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 Sallie Mae Reports Fourth-Quarter and Full-Year 2016 Financial Results
   Wednesday, January 18, 2017 5:00:01 PM ET

--Private Education Loan Portfolio Grows to $14.1 Billion, Up 34 Percent Year-Over-Year

--Full-Year Net Interest Income Increases to $891 Million, Up 27 Percent Year-Over-Year

Sallie Mae (SLM ), formally SLM Corporation, today released fourth-quarter 2016 and full-year 2016 financial results. In 2016, the company grew private education loan originations 8 percent to $4.7 billion, expanded its private education loan portfolio 34 percent to $14.1 billion, and increased net interest income 27 percent to $891 million, all compared to 2015.

"We continue to execute on our mission as we helped 348,000 families make college happen in 2016, originations of high-quality student loans increased again, and our efficiency ratio improved as we saw a healthy return on customer experience investments," said Raymond J. Quinlan, chairman and CEO. "These positive indicators illustrate how Sallie Mae is positioned for continued growth in 2017."



For the fourth-quarter 2016, GAAP net income was $70 million, compared with $90 million in the year-ago quarter. GAAP net income attributable to the company’s common stock was $65 million ($0.15 diluted earnings per share) in the fourth-quarter 2016, compared with $85 million ($0.20 diluted earnings per share) in the year-ago quarter. The year-over-year decrease was primarily attributable to a $58-million decrease in gains on sales of loans, net, a $13-million increase in provision for credit losses, and a $13-million increase in total non-interest expenses, which were offset by a $58-million increase in net interest income and a $12-million decrease in income tax expense.

Comparisons of 2016 and 2015 results reflect the company’s decision in early 2016 to retain all new loan originations and recognize interest income over the life of the loans rather than sell the loans and recognize gains from their sale. In 2015, the company sold $1.5 billion in loans for a pre-tax gain of $135 million, generating $0.20 diluted earnings per share attributable to this activity. In 2016, there was no corresponding gain or earnings per share contribution because loan sales were not repeated.

For 2016, GAAP net income was $250 million, compared with $274 million in 2015. GAAP net income attributable to the company’s common stock was $229 million ($0.53 diluted earnings per share) in 2016, compared with $255 million ($0.59 diluted earnings per share) in 2015.

Fourth-quarter 2016 results vs. fourth-quarter 2015 included:

-- Private education loan originations of $608 million, up 6 percent.

-- Net interest income of $245 million, up 31 percent.

-- Net interest margin of 5.55 percent, up 7 basis points.

-- Average private education loans outstanding of $14.1 billion, up 33 percent.

-- Average yield on the private education loan portfolio was 8.08 percent, up 24 basis points.

-- Private education loan provision for loan losses was $43 million, up from $29 million.

-- Private education loans in forbearance were 3.5 percent of private education loans in repayment and forbearance, up from 3.4 percent.

-- Private education loan delinquencies as a percentage of private education loans in repayment were 2.1 percent, down from 2.2 percent.

Core earnings for the fourth-quarter 2016 were $73 million, compared with $90 million in the year-ago quarter. Core earnings attributable to the company’s common stock were $67 million ($0.15 diluted earnings per share) in the fourth-quarter 2016, compared with $85 million ($0.20 diluted earnings per share) in the year-ago quarter.

Core earnings for 2016 were $252 million, compared with $273 million for 2015. Core earnings attributable to the company’s common stock were $231 million ($0.53 diluted earnings per share) for 2016, compared with $254 million ($0.59 diluted earnings per share) for 2015.

Sallie Mae provides core earnings because it is one of several measures used to evaluate management performance and allocate corporate resources. The difference between core earnings and GAAP net income is driven by mark-to-market unrealized gains and losses on derivative contracts recognized in GAAP, but not in core earnings results. Management believes its derivatives are effective economic hedges, and, as such, they are a critical element of the company’s interest rate risk management strategy.

Fourth-quarter 2016 and full-year 2016 GAAP results included $4.4 million and $3.1 million, respectively, of pre-tax losses from derivative accounting treatment that are excluded from core earnings results, vs. pre-tax gains of $0.3 million and $1.8 million, respectively, in the year-ago periods.

Total Non-Interest Expenses

Total non-interest expenses were $98 million in the fourth-quarter 2016, compared with $85 million in the year-ago quarter (which included a $1 million credit to restructuring and other reorganization expenses). Operating expenses grew 15 percent from the year-ago quarter while the non-GAAP operating efficiency ratio decreased to 38.6 percent in the fourth-quarter 2016, from 42.5 percent in the year-ago quarter.

Total non-interest expenses were $386 million for 2016, compared with $356 million for 2015 (which included $5 million in restructuring and other reorganization expenses). Full-year operating expenses grew 10 percent year-over-year while the non-GAAP operating efficiency ratio decreased to 40.2 percent in 2016, from 46.8 percent in 2015. The improvement in the non-GAAP operating efficiency ratio is primarily due to the continued infrastructure efficacy as the portfolio grows, and operational improvements resulting from 2015 customer experience investments.

Income Tax Expense

Income tax expense decreased to $43 million in the fourth-quarter 2016 from $55 million in the year-ago quarter. The effective income tax rate in fourth-quarter 2016 was 38.0 percent, relatively unchanged from 37.9 percent in the year-ago quarter.

Income tax expense decreased to $164 million in 2016 from $165 million in 2015. The company’s effective income tax rate increased to 39.6 percent in 2016 from 37.5 percent in 2015. The increase in the effective income tax rate for 2016 was primarily the result of an increase in uncertain tax positions. Managing uncertain tax positions will add volatility to the company’s reported effective tax rate, but should not impact its expected cash tax liability.

Capital

The regulatory capital ratios of the company’s Sallie Mae Bank subsidiary continue to exceed guidelines for institutions considered "well capitalized." At Dec. 31, 2016, Sallie Mae Bank’s regulatory capital ratios were as follows:

                                                                        
                                                                             Dec. 31, 2016                      "Well Capitalized"
                                                                                                                    Regulatory
                                                                                                                   Requirements
                                                                            -------------                      --------------------
Common Equity Tier 1 Capital (to Risk-Weighted Assets)                       12.6 percent                           6.5 percent
Tier 1 Capital (to Risk-Weighted Assets)                                     12.6 percent                           8.0 percent
Total Capital (to Risk-Weighted Assets)                                      13.8 percent                          10.0 percent
Tier 1 Capital (to Average Assets)                                           11.1 percent                           5.0 percent
                                                                                                                

Deposits

Deposits at the company totaled $13.4 billion ($7.1 billion in brokered deposits and $6.3 billion in retail and other deposits) at Dec. 31, 2016, compared with $11.5 billion ($7.3 billion in brokered deposits and $4.2 billion in retail and other deposits) at Dec. 31, 2015. The increase was primarily driven by growth in retail deposits and other money market deposits.

Guidance

The company expects 2017 results to be as follows:

-- Full-year diluted core earnings per share: $0.67 - $0.69.

-- Full-year private education loan originations of $4.9 billion.

-- Full-year non-GAAP operating efficiency ratio: 38 percent - 39 percent.

***

Sallie Mae will host an earnings conference call tomorrow, Jan. 19, 2017, 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 30532768 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 will be available approximately two hours after the call’s conclusion and will remain available through Feb. 1, 2017, by dialing 855-859-2056 (USA and Canada) or 404-537-3406 (international) with access code 30532768.

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, opinions 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, 2015 (filed with the Securities and Exchange Commission ("SEC") on Feb. 26, 2016) and subsequent filings with the SEC; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; failure to comply with consumer protection, banking and other laws; 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 education 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; reductions to its credit ratings; failures or breaches of its operating systems or infrastructure, including those of third-party vendors; damage to its reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting and restructuring initiatives and the adverse effects of such initiatives on the company’s business; 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 versus its funding arrangements; rates of prepayments on the loans made by the company and its subsidiaries; changes in general economic conditions and the company’s ability to successfully effectuate any acquisitions; and other strategic initiatives. 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 such statements to actual results or changes in its expectations.

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 (excluding current period accruals on the derivative instruments), net of tax. 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 "Management’s Discussion and Analysis of Financial Condition and Results of Operations -- GAAP Consolidated Earnings Summary -’Core Earnings’ " in the company’s Form 10-Q for the quarter ended Sept. 30, 2016 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."

The company reports a non-GAAP operating efficiency ratio. A GAAP-based operating efficiency ratio would compare total non-interest expenses to net revenue (which consists of net interest income, before provisions for credit losses, plus non-interest income). Our operating efficiency ratio is a non-GAAP measure because we adjust (a) the non-interest expense numerator by deducting restructuring and other reorganization expenses, and (b) the net revenue denominator by deducting gains on sales of loans, net. We believe doing so provides useful information to investors because it is a measure used by our management team to monitor our effectiveness in managing operating expenses. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate our ratio. Accordingly, our non-GAAP operating efficiency ratio may not be comparable to similar measures used by other companies.

***

Sallie Mae (SLM ) is the nation’s saving, planning, and paying for college company. Whether college is a long way off or just around the corner, Sallie Mae offers products that promote responsible personal finance, including private education loans, Upromise rewards, scholarship search, college financial planning tools, and online retail banking. 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.

 
                                                                                                                                                                 Selected Financial Information and Ratios
                                                                                                                                                                                (Unaudited)
 
                                                                                                                             Quarters Ended                                                                                                                     Years Ended
                                                                                                                                                 December 31,                                                                                                                                        December 31,
                                                                                        -------------------------------------------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share data and                                                                        2016                                                   2015                                                                      2016                                                   2015
percentages)
------------------------------------------------------------------                      --------------------------------------------------                        --------------------------------------------------                        --------------------------------------------------                        --------------------------------------------------
                                                                                                                                                                                                                                                                                                                       
Net income attributable to SLM Corporation common stock                                                    $     64,736                                                              $     84,856                                                              $    229,123                                                              $    254,689
Diluted earnings per common share attributable to SLM Corporation                                          $       0.15                                                              $       0.20                                                              $       0.53                                                              $       0.59
Weighted average shares used to compute diluted earnings per share                                              435,419                                                                   431,531                                                                   432,919                                                                   432,234
Return on assets                                                                                                    1.5 %                                                                     2.5 %                                                                     1.5 %                                                                     2.0 %
Non-GAAP operating efficiency ratio(1)                                                                             38.6 %                                                                    42.5 %                                                                    40.2 %                                                                    46.8 %
                                                                                                                                                                                                                                                                                                                       
Other Operating Statistics
Ending Private Education Loans, net                                                                        $ 14,113,409                                                              $ 10,515,505                                                              $ 14,113,409                                                              $ 10,515,505
Ending FFELP Loans, net                                                                    1,011,678                           1,115,086                           1,011,678                           1,115,086  
                                                                                        -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------
Ending total education loans, net                                                                          $ 15,125,087                                           $ 11,630,591                                           $ 15,125,087                                           $ 11,630,591  
                                                                                        ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                       
Average education loans                                                                                    $ 15,082,071                                                              $ 11,707,966                                                              $ 13,811,081                                                              $ 10,998,776
 
_________
(1) A GAAP-based operating efficiency ratio would compare total
non-interest expenses to net revenue (which consists of net interest
income, before provisions for credit losses, plus non-interest
income). Our operating efficiency ratio is a non-GAAP measure
because we adjust (a) the non-interest expense numerator by
deducting restructuring and other reorganization expenses, and (b)
the net revenue denominator by deducting gains on sales of loans,
net. We believe doing so provides useful information to investors
because it is a measure used by our management team to monitor our
effectiveness in managing operating expenses. Other companies may
use similarly titled non-GAAP financial measures that are calculated
differently from the way we calculate our ratio. Accordingly, our
non-GAAP operating efficiency ratio may not be comparable to similar
measures used by other companies.
 
 
                                                                                                        SLM CORPORATION
 
                                                                                                  CONSOLIDATED BALANCE SHEETS
                                                                                      (In thousands, except share and per share amounts)
                                                                                                          (Unaudited)
 
                                                                                              December 31,                                             December 31,
                                                                                                                     2016                                                                        2015
                                                                                           ---------------------------------------------------------                     -----------------------------------------------------
Assets
Cash and cash equivalents                                                                                     $      1,918,793                                                              $  2,416,219
Available-for-sale investments at fair value (cost of $211,406 and                                                     208,603                                                                   195,391
$196,402, respectively)
Loans held for investment (net of allowance for losses of $184,701                                                  15,137,922                                                                11,630,591
and $112,507, respectively)
Restricted cash and investments                                                                                         53,717                                                                    27,980
Other interest-earning assets                                                                                           49,114                                                                    54,845
Accrued interest receivable                                                                                            766,106                                                                   564,496
Premises and equipment, net                                                                                             87,063                                                                    81,273
Tax indemnification receivable                                                                                         259,532                                                                   186,076
Other assets                                                                                         52,153                              57,227  
                                                                                           -------------------- -------------- --------------------                      -------------------- ---------- --------------------
Total assets                                                                                                  $     18,533,003                                           $ 15,214,098  
                                                                                           ==================== ============== ====================                      ==================== ========== ====================
                                                                                                                                                                          
Liabilities
Deposits                                                                                                      $     13,435,667                                                              $ 11,487,707
Short-term borrowings                                                                                           --                                                                   500,175
Long-term borrowings                                                                                                 2,167,979                                                                   579,101
Income taxes payable, net                                                                                              184,324                                                                   166,662
Upromise related liabilities                                                                                           256,041                                                                   275,384
Other liabilities                                                                                   141,934                             108,746  
                                                                                           -------------------- -------------- --------------------                      -------------------- ---------- --------------------
Total liabilities                                                                                16,185,945                          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,                                                  165,000                                                                   165,000
   at stated value of $50 per share
   Series B: 4 million and 4 million shares issued, respectively, at                                                   400,000                                                                   400,000
   stated value of $100 per share
Common stock, par value $0.20 per share, 1.125 billion shares                                                           87,327                                                                    86,136
authorized: 436.6 million and 430.7 million shares issued,
respectively
Additional paid-in capital                                                                                           1,175,564                                                                 1,135,860
Accumulated other comprehensive loss (net of tax benefit $5,364 and                                                     (8,671 )                                                                 (16,059 )
$9,949, respectively)
Retained earnings                                                                                   595,322                             366,609  
                                                                                           -------------------- -------------- --------------------                      -------------------- ---------- --------------------
Total SLM Corporation stockholders’ equity before treasury stock                                                     2,414,542                                                                 2,137,546
Less: Common stock held in treasury at cost: 7.7 million and 4.4                                    (67,484 )                                              (41,223 )
million shares, respectively
                                                                                           -------------------- -------------- --------------------                      -------------------- ---------- --------------------
Total equity                                                                                      2,347,058                           2,096,323  
                                                                                           -------------------- -------------- --------------------                      -------------------- ---------- --------------------
Total liabilities and equity                                                                                  $     18,533,003                                           $ 15,214,098  
                                                                                           ==================== ============== ====================                      ==================== ========== ====================
                                                                                                                                                                                                          
 
                                                                                                                                                                           SLM CORPORATION
 
                                                                                                                                                                  CONSOLIDATED STATEMENTS OF INCOME
                                                                                                                                                              (In thousands, except per share amounts)
                                                                                                                                                                             (Unaudited)
 
                                                                                                                             Quarters Ended                                                                                                                  Years Ended
                                                                                                                                                 December 31,                                                                                                                                     December 31,
                                                                                       --------------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------------------------------
                                                                                                                 2016                                                    2015                                                                      2016                                                2015
                                                                                       ---------------------------------------------------------                     --------------------------------------------------                     ---------------------------------------------------------                     ------------------------------------------
Interest income:
   Loans                                                                                                  $        295,241                                                              $ 218,703                                                              $      1,060,487                                                              $              817,120
   Investments                                                                                                       2,005                                                                  2,501                                                                         9,160                                                                              10,247
   Cash and cash equivalents                                                                      2,767                            1,183                                   7,599                                         3,751
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Total interest income                                                                                              300,013                                                                222,387                                                                     1,077,246                                                                             831,118
Interest expense:
   Deposits                                                                                                         40,775                                                                 29,430                                                                       148,408                                                                             116,391
   Interest expense on short-term borrowings                                                                         1,495                                                                  1,771                                                                         7,322                                                                               6,490
   Interest expense on long-term borrowings                                                      12,309                            3,340                                  30,178                                         5,738
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Total interest expense                                                                           54,579                           34,541                                 185,908                                       128,619
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Net interest income                                                                                                245,434                                                                187,846                                                                       891,338                                                                             702,499
Less: provisions for credit losses                                                               43,226                           30,382                                 159,405                                        90,055
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Net interest income after provisions for credit losses                                          202,208                          157,464                                 731,933                                       612,444
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Non-interest income:
   Gains on sales of loans, net                                                                                        230                                                                 58,484                                                                           230                                                                             135,358
   (Losses) gains on derivatives and hedging activities, net                                                        (4,114 )                                                                  953                                                                          (958 )                                                                             5,300
   Other income                                                                                  13,235                           12,561                                  69,544                                        41,935
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Total non-interest income                                                                         9,351                           71,998                                  68,816                                       182,593
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Non-interest expenses:
   Compensation and benefits                                                                                        45,337                                                                 39,896                                                                       183,996                                                                             158,975
   FDIC assessment fees                                                                                              5,661                                                                  4,118                                                                        19,209                                                                              14,348
   Other operating expenses                                                                      47,038                           41,231                                 182,202                                       175,772
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
   Total operating expenses                                                                                         98,036                                                                 85,245                                                                       385,407                                                                             349,095
   Acquired intangible asset amortization expense                                                                      159                                                                    370                                                                           906                                                                               1,480
   Restructuring and other reorganization expenses                                       --                             (913 )                                           --                                         5,398
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Total non-interest expenses                                                                      98,195                           84,702                                 386,313                                       355,973
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Income before income tax expense                                                                                   113,364                                                                144,760                                                                       414,436                                                                             439,064
Income tax expense                                                                               43,122                           54,915                                 164,109                                       164,780
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Net income                                                                                                          70,242                                                                 89,845                                                                       250,327                                                                             274,284
Preferred stock dividends                                                                         5,506                            4,989                                  21,204                                        19,595
                                                                                       -------------------- -------------- --------------------                      -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------------------
Net income attributable to SLM Corporation common stock                                                   $         64,736                                           $  84,856                                           $        229,123                                           $              254,689
                                                                                       ==================== ============== ====================                      ==================== ======= ====================                      ==================== ============== ====================                      ==================== ====================
Basic earnings per common share attributable to SLM Corporation                                           $           0.15                                           $    0.20                                           $           0.54                                           $                 0.60
                                                                                       ==================== ============== ====================                      ==================== ======= ====================                      ==================== ============== ====================                      ==================== ====================
Average common shares outstanding                                                               428,368                          426,137                                 427,876                                       425,574
                                                                                       ==================== ============== ====================                      ==================== ======= ====================                      ==================== ============== ====================                      ==================== ====================
Diluted earnings per common share attributable to SLM Corporation                                         $           0.15                                           $    0.20                                           $           0.53                                           $                 0.59
                                                                                       ==================== ============== ====================                      ==================== ======= ====================                      ==================== ============== ====================                      ==================== ====================
Average common and common equivalent shares outstanding                                         435,419                          431,531                                 432,919                                       432,234
                                                                                       ==================== ============== ====================                      ==================== ======= ====================                      ==================== ============== ====================                      ==================== ====================
                                                                                                                                                                                                                                                                                                                                                
 
                                                                                                                                    SLM CORPORATION
 
                                                                                                                    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                                                                                                                    (In thousands)
                                                                                                                                      (Unaudited)
                                                                                                                                                         
                                                                                                                         Quarters Ended                                                                                               Years Ended
                                                                                                                          December 31,                                                                                               December 31,
                                                                                      -------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------------
                                                                                                    2016                              2015                                                 2016                               2015
                                                                                      --------------------------------                     --------------------------------                     ---------------------------------                     ---------------------------------
Net income                                                                              $ 70,242                                             $ 89,845                                             $ 250,327                                             $ 274,284
Other comprehensive income (loss):
  Unrealized losses on investments                                                        (6,515 )                                             (1,706 )                                              (1,792 )                                              (2,205 )
  Unrealized gains (losses) on cash flow hedges                                           37,546                            14,060                             13,764                             (5,224 )
                                                                                      -------------------------------                      -------------------------------                      --------------------------------                      --------------------------------
  Total unrealized gains (losses)                                                         31,031                                               12,354                                                11,972                                                (7,429 )
Income tax (expense) benefit                                                             (11,890 )                                             (4,898 )                                              (4,585 )                                               2,763  
                                                                                      -------------------------------                      -------------------------------                      --------------------------------                      --------------------------------
Other comprehensive gains (losses), net of tax (expense) benefit                          19,141                             7,456                              7,387                             (4,666 )
                                                                                      -------------------------------                      -------------------------------                      --------------------------------                      --------------------------------
Total comprehensive income                                                              $ 89,383                          $ 97,301                          $ 257,714                          $ 269,618  
                                                                                      === ====== ====================                      === ====== ====================                      === ======= ====================                      === ======= ====================
                                                                                                                                                                                                                                                                   
 
"Core Earnings" to GAAP Reconciliation
 
The following table reflects adjustments associated with our
derivative activities.
                                                                                                                                                                                                                    
                                                                                                                                                                               Quarters Ended                                                                                                        Years Ended
                                                                                                                                                                                December 31,                                                                                                        December 31,
                                                                                                                                       -----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------
(Dollars in thousands, except per share                                                                                                                2016                                   2015                                                      2016                                   2015
amounts)
-----------------------------------------------------------------------------------------------------------------                      ----------------------------------                        ----------------------------------                        ----------------------------------                        ----------------------------------
                                                                                                                                                                                                                                                                                                                      
"Core Earnings" adjustments to GAAP:
GAAP net income                                                                                                                              $  70,242                                                 $  89,845                                                 $ 250,327                                                 $ 274,284
Preferred stock dividends                                                                                                                        5,506                                  4,989                                 21,204                                 19,595  
                                                                                                                                       ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
GAAP net income attributable to SLM Corporation common stock                                                                                 $  64,736                              $  84,856                              $ 229,123                              $ 254,689  
                                                                                                                                       ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                      
Adjustments:
Net impact of derivative accounting(1)                                                                                                           4,386                                                      (348 )                                                   3,127                                                    (1,849 )
Net tax effect(2)                                                                                                                                1,682                                   (124 )                                                   1,199                                   (711 )
                                                                                                                                       ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Total "Core Earnings" adjustments to GAAP                                                   2,704                                   (224 )                                                   1,928                                 (1,138 )
                                                                                                                                       ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                      
"Core Earnings" attributable to SLM Corporation common stock                            $  67,440                              $  84,632                              $ 231,051                              $ 253,551  
                                                                                                                                       ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                      
GAAP diluted earnings per common share                                                                                                       $    0.15                                                 $    0.20                                                 $    0.53                                                 $    0.59
Derivative adjustments, net of tax                                                                                                      --                         --                         --                         --  
                                                                                                                                       ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
"Core Earnings" diluted earnings per common share                                       $    0.15                              $    0.20                              $    0.53                              $    0.59  
                                                                                                                                       ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                      
______
(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.
 
 
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                                                                                                                                                                                                                    Years Ended
                                                                                                                                                          December 31,                                                                                                                                                                                                                    December 31,
                                                           -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   2016                                                                                         2015                                                                                                            2016                                                                                         2015
                                                           -------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                     Balance                            Rate                                                 Balance                                  Rate                                                     Balance                            Rate                                                 Balance                                  Rate
-------------------------------------                      -----------------------------------                        ------------------------                       -------------------------------------                        ----------------------------------                       -----------------------------------                        ------------------------                       -------------------------------------                        ----------------------------------
Average Assets
Private Education Loans                                        $ 14,057,669                                           8.08                    %                            $ 10,578,001                                                     7.84                    %                          $ 12,747,756                                           8.02                    %                            $  9,819,053                                                     7.93                    %
FFELP Loans                                                       1,024,402                                           3.70                                                    1,129,965                                                     3.35                                                  1,063,325                                           3.53                                                    1,179,723                                                     3.26
Other loans                                                           3,496                                           7.50                                               --                                           --                                                      1,114                                           6.77                                               --                                           --
Taxable securities                                                  479,384                                           1.65                                                      390,204                                                     2.54                                                    407,860                                           2.24                                                      395,718                                                     2.59
Cash and other short-term investments                             2,017,081                        0.55                                 1,507,528                                  0.31                               1,480,170                        0.51                                 1,407,158                                  0.27  
                                                           -------------------------------------                      ---- --------------------                      ---------------------------------------                      -------------- --------------------                      -------------------------------------                      ---- --------------------                      ---------------------------------------                      -------------- --------------------
Total interest-earning assets                                    17,582,032                                           6.79                    %                              13,605,698                                                     6.48                    %                            15,700,225                                           6.86                    %                              12,801,652                                                     6.49                    %
                                                                                                                      ==== ====================                                                                                   ============== ====================                                                                                 ==== ====================                                                                                   ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Non-interest-earning assets                                         816,337                                                                                  677,109                                                                                          772,167                                                                                  670,084  
                                                           -------------------------------------                                                                     ---------------------------------------                                                                               -------------------------------------                                                                     ---------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Total assets                                                   $ 18,398,369                                                                             $ 14,282,807                                                                                     $ 16,472,392                                                                             $ 13,471,736  
                                                           ===== ========== ====================                                                                     ======= ========== ====================                                                                               ===== ========== ====================                                                                     ======= ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Average Liabilities and Equity
Brokered deposits                                              $  7,302,429                                           1.32                    %                            $  6,764,673                                                     1.16                    %                          $  7,154,218                                           1.31                    %                            $  6,640,078                                                     1.19                    %
Retail and other deposits                                         5,961,087                                           1.09                                                    3,989,790                                                     0.95                                                  5,095,631                                           1.06                                                    3,869,359                                                     0.95
Other interest-bearing liabilities(1)                             2,205,726                        2.51                                   907,538                                  2.29                               1,476,740                        2.58                                   398,851                                  3.27  
                                                           -------------------------------------                      ---- --------------------                      ---------------------------------------                      -------------- --------------------                      -------------------------------------                      ---- --------------------                      ---------------------------------------                      -------------- --------------------
Total interest-bearing liabilities                               15,469,242                                           1.40                    %                              11,662,001                                                     1.18                    %                            13,726,589                                           1.35                    %                              10,908,288                                                     1.18                    %
                                                                                                                      ==== ====================                                                                                   ============== ====================                                                                                 ==== ====================                                                                                   ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Non-interest-bearing liabilities                                    624,041                                                                                                     563,942                                                                                                             539,153                                                                                                     610,715
Equity                                                            2,305,086                                                                                2,056,864                                                                                        2,206,650                                                                                1,952,733  
                                                           -------------------------------------                                                                     ---------------------------------------                                                                               -------------------------------------                                                                     ---------------------------------------
Total liabilities and equity                                   $ 18,398,369                                                                             $ 14,282,807                                                                                     $ 16,472,392                                                                             $ 13,471,736  
                                                           ===== ========== ====================                                                                     ======= ========== ====================                                                                               ===== ========== ====================                                                                     ======= ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net interest margin                                                                                                   5.55                    %                                                                                             5.48                    %                                                                                 5.68                    %                                                                                             5.49                    %
                                                                                                                      ==== ====================                                                                                   ============== ====================                                                                                 ==== ====================                                                                                   ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
______
(1) For the three and twelve months ended December 31, 2016,
includes the average balance of our secured borrowings and
amortization expense of transaction costs related to our term
asset-backed securitizations and our asset-backed commercial paper
funding facility.
 
                                                                                                                                                                 
Earnings per Common Share
                                                                                                                                                                                                         
                                                                                                                                 Quarters Ended                                                                                               Years Ended
                                                                                                                                  December 31,                                                                                               December 31,
                                                                                              -------------------------------------------------------------------------------------                     --------------------------------------------------------------------------------------
(In thousands, except per share data)                                                                       2016                              2015                                                 2016                               2015
------------------------------------------------------------------------                      -----------------------------                        -----------------------------                        ------------------------------                        ------------------------------
Numerator:
Net income                                                                                      $ 70,242                                             $ 89,845                                             $ 250,327                                                    $              274,284
Preferred stock dividends                                                                          5,506                             4,989                             21,204                                                 19,595
                                                                                              -------------------------------                      -------------------------------                      --------------------------------                      --------------------------------
Net income attributable to SLM Corporation common stock                                         $ 64,736                          $ 84,856                          $ 229,123                                 $              254,689
                                                                                              === ====== ====================                      === ====== ====================                      === ======= ====================                      ========== ====================
Denominator:
Weighted average shares used to compute basic EPS                                                428,368                                              426,137                                               427,876                                                                   425,574
Effect of dilutive securities:
    Dilutive effect of stock options, restricted stock, restricted stock                           7,051                             5,214                              5,043                                                  6,660
    units and Employee Stock Purchase Plan
                                                                                              ---------  --------------------                      ---------  --------------------                      ----------  --------------------                      ------------------------------
Weighted average shares used to compute diluted EPS                                              435,419                           431,351                            432,919                                                432,234
                                                                                              ===============================                      ===============================                      ================================                      ================================
                                                                                                                                                                                                                                                               
Basic earnings per common share attributable to SLM Corporation:                                $   0.15                          $   0.20                          $    0.54                                 $                 0.60
                                                                                              === ====== ====================                      === ====== ====================                      === ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                               
Diluted earnings per common share attributable to SLM Corporation:                              $   0.15                          $   0.20                          $    0.53                                 $                 0.59
                                                                                              === ====== ====================                      === ====== ====================                      === ======= ====================                      ========== ====================
                                                                                                                                                                                                                                                                          
 
Allowance for Loan Losses Metrics
 
                                                                                                                                                                                                                                     Quarters Ended
                                                                                                                                                                                                                                                         December 31,
                                                                                   ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                 2016                                                                                                                                                               2015
                                                                                   ----------------------------------------------------------------------------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Private Education                                                                                                                              Private Education           
(Dollars in thousands)                                                                              FFELP Loans                                                      Loans                                                     Total                                                     FFELP Loans                                                      Loans                                                      Total
-------------------------------------------------------------                      -----------------------------------------                        -----------------------------------                        ---------------------------------                        -----------------------------------------                        -----------------------------------                        ------------------------------------
Allowance for Loan Losses:
Beginning balance                                                                        $          2,209                                               $    162,630                                             $    164,839                                                 $          4,170                                               $    100,033                                                $    104,203
  Total provision                                                                                     224                                                     42,808                                                   43,032                                                              (39 )                                                   28,715                                                      28,676
  Net charge-offs:
    Charge-offs                                                                                      (262 )                                                  (25,224 )                                                (25,486 )                                                           (440 )                                                  (19,231 )                                                   (19,671 )
    Recoveries                                                                             --                                   3,284                                 3,284                                --                                   1,291                                    1,291  
                                                                                   -------------------------------------------                      -------------------------------------                      -----------------------------------                      -------------------------------------------                      -------------------------------------                      --------------------------------------
  Net charge-offs                                                                                    (262 )                                                  (21,940 )                                                (22,202 )                                                           (440 )                                                  (17,940 )                                                   (18,380 )
  Loan sales(1)                                                                            --                                  (1,026 )                                                 (1,026 )                                                 --                                  (1,992 )                                                    (1,992 )
                                                                                   -------------------------------------------                      -------------------------------------                      -----------------------------------                      -------------------------------------------                      -------------------------------------                      --------------------------------------
Ending Balance                                                                           $          2,171                            $    182,472                          $    184,643                              $          3,691                            $    108,816                             $    112,507  
                                                                                   ======= ============== ====================                      ===== ========== ====================                      === ========== ====================                      ======= ============== ====================                      ===== ========== ====================                      ====== ========== ====================
Allowance:
Ending balance: individually evaluated for impairment                                    $ --                                               $     86,930                                             $     86,930                                                 $ --                                               $     43,480                                                $     43,480
Ending balance: collectively evaluated for impairment                                    $          2,171                                               $     95,542                                             $     97,713                                                 $          3,691                                               $     65,336                                                $     69,027
Loans:
Ending balance: individually evaluated for impairment                                    $ --                                               $    612,606                                             $    612,606                                                 $ --                                               $    265,831                                                $    265,831
Ending balance: collectively evaluated for impairment                                    $      1,010,908                                               $ 13,639,069                                             $ 14,649,977                                                 $      1,115,663                                               $ 10,330,606                                                $ 11,446,269
Net charge-offs as a percentage of average loans in repayment                                        0.13 %                                                     0.95 %                                                                                                                    0.21 %                                                     1.08 %
(annualized)(2)
Allowance as a percentage of the ending total loan balance                                           0.21 %                                                     1.28 %                                                                                                                    0.33 %                                                     1.03 %
Allowance as a percentage of the ending loans in repayment(2)                                        0.28 %                                                     1.88 %                                                                                                                    0.45 %                                                     1.57 %
Allowance coverage of net charge-offs (annualized)                                                   2.07                                                       2.08                                                                                                                      2.10                                                       1.52
Ending total loans, gross                                                                $      1,010,908                                               $ 14,251,675                                                                                                          $      1,115,663                                               $ 10,596,437
Average loans in repayment(2)                                                            $        788,196                                               $  9,265,149                                                                                                          $        823,940                                               $  6,646,604
Ending loans in repayment(2)                                                             $        786,332                                               $  9,709,758                                                                                                          $        813,815                                               $  6,927,266
                                                                                                                                                                                                                                                                                                                                                                                                     
________
(1)      Represents fair value adjustments on loans sold.
 
(2)                         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.
                             
                                                                  
                                                                                                                                                                                                                                                             Years Ended
                                                                                                                                                                                                                                                            December 31,
                                                                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                    2016                                                                                                                                                               2015
                                                                                      ----------------------------------------------------------------------------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               Private Education                                                                                                                              Private Education           
(Dollars in thousands)                                                                                 FFELP Loans                                                      Loans                                                     Total                                                     FFELP Loans                                                      Loans                                                      Total
----------------------------------------------------------------                      -----------------------------------------                        -----------------------------------                        ---------------------------------                        -----------------------------------------                        -----------------------------------                        ------------------------------------
Allowance for Loan Losses:
Beginning balance                                                                           $          3,691                                               $    108,816                                             $    112,507                                                 $          5,268                                               $     78,574                                                $     83,842
  Total provision                                                                                       (172 )                                                  159,511                                                  159,339                                                            1,005                                                     87,344                                                      88,349
  Net charge-offs:
    Charge-offs                                                                                       (1,348 )                                                  (90,203 )                                                (91,551 )                                                         (2,582 )                                                  (55,357 )                                                   (57,939 )
    Recoveries                                                                                --                                  10,382                                10,382                                --                                   5,820                                    5,820  
                                                                                      -------------------------------------------                      -------------------------------------                      -----------------------------------                      -------------------------------------------                      -------------------------------------                      --------------------------------------
  Net charge-offs                                                                                     (1,348 )                                                  (79,821 )                                                (81,169 )                                                         (2,582 )                                                  (49,537 )                                                   (52,119 )
  Loan sales(1)                                                                               --                                  (6,034 )                                                 (6,034 )                                                 --                                  (7,565 )                                                    (7,565 )
                                                                                      -------------------------------------------                      -------------------------------------                      -----------------------------------                      -------------------------------------------                      -------------------------------------                      --------------------------------------
Ending Balance                                                                              $          2,171                            $    182,472                          $    184,643                              $          3,691                            $    108,816                             $    112,507  
                                                                                      ======= ============== ====================                      ===== ========== ====================                      === ========== ====================                      ======= ============== ====================                      ===== ========== ====================                      ====== ========== ====================
Allowance:
Ending balance: individually evaluated for impairment                                       $ --                                               $     86,930                                             $     86,930                                                 $ --                                               $     43,480                                                $     43,480
Ending balance: collectively evaluated for impairment                                       $          2,171                                               $     95,542                                             $     97,713                                                 $          3,691                                               $     65,336                                                $     69,027
Loans:
Ending balance: individually evaluated for impairment                                       $ --                                               $    612,606                                             $    612,606                                                 $ --                                               $    265,831                                                $    265,831
Ending balance: collectively evaluated for impairment                                       $      1,010,908                                               $ 13,639,069                                             $ 14,649,977                                                 $      1,115,663                                               $ 10,330,606                                                $ 11,446,269
Net charge-offs as a percentage of average loans in repayment(2)                                        0.17 %                                                     0.96 %                                                                                                                    0.30 %                                                     0.82 %
Allowance as a percentage of the ending total loan balance                                              0.21 %                                                     1.28 %                                                                                                                    0.33 %                                                     1.03 %
Allowance as a percentage of the ending loans in repayment(2)                                           0.28 %                                                     1.88 %                                                                                                                    0.45 %                                                     1.57 %
Allowance coverage of net charge-offs                                                                   1.61                                                       2.29                                                                                                                      1.43                                                       2.20
Ending total loans, gross                                                                   $      1,010,908                                               $ 14,251,675                                                                                                          $      1,115,663                                               $ 10,596,437
Average loans in repayment(2)                                                               $        793,203                                               $  8,283,036                                                                                                          $        857,359                                               $  6,031,741
Ending loans in repayment(2)                                                                $        786,332                                               $  9,709,758                                                                                                          $        813,815                                               $  6,927,266
                                                                                                                                                                                                                                                                                                                                                                                                        
______
(1)   Represents fair value adjustments on loans sold.
                          
(2)                      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.
                          
 
Private Education Loan Key Credit Quality Indicators
 
                                                                                                                             December 31,
                                                    -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             2016                                                                                      2015
                                                    --------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------
(Dollars in thousands)                                           Balance(1)                        % of Balance                                          Balance(1)                          % of Balance
------------------------------                      ----------------------------------                        --------------------------                       ----------------------------------                        ------------------------------
                                                                                                                                                                                                                          
Cosigners:
  With cosigner                                        $ 12,816,512                                               90 %                                            $  9,515,136                                                   90 %
  Without cosigner                                        1,435,163                            10                              1,081,301                                10  
                                                    ------------------------------------                      ------ --------------------                      ------------------------------------                      ---------- --------------------
Total                                                  $ 14,251,675                           100 %                                            $ 10,596,437                               100 %
                                                    ==== ========== ====================                      ====== ====================                      ==== ========== ====================                      ========== ====================
                                                                                                                                                                                                                          
FICO at Original Approval:
  Less than 670                                        $    920,132                                                6 %                                            $    700,779                                                    7 %
                                                          2,092,722                                               15                                                 1,554,959                                                   15
  670-699
                                                          4,639,958                                               33                                                 3,403,823                                                   32
  700-749
  Greater than or equal to 750                            6,598,863                            46                              4,936,876                                46  
                                                    ------------------------------------                      ------ --------------------                      ------------------------------------                      ---------- --------------------
Total                                                  $ 14,251,675                           100 %                                            $ 10,596,437                               100 %
                                                    ==== ========== ====================                      ====== ====================                      ==== ========== ====================                      ========== ====================
                                                                                                                                                                                                                          
Seasoning(2):
  1-12 payments                                        $  3,737,110                                               26 %                                            $  3,059,901                                                   29 %
  13-24 payments                                          2,841,107                                               20                                                 2,096,412                                                   20
  25-36 payments                                          1,839,764                                               13                                                 1,084,818                                                   10
  37-48 payments                                            917,633                                                7                                                   513,125                                                    5
  More than 48 payments                                     726,106                                                5                                                   414,217                                                    4
  Not yet in repayment                                    4,189,955                            29                              3,427,964                                32  
                                                    ------------------------------------                      ------ --------------------                      ------------------------------------                      ---------- --------------------
Total                                                  $ 14,251,675                           100 %                                            $ 10,596,437                               100 %
                                                    ==== ========== ====================                      ====== ====================                      ==== ========== ====================                      ========== ====================
                                                                                                                                                                                                                                     
______
(1)   Balance represents gross Private Education Loans.
                          
(2)                      Number of months in active repayment (whether interest only payment,
                         fixed payment or full principal and interest payment status) for
                         which a scheduled payment was due.
                          
Private Education Loan Delinquencies
 
The following table provides information regarding the loan status
of our Private Education Loans. Loans in repayment include loans
making interest only or fixed payments as well as loans that have
entered full principal and interest repayment status after any
applicable grace period.
 
                                                                                                                                                      Private Education Loans
                                                                                    -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                              December 31,
                                                                                    -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                             2016                                                                                    2015
                                                                                    --------------------------------------------------------------------------------------                     --------------------------------------------------------------------------------------
(Dollars in thousands)                                                                              Balance                              %                                                  Balance                              %
--------------------------------------------------------------                      -----------------------------------                        -------------------------                       -----------------------------------                        -------------------------
Loans in-school/grace/deferment(1)                                                      $  4,189,955                                                                                               $  3,427,964
Loans in forbearance(2)                                                                      351,962                                                                                                    241,207
Loans in repayment and percentage of each status:
  Loans current                                                                            9,509,394                                            97.9 %                                                6,773,095                                            97.8 %
  Loans delinquent 31-60 days(3)                                                             124,773                                             1.3                                                     91,129                                             1.3
  Loans delinquent 61-90 days(3)                                                              51,423                                             0.5                                                     42,048                                             0.6
  Loans delinquent greater than 90 days(3)                                                    24,168                          0.3                                  20,994                          0.3  
                                                                                    -------------------------------------                      ----- --------------------                      -------------------------------------                      ----- --------------------
Total loans in repayment                                                                   9,709,758                        100.0 %                                                6,927,266                        100.0 %
                                                                                    -------------------------------------                      ===== ====================                      -------------------------------------                      ===== ====================
Total loans, gross                                                                        14,251,675                                                                                                 10,596,437
Deferred origination costs                                                                    44,206                                                                                  27,884  
                                                                                    -------------------------------------                                                                      -------------------------------------
Total loans                                                                               14,295,881                                                                                                 10,624,321
Allowance for losses                                                                        (182,472 )                                                                                                 (108,816 )
                                                                                    -------------------------------------                                                                      -------------------------------------
Total loans, net                                                                        $ 14,113,409                                                                            $ 10,515,505  
                                                                                    ===== ========== ====================                                                                      ===== ========== ====================
Percentage of loans in repayment                                                                                                                68.1 %                                                                                                     65.4 %
                                                                                                                                               ===== ====================                                                                                 ===== ====================
Delinquencies as a percentage of loans in repayment                                                                                              2.1 %                                                                                                      2.2 %
                                                                                                                                               ===== ====================                                                                                 ===== ====================
Loans in forbearance as a percentage of loans in repayment and                                                                                   3.5 %                                                                                                      3.4 %
forbearance
                                                                                                                                               ===== ====================                                                                                 ===== ====================
                                                                                                                                                                                                                                                                 
_______
(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.
                             
 
Summary of Our Education Loan Portfolio
Ending Education Loan Balances, net
 
                                                                                                                                                                                                                                                                                            December 31,
                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                    2016                                                                                                                                                                                                                                                  2015
                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                              Private                                                   FFELP                                                   Total                                                                                         Private                                                   FFELP                                                   Total
                                                                                                                   Education                                                                                        Loans                                                                                       Portfolio                                                                                      Education                                                                                        Loans                                                                                       Portfolio
                                                                                                                     Loans                                                                                                                                                                                                                                                                                       Loans
--------------------------------------------------                                           --------------------------------------------------                                             -------------------------------------------------                                             --------------------------------------------------                                             --------------------------------------------------                                             -------------------------------------------------                                             --------------------------------------------------
Total education loan portfolio:
     In-school(1)                                                                                               $  3,371,870                                                                                   $       377                                                                                   $  3,372,247                                                                                   $  2,823,035                                                                                   $       582                                                                                   $  2,823,617
     Grace, repayment and other(2)                                                             10,879,805                                               1,010,531                                               11,890,336                                                7,773,402                                               1,115,081                                                8,888,483  
                                                                                             -------------------- ---------- --------------------                                           -------------------- --------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- --------- --------------------                                           -------------------- ---------- --------------------
Total, gross                                                                                                      14,251,675                                                                                     1,010,908                                                                                     15,262,583                                                                                     10,596,437                                                                                     1,115,663                                                                                     11,712,100
Deferred origination costs and unamortized premium                                                                    44,206                                                                                         2,941                                                                                         47,147                                                                                         27,884                                                                                         3,114                                                                                         30,998
Allowance for loan losses                                                                        (182,472 )                                                                   (2,171 )                                                                  (184,643 )                                                                  (108,816 )                                                                   (3,691 )                                                                  (112,507 )
                                                                                             -------------------- ---------- --------------------                                           -------------------- --------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- --------- --------------------                                           -------------------- ---------- --------------------
Total education loan portfolio                                                                                  $ 14,113,409                                                                $ 1,011,678                                                                $ 15,125,087                                                                $ 10,515,505                                                                $ 1,115,086                                                                $ 11,630,591  
                                                                                             ==================== ========== ====================                                           ==================== ========= ====================                                           ==================== ========== ====================                                           ==================== ========== ====================                                           ==================== ========= ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
% of total                                                                                                                93 %                                                                                           7 %                                                                                          100 %                                                                                           90 %                                                                                          10 %                                                                                          100 %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
(1)     Loans for customers still attending school and who are not yet
                                              required to make payments on the loan.
(2)                                           Includes loans in deferment or forbearance.
                                               
 
Average Education Loan Balances (net of unamortized
premium/discount)
 
                                                                                                                                             Quarters Ended                                                                                                                                                                                                                                           Years Ended
                                                                                                                                                                                    December 31,                                                                                                                                                                                                                                                                                 December 31,
                                                                  ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                           2016                                                                                                   2015                                                                                                                                         2016                                                                                                       2015
-----------------------                                           ---------------------------------------------------------------------------------------------                                                ---------------------------------------------------------------------------------------------                                                ---------------------------------------------------------------------------------------------                                                ----------------------------------------------------------------------------------------------------
Private Education Loans                                                              $ 14,057,669      93 %                                                                                 $ 10,578,001      90 %                                                                                 $ 12,747,756      92 %                                                                                 $  9,819,053             89 %
FFELP Loans                                                          1,024,402                                             7                                                1,129,965                                            10                                                1,063,325                                             8                                                1,179,723                                                   11  
                                                                  -------------------- ----------                                           --- --------------------                                           -------------------- ----------                                           --- --------------------                                           -------------------- ----------                                           --- --------------------                                           -------------------- ----------                                           ---------- --------------------
Total portfolio                                                                      $ 15,082,071                                           100 %                                                                                 $ 11,707,966                                           100 %                                                                                 $ 13,811,081                                           100 %                                                                                 $ 10,998,776                                                  100 %
                                                                  ==================== ==========                                           === ====================                                           ==================== ==========                                           === ====================                                           ==================== ==========                                           === ====================                                           ==================== ==========                                           ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                   
Education Loan Activity
 
                                                                                                                                                                                                                                                                                                                                          Quarters Ended
                                                                                                                                                                                                                                                                                                                                          December 31,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                              2016                                                                                                                                                                                                                                                                                             2015
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                                      Private                                                                                           FFELP                                                                                            Total                                                                                         Private                                                                                           FFELP                                                                                            Total
                                                                                                                           Education                                                                                          Loans                                                                                          Portfolio                                                                                      Education                                                                                          Loans                                                                                          Portfolio
                                                                                                                             Loans                                                                                                                                                                                                                                                                                            Loans
----------------------------------------------------------                                           --------------------------------------------------                                             ------------------------------------------------------                                             --------------------------------------------------                                             --------------------------------------------------                                             ------------------------------------------------------                                             --------------------------------------------------
Beginning balance                                                                                                       $ 13,725,959                                                                                   $      1,034,545                                                                                   $ 14,760,504                                                                                   $ 10,766,511                                                                                   $      1,142,637                                                                                   $ 11,909,148
Acquisitions and originations                                                                                                612,991                                                                                     --                                                                                        612,991                                                                                        579,705                                                                                     --                                                                                        579,705
Capitalized interest and deferred origination cost premium                                                                   181,052                                                                                              8,901                                                                                        189,953                                                                                        120,676                                                                                              9,420                                                                                        130,096
amortization
Sales                                                                                                                         (1,609 )                                                                                   --                                                                                         (1,609 )                                                                                     (698,795 )                                                                                   --                                                                                       (698,795 )
Loan consolidation to third parties                                                                                          (91,150 )                                                                                          (10,118 )                                                                                     (101,268 )                                                                                      (33,511 )                                                                                           (8,824 )                                                                                      (42,335 )
Repayments and other                                                                                     (313,834 )                                                                       (21,650 )                                                                  (335,484 )                                                                  (219,081 )                                                                       (28,147 )                                                                  (247,228 )
                                                                                                     -------------------- ---------- --------------------                                           -------------------- -------------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------------- --------------------                                           -------------------- ---------- --------------------
Ending balance                                                                                                          $ 14,113,409                                                                $      1,011,678                                                                $ 15,125,087                                                                $ 10,515,505                                                                $      1,115,086                                                                $ 11,630,591  
                                                                                                     ==================== ========== ====================                                           ==================== ============== ====================                                           ==================== ========== ====================                                           ==================== ========== ====================                                           ==================== ============== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                          Years Ended
                                                                                                                                                                                                                                                                                                                                          December 31,
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                              2016                                                                                                                                                                                                                                                                                             2015
                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                                      Private                                                                                           FFELP                                                                                            Total                                                                                         Private                                                                                           FFELP                                                                                            Total
                                                                                                                           Education                                                                                          Loans                                                                                          Portfolio                                                                                      Education                                                                                          Loans                                                                                          Portfolio
                                                                                                                             Loans                                                                                                                                                                                                                                                                                            Loans
----------------------------------------------------------                                           --------------------------------------------------                                             ------------------------------------------------------                                             --------------------------------------------------                                             --------------------------------------------------                                             ------------------------------------------------------                                             --------------------------------------------------
Beginning balance                                                                                                       $ 10,515,505                                                                                   $      1,115,086                                                                                   $ 11,630,591                                                                                   $  8,246,647                                                                                   $      1,263,139                                                                                   $  9,509,786
Acquisitions and originations                                                                                              4,685,622                                                                                     --                                                                                      4,685,622                                                                                      4,366,651                                                                                     --                                                                                      4,366,651
Capitalized interest and deferred origination cost premium                                                                   339,163                                                                                             35,774                                                                                        374,937                                                                                        239,330                                                                                             39,743                                                                                        279,073
amortization
Sales                                                                                                                         (9,521 )                                                                                   --                                                                                         (9,521 )                                                                                   (1,412,015 )                                                                                   --                                                                                     (1,412,015 )
Loan consolidation to third parties                                                                                         (235,118 )                                                                                          (45,014 )                                                                                     (280,132 )                                                                                      (75,369 )                                                                                          (43,087 )                                                                                     (118,456 )
Repayments and other                                                                                   (1,182,242 )                                                                       (94,168 )                                                                (1,276,410 )                                                                  (849,739 )                                                                      (144,709 )                                                                  (994,448 )
                                                                                                     -------------------- ---------- --------------------                                           -------------------- -------------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- ---------- --------------------                                           -------------------- -------------- --------------------                                           -------------------- ---------- --------------------
Ending balance                                                                                                          $ 14,113,409                                                                $      1,011,678                                                                $ 15,125,087                                                                $ 10,515,505                                                                $      1,115,086                                                                $ 11,630,591  
                                                                                                     ==================== ========== ====================                                           ==================== ============== ====================                                           ==================== ========== ====================                                           ==================== ========== ====================                                           ==================== ============== ====================                                           ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
 
Private Education Loan Originations
 
The following table summarizes our Private Education Loan
originations. Originations represent loans that were funded or
acquired during the period presented.
 
                                                                                                                                                                                               Quarters Ended                                                                                                                                                                                                                                                                                                             Years Ended
                                                                                                                                                                                                                                      December 31,                                                                                                                                                                                                                                                                                                                                                   December 31,
                                                                                    ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Dollars in thousands)                                                                                     2016                                             %                                               2015                                                 %                                                                                   2016                                              %                                               2015                                                    %
-----------------------------------------                                           -----------------------------------------------                                             ----------------------------------                                            ------------------------------------------------------                                             ----------------------------------                                            -------------------------------------------------                                             ----------------------------------                                            ------------------------------------------------------                                             ----------------------------------------
Smart Option - interest only(1)                                                                        $ 156,508                                                                            26 %                                                                                 $        142,231                                                                            25 %                                                                                 $ 1,189,517                                                                            25 %                                                                                 $      1,075,260                                                                                  25 %
Smart Option - fixed pay(1)                                                                              177,771                                                                            29                                                                                            186,354                                                                            32                                                                                     1,403,421                                                                            30                                                                                          1,350,680                                                                                  31
Smart Option - deferred(1)                                                                               263,296                                                                            44                                                                                            245,869                                                                            43                                                                                     2,034,100                                                                            44                                                                                          1,902,729                                                                                  44
Smart Option - principal and interest                                                                      1,319                                                                --                                                                                                383                                                                --                                                                                         7,953                                                                --                                                                                              1,727                                                                      --
Parent Loan                                                                             8,794                                                          1                                               --                                             --                                                  31,272                                                          1                                               --                                                
                                                                                    -------------------- ------- --------------------                                           -------------- --------------------                                           -------------------- -------------- --------------------                                           -------------- --------------------                                           -------------------- --------- --------------------                                           -------------- --------------------                                           -------------------- -------------- --------------------                                           -------------------- --------------------
Total Private Education Loan originations                                                              $ 607,688                                                        100 %                                                                                 $        574,837                                                        100 %                                                                                 $ 4,666,263                                                        100 %                                                                                 $      4,330,396                                                              100 %
                                                                                    ==================== ======= ====================                                           ============== ====================                                           ==================== ============== ====================                                           ============== ====================                                           ==================== ========= ====================                                           ============== ====================                                           ==================== ============== ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
Percentage of loans with a cosigner                                                                           87 %                                                                                                                                                                             88 %                                                                                                                                                                        89 %                                                                                                                                                                             90 %
Average FICO at approval                                                                                     748                                                                                                                                                                              746                                                                                                                                                                         748                                                                                                                                                                              749
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
_______
(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,
                                                                      ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                2016                                                                                            2015
                                                                      -----------------------------------------------------------------------------------------                                          -----------------------------------------------------------------------------------------------
(Dollars in thousands)                                                             Amount                    Year-End                                                           Amount                       Year-End
                                                                                                                                                   Weighted                                                                                                                              Weighted
                                                                                                                                                    Average                                                                                                                               Average
                                                                                                                                                Stated Rate(1)                                                                                                                        Stated Rate(1)
---------------------------                                           ------------------------------                                            -------------                                            ------------------------------                                            -------------------
                                                                                                                                                                                                                                                                                    
Money market                                                                             $  7,129,404                                              1.22 %                                                                   $  4,886,299                                                 1.19 %
Savings                                                                                       834,521                                              0.84 %                                                                        669,254                                                 0.82 %
Certificates of deposit                                                  5,471,065                                              1.41 %                                                   5,931,453                                                 0.98 %
                                                                      -------------------- ----------                                                                                                    -------------------- ----------
Deposits - interest bearing                                                              $ 13,434,990                                                                                                                       $ 11,487,006
                                                                      ==================== ==========                                                                                                    ==================== ==========
                                                                                                                                                                                                                                                                                    
_____
(1)     Includes the effect of interest rate swaps in effective hedge
                                              relationships.
                                               
 
Regulatory Capital
 
(Dollars in thousands)                                                                  Actual                                                           "Well Capitalized"
                                                                                                                                                                                                                                                             Regulatory Requirements
------------------------------------------------------                                           ---------------------------------------------------------                                                 -------------------------------------------------------------------------------------------------------------------
                                                                                                     Amount          Ratio                                                  Amount                                                      Ratio
                                                                                                 ---------------------------------- -------------------- --------                                          --------------------                                                                       --------------------------------
As of December 31, 2016:                                                                                          
Common Equity Tier 1 Capital (to Risk-Weighted Assets)                                            $ 2,011,583                                            12.6  %                                                  $ 1,038,638                       greater-than or equal to                             6.5                    %
Tier 1 Capital (to Risk-Weighted Assets)                                                          $ 2,011,583                                            12.6  %                                                  $ 1,278,323                       greater-than or equal to                             8.0                    %
Total Capital (to Risk-Weighted Assets)                                                           $ 2,197,997                                            13.8  %                                                  $ 1,597,904                       greater-than or equal to                            10.0                    %
Tier 1 Capital (to Average Assets)                                                                $ 2,011,583                                            11.1  %                                                  $   907,565                       greater-than or equal to                             5.0                    %
                                                                                                                                                                                                                                                                                                       
As of December 31, 2015:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)                                            $ 1,734,315                                            14.4  %                                                  $   781,638                       greater-than or equal to                             6.5                    %
Tier 1 Capital (to Risk-Weighted Assets)                                                          $ 1,734,315                                            14.4  %                                                  $   962,017                       greater-than or equal to                             8.0                    %
Total Capital (to Risk-Weighted Assets)                                                           $ 1,848,528                                            15.4  %                                                  $ 1,202,521                       greater-than or equal to                            10.0                    %
Tier 1 Capital (to Average Assets)                                                                $ 1,734,315                                            12.3  %                                                  $   704,979                       greater-than or equal to                             5.0                    %
                                                                                                                                                                                                                                                                                                                  

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20170118006303r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170118006303/en/

SOURCE: Sallie Mae

Sallie Mae 
Media: 
Martha Holler, 302-451-4900 
martha.holler@salliemae.com 
or 
Rick Castellano, 302-451-2541 
rick.castellano@salliemae.com 
or 
Investors: 
Brian Cronin, 302-451-0304 
brian.cronin@salliemae.com


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