We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sallie Mae Q3 Loss Widens on Lower NII & Higher Expenses, Stock Dips
Read MoreHide Full Article
Sallie Mae (SLM - Free Report) , formally SLM Corporation, reported a third-quarter 2024 loss per share of 23 cents, wider than the Zacks Consensus Estimate of 7 cents. The bottom line compared unfavorably against the prior-year quarter’s earnings of 11 cents.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
A decline in the net interest income (NII) and a rise in non-interest expenses negatively impacted SLM’s results. However, lower provisions for credit losses and robust loan originations created tailwinds.
Following the announcement of the third-quarter results, SLM shares fell 1%.
The company’s GAAP net loss was $45 million against the net income of $29 million in the prior-year quarter.
Sallie Mae’s NII Declines, Expenses Climb
Third-quarter NII was $359 million, down 6.8% year over year. The reported figure missed the Zacks Consensus Estimate by 1.1%.
The quarterly net interest margin (NIM) was 5%, down 53 basis points from the prior-year quarter.
Non-interest income was $24 million, flat year over year.
Non-interest expenses inched up 1.2% year over year to $172 million. The uptick mainly resulted from higher compensation and benefits, and FDIC assessment fees.
SLM’s Credit Quality Improves
Provision for credit losses was $271 million, down 37% million from the prior-year quarter.
Net charge-offs for private education loans were $77 million, down 22.3% year over year.
Private education loans held for investment net charge-offs, as a percentage of average private education loans held for investment in repayment (annualized), was 2.08%. The figure contracted 45 basis points year over year.
Sallie Mae’s Balance Sheet Position: Mixed Bag
As of Sept. 30, 2024, deposits were $21.4 billion, down 0.5% year over year.
Private education loans held for investment were $20.5 billion, up 0.6% from the year-ago figure.
In the reported quarter, the company’s private education loan originations increased 13% from the year-ago quarter.
SLM’s Share Repurchase Update
In the third quarter, SLM repurchased 5.3 million shares for $115 million under its 2024 share buyback program.
Sallie Mae’s 2024 Outlook
The company expects diluted earnings per share of $2.70-$2.80.
It anticipates total loan portfolio net charge-offs of $325-$340 million.
Private education loan originations are projected to grow 8-9% year over year.
SLM’s non-interest expenses are expected to be $635-$655 million.
Final Thoughts on SLM
Sallie Mae’s overall financial performance of the company seems decent. Robust loan origination and lower provisions for credit loss are positives. However, a decline in the NII and a rise in non-interest expenses are major near-term headwinds.
Mr. Cooper Group Inc. reported third-quarter 2024 earnings of $2.84 per share, which beat the Zacks Consensus Estimate by 11.8%. The bottom line rose 1.8% year over year.
Solid growth in the Servicing and Originations segments were major tailwinds for COOP in the third quarter. The servicing portfolio increased year over year, surpassing the $1.2-trillion mark. However, a decline in revenues and an increase in expenses were spoilsports.
Ally Financial’s (ALLY - Free Report) third-quarter 2024 adjusted earnings of 95 cents per share surpassed the Zacks Consensus Estimate of 81 cents. Also, the bottom line reflected a rise of 14.5% from the year-ago quarter.
In the reported quarter, ALLY witnessed increased revenues and lower expenses. Capital ratios rose, which was a positive. However, a decline in net finance receivables and loans and deposits were the undermining factors. Also, an increase in provisions hurt results to some extent.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Sallie Mae Q3 Loss Widens on Lower NII & Higher Expenses, Stock Dips
Sallie Mae (SLM - Free Report) , formally SLM Corporation, reported a third-quarter 2024 loss per share of 23 cents, wider than the Zacks Consensus Estimate of 7 cents. The bottom line compared unfavorably against the prior-year quarter’s earnings of 11 cents.
Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.
A decline in the net interest income (NII) and a rise in non-interest expenses negatively impacted SLM’s results. However, lower provisions for credit losses and robust loan originations created tailwinds.
Following the announcement of the third-quarter results, SLM shares fell 1%.
The company’s GAAP net loss was $45 million against the net income of $29 million in the prior-year quarter.
Sallie Mae’s NII Declines, Expenses Climb
Third-quarter NII was $359 million, down 6.8% year over year. The reported figure missed the Zacks Consensus Estimate by 1.1%.
The quarterly net interest margin (NIM) was 5%, down 53 basis points from the prior-year quarter.
Non-interest income was $24 million, flat year over year.
Non-interest expenses inched up 1.2% year over year to $172 million. The uptick mainly resulted from higher compensation and benefits, and FDIC assessment fees.
SLM’s Credit Quality Improves
Provision for credit losses was $271 million, down 37% million from the prior-year quarter.
Net charge-offs for private education loans were $77 million, down 22.3% year over year.
Private education loans held for investment net charge-offs, as a percentage of average private education loans held for investment in repayment (annualized), was 2.08%. The figure contracted 45 basis points year over year.
Sallie Mae’s Balance Sheet Position: Mixed Bag
As of Sept. 30, 2024, deposits were $21.4 billion, down 0.5% year over year.
Private education loans held for investment were $20.5 billion, up 0.6% from the year-ago figure.
In the reported quarter, the company’s private education loan originations increased 13% from the year-ago quarter.
SLM’s Share Repurchase Update
In the third quarter, SLM repurchased 5.3 million shares for $115 million under its 2024 share buyback program.
Sallie Mae’s 2024 Outlook
The company expects diluted earnings per share of $2.70-$2.80.
It anticipates total loan portfolio net charge-offs of $325-$340 million.
Private education loan originations are projected to grow 8-9% year over year.
SLM’s non-interest expenses are expected to be $635-$655 million.
Final Thoughts on SLM
Sallie Mae’s overall financial performance of the company seems decent. Robust loan origination and lower provisions for credit loss are positives. However, a decline in the NII and a rise in non-interest expenses are major near-term headwinds.
SLM Corporation Price, Consensus and EPS Surprise
SLM Corporation price-consensus-eps-surprise-chart | SLM Corporation Quote
Currently, SLM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Consumer Loan Providers
Mr. Cooper Group Inc. reported third-quarter 2024 earnings of $2.84 per share, which beat the Zacks Consensus Estimate by 11.8%. The bottom line rose 1.8% year over year.
Solid growth in the Servicing and Originations segments were major tailwinds for COOP in the third quarter. The servicing portfolio increased year over year, surpassing the $1.2-trillion mark. However, a decline in revenues and an increase in expenses were spoilsports.
Ally Financial’s (ALLY - Free Report) third-quarter 2024 adjusted earnings of 95 cents per share surpassed the Zacks Consensus Estimate of 81 cents. Also, the bottom line reflected a rise of 14.5% from the year-ago quarter.
In the reported quarter, ALLY witnessed increased revenues and lower expenses. Capital ratios rose, which was a positive. However, a decline in net finance receivables and loans and deposits were the undermining factors. Also, an increase in provisions hurt results to some extent.