SLM Corporation (SLM) Bundle
A Brief History of SLM Corporation
SLM Corporation, commonly known as Sallie Mae, has a long-standing history in providing education loans. Founded in 1972, the company has evolved significantly over the decades, adapting to changes in the education financing landscape.
Financial Performance Overview
As of September 30, 2024, SLM Corporation reported a net income attributable to common stock of $482.8 million, translating to a diluted earnings per share (EPS) of $2.18. This reflects an increase from $399.9 million in net income and an EPS of $1.69 for the same period in 2023.
| Metric | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Income (in millions) | $482.8 | $399.9 |
| Diluted EPS | $2.18 | $1.69 |
| Return on Assets | 2.3% | 1.9% |
| Total Loans Held for Investment (in millions) | $20,459.9 | $20,899.2 |
Loan Portfolio Details
As of September 30, 2024, SLM's total loan portfolio consisted of $20.5 billion in Private Education Loans, while the FFELP (Federal Family Education Loan Program) Loans totaled $534 million. The company’s total loans held for investment stood at $20.3 billion after considering allowances for credit losses.
| Loan Type | Amount (in millions) |
|---|---|
| Private Education Loans | $20,459.9 |
| FFELP Loans | $534.1 |
| Total Loans Held for Investment | $20,306.4 |
Capital and Dividends
SLM Corporation declared a common stock dividend of $0.11 per share in both September 2024 and September 2023. The total dividends paid for the nine months ending September 30, 2024, amounted to approximately $71.8 million.
Stock Performance
The closing price of SLM's common stock on September 30, 2024, was $22.87. The company has been active in share repurchase programs, with $448 million remaining under the 2024 Share Repurchase Program announced in January 2024.
| Year | Repurchase Amount (in millions) |
|---|---|
| 2023 | $257 |
| 2024 (to date) | $204 |
Recent Developments
In the third quarter of 2024, SLM Corporation's total operating expenses rose to $171 million, compared to $167 million in the prior year, largely driven by increased marketing and personnel costs. The company reported an increase in provisions for credit losses to $271 million in the same period.
SLM continues to focus on maintaining credit quality while expanding its loan origination goals. The company reported total loans acquired and originated of approximately $6.1 billion for the nine months ended September 30, 2024.
A Who Owns SLM Corporation (SLM)
Major Shareholders
As of 2024, SLM Corporation (SLM) has a diverse ownership structure, with significant stakes held by institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders as of September 30, 2024:
| Shareholder Type | Number of Shares Owned (in millions) | Percentage Ownership |
|---|---|---|
| Institutional Investors | 112.5 | 52.4% |
| Mutual Funds | 75.3 | 35.1% |
| Individual Shareholders | 26.2 | 12.5% |
Top Institutional Investors
The top institutional investors include:
- Vanguard Group: 12.3 million shares (5.7%)
- BlackRock, Inc.: 11.8 million shares (5.5%)
- State Street Corporation: 10.5 million shares (4.9%)
- Fidelity Investments: 9.7 million shares (4.5%)
- Goldman Sachs Asset Management: 8.4 million shares (3.9%)
Stock Performance
SLM Corporation's stock performance has been notable in 2024, with the following key metrics:
| Metric | Value |
|---|---|
| Current Share Price | $14.25 |
| Market Capitalization | $3.06 billion |
| 52-Week High | $17.80 |
| 52-Week Low | $12.50 |
| Dividend Yield | 2.3% |
Recent Financial Performance
For the nine months ended September 30, 2024, SLM reported the following financial highlights:
| Financial Metric | Value (in millions) |
|---|---|
| Net Income | $483 |
| Net Interest Income | $1,118.6 |
| Provision for Credit Losses | $300 |
| Loans Held for Investment | $20,459.9 |
| Total Assets | $25.1 billion |
Ownership Changes
In 2024, SLM Corporation saw some changes in its ownership structure, driven by share repurchase activities and market fluctuations:
- 5.3 million shares repurchased for $115 million in Q3 2024.
- 9.6 million shares repurchased for $204 million in the first nine months of 2024.
- Remaining capacity under the share repurchase program as of September 30, 2024, is $448 million.
Conclusion
SLM Corporation continues to maintain a balanced ownership structure, with significant institutional investor participation and a robust financial performance through 2024.
SLM Corporation (SLM) Mission Statement
Overview
SLM Corporation, commonly known as Sallie Mae, is dedicated to helping students achieve their educational goals through affordable and accessible financing solutions. The company's mission emphasizes commitment to providing innovative financial services tailored to meet the unique needs of students and families.
Core Mission Components
- Empowerment through Education: SLM aims to empower students by offering financial products that facilitate access to higher education.
- Customer-Centric Approach: The company focuses on understanding and responding to the needs of its customers, ensuring a positive experience throughout the loan process.
- Financial Literacy: SLM is committed to enhancing financial literacy among students and families, providing resources and tools to help them make informed decisions.
- Innovation: The mission includes a focus on innovation in financial products and services, adapting to the changing landscape of student financing.
Recent Financial Performance
As of September 30, 2024, SLM Corporation reported significant financial metrics reflecting its operational efficiency and market position:
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Income | $483 million | $400 million | 21% |
| Diluted Earnings per Share | $2.18 | $1.69 | 29% |
| Provision for Credit Losses | $300 million | $330 million | -9% |
| Gains on Sales of Loans | $255 million | $125 million | 104% |
| Total Operating Expenses | $488 million | $476 million | 3% |
Strategic Initiatives
SLM Corporation is actively pursuing strategic initiatives aimed at enhancing its market presence and operational effectiveness:
- Loan Sales: In 2024, SLM executed significant loan sales amounting to approximately $3.69 billion of Private Education Loans.
- Securitization Transactions: The company completed securitization transactions, including a $668 million deal in May 2024 and an $868 million deal in August 2024, raising substantial gross proceeds.
- Share Repurchase Program: As part of its capital allocation strategy, SLM repurchased 9.6 million shares for $204 million in the first nine months of 2024, with a remaining capacity of $448 million under the 2024 Share Repurchase Program.
Loan Portfolio Overview
As of September 30, 2024, SLM's loan portfolio reflects robust growth and strategic management:
| Loan Type | Amount (in millions) | Percentage of Total Portfolio |
|---|---|---|
| Private Education Loans | $20,459 | 97% |
| FFELP Loans | $0 | 0% |
| Total Loans Held for Investment | $20,459 | 100% |
Conclusion
SLM Corporation's mission statement and strategic initiatives demonstrate its commitment to facilitating educational access and financial literacy while maintaining a strong financial foundation through effective management of its loan portfolio and innovative solutions.
How SLM Corporation (SLM) Works
Overview of SLM Corporation
SLM Corporation, commonly known as Sallie Mae, primarily focuses on providing private education loans to students and their families. As of September 30, 2024, SLM’s total loans held for investment amounted to $20.46 billion, with a significant portion attributed to private education loans.
Financial Performance
For the nine months ended September 30, 2024, SLM reported a net income attributable to common stock of $483 million, translating to a diluted earnings per share of $2.18. This reflects a year-over-year increase from $400 million or $1.69 per share for the same period in 2023.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Net Income | $483 million | $400 million |
| Diluted Earnings per Share | $2.18 | $1.69 |
Loan Portfolio
As of September 30, 2024, SLM's loan portfolio consists primarily of private education loans, which are categorized as follows:
| Loan Type | Balance (Gross) | Allowance for Credit Losses | Net Balance |
|---|---|---|---|
| In-school Loans | $4,255,608,000 | $1,413,621,000 | $20,459,933,000 |
| Grace, Repayment, and Other | $17,521,858,000 | ||
| Total Loans | $21,777,466,000 | $1,413,621,000 | $20,459,933,000 |
Interest Income and Expenses
For the nine months ended September 30, 2024, SLM reported total interest income of $1.958 billion with interest expenses totaling $839 million. The net interest income for the same period was $1.119 billion.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Total Interest Income | $1.958 billion | $1.924 billion |
| Total Interest Expense | $839 million | $747 million |
| Net Interest Income | $1.119 billion | $1.177 billion |
Credit Losses and Provisions
SLM's provision for credit losses for the nine months ended September 30, 2024, was $300 million, a decrease from $330 million in the previous year. This was impacted by improved economic conditions and loan sales.
Gains on Loan Sales
During the first nine months of 2024, SLM recognized $255 million in gains from the sale of approximately $3.69 billion of private education loans. This was a significant increase compared to $125 million in gains from $2.10 billion of loans sold in the same period of 2023.
Operating Expenses
SLM's total operating expenses for the nine months ended September 30, 2024, were $488 million, up from $476 million in the previous year. The increase was primarily due to higher personnel and marketing costs.
Tax Expenses
The income tax expense for the nine months ending September 30, 2024, was $170 million, compared to $140 million in the prior year. The effective tax rate slightly increased to 25.5%.
Loan Delinquencies
As of September 30, 2024, the total loans in repayment amounted to $15.36 billion, with delinquent loans (90 days or greater) totaling $118.7 million.
| Delinquency Status | Amount (in thousands) |
|---|---|
| Total Loans in Repayment | $15,360,255 |
| Delinquent (90 days or greater) | $118,703 |
Conclusion of Financial Metrics
Overall, SLM Corporation continues to navigate the education loan market with a focus on profitability and managing credit risk effectively, supported by a robust loan portfolio and strategic sales of loan assets.
How SLM Corporation (SLM) Makes Money
Revenue Streams
SLM Corporation generates revenue primarily through the following channels:
- Net interest income from Private Education Loans
- Gains on sales of loans
- Servicing fees from third-party loans
- Investment income
Net Interest Income
For the nine months ended September 30, 2024, SLM reported net interest income of $818 million, a decrease from $846 million in the same period of 2023. The decline was attributed to a decrease in the net interest margin, which fell by 27 basis points during this period. The average balance of Private Education Loans was $20.8 billion, with a weighted average interest rate of 10.90%.
| Period | Net Interest Income ($ millions) | Average Balance of Loans ($ millions) | Weighted Average Interest Rate (%) |
|---|---|---|---|
| 9 Months Ended September 30, 2024 | 818 | 20,805 | 10.90 |
| 9 Months Ended September 30, 2023 | 846 | 21,033 | 10.80 |
Gains on Sales of Loans
SLM achieved gains on sales of loans totaling $255 million for the nine months ended September 30, 2024, compared to $125 million in the previous year. This increase resulted from the sale of approximately $3.69 billion in Private Education Loans during this period.
| Period | Gains on Sales of Loans ($ millions) | Loans Sold ($ billions) |
|---|---|---|
| 9 Months Ended September 30, 2024 | 255 | 3.69 |
| 9 Months Ended September 30, 2023 | 125 | 2.10 |
Servicing Fees
For the nine months ended September 30, 2024, other income, which includes servicing fees, amounted to $85 million, up from $63 million in the prior year. The increase was driven by additional loans sold during the year, leading to higher servicing fee income.
| Period | Other Income ($ millions) | Servicing Fees Increase ($ millions) |
|---|---|---|
| 9 Months Ended September 30, 2024 | 85 | 17 |
| 9 Months Ended September 30, 2023 | 63 | N/A |
Investment Income
Investment income for the nine months ended September 30, 2024, reached $46 million, compared to $37 million in the same period of 2023. This reflects an increase of 24% year-over-year.
| Period | Investment Income ($ millions) |
|---|---|
| 9 Months Ended September 30, 2024 | 46 |
| 9 Months Ended September 30, 2023 | 37 |
Operating Expenses
Operating expenses for SLM increased to $488 million for the nine months ended September 30, 2024, compared to $476 million in the same period of 2023. The rise was primarily due to higher personnel and marketing costs.
| Period | Operating Expenses ($ millions) |
|---|---|
| 9 Months Ended September 30, 2024 | 488 |
| 9 Months Ended September 30, 2023 | 476 |
Conclusion on Financial Performance
SLM Corporation's financial performance in 2024 reflects a combination of revenue growth through its core lending operations and increased servicing fees, despite some challenges in net interest income and operating expenses.
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Article updated on 8 Nov 2024
Resources:
- SLM Corporation (SLM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of SLM Corporation (SLM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View SLM Corporation (SLM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.