SLM (SLM) Q3 2024 earnings summary

Executive summary

• Reported a GAAP net loss of $50M ($0.23 per share) for Q3 2024, compared to net income of $25M in Q3 2023, primarily due to higher credit loss provisions.

• Private education loan originations grew 13% year-over-year to $2.8B in Q3 2024, with year-to-date originations up 9%.

• Increased quarterly dividend for Q4 2024 to $0.13 per share, following a Q3 dividend of $0.11.

• Repurchased 5.3M shares in Q3 2024, with $448M capacity remaining under the repurchase program.

• Net income for the nine months ended September 30, 2024, was $483M, up from $400M year-over-year.

Financial highlights

• Net interest income for Q3 2024 was $359M, with total interest income at $653M; net interest margin declined to 5.00% from 5.43% year-over-year.

• Provision for credit losses increased to $271M in Q3 2024, up from $198M in Q3 2023.

• Non-interest expenses were $172M in Q3 2024, slightly up from $170M year-over-year.

• Return on assets was -0.6% and return on common equity was -10.2% for Q3 2024.

• Allowance for credit losses as a percentage of ending total loan balance plus commitments was 5.84%, down from 5.99% a year ago.

Outlook and guidance

• Full-year 2024 diluted EPS expected between $2.70 and $2.80.

• Private education loan originations projected to grow 8%-9% year-over-year.

• Net charge-offs for the total loan portfolio forecasted at $325M–$340M (2.1%–2.3% of average loans in repayment).

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

• NIM pressure expected to persist into early next year, with normalization later in 2024.