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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Valuation of Financial Instruments that are Marked-to-Market on Recurring Basis

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
						September 30, 2024																								December 31, 2023
(Dollars in thousands)						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets:
Trading investments						$	—					$	—					$	54,840					$	54,840					$	—					$	—					$	54,481					$	54,481
Available-for-sale investments						—						2,019,695						2,910						2,022,605						—						2,411,622						—						2,411,622
Held for sale loans						—						485,701						—						485,701						—						—						—						—
Derivative instruments						—						600						—						600						—						—						—						—
Total						$	—					$	2,505,996					$	57,750					$	2,563,746					$	—					$	2,411,622					$	54,481					$	2,466,103
Liabilities:
Derivative instruments						$	—					$	(84)					$	—					$	(84)					$	—					$	(370)					$	—					$	(370)
Total						$	—					$	(84)					$	—					$	(84)					$	—					$	(370)					$	—					$	(370)

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following table summarizes the change in balance sheet carrying value associated with level 3 financial instruments carried at fair value on a recurring basis.

						Nine Months Ended September 30,
						2024																		2023
						Investments																		Investments
(Dollars in thousands)						Available For Sale - Debt Securities						Trading - Residual Interests						Total						Available For Sale - Debt Securities						Trading - Residual Interests						Total
Balance, beginning of period						$	—					$	54,481					$	54,481					$	—					$	50,786					$	50,786
Total gains/(losses):
Included in earnings (or changes in net assets)(1)						14						398						412						—						2,016						2,016
Included in other comprehensive income						83						—						83						—						—						—
Settlements						2,813						(39)						2,774						—						(241)						(241)
Transfers into level 3						—						—						—						—						—						—
Transfers out of level 3						—						—						—						—						—						—
Balance, end of period						$	2,910					$	54,840					$	57,750					$	—					$	52,561					$	52,561
Change in unrealized gains or losses for the period included in other comprehensive income for assets held at the end of the reporting period						$	83					$	—					$	83					$	—					$	—					$	—
Change in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period(2)						$	—					$	398					$	398					$	—					$	2,016					$	2,016

(1) Included in earnings (or changes in net assets) is comprised of the amounts recorded in the specified line item in the consolidated statements of income:

						Nine Months Ended September 30,
(Dollars in thousands)						2024						2023
Interest Income - Investments						$	14					$	—
Gains (losses) on securities, net						398						2,016
Total						$	412					$	2,016

(2) Recorded in "gains (losses) on securities, net" in the consolidated statements of income.

Fair Value Measurement Inputs and Valuation Techniques

The following table presents the significant unobservable inputs used in the recurring valuations of the level 3 financial instruments detailed above.

(Dollars in thousands)

Fair Value at 9/30/2024

Valuation Technique

Unobservable Input

Range (Average)

Debt Securities

$

2,910

Discounted cash flow

Constant Prepayment Rate

7.1%-11.1% (8.5%)

Probability of default

4.0%-17.0% (11.5%)

Residual Interests

54,840

Discounted cash flow

Constant Prepayment Rate

7.1%-11.1% (8.5%)

Probability of default

4.0%-17.0% (11.5%)

Total

$

57,750

Fair Values of Financial Assets and Liabilities, Including Derivative Financial Instruments

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

						September 30, 2024																		December 31, 2023
(Dollars in thousands)						Fair Value						Carrying Value						Difference						Fair Value						Carrying Value						Difference
Earning assets:
Loans held for investment, net:
Private Education Loans						$	23,812,201					$	20,459,933					$	3,352,268					$	22,229,045					$	19,772,293					$	2,456,752
FFELP Loans						—						—						—						542,775						534,064						8,711
Loans held for sale						485,701						485,701						—						—						—						—
Cash and cash equivalents						4,489,539						4,489,539						—						4,149,838						4,149,838						—
Trading investments						54,840						54,840						—						54,481						54,481						—
Available-for-sale investments						2,022,605						2,022,605						—						2,411,622						2,411,622						—
Accrued interest receivable						1,667,539						1,537,594						129,945						1,448,766						1,379,904						68,862
Derivative instruments						600						600						—						—						—						—
Total earning assets						$	32,533,025					$	29,050,812					$	3,482,213					$	30,836,527					$	28,302,202					$	2,534,325
Interest-bearing liabilities:
Money-market and savings accounts						$	10,477,366					$	10,484,269					$	6,903					$	11,134,883					$	11,203,292					$	68,409
Certificates of deposit						11,027,258						10,960,441						(66,817)						10,380,684						10,448,365						67,681
Long-term borrowings						5,889,769						6,036,527						146,758						4,873,690						5,227,512						353,822
Accrued interest payable						98,945						98,945						—						105,066						105,066						—
Derivative instruments						84						84						—						370						370						—
Total interest-bearing liabilities						$	27,493,422					$	27,580,266					$	86,844					$	26,494,693					$	26,984,605					$	489,912
Excess of net asset fair value over carrying value																		$	3,569,057																	$	3,024,237

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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