Net income increased to $447 million, or 84 cents a share, from $309 million, or 52 cents, a year earlier, the Reston, Virginia-based company said today in a statement distributed by Business Wire. SLM’s “core” earnings were 75 cents a share, the company said. The average estimate of seven analysts surveyed by Bloomberg was for profit of 71 cents.
The lender originated $413 million in student loans without federal backing during the quarter, compared with $381 million in the same period a year ago, according to the statement. Additionally, Sallie Mae serviced 3.3 million accounts for the U.S. Department of Education. The company is revamping its business after the government stopped using private lenders to make loans through the Federal Family Education Loan Program.
The servicing business “is important because it keeps them in the game,” said Matt Snowling, an analyst with Arlington, Virginia-based FBR Capital Markets. “But it’s not going to transform the company. Earnings have to be derived from private loan originations.”
Sallie Mae repurchased $1.3 billion of debt and realized gains of $118 million in the fourth quarter, the company said.
Charge-offs on private loans declined to 4.8 percent from 5.1 percent in the same quarter last year. Delinquencies declined to 10.6 percent from 12.1 percent in the year-ago quarter.
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