SLM (SLM) Q2 2024 earnings summary

Executive summary

• Q2 2024 delivered strong results with GAAP net income of $247M ($1.11 EPS), stable year-over-year, driven by core Private Education Loan growth and improved credit quality.

• Loan originations grew 6% year-over-year to $691M, with higher cosigner rates and average FICO scores; underclassmen originations rose 7% in the first half.

• $1.6B in private education loans sold in Q2, generating $112M in gains and a $103M allowance release.

• Share repurchases totaled 2.9M shares in Q2 at an average price of $21.17; $562M repurchase capacity remains.

• Credit performance exceeded expectations, supported by enhanced payment and loss mitigation programs.

Financial highlights

• Net interest income for Q2 was $372M, with a net interest margin of 5.36%, down from 5.52% a year ago.

• Total provision for credit losses was $17M, reflecting a $103M release from the loan sale and improved economic outlook.

• Non-interest/operating expenses were $157M, up from $154M year-over-year.

• Return on assets was 3.6% in Q2 2024.

• Common stock dividend of $0.11 paid in Q2 2024.

Outlook and guidance

• Full-year 2024 GAAP diluted EPS expected between $2.70 and $2.80, reflecting strong loan sale prices and positive credit trends.

• Net charge-offs for 2024 forecasted at $325M–$345M (2.1%–2.3% of average loans in repayment).

• Private Education Loan originations projected to grow 7%–8% year-over-year.

• Non-interest expenses expected at $635M–$655M for 2024.

• Peak season expected to be elongated due to FAFSA delays, but volume plan remains on track.