Salliemae(US:SLM)2025-07-24 20:39Financial Performance - Net income attributable to SLM Corporation for the three months ended June 30, 2025, was $67.3 million, a decrease from $247.4 million in the same period of 2024[199]. - Diluted earnings per share for the six months ended June 30, 2025, was $1.72, down from $2.39 in 2024[199]. - For Q2 2025, net income attributable to common stock was $67 million, or $0.32 diluted earnings per share, a decrease of 73% from $247 million, or $1.11 diluted earnings per share in Q2 2024[206]. - For the first half of 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 in the first half of 2024[214]. Loan Portfolio and Originations - Total ending private education loans, net, reached $21.16 billion as of June 30, 2025, compared to $18.91 billion in 2024, reflecting a significant increase[199]. - The average balance of private education loans was $22,561,636 thousand for the three months ended June 30, 2025, up from $20,480,805 thousand in 2024, representing an increase of 10.16%[227]. - Total acquisitions and originations of loans 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, indicating a growth of 5.54%[229]. - Total Private Education Loan originations for the three months ended June 30, 2025, were $685,602,000, a slight decrease of 0.5% from $690,916,000 in the same period of 2024[233]. Credit Losses and Provisions - Provision for credit losses in Q2 2025 was $149 million, compared to $17 million in Q2 2024, reflecting a significant year-over-year increase due to prior negative provisions from loan sales[208]. - Provision for credit losses for the first half of 2025 was $172 million, compared to $29 million in the year-ago period, influenced by new loan commitments and economic outlook changes[215]. - Total Private Education Loan provisions for credit losses for the six months ended June 30, 2025, were $172,004,000, significantly higher than $29,229,000 in 2024[236]. - The allowance for credit losses increased to $1,469,509 thousand as of June 30, 2025, from $1,265,592 thousand at June 30, 2024[246]. Operating Expenses - Total operating expenses for Q2 2025 were $166 million, up from $157 million in Q2 2024, 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 initiative spending[219]. Tax and Regulatory Changes - The company is currently evaluating the tax impact of significant U.S. tax law changes included in the new Bill, which reinstates the ability to expense research and development costs[198]. - Income tax expense for the first half of 2025 was $115 million, down from $184 million in the year-ago period, with an effective tax rate decrease to 23.4% from 25.4%[221]. Risk Management and Compliance - The strategic focus remains on maximizing profitability and growth in the core private student loan business while enhancing risk management frameworks[202]. - The company continues to seek to inform the external narrative about student lending and strengthen its risk and compliance functions[202]. - The company has enhanced its loss mitigation programs through forbearance and loan modification offerings to assist borrowers[247]. Liquidity and Capital Management - Total unrestricted cash and liquid investments as of June 30, 2025, amount to $5,222,134 thousand, down from $6,061,797 thousand as of December 31, 2024[271]. - The company maintains a significant liquidity buffer to meet contractual obligations under various stress scenarios[270]. - The Bank's risk-based and leverage capital ratios exceeded the required minimum ratios under U.S. Basel III as of June 30, 2025[289]. Interest Rate Sensitivity and Economic Impact - 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]. - The Earnings at Risk (EAR) results for June 30, 2025, show potential earnings impact of -10.6% under a +300 basis points shock scenario[322]. - The Economic Value of Equity (EVE) sensitivity analysis indicates a potential decrease of -24.5% under a +300 basis points shock scenario[322].