Financial Performance - Net income attributable to SLM Corporation for the three months ended June 30, 2025, was $67,300,000, compared to $247,365,000 for the same period in 2024, representing a decrease of approximately 72.8%[199] - Diluted earnings per common share for the six months ended June 30, 2025, was $1.72, down from $2.39 in 2024, indicating a decline of about 28.0%[199] - For the three months ended June 30, 2025, net income attributable to common stock was $67 million, or $0.32 diluted earnings per share, a decrease of 73% compared to $247 million, or $1.11 diluted earnings per share, for the same period in 2024[206] - For the six months ended June 30, 2025, net income attributable to common stock was $368 million, or $1.72 diluted earnings per share, down from $533 million, or $2.39 diluted earnings per share, for the same period in 2024[214] Loan Portfolio and Originations - The ending balance of Private Education Loans, net, as of June 30, 2025, was $21,160,332,000, an increase from $18,432,600,000 in 2024, reflecting a growth of approximately 14.8%[199] - The average education loans for the six months ended June 30, 2025, were $22,738,295,000, compared to $21,476,000,000 in 2024, showing an increase of approximately 5.9%[199] - Total Private Education Loan originations for the three months ended June 30, 2025, were $685,602,000, a slight decrease from $690,916,000 in the same period of 2024[233] - Total acquisitions and originations for the six months ended June 30, 2025, amounted to $3,474,194 thousand, compared to $3,291,778 thousand in the same period of 2024, representing a growth of 5.54%[229] Credit Losses and Provisions - Provision for credit losses in the current quarter was $149 million, significantly higher than $17 million in the year-ago quarter, primarily due to changes in economic outlook and new loan commitments[208] - Provision for credit losses for the first six months of 2025 was $172 million, compared to $29 million in the year-ago period, influenced by new loan commitments and changes in economic outlook[215] - The company reported a total provision for credit losses of $148,718,000 for the three months ended June 30, 2025, compared to $16,830,000 in 2024[236] - The allowance for credit losses increased to $1,469,509 thousand as of June 30, 2025, from $1,265,592 thousand in June 30, 2024[246] Operating Expenses - Total operating expenses for the second quarter of 2025 were $166 million, up from $157 million in the year-ago quarter, primarily due to increased marketing spend[212] - Total operating expenses for the first half of 2025 were $320 million, slightly up from $318 million in the year-ago period, driven by increased marketing and strategic initiatives[219] Risk Management and Compliance - The Company continues to face risks related to compliance with laws and regulations, which may impact future financial performance[194] - The strategic focus remains on maximizing profitability and growth in the core private student loan business while enhancing risk management frameworks[202] - The allowance for credit losses is based on projected future cash flows using a discounted cash flow method, reflecting significant judgments and uncertainties[306] Capital Management - The Company aims to maintain a rigorous capital allocation and return program to enhance stockholder value[202] - The Bank's risk-based and leverage capital ratios exceeded the required minimum ratios under U.S. Basel III as of June 30, 2025, indicating strong capital management[289] - The Bank's Common Equity Tier 1 risk-based capital ratio was above 7.0% as of June 30, 2025, meeting the capital conservation buffer requirements[290] Interest Income and Margin - Net interest income increased by $5 million in the current quarter, primarily due to a $2.1 billion increase in average Private Education Loans, despite a 5-basis point decrease in net interest margin[207] - Net interest income for the six months ended June 30, 2025, decreased by $7,398 thousand, primarily due to a rate decrease of $19,401 thousand, despite a volume increase of $12,003 thousand[225] - The net interest margin for the three months ended June 30, 2025, was 5.31%, slightly down from 5.36% in the same period of 2024, reflecting competitive market conditions[226] Liquidity and Cash Management - The company maintains total unrestricted cash and liquid investments of $5,222,134 thousand as of June 30, 2025[271] - Total unrestricted cash and liquid investments decreased to $5.1 billion as of June 30, 2025, from $6.1 billion at December 31, 2024, reflecting a decline of approximately 15.6%[272] - The company has a liquidity buffer of cash and liquid investments expected to be maintained through 2025[270] Loan Performance Metrics - Total Private Education Loans in repayment were $16,231,194,000, with a delinquency rate of 3.5% as of June 30, 2025, up from 3.3% in 2024[241][242] - The percentage of loans in repayment remained stable at 72.1% in 2025, down from 72.5% in 2024[241] - The average FICO score at approval for loans was 754 in Q2 2025, compared to 752 in Q2 2024[233] Derivatives and Interest Rate Risk - The company uses interest rate swaps and derivatives to manage interest rate risk, aiming to match assets with debt that have the same underlying index[327] - The interest rate sensitivity analysis indicates a low sensitivity to rate changes, with a higher mix of fixed-rate versus variable-rate loan disbursements[321]

Financial Performance - GAAP diluted earnings per common share for Q2 2025 was $0.32, a decrease from $1.40 in Q1 2025 and $1.11 in Q2 2024[12] - The company reported a net income attributable to common stock of $67 million in Q2 2025, down from $247 million in Q2 2024[12] - Net income attributable to SLM Corporation common stock for the three months ended June 30, 2025, was $67,300 thousand, a decrease of 72.8% from $247,365 thousand in the same period of 2024[24] - Basic earnings per common share decreased to $0.32 for the three months ended June 30, 2025, down from $1.13 in the same period of 2024, representing a decline of 71.2%[24] Loan and Credit Metrics - Private education loan originations reached $686 million in Q2 2025, with a year-over-year growth expectation of 6% to 8% for the full year 2025[9] - Total net charge-offs as a percentage of average loans in repayment was 2.36% in Q2 2025, compared to 2.19% in Q2 2024[11] - The provision for credit losses was $149 million in Q2 2025, significantly higher than $17 million in Q2 2024[11] - Provisions for credit losses increased significantly to $148,718 thousand for the three months ended June 30, 2025, compared to $16,830 thousand in the same period of 2024, marking an increase of 786.5%[24] Income and Expenses - Non-interest expenses totaled $167 million in Q2 2025, an increase from $159 million in Q2 2024[12] - Net interest income after provisions for credit losses for the three months ended June 30, 2025, was $228,102 thousand, down 35.8% from $355,342 thousand in the same period of 2024[24] - Total non-interest income for the three months ended June 30, 2025, was $26,776 thousand, a decrease of 81.1% from $141,805 thousand in the same period of 2024[24] Balance Sheet Highlights - Total assets decreased to $29,602,917 thousand as of June 30, 2025, from $30,072,110 thousand on December 31, 2024, representing a decline of 1.56%[22] - Total liabilities decreased to $27,227,930 thousand as of June 30, 2025, from $27,912,190 thousand on December 31, 2024, a reduction of 2.5%[22] - Total equity increased to $2,374,987 thousand as of June 30, 2025, compared to $2,159,920 thousand on December 31, 2024, reflecting an increase of 9.9%[22] Shareholder Returns - The company has $302 million of capacity remaining under the 2024 Share Repurchase Program as of June 30, 2025[13] Capital Ratios - The total risk-based capital ratio was 12.8% with a CET1 capital ratio of 11.5% as of June 30, 2025[8] Loan Growth - The average loans outstanding, net, increased by 10% to $22.6 billion compared to Q2 2024[11] Interest Income - Total interest income increased to $656,759 thousand for the three months ended June 30, 2025, compared to $641,476 thousand in the prior year, reflecting a growth of 2.0%[24] Share Count - Average common shares outstanding decreased to 209,282 thousand for the three months ended June 30, 2025, from 218,924 thousand in the same period of 2024, a decline of 4.0%[24]

Core Insights - Wall Street analysts forecast that Sallie Mae (SLM) will report quarterly earnings of $0.49 per share, indicating a year-over-year decline of 55.9% [1] - Anticipated revenues are projected to be $375.13 million, reflecting a slight increase of 0.8% compared to the same quarter last year [1] Earnings Estimates Revisions - Over the last 30 days, there has been a 19.3% upward revision in the consensus EPS estimate for the quarter, indicating analysts' reassessment of their initial forecasts [2] - Revisions to earnings estimates are significant indicators for predicting potential investor actions regarding the stock [3] Key Metrics Projections - Analysts expect 'Net Interest Margin' to reach 5.3%, down from 5.4% reported in the same quarter last year [5] - 'Net Interest Income' is projected to be $375.13 million, slightly above the year-ago value of $372.17 million [5] - 'Total Non-Interest Income' is expected to be $21.89 million, a significant decrease from $141.81 million reported in the same quarter last year [6] - 'Other income' is anticipated to be $21.89 million, down from $27.77 million in the previous year [6] - Analysts predict 'Gains (losses) on sales of loans, net' to be $0.00 million, a stark contrast to $111.93 million reported in the same quarter last year [7] Stock Performance - Shares of Sallie Mae have shown a return of +3.2% over the past month, compared to a +5.9% change in the Zacks S&P 500 composite [7] - With a Zacks Rank 3 (Hold), SLM is expected to perform in line with the overall market in the near future [7]

Core Viewpoint - Sallie Mae (SLM) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ended June 2025, with actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The consensus estimate for Sallie Mae's quarterly earnings is $0.49 per share, reflecting a year-over-year decrease of 55.9%. Revenues are projected to be $375.13 million, which is a 0.8% increase from the same quarter last year [3]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised 19.04% higher, indicating a reassessment by analysts regarding the company's earnings prospects [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Sallie Mae is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -4.47%. This indicates a bearish outlook from analysts [12]. Historical Performance - In the last reported quarter, Sallie Mae was expected to post earnings of $1.19 per share but exceeded expectations with actual earnings of $1.40, resulting in a surprise of +17.65%. Over the last four quarters, the company has beaten consensus EPS estimates two times [13][14]. Investment Considerations - Despite the potential for an earnings beat, Sallie Mae does not appear to be a compelling candidate for such an outcome, and investors should consider other factors when making investment decisions [17].

Core Viewpoint - Sallie Mae (SLM) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, particularly influenced by institutional investors [4][6]. - For Sallie Mae, the recent increase in earnings estimates suggests an improvement in the company's underlying business, likely leading to a higher stock price [5][10]. Earnings Estimate Revisions - Sallie Mae is projected to earn $3.12 per share for the fiscal year ending December 2025, with no year-over-year change, but the Zacks Consensus Estimate has increased by 1.6% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior potential for market-beating returns [9][10].

Analyst's Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. We last covered the Series B preferred equity (NASDAQ: SLMBP ) from Sallie Mae ( SLM ) at the beginnin ...

Core Viewpoint - Sallie Mae (SLM) shares have recently declined by 5.5% over the past two weeks, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottoming out, suggesting that selling pressure may be exhausting [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, typically occurring during a downtrend, signaling that bears may be losing control [4][5]. - The success of bulls in preventing further price declines indicates a potential trend reversal when the hammer pattern appears at the bottom of a downtrend [5]. Fundamental Analysis - Recent upward revisions in earnings estimates for SLM are viewed as a bullish indicator, correlating strongly with near-term stock price movements [7]. - The consensus EPS estimate for the current year has increased by 0.1% over the last 30 days, indicating analysts' agreement on improved earnings potential [8]. - SLM holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

[PART I. Financial Information](index=2&type=section&id=PART%20I.%20Financial%20Information) This section provides an overview of SLM Corporation's financial performance and condition, including detailed financial statements, notes, management's discussion, market risk disclosures, and controls [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents SLM Corporation's unaudited consolidated financial statements for Q1 2025 and 2024, including balance sheets, income statements, and cash flow statements Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,695,076 | $4,700,366 | | Total investments | $1,808,669 | $2,098,865 | | Loans held for investment, net | $21,091,204 | $20,902,158 | | **Total assets** | **$28,899,184** | **$30,072,110** | | **Liabilities & Equity** | | | | Deposits | $20,073,168 | $21,068,568 | | Long-term borrowings | $6,147,473 | $6,440,345 | | **Total liabilities** | **$26,498,328** | **$27,912,190** | | **Total equity** | **$2,400,856** | **$2,159,920** | | **Total liabilities and equity** | **$28,899,184** | **$30,072,110** | Consolidated Income Statement Highlights (Unaudited) | (In thousands, except per share) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net interest income | $374,970 | $387,016 | | Provisions for credit losses | $23,286 | $12,041 | | Total non-interest income | $206,044 | $174,158 | | Total non-interest expenses | $154,609 | $161,648 | | Net income | $304,540 | $289,931 | | Net income attributable to common stock | $300,584 | $285,278 | | Diluted earnings per common share | $1.40 | $1.27 | Consolidated Statements of Cash Flows Highlights (Unaudited) | (In thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(146,051) | $(76,711) | | Net cash provided by investing activities | $496,928 | $572,330 | | Net cash used in financing activities | $(1,356,576) | $(1,063,304) | | **Net decrease in cash, cash equivalents and restricted cash** | **$(1,005,699)** | **$(567,685)** | [Notes to the Financial Statements](index=9&type=section&id=Item%201.%20Notes%20to%20the%20Financial%20Statements) This section provides detailed disclosures supporting the consolidated financial statements, covering accounting policies, investments, loans, credit losses, and regulatory capital [Significant Accounting Policies](index=10&type=section&id=1.%20Significant%20Accounting%20Policies) The company's CECL methodology uses a discounted cash flow model with a two-year forecast, and Q1 2025 revisions to economic scenario weightings decreased the provision for credit losses by **$17 million** - The company uses a discounted cash flow method to determine the allowance for credit losses (CECL), projecting future cash flows using statistical models for defaults, prepayments, and recoveries[22](index=22&type=chunk)[23](index=23&type=chunk) - In Q1 2025, the company changed the weighting of its economic scenarios for the CECL calculation to **60% Baseline**, **20% S1** (stronger growth), and **20% S3** (unfavorable), from a previous **40/30/30** split. This revision resulted in a **$17 million** decrease to the provision for credit losses for the quarter[27](index=27&type=chunk) - In Q2 2024, the company implemented new loan-level models for future default rates and prepayment speeds, incorporating forecasts for GDP, unemployment, retail sales, and interest rates, which reduced reliance on certain qualitative overlays[32](index=32&type=chunk) [Investments](index=13&type=section&id=2.%20Investments) Total investments decreased to **$1.81 billion** as of March 31, 2025, primarily comprising available-for-sale securities, with a **$10 million** impairment recognized in Q1 2025 Available-for-Sale Investments by Type (March 31, 2025) | (In thousands) | Amortized Cost | Estimated Fair Value | | :--- | :--- | :--- | | Mortgage-backed securities | $544,422 | $480,423 | | U.S. government-sponsored enterprises and Treasuries | $648,413 | $624,355 | | Other securities | $551,570 | $549,949 | | Utah Housing Corporation bonds | $2,659 | $2,250 | | **Total** | **$1,747,064** | **$1,656,977** | - The company holds trading investments, primarily residual interests from securitizations, valued at **$54 million** as of March 31, 2025[37](index=37&type=chunk) - In Q1 2025, an impairment loss of **$10 million** was recognized on non-marketable equity securities related to a former credit card platform[46](index=46&type=chunk) [Loans Held for Investment](index=16&type=section&id=3.%20Loans%20Held%20for%20Investment) Loans held for investment consist solely of Private Education Loans, totaling **$21.09 billion** net, following a **$2.0 billion** sale in Q1 2025 that generated a **$188 million** gain - The company's loans held for investment portfolio consists solely of Private Education Loans after the sale of the remaining FFELP Loan portfolio in Q4 2024[49](index=49&type=chunk) Private Education Loan Sales (Q1) | (In millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total Private Education Loans sold | $2,003 | $2,103 | | Gain on sale of loans, net | $188 | $143 | Loans Held for Investment Composition (March 31, 2025) | (In thousands) | Amount | | :--- | :--- | | Fixed-rate | $17,463,708 | | Variable-rate | $4,968,417 | | Total Private Education Loans, gross | $22,432,125 | | Allowance for credit losses | $(1,443,715) | | **Loans held for investment, net** | **$21,091,204** | [Allowance for Credit Losses and Unfunded Loan Commitments](index=17&type=section&id=4.%20Allowance%20for%20Credit%20Losses%20and%20Unfunded%20Loan%20Commitments) The total allowance for credit losses reached **$1.47 billion**, with Q1 2025 provision increasing to **$23.3 million**, while net charge-offs for Private Education Loans decreased Allowance for Credit Losses Activity (Q1 2025, Private Education Loans) | (In thousands) | Amount | | :--- | :--- | | Beginning allowance for loan losses | $1,435,920 | | Total provisions | $(21,170) | | Net charge-offs | $(76,169) | | **Ending allowance for loan losses** | **$1,443,715** | | **Ending allowance for unfunded commitments** | **$23,890** | | **Total allowance for credit losses** | **$1,467,605** | Key Credit Metrics (Private Education Loans) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net charge-offs as a % of avg. loans in repayment (annualized) | 1.88% | 2.14% | | Total Allowance % of Private Education Loan Exposure | 5.97% | 5.99% | | Delinquent loans as a % of loans in repayment | 3.6% | 3.4% | - The provision for credit losses increased to **$23.3 million** in Q1 2025 from **$12.0 million** in Q1 2024. The Q1 2025 provision was affected by new loan commitments and economic outlook changes, offset by a **$116 million** negative provision from a loan sale and adjustments to economic forecast weightings[68](index=68&type=chunk)[69](index=69&type=chunk) - As of March 31, 2025, the company had **$584 million** in unfunded loan commitments with an associated allowance of **$24 million**[102](index=102&type=chunk) [Goodwill and Acquired Intangible Assets](index=30&type=section&id=5.%20Goodwill%20and%20Acquired%20Intangible%20Assets) Goodwill remained stable at **$56 million**, while net acquired intangible assets decreased to **$6.4 million** due to amortization, with a quarterly expense of approximately **$1 million** - Goodwill remained stable at **$56 million** as of March 31, 2025, related to the acquisitions of Nitro College and Scholly[104](index=104&type=chunk) Acquired Intangible Assets (Net) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade name and trademarks | $3,523 | $3,901 | | Customer relationships | $1,974 | $2,455 | | Developed technology | $776 | $929 | | Sallie.com domain | $135 | $144 | | **Total net acquired intangible assets** | **$6,408** | **$7,429** | [Deposits](index=31&type=section&id=6.%20Deposits) Total deposits decreased to **$20.1 billion**, comprising **$8.7 billion** in brokered deposits and **$11.4 billion** in retail and other deposits, with **$5.7 billion** in CDs maturing within one year - Total deposits were **$20.1 billion** as of March 31, 2025, comprised of **$8.7 billion** in brokered deposits and **$11.4 billion** in retail and other deposits[108](index=108&type=chunk) Interest-Bearing Deposits by Type (March 31, 2025) | (In thousands) | Amount | Qtr-End Weighted Avg. Stated Rate | | :--- | :--- | :--- | | Money market | $9,414,764 | 4.11% | | Savings | $1,002,260 | 3.83% | | Certificates of deposit | $9,653,528 | 4.06% | | **Total** | **$20,070,552** | | [Borrowings](index=33&type=section&id=7.%20Borrowings) Total borrowings decreased to **$6.15 billion**, consisting of unsecured debt and secured securitizations, with **$500 million** in new unsecured notes issued and an equal amount redeemed in Q1 2025 Borrowings Composition (March 31, 2025) | (In thousands) | Amount | | :--- | :--- | | Unsecured debt (fixed-rate) | $989,528 | | Private Education Loan term securitizations | $5,157,945 | | **Total borrowings** | **$6,147,473** | - In January 2025, the company issued **$500 million** of 6.50% unsecured Senior Notes due 2030[117](index=117&type=chunk) - In February 2025, the company redeemed **$500 million** of 4.20% unsecured Senior Notes due 2025[118](index=118&type=chunk) [Derivative Financial Instruments](index=36&type=section&id=8.%20Derivative%20Financial%20Instruments) The company uses interest rate swaps to manage risk, with a total notional value of **$623 million** as of March 31, 2025, and a net fair value of derivative liabilities at **$23 million** Notional Value of Interest Rate Swaps | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash Flow Hedges | $616,191 | $639,097 | | Fair Value Hedges | $6,520 | $281,520 | | **Total Notional** | **$622,711** | **$920,617** | - The company estimates that **$16 million** will be reclassified from accumulated other comprehensive income as a decrease to interest expense over the next twelve months related to derivatives[140](index=140&type=chunk) [Stockholders' Equity](index=40&type=section&id=9.%20Stockholders%27%20Equity) In Q1 2025, the company repurchased **1.04 million** shares for **$30.8 million**, with **$372 million** remaining under the current repurchase program, and paid a **$0.13 per share** common stock dividend Common Stock Repurchases (Q1 2025) | Metric | Value | | :--- | :--- | | Shares repurchased under program | 1,037,391 | | Average purchase price per share | $29.65 | | Total cost (approx.) | $30.8 million | - A new **$650 million** share repurchase program was announced in January 2024, which expires in February 2026[146](index=146&type=chunk) - As of March 31, 2025, **$372 million** of capacity remained[146](index=146&type=chunk) - A common stock dividend of **$0.13 per share** was paid in March 2025, up from **$0.11 per share** in March 2024[145](index=145&type=chunk) [Earnings per Common Share](index=41&type=section&id=10.%20Earnings%20per%20Common%20Share) Diluted EPS increased to **$1.40** in Q1 2025 from **$1.27** in Q1 2024, driven by higher net income and fewer weighted average shares outstanding EPS Calculation (Q1) | (In thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to common stock | $300,584 | $285,278 | | Weighted average shares (basic) | 210,682 | 220,416 | | Weighted average shares (diluted) | 214,986 | 223,845 | | **Basic EPS** | **$1.43** | **$1.29** | | **Diluted EPS** | **$1.40** | **$1.27** | [Fair Value Measurements](index=42&type=section&id=11.%20Fair%20Value%20Measurements) Total assets measured at fair value on a recurring basis were **$1.71 billion**, with **$1.66 billion** in Level 2 and **$53.8 million** in Level 3 assets, primarily residual interests in securitizations Recurring Fair Value Measurements (March 31, 2025) | (In thousands) | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **Assets:** | | | | | | Trading investments | $0 | $2,436 | $51,296 | $53,732 | | Available-for-sale investments | $0 | $1,654,505 | $2,472 | $1,656,977 | | **Total Assets** | **$0** | **$1,656,941** | **$53,768** | **$1,710,709** | | **Liabilities:** | | | | | | Derivative instruments | $0 | $(23) | $0 | $(23) | - The fair value of the Private Education Loan portfolio was estimated at **$24.4 billion**, which is **$3.3 billion** higher than its carrying value of **$21.1 billion** as of March 31, 2025[161](index=161&type=chunk) [Regulatory Capital](index=45&type=section&id=12.%20Regulatory%20Capital) Sallie Mae Bank remains well-capitalized with a CET1 ratio of **11.6%** as of March 31, 2025, significantly exceeding regulatory minimums, and declared **$100 million** in dividends to the parent company Sallie Mae Bank Capital Ratios (March 31, 2025) | Ratio | Actual | Minimum Requirement + Buffer | | :--- | :--- | :--- | | Common Equity Tier 1 (CET1) | 11.6% | > 7.0% | | Tier 1 Capital | 11.6% | > 8.5% | | Total Capital | 12.9% | > 10.5% | | Tier 1 Leverage | 10.1% | > 4.0% | - The Bank is considered "well capitalized" under the prompt corrective action framework, with all ratios exceeding the required thresholds[165](index=165&type=chunk)[170](index=170&type=chunk) - The Bank declared **$100 million** in dividends to the parent company, SLM Corporation, during the first quarter of 2025[171](index=171&type=chunk) [Commitments, Contingencies and Guarantees](index=47&type=section&id=13.%20Commitments%2C%20Contingencies%20and%20Guarantees) The company had **$584 million** in outstanding loan commitments with a **$24 million** reserve for expected credit losses and is involved in routine legal and regulatory matters - As of March 31, 2025, the company had **$584 million** of outstanding contractual loan commitments, primarily for future disbursements of approved Private Education Loans, with a **$24 million** reserve for expected credit losses on these commitments[172](index=172&type=chunk) - The company is routinely a defendant in legal actions and receives requests from regulatory bodies, establishing reserves for loss contingencies that are probable and estimable[173](index=173&type=chunk)[175](index=175&type=chunk) [Segment Reporting](index=48&type=section&id=14.%20Segment%20Reporting) The company operates as a single reportable segment, focusing on originating and servicing Private Education Loans and other education-related services - The company is managed as a single line of business with one reportable segment focused on originating and servicing Private Education Loans[177](index=177&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's Q1 2025 financial performance, covering results of operations, financial condition, liquidity, capital, and critical accounting policies [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Net income attributable to common stock increased to **$301 million** in Q1 2025, driven by higher loan sale gains and lower operating expenses, despite a decrease in net interest income GAAP Consolidated Earnings Summary (Q1) | (In millions, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net interest income | $375 | $387 | | Provisions for credit losses | $23 | $12 | | Gains on sales of loans, net | $188 | $143 | | Total non-interest expenses | $155 | $162 | | **Net income attributable to common stock** | **$301** | **$285** | | **Diluted EPS** | **$1.40** | **$1.27** | - Net interest income decreased by **$12 million** due to a **22-basis point** compression in net interest margin, as asset yields declined while funding costs rose[195](index=195&type=chunk) - Gains on loan sales increased by **$45 million**, driven by a **$2.0 billion** loan sale in Q1 2025 compared to a **$2.1 billion** sale in Q1 2024[197](index=197&type=chunk) - Operating expenses decreased by **$7 million** to **$154 million**, primarily due to lower personnel costs and initiative spending[200](index=200&type=chunk) [Financial Condition](index=53&type=section&id=Financial%20Condition) Total assets were **$28.9 billion**, with net loans held for investment at **$21.1 billion**, while net interest margin decreased to **5.27%** and Private Education Loan originations increased by **7%** - The net interest margin (NIM) decreased to **5.27%** in Q1 2025 from **5.49%** in Q1 2024, primarily due to liabilities repricing slower than assets in a declining rate environment[203](index=203&type=chunk) Private Education Loan Originations (Q1) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total Private Education Loan originations | $2,771,478 | $2,582,070 | | Percentage of loans with a cosigner | 93.5% | 90.7% | | Average FICO at approval | 753 | 748 | Private Education Loan Delinquency Trends (as of March 31) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total loans in repayment | $15,903,797 | $14,961,692 | | Total delinquent loans (30+ days) | $570,125 | $510,086 | | Delinquencies as % of loans in repayment | 3.6% | 3.4% | [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$4.8 billion** in unrestricted cash and liquid investments, supported by deposits and borrowings, and Sallie Mae Bank remains well-capitalized Sources of Primary Liquidity (Ending Balances) | (In thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unrestricted cash and liquid investments | $4,802,104 | $6,061,797 | | Total deposits | $20,073,168 | $21,068,568 | | Total borrowings | $6,147,473 | $6,440,345 | - Sallie Mae Bank's CET1 capital ratio was **11.6%** as of March 31, 2025, exceeding the 'well capitalized' threshold of **6.5%** and the minimum requirement plus buffer of **7.0%**[273](index=273&type=chunk)[279](index=279&type=chunk) - The company has access to discretionary uncommitted Federal Funds lines of credit totaling **$125 million** and the FRB's Discount Window, with pledged collateral of **$2.5 billion**, neither of which were used in Q1 2025[284](index=284&type=chunk)[285](index=285&type=chunk) [Critical Accounting Policies and Estimates](index=72&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The allowance for credit losses is a critical estimate, with Q1 2025 scenario weighting revisions decreasing the provision by **$17 million**, and a sensitivity analysis showing potential for a **$192 million** increase - The allowance for credit losses is identified as the most critical accounting estimate, requiring material estimates susceptible to significant change[289](index=289&type=chunk)[298](index=298&type=chunk) - In Q1 2025, the company revised its CECL economic scenario weightings to **60% Baseline**, **20% S1** (stronger growth), and **20% S3** (unfavorable), from a **40/30/30** split. This change decreased the provision for credit losses by approximately **$17 million**[295](index=295&type=chunk) - A sensitivity analysis indicates that applying a **100%** weighting to the S3 unfavorable economic scenario would hypothetically increase the allowance for credit losses by **$192 million**, or **13.0%**, as of March 31, 2025[301](index=301&type=chunk)[303](index=303&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=74&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages interest rate risk using EAR and EVE analysis, showing low sensitivity to rate changes, with a **100 basis point** increase decreasing EAR by **3.1%** and EVE by **7.8%** Interest Rate Sensitivity Analysis (as of March 31, 2025) | Hypothetical Rate Change | Impact on Earnings at Risk (EAR) - Shock | Impact on Economic Value of Equity (EVE) | | :--- | :--- | :--- | | +300 basis points | -9.7% | -23.7% | | +100 basis points | -3.1% | -7.8% | | -100 basis points | +2.5% | +7.2% | | -300 basis points | +7.7% | +21.8% | Weighted Average Life of Assets and Liabilities (as of March 31, 2025) | (in years) | Weighted Average Life | | :--- | :--- | | **Earning assets** | **4.79** | | Private Education Loans | 5.62 | | Cash and investments | 1.52 | | **Deposits** | **0.85** | | **Borrowings** | **3.83** | [Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[316](index=316&type=chunk) - No material changes were made to the internal control over financial reporting during the first quarter of 2025[317](index=317&type=chunk) [PART II. Other Information](index=78&type=section&id=PART%20II.%20Other%20Information) This section provides additional information including legal proceedings, risk factors, unregistered sales of equity securities, and other disclosures [Legal Proceedings](index=78&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements, covering routine legal and regulatory matters - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements[319](index=319&type=chunk) [Risk Factors](index=78&type=section&id=Item%201A.%20Risk%20Factors) Readers are referred to the detailed Risk Factors section in the 2024 Form 10-K for a comprehensive discussion of the company's risks - Readers are referred to the Risk Factors section of the 2024 Form 10-K for a detailed discussion of risks[320](index=320&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased **1.87 million** shares for **$56.7 million**, including **1.04 million** under its public program, with **$372 million** remaining for repurchases Share Repurchases (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased Under Program | Remaining Authorization (End of Period) | | :--- | :--- | :--- | :--- | :--- | | Jan 2025 | 7,645 | $28.35 | — | $402,000,000 | | Feb 2025 | 1,123,800 | $31.14 | 337,782 | $392,000,000 | | Mar 2025 | 736,814 | $29.19 | 699,609 | $372,000,000 | | **Total Q1** | **1,868,259** | **$30.36** | **1,037,391** | | [Other Information](index=79&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement in Q1 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in Q1 2025[325](index=325&type=chunk)

[Financial Highlights and Outlook](index=3&type=section&id=Financial%20Highlights%20and%20Outlook) [First-Quarter 2025 Performance Highlights](index=3&type=section&id=First-Quarter%202025%20Performance%20Highlights) Sallie Mae reported a strong start to 2025 with GAAP Diluted EPS of $1.40 and a 7% year-over-year growth in Private Education Loan Originations. The company highlighted stable credit performance and disciplined execution of its strategy, positioning it to meet its full-year guidance despite the evolving macroeconomic environment Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | GAAP Diluted Earnings Per Common Share | $1.40 | | Private Education Loan Originations Growth (YoY) | 7% | | Shares Repurchased | 1.0M for $31M | | Total Net Charge-Offs (as % of avg. loans in repayment) | 1.88% | | Non-Interest Expenses | $155M | - CEO Jonathan Witter noted a strong start to 2025, citing the strength of the core business and stable credit performance with positive trends, expressing confidence in delivering results in line with annual guidance[7](index=7&type=chunk) [Balance Sheet & Capital Allocation](index=3&type=section&id=Balance%20Sheet%20%26%20Capital%20Allocation) The company maintained strong capital levels with a total risk-based capital ratio of 12.9% and a CET1 ratio of 11.6%. Capital was returned to shareholders through a $0.13 per share dividend and $31 million in share repurchases, with $372 million remaining under the current repurchase program Q1 2025 Capital Allocation and Ratios | Metric | Value | | :--- | :--- | | Common Stock Dividend per Share | $0.13 | | Total Risk-Based Capital Ratio | 12.9% | | CET1 Capital Ratio | 11.6% | | Remaining Share Repurchase Capacity (as of Mar 31, 2025) | $372M | [Income Statement & Earnings Summary](index=3&type=section&id=Income%20Statement%20%26%20Earnings%20Summary) For Q1 2025, GAAP Net Income attributable to common stock was $301 million. This result was significantly boosted by a $188 million gain on loan sales, which increased by $45 million year-over-year. The Net Interest Margin contracted by 22 basis points from Q1 2024 to 5.27%. Provision for credit losses increased, largely due to new loan commitments, though this was partially offset by a provision release from the loan sale Q1 2025 Income Statement Highlights | Metric | Value | Change/Comment | | :--- | :--- | :--- | | GAAP Net Income (attributable to common) | $301M | - | | Net Interest Margin (NIM) | 5.27% | Decrease of 22 bps from Q1 2024 | | Gain on Sale of Loans | $188M | Increase of $45M from Q1 2024 | | Provision for Credit Losses | $23M | Increased from Q1 2024, offset by $116M release from loan sale | [Private Education Loan Portfolio Trends](index=3&type=section&id=Private%20Education%20Loan%20Portfolio%20Trends) The average private education loan portfolio grew 7% year-over-year to $22.9 billion. Credit quality showed improvement in key areas, with net charge-offs decreasing to 1.88% from 2.14% in Q1 2024 and loans in hardship forbearance declining. However, delinquencies as a percentage of loans in repayment saw a slight increase - Key portfolio trends for Q1 2025 compared to Q1 2024: - Average loans outstanding increased **7% to $22.9B** - Net charge-offs as a percentage of average loans in repayment (annualized) decreased to **1.88% from 2.14%** - Loans in hardship forbearance decreased to **0.92% from 1.00%** - Delinquencies as a percentage of loans in repayment increased to **3.58% from 3.41%**[11](index=11&type=chunk) [Full-Year 2025 Guidance](index=3&type=section&id=Full-Year%202025%20Guidance) Sallie Mae reaffirmed its full-year 2025 guidance, signaling confidence in its operational and financial outlook. The company expects GAAP Diluted EPS to be in the range of $3.00 to $3.10 and projects continued growth in loan originations Full-Year 2025 Guidance | Metric | Expected Range/Growth | | :--- | :--- | | GAAP Diluted Earnings Per Common Share | $3.00 - $3.10 | | Private Education Loan Originations (YoY Growth) | 6% - 8% | | Total Loan Portfolio Net Charge-Offs | 2.0% - 2.2% | | Non-Interest Expenses | $655 million - $675 million | [Detailed Financial Statements](index=4&type=section&id=Detailed%20Financial%20Statements) [Key Performance Metrics (Quarterly Comparison)](index=4&type=section&id=Key%20Performance%20Metrics%20(Quarterly%20Comparison)) Q1 2025 GAAP diluted EPS was $1.40, a significant increase from $0.50 in Q4 2024 and $1.27 in Q1 2024. The Net Interest Margin improved sequentially to 5.27% from 4.92% but declined from 5.49% year-over-year. The quarter's results were heavily influenced by a $2.0 billion private education loan sale, which boosted non-interest income and profitability metrics like ROA and ROCE Quarterly Performance Metrics Comparison | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | GAAP diluted EPS | $1.40 | $0.50 | $1.27 | | Net interest margin | 5.27% | 4.92% | 5.49% | | Return on Assets (ROA) | 4.2% | 1.5% | 4.1% | | Return on Common Equity (ROCE) | 60.1% | 22.5% | 65.6% | | Private Education Loan sales | $2,003M | $— | $2,103M | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets stood at $28.9 billion, down from $30.1 billion at the end of 2024, driven by decreases in cash and deposits. Net loans held for investment remained stable at $21.1 billion. Total equity increased to $2.4 billion from $2.2 billion, supported by retained earnings growth Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $28,899,184 | $30,072,110 | | Loans held for investment, net | $21,091,204 | $20,902,158 | | Deposits | $20,073,168 | $21,068,568 | | Total liabilities | $26,498,328 | $27,912,190 | | Total equity | $2,400,856 | $2,159,920 | [Consolidated Statements of Income](index=10&type=section&id=Consolidated%20Statements%20of%20Income) For the first quarter of 2025, net income attributable to common stock increased to $300.6 million from $285.3 million in the prior-year quarter. This growth was primarily driven by a $44.7 million increase in gains on loan sales, which more than compensated for a $12.0 million decrease in net interest income and an $11.2 million increase in the provision for credit losses. Operating expenses decreased year-over-year Income Statement Comparison (in thousands) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net interest income | $374,970 | $387,016 | | Provisions for credit losses | $23,286 | $12,041 | | Gains on sales of loans, net | $187,735 | $143,039 | | Total non-interest expenses | $154,609 | $161,648 | | Net income attributable to common stock | $300,584 | $285,278 | [Other Information](index=5&type=section&id=Other%20Information) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This section provides a standard legal disclaimer, cautioning that the press release contains forward-looking statements, including the 2025 guidance, which are based on current management expectations. It warns that actual results could differ materially due to various risks and uncertainties, and the company does not commit to updating these statements - Forward-looking statements include the company's 2025 guidance, expectations for loan sales, share repurchases, and dividends[19](index=19&type=chunk) - These statements are subject to numerous risks, including changes in financing costs, regulatory changes, credit risk, and general economic conditions, which could cause actual results to differ materially[20](index=20&type=chunk) [Footnotes and Definitions](index=5&type=section&id=Footnotes%20and%20Definitions) The footnotes clarify the calculation methods for key performance indicators. They specify that Return on Assets (ROA) and Return on Common Equity (ROCE) are based on annualized GAAP net income. The note on share repurchases confirms that Q1 activity was conducted under the 2024 Share Repurchase Program, and the forbearance calculation methodology is also detailed - Return on Assets (ROA) is calculated as annualized GAAP net income divided by GAAP total average assets[16](index=16&type=chunk) - Return on Common Equity (ROCE) is calculated as annualized GAAP net income attributable to common stock divided by average common equity (total average equity less preferred stock)[16](index=16&type=chunk) - Share repurchases were executed under Rule 10b5-1 trading plans as part of the 2024 Share Repurchase Program, which had **$372 million** of capacity remaining as of March 31, 2025[14](index=14&type=chunk)