On July 24, 2024, SLM Corp (SLM, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. SLM Corp, the largest student lender in the country, provides student loans through both federal and private channels and engages in debt-management operations.
Performance Overview
SLM Corp reported GAAP diluted earnings per common share of $1.11 for Q2 2024, surpassing the analyst estimate of $0.76. However, the company reported total revenue of $514 million, which exceeded the estimated $362.83 million. The company’s net income attributable to common stock was $247 million, down from $261 million in Q2 2023.
Key Financial Achievements
SLM Corp's private education loan originations grew by 6% year-over-year, reflecting strong demand in the student lending market. The company also completed a $1.6 billion sale of private education loans during the quarter, contributing to its financial performance.
Income Statement Highlights
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Total interest income | $641 million | $664 million | $634 million |
| Total interest expense | $269 million | $277 million | $247 million |
| Net interest income | $372 million | $387 million | $387 million |
| Net income attributable to common stock | $247 million | $285 million | $261 million |
Balance Sheet and Capital Allocation
SLM Corp reported a total risk-based capital ratio of 14.7% and a CET1 capital ratio of 13.4%. The company paid a common stock dividend of $0.11 per share in Q2 2024 and repurchased 2.9 million shares for $62 million. As of June 30, 2024, SLM Corp had $562 million remaining under its 2024 Share Repurchase Program.
Key Performance Metrics
The net interest margin for Q2 2024 was 5.36%, a decrease of 16 basis points from Q2 2023. The return on assets (ROA) was 3.6%, and the return on common equity (ROCE) was 50.6%. The company’s private education loan portfolio had an average yield of 10.91%, while the cost of funds was 4.16%.
Analysis and Outlook
SLM Corp's performance in Q2 2024 highlights its strong position in the private student lending market. The growth in loan originations and successful loan sales demonstrate the company's ability to generate revenue and manage its loan portfolio effectively. However, the decline in net interest income and net income attributable to common stock compared to the previous quarter indicates potential challenges in maintaining profitability.
Overall, SLM Corp's financial results for Q2 2024 reflect a mixed performance, with strong earnings per share but lower-than-expected revenue. Investors will be keen to see how the company navigates the evolving economic landscape and continues to capitalize on opportunities in the student lending market.
Explore the complete 8-K earnings release (here) from SLM Corp for further details.
