Salliemae(US:SLM)2025-10-23 20:33Financial Performance - For the three months ended September 30, 2025, net income attributable to common stock was $132 million, or $0.63 diluted earnings per common share, compared to a net loss of $50 million, or $0.23 loss per common share for the same period in 2024[205]. - Net interest income for the three months ended September 30, 2025, was $373 million, an increase of 4% from $359 million in the same period of 2024[204]. - Non-interest income for the three months ended September 30, 2025, was $173 million, a significant increase of 621% from $24 million in the same period of 2024[204]. - The company reported a return on assets of 1.9% for the three months ended September 30, 2025, compared to a return of (0.6)% for the same period in 2024[199]. - Net income attributable to common stock for the nine months ended September 30, 2025, was $500 million, or $2.35 diluted earnings per share, compared to $483 million, or $2.18 diluted earnings per share, for the same period in 2024[214]. Credit Losses and Provisions - Provisions for credit losses decreased by 34% to $179 million for the three months ended September 30, 2025, compared to $271 million in the same period of 2024[204]. - Provision for credit losses for the nine months ended September 30, 2025, was $351 million, up from $300 million in the year-ago period, influenced by new loan commitments and changes in economic outlook[216]. - Provisions for credit losses for Private Education Loans totaled $179,462 thousand for the three months ended September 30, 2025, down from $271,465 thousand in the same period of 2024, indicating a decrease of about 33.9%[237]. - The total provisions for credit losses for the nine months ended September 30, 2025, were $351,466 thousand, compared to $300,336 thousand in 2024, reflecting an increase of about 17.0%[237]. Loan Performance - The ending balance of private education loans, net, was $21.62 billion as of September 30, 2025, compared to $20.46 billion as of September 30, 2024[199]. - Total Private Education Loan originations for the three months ended September 30, 2025, amounted to $2,936,393, up from $2,758,529 in the same period of 2024, reflecting a 6.5% increase[234]. - The average FICO score at approval for Private Education Loans in the three months ended September 30, 2025, was 756, slightly up from 754 in the same period of 2024[234]. - The percentage of loans in repayment that are current was 96.0% as of September 30, 2025, slightly down from 96.4% in 2024[242]. - Delinquencies as a percentage of Private Education Loans in repayment increased to 4.0% at September 30, 2025, up from 3.6% at September 30, 2024[243]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, were $180 million, an increase of 5% from $171 million in the same period of 2024[204]. - Total operating expenses for the first nine months of 2025 were $499 million, an increase from $488 million in the year-ago period, primarily due to increased marketing and IT spending[220]. Dividends and Shareholder Returns - The company declared dividends per common share of $0.13 for the three months ended September 30, 2025, an increase of 18% from $0.11 in the same period of 2024[204]. - The Bank declared dividends of $100 million and $294 million for the three and nine months ended September 30, 2025, respectively, compared to $116 million and $414 million for the same periods in 2024[2]. Capital and Liquidity - The Bank's risk-based capital ratios exceeded the required minimums under U.S. Basel III as of September 30, 2025, indicating strong capital management[290]. - The Common Equity Tier 1 risk-based capital ratio must be maintained above 7.0% to avoid restrictions on capital distributions, with the Bank currently meeting this requirement[291]. - Total unrestricted cash and liquid investments amount to $4,671,680 thousand as of September 30, 2025[272]. - The company maintains a significant liquidity buffer of cash and liquid investments, expected to be sustained through 2025[271]. Loan Commitments and Derivatives - The Bank has $2.7 billion in outstanding contractual loan commitments expected to be funded during the 2025/2026 academic year[4]. - The allowance for credit losses includes a reserve of $98 million for lifetime expected credit losses on unfunded commitments as of September 30, 2025[5]. - The Bank's total exposure to counterparties with credit ratings was entirely above S&P AA- or Moody's Aa3, indicating no exposure to lower-rated counterparties[287]. Interest Rate Risk Management - The company has a significant portion of earning assets indexed to the 30-day average SOFR, which is a core rate in interest rate risk analysis[319]. - Interest rate swaps and derivatives are utilized to align assets with debt, mitigating interest rate risk[327]. - The company anticipates low overall repricing risk due to the correlation of short-term indices[327].