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]

Financial Data and Key Metrics Changes - GAAP diluted EPS for Q1 2025 was $1.40, up from $1.27 in the same quarter last year, indicating a positive growth trend [6] - Loan originations for Q1 2025 reached $2.8 billion, a 7.3% increase compared to the previous year [6] - Net interest income for Q1 2025 was $375 million, down $12 million from the prior year but up $13 million from Q4 2024 [10] - Net interest margin was 5.27%, an increase of 35 basis points from the previous quarter [11] - Provision for credit losses was $23 million, up from $12 million in the prior year quarter [11] Business Line Data and Key Metrics Changes - The cosigner rate for Q1 was 93%, up from 91% in the year-ago quarter, reflecting improved credit quality [7] - Average FICO score at approval was 753, an increase from 748 in Q1 2024 [7] - Net private education loan charge-offs were $76 million, representing 1.88% of average loans in repayment, down 26 basis points from Q1 2024 [7] Market Data and Key Metrics Changes - Private education loans delinquent for 30 days or more were 3.6% of loans in repayment, a decrease from 3.7% at the end of Q4 2024 [12] - The volume of loan modification enrollments decreased by approximately 50% from the highs in Q3 2024, indicating improved borrower performance [13] Company Strategy and Development Direction - The company is focused on maintaining a capital return strategy, having repurchased 1 million shares at an average price of $29.65 per share [9] - The management emphasized a cautious approach to growth, balancing between expanding the balance sheet and returning capital to shareholders [37] - The company aims to continue optimizing its loss mitigation programs and enhancing underwriting capabilities to improve credit performance [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum for the remainder of 2025, despite broader macroeconomic uncertainties [16] - The company reaffirmed its 2025 guidance, indicating a solid start to the year with expectations for continued performance [15] - Management acknowledged the potential impact of recent government policy changes on the broader economic environment but noted no immediate adverse effects on their operations [22] Other Important Information - The company completed a $500 million unsecured bond transaction during the quarter, which was used to redeem a maturing bond [10] - Liquidity at the end of the quarter was 16.8% of total assets, with total risk-based capital at 12.9% [14] Q&A Session Summary Question: Credit charge-offs performance and loss mitigation programs - Management attributed the positive charge-off performance to seasonality, loss mitigation programs, and enhanced underwriting capabilities [19][20] Question: Impact of government programs on borrower behavior - Management noted no significant changes in FICO performance among customers with federal loans and observed that joint customers had lower delinquency rates [25] Question: Changes in borrower behavior and graduate borrowers - Management indicated early signs of increased activity from graduate borrowers but emphasized that it was too early to draw strong conclusions [28] Question: Delinquency rate trends and extended grace usage - Management explained that the delinquency rate increase was influenced by borrowers in modification programs and that extended grace usage was functioning as intended [31][34] Question: Balance sheet growth and capital return strategy - Management highlighted a moderate growth strategy for the balance sheet while maintaining a commitment to capital return through share buybacks [36][38] Question: Job market challenges for graduates - Management acknowledged potential challenges in the job market but noted that recent graduates remained optimistic about meeting financial obligations [70][72] Question: Changes in university funding and its impact - Management stated that while reduced funding could lead to increased demand for private loans, the overall impact was still uncertain [62][64] Question: Character of buyers in loan sales - Management reported no significant changes in the makeup of bidders for loan sales compared to previous years [66] Question: Trading of student loan ABS post-sale - Management indicated that the market for student loan ABS was stable, with no material widening of spreads since the last sale [84]