Salliemae(SLM)2025-02-20 21:33Loan Portfolio and Default Rates - Approximately 96% of the total loan portfolio in repayment is in good standing, with an annual default rate of fewer than 3%[47] - Approximately 18% or $1.31 billion of the 2024 Private Education Loan originations were for students attending for-profit schools[53] Private Education Loan Originations - The Private Education Loan originations for AY 2023-2024 are estimated at $11.5 billion, reflecting a $0.5 billion increase from AY 2022-2023[60] Higher Education Spending - Total spending on higher education is estimated at $506 billion for AY 2023-2024, up from $465 billion in AY 2019-2020[62] - Average published tuition and fees at four-year public institutions increased at a compound annual growth rate of 2.4% from AY 2020-2021 through 2024-2025[57] Company Acquisitions - The company acquired assets from Epic Research Education Services, LLC (Nitro) in 2022, enhancing digital marketing capabilities and reducing customer acquisition costs[48] - In 2023, the company completed the acquisition of key assets from Scholly, Inc., which operates a scholarship publishing and servicing platform[50] Customer Service Improvements - The company has implemented several improvements in customer service, including an integrated platform for self-service and an online chat function[51] Competition - The company competes with large banks and specialty finance companies based on products, originations capability, price, and customer service[54] Shareholder Returns - The Bank declared dividends of $570 million, $550 million, and $700 million for the years ended December 31, 2024, 2023, and 2022, respectively, primarily used to fund share repurchase programs and stock dividends[80] - The Company repurchased 11.6 million and 22.3 million shares during the years ended December 31, 2024 and 2023, respectively, with $402 million of capacity remaining under the 2024 Share Repurchase Program as of December 31, 2024[82] - The Company initiated a new policy to pay a regular quarterly cash dividend on its common stock starting in the first quarter of 2019, alongside its existing preferred stock dividends[78] - The Company has authorized a share repurchase program of up to $650 million of common stock as of January 2024, allowing flexibility in share purchases based on market conditions[81] Regulatory and Capital Requirements - The Company is subject to various regulatory capital requirements, and failure to meet minimum capital requirements could adversely affect its business and financial condition[83] - The Dodd-Frank risk retention rules require the Company to retain at least five percent of the credit risk of the assets being securitized, which it has complied with since 2016[96] Derivative Contracts and Interest Rate Risk - As of December 31, 2024, the Company had $921 million in total notional derivative contracts, with $850 million cleared on the CME and $71 million cleared on the LCH[95] - The company has a low sensitivity to interest rate changes, with an Earnings at Risk (EAR) analysis indicating a potential decrease of 8.1% under a +300 basis points shock scenario for 2024[431] - The company’s interest rate risk management program aims to achieve sustainable growth in net interest income over the long term[427] - The company’s asset liability management strategy includes using interest rate swaps and other derivatives to match assets with debt[435] - The analysis of interest rate sensitivity does not account for potential changes in credit quality or balance sheet mix, which could affect actual results[432] Funding and Financial Position - As of December 31, 2024, the company has total earning assets of $30,072.1 million and total funding of $30,072.1 million, resulting in a funding gap of $0[434] - The company’s funding includes $1.9 billion and $0.4 billion of non-interest-bearing liabilities, indicating a low overall repricing risk[434] Workforce and Community Engagement - As of December 31, 2024, the Company had approximately 1,710 team members, all located in the United States, emphasizing the importance of an engaged workforce[101] - Team members donated approximately 4,700 hours through community engagement programs in 2024[104] - The company provides a comprehensive benefits package, including contributions to 401(k) and educational assistance for team members and their dependents[102] - The company has made significant investments in learning and talent development to support team members' success[103] Community Reinvestment Act (CRA) Rating - The Company has received a CRA rating of Outstanding, indicating strong performance in meeting the credit needs of its local community[90]