UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 21, 2015
SLM CORPORATION
(Exact name of registrant as specified in its charter)
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) |
Registrant’s telephone number, including area code: (302) 451-0200
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On January 21, 2015, SLM Corporation issued a press release announcing its financial results for the quarter ended December 31, 2014. The press release is furnished as Exhibit 99.1 and incorporated by reference herein.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit Number | Description | |
99.1* | Press Release, dated January 21, 2015. | |
* | Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SLM CORPORATION | ||
Date: January 21, 2015 | By: | /s/ STEVEN J. MCGARRY |
Steven J. McGarry | ||
Executive Vice President, Chief Financial Officer | ||
EXHIBIT INDEX
Exhibit Number | Description | |
99.1* | Press Release, dated January 21, 2015. | |
* | Furnished herewith. |
Exhibit 99.1
 | NEWS RELEASE |
FOR IMMEDIATE RELEASE | |
SALLIE MAE REPORTS FOURTH-QUARTER AND FULL-YEAR 2014 FINANCIAL RESULTS
Full-Year Private Education Loan Originations of $4.1 Billion
Private Education Loan Portfolio Grows to $8.2 Billion, Up 27 Percent Year-over-Year
Net Interest Income Up 25 Percent Year-over-Year
Asset-Backed Commercial Paper Facility Closing Caps Successful Year in Capital Markets
NEWARK, Del., Jan. 21, 2015 — Sallie Mae (NASDAQ: SLM), formally SLM Corporation, today released fourth-quarter 2014 and full-year 2014 financial results that include the effects of $4.1 billion in private education loan originations, up 7 percent from last year; a 27-percent increase in private education loan portfolio size to $8.2 billion; and net interest income of $578 million, up 25 percent from 2013.
In a year of significant change, Sallie Mae achieved the legal separation of Navient, established a market for the sale and securitization of its private education loans and completed the roll out of its own, independent servicing and customer support capabilities. Most recently, the company closed a $750 million asset-backed commercial paper facility.
“2014 was a year of many accomplishments,” said Raymond Quinlan, chairman and CEO. “We managed the extraordinary demands of successfully completing the spin from the preexisting company while strengthening our customer franchise and assisting 367,000 students and families to pay for college.”
For the fourth-quarter 2014, GAAP net income was $20 million ($.03 diluted earnings per share), down from $60 million ($.14 diluted earnings per share) in the year-ago quarter. The year-over-year decrease was attributable to a $64-million decrease in gains on sales of securities and a $12-million increase in operating expenses, partially offset by a $28-million increase in net interest income.
For 2014, GAAP net income was $194 million ($.42 diluted earnings per share), down from $259 million ($.58 diluted earnings per share) in 2013.
Core earnings for the quarter were $20 million ($.03 diluted earnings per share), compared with $61 million ($.14 diluted earnings per share) in the year-ago quarter.
Core earnings for the year were $195 million ($.42 diluted earnings per share), compared with $259 million ($.58 diluted earnings per share) for 2013.
Sallie Mae provides core basis earnings because management believes its derivatives are effective economic hedges, and, as such are a critical element of its interest rate risk management strategy, and, consequently, it is one of several measures used to evaluate management performance. The difference between core earnings and GAAP net income is driven by mark-to-market unrealized gains and losses on derivative contracts not in effective accounting hedges and hedge ineffectiveness that are recognized in GAAP, but not in core earnings results. Fourth-quarter 2014 and full-year 2014 GAAP results included $62 thousand and $2 million, respectively, of pre-tax losses from derivative accounting treatment that are excluded from core earnings results, vs. $527 thousand and $645 thousand, respectively, in the year-ago periods.
Fourth-quarter 2014 private education loan portfolio results vs. fourth-quarter 2013 included:
• | Loan originations of $557 million, up 7 percent. |
• | Net interest income of $151 million, up 23 percent. |
• | Average private education loans outstanding increased $1.7 billion to $8.1 billion. |
• | Average yield on the private education loan portfolio was 8.07 percent compared with 8.17 percent. |
• | Provision for loan losses was $30 million, up from $28 million. |
• | Loans in forbearance increased to 2.6 percent of loans in repayment and forbearance. |
• | Delinquencies as a percentage of private education loans in repayment increased to 2.0 percent. |
Year-over-year private education loan portfolio performance continues to be affected by changes in the company’s business practices undertaken in connection with the Navient spin-off. Most notably, the company changed its policy to charge off loans after 120 days of delinquency and changed its loss confirmation period from two years to one year to reflect both the shorter charge-off policy and its related servicing practices. Prior to the spin-off, Sallie Mae Bank also sold all loans past 90 days delinquent to an affiliate now owned by Navient. Consequently, many of the pre-spin-off, historical credit indicators and period-over-period trends are not comparable and may not be indicative of future performance.
Operating Expenses
Operating expenses were $88 million in fourth-quarter 2014 (including $10 million of reorganization expenses), compared with $76 million of operating expenses in the year-ago quarter (which included $11 million reserved for compliance-related restitution).
Operating expenses were $316 million for the full-year 2014 (including $38 million of reorganization expenses), compared with $275 million in 2013. The year-over-year increase in operating expenses was primarily the result of increased personnel costs related to being a stand-alone company as well as reorganization costs.
Income Tax Expense
Income tax expense declined to $24 million in fourth-quarter 2014 from $37 million in the prior-year quarter. The company recorded a net reserve of $7 million for uncertain historical tax positions which resulted in an increase to our effective tax rate to 55 percent in fourth-quarter 2014. Absent these adjustments, the company’s effective tax rate would have been approximately 39 percent in fourth-quarter 2014, compared with an effective tax rate of 38 percent in the prior-year quarter.
The company’s effective tax rate increased to 42 percent in 2014 from 38 percent in 2013. The increase in the effective tax rate for 2014 was primarily the result of additional reserves related to uncertain historical tax positions. The increase is specific to fourth-quarter 2014 and should not significantly affect the company’s effective tax rate going forward.
Capital
The regulatory capital ratios of the company’s Sallie Mae Bank subsidiary continue to exceed guidelines to be considered well capitalized. At Dec. 31, 2014, Sallie Mae Bank’s regulatory capital ratios were as follows:
Dec. 31, 2014 Well Capitalized Regulatory Requirements
Tier 1 leverage 11.5 percent 5.0 percent
Tier 1 risk-based capital 15.0 percent 6.0 percent
Total risk-based capital 15.9 percent 10.0 percent
Deposits
Deposits at Sallie Mae Bank totaled $11.3 billion at Dec. 31, 2014, compared with $9.3 billion at Dec. 31, 2013. The increase was primarily driven by an increase in money market accounts. The percentage of brokered deposits to total deposits decreased to 60 percent at Dec. 31, 2014, from 63 percent at Dec. 31, 2013.
Guidance
The company expects 2015 results to be as follows:
• | Full-year private education loan originations of $4.3 billion. |
• | Full-year operating expenses of $325 million, plus an additional $5 million of reorganization expenses. |
• | Full-year loan sales of $1.5 billion. |
• | Provision for private education loan losses between approximately $116 million and $130 million. |
• | Full-year diluted core earnings per share between $0.48 and $0.50. |
***
2
Definitions for capitalized terms in this document can be found in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2013 (filed with the SEC on Feb. 19, 2014). Certain reclassifications have been made to the balances as of and for the three months and twelve months ended Dec. 31, 2013, to be consistent with classifications adopted for 2014, and had no effect on net income, total assets or total liabilities.
***
Sallie Mae will host an earnings conference call tomorrow, Jan. 22, 2015, at 8 a.m. EST. Sallie Mae executives will be on hand to discuss various highlights of the quarter and to answer questions related to Sallie Mae’s performance. Individuals interested in participating in the call should dial 877-356-5689 (USA and Canada) or dial 706-679-0623 (international) and use access code 55432423 starting at 7:45 a.m. EST. A live audio webcast of the conference call may be accessed at www.SallieMae.com/investors. A replay of the conference call via the company’s website will be available approximately two hours after the call’s conclusion. A telephone replay may be accessed approximately two hours after the call’s conclusion through Feb. 4, 2015, by dialing 855-859-2056 (USA and Canada) or 404-537-3406 (international) with access code 55432423.
Presentation slides for the conference call may be accessed at www.SallieMae.com/investors under the webcasts tab.
This press release contains “forward-looking statements” and information based on management’s current expectations as of the date of this release. Statements that are not historical facts, including statements about the company’s beliefs or expectations and statements that assume or are dependent upon future events, are forward-looking statements. 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 the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2013 (filed with the SEC on Feb. 19, 2014), the company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, and the company’s Quarterly Report on Form 10-Q for the quarter ended Sept. 30, 2014; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; changes in accounting standards and the impact of related changes in significant accounting estimates; any adverse outcomes in any significant litigation to which the company is a party; credit risk associated with the company’s exposure to third parties, including counterparties to the company’s derivative transactions; and changes in the terms of student loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws). The company could also be affected by, among other things: changes in its funding costs and availability; failures of its operating systems or infrastructure, including those of third-party vendors; failure to implement the recently executed separation of the company into two separate publicly traded companies, including failure to transition its origination and servicing operations as planned, increased costs in connection with being a stand-alone company, and failure to achieve the expected benefits of the separation; damage to its reputation; 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 its customers; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of its earning assets vs. its funding arrangements; and changes in general economic conditions. The preparation of the company’s consolidated financial statements also requires management 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 release are qualified by these cautionary statements and are made only as of the date of this release. The company does not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual results or changes in its expectations.
In connection with the spin-off of Navient Corporation, the company conformed its policy with that of Sallie Mae Bank to charge off loans after 120 days of delinquency. The company also changed its loss confirmation period from two years to one year to reflect both the shorter charge-off policy and its related servicing practices. Prior to the spin-off, Sallie Mae Bank sold all loans past 90 days delinquent to an affiliate of what is now Navient Corporation. Post-spin-off, sales of delinquent loans to Navient Corporation have been significantly curtailed. Consequently, many of the pre-spin-off, historical credit indicators and period-over-period trends are not comparable and may not be indicative of future performance.
3
The company reports financial results on a GAAP basis and also provides certain “Core Earnings” performance measures. The difference between the company’s “Core Earnings” and GAAP results for the periods presented were the unrealized, mark-to-market gains/losses on derivative contracts. These are recognized in GAAP but not in “Core Earnings” results. The company provides “Core Earnings” measures because this is what management uses when making management decisions regarding the company’s performance and the allocation of corporate resources. The company’s “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 -‘Core Earnings’” in the company’s Form 10-Q for the quarter ended Sept. 30, 2014 for a further discussion and the “‘Core Earnings’ to GAAP Reconciliation” table in this press release, for a complete reconciliation between GAAP net income and “Core Earnings.”
***
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for American families. With products and services that include Upromise rewards, scholarship search and planning tools, private education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
###
Contacts:
Media: | Martha Holler, 302-451-4900, martha.holler@SallieMae.com |
Investors: | Brian Cronin, 302-451-0304, brian.cronin@SallieMae.com |
###
4
Selected Financial Information and Ratios
(Unaudited)
Quarters Ended | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Net income attributable to SLM Corporation | $ | 19,717 | $ | 60,202 | $ | 194,219 | $ | 258,945 | ||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.03 | $ | 0.14 | $ | 0.42 | $ | 0.58 | ||||||||
Weighted average shares used to compute diluted earnings per share | 432,108 | 442,949 | 432,269 | 448,549 | ||||||||||||
Return on assets | 0.66 | % | 2.44 | % | 1.77 | % | 2.83 | % | ||||||||
Operating efficiency ratio(1) | 59 | % | 43 | % | 43 | % | 40 | % | ||||||||
Other Operating Statistics | ||||||||||||||||
Ending Private Education Loans, net | $ | 8,246,647 | $ | 6,506,642 | $ | 8,246,647 | $ | 6,506,642 | ||||||||
Ending FFELP Loans, net | 1,263,139 | 1,424,735 | 1,263,139 | 1,424,735 | ||||||||||||
Ending total education loans, net | $ | 9,509,786 | $ | 7,931,377 | $ | 9,509,786 | $ | 7,931,377 | ||||||||
Average education loans | $ | 9,355,797 | $ | 7,671,772 | $ | 8,916,853 | $ | 7,139,630 | ||||||||
(1) Our efficiency ratio is calculated as operating expense, excluding restructuring costs, divided by net interest income after provision for loan losses and other income. | ||||||||||||||||
5
SLM CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 2,359,780 | $ | 2,182,865 | ||||
Available-for-sale investments at fair value (cost of $167,740 and $106,977, respectively) | 168,934 | 102,105 | ||||||
Loans held for investment (net of allowance for losses of $83,842 and $68,081, respectively) | 9,509,786 | 7,931,377 | ||||||
Other interest-earning assets | 77,283 | 4,355 | ||||||
Accrued interest receivable | 469,697 | 356,283 | ||||||
Premises and equipment, net | 78,470 | 74,188 | ||||||
Acquired intangible assets, net | 3,225 | 6,515 | ||||||
Tax indemnification receivable | 240,311 | — | ||||||
Other assets | 64,757 | 48,976 | ||||||
Total assets | $ | 12,972,243 | $ | 10,706,664 | ||||
Liabilities | ||||||||
Deposits | $ | 10,540,555 | $ | 9,001,550 | ||||
Income taxes payable, net | 191,499 | 162,205 | ||||||
Upromise related liabilities | 293,004 | 307,518 | ||||||
Other liabilities | 117,227 | 69,248 | ||||||
Total liabilities | 11,142,285 | 9,540,521 | ||||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock, par value $0.20 per share, 20 million shares authorized: | ||||||||
Series A: 3.3 million and 0 shares issued, respectively, at stated value of $50 per share | 165,000 | — | ||||||
Series B: 4 million and 0 shares issued, respectively, at stated value of $100 per share | 400,000 | — | ||||||
Common stock, par value $0.20 per share, 1.125 billion shares authorized: 425 million and 0 shares issued, respectively | 84,961 | — | ||||||
Additional paid-in capital | 1,090,511 | — | ||||||
Navient's subsidiary investment | — | 1,164,495 | ||||||
Accumulated other comprehensive loss (net of tax benefit of $(7,186) and ($1,849), respectively) | (11,393 | ) | (3,024 | ) | ||||
Retained earnings | 113,066 | — | ||||||
Total SLM Corporation stockholders' equity before treasury stock | 1,842,145 | 1,161,471 | ||||||
Less: Common stock held in treasury at cost: 1 million and 0 shares, respectively | (12,187 | ) | — | |||||
Total SLM Corporation stockholders' equity | 1,829,958 | 1,161,471 | ||||||
Noncontrolling interest | — | 4,672 | ||||||
Total equity | 1,829,958 | 1,166,143 | ||||||
Total liabilities and equity | $ | 12,972,243 | $ | 10,706,664 | ||||
6
SLM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Quarters Ended | Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest income: | ||||||||||||||||
Loans | $ | 174,413 | $ | 142,446 | $ | 660,792 | $ | 527,257 | ||||||||
Investments | 2,792 | 2,640 | 8,913 | 20,090 | ||||||||||||
Cash and cash equivalents | 1,444 | 1,245 | 4,589 | 3,853 | ||||||||||||
Total interest income | 178,649 | 146,331 | 674,294 | 551,200 | ||||||||||||
Interest expense: | ||||||||||||||||
Deposits | 27,973 | 23,162 | 95,774 | 88,019 | ||||||||||||
Other interest expense | — | 956 | 41 | 1,066 | ||||||||||||
Total interest expense | 27,973 | 24,118 | 95,815 | 89,085 | ||||||||||||
Net interest income | 150,676 | 122,213 | 578,479 | 462,115 | ||||||||||||
Less: provisions for loan losses | 30,458 | 29,258 | 85,529 | 69,339 | ||||||||||||
Net interest income after provisions for loan losses | 120,218 | 92,955 | 492,950 | 392,776 | ||||||||||||
Noninterest income: | ||||||||||||||||
Gains on sales of loans, net | 396 | 4,496 | 121,359 | 196,593 | ||||||||||||
Gains (losses) on derivatives and hedging activities, net | 825 | (215 | ) | (3,996 | ) | 640 | ||||||||||
Gains on sales of securities | — | 63,813 | — | 63,813 | ||||||||||||
Other | 11,095 | 11,342 | 39,921 | 37,222 | ||||||||||||
Total noninterest income | 12,316 | 79,436 | 157,284 | 298,268 | ||||||||||||
Expenses: | ||||||||||||||||
Compensation and benefits | 36,778 | 24,183 | 129,709 | 106,799 | ||||||||||||
Other operating expenses | 39,944 | 49,925 | 143,170 | 163,036 | ||||||||||||
Total operating expenses | 76,722 | 74,108 | 272,879 | 269,835 | ||||||||||||
Acquired intangible asset impairment and amortization expense | 1,147 | 871 | 5,292 | 3,956 | ||||||||||||
Restructuring and other reorganization expenses | 10,483 | 619 | 38,311 | 726 | ||||||||||||
Total expenses | 88,352 | 75,598 | 316,482 | 274,517 | ||||||||||||
Income before income tax expense | 44,182 | 96,793 | 333,752 | 416,527 | ||||||||||||
Income tax expense | 24,465 | 36,923 | 139,967 | 158,934 | ||||||||||||
Net income | 19,717 | 59,870 | 193,785 | 257,593 | ||||||||||||
Less: net loss attributable to noncontrolling interest | — | (332 | ) | (434 | ) | (1,352 | ) | |||||||||
Net income attributable to SLM Corporation | 19,717 | 60,202 | 194,219 | 258,945 | ||||||||||||
Preferred stock dividends | 4,855 | — | 12,933 | — | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 14,862 | $ | 60,202 | $ | 181,286 | $ | 258,945 | ||||||||
Basic earnings per common share attributable to SLM Corporation | $ | 0.04 | $ | 0.14 | $ | 0.43 | $ | 0.59 | ||||||||
Average common shares outstanding | 423,325 | 433,875 | 423,970 | 440,108 | ||||||||||||
Diluted earnings per common share attributable to SLM Corporation | $ | 0.03 | $ | 0.14 | $ | 0.42 | $ | 0.58 | ||||||||
Average common and common equivalent shares outstanding | 432,108 | 442,949 | 432,269 | 448,549 | ||||||||||||
7
SLM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income | $ | 19,717 | $ | 59,870 | $ | 193,785 | $ | 257,593 | ||||||||
Other comprehensive income (loss): | ||||||||||||||||
Unrealized gain (loss) on investments | 2,437 | (5,580 | ) | 6,066 | 35,802 | |||||||||||
Reclassification adjustments for (gain) on sale of available-for-sale securities included in other income | — | (63,813 | ) | — | (63,813 | ) | ||||||||||
Total unrealized gains (losses) on investments | 2,437 | (69,393 | ) | 6,066 | (28,011 | ) | ||||||||||
Unrealized loss on cash flow hedges | (17,890 | ) | — | (19,772 | ) | — | ||||||||||
Total unrealized losses | (15,453 | ) | (69,393 | ) | (13,706 | ) | (28,011 | ) | ||||||||
Income tax benefit | 5,911 | 26,334 | 5,337 | 10,639 | ||||||||||||
Other comprehensive loss, net of tax benefit | (9,542 | ) | (43,059 | ) | (8,369 | ) | (17,372 | ) | ||||||||
Comprehensive income | 10,175 | 16,811 | 185,416 | 240,221 | ||||||||||||
Less: comprehensive loss attributable to noncontrolling interest | — | (332 | ) | (434 | ) | (1,352 | ) | |||||||||
Total comprehensive income attributable to SLM Corporation | $ | 10,175 | $ | 17,143 | $ | 185,850 | $ | 241,573 | ||||||||
8
“Core Earnings” to GAAP Reconciliation
The following table reflects adjustments associated with our derivative activities.
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
“Core Earnings” adjustments to GAAP: | ||||||||||||||||
GAAP net income attributable to SLM Corporation | $ | 19,717 | $ | 60,202 | $ | 194,219 | $ | 258,945 | ||||||||
Preferred stock dividends | 4,855 | — | 12,933 | — | ||||||||||||
GAAP net income attributable to SLM Corporation common stock | $ | 14,862 | $ | 60,202 | $ | 181,286 | $ | 258,945 | ||||||||
GAAP net income attributable to SLM Corporation | $ | 19,717 | $ | 60,202 | $ | 194,219 | $ | 258,945 | ||||||||
Adjustments: | ||||||||||||||||
Net impact of derivative accounting(1) | 62 | 527 | 1,746 | 645 | ||||||||||||
Net tax effect(2) | 24 | 201 | 659 | 246 | ||||||||||||
Total “Core Earnings” adjustments to GAAP | 38 | 326 | 1,087 | 399 | ||||||||||||
“Core Earnings” | $ | 19,755 | $ | 60,528 | $ | 195,306 | $ | 259,344 | ||||||||
GAAP diluted earnings per common share | $ | 0.03 | $ | 0.14 | $ | 0.42 | $ | 0.58 | ||||||||
Derivative adjustments, net of tax | — | — | — | — | ||||||||||||
“Core Earnings” diluted earnings per common share | $ | 0.03 | $ | 0.14 | $ | 0.42 | $ | 0.58 | ||||||||
______
(1) Derivative Accounting: “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, as well as the periodic unrealized gains and losses that are a result of ineffectiveness recognized related to effective hedges under GAAP. 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.
9
Average Balance Sheets - GAAP
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.
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||||
(Dollars in thousands) | Balance | Rate | Balance | Rate | Balance | Rate | Balance | Rate | ||||||||||||||||||||
Average Assets | ||||||||||||||||||||||||||||
Private Education Loans | $ | 8,062,977 | 8.07 | % | $ | 6,399,584 | 8.17 | % | $ | 7,563,356 | 8.16 | % | $ | 5,996,651 | 8.16 | % | ||||||||||||
FFELP Loans | 1,292,820 | 3.21 | 1,272,188 | 3.31 | 1,353,497 | 3.24 | 1,142,979 | 3.32 | ||||||||||||||||||||
Taxable securities | 407,408 | 2.72 | 187,655 | 4.87 | 331,479 | 2.68 | 523,883 | 3.75 | ||||||||||||||||||||
Cash and other short-term investments | 2,159,088 | 0.27 | 1,944,405 | 0.32 | 1,746,839 | 0.26 | 1,473,392 | 0.3 | ||||||||||||||||||||
Total interest-earning assets | 11,922,293 | 5.94 | % | 9,803,832 | 5.92 | % | 10,995,171 | 6.13 | % | 9,136,905 | 6.03 | % | ||||||||||||||||
Non-interest-earning assets | 614,105 | 591,530 | 549,237 | 463,584 | ||||||||||||||||||||||||
Total assets | $ | 12,536,398 | $ | 10,395,362 | $ | 11,544,408 | $ | 9,600,489 | ||||||||||||||||||||
Average Liabilities and Equity | ||||||||||||||||||||||||||||
Brokered deposits | $ | 6,171,293 | 1.22 | % | $ | 5,447,772 | 1.18 | % | $ | 5,588,569 | 1.12 | % | $ | 5,015,201 | 1.24 | % | ||||||||||||
Retail and other deposits | 3,809,375 | 0.93 | 2,959,532 | 0.92 | 3,593,817 | 0.92 | 2,675,879 | 0.96 | ||||||||||||||||||||
Other interest-bearing liabilities | 17,068 | 2.72 | 49,786 | 7.71 | 26,794 | 0.91 | 120,546 | 0.92 | ||||||||||||||||||||
Total interest-bearing liabilities | 9,997,736 | 1.11 | % | 8,457,090 | 1.13 | % | 9,209,180 | 1.04 | % | 7,811,626 | 1.14 | % | ||||||||||||||||
Non-interest-bearing liabilities | 718,365 | 604,442 | 727,806 | 588,586 | ||||||||||||||||||||||||
Equity | 1,820,297 | 1,333,830 | 1,607,422 | 1,200,277 | ||||||||||||||||||||||||
Total liabilities and equity | $ | 12,536,398 | $ | 10,395,362 | $ | 11,544,408 | $ | 9,600,489 | ||||||||||||||||||||
Net interest margin | 5.01 | % | 4.95 | % | 5.26 | % | 5.06 | % | ||||||||||||||||||||
10
Earnings per Common Share
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||
(In thousands, except per share data) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Numerator: | ||||||||||||||||
Net income attributable to SLM Corporation | $ | 19,717 | $ | 60,202 | $ | 194,219 | $ | 258,945 | ||||||||
Preferred stock dividends | 4,855 | — | 12,933 | — | ||||||||||||
Net income attributable to SLM Corporation common stock | $ | 14,862 | $ | 60,202 | $ | 181,286 | $ | 258,945 | ||||||||
Denominator: | ||||||||||||||||
Weighted average shares used to compute basic EPS | 423,325 | 433,875 | 423,970 | 440,108 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Dilutive effect of stock options, restricted stock, restricted stock units and Employee Stock Purchase Plan | 8,783 | 9,074 | 8,299 | 8,441 | ||||||||||||
Weighted average shares used to compute diluted EPS | 432,108 | 442,949 | 432,269 | 448,549 | ||||||||||||
Basic earnings per common share attributable to SLM Corporation: | $ | 0.04 | $ | 0.14 | $ | 0.43 | $ | 0.59 | ||||||||
Diluted earnings per common share attributable to SLM Corporation: | $ | 0.03 | $ | 0.14 | $ | 0.42 | $ | 0.58 | ||||||||
11
Allowance for Loan Losses Metrics
Quarters Ended | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | FFELP Loans | Private Education Loans | Total | FFELP Loans | Private Education Loans | Total | ||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||
Beginning balance | $ | 5,742 | $ | 59,973 | $ | 65,715 | $ | 5,348 | $ | 54,237 | $ | 59,585 | ||||||||||||
Total provision | 464 | 29,994 | 30,458 | 1,582 | 27,676 | 29,258 | ||||||||||||||||||
Charge-offs(1) | (938 | ) | (10,056 | ) | (10,994 | ) | (612 | ) | — | (612 | ) | |||||||||||||
Recoveries | — | 1,147 | 1,147 | — | — | — | ||||||||||||||||||
Net charge-offs | (938 | ) | (8,909 | ) | (9,847 | ) | (612 | ) | — | (612 | ) | |||||||||||||
Student loan sales(2) | — | (2,484 | ) | (2,484 | ) | — | (20,150 | ) | (20,150 | ) | ||||||||||||||
Ending Balance | $ | 5,268 | $ | 78,574 | $ | 83,842 | $ | 6,318 | $ | 61,763 | $ | 68,081 | ||||||||||||
Allowance: | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | — | $ | 9,815 | $ | 9,815 | $ | — | $ | — | $ | — | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 5,268 | $ | 68,759 | $ | 74,027 | $ | 6,318 | $ | 61,763 | $ | 68,081 | ||||||||||||
Loans: | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | — | $ | 46,760 | $ | 46,760 | $ | — | $ | — | $ | — | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,264,807 | $ | 8,264,616 | $ | 9,529,423 | $ | 1,426,972 | $ | 6,563,342 | $ | 7,990,314 | ||||||||||||
Net charge-offs as a percentage of average loans in repayment (annualized) | 0.40 | % | 0.72 | % | 0.25 | % | — | |||||||||||||||||
Allowance as a percentage of the ending total loan balance | 0.42 | % | 0.95 | % | 0.44 | % | 0.94 | % | ||||||||||||||||
Allowance as a percentage of the ending loans in repayment | 0.57 | % | 1.53 | % | 0.62 | % | 1.55 | % | ||||||||||||||||
Allowance coverage of net charge-offs (annualized) | 1.40 | 2.20 | 2.59 | — | ||||||||||||||||||||
Ending total loans | $ | 1,264,807 | $ | 8,311,376 | $ | 1,426,972 | $ | 6,563,342 | ||||||||||||||||
Average loans in repayment | $ | 930,336 | $ | 4,930,742 | $ | 964,583 | $ | 3,776,759 | ||||||||||||||||
Ending loans in repayment | $ | 926,891 | $ | 5,149,215 | $ | 1,023,471 | $ | 3,972,317 | ||||||||||||||||
________
(1) | Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient, prior to being charged-off. Therefore, many of our historical credit indicators and period-over-period trends are not indicative of future performance. Because we now retain more delinquent loans, we believe it could take up to two years from now before our credit performance indicators provide meaningful period-over-period comparisons. |
(2) | Represents fair value write-downs on loans sold. |
12
Years Ended | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | FFELP Loans | Private Education Loans | Total | FFELP Loans | Private Education Loans | Total | ||||||||||||||||||
Allowance for Loan Losses: | ||||||||||||||||||||||||
Beginning balance | $ | 6,318 | $ | 61,763 | $ | 68,081 | $ | 3,971 | $ | 65,218 | $ | 69,189 | ||||||||||||
Total provision | 1,946 | 83,583 | 85,529 | 4,384 | 64,955 | 69,339 | ||||||||||||||||||
Charge-offs(1) | (2,996 | ) | (14,442 | ) | (17,438 | ) | (2,037 | ) | — | (2,037 | ) | |||||||||||||
Recoveries | — | 1,155 | 1,155 | — | — | — | ||||||||||||||||||
Net charge-offs | (2,996 | ) | (13,287 | ) | (16,283 | ) | (2,037 | ) | — | (2,037 | ) | |||||||||||||
Student loan sales(2) | — | (53,485 | ) | (53,485 | ) | — | (68,410 | ) | (68,410 | ) | ||||||||||||||
Ending Balance | $ | 5,268 | $ | 78,574 | $ | 83,842 | $ | 6,318 | $ | 61,763 | $ | 68,081 | ||||||||||||
Allowance: | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | — | $ | 9,815 | $ | 9,815 | $ | — | $ | — | $ | — | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 5,268 | $ | 68,759 | $ | 74,027 | $ | 6,318 | $ | 61,763 | $ | 68,081 | ||||||||||||
Loans: | ||||||||||||||||||||||||
Ending balance: individually evaluated for impairment | $ | — | $ | 46,760 | $ | 46,760 | $ | — | $ | — | $ | — | ||||||||||||
Ending balance: collectively evaluated for impairment | $ | 1,264,807 | $ | 8,264,616 | $ | 9,529,423 | $ | 1,426,972 | $ | 6,563,342 | $ | 7,990,314 | ||||||||||||
Net charge-offs as a percentage of average loans in repayment | 0.31 | % | 0.32 | % | 0.23 | % | — | |||||||||||||||||
Allowance as a percentage of the ending total loan balance | 0.42 | % | 0.95 | % | 0.44 | % | 0.94 | % | ||||||||||||||||
Allowance as a percentage of the ending loans in repayment | 0.57 | % | 1.53 | % | 0.62 | % | 1.55 | % | ||||||||||||||||
Allowance coverage of net charge-offs | 1.76 | 5.91 | 3.10 | — | ||||||||||||||||||||
Ending total loans | $ | 1,264,807 | $ | 8,311,376 | $ | 1,426,972 | $ | 6,563,342 | ||||||||||||||||
Average loans in repayment | $ | 968,134 | $ | 4,539,325 | $ | 870,460 | $ | 3,509,502 | ||||||||||||||||
Ending loans in repayment | $ | 926,891 | $ | 5,149,215 | $ | 1,023,471 | $ | 3,972,317 | ||||||||||||||||
______
(1) | Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient, prior to being charged-off. Therefore, many of our historical credit indicators and period-over-period trends are not indicative of future performance. Because we now retain more delinquent loans, we believe it could take up to two years from now before our credit performance indicators provide meaningful period-over-period comparisons. |
(2) | Represents fair value write-downs on loans sold. |
13
Private Education Loan Key Credit Quality Indicators
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in thousands) | Balance(1) | % of Balance | Balance(1) | % of Balance | ||||||||||
Cosigners: | ||||||||||||||
With cosigner | $ | 7,465,339 | 90 | % | $ | 5,898,751 | 90 | % | ||||||
Without cosigner | 846,037 | 10 | 664,591 | 10 | ||||||||||
Total | $ | 8,311,376 | 100 | % | $ | 6,563,342 | 100 | % | ||||||
FICO at Origination: | ||||||||||||||
Less than 670 | $ | 558,801 | 7 | % | $ | 461,412 | 7 | % | ||||||
670-699 | 1,227,860 | 15 | 1,364,286 | 21 | ||||||||||
700-749 | 2,626,238 | 32 | 1,649,192 | 25 | ||||||||||
Greater than or equal to 750 | 3,898,477 | 46 | 3,088,452 | 47 | ||||||||||
Total | $ | 8,311,376 | 100 | % | $ | 6,563,342 | 100 | % | ||||||
Seasoning(2)(3): | ||||||||||||||
1-12 payments | $ | 2,373,117 | 29 | % | $ | 1,840,538 | 28 | % | ||||||
13-24 payments | 1,532,042 | 18 | 1,085,393 | 17 | ||||||||||
25-36 payments | 755,143 | 9 | 669,685 | 10 | ||||||||||
37-48 payments | 411,493 | 5 | 362,124 | 6 | ||||||||||
More than 48 payments | 212,438 | 3 | 30,891 | — | ||||||||||
Not yet in repayment | 3,027,143 | 36 | 2,574,711 | 39 | ||||||||||
Total | $ | 8,311,376 | 100 | % | $ | 6,563,342 | 100 | % | ||||||
______
(1) | Balance represents gross Private Education Loans. |
(2) | Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient, prior to being charged-off. Therefore, many of our historical credit indicators and period-over-period trends are not indicative of future performance. Because we now retain more delinquent loans, we believe it could take up to two years from now before our credit performance indicators provide meaningful period-over-period comparisons. |
(3) | Number of months in active repayment for which a scheduled payment was due. |
14
Private Education Loan Delinquencies
The following tables provide information regarding the loan status and aging of past due loans. Prior to the Spin-Off, Private Education Loans were sold to an entity that is now a subsidiary of Navient, prior to being charged-off. Therefore, many of our historical credit indicators and period-over-period trends are not indicative of future performance. Because we now retain more delinquent loans, we believe it could take up to two years from now before our credit performance indicators provide meaningful period-over-period comparisons.
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in thousands) | Balance | % | Balance | % | ||||||||||
Loans in-school/grace/deferment(1) | $ | 3,027,143 | $ | 2,574,711 | ||||||||||
Loans in forbearance(2) | 135,018 | 16,314 | ||||||||||||
Loans in repayment and percentage of each status: | ||||||||||||||
Loans current | 5,045,600 | 98.0 | % | 3,933,143 | 99.0 | % | ||||||||
Loans delinquent 31-60 days(3) | 63,873 | 1.2 | 28,854 | 0.7 | ||||||||||
Loans delinquent 61-90 days(3) | 29,041 | 0.6 | 10,280 | 0.3 | ||||||||||
Loans delinquent greater than 90 days(3) | 10,701 | 0.2 | 40 | — | ||||||||||
Total private education loans in repayment | 5,149,215 | 100.0 | % | 3,972,317 | 100.0 | % | ||||||||
Total private education loans, gross | 8,311,376 | 6,563,342 | ||||||||||||
Private education loans deferred origination costs | 13,845 | 5,063 | ||||||||||||
Total private education loans | 8,325,221 | 6,568,405 | ||||||||||||
Private education loans allowance for losses | (78,574 | ) | (61,763 | ) | ||||||||||
Private education loans, net | $ | 8,246,647 | $ | 6,506,642 | ||||||||||
Percentage of private education loans in repayment | 62.0 | % | 60.5 | % | ||||||||||
Delinquencies as a percentage of private education loans in repayment | 2.0 | % | 1.0 | % | ||||||||||
Loans in forbearance as a percentage of loans in repayment and forbearance | 2.6 | % | 0.4 | % | ||||||||||
_______
(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 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. |
15
Summary of Our Education Loan Portfolio
Ending Education Loan Balances, net
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | Private Education Loans | FFELP Loans | Total Portfolio | Private Education Loans | FFELP Loans | Total Portfolio | ||||||||||||||||||
Total education loan portfolio: | ||||||||||||||||||||||||
In-school(1) | $ | 2,548,721 | $ | 1,185 | $ | 2,549,906 | $ | 2,191,445 | $ | 2,477 | $ | 2,193,922 | ||||||||||||
Grace, repayment and other(2) | 5,762,655 | 1,263,622 | 7,026,277 | 4,371,897 | 1,424,495 | 5,796,392 | ||||||||||||||||||
Total, gross | 8,311,376 | 1,264,807 | 9,576,183 | 6,563,342 | 1,426,972 | 7,990,314 | ||||||||||||||||||
Deferred origination costs and unamortized premium | 13,845 | 3,600 | 17,445 | 5,063 | 4,081 | 9,144 | ||||||||||||||||||
Allowance for loan losses | (78,574 | ) | (5,268 | ) | (83,842 | ) | (61,763 | ) | (6,318 | ) | (68,081 | ) | ||||||||||||
Total education loan portfolio | $ | 8,246,647 | $ | 1,263,139 | $ | 9,509,786 | $ | 6,506,642 | $ | 1,424,735 | $ | 7,931,377 | ||||||||||||
% of total | 87 | % | 13 | % | 100 | % | 82 | % | 18 | % | 100 | % | ||||||||||||
(1) Loans for customers still attending school and are not yet required to make payments on the loan.
(2) Includes loans in deferment or forbearance.
Average Student Loan Balances (net of unamortized premium/discount)
Quarters Ended December 31, | Years Ended December 31, | ||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||||
Private Education Loans | $ | 8,062,977 | 86 | % | $ | 6,399,584 | 83 | % | $ | 7,563,356 | 85 | % | 5,996,651 | 84 | % | ||||||||||||
FFELP Loans | 1,292,820 | 14 | 1,272,188 | 17 | 1,353,497 | 15 | 1,142,979 | 16 | |||||||||||||||||||
Total portfolio | $ | 9,355,797 | 100 | % | $ | 7,671,772 | 100 | % | $ | 8,916,853 | 100 | % | 7,139,630 | 100 | % | ||||||||||||
16
Student Loan Activity
Quarters Ended | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | Private Education Loans | FFELP Loans | Total Portfolio | Private Education Loans | FFELP Loans | Total Portfolio | ||||||||||||||||||
Beginning balance | $ | 7,779,422 | $ | 1,315,951 | $ | 9,095,373 | $ | 6,161,411 | $ | 1,214,831 | $ | 7,376,242 | ||||||||||||
Acquisitions and originations | 559,043 | — | 559,043 | 522,008 | 233,854 | 755,862 | ||||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 84,076 | 9,932 | 94,008 | 61,715 | 17,398 | 79,113 | ||||||||||||||||||
Sales | (7,212 | ) | — | (7,212 | ) | (109,718 | ) | (987 | ) | (110,705 | ) | |||||||||||||
Loan consolidation to third parties | (1,742 | ) | (13,197 | ) | (14,939 | ) | (4,732 | ) | (5,903 | ) | (10,635 | ) | ||||||||||||
Repayments and other | (166,940 | ) | (49,547 | ) | (216,487 | ) | (124,042 | ) | (34,458 | ) | (158,500 | ) | ||||||||||||
Ending balance | $ | 8,246,647 | $ | 1,263,139 | $ | 9,509,786 | $ | 6,506,642 | $ | 1,424,735 | $ | 7,931,377 | ||||||||||||
Years Ended | ||||||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
(Dollars in thousands) | Private Education Loans | FFELP Loans | Total Portfolio | Private Education Loans | FFELP Loans | Total Portfolio | ||||||||||||||||||
Beginning balance | $ | 6,506,642 | $ | 1,424,735 | $ | 7,931,377 | $ | 5,447,700 | $ | 1,039,755 | $ | 6,487,455 | ||||||||||||
Acquisitions and originations | 4,087,320 | 7,470 | 4,094,790 | 3,803,262 | 478,384 | 4,281,646 | ||||||||||||||||||
Capitalized interest and deferred origination cost premium amortization | 170,306 | 46,093 | 216,399 | 112,122 | 49,313 | 161,435 | ||||||||||||||||||
Sales | (1,873,414 | ) | (7,654 | ) | (1,881,068 | ) | (2,347,521 | ) | (1,182 | ) | (2,348,703 | ) | ||||||||||||
Loan consolidation to third parties | (14,811 | ) | (41,760 | ) | (56,571 | ) | (13,445 | ) | (23,456 | ) | (36,901 | ) | ||||||||||||
Repayments and other | (629,396 | ) | (165,745 | ) | (795,141 | ) | (495,476 | ) | (118,079 | ) | (613,555 | ) | ||||||||||||
Ending balance | $ | 8,246,647 | $ | 1,263,139 | $ | 9,509,786 | $ | 6,506,642 | $ | 1,424,735 | $ | 7,931,377 | ||||||||||||
17
Private Education Loan Originations
The following table summarizes our Private Education Loan originations.
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | % | 2013 | % | 2014 | % | 2013 | % | ||||||||||||||||||||
Smart Option - interest only(1) | $ | 138,141 | 25 | % | $ | 126,680 | 24 | % | $ | 998,612 | 25 | % | $ | 942,568 | 25 | % | ||||||||||||
Smart Option - fixed pay(1) | 169,048 | 30 | 163,788 | 31 | 1,256,978 | 31 | 1,184,073 | 31 | ||||||||||||||||||||
Smart Option - deferred(1) | 247,444 | 45 | 231,609 | 45 | 1,817,011 | 44 | 1,666,547 | 44 | ||||||||||||||||||||
Smart Option - principal and interest | 2,059 | — | 476 | — | 3,347 | — | 1,347 | — | ||||||||||||||||||||
Total Private Education Loan originations | $ | 556,692 | 100 | % | $ | 522,553 | 100 | % | $ | 4,075,948 | 100 | % | 3,794,535 | 100 | % | |||||||||||||
(1) | Interest only, fixed pay and deferred describe the payment option while in school or in grace period. |
Deposits
Interest bearing deposits are summarized as follows:
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in thousands) | Amount | Year-End Weighted Average Stated Rate | Amount | Year-End Weighted Average Stated Rate | ||||||||||
Money market | $ | 4,527,448 | 1.15 | % | $ | 3,212,889 | 0.65 | % | ||||||
Savings | 703,687 | 0.81 | % | 743,742 | 0.81 | % | ||||||||
NOW | — | — | % | 18,214 | 0.12 | % | ||||||||
Certificates of deposit | 5,308,818 | 1.00 | % | 4,971,669 | 1.39 | % | ||||||||
Deposits - interest bearing | $ | 10,539,953 | $ | 8,946,514 | ||||||||||
Regulatory Capital
Actual | Well Capitalized Regulatory Requirements | ||||||||||||
(Dollars in thousands) | Amount | Ratio | Amount | Ratio | |||||||||
As of December 31, 2014: | |||||||||||||
Tier I Capital (to Average Assets) | $ | 1,413,988 | 11.5 | % | $ | 614,709 | > | 5.0 | % | ||||
Tier I Capital (to Risk Weighted Assets) | $ | 1,413,988 | 15.0 | % | $ | 565,148 | > | 6.0 | % | ||||
Total Capital (to Risk Weighted Assets) | $ | 1,497,830 | 15.9 | % | $ | 941,913 | > | 10.0 | % | ||||
As of December 31, 2013: | |||||||||||||
Tier I Capital (to Average Assets) | $ | 1,221,416 | 11.7 | % | $ | 521,973 | > | 5.0 | % | ||||
Tier I Capital (to Risk Weighted Assets) | $ | 1,221,416 | 16.4 | % | $ | 446,860 | > | 6.0 | % | ||||
Total Capital (to Risk Weighted Assets) | $ | 1,289,497 | 17.3 | % | $ | 745,374 | > | 10.0 | % | ||||
18