SLM

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.

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]

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.

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.

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.

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

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

Interested in SLM Corporation? Here are five stocks we like better. SLM beat early expectations after Federal PLUS reform, saying first peak-season indicators for new products and the new parent loan are running at the high end of expectations or better, with management seeing a potential $4.5 billion-$5 billion boost to annual originations over the next several years. Second-quarter originations rose nearly 4.5% year over year to $716 million, while credit quality remained stable with a slight improvement in average FICO scores and strong cosigner participation. Delinquencies ticked up from a year ago, but management said the increase was not a sign of broad-based credit deterioration. Net interest margin fell to 4.75% and net interest income declined, but Sallie Mae said the second quarter should mark the low point for margin this year as liquidity is deployed into peak season. The company also narrowed 2026 net charge-off guidance, continued heavy share buybacks, and said discussions for a second loan sale partner are advancing. SLM (NASDAQ:SLM), known as Sallie Mae, reported second-quarter 2026 GAAP diluted earnings of $0.29 per share and said early indicators from the first peak season following Federal PLUS reform are tracking at the high end of expectations or better. Chief Executive Officer Jonathan Witter said the company has spent the past year preparing for changes in the higher education financing market after Federal PLUS reform “created the potential for a $4.5 billion-$5 billion increase in annual originations for Sallie Mae over the next several years.” He said Sallie Mae has completed planned product and capability updates ahead of peak season, including enhancements to its medical, dental, law and MBA products and the launch of a new parent loan. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? “While peak season is just beginning and it is too early for definitive conclusions, the application and volume trends for these new products ... are at the higher end of our expectations or better,” Witter said. He added that the trends, if sustained, support the company’s 2026 origination estimates and its longer-term view of the opportunity from PLUS program changes. Sallie Mae reported second-quarter loan originations of $716 million, up nearly 4.5% from the prior-year quarter. Witter said origination credit quality improved modestly year over year, with average FICO scores rising to 755 from 754, while cosigner rates remained strong at 84%. → 3 Photonics Companies Making Quantum Tech Possible The company also emphasized its position with school partners. Witter said Sallie Mae remains a preferred lender for more than 2,100 schools and has focused on supporting those relationships as the financing landscape changes. Co-President and Chief Financial Officer Peter Graham said Sallie Mae generated $333 million of net interest income and $45 million of other income in the quarter. Net interest income declined by $44 million from the year-ago period, while other income increased by $16 million, driven by recurring program management fees from the company’s strategic partnership and growth in servicing fee revenue. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off Net interest margin was 4.75% for the quarter. Graham said the moderation was expected and primarily reflected higher liquidity levels following a loan sale completed in late March. He said the company expects margin expansion to resume in the second half as excess liquidity is deployed into peak-season originations. “As a result, we believe the second quarter will likely represent the low point for margin this year,” Graham said. In response to an analyst question, he said the company expects to normalize closer to its long-term target range of around 5%, though not necessarily far above that level in 2026. Credit remained a major focus of the call. Witter said Sallie Mae has identified activity affecting a small borrower segment that the company believes has both the willingness and capacity to repay but is moving directly through delinquency to default. He said many of those borrowers appear to be engaging with debt resolution providers whose services are marketed as consolidation or refinancing solutions. Witter said Sallie Mae does not believe many of those practices are in customers’ best interests and has taken steps to increase control over post-default recoveries. The company previously estimated a potential roughly $25 million impact to 2026 recoveries from the change in recovery practices, but Witter described the issue as “largely a timing dynamic.” Net charge-offs were $113 million in the quarter, up from $94 million in the prior-year quarter. Witter said about $16 million of the year-over-year increase was attributable to the misaligned third-party debt resolution practices and related changes in recovery strategy. He said the company does not view the increase as a broad-based weakening in credit. Private education loans delinquent 30 days or more were 3.7% of loans in repayment, up from 3.5% a year earlier but down from 4% at the end of the first quarter. The provision for credit losses was $126 million, down from $149 million in the year-ago quarter, and the reserve rate was 5.89%, down six basis points from the prior-year period. Witter also pointed to continued performance from loan modification programs. He said borrowers in active modification cohorts have payment success rates above 80% over six- and 12-month periods, while more than 75% of borrowers exiting the programs are consistently making payments after three and six months. Non-interest expenses were $195 million, up $28 million from the prior-year quarter. Graham said most of the increase reflected one-time investments in product enhancements and strategic initiatives tied to expected growth from federal lending reforms. The efficiency ratio was 48.6%, up seven percentage points year over year. Graham said revenue growth from servicing and recurring program management fees offset a significant portion of those investments. In the Q&A session, he said the company still expects the rate of expense growth in 2027 to be roughly half the rate from 2025 to 2026, while noting that management would like to do better. Sallie Mae narrowed its 2026 net charge-off guidance range, maintaining the high end at $385 million and raising the low end to $365 million. The company affirmed all other guidance metrics. Graham said the expected $25 million potential impact from recovery changes has been partially offset by slightly better-than-expected performance in the broader portfolio. The company also continued to return capital to shareholders. Graham said Sallie Mae completed a $200 million accelerated share repurchase program during the second quarter, repurchasing 9.3 million shares. Year to date, the company has repurchased about 13 million shares, or 6.5% of shares outstanding at the end of 2025, at an average price of $21.95 per share. Since 2020, Graham said Sallie Mae has reduced shares outstanding by approximately 59% at an average price of $17.19 per share. The company ended the quarter with $242 million remaining under its repurchase authorization, which it expects to substantially deploy during the remainder of 2026. Sallie Mae ended the quarter with liquidity equal to 18.6% of total assets. Total risk-based capital was 13.1%, and Common Equity Tier 1 capital was 11.8%. During the Q&A session, Graham said discussions with a potential second loan sale partner are progressing and could close in the third quarter or early fourth quarter. He said the existing partnership with KKR is performing according to plan and that both KKR and the potential second partner have expressed interest in building capabilities for graduate loan products. SLM Corporation, operating as Sallie Mae Bank, is a leading U.S.-based consumer banking company specializing in education financing and related banking products. The company provides a range of private student loans for undergraduate and graduate studies, Parent PLUS loans, and specialized financing for career and certificate programs. In addition to its core lending services, Sallie Mae offers deposit products including savings accounts, checking accounts, money market accounts, certificates of deposit, and credit cards tailored to students and young adults. Founded in 1972 as the Student Loan Marketing Association—a government-sponsored enterprise—Sallie Mae was privatized in 2004 and has since focused on expanding its private education loan offerings and digital banking solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "SLM Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. SLM (SLM) is back in focus ahead of its Q2 2026 earnings release and call on July 23, as investors weigh expectations for profit per share, net interest income, and non interest income. See our latest analysis for SLM. SLM's share price has recently gained 10.42% over the past 30 days and 7.69% over 90 days, while its year to date share price return and 1 year total shareholder return are both still in decline. This suggests that recent momentum is building against a weaker longer term backdrop. If you are watching SLM ahead of earnings and want to widen your watchlist, this could be a useful moment to check out 18 top founder-led companies After a sharp 30 day rebound but weaker 1 year returns, SLM sits in an awkward middle ground where both buying the bounce and waiting for a cheaper entry look plausible. How does the current valuation stack up? SLM last closed at $25.22, while the most followed narrative anchors fair value at $28.82, framing today’s price against a lower earnings outlook and policy driven tailwinds. Read the complete narrative. Read the complete narrative. Analysts baking in declining revenue, lower margins, and a richer future P/E still arrive at a higher fair value. Curious which specific earnings path and share count changes underpin that stance. Result: Fair Value of $28.82 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, SLM's narrative could be challenged if credit losses rise faster than expected, or if new competitors aggressively target the same private loan demand. Find out about the key risks to this SLM narrative. Given the mix of optimism and concern around SLM, this is a good moment to look through the data yourself, stress test the story from both sides, and then weigh the 2 key rewards and 3 important warning signs. Before earnings land and opinions harden, give yourself options. Fresh ideas can help you compare SLM's setup against other opportunities and avoid anchoring on a single story. Broaden your watchlist with a few targeted screeners that surface stocks by quality, value, and resilience so you are not relying on one idea when markets move. Target consistency by focusing on resilient companies with steadier risk profiles using the 82 resilient stocks with low risk scores. Hunt for value by zeroing in on companies that combine quality fundamentals with prices that may sit below their implied worth via the 47 high quality undervalued stocks. Strengthen your income stream by searching for stocks with higher yields that still aim to keep payouts supported by fundamentals through the 7 dividend fortresses. 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]