Salliemae(US:SLM)2024-10-23 20:32Financial Performance - Net income attributable to SLM Corporation common stock for the three months ended September 30, 2024, was $(49,800) thousand, compared to $24,723 thousand for the same period in 2023[175]. - Diluted earnings per common share for the nine months ended September 30, 2024, was $2.18, up from $1.69 for the same period in 2023[175]. - For the three months ended September 30, 2024, the net loss attributable to common stock was $50 million, or $0.23 loss per common share, compared to a net income of $25 million, or $0.11 diluted earnings per common share for the same period in 2023[185]. - For the nine months ended September 30, 2024, net income attributable to common stock was $483 million, or $2.18 diluted earnings per common share, compared to $400 million, or $1.69 diluted earnings per common share for the same period in 2023[187]. Loan Portfolio and Originations - Total education loans, net, at the end of September 30, 2024, was $20,459,933 thousand, a decrease from $20,899,181 thousand at the end of September 30, 2023[175]. - The company originated $2,779,631 in loans during the three months ended September 30, 2024[199]. - Private Education Loan originations for the three months ended September 30, 2024, reached $2,758,529 thousand, up from $2,451,413 thousand in the same period of 2023, indicating an increase of approximately 12.5%[207]. - Total Private Education Loan originations for the nine months ended September 30, 2024, were $6,031,515 thousand, compared to $5,544,017 thousand in the same period of 2023, marking an increase of approximately 8.8%[208]. Credit Losses and Provisions - Provision for credit losses increased to $271 million in the current quarter from $198 million in the year-ago quarter, driven by new loan commitments[185]. - The provision for credit losses for the three months ended September 30, 2024, was $109,196 thousand, compared to $44,423 thousand in the same period of 2023, reflecting a significant increase of approximately 145%[210]. - Total provisions for credit losses reported in consolidated statements of operations for the nine months ended September 30, 2024, were $300,336 thousand, down from $329,864 thousand in 2023, a decrease of 9.0%[216]. - Provisions for loan losses in the current period for the nine months ended September 30, 2024, were $40,579 thousand, down from $60,328 thousand in 2023, a decrease of 32.8%[216]. Interest Income and Margin - Net interest income decreased by $26 million in the current quarter, primarily due to a 43-basis point decrease in net interest margin and a $238 million decrease in average Private Education Loans and FFELP Loans outstanding[185]. - Net interest margin for the three months ended September 30, 2024, is 5.00% compared to 5.43% for the same period in 2023[190]. - Interest income for the three months ended September 30, 2024, decreased by $25,225, with a change in rate contributing $(31,183) and volume contributing $5,958[192]. Operating Expenses - Total operating expenses for the third quarter of 2024 were $171 million, compared to $167 million in the year-ago quarter, primarily due to higher marketing and personnel costs[185]. - Total operating expenses for the first nine months of 2024 were $488 million, up from $476 million in the year-ago period, driven by higher personnel and marketing costs[187]. Securitization and Share Repurchase - The company executed a $668 million securitization transaction on May 15, 2024, raising approximately $668 million of gross proceeds[179]. - The company executed a $868 million securitization transaction on August 14, 2024, raising approximately $868 million of gross proceeds[180]. - The company repurchased 9.6 million shares of common stock at a total cost of $204 million during the nine months ended September 30, 2024[180]. Liquidity and Capital Management - The company holds a Secured Borrowing Facility with a borrowing capacity of $2 billion, with an extended revolving period until June 13, 2025[180]. - Unrestricted cash and liquid investments totaled $5.921 billion as of September 30, 2024, a decrease from $6.138 billion at December 31, 2023[238]. - The company targets maintaining sufficient on-balance sheet liquidity to meet all contractual obligations under various stress scenarios[237]. Regulatory and Risk Management - The bank's risk-based capital ratios exceeded the required minimums under U.S. Basel III as of September 30, 2024, with a Common Equity Tier 1 risk-based capital ratio above 7.0%[252]. - The bank's regulatory capital ratios exceeded all applicable standards to qualify as "well capitalized" under the prompt corrective action framework[255]. - 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[283]. Economic and Market Conditions - The Economic Value of Equity (EVE) sensitivity analysis shows a potential decrease of 21.3% under a +300 basis points shock scenario as of September 30, 2024[276]. - The funding gap for the SOFR rate category is $1,103.9 million, indicating a mismatch in funding and assets[281].