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 [4][5] - 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 [6][7] - 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 the loan sale [6][7] Business Line Data and Key Metrics Changes - The cosigner rate for Q3 2025 was 95%, up from 92% in the year-ago quarter, and the average FICO score at approval increased to 756 from 754 [5] - 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 [5][6] - Non-interest expenses for Q3 2025 were $180 million, compared to $167 million in the prior quarter and $172 million in the year-ago quarter [9] Market Data and Key Metrics Changes - 4% of private education loans in repayment were 30 days or more delinquent, up from 3.6% at the end of the year-ago quarter, attributed to changes in loan modification eligibility criteria [7][8] - Graduate loan originations increased by 11% year-over-year, driven by behavioral changes from borrowers and a focus on graduate marketing [34][36] Company Strategy and Development Direction - The company is optimistic about the long-term outlook for private student lending and plans to explore 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 the value of the customer base and setting the stage for sustainable growth of fee-based revenues [11][12] - 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-$3.30 [12] Management's Comments on Operating Environment and Future Outlook - Management noted that despite economic ambiguity, there has been no material change in borrowers' ability to meet obligations [5][10] - The company is prepared for the transition period for graduates entering repayment, emphasizing the importance of outreach programs to assist borrowers [49][51] - Management remains confident in the long-term metrics and guidance provided, despite the challenges posed by the current economic environment [26][88] 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 [5][6] - The liquidity ratio at the end of the quarter was 15.8%, with total risk-based capital at 12.6% and CET1 capital at 11.3% [9] Q&A Session Summary Question: Outlook on delinquency performance - Management expressed satisfaction with loan modification program performance and expects stability in late-stage delinquencies and roll rates [14] Question: Details on loan sale partnership - Management is finalizing the deal and will provide details once completed, emphasizing the importance of the partnership for future growth [15] Question: Impact of modifications on delinquency rates - Management noted that borrowers in modification programs show strong payment patterns, and they are optimistic about the upcoming wave of graduates transitioning into repayment [19][20] Question: Credit outlook and charge-offs - Management indicated that while delinquencies are up year-over-year, they expect charge-offs to remain stable, with a long-term target of 1.9%-2.1% [26][34] Question: Impact of recent credit market volatility - Management acknowledged that market conditions could affect gain on sale margins but emphasized their historical success in loan sales [40] Question: Opportunities from Plus Reform - Management sees Plus Reform as a significant opportunity for growth in private student lending, with potential annual origination increases of $4 billion-$5 billion [90][91]

Financial Data and Key Metrics Changes - GAAP diluted EPS for Q3 2025 was $0.63 per share [4] - Loan originations for Q3 were $2.9 billion, representing a 6.4% growth year-over-year and 6% growth year-to-date [5] - Net interest income for 2025 was $373 million, up $14 million from the prior year quarter [7] - Net interest margin was 5.18%, 18 basis points higher than the year-ago quarter [7] - Provision for credit losses was $179 million, down from $271 million in the prior year [8] - Non-interest expenses were $180 million, compared to $172 million in the year-ago quarter [12] Business Line Data and Key Metrics Changes - Cosigner rate for Q3 was 95%, up from 92% in the year-ago quarter [5] - Average FICO score at approval increased to 756 from 754 [5] - Private education loan net charge-offs were $78 million, representing 1.95% of average private education loans in repayment, down 13 basis points from the year-ago quarter [6] Market Data and Key Metrics Changes - 4% of private education loans in repayment were thirty days or more delinquent, up from 3.6% at the end of the year-ago quarter [10] - Stability in late-stage delinquencies and roll rates was observed [11] Company Strategy and Development Direction - The company is optimistic about the long-term outlook for private student lending and plans to explore alternative funding partnerships in the private credit space [14][15] - A first-of-its-kind partnership is expected to be announced soon, aimed at unlocking the value of the customer base and setting the stage for sustainable growth [15] - The company anticipates selling a small portfolio of seasoned loans and a portion of recent peak season originations [16] Management's Comments on Operating Environment and Future Outlook - Management noted that despite economic ambiguity, there has been no material change in borrowers' ability to meet obligations [6] - The company is encouraged by the opportunities created by recent federal reforms [14] - Management expressed confidence in maintaining a net charge-off rate in the high ones to low 2% range over the long term [21] Other Important Information - The company has reduced outstanding shares by 55% since initiating its capital return strategy in 2020 [6] - Liquidity ratio at the end of the quarter was 15.8%, with total risk-based capital at 12.6% and common equity Tier one capital at 11.3% [12] Q&A Session Summary Question: Outlook on delinquency performance - Management expressed satisfaction with the loan modification programs and expects stability in late-stage delinquencies and roll rates [20][21] Question: Details on loan sale terms - Management indicated that details on the loan sale will be released once the deal is finalized [22] Question: Performance of modifications and roll-off - Management noted strong payment patterns among borrowers in modification programs and is optimistic about their success [27] Question: Impact of credit market volatility on gain on sale margins - Management stated that gain on sale margins can vary based on market conditions, but they have historically achieved mid to high single-digit ranges [48] Question: Buyback appetite and authorization - Management confirmed a commitment to aggressive share buybacks, with plans to assess timing and quantity post-partnership completion [90] Question: General sentiment on credit outlook - Management believes that current economic conditions have not significantly impacted borrowers' ability to meet obligations, despite general concerns [93]