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Unfunded Loan Commitments (Tables) | 6 Months Ended
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Jun. 30, 2024
Credit Loss [Abstract] |
Schedule of Allowance for Credit Losses and Recorded Investments in Loans | Allowance for Credit Losses Metrics
Three Months Ended June 30, 2024 (dollars in thousands) |  | FFELP Loans |  | Private Education Loans |  |  |  | Total
Allowance for Credit Losses |  |  |  |  |  |  |  |
Beginning balance |  | $ | 4,627 |  |  | $ | 1,345,431 |  |  |  |  | $ | 1,350,058 |
Transfer from unfunded commitment liability(1) |  | — |  |  | 29,715 |  |  |  |  | 29,715 |
Provisions: |  |  |  |  |  |  |  |
Provision for current period |  | (441) |  |  | 72,862 |  |  |  |  | 72,421 |
Loan sale reduction to provision |  | — |  |  | (102,751) |  |  |  |  | (102,751) |
Total provisions(2) |  | (441) |  |  | (29,889) |  |  |  |  | (30,330) |
Net charge-offs: |  |  |  |  |  |  |  |
Charge-offs |  | (126) |  |  | (91,042) |  |  |  |  | (91,168) |
Recoveries |  | — |  |  | 11,377 |  |  |  |  | 11,377 |
Net charge-offs |  | (126) |  |  | (79,665) |  |  |  |  | (79,791) |
Ending Balance |  | $ | 4,060 |  |  | $ | 1,265,592 |  |  |  |  | $ | 1,269,652 |
Allowance(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 4,060 |  |  | $ | 1,265,592 |  |  |  |  | $ | 1,269,652 |
Loans(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 485,608 |  |  | $ | 19,619,531 |  |  |  |  | $ | 20,105,139 |
Accrued interest to be capitalized(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | — |  |  | $ | 1,231,754 |  |  |  |  | $ | 1,231,754 |
Net charge-offs as a percentage of average loans in repayment (annualized)(4) |  | 0.13 | % |  | 2.19 | % |  |  |  |
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) |  | 0.84 | % |  | 6.07 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) |  | 1.10 | % |  | 8.62 | % |  |  |  |
Allowance coverage of net charge-offs (annualized) |  | 8.06 |  |  | 3.97 |  |  |  |  |
Ending total loans, gross |  | $ | 485,608 |  |  | $ | 19,619,531 |  |  |  |  |
Average loans in repayment(4) |  | $ | 378,667 |  |  | $ | 14,543,669 |  |  |  |  |
Ending loans in repayment(4) |  | $ | 369,681 |  |  | $ | 14,231,581 |  |  |  |  |
Accrued interest to be capitalized on loans in repayment(6) |  | $ | — |  |  | $ | 453,150 |  |  |  |  |
(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the 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 June 30, 2024 (dollars in thousands)
Private Education Loan provisions for credit losses: |  |
Provisions for loan losses |  | $ | (29,889) |
Provisions for unfunded loan commitments |  | 47,160 |
Total Private Education Loan provisions for credit losses |  | 17,271 |
Other impacts to the provisions for credit losses: |  |
FFELP Loans |  | (441) |
Total |  | (441) |
Provisions for credit losses reported in consolidated statements of income |  | $ | 16,830 |
(3) For the three months ended June 30, 2024, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
Three Months Ended June 30, 2023 (dollars in thousands) |  | FFELP Loans |  | Private Education Loans |  | Credit Cards(7) |  | Total
Allowance for Credit Losses |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,927 |  |  | $ | 1,475,379 |  |  | $ | — |  |  | $ | 1,479,306 |
Transfer from unfunded commitment liability(1) |  | — |  |  | 28,188 |  |  | — |  |  | 28,188 |
Provisions: |  |  |  |  |  |  |  |
Provision for current period |  | 820 |  |  | 96,102 |  |  | (730) |  |  | 96,192 |
Loan sale reduction to provision |  | — |  |  | (136,531) |  |  | — |  |  | (136,531) |
Total provisions(2) |  | 820 |  |  | (40,429) |  |  | (730) |  |  | (40,339) |
Net charge-offs: |  |  |  |  |  |  |  |
Charge-offs |  | (325) |  |  | (114,550) |  |  | 741 |  |  | (114,134) |
Recoveries |  | — |  |  | 11,706 |  |  | (11) |  |  | 11,695 |
Net charge-offs |  | (325) |  |  | (102,844) |  |  | 730 |  |  | (102,439) |
Ending Balance |  | $ | 4,422 |  |  | $ | 1,360,294 |  |  | $ | — |  |  | $ | 1,364,716 |
Allowance(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 4,422 |  |  | $ | 1,360,294 |  |  | $ | — |  |  | $ | 1,364,716 |
Loans(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 573,597 |  |  | $ | 19,938,363 |  |  | $ | — |  |  | $ | 20,511,960 |
Accrued interest to be capitalized(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | — |  |  | $ | 1,136,973 |  |  | $ | — |  |  | $ | 1,136,973 |
Net charge-offs as a percentage of average loans in repayment (annualized)(4) |  | 0.29 | % |  | 2.69 | % |  | — | % |  |
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) |  | 0.77 | % |  | 6.45 | % |  | — | % |  |
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) |  | 1.02 | % |  | 9.03 | % |  | — | % |  |
Allowance coverage of net charge-offs (annualized) |  | 3.40 |  |  | 3.31 |  |  | — |  |  |
Ending total loans, gross |  | $ | 573,597 |  |  | $ | 19,938,363 |  |  | $ | — |  |  |
Average loans in repayment(4) |  | $ | 441,749 |  |  | $ | 15,269,101 |  |  | $ | — |  |  |
Ending loans in repayment(4) |  | $ | 431,543 |  |  | $ | 14,652,527 |  |  | $ | — |  |  |
Accrued interest to be capitalized on loans in repayment(6) |  | $ | — |  |  | $ | 408,923 |  |  | $ | — |  |  |
(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the 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 June 30, 2023 (dollars in thousands)
Private Education Loan provisions for credit losses: |  |
Provisions for loan losses |  | $ | (40,429) |
Provisions for unfunded loan commitments |  | 58,068 |
Total Private Education Loan provisions for credit losses |  | 17,639 |
Other impacts to the provisions for credit losses: |  |
FFELP Loans |  | 820 |
Credit Cards |  | (730) |
Total |  | 90 |
Provisions for credit losses reported in consolidated statements of income |  | $ | 17,729 |
(3) For the three months ended June 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance). (7) We use “Credit Cards” to refer to the suite of Credit Card loans that we previously held; we sold the Credit Card portfolio to a third party in May 2023.l
Six Months Ended June 30, 2024 (dollars in thousands) |  | FFELP Loans |  | Private Education Loans |  |  |  | Total
Allowance for Credit Losses |  |  |  |  |  |  |  |
Beginning balance |  | $ | 4,667 |  |  | $ | 1,335,105 |  |  |  |  | $ | 1,339,772 |
Transfer from unfunded commitment liability(1) |  | — |  |  | 161,329 |  |  |  |  | 161,329 |
Provisions: |  |  |  |  |  |  |  |
Provision for current period |  | (358) |  |  | 167,338 |  |  |  |  | 166,980 |
Loan sale reduction to provision |  | — |  |  | (235,955) |  |  |  |  | (235,955) |
Total provisions(2) |  | (358) |  |  | (68,617) |  |  |  |  | (68,975) |
Net charge-offs: |  |  |  |  |  |  |  |
Charge-offs |  | (249) |  |  | (184,916) |  |  |  |  | (185,165) |
Recoveries |  | — |  |  | 22,691 |  |  |  |  | 22,691 |
Net charge-offs |  | (249) |  |  | (162,225) |  |  |  |  | (162,474) |
Ending Balance |  | $ | 4,060 |  |  | $ | 1,265,592 |  |  |  |  | $ | 1,269,652 |
Allowance(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 4,060 |  |  | $ | 1,265,592 |  |  |  |  | $ | 1,269,652 |
Loans(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 485,608 |  |  | $ | 19,619,531 |  |  |  |  | $ | 20,105,139 |
Accrued interest to be capitalized(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | — |  |  | $ | 1,231,754 |  |  |  |  | $ | 1,231,754 |
Net charge-offs as a percentage of average loans in repayment (annualized)(4) |  | 0.13 | % |  | 2.17 | % |  |  |  |
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) |  | 0.84 | % |  | 6.07 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) |  | 1.10 | % |  | 8.62 | % |  |  |  |
Allowance coverage of net charge-offs (annualized) |  | 8.15 |  |  | 3.90 |  |  |  |  |
Ending total loans, gross |  | $ | 485,608 |  |  | $ | 19,619,531 |  |  |  |  |
Average loans in repayment(4) |  | $ | 388,510 |  |  | $ | 14,977,567 |  |  |  |  |
Ending loans in repayment(4) |  | $ | 369,681 |  |  | $ | 14,231,581 |  |  |  |  |
Accrued interest to be capitalized on loans in repayment(6) |  | $ | — |  |  | $ | 453,150 |  |  |  |  |
(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the 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
Six Months Ended June 30, 2024 (dollars in thousands)
Private Education Loan provisions for credit losses: |  |
Provisions for loan losses |  | $ | (68,617) |
Provisions for unfunded loan commitments |  | 97,846 |
Total Private Education Loan provisions for credit losses |  | 29,229 |
Other impacts to the provisions for credit losses: |  |
FFELP Loans |  | (358) |
Total |  | (358) |
Provisions for credit losses reported in consolidated statements of income |  | $ | 28,871 |
(3) For the six months ended June 30, 2024, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance).
Six Months Ended June 30, 2023 (dollars in thousands) |  | FFELP Loans |  | Private Education Loans |  |  |  | Total
Allowance for Credit Losses |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,444 |  |  | $ | 1,353,631 |  |  |  |  | $ | 1,357,075 |
Transfer from unfunded commitment liability(1) |  | — |  |  | 176,701 |  |  |  |  | 176,701 |
Provisions: |  |  |  |  |  |  |  |
Provision for current period |  | 1,559 |  |  | 152,436 |  |  |  |  | 153,995 |
Loan sale reduction to provision |  | — |  |  | (136,531) |  |  |  |  | (136,531) |
Total provisions(2) |  | 1,559 |  |  | 15,905 |  |  |  |  | 17,464 |
Net charge-offs: |  |  |  |  |  |  |  |
Charge-offs |  | (581) |  |  | (209,635) |  |  |  |  | (210,216) |
Recoveries |  | — |  |  | 23,692 |  |  |  |  | 23,692 |
Net charge-offs |  | (581) |  |  | (185,943) |  |  |  |  | (186,524) |
Ending Balance |  | $ | 4,422 |  |  | $ | 1,360,294 |  |  |  |  | $ | 1,364,716 |
Allowance(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 4,422 |  |  | $ | 1,360,294 |  |  |  |  | $ | 1,364,716 |
Loans(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | 573,597 |  |  | $ | 19,938,363 |  |  |  |  | $ | 20,511,960 |
Accrued interest to be capitalized(3): |  |  |  |  |  |  |  |
Ending balance: collectively evaluated for impairment |  | $ | — |  |  | $ | 1,136,973 |  |  |  |  | $ | 1,136,973 |
Net charge-offs as a percentage of average loans in repayment (annualized)(4) |  | 0.26 | % |  | 2.41 | % |  |  |  |
Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized(5) |  | 0.77 | % |  | 6.45 | % |  |  |  |
Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment(4)(5) |  | 1.02 | % |  | 9.03 | % |  |  |  |
Allowance coverage of net charge-offs (annualized) |  | 3.81 |  |  | 3.66 |  |  |  |  |
Ending total loans, gross |  | $ | 573,597 |  |  | $ | 19,938,363 |  |  |  |  |
Average loans in repayment(4) |  | $ | 446,655 |  |  | $ | 15,448,931 |  |  |  |  |
Ending loans in repayment(4) |  | $ | 431,543 |  |  | $ | 14,652,527 |  |  |  |  |
Accrued interest to be capitalized on loans in repayment(6) |  | $ | — |  |  | $ | 408,923 |  |  |  |  |
(1) See Note 5, “Unfunded Loan Commitments,” in this Form 10-Q for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the 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
Six Months Ended June 30, 2023 (dollars in thousands)
Private Education Loan provisions for credit losses: |  |
Provisions for loan losses |  | $ | 15,905 |
Provisions for unfunded loan commitments |  | 114,377 |
Total Private Education Loan provisions for credit losses |  | 130,282 |
Other impacts to the provisions for credit losses: |  |
FFELP Loans |  | $ | 1,559 |
Total |  | 1,559 |
Provisions for credit losses reported in consolidated statements of income |  | $ | 131,841 |
(3) For the six months ended June 30, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) 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). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include the interest on those loans while they are in forbearance). 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.
| 2024 |  | 2023
Three Months Ended June 30, (dollars in thousands) | Allowance |  | Unfunded Commitments |  | Allowance |  | Unfunded Commitments
Beginning Balance | $ | 32,034 |  |  | $ | 673,492 |  |  | $ | 32,720 |  |  | $ | 684,353 |
Provision/New commitments - net(1) | 47,160 |  |  | 1,317,770 |  |  | 58,068 |  |  | 1,529,368 |
Transfer - funded loans(2) | (29,715) |  |  | (690,869) |  |  | (28,188) |  |  | (650,865) |
Ending Balance | $ | 49,479 |  |  | $ | 1,300,393 |  |  | $ | 62,600 |  |  | $ | 1,562,856 |
| 2024 |  | 2023
Six Months Ended June 30, (dollars in thousands) | Allowance |  | Unfunded Commitments |  | Allowance |  | Unfunded Commitments
Beginning Balance | $ | 112,962 |  |  | $ | 2,221,077 |  |  | $ | 124,924 |  |  | $ | 1,995,808 |
Provision/New commitments - net(1) | 97,846 |  |  | 2,352,228 |  |  | 114,377 |  |  | 2,654,184 |
Transfer - funded loans(2) | (161,329) |  |  | (3,272,912) |  |  | (176,701) |  |  | (3,087,136) |
Ending Balance | $ | 49,479 |  |  | $ | 1,300,393 |  |  | $ | 62,600 |  |  | $ | 1,562,856 |
(1) Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to provision for existing commitments. (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.

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