Sallie Mae 2014 Annual Report Download - page 95

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, unless otherwise noted)
1. Organization and Business
SLM Corporation (“Sallie Mae,” “SLM,” the “Company,” “we” or “us”) is a holding company that operates through a
number of subsidiaries. Its predecessor was formed in 1972 as the Student Loan Marketing Association, a federally chartered
government-sponsored enterprise (the “GSE”), with the goal of furthering access to higher education by providing liquidity to
the education loan marketplace. On December 29, 2004, we terminated the federal charter, incorporated SLM Corporation as a
Delaware corporation, and subsequently dissolved the GSE.
Our primary business is to originate, service and collect loans we make to students and their families to finance the cost
of their education. Since July 2010, we have originated only Private Education Loans. We use “Private Education Loans” to
mean education loans to students or their families that are non-federal loans and loans not insured or guaranteed under the
previously existing Federal Family Education Loan Program (“FFELP”). The core of our marketing strategy is to generate
Private Education Loan originations by promoting our products on campus through the financial aid office and through direct
marketing to students and their families. Since the beginning of 2006, virtually all of our Private Education Loans have been
originated and funded by Sallie Mae Bank (the “Bank”), a Utah industrial bank subsidiary, which is regulated by the Utah
Department of Financial Institutions (“UDFI”) and the Federal Deposit Insurance Corporation (“FDIC”). We also operate
Upromise, Inc. (“Upromise”), a consumer savings network that provides financial rewards on everyday purchases to help
families save for college.
On April 30, 2014, we completed our plan to separate into two distinct publicly traded entities—an education loan
management, servicing and asset recovery business, Navient Corporation (“Navient”), and a consumer banking business, SLM
Corporation. The separation of Navient from SLM Corporation (the “Spin-Off”) was preceded by an internal corporate
reorganization, which was the first step to separate the education loan management, servicing and asset recovery business from
the consumer banking business. As a result of a holding company merger under Section 251(g) of the Delaware General
Corporation Law (“DGCL”), which is referred to herein as the “SLM Merger,” all of the shares of then existing SLM
Corporation’s common stock were converted, on a 1-to-1 basis, into shares of common stock of New BLC Corporation, a
newly formed company that was a subsidiary of pre-Spin-Off SLM Corporation (“pre-Spin-Off SLM”), and, pursuant to the
SLM Merger, New BLC Corporation replaced then existing SLM Corporation as the publicly traded registrant and changed its
name to SLM Corporation. As part of the internal corporate reorganization, the assets and liabilities associated with the
education loan management, servicing and asset recovery business were transferred to Navient, and those assets and liabilities
associated with the consumer banking business remained with or were transferred to the newly constituted SLM Corporation.
The separation and distribution were accounted for on a substantially tax-free basis.
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