SLM Corporation(SLMBP) - 2025 Q1 - Quarterly Results

Financial Highlights and Outlook First-Quarter 2025 Performance Highlights 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] Balance Sheet & Capital Allocation 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 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 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] Full-Year 2025 Guidance 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 Key Performance Metrics (Quarterly Comparison) 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 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 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 Forward-Looking Statements 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] - 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] Footnotes and Definitions 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] - 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] - 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]