Sallie Mae Reports Fourth Quarter and Full-Year 2025 Financial Results
Board of Directors Approves New $500 Million Share Repurchase Program
NEWARK, Del., Jan. 22, 2026 — Sallie Mae (Nasdaq: SLM), formally SLM Corporation, today released fourth quarter and full-year 2025 financial results. Complete financial results and related materials are available at www.SallieMae.com/investors. The materials will also be available on the Securities and Exchange Commission’s website at www.sec.gov.
Sallie Mae will host an earnings conference call today, Jan. 22, 2026, at 5:30 p.m. ET. Executives will be on hand to discuss various highlights of the quarter and year and to answer questions related to Sallie Mae’s performance. A live audio webcast of the conference call and presentation slides may be accessed at www.SallieMae.com/investors and the hosting website.
A replay of the webcast will be available via the company’s investor website approximately two hours after the call’s conclusion.
Sallie Mae announced today that its Board of Directors authorized a new stock repurchase program of up to $500 million of the Company’s outstanding common stock, par value $0.20 per share, to begin on Jan. 22, 2026 (the “2026 Share Repurchase Program”). The 2026 Share Repurchase Program is expected to be completed over the next approximately 24 months ending Feb. 4, 2028. The Company’s “2024 Share Repurchase Program,” authorized on Jan. 23, 2024, with a repurchase capacity of $650 million, remains open. Repurchases may be made under the 2024 Share Repurchase Program until it expires on Feb. 6, 2026, or is expended (whichever comes first).
Under the announced program, Sallie Mae may repurchase shares of common stock from time to time in various transaction formats including, but not limited to, tender offers, open market purchases, accelerated share repurchases, negotiated or block purchases, and/ or pursuant to trading plans in accordance with Rules 10b5-1 and 10b-18 of the Exchange Act. The actual timing, number, and value of shares repurchased under the program will be determined by management at its discretion and are dependent on a number of factors. Sallie Mae reserves the right to suspend or discontinue share repurchases at any time and for any reason.
###
Sallie Mae (Nasdaq: SLM) believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, we provide financing and know-how to support access to college and offer products and resources to help customers make new goals and experiences, beyond college, happen. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
Contacts:
Media
Rick Castellano, 302-451-2541, rick.castellano@SallieMae.com
Investors
Kate deLacy, 571-438-9574, kate.delacy@salliemae.com
NEWARK, Del., Jan. 22, 2026 — Sallie Mae (Nasdaq:SLM), formally SLM Corporation, today released its fourth quarter and full-year 2025 financial results.
Full-Year 2025 Financial Results
$3.46
GAAP Diluted Earnings Per Common Share in 2025
6%
Private Education Loan Originations Growth from 2024
12.8M
Shares repurchased in 2025 for $373M(1)
2.15%
Total Net Charge-Offs as a Percentage of Average Loans in Repayment
$659M
Non-Interest Expenses in 2025
Fourth Quarter 2025 Financial Results
$1.12
GAAP Diluted Earnings Per Common Share in Q4 2025
4%
Private Education Loan Originations Growth compared to Q4 2024
3.8M
Shares repurchased in Q4 2025 for $106M(1)
2.42%
Total Net Charge-Offs as a Percentage of Average Loans in Repayment (annualized)
$157M
Non-Interest Expenses in Q4 2025
“We delivered solid results for 2025, expanding originations, improving our net charge-off rate, returning capital to shareholders, and building further capabilities to serve more students and families through our new private credit strategic partnership. This momentum, coupled with recent reforms to the federal student loan program, should set us up for an exciting 2026 and beyond as families continue to value and invest in higher education.”
Jonathan Witter, CEO, Sallie Mae
Quarterly Private Education Loan Portfolio Trends
▪$22.9B of average loans outstanding, net, an increase of 4% compared to Q4 2024
▪$19M in negative provisions for credit losses in Q4 2025, compared with $108M in provisions in Q4 2024
▪0.99% loans in a hardship forbearance, an increase from 0.92% in Q4 2024(2)
▪4.00% delinquencies as a percentage of loans in repayment, compared with 3.68% in Q4 2024
▪2.42% net charge-offs as a percentage of average loans in repayment (annualized), compared with 2.38% in Q4 2024
Balance Sheet & Capital Allocation
$0.13
Common stock dividend per share paid in Q4 2025
12.4%
Total risk-based capital ratio and CET1 capital ratio of 11.1%
$33M
Capacity remaining under the 2024 Share Repurchase Program as of December 31, 2025
Income Statement & Earnings Summary
2026 Guidance*
For the full year 2026, the Company expects:
5.21%
Net interest margin for Q4 2025, an increase of 29 basis points from Q4 2024
34.6%
Efficiency Ratio for Q4 2025, a decrease from 38.5% for Q4 2024(3)
Negative provision for credit losses in Q4 2025, a decrease from Q4 2024 provision largely due to a combined $106M release of provision from loan sale and loans transferred to held for sale, offset by an increase in loan commitments, net of expired commitments.
$345 million - $385 million
Net Charge-Offs
$750 million - $780 million
Non-Interest Expenses
Investor Contact: Kate deLacy, 571-438-9574 Media Contact: Rick Castellano, 302-451-2541
* The 2026 Guidance and related comments constitute forward-looking statements and are based on management’s current expectations and beliefs. There can be no guarantee as to whether and to what extent this guidance will be achieved. The Company undertakes no obligation to revise or release any revision or update to these forward-looking statements. See our Forward-Looking Statements disclosures on pg. 4 for more information.
Quarterly and Full-Year Financial Highlights
Q4 2025
Q3 2025
Q4 2024
2025
2024
Income Statement ($ millions)
Total interest income
$657
$658
$661
$2,627
$2,619
Total interest expense
280
285
299
1,125
1,138
Net interest income
377
373
362
1,502
1,481
Less: provisions for credit losses
(19)
179
108
333
409
Total non-interest income
77
173
28
483
368
Total non-interest expenses
157
180
150
659
642
Income tax expense
83
50
21
248
190
Net income
233
136
112
745
608
Preferred stock dividends
4
4
4
16
18
Net income attributable to common stock
$229
$132
$107
$729
$590
Ending Balances ($ millions)
Private Education Loans held for investment, net
$20,332
$21,615
$20,902
$20,332
$20,902
Private Education Loans held for sale, net
933
—
—
933
—
Deposits
21,060
20,012
21,069
21,060
21,069
-Brokered
8,784
7,738
9,476
8,784
9,476
-Retail and other
12,276
12,274
11,593
12,276
11,593
Key Performance Metrics ($ in millions)
Net interest margin
5.21%
5.18%
4.92%
5.24%
5.19%
Yield - Total interest-earning assets
9.07%
9.14%
8.98%
9.17%
9.17%
Private Education Loans
10.44%
10.58%
10.54%
10.56%
10.81%
Cost of Funds
4.14%
4.24%
4.31%
4.21%
4.25%
Efficiency Ratio(3)
34.6%
33.0%
38.5%
33.2%
34.7%
Return on Assets (“ROA”)(4)
3.1%
1.9%
1.5%
2.5%
2.1%
Return on Common Equity (“ROCE”)(5)
42.2%
24.3%
22.5%
34.4%
31.3%
Private Education Loan sales
$1,014
$1,936
$—
$4,952
$3,692
Per Common Share
GAAP diluted earnings per common share
$1.12
$0.63
$0.50
$3.46
$2.68
Average common and common equivalent shares outstanding (millions)
205
211
215
211
220
2
Footnotes:
(1) Shares of common stock were repurchased under Rule 10b5-1 trading plans authorized under the Company’s 2024 Share Repurchase Program. As of December 31, 2025, we had $33 million of capacity remaining under the 2024 Share Repurchase Program.
(2) We calculate the percentage of loans in hardship and other forbearances as the ratio of (a) Private Education Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) numerator to (b) Private Education Loans in repayment and forbearance denominator. If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations, which may include a short-term hardship forbearance. Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) were approximately $161 million and $152 million at December 31, 2025 and 2024, respectively.
(3) We calculate and report our Efficiency Ratio as the ratio of (a) total non-interest expenses numerator to (b) the net denominator, which consists of net interest income plus total non-interest income.
(4) We calculate and report our Return on Assets (“ROA”) as the ratio of (a) GAAP net income (loss) numerator (annualized) to (b) the GAAP total average assets denominator.
(5) We calculate and report our Return on Common Equity (“ROCE”) as the ratio of (a) GAAP net income (loss) attributable to common stock numerator (annualized) to (b) the net denominator, which consists of GAAP total average equity less total average preferred stock.
***
3
CAUTIONARY NOTE AND DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS
This press release contains “forward-looking statements” and information based on management’s current expectations as of the date of this press release. Statements that are not historical facts, including statements about the Company’s beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements. These include, but are not limited to: strategies; goals and assumptions of SLM Corporation and its subsidiaries, collectively or individually as the context requires (the “Company”): the Company’s expectation and ability to execute loan sales and share repurchases; the Company’s expectation and ability to pay a quarterly cash dividend on our common stock in the future, subject to the approval of our Board of Directors; the Company’s 2026 guidance; the Company’s three-year horizon outlook; the Company’s credit outlook; the impact of acquisitions the Company has made or may make in the future; the Company’s projections regarding originations, net charge-offs, non-interest expenses, earnings, balance sheet position, and other metrics; any estimates related to accounting standard changes; and any estimates related to the impact of credit administration practices changes, including the results of simulations or other behavioral observations.
Forward-looking statements are subject to risks, uncertainties, assumptions, and other factors, many of which are difficult to predict and generally beyond the control of the Company, which may cause actual results to be materially different from those reflected in such forward-looking statements. There can be no assurance that future developments affecting the Company will be the same as those anticipated by management. The Company cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. These factors include, among others, the risks and uncertainties set forth in Item 1A. “Risk Factors” and elsewhere in the Company’s most recently filed Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; failure to comply with consumer protection, banking, and other laws or regulations; changes in laws, regulations, and supervisory expectations, especially in light of the goals of the Trump administration; our ability to timely develop new products and services and the acceptance of those products and services by potential and existing customers; changes in accounting standards and the impact of related changes in significant accounting estimates, including any regarding the measurement of our allowance for credit losses and the related provision expense; any adverse outcomes in any significant litigation to which the Company is a party; credit risk associated with the Company’s exposure to third parties, including counterparties to the Company’s derivative transactions; the effectiveness of our risk management framework and quantitative models; changes in the terms of education loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws); and changes in the demand for our deposit products, including changes caused by new or emerging market entrants or technologies. We could also be affected by, among other things: changes in our funding costs and availability; reductions to our credit ratings; cybersecurity incidents, cyberattacks, risks related to artificial intelligence (AI), and other failures or breaches of our operating systems or infrastructure, including those of third-party vendors; the societal, demographic, business, and legislative/regulatory impact of pandemics, other public health crises, severe weather events, and/or natural disasters; damage to our reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting programs and the adverse effects of such initiatives on our business; changes in the demand for higher education, educational financing, or in financing preferences of lenders, educational institutions, students, and their families, including changes to the amount or availability of funding that educational institutions, students, or their families receive from government sources; changes in laws and regulations with respect to the student lending business and financial institutions generally; changes in banking rules and regulations, including increased capital requirements; increased competition from banks and other consumer lenders; the creditworthiness of our customers, or any change related thereto; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of our earning assets versus our funding arrangements; rates of prepayments on the loans owned by us; changes in general economic or macroeconomic conditions, including changes due to inflation, stagflation, recession, shifts in the labor market, changes to government policies or initiatives, such as tariffs, trade wars, wars, immigration, and student visa policies, which could negatively impact consumer or business sentiment, demand for higher education, demand for student loans, our financial and business results and/or modeling, and our ability to successfully effectuate any acquisitions, strategic partnerships, or initiatives. The preparation of our consolidated financial statements also requires management to make certain estimates and assumptions, including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect.
All oral and written forward-looking statements attributed to the Company are expressly qualified in their entirety by the factors, risks, and uncertainties set forth in the foregoing cautionary statements, and are made only as of the date of this press release or, where the statement is oral, as of the date stated. We do not undertake any obligation to update or revise any forward-looking statements to conform to actual results or changes in our expectations, nor to reflect events or circumstances that occur after the date on which such statements were made. In light of these risks, uncertainties, and assumptions, you should not put undue reliance on any forward-looking statements discussed hereto.
4
SLM CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
As of December 31,
(dollars in thousands, except share and per share amounts)
2025
2024
Assets
Cash and cash equivalents
$
4,241,265
$
4,700,366
Investments:
Trading investments at fair value (cost of $37,606 and $41,715, respectively)
49,250
53,262
Available-for-sale investments at fair value (cost of $1,812,408 and $2,042,473, respectively)
1,758,070
1,933,226
Other investments
115,394
112,377
Total investments
1,922,714
2,098,865
Loans held for investment (net of allowance for losses of $1,430,318 and $1,435,920, respectively)
20,332,124
20,902,158
Loans held for sale
933,256
—
Restricted cash
177,263
173,894
Other interest-earning assets
120
4,880
Accrued interest receivable
1,562,811
1,546,590
Premises and equipment, net
122,193
119,354
Goodwill and acquired intangible assets, net
59,974
63,532
Income taxes receivable, net
347,260
425,625
Other assets
47,315
36,846
Total assets
$
29,746,295
$
30,072,110
Liabilities
Deposits
$
21,060,151
$
21,068,568
Short-term borrowings
498,415
—
Long-term borrowings
5,362,494
6,440,345
Other liabilities
373,877
403,277
Total liabilities
27,294,937
27,912,190
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: 443.2 million and 440.6 million shares issued, respectively
88,650
88,121
Additional paid-in capital
1,240,250
1,193,753
Accumulated other comprehensive loss (net of tax benefit of $(13,446) and $(21,209), respectively)
(40,128)
(65,861)
Retained earnings
4,734,313
4,114,446
Total SLM Corporation stockholders’ equity before treasury stock
6,274,155
5,581,529
Less: Common stock held in treasury at cost: 244.0 million and 230.2 million shares, respectively
(3,822,797)
(3,421,609)
Total equity
2,451,358
2,159,920
Total liabilities and equity
$
29,746,295
$
30,072,110
5
SLM CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Quarters Ended
Years Ended
December 31,
December 31,
(Dollars in thousands, except per share amounts)
2025
2024
2025
2024
Interest income:
Loans
$
602,307
$
587,426
$
2,392,417
$
2,314,417
Investments
15,404
15,467
58,815
61,412
Cash and cash equivalents
39,108
58,480
176,023
243,217
Total interest income
656,819
661,373
2,627,255
2,619,046
Interest expense:
Deposits
199,604
223,976
808,798
881,456
Interest expense on short-term borrowings
3,687
3,476
11,418
13,815
Interest expense on long-term borrowings
76,471
71,730
305,215
242,993
Total interest expense
279,762
299,182
1,125,431
1,138,264
Net interest income
377,057
362,191
1,501,824
1,480,782
Less: provisions for credit losses
(18,779)
108,179
332,687
408,515
Net interest income after provisions for credit losses
395,836
254,012
1,169,137
1,072,267
Non-interest income:
Gains (losses) on sales of loans, net
45,200
(9)
368,880
254,928
Gains (losses) on securities, net
(1,652)
82
(9,795)
467
Other income
33,499
27,709
123,484
112,873
Total non-interest income
77,047
27,782
482,569
368,268
Non-interest expenses:
Operating expenses:
Compensation and benefits
86,417
80,084
345,814
349,387
FDIC assessment fees
5,595
13,594
34,291
51,606
Other operating expenses
64,081
54,455
275,480
235,577
Total operating expenses
156,093
148,133
655,585
636,570
Acquired intangible assets impairment and amortization expense
793
1,495
3,558
5,329
Total non-interest expenses
156,886
149,628
659,143
641,899
Income before income tax expense
315,997
132,166
992,563
798,636
Income tax expense
82,812
20,613
247,716
190,311
Net income
233,185
111,553
744,847
608,325
Preferred stock dividends
3,803
4,367
15,725
18,296
Net income attributable to SLM Corporation common stock
$
229,382
$
107,186
$
729,122
$
590,029
Basic earnings per common share
$
1.14
$
0.51
$
3.52
$
2.73
Average common shares outstanding
201,612
210,741
207,155
216,220
Diluted earnings per common share
$
1.12
$
0.50
$
3.46
$
2.68
Average common and common equivalent shares outstanding
204,957
215,113
210,914
219,934
Declared dividends per common share
$
0.13
$
0.13
$
0.52
$
0.46
6
SLM CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Quarters Ended
Years Ended
December 31,
December 31,
(Dollars in thousands)
2025
2024
2025
2024
Net income
$
233,185
$
111,553
$
744,847
$
608,325
Other comprehensive income (loss):
Unrealized gains (losses) on investments
11,860
(18,546)
54,935
42,604
Unrealized gains (losses) on cash flow hedges
(5,143)
(1,975)
(21,439)
(30,394)
Total unrealized gains (losses)
6,717
(20,521)
33,496
12,210
Income tax (expense) benefit
(1,678)
4,999
(7,763)
(2,967)
Other comprehensive income (loss), net of tax (expense) benefit
5,039
(15,522)
25,733
9,243
Total comprehensive income
$
238,224
$
96,031
$
770,580
$
617,568
7
Average Balance Sheets
The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities and reflects our net interest margin on a consolidated basis.
Quarters Ended December 31,
Years Ended December 31,
2025
2024
2025
2024
(Dollars in thousands)
Balance
Rate
Balance
Rate
Balance
Rate
Balance
Rate
Average Assets
Private Education Loans
$
22,882,452
10.44
%
$
22,061,986
10.54
%
$
22,654,942
10.56
%
$
21,121,545
10.81
%
FFELP Loans
—
—
149,225
7.16
—
—
413,338
7.45
Taxable securities
1,828,595
3.34
2,064,637
2.98
1,836,407
3.20
2,316,848
2.65
Cash and other short-term investments
4,025,614
3.88
5,028,902
4.65
4,164,094
4.25
4,700,066
5.19
Total interest-earning assets
28,736,661
9.07
%
29,304,750
8.98
%
28,655,443
9.17
%
28,551,797
9.17
%
Non-interest-earning assets
756,611
632,835
596,535
505,245
Total assets
$
29,493,272
$
29,937,585
$
29,251,978
$
29,057,042
Average Liabilities and Equity
Brokered deposits
$
8,278,192
3.93
%
$
9,628,044
4.10
%
$
8,546,629
4.01
%
$
10,009,221
3.89
%
Retail and other deposits
12,182,687
4.00
11,627,142
4.48
11,830,694
4.13
11,142,798
4.65
Other interest-bearing liabilities(1)
6,319,320
4.71
6,331,195
4.34
6,362,734
4.63
5,616,445
4.09
Total interest-bearing liabilities
26,780,199
4.14
%
27,586,381
4.31
%
26,740,057
4.21
%
26,768,464
4.25
%
Non-interest-bearing liabilities
306,427
206,242
141,396
149,594
Equity
2,406,646
2,144,962
2,370,525
2,138,984
Total liabilities and equity
$
29,493,272
$
29,937,585
$
29,251,978
$
29,057,042
Net interest margin
5.21
%
4.92
%
5.24
%
5.19
%
(1) Includes the average balance of our unsecured borrowings, as well as secured borrowings and amortization expense of transaction costs related to our term asset-backed securitizations and our Secured Borrowing Facility.
8
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.
Quarters Ended
Years Ended
December 31,
December 31,
(In thousands, except per share data)
2025
2024
2025
2024
Numerator:
Net income
$
233,185
$
111,553
$
744,847
$
608,325
Preferred stock dividends
3,803
4,367
15,725
18,296
Net income attributable to SLM Corporation common stock
$
229,382
$
107,186
$
729,122
$
590,029
Denominator:
Weighted average shares used to compute basic EPS
201,612
210,741
207,155
216,220
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)
3,345
4,372
3,759
3,714
Weighted average shares used to compute diluted EPS
204,957
215,113
210,914
219,934
Basic earnings per common share
$
1.14
$
0.51
$
3.52
$
2.73
Diluted earnings per common share
$
1.12
$
0.50
$
3.46
$
2.68
(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 both the quarter and year ended December 31, 2025, securities covering less than 1 million shares were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive. For the quarter and year ended December 31, 2024, securities covering no shares and less than 1 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they were anti-dilutive.
2026 Share Repurchase Program
The Company has been authorized to repurchase up to $500 million in common stock under a new share repurchase program (the “2026 Share Repurchase Program”), which became effective on January 22, 2026 and is expected to be completed over the next approximately 24 months ending February 4, 2028. The Company’s “2024 Share Repurchase Program,” authorized on January 23, 2024, with a repurchase capacity of $650 million, remains open. Repurchases may be made under the 2024 Share Repurchase Program until it expires on February 6, 2026, or is expended (whichever comes first). Under the 2026 Share Repurchase Program, the Company may repurchase shares of common stock from time to time in various transaction formats including, but not limited to, tender offers, open market purchases, accelerated share repurchases, negotiated or block purchases, and/ or pursuant to trading plans in accordance with Rules 10b5-1 and 10b-18 of the Exchange Act. The actual timing, number, and value of shares repurchased under the program will be determined by management at its discretion and are dependent on a number of factors. The Company reserves the right to suspend or discontinue share repurchases at any time and for any reason.
9
Allowance for Credit Losses Metrics
Quarter Ended December 31, 2025 (dollars in thousands)
Private Education Loans
Allowance for loan losses, beginning balance
$
1,526,104
Transfer from allowance for unfunded loan commitments
37,810
Provisions:
Provision for current period
69,701
Loan sale reduction to provision
(61,271)
Loans transferred to held-for-sale
(44,274)
Total provisions(1)
(35,844)
Net charge-offs:
Charge-offs
(114,795)
Recoveries
17,043
Net charge-offs
(97,752)
Allowance for loan losses, ending balance
1,430,318
Allowance for unfunded loan commitments, beginning balance(2)
97,877
Provision(1)(3)
17,065
Transfer to allowance for loan losses
(37,810)
Allowance for unfunded loan commitments, ending balance(2)
77,132
Total allowance for credit losses, ending balance
$
1,507,450
Net charge-offs as a percentage of average loans in repayment (annualized)(4)
2.42
%
Allowance for loan losses coverage of net charge-offs (annualized)
3.66
Total Allowance Percentage of Private Education Loan Exposure(5) (6)
6.00
%
Ending total loans, gross
$
21,660,434
Average loans in repayment(4)
$
16,157,225
Ending loans in repayment(4)
$
15,894,827
Unfunded loan commitments for loans held for investment(6)
$
1,913,753
Total accrued interest receivable
$
1,570,069
(1) See “Provisions for Credit Loan Losses” on page 14 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.
(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “Unfunded Loan Commitments” on page 14 for further discussion.
(3) Includes incremental provision for new commitments and changes to provision for existing commitments.
(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 loans in the “loans in forbearance” metric).
(5) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.
(6) Unfunded loan commitments for loans held for investment and the calculation of the Total Allowance Percentage of Private Education Loan Exposure do not include approximately $523 million of unfunded loan commitments associated with loans classified as held for sale at December 31, 2025. Due to the near-term timing of the loan sale and credit quality of the loans, we believe there is no risk of credit loss and are not recording an allowance for the unfunded loan commitments related to the loans classified as held for sale.
10
Quarter Ended December 31, 2024 (dollars in thousands)
Private Education Loans
Allowance for loan losses, beginning balance
$
1,413,621
Transfer from allowance for unfunded loan commitments
35,037
Provisions:
Provision for current period
80,533
Total provisions(1)
80,533
Net charge-offs:
Charge-offs
(104,187)
Recoveries
10,916
Net charge-offs
(93,271)
Allowance for loan losses, ending balance
1,435,920
Allowance for unfunded loan commitments, beginning balance(2)
91,959
Provision(1)(3)
27,646
Transfer to allowance for loan losses
(35,037)
Allowance for unfunded loan commitments, ending balance(2)
84,568
Total allowance for credit losses, ending balance
$
1,520,488
Net charge-offs as a percentage of average loans in repayment (annualized)(4)
2.38
%
Allowance for loan losses coverage of net charge-offs (annualized)
3.85
Total Allowance Percentage of Private Education Loan Exposure(5)
5.83
%
Ending total loans, gross
$
22,235,008
Average loans in repayment(4)
$
15,681,361
Ending loans in repayment(4)
$
16,106,751
Unfunded loan commitments for loans held for investment
$
2,311,660
Total accrued interest receivable
$
1,549,415
(1) See “Provisions for Credit Loan Losses” on page 14 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.
(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “Unfunded Loan Commitments” on page 14 for further discussion.
(3) Includes incremental provision for new commitments and changes to provision for existing commitments.
(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 loans in the “loans in forbearance” metric).
(5) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.
11
Year Ended December 31, 2025 (dollars in thousands)
Private Education Loans
Allowance for loan losses, beginning balance
$
1,435,920
Transfer from allowance for unfunded loan commitments
280,244
Provisions:
Provision for current period
400,677
Loan sale reduction to provision
(296,524)
Loans transferred to held-for-sale
(44,274)
Total provisions(1)
59,879
Net charge-offs:
Charge-offs
(399,636)
Recoveries
53,911
Net charge-offs
(345,725)
Allowance for loan losses, ending balance
1,430,318
Allowance for unfunded loan commitments, beginning balance(2)
84,568
Provision(1)(3)
272,808
Transfer to allowance for loan losses
(280,244)
Allowance for unfunded loan commitments, ending balance(2)
77,132
Total allowance for credit losses, ending balance
$
1,507,450
Net charge-offs as a percentage of average loans in repayment(4)
2.15
%
Allowance for loan losses coverage of net charge-offs
4.14
Total Allowance Percentage of Private Education Loan Exposure(5)(6)
6.00
%
Ending total loans, gross
$
21,660,434
Average loans in repayment(4)
$
16,047,085
Ending loans in repayment(4)
$
15,894,827
Unfunded loan commitments for loans held for investment(6)
$
1,913,753
Total accrued interest receivable
$
1,570,069
(1) See “Provisions for Credit Loan Losses” on page 14 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.
(2) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “Unfunded Loan Commitments” on page 14 for further discussion.
(3) Includes incremental provision for new commitments and changes to provision for existing commitments.
(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 loans in the “loans in forbearance” metric).
(5) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.
(6) Unfunded loan commitments for loans held for investment and the calculation of the Total Allowance Percentage of Private Education Loan Exposure do not include approximately $523 million of unfunded loan commitments associated with loans classified as held for sale at December 31, 2025. Due to the near-term timing of the loan sale and credit quality of the loans, we believe there is no risk of credit loss and are not recording an allowance for the unfunded loan commitments related to the loans classified as held for sale.
12
Year Ended December 31, 2024 (dollars in thousands)
FFELP Loans
Private Education Loans
Total
Allowance for loan losses, beginning balance
$
4,667
$
1,335,105
$
1,339,772
Transfer from allowance for unfunded loan commitments
—
311,787
311,787
Provisions:
Provision for current period
4,010
357,067
361,077
Loan sale reduction to provision
—
(235,955)
(235,955)
Total provisions(1)
4,010
121,112
125,122
Net charge-offs:
Charge-offs
(380)
(376,840)
(377,220)
Recoveries
—
44,756
44,756
Net charge-offs
(380)
(332,084)
(332,464)
Write-downs arising from transfer of loans to held for sale(2)
(8,297)
—
(8,297)
Allowance for loan losses, ending balance
—
1,435,920
1,435,920
Allowance for unfunded loan commitments, beginning balance(3)
—
112,962
112,962
Provision(1)(4)
—
283,393
283,393
Transfer to allowance for loan losses
—
(311,787)
(311,787)
Allowance for unfunded loan commitments, ending balance(3)
—
84,568
84,568
Total allowance for credit losses, ending balance
$
—
$
1,520,488
$
1,520,488
Net charge-offs as a percentage of average loans in repayment(5)
—
%
2.19
%
Allowance for loan losses coverage of net charge-offs
—
4.32
Total Allowance Percentage of Private Education Loan Exposure(6)
—
%
5.83
%
Ending total loans, gross
$
—
$
22,235,008
Average loans in repayment(5)
$
—
$
15,139,184
Ending loans in repayment(5)
$
—
$
16,106,751
Unfunded loan commitments for loans held for investment
$
—
$
2,311,660
Total accrued interest receivable
$
—
$
1,549,415
(1) See “Provisions for Credit Loan Losses” on page 14 for a reconciliation of the provisions for credit losses reported in the consolidated statements of income.
(2) Represents fair value adjustments on loans transferred to held for sale.
(3) When a new loan commitment is made, we record an allowance to cover lifetime expected credit losses on the unfunded commitments, which is recorded in “Other Liabilities” on the consolidated balance sheet. See “Unfunded Loan Commitments” on page 14 for further discussion.
(4) Includes incremental provision for new commitments and changes to provision for existing commitments.
(5) 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 loans in the “loans in forbearance” metric).
(6) The Total Allowance Percentage of Private Education Loan Exposure is the total allowance for credit losses as a percentage of ending total loans plus unfunded loan commitments and total accrued interest receivable on Private Education Loans.
13
Provisions for Credit Losses
Consolidated Statements of Income Provisions for Credit Losses Reconciliation
Quarters Ended December 31,
Years Ended December 31,
(Dollars in thousands)
2025
2024
2025
2024
Private Education Loan provisions for credit losses:
Provisions for loan losses
$
(35,844)
$
80,533
$
59,879
$
121,112
Provisions for unfunded loan commitments
17,065
27,646
272,808
283,393
Total Private Education Loan provisions for credit losses
(18,779)
108,179
332,687
404,505
Total FFELP Loans provisions for credit losses
—
—
—
4,010
Provisions for credit losses reported in consolidated statements of income
$
(18,779)
$
108,179
$
332,687
$
408,515
Unfunded Loan Commitments
Quarters Ended December 31, (dollars in thousands)
2025
2024
Allowance
Unfunded Commitments
Allowance
Unfunded Commitments
Beginning Balance
$
97,877
$
2,673,369
$
91,959
$
2,476,785
Provision/New commitments - net(1)
17,065
786,516
27,646
816,683
Transfer - funded loans(2)
(37,810)
(1,022,850)
(35,037)
(981,808)
Ending Balance(3)
$
77,132
$
2,437,035
$
84,568
$
2,311,660
Years Ended December 31, (dollars in thousands)
2025
2024
Allowance
Unfunded Commitments
Allowance
Unfunded Commitments
Beginning Balance
$
84,568
$
2,311,660
$
112,962
$
2,221,077
Provision/New commitments - net(1)
272,808
7,541,698
283,393
7,103,832
Transfer - funded loans(2)
(280,244)
(7,416,323)
(311,787)
(7,013,249)
Ending Balance(3)
$
77,132
$
2,437,035
$
84,568
$
2,311,660
(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.
(3) The ending balance of unfunded loan commitments includes approximately $523 million of unfunded loan commitments associated with the loans classified as held for sale at December 31, 2025. Due to the near-term timing of the loan sale and credit quality of the loans, we believe there is no risk of credit loss and are not recording an allowance for the unfunded loan commitments related to the loans classified as held for sale.
14
Private Education Loans Held for Investment - Key Credit Quality Indicators
Private Education Loans Held for Investment As of December 31, (dollars in thousands)
Credit Quality Indicators
2025
2024
Balance(1)
% of Balance
Balance(1)
% of Balance
Cosigners:
With cosigner
$
19,215,391
89
%
$
19,522,539
88
%
Without cosigner
2,445,043
11
2,712,469
12
Total
$
21,660,434
100
%
$
22,235,008
100
%
FICO at Original Approval(2):
Less than 670
$
1,589,780
7
%
$
1,674,778
8
%
670-699
3,007,221
14
3,199,300
14
700-749
6,762,880
31
7,060,211
32
Greater than or equal to 750
10,300,553
48
10,300,719
46
Total
$
21,660,434
100
%
$
22,235,008
100
%
FICO-Refreshed(2)(3):
Less than 670
$
3,127,160
14
%
$
2,913,860
13
%
670-699
2,580,061
12
2,719,797
12
700-749
5,750,872
27
6,203,257
28
Greater than or equal to 750
10,202,341
47
10,398,094
47
Total
$
21,660,434
100
%
$
22,235,008
100
%
Seasoning(4):
1-12 payments
$
4,573,677
21
%
$
4,898,818
22
%
13-24 payments
3,816,855
18
3,757,313
17
25-36 payments
2,067,158
10
2,358,304
11
37-48 payments
1,692,504
8
1,609,522
7
More than 48 payments
4,177,708
19
3,888,224
17
Not yet in repayment
5,332,532
24
5,722,827
26
Total
$
21,660,434
100
%
$
22,235,008
100
%
(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 respective fourth-quarter.
(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.
15
Delinquencies - Private Education Loans Held for Investment
The following table provides information regarding the loan status of our Private Education Loans held for investment. Loans in repayment include loans making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but for purposes of the following table, do not include loans in the “loans in forbearance” metric).
Private Education Loans Held for Investment As of December 31, (dollars in thousands)
2025
2024
Balance
%
Balance
%
Loans in-school/grace/deferment(1)
$
5,332,532
$
5,722,827
Loans in forbearance(2)
433,075
405,430
Loans in repayment and percentage of each status:
Loans current
15,258,723
96.0
%
15,513,333
96.3
%
Loans delinquent 30-59 days(3)
330,307
2.0
310,748
1.9
Loans delinquent 60-89 days(3)
154,683
1.0
140,735
0.9
Loans 90 days or greater past due(3)
151,114
1.0
141,935
0.9
Total Private Education Loans in repayment
15,894,827
100.0
%
16,106,751
100.0
%
Total Private Education Loans, gross
21,660,434
22,235,008
Private Education Loans deferred origination costs and unamortized premium/(discount)
102,008
103,070
Total Private Education Loans
21,762,442
22,338,078
Private Education Loans allowance for losses
(1,430,318)
(1,435,920)
Private Education Loans, net
$
20,332,124
$
20,902,158
Percentage of Private Education Loans in repayment
73.4
%
72.4
%
Delinquencies as a percentage of Private Education Loans in repayment
4.0
%
3.7
%
Percentage of loans in forbearance:
Percentage of loans in an extended grace period(4)
1.7
%
1.6
%
Percentage of loans in hardship and other forbearances(5)
1.0
%
0.9
%
(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 (other than delinquent loans in disaster forbearance), 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.
(4)We calculate the percentage of loans in an extended grace period as the ratio of (a) Private Education Loans in forbearance in an extended grace period numerator to (b) Private Education Loans in repayment and forbearance denominator. An extended grace period aligns with The Office of the Comptroller of the Currency definition of an additional, consecutive, one-time period during which no payment is required for up to six months after the initial grace period. We typically grant this extended grace period to customers who may be having difficulty finding employment before the full principal and interest repayment period starts or once it has begun. Loans in forbearance in an extended grace period were approximately $272 million and $253 million at December 31, 2025 and 2024, respectively.
(5)We calculate the percentage of loans in hardship and other forbearances as the ratio of (a) Private Education Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) numerator to (b) Private Education Loans in repayment and forbearance denominator. If the customer is in financial hardship, we work with the customer and/or cosigner and identify any available alternative arrangements designed to reduce monthly payment obligations, which may include a short-term hardship forbearance. Loans in hardship and other forbearances (excluding loans in an extended grace period and delinquent loans in disaster forbearance) were approximately $161 million and $152 million at December 31, 2025 and 2024, respectively.
16
Loan Modifications - Private Education Loans Held for Investment
The following table depicts the performance of loans that have been modified during the respective reporting periods (the twelve months ended December 31, 2025 and 2024, respectively).
Twelve Months Ended December 31, 2025
Twelve Months Ended December 31, 2024
(Dollars in thousands)
Balance
%
Balance
%
Payment Status (Amortized Cost Basis)(1):
Loan modifications in deferment(2)
$
14,680
$
33,645
Loan modifications in repayment:
Loans current(3)(4)
358,054
70
%
826,007
83
%
Loans delinquent 30-59 days(3)(4)
68,823
13
%
77,446
8
%
Loans delinquent 60-89 days(3)(4)
41,592
8
%
43,484
4
%
Loans 90 days or greater past due(3)(4)
46,485
9
%
54,473
5
%
Total loan modifications in repayment
514,954
100
%
1,001,410
100
%
Total Private Education Loan modifications
$
529,634
$
1,035,055
(1)Loans that were modified and subsequently charged-off during the twelve months ended December 31, 2025 and 2024 are excluded from the table and had an amortized cost basis of $39.1 million and $40.4 million, respectively. Additionally, loans that received a permanent term extension with no interest rate reduction during the fourth quarter of 2023 are excluded from the table.
(2)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.
(3)Represents loans in repayment, which include loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the table, do not include loans in the “loans in forbearance” metric).
(4)The period of delinquency is based on the number of days scheduled payments are contractually past due.
17
Summary of Our Loans Held for Investment Portfolio
Ending Loans Held for Investment Balances, net
Private Education Loans
As of December 31, (dollars in thousands)
2025
2024
Total loan portfolio:
In-school(1)
$
3,983,859
$
4,397,127
Grace, repayment and other(2)
17,676,575
17,837,881
Total, gross
21,660,434
22,235,008
Deferred origination costs and unamortized premium/(discount)
102,008
103,070
Allowance for credit losses
(1,430,318)
(1,435,920)
Total loans held for investment portfolio, net
$
20,332,124
$
20,902,158
(1) Loans for customers still attending school and who are not yet required to make payments on the loans.
(2) Includes loans in deferment or forbearance. 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 loans in the “loans in forbearance” metric).
Average Loans Held for Investment Balances (net of unamortized premium/(discount))
Quarters Ended December 31,
Years Ended December 31,
(Dollars in thousands)
2025
2024
2025
2024
Private Education Loans
$
22,882,452
100
%
$
22,061,986
99
%
$
22,654,942
100
%
$
21,121,545
98
%
FFELP Loans
—
—
149,225
1
—
—
413,338
2
Total portfolio
$
22,882,452
100
%
$
22,211,211
100
%
$
22,654,942
100
%
$
21,534,883
100
%
Loans Held for Investment, Net — Activity
Quarter Ended December 31, 2025 (dollars in thousands)
Private Education Loans
Beginning balance
$
21,615,067
Acquisitions and originations:
Fixed-rate
852,132
Variable-rate
178,463
Total acquisitions and originations
1,030,595
Capitalized interest and deferred origination cost premium amortization
296,117
Sales
(927,440)
Loan consolidations to third parties
(308,024)
Allowance
95,787
Transfer to loans held-for-sale
(910,760)
Repayments and other
(559,218)
Ending balance
$
20,332,124
18
Quarter Ended December 31, 2024 (dollars in thousands)
Private Education Loans
Beginning balance
$
20,459,933
Acquisitions and originations:
Fixed-rate
899,364
Variable-rate
93,457
Total acquisitions and originations
992,821
Capitalized interest and deferred origination cost premium amortization
268,681
Loan consolidations to third parties
(242,535)
Allowance
(22,299)
Repayments and other
(554,443)
Ending balance
$
20,902,158
Year Ended December 31, 2025 (dollars in thousands)
Private Education Loans
Beginning balance
$
20,902,158
Acquisitions and originations:
Fixed-rate
6,395,293
Variable-rate
1,066,205
Total acquisitions and originations
7,461,498
Capitalized interest and deferred origination cost premium amortization
676,532
Sales
(4,553,263)
Loan consolidations to third parties
(976,282)
Allowance
5,602
Transfer to loans held-for-sale
(910,760)
Repayments and other
(2,273,361)
Ending balance
$
20,332,124
Year Ended December 31, 2024 (dollars in thousands)
Private Education Loans
FFELP Loans
Total Loans Held for Investment, net
Beginning balance
$
19,772,293
$
534,064
$
20,306,357
Acquisitions and originations:
Fixed-rate
6,629,205
—
6,629,205
Variable-rate
435,025
—
435,025
Total acquisitions and originations
7,064,230
—
7,064,230
Capitalized interest and deferred origination cost premium amortization
602,825
16,796
619,621
Sales
(3,430,920)
—
(3,430,920)
Loan consolidations to third parties
(806,908)
(45,467)
(852,375)
Allowance
(100,815)
4,667
(96,148)
Transfer to loans held-for-sale
—
(466,168)
(466,168)
Repayments and other
(2,198,547)
(43,892)
(2,242,439)
Ending balance
$
20,902,158
$
—
$
20,902,158
19
Private Education Loan Originations
The following table summarizes our Private Education Loan originations. Originations represent loans that were funded or acquired during the period presented.
Quarters Ended December 31, (dollars in thousands)
2025
%
2024
%
Smart Option - interest only(1)
$
202,084
20
%
$
171,596
17
%
Smart Option - fixed pay(1)
339,747
33
336,988
34
Smart Option - deferred(1)
344,331
34
358,620
37
Graduate Loan(2)
136,688
13
114,604
12
Total Private Education Loan originations
$
1,022,850
100
%
$
981,808
100
%
Percentage of loans with a cosigner
91.7
%
88.5
%
Average FICO at approval(4)
756
755
Years Ended December 31, (dollars in thousands)
2025
%
2024
%
Smart Option - interest only(1)
$
1,469,697
20
%
$
1,272,414
18
%
Smart Option - fixed pay(1)
2,443,689
33
2,331,055
33
Smart Option - deferred(1)
2,785,186
38
2,786,821
40
Graduate Loan(2)
717,751
9
623,033
9
Total Private Education Loan originations
$
7,416,323
100
%
$
7,013,323
100
%
Percentage of loans with a cosigner
92.8
%
90.0
%
Average FICO at approval(3)
755
752
(1) Interest only, fixed pay and deferred describe the payment option while in school or in grace period. See Item 1. “Business - Our Business - Private Education Loans” in the 2023 Form 10-K for a further discussion.
(2) For the quarter ended December 31, 2025, the Graduate Loan originations include $3.6 million of Smart Option Loans where the student was in a graduate status. For the quarter ended December 31, 2024, the Graduate Loan originations include $3.8 million of Smart Option Loans where the student was in a graduate status. For the year ended December 31, 2025, the Graduate Loan originations include $24.7 million of Smart Option Loans where the student was in a graduate status. For the year ended December 31, 2024, the Graduate Loan originations include $32.2 million of Smart Option Loans where the student was in a graduate status.
(3) Represents the higher credit score of the cosigner or the borrower.
20
Deposits
Interest-bearing deposits are summarized as follows:
2025
2024
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
$
10,004,845
3.83
%
$
9,582,290
4.27
%
Savings
1,177,177
3.83
944,034
4.02
Certificates of deposit
9,877,945
3.87
10,540,428
4.20
Deposits - interest bearing
$
21,059,967
$
21,066,752
(1) Includes the effect of interest rate swaps in effective hedge relationships.
Regulatory Capital
Under regulations issued by the FDIC and other federal banking agencies, banking organizations that adopted CECL during the 2020 calendar year, including Sallie Mae Bank (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 ended January 1, 2022. On each of January 1, 2022, 2023, 2024, and 2025, 25 percent of the adjusted transition amounts was phased in for regulatory capital purposes. As of January 1, 2025, all adjusted transition amounts have been phased in for regulatory capital purposes. 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.
21
The Bank’s required and actual regulatory capital amounts and ratios, including applicable capital conservation buffers, 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.
(Dollars in thousands)
Actual
U.S. Basel III
Minimum Requirements Plus Buffer(1)(2)
Amount
Ratio
Amount
Ratio
As of December 31, 2025(3):
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
$
2,929,973
11.1
%
$
1,849,590
>
7.0
%
Tier 1 Capital (to Risk-Weighted Assets)
$
2,929,973
11.1
%
$
2,245,930
>
8.5
%
Total Capital (to Risk-Weighted Assets)
$
3,274,883
12.4
%
$
2,774,384
>
10.5
%
Tier 1 Capital (to Average Assets)
$
2,929,973
9.9
%
$
1,186,335
>
4.0
%
As of December 31, 2024(3):
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
$
2,957,067
11.3
%
$
1,827,318
>
7.0
%
Tier 1 Capital (to Risk-Weighted Assets)
$
2,957,067
11.3
%
$
2,218,886
>
8.5
%
Total Capital (to Risk-Weighted Assets)
$
3,294,663
12.6
%
$
2,740,976
>
10.5
%
Tier 1 Capital (to Average Assets)
$
2,957,067
9.7
%
$
1,213,505
>
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 December 31, 2025 and 2024, the actual amounts and the actual ratios include the fully phased in adjusted transition amounts discussed above.
