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TranscriptFY2026 Q32026-10-22FY2026 Q3 earnings call transcript
Earnings source - 79 paragraphs
FY2026 Q3 earnings call transcript
I would now like to turn the call over to Kate deLacy, Vice President, Investor Relations. Please go ahead.
Thank you, Leslie. Good evening, and welcome to Sallie Mae's Third Quarter 2026 Earnings Call. It is my pleasure to be here today with Jon Witter, our CEO, Pete Graham, our Co-President and CFO, and Melissa Bernot, Managing Vice President and Deputy CFO. After the prepared remarks, we will open the call for questions. Before we begin, keep in mind our discussion will contain predictions, expectations, and forward-looking statements. Actual results in the future may be materially different from those discussed here due to a variety of factors. Listeners should refer to the discussion of those factors in the company's Form 10-Q and other filings with the SEC. For Sallie Mae, these factors include, among others, results of operations, financial conditions, and/or cash flows, as well as any potential impacts of various external factors on our business.
We undertake no obligation to update or revise any predictions, expectations, or forward-looking statements to reflect events or circumstances that occur after today, Thursday, October 22nd, 2026. Thank you, and I'll now turn the call over to Jon.
Thank you, Kate and Leslie. Good evening, everyone. Thank you for joining us to discuss Sallie Mae's third quarter 2026 results. The third quarter was a strong one for Sallie Mae, reflecting solid operating performance and continued execution against our strategy. Tonight, we'll discuss our results, changes in the market environment, how our outlook has evolved, and why we remain confident in the long-term trajectory of the company. Let me begin with an update on our strategy. Over the last several years, we have been building a more diversified and flexible funding model. Last year, we launched our strategic partnerships business with our inaugural partner, KKR, adding a third funding channel alongside our bank balance sheet and whole loan sales. Tonight, we are pleased to announce that we have completed a strategic partnership with Sixth Street for an initial three-year term.
Sixth Street has committed to purchase a minimum of $1.5 billion in newly originated private education loans annually, with the first year inclusive of an initial seed portfolio of $600 million in seasoned loans. This transaction is substantially similar to our first strategic partnership. We look forward to providing additional details about our strategic partnerships business in the near future following the completion of the seed sales. Adding a second partner further validates our strategic partnerships model. Together, our strategic partnerships with KKR and Sixth Street enable growth by expanding our origination capacity with access to scalable and capital-efficient funding, makes us less dependent on short-term capital market conditions, and generates recurring and predictable program management and servicing fees. Our next priority in this area will be developing flow capability for our graduate loan products now that we are completing our first peak season following PLUS reform.
With that strategic context, let me turn to peak season. Loan originations for the third quarter were $3.4 billion, representing 15% growth over the year-ago quarter and the highest quarterly origination volume in our history. We are particularly pleased with the growth we have seen in graduate loans. You will remember that we invested significantly in building new products, credit programs, marketing strategies, and other capabilities to compete aggressively to serve these customers post-PLUS reform. In Q3, graduate originations were up 119% year-over-year, with an average FICO score nine points higher than the overall average of new origination in the portfolio. This peak season has been elongated. Last-minute changes to federal rulemaking, systems challenges, and other factors caused school delays in delivering financial aid packages and the resulting certification process. As a result, peak season activity has continued well into October and is arguably still underway today.
For October month to date, we have seen a 35% increase in disbursements year over year. We believe that stronger than normal volume will continue into the fourth quarter, and that by year-end, our full-year originations will be in line with our guidance of 12%-14% growth. We have said consistently that this first peak season would afford an important learning opportunity. We now have a more complete view of federal rulemaking, first-hand experience about how both schools and students will respond to the updated federal program, and more insight into the actual mix of student loans demanded. We are currently in the early stages of processing and analyzing that data, and will surely continue to learn more about the nature of the PLUS opportunity.
We look forward to sharing our insights with you as appropriate later this fall and continue to be excited about the potential for future originations growth. Let me turn to the existing portfolio. Private education loan net charge-offs were $90 million in the third quarter. These results were modestly above our expectation, with the increase concentrated within the segment of borrowers affected by the misaligned third-party debt resolution practices we have previously discussed. Results within our non-affected segment were in line with or slightly better than our expectations. Furthermore, as you can see on slide nine in our earnings presentation, our loan modification program continues to outperform expectations. Let me provide an update on the impacted segment we discussed earlier this year. As previously communicated, we implemented a number of changes to create a more customer-aligned recovery approach. We are beginning to see the positive impact of those strategies.
For example, using AI, we've reviewed all relevant collection and recovery calls and observed a 50% decline in mentions by borrowers of relevant players and practices during the month to date in October. While we are pleased with the general performance of these strategies, adoption by customers already in the later stages of delinquency and more fully engaged with these debt resolution providers has been slower than we initially expected. As such, we are now estimating net charge-offs for the year will be moderately higher than we believed last quarter. Last quarter, we estimated an approximately $25 million impact of these practices to our 2026 net charge-offs, driven by a decision to suspend many recovery efforts. At that time, we believed we could absorb the increase into our original guidance range of $345 million to $385 million, although likely at the upper end.
We now expect to see modest additional pressure on gross charge-off from these customers, leading us to increase our estimated impact in the year from $25 million to $45 million. As such, we are increasing our full-year net charge-off guidance to $400 million-$420 million with a midpoint $45 million higher than that of our original range. As we have said, we believe that customers who are charging off as a result of these questionable practices have a significantly higher ability to repay than a historically charged-off customer. We have started to see our first few recoveries from this population through our enhanced strategies. While it is a very small sample, we are seeing meaningfully higher recovery rates. Assuming this trend continues, this bodes well for future performance. Pete will now take you through some additional financial highlights of the quarter. Pete?
Thank you, Jon. Good evening, everyone. For the third quarter of 2026, we generated $339 million of net interest income and $46 million of other income. Compared with the prior year quarter, net interest income decreased by $34 million, while other income increased by $15 million, driven by growth in recurring program management fees from our strategic partnership and year-over-year growth in servicing fee revenue. Net interest margin was 4.85% for the quarter, up 10 basis points from the prior quarter. While interest rate volatility and higher long-term rates created some headwinds during the period, actions that we purposefully and proactively took earlier this year helped offset a portion of that pressure. Specifically, we extended the duration of our funding to better align with the growing proportion of fixed-rate loans in our portfolio.
Those actions increased the weighted average life of our deposits to 37 months from 23 months at the end of 2025 and moved us into a more neutral interest rate risk position. Private education loans delinquent 30 days or more were 4.2% of loans in repayment, an increase from 4% in the year-ago quarter. Our reserve rate was 5.89% at the end of the quarter, down four basis points from the prior year period, reflecting disciplined underwriting and ongoing work to optimize loss mitigation strategies. Provision for credit losses was $214 million in the third quarter, primarily reflecting the impacts of significant originations growth in the period. Non-interest expenses were $221 million, up $40 million from the year-ago quarter. The increase was driven largely by investments made to support peak season and position the company for growth in a changing federal student lending environment.
At the same time, we have been laser-focused on non-interest expense management during the year and have been performing better than our original expectations year to date. On October 1st, we executed a restructuring plan to better align resources with the company's strategic priorities and improve operating efficiency. Our year-to-date and expected future outperformance will allow us to absorb these restructuring charges within our full-year guidance range. Without these one-time expenses, non-interest expense would have come in at the low end of the range, but will now be closer to the high end of the range. This restructuring aligns resources to our long-term strategy and combined with our continued focus on disciplined expense management, should help us return OpEx growth to more normalized levels as we move into 2027, even recognizing that we expect to achieve continued significant originations growth during that time.
We continued to return capital to shareholders during the third quarter, repurchasing 5.1 million shares at an average price of $25.69. Since the beginning of the year, we have repurchased 18.1 million shares at an average purchase price of $23.02, representing 9% of the shares outstanding. Finally, our liquidity and capital positions remain solid. We ended the quarter with liquidity of 15% of total assets. Total risk-based capital was 12.5%, and common equity tier one capital was 11.2%. We continue to believe in our strategy and the foundation it provides to support sustainable growth and return capital to shareholders. I will now turn the call back to Jon.
Thanks, Pete. Let me close with a discussion of recent market trends and how they have caused us to change some nearer-term plans and the resulting financial outlook. As many of you have undoubtedly tracked over the last month, interest rates have moved significantly higher, and capital market conditions have become more volatile and challenging. Consequently, as we both gauged external indications of interest and ran our own internal valuation models, we came to believe that the likely premium we would receive on any loan sale in this environment would be below our minimum acceptable threshold. Generally, our strategy has been to engage in regular way seasoned loan sales only when they represented an attractive economic trade versus our other alternatives.
However, in this instance, we determined that we could create more shareholder value by retaining the loans on our balance sheet and earning a roughly 5% NIM over time rather than selling at the current indicated premium levels. The low-cost matched funding of our bank, together with the flexibility afforded by our strategic partnerships model, creates a distinct strategic advantage. This positioning allows us to remain selective rather than be compelled to pursue actions dictated by market conditions. Given that the markets remain elevated and volatile, at this time, we do not anticipate executing our final loan sale for the year, which was previously planned for October. We appreciate that this could create an in-year EPS impact for 2026. However, we have committed to being a disciplined capital allocator and believe this change in plans will drive a meaningfully greater shareholder value creation in the future.
It's important to note several things. First, we do not expect this change in loan sale plans to substantially impact our 2026 share buyback activity. We still expect to exhaust most of our current share repurchase authorization before the end of the year. Second, this does not reflect a permanent change to our loan sale program expectations as we see several factors that could potentially allow us to earn above-threshold premiums even in a higher, for longer future. While we certainly cannot predict future market conditions, we currently believe that meaningful loan sales will be a part of our 2027 plans and beyond. We've outlined a number of moving pieces that impact our full-year outlook. In summary, primarily as a result of our decision not to execute an additional whole loan sale, we are lowering our full-year 2026 EPS guidance to $1.95-$2.05 a share.
As mentioned earlier, we are raising our full-year net charge-off guidance range to $400 million to $420 million. We are reaffirming our non-interest expense and origination guidance. In conclusion, I know we've given you a lot of information this evening, so let me try to sum up the key takeaways. First, we continue to be excited about the PLUS opportunity and believe the investments we have made and performance this quarter position us well for future originations growth. Second, our loss mitigation and credit strategies, including loan modifications, are generally performing as intended, if not better, and position us well to manage credit performance going forward. Third, we've been good stewards of our expense dollars and spent wisely in 2026.
We expect to land within our non-interest expense guidance range for the year, even after absorbing one-time restructuring expenses, and believe we are set up to return to a more normalized expense growth rate going forward. Finally, we have built a true strategic advantage in our flexible funding strategy and are positioned well to maximize shareholder value creation across a variety of macroeconomic environments. We believe all this sets us up for continued growth and long-term shareholder value creation into the future. With that, Pete, why don't we go ahead and open up the call for some questions?
Thank you. The floor is now open for questions. At this time, if you have a question or comment, please press star one on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star two. Again, we ask you pick up your handset when posing your questions to provide optimal sound quality. Our first question comes from Jeff Adelson, Morgan Stanley. Please go ahead. Your line is now open.
Hey, good morning, guys. Thanks for taking my question. I guess just given the current market environment, obviously that's why you're taking the EPS guide down. Can you just help us understand how much of a whole loan sale you were thinking originally was going to be in this year, in the back half of the year? I know it's early and you haven't put it out yet, but can you maybe help everyone understand how you're thinking about 2027 in terms of early indications of guidance? Should we be assuming you do another similar case of whole loan sales next year on top of the announced partnerships? Are you including any plans for a third partnership to be announced? I think everyone would appreciate a better sense of what 2027 looks like.
Should we look at the investor forum past as maybe some sort of indication of how you're thinking about that? Thanks.
Yeah. Thanks for the question. There's a lot in there, so I'll maybe take it in stages. I think in context of the size of the loan sale, you'll recall when we pulled forward earlier in the year, pulled forward and did a $2 billion loan sale, to take advantage of market dislocation and launch the ASR. We said kind of on balance, we felt like that would add roughly $1 billion to our total loan sale, sort of plan for the year. So it's in sort of that kind of a zip code. The other thing that always goes into the factor of the size of our loan sales in any given year is sort of the equation of the level of originations, they're coupled with our commitments to partners and the balancing feature of our bank's balance sheet.
We came into this year thinking we would likely be flat balance sheet to slightly down. We aspired to add a second partner, which Jon announced earlier on the call. So I think in the context of sizing, kind of in that billion dollar range is probably the right way to think about that. The second part of your question really was around, what does this mean for the future? I think, again, we feel like the current environment is sort of a temporary thing. As in any given quarter there can be conditions in the market that make it suboptimal to execute a whole loan sale. We think we're in that kind of a situation now with sort of peak rates, a high degree of volatility in terms of the near-term outlook. We believe that will stabilize as we go into next year.
In the context of what does that mean for next year, I think our base case is we return to an environment that allows for premiums that are above sort of a minimum threshold level. In that type of scenario, we're probably looking at flat balance sheets or maybe single-digit growth of the balance sheet. We'll meet our commitments to partners, which we've now added a second significant flow commitment from Sixth Street that we need to think about as we plan for funding of our originations profile. Then we'll use the loan sales as we always do to sort of manage capital and create capital for return to shareholders, at the same time managing the rate of growth of our balance sheet.
Okay. Thank you. If I could just follow up on the net charge-off guidance. I appreciate the color around the third-party issue. You expect to see a modest additional pressure on gross charge-offs. I think you cited an increase of about $20 million impact there from $25 million to $45 million, but then you took the full year guide up at the midpoint by 45. Could you help us understand maybe where the rest of that $45 million, I think it's $25 million difference is coming from if it's not the third-party issue? Thanks.
Yeah, Jeff, we tried to lay that out as clearly as we could for you. I think when we had originally updated guidance back in the second quarter, it was really in reflection of sort of the $25 million estimate that we had put out largely through the sort of pausing of certain recovery efforts. I think what we said at that time is we thought we could cover that within our original range, but it would be at the higher end. That sort of took us up closer to that higher end of the initial range. I think as we went ahead and reset guidance, we felt like it was appropriate with the additional 20 just to reset that midpoint to midpoint. I don't think there's anything else in what you are asking about.
I think it's just the reflection of last quarter us believing we can stay in the range, albeit at the high end, and us now sort of recognizing that we have crept out of that and feeling like we should sort of reset it in a more traditional way.
Got it. Okay, great. Thanks for taking my question. Oh, sorry, go ahead.
I was just going to say, to be clear, it is all related to this third-party issue.
That is right.
Thank you. Our next question comes from Sanjay Sakhrani with KBW. Please go ahead. Your line is now open.
Thank you. Appreciate you guys doing what's right in terms of the loan sales. I guess as we think about what an acceptable rate would be, can that happen, like if rates are still in flux as we get out to next year? I'm just curious, like how much capacity do you guys have to balance sheet loans in terms of the equity?
Yeah. Thanks for the question, Sanjay. I think if you think about even in a higher-for-longer scenario, which there were some recent articles around that and surveys of economists. Even in those sort of longer-term outlooks, they had the 10-year Treasury at a lower point in the second half of next year than where it currently sits. We don't obviously price off of 10-year Treasury. I think that's an indication that even in kind of like the most bear case scenario for loan sales, there'll be relief from here. I think there's more to it than just interest rates, although that's certainly a piece of it.
I think there's also the aspect of just sort of uncertainty about where we're going from here, and the fact that in the current environment also, there's a lot of other activity in the ABS space that's sort of pulling investor demand into higher yielding product. Think about all the ABS that's funding the AI trades at this point. Again, I think there's a lot of things unique to this quarter that create the market conditions that we feel isn't generally appropriate. I don't think that's a permanent thing, and we see a path to that being a more stable environment for us going into next year.
Okay. Just to be clear, Pete, just on the capacity that you have to grow, would you have to pull down like originations if given the capital levels? How much flexibility do you have on CET1 to sort of aid that growth if you have to balance sheet it? Is I guess my question.
Yeah. I think the balance sheet is in great shape. Again, the capital buffers that we carry to all the regulatory thresholds are pretty substantial. I think that the addition of a second partner here gives us some additional funding capacity in terms of flow originations. As Jon said in his prepared remarks, the next thing we are working on, and we have already started dialogue around it, is additional flow capacity for graduate originations. I think the building of capacity there gives us an additional lever in addition to growing the balance sheet.
Okay, great. Thank you very much.
Thank you. Our next question is from Terry Ma with Barclays. Please go ahead. Your line is now open.
Hey, thank you. Good evening. I guess first I just want to make sure I have the right pieces to the revised EPS guide. Can you just confirm whether or not the gain on sale from that second partnership is included in this guide, or is that a first quarter 2027 thing? And then, obviously credit costs are factored into the revised EPS guide. But any sense you can kind of give us on how long that third-party collection issue should kind of impact credit costs? Is there anything else you can do to kind of help ring-fence the issue?
Yeah. Terry, let me start with the third-party debt collection issue, and then I'll turn it over to Pete to talk a little bit more about your guide question. Look, I think it's obviously a little bit hard to say with certainty how long that matter is going to last, because unlike things like pure credit trends, there are active players, sort of industry participants on the other side, and they may change their strategies, they may change their approaches. We will obviously have to adapt. With that said, I think we're really pleased with what we are seeing so far. As I said in my prepared notes, we have put in place actions that we think are really forceful and effective actions. We think they create a much more aligned structure with our customers and help us address the situation.
We are seeing really positive early indicators of success of those actions in our operational data. I think I mentioned on my prepared remarks sort of the volume reduction we are seeing in our call listening. There are others that I won't go into for a variety of reasons that I think give us confidence that this is starting to get real traction. By the way, anecdotally, I think we are starting to see some change in behavior, positive change in behavior on the part of some of these players in a way that is constructive and supportive. I think all of that leads us to believe that absent some material change in sort of their strategic posture, that we are on the downward slope of this.
I'd be hesitant to sort of put out there an exact number, an exact timing of it, but I certainly think we expect next year's impact to be meaningfully less than what we saw this year.
I think the other thing I'd add there is the recovery profile of these borrowers, as Jon said, is much different than our normal charge-offs. So that's going to be additive to the recovery curve as we move into next year.
Yeah. Great point, Pete.
The second part of your question was around whether our updated guidance range included the gain on sale from the second strategic partnership with Sixth Street. Yeah, that is included in our guidance for this year.
Got it. Okay. That is helpful. Then maybe just on the restructuring, help us maybe reconcile, like almost a year ago and early this year, you guys indicated incremental investment dollars to address the Grad PLUS opportunity. So obviously very optimistic around that. Now you are kind of restructuring, kind of shrinking. Maybe just help us understand that, and just confirm that you still view the TAM expansion as a real opportunity. Thank you.
Yeah, Terry, we absolutely still see the TAM expansion as a real opportunity, and I think in the numbers that Pete described, was an expectation of continued investment in things like marketing and, probably at a lower pace, still some product and system and capability enhancements going into next year. But I would encourage you to go back and look at our OpEx trajectory over the last five or seven years. I think we have managed that really well in terms of annual growth. It has been a source of sort of pride for us. Obviously, we felt it was important last year to get out in front of this opportunity, both from a capability perspective, but also a marketing spend perspective. I think we did that. I think you see the results of that in our peak season volumes. But that was never the end of the game for us.
We know we have a business that we can continue to refine and optimize. We know we have ability to continue to find efficiencies in what we do every day. And we knew as we continued to build and evolve our strategy, there were resources that maybe didn't fit as much going forward with our new priorities as they did with our previous priorities. So, we do a certain amount of this, Terry, every year. I think, this year, for a variety of reasons, ended up being a bit more consequential than what we have seen in the past. But we think it sort of demonstrates our commitment to being great stewards of our OpEx budget. And we also think it gives us what we need to continue to invest in growth going forward.
Got it. Thank you.
Thank you. Once again, if you do have a question, you may press star and one on your telephone keypad at this time. Our next question comes from Don Fandetti with Wells Fargo. Please go ahead.
Hi. Can you talk a little bit about your near-term NIM expectations? It looked like the broker deposit rate went up a good bit this quarter, and we've heard some competitors talk about just more competition for deposits. If you could just dig in a little bit on that.
Yeah, sure. I think in the discussion of NIM, I think it's important to reflect on what's changed in our environment over the course of this year, and how that impacts NIM. One of the big drivers on NIM this year was the fact that we pulled forward that big loan sale in the first quarter. We were carrying a lot of excess liquidity in a time period in the year when we have very low originations, and that caused us to have a dramatic low point for NIM in the second quarter. And at that time, we said our expectation was that as we funded peak season originations that would draw that down, and we would get some normalization. So that's the biggest factor on NIM in the current year.
I think at the margins, some of the extension of our duration in the portfolio certainly has somewhat of an impact, but I feel good about that, right? We came into the year off of a peak season last year that had been very heavily focused on fixed-rate originations. And so we needed to make sure that we matched the duration of that profile accordingly. And so we extended duration on our deposits over the course of the first half of the year, roughly, to close down the interest rate exposure that we had to rising interest rates. And I feel pretty good about the timing of when we did that, in the context of overall market volatility.
Got it. I guess my follow-up, just wanted to clarify, I think on the new fund, there's like a seasoned loan sale of $600 million. When would that take place, and would those have kind of good historical margins? And then if you can just talk, I saw there was like $1.4 billion move to held for sale. If you can just talk about that.
Yeah. So a portion of the seasoned portfolio closed just at the end of the quarter, and the remainder will close in the early part of the fourth quarter. In the context of the held for sale portfolio, keep in mind that there will be the regular commitments to the forward flow under the KKR deal, in addition to these new held for sale associated with the seasoned portfolio.
Okay, thanks.
Thank you. Our next question comes from Rick Shane with J.P. Morgan. Please go ahead.
Hey, I need to get my questions in before Don because he asked pretty much what I wanted to focus on. I just want to make sure we understand one thing. The held for sale portfolio is substantially larger than it's been. Some of that has to do with the Sixth Street transfer. Some of that has to do with the KKR flow. I am wondering if there's a timing issue here. You guys thought you were going to sell loans in the fourth quarter. Presumably, you have to sort of assume that you didn't know that on September 30th. Is there going to be some migration from the held for sale or the available for sale portfolio to held for investment in the fourth quarter? What are the implications of that?
Thanks for the question, Rick. I think the thing to keep in mind about the flow agreements, they've got an overall commitment for the year. But because of the seasonality in our business, it's not a ratable amount each month or each quarter. They will fluctuate according to the seasonality of our originations. Obviously, third quarter, we just had, as Jon said on the call, the highest originations in our company's history, and that's the driver of why that held for sale number is bigger at the end of the third quarter.
Got it. It doesn't have anything to do with deciding not to do a traditional non-flow sale and some weird timing issue there?
Not at all.
Okay. Got it. I appreciate the answers, guys. Thank you very much.
Yep.
Thank you. Our next question comes from Giuliano Bologna, Compass Point. Please go ahead. Your line is open.
Well, hopefully not going over too much that's already been asked. But when I look at the large kind of held for sale portfolio, is it your expectation that you would complete the sale of a large portion of that or the majority of that held for sale portfolio in the fourth quarter? Or would a chunk of that leak into next year? Then kind of related to that, thinking about the seasoned portfolio, has that all been moved to held for sale already? Or is there more that would be moved to held for sale in the fourth quarter and have some reserve reversals?
Yeah. Let me take that question in two parts. With regard to sort of the mechanics of how our flow portfolio transactions work, we generally will make sales from our bank into our warehouse on a monthly basis, and then generally have a takeout sale to the partner in the subsequent month end after the quarter. So the held for sale at the end of the third quarter will clear out when we make those sales to KKR, in this case, for the third quarter. Additionally, in that held for sale is the $600 million of seasoned portfolio. A portion of that closed in the third quarter, and the remainder of that will close in the fourth quarter. So hopefully that gives you the answer to that.
With regard to the portfolio sale that we had planned, that we discussed that we weren't going to move forward with, we had not gone through a process of selecting a portfolio yet. We typically will gauge indication of interest in the market by getting sort of indicative bids from time to time, and that helps us gauge where we think a loan process might come out. But we had not gone through a process of selecting a portfolio, which would be a prerequisite for us putting anything into a different designation other than held for investment.
That's helpful. Then as a side follow-up, I think the way that most of this reading came out, and it seems like kind of what was implied was about a 2% gain on sale up front for the strategic partnership sales, and there's some commentary about low single digits in the 10-Q. When I think about that, the large held for sale book, is that still the right range to use, in the 2% range, or would that come down a little bit from the 2% ballpark?
The disclosures in the Q would be in two parts. One would be we have one disclosure of fair value, which is our broad sort of evaluation of our total portfolio. Then we have a separate valuation on the held for sale. That is a combination of both the flow commitments to KKR that is in the warehouse, as well as the $600 million of seed portfolio. It is a combination of both.
I guess, roughly speaking, is $1.44 billion of loans held for sale as of the end of September 30. Should we expect the full gain on sale for the forward flow to be realized in the fourth quarter on that chunk of the portfolio?
Correct.
Got it. That is very helpful. Thank you. I will come back in queue.
Sure.
Thank you. This concludes the Q&A portion of today's call. I would now like to turn the floor over to Mr. Jon Witter for closing remarks.
Thank you everyone for your time and engagement this evening. I know we've given you a lot of information to work through in understanding our Q3 performance and outlook. In its simplest form, we are excited about the origination growth opportunity ahead of us. We're pleased with the performance of our various loss mitigation programs, and we believe we're managing OpEx as well. We're grateful for the strategic flexibility and the competitive advantage of having a well-capitalized deposit-funded bank now complemented through our emerging strategic partnerships business. We're building a more resilient, predictable, and profitable Sallie Mae. While we would prefer a different macroeconomic environment, times like this demonstrate the power of our franchise, the strength of our strategy, and the quality of our execution. Sallie Mae investor relations team is standing by to answer your more detailed questions.
With that, I'll turn the call over to Kate for some concluding business.
Thanks, Jon. Thank you all for your time and questions today. A replay of this call and the presentation will be available on the investor page at salliemae.com. If you have any further questions, feel free to contact me directly. This concludes today's call.
Thank you. This concludes today's Sallie Mae third quarter 2026 earnings conference call and webcast. Please disconnect your lines at this time, and have a wonderful evening.
Related articleQuarter not tagged2026-10-15Analysts Estimate Sallie Mae (SLM) to Report a Decline in Earnings: What to Look Out for
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Analysts Estimate Sallie Mae (SLM) to Report a Decline in Earnings: What to Look Out for
Wall Street expects a year-over-year decline in earnings on lower revenues when Sallie Mae (SLM) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This student loan company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of -81%. Revenues are expected to be $353.66 million, down 5.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 27.23% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnin…Read full documentShow less
Wall Street expects a year-over-year decline in earnings on lower revenues when Sallie Mae (SLM) reports results for the quarter ended September 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This student loan company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change of -81%. Revenues are expected to be $353.66 million, down 5.2% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 27.23% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Sallie Mae, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -15.73%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Sallie Mae will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Sallie Mae would post earnings of $0.46 per share when it actually produced earnings of $0.29, delivering a surprise of -36.96%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Sallie Mae doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Ally Financial (ALLY), another stock in the Zacks Financial - Consumer Loans industry, is expected to report earnings per share of $1.32 for the quarter ended September 2026. This estimate points to a year-over-year change of +14.8%. Revenues for the quarter are expected to be $2.28 billion, up 5.1% from the year-ago quarter. The consensus EPS estimate for Ally Financial has been revised 5% lower over the last 30 days to the current level. However, an equal Most Accurate Estimate has resulted in an Earnings ESP of 0.00%. This Earnings ESP, combined with its Zacks Rank #5 (Strong Sell), makes it difficult to conclusively predict that Ally Financial will beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates three times. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SLM Corporation (SLM) : Free Stock Analysis Report Ally Financial Inc. (ALLY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research
Related articleQuarter not tagged2026-10-13Sallie Mae to Release Third-Quarter Financial Results
Business Wire
Sallie Mae to Release Third-Quarter Financial Results
Webcast Scheduled for Thursday, Oct. 22, at 5:30 p.m. ET NEWARK, Del., October 13, 2026--(BUSINESS WIRE)--Sallie Mae® (Nasdaq: SLM), formally SLM Corporation, will release third-quarter 2026 financial results after market close on Thursday, Oct. 22, 2026. A live audio webcast and presentation slides will be available at SallieMae.com/investors and the hosting website. Investors should log in at least 15 minutes prior to the broadcast. The earnings news release will be available at SallieMae.com/investors. A replay will also be available on the site. Sallie Mae (Nasdaq: SLM) believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, we provide financing and know-how to support access to college and offer products and resources to help customers make new goals and experiences, beyond college, happen. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America. Category: Corporate and Financial View source version on businesswire.com: https://www.businesswire.com/news/home/20261013754576/en/ Contacts Media [email protected] Investors [email protected]
Related articleQuarter not tagged2026-09-24Reflecting On Consumer Finance Stocks’ Q2 Earnings: Sallie Mae (NASDAQ:SLM)
StockStory
Reflecting On Consumer Finance Stocks’ Q2 Earnings: Sallie Mae (NASDAQ:SLM)
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at consumer finance stocks, starting with Sallie Mae (NASDAQ:SLM). Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 20 consumer finance stocks we track reported a strong Q2. As a group, revenues beat analysts' consensus estimates by 2.1% while next quarter's revenue guidance was 3.6% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.7% since the latest earnings results. Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ:SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college. Sallie Mae reported revenues of $401.1 million, flat year on year. This print fell short of analysts' expectations by 1.8%. Overall, it was a softer quarter for the company with a significant miss of analysts' net interest income estimates and a significant miss of analysts' EPS estimates. The market seems disappointed with the results as the stock is down 2.4% since reporting and currently trades at $23.61. Read our full report on Sallie Mae here, it's free. With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America. Nubank reported revenues of $5.88 billion, up 55.8% year on year, outperforming analysts' expectations by 29.8%. The business had an incredible quarter with a beat of analysts' EPS estimates. Nubank pulled off the biggest analyst estimate beat of the whole group. Although it had a fine quarter compared to its peers, the market seems un…Read full documentShow less
As the craze of earnings season draws to a close, here's a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at consumer finance stocks, starting with Sallie Mae (NASDAQ:SLM). Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 20 consumer finance stocks we track reported a strong Q2. As a group, revenues beat analysts' consensus estimates by 2.1% while next quarter's revenue guidance was 3.6% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 8.7% since the latest earnings results. Originally created as a government-sponsored enterprise before privatizing in 2004, Sallie Mae (NASDAQ:SLM) is a financial services company that provides private education loans, savings products, and educational resources to help students and families pay for college. Sallie Mae reported revenues of $401.1 million, flat year on year. This print fell short of analysts' expectations by 1.8%. Overall, it was a softer quarter for the company with a significant miss of analysts' net interest income estimates and a significant miss of analysts' EPS estimates. The market seems disappointed with the results as the stock is down 2.4% since reporting and currently trades at $23.61. Read our full report on Sallie Mae here, it's free. With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE:NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America. Nubank reported revenues of $5.88 billion, up 55.8% year on year, outperforming analysts' expectations by 29.8%. The business had an incredible quarter with a beat of analysts' EPS estimates. Nubank pulled off the biggest analyst estimate beat of the whole group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.7% since reporting. It currently trades at $13.70. Is now the time to buy Nubank? Access our full analysis of the earnings results here, it's free. Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans. Nelnet reported revenues of $358.7 million, down 30.5% year on year, falling short of analysts' expectations by 14.6%. It was a disappointing quarter as it posted a significant miss of analysts' net interest income estimates and a significant miss of analysts' EPS estimates. Nelnet delivered the weakest performance against analyst estimates and slowest revenue growth among its peers. As expected, the stock is down 7.3% since the results and currently trades at $125.05. Read our full analysis of Nelnet's results here. Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE:COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses. Capital One reported revenues of $15.83 billion, up 25.8% year on year. This print was in line with analysts' expectations. It was a very strong quarter as it also recorded a beat of analysts' EPS estimates. The stock is down 4.6% since reporting and currently trades at $196.67. Read our full, actionable report on Capital One here, it's free. Starting as a student loan refinancing company founded by Stanford business school students in 2011, SoFi Technologies (NASDAQ:SOFI) operates a digital financial platform offering lending, banking, investing, and other financial services to help members borrow, save, spend, invest, and protect their money. SoFi reported revenues of $1.21 billion, up 40.5% year on year. This result surpassed analysts' expectations by 7.1%. Overall, it was an exceptional quarter as it also put up an impressive beat of analysts' EBITDA estimates and a beat of analysts' EPS estimates. The stock is flat since reporting and currently trades at $16.66. Read our full, actionable report on SoFi here, it's free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market's biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market's primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market's dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Related articleQuarter not tagged2026-09-09Sallie Mae (SLM): Buy, Sell, or Hold Post Q2 Earnings?
StockStory
Sallie Mae (SLM): Buy, Sell, or Hold Post Q2 Earnings?
Sallie Mae’s 36.2% return over the past six months has outpaced the S&P 500 by 22.2%, and its stock price has climbed to $27.21 per share. This performance may have investors wondering how to approach the situation. Is there a buying opportunity in Sallie Mae, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we don’t have much confidence in Sallie Mae. Here are two reasons we avoid SLM, plus one stock we’d rather own. A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Sallie Mae struggled to consistently increase demand as its $1.96 billion of revenue for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of poor business quality. We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable. Sadly for Sallie Mae, its EPS declined by 1.5% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences.If the tide turns unexpectedly, Sallie Mae’s low margin of safety could leave its stock price susceptible to large downswings. Sallie Mae doesn’t pass our quality test. With its shares outperforming the market lately, the stock trades at 8.6× forward P/E (or $27.21 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. We’d recommend looking at the Amazon and PayPal of Latin America. ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Co…Read full documentShow less
Sallie Mae’s 36.2% return over the past six months has outpaced the S&P 500 by 22.2%, and its stock price has climbed to $27.21 per share. This performance may have investors wondering how to approach the situation. Is there a buying opportunity in Sallie Mae, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free. Despite the momentum, we don’t have much confidence in Sallie Mae. Here are two reasons we avoid SLM, plus one stock we’d rather own. A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Unfortunately, Sallie Mae struggled to consistently increase demand as its $1.96 billion of revenue for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of poor business quality. We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable. Sadly for Sallie Mae, its EPS declined by 1.5% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences.If the tide turns unexpectedly, Sallie Mae’s low margin of safety could leave its stock price susceptible to large downswings. Sallie Mae doesn’t pass our quality test. With its shares outperforming the market lately, the stock trades at 8.6× forward P/E (or $27.21 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. We’d recommend looking at the Amazon and PayPal of Latin America. ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
Related articleQuarter not tagged2026-08-27Q2 Earnings Highlights: Navient (NASDAQ:NAVI) Vs The Rest Of The Consumer Finance Stocks
StockStory
Q2 Earnings Highlights: Navient (NASDAQ:NAVI) Vs The Rest Of The Consumer Finance Stocks
Wrapping up Q2 earnings, we look at the numbers and key takeaways for the consumer finance stocks, including Navient (NASDAQ:NAVI) and its peers. Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 18 consumer finance stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ:NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services. Navient reported revenues of $147 million, down 10.4% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.3% since reporting and currently trades at $9.37. Is now the time to buy Navient? Access our full analysis of the earnings results here, it’s free. Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE:BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants. Bread Financial reported revenues of $993 million, up 6.9% year on year, outperforming analysts’ expectations by 3.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and net interest income in line with analysts’ estimates. The market seems happy with the results as the stock is up 5.6% since reporting. It curren…Read full documentShow less
Wrapping up Q2 earnings, we look at the numbers and key takeaways for the consumer finance stocks, including Navient (NASDAQ:NAVI) and its peers. Consumer finance companies provide loans and credit products to individuals. Growth drivers include increasing consumer spending, financial inclusion initiatives in developing markets, and digital lending platforms reducing distribution costs. Challenges include credit risk during economic downturns, regulatory scrutiny of lending practices, and intensifying competition from traditional banks and fintech firms offering innovative credit solutions. The 18 consumer finance stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Spun off from Sallie Mae in 2014 to handle the company's loan servicing and collection operations, Navient (NASDAQ:NAVI) provides education loan servicing and business processing solutions that help manage federal student loans, private education loans, and government services. Navient reported revenues of $147 million, down 10.4% year on year. This print exceeded analysts’ expectations by 2.1%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 1.3% since reporting and currently trades at $9.37. Is now the time to buy Navient? Access our full analysis of the earnings results here, it’s free. Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE:BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants. Bread Financial reported revenues of $993 million, up 6.9% year on year, outperforming analysts’ expectations by 3.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and net interest income in line with analysts’ estimates. The market seems happy with the results as the stock is up 5.6% since reporting. It currently trades at $107.56. Is now the time to buy Bread Financial? Access our full analysis of the earnings results here, it’s free. Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE:NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans. Nelnet reported revenues of $358.7 million, down 30.5% year on year, falling short of analysts’ expectations by 14.6%. It was a disappointing quarter as it posted a significant miss of analysts’ net interest income estimates and a significant miss of analysts’ EPS estimates. Nelnet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 5.3% since the results and currently trades at $127.74. Read our full analysis of Nelnet’s results here. Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories. Credit Acceptance reported revenues of $415 million, up 1.7% year on year. This print came in 12% below analysts’ expectations. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EBITDA estimates. The stock is up 2.7% since reporting and currently trades at $603.47. Read our full, actionable report on Credit Acceptance here, it’s free. Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses. American Express reported revenues of $18.55 billion, up 12.8% year on year. This result lagged analysts’ expectations by 5.8%. Overall, it was a softer quarter for the company. The stock is down 1.4% since reporting and currently trades at $336.05. Read our full, actionable report on American Express here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Related articleQuarter not tagged2026-08-06Does SLM's (SLM) Earnings Dip and Steady Dividend Reveal a Deeper Capital Return Strategy?
Simply Wall St.
Does SLM's (SLM) Earnings Dip and Steady Dividend Reveal a Deeper Capital Return Strategy?
In the past quarter, SLM Corporation reported second-quarter 2026 net income of US$58.53 million, down from US$71.27 million a year earlier, while also affirming a quarterly dividend of US$0.13 per share payable on September 15, 2026. While quarterly earnings softened, the increase in basic earnings per share from continuing operations over the first half of 2026 versus 2025 highlights how share count reductions are influencing per-share profitability. We'll now examine how SLM's softer quarterly earnings relative to expectations affect its investment narrative built around credit stability and capital returns. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 28 best rare earth metal stocks of the very few that mine this essential strategic resource. To own SLM, you need to be comfortable with a story centered on private student lending, credit discipline, and ongoing capital returns. The latest quarter’s revenue miss and softer profit compared with expectations test confidence in near term earnings power but do not obviously alter the key short term catalyst, which remains credit performance, or the central risk around regulatory and policy shifts affecting demand for private loans. The reaffirmed US$0.13 quarterly dividend, alongside higher first half basic EPS despite lower net income, keeps the focus on SLM’s capital return profile and share count reduction. That sits beside its use of debt markets and buybacks, which could either enhance per share returns or limit flexibility if credit costs or funding conditions become more challenging. Yet beneath the appealing dividend and buybacks, investors should also be aware of the risk that... Read the full narrative on SLM (it's free!) SLM's narrative projects $1.5 billion revenue and $575.2 million earnings by 2029. Uncover how SLM's forecasts yield a $28.82 fair value, a 5% upside to its current price. Against this, the most bearish analysts already expected revenues to fall toward about US$1.4 billion and earnings to around US$596 million, painting a much harsher picture than the baseline narrative and reminding you that views on SLM’s legal, credit and capital return risks can differ widely and may shift again after this earnings miss. Explore 3 other…Read full documentShow less
In the past quarter, SLM Corporation reported second-quarter 2026 net income of US$58.53 million, down from US$71.27 million a year earlier, while also affirming a quarterly dividend of US$0.13 per share payable on September 15, 2026. While quarterly earnings softened, the increase in basic earnings per share from continuing operations over the first half of 2026 versus 2025 highlights how share count reductions are influencing per-share profitability. We'll now examine how SLM's softer quarterly earnings relative to expectations affect its investment narrative built around credit stability and capital returns. Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 28 best rare earth metal stocks of the very few that mine this essential strategic resource. To own SLM, you need to be comfortable with a story centered on private student lending, credit discipline, and ongoing capital returns. The latest quarter’s revenue miss and softer profit compared with expectations test confidence in near term earnings power but do not obviously alter the key short term catalyst, which remains credit performance, or the central risk around regulatory and policy shifts affecting demand for private loans. The reaffirmed US$0.13 quarterly dividend, alongside higher first half basic EPS despite lower net income, keeps the focus on SLM’s capital return profile and share count reduction. That sits beside its use of debt markets and buybacks, which could either enhance per share returns or limit flexibility if credit costs or funding conditions become more challenging. Yet beneath the appealing dividend and buybacks, investors should also be aware of the risk that... Read the full narrative on SLM (it's free!) SLM's narrative projects $1.5 billion revenue and $575.2 million earnings by 2029. Uncover how SLM's forecasts yield a $28.82 fair value, a 5% upside to its current price. Against this, the most bearish analysts already expected revenues to fall toward about US$1.4 billion and earnings to around US$596 million, painting a much harsher picture than the baseline narrative and reminding you that views on SLM’s legal, credit and capital return risks can differ widely and may shift again after this earnings miss. Explore 3 other fair value estimates on SLM - why the stock might be worth over 2x more than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your SLM research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision. Our free SLM research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate SLM's overall financial health at a glance. Our top stock finds are flying under the radar-for now. Get in early: We've uncovered the 8 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Find 51 companies with promising cash flow potential yet trading below their fair value. Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SLM. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]
Related articleQuarter not tagged2026-08-015 Must-Read Analyst Questions From Sallie Mae’s Q2 Earnings Call
StockStory
5 Must-Read Analyst Questions From Sallie Mae’s Q2 Earnings Call
Sallie Mae’s second-quarter performance fell short of Wall Street’s expectations, with both revenue and GAAP earnings per share missing analyst forecasts. Management attributed the flat revenue and lower profits to a combination of increased noninterest expenses—mainly from upfront investments in new products and technology—and a temporary dip in net interest margin due to elevated liquidity ahead of peak loan origination season. CEO Jonathan Witter emphasized that credit trends within the portfolio remained stable, noting, “Credit quality remains strong, borrower performance trends are stable, and the current loss pressure is concentrated, understood and manageable.” Is now the time to buy SLM? Find out in our full research report (it’s free). Revenue: $401.1 million vs analyst estimates of $408.3 million (flat year on year, 1.8% miss) EPS (GAAP): $0.29 vs analyst expectations of $0.44 (34.2% miss) EPS (GAAP) guidance for the full year is $3.15 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 20.1%, down from 21.7% in the same quarter last year Market Capitalization: $4.83 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Mark DeVries (Barclays) asked about the trajectory for net interest margin recovery in the back half of the year. CFO Peter Graham explained that as liquidity is deployed into peak season originations, NIM should return closer to the 5% target, although not significantly above it in the near term. Moshe Orenbuch (Credit Suisse) questioned the impact of credit performance and recovery strategies on future charge-offs. CEO Jonathan Witter emphasized that the credit impact is limited to a small segment and that loan modifications have outperformed expectations, with more than 75% of borrowers making payments after exiting modification programs. Sanjay Sakhrani (KBW) probed whether loan yields will recover alongside NIM as origination mix changes. Graham noted that yield patterns should normalize during peak season, and the impact of product mix will become clearer after this cycle. Terry Ma (J.P. Morgan) inquired about moving parts behind the back half EPS gui…Read full documentShow less
Sallie Mae’s second-quarter performance fell short of Wall Street’s expectations, with both revenue and GAAP earnings per share missing analyst forecasts. Management attributed the flat revenue and lower profits to a combination of increased noninterest expenses—mainly from upfront investments in new products and technology—and a temporary dip in net interest margin due to elevated liquidity ahead of peak loan origination season. CEO Jonathan Witter emphasized that credit trends within the portfolio remained stable, noting, “Credit quality remains strong, borrower performance trends are stable, and the current loss pressure is concentrated, understood and manageable.” Is now the time to buy SLM? Find out in our full research report (it’s free). Revenue: $401.1 million vs analyst estimates of $408.3 million (flat year on year, 1.8% miss) EPS (GAAP): $0.29 vs analyst expectations of $0.44 (34.2% miss) EPS (GAAP) guidance for the full year is $3.15 at the midpoint, roughly in line with what analysts were expecting Operating Margin: 20.1%, down from 21.7% in the same quarter last year Market Capitalization: $4.83 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Mark DeVries (Barclays) asked about the trajectory for net interest margin recovery in the back half of the year. CFO Peter Graham explained that as liquidity is deployed into peak season originations, NIM should return closer to the 5% target, although not significantly above it in the near term. Moshe Orenbuch (Credit Suisse) questioned the impact of credit performance and recovery strategies on future charge-offs. CEO Jonathan Witter emphasized that the credit impact is limited to a small segment and that loan modifications have outperformed expectations, with more than 75% of borrowers making payments after exiting modification programs. Sanjay Sakhrani (KBW) probed whether loan yields will recover alongside NIM as origination mix changes. Graham noted that yield patterns should normalize during peak season, and the impact of product mix will become clearer after this cycle. Terry Ma (J.P. Morgan) inquired about moving parts behind the back half EPS guidance and seasonality in credit delinquencies. Graham said the updated net charge-off guidance captures the main risks, and Witter added that typical seasonal trends in delinquencies are expected, with some effects from larger repayment waves and the new origination mix. Donald Fandetti (Wells Fargo) asked for clarification on the decision to halt debt sales and the potential to resume them. Graham responded that the pause was to limit negative impacts from third-party resolution firms, and strategies could be adjusted once outcomes are better understood. In future quarters, the StockStory team will be monitoring (1) origination trends and application volumes during the ongoing peak season, especially for new parent and graduate loans, (2) the timing and structure of the second strategic partnership and its impact on recurring fee revenue, and (3) net charge-off rates as recovery strategies evolve. Progress in loan modification performance and cost discipline will also be critical signposts. Sallie Mae currently trades at $25.72, up from $24.18 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
Related articleQuarter not tagged2026-07-24SLM Corporation Q2 2026 Earnings Call Summary
Moby
SLM Corporation Q2 2026 Earnings Call Summary
Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is capitalizing on federal PLUS reform, which is expected to expand the annual addressable market by $4.5 billion to $5 billion over several years. The company successfully launched enhanced graduate products and a new parent loan, with early application trends tracking at or above the high end of internal expectations. Performance attribution for the quarter was impacted by a strategic shift to bring debt recoveries in-house to counter misaligned third-party debt resolution practices. Loan modification programs are demonstrating sustained success, with over 75% of borrowers consistently making payments six months after exiting the program. The company is transitioning toward a capital-light model by expanding strategic partnerships, such as the existing KKR arrangement, to manage balance sheet growth and generate fee income. Net interest margin moderated to 4.75% due to high liquidity levels following a Q1 loan sale, but management expects this to be the annual low point. Management narrowed net charge-off guidance to $365 million–$385 million, reflecting a $25 million timing impact from the pause in recovery sales. NIM is expected to expand toward the 5% target in the second half of 2026 as excess liquidity is deployed into peak-season originations. The company plans to substantially deploy the remaining $242 million share repurchase authorization throughout the remainder of the year. A second strategic partnership is expected to close in Q3 or early Q4 2026, potentially including credit box expansion and graduate product coverage. Efficiency ratio improvements are projected as the company exits its current heavy investment phase for PLUS reform readiness and scales fee-based revenue. A $25 million headroom impact to 2026 recoveries was identified due to the deliberate halt of debt sales to protect borrowers from predatory resolution providers. Non-interest expenses rose $28 million year-over-year, primarily driven by one-time investments in product enhancements and infrastructure for federal lending reforms. The company completed a $200 million accelerated share repurchase program, reducing total shares outstanding by approximately 6.5% year-to-date. One stock. Nvidia-level potential. 30M+ inve…Read full documentShow less
Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is capitalizing on federal PLUS reform, which is expected to expand the annual addressable market by $4.5 billion to $5 billion over several years. The company successfully launched enhanced graduate products and a new parent loan, with early application trends tracking at or above the high end of internal expectations. Performance attribution for the quarter was impacted by a strategic shift to bring debt recoveries in-house to counter misaligned third-party debt resolution practices. Loan modification programs are demonstrating sustained success, with over 75% of borrowers consistently making payments six months after exiting the program. The company is transitioning toward a capital-light model by expanding strategic partnerships, such as the existing KKR arrangement, to manage balance sheet growth and generate fee income. Net interest margin moderated to 4.75% due to high liquidity levels following a Q1 loan sale, but management expects this to be the annual low point. Management narrowed net charge-off guidance to $365 million–$385 million, reflecting a $25 million timing impact from the pause in recovery sales. NIM is expected to expand toward the 5% target in the second half of 2026 as excess liquidity is deployed into peak-season originations. The company plans to substantially deploy the remaining $242 million share repurchase authorization throughout the remainder of the year. A second strategic partnership is expected to close in Q3 or early Q4 2026, potentially including credit box expansion and graduate product coverage. Efficiency ratio improvements are projected as the company exits its current heavy investment phase for PLUS reform readiness and scales fee-based revenue. A $25 million headroom impact to 2026 recoveries was identified due to the deliberate halt of debt sales to protect borrowers from predatory resolution providers. Non-interest expenses rose $28 million year-over-year, primarily driven by one-time investments in product enhancements and infrastructure for federal lending reforms. The company completed a $200 million accelerated share repurchase program, reducing total shares outstanding by approximately 6.5% year-to-date. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that third-party resolution companies were exploiting the 'back door' of the recovery process to the detriment of borrowers who actually have the capacity to pay. Pulling recoveries in-house is viewed as a timing issue rather than a credit loss, as internal strategies historically yield higher returns over a longer horizon. The company is in bilateral negotiations with a partner for a flow agreement similar to the KKR structure, with a focus on undergraduate and potentially graduate products. The deal is expected to close by early Q4, allowing some peak-season volume to be offloaded into the new partnership. Management noted that success rates exceeding 80% for active cohorts and 75% for those exiting are better than expected and driven by tight entry controls. These trends are expected to set a new baseline for credit performance expectations as more borrowers cycle through the programs.
Related articleQuarter not tagged2026-07-24SLM Corp (SLM) Q2 2026 Earnings Call Highlights: Navigating Growth Amidst Challenges
GuruFocus.com
SLM Corp (SLM) Q2 2026 Earnings Call Highlights: Navigating Growth Amidst Challenges
This article first appeared on GuruFocus. GAAP Diluted EPS: $0.29 per share for the second quarter. Loan Originations: $716 million, up nearly 4.5% from the prior year quarter. Net Interest Income: $333 million, a decrease of $44 million from the prior year quarter. Other Income: $45 million, an increase of $16 million from the prior year quarter. Net Interest Margin: 4.75% for the quarter. Net Charge-Offs: $113 million, up from $94 million in the prior year quarter. Provision for Credit Losses: $126 million, down from $149 million in the year ago quarter. Noninterest Expenses: $195 million, up $28 million from the year ago quarter. Efficiency Ratio: 48.6%, an increase of 7 percentage points year-over-year. Share Repurchase: 9.3 million shares repurchased in the second quarter, with a total of 13 million shares repurchased year-to-date. Liquidity: 18.6% of total assets at the end of the quarter. Total Risk-Based Capital: 13.1% at the end of the second quarter. Common Equity Tier 1 Capital: 11.8% at the end of the second quarter. Warning! GuruFocus has detected 2 Warning Sign with SLM. Is SLM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SLM Corp (NASDAQ:SLM) reported a 4.5% increase in loan originations year-over-year, reaching $716 million. The company successfully launched new products, including enhancements to medical, dental, law, and MBA loans, as well as a new parent loan. Credit quality improved with the average FICO score increasing from 754 to 755, and cosigner rates remained strong at 84%. SLM Corp (NASDAQ:SLM) completed a $200 million accelerated share repurchase program, reducing shares outstanding by approximately 6.5% year-to-date. The company reported a decrease in the provision for credit losses, down from $149 million in the prior year quarter to $126 million. Net interest income decreased by $44 million compared to the prior year quarter. Net charge-offs increased to $113 million from $94 million in the prior year quarter, partly due to misaligned third-party debt resolution practices. Noninterest expenses rose by $28 million year-over-year, driven by onetime investments and strategic initiatives. Private education loans delinquent 30 days or more increased to 3.7% from 3.5% in the year-ago quarte…Read full documentShow less
This article first appeared on GuruFocus. GAAP Diluted EPS: $0.29 per share for the second quarter. Loan Originations: $716 million, up nearly 4.5% from the prior year quarter. Net Interest Income: $333 million, a decrease of $44 million from the prior year quarter. Other Income: $45 million, an increase of $16 million from the prior year quarter. Net Interest Margin: 4.75% for the quarter. Net Charge-Offs: $113 million, up from $94 million in the prior year quarter. Provision for Credit Losses: $126 million, down from $149 million in the year ago quarter. Noninterest Expenses: $195 million, up $28 million from the year ago quarter. Efficiency Ratio: 48.6%, an increase of 7 percentage points year-over-year. Share Repurchase: 9.3 million shares repurchased in the second quarter, with a total of 13 million shares repurchased year-to-date. Liquidity: 18.6% of total assets at the end of the quarter. Total Risk-Based Capital: 13.1% at the end of the second quarter. Common Equity Tier 1 Capital: 11.8% at the end of the second quarter. Warning! GuruFocus has detected 2 Warning Sign with SLM. Is SLM fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SLM Corp (NASDAQ:SLM) reported a 4.5% increase in loan originations year-over-year, reaching $716 million. The company successfully launched new products, including enhancements to medical, dental, law, and MBA loans, as well as a new parent loan. Credit quality improved with the average FICO score increasing from 754 to 755, and cosigner rates remained strong at 84%. SLM Corp (NASDAQ:SLM) completed a $200 million accelerated share repurchase program, reducing shares outstanding by approximately 6.5% year-to-date. The company reported a decrease in the provision for credit losses, down from $149 million in the prior year quarter to $126 million. Net interest income decreased by $44 million compared to the prior year quarter. Net charge-offs increased to $113 million from $94 million in the prior year quarter, partly due to misaligned third-party debt resolution practices. Noninterest expenses rose by $28 million year-over-year, driven by onetime investments and strategic initiatives. Private education loans delinquent 30 days or more increased to 3.7% from 3.5% in the year-ago quarter. The company paused all recovery sales due to concerns over debt resolution companies targeting borrowers with the ability to pay, impacting short-term recovery strategies. Q: Can you provide more details on the expected trajectory of the Net Interest Margin (NIM) for the rest of the year? A: Peter Graham, Co-President and CFO, explained that as liquidity is deployed during peak season, the NIM should normalize closer to the long-term target range of around 5%. While it may not reach the upper end of that range, it should track close to it for the full year. Q: Are there any updates on the ongoing conversations with the new loan sale partner, and how might this affect your credit box and total addressable market (TAM)? A: Peter Graham mentioned that negotiations with the new partner are progressing well, with documents being exchanged and economic terms being finalized. The new partner is open to the asset class and interested in both traditional undergrad products and potential credit box expansion. The partnership is expected to close by the third or early fourth quarter, potentially allowing peak origination volume to be included. Q: Can you elaborate on the current partnership with KKR and any differences with the new partner? A: The partnership with KKR is proceeding as planned, with volumes meeting expectations. The second partnership will have similar economics with minor structural tweaks. Both partners are interested in expanding capabilities to include Grad products, which will be the next phase after peak originations. Q: How is the credit performance, particularly regarding the segment affected by debt resolution providers? A: Jonathan Witter, CEO, emphasized that the issue is more about timing of recoveries rather than a broad credit weakening. The company has adjusted recovery practices, which has already partially offset the expected impact. The underlying portfolio remains strong, with loan modification programs performing better than expected. Q: What are the expectations for balance sheet growth and loan sales this year? A: Peter Graham stated that the company anticipates managing a flat to slightly down balance sheet this year, with approximately $1 billion more in loan sales than initially planned. This is contingent on peak season origination levels. For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Related articleQuarter not tagged2026-07-24Sallie Mae Q2 Earnings Miss Estimates, NII Dips, Expenses Rise Y/Y
Zacks
Sallie Mae Q2 Earnings Miss Estimates, NII Dips, Expenses Rise Y/Y
Sallie Mae SLM, reported second-quarter 2026 earnings per share (EPS) of 29 cents, missing the Zacks Consensus Estimate of 46 cents. The metric declined 9.4% from the year-ago quarter. Revenues of $338.8 million missed the Zacks Consensus Estimate of $355.2 million by 4.6%. This compares with the year-ago revenues of $376.82 million. The quarterly results were hurt by lower net interest income (NII), higher provisions for credit losses and an increase in expenses. However, growth in non-interest income and private education loan originations offered some support. The company’s GAAP net income attributable to common stock was $55 million compared with $67 million in the year-ago quarter. Second-quarter NII totaled $332.8 million, down 11.7% from $376.8 million in the prior-year quarter. The quarterly net interest margin was 4.75%, contracting 56 basis points year over year. Quarterly non-interest income was $68.3 million, up significantly from $26.8 million in the year-ago quarter. Gains on sales of loans were $14.9 million against a loss of $13,000 in the prior-year quarter. Other income grew 54.1% year over year to $45.3 million. Non-interest expenses increased 16.6% year over year to $195 million. Compensation and benefits expenses rose 18.1% to $100.3 million. Other operating expenses were $88.9 million, up 24.1%. In the second quarter, provisions for credit losses were $125.7 million, down from $148.7 million in the prior-year quarter. Net charge-offs were $113 million in the reported quarter, up from the year-ago quarter. Delinquencies as a percentage of loans in repayment were 3.72% for the second quarter of 2026 compared with 3.51% in the prior-year quarter. As of June 30, 2026, deposits totaled $19.9 billion, down from $20.5 billion in the year-ago quarter. Private education loans held for investment, net, were $19.5 billion, down from $21.2 billion in the prior-year quarter. Average loans outstanding, net, totaled $21.1 billion in the quarter. In the reported quarter, private education loan originations increased 4.5% year over year. The efficiency ratio was 48.6% compared with 41.4% in the year-ago quarter. Return on assets was 0.8% compared with 1% in the prior-year quarter. Return on common equity was 9.9% compared with 12.6% in the year-ago quarter. The company’s $200-million accelerated share repurchase concluded in June 2026. It repurchased 9.…Read full documentShow less
Sallie Mae SLM, reported second-quarter 2026 earnings per share (EPS) of 29 cents, missing the Zacks Consensus Estimate of 46 cents. The metric declined 9.4% from the year-ago quarter. Revenues of $338.8 million missed the Zacks Consensus Estimate of $355.2 million by 4.6%. This compares with the year-ago revenues of $376.82 million. The quarterly results were hurt by lower net interest income (NII), higher provisions for credit losses and an increase in expenses. However, growth in non-interest income and private education loan originations offered some support. The company’s GAAP net income attributable to common stock was $55 million compared with $67 million in the year-ago quarter. Second-quarter NII totaled $332.8 million, down 11.7% from $376.8 million in the prior-year quarter. The quarterly net interest margin was 4.75%, contracting 56 basis points year over year. Quarterly non-interest income was $68.3 million, up significantly from $26.8 million in the year-ago quarter. Gains on sales of loans were $14.9 million against a loss of $13,000 in the prior-year quarter. Other income grew 54.1% year over year to $45.3 million. Non-interest expenses increased 16.6% year over year to $195 million. Compensation and benefits expenses rose 18.1% to $100.3 million. Other operating expenses were $88.9 million, up 24.1%. In the second quarter, provisions for credit losses were $125.7 million, down from $148.7 million in the prior-year quarter. Net charge-offs were $113 million in the reported quarter, up from the year-ago quarter. Delinquencies as a percentage of loans in repayment were 3.72% for the second quarter of 2026 compared with 3.51% in the prior-year quarter. As of June 30, 2026, deposits totaled $19.9 billion, down from $20.5 billion in the year-ago quarter. Private education loans held for investment, net, were $19.5 billion, down from $21.2 billion in the prior-year quarter. Average loans outstanding, net, totaled $21.1 billion in the quarter. In the reported quarter, private education loan originations increased 4.5% year over year. The efficiency ratio was 48.6% compared with 41.4% in the year-ago quarter. Return on assets was 0.8% compared with 1% in the prior-year quarter. Return on common equity was 9.9% compared with 12.6% in the year-ago quarter. The company’s $200-million accelerated share repurchase concluded in June 2026. It repurchased 9.3 million shares under the program, including the final delivery of 0.9 million shares in the second quarter. As of June 30, 2026, $242 million remained available under the company’s 2026 share repurchase program. Management reaffirmed its 2026 EPS guidance of $3.10-$3.20. Sallie Mae expects year-over-year private education loan origination growth of 12-14%, net charge-offs of $365-$385 million and non-interest expenses of $750-$780 million. The company sold $420 million in private education loans during the quarter, including $399 million of principal and $21 million of capitalized interest through its strategic partnerships business. Sallie Mae delivered a disappointing second-quarter performance. Lower NII, margin contraction, higher expenses, declining loan and deposit balances, and elevated delinquencies remain concerning. Nonetheless, lower provisions for credit losses, growth in non-interest income and higher private education loan originations were positives. SLM Corporation price-consensus-eps-surprise-chart | SLM Corporation Quote Currently, SLM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. OneMain Holdings OMF is slated to announce second-quarter 2026 numbers on July 29. In the past week, the Zacks Consensus Estimate for OneMain’s quarterly earnings has been revised downward to $1.31. This implies a 9.7% decrease from the prior-year reported number. Navient NAVI is scheduled to announce quarterly numbers on Aug. 6. In the past seven days, the Zacks Consensus Estimate for Navient’s quarterly earnings has been unchanged at 19 cents. This indicates a 9.5% decline from the prior-year reported number. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SLM Corporation (SLM) : Free Stock Analysis Report Navient Corporation (NAVI) : Free Stock Analysis Report OneMain Holdings, Inc. (OMF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research
Related articleQuarter not tagged2026-07-23Sallie Mae (SLM) Misses Q2 Earnings and Revenue Estimates
Zacks
Sallie Mae (SLM) Misses Q2 Earnings and Revenue Estimates
Sallie Mae (SLM) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $0.32 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -36.96%. A quarter ago, it was expected that this student loan company would post earnings of $1.14 per share when it actually produced earnings of $1.54, delivering a surprise of +35.09%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Sallie Mae, which belongs to the Zacks Financial - Consumer Loans industry, posted revenues of $332.82 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 6.31%. This compares to year-ago revenues of $376.82 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sallie Mae shares have lost about 6.8% since the beginning of the year versus the S&P 500's gain of 9.6%. While Sallie Mae has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Sallie Mae was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Stro…Read full documentShow less
Sallie Mae (SLM) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $0.32 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -36.96%. A quarter ago, it was expected that this student loan company would post earnings of $1.14 per share when it actually produced earnings of $1.54, delivering a surprise of +35.09%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Sallie Mae, which belongs to the Zacks Financial - Consumer Loans industry, posted revenues of $332.82 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 6.31%. This compares to year-ago revenues of $376.82 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sallie Mae shares have lost about 6.8% since the beginning of the year versus the S&P 500's gain of 9.6%. While Sallie Mae has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Sallie Mae was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.40 on $358.27 million in revenues for the coming quarter and $3.16 on $1.45 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial - Consumer Loans is currently in the bottom 35% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Open Lending (LPRO), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly earnings of $0.01 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Open Lending's revenues are expected to be $22.84 million, down 9.8% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SLM Corporation (SLM) : Free Stock Analysis Report Open Lending Corporation (LPRO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research