Sallie Mae 2008 Annual Report Download - page 50

Rate/Volume Analysis — On-Balance Sheet
The following rate/volume analysis shows the relative contribution of changes in interest rates and asset
volumes.
(Decrease)
Increase Rate Volume
(Decrease)
Increase
Attributable to
Change in
2008 vs. 2007
Interest income ........................................ $(1,404) $(3,163) $1,759
Interest expense ....................................... (1,181) (2,402) 1,221
Net interest income ..................................... $ (223) $ (761) $ 538
2007 vs. 2006
Interest income ........................................ $2,096 $ (98) $2,194
Interest expense ....................................... 1,962 301 1,661
Net interest income ..................................... $ 134 $ (399) $ 533
Net Interest Margin — On-Balance Sheet
The following table reflects the net interest margin of on-balance sheet interest-earning assets, before
provisions for loan losses. (Certain percentages do not add or subtract down as they are based on average
balances.)
2008 2007 2006
Years Ended
December 31,
Student loan spread
(1)(2)
......................................... 1.28% 1.44% 1.68%
Other asset spread
(1)(3)
.......................................... (.27) (.16) .27
Net interest margin, before the impact of 2008 Asset-Backed Financing
Facilities fees
(1)
............................................. 1.17 1.26 1.53
Less: 2008 Asset-Backed Financing Facilities fees ..................... (.24) — —
Net interest margin ............................................ .93% 1.26% 1.53%
(1)
Before commitment and liquidity fees associated with the 2008 Asset-Backed Financing Facilities, which are referred to as the
“2008 Asset-Backed Financing Facilities fees” (see “LIQUIDITY AND CAPITAL RESOURCES — Additional Funding Sources
for General Corporate Purposes” for a further discussion).
(2)
Composition of student loan spread:
Student loan yield, before Floor Income ..................................... 5.60% 7.92% 7.93%
Gross Floor Income . . ................................................ .28 .05 .04
Consolidation Loan Rebate Fees .......................................... (.55) (.63) (.67)
Repayment Borrower Benefits ........................................... (.11) (.12) (.12)
Premium and discount amortization . . ...................................... (.16) (.18) (.14)
Student loan net yield . ................................................ 5.06 7.04 7.04
Student loan cost of funds . . . ........................................... (3.78) (5.60) (5.36)
Student loan spread, before 2008 Asset-Backed Financing Facilities fees. . . ............. 1.28% 1.44% 1.68%
(3)
Comprised of investments, cash and other loans.
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