SLM Corp 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, 2023, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, our management used the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment and those criteria, management concluded that, as of December 31, 2023, our internal control over financial reporting is effective. KPMG LLP, an independent registered public accounting firm, audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, as stated in their report listed under the heading “(a) 1.A. Financial Statements” of Item 15 hereof. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Nothing to report. 94 SLM CORPORATION — 2023 Form 10-K PART III. Item 10. Directors, Executive Officers and Corporate Governance The information contained in the 2024 Proxy Statement, including information appearing in the sections titled “Proposal 1 — Election of Directors,” “Executive Officers,” “Compensation Discussion and Analysis — Other Arrangements, Policies and Practices Related to Executive Compensation Programs — Section 16(a) Beneficial Ownership Reporting Compliance,” and “Corporate Governance” in the 2024 Proxy Statement, is incorporated herein by reference. Item 11. Executive Compensation The information contained in the 2024 Proxy Statement, including information appearing in the sections titled “Executive Compensation” and “Director Compensation” in the 2024 Proxy Statement, is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information contained in the 2024 Proxy Statement, including information appearing in the sections titled “Equity Compensation Plan Information,” “Ownership of Common Stock by 5 Percent or More Holders,” and “Ownership of Common Stock by Directors and Executive Officers” in the 2024 Proxy Statement, is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence The information contained in the 2024 Proxy Statement, including information appearing under “Corporate Governance — Related Party Transactions” and “Corporate Governance — Director Independence” in the 2024 Proxy Statement, is incorporated herein by reference. Item 14. Principal Accounting Fees and Services The information contained in the 2024 Proxy Statement, including information appearing under “Independent Registered Public Accounting Firm” in the 2024 Proxy Statement, is incorporated herein by reference. 2023 Form 10-K — SLM CORPORATION 95 PART IV. Item 15. Exhibits, Financial Statement Schedules (a) 1. Financial Statements A. The following consolidated financial statements of SLM Corporation and the Report of the Independent Registered Public Accounting Firm thereon are included in Item 8 above: Report of Independent Registered Public Accounting Firm F- 2 Report of Independent Registered Public Accounting Firm F- 5 Consolidated Balance Sheets as of December 31, 202 3 and 202 2 F- 7 Consolidated Statements of Income for the years ended December 31, 202 3 , 202 2 , and 202 1 F- 8 Consolidated Statements of Comprehensive Income for the years ended December 31, 202 3 , 202 2 , and 202 1 F- 9 Consolidated Statements of Changes in Equity for the years ended December 31, 202 3 , 202 2 , and 202 1 F- 10 Consolidated Statements of Cash Flows for the years ended December 31, 202 3 , 202 2 , and 202 1 F- 13 Notes to Consolidated Financial Statements F- 15 2. Financial Statement Schedules All schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. 3. Exhibits The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K. We will furnish at cost a copy of any exhibit filed with or incorporated by reference into this Annual Report on Form 10-K. Oral or written requests for copies of any exhibits should be directed to the Corporate Secretary. 96 SLM CORPORATION — 2023 Form 10-K (b) Exhibits 2.1 Separation and Distribution Agreement by and among SLM Corporation, New BLC Corporation and Navient Corporation, dated as of April 28, 2014 (incorporated by reference to Exhibit 2.2 of the Company’s Current Report on Form 8-K filed on May 2, 2014). 3.1 Restated Certificate of Incorporation of the Company, dated February 25, 2015 (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on February 26, 2015). 3.2 Amended and Restated Bylaws of SLM Corporation, effective November 18, 2021 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on November 23, 2021). 4.1 Indenture, dated as of June 17, 2015, between SLM Corporation and Deutsche Bank National Trust Company, as Trustee (incorporated by reference to Exhibit 4.3 of the Company’s Registration Statement on Form S-3 filed on June 17, 2015). 4.2 First Supplemental Indenture dated as of April 5, 2017 between SLM Corporation and Deutsche Bank National Trust Company, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on April 5, 2017). 4.3 Second Supplemental Indenture dated as of October 29, 2020 between SLM Corporation and Deutsche Bank National Trust Company, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on October 29, 2020). 4.4 Form of Senior Note due 2025 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on October 29, 2020). 4.5 Description of SLM Corporation’s Common Stock (incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K filed on February 28, 2020). 4.6 Description of SLM Corporation’s Floating-Rate Non-Cumulative Preferred Stock, Series B (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed on February 28, 2020). 4.7 Third Supplemental Indenture dated as of November 1, 2021 between SLM Corporation and Deutsche Bank National Trust Company, as trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on November 1, 2021). 4.8 Form of Senior Note due 2026 (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on November 1, 2021). 10.1† SLM Corporation Executive Severance Plan for Senior Officers, including amendments as of June 25, 2015 (incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.2† SLM Corporation Change in Control Severance Plan for Senior Officers, including amendments as of June 25, 2015 (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.3† Form of Director’s Indemnification Agreement (incorporated by reference to Exhibit 10.24 of the Company’s Annual Report on Form 10-K filed on February 27, 2012). 10.4† Sallie Mae Supplemental 401(k) Savings Plan, as Amended and Restated as of June 25, 2015 (incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.5† Amendment to Sallie Mae Supplemental 401(k) Savings Plan (Effective as of March 5, 2019) (incorporated by reference to Exhibit 10.5 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.6† SLM Deferred Compensation Plan for Key Employees, as Established Effective May 1, 2014 and Amended June 25, 2015 (incorporated by reference to Exhibit 10.10 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.7† Amendment to SLM Corporation Deferred Compensation Plan for Key Employees (Effective as of March 5, 2019) (incorporated by reference to Exhibit 10.6 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.8† SLM Corporation Deferred Compensation Plan for Directors, as Established Effective May 1, 2014 and Amended June 25, 2015 (incorporated by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.9† Amended and Restated SLM Corporation Incentive Plan (incorporated by reference to Exhibit 10.24 of the Company’s Current Report on Form 8-K (file no. 001-13251) filed on May 25, 2005). 10.10† Director’s Stock Plan (incorporated by reference to Exhibit 10.25 of the Company’s Current Report on Form 8-K (file no. 001-13251) filed on May 25, 2005). 2023 Form 10-K — SLM CORPORATION 97 10.11† SLM Corporation Directors Equity Plan (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-8 (File No. 333-159447) filed on May 22, 2009). 10.12† SLM Corporation 2009-2012 Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-8 (File No. 333-159447) filed on May 22, 2009). 10.13† SLM Corporation 2012 Omnibus Incentive Plan (incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement for the 2017 Annual Meeting of Shareholders filed on April 27, 2017). 10.14† Sallie Mae Employee Stock Purchase Plan, Amended and Restated as of June 24, 2014, Including Amendments as of June 25, 2015 (incorporated by reference to Exhibit 10.39 of the Company’s Annual Report on Form 10-K filed on February 26, 2016). 10.15† Restatement of the Sallie Mae 401(k) Savings Plan (Effective as of January 1, 2018) (incorporated by reference to Exhibit 10.50 of the Company’s Annual Report on Form 10-K filed on February 28, 2020). 10.16† Amendment to Sallie Mae 401(k) Savings Plan (Effective as of January 1, 2019) (incorporated by reference to Exhibit 10.51 of the Company’s Annual Report on Form 10-K filed on February 28, 2020). 10.17† Amendment to Sallie Mae 401(k) Savings Plan (Effective as of March 5, 2019) (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.18 Tax Sharing Agreement between Navient Corporation and New BLC Corporation, dated as of April 29, 2014 (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on May 2, 2014). 10.19 Amended and Restated Loan Servicing and Administration Agreement between Sallie Mae Bank and Navient Solutions, Inc., dated as of April 30, 2014 (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed on May 2, 2014). 10.20† Agreement and Release, dated as of March 20, 2018, between the Company and the Personal Representatives of the Estate of Charles P. Rocha (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018). 10.21† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018). 10.22† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018). 10.23† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2018 Bonus Restricted Stock Unit Term Sheet (Three-Year Restriction), 2017 Management Incentive Plan Award (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 23, 2018). 10.24† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2019 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.25† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2019 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.26† Form of SLM Corporation 2012 Omnibus Incentive Plan, Bonus Restricted Stock Unit Term Sheet (Three-Year Restriction), 2018 Management Incentive Plan Award (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 17, 2019). 10.27† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2020 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020). 10.28† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2020 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020). 10.29† Offer Letter between Jonathan W. Witter and the Company dated March 4, 2020 (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020). 10.30 Fixed Dollar Uncollared ASR Master Confirmation and Form of Supplement (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 22, 2020). 10.31† Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2020 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020). 10.32† Separation Agreement between Raymond J. Quinlan and the Company effective April 19, 2020 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020). 10.33† Jonathan W. Witter Sign-On Equity Grant - 2020 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020). 98 SLM CORPORATION — 2023 Form 10-K 10.34† Offer Letter between Donna F. Vieira and the Company dated September 18, 2018 (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on July 22, 2020). 10.35† Separation Agreement between Paul Thome and the Company effective August 10, 2020 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on October 21, 2020). 10.36† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021). 10.37† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021). 10.38† Form of SLM Corporation 2012 Omnibus Incentive Plan, 2021 Stock Option Award Agreement (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 21, 2021). 10.39† Form of SLM Corporation 2012 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement - 2021 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 21, 2021). 10.40† SLM Corporation 2021 Omnibus Incentive Plan (incorporated herein by reference to Exhibit 99.1 of the Company’s Registration Statement on Form S-8 filed on June 9, 2021). 10.41† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 27, 2022). 10.42† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2022 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 27, 2022). 10.43† Form of SLM Corporation 2021 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2022 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 27, 2022). 10.44† Offer Letter between Kerri Palmer and the Company dated January 7, 2021 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on July 27, 2022). 10.45† SLM Corporation Amended and Restated Executive Severance Plan for Senior Officers (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 21, 2023). 10.46† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2023 Restricted Stock Unit Term Sheet (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023). 10.47† Form of SLM Corporation 2021 Omnibus Incentive Plan, 2023 Performance Stock Unit Term Sheet (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023). 10.48† Retention Agreement between Steven J. McGarry and the Company dated March 2, 2023 (incorporated by reference to Exhibit 10.3 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023). 10.49† Agreement and Release between Daniel Kennedy and the Company effective March 30, 2023 (incorporated by reference to Exhibit 10.4 of the Company’s Quarterly Report on Form 10-Q filed on April 26, 2023). 10.50† Form of SLM Corporation 2021 Omnibus Incentive Plan, Independent Director Restricted Stock Agreement – 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on July 26, 2023). 10.51† Offer Letter between Peter Graham and the Company dated August 25, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q filed on October 25, 2023). 21.1* List of Subsidiaries. 23.1* Consent of KPMG LLP. 31.1* Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1* Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2* Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* Financial Restatement Compensation Recovery Policy. 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. 2023 Form 10-K — SLM CORPORATION 99 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). † Management Contract or Compensatory Plan or Arrangement * Filed herewith 100 SLM CORPORATION — 2023 Form 10-K SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: February 22, 2024 SLM CORPORATION By: / S / JONATHAN W. WITTER Jonathan W. Witter Chief Executive Officer and Director Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /S/ JONATHAN W. WITTER Jonathan W. Witter Chief Executive Officer and Director (Principal Executive Officer) February 22, 2024 /S/ PETER M. GRAHAM Peter M. Graham Executive Vice President and Chief Financial Officer (Principal Financial Officer) February 22, 2024 /S/ JONATHAN R. BOYLES Jonathan R. Boyles Senior Vice President and Controller (Principal Accounting Officer) February 22, 2024 /S/ MARY CARTER WARREN FRANKE Mary Carter Warren Franke Chair of the Board of Directors February 22, 2024 /S/ JANAKI AKELLA Janaki Akella Director February 22, 2024 /S/ R. SCOTT BLACKLEY R. Scott Blackley Director February 22, 2024 /S/ PAUL G. CHILD Paul G. Child Director February 22, 2024 /S/ MARIANNE M. KELER Marianne M. Keler Director February 22, 2024 /S/ MARK L. LAVELLE Mark L. Lavelle Director February 22, 2024 2023 Form 10-K — SLM CORPORATION 101 /S/ CHRISTOPHER T. LEECH Christopher T. Leech Director February 22, 2024 /S/ TED MANVITZ Ted Manvitz Director February 22, 2024 /S/ JIM MATHESON Jim Matheson Director February 22, 2024 /S/ SAMUEL T. RAMSEY Samuel T. Ramsey Director February 22, 2024 /S/ VIVIAN C. SCHNECK-LAST Vivian C. Schneck-Last Director February 22, 2024 /S/ ROBERT S. STRONG Robert S. Strong Director February 22, 2024 /S/ SHANNON WATKINS Shannon Watkins Director February 22, 2024 /S/ KIRSTEN O. WOLBERG Kirsten O. Wolberg Director February 22, 2024 102 SLM CORPORATION — 2023 Form 10-K CONSOLIDATED FINANCIAL STATEMENTS INDEX Page Report of Independent Registered Public Accounting Firm F- 2 Report of Independent Registered Public Accounting Firm F- 5 Consolidated Balance Sheets F- 7 Consolidated Statements of Income F- 8 Consolidated Statements of Comprehensive Income F- 9 Consolidated Statements of Changes in Equity F- 10 Consolidated Statements of Cash Flows F- 13 Notes to Consolidated Financial Statements F- 15 2023 Form 10-K — SLM CORPORATION F-1 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors SLM Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of SLM Corporation and subsidiaries (the Company) as of December 31, 2023 and December 31, 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Assessment of the Allowance for Credit Losses related to Private Education Loans Evaluated on a Collective Basis As discussed in Notes 2 and 7 to the consolidated financial statements, the Company’s total allowance for credit losses as of December 31, 2023 was $1,340 million, of which $1,335 million related to the Company’s allowance for credit losses on private education loans evaluated on a collective basis (the Collective ACL). For all loans carried at amortized cost, upon loan origination, the Company is required to measure the allowance for credit losses based on the estimate of all current expected credit losses over the remaining contractual term of the loans. In determining the lifetime expected credit losses on the private education loan portfolio, the Company applies a discounted cash flow method that incorporates a probability of default model and a prepayment model. This method requires the Company to project future principal and interest F- 2 SLM CORPORATION — 2023 Form 10-K cash flows on the loans in this portfolio following a vintage-based methodology that considers life of loan loss expectations, prepayments, defaults, recoveries, and any other adjustments deemed necessary to determine the adequacy of the allowance for credit losses. In estimating current expected credit losses, the Company uses a combination of expected economic scenarios, which are weighted based upon the current economic conditions and the Company’s view of the risks of alternate outcomes. In determining the loss rates used for the vintage-based approach, the Company uses the probability of default model which starts with historical loss rates, stratifies the loans within each vintage, and then adjusts the loss rates based upon economic factors forecasted over a reasonable and supportable forecast period. At the end of the reasonable and supportable forecast period, the forecast is immediately reverted to historical averages. The cash flows are then discounted at the loan’s effective interest rate to calculate the present value of those cash flows. The Company also takes certain qualitative factors into consideration when calculating the Collective ACL, which could result in management overlays. We identified the assessment of the Collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to significant measurement uncertainty. Specifically, the assessment of the Collective ACL methodology encompassed the evaluation of the conceptual soundness and performance of the probability of default and prepayment models, including their significant assumptions. Such significant assumptions included (1) economic factors, (2) loss rates derived from the probability of default model, and (3) prepayment rates derived from the prepayment model. The assessment also encompassed the conceptual soundness of the methods and significant assumptions used to determine certain individual management overlays. In addition, auditor judgement was required to evaluate the sufficiency of audit evidence obtained. The following are the primary procedures we performed to address the critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the Collective ACL estimate, including controls over the: • Collective ACL methodology • performance monitoring of the probability of default and prepayment models • determination and measurement of the significant assumptions used in the models • continued use and appropriateness of the probability of default model • continued use and appropriateness of the prepayment model • development of the individual management overlay methods and assumptions • analysis of the Collective ACL results, trends, and ratios. We evaluated the Company’s process to develop the Collective ACL estimate by testing certain sources of data, factors, and assumptions that the Company used, and considered the relevance and reliability of such data, factors, and assumptions. In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in: • evaluating the Company’s Collective ACL methodology for compliance with U.S. generally accepted accounting principles • evaluating judgments made by the Company relative to the performance testing of the probability of default and prepayment models by comparing them to the relevant Company-specific metrics and trends • assessing the conceptual soundness and performance testing of the probability of default and prepayment models by inspecting the model documentation to determine whether the models are suitable for their intended use 2023 Form 10-K — SLM CORPORATION F-3 • evaluating the selection of the economic factors used to adjust loss rates over the reasonable and supportable forecast period by comparing them to the Company’s business environment and relevant industry practices • evaluating the conceptual soundness of the methods and assumptions used to develop the individual management overlays and their impact on the Collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the underlying probability of default and prepayment models. We also assessed the sufficiency of the audit evidence obtained related to the Collective ACL by evaluating the cumulative results of the audit procedures and potential bias in the accounting estimates. /s/ KPMG LLP We have served as the Company’s auditor since 2013. McLean, Virginia February 22, 2024 F- 4 SLM CORPORATION — 2023 Form 10-K Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors SLM Corporation: Opinion on Internal Control Over Financial Reporting We have audited SLM Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements), and our report dated February 22, 2024 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of 2023 Form 10-K — SLM CORPORATION F-5 unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP McLean, Virginia February 22, 2024 F- 6 SLM CORPORATION — 2023 Form 10-K CONSOLIDATED BALANCE SHEETS As of December 31, (dollars in thousands, except share and per share amounts) 2023 2022 Assets Cash and cash equivalents $ 4,149,838 $ 4,616,117 Investments: Trading investments at fair value (cost of $ 43,412 and $ 47,554 , respectively ) 54,481 55,903 Available-for-sale investments at fair value (cost of $ 2,563,984 and $ 2,554,332 , respectively) 2,411,622 2,342,089 Other investments 91,567 94,716 Total investments 2,557,670 2,492,708 Loans held for investment (net of allowance for losses of $ 1,339,772 and $ 1,357,075 , respectively) 20,306,357 19,626,868 Loans held for sale — 29,448 Restricted cash 149,669 156,719 Other interest-earning assets 9,229 11,162 Accrued interest receivable 1,379,904 1,202,059 Premises and equipment, net 129,501 140,728 Goodwill and acquired intangible assets, net 68,711 118,273 Income taxes receivable, net 366,247 380,058 Tax indemnification receivable — 2,816 Other assets 52,342 34,073 Total assets $ 29,169,468 $ 28,811,029 Liabilities Deposits $ 21,653,188 $ 21,448,071 Long-term borrowings 5,227,512 5,235,114 Other liabilities 407,971 400,874 Total liabilities 27,288,671 27,084,059 Commitments and contingencies Equity Preferred stock, par value $ 0.20 per share, 20 million shares authorized: Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $ 100 per share 251,070 251,070 Common stock, par value $ 0.20 per share, 1.125 billion shares authorized: 438.2 million and 435.1 million shares issued, respectively 87,647 87,025 Additional paid-in capital 1,148,689 1,109,072 Accumulated other comprehensive loss (net of tax benefit of $( 24,176 ) and $( 30,160 ), respectively) ( 75,104 ) ( 93,870 ) Retained earnings 3,624,859 3,163,640 Total SLM Corporation stockholders’ equity before treasury stock 5,037,161 4,516,937 Less: Common stock held in treasury at cost: 217.9 million and 194.4 million shares, respectively ( 3,156,364 ) ( 2,789,967 ) Total equity 1,880,797 1,726,970 Total liabilities and equity $ 29,169,468 $ 28,811,029 See accompanying notes to consolidated financial statements. 2023 Form 10-K — SLM CORPORATION F-7 CONSOLIDATED STATEMENTS OF INCOME Years ended December 31, (dollars in thousands, except per share amounts) 2023 2022 2021 Interest income: Loans $ 2,327,743 $ 1,914,554 $ 1,756,945 Investments 50,810 35,304 13,859 Cash and cash equivalents 213,750 81,722 6,040 Total interest income 2,592,303 2,031,580 1,776,844 Interest expense: Deposits 808,065 368,914 225,370 Interest expense on short-term borrowings 13,501 11,956 18,945 Interest expense on long-term borrowings 208,524 161,929 137,763 Total interest expense 1,030,090 542,799 382,078 Net interest income 1,562,213 1,488,781 1,394,766 Less: provisions for credit losses 345,463 633,453 ( 32,957 ) Net interest income after provisions for credit losses 1,216,750 855,328 1,427,723 Non-interest income: Gains on sales of loans, net 160,290 327,750 548,315 Gains (losses) on securities, net 2,678 ( 60,267 ) 39,096 Gains (losses) on derivatives and hedging activities, net — ( 5 ) 144 Other income 84,148 67,160 44,894 Total non-interest income 247,116 334,638 632,449 Non-interest expenses: Operating expenses: Compensation and benefits 326,554 270,354 258,321 FDIC assessment fees 45,766 20,939 23,368 Other operating expenses 246,886 260,169 236,964 Total operating expenses 619,206 551,462 518,653 Acquired intangible assets impairment and amortization expense 66,364 7,779 — Restructuring expenses — — 1,255 Total non-interest expenses 685,570 559,241 519,908 Income before income tax expense 778,296 630,725 1,540,264 Income tax expense 196,905 161,711 379,751 Net income 581,391 469,014 1,160,513 Preferred stock dividends 17,705 9,029 4,736 Net income attributable to SLM Corporation common stock $ 563,686 $ 459,985 $ 1,155,777 Basic earnings per common share $ 2.44 $ 1.78 $ 3.67 Average common shares outstanding 231,411 258,439 314,993 Diluted earnings per common share $ 2.41 $ 1.76 $ 3.61 Average common and common equivalent shares outstanding 234,063 261,503 319,912 Declared dividends per common share $ 0.44 $ 0.44 $ 0.20 See accompanying notes to consolidated financial statements. F- 8 SLM CORPORATION — 2023 Form 10-K CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Years ended December 31, (dollars in thousands) 2023 2022 2021 Net income $ 581,391 $ 469,014 $ 1,160,513 Other comprehensive income (loss): Unrealized gains (losses) on investments 59,205 ( 194,157 ) ( 26,606 ) Unrealized gains (losses) on cash flow hedges ( 34,457 ) 93,731 48,111 Total unrealized gains (losses) 24,748 ( 100,426 ) 21,505 Income tax (expense) benefit ( 5,982 ) 24,453 ( 5,202 ) Other comprehensive income (loss), net of tax (expense) benefit 18,766 ( 75,973 ) 16,303 Total comprehensive income $ 600,157 $ 393,041 $ 1,176,816 See accompanying notes to consolidated financial statements. 2023 Form 10-K — SLM CORPORATION F-9 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Common Stock Shares (In thousands, except share and per share amounts) Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Equity Balance at December 31, 2020 2,510,696 456,729,251 ( 81,441,252 ) 375,287,999 $ 251,070 $ 91,346 $ 1,331,247 $ ( 34,200 ) $ 1,722,365 $ ( 798,993 ) $ 2,562,835 Net income — — — — — — — — 1,160,513 — 1,160,513 Other comprehensive income, net of tax — — — — — — — 16,303 — — 16,303 Total comprehensive income — — — — — — — — — — 1,176,816 Cash dividends declared: Common stock ($ 0.20 per share) — — — — — — — — ( 60,462 ) — ( 60,462 ) Preferred Stock, Series B ($ 1.89 per share) — — — — — — — — ( 4,736 ) — ( 4,736 ) Dividend equivalent units related to employee stock-based compensation plans — — — — — — 530 — ( 546 ) — ( 16 ) Issuance of common shares — 3,786,581 3,786,581 — 757 4,134 — — — 4,891 Stock-based compensation expense — — — — — — 30,649 — — — 30,649 Common stock repurchased and cancelled — ( 28,502,460 ) — ( 28,502,460 ) — ( 5,700 ) ( 466,860 ) — — — ( 472,560 ) Common stock repurchased — — ( 70,246,445 ) ( 70,246,445 ) — — 174,684 — — ( 1,242,267 ) ( 1,067,583 ) Shares repurchased related to employee stock-based compensation plans — — ( 1,368,942 ) ( 1,368,942 ) — — — — — ( 20,123 ) ( 20,123 ) Balance at December 31, 2021 2,510,696 432,013,372 ( 153,056,639 ) 278,956,733 $ 251,070 $ 86,403 $ 1,074,384 $ ( 17,897 ) $ 2,817,134 $ ( 2,061,383 ) $ 2,149,711 See accompanying notes to consolidated financial statements. F- 10 SLM CORPORATION — 2023 Form 10-K CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Common Stock Shares (In thousands, except share and per share amounts) Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Treasury Stock Total Equity Balance at December 31, 2021 2,510,696 432,013,372 ( 153,056,639 ) 278,956,733 $ 251,070 $ 86,403 $ 1,074,384 $ ( 17,897 ) $ 2,817,134 $ ( 2,061,383 ) $ 2,149,711 Net income — — — — — — — — 469,014 — 469,014 Other comprehensive loss, net of tax — — — — — — — ( 75,973 ) — — ( 75,973 ) Total comprehensive income — — — — — — — — — — 393,041 Cash dividends declared: Common stock ( 0.44 per share) — — — — — — — — ( 112,961 ) — ( 112,961 ) Preferred Stock, Series B ($ 3.60 per share) — — — — — — — — ( 9,029 ) — ( 9,029 ) Issuance of common shares — 3,107,768 3,107,768 — 622 618 — ( 807 ) — 433 Stock-based compensation expense — — — — — — 34,070 — 289 — 34,359 Common stock repurchased — — ( 40,253,548 ) ( 40,253,548 ) — — — — — ( 707,742 ) ( 707,742 ) Shares repurchased related to employee stock-based compensation plans — — ( 1,135,509 ) ( 1,135,509 ) — — — — — ( 20,842 ) ( 20,842 ) Balance at December 31, 2022 2,510,696 435,121,140 ( 194,445,696 ) 240,675,444 $ 251,070 $ 87,025 $ 1,109,072 $ ( 93,870 ) $ 3,163,640 $ ( 2,789,967 ) $ 1,726,970 See accompanying notes to consolidated financial statements. 2023 Form 10-K — SLM CORPORATION F-11 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Common Stock Shares (In thousands, except share and per share amounts) Preferred Stock Shares Issued Treasury Outstanding Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Treasury Stock Total Equity Balance at December 31, 2022 2,510,696 435,121,140 ( 194,445,696 ) 240,675,444 $ 251,070 $ 87,025 $ 1,109,072 $ ( 93,870 ) $ 3,163,640 $ ( 2,789,967 ) $ 1,726,970 Net income — — — — — — — — 581,391 — 581,391 Other comprehensive income, net of tax — — — — — — — 18,766 — — 18,766 Total comprehensive income — — — — — — — — — — 600,157 Cash dividends declared: Common stock ($ 0.44 per share) — — — — — — — — ( 101,233 ) — ( 101,233 ) Preferred Stock, Series B ($ 7.05 per share) — — — — — — — — ( 17,705 ) — ( 17,705 ) Issuance of common shares — 3,109,276 3,109,276 — 622 3,237 — ( 1,234 ) — 2,625 Stock-based compensation expense — — — — — — 36,380 — — — 36,380 Common stock repurchased — — ( 22,341,595 ) ( 22,341,595 ) — — — — — ( 349,397 ) ( 349,397 ) Shares repurchased related to employee stock-based compensation plans — — ( 1,099,241 ) ( 1,099,241 ) — — — — — ( 17,000 ) ( 17,000 ) Balance at December 31, 2023 2,510,696 438,230,416 ( 217,886,532 ) 220,343,884 $ 251,070 $ 87,647 $ 1,148,689 $ ( 75,104 ) $ 3,624,859 $ ( 3,156,364 ) $ 1,880,797 See accompanying notes to consolidated financial statements. F- 12 SLM CORPORATION — 2023 Form 10-K CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, (dollars in thousands) 2023 2022 2021 Operating activities Net income $ 581,391 $ 469,014 $ 1,160,513 Adjustments to reconcile net income to net cash used in operating activities: Provisions for credit losses 345,463 633,453 ( 32,957 ) Deferred tax provision (benefit) ( 23,224 ) ( 93,670 ) 55,372 Amortization of brokered deposit placement fee 11,681 12,904 15,516 Amortization of Secured Borrowing Facility upfront fee 2,869 2,634 2,415 Amortization of deferred loan origination costs and loan premium/(discounts), net 12,583 14,804 16,103 Net amortization of discount on investments ( 2,726 ) 103 7,310 Reduction of tax indemnification receivable 2,816 5,231 10,445 Depreciation of premises and equipment 17,811 17,331 16,043 Acquired intangible assets impairment and amortization expense 66,364 7,779 — Stock-based compensation expense 36,380 34,461 30,649 Unrealized (gains) losses on derivative and hedging activities, net ( 341 ) 269 23,249 Gains on sale of loans, net ( 160,290 ) ( 327,750 ) ( 548,315 ) (Gains) losses on securities, net ( 2,678 ) 60,267 ( 39,096 ) Acquisition transaction costs, net 952 2,603 — Other adjustments to net income, net 16,212 14,213 15,686 Changes in operating assets and liabilities: Increase in accrued interest receivable ( 1,054,071 ) ( 819,958 ) ( 743,757 ) Increase in trading investments — ( 5,117 ) — Increase in non-marketable securities ( 1,256 ) ( 2,050 ) ( 9,969 ) (Increase) decrease in other interest-earning assets 1,933 ( 1,507 ) 33,219 Increase in other assets ( 38,902 ) ( 23,472 ) ( 123,268 ) Increase (decrease) in income tax payable, net 36,723 ( 15,063 ) 72,191 Increase (decrease) in accrued interest payable 33,480 24,986 ( 13,672 ) Increase (decrease) in other liabilities ( 27,807 ) ( 6,473 ) 2,801 Total adjustments ( 726,028 ) ( 464,022 ) ( 1,210,035 ) Total net cash (used in) provided by operating activities ( 144,637 ) 4,992 ( 49,522 ) Investing activities Loans acquired and originated ( 6,452,199 ) ( 6,081,389 ) ( 5,511,845 ) Net proceeds from sales of loans held for investment and loans held for sale 3,198,502 3,459,527 4,642,505 Proceeds from FFELP Loan claim payments 50,145 33,197 19,386 Net decrease in loans held for investment and loans held for sale (other than loans acquired and originated, and loan sales) 3,046,064 3,586,825 3,845,990 Purchases of available-for-sale securities ( 105,970 ) ( 753,129 ) ( 1,257,129 ) Proceeds from sales and maturities of available-for-sale securities 265,652 960,015 865,766 Purchase of subsidiary, net of cash acquired ( 14,654 ) ( 127,654 ) — Total net cash (used in) provided by investing activities ( 12,460 ) 1,077,392 2,604,673 Financing activities Brokered deposit placement fee ( 7,841 ) ( 11,170 ) ( 12,565 ) Net increase (decrease) in certificates of deposit 953,412 130,109 ( 2,130,728 ) Net increase (decrease) in other deposits ( 770,485 ) 570,147 393,306 Issuance costs for collateralized borrowings ( 15 ) ( 40 ) — Borrowings collateralized by loans in securitization trusts - issued 1,135,036 572,640 1,585,125 Borrowings collateralized by loans in securitization trusts - repaid ( 1,154,269 ) ( 1,278,183 ) ( 1,143,738 ) Fees paid on Secured Borrowing Facility ( 2,868 ) ( 2,833 ) ( 2,846 ) Issuance costs for unsecured debt offering — ( 375 ) ( 1,540 ) Unsecured debt issued — — 492,135 Unsecured debt repaid — — ( 202,784 ) 2023 Form 10-K — SLM CORPORATION F-13 Preferred stock dividends paid ( 17,705 ) ( 9,029 ) ( 4,736 ) Common stock dividends paid ( 101,233 ) ( 112,961 ) ( 60,462 ) Common stock repurchased ( 350,264 ) ( 713,197 ) ( 1,530,683 ) Net cash used in financing activities ( 316,232 ) ( 854,892 ) ( 2,619,516 ) Net increase (decrease) in cash, cash equivalents and restricted cash ( 473,329 ) 227,492 ( 64,365 ) Cash, cash equivalents and restricted cash at beginning of year 4,772,836 4,545,344 4,609,709 Cash, cash equivalents and restricted cash at end of year $ 4,299,507 $ 4,772,836 $ 4,545,344 Cash disbursements made for: Interest $ 963,260 $ 482,974 $ 359,684 Income taxes paid $ 191,690 $ 272,940 $ 261,473 Income taxes refunded $ ( 8,201 ) $ ( 2,043 ) $ ( 8,614 ) Reconciliation of the Consolidated Statements of Cash Flows to the Consolidated Balance Sheets: Cash and cash equivalents $ 4,149,838 $ 4,616,117 $ 4,334,603 Restricted cash 149,669 156,719 210,741 Total cash, cash equivalents and restricted cash $ 4,299,507 $ 4,772,836 $ 4,545,344 See accompanying notes to consolidated financial statements. F- 14 SLM CORPORATION — 2023 Form 10-K 1. Organization and Business SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we,” “our,” or “us”) is a holding company that operates through a number of subsidiaries and is the premier financial brand for higher education. While the Sallie Mae name has existed for more than 50 years, the company that operates as Sallie Mae today, SLM Corporation, was formed in late 2013 and includes its wholly-owned subsidiary, Sallie Mae Bank, an industrial bank established in 2005 (the “Bank”). On April 30, 2014, we legally separated (the “Spin-Off”) from another public company that is now named Navient Corporation (“Navient”), which is in the education loan management, servicing, asset recovery, and consolidation loan business. We are a consumer banking business and did not retain any assets or liabilities generated prior to the Spin-Off other than those explicitly retained by us pursuant to the documents executed in connection with the Spin-Off. We sometimes refer to the company that existed prior to the Spin-Off as “pre-Spin-Off SLM.” Our primary business is to originate and service loans we make to students and their families to finance the cost of their education. We use “Private Education Loans” to mean education loans to students or their families that are not made, insured, or guaranteed by any state or federal government. Private Education Loans do not include loans insured or guaranteed under the previously existing Federal Family Education Loan Program (“FFELP Loans”). The core of our marketing strategy is to generate Private Education Loan originations by promoting our products on campuses through the financial aid offices as well as through online and direct marketing to students and their families. The Bank is regulated by the Utah Department of Financial Institutions (the “UDFI”), the Federal Deposit Insurance Corporation (the “FDIC”), and the Consumer Financial Protection Bureau (the “CFPB”). 2023 Form 10-K — SLM CORPORATION F-15 2. Significant Accounting Policies Use of Estimates and Assumptions The financial reporting and accounting policies of SLM Corporation conform to generally accepted accounting principles in the United States of America (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Key accounting policies that include significant judgments and estimates include the valuation of allowance for credit losses. Consolidation The consolidated financial statements include the accounts of SLM Corporation and its majority-owned and controlled subsidiaries after eliminating the effects of intercompany accounts and transactions. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. Cash and Cash Equivalents Cash and cash equivalents include cash held in the Federal Reserve Bank of San Francisco (the “FRB”) and commercial bank accounts, and other short-term liquid instruments with original maturities of three months or less. Fees associated with investing cash and cash equivalents are amortized into interest income using the effective interest rate method. Trading Investments We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. Available-for-Sale Investments Our available-for-sale investments consist of mortgage-backed securities, Utah Housing Corporation bonds, and U.S. government-sponsored enterprises and Treasury securities. We record our investment purchases and sales on a trade date basis. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts, which are amortized using the effective interest rate method. Our investments are classified as available-for-sale and reported at fair value. Unrealized gains or losses on available-for-sale investments are recorded in equity and reported as a component of other comprehensive income (loss), net of applicable income taxes. We assess unrealized losses on available-for-sale debt securities that we have the ability and intent to hold for a period of time sufficient to recover the amortized cost of the security, for the purpose of determining credit impairment. If any credit impairment exists, an allowance for losses is established for the amount of the unrealized loss that is determined to be credit-related. F- 16 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) Other Investments We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. We also invest in affordable housing projects that qualify for the low income housing tax credit (“LIHTC”), which is designed to promote private development of low income housing. These investments generate a return mostly through realization of federal tax credits. Loans Held for Investment Loans, consisting of Private Education Loans and FFELP Loans, that we have the ability and intent to hold for the foreseeable future, are classified as held for investment, and are carried at amortized cost. Amortized cost includes the unamortized premiums, discounts, and capitalized origination costs and fees, all of which are amortized to interest income as discussed under “Loan Interest Income.” Loans that are held for investment are reported net of an allowance for credit losses. At September 30, 2022, we transferred the portfolio of our former suite of credit cards (“Credit Cards”) from loans held for investment to loans held for sale as we planned to sell the portfolio. In May 2023, we sold our Credit Card loan portfolio to a third party. This transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date. For additional information, see Notes to Consolidated Financial Statements, Note 6, “Loans Held for Sale” in this Form 10-K. Loans Held for Sale Any loans we have not classified as held for investment are classified as held for sale and are carried at the lower of cost or fair value. Loans are classified as held for sale when we have the intent and ability to sell such loans. Loans that are held for sale do not have the associated premium, discount, and capitalized origination costs and fees amortized into interest income. When a decision has been made to sell loans not previously classified as held for sale, such loans are transferred into the held for sale classification and carried at the lower of amortized cost basis (which excludes any allowance for credit losses) or fair value. At the time of the transfer to the held for sale classification, any amount by which the amortized cost basis exceeds fair value is accounted for as a valuation allowance. In addition, once a loan is classified as held for sale, we reverse any allowance for loan loss applicable to that loan. As market conditions permit, we may sell or securitize loans as a source of financing for other loans. Due to varying structuring terms, certain transactions may qualify for sale treatment while others do not qualify for sale treatment and are recorded as financings. All of our education loans are initially categorized as held for investment. It is only when we have selected the loans to sell or securitize and the transaction qualifies as a sale that we transfer the loans into the held for sale classification and carry them at the lower of cost or fair value. If we anticipate recognizing a gain related to the impending securitization or sale, then the fair value of the loans is higher than their respective cost basis and no valuation allowance is recorded. Restricted Cash Restricted cash primarily includes amounts held in student loan securitization trusts and other secured borrowings. This cash must be used to make payments related to trust obligations. Amounts on deposit in these accounts are primarily the result of timing differences between when principal and interest is collected on the trust assets and when principal and interest is paid on trust liabilities. Allowance for Credit Losses We maintain an allowance for credit losses for the lifetime expected credit losses on loans in our portfolios, as well as for future loan commitments, at the reporting date. In determining the lifetime expected credit losses on our Private Education Loan portfolio loan segments, we use a discounted cash flow method. This method requires us to project future principal and interest cash flows on our loans in those portfolios. To estimate the future expected cash flows, we use a vintage-based methodology that considers life of loan loss expectations, prepayments, defaults, recoveries, and any other adjustments deemed necessary, to determine the adequacy of the allowance at each balance sheet date. These cash flows are discounted at the loan’s effective interest rate to calculate the present value of those cash flows. Management adjusts the effective interest rate used to discount 2023 Form 10-K — SLM CORPORATION F-17 2. Significant Accounting Policies (Continued) expected cash flows to incorporate expected prepayments. The difference between the present value of those cash flows and the amortized cost basis of the underlying loans is the allowance for credit losses. Entities that measure credit losses based on the present value of expected future cash flows are permitted to report the entire change in present value as credit loss expense, but may alternatively report the change in present value due to the passage of time as interest income. We have elected to report the entire change in present value as credit loss expense. In determining the loss rates used for the vintage-based approach, we start with our historical loss rates, stratify the loans within each vintage, and then adjust the loss rates based upon economic factors forecasted over a reasonable and supportable forecast period. The reasonable and supportable forecast period is meant to represent the period in which we believe we can estimate the impact of forecasted economic factors in our expected losses. At the end of the reasonable and supportable forecast period, we immediately revert our forecasted economic factors to long-term historical loss conditions. We use a two-year reasonable and supportable forecast period, although this period is subject to change as our view evolves on our ability to reasonably forecast economic conditions to estimate future losses. In estimating our current expected credit losses, we use a combination of expected economic scenarios coupled with our historical experience to derive a base case adjusted for any qualitative factors (as described below). We also develop an adverse and favorable economic scenario. At each reporting date, we determine the appropriate weighting of these alternate scenarios based upon the current economic conditions and our view of the risks of alternate outcomes. This weighting of expectations is used in calculating our current expected credit losses recorded each period. In estimating recoveries, we use both estimates of what we would receive from the sale of defaulted loans as well as historical borrower payment behavior to estimate the timing and amount of future recoveries on charged-off loans. We use historical experience and economic forecasts to estimate future prepayment speeds. At the end of the two-year reasonable and supportable forecast for prepayments, we immediately revert to our historical long-term prepayment rates. In addition to the above modeling approach, we also take certain other qualitative factors into consideration when calculating the allowance for credit losses, which could result in management overlays (increases or decreases to the allowance for credit losses). These management overlays can encompass a broad array of factors not captured by model inputs, including but not limited to, changes in lending policies and procedures, including changes in underwriting standards, changes in servicing policies and collection administration practices, state law changes that could impact servicing and collection practices, charge-offs, recoveries not already included in the analysis, the effect of other external factors such as legal and regulatory requirements on the level of estimated current expected credit losses, the performance of the model over time versus actual losses, and any other operational or regulatory changes that could affect our estimate of future losses. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. If actual future performance in delinquency, charge-offs, and recoveries is significantly different than estimated, or management assumptions or practices were to change, this could materially affect the estimate of the allowance for credit losses, the timing of when losses are recognized, and the related provision for credit losses on our consolidated statements of income. When calculating our allowance for credit losses and liability for unfunded commitments, we incorporate several inputs that are subject to change period to period. These include, but are not limited to, CECL model inputs and any overlays deemed necessary by management. The most impactful CECL model inputs include: • Economic forecasts; • Weighting of economic forecasts; • Prepayment speeds; and • Recovery rates. Below we describe in further detail our policies and procedures for the allowance for credit losses as they relate to our Private Education Loan and FFELP Loan portfolios. During the third quarter of 2022, we reclassified our Credit Card loan portfolio to loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. F- 18 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) Allowance for Private Education Loan Losses In addition to the key assumptions/estimates described above, some estimates are unique to our Private Education Loan portfolio. Estimates are made on our Private Education Loans regarding when each borrower will separate from school. The cash flow timing of when a borrower will begin making full principal and interest payments is dependent upon when the student either graduates or leaves school. These dates can change based upon many factors. We receive information regarding projected graduation dates from a third-party clearinghouse. The separation from school date is updated quarterly based on updated information received from the clearinghouse. Additionally, when we have a contractual obligation to fund a loan or a portion of a loan at a later date, we make an estimate regarding the percentage of this obligation that will be funded. This estimate is based on historical experience. For unfunded commitments, we recognize the related life of loan allowance as a liability. Once the loan is funded, that liability transfers to the allowance for Private Education Loan losses. Key Credit Quality Indicators - Private Education Loans We determine the collectability of our Private Education Loan portfolio by evaluating certain risk characteristics. We consider credit score at original approval and periodically refreshed/updated credit scores through the loan’s term, existence of a cosigner, loan status, and loan seasoning as the key credit quality indicators because they have the most significant effect on the determination of the adequacy of our allowance for credit losses. Credit scores are an indicator of the creditworthiness of borrowers, and the higher the credit scores the more likely it is the borrowers will be able to make all of their contractual payments. Loan status affects the credit risk because a past due loan is more likely to result in a credit loss than a current loan. Additionally, loans in the deferred payment status have different credit risk profiles compared with those in current pay status. Loan seasoning affects credit risk because a loan with a history of making payments generally has a lower incidence of default than a loan with a history of making infrequent or no payments. The existence of a cosigner lowers the likelihood of default as well. We monitor and update these credit quality indicators in the analysis of the adequacy of our allowance for credit losses on a quarterly basis. In the second quarter of 2023, we changed how we collect on defaulted loans. Previously, we used a mix of in-house collectors and sales to third parties. We will continue to sell a segment of defaulted loans immediately after charge-off but will no longer sell retained defaulted loans (that have been subject to internal collection attempts for six months) to third parties and instead will continue our collection efforts using in-house collectors and third-party collectors. This improved our estimate of recovery rates for the year ended December 31, 2023. When we estimate the timing and amount of future recoveries on charged-off loans, we no longer include expectations of future sales on retained defaulted loans. We continue to monitor how we collect on defaulted loans and may modify the approach from time to time based on performance, industry conventions, and/or regulatory feedback. For December 31, 2022, we used both an estimate of recovery rates from in-house collections as well as expectations of future sales of defaulted loans to estimate the timing and amount of future recoveries on charged-off loans. Private Education Loans generally do not require borrowers to begin principal and interest repayment until at least six months after the borrowers have graduated or otherwise separated from school. Consequently, the loss estimates for these loans are generally low while the borrower is in school and then increase upon the end of the grace period after separation from school. At December 31, 2023 and 2022, 25 percent and 24 percent, respectively, of the principal balance of the Private Education Loan portfolio was related to borrowers who were then in an in-school (fully deferred), grace, or other deferment status and not required to make payments. Our collection policies for Private Education Loans allow for periods of nonpayment (forbearance) for certain borrowers requesting an extended grace period upon leaving school or experiencing temporary difficulty meeting payment obligations. As part of concluding on the adequacy of the allowance for credit losses for Private Education Loans, we review key allowance and loan metrics. The most relevant of these metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans and accrued interest to be capitalized and of ending loans in repayment and accrued interest to be capitalized on loans in repayment; and delinquency and forbearance percentages. We consider a Private Education Loan to be delinquent if the borrower has not made a required payment prior to the 31st day after such payment was contractually due. 2023 Form 10-K — SLM CORPORATION F-19 2. Significant Accounting Policies (Continued) Adoption of ASU No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures” On March 31, 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2022-02, “Troubled Debt Restructurings and Vintage Disclosures” (“ASU No. 2022-02”), which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The enhanced disclosures are required to be provided for modifications made starting in the period of adoption. Information about modifications in periods before adoption is not required to be provided. ASU No. 2022-02 also requires that entities disclose current-period gross charge-offs by year of origination. For entities that have adopted the amendments in CECL, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption of the amendments in ASU No. 2022-02 was permitted if an entity has adopted CECL. The amendments should be applied prospectively. For the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method. We elected to early adopt all aspects of ASU No. 2022-02 prospectively for the period beginning January 1, 2022. The adoption was immaterial to our consolidated financial statements. For additional information, see Note 7, "Allowance for Credit Losses," in this Form 10–K. Troubled Debt Restructurings - 2021 In the year ended December 31, 2021, in estimating the expected defaults for our Private Education Loans that were considered TDRs, we followed the same discounted cash flow process described above but used the historical loss rates related to past TDR loans. The appropriate gross loss rates were determined for each individual loan by evaluating loan maturity, risk characteristics, and macroeconomic conditions. The allowance for our TDR portfolio was included in our overall allowance for Private Education Loans. Our TDR portfolio was comprised mostly of loans with interest rate reductions and loans with forbearance usage greater than three months, as further described below. We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans. These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers. We classified a loan as a TDR due to forbearance using a two-step process. The first step was to identify a loan that was in full principal and interest repayment status and received more than three months of forbearance in a 24 -month period; however, during the first nine months after a loan had entered full principal and interest repayment status, we did not count up to the first six months of forbearance received during that period against the three-month policy limit. The second step was to evaluate the creditworthiness of the loan by examining its most recent refreshed FICO score. Loans that met the criteria in the first test and had a FICO score above a certain threshold (based on the most recent quarterly FICO score refresh) were not classified as TDRs. Loans that met the criteria in the first test and had a FICO score under the threshold (based on the most recent quarterly FICO score refresh) were classified as TDRs. A loan also became a TDR when it was modified to reduce the interest rate on the loan (regardless of when such modification occurred and/or whether such interest rate reduction was temporary). Once a loan qualified for TDR status, it remained a TDR for allowance purposes for the remainder of its life. About half our loans that were considered TDRs involved a temporary forbearance of payments and did not change the contractual interest rate of the loan. Off-Balance Sheet Exposure for Contractual Loan Commitments When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. The discounted cash flow approach described above includes expected future contractual disbursements. The portion of the allowance for credit losses related to future disbursements is shown as a liability on the face of the balance sheet, and related provision for credit losses is reflected on the income statement. F- 20 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) Uncollectible Interest The majority of the total accrued interest receivable on our Private Education Loan portfolio represents accrued interest on deferred loans where no payments are due while the borrower is in school and on fixed-pay loans where the borrower makes a $ 25 monthly payment that is smaller than the interest accrued on the loan in that month. The accrued interest on these loans will be capitalized and increase the unpaid principal balance of the loans when the borrower exits the grace period after separation from school. The discounted cash flow approach described above considers both the collectability of principal as well as this portion of accrued interest that is expected to capitalize to the balance of the loan. Therefore, the allowance for this portion of accrued interest balance is included in our allowance for credit losses. The discounted cash flow approach does not consider interest accrued on loans that are in a full principal and interest repayment status or in interest-only repayment status. We separately capture the amount of expected uncollectible interest associated with these loans using historical experience to estimate the uncollectible interest for the next four months at each period-end date. This amount is recorded as a reduction of interest income. Accrued interest receivable is separately disclosed on the face of the balance sheet. Allowance for Credit Card Loans At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale as we planned to sell our Credit Card portfolio. At that time, we reversed $ 2.4 million through the provisions for credit losses for the allowance related to these loans, when the loans were transferred to held for sale. We subsequently sold the Credit Card portfolio to a third party in May 2023. For the year ended December 31, 2021, we used the gross loss approach when estimating the allowance for credit losses for our Credit Card portfolio. Because our Credit Card portfolio was new and we did not have sufficient historical loss experience, we used estimated loss rates reported by other financial institutions to estimate our allowance for credit losses for Credit Cards, net of expected recoveries. In addition, we used a model that utilized purchased credit card information with risk characteristics similar to those of our own portfolio as a challenger model. We then considered any qualitative factors that may change our future expectations of losses. Allowance for FFELP Loan Losses FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement. Because we bear a maximum of three percent loss exposure due to this federal guarantee, our allowance for credit losses for FFELP Loans and related periodic provision expense are relatively small. We use the gross loss approach when estimating the allowance for credit losses for the unguaranteed portion of our FFELP Loans. We maintain an allowance for credit losses for our FFELP Loans at a level sufficient to cover lifetime expected credit losses. The allowance for FFELP Loan losses uses historical experience of customer default behavior. We apply the default rate projections, net of applicable risk sharing, to our FFELP Loans for the current period to perform our quantitative calculation. Once the quantitative calculation is performed, we review the adequacy of the allowance for credit losses and determine if qualitative adjustments need to be considered. Business Combinations On March 4, 2022, we completed the acquisition of the assets primarily used or held for use of Epic Research Education Services, LLC, which does business as Nitro College (“Nitro”). Nitro provides resources that help students and families evaluate how to responsibly pay for college and manage their financial responsibilities after graduation. The addition of Nitro will support our mission of providing students with the confidence needed to successfully navigate the higher education journey. The acquisition of the Nitro assets, including its employees and intellectual property, has expanded our digital marketing capabilities, reduced the cost to acquire customer accounts, and accelerated our progress to become a broader education solutions provider for students before, during, and immediately after college. On July 21, 2023, we completed the acquisition of several key assets of Scholly, Inc. (“Scholly”). Scholly is engaged in the business of operating as a scholarship publishing and servicing platform, comprised of websites and mobile application search products that offer custom recommendations for post-secondary scholarships for students, their families, and others as well as related services for scholarship providers. The addition of Scholly assets will support our mission of providing students with the confidence needed to successfully navigate the higher education journey. These acquisitions were accounted for as business combinations using the acquisition method of accounting in accordance with the FASB’s Accounting Standard Codification 805, “Business Combinations,” whereby as of the respective acquisition date, the acquired tangible assets and liabilities were recorded at their estimated fair values. The 2023 Form 10-K — SLM CORPORATION F-21 2. Significant Accounting Policies (Continued) identifiable intangible assets were recorded at fair values as determined by an independent appraiser. The final purchase price allocation for Nitro resulted in an excess purchase price over fair value of net assets acquired, or goodwill, of $ 51 million. The final purchase price allocation for Scholly resulted in an excess purchase price over fair value of net assets acquired, or goodwill, of $ 5 million. The results of operations of Nitro and Scholly have been included in our consolidated financial statements since the respective acquisition dates. We have not disclosed the pro forma impact of these acquisitions to the results of operations for the years ended December 31, 2023 and 2022, as the pro forma impacts were deemed immaterial. Transaction costs associated with the Nitro acquisition were approximately $ 3 million and were expensed as incurred within “Other operating expenses” in the consolidated statements of income for the year ended December 31, 2022. Transaction costs associated with the Scholly acquisition were approximately $ 1 million and were expensed as incurred within “Other operating expenses” in the consolidated statements of income for the year ended December 31, 2023. Identifiable intangible assets at the acquisition date of Nitro included definite life intangible assets with an aggregate fair value of approximately $ 75 million, including trade name and trademarks, customer relationships, and developed technology. In the fourth quarter of 2023 we impaired our Nitro trade name and trademarks intangible asset. See Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K for additional details. Identifiable intangible assets at the acquisition date of Scholly included definite life intangible assets with an aggregate fair value of approximately $ 11 million, including trade name and trademarks, developed technology, customer relationships, and partner relationships. See “— Goodwill and Acquired Intangible Assets,” and Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K for additional details. Goodwill and Acquired Intangible Assets Acquisitions are accounted for under the acquisition method of accounting, which results in the Company allocating the purchase price to the fair value of the acquired assets, liabilities, and non-controlling interests, if any, with the remaining purchase price allocated to goodwill. Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. We complete a goodwill impairment analysis, which may be a qualitative or a quantitative analysis depending on the facts and circumstances associated with the reporting unit. In conjunction with a qualitative impairment analysis, we assess relevant qualitative factors to determine whether it is “more-likely-than-not” that the fair value of a reporting unit is less than its carrying amount. The “more-likely-than-not” threshold is defined as having a likelihood of more than 50 percent. If, based on first assessing impairment utilizing a qualitative approach, we determine it is “more-likely-than not” that the fair value of the reporting unit is less than its carrying amount, we will also complete a quantitative impairment analysis. In conjunction with a quantitative impairment analysis, we compare the fair value of the reporting unit to the reporting unit’s carrying value, including goodwill. If the carrying value of the reporting unit exceeds the fair value, goodwill is impaired in an amount equal to the amount by which the carrying value exceeds the fair value of the reporting unit, but not to exceed the goodwill amount attributed to the reporting unit. Acquired intangible assets include trade names and trademarks, customer relationships, developed technology, and partner relationships. Our acquired intangible assets have finite lives and are amortized over their estimated useful lives in proportion to their estimated economic benefit. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. See Notes to Consolidated Financial Statements, Note 10, “Goodwill and Acquired Intangible Assets” in this Form 10-K for additional details. Deposits Our retail deposit accounts are principally certificates of deposit (“CDs”), money market deposit accounts (“MMDAs”), and high-yield savings (“HYS”) accounts. CDs are accounts that have a stipulated maturity and interest rate. Retail CDs may be withdrawn early, but a penalty is assessed. MMDA and HYS accounts are both interest and non-interest bearing accounts that have no maturity or expiration date. For retail MMDA and HYS accounts, the depositor may be required to give written notice of any intended withdrawal not less than seven days before the withdrawal is made. F- 22 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) The Bank also includes brokered CDs in its funding base. Early withdrawal of brokered CDs is prohibited (except in the case of death or legal incapacity). Other deposit accounts include large interest-bearing omnibus accounts deposited in the Bank by commercial entities having custodial responsibilities for many underlying accounts. These omnibus accounts may be structured with or without fixed maturities, and may have fixed or variable interest rates. Fair Value Measurement We use estimates of fair value in applying various accounting standards for our financial statements. Fair value measurements are used in one of four ways: • In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of income; • In the consolidated balance sheet with changes in fair value recorded in the accumulated other comprehensive income section of the consolidated statement of changes in equity; • In the consolidated balance sheet for instruments carried at lower of cost or fair value with impairment charges recorded in the consolidated statement of income; and • In the notes to the consolidated financial statements. Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, our policy in estimating fair value is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates, and credit spreads (including for our liabilities), relying first on observable data from active markets. Depending on current market conditions, additional adjustments to fair value may be based on factors such as liquidity, credit, and bid/offer spreads. Transaction costs are not included in the determination of fair value. When possible, we seek to validate the model’s output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. Classification is based on the lowest level of input that is significant to the fair value of the instrument. The three levels are as follows: • Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. The types of financial instruments included in level 1 are highly liquid instruments with quoted prices. • Level 2 — Inputs from active markets, other than quoted prices for identical instruments, are used to determine fair value. Significant inputs are directly observable from active markets for substantially the full term of the asset or liability being valued. • Level 3 — Pricing inputs significant to the valuation are unobservable. Inputs are developed based on the best information available. However, significant judgment is required by us in developing the inputs. Loan Interest Income For all loans, including impaired loans (regardless of the delinquency status of the impaired loans), classified as held for investment, we recognize interest income as earned, adjusted for the amortization of deferred direct origination and acquisition costs. Deferred fees or costs are required to be recognized as yield adjustments over the life of the related loans and are recognized by the interest method. The objective of the interest method is to arrive at periodic interest income (including recognition of fees and costs) at a constant effective yield on the net investment in the receivable (i.e., the principal amount of the receivable adjusted by unamortized fees or costs, purchase premium or discount, and any hedging activity—these unamortized costs will collectively be referred to as “basis adjustments”). The difference between the periodic interest income so determined and the interest income determined by applying the stated interest rate to the outstanding principal amount of the receivable is the amount of periodic amortization of deferred direct origination and acquisition costs. For the amortization of the basis adjustments, we determine the constant effective yield necessary to apply the interest method based upon the contractual terms of the loan contract, with no consideration given to expected prepayments. For fixed-rate loans, when a prepayment occurs the unamortized balance of the basis adjustments is adjusted so that future amortization (based upon the contractual terms of the loan) will result in a constant effective yield equal to the 2023 Form 10-K — SLM CORPORATION F-23 2. Significant Accounting Policies (Continued) original effective interest rate. Prepayments do not result in a change in the effective interest rate of the loan. We determine the contractual payments on a pool basis; as such, when a prepayment occurs, future contractual payments will be determined assuming the pool will make smaller payments through the original term of the contract. The adjustment to the unamortized basis adjustment balance is recorded in interest income. For variable-rate loans, the effective interest rate at the time of origination is the loan’s effective interest rate assuming all future contractual payments. The effective interest rate remains the same for that loan until the loan rate changes. If there is no prepayment and no change in the stated interest rate, the periodic amortization of the basis adjustments is equal to the difference between the effective interest rate multiplied by the book basis and the contractual interest due. We determine the contractual payments on a pool basis; as such, when a prepayment occurs, future contractual payments will be determined assuming the pool will make smaller payments through the original term of the contract. The adjustment to the unamortized basis adjustment balance is recorded in interest income. When the interest rate on a variable-rate loan changes, the effective interest rate is recalculated using the same methodology described in the previous paragraph; however, the future contractual payments are changed to reflect the new interest rate. There is no forecasting of future expected changes in interest rates. The accounting basis used to determine the effective interest rate of the cash flows is equal to the balances of the unpaid principal balance and unamortized basis adjustments at the time of the rate change. We also pay to the U.S. Department of Education (the “DOE”) an annual 105 basis point Consolidation Loan Rebate Fee on FFELP consolidation loans, which is netted against loan interest income. Additionally, interest earned on education loans reflects potential non-payment adjustments in accordance with our uncollectible interest recognition policy. We do not amortize any adjustments to the basis of loans when they are classified as held for sale. For loans not currently in full principal and interest repayment status or interest-only repayment status, we recognize the allowance for the portion of uncollectible interest representing amounts to be capitalized after separation from school and the expiration of the grace period to the provisions for credit losses and classify this allowance as part of our allowance for credit losses. The allowance for the portion of uncollectible interest on loans making full interest payments will continue to be recorded as a reduction of interest income. As we maintain an allowance for uncollectible interest on loans making full interest payments and an allowance for credit losses for the interest on loans where all, or a portion of the interest, will be capitalized in the future, we do not place loans in nonaccrual status prior to charge-off. However, if it is determined that an individual loan or pool of loans is high risk, they may be placed on nonaccrual status, which entails stopping the accrual of interest on those loans until such time that the borrower(s) have made a sufficient number of payments (typically six months) to return to accrual status. At December 31, 2023, we had an immaterial amount of loans in nonaccrual status. At December 31, 2022, we had no loans in nonaccrual status. We recognize certain fee income (primarily late fees) on all loans when earned according to the contractual provisions of the promissory notes, as well as our expectation of collectability. Fee income is recorded when earned in “other non-interest income” in the accompanying consolidated statements of income. Interest Expense Interest expense is based upon contractual interest rates and other fees, adjusted for the amortization of issuance costs, premiums, and discounts. We incur interest expense on interest-bearing deposits comprised of non-maturity savings deposits, brokered and retail CDs, brokered and retail MMDAs, as well as unsecured and secured financings. Our Private Education Loan multi-lender secured borrowing facility (the “Secured Borrowing Facility”) also incurs an unused facility fee on the amount of unfunded commitments. Interest expense is recognized when amounts are contractually due and is adjusted for net payments/receipts related to qualifying interest rate swap agreements designated as hedges of interest-bearing liabilities. Interest expense also includes the amortization of deferred gains and losses on closed qualifying hedge transactions. Amortization of debt issuance costs, premiums, discounts, and terminated hedge-basis F- 24 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) adjustments are recognized using the effective interest rate method. Refer to Note 11, “Deposits,” and Note 12, “Borrowings” in this Form 10-K for further details of our interest-bearing liabilities. Gains on Sale of Loans, Net We may participate and sell loans to third parties and affiliates. These sales may occur through whole loan sales or securitization transactions that qualify for sale treatment. If a transfer of loans qualifies as a sale, we derecognize the loan and recognize a gain or loss as the difference between the carry basis of the loan sold and liabilities retained and the compensation received. We recognize the results of a transfer of loans based upon the settlement date of the transaction. These loans were initially recorded as held for investment and were transferred to held for sale immediately prior to sale or securitization. Other Income Included in other income are late fees on both Private Education Loans and FFELP Loans, which we recognize when the cash has been received, income for servicing private student loans for third parties, and changes to our tax indemnification receivable from Navient. Other income also included fees related to our Credit Card program. At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. Securitization Accounting Our securitization transactions use a two-step structure with a special purpose entity VIE that legally isolates the transferred assets from us in the event of bankruptcy or receivership. Transactions receiving sale treatment are also structured to ensure that the holders of the beneficial interests issued are not constrained from pledging or exchanging their interests, and that we do not maintain effective control over the transferred assets. If these criteria are not met, the transaction does not meet the criteria for sale treatment and is accounted for as an on-balance sheet secured borrowing. If a securitization qualifies as a sale, we assess whether Sallie Mae is the primary beneficiary of the securitization trust and thus required to consolidate the trust. We are considered the primary beneficiary if we have both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. As there is not a bright-line test for determining significance, the assessment of who has the power to significantly direct the activities of the VIE, and who has the obligation to absorb losses or receive benefits material to the VIE, can be qualitative and judgmental in nature. If we are determined to be the primary beneficiary, then no gain or loss is recognized on the transaction. Irrespective of whether a securitization receives sale or on-balance sheet treatment, our continuing involvement with our securitization trusts is generally limited to: • Owning the equity certificates of certain trusts; • The servicing of the student loan assets within the securitization trusts, on both a pre- and post-default basis; • Our acting as administrator for the securitization transactions we sponsored; • Our responsibilities relative to representation and warranty violations; and • The option to exercise the clean-up call and purchase the student loans from the trust when the pool balance is 10 percent or less of the original pool balance. In 2023 and 2022, we executed several secured financing transactions. Based upon our relationships with these securitizations, we believe the consolidation assessment is straightforward. We consolidated our secured financing transactions because either we did not meet the accounting criterion for sales treatment or we determined we were the primary beneficiary of the VIE because we retained (i) the residual interest in the securitization and therefore had the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE, as well as (ii) the power to direct the activities of the VIE in our role as servicer. The investors in our securitization trusts have no recourse to our other assets should there be a failure of the trust to pay when due. Generally, the only recourse the securitization trusts have to us is in the event we breach a seller representation or warranty or our duties as master servicer and servicer, in which event we are obligated to repurchase the related loans from the trust. We may also be responsible for indemnities in other instances for such things as willful misfeasance or bad faith. In 2023 and 2022, we also closed several loan sales and securitization transactions that were not consolidated on our balance sheet due to the transaction having met the criteria for sales treatment, for which Sallie Mae is not the primary beneficiary. In these transactions, we remove loans from our consolidated balance sheet and recognize any assets retained and liabilities assumed at fair value, and record a gain or loss on the transferred loans. Our continuing 2023 Form 10-K — SLM CORPORATION F-25 2. Significant Accounting Policies (Continued) involvement in these securitization transactions mainly consists of acting as the primary servicer and holding certain retained interests. We provide additional information regarding these types of activities in Note 12, “Borrowings — Unconsolidated VIEs” in this Form 10-K. Derivative Accounting We account for our derivatives, consisting of interest rate swaps, at fair value on the consolidated balance sheets as either an asset or liability. Derivative positions are recorded as net positions by counterparty based on master netting arrangements (see Note 13, “Derivative Financial Instruments”), exclusive of accrued interest and cash collateral held or pledged. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the Chicago Mercantile Exchange (the “CME”) and the London Clearing House (the “LCH”). All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of December 31, 2023, $ 1.8 billion notional of our derivative contracts were cleared on the CME and $ 0.1 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 92.6 percent and 7.4 percent, respectively, of our total notional derivative contracts of $ 1.9 billion at December 31, 2023. For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of December 31, 2023 was $( 40 ) million and $( 4 ) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses). We determine the fair value for our derivative contracts primarily using pricing models that consider current market conditions and the contractual terms of the derivative contracts. These pricing models consider interest rates, time value, forward interest rate curves, and volatility factors. Inputs are generally from active financial markets. The accounting for derivative instruments requires that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at fair value. Our derivative instruments are classified and accounted for by us as fair value hedges, cash flow hedges, and trading hedges. Each derivative is designated to a specific (or pool of) liability(ies) on the consolidated balance sheets, and is designated as either a “fair value” hedge or a “cash flow” hedge. Fair value hedges are designed to hedge our exposure to the changes in fair value of a fixed-rate liability. For effective fair value hedges, both the hedge and the hedged item (for the risk being hedged) are recorded at fair value with any difference reflecting ineffectiveness recorded immediately in the consolidated statements of income. Cash flow hedges are designed to hedge our exposure to variability in cash flows related to variable-rate deposits. The assessment of the hedge’s effectiveness is performed at inception and on an ongoing basis, using regression testing. For hedges of a pool of liabilities, tests are performed to demonstrate the similarity of individual instruments of the pool. When it is determined that a derivative is not currently an effective hedge, ineffectiveness is recognized for the full change in fair value of the derivative with no offsetting amount from the hedged item since the last time it was effective. If it is also determined the hedge will not be effective in the future, we discontinue the hedge accounting prospectively and begin amortization of any basis adjustments that exist related to the hedged item. On March 12, 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (“Topic 848”): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” On January 7, 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (“Topic 848”): Scope” that clarified the scope of Topic 848. Topic 848 contains temporary optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions affected by reference rate reform. Our derivative portfolio is made up of interest rate swaps that are centrally cleared through either the CME or the LCH. On October 16, 2020, both the CME and the LCH changed the price alignment interest and discount rate applied when valuing these transactions to the Secured Overnight Financing rate (“SOFR”). The ISDA 2020 LIBOR Fallbacks Protocol (the “ISDA Fallback Protocol”) was made available for adherence on October 23, 2020, with an effective date of January 25, 2021. Once adhered to by both counterparties in a bilateral relationship and the effective date is reached, the ISDA Fallback Protocol represents a change to the contractual terms of derivatives governed by each respective ISDA agreement between the Company and a derivative counterparty. We have elected the option provided in Topic 848 to not reassess previous accounting determinations as well as the option to not dedesignate a hedging relationship due to a current or future change in a critical or contractual term related to reference rate reform, including changes in the discount rate. F- 26 SLM CORPORATION — 2023 Form 10-K 2. Significant Accounting Policies (Continued) As our liabilities began to use alternatives to LIBOR before LIBOR was no longer published, for cash flow hedges of forecasted LIBOR based payments, we elected the expedient offered in Topic 848 to disregard the potential change in the designated hedged interest rate risk that may occur because of reference rate reform when we assess whether the hedged forecasted transactions are probable, in accordance with the requirements of “Derivatives and Hedging” Topic 815. We have also elected the expedient provided by Topic 848 to assume the reference rate would not be replaced for the remainder of the hedging relationship when assessing hedge effectiveness. Stock-Based Compensation We recognize stock-based compensation cost in our consolidated statements of income using the fair value method. Under this method, we determine the fair value of the stock-based compensation at the time of the grant and recognize the resulting compensation expense over the shorter of the vesting period of the stock-based grant or the employee’s retirement eligible date. We do not apply a forfeiture rate to our stock-based compensation expense, but rather record forfeitures when they occur. We record all excess tax benefits/deficiencies related to the settlement of employee stock-based compensation to the income tax expense line item on our consolidated statements of income. Restructuring Activities From time to time we implement plans to restructure our business. During the third quarter of 2020, we initiated a restructuring program to reduce costs and improve operating efficiencies by better aligning our organizational structure with our new corporate strategic imperatives. In conjunction with these restructuring plans, involuntary benefit arrangements, and certain other costs that are incremental and incurred as a direct result of our restructuring plans, are classified as restructuring expenses in the accompanying consolidated statements of income. We recorded $ 1 million in additional restructuring expenses in the year ended December 31, 2021. We sponsor employee severance plans that provide severance benefits in the event of termination of our full-time employees and part-time employees who work at least 24 hours per week. The severance plans establish specified benefits based on base salary, job level immediately preceding termination, and years of service upon termination of employment due to involuntary termination or a job abolishment, as defined in the severance plans. The benefits payable under the severance plans relate to past service. Accordingly, we recognize severance costs to be paid pursuant to the severance plans when payment of such benefits is probable and reasonably estimable. Such benefits, including severance pay calculated based on the severance plan, medical and dental benefits, outplacement services, and continuation pay, were incurred during the year ended December 31, 2020, as a direct result of our restructuring initiative. Accordingly, such costs are classified as restructuring expenses in the accompanying consolidated statements of income. We finalized this restructuring plan in 2020. Income Taxes We account for income taxes under the asset and liability approach, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and tax basis of our assets and liabilities. To the extent tax laws change, deferred tax assets and liabilities are adjusted in the period that the tax change is enacted. “Income tax expense (benefit)” includes (i) deferred tax expense (benefit), which represents the net change in the deferred tax asset or liability balance during the year when applicable, and (ii) current tax expense (benefit), which represents the amount of tax currently payable to or receivable from a tax authority plus amounts accrued for unrecognized tax benefits. Income tax expense (benefit) excludes the tax effects related to adjustments recorded in equity. An uncertain tax position is recognized only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount of tax benefit recognized in the consolidated financial statements is the largest amount of benefit that is more than 50 percent likely of being sustained upon ultimate settlement of the uncertain tax position. We recognize interest and penalties related to unrecognized tax benefits in income tax expense (benefit). In connection with the Spin-Off, we recorded a liability related to uncertain tax positions of $ 27 million for which we are indemnified by Navient. If there is an adjustment to the indemnified uncertain tax liability, an offsetting adjustment to the indemnification receivable is recorded as pre-tax adjustment to other income in the income statement. As of December 31, 2023, with respect to those amounts recorded at the Spin-Off, both the remaining liability balance (related to uncertain tax positions) and the remaining indemnification receivable balance (related to uncertain tax positions) were zero . 2023 Form 10-K — SLM CORPORATION F-27 3. Cash and Cash Equivalents As of December 31, 2023, cash and cash equivalents include cash due from the FRB of $ 4.1 billion and cash due from depository institutions of $ 41 million. As of December 31, 2022, cash and cash equivalents include cash due from the FRB of $ 4.6 billion and cash due from depository institutions of $ 63 million. As of December 31, 2023 and 2022, we had no outstanding cash equivalents. The FRB Term Deposit Facility program is used to facilitate the conduct of monetary policy by providing a tool that may be used to manage the aggregate quantity of reserve balances held by depository institutions. Under this program, the FRB accepts deposits for a stated maturity at a rate of interest determined via auction. The funds are removed from the accounts of participating institutions for the life of the term deposit. We did not participate in these auctions in 2023 or 2022, resulting in no interest reported. As of December 31, 2023 and 2022, no funds were on deposit with the FRB under this program. 4. Investments Trading Investments We periodically sell Private Education Loans through securitization transactions where we were required to retain a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitizations). We classify those vertical risk retention interests related to the transactions as available-for-sale investments, except for the interest in the residual classes, which we classify as trading investments recorded at fair value with changes recorded through earnings. At December 31, 2022, we had a $ 5 million investment in a convertible debt security classified as a trading investment. In March 2023, this security, and the related accrued interest, was converted into equity securities classified as investments in non-marketable securities. At December 31, 2023 and 2022, we had $ 54 million and $ 56 million, respectively, classified as trading investments. Available-for-Sale Investments The amortized cost and fair value of securities available for sale are as follows: As of December 31, 2023 (dollars in thousands) Amortized Cost Allowance for credit losses (1) Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available for sale: Mortgage-backed securities $ 468,204 $ — $ 703 $ ( 62,480 ) $ 406,427 Utah Housing Corporation bonds 3,408 — — ( 279 ) 3,129 U.S. government-sponsored enterprises and Treasuries 1,645,609 — — ( 66,870 ) 1,578,739 Other securities 446,763 — 603 ( 24,039 ) 423,327 Total $ 2,563,984 $ — $ 1,306 $ ( 153,668 ) $ 2,411,622 As of December 31, 2022 (dollars in thousands) Amortized Cost Allowance for credit losses (1) Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Available for sale: Mortgage-backed securities $ 389,067 $ — $ 2 $ ( 68,705 ) $ 320,364 Utah Housing Corporation bonds 3,584 — — ( 357 ) 3,227 U.S. government-sponsored enterprises and Treasuries 1,804,726 — — ( 115,416 ) 1,689,310 Other securities 356,955 — 33 ( 27,800 ) 329,188 Total $ 2,554,332 $ — $ 35 $ ( 212,278 ) $ 2,342,089 (1) Represents the amount of impairment that has resulted from credit-related factors and that was recognized in the consolidated balance sheets (as a credit loss expense on available-for-sale securities). The amount excludes unrealized losses related to non-credit factors. F- 28 SLM CORPORATION — 2023 Form 10-K 4. Investments (Continued) The following table summarizes the amount of gross unrealized losses for our available-for-sale securities and the estimated fair value for securities having gross unrealized loss positions, categorized by length of time the securities have been in an unrealized loss position: Less than 12 months 12 months or more Total As of December 31, (dollars in thousands) Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value Gross Unrealized Losses Estimated Fair Value 2023: Mortgage-backed securities $ ( 531 ) $ 51,391 $ ( 61,949 ) $ 300,318 $ ( 62,480 ) $ 351,709 Utah Housing Corporation bonds — — ( 279 ) 3,129 ( 279 ) 3,129 U.S. government-sponsored enterprises and Treasuries — — ( 66,870 ) 1,578,739 ( 66,870 ) 1,578,739 Other securities ( 2,221 ) 90,725 ( 21,818 ) 241,253 ( 24,039 ) 331,978 Total $ ( 2,752 ) $ 142,116 $ ( 150,916 ) $ 2,123,439 $ ( 153,668 ) $ 2,265,555 2022: Mortgage-backed securities $ ( 13,956 ) $ 99,598 $ ( 54,749 ) $ 220,576 $ ( 68,705 ) $ 320,174 Utah Housing Corporation bonds ( 357 ) 3,227 — — ( 357 ) 3,227 U.S. government-sponsored enterprises and Treasuries ( 28,128 ) 689,300 ( 87,288 ) 1,000,010 ( 115,416 ) 1,689,310 Other securities ( 15,852 ) 232,546 ( 11,948 ) 92,883 ( 27,800 ) 325,429 Total $ ( 58,293 ) $ 1,024,671 $ ( 153,985 ) $ 1,313,469 $ ( 212,278 ) $ 2,338,140 At December 31, 2023 and 2022, 213 of 248 and 191 of 194 , respectively, of our available-for-sale securities were in an unrealized loss position. Impairment For available-for-sale securities in an unrealized loss position, we first assess whether we intend to sell, or it is more likely than not that we will be required to sell, the security before recovery of its amortized cost basis. If either of these criteria is met, the security’s amortized cost basis is written down to fair value through income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. In making this assessment, we consider the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, adverse conditions specifically related to the security, as well as any guarantees (e.g., guarantees by the U.S. Government) that may be applicable to the security. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security. Our investment portfolio contains mortgage-backed securities issued by Ginnie Mae, Fannie Mae, and Freddie Mac, as well as Utah Housing Corporation bonds. We own these securities to meet our requirements under the Community Reinvestment Act (“CRA”). We also invest in other U.S. government-sponsored enterprise securities issued by the Federal Home Loan Banks, Freddie Mac, and the Federal Farm Credit Bank. Our mortgage-backed securities that were issued under Ginnie Mae programs carry a full faith and credit guarantee from the U.S. Government. The remaining mortgage-backed securities in a net loss position carry a principal and interest guarantee by Fannie Mae or Freddie Mac, respectively. Our Treasury and other U.S. government-sponsored enterprise bonds are rated Aaa by Moody’s Investors Service or AA+ by Standard and Poor’s. The decline in value from December 31, 2022 to December 31, 2023 was driven by the current interest rate environment and is not credit-related. We have the intent and ability to hold these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. Based on this qualitative analysis, we have determined that no credit impairment exists. We periodically sell Private Education Loans through securitization transactions where we are required to retain a five percent vertical risk retention interest. We classify the non-residual vertical risk retention interests as available-for-sale investments. We have the intent and ability to hold each of these bonds for a period of time sufficient for the market price to recover to at least the adjusted amortized cost of the security. We expect to receive all contractual cash flows related to these investments and do not consider a credit impairment to exist. 2023 Form 10-K — SLM CORPORATION F-29 4. Investments (Continued) As of December 31, 2023, the amortized cost and fair value of securities, by contractual maturities, are summarized below. Contractual maturities versus actual maturities may differ due to the effect of prepayments. As of December 31, 2023 Year of Maturity (Dollars in thousands) Amortized Cost Estimated Fair Value 2024 $ 699,496 $ 686,762 2025 298,815 289,794 2026 548,686 506,438 2027 98,612 95,746 2038 68 69 2039 646 639 2042 2,296 2,002 2043 4,156 3,773 2044 4,837 4,483 2045 5,107 4,596 2046 7,725 6,897 2047 7,646 6,880 2048 2,027 1,971 2049 15,792 14,170 2050 107,611 87,112 2051 154,622 124,399 2052 53,653 46,966 2053 245,209 236,537 2054 71,439 63,426 2055 86,199 81,892 2056 102,609 100,728 2058 46,733 46,342 Total $ 2,563,984 $ 2,411,622 Some of the mortgage-backed securities and a portion of the government securities have been pledged to the FRB as collateral against any advances and accrued interest under the Primary Credit lending program sponsored by the FRB. We had $ 612 million and $ 547 million par value of securities pledged to this borrowing facility at December 31, 2023 and 2022, respectively, as discussed further in Note 12, “Borrowings” in this Form 10-K. Other Investments Investments in Non-Marketable Securities We hold investments in non-marketable securities and account for these investments at cost, less impairment, plus or minus observable price changes of identical or similar securities of the same issuer. Changes in market value are recorded through earnings. Because these are non-marketable securities, we use observable price changes of identical or similar securities of the same issuer, or when observable prices are not available, use market data of similar entities, in determining any changes in the value of the securities. In March 2023, our $ 5 million investment in a convertible debt security, classified as a trading investment, and the related accrued interest were converted into equity securities and were reclassified to investments in non-marketable securities. In the second quarter of 2021, we funded an additional investment, as part of a larger equity raise, in an issuer whose equity securities we purchased in the past. We used the valuation associated with the more recent equity raise to adjust the valuation of our previous investments, and, as a result, recorded a gain of $ 35 million on our earlier equity securities investments. This gain was recorded in “gains (losses) on securities, net” in the consolidated statements of income in 2021. In the fourth quarter of 2022, we determined that our investment in these non-marketable equity securities was impaired. As such, we wrote down the value based upon an F- 30 SLM CORPORATION — 2023 Form 10-K 4. Investments (Continued) estimate of the value of these securities and recorded a loss of $ 60 million in “gains (losses) on securities, net” in the consolidated statements of income in 2022. At December 31, 2023 and December 31, 2022, our total investment in the non-marketable securities of this issuer was $ 14 million and $ 8 million, respectively. Low Income Housing Tax Credit Investments We invest in affordable housing projects that qualify for the LIHTC, which is designed to promote private development of low income housing. We recognized $ 11 million, $ 9 million, and $ 7 million of tax credits and other tax benefits associated with investments in affordable housing projects within income tax expense for the years ended December 31, 2023, 2022, and 2021, respectively. The amount of amortization of such investments reported in income tax expense was $ 9 million, $ 7 million, and $ 6 million for the years ended December 31, 2023, 2022, and 2021, respectively. Total carrying value of the LIHTC investments was $ 72 million at December 31, 2023 and $ 80 million at December 31, 2022. We are periodically required to provide additional financial support during the investment period. Our liability for these unfunded commitments was $ 30 million at December 31, 2023 and $ 46 million at December 31, 2022. 5. Loans Held for Investment Loans held for investment consist of Private Education Loans and FFELP Loans. We use “Credit Cards” to refer to the suite of Credit Card loans that we previously held. At September 30, 2022, we transferred our Credit Card portfolio to loans held for sale and subsequently sold the Credit Card portfolio to a third party in May 2023. We recorded a loss of $ 4 million on the on the sale of the Credit Card portfolio in 2023. For additional information, see Note 6, “Loans Held for Sale” in this Form 10-K. Our Private Education Loans are made largely to bridge the gap between the cost of higher education and the amount funded through financial aid, government loans, and customers’ resources. Private Education Loans bear the full credit risk of the customer. We manage this risk through risk-performance underwriting strategies and qualified cosigners. Private Education Loans may be fixed-rate or may carry a variable interest rate indexed to SOFR, the Secured Overnight Financing Rate. As of December 31, 2023, 33 percent of all our Private Education Loans were indexed to SOFR. As of December 31, 2022, 45 percent of all our Private Education Loans were indexed to LIBOR or SOFR. We provide incentives for customers to include a cosigner on the loan, and the vast majority of Private Education Loans in our portfolio are cosigned. We also encourage customers to make payments while in school. FFELP Loans are insured as to their principal and accrued interest in the event of default, subject to a risk-sharing level based on the date of loan disbursement. These insurance obligations are supported by contractual rights against the United States. For loans disbursed on or after July 1, 2006, we receive 97 percent reimbursement on all qualifying claims. For loans disbursed after October 1, 1993, and before July 1, 2006, we receive 98 percent reimbursement on all qualifying claims. For loans disbursed prior to October 1, 1993, we receive 100 percent reimbursement on all qualifying claims. In 2021, we recognized $ 548 million in gains from the sale of approximately $ 4.24 billion of our Private Education Loans, including $ 3.98 billion of principal and $ 264 million in capitalized interest, to unaffiliated third parties. In 2022, we recognized $ 328 million in gains from the sale of approximately $ 3.34 billion of our Private Education Loans, including $ 3.13 billion of principal and $ 217 million in capitalized interest, to unaffiliated third parties. In 2023, we recognized $ 164 million in gains from the sale of approximately $ 3.15 billion of our Private Education Loans, including $ 2.93 billion of principal and $ 226 million in capitalized interest, to an unaffliated third party. There were VIEs created in the execution of certain of these loan sales; however, based on our consolidation analysis, we are not the primary beneficiary of these VIEs. These transactions qualified for sale treatment and removed the balance of the loans from our balance sheet on the respective settlement dates. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales. For additional information, see Note 12, “Borrowings - Unconsolidated VIEs” in this Form 10-K. 2023 Form 10-K — SLM CORPORATION F-31 5. Loans Held for Investment (Continued) Loans held for investment are summarized as follows: As of December 31, (dollars in thousands) 2023 2022 Private Education Loans: Fixed-rate $ 13,985,791 $ 11,108,079 Variable-rate 7,040,053 9,195,609 Total Private Education Loans, gross 21,025,844 20,303,688 Deferred origination costs and unamortized premium/ (discount) 81,554 69,656 Allowance for credit losses ( 1,335,105 ) ( 1,353,631 ) Total Private Education Loans, net 19,772,293 19,019,713 FFELP Loans 537,401 609,050 Deferred origination costs and unamortized premium/ (discount) 1,330 1,549 Allowance for credit losses ( 4,667 ) ( 3,444 ) Total FFELP Loans, net 534,064 607,155 Loans held for investment, net $ 20,306,357 $ 19,626,868 The estimated weighted average life of education loans in our portfolio was approximately 5.0 years at both December 31, 2023 and 2022. The average balance and the respective weighted average interest rates of loans in our portfolio (net of unamortized premium/discount) are summarized as follows: 2023 2022 2021 Years ended December 31, (dollars in thousands) Average Balance Weighted Average Interest Rate Average Balance Weighted Average Interest Rate Average Balance Weighted Average Interest Rate Private Education Loans $ 21,039,701 10.86 % $ 20,576,737 9.14 % $ 20,968,061 8.25 % FFELP Loans 574,218 7.19 662,194 4.62 718,186 3.43 Credit Cards (1) — — — — 14,982 4.67 Total portfolio $ 21,613,919 $ 21,238,931 $ 21,701,229 (1) Credit Card loans were transferred to loans held for sale at September 30, 2022 and were subsequently sold to a third party in May 2023. F- 32 SLM CORPORATION — 2023 Form 10-K 5. Loans Held for Investment (Continued) Certain Collection Tools — Private Education Loans We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans. These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers. Forbearance allows a borrower to not make scheduled payments for a specified period of time. Using forbearance extends the original term of the loan by the term of forbearance taken. Forbearance does not grant any reduction in the total principal or interest repayment obligation. While a loan is in forbearance status, interest continues to accrue and is capitalized (added to principal) at the end of the forbearance. Interest will not capitalize at the end of certain types of forbearance, such as disaster forbearance, however. We grant forbearance through our servicing centers to borrowers who are current in their payments and through our collections centers to certain borrowers who are delinquent. Our forbearance policies and practices vary depending upon whether a borrower is current or delinquent at the time forbearance is requested, generally with stricter payment requirements for delinquent borrowers. We view the population of borrowers that use forbearance positively because the borrowers are either proactively reaching out to us to obtain assistance in managing their obligations or are working with our collections center to bring their loans current. Forbearance may be granted through our servicing centers to customers who are exiting their grace period, and to other customers who are current in their payments, to provide temporary payment relief. In these circumstances, a customer’s loan is placed into a forbearance status in limited monthly increments and is reflected in the forbearance status at month-end during this time. At the end of the forbearance period, the customer will enter repayment status as current and is expected to begin making scheduled monthly payments. Forbearance may also be granted through our collections centers to customers who are delinquent in their payments. If specific payment requirements are met, the forbearance can cure the delinquency and the customer is returned to a current repayment status. Forbearance as a collection tool is used most effectively when applying historical experience and our judgment to a customer’s unique situation. We leverage updated customer information and other decision support tools to best determine who will be granted forbearance based on our expectations as to a customer’s ability and willingness to repay their obligation. This strategy is aimed at assisting customers while mitigating the risks of delinquency and default as well as encouraging resolution of delinquent loans. In most instances, we require one payment, as an indication of a customer’s willingness and ability to repay, before granting forbearance to delinquent borrowers. Historically, we have utilized disaster forbearance to assist borrowers affected by material events, typically federally-declared disasters, including hurricanes, wildfires, floods, and the COVID-19 pandemic. We typically grant disaster forbearance to affected borrowers in increments of up to three months at a time, but the disaster forbearance granted generally does not apply toward the 12-month forbearance limit described below. Management continually monitors our credit administration practices and may periodically modify these practices based upon performance, industry conventions, and/or regulatory feedback. In light of these considerations, we previously announced certain changes to our credit administration practices, including the imposition of limits on the number of forbearance months granted consecutively and the number of times certain extended or reduced repayment alternatives may be granted. Currently, we generally grant forbearance in increments of one to two months at a time, for up to 12 months over the life of the loan, although disaster forbearance and certain assistance we grant to borrowers who are still in school do not apply toward the 12-month limit. We also currently require 12 months of positive payment performance by a borrower (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan) between successive grants of forbearance and between forbearance grants and certain other repayment alternatives. This required period of positive payment performance does not apply, however, to forbearances granted during the first six months following a borrower’s grace period and is not required for a borrower to receive a contractual interest rate reduction. In addition, we currently limit the participation of delinquent borrowers in certain short-term extended or interest-only repayment alternatives to once in 12 months and twice in five years . We also now count the number of months a borrower receives a short-term extended repayment alternative toward the 12-month forbearance limit described above. We also offer rate and term modifications to customers experiencing more severe hardship. In the fourth quarter of 2023, we developed additional modification programs tailored to the financial condition of individual borrowers. Pursuant 2023 Form 10-K — SLM CORPORATION F-33 5. Loans Held for Investment (Continued) to these additional modification programs, for our borrowers experiencing the most severe financial conditions, we currently may reduce the contractual interest rate on a loan to as low as 2.0 percent for the remaining life of the loan and also permanently extend the final maturity of the loan. Other borrowers experiencing severe hardship may not require as much assistance, however, given their circumstances. In those instances, we may reduce the contractual interest rate on a loan to a rate greater than 2.0 percent, and up to 8.0 percent, for a temporary period of up to two to four years, and in some instances may also permanently extend the final maturity of the loan. When we give a borrower facing financial difficulty an interest rate reduction under our programs, we evaluate their ability to pay and provide customized repayment terms based upon their financial condition. As part of demonstrating the ability and willingness to pay, the customer must make three consecutive monthly payments at the reduced payment to qualify for the program. We believe by tailoring the modification programs to the borrower’s current financial condition and not having a one size fits all approach, we increase the likelihood the borrower will be able to make the modified payments and avoid default. This approach of giving different interest rate reductions to different borrowers experiencing more severe hardship also helps us better manage the overall assistance we provide to borrowers. We currently limit the granting of a permanent extension of the final maturity date of a loan under our loan modification programs to one time over the life of the loan. We also currently permit two consecutive rate reductions so long as the borrower qualifies and makes three consecutive monthly payments at the reduced payment in connection with each rate reduction. We also now limit the number of interest rate reductions to twice over the life of the loan. While there are limitations to our estimate of the future impact of the various credit administration practices changes we have implemented, we expect that the credit administration practices described above, including the changes we implemented in 2021, will accelerate periodic defaults and will increase periodic defaults in our Private Education Loan held for investment portfolio. For 2021, we increased our allowance for credit losses as a result of the new credit administration practices. In 2022, we further increased our allowance for credit losses to reflect higher expected future periodic defaults in both the near term (reasonable and supportable period) and long term. This change reflected our estimate that the elevated default rates experienced in the latter half of 2022 that continued into 2023 would eventually decline over time. Among the measures that we have implemented and may modify further and expect may partly offset or moderate any acceleration of or increase in defaults will be greater focus on the risk assessment process to ensure borrowers are mapped to the appropriate program, better utilization of existing loss mitigation programs (e.g., Graduated Repayment Period program (“GRP”) and rate modifications), the use of a program offering short-term payment reductions (permitting interest-only payments for up to six months) for certain early-stage delinquencies, and implementation of potential new risk mitigation and collection strategies. We expect to learn more about how our borrowers are reacting to these changes to our credit administration practices and, as we analyze such reactions, we will continue to refine our estimates of the impact of those changes on our allowance for credit losses. As discussed above, we will continue to monitor our credit administration practices and may modify them further from time to time based upon performance, industry conventions, and/or regulatory feedback. The period of delinquency for loans is based on the number of days scheduled payments are contractually past due. As of December 31, 2023 and 2022, we had $ 151 million and $ 135 million, respectively, of Private Education Loans held for investment and $ 45 million and $ 68 million, respectively, of FFELP Loans held for investment which were more than 90 days delinquent that continue to accrue interest. At December 31, 2023, we had an immaterial amount of loans in nonaccrual status. At December 31, 2022, we had no loans in nonaccrual status. Borrower-in-Custody Arrangements We maintain Borrower-in-Custody arrangements with the FRB. Under these arrangements, we can pledge FFELP Loans or Private Education Loans to the FRB to secure any advances and accrued interest generated under the Primary Credit program at the FRB. As of December 31, 2023 and 2022, we had $ 1.4 billion and $ 2.7 billion, respectively, of Private Education Loans pledged to this borrowing facility, as discussed further in Note 12, “Borrowings” in this Form 10-K. We did not have any FFELP Loans pledged at December 31, 2023 or 2022. Loans Held for Investment by Region At December 31, 2023 and 2022, 43.5 percent and 43.1 percent, respectively, of total education loans were concentrated in the following states: F- 34 SLM CORPORATION — 2023 Form 10-K 5. Loans Held for Investment (Continued) As of December 31, 2023 2022 California 10.1 % 9.8 % New York 9.0 9.1 Pennsylvania 7.2 7.4 Texas 6.3 6.0 New Jersey 5.6 5.8 Florida 5.3 5.0 43.5 % 43.1 % No other state had a concentration of total education loans in excess of 5 percent of the aggregate outstanding education loans held for investment. 6. Loans Held for Sale We had no loans held for sale at December 31, 2023 and $ 29 million in loans held for sale at December 31, 2022. The balance at December 31, 2022 was comprised of our Credit Card loan portfolio. At September 30, 2022, when the loans were transferred to held for sale, we reversed $ 2.4 million through the provisions for credit losses for the allowance related to these loans. At September 30, 2022, we wrote down this loan portfolio to its estimated fair value through a charge-off to the allowance for credit losses of $ 1.5 million. In May 2023, we sold our Credit Card loan portfolio to a third party. This transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date. We recorded a loss of $ 4 million related to the sale in the second quarter of 2023. 7. Allowance for Credit Losses Our provision for credit losses represents the periodic expense of maintaining an allowance sufficient to absorb lifetime expected credit losses in the held for investment loan portfolios. The evaluation of the allowance for credit losses is inherently subjective, as it requires material estimates that may be susceptible to significant changes. We believe the allowance for credit losses is appropriate to cover lifetime expected losses incurred in the loan portfolios. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses, — Allowance for Private Education Loan Losses, — Allowance for FFELP Loan Losses, — Allowance for Credit Card Loans,” for a more detailed discussion. 2023 Form 10-K — SLM CORPORATION F-35 7. Allowance for Credit Losses (Continued) Allowance for Credit Losses Metrics Year Ended December 31, 2023 (dollars in thousands) FFELP Loans Private Education Loans Total Allowance for Credit Losses Beginning balance $ 3,444 $ 1,353,631 $ 1,357,075 Transfer from unfunded commitment liability (1) — 320,237 320,237 Provisions: Provision for current period 2,224 240,347 242,571 Loan sale reduction to provision — ( 205,383 ) ( 205,383 ) Loans transferred to held-for-sale — — — Total provisions (2) 2,224 34,964 37,188 Net charge-offs: Charge-offs ( 1,001 ) ( 420,095 ) ( 421,096 ) Recoveries — 46,368 46,368 Net charge-offs ( 1,001 ) ( 373,727 ) ( 374,728 ) Ending Balance $ 4,667 $ 1,335,105 $ 1,339,772 Allowance (3) : Ending balance: collectively evaluated for impairment $ 4,667 $ 1,335,105 $ 1,339,772 Loans (3) : Ending balance: collectively evaluated for impairment $ 537,401 $ 21,025,844 $ 21,563,245 Accrued interest to be capitalized (3) : Ending balance: collectively evaluated for impairment $ — $ 1,203,357 $ 1,203,357 Net charge-offs as a percentage of average loans in repayment (4) 0.23 % 2.44 % Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized (5) 0.87 % 6.01 % Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment (4)(5) 1.15 % 8.43 % Allowance coverage of net charge-offs 4.66 3.57 Ending total loans, gross $ 537,401 $ 21,025,844 Average loans in repayment (4) $ 433,225 $ 15,310,934 Ending loans in repayment (4) $ 406,568 $ 15,409,814 Accrued interest to be capitalized on loans in repayment (6) $ — $ 435,807 (1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses. Consolidated Statements of Income Provisions for Credit Losses Reconciliation Year Ended December 31, 2023 (dollars in thousands) Private Education Loan provisions for credit losses: Provisions for loan losses $ 34,964 Provisions for unfunded loan commitments 308,275 Total Private Education Loan provisions for credit losses 343,239 Other impacts to the provisions for credit losses: FFELP Loans 2,224 Total 2,224 Provisions for credit losses reported in consolidated statements of income $ 345,463 (3) For the year ended December 31, 2023, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance). F- 36 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Year Ended December 31, 2022 (dollars in thousands) FFELP Loans Private Education Loans Credit Cards Total Allowance for Credit Losses Beginning balance $ 4,077 $ 1,158,977 $ 2,281 $ 1,165,335 Transfer from unfunded commitment liability (1) — 344,310 — 344,310 Provisions: Provision for current period ( 20 ) 410,254 3,301 413,535 Loan sale reduction to provision — ( 174,231 ) — ( 174,231 ) Loans transferred to held-for-sale — — ( 2,372 ) ( 2,372 ) Total provisions (2) ( 20 ) 236,023 929 236,932 Net charge-offs: Charge-offs ( 613 ) ( 427,416 ) ( 3,215 ) ( 431,244 ) Recoveries — 41,737 5 41,742 Net charge-offs ( 613 ) ( 385,679 ) ( 3,210 ) ( 389,502 ) Ending Balance $ 3,444 $ 1,353,631 $ — $ 1,357,075 Allowance (3) : Ending balance: collectively evaluated for impairment $ 3,444 $ 1,353,631 $ — $ 1,357,075 Loans (3) : Ending balance: collectively evaluated for impairment $ 609,050 $ 20,303,688 $ — $ 20,912,738 Accrued interest to be capitalized (3) : Ending balance: collectively evaluated for impairment $ — $ 936,837 $ — $ 936,837 Net charge-offs as a percentage of average loans in repayment (4) 0.12 % 2.55 % — % Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized (5) 0.57 % 6.37 % — % Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment (4)(5) 0.76 % 8.76 % — % Allowance coverage of net charge-offs 5.62 3.51 — Ending total loans, gross $ 609,050 $ 20,303,688 $ — Average loans in repayment (4) $ 517,139 $ 15,103,123 $ — Ending loans in repayment (4) $ 453,915 $ 15,129,550 $ — Accrued interest to be capitalized on loans in repayment (6) $ — $ 324,384 $ — (1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses. Consolidated Statements of Income Provisions for Credit Losses Reconciliation Year Ended December 31, 2022 (dollars in thousands) Private Education Loan provisions for credit losses: Provisions for loan losses $ 236,023 Provisions for unfunded loan commitments 396,521 Total Private Education Loan provisions for credit losses 632,544 Other impacts to the provisions for credit losses: FFELP Loans ( 20 ) Credit Cards 929 Total 909 Provisions for credit losses reported in consolidated statements of income $ 633,453 (3) For the year ended December 31, 2022, there were no allowance for credit losses, loans, or accrued interest to be capitalized balances that were individually evaluated for impairment. (4) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (5) Accrued interest to be capitalized on Private Education Loans only. (6) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance). 2023 Form 10-K — SLM CORPORATION F-37 7. Allowance for Credit Losses (Continued) Year Ended December 31, 2021 (dollars in thousands) FFELP Loans Private Education Loans Credit Cards Total Allowance for Credit Losses Beginning balance $ 4,378 $ 1,355,844 $ 1,501 $ 1,361,723 Transfer from unfunded commitment liability (1) — 301,655 — 301,655 Provisions: Provision for current period 20 ( 233,852 ) 1,124 ( 232,708 ) Loan sale reduction to provision — ( 66,460 ) — ( 66,460 ) Loans transferred to held-for-sale — 1,887 — 1,887 Total provisions (2) 20 ( 298,425 ) 1,124 ( 297,281 ) Net charge-offs: Charge-offs ( 321 ) ( 229,591 ) ( 356 ) ( 230,268 ) Recoveries — 29,494 12 29,506 Net charge-offs ( 321 ) ( 200,097 ) ( 344 ) ( 200,762 ) Ending Balance $ 4,077 $ 1,158,977 $ 2,281 $ 1,165,335 Allowance: Ending balance: individually evaluated for impairment $ — $ 47,712 $ — $ 47,712 Ending balance: collectively evaluated for impairment $ 4,077 $ 1,111,265 $ 2,281 $ 1,117,623 Loans: Ending balance: individually evaluated for impairment $ — $ 1,057,665 $ — $ 1,057,665 Ending balance: collectively evaluated for impairment $ 695,216 $ 19,659,198 $ 25,014 $ 20,379,428 Accrued interest to be capitalized: Ending balance: individually evaluated for impairment $ — $ — $ — $ — Ending balance: collectively evaluated for impairment $ — $ 947,391 $ — $ 947,391 Net charge-offs as a percentage of average loans in repayment (3) 0.06 % 1.33 % 2.24 % Allowance as a percentage of the ending total loan balance and accrued interest to be capitalized (4) 0.59 % 5.35 % 9.12 % Allowance as a percentage of the ending loans in repayment and accrued interest to be capitalized on loans in repayment (3)(4) 0.74 % 7.32 % 9.12 % Allowance coverage of net charge-offs 12.70 5.79 6.63 Ending total loans, gross $ 695,216 $ 20,716,863 $ 25,014 Average loans in repayment (3) $ 545,689 $ 15,019,869 $ 15,343 Ending loans in repayment (3) $ 553,980 $ 15,511,212 $ 25,014 Accrued interest to be capitalized on loans in repayment (5) $ — $ 312,537 $ — (1) See Note 8, “Unfunded Loan Commitments,” for a summary of the activity in the allowance for and balance of unfunded loan commitments, respectively. (2) Below is a reconciliation of the provisions for credit losses reported in the consolidated statements of income. When a new loan commitment is made, we record the CECL allowance as a liability for unfunded loan commitments by recording a provision for credit losses. When the loan is funded, we transfer that liability to the allowance for credit losses. Consolidated Statements of Income Provisions for Credit Losses Reconciliation Year Ended December 31, 2021 (dollars in thousands) Private Education Loan provisions for credit losses: Provisions for loan losses $ ( 298,425 ) Provisions for unfunded loan commitments 264,324 Total Private Education Loan provisions for credit losses ( 34,101 ) Other impacts to the provisions for credit losses: FFELP Loans 20 Credit Cards 1,124 Total 1,144 Provisions for credit losses reported in consolidated statements of income $ ( 32,957 ) (3) Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (4) Accrued interest to be capitalized on Private Education Loans only. (5) Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest payment status after any applicable grace period (but, for purposes of the table, does not include interest on those loans while they are in forbearance). F- 38 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Private Education Loans Allowance for Credit Losses - Forecast Assumptions In the fourth quarter of 2022, we changed our loss model to include forecasts of college graduate unemployment, retail sales, and median family income in determining the adequacy of the allowance for credit losses. Prior to this change, we used forecasts of college graduate unemployment and the Consumer Price Index in our loss forecasting models. We obtain forecasts for these inputs from Moody’s Analytics. Moody’s Analytics provides a range of forecasts for each of these inputs with various likelihoods of occurring. We determine which forecasts we will include in our estimation of allowance for credit losses and the associated weightings for each of these inputs. At January 1, 2020 (the initial adoption date of CECL), December 31, 2023, December 31, 2022, and December 31, 2021, we used the Base (50th percentile likelihood of occurring)/S1 (stronger near-term growth scenario with 10 percent likelihood of occurring)/S3 (downside scenario with 10 percent likelihood of occurring) scenarios and weighted them 40 percent, 30 percent, and 30 percent, respectively. Management reviews both the scenarios and their respective weightings each quarter in determining the allowance for credit losses. Provision for credit losses for the year ended December 31, 2023 was $ 345 million, compared with $ 633 million in the year-ago period. During 2023, the provision for credit losses was primarily affected by new loan commitments, net of expired commitments, slower prepayment rates, management overlays, and changes in economic outlook, which were partially offset by $ 205 million in negative provisions recorded as a result of the approximately $ 3.15 billion in Private Education Loans sales during 2023 and an increase in recovery rates (as a result of the change in our defaulted loan recovery process). In the year-ago period, the provision for credit losses was primarily affected by new loan commitments made during the period, slower than expected prepayment rates, and additional management overlays, which were partially offset by negative provisions recorded related to $ 3.34 billion in Private Education Loans sold in 2022 and the adoption of a new loss model that included a reduction in the long-term estimate of losses after the reasonable and supportable period. Management overlays increased in 2022 due to several factors, including additional provisions for our expectation of higher future losses related to the previously announced credit administration practices changes we implemented in 2021, “gap year” loans, a shortage and lack of tenured collections staff, and other operational challenges we experienced in 2022. “Gap year” loans refer to loans to borrowers who took a “gap year” during the COVID-19 pandemic and entered full principal and interest repayment status starting in late 2021 and early 2022. Losses on these “gap year” loans were higher than expected and contributed to the higher provision expense recorded in 2022 to cover the higher-than-expected losses. As part of concluding on the adequacy of the allowance for credit losses, we review key allowance and loan metrics. The most significant of these metrics considered are the allowance coverage of net charge-offs ratio; the allowance as a percentage of ending total loans and accrued interest to be capitalized and of ending loans in repayment and accrued interest to be capitalized on loans in repayment; and delinquency and forbearance percentages. Loan Modifications to Borrowers Experiencing Financial Difficulty The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon asset origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical information, which includes losses from modifications of receivables whose borrowers are experiencing financial difficulty. We use a discounted cash flow model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications of loans made to borrowers who are experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance. The forecast of expected future cash flows is updated as the loan modifications occur. We adjust the terms of loans for certain borrowers when we believe such changes will help our customers manage their student loan obligations and achieve better student outcomes, and increase the collectability of the loans. These changes generally take the form of a temporary forbearance of payments, a temporary or permanent interest rate reduction, a temporary or permanent interest rate reduction with a permanent extension of the loan term, and/or a short-term extended repayment alternative. Forbearance is granted prospectively for borrowers who are current in their payments and may be granted retroactively for certain delinquent borrowers. When we give a borrower facing financial difficulty an interest rate reduction under our programs, we evaluate their ability to pay and provide customized repayment terms based upon their financial condition. As part of demonstrating the ability and willingness to pay, the customer must make three consecutive monthly payments at the reduced payment to qualify for the program. We believe by tailoring the modification programs to the borrower’s current financial condition and not having a one size fits all approach, we increase the likelihood the borrower will be able to make the modified payments and avoid default. This approach of giving different interest rate reductions to different borrowers experiencing more severe hardship also helps us better manage the overall assistance we provide to borrowers. We currently limit the 2023 Form 10-K — SLM CORPORATION F-39 7. Allowance for Credit Losses (Continued) granting of a permanent extension of the final maturity date of a loan under our loan modification programs to one time over the life of the loan. We also currently permit two consecutive rate reductions so long as the borrower qualifies and makes three consecutive monthly payments at the reduced payment in connection with each rate reduction. We also now limit the number of interest rate reductions to twice over the life of the loan. Within the Private Education Loan portfolio, we deem loans greater than 90 days past due as nonperforming. FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest by the federal government in the event of default and, therefore, we do not deem FFELP Loans as nonperforming from a credit risk perspective at any point in their life cycle prior to claim payment and continue to accrue interest on those loans through the date of claim. For additional information, see Note 2, “Significant Accounting Policies —Allowance for Credit Losses” in this Form 10-K. Under our current forbearance practices, temporary forbearance of payments is generally granted in one -to- two month increments, for up to 12 months over the life of the loan, with 12 months of positive payment performance by a borrower required between grants (meaning the borrower must make payment in a cumulative amount equivalent to 12 monthly required payments under the loan). See Note 5, “Loans Held for Investment — Certain Collection Tools - Private Education Loans.” In the first quarter of 2022, we adopted ASU No. 2022-02 (see Note 2, “Significant Accounting Policies”). Under this new amendment, if the debt has been previously restructured, an entity must consider the cumulative effect of past restructurings made within the 12-month period before the current restructuring when determining whether a delay in payment resulting from the current restructuring is insignificant. Due to our current forbearance practices, including the limitations on forbearances offered to borrowers, we do not believe the granting of forbearances will exceed the significance threshold and, therefore, we do not consider the forbearances as loan modifications. The limitations on granting of forbearances described above apply to hardship forbearances. We offer other administrative forbearances (e.g., death and disability, bankruptcy, military service, disaster forbearance, and in school assistance) that are either required by law (such as by the Servicemembers Civil Relief Act) or are considered separate from our active loss mitigation programs and therefore are not considered to be loan modifications requiring disclosure under ASU No. 2022-02. In addition, we may offer on a limited basis term extensions or rate reductions or a combination of both to borrowers to reduce consolidation activities. For purposes of this disclosure, we do not consider them modifications of loans to borrowers experiencing financial difficulty and they therefore are not included in the tables below. The following tables show the amortized cost basis at the end of the respective reporting period of the loans to borrowers experiencing financial difficulty that were modified during the period, disaggregated by class of financing receivable and type of modification. When we approve a Private Education Loan at the beginning of an academic year, we do not always disburse the full amount of the loan at the time of approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We consider borrowers to be in financial difficulty after they have exited school and have difficulty making their scheduled principal and interest payments. Loan Modifications Made to Borrowers Experiencing Financial Difficulty Year Ended December 31, 2023 (dollars in thousands) Interest Rate Reduction Combination - Interest Rate Reduction and Term Extension Loan Type: Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable Private Education Loans $ 48,637 0.22 % $ 331,889 1.48 % Total $ 48,637 0.22 % $ 331,889 1.48 % F- 40 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Loan Modifications Made to Borrowers Experiencing Financial Difficulty Year Ended December 31, 2022 (dollars in thousands) Interest Rate Reduction Combination - Interest Rate Reduction and Term Extension Loan Type: Amortized Cost Basis % of Total Class of Financing Receivable Amortized Cost Basis % of Total Class of Financing Receivable Private Education Loans $ 30,569 0.14 % $ 295,547 1.37 % Total $ 30,569 0.14 % $ 295,547 1.37 % The following tables describe the financial effect of the modifications made to loans whose borrowers are experiencing financial difficulty: Year Ended December 31, 2023 Interest Rate Reduction Combination - Interest Rate Reduction and Term Extension Loan Type Financial Effect Loan Type Financial Effect Private Education Loans Reduced average contractual rate from 13.37 % to 4.00 % Private Education Loans Added a weighted average 10.20 years to the life of loans Reduced average contractual rate from 12.92 % to 4.00 % Year Ended December 31, 2022 Interest Rate Reduction Combination - Interest Rate Reduction and Term Extension Loan Type Financial Effect Loan Type Financial Effect Private Education Loans Reduced average contractual rate from 11.12 % to 4.00 % Private Education Loans Added a weighted average 10.40 years to the life of loans Reduced average contractual rate from 10.57 % to 4.00 % Private Education Loans are charged off at the end of the month in which they reach 120 days delinquent or otherwise when the loans are classified as a loss by us or our regulator. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses — Allowance for Private Education Loan Losses, and — Allowance for FFELP Loan Losses” in this Form 10-K for a more detailed discussion. 2023 Form 10-K — SLM CORPORATION F-41 7. Allowance for Credit Losses (Continued) For the current period presented, the following table provides loan modifications for which a payment default occurred in the relevant period presented and within 12 months of the loan receiving a loan modification. Additionally, for the current period presented, the table summarizes charge-offs occurring in the relevant period presented and within 12 months of the loan receiving a loan modification. We define payment default as 60 days past due for purposes of this disclosure. Year Ended December 31, 2023 Year Ended December 31, 2022 (Dollars in thousands) Modified Loans (1)(2) Payment Default (3) Charge-Offs (4) Modified Loans (1)(2) Payment Default (3) Charge-Offs (4) Loan Type: Private Education Loans $ 28,972 $ 30,862 $ 8,070 $ 22,925 $ 22,621 $ 6,331 Total $ 28,972 $ 30,862 $ 8,070 $ 22,925 $ 22,621 $ 6,331 (1) Represents period-end amortized cost basis of loans that have been modified and for which a payment default occurred in the relevant period presented and within 12 months of receiving a modification (or within the reporting period, for the loans shown in in the year-ago period, as the case may be). (2) For the year ended December 31, 2023, the modified loans include $ 24.8 million of interest rate reduction and term extension loan modifications and $ 4.2 million of interest rate reduction only loan modifications. For the year ended December 31, 2022, the modified loans include $ 20.6 million of interest rate reduction and term extension loan modifications and $ 2.3 million of interest rate reduction only loan modifications. (3) Represents the unpaid principal balance at the time of payment default. (4) Represents the unpaid principal balance at the time of charge off. We closely monitor performance of the loans to borrowers experiencing financial difficulty that are modified to understand the effectiveness of the modification efforts. The following table depicts the performance of loans that have been modified during the respective reporting periods (the full years 2023 and 2022, respectively). Payment Status (Amortized Cost Basis) At December 31, 2023 (dollars in thousands) Deferment (1) Current (2)(3) 30-59 Days Past Due (2)(3) 60-89 Days Past Due (2)(3) 90 Days or Greater Past Due (2)(3) Total Loan Type: Private Education Loans $ 6,843 $ 334,967 $ 17,205 $ 7,689 $ 13,822 $ 380,526 Total $ 6,843 $ 334,967 $ 17,205 $ 7,689 $ 13,822 $ 380,526 Payment Status (Amortized Cost Basis) At December 31, 2022 (dollars in thousands) Deferment (1) Current (2)(3) 30-59 Days Past Due (2)(3) 60-89 Days Past Due (2)(3) 90 Days or Greater Past Due (2)(3) Total Loan Type: Private Education Loans $ 7,698 $ 289,134 $ 13,859 $ 8,809 $ 6,616 $ 326,116 Total $ 7,698 $ 289,134 $ 13,859 $ 8,809 $ 6,616 $ 326,116 (1) Deferment includes customers who have returned to school or are engaged in other permitted educational activities and are not yet required to make full principal and interest payments on the loans (e.g., residency periods for medical students or a grace period for bar exam preparation). Deferment also includes loans that have entered a forbearance after the loan modification was granted. (2) For purposes of this table, loans in repayment only include loans on which borrowers are making full principal and interest payments after any applicable grace period (but, for purposes of the table, do not include those loans while they are in forbearance). (3) The period of delinquency is based on the number of days scheduled payments are contractually past due. F- 42 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Private Education Loans Held for Investment - Key Credit Quality Indicators FFELP Loans are at least 97 percent guaranteed as to their principal and accrued interest in the event of default; therefore, there are no key credit quality indicators associated with FFELP Loans. For Private Education Loans, the key credit quality indicators are FICO scores, the existence of a cosigner, the loan status, and loan seasoning. The FICO scores are assessed at original approval and periodically refreshed/updated through the loan’s term. The following tables highlight the gross principal balance of our Private Education Loan portfolio (held for investment), by year of origination approval, stratified by key credit quality indicators. As of December 31, 2023 (dollars in thousands) Private Education Loans Held for Investment - Credit Quality Indicators Year of Origination 2023 (1) 2022 (1) 2021 (1) 2020 (1) 2019 (1) 2018 and Prior (1) Total (1) % of Balance Cosigners: With cosigner $ 3,903,676 $ 4,428,163 $ 2,516,380 $ 1,535,308 $ 1,378,699 $ 4,529,768 $ 18,291,994 87 % Without cosigner 586,443 660,576 421,042 283,781 253,601 528,407 2,733,850 13 Total $ 4,490,119 $ 5,088,739 $ 2,937,422 $ 1,819,089 $ 1,632,300 $ 5,058,175 $ 21,025,844 100 % FICO at Origination Approval (2) : Less than 670 $ 328,199 $ 395,526 $ 208,696 $ 118,935 $ 137,494 $ 451,613 $ 1,640,463 8 % 670-699 635,642 704,642 400,744 254,762 257,840 868,777 3,122,407 15 700-749 1,383,779 1,586,783 934,033 590,401 545,333 1,709,299 6,749,628 32 Greater than or equal to 750 2,142,499 2,401,788 1,393,949 854,991 691,633 2,028,486 9,513,346 45 Total $ 4,490,119 $ 5,088,739 $ 2,937,422 $ 1,819,089 $ 1,632,300 $ 5,058,175 $ 21,025,844 100 % FICO Refreshed (2)(3) : Less than 670 $ 495,451 $ 638,381 $ 379,738 $ 217,956 $ 214,665 $ 791,875 $ 2,738,066 13 % 670-699 616,684 672,777 365,674 193,462 176,963 564,245 2,589,805 12 700-749 1,347,094 1,477,310 836,747 498,414 445,244 1,361,073 5,965,882 28 Greater than or equal to 750 2,030,890 2,300,271 1,355,263 909,257 795,428 2,340,982 9,732,091 47 Total $ 4,490,119 $ 5,088,739 $ 2,937,422 $ 1,819,089 $ 1,632,300 $ 5,058,175 $ 21,025,844 100 % Seasoning (4) : 1-12 payments $ 2,514,079 $ 740,450 $ 440,293 $ 245,631 $ 208,941 $ 332,608 $ 4,482,002 21 % 13-24 payments — 2,675,956 303,045 167,532 165,577 384,760 3,696,870 18 25-36 payments — — 1,524,834 195,091 129,571 456,448 2,305,944 11 37-48 payments — — — 902,938 208,521 446,350 1,557,809 7 More than 48 payments — — — 116 706,097 2,985,015 3,691,228 18 Not yet in repayment 1,976,040 1,672,333 669,250 307,781 213,593 452,994 5,291,991 25 Total $ 4,490,119 $ 5,088,739 $ 2,937,422 $ 1,819,089 $ 1,632,300 $ 5,058,175 $ 21,025,844 100 % 2023 Current period (5) gross charge-offs $ ( 1,812 ) $ ( 31,032 ) $ ( 70,331 ) $ ( 49,624 ) $ ( 50,585 ) $ ( 216,711 ) $ ( 420,095 ) 2023 Current period (5) recoveries 172 2,342 6,496 4,923 5,260 27,175 46,368 2023 Current period (5) net charge-offs $ ( 1,640 ) $ ( 28,690 ) $ ( 63,835 ) $ ( 44,701 ) $ ( 45,325 ) $ ( 189,536 ) $ ( 373,727 ) Total accrued interest by origination vintage $ 177,959 $ 408,800 $ 269,978 $ 152,094 $ 116,618 $ 229,116 $ 1,354,565 (1) Balance represents gross Private Education Loans held for investment. (2) Represents the higher credit score of the cosigner or the borrower. (3) Represents the FICO score updated as of the fourth-quarter 2023. (4) 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. (5) Current period refers to period from January 1, 2023 through December 31, 2023. 2023 Form 10-K — SLM CORPORATION F-43 7. Allowance for Credit Losses (Continued) As of December 31, 2022 (dollars in thousands) Private Education Loans Held for Investment - Credit Quality Indicators Year of Origination 2022 (1) 2021 (1) 2020 (1) 2019 (1) 2018 (1) 2017 and Prior (1) Total (1) % of Balance Cosigners: With cosigner $ 3,656,111 $ 3,941,921 $ 2,208,033 $ 1,853,619 $ 1,402,828 $ 4,626,491 $ 17,689,003 87 % Without cosigner 620,422 605,238 376,589 319,041 213,014 480,381 2,614,685 13 Total $ 4,276,533 $ 4,547,159 $ 2,584,622 $ 2,172,660 $ 1,615,842 $ 5,106,872 $ 20,303,688 100 % FICO at Origination Approval (2) : Less than 670 $ 326,991 $ 307,646 $ 158,606 $ 177,098 $ 143,674 $ 439,587 $ 1,553,602 8 % 670-699 593,216 611,649 356,541 339,685 259,142 878,426 3,038,659 15 700-749 1,336,765 1,440,510 834,819 719,777 537,680 1,722,068 6,591,619 32 Greater than or equal to 750 2,019,561 2,187,354 1,234,656 936,100 675,346 2,066,791 9,119,808 45 Total $ 4,276,533 $ 4,547,159 $ 2,584,622 $ 2,172,660 $ 1,615,842 $ 5,106,872 $ 20,303,688 100 % FICO Refreshed (2)(3) : Less than 670 $ 443,868 $ 461,589 $ 242,310 $ 237,105 $ 204,894 $ 773,324 $ 2,363,090 12 % 670-699 594,118 579,784 284,244 240,999 173,754 564,344 2,437,243 12 700-749 1,322,558 1,378,910 748,368 628,060 449,701 1,388,090 5,915,687 29 Greater than or equal to 750 1,915,989 2,126,876 1,309,700 1,066,496 787,493 2,381,114 9,587,668 47 Total $ 4,276,533 $ 4,547,159 $ 2,584,622 $ 2,172,660 $ 1,615,842 $ 5,106,872 $ 20,303,688 100 % Seasoning (4) : 1-12 payments $ 2,448,884 $ 636,073 $ 384,334 $ 330,316 $ 235,878 $ 424,636 $ 4,460,121 22 % 13-24 payments — 2,477,764 255,510 195,753 166,045 455,782 3,550,854 18 25-36 payments — — 1,366,398 257,534 126,223 489,157 2,239,312 11 37-48 payments — — 127 1,008,418 224,805 451,102 1,684,452 8 More than 48 payments — — — — 643,611 2,830,285 3,473,896 17 Not yet in repayment 1,827,649 1,433,322 578,253 380,639 219,280 455,910 4,895,053 24 Total $ 4,276,533 $ 4,547,159 $ 2,584,622 $ 2,172,660 $ 1,615,842 $ 5,106,872 $ 20,303,688 100 % 2022 Current period (5) gross charge-offs $ ( 2,224 ) $ ( 25,698 ) $ ( 48,271 ) $ ( 62,071 ) $ ( 57,505 ) $ ( 231,647 ) $ ( 427,416 ) 2022 Current period (5) recoveries 124 1,841 4,170 5,556 5,407 24,639 41,737 2022 Current period (5) net charge-offs $ ( 2,100 ) $ ( 23,857 ) $ ( 44,101 ) $ ( 56,515 ) $ ( 52,098 ) $ ( 207,008 ) $ ( 385,679 ) Total accrued interest by origination vintage $ 142,915 $ 315,308 $ 207,858 $ 184,832 $ 116,211 $ 210,438 $ 1,177,562 (1) Balance represents gross Private Education Loans held for investment. (2) Represents the higher credit score of the cosigner or the borrower. (3) Represents the FICO score updated as of the fourth-quarter 2022. (4) 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. (5) Current period refers to period from January 1, 2022 through December 31, 2022. F- 44 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Delinquencies - Private Education Loans Held for Investment The following tables provide information regarding the loan status of our Private Education Loans held for investment, by year of origination approval. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following tables, do not include those loans while they are in forbearance). Private Education Loans Held for Investment - Delinquencies by Origination Vintage As of December 31, 2023 (dollars in thousands) 2023 2022 2021 2020 2019 2018 and Prior Total Loans in-school/grace/deferment (1) $ 1,976,040 $ 1,672,333 $ 669,250 $ 307,781 $ 213,593 $ 452,994 $ 5,291,991 Loans in forbearance (2) 19,265 93,079 58,438 35,450 31,818 85,989 324,039 Loans in repayment: Loans current 2,469,817 3,254,534 2,131,040 1,416,069 1,323,825 4,213,986 14,809,271 Loans delinquent 30-59 days (3) 17,599 34,627 37,147 28,020 31,432 149,926 298,751 Loans delinquent 60-89 days (3) 5,720 17,227 20,077 16,614 15,482 75,897 151,017 Loans 90 days or greater past due (3) 1,678 16,939 21,470 15,155 16,150 79,383 150,775 Total Private Education Loans in repayment 2,494,814 3,323,327 2,209,734 1,475,858 1,386,889 4,519,192 15,409,814 Total Private Education Loans, gross 4,490,119 5,088,739 2,937,422 1,819,089 1,632,300 5,058,175 21,025,844 Private Education Loans deferred origination costs and unamortized premium/(discount) 35,616 18,556 9,465 5,809 3,556 8,552 81,554 Total Private Education Loans 4,525,735 5,107,295 2,946,887 1,824,898 1,635,856 5,066,727 21,107,398 Private Education Loans allowance for losses ( 269,642 ) ( 335,090 ) ( 194,104 ) ( 118,755 ) ( 100,111 ) ( 317,403 ) ( 1,335,105 ) Private Education Loans, net $ 4,256,093 $ 4,772,205 $ 2,752,783 $ 1,706,143 $ 1,535,745 $ 4,749,324 $ 19,772,293 Percentage of Private Education Loans in repayment 55.6 % 65.3 % 75.2 % 81.1 % 85.0 % 89.3 % 73.3 % Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 1.0 % 2.1 % 3.6 % 4.1 % 4.5 % 6.8 % 3.9 % Loans in forbearance as a percentage of loans in repayment and forbearance 0.8 % 2.7 % 2.6 % 2.3 % 2.2 % 1.9 % 2.1 % (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. 2023 Form 10-K — SLM CORPORATION F-45 7. Allowance for Credit Losses (Continued) Private Education Loans Held for Investment - Delinquencies by Origination Vintage As of December 31, 2022 (dollars in thousands) 2022 2021 2020 2019 2018 2017 and Prior Total Loans in-school/grace/deferment (1) $ 1,827,649 $ 1,433,322 $ 578,253 $ 380,639 $ 219,280 $ 455,910 $ 4,895,053 Loans in forbearance (2) 16,046 64,360 38,613 37,802 30,583 91,681 279,085 Loans in repayment: Loans current 2,411,441 2,991,839 1,907,574 1,683,986 1,301,809 4,262,698 14,559,347 Loans delinquent 30-59 days (3) 14,164 30,740 30,877 35,213 31,366 144,948 287,308 Loans delinquent 60-89 days (3) 5,523 15,056 14,433 18,201 16,697 77,595 147,505 Loans 90 days or greater past due (3) 1,710 11,842 14,872 16,819 16,107 74,040 135,390 Total Private Education Loans in repayment 2,432,838 3,049,477 1,967,756 1,754,219 1,365,979 4,559,281 15,129,550 Total Private Education Loans, gross 4,276,533 4,547,159 2,584,622 2,172,660 1,615,842 5,106,872 20,303,688 Private Education Loans deferred origination costs and unamortized premium/(discount) 26,714 15,933 9,062 5,496 3,575 8,876 69,656 Total Private Education Loans 4,303,247 4,563,092 2,593,684 2,178,156 1,619,417 5,115,748 20,373,344 Private Education Loans allowance for losses ( 304,943 ) ( 323,506 ) ( 181,915 ) ( 141,424 ) ( 101,023 ) ( 300,820 ) ( 1,353,631 ) Private Education Loans, net $ 3,998,304 $ 4,239,586 $ 2,411,769 $ 2,036,732 $ 1,518,394 $ 4,814,928 $ 19,019,713 Percentage of Private Education Loans in repayment 56.9 % 67.1 % 76.1 % 80.7 % 84.5 % 89.3 % 74.5 % Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 0.9 % 1.9 % 3.1 % 4.0 % 4.7 % 6.5 % 3.8 % Loans in forbearance as a percentage of loans in repayment and forbearance 0.7 % 2.1 % 1.9 % 2.1 % 2.2 % 2.0 % 1.8 % (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. F- 46 SLM CORPORATION — 2023 Form 10-K 7. Allowance for Credit Losses (Continued) Private Education Loans Held for Investment - Delinquencies by Origination Vintage As of December 31, 2021 (dollars in thousands) 2021 2020 2019 2018 2017 2016 and Prior Total Loans in-school/grace/deferment (1) $ 1,556,550 $ 1,283,523 $ 773,320 $ 435,657 $ 296,008 $ 559,356 $ 4,904,414 Loans in forbearance (2) 11,951 55,844 52,364 43,613 41,355 96,110 301,237 Loans in repayment (1) : Loans current 2,234,876 2,786,646 2,321,728 1,772,651 1,570,815 4,319,057 15,005,773 Loans delinquent 30-59 days (3) 15,148 29,146 46,616 43,197 41,695 132,757 308,559 Loans delinquent 60-89 days (3) 3,194 7,441 14,044 14,310 16,425 61,533 116,947 Loans 90 days or greater past due (3) 642 3,683 8,453 10,632 11,935 44,588 79,933 Total Private Education Loans in repayment 2,253,860 2,826,916 2,390,841 1,840,790 1,640,870 4,557,935 15,511,212 Total Private Education Loans, gross 3,822,361 4,166,283 3,216,525 2,320,060 1,978,233 5,213,401 20,716,863 Private Education Loans deferred origination costs and unamortized premium/(discount) 22,169 16,067 9,575 5,918 4,588 9,171 67,488 Total Private Education Loans 3,844,530 4,182,350 3,226,100 2,325,978 1,982,821 5,222,572 20,784,351 Private Education Loans allowance for losses ( 248,102 ) ( 239,507 ) ( 195,223 ) ( 129,678 ) ( 99,982 ) ( 246,485 ) ( 1,158,977 ) Private Education Loans, net $ 3,596,428 $ 3,942,843 $ 3,030,877 $ 2,196,300 $ 1,882,839 $ 4,976,087 $ 19,625,374 Percentage of Private Education Loans in repayment 59.0 % 67.9 % 74.3 % 79.3 % 82.9 % 87.4 % 74.9 % Delinquent Private Education Loans in repayment as a percentage of Private Education Loans in repayment 0.8 % 1.4 % 2.9 % 3.7 % 4.3 % 5.2 % 3.3 % Loans in forbearance as a percentage of loans in repayment and forbearance 0.5 % 1.9 % 2.1 % 2.3 % 2.5 % 2.1 % 1.9 % (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. 2023 Form 10-K — SLM CORPORATION F-47 7. Allowance for Credit Losses (Continued) Accrued Interest Receivable The following table provides information regarding accrued interest receivable on our Private Education Loans. The table also discloses the amount of accrued interest on loans 90 days or greater past due as compared to our allowance for uncollectible interest on loans making full interest payments. The majority of the total accrued interest receivable represents accrued interest on deferred loans where no payments are due while the borrower is in school and fixed-pay loans where the borrower makes a $ 25 monthly payment that is smaller than the interest accruing on the loan in that month. The accrued interest on these loans will be capitalized to the balance of the loans when the borrower exits the grace period after separation from school, and the current expected credit losses on accrued interest that will be capitalized is included in our allowance for credit losses. Private Education Loans Accrued Interest Receivable (Dollars in thousands) Total Interest Receivable 90 Days or Greater Past Due Allowance for Uncollectible Interest (1) December 31, 2023 $ 1,354,565 $ 8,373 $ 9,897 December 31, 2022 $ 1,177,562 $ 6,609 $ 8,121 (1) The allowance for uncollectible interest at December 31, 2023 and 2022 represents the expected losses related to the portion of accrued interest receivable on those loans that are in repayment (at December 31, 2023 and 2022, relates to $ 151 million and $ 240 million, respectively, of accrued interest receivable) that is/was not expected to be capitalized. The accrued interest receivable that is/was expected to be capitalized ($ 1.2 billion and $ 937 million at December 31, 2023 and 2022, respectively) is reserved in the allowance for credit losses. F- 48 SLM CORPORATION — 2023 Form 10-K 8. Unfunded Loan Commitments When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period in which we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. See Note 2, “Significant Accounting Policies — Allowance for Credit Losses, — Off-Balance Sheet Exposure for Contractual Loan Commitments” in this Form 10-K for additional information. At December 31, 2023, we had $ 2.2 billion of outstanding contractual loan commitments that we expect to fund during the remainder of the 2023/2024 academic year. The tables below summarize the activity in the allowance recorded to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheets, as well as the activity in the unfunded commitments balance. Years ended December 31, (dollars in thousands) 2023 2022 2021 Allowance Unfunded Commitments Allowance Unfunded Commitments Allowance Unfunded Commitments Beginning Balance $ 124,924 $ 1,995,808 $ 72,713 $ 1,776,976 $ 110,044 $ 1,673,018 Provision/New commitments - net (1) 308,275 6,602,803 396,521 6,180,805 264,324 5,512,841 Transfer - funded loans (2) ( 320,237 ) ( 6,377,534 ) ( 344,310 ) ( 5,961,973 ) ( 301,655 ) ( 5,408,883 ) Ending Balance $ 112,962 $ 2,221,077 $ 124,924 $ 1,995,808 $ 72,713 $ 1,776,976 (1) Net of expirations of commitments unused. Also includes incremental provision for new commitments and changes to provision for existing commitments. (2) When a loan commitment is funded, its related liability for credit losses (which originally was recorded as a provision for unfunded commitments) is transferred to the allowance for credit losses. The unfunded commitments disclosed above represent the total amount of outstanding unfunded commitments at each period end. However, historically not all of these commitments are funded prior to the expiration of the commitments. We estimate the amount of commitments expected to be funded in calculating the reserve for unfunded commitments. The amount we expect to fund and use in our calculation of the reserve for unfunded commitments will change period to period based upon the loan characteristics of the underlying commitments. 2023 Form 10-K — SLM CORPORATION F-49 9. Premises and Equipment, net The following is a summary of our premises and equipment. As of December 31, (dollars in thousands) 2023 2022 Land and land improvements $ 12,356 $ 12,356 Buildings and leasehold improvements 122,301 122,243 Furniture, fixtures, and equipment 34,068 32,170 Software 106,422 97,140 Premises and equipment, gross 275,147 263,909 Accumulated depreciation ( 145,646 ) ( 123,181 ) Premises and equipment, net $ 129,501 $ 140,728 Depreciation expense for premises and equipment was $ 18 million, $ 17 million, and $ 16 million for the years ended December 31, 2023, 2022, and 2021, respectively. 10. Goodwill and Acquired Intangible Assets Goodwill We recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of the Nitro acquisition in the first quarter of 2022 and the Scholly acquisition in the third quarter of 2023. At December 31, 2023, we had $ 56 million in total goodwill. See Notes to Consolidated Financial Statements, Note 2, “Significant Accounting Policies — Business Combination,” in this Form 10-K for additional details on our acquisitions of Nitro and Scholly. Goodwill is not amortized but is tested periodically for impairment. We test goodwill for impairment annually in the fourth quarter of the year, or more frequently if we believe that indicators of impairment exist. As a part of the 2023 annual impairment testing, we conducted a quantitative impairment test of goodwill associated with our education business services reporting unit. We utilized the income approach to estimate the fair value of the reporting unit. The income approach measures the value of the reporting unit’s future economic benefit determined by its discounted cash flows derived from our reporting unit’s internal forecast. Based on the quantitative analysis, we determined that the fair value of the reporting unit exceeded its carrying value. Thus, no impairment charges were recorded during the year ended December 31, 2023. Acquired Intangible Assets Our intangible assets include acquired trade name and trademarks, customer relationships, developed technology, and partner relationships. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In the fourth quarter of 2023, we determined that it was more likely than not that the Nitro trade name and trademark assets would not be used as originally intended due to changes in business strategy and, therefore, no longer held value. As a result, the Company performed an impairment review and wrote down the Nitro trade name and trademark to zero, which resulted in the recognition of a non-cash pre-tax impairment loss of $ 56 million. That impairment loss was recorded to acquired intangible assets impairment and amortization expense. F- 50 SLM CORPORATION — 2023 Form 10-K 10 . Goodwill and Acquired Intangibles Assets (Continued) Acquired intangible assets include the following: December 31, 2023 December 31, 2022 (Dollars in thousands) Useful Life (in years) (1) Cost Basis Accumulated Amortization Net Cost Basis Accumulated Amortization Net Trade name and trademarks (2)(3) 4.0 $ 6,040 $ ( 629 ) $ 5,411 $ 68,470 $ ( 5,706 ) $ 62,764 Customer relationships (2) 4.6 8,920 ( 4,013 ) 4,907 5,670 ( 1,723 ) 3,947 Developed technology (2) 3.5 2,590 ( 908 ) 1,682 1,260 ( 350 ) 910 Partner relationships 2.5 730 ( 122 ) 608 — — — Total acquired intangible assets $ 18,280 $ ( 5,672 ) $ 12,608 $ 75,400 $ ( 7,779 ) $ 67,621 (1) The weighted average useful life of acquired intangible assets related to the Nitro acquisition is 4.3 years and the weighted average useful life of the acquired intangible assets related to the Scholly acquisition is 3.9 years. (2) Trade name and trademarks, customer relationships, and developed technology at December 31, 2023 include $ 6 million, $ 3 million, and $ 1 million, respectively, related to the Scholly acquisition. (3) In 2023, we fully impaired the Nitro trade name and trademarks asset for $ 56 million. We recorded amortization of acquired intangible assets totaling approximately $ 10 million and $ 8 million in the years ended December 31, 2023 and 2022, respectively. We will continue to amortize our intangible assets with definite useful lives over their remaining estimated useful lives. We estimate amortization expense associated with these intangible assets will be approximately $ 5 million, $ 4 million, $ 3 million, and $ 1 million in 2024, 2025, 2026, and 2027. 2023 Form 10-K — SLM CORPORATION F-51 11. Deposits The following table summarizes total deposits at December 31, 2023 and 2022. As of December 31, (dollars in thousands) 2023 2022 Deposits - interest bearing $ 21,651,657 $ 21,446,647 Deposits - non-interest bearing 1,531 1,424 Total deposits $ 21,653,188 $ 21,448,071 Our total deposits of $ 21.7 billion were comprised of $ 10.3 billion in brokered deposits and $ 11.4 billion in retail and other deposits at December 31, 2023, compared with total deposits of $ 21.4 billion, which were comprised of $ 9.9 billion in brokered deposits and $ 11.5 billion in retail and other deposits, at December 31, 2022. Interest bearing deposits as of December 31, 2023 and 2022 consisted of retail and brokered non-maturity savings deposits, retail and brokered non-maturity MMDAs, and retail and brokered CDs. Interest bearing deposits also include deposits from Educational 529 and Health Savings plans that diversify our funding sources and that we consider to be core. These and other large omnibus accounts, aggregating the deposits of many individual depositors, represented $ 7.6 billion of our deposit total as of December 31, 2023, compared with $ 8.0 billion at December 31, 2022. Some of our deposit products are serviced by third-party providers. Placement fees associated with the brokered CDs are amortized into interest expense using the effective interest rate method. We recognized placement fee expense of $ 12 million, $ 13 million, and $ 16 million in the years ended December 31, 2023, 2022, and 2021, respectively. Fees paid to third-party brokers related to brokered CDs were $ 8 million, $ 13 million, and $ 13 million during the years ended December 31, 2023, 2022, and 2021, respectively. Interest bearing deposits at December 31, 2023 and 2022 are summarized as follows: 2023 2022 As of December 31, (dollars in thousands) Amount Year-End Weighted Average Stated Rate (1) Amount Year-End Weighted Average Stated Rate (1) Money market $ 10,258,292 4.85 % $ 10,977,242 3.75 % Savings 945,000 4.35 982,586 3.15 Certificates of deposit 10,448,365 3.69 9,486,819 2.57 Deposits - interest bearing $ 21,651,657 $ 21,446,647 (1) Includes the effect of interest rate swaps in effective hedge relationships. F-52 SLM CORPORATION — 2022 Form 10-K 11. Deposits (Continued) Certificates of deposit remaining maturities are summarized as follows: As of December 31, (dollars in thousands) 2023 2022 One year or less $ 3,937,766 $ 3,224,573 After one year to two years 4,112,902 2,954,257 After two years to three years 1,881,371 1,904,919 After three years to four years 327,295 1,031,881 After four years to five years 188,802 324,375 After five years 229 46,814 Total $ 10,448,365 $ 9,486,819 As of December 31, 2023 and 2022, there were $ 478 million and $ 615 million, respectively, of deposits exceeding FDIC insurance limits. Accrued interest on deposits was $ 91 million and $ 59 million at December 31, 2023 and 2022, respectively. 2023 Form 10-K — SLM CORPORATION F-53 12. Borrowings Outstanding borrowings consist of unsecured debt and secured borrowings issued through our term ABS program and our Secured Borrowing Facility. The issuing entities for those secured borrowings are VIEs and are consolidated for accounting purposes. The following table summarizes our secured borrowings at December 31, 2023 and 2022. As of December 31, (dollars in thousands) 2023 2022 Short-Term Long-Term Total Short-Term Long-Term Total Unsecured borrowings: Unsecured debt (fixed-rate) $ — $ 992,200 $ 992,200 $ — $ 988,986 $ 988,986 Total unsecured borrowings — 992,200 992,200 — 988,986 988,986 Secured borrowings: Private Education Loan term securitizations: Fixed-rate — 3,585,254 3,585,254 — 3,462,363 3,462,363 Variable-rate — 650,058 650,058 — 783,765 783,765 Total Private Education Loan term securitizations — 4,235,312 4,235,312 — 4,246,128 4,246,128 Secured Borrowing Facility — — — — — — Total secured borrowings — 4,235,312 4,235,312 — 4,246,128 4,246,128 Total $ — $ 5,227,512 $ 5,227,512 $ — $ 5,235,114 $ 5,235,114 Short-term Borrowings Secured Financings On May 16, 2023, we amended our Secured Borrowing Facility to extend the maturity of the facility. The amount that can be borrowed under the facility is $ 2 billion. We hold 100 percent of the residual interest in the Secured Borrowing Facility trust. Under the Secured Borrowing Facility, we incur financing costs on unused borrowing capacity and on outstanding advances. The amended Secured Borrowing Facility extended the revolving period, during which we may borrow, repay, and reborrow funds, until May 15, 2024. The scheduled amortization period, during which amounts outstanding under the Secured Borrowing Facility must be repaid, ends on May 15, 2025 (or earlier, if certain material adverse events occur). At both December 31, 2023 and December 31, 2022, there were no secured borrowings outstanding under the Secured Borrowing Facility. Short-term borrowings have a remaining term to maturity of one year or less. The Secured Borrowing Facility’s contractual maturity is two years from the date of inception or renewal (one-year revolving period plus a one-year amortization period); however, we classify advances under our Secured Borrowing Facility as short-term borrowings because it is our intention to repay those advances within one year. For the years ended December 31, 2023 and 2022, there were no outstanding short-term borrowings. The Secured Borrowing Facility also incurs a non-use fee based upon the facility’s maximum borrowing limit of $ 2 billion, for both 2023 and 2022, which is applied to the unfunded balance. The facility non-use fee was 55 basis points and 45 basis points in 2023 and 2022, respectively. Long-term Borrowings Unsecured Debt On October 29, 2020, we issued at par an unsecured debt offering of $ 500 million of 4.20 percent Senior Notes due October 29, 2025. At December 31, 2023, the outstanding balance was $ 497 million. On November 1, 2021, we issued an unsecured debt offering of $ 500 million, 3.125 percent Senior Notes due November 2, 2026, at a price of 99.43 percent. At December 31, 2023, the outstanding balance was $ 495 million. F- 54 SLM CORPORATION — 2023 Form 10-K 12. Borrowings (Continued) Secured Financings 2023 Transactions On March 15, 2023, we executed our $ 579 million SMB Private Education Loan Trust 2023-A term ABS transaction, which was accounted for as a secured financing. We sold $ 579 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $ 572 million of gross proceeds. The Class A and Class B notes had a weighted average life of 5.06 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.53 percent. On December 31, 2023, $ 591 million of our Private Education Loans, including $ 551 million of principal and $ 40 million in capitalized interest, were encumbered because of this transaction. On August 16, 2023, we executed our $ 568 million SMB Private Education Loan Trust 2023-C term ABS transaction, which was accounted for as a secured financing. We sold $ 568 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $ 568 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.93 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.69 percent. On December 31, 2023, $ 620 million of our Private Education Loans, including $ 579 million of principal and $ 41 million in capitalized interest, were encumbered because of this transaction. 2022 Transactions On August 9, 2022, we executed our $ 575 million SMB Private Education Loan Trust 2022-C term ABS transaction, which was accounted for as a secured financing. We sold $ 575 million of notes to third parties and retained a 100 percent interest in the residual certificates issued in the securitization, raising approximately $ 575 million of gross proceeds. The Class A and Class B notes had a weighted average life of 4.69 years and priced at a weighted average SOFR equivalent cost of SOFR plus 1.76 percent. At December 31, 2023, $ 543 million of our Private Education Loans, including $ 513 million of principal and $ 30 million in capitalized interest, were encumbered because of this transaction. Pre-2022 Transactions Prior to 2022, we executed a total of $ 9.81 billion in ABS transactions that were accounted for as secured financings. At December 31, 2023, $ 4.02 billion of our Private Education Loans, including $ 3.90 billion of principal and $ 128 million in capitalized interest, were encumbered as a result of these transactions. The following table summarizes the outstanding long-term borrowings, the weighted average interest rates at the end of the period and the related average balance during the period. Rates reflect stated interest of borrowings and related discounts and premiums. The long-term borrowings amortize over time and mature serially from 2025 to 2053. December 31, 2023 Year Ended December 31, 2023 December 31, 2022 Year Ended December 31, 2022 (Dollars in thousands) Ending Balance Weighted Average Interest Rate Average Balance Ending Balance Weighted Average Interest Rate Average Balance Long-term borrowings: Floating-rate borrowings $ 650,058 6.51 % $ 715,409 $ 783,765 5.26 % $ 898,002 Fixed-rate borrowings 4,577,454 3.52 4,605,806 4,451,349 2.93 4,571,690 Total long-term borrowings $ 5,227,512 3.89 % $ 5,321,215 $ 5,235,114 3.28 % $ 5,469,692 2023 Form 10-K — SLM CORPORATION F-55 12. Borrowings (Continued) As of December 31, 2023, the maturities of our brokered CDs and borrowings are summarized below. As of December 31, 2023 (dollars in thousands) Brokered CDs Unsecured Debt Secured Borrowings (1) Total 2024 $ 2,385,510 $ — $ 721,038 $ 3,106,548 2025 2,768,889 497,567 710,111 3,976,567 2026 1,832,740 494,633 663,588 2,990,961 2027 151,131 — 592,381 743,512 2028 146,459 — 496,386 642,845 2029 and after — — 1,051,808 1,051,808 7,284,729 992,200 4,235,312 12,512,241 Hedge accounting adjustments ( 1,306 ) — — ( 1,306 ) Total $ 7,283,423 $ 992,200 $ 4,235,312 $ 12,510,935 (1) We view our secured borrowings as long-term based on the contractual maturity dates ranging from 2031 to 2053. However, the actual maturity of our secured borrowings depends on the prepayment speeds of the underlying collateralized loans. To disclose how we expect this debt to pay down over time, the maturities for our secured borrowings are based on the projected bond principal paydowns using the current estimated loan prepayment speeds. Secured Financings The following summarizes our secured financings issued in 2022 and 2023: Issue Date Issued Total Issued Weighted Average Cost of Funds (1) Weighted Average Life (in years) (Dollars in thousands) Private Education Loans: 2022-C August 2022 575,000 SOFR plus 1.76 % 4.69 Total notes issued in 2022 $ 575,000 Total loan and accrued interest amount securitized at inception in 2022 (2) $ 674,387 2023-A March 2023 $ 579,000 SOFR plus 1.53 % 5.06 2023-C August 2023 $ 568,000 SOFR plus 1.69 % 4.93 Total notes issued in 2023 $ 1,147,000 Total loan and accrued interest amount securitized at inception in 2023 (3) $ 1,292,507 (1) Represents SOFR equivalent cost of funds for floating and fixed-rate bonds, excluding issuance costs. (2) At December 31, 2023, $ 543 million of our Private Education Loans, including $ 513 million of principal and $ 30 million in capitalized interest, were encumbered related to these transactions. (3) At December 31, 2023, $ 1.21 billion of our Private Education Loans, including $ 1.13 billion of principal and $ 81 million in capitalized interest, were encumbered related to these transactions. F- 56 SLM CORPORATION — 2023 Form 10-K 12. Borrowings (Continued) Consolidated Funding Vehicles We consolidate our financing entities that are VIEs as a result of our being the entities’ primary beneficiary. As a result, these financing VIEs are accounted for as secured borrowings. As of December 31, 2023 (dollars in thousands) Debt Outstanding Carrying Amount of Assets Securing Debt Outstanding Short-Term Long-Term Total Loans Restricted Cash Other Assets (1) Total Secured borrowings: Private Education Loan term securitizations $ — $ 4,235,312 $ 4,235,312 $ 5,539,964 $ 149,412 $ 311,697 $ 6,001,073 Secured Borrowing Facility — — — — — 1,066 1,066 Total $ — $ 4,235,312 $ 4,235,312 $ 5,539,964 $ 149,412 $ 312,763 $ 6,002,139 As of December 31, 2022 (dollars in thousands) Debt Outstanding Carrying Amount of Assets Securing Debt Outstanding Short-Term Long-Term Total Loans Restricted Cash Other Assets (1) Total Secured borrowings: Private Education Loan term securitizations $ — $ 4,246,128 $ 4,246,128 $ 5,433,602 $ 156,719 $ 286,093 $ 5,876,414 Secured Borrowing Facility — — — — — 1,066 1,066 Total $ — $ 4,246,128 $ 4,246,128 $ 5,433,602 $ 156,719 $ 287,159 $ 5,877,480 (1) Other assets primarily represent accrued interest receivable. Unconsolidated VIEs Private Education Loan Securitizations Unconsolidated VIEs include variable interests that we hold in certain securitization trusts created by the sale of our Private Education Loans to unaffiliated third parties. We remained the servicer of these loans pursuant to applicable servicing agreements executed in connection with the sales, and we are also the administrator of these trusts. Additionally, we own five percent of the securities issued by the trusts to meet risk retention requirements. We were not required to consolidate these entities because the fees we receive as the servicer/administrator are commensurate with our responsibility, so the fees are not considered a variable interest. Additionally, the five percent vertical interest we maintain does not absorb more than an insignificant amount of the VIE’s expected losses, nor do we receive more than an insignificant amount of the VIE’s expected residual returns. 2023-B Transaction On May 24, 2023, we closed an SMB Private Education Loan Trust 2023-B term ABS transaction (the “2023-B Transaction”), in which an unaffiliated third party sold to the trust approximately $ 2 billion of Private Education Loans that the third-party seller previously purchased from us on May 3, 2023. Sallie Mae Bank sponsored the 2023-B Transaction, is the servicer and administrator, and was the seller of an additional $ 105 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2023-B Transaction and we recorded a $ 5 million gain on sale associated with this transaction. In connection with the 2023-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2023-B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. 2023 Form 10-K — SLM CORPORATION F-57 12. Borrowings (Continued) 2023-D Transaction On November 7, 2023, we closed an SMB Private Education Loan Trust 2023-D term ABS transaction (the “2023-D Transaction”), in which an unaffiliated third party sold to the trust approximately $ 1.0 billion of Private Education Loans that the third-party seller previously purchased from us on October 13, 2023. Sallie Mae Bank sponsored the 2023-D Transaction, is the servicer and administrator, and was the seller of an additional $ 53 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2023-D Transaction and we recorded a $ 1 million gain on sale associated with this transaction. In connection with the 2023-D Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2023-D Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. 2022-A Transaction On March 16, 2022, we closed an SMB Private Education Loan Trust 2022-A term ABS transaction (the “2022-A Transaction”), in which an unaffiliated third party sold to the trust approximately $ 973 million of Private Education Loans that the third-party seller previously purchased from us on November 17, 2021. In the 2022-A Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $ 95 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2022-A Transaction and we recorded a $ 10 million gain on sale associated with this transaction. In connection with the 2022-A Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-A Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. 2022-B Transaction On May 27, 2022, we closed an SMB Private Education Loan Trust 2022-B term ABS transaction (the “2022-B Transaction”), in which an unaffiliated third party sold to the trust approximately $ 2.0 billion of Private Education Loans that the third-party seller previously purchased from us on April 27, 2022. In the 2022-B Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $ 107 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2022-B Transaction and we recorded an $ 11 million gain on sale associated with this transaction. In connection with the 2022-B Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-B Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. 2022-D Transaction On October 19, 2022, we closed an SMB Private Education Loan Trust 2022-D term ABS transaction (the “2022-D Transaction”), in which an unaffiliated third party sold to the trust approximately $ 1.0 billion of Private Education Loans that the third-party seller previously purchased from us on September 15, 2022. In the 2022-D Transaction, we were the sponsor, servicer and administrator, and the seller of an additional $ 54 million of Private Education Loans into the trust. The sale of such additional loans qualified for sale treatment and removed these loans from our balance sheet on the settlement date of the 2022-D Transaction and we recorded a $ 3 million gain on sale associated with this transaction. In connection with the 2022-D Transaction settlement, we retained a five percent vertical risk retention interest (i.e., five percent of each class issued in the securitization). We classified those vertical risk retention interests related to the 2022-D Transaction as available-for-sale investments, except for the interest in the residual class, which we classified as a trading investment recorded at fair value with changes recorded through earnings. The table below provides a summary of our exposure related to our unconsolidated VIEs. 2023 2022 As of December 31, (dollars in thousands) Debt Interests (1) Equity Interests (2) Total Exposure Debt Interests (1) Equity Interests (2) Total Exposure Private Education Loan term securitizations $ 423,327 $ 54,481 $ 477,808 $ 329,188 $ 50,786 $ 379,974 (1) Vertical risk retention interest classified as available-for-sale investment. (2) Vertical risk retention interest classified as trading investment. F- 58 SLM CORPORATION — 2023 Form 10-K 12. Borrowings (Continued) Other Borrowing Sources We maintain discretionary uncommitted Federal Funds lines of credit with various correspondent banks, which totaled $ 125 million at December 31, 2023. The interest rate we are charged on these lines of credit is priced at Fed Funds plus a spread at the time of borrowing, and is payable daily. We did not utilize these lines of credit in the years ended December 31, 2023 and 2022. We established an account at the FRB to meet eligibility requirements for access to the Primary Credit borrowing facility at the FRB’s Discount Window (the “Window”). The Primary Credit borrowing facility is a lending program available to depository institutions that are in generally sound financial condition. All borrowings at the Window must be fully collateralized. We can pledge asset-backed and mortgage-backed securities, as well as FFELP Loans and Private Education Loans, to the FRB as collateral for borrowings at the Window. Generally, collateral value is assigned based on the estimated fair value of the pledged assets. At December 31, 2023 and December 31, 2022, the value of our pledged collateral at the FRB totaled $ 1.6 billion and $ 2.2 billion, respectively. The interest rate charged to us is the discount rate set by the FRB. We did not utilize this facility in the years ended December 31, 2023 and 2022. 13. Derivative Financial Instruments Risk Management Strategy We maintain an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate changes. Our goal is to manage interest rate sensitivity by modifying the repricing frequency and underlying index characteristics of certain balance sheet assets or liabilities so any adverse impacts related to movements in interest rates are managed within low to moderate limits. As a result of interest rate fluctuations, hedged balance sheet positions will appreciate or depreciate in market value or create variability in cash flows. Income or loss on the derivative instruments linked to the hedged item will generally offset the effect of this unrealized appreciation or depreciation or volatility in cash flows for the period the item is being hedged. We view this strategy as a prudent management of interest rate risk. Although we use derivatives to reduce the risk of interest rate changes, the use of derivatives does expose us to both market and credit risk. Market risk is the chance of financial loss resulting from changes in interest rates and market liquidity. Credit risk is the risk that a counterparty will not perform its obligations under a contract and it is limited to the loss of the fair value gain in a derivative that the counterparty owes us less collateral held and plus collateral posted. When the fair value of a derivative contract less collateral held and plus collateral posted is negative, we owe the counterparty and, therefore, we have no credit risk exposure to the counterparty; however, the counterparty has exposure to us. We minimize the credit risk in derivative instruments by entering into transactions with reputable counterparties that are reviewed regularly by our Credit Department. We also maintain a policy of requiring that all derivative contracts be governed by an International Swaps and Derivatives Association, Inc. Master Agreement. Depending on the nature of the derivative transaction, bilateral collateral arrangements are required as well. When we have more than one outstanding derivative transaction with the counterparty, and there exists legally enforceable netting provisions with the counterparty (i.e., a legal right to offset receivable and payable derivative contracts), the “net” mark-to-market exposure, less collateral held and plus collateral posted, represents exposure with the counterparty. We refer to this as the “net position.” When there is a net negative exposure, we consider our exposure to the counterparty and the net position to be zero. Title VII of the Dodd-Frank Act requires all standardized derivatives, including most interest rate swaps, to be submitted for clearing to central counterparties to reduce counterparty risk. Two of the central counterparties we use are the CME and the LCH. All variation margin payments on derivatives cleared through the CME and LCH are accounted for as legal settlement. As of December 31, 2023, $ 1.8 billion notional of our derivative contracts were cleared on the CME and $ 0.1 billion were cleared on the LCH. The derivative contracts cleared through the CME and LCH represent 92.6 percent and 7.4 percent, respectively, of our total notional derivative contracts of $ 1.9 billion at December 31, 2023. For derivatives cleared through the CME and LCH, the net gain (loss) position includes the variation margin amounts as settlement of the derivative and not collateral against the fair value of the derivative. The amount of variation margin included as settlement as of December 31, 2023 was $( 40 ) million and $( 4 ) million for the CME and LCH, respectively. Changes in fair value for derivatives not designated as hedging instruments are presented as realized gains (losses). Our exposure is limited to the value of the derivative contracts in a gain position less any collateral held and plus any collateral posted. When there is a net negative exposure, we consider our exposure to the counterparty to be zero. At December 31, 2023 and 2022, we had a net positive exposure (derivative gain positions to us, less collateral held by us and plus collateral posted with counterparties) related to derivatives of $ 9 million and $ 12 million, respectively. 2023 Form 10-K — SLM CORPORATION F-59 13. Derivative Financial Instruments (Continued) Accounting for Derivative Instruments The accounting for derivative instruments requires that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded on the balance sheet as either an asset or liability measured at fair value. Our derivative instruments are classified and accounted for by us as fair value hedges, cash flow hedges, and trading hedges. Fair Value Hedges We generally use fair value hedges to offset the exposure to changes in fair value of a recognized fixed-rate liability. We enter into interest rate swaps to economically convert fixed-rate liabilities into variable-rate liabilities. For fair value hedges, we generally consider all components of the derivative’s gain and/or loss when assessing hedge effectiveness and generally hedge changes in fair values due to interest rates. For fair value hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in the same line item in the consolidated statements of income that is used to present the earnings effect of the hedged component of the hedged item. Cash Flow Hedges We use cash flow hedges to hedge the exposure to variability in cash flows of floating-rate liabilities. This strategy is used primarily to minimize the exposure to volatility in cash flows from future changes in interest rates. In assessing hedge effectiveness, generally all components of each derivative’s gains or losses are included in the assessment. We hedge exposure to changes in cash flows due to changes in interest rates or total changes in cash flow. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is recorded in other comprehensive income (loss). Those amounts are subsequently reclassified to earnings, in the same line item in the consolidated statements of income as impacted by the hedged item, when the hedged item affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate deposits. During the next twelve months, we estimate that $ 36 million will be reclassified as a decrease to interest expense. Trading Activities When derivative instruments do not qualify for hedge accounting treatment, they are accounted for at fair value with all changes in fair value recorded through earnings. All of our derivative instruments entered into with maturities of less than three years are economically hedging risk, but do not receive hedge accounting treatment. Trading derivatives also include any hedges that originally received hedge accounting treatment, but lost hedge accounting treatment due to failed effectiveness testing, as well as the activity of certain derivatives prior to those derivatives receiving hedge accounting treatment. F- 60 SLM CORPORATION — 2023 Form 10-K 13. Derivative Financial Instruments (Continued) Summary of Derivative Financial Statement Impact The following tables summarize the fair values and notional amounts of all derivative instruments at December 31, 2023 and 2022, and their impact on earnings and other comprehensive income for the years ended December 31, 2023, 2022, and 2021. Impact of Derivatives on the Consolidated Balance Sheets Cash Flow Hedges Fair Value Hedges Trading Total As of December 31, (dollars in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Fair Values (1) Hedged Risk Exposure Derivative Assets: (2) Interest rate swaps Interest rate $ — $ 972 $ — $ — $ — $ — $ — $ 972 Derivative Liabilities: (2) Interest rate swaps Interest rate ( 339 ) — ( 31 ) ( 567 ) — — ( 370 ) ( 567 ) Total net derivatives $ ( 339 ) $ 972 $ ( 31 ) $ ( 567 ) $ — $ — $ ( 370 ) $ 405 (1) Fair values reported include variation margin as legal settlement of the derivative contract. Assets and liabilities are presented without consideration of master netting agreements. Derivatives are carried on the balance sheet based on net position by counterparty under master netting agreements and classified in other assets or other liabilities depending on whether in a net positive or negative position. (2) The following table reconciles gross positions with the impact of master netting agreements to the balance sheet classification: As of December 31, (dollars in thousands) Other Assets Other Liabilities 2023 2022 2023 2022 Gross position (1) $ — $ 972 $ ( 370 ) $ ( 567 ) Impact of master netting agreement — ( 567 ) — 567 Derivative values with impact of master netting agreements (as carried on balance sheet) — 405 ( 370 ) — Cash collateral pledged (2) 9,228 11,162 — — Net position $ 9,228 $ 11,567 $ ( 370 ) $ — __________ (1) Gross position amounts include accrued interest and variation margin as legal settlement of the derivative contract. (2) Cash collateral pledged excludes amounts that represent legal settlement of the derivative contracts. Notional Values Cash Flow Fair Value Trading Total As of December 31, (dollars in thousands) 2023 2022 2023 2022 2023 2022 2023 2022 Interest rate swaps $ 1,203,783 $ 1,314,660 $ 702,309 $ 1,528,186 $ — $ — $ 1,906,092 $ 2,842,846 Net total notional $ 1,203,783 $ 1,314,660 $ 702,309 $ 1,528,186 $ — $ — $ 1,906,092 $ 2,842,846 2023 Form 10-K — SLM CORPORATION F-61 13. Derivative Financial Instruments (Continued) As of December 31, 2023 and 2022, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges: As of December 31, (dollars in thousands) Line Item in the Balance Sheet in Which the Hedged Item is Included: Carrying Amount of the Hedged Assets/(Liabilities) Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) 2023 2022 2023 2022 Deposits $ ( 689,137 ) $ ( 1,494,087 ) $ 12,910 $ 31,259 Impact of Derivatives on the Consolidated Statements of Income Years Ended December 31, (dollars in thousands) 2023 2022 2021 Fair Value Hedges Interest rate swaps: Interest recognized on derivatives $ ( 26,054 ) $ 16,308 $ 85,850 Hedged items recorded in interest expense ( 18,350 ) 82,043 103,450 Derivatives recorded in interest expense 18,487 ( 82,063 ) ( 103,431 ) Total $ ( 25,917 ) $ 16,288 $ 85,869 Cash Flow Hedges Interest rate swaps: Amount of gain (loss) reclassified from accumulated other comprehensive income into interest expense $ 47,810 $ 3,658 $ ( 20,852 ) Total $ 47,810 $ 3,658 $ ( 20,852 ) Trading Interest rate swaps: Change in fair value of future interest payments recorded in earnings $ — $ ( 248 ) $ ( 23,216 ) Total — ( 248 ) ( 23,216 ) Total $ 21,893 $ 19,698 $ 41,801 F- 62 SLM CORPORATION — 2023 Form 10-K 13. Derivative Financial Instruments (Continued) Impact of Derivatives on the Statements of Changes in Stockholders’ Equity Years Ended December 31, (dollars in thousands) 2023 2022 2021 Amount of gain (loss) recognized in other comprehensive income (loss) $ 13,353 $ 97,389 $ 27,259 Less: Amount of gain (loss) reclassified in interest expense 47,810 3,658 ( 20,852 ) Total change in other comprehensive income (loss) for unrealized gains (losses) on derivatives, before income tax (expense) benefit $ ( 34,457 ) $ 93,731 $ 48,111 Cash Collateral As of December 31, 2023, cash collateral held and pledged excludes amounts that represent legal settlement of the derivative contracts held with the CME and LCH. There was no cash collateral held by us related to derivative exposure between us and our derivatives counterparties at December 31, 2023 and 2022, respectively. Collateral held is recorded in “Other Liabilities” on the consolidated balance sheets. Cash collateral pledged related to derivative exposure between us and our derivatives counterparties was $ 9 million and $ 11 million at December 31, 2023 and 2022, respectively. Collateral pledged is recorded in “Other interest-earning assets” on the consolidated balance sheets. 14. Stockholders’ Equity Preferred Stock At December 31, 2023, we had 2.5 million shares of Floating-Rate Non-Cumulative Preferred Stock, Series B (the “Series B Preferred Stock”) outstanding. The Series B Preferred Stock does not have a maturity date, but can be redeemed at our option. Redemption would include any accrued and unpaid dividends for the then current quarterly dividend period, up to the redemption date. The shares have no preemptive or conversion rights and are not exchangeable for any of our other securities or property. Dividends are not mandatory and are paid quarterly, when, as, and if declared by the Board of Directors. Holders of Series B Preferred Stock were entitled to receive quarterly dividends based on 3-month LIBOR plus 170 basis points per annum in arrears, until the transition to SOFR in the third quarter of 2023. The first dividends on our Series B Preferred Stock that were based on a SOFR rate were declared dividends paid on December 15, 2023, which were based on the adjusted 3-month CME Term SOFR plus 170 basis points per annum in arrears, where the adjusted 3-month CME Term SOFR includes the LIBOR Benchmark Replacement Adjustment of 26.161 basis points. Upon liquidation or dissolution of the Company, holders of the Series B Preferred Stock are entitled to receive $ 100 per share, plus an amount equal to accrued and unpaid dividends for the then current quarterly dividend period, pro rata, and before any distribution of assets is made to holders of our common stock. Common Stock Our shareholders have authorized the issuance of 1.125 billion shares of common stock (par value of $0 .20 ). At December 31, 2023, 220 million shares were issued and outstanding and 36 million shares were unissued but encumbered for outstanding stock options, restricted stock, restricted stock units, performance stock units, and dividend equivalent units for employee compensation and remaining authority for stock-based compensation plans. Common Stock Dividends In both the years ended December 31, 2023 and 2022, we paid a total common stock dividend of $ 0.44 per common share. In the year ended December 31, 2021, we paid a total common stock dividend of $ 0.20 per common share. Common stock dividend declarations are subject to determination by, and the discretion of, our Board of Directors. We may change our common stock dividend policy at any time. We are dependent on funds obtained from the Bank to fund dividend payments. Regulatory and other legal restrictions may limit our ability to transfer funds freely, either to or from our subsidiaries. In particular, the Bank is subject to laws and regulations that authorize regulatory bodies to block or reduce the flow of funds to us, or that prohibit such transfers altogether in certain circumstances. These laws, regulations, and rules may hinder our ability to access funds that we may need to make payments in respect of our stock or to satisfy our other responsibilities. The FDIC has the authority to prohibit or limit the payment of dividends by the Bank and SLM Corporation. 2023 Form 10-K — SLM CORPORATION F-63 14. Stockholders’ Equity (Continued) Share Repurchases On January 22, 2020, we announced a share repurchase program (the “2020 Share Repurchase Program”), which was effective upon announcement and expired on January 21, 2022, and permitted us to repurchase shares of common stock from time to time up to an aggregate repurchase price not to exceed $ 600 million. Under the authority of the 2020 Share Repurchase Program, on March 10, 2020, we entered into an accelerated share repurchase agreement (“ASR”) with a third-party financial institution under which we paid $ 525 million for an upfront delivery of our common stock and a forward agreement. On March 11, 2020, the third-party financial institution delivered to us approximately 45 million shares. The final total actual number of shares of common stock delivered to us pursuant to the forward agreement was based generally upon a volume-weighted average price at which the shares of our common stock traded during the regular trading sessions on the NASDAQ Global Select Market during the term of the ASR. The transactions were accounted for as equity transactions and were included in treasury stock when the shares were received, at which time there was an immediate reduction in the weighted average common shares calculation for basic and diluted earnings per share. On January 26, 2021, we completed the ASR and upon final settlement on January 28, 2021, we received an additional 13 million shares. In total, we repurchased 58 million shares under the ASR at an average price per share of $ 9.01 . Under the 2020 Share Repurchase Program, we also repurchased an additional 4 million shares of common stock for $ 75 million in the three months ended March 31, 2021. We have utilized all capacity under the 2020 Share Repurchase Program. On January 27, 2021, we announced another share repurchase program (the “2021 Share Repurchase Program”), which was effective upon announcement and expired on January 26, 2023, and originally permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $ 1.25 billion. In October 2021, our Board of Directors approved a $ 250 million increase in the amount of common stock that could be repurchased under our 2021 Share Repurchase Program, which expired on January 26, 2023. This was in addition to the original $ 1.25 billion of authorization announced on January 27, 2021, for a total 2021 Share Repurchase Program authorization of $ 1.5 billion. Of the total $ 1.5 billion 2021 Share Repurchase Program authorization, we repurchased 81.1 million shares of common stock for $ 1.46 billion in the year ended December 31, 2021. (Those amounts include the shares repurchased under the Tender Offer described below.) We also repurchased 2.0 million shares of common stock under the 2021 Share Repurchase Program for $ 38 million in the three months ended March 31, 2022. We have utilized all capacity under the 2021 Share Repurchase Program. On January 26, 2022, we announced another share repurchase program (the “2022 Share Repurchase Program”), which was effective upon announcement and expired on January 25, 2024, and permitted us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $ 1.25 billion. Under the 2022 Share Repurchase Program, we repurchased 22.3 million shares of common stock at an average price per share of $ 15.64 , for $ 349 million in the year ended December 31, 2023, and we repurchased 38.2 million shares of common stock at an average price per share of $ 17.52 , for $ 669 million in the year ended December 31, 2022. There was $ 236 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2023. Any capacity remaining unused under the 2022 Share Repurchase Program on January 25, 2024 expired on that date pursuant to the terms of the 2022 Share Repurchase Program. On January 24, 2024, we announced a new share repurchase program (the “2024 Share Repurchase Program”), which became effective on January 26, 2024 and expires on February 6, 2026, and permits us to repurchase shares of our common stock from time to time up to an aggregate repurchase price not to exceed $ 650 million. Under the 2024 Share Repurchase Program, repurchases may occur from time to time and through a variety of methods, including open market repurchases, repurchases effected through Rule 10b5-1 trading plans, negotiated block purchases, accelerated share repurchase programs, tender offers, or other similar transactions. The timing and volume of any repurchases will be subject to market conditions, and there can be no guarantee that the Company will repurchase up to the limit of the 2024 Share Repurchase Program or at all. Common Stock Tender Offer On February 2, 2021, we announced the commencement of a “modified Dutch Auction” tender offer (the “Tender Offer”) to purchase up to $ 1 billion in aggregate purchase price of our outstanding shares of common stock, par value $ 0.20 per share. Pursuant to the Tender Offer, we repurchased 28.5 million shares at a price of $ 16.50 per share. The purchase of shares settled on March 16, 2021, for an aggregate cost of approximately $ 472 million, including fees and expenses related to the Tender Offer. We cancelled the 28.5 million shares purchased in connection with the Tender Offer. This cancellation decreased the balances of common stock by $ 6 million and of additional paid-in capital by $ 466 million, respectively. F- 64 SLM CORPORATION — 2023 Form 10-K 14. Stockholders’ Equity (Continued) Share Repurchases under our Rule 10b5-1 Trading Plans During the years ended December 31, 2023, 2022, and 2021, we repurchased 22 million, 40 million, and 57 million shares, respectively, of our common stock at a total cost of $ 349 million, $ 708 million, and $ 1.1 billion, respectively, under Rule 10b5-1 trading plans authorized under our share repurchase programs. The following table summarizes our common share repurchases and issuances associated with these programs. Years Ended December 31, (shares and per share amounts in actuals) 2023 2022 2021 Common stock repurchased under repurchase programs (1)(2)(3) 22,341,595 40,253,548 98,748,905 Average purchase price per share (4) $ 15.64 $ 17.58 $ 17.37 Shares repurchased related to employee stock-based compensation plans (5) 1,099,241 1,135,509 1,368,942 Average purchase price per share $ 15.46 $ 18.36 $ 14.70 Common shares issued (6) 3,109,276 3,107,768 3,786,581 (1) Common shares purchased under our share repurchase programs. We have utilized all capacity under our 2021 Share Repurchase Program. There was $ 236 million of capacity remaining under the 2022 Share Repurchase Program at December 31, 2023. (2) For the year ended December 31, 2021, the amount includes 13 million shares related to the accelerated share repurchase agreement described above. (3) For the year ended December 31, 2021, the amount includes 28.5 million shares related to the settlement of our common stock Tender Offer described above. (4) Average purchase price per share includes purchase commission costs and excise taxes. (5) Comprised of shares withheld from stock option exercises and vesting of restricted stock for employees’ tax withholding obligations and shares tendered by employees to satisfy option exercise costs. (6) Common shares issued under our various compensation and benefit plans. The closing price of our common stock on the NASDAQ Global Select Market on December 29, 2023 was $ 19.12 . 2023 Form 10-K — SLM CORPORATION F-65 15. Earnings per Common Share Basic earnings per common share (“EPS”) are calculated using the weighted average number of shares of common stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows. Years ended December 31, (dollars in thousands, except per share data) 2023 2022 2021 Numerator: Net income $ 581,391 $ 469,014 $ 1,160,513 Preferred stock dividends 17,705 9,029 4,736 Net income attributable to SLM Corporation common stock $ 563,686 $ 459,985 $ 1,155,777 Denominator: Weighted average shares used to compute basic EPS 231,411 258,439 314,993 Effect of dilutive securities: Dilutive effect of stock options, restricted stock, restricted stock units, performance stock units, and Employee Stock Purchase Plan (“ESPP”) (1)(2) 2,652 3,064 4,919 Weighted average shares used to compute diluted EPS 234,063 261,503 319,912 Basic earnings per common share $ 2.44 $ 1.78 $ 3.67 Diluted earnings per common share $ 2.41 $ 1.76 $ 3.61 (1) Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options, restricted stock, restricted stock units, performance stock units, and the outstanding commitment to issue shares under the ESPP, determined by the treasury stock method. (2) For the years ended December 31, 2023, 2022, and 2021, securities covering approximately 1 million shares, 1 million shares, and 1 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive. F- 66 SLM CORPORATION — 2023 Form 10-K 16. Stock-Based Compensation Plans and Arrangements Plan Summaries As of December 31, 2023, we had one active stock-based compensation plan that provides for grants of equity awards to our employees and non-employee directors. The SLM Corporation 2021 Omnibus Incentive Plan was approved by shareholders on June 8, 2021, and at December 31, 2023, 16 million shares were authorized to be issued from this plan. We also maintain an Employee Stock Purchase Plan (the “ESPP”). The number of shares authorized under the plan at December 31, 2023 was 14 million shares. Shares issued under these stock-based compensation plans may be either shares reacquired by us or shares that are authorized but unissued. Stock-Based Compensation The total stock-based compensation cost recognized in the consolidated statements of income for the years ended December 31, 2023, 2022, and 2021 was $ 36 million, $ 34 million, and $ 31 million, respectively. As of December 31, 2023, there was $ 22 million of total unrecognized compensation expense related to unvested restricted stock awards, restricted stock units, performance stock units, and ESPP awards, which is expected to be recognized over a weighted average period of 1.4 years. We amortize compensation expense on a straight-line basis over the related vesting periods of each tranche of each award. Stock Options There were 998,891 time-vested options granted in the year ended December 31, 2021. The options were granted solely to members of senior management. The exercise price of the options is equal to 115 percent of the fair market value of a share of our common stock as of the grant date. The options will vest 100 percent on the third anniversary of the respective grant date and expire ten years after the respective grant date. The fair value of each stock option grant was estimated on the date of grant using the Monte Carlo simulation-pricing model. The expected volatility of our common stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates consistent with the expected life of each stock option grant. There were 86,536 time-vested options granted in the year ended December 31, 2022. The options were granted to team members of an acquisition that took place in the first half of the year in 2022. The exercise price of the options is equal to 100 percent of the fair market value of a share of our common stock as of the grant date. The options will vest 100 percent on the third anniversary of the respective grant date and expire ten years after the respective grant date. The fair value of each stock option grant was estimated on the date of grant using a Black-Scholes option pricing model. The expected volatility of our common stock at the date of grant is estimated based on a historic volatility rate and the expected option life is calculated based on historical stock option experience as the best estimate of future exercise patterns. The dividend yield assumption is based on historical and anticipated dividend payouts. The risk-free interest rate assumption is based on observed interest rates consistent with the expected life of each stock option grant. There were no stock options granted in the year ended December 31, 2023. 2023 Form 10-K — SLM CORPORATION F-67 16. Stock-Based Compensation Plans and Arrangements (Continued) The following table summarizes stock option activity for the year ended December 31, 2023. (Dollars in thousands, shares and per share amounts in actuals) Number of Options Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) Outstanding at December 31, 2022 1,066,197 $ 17.59 Granted — — Exercised (2) — — Canceled — — Outstanding at December 31, 2023 (3) 1,066,197 $ 17.59 0.2 years $ 1,629 Exercisable at December 31, 2023 — $ — — $ — (1) The aggregate intrinsic value represents the total intrinsic value (the aggregate difference between our closing stock price on December 31, 2023 and the exercise price of in-the-money options) that would have been received by the option holders if all in-the-money options had been exercised on December 31, 2023. (2) No options were exercised in the years ended December 31, 2023 and 2022. The total intrinsic value of options exercised was $ 2 million for the year ended December 31, 2021. (3) For net-settled options, gross number is reflected. Restricted Stock Restricted stock awards generally vest over one year . Outstanding restricted stock is entitled to dividend equivalent units that vest subject to the same vesting requirements or lapse of transfer restrictions, as applicable, as the underlying restricted stock award. The fair value of restricted stock awards is based on our stock price at the grant date. The following table summarizes restricted stock activity for the year ended December 31, 2023. (Shares and per share amounts in actuals) Number of Shares Weighted Average Grant Date Fair Value Non-vested at December 31, 2022 79,710 $ 15.68 Granted 83,479 16.47 Vested (1) ( 79,710 ) 15.68 Canceled — — Non-vested at December 31, 2023 (2) 83,479 $ 16.47 (1) The total fair value of shares that vested during the years ended December 31, 2023, 2022, and 2021 was $ 1 million, $ 1 million, and $ 1 million, respectively. (2) As of December 31, 2023, there was $ 0.6 million of unrecognized compensation cost related to restricted stock, which is expected to be recognized over a weighted average period of 0.5 years. F- 68 SLM CORPORATION — 2023 Form 10-K 16. Stock-Based Compensation Plans and Arrangements (Continued) Restricted Stock Units and Performance Stock Units Restricted stock units (“RSUs”) and performance stock units (“PSUs”) are equity awards granted to employees that entitle the holder to shares of our common stock when the award vests. RSUs may be time-vested over three years or vested at grant but subject to transfer restrictions, while PSUs vest based on corporate performance targets at the end of a three-year period. Outstanding RSUs and PSUs are entitled to dividend equivalent units that vest subject to the same vesting requirements or lapse of transfer restrictions, as applicable, as the underlying award. The fair value of RSUs is based on our stock price at the grant date. The fair value of each PSU grant was estimated on the date of grant using the Monte Carlo simulation-pricing model. The following table summarizes RSU and PSU activity for the year ended December 31, 2023. (Shares and per share amounts in actuals) Number of RSUs/ PSUs Weighted Average Grant Date Fair Value Outstanding at December 31, 2022 4,248,945 $ 15.44 Granted 2,932,239 14.30 Vested and converted to common stock (1) ( 2,746,671 ) 12.68 Canceled ( 87,519 ) 16.63 Outstanding at December 31, 2023 (2) 4,346,994 $ 16.39 (1) The total fair value of RSUs/PSUs that vested and converted to common stock during the years ended December 31, 2023, 2022, and 2021 was $ 35 million, $ 34 million, and $ 31 million, respectively. (2) As of December 31, 2023, there was $ 21 million of unrecognized compensation cost related to RSUs/PSUs, which is expected to be recognized over a weighted average period of 1.5 years. Employee Stock Purchase Plan Employees may purchase shares of our common stock at the end of a 12 -month offering period at a price equal to the share price at the beginning of the 12-month period, less 15 percent, up to a maximum purchase price of $ 7,500 (whole dollars). The purchase price for each offering is determined at the beginning of the offering period on August 1. The fair values of the stock purchase rights of the ESPP offerings were calculated using a Black-Scholes option pricing model with the following weighted average assumptions: Years ended December 31, (per share amounts in actuals) 2023 2022 2021 Risk-free interest rate 5.31 % 3.02 % 0.07 % Expected volatility 38 % 39 % 34 % Expected dividend rate 2.73 % 2.78 % 0.66 % Expected life of the option 1 year 1 year 1 year Weighted average fair value of stock purchase rights $ 4.14 $ 4.17 $ 4.93 The expected volatility is based on implied volatility from publicly-traded options on our stock at the grant date and historical volatility of our stock consistent with the expected life. The risk-free interest rate is based on the zero-coupon U.S. Treasury STRIPS rate at the grant date consistent with the expected life. The fair values were amortized to compensation cost on a straight-line basis over a one-year vesting period. As of December 31, 2023, there was less than $ 1 million of unrecognized compensation cost related to the ESPP, which is expected to be recognized by July 2024. 2023 Form 10-K — SLM CORPORATION F-69 16. Stock-Based Compensation Plans and Arrangements (Continued) During the years ended December 31, 2021 and 2023, plan participants purchased approximately 496,000 shares and 195,000 shares, respectively, of our common stock. No shares were purchased for the year ended December 31, 2022, as our stock price on July 31, 2022 was less than the offering price for the ESPP plan. 17. Fair Value Measurements We use estimates of fair value in applying various accounting standards for the consolidated financial statements. We categorize our fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. For additional information regarding our policies for determining fair value and the hierarchical framework, see Note 2, “Significant Accounting Policies — Fair Value Measurement” in this Form 10-K. The following table summarizes the valuation of our financial instruments that are marked-to-fair value on a recurring basis. Fair Value Measurements on a Recurring Basis 2023 2022 As of December 31, (dollars in thousands) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Trading investments $ — $ — $ 54,481 $ 54,481 $ — $ — $ 55,903 $ 55,903 Available-for-sale investments — 2,411,622 — 2,411,622 — 2,342,089 — 2,342,089 Derivative instruments — — — — — 972 — 972 Total $ — $ 2,411,622 $ 54,481 $ 2,466,103 $ — $ 2,343,061 $ 55,903 $ 2,398,964 Liabilities: Derivative instruments $ — $ ( 370 ) $ — $ ( 370 ) $ — $ ( 567 ) $ — $ ( 567 ) Total $ — $ ( 370 ) $ — $ ( 370 ) $ — $ ( 567 ) $ — $ ( 567 ) F- 70 SLM CORPORATION — 2023 Form 10-K 17. Fair Value Measurements (Continued) The following table summarizes the fair values of our financial assets and liabilities, including derivative financial instruments. As of December 31, (dollars in thousands) 2023 2022 Fair Value Carrying Value Difference Fair Value Carrying Value Difference Earning assets: Loans held for investment, net: Private Education Loans $ 22,229,045 $ 19,772,293 $ 2,456,752 $ 21,062,548 $ 19,019,713 $ 2,042,835 FFELP Loans 542,775 534,064 8,711 618,186 607,155 11,031 Loans held for sale — — — 29,448 29,448 — Cash and cash equivalents 4,149,838 4,149,838 — 4,616,117 4,616,117 — Trading investments 54,481 54,481 — 55,903 55,903 — Available-for-sale investments 2,411,622 2,411,622 — 2,342,089 2,342,089 — Accrued interest receivable 1,448,766 1,379,904 68,862 1,237,074 1,202,059 35,015 Tax indemnification receivable — — — 2,816 2,816 — Derivative instruments — — — 972 972 — Total earning assets $ 30,836,527 $ 28,302,202 $ 2,534,325 $ 29,965,153 $ 27,876,272 $ 2,088,881 Interest-bearing liabilities: Money-market and savings accounts $ 11,134,883 $ 11,203,292 $ 68,409 $ 11,854,849 $ 11,959,828 $ 104,979 Certificates of deposit 10,380,684 10,448,365 67,681 9,175,339 9,486,819 311,480 Long-term borrowings 4,873,690 5,227,512 353,822 4,813,233 5,235,114 421,881 Accrued interest payable 105,066 105,066 — 71,586 71,586 — Derivative instruments 370 370 — 567 567 — Total interest-bearing liabilities $ 26,494,693 $ 26,984,605 $ 489,912 $ 25,915,574 $ 26,753,914 $ 838,340 Excess of net asset fair value over carrying value $ 3,024,237 $ 2,927,221 The methods and assumptions used to estimate the fair value of each class of financial instruments are as follows: Cash and Cash Equivalents Cash and cash equivalents are carried at cost. Carrying value approximated fair value for disclosure purposes. These are level 1 valuations. Investments Trading Investments classified as trading are carried at fair value in the consolidated financial statements. Investments in residual class interests are valued using observable inputs in its cash flow modeling where available but many significant inputs are unobservable. Residual interests are not exchange traded nor do they have quoted market prices as they are unique and do not actively trade. As such, these are level 3 valuations. At December 31, 2023 and December 31, 2022, we had $ 54 million and $ 56 million, respectively, classified as level 3 financial instruments carried at fair value on a recurring basis through earnings. At December 31, 2023 and December 31, 2022, $ 54 million and $ 51 million, respectively, represent the five percent vertical risk retentions in the residual classes of Private Education Loans sold through securitizations. Total gains/(losses), net included in earnings were $ 3 million in net gains in the year ended December 2023, compared to less than $ 1 million in net losses in the year-ago period. Settlements in the year ended December 31, 2023 were $ 1 million, compared to $ 13 million in the year-ago period. There 2023 Form 10-K — SLM CORPORATION F-71 17. Fair Value Measurements (Continued) were no transfers into or out of level 3 related to these residual interest investments during the years ended December 31, 2023 and 2022. The change in mark to market gains/(losses) on investments held as of the reporting date were $ 4 million in the year ended December 31, 2023, compared to $ 13 million in the year-ago period. At December 31, 2022, $ 5 million of the total trading investment balance included a debt security investment which was converted to an equity investment (classified in other investments) in the first quarter of 2023. Total interest income included in earnings was less than $ 1 million for both of the years ended December 31, 2023 and 2022. There were no transfers into or out of level 3 related to this investment. There were no market value adjustments recorded related to this investment in the years ended December 31, 2023 and 2022. The fair value at December 31, 2023 of the residual interests classified as level 3 valuations was $ 54 million. The residual interest investments are the projected future cash flows representing the difference between the securitized trust’s asset cash flows and the related outflows to the bondholders and for other fees. The residual investments are valued using an internal discounted cash flow model to arrive at the net present value of expected trust residual distributions. These instruments are not actively traded, nor do they have quoted market prices. As a result, unobservable model input assumptions are made regarding the expected CPR and the probability of defaults of the loans in the securitization trusts. At December 31, 2023, the range (average by volume) of the CPR input was 8.1 percent to 12.2 percent (average of 9.49 percent) and the range of the defaults input was 5.1 percent to 20.7 percent (average of 11.03 percent). The significant inputs considered unobservable detailed above would be expected to have the following impacts to the valuations: • A decrease in CPR would result in a longer weighted average life of the trust, resulting in a decrease to the valuation due to the delay in residual cash flows with the increased term. The opposite is true for an increase in the CPR. • A decrease in the probability of defaults means increased principal receipts, resulting in an increase to the valuation due to the increase in residual cash flow. • Conversely, an increase in the probability of defaults means decreased principal receipts, resulting in a decrease to the valuation due to the decrease in residual cash flow. Available-for-Sale Investments classified as available-for-sale are carried at fair value in the consolidated financial statements. Investments in mortgage-backed securities, U.S. government-sponsored enterprises and Treasury securities, and Utah Housing Corporation bonds are valued using observable market prices of similar assets. As such, these are level 2 valuations. The fair value of our non-residual vertical risk retention investments is estimated using pricing indications obtained from the investment bankers who participate in the asset-backed securities market. As such, these are level 2 valuations. Loans Held For Investment and Accrued Interest Receivable Private Education Loans For Private Education Loans, fair value was determined by using observable quoted prices for similar assets in our most recent market transactions. Adjustments were then made to account for the value of loans in our portfolio that have materially different characteristics than those included in the most recent market transaction. These are considered level 2 valuations. A portion of the fair value that has been modeled is attributable to accrued interest receivable that has not yet been capitalized, and has been allocated to the accrued interest receivable line item. The remaining accrued interest receivable that will not be capitalized into the principal balance of the loan is carried at cost. FFELP Loans For FFELP Loans, the fair value was determined by modeling expected loan level cash flows using stated terms of the assets and internally developed assumptions to determine aggregate portfolio yield, net present value, and average life. The significant assumptions used to determine fair value are prepayment speeds, default rates, cost of funds, and required return on equity. Significant inputs into the model are not observable. However, we do calibrate the model based on market transactions when appropriate. As such, these are level 3 valuations. F- 72 SLM CORPORATION — 2023 Form 10-K 17. Fair Value Measurements (Continued) Loans Held For Sale Our loans held for sale are accounted for at the lower of cost or market. The fair value was determined by using observable quoted prices for similar assets in our most recent market transactions. These are considered level 2 valuations. Tax Indemnification Receivable Tax indemnification receivable is carried at cost. The carrying value approximates fair value. This is a level 2 valuation. Money Market and Savings Accounts Some of our MMDAs are fixed-rate deposits that are subject to minimum balances for a specified period of time. The fair values of these deposits are estimated using discounted cash flows based on rates currently offered for deposits of similar maturities. These are level 2 valuations. The fair values of our remaining money market and savings accounts equal the amounts payable on demand at the balance sheet date and are reported at their carrying value. These are level 1 valuations. Certificates of Deposit The fair values of CDs are estimated using discounted cash flows based on rates currently offered for deposits of similar remaining maturities. These are level 2 valuations. Accrued Interest Payable Accrued interest payable is carried at cost. The carrying value approximates fair value due to its short-term nature. This is a level 1 valuation. Borrowings Borrowings are accounted for at cost in the consolidated financial statements. The carrying value of short-term borrowings approximated fair value for disclosure purposes, due to the short-term nature of those borrowings. This is a level 1 valuation. The fair value of long-term borrowings is estimated using pricing indications obtained from the investment bankers who participate in the asset-backed securities market. This is a level 2 valuation. Derivatives All derivatives are accounted for at fair value in the consolidated financial statements. The fair value of derivative financial instruments was determined by a standard derivative pricing and option model using the stated terms of the contracts and observable market inputs. It is our policy to compare the derivative fair values to those received from our counterparties in order to evaluate the model’s outputs. When determining the fair value of derivatives, we take into account counterparty credit risk for positions where we are exposed to the counterparty on a net basis by assessing exposure net of collateral held. When the counterparty has exposure to us under derivative contracts with the Company, we fully collateralize the exposure (subject to certain thresholds). Interest rate swaps are valued using a standard derivative cash flow model with a SOFR swap yield curve, which is an observable input from an active market. These derivatives are level 2 fair value estimates in the hierarchy. The carrying value of borrowings designated as the hedged item in a fair value hedge is adjusted for changes in fair value due to changes in the benchmark interest rate (SOFR). These valuations are determined through standard pricing models using the stated terms of the borrowings and observable yield curves. 2023 Form 10-K — SLM CORPORATION F-73 18. Arrangements with Navient Corporation In connection with the Spin-Off, we entered into a Separation and Distribution Agreement with Navient (the “Separation and Distribution Agreement”). We also entered into various other ancillary agreements with Navient to effect the Spin-Off and provide a framework for our relationship with Navient thereafter, such as a transition services agreement, a tax sharing agreement, an employee matters agreement, a loan servicing and administration agreement, a joint marketing agreement, a key services agreement, a data sharing agreement, and a master sublease agreement. The majority of these agreements were transitional in nature with most having terms that have expired. In the case of the loan servicing and administration agreement for those FFELP Loans that we hold and Navient services for us, the agreement is scheduled to expire or be renewed by the end of 2026. We continue to have exposure to risks related to Navient’s creditworthiness. If we are unable to obtain indemnification payments from Navient, our results of operations and financial condition could be materially and adversely affected. We briefly summarize below some of the most significant agreements and relationships we continue to have with Navient. For additional information regarding the Separation and Distribution Agreement and the other ancillary agreements, see our Current Report on Form 8-K filed on May 2, 2014. Separation and Distribution Agreement The Separation and Distribution Agreement addresses, among other things, the following activities: • the obligation of each party to indemnify the other against liabilities retained or assumed by that party pursuant to the Separation and Distribution Agreement and in connection with claims of third parties; • the allocation among the parties of rights and obligations under insurance policies; and • the creation of a governance structure by which matters related to the separation and other transactions contemplated by the Separation and Distribution Agreement are to be managed. The Separation and Distribution Agreement provides specific processes and procedures pursuant to which we may submit claims for indemnification to Navient. If for any reason Navient is unable or unwilling to pay claims made against it, our costs, operating expenses, cash flows, and financial condition could be materially and adversely affected over time. Indemnification Obligations Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities related to the conduct of the pre-Spin-Off consumer banking business that were specifically assumed by the Bank (and as to which the Bank is obligated to indemnify Navient). Some significant examples of the types of indemnification obligations Navient has under the Separation and Distribution Agreement and related ancillary agreements include: • Navient is required to indemnify the Company and the Bank for any liabilities, costs, or expenses they may incur arising from any action or threatened action related to the servicing, operations, and collections activities of pre-Spin-Off SLM and its subsidiaries with respect to Private Education Loans and FFELP Loans that were assets of the Bank or Navient at the time of the Spin-Off; provided that written notice was provided to Navient on or prior to April 30, 2017, the third anniversary date of the Spin-Off. Navient is not required to indemnify for changes in law or changes in prior existing interpretations of law that occur on or after April 30, 2014. • In connection with the Spin-Off, we recorded a liability related to uncertain tax positions of $ 27 million for which we are indemnified by Navient. As of December 31, 2023, the remaining balance of the indemnification receivable related to those uncertain tax positions was zero . F- 74 SLM CORPORATION — 2023 Form 10-K 18. Arrangements with Navient Corporation (Continued) Long-Term Arrangements The loan servicing and administration agreement governs the terms by which Navient provides servicing, administration, and collection services for the Bank’s portfolio of FFELP Loans, as well as servicing history information with respect to Private Education Loans previously serviced by Navient and access to certain promissory notes in Navient’s possession. The term of the loan servicing and administration agreement has been extended to December 31, 2026. The tax sharing agreement governs the respective rights, responsibilities, and obligations of us and Navient after the Spin-Off relating to taxes, including with respect to the payment of taxes, the preparation and filing of tax returns, and the conduct of tax contests. Under this agreement, each party is generally liable for taxes attributable to its business. The agreement also addresses the allocation of tax liabilities that are incurred as a result of the Spin-Off and related transactions. 19. Regulatory Capital The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on our business, results of operations, and financial position. Under the FDIC’s regulations implementing the Basel III capital framework (“U.S. Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors. The Bank is subject to the following minimum capital ratios under U.S. Basel III: a Common Equity Tier 1 risk-based capital ratio of 4.5 percent, a Tier 1 risk-based capital ratio of 6.0 percent, a Total risk-based capital ratio of 8.0 percent, and a Tier 1 leverage ratio of 4.0 percent. In addition, the Bank is subject to a Common Equity Tier 1 capital conservation buffer of greater than 2.5 percent. Failure to maintain the buffer will result in restrictions on the Bank’s ability to make capital distributions, including the payment of dividends, and to pay discretionary bonuses to executive officers. Including the buffer, the Bank is required to maintain the following capital ratios under U.S. Basel III in order to avoid such restrictions: a Common Equity Tier 1 risk-based capital ratio of greater than 7.0 percent, a Tier 1 risk-based capital ratio of greater than 8.5 percent, and a Total risk-based capital ratio of greater than 10.5 percent. To qualify as “well capitalized” under the prompt corrective action framework for insured depository institutions, the Bank must maintain a Common Equity Tier 1 risk-based capital ratio of at least 6.5 percent, a Tier 1 risk-based capital ratio of at least 8.0 percent, a Total risk-based capital ratio of at least 10.0 percent, and a Tier 1 leverage ratio of at least 5.0 percent. In July 2023, the federal banking agencies proposed a rule to implement significant changes to the U.S. Basel III regulatory capital requirements. The proposed changes to the regulatory capital requirements generally would amend or introduce approaches and methodologies that would apply to banking organizations with total consolidated assets of $100 billion or more or to banking organizations with significant trading activity. The proposed rule therefore would not affect the Bank’s capital requirements or the calculation of its capital ratios. Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including the Bank, could elect to delay for two years , and then phase in over the following three years, the effects on regulatory capital of CECL relative to the incurred loss methodology. The Bank elected to use this option. Therefore, the regulatory capital impact of the Bank’s transition adjustments recorded on January 1, 2020 from the adoption of CECL, and 25 percent of the ongoing impact of CECL on the Bank’s allowance for credit losses, retained earnings, and average total consolidated assets, each as reported for regulatory capital purposes (collectively, the “adjusted transition amounts”), were deferred for the two-year period ending January 1, 2022. On January 1 of 2023 and 2022, 25 percent of the adjusted transition amounts were phased in for regulatory capital purposes. On January 1, 2024, an additional 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes. On January 1, 2025, the remaining 25 percent of the adjusted transition amounts will be phased in for regulatory capital purposes, with the phased-in amounts included in regulatory capital at the beginning of the year. The Bank’s January 1, 2020 CECL transition amounts increased our allowance for credit losses by $ 1.1 billion, increased the liability representing our off-balance sheet exposure for unfunded commitments by $ 116 million, and increased our deferred tax asset by $ 306 million, resulting in a cumulative effect adjustment that reduced retained earnings by $ 953 million. This transition adjustment was inclusive of qualitative adjustments incorporated into our CECL allowance as necessary, to address any limitations in the models used. 2023 Form 10-K — SLM CORPORATION F-75 19. Regulatory Capital (Continued) At December 31, 2023, the adjusted transition amounts that were deferred and are being phased in for regulatory capital purposes are as follows: Adjusted Transition Amounts Phase-In Amounts for the Year Ended Phase-In Amounts for the Year Ended Remaining Adjusted Transition Amounts to be Phased-In (Dollars in thousands) December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2023 Retained earnings $ 836,351 $ ( 209,088 ) $ ( 209,088 ) $ 418,175 Allowance for credit losses 1,038,145 ( 259,536 ) ( 259,536 ) 519,073 Liability for unfunded commitments 104,377 ( 26,094 ) ( 26,094 ) 52,189 Deferred tax asset 306,171 ( 76,542 ) ( 76,542 ) 153,087 The Bank’s required and actual regulatory capital amounts and ratios under U.S. Basel III are shown in the following table. The following capital amounts and ratios are based upon the Bank’s average assets and risk-weighted assets, as indicated. The Bank has elected to exclude accumulated other comprehensive income related to both available-for-sale investments and swap valuations from Common Equity Tier 1 Capital. At December 31, 2023 and December 31, 2022, the unrealized loss on available-for-sale investments included in other comprehensive income totaled $ 115 million and $ 160 million, net of tax of $ 37 million and $ 52 million, respectively. The capital ratios would remain above the U.S. Basel III well capitalized thresholds if the unrealized loss became fully recognized into capital. (Dollars in thousands) Actual U.S. Basel III Minimum Requirements Plus Buffer (1)(2) Amount Ratio Amount Ratio As of December 31, 2023 (3) : Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 3,019,973 12.3 % $ 1,719,621 > 7.0 % Tier 1 Capital (to Risk-Weighted Assets) $ 3,019,973 12.3 % $ 2,088,111 > 8.5 % Total Capital (to Risk-Weighted Assets) $ 3,334,140 13.6 % $ 2,579,432 > 10.5 % Tier 1 Capital (to Average Assets) $ 3,019,973 10.2 % $ 1,184,213 > 4.0 % As of December 31, 2022 (3) : Common Equity Tier 1 Capital (to Risk-Weighted Assets) $ 3,040,662 12.9 % $ 1,645,807 > 7.0 % Tier 1 Capital (to Risk-Weighted Assets) $ 3,040,662 12.9 % $ 1,998,480 > 8.5 % Total Capital (to Risk-Weighted Assets) $ 3,338,645 14.2 % $ 2,468,711 > 10.5 % Tier 1 Capital (to Average Assets) $ 3,040,662 10.3 % $ 1,185,280 > 4.0 % (1) Reflects the U.S. Basel III minimum required ratio plus the applicable capital conservation buffer. (2) The Bank’s regulatory capital ratios also exceeded all applicable standards for the Bank to qualify as “well capitalized” under the prompt corrective action framework. (3) For both December 31, 2023 and 2022, the actual amounts and the actual ratios include the respective adjusted transition amounts discussed above that were phased in at the beginning of 2023 and 2022. F- 76 SLM CORPORATION — 2023 Form 10-K 19. Regulatory Capital (Continued) Bank Dividends The Bank is chartered under the laws of the State of Utah and its deposits are insured by the FDIC. The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividend, the Bank’s capital and surplus would not be impaired. The Company relies on dividends from the Bank, as necessary, to enable the Company to pay any declared dividends and other payments and consummate share repurchases, as described herein. The Bank declared $ 550 million, $ 700 million, and $ 1.4 billion in dividends to the Company for the years ended December 31, 2023, 2022, and 2021, respectively, with the proceeds primarily used to fund share repurchase programs and stock dividends. In the future, we expect that the Bank will pay dividends to the Company as may be necessary to enable the Company to pay any declared dividends on its Series B Preferred Stock and common stock and to consummate any common share repurchases by the Company under its repurchase programs. 20. Defined Contribution Plans We participate in a defined contribution plan which is intended to qualify under section 401(k) of the Internal Revenue Code. The Sallie Mae 401(k) Savings Plan covers substantially all employees. After six months of service, we match 100 percent of the first five percent of contributions for eligible employees. For the years ended December 31, 2023, 2022, and 2021, we contributed $ 8 million, $ 7 million, and $ 7 million, respectively, to this plan. 21. Commitments, Contingencies and Guarantees Commitments When we approve a Private Education Loan at the beginning of an academic year, that approval may cover the borrowing for the entire academic year. As such, we do not always disburse the full amount of the loan at the time of such approval, but instead have a commitment to fund a portion of the loan at a later date (usually at the start of the second semester or subsequent trimesters). We estimate expected credit losses over the contractual period that we are exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by us. At December 31, 2023, we had $ 2.2 billion of outstanding contractual loan commitments which we expect to fund during the remainder of the 2023/2024 academic year. At December 31, 2023, we had a $ 113 million reserve recorded in “Other Liabilities” to cover expected losses that may occur during the one-year loss emergence period on these unfunded commitments. See Notes to Consolidated Financial Statements, Note 2,“Significant Accounting Policies - Allowance for Credit Losses — Off-Balance Sheet Exposure for Contractual Loan Commitments” in this Form 10-K and Note 8, “Unfunded Loan Commitments” in this Form 10-K for additional information. Regulatory Matters In May 2014, the Bank received a Civil Investigative Demand (“CID”) from the CFPB as part of the CFPB’s separate investigation relating to customer complaints, fees, and charges assessed in connection with the servicing of student loans and related collection practices of pre-Spin-Off SLM by entities now subsidiaries of Navient during a time period prior to the Spin-Off (the “CFPB Investigation”). To the extent requested, the Bank has been cooperating fully with the CFPB. Given the timeframe covered by the CID and the CFPB Investigation, and the focus on practices and procedures previously conducted by Navient and its servicing subsidiaries prior to the Spin-Off, Navient is leading the response to these investigations. Consequently, we have no basis from which to estimate either the duration or ultimate outcome of this investigation. We note that on January 18, 2017, the CFPB filed a complaint in federal court in Pennsylvania against Navient, along with its subsidiaries, Navient Solutions, Inc. and Pioneer Credit Recovery, Inc. The complaint alleges these Navient entities, among other things, engaged in deceptive practices with respect to their historic servicing and debt collection practices. Neither SLM, the Bank, nor any of their current subsidiaries are named in, or otherwise a party to, the lawsuit and are not alleged to have engaged in any wrongdoing. The CFPB’s complaint asserts Navient’s assumption of these liabilities pursuant to the Separation and Distribution Agreement. Pursuant to the terms of the Separation and Distribution Agreement, and as contemplated by the structure of the Spin-Off, Navient is legally obligated to indemnify the Bank against all claims, actions, damages, losses, or expenses that may arise from the conduct of all activities of pre-Spin-Off SLM occurring prior to the Spin-Off, except for certain liabilities 2023 Form 10-K — SLM CORPORATION F-77 21. Commitments, Contingencies and Guarantees (Continued) related to the conduct of the pre-Spin-Off consumer banking business that were specifically assumed by the Bank (and as to which the Bank is obligated to indemnify Navient). Navient has acknowledged its indemnification obligations under the Separation and Distribution Agreement, in connection with the previously disclosed investigation matters and the now resolved multistate litigation. Navient has informed the Bank, however, that it believes the Bank may be responsible to indemnify Navient against certain potential liabilities arising from the above-described lawsuits under the Separation and Distribution Agreement and/or a separate loan servicing agreement between the parties, and has suggested that the parties defer further discussion regarding indemnification obligations, and reimbursement of ongoing legal costs, in connection with the lawsuits. The Bank disagrees with Navient’s position and the Bank has reiterated to Navient that Navient is responsible for promptly indemnifying the Bank against all liabilities arising out of the conduct of pre-Spin-Off SLM that are at issue. Contingencies In the ordinary course of business, we and our subsidiaries are routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment, and other laws. In certain of these actions and proceedings, claims for substantial monetary damage may be asserted against us and our subsidiaries. It is common for the Company, our subsidiaries, and affiliates to receive information and document requests and investigative demands from state attorneys general, legislative committees, and administrative agencies. These requests may be for informational or regulatory purposes and may relate to our business practices, the industries in which we operate, or other companies with whom we conduct business. Our practice has been and continues to be to cooperate with these bodies and be responsive to any such requests. We are required to establish reserves for litigation and regulatory matters where those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, we do not establish reserves. Based on current knowledge, management does not believe there are loss contingencies, if any, arising from pending investigations, litigation, or regulatory matters for which reserves should be established. F- 78 SLM CORPORATION — 2023 Form 10-K 22. Income Taxes Reconciliations of the statutory U.S. federal income tax rates to our effective tax rate for continuing operations follow: Years ended December 31, 2023 2022 2021 Statutory rate 21.0 % 21.0 % 21.0 % State tax, net of federal benefit 3.8 4.1 3.1 Business credits ( 1.3 ) ( 1.5 ) ( 0.8 ) Other, net 1.8 2.0 1.4 Effective tax rate 25.3 % 25.6 % 24.7 % The effective tax rate varies from the statutory U.S. federal rate of 21 percent primarily due to business tax credits and the impact of state taxes, net of federal benefit, for the year ended December 31, 2023; due to business tax credits and the impact of state taxes, net of federal benefit, for the year ended December 31, 2022; and due to the impact of state taxes, net of federal benefit, for the year ended December 31, 2021. Income tax expense consists of: As of December 31, (dollars in thousands) 2023 2022 2021 Current provision (benefit): Federal $ 175,977 $ 205,954 $ 259,536 State 44,152 49,427 64,843 Total current provision (benefit) 220,129 255,381 324,379 Deferred provision (benefit): Federal ( 20,687 ) ( 75,978 ) 47,240 State ( 2,537 ) ( 17,692 ) 8,132 Total deferred provision (benefit) ( 23,224 ) ( 93,670 ) 55,372 Provision for income tax expense $ 196,905 $ 161,711 $ 379,751 2023 Form 10-K — SLM CORPORATION F-79 22. Income Taxes (Continued) The tax effect of temporary differences that give rise to deferred tax assets and liabilities is summarized below. As of December 31, (dollars in thousands) 2023 2022 Deferred tax assets: Loan reserves $ 354,412 $ 362,368 Net unrealized losses 24,176 30,160 Accrued expenses not currently deductible 16,297 12,949 Unrecorded tax benefits 11,568 12,916 Research and development costs 26,519 10,929 Stock-based compensation plans 10,847 9,624 Acquired intangible assets 14,536 781 Operating loss carryovers 26 300 Other 1,426 3,837 Total deferred tax assets 459,807 443,864 Deferred tax liabilities: Student loan premiums and discounts, net 15,908 14,065 Fixed assets 8,533 9,347 Federal deferred for state receivable 1,171 2,111 Other 614 397 Total deferred tax liabilities 26,226 25,920 Net deferred tax assets $ 433,581 $ 417,944 Included in operating loss carryovers are state net operating losses of $ 223 million and $ 7 million as of December 31, 2023 and 2022, respectively. The Company has recorded a valuation allowance against these net operating losses of $ 223 million and $ 7 million, respectively. Also included in operating loss carryovers is a capital loss of $ 18 million and $ 16 million as of December 31, 2023 and 2022, respectively. The Company has recorded a full valuation allowance against this capital loss. The valuation allowance is primarily attributable to deferred tax assets for state net operating losses and capital losses that management believes are more likely than not to expire prior to being realized. Included in net unrealized losses is a valuation allowance of $ 4 million and $ 4 million, respectively. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income of the appropriate character (i.e., capital or ordinary) during the period in which the temporary differences become deductible. Management considers, among other things, the scheduled reversals of deferred tax liabilities and the history of positive taxable income in evaluating the realizability of the deferred tax assets. Management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize our deferred tax assets (other than state net operating loss, net unrealized losses and capital loss carryovers as outlined above). As of December 31, 2023, the state net operating loss carryforwards will begin to expire in 2029 and the capital losses in 2025. F- 80 SLM CORPORATION — 2023 Form 10-K 22. Income Taxes (Continued) Accounting for Uncertainty in Income Taxes The following table summarizes changes in unrecognized tax benefits: As of December 31, (dollars in thousands) 2023 2022 2021 Unrecognized tax benefits at beginning of year $ 79,366 $ 75,328 $ 63,134 Increases resulting from tax positions taken during a prior period 1,204 6,049 1,496 Decreases resulting from tax positions taken during a prior period ( 250 ) ( 1,327 ) ( 1,481 ) Increases resulting from tax positions taken during the current period 2,711 11,032 20,743 Decreases related to settlements with taxing authorities ( 10,089 ) ( 4,666 ) ( 3,682 ) Increases related to settlements with taxing authorities — — 96 Reductions related to the lapse of statute of limitations ( 4,819 ) ( 7,050 ) ( 4,978 ) Unrecognized tax benefits at end of year $ 68,123 $ 79,366 $ 75,328 As of December 31, 2023, the gross unrecognized tax benefits are $ 68 million. Included in the $ 68 million are $ 59 million of unrecognized tax benefits that, if recognized, would favorably impact the effective tax rate. As a part of the Spin-Off, the Company recorded a liability related to uncertain tax positions for which it was indemnified by Navient. See Note 2, “Significant Accounting Policies — Income Taxes” in this Form 10-K for additional details. Tax-related interest and penalty expense is reported as a component of income tax expense. As of December 31, 2023, 2022, and 2021, the total amount of income tax-related accrued interest and penalties, net of related benefit, recognized in the consolidated balance sheets was $ 8 million, $ 8 million, and $ 10 million, respectively. For the years ended December 31, 2023, 2022, and 2021, the total amount of income tax-related accrued interest, net of related tax benefit, recognized in the consolidated statements of income was $ 2 million, $( 2 ) million, and $( 1 ) million, respectively. The Company or one of its subsidiaries files income tax returns at the U.S. federal level and in most U.S. states. U.S. federal income tax returns filed for years 2014 and prior are no longer subject to examination. Various combinations of subsidiaries, tax years, and jurisdictions remain open for review, subject to statute of limitations periods (typically three to four prior years). The Company’s federal income tax returns for the years ended December 31, 2015, December 31, 2016, and December 31, 2017 are currently under audit by the Internal Revenue Service. We do not expect the resolution of open audits to have a material impact on our unrecognized tax benefits. It is reasonably possible that the uncertain tax position reserve may decrease by as much as $ 21 million during the next 12 months due to the expiration of statutes of limitations and audit settlements. The reduction in the uncertain tax position reserve would be reflected as a tax benefit. 2023 Form 10-K — SLM CORPORATION F-81 23. Concentrations of Risk Our business is primarily focused on helping students and their families save, plan, and pay for college. We primarily originate, service, and/or collect loans made to students and their families to finance the cost of their education. We provide funding, delivery, and servicing support for education loans in the United States through our Private Education Loan program. Because of this concentration in one industry, we are exposed to credit, legislative/political/reputational, operational, regulatory, liquidity, capital, and interest rate risks associated with the student loan industry. Concentration Risk in the Revenues Associated with Private Education Loans We compete in the Private Education Loan market with banks and other consumer lending institutions, some with strong consumer brand name recognition and greater financial resources. We compete based on our products, origination capability, and customer service. To the extent our competitors compete aggressively or more effectively, we could lose market share to them or subject our existing loans to refinancing risk. Our product offerings may not prove to be profitable and may result in higher-than-expected losses. We are a leading provider of saving- and paying-for-college products and programs. This concentration gives us a competitive advantage in the marketplace. This concentration also creates risks in our business, particularly in light of our concentration as a Private Education Loan lender. If population demographics result in a decrease in college-age individuals, if demand for higher education decreases, if the cost of attendance of higher education decreases, if consumers increase their targeted savings for higher education, if public resistance to higher education costs strengthens, if certain proposals for new federal and state spending on education gain broader appeal or momentum, or if the demand for higher education loans decreases, our consumer lending business could be negatively affected. In addition, the federal government, through the Federal Direct Student Loan Program (the “DSLP”), poses significant competition to our private credit loan products. If loan limits under the DSLP increase, DSLP loans could be more widely available to students and their families and DSLP loans could increase, resulting in further decreases in the size of the Private Education Loan market and demand for our Private Education Loan products. Also, competition from banks and other consumer lenders, many of whom may have a greater level of diversification in their mix of assets or may have lower return hurdles, could lead to decreases in demand for our Private Education Loan products. Concentration Risk Associated with Deposit Products Our ability to achieve our business goals, including funding our Private Education Loans, is heavily reliant on our ability to obtain deposits. We expect to compete for deposits based primarily on a combination of reputation, rate, and availability of information about our deposit products. Our competitors, many of whom have greater financial resources or lower costs than we do, may be more effective in attracting new deposits and retaining existing deposits such as by offering more competitive rates, dedicating more resources for advertising, or engaging in more effective forms of marketing. At December 31, 2023, our brokered deposits represented 47 percent of our total deposits. Brokered deposits may be more price sensitive than other types of deposits and may become less available if alternative investments offer higher returns. In addition, our ability to maintain existing balances of all deposit types or obtain additional deposits of any type may be affected by factors, including those beyond our control, such as a rising stock market, more attractive returns on alternative investments, perceptions about our existing and future financial strength, quality of deposit servicing or online banking generally, changes in monetary or fiscal policies that influence deposit or other rates, general economic conditions, including high unemployment and decreased savings rates, and adverse developments in the financial services industry generally. Also, our ability to maintain our current level of deposits or grow our deposit base could be affected by regulatory restrictions, including the possible imposition by our regulators of prior approval requirements or restrictions on our offered rates, brokered deposit growth, or other areas. F- 82 SLM CORPORATION — 2023 Form 10-K 24. Parent Only Statements The following parent company-only financial information should be read in conjunction with the other notes to the consolidated financial statements. The accounting policies for the parent company-only financial statements are the same as those used in the presentation of the consolidated financial statements, except that the parent company-only financial statements account for the parent company’s investments in its subsidiaries under the equity method. Parent Only Condensed Balance Sheets At December 31, (dollars in thousands, except share and per share amounts) 2023 2022 Assets Cash and cash equivalents $ 237,857 $ 196,820 Total investments in subsidiaries (primarily Sallie Mae Bank) 2,628,838 2,476,020 Tax indemnification receivable — 2,816 Due from subsidiaries, net 63,679 100,543 Other assets 2,270 3,052 Total assets $ 2,932,644 $ 2,779,251 Liabilities and Equity Liabilities Long-term borrowings $ 992,200 $ 988,986 Income taxes payable, net 26,701 26,211 Other liabilities 32,946 37,084 Total liabilities 1,051,847 1,052,281 Equity Preferred stock, par value $ 0.20 per share, 20 million shares authorized: Series B: 2.5 million and 2.5 million shares issued, respectively, at stated value of $ 100 per share 251,070 251,070 Common stock, par value $ 0.20 per share, 1.125 billion shares authorized: 438.2 million and 435.1 million shares issued, respectively 87,647 87,025 Additional paid-in capital 1,148,689 1,109,072 Accumulated other comprehensive loss (net of tax benefit of $( 24,176 ) and $( 30,160 ), respectively) ( 75,104 ) ( 93,870 ) Retained earnings 3,624,859 3,163,640 Total SLM Corporation stockholders’ equity before treasury stock 5,037,161 4,516,937 Less: Common stock held in treasury at cost: 217.9 million and 194.4 million shares, respectively ( 3,156,364 ) ( 2,789,967 ) Total equity 1,880,797 1,726,970 Total liabilities and equity $ 2,932,644 $ 2,779,251 2023 Form 10-K — SLM CORPORATION F-83 24. Parent Only Statements (Continued) Parent Only Condensed Statements of Income Years ended December 31, (dollars in thousands) 2023 2022 2021 Interest income $ 9,334 $ 4,084 $ 392 Interest expense 39,850 39,860 35,208 Net interest loss ( 30,516 ) ( 35,776 ) ( 34,816 ) Non-interest loss ( 2,701 ) ( 5,117 ) ( 13,078 ) Non-interest expenses 61,958 55,466 54,352 Loss before income tax benefit and equity in net income from subsidiaries ( 95,175 ) ( 96,359 ) ( 102,246 ) Income tax expense (benefit) ( 6,942 ) ( 10,351 ) 8,477 Equity in net income from subsidiaries (primarily Sallie Mae Bank) 669,624 555,022 1,271,236 Net income 581,391 469,014 1,160,513 Preferred stock dividends 17,705 9,029 4,736 Net income attributable to SLM Corporation common stock $ 563,686 $ 459,985 $ 1,155,777 F- 84 SLM CORPORATION — 2023 Form 10-K 24. Parent Only Statements (Continued) Parent Only Condensed Statement of Cash Flows Years ended December 31, (dollars in thousands) 2023 2022 2021 Cash flows from operating activities: Net income $ 581,391 $ 469,014 $ 1,160,513 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Undistributed earnings of subsidiaries ( 669,624 ) ( 555,022 ) ( 1,271,236 ) Dividends received from Sallie Mae Bank 550,000 699,500 1,444,500 Reduction of tax indemnification receivable 2,816 5,231 10,445 Amortization of unsecured debt upfront fees 2,643 2,651 2,663 Amortization of discount on unsecured borrowings 571 571 — Loss on early extinguishment of unsecured debt — — 2,784 Acquisition related costs 952 2,603 — (Increase) decrease in investment in subsidiaries, net 35,654 ( 9,179 ) 34,935 (Increase) decrease in due from subsidiaries, net 36,864 5,124 ( 58,310 ) Increase in other assets ( 13,422 ) ( 20,533 ) ( 16,964 ) Increase (decrease) in income taxes payable, net 490 ( 8,713 ) 36,657 Decrease in payable due to entity that is a subsidiary of Navient — ( 101 ) ( 8,430 ) Increase (decrease) in other liabilities ( 3,442 ) ( 1,836 ) 2,165 Total adjustments ( 56,498 ) 120,296 179,209 Net cash provided by operating activities 524,893 589,310 1,339,722 Cash flows from investing activities: Purchase of subsidiary, net of cash acquired ( 14,654 ) ( 127,654 ) — Net cash used in investing activities ( 14,654 ) ( 127,654 ) — Cash flows from financing activities: Issuance costs for unsecured debt offering — ( 375 ) ( 1,540 ) Unsecured debt issued — — 492,135 Unsecured debt repaid — — ( 202,784 ) Common stock dividends paid ( 101,233 ) ( 112,961 ) ( 60,462 ) Preferred stock dividends paid ( 17,705 ) ( 9,029 ) ( 4,736 ) Common stock repurchased ( 350,264 ) ( 713,197 ) ( 1,530,683 ) Net cash used in financing activities ( 469,202 ) ( 835,562 ) ( 1,308,070 ) Net increase (decrease) in cash and cash equivalents 41,037 ( 373,906 ) 31,652 Cash and cash equivalents at beginning of year 196,820 570,726 539,074 Cash and cash equivalents at end of year $ 237,857 $ 196,820 $ 570,726 2023 Form 10-K — SLM CORPORATION F-85 25. Selected Quarterly Financial Information (unaudited) 2023 (Dollars in thousands, except per share data) First Second Third Fourth Quarter Quarter Quarter Quarter Net interest income $ 405,068 $ 386,631 $ 384,628 $ 385,886 Less: provisions for credit losses 114,112 17,729 198,023 15,599 Net interest income after provisions for credit losses 290,956 368,902 186,605 370,287 Gains (losses) on sales of loans, net ( 9 ) 124,754 ( 5 ) 35,550 Gains (losses) on securities, net 1,711 ( 1,213 ) 1,490 690 Other income 20,009 20,513 22,753 20,873 Total operating expenses 154,539 154,164 167,402 143,101 Acquired intangible assets impairment and amortization expense 2,272 2,245 2,834 59,013 Income tax expense 37,338 91,482 11,242 56,843 Net income 118,518 265,065 29,365 168,443 Preferred stock dividends 4,063 4,274 4,642 4,726 Net income attributable to SLM Corporation common stock $ 114,455 $ 260,791 $ 24,723 $ 163,717 Basic earnings per common share (1) $ 0.47 $ 1.11 $ 0.11 $ 0.73 Diluted earnings per common share (1) $ 0.47 $ 1.10 $ 0.11 $ 0.72 Declared dividends per common share $ 0.11 $ 0.11 $ 0.11 $ 0.11 (1) Basic and diluted earnings per common share attributable to SLM Corporation are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings per common share information may not equal annual basic and diluted earnings per common share. F- 86 SLM CORPORATION — 2023 Form 10-K 25. Selected Quarterly Financial Information (unaudited) (Continued) 2022 First Second Third Fourth (Dollars in thousands, except per share data) Quarter Quarter Quarter Quarter Net interest income $ 375,032 $ 362,808 $ 369,510 $ 381,431 Less: provisions for credit losses 98,050 30,545 207,598 297,260 Net interest income after provisions for credit losses 276,982 332,263 161,912 84,171 Gains on sales of loans, net 9,881 239,997 74,978 2,894 Gains (losses) on securities, net ( 3,580 ) 667 891 ( 58,245 ) Gains (losses) on derivative and hedging activities, net ( 5 ) — — — Other income 15,629 17,589 19,234 14,708 Total operating expenses 132,006 131,730 149,964 137,762 Acquired intangible assets amortization expense 733 2,417 2,328 2,301 Income tax expense (benefit) 37,356 114,296 29,551 ( 19,492 ) Net income (loss) 128,812 342,073 75,172 ( 77,043 ) Preferred stock dividends 1,275 1,757 2,531 3,466 Net income (loss) attributable to SLM Corporation common stock $ 127,537 $ 340,316 $ 72,641 $ ( 80,509 ) Basic earnings (loss) per common share (1) $ 0.46 $ 1.30 $ 0.29 $ ( 0.33 ) Diluted earnings (loss) per common share (1) $ 0.45 $ 1.29 $ 0.29 $ ( 0.33 ) Declared dividends per common share $ 0.11 $ 0.11 $ 0.11 $ 0.11 (1) Basic and diluted earnings (loss) per common share attributable to SLM Corporation are computed independently for each of the quarters presented. Therefore, the sum of quarterly basic and diluted earnings (loss) per common share information may not equal annual basic and diluted earnings (loss) per common share. 2023 Form 10-K — SLM CORPORATION F-87 26. Subsequent Event 2024 Loan Sales On February 1, 2024, we sold approximately $ 2.0 billion of our Private Education Loans, including $ 1.9 billion in principal, $ 143 million in capitalized interest and $ 10 million in accrued interest to an unaffiliated third party. The gain on sale of loans sold expressed as a percentage was in the mid-to-high single-digits and will be recognized in the first-quarter 2024 consolidated statements of income. The transaction qualified for sale treatment and removed the balance of the loans from our balance sheet on the settlement date. We will continue to service these loans pursuant to the terms of the applicable transaction documents. F- 88 SLM CORPORATION — 2023 Form 10-K