Financial Data and Key Metrics Changes - GAAP diluted EPS for Q3 2025 was $0.63 per share, with loan originations of $2.9 billion, reflecting a 6.4% increase year-over-year and 6% growth year-to-date [3][4] - Net interest income for Q3 2025 was $373 million, up $14 million from the prior year, with a net interest margin of 5.18%, an increase of 18 basis points year-over-year [5][6] - Provision for credit losses was $179 million, down from $271 million in the prior year quarter, largely due to a $119 million provision release from a loan sale [5][6] Business Line Data and Key Metrics Changes - Cosigner rate increased to 95% from 92% year-over-year, and the average FICO score at approval rose to 756 from 754, indicating improved underwriting discipline [4] - Private education loan net charge-offs in Q3 2025 were $78 million, representing 1.95% of average private education loans in repayment, down 13 basis points from the year-ago quarter [4] Market Data and Key Metrics Changes - The delinquency rate for private education loans in repayment was 4%, up from 3.6% year-over-year, attributed to changes in loan modification eligibility criteria [7][8] - The company noted stability in late-stage delinquencies and roll rates, with 80% of borrowers in loan modification programs making consistent payments [8] Company Strategy and Development Direction - The company is optimistic about the long-term outlook for private student lending and is exploring alternative funding partnerships in the private credit space [10][11] - A first-of-its-kind partnership is expected to be announced soon, aimed at unlocking value from the customer base and setting the stage for sustainable growth of fee-based revenues [11] - The company anticipates selling a small portfolio of seasoned loans and a portion of recent peak season originations, expecting GAAP earnings per common share for 2025 to be between $3.20 and $3.30 [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic ambiguity, noting no material changes in borrowers' ability to meet obligations [4][10] - The company is preparing for the impact of recent federal reforms, which are expected to create opportunities for growth in private student lending [10][69] Other Important Information - The company has reduced outstanding shares by 55% since initiating its capital return strategy in 2020, repurchasing 5.6 million shares at an average price of $29.45 per share [4][5] - Liquidity and capital positions remain strong, with a liquidity ratio of 15.8% and total risk-based capital at 12.6% [9] Q&A Session Summary Question: Outlook for delinquency performance - Management is pleased with loan modification program performance and expects stability in late-stage delinquencies and roll rates, maintaining guidance for the end of the year [13][14] Question: Details on loan sale terms - Specific details on the loan sale are still being finalized, with more information expected to be shared at the investor forum [15] Question: Modification volume and delinquency rates - The company is optimistic about the performance of borrowers in modification programs, with strong payment patterns observed [18][19] Question: Credit outlook and charge-offs - Management believes that delinquencies will remain flat within normal operational variability, reaffirming long-term net charge-off guidance [22][24] Question: Impact of market volatility on gain on sale margins - The company has historically achieved successful loan sales in the mid to high single-digit range, with margins influenced by market conditions [34] Question: Buyback strategy and authorization - The company remains committed to aggressive share buybacks, with plans to assess timing and quantity based on upcoming partnership developments [64][66] Question: Opportunities from federal policy changes - The company views federal reforms as a significant opportunity for growth in private student lending, with potential annual origination increases estimated at $4 to $5 billion [69][70]