SLM (SLM) Q1 2025 earnings summary

Executive summary

• Q1 2025 GAAP net income attributable to common stock was $301M, with diluted EPS of $1.40, up from $1.27 year-over-year, and a return on common equity of 60% for the quarter.

• Private Education Loan originations reached $2.8B, up 7.3% year-over-year, with average FICO at approval rising to 753 and cosigner rate at 93%.

• $2.0B in Private Education Loans were sold, generating a $188M gain on sale, up $45M from Q1 2024.

• Operating expenses declined 4% year-over-year to $154M–$155M, primarily due to lower personnel costs and initiative spending.

• Management reaffirmed full-year 2025 guidance, citing confidence in trajectory but acknowledging macroeconomic uncertainties.

Financial highlights

• Net interest income for Q1 2025 was $375M, down $12M year-over-year but up $13M sequentially, with a net interest margin of 5.27%.

• Provision for credit losses increased to $23M, mainly due to loan growth and new commitments, partially offset by a $116M reserve release from a $2B loan sale.

• Non-interest income rose to $206M, driven by gains on loan sales.

• Return on assets was 4.2% for Q1 2025.

• Non-interest expenses were $155M, a 4% decrease year-over-year despite higher application and origination volumes.

Outlook and guidance

• Full-year 2025 GAAP diluted EPS expected between $3.00 and $3.10.

• Private Education Loan originations projected to grow 6–8% year-over-year.

• Total loan portfolio net charge-offs forecasted at 2.0–2.2% of average loans in repayment.

• Non-interest expenses for 2025 expected in the range of $655M–$675M.

• Management expects continued loan sales, with timing and volume dictated by market conditions and portfolio growth targets.