Sallie Mae Cashes in on Demand for Higher Education
“Students and their families are increasingly cost conscious when making education decisions,” said John Remondi, president and CEO of SLM Corp. (NYSE:SLM) — aka government-sponsored student loan company Sallie Mae — in the company’s third-quarter financial report. “Even so, our loan originations grew by double digits this quarter, confirming the continuing demand for our responsibly designed products.”
Private loan originations grew by 11 percent on the year to $1.5 billion at Sallie Mae’s consumer lending segment, a lucrative pop in business, particularly given a 0.6 percentage point reduction in the corporation’s annual charge-off rate to 2.6 percent. Provisions for education loan losses fell 22.6 percent on the year to $195 million, and the firm’s core net interest margin before loan loss provisions increased from 4.05 to 4.24 percent.
All told, it was a fairly strong quarter for Fannie Mae, although one that analysts pretty much expected. Adjusted earnings of 60 cents per share fell just shy of the average analyst estimate of 61 cents per share. Shares traded down fractionally on the news.