SLM Corporation(US:JSM)2025-10-29 20:19Financial Performance - Third-quarter 2025 net loss was $86 million ($0.87 diluted loss per share), compared to a net loss of $2 million ($0.02 diluted loss per share) in the same quarter last year, representing a significant increase in losses [47][53]. - Core Earnings net loss for the third quarter was $83 million ($0.84 diluted loss per share), compared to a profit of $160 million ($1.45 diluted per share) in the prior year [48]. - Net income for the third quarter of 2025 was $35 million, compared to $27 million in the same quarter of 2024, reflecting a 30% increase [67]. - Net income (loss) for the three months ended September 30, 2025, was a loss of $86 million [123]. - Net income for the nine months ended September 30, 2025, was $(75) million, compared to $107 million for the same period in 2024 [186]. Loan Performance - The provision for loan losses totaled $168 million, with $155 million attributed to Consumer Lending, reflecting elevated delinquency balances and macroeconomic forecasts [50][54]. - Delinquencies greater than 90 days increased to $2.5 billion from $1.9 billion year-over-year [67]. - The delinquency rate for FFELP loans greater than 90 days increased to 10.5% as of September 30, 2025, from 8.7% as of December 31, 2024 [101]. - The percentage of loans in repayment increased to 82.8% as of September 30, 2025, compared to 80.1% on September 30, 2024 [204]. - Loans delinquent greater than 90 days increased to $2,539 million, representing 10.5% of loans in repayment as of September 30, 2025, compared to 7.3% on September 30, 2024 [204]. Capital Management - Total capital returned to shareholders in Q3 2025 was $42 million, down from $50 million in Q3 2024 [28]. - The company has authorized a new $100 million share repurchase program in October 2025, in addition to approximately $26 million of unused authorization as of September 30, 2025 [26]. - The company repurchased $26 million of common shares and authorized a new $100 million share repurchase program [50]. - The company repurchased a total of 2.0 million shares at an average price of $13.19 during the third quarter of 2025 [160]. - The company has approximately $26 million of unused authorization remaining under its share repurchase programs as of September 30, 2025 [160]. Operational Efficiency - Operating expenses were $105 million, a decrease of 43% from $184 million in the prior year [52]. - Operating expenses decreased by $200 million, primarily due to a decline in business processing expenses from the sale of the government services and healthcare services businesses [61]. - The company reduced its headcount by over 80% since the beginning of 2024 as part of its strategic actions to simplify the company [33]. - Total expenses for the quarter were $109 million, with direct operating expenses amounting to $61 million [123]. - Total expenses amounted to $341 million, with direct operating expenses at $189 million and unallocated shared services expenses at $144 million [127]. Loan Originations - The company originated $1.8 billion of Private Education Loans in the first nine months of 2025, a 73% increase from $1.0 billion a year ago [22]. - Total originations of Private Education Loans nearly doubled to $1.8 billion in the first nine months of 2025 compared to $1.0 billion a year ago [36]. - The company originated $788 million in Private Education Loans, marking a 58% increase compared to the previous year [50]. - The company originated $687 million in new loans during the three months ended September 30, 2025, compared to $407 million in the same period of 2024 [100]. - The company originated $788 million of Private Education Loans in Q3 2025, a 58% increase compared to $500 million in Q3 2024 [80]. Asset Management - Ending total education loans, net, stood at $44.4 billion, down from $47.5 billion year-over-year [45]. - Total assets decreased to $49.3 billion as of September 30, 2025, down from $51.8 billion at the end of 2024, representing a decline of approximately 4.8% [169]. - Total liabilities decreased to $46.87 billion, down from $49.15 billion, reflecting a decrease of approximately 4.6% [169]. - The company reported unrestricted cash of $571 million as of September 30, 2025, down from $1.143 billion a year earlier [111]. - The total balance of loans in forbearance for Private Education Loans decreased from $445 million as of September 30, 2024, to $239 million as of September 30, 2025, a reduction of approximately 46.3% [102]. Interest Income and Expenses - Total interest income decreased by 18% to $781 million in the third quarter, down from $948 million in the same period last year [52]. - The company reported a total interest expense of $639 million, leading to a net interest income of $142 million before provisions [123]. - Total interest income for the three months ended September 30, 2025, was $781 million, with education loans contributing $760 million [123]. - Total interest income for the nine months ended September 30, 2025, was $2,361 million, down from $2,948 million in 2024, representing a decrease of approximately 20% [172]. - The company incurred $4 million in restructuring and other reorganization expenses during the quarter [123]. Future Outlook - The passage of the "Big Beautiful Bill" on July 3, 2025, is expected to drive increased demand for private in-school graduate loans, presenting a growth opportunity for Navient [40]. - The company plans to focus on market expansion and new product development as part of its future strategy [125]. - The company anticipates continued focus on market expansion and new product development in the upcoming quarters [127]. - The company has no further obligations to provide transition services for its government services business as of October 2025 [89]. - The company expects to fund ongoing liquidity needs, including the repayment of $0.5 billion of senior unsecured notes maturing in the short term and $4.8 billion maturing in the long term, with 69% maturing by 2031 [109].