Sallie Mae Reports 22% Drop in Fourth-Quarter Profit
(Corrects analyst estimate for adjusted earnings per share in third paragraph of story published Jan. 16.)
SLM Corp. (SLM), the student lender known as Sallie Mae, reported a fourth-quarter profit decline of 22 percent.
Net income fell to $270 million, or 60 cents per share, compared with $348 million, or 74 cents, in the year-earlier period, the Newark, Delaware-based company said today in a statement distributed by Business Wire.
SLM’s earnings excluding items such as the market gains and losses of derivatives contracts was 75 cents a share, above the average estimate of 73 cents by six analysts surveyed by Bloomberg.
Sallie Mae is remaking its business after legislation passed in 2010 cut companies out of the market for government-guaranteed debt. The lender is splitting into two firms, separating its education-loan arm from its consumer-lending unit.
Both companies will initially be owned by existing shareholders, according to a May 29 regulatory filing. SLM held about $104.6 billion of loans originated under the government’s Federal Family Education Loan Program as of Dec. 31, according to today’s statement.
Sallie Mae made $524 million in private education loans in the fourth quarter, a 2 percent increase, according to the statement. The lender matched its forecast of $3.8 billion of originations in 2013 and projects $4 billion this year.
The charge-off rate, or the percentage of loans that have been written off, was 2.9 percent, down from 4.2 percent a year ago, the company said. The proportion of payments more than 90 days late fell to 4.1 percent from 4.6 percent.
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