Financial Data and Key Metrics Changes - The company reported core earnings per share of $0.29 for the quarter, adjusting for significant items, while the core loss per share was $0.84 [12][4] - The expected life of loan cash flows increased by approximately $195 million due to lower prepayment speeds and updated assumptions [9][10] - The company announced a new share repurchase authorization of $100 million to enhance shareholder value [4] Business Line Data and Key Metrics Changes - Total loan originations in the Consumer Lending segment grew to $788 million, a 58% increase year-over-year, driven by over 100% growth in refinance originations [15] - The Federal Education Loan segment's net interest margin for Q3 was 84 basis points, up 14 basis points from the previous quarter [13] - In-school lending reached a record high of $260 million, marking the highest quarterly volume in the company's history [5] Market Data and Key Metrics Changes - The company experienced strong investor demand for asset-backed securities (ABS), completing its fourth term ABS financing of the year [11][20] - The total reserve build in the quarter was driven by changes in borrower behavior, elevated delinquency rates, and macroeconomic outlook changes [17][18] Company Strategy and Development Direction - The company is focused on aggressively reducing expenses, exceeding its initial goal of $400 million in run-rate expense reductions ahead of schedule [6][8] - The company aims to capitalize on growth opportunities in the refinance market, particularly as federal loan policies become less attractive to borrowers [88][90] - The company plans to provide an update on its growth strategy for the Earnest business on November 19th [11] Management's Comments on Operating Environment and Future Outlook - Management noted that delinquency rates are improving but remain elevated, reflecting ongoing credit trends and lower prepayment activity [12][25] - The outlook for Q4 is a range of $0.30 to $0.35 per share, with expectations of continued strong origination growth [13][21] - Management emphasized the importance of macroeconomic conditions and public policy changes in shaping future performance [71][72] Other Important Information - The company has completed its final obligations under the Transition Services Agreement, allowing for further expense reductions [7][18] - The allowance for loan loss, excluding expected future recoveries, stands at $765 million for the entire education loan portfolio [17] Q&A Session Summary Question: Can you discuss the provision and delinquencies noted on the call? - Management explained that the provision expense reflects incremental defaults due to changes in borrower repayment behavior and macroeconomic conditions, particularly affecting legacy portfolios [24][25] Question: Where within consumer lending are you seeing credit weakness? - The majority of credit weakness is concentrated in legacy portfolios, with some changes in newer products but not as significant [36][38] Question: What is the breakdown of the $151 million provision? - Management indicated that the macroeconomic condition piece is relatively small, with the majority driven by trends in the private legacy portfolio [84][86] Question: How do you view the competition going forward? - The company believes it is well-positioned to take advantage of opportunities in the market, particularly in graduate loan originations and refinancing [96][98] Question: What is the potential opportunity in the Grad PLUS market? - Management estimates the Grad PLUS market to be around $14 billion, with expectations of significant expansion opportunities [103]