Sallie Mae 2014 Annual Report Download - page 58

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Liquidity and Capital Resources
Funding and Liquidity Risk Management
Our four primary liquidity needs include our ongoing ability to fund our businesses throughout market cycles (including
during periods of financial stress), our ongoing ability to fund originations of Private Education Loans, servicing our bank
deposits, and payment of required dividends on our preferred stock. To achieve these objectives we analyze and monitor our
liquidity needs, maintain excess liquidity and access diverse funding sources, such as deposits at the Bank, issuance of secured
debt primarily through asset-backed securitizations and other financing facilities and through whole loan sales. It is our policy
to manage operations so liquidity needs are fully satisfied through normal operations to avoid unplanned asset sales under
emergency conditions. Our liquidity management is governed by policies approved by our Board of Directors. Oversight of
these policies is performed in the Asset and Liability Committee (“ALCO”), a management-level committee.
These policies take into account the volatility of cash flow forecasts, expected maturities, anticipated loan demand and a
variety of other factors to establish minimum liquidity guidelines.
Key risks associated with our liquidity relate to our ability to access the capital markets and the markets for bank deposits
at reasonable rates. This ability may be affected by our performance and the macroeconomic environment and the impact they
have on the availability of funding sources in the marketplace.
Sources of Liquidity and Available Capacity
Ending Balances
(Dollars in thousands)
December 31, 2014
December 31, 2013
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries ........
$
7,677
$
1,052
Sallie Mae Bank(1).......................................................
2,352,103
2,181,813
Available-for-sale investments .....................................
168,934
102,105
Total unrestricted cash and liquid investments ..................
$
2,528,714
$
2,284,970
_______
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
Average Balances
Years Ended December 31,
(Dollars in thousands)
2014
2013
2012
Sources of primary liquidity:
Unrestricted cash and liquid investments:
Holding Company and other non-bank subsidiaries .............
$
4,364
$
1,176
$
2,458
Sallie Mae Bank
(1)
............................................................
1,755,517
1,509,026
913,350
Available-for-sale investments ..........................................
140,622
537,458
569,344
Total unrestricted cash and liquid investments .......................
$
1,900,503
$
2,047,660
$
1,485,152
________
(1) This amount will be used primarily to originate Private Education Loans at the Bank.
56