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]
SLM Corporation(SLMBP) - 2025 Q2 - Quarterly Report