Sallie Mae 2012 Annual Report Download - page 65

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Student Loan Allowance for Loan Losses Activity
GAAP Basis
December 31, 2012 December 31, 2011 December 31, 2010
(Dollars in millions)
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
GAAP Basis:
Beginning balance ............... $187 $ 2,171 $ 2,358 $189 $ 2,022 $ 2,211 $161 $ 1,443 $ 1,604
Less:
Charge-offs(1) ................. (92) (1,037) (1,129) (78) (1,072) (1,150) (87) (1,291) (1,378)
Student loan sales .............. (8) — (8) (10) — (10) (8) — (8)
Plus:
Provision for loan losses ......... 72 1,008 1,080 86 1,179 1,265 98 1,298 1,396
Reclassification of interest
reserve(2) ................... — 29 29 — 42 42 — 48 48
Consolidation of securitization
trusts(3) ..................... — — — — — — 25 524 549
Ending balance .................. $159 $ 2,171 $ 2,330 $187 $ 2,171 $ 2,358 $189 $ 2,022 $ 2,211
Off-Balance Sheet
December 31, 2012 December 31, 2011 December 31, 2010
(Dollars in millions)
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
Off-Balance Sheet:
Beginning balance ............... $— $— $— $— $— $— $ 25 $524 $549
Less:
Charge-offs(1) ................. — — — — — —
Student loan sales .............. — — — — — — — — —
Plus:
Provision for loan losses ......... — — — — — — — — —
Reclassification of interest
reserve(2) ................... — — — — — — — — —
Consolidation of securitization
trusts(3) ..................... — — — — — — (25) (524) (549)
Ending balance .................. $— $— $— $— $— $— $— $— $—
“Core Earnings” Basis
December 31, 2012 December 31, 2011 December 31, 2010
(Dollars in millions)
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
FFELP
Loans
Private
Education
Loans
Total
Portfolio
“Core Earnings” Basis:
Beginning balance ............... $187 $2,171 $ 2,358 $ 189 $ 2,022 $ 2,211 $ 186 $ 1,967 $ 2,153
Less:
Charge-offs(1) ................. (92) (1,037) (1,129) (78) (1,072) (1,150) (87) (1,291) (1,378)
Student loan sales .............. (8) — (8) (10) — (10) (8) — (8)
Plus:
Provision for loan losses ......... 72 1,008 1,080 86 1,179 1,265 98 1,298 1,396
Reclassification of interest
reserve(2) ................... — 29 29 — 42 42 — 48 48
Ending balance .................. $159 $2,171 $ 2,330 $ 187 $ 2,171 $ 2,358 $ 189 $ 2,022 $ 2,211
Percent of total .................. 7% 93% 100% 8% 92% 100% 9% 91% 100%
Troubled debt restructuring(4) ....... $— $7,294 $ 7,294 $ — $ 5,429 $ 5,429 $ — $ 439 $ 439
(1) Charge-offs are reported net of expected recoveries. For Private Education Loans, the expected recovery amount is transferred to the
receivable for partially charged-off loan balance. Charge-offs include charge-offs against the receivable for partially charged-off loans
which represents the difference between what was expected to be collected and any shortfalls in what was actually collected in the period.
See “Receivable for Partially Charged-Off Private Education Loans” for further discussion.
(2) Represents the additional allowance related to the amount of uncollectible interest reserved within interest income that is transferred in the
period to the allowance for loan losses when interest is capitalized to a loan’s principal balance.
(3) On January 1, 2010, upon the adoption of the new consolidation accounting guidance, all off-balance sheet loans were consolidated on-
balance sheet.
(4) Represents the recorded investment of loans classified as troubled debt restructuring.
63