Financial Data and Key Metrics Changes - GAAP diluted EPS for Q2 2025 was $0.032 per share, with loan originations at $686 million, roughly in line with the same period last year [6][10] - Net interest income for Q2 2025 was $377 million, up $5 million from the prior year, with a net interest margin of 5.31% [11] - Provision for credit losses increased to $149 million in Q2 2025 from $17 million in the prior year, reflecting a more cautious macroeconomic outlook [12] - Private education loans delinquent for 30 days or more were 3.5%, a decrease from 3.6% at the end of Q1 2025 [13] Business Line Data and Key Metrics Changes - The credit quality of originations showed improvement, with a cosigner rate of 84%, up from 80% in the year-ago quarter [8] - Net private education loan charge-offs in Q2 were $94 million, representing 2.36% of average loans in repayment, an increase of 17 basis points year-over-year [14] - Non-interest expenses for Q2 were $67 million, significantly lower than $155 million in the prior quarter and $159 million in the year-ago quarter [15] Market Data and Key Metrics Changes - The company anticipates that new federal lending limits could generate an additional $4.5 billion to $5 billion in annual private education loan origination volume once fully realized [21] - The reforms will take effect on July 1, 2026, with existing borrowers grandfathered into current programs, potentially impacting near-term originations [20] Company Strategy and Development Direction - The company plans to maintain a strategy of mid to high single-digit private student loan portfolio growth, supported by loan sales and other structures [24] - The management is exploring new alternative funding partnerships in the private credit space to support growth while preserving balance sheet capacity [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for private student lending, particularly due to recent federal student loan reforms [6][19] - The company is closely monitoring the impacts of federal lending reforms and other policy developments on its business [7][20] Other Important Information - The company repurchased 2.4 million shares at an average price of $29.42 per share, reducing shares outstanding by over 53% since the start of the buyback strategy in 2020 [9] - The liquidity ratio at the end of Q2 was 17.8%, with total risk-based capital at 12.8% and common equity Tier 1 capital at 11.5% [16] Q&A Session Summary Question: Can you discuss the $1.8 billion loan sale and gain on sale margin? - The company is in line with expectations for the transaction, with modest adjustments in pricing due to changes in the rates environment [26] Question: Should we expect another loan sale in Q4 2025? - The company will monitor the peak season and evaluate capital levels before deciding on additional sales [27] Question: Can you explain the uptick in net charge-off rates? - The increase is attributed to disaster forbearance related to the California wildfires, which shifted some charge-off timing [28][30] Question: How does the new federal lending reform impact your growth algorithm? - The company maintains its growth framework but may trend towards higher growth rates due to the new opportunities presented by the reforms [34] Question: What is the expected market share for the new addressable market? - The company expects to maintain a market share in the 60% range for the new opportunities presented by the reforms [58] Question: What is the timing for the new private credit partnerships? - The company aims to have partnerships in place before the additional volume from reforms comes into effect [65]

Financial Performance - Full-Year 2024 private education loan originations reached $70 billion, a 10% increase compared to $64 billion in 2023[8] - Q4 2024 private education loan originations totaled $982 million, a 17% increase compared to $839 million in the year-ago quarter[11] - Full-Year 2024 GAAP diluted earnings per common share were $268[17] - The company repurchased 116 million shares in Full-Year 2024 for $250 million, at an average price of $2159 per share[13] Balance Sheet and Capital Allocation - Total assets grew by 31% in Full-Year 2024, inclusive of FFELP loan portfolio sale, while private education loan balance grew by 57%[9] - The total risk-based capital ratio was 126%, with a CET1 capital ratio of 113%[12] - $37 billion in private education loans were sold at attractive premiums in 2024, including $34 billion of principal and $274 million in capitalized interest[19] Credit Performance - The percentage of private education loans in repayment delinquent 30+ days as of December 31, 2024, was 37%, compared to 39% in 2023[25] - Private education loan net charge-offs for Full-Year 2024 were $332 million, representing 219% of average private education loans in repayment, compared with 244% in 2023[27] - Q4 2024 provision for credit losses was $108 million, with a total allowance of 583% as a percentage of the ending total loan balance plus unfunded commitments and total accrued interest receivable on private education loans[24] Funding and Liquidity - Deposit portfolio balances at the end of Q4 2024 were 18% lower than at the end of Q3 2024[20] - Uninsured deposits represented 3% of total deposits as of December 31, 2024[22]