Delaware | 001-13251 | 52-2013874 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
300 Continental Drive, Newark, Delaware | 19713 |
(Address of principal executive offices) | (Zip Code) |
c | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
c | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
c | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
c | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description | |
99.1* | Press Release, dated July 20, 2016. |
* | Furnished herewith. |
SLM CORPORATION | ||
Date: July 20, 2016 | By: | /s/ STEVEN J. MCGARRY |
Steven J. McGarry | ||
Executive Vice President and Chief Financial Officer |
Exhibit Number | Description | |
99.1* | Press Release, dated July 20, 2016. |
* | Furnished herewith. |
![]() | NEWS RELEASE |
FOR IMMEDIATE RELEASE |
• | Private education loan originations of $423 million, up 10 percent. |
• | Net interest income of $213 million, up 26 percent. |
• | Net interest margin of 5.84 percent, up 33 basis points. |
• | Average private education loans outstanding of $12.2 billion, up 30 percent. |
• | Average yield on the private education loan portfolio of 7.98 percent, up 2 basis points. |
• | Private education loan provision for loan losses of $42 million, up from $15 million. |
• | Loans in forbearance were 2.9 percent of private education loans in repayment and forbearance, down from 5.7 percent. The year-ago quarter included the effect of disaster forbearance granted to customers in flood-impacted areas. |
• | Delinquencies as a percentage of private education loans in repayment were 2.1 percent, up from 1.7 percent. |
June 30, 2016 | "Well Capitalized" Regulatory Requirements | |
Common Equity Tier 1 Capital (to Risk-Weighted Assets) | 13.5 percent | 6.5 percent |
Tier 1 Capital (to Risk-Weighted Assets) | 13.5 percent | 8.0 percent |
Total Capital (to Risk-Weighted Assets) | 14.5 percent | 10.0 percent |
Tier 1 Capital (to Average Assets) | 12.2 percent | 5.0 percent |
• | Full-year diluted core earnings per share between $.51 and $.52. |
• | Full-year private education loan originations of $4.6 billion. |
• | Full-year operating efficiency ratio improvement of 10 percent. |
Media: | Martha Holler, 302-451-4900, martha.holler@salliemae.com, Rick Castellano, 302-451-2541, rick.castellano@salliemae.com |
Investors: | Brian Cronin, 302-451-0304, brian.cronin@salliemae.com |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(In thousands, except per share data and percentages) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 51,962 | $ | 86,146 | $ | 112,738 | $ | 129,022 | ||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.12 | $ | 0.20 | $ | 0.26 | $ | 0.30 | ||||||||
Weighted average shares used to compute diluted earnings per share | 431,796 | 432,742 | 431,349 | 432,523 | ||||||||||||
Return on assets | 1.5 | % | 2.8 | % | 1.6 | % | 2.2 | % | ||||||||
Operating efficiency ratio(1) | 41.6 | % | 49.9 | % | 41.0 | % | 47.3 | % | ||||||||
Other Operating Statistics | ||||||||||||||||
Ending Private Education Loans, net | $ | 12,183,293 | $ | 9,245,259 | $ | 12,183,293 | $ | 9,245,259 | ||||||||
Ending FFELP Loans, net | 1,062,133 | 1,177,649 | 1,062,133 | 1,177,649 | ||||||||||||
Ending total education loans, net | $ | 13,245,426 | $ | 10,422,908 | $ | 13,245,426 | $ | 10,422,908 | ||||||||
Average education loans | $ | 13,294,309 | $ | 10,556,020 | $ | 13,107,635 | $ | 10,622,272 | ||||||||
_________ | ||||||||||||||||
(1) The operating efficiency ratio is calculated as total expenses, excluding restructuring and other reorganization expenses, divided by net interest income (before provisions for credit losses) and other income, excluding gains on sales of loans, net. |
June 30, | December 31, | |||||||
2016 | 2015 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 1,042,915 | $ | 2,416,219 | ||||
Available-for-sale investments at fair value (cost of $203,480 and $196,402, respectively) | 206,785 | 195,391 | ||||||
Loans held for investment (net of allowance for losses of $144,925 and $112,507, respectively) | 13,245,426 | 11,630,591 | ||||||
Restricted cash and investments | 34,297 | 27,980 | ||||||
Other interest-earning assets | 53,555 | 54,845 | ||||||
Accrued interest receivable | 719,875 | 564,496 | ||||||
Premises and equipment, net | 86,512 | 81,273 | ||||||
Tax indemnification receivable | 160,325 | 186,076 | ||||||
Other assets | 80,239 | 57,227 | ||||||
Total assets | $ | 15,629,929 | $ | 15,214,098 | ||||
Liabilities | ||||||||
Deposits | $ | 11,900,083 | $ | 11,487,707 | ||||
Short-term borrowings | — | 500,175 | ||||||
Long-term borrowings | 1,038,029 | 579,101 | ||||||
Income taxes payable, net | 79,904 | 166,662 | ||||||
Upromise related liabilities | 260,127 | 275,384 | ||||||
Other liabilities | 154,875 | 108,746 | ||||||
Total liabilities | 13,433,018 | 13,117,775 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock, par value $0.20 per share, 20 million shares authorized: | ||||||||
Series A: 3.3 million and 3.3 million shares issued, respectively, at stated value of $50 per share | 165,000 | 165,000 | ||||||
Series B: 4 million and 4 million shares issued, respectively, at stated value of $100 per share | 400,000 | 400,000 | ||||||
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 433.9 million and 430.7 million shares issued, respectively | 86,769 | 86,136 | ||||||
Additional paid-in capital | 1,149,783 | 1,135,860 | ||||||
Accumulated other comprehensive loss (net of tax benefit of $20,944 and $9,949, respectively) | (33,853 | ) | (16,059 | ) | ||||
Retained earnings | 478,947 | 366,609 | ||||||
Total SLM Corporation stockholders' equity before treasury stock | 2,246,646 | 2,137,546 | ||||||
Less: Common stock held in treasury at cost: 5.8 million and 4.4 million shares, respectively | (49,735 | ) | (41,223 | ) | ||||
Total equity | 2,196,911 | 2,096,323 | ||||||
Total liabilities and equity | $ | 15,629,929 | $ | 15,214,098 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 251,675 | $ | 195,287 | $ | 496,905 | $ | 393,143 | ||||||||
Investments | 2,371 | 2,386 | 4,962 | 5,106 | ||||||||||||
Cash and cash equivalents | 1,195 | 801 | 2,829 | 1,581 | ||||||||||||
Total interest income | 255,241 | 198,474 | 504,696 | 399,830 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 35,409 | 29,482 | 69,423 | 59,052 | ||||||||||||
Interest expense on short-term borrowings | 2,060 | 735 | 4,223 | 1,567 | ||||||||||||
Interest expense on long-term borrowings | 5,006 | — | 8,421 | — | ||||||||||||
Total interest expense | 42,475 | 30,217 | 82,067 | 60,619 | ||||||||||||
Net interest income | 212,766 | 168,257 | 422,629 | 339,211 | ||||||||||||
Less: provisions for credit losses | 41,793 | 15,558 | 74,395 | 32,176 | ||||||||||||
Net interest income after provisions for credit losses | 170,973 | 152,699 | 348,234 | 307,035 | ||||||||||||
Non-interest income: | ||||||||||||||||
Gains on sales of loans, net | — | 76,874 | — | 76,874 | ||||||||||||
Gains on derivatives and hedging activities, net | 2,142 | 1,602 | 1,788 | 4,894 | ||||||||||||
Other | 13,683 | 10,912 | 34,711 | 18,919 | ||||||||||||
Total non-interest income | 15,825 | 89,388 | 36,499 | 100,687 | ||||||||||||
Expenses: | ||||||||||||||||
Compensation and benefits | 44,570 | 38,572 | 94,779 | 79,775 | ||||||||||||
Other operating expenses | 50,207 | 51,227 | 92,883 | 91,211 | ||||||||||||
Total operating expenses | 94,777 | 89,799 | 187,662 | 170,986 | ||||||||||||
Acquired intangible asset impairment and amortization expense | 261 | 370 | 521 | 740 | ||||||||||||
Restructuring and other reorganization expenses | — | 744 | — | 5,401 | ||||||||||||
Total expenses | 95,038 | 90,913 | 188,183 | 177,127 | ||||||||||||
Income before income tax expense | 91,760 | 151,174 | 196,550 | 230,595 | ||||||||||||
Income tax expense | 34,555 | 60,158 | 73,430 | 91,880 | ||||||||||||
Net income | 57,205 | 91,016 | 123,120 | 138,715 | ||||||||||||
Preferred stock dividends | 5,243 | 4,870 | 10,382 | 9,693 | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 51,962 | $ | 86,146 | $ | 112,738 | $ | 129,022 | ||||||||
Basic earnings per common share attributable to SLM Corporation | $ | 0.12 | $ | 0.20 | $ | 0.26 | $ | 0.30 | ||||||||
Average common shares outstanding | 427,942 | 425,688 | 427,526 | 425,061 | ||||||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.12 | $ | 0.20 | $ | 0.26 | $ | 0.30 | ||||||||
Average common and common equivalent shares outstanding | 431,796 | 432,742 | 431,349 | 432,523 |
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
“Core Earnings” adjustments to GAAP: | ||||||||||||||||
GAAP net income | $ | 57,205 | $ | 91,016 | $ | 123,120 | $ | 138,715 | ||||||||
Preferred stock dividends | 5,243 | 4,870 | 10,382 | 9,693 | ||||||||||||
GAAP net income attributable to SLM Corporation common stock | $ | 51,962 | $ | 86,146 | $ | 112,738 | $ | 129,022 | ||||||||
Adjustments: | ||||||||||||||||
Net impact of derivative accounting(1) | (1,470 | ) | (632 | ) | (428 | ) | (2,901 | ) | ||||||||
Net tax effect(2) | (562 | ) | (252 | ) | (164 | ) | (1,157 | ) | ||||||||
Total “Core Earnings” adjustments to GAAP | (908 | ) | (380 | ) | (264 | ) | (1,744 | ) | ||||||||
“Core Earnings” attributable to SLM Corporation common stock | $ | 51,054 | $ | 85,766 | $ | 112,474 | $ | 127,278 | ||||||||
GAAP diluted earnings per common share | $ | 0.12 | $ | 0.20 | $ | 0.26 | $ | 0.30 | ||||||||
Derivative adjustments, net of tax | — | — | — | 0.00 | ||||||||||||
“Core Earnings” diluted earnings per common share | $ | 0.12 | $ | 0.20 | $ | 0.26 | $ | 0.29 |
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