Sallie Mae Misses First-Quarter Estimates as Net Income DeclinesSarah Mulholland
SLM Corp., the student lender known as Sallie Mae, reported its profit fell 18 percent in the first quarter even as defaults declined.
Net income fell to $284 million, or 64 cents a share, for the three months ended March 31, compared with $346 million, or 74 cents, a year earlier, 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 were $227 million, or 51 cents a share, the company said. That compared with an average estimate of 56 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.
In the first quarter of 2013, the lender generated gains by selling interests in its portfolio of government-guaranteed loans and debt repurchases, according to today’s statement. There were no similar transactions to boost earnings this year, the statement said.
Sallie Mae made $1.5 billion in private education loans in the third quarter, an 8 percent increase from the year-ago period, according to the statement. The proportion of payments more than 60 days late fell to 6.9 percent, down from 7.8 percent a year ago.
The charge-off rate, or the percentage of loans that have been written off, was 2.8 percent, down from 3 percent a year ago, the company said.