961  
 
Percentage of Private Education Loans in repayment72.4 %71.4 %
Delinquencies as a percentage of Private Education Loans in repayment3.7 %2.4 %
 
Loans in forbearance as a percentage of Private Education Loans in repayment and forbearance1.4 %2.3 %
(1)At September 30, 2020, the loans in the “in-school/grace/deferment” category above include $379 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 received an extension of time from us to re-enroll before beginning their grace period. At September 30, 2020, the loans in the “in forbearance” category above include $11 million of Private Education Loans whose borrowers 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. At September 30, 2020, the loans in the “in repayment” category above include $447 million of Private Education Loans whose borrowers 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. 
(2)Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation).
(3)(2)Loans for customers who have requested extension of grace period generally during employment transition or who have temporarily ceased making full payments due to hardship or other factors, consistent with established loan program servicing policies and procedures.
(4)(3)The period of delinquency is based on the number of days scheduled payments are contractually past due.
80


Delinquencies as a percentage of Private Education Loans (held for investment) in repayment and delinquent forbearance loans decreasedincreased to 3.7 percent at September 30, 2022 from 2.4 percent at September 30, 2021, from 3.0 percent at September 30, 2020, and the forbearance rate decreased to 1.4 percent at September 30, 2022 from 2.3 percent at September 30, 2021 from 4.3 percent2021. The delinquency rate at September 30, 2020. The delinquency rate on September 30, 20212022 was lowerhigher than for the year-ago quarter due to several factors, including the suspension of payments on federalcredit administration practices changes we implemented in 2021 that imposed additional requirements for those borrowers requesting forbearance. Also contributing to the increase are certain loans which reducedwhose borrowers took a “gap year” during the payment burden by our borrowers, multiple stimulus packages signed into law during 2020pandemic entering full principal and interest repayment status starting in late 2021 and early 2022, and the first quarteroverall strain on our collections team arising from increased collections activity and staffing shortages driven by tight labor markets. The lower forbearance rate was the result of 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, an additional forbearance. Many of those borrowers went back into repayment status at the end of their original three-month disaster forbearance. Other borrowers asked for additional forbearance and we began granting those in one-month increments. We stopped providing COVID-19 related disaster forbearances in June 2021.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 “Financial Condition — Allowance for Credit Losses — Use of Forbearance and Rate Modifications as a Private Education Loan Collection Tool” in the 20202021 Form 10-K.





81
72 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)2021202020212020
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 balance1,154,540 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)
Recoveries7,302 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 balance5.57 %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 
 September 30,		Nine Months Ended 
 September 30,
(Dollars in thousands)2022202120222021
Beginning balance$1,074,744 $1,154,540 $1,158,977 $1,355,844 
Transfer from unfunded commitment liability(1)
168,377 110,613 303,591 262,049 
Provision for credit losses:
Provision, current period95,482 (6,995)168,473 (260,923)
Loan sale reduction to provision(50,226)— (171,325)(10,335)
Loans transferred from held-for-sale— — — 1,887 
Total provision45,256 (6,995)(2,852)(269,371)
Net charge-offs:
Charge-offs(109,350)(56,000)(299,699)(161,039)
Recoveries11,400 7,302 30,410 21,977 
Net charge-offs(97,950)(48,698)(269,289)(139,062)
Ending balance$1,190,427 $1,209,460 $1,190,427 $1,209,460 
   
Allowance as a percentage of the ending total loan balance5.92 %5.57 %5.92 %5.57 %
Allowance as a percentage of the ending loans in repayment(2)
8.18 %7.81 %8.18 %7.81 %
Allowance coverage of net charge-offs (annualized)3.04 6.21 3.32 6.52 
Net charge-offs as a percentage of average loans in repayment (annualized)(2)
2.67 %1.29 %2.37 %1.25 %
Delinquencies as a percentage of ending loans in repayment(2)
3.74 %2.42 %3.74 %2.42 %
Loans in forbearance as a percentage of ending loans in repayment and forbearance(2)
1.36 %2.26 %1.36 %2.26 %
Ending total loans, gross$20,104,463 $21,702,837 $20,104,463 $21,702,837 
Average loans in repayment(2)
$14,674,437 $15,108,802 $15,173,465 $14,877,937 
Ending loans in repayment(2)
$14,546,556 $15,490,132 $14,546,556 $15,490,132 
(1) 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.
(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.period (but, for purposes of the table, do not include those loans while they are in forbearance).
 
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.
82


Use of ForbearanceCharge-offs increased in both the three and Rate Modifications as a Private Education Loan Collection Tool
We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations 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.

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 one 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 threenine 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 responseended September 30, 2022 compared to the COVID-19 pandemic. As borrowers inrespective year-ago periods because of 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,changes 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,implemented in 2021 that imposed additional requirements for those borrowers could receive consecutive forbearance grants without intervening payments of principal and interest, if they satisfied all eligibility requirements.
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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 subjectrequesting forbearance. Also contributing 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-initiatedincrease were elevated losses on loans whose borrowers took 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 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“gap year” during the first six months following a borrower’s grace periodpandemic 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 inentered 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 collectionstarting in late 2021 and servicing practices will generally align with guidelines for student lending published by the Office of the Comptroller of the Currency.
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),2022, 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 tooverall strain on our collections practices described above will only be realized over the long term. When we calculatedteam arising from increased collections activity and staffing shortages driven by tight labor markets. The increased charge-offs caused the allowance coverage of net charge-offs (annualized) ratio to decline for credit losses under CECL atthe three and nine months ended September 30, 2021, our loan loss reserves increased materially because we expect2022 compared with the life of loan defaults on our overall Private Education Loan portfolio to increase, in part as arespective year-ago periods.
84SLM CORPORATION 73

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.
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 percent2022, for Private Education Loans (held for investment) that have been in active repayment status for fewer than 25 months.months, loans in forbearance status as a percentage of all loans in repayment and forbearance were 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 1213 to 2425 to 3637 to 48More than 48

As of September 30, 2022
(dollars in millions)

As of September 30, 2022
(dollars in millions)
Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/defermentLoans in-school/grace/deferment$— $— $— $— $— $5,855 $5,855 Loans in-school/grace/deferment$— $— $— $— $— $5,357 $5,357 
Loans in forbearanceLoans in forbearance195 56 37 27 42 — 357 Loans in forbearance117 33 20 13 18 — 201 
Loans in repayment - currentLoans in repayment - current4,853 3,364 2,244 1,625 3,030 — 15,116 Loans in repayment - current4,918 2,659 2,032 1,418 2,975 — 14,002 
Loans in repayment - delinquent 30-59 daysLoans in repayment - delinquent 30-59 days74 37 28 21 40 — 200 Loans in repayment - delinquent 30-59 days88 45 38 24 60 — 255 
Loans in repayment - delinquent 60-89 daysLoans in repayment - delinquent 60-89 days43 19 14 9 17 — 102 Loans in repayment - delinquent 60-89 days53 27 22 16 34 — 152 
Loans in repayment - 90 days and greater past due28 14 10 7 14 — 73 
Loans in repayment - 90 days or greater past dueLoans in repayment - 90 days or greater past due44 27 21 14 31 — 137 
TotalTotal$5,193 $3,490 $2,333 $1,689 $3,143 $5,855 21,703 Total$5,220 $2,791 $2,133 $1,485 $3,118 $5,357 20,104 
Deferred origination costs and unamortized premium/(discount)Deferred origination costs and unamortized premium/(discount)      68 Deferred origination costs and unamortized premium/(discount)      67 
Allowance for credit lossesAllowance for credit losses      (1,209)Allowance for credit losses      (1,190)
Total Private Education Loans, netTotal Private Education Loans, net      $20,562 Total Private Education Loans, net      $18,981 
     
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearanceLoans in forbearance as a percentage of total Private Education Loans in repayment and forbearance1.23 %0.35 %0.24 %0.17 %0.27 %— %2.26 %Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance0.79 %0.22 %0.14 %0.09 %0.12 %— %1.36 %
 
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(Dollars in millions)
September 30, 2020
Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/deferment$— $— $— $— $— $6,056 $6,056 
Loans in forbearance351 113 88 63 90 — 705 
Loans in repayment - current5,345 3,223 2,356 1,719 2,732 — 15,375 
Loans in repayment - delinquent 30-59 days118 44 37 24 42 — 265 
Loans in repayment - delinquent 60-89 days63 25 19 13 20 — 140 
Loans in repayment - 90 days or greater past due33 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 forbearance2.12 %0.68 %0.53 %0.38 %0.55 %— %4.26 %


As of September 30, 2021
(dollars in millions)		Private Education Loans Held for Investment
Monthly Scheduled Payments Due		Not Yet in
Repayment		Total
0 to 1213 to 2425 to 3637 to 48More than 48
Loans in-school/grace/deferment$— $— $— $— $— $5,855 $5,855 
Loans in forbearance195 56 37 27 42 — 357 
Loans in repayment - current4,853 3,364 2,244 1,625 3,030 — 15,116 
Loans in repayment - delinquent 30-59 days74 37 28 21 40 — 200 
Loans in repayment - delinquent 60-89 days43 19 14 9 17 — 102 
Loans in repayment - 90 days or greater past due28 14 10 7 14 — 73 
Total$5,193 $3,490 $2,333 $1,689 $3,143 $5,855 21,703 
Deferred origination costs and unamortized premium/(discount)      68 
Allowance for credit losses      (1,209)
Total Private Education Loans, net      $20,562 
 
Loans in forbearance as a percentage of total Private Education Loans in repayment and forbearance1.23 %0.35 %0.24 %0.17 %0.27 %— %2.26 %

8674 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, 20212022 and December 31, 2020.2021.

 
September 30, 2021
(Dollars in thousands)Signature and
Other		Parent LoanSmart OptionCareer
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 September 30, 2022
(dollars in thousands)		Signature and
Other
Parent Loan(1)
Smart Option
Career
Training(2)
Graduate
Loan		Total
$ in repayment(3)
$225,630 $275,581 $13,042,595 $5,441 $997,309 $14,546,556 
$ in total$316,076 $276,608 $18,029,447 $5,509 $1,476,823 $20,104,463 
 

December 31, 2020
(Dollars in thousands)Signature and
Other		Parent LoanSmart OptionCareer
Training		Graduate
Loan		Total
$ in repayment(1)
$215,439 $285,323 $13,130,229 $12,250 $661,580 $14,304,821 
$ in total$330,979 $289,572 $18,067,491 $12,797 $1,028,498 $19,729,337 
_______
As of December 31, 2021 (dollars in thousands)Signature and
Other
Parent Loan(1)
Smart Option
Career
Training(2)
Graduate
Loan		Total
$ in repayment(3)
$221,637 $301,422 $14,097,819 $9,354 $880,980 $15,511,212 
$ in total$318,055 $302,764 $18,789,771 $9,402 $1,296,871 $20,716,863 
(1) In December 2021, we discontinued offering our Parent Loan product. Applications for those loans received before the offering termination date will continue to be processed, with final disbursements under those loans to occur until mid–December 2022.
(2) In May 2022, we discontinued offering our Career Training 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 May 2023.
(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.period (but, for purposes of the table, do not include those loans while they are in forbearance).


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 Receivable90 Days and Greater Past DueAllowance 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 Receivable90 Days or Greater Past DueAllowance for
Uncollectible
Interest
September 30, 2022$1,201,159 $6,515 $7,783 
December 31, 2021$1,187,123 $3,635 $4,937 
September 30, 2021$1,386,427 $3,636 $4,351 
 

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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, and 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 andmarketable 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, 2021December 31, 2020(Dollars in thousands)September 30, 2022December 31, 2021
Sources of primary liquidity:Sources of primary liquidity:  Sources of primary liquidity:  
Unrestricted cash and liquid investments:Unrestricted cash and liquid investments:  Unrestricted cash and liquid investments:  
Holding Company and other non-bank subsidiariesHolding Company and other non-bank subsidiaries$2,784 $1,117 Holding Company and other non-bank subsidiaries$467 $2,588 
Sallie Mae Bank(1)
Sallie Mae Bank(1)
2,714,968 4,454,175 
Sallie Mae Bank(1)
4,846,288 4,332,015 
Available-for-sale investmentsAvailable-for-sale investments2,299,273 1,927,726 Available-for-sale investments2,131,024 2,325,711 
Total unrestricted cash and liquid investmentsTotal unrestricted cash and liquid investments$5,017,025 $6,383,018 Total unrestricted cash and liquid investments$6,977,779 $6,660,314 
____
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
8876 SLM CORPORATION

Average Balances
 
Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,		 Three Months Ended 
 September 30,		Nine Months Ended 
 September 30,
(Dollars in thousands)(Dollars in thousands)2021202020212020(Dollars in thousands)2022202120222021
Sources of primary liquidity:Sources of primary liquidity:Sources of primary liquidity:
Unrestricted cash and liquid investments:Unrestricted cash and liquid investments:Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiariesHolding Company and other non-bank subsidiaries$4,621 $6,172 $3,903 $24,061 Holding Company and other non-bank subsidiaries$1,391 $4,621 $7,661 $3,903 
Sallie Mae Bank(1)
Sallie Mae Bank(1)
4,271,373 4,710,900 5,370,768 5,408,975 
Sallie Mae Bank(1)
4,432,386 4,271,373 3,868,795 5,370,768 
Available-for-sale investmentsAvailable-for-sale investments1,817,721 2,038,473 1,822,730 1,331,776 Available-for-sale investments2,229,465 1,817,721 2,291,946 1,822,730 
Total unrestricted cash and liquid investmentsTotal unrestricted cash and liquid investments$6,093,715 $6,755,545 $7,197,401 $6,764,812 Total unrestricted cash and liquid investments$6,663,242 $6,093,715 $6,168,402 $7,197,401 
____
(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,September 30,December 31,
(Dollars in thousands)(Dollars in thousands)20212020(Dollars in thousands)20222021
Deposits - interest bearing$20,890,292 $22,664,899 
Deposits - non-interest bearing568 1,140 
Deposits - interest-bearingDeposits - interest-bearing$21,276,181 $20,826,692 
Deposits - non-interest-bearingDeposits - non-interest-bearing567 1,432 
Total depositsTotal deposits$20,890,860 $22,666,039 Total deposits$21,276,748 $20,828,124 

Our total deposits of $20.9$21.3 billion were comprised of $11.6$10.2 billion in brokered deposits and $9.3$11.1 billion in retail and other deposits at September 30, 2021,2022, 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 bearingInterest-bearing deposits as of September 30, 20212022 and December 31, 20202021 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity MMDAs, and retail and brokered CDs. Interest bearingInterest-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$8.0 billion and $7.1$7.3 billion of our deposit total as of September 30, 20212022 and December 31, 2020,2021, respectively.
Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $4$3 million and $5$4 million in the three months ended September 30, 20212022 and 2020,2021, respectively, and placement fee expense of $12$10 million and $15$12 million in the nine months ended September 30, 20212022 and 2020,2021, respectively. Fees paid to third-party brokers related to brokered CDs were $10$4 million and $2$10 million for the three months ended September 30, 20212022 and 2020,2021, respectively, and fees paid to third-party brokers related to brokered CDs were $11$8 million and $5$11 million for the nine months ended September 30, 20212022 and 2020,2021, respectively.

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Interest bearing deposits at September 30, 20212022 and December 31, 20202021 are summarized as follows:

 September 30, 2021December 31, 2020
(Dollars in thousands)Amount
Qtr.-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Money market$10,082,114 0.71 %$10,159,657 0.83 %
Savings956,571 0.44 907,976 0.55 
Certificates of deposit9,851,607 1.16 11,597,266 1.34 
Deposits - interest bearing$20,890,292 $22,664,899 
____________
 September 30, 2022December 31, 2021
(Dollars in thousands)Amount
Qtr.-End
Weighted
Average
Stated Rate(1)
Amount
Year-End
Weighted
Average
Stated Rate(1)
Money market$11,053,370 2.57 %$10,473,569 0.69 %
Savings947,870 2.14 959,122 0.43 
Certificates of deposit9,274,941 2.29 9,394,001 1.20 
Deposits - interest bearing$21,276,181 $20,826,692 
(1) Includes the effect of interest rate swaps in effective hedge relationships.

As of September 30, 2021,2022 and December 31, 2020,2021, there were $676$538 million and $571$743 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $46$48 million and $50$35 million at September 30, 20212022 and December 31, 2020,2021, respectively.

Counterparty Exposure
Counterparty exposure related to financial instruments arises from the risk that a lending, investment, or derivative counterparty will not be able to meet its obligations to us.
Excess cash is generally invested with the FRB on an overnight basis or in the FRB’s Term Deposit Facility, minimizing counterparty exposure on cash balances.
Our investment portfolio is primarily comprised of U.S. government-sponsored enterprises and Treasuries, and a small portfolio of mortgage-backed securities issued by government agencies and government-sponsored enterprises that are purchased to meet CRA targets. Additionally, our investing activity is governed by Board-approved limits on the amount that is allowed to be invested with any one issuer based on the credit rating of the issuer, further minimizing our counterparty exposure. Counterparty credit risk is considered when valuing investments and considering impairment.
Related to derivative transactions, protection against counterparty risk is generally provided by International Swaps and Derivatives Association, Inc. Credit Support Annexes (“CSAs”), or clearinghouses for over-the-counter derivatives. CSAs require a counterparty to post collateral if a potential default would expose the other party to a loss. All derivative contracts entered into by the Bank are covered under CSAs or clearinghouse agreements and require collateral to be exchanged based on the net fair value of derivatives with each counterparty. Our exposure to the counterparty is limited to the value of the derivative contracts in a gain position, less any collateral held by us and plus collateral posted with the counterparty.
Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of September 30, 2021, $5.92022, $3.2 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 94.693.0 percent and 5.47.0 percent, respectively, of our total notional derivative contracts of $6.2$3.5 billion at September 30, 2021.2022.
For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of September 30, 20212022 was $(96)$(56) million and $11$(7) 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, 20212022 and December 31, 2020,2021, we had a net positive exposure (derivative gaingain/loss positions to us, less
90

collateral held by us and plus collateral posted with counterparties) related to derivatives of $12 million and $43$9 million, respectively.
78 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, 2021.2022.

As of September 30, 2022
(Dollarsdollars in thousands)		SLM Corporation
and Sallie Mae Bank
Contracts
Total exposure, net of collateral$11,50912,146 
Exposure to counterparties with credit ratings, net of collateral$11,50912,146 
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 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, 2021,2022, the Bank’s risk-based and leverage capital ratios exceed the required minimum ratios and the applicable buffers under the fully phased-in U.S. Basel III standards as well as the “well capitalized” standards under the prompt corrective action framework.
Under U.S. Basel III, the Bank is required to maintain the following minimum regulatory capital ratios: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent.
To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent.
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On August 26, 2020,Under regulations issued by the FDIC and other federal banking agencies, published a final rule that provides those banking organizations that adoptedadopt CECL during the 2020 calendar year, withincluding the optionBank, may elect to delay for two years, and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. We haveThe Bank has elected to use this option. The final rule is substantially similar to an interim final rule issued on March 27, 2020. Under this final rule, because we have elected to use the deferral option,Therefore, the regulatory capital impact of ourthe Bank’s transition adjustments recorded on January 1, 2020
SLM CORPORATION 79

from the adoption of CECL, will be deferred for two years. In addition, from January 1, 2020 through the end of the two-year deferral period,and 25 percent of the ongoing impact of CECL on ourthe Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes will be added to(collectively, the deferred transition amounts (“adjusted“adjusted transition amounts”) and, were deferred for the two-year period. At the conclusion of the two-year period (i.e., beginningending January 1, 2022),2022. From January 1, 2022 to January 1, 2025, the adjusted transition amounts will be phased in for regulatory capital purposes at a rate of 25 percent per year, with the phased-in amounts included in regulatory capital at the beginning of each year. OurThe Bank’s January 1, 2020 CECL transition amounts increased theour allowance for credit losses by $1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $116 million, and increased our deferred tax asset by $306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used.
At September 30, 2021,2022, the adjusted transition amounts, subject toreflecting changes over the two-year phase-in period, that will be deferred for regulatory capital purposes are as follows:
Transition AmountsAdjustments for the Year EndedAdjustments for the Nine Months EndedAdjusted Transition Amounts
(Dollars in thousands)January 1, 2020December 31, 2020September 30, 2021September 30, 2021
Retained earnings$952,639 $(57,859)$(39,308)$855,472 
Allowance for credit losses1,143,053 (55,811)(36,579)1,050,663 
Liability for unfunded commitments115,758 (2,048)(2,729)110,981 
Deferred tax asset306,171 — — 306,171 

Transition AmountsAdjustments for the Year EndedAdjustments for the Year EndedAdjustments
 for the
Nine Months Ended		Adjusted Transition Amounts
(Dollars in thousands)January 1, 2020December 31, 2020December 31, 2021September 30, 2022September 30, 2022
Retained earnings$952,639 $(57,859)$(58,429)$(209,088)$627,263 
Allowance for credit losses1,143,053 (55,811)(49,097)(259,536)778,609 
Liability for unfunded commitments115,758 (2,048)(9,333)(26,094)78,283 
Deferred tax asset306,171 — — (76,542)229,629 


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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)
AmountRatioAmountRatio
As of September 30, 2021:
(Dollars in thousands)(Dollars in thousands)AmountRatioAmountRatio
As of September 30, 2022(3):
As of September 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)$3,098,799 13.3 %$1,626,628 >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)$3,098,799 13.3 %$1,975,191 >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)$3,391,178 14.6 %$2,439,942 >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)$3,098,799 10.6 %

$1,170,406 >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 September 30, 2022, the actual amounts and the actual ratios include the adjusted transition amounts discussed above that were phased in at the beginning of 2022.
80 SLM CORPORATION

Dividends
The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends 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$241 million and $642 million in dividends to the Company for the three and nine months ended September 30, 2022, respectively, and $50 million and $1.2 billion in dividends to the Company for the three and nine months ended September 30, 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 Programsshare 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.
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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, 20212022 and December 31, 2020,2021, respectively. For additional information, see Notes to Consolidated Financial Statements, Note 8, “Borrowings.”9, “Borrowings” in this Form 10-Q.

September 30, 2021December 31, 2020September 30, 2022December 31, 2021
(Dollars in thousands)(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal(Dollars in thousands)Short-TermLong-TermTotalShort-TermLong-TermTotal
Unsecured borrowings:Unsecured borrowings:Unsecured borrowings:
Unsecured debt (fixed-rate)Unsecured debt (fixed-rate)$199,583 $494,585 $694,168 $— $692,879 $692,879 Unsecured debt (fixed-rate)$— $988,182 $988,182 $— $986,138 $986,138 
Total unsecured borrowingsTotal unsecured borrowings199,583 494,585 694,168 — 692,879 692,879 Total unsecured borrowings— 988,182 988,182 — 986,138 986,138 
Secured borrowings:Secured borrowings:Secured borrowings:
Private Education Loan term securitizations:Private Education Loan term securitizations:Private Education Loan term securitizations:
Fixed-rateFixed-rate— 3,698,662 3,698,662 — 3,261,233 3,261,233 Fixed-rate— 3,673,627 3,673,627 — 3,897,996 3,897,996 
Variable-rateVariable-rate— 1,026,501 1,026,501 — 1,235,105 1,235,105 Variable-rate— 860,502 860,502 — 1,046,856 1,046,856 
Total Private Education Loan term securitizationsTotal Private Education Loan term securitizations— 4,725,163 4,725,163 — 4,496,338 4,496,338 Total Private Education Loan term securitizations— 4,534,129 4,534,129 — 4,944,852 4,944,852 
Secured Borrowing FacilitySecured Borrowing Facility— — — — — — Secured Borrowing Facility— — — — — — 
Total secured borrowingsTotal secured borrowings— 4,725,163 4,725,163 — 4,496,338 4,496,338 Total secured borrowings— 4,534,129 4,534,129 — 4,944,852 4,944,852 
TotalTotal$199,583 $5,219,748 $5,419,331 $— $5,189,217 $5,189,217 Total$— $5,522,311 $5,522,311 $— $5,930,990 $5,930,990 

Short-term borrowingsBorrowings
On July 30, 2021,May 17, 2022, 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, 2022.16, 2023. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 17, 202316, 2024 (or earlier, if certain material adverse events occur). At both September 30, 20212022, and December 31, 2020,2021, there were no secured borrowings outstanding under the Secured Borrowing Facility.
Other Borrowing Sources
We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $125 million at September 30, 2021.2022. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing and is payable daily. We did not utilize these lines of credit in the nine months ended September 30, 20212022 or in the year ended December 31, 2020.2021.
SLM CORPORATION 81

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, 20212022 and December 31, 2020,2021, the value of our pledged collateral at the FRB totaled $2.7$2.6 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 months ended September 30, 20212022 or in the year ended December 31, 2020.2021.

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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, 2021,2022, we had $2.0$2.2 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2021/20222022/2023 academic year. At September 30, 2021,2022, we had a $99$108 million reserve recorded in “Other Liabilities” to cover lifetime expected credit losses on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies - Allowance for Credit Losses - 2021 and 2020 — Off-Balance Sheet Exposure for Contractual Loan Commitments”Commitments - 2021 and 2020” in our 20202021 Form 10-K and Note 6, “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. In preparing our consolidated financial statements, we have identified certain accounting estimates and assumptions that we consider to be the most critical to an understanding of our financial statements because they involve significant judgments and uncertainties.
The critical accounting estimates we have identified relate to the allowance for credit losses. These estimates reflect our best judgment about current and, for some estimates, including management overlays, future economic and market conditions. These estimates are based on information available as of the date of these financial statements. If conditions change from those expected, it is reasonably possible that these judgments and estimates could change, which may result in a change in the allowance for credit losses or material changes to our consolidated financial statements. A discussion of our critical accounting policies which include allowance for credit losses and derivative accounting, can be found in our 20202021 Form 10-K. There were no significant changes to our critical accounting policies duringDuring the threenine months ended September 30, 2021.2022, we adopted ASU No. 2022-02, which affects the accounting and disclosure of TDRs, as discussed below.
Recently Issued and Adopted Accounting Pronouncements
On March 31, 2022, the FASB issued ASU No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures,” which eliminates the accounting guidance for TDRs while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The enhanced disclosures are required to be provided for modifications made starting in the period of adoption. Information about modifications in periods before adoption is not required to be provided.
ASU No. 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination. For entities that have adopted 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 elected to early adopt ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption was immaterial to our consolidated financial statements. For additional information, see Notes to Consolidated Financial Statements, Note 5, "Allowance for Credit Losses" in this Form 10-Q.


9582 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, 20212022 and 2020,2021, based upon a sensitivity analysis performed by management assuming hypothetical increases in market interest rates of 100 and 300 basis points and a decrease of 100 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,levels, a 100 or 300-basis point downward rate shock does not provide a meaningful indication of interest rate sensitivity, so results for those scenariosthat scenario have not been presented. At September 30, 2021, 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, 20212022 indicate a market risk profile of low sensitivity to rate changes, based on static balance sheet assumptions over the next two years. This position has increasedThe EVE metrics demonstrate lower sensitivity than 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 30,20222021
20212020
+300
Basis Points		+100
Basis Points		-100
Basis Points		+300
Basis Points		+100
Basis Points		-100
Basis Points
As of September 30,As of September 30,+300
Basis Points		+100
Basis Points		-100
Basis Points		+300
Basis Points		+100
Basis Points		-100
Basis Points
EAR - ShockEAR - Shock+2.6%+1.0%N/A-0.4%-0.0%N/AEAR - Shock+1.8%+0.6%-0.7%+2.6%+1.0%N/A
EAR - RampEAR - Ramp+1.8%+0.7%N/A-0.0%+0.1%N/AEAR - Ramp+1.0%+0.3%-0.4%+1.8%+0.7%N/A
EVEEVE-9.3%-2.8%N/A-15.6%-5.2%N/AEVE-6.0%-2.0%+1.8%-9.3%-2.8%N/A
    

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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 or SOFR 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 83

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, 2021.2022. 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 Ratedaily/weekly/monthly$— $518.2 $(518.2)
SOFRmonthly878.0 175.7 702.3 
3-month Treasury billweekly105.7 — 105.7 
Primemonthly18.8 — 18.8 
3-month LIBORquarterly— 251.1 (251.1)
1-month LIBORmonthly10,592.9 7,760.6 2,832.3 
1-month LIBORdaily600.0 527.7 72.3 
Non-Discrete reset(2)
daily/weekly2,930.0 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 September 30, 2022
(dollars in millions)
Index
Frequency of
Variable
Resets		Assets
Funding (1)
Funding
Gap
Fed Funds Effective Ratedaily/weekly/monthly$— $1,499.9 $(1,499.9)
SOFR Ratedaily/weekly/monthly2,618.7 2,910.2 (291.5)
3-month Treasury billweekly98.8 — 98.8 
Primemonthly31.1 — 31.1 
3-month LIBORquarterly— 251.1 (251.1)
1-month LIBORmonthly6,886.1 3,442.6 3,443.5 
1-month LIBORdaily544.8 — 544.8 
Non-Discrete reset(2)
daily/weekly5,072.1 4,154.9 917.2 
Fixed-Rate(3)
 13,887.5 16,880.4 (2,992.9)
Total $29,139.1 $29,139.1 $— 
         ______________________
(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, 3-month LIBOR, 1-Month LIBOR monthly, 1-Month LIBOR daily, 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$1.7 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
97

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.
84 SLM CORPORATION

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

2022.
 
As of September 30, 2022
(averages in years)		Weighted
Average
(Averages in Years)Life
Earning assets 
Education loans4.654.96 
Cash and investments1.401.29 
Total earning assets4.013.96 
Deposits
Short-term deposits0.601.01 
Long-term deposits2.632.62 
Total deposits1.081.36 
Borrowings
Short-term borrowings0.51 
Long-term borrowings3.583.46 
Total borrowings3.46 


98SLM CORPORATION 85



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, 2021.2022. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of September 30, 2021,2022, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (a)(i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (b)(ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended September 30, 20212022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

9986 SLM CORPORATION

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


Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchases
The following table provides information relating to our purchase of shares of our common stock in the three months ended September 30, 2021.2022.
 
(In thousands, except per share data)
Total Number
of Shares
Purchased(1)
Average Price
Paid per
Share
Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs(2)(3)  
Approximate Dollar
Value
of Shares That
May Yet Be
Purchased Under
Publicly Announced
Plans or
Programs(2)
Period:   
July 1 - July 31, 20213,531 $19.85 3,531 $225,000 
August 1 - August 31, 20214,636 $18.74 4,521 $141,000 
September 1 - September 30, 20214,967 $17.98 4,967 $51,000 
Total third-quarter 202113,134 $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:   
July 1 - July 31, 2022— $— — $753,000 
August 1 - August 31, 2022— $— — $753,000 
September 1 - September 30, 20221,192 $14.14 1,191 $736,000 
Total third-quarter 20221,192 $14.14 1,191  
_________
(1)      The total number of shares purchased includes: (i) shares purchased under the stock repurchase programs discussed herein, and (ii) shares of our common stock tendered to us to satisfy the exercise price in connection with cashless exercises of stock options, and tax withholding obligations in connection with exercises of stock options and vesting of restricted stock, restricted stock units, and performance stock units.
(2)     On January 22, 2020, our Board of Directors authorized us to repurchase shares of our common stock up to an aggregate repurchase price not to exceed $600 million under the 2020 Share Repurchase Program. In the first quarter of 20212022, we utilized all remaining capacity under the 2020 Share Repurchase Program. On January 27, 2021, our Board of Directors authorized us to repurchase shares of our common stock up to an aggregate repurchase price not to exceed $1.25 billionthen remaining under the 2021 Share Repurchase Program. In October 2021, our BoardAs of Directors approved a $250September 30, 2022, we had $736 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 20212022 Share Repurchase Program at September 30, 2021.Program.
(3)    In the third quarter of 2021,2022, we repurchased 13.01.2 million shares under our 10b5-1 trading plans.plan. See Note 10,11, “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, 20212022 was $17.60.

$13.99.

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 87

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



10288 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, 202126, 2022

103SLM CORPORATION 89