Salliemae(SLM) - 2025 Q2 - Quarterly Results

Financial Highlights and Overview This section provides an overview of Sallie Mae's Q2 2025 financial results, full-year guidance, and private education loan portfolio trends Q2 2025 Performance Summary Sallie Mae reported solid Q2 2025 results with a GAAP Diluted EPS of $0.32 and GAAP Net Income of $67 million The company executed $70 million in share repurchases and paid a $0.13 dividend per share The net interest margin saw a slight year-over-year decrease to 5.31%, while the provision for credit losses increased significantly compared to Q2 2024 - CEO Jonathan Witter highlighted the solid performance, the resilience of customers, and the continued execution of strategy, expressing optimism for the long-term outlook of private student lending[7] Q2 2025 Key Metrics | Metric | Value | | :--- | :--- | | GAAP Diluted Earnings Per Common Share | $0.32 | | Private Education Loan Originations | $686 million | | Shares Repurchased | 2.4 million for $70 million | | Total Net Charge-Offs (annualized) | 2.36% | | Non-Interest Expenses | $167 million | Q2 2025 Financial & Capital Highlights | Metric | Value | | :--- | :--- | | GAAP Net Income (attributable to common stock) | $67 million | | Net Interest Margin | 5.31% (down 5 bps YoY) | | Provision for Credit Losses | $149 million | | Common Stock Dividend Paid | $0.13 per share | | Total Risk-Based Capital Ratio | 12.8% | | CET1 Capital Ratio | 11.5% | Full-Year 2025 Guidance The company provides its full-year 2025 outlook, expecting GAAP Diluted EPS between $3.00 and $3.10, private education loan origination growth of 6% to 8%, and total loan portfolio net charge-offs between 2.0% and 2.2% Full-Year 2025 Guidance | Metric | Expected Range | | :--- | :--- | | 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 | Private Education Loan Portfolio Trends The private education loan portfolio showed a 10% year-over-year increase in average loans outstanding to $22.6 billion Key credit metrics such as delinquencies and net charge-offs increased slightly compared to Q2 2024, while loans in hardship forbearance decreased Provisions for credit losses rose significantly to $149 million from $17 million in the prior-year quarter - Average loans outstanding (net) grew 10% from Q2 2024 to $22.6 billion[11] Loan Portfolio Credit Trends (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Provisions for credit losses | $149 million | $17 million | | Loans in hardship forbearance | 0.91% | 1.00% | | Delinquencies (% of loans in repayment) | 3.51% | 3.34% | | Net charge-offs (annualized, % of avg loans in repayment) | 2.36% | 2.19% | Key Financial Metrics (Comparative) This section provides a comparative view of key financial metrics for Q2 2025, Q1 2025, and Q2 2024 Net income attributable to common stock was $67 million in Q2 2025, a significant decrease from $301 million in Q1 2025 and $247 million in Q2 2024 The decline was primarily due to higher provisions for credit losses and lower non-interest income, which was impacted by the absence of significant loan sales in the current quarter Selected Financial Data ($ millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net interest income | $377 million | $375 million | $372 million | | Provisions for credit losses | $149 million | $23 million | $17 million | | Total non-interest income | $27 million | $206 million | $142 million | | Net income attributable to common stock | $67 million | $301 million | $247 million | | Private Education Loans held for investment, net | $21,160 million | $21,091 million | $18,433 million | | GAAP diluted earnings per common share | $0.32 | $1.40 | $1.11 | Consolidated Financial Statements This section presents Sallie Mae's consolidated balance sheets and statements of income, highlighting key changes in assets, liabilities, and profitability for the periods presented Consolidated Balance Sheets As of June 30, 2025, Sallie Mae's total assets were $29.6 billion, a slight decrease from $30.1 billion at year-end 2024 The change was mainly driven by lower cash and investments, while loans held for investment increased slightly Total liabilities also decreased to $27.2 billion, primarily due to a reduction in deposits Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $29,602,917 | $30,072,110 | | Loans held for investment, net | $21,160,332 | $20,902,158 | | Total liabilities | $27,227,930 | $27,912,190 | | Deposits | $20,481,952 | $21,068,568 | | Total equity | $2,374,987 | $2,159,920 | Consolidated Statements of Income For the three months ended June 30, 2025, net income attributable to common stock was $67.3 million, down from $247.4 million in the prior-year period The decline was primarily driven by a significant increase in provisions for credit losses (to $148.7 million from $16.8 million) and a sharp drop in non-interest income due to lower gains on loan sales For the six-month period, net income also decreased to $367.9 million from $532.6 million year-over-year Income Statement Summary - Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net interest income | $376,820 | $372,172 | | Provisions for credit losses | $148,718 | $16,830 | | Total non-interest income | $26,776 | $141,805 | | Net income attributable to common stock | $67,300 | $247,365 | Income Statement Summary - Six Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net interest income | $751,790 | $759,188 | | Provisions for credit losses | $172,004 | $28,871 | | Total non-interest income | $232,820 | $315,963 | | Net income attributable to common stock | $367,884 | $532,643 | Other Information This section includes cautionary notes regarding forward-looking statements and provides detailed definitions and methodologies for key financial metrics Forward-Looking Statements This section contains a standard cautionary note advising investors that the press release includes forward-looking statements based on current management expectations It lists numerous risks and uncertainties, such as changes in financing costs, regulations, and economic conditions, that could cause actual results to differ materially from the projections - Forward-looking statements cover strategies, goals, loan sales, share repurchases, dividends, and the 2025 guidance[18] - Results are subject to various risks including financing costs, regulatory changes, accounting standards, credit risk, cybersecurity incidents, and general economic conditions[19] Footnotes This section provides definitions and calculation methodologies for key metrics mentioned in the report It clarifies details on the share repurchase program, the calculation of loans in forbearance, Return on Assets (ROA), and Return on Common Equity (ROCE) - As of June 30, 2025, $302 million of capacity remained under the 2024 Share Repurchase Program[13] - The report defines how it calculates the percentage of loans in hardship forbearance, which stood at approximately $150 million at June 30, 2025[14] - The calculation methods for Return on Assets (ROA) and Return on Common Equity (ROCE) are defined as GAAP net income (annualized) divided by GAAP total average assets and GAAP net income to common (annualized) divided by average common equity, respectively[15]