SLM (SLM) risk factors, FY2024 10-K

Other

1. 01Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors. Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position
2. 022024 Form 10-K — SLM CORPORATION 23
3. 03Consumer access to alternative means of financing the costs of education and other factors may reduce demand for, or adversely affect our ability to retain, Private Education Loans, which could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows
4. 04Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows
5. 05Defaults on our loans could adversely affect our business, financial condition, results of operations, and/or cash flows
6. 06Our allowance for credit losses may not be adequate to cover actual losses in all possible scenarios, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition, and/or results of operations
7. 072024 Form 10-K — SLM CORPORATION 25
8. 08We are subject to the creditworthiness of third parties other than borrowers and exposure to those third parties could adversely affect our business, financial condition, results of operations, and/or cash flows
9. 09The levels of or changes in interest rates could adversely affect our results of operations, financial condition, regulatory capital, and/or liquidity
10. 10The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and maturity characteristics of our funding arrangements, which may negatively impact the level of our net interest income
11. 11We are subject to repayment and prepayment risks, which can increase uncertainty as we manage our interest rate risk and can adversely affect our business, financial condition, results of operations, and/or cash flows
12. 12Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings
13. 13The trailing effects of the discontinuance of LIBOR could adversely affect our business and financial results
14. 14payments received on Private Education Loans that we hold, and proceeds from loan sales and securitization transactions. We may maintain too much liquidity, which can be costly, or we may be too illiquid, which could result in financial distress during times of economic stress or capital market disruptions
15. 152024 Form 10-K — SLM CORPORATION 28
16. 16Adverse developments, and/or a continuation of recent turmoil, in the financial services industry could adversely affect our financial condition and results of operations
17. 17Unfavorable results from the periodic stress scenarios we model under regulatory guidance may adversely affect our business and result in regulatory action that could adversely affect our cost of capital and liquidity position
18. 18Changes in accounting standards, or incorrect estimates and assumptions by management in connection with the preparation of our consolidated financial statements, could adversely affect our capital levels, results of operations, and/or financial condition
19. 192024 Form 10-K — SLM CORPORATION 30

REGULATORY RISK

1. 20We operate in a highly regulated environment and the laws and regulations that govern our operations, or changes in these laws and regulations, or our failure to comply with them, may adversely affect us
2. 212024 Form 10-K — SLM CORPORATION 31
3. 22Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and requirements could subject us to civil and criminal penalties or litigation, including class actions, and have a material adverse effect on our business
4. 232024 Form 10-K — SLM CORPORATION 32
5. 24Our framework for managing risks, including model risk and data governance risk, may not be effective in mitigating our risk of loss in all possible scenarios and, if the framework is ineffective, could have a material adverse effect on us and our business
6. 25Proposals of federal and state governments, or of various political officials or candidates, affecting the student loan industry in particular, subject us to political risk and could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows
7. 26We are subject to reputational and other risks, which could damage our brand and have a material adverse impact on our business, results of operations, financial condition, and/or cash flows
8. 27Additionally, as described above, proposals of political candidates, administrations, or legislators that may affect the financial industry, or the student loan industry, in particular, could impact our reputation and/or business and adversely impact the price of our common stock

OPERATIONAL RISKS

1. 28Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or damage our reputation
2. 29Our business processes are becoming increasingly dependent upon technological advancement, and we could lose market share if we are not able to keep pace with rapid changes in technology
3. 302024 Form 10-K — SLM CORPORATION 35
4. 31While we maintain insurance coverage that may apply to various cybersecurity risks and liabilities, there is no guarantee that any or all costs or losses incurred would be partially or fully covered
5. 32We may face risks from our operations related to litigation or regulatory or supervisory actions that could result in significant legal expenses and settlement or damage awards
6. 33Our internal controls over financial reporting and disclosure controls, as well as other internal controls, may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations
7. 342024 Form 10-K — SLM CORPORATION 37

RISKS RELATED TO SPIN-OFF

1. 35We may have exposure to risks related to the Spin-Off, indemnification claims, and/or Navient’s creditworthiness

GENERAL RISKS

1. 36The holders of our preferred stock have rights that are senior to those of our common stockholders
2. 37We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our common stock, and make payments on our corporate debt
3. 38Our business could be negatively affected if we are unable to attract, retain, and motivate skilled employees