Core Insights - Sallie Mae (SLM) is expected to report quarterly earnings of $0.84 per share, marking a significant increase of 465.2% year-over-year [1] - Revenue projections stand at $375.85 million, reflecting a year-over-year growth of 4.6% [1] Earnings Estimates - The consensus EPS estimate has been revised down by 8.4% over the last 30 days, indicating a reevaluation by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions and have shown a strong correlation with short-term stock performance [3] Key Metrics Projections - Analysts predict a 'Net Interest Margin' of 5.1%, slightly up from 5.0% a year ago [5] - 'Net Interest Income' is estimated at $375.85 million, compared to $359.40 million in the same quarter last year [5] - 'Other income' is projected to be $23.75 million, down from $28.39 million reported in the same quarter of the previous year [5] - The consensus estimate for 'Total Non-Interest Income' is $168.34 million, significantly higher than the year-ago figure of $24.52 million [6] Stock Performance - Sallie Mae shares have decreased by 4.4% over the past month, contrasting with a 1.1% increase in the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 4 (Sell), suggesting it is expected to underperform the overall market in the near term [6]

Core Viewpoint - Sallie Mae reported quarterly earnings of $0.32 per share, missing the Zacks Consensus Estimate of $0.49 per share, and a significant decline from $1.11 per share a year ago, indicating an earnings surprise of -34.69% [1] Financial Performance - The company posted revenues of $376.82 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.45% and showing a slight increase from $372.17 million year-over-year [2] - Over the last four quarters, Sallie Mae has exceeded consensus revenue estimates two times [2] Stock Performance - Sallie Mae shares have increased approximately 19.7% since the beginning of the year, outperforming the S&P 500's gain of 8.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $387.17 million, and for the current fiscal year, it is $3.11 on revenues of $1.54 billion [7] - The outlook for the Financial - Consumer Loans industry, where Sallie Mae operates, is currently in the bottom 22% of Zacks industries, which may impact stock performance [8]

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)