Quarterly core earnings improved to $63 million from a loss of $27 million in 2011, driven primarily by lower loan loss provision.
Private education loan portfolio results vs. third-quarter 2011 included:
- Loan originations of $1.3 billion, up 25 percent.
- Provision for private education loan losses of $252 million, down from $384 million, primarily due to an additional $124 million of provision attributable to last year’s adoption of new accounting guidance for TDRs.
- Delinquencies of 90 days or more of 5.3 percent, up from 5.0 percent of loans in repayment.
- Loans in forbearance of 3.2 percent, down from 4.5 percent of loans in repayment and forbearance.
- Annualized charge-off rate of 3.23 percent, down from 3.74 percent of loans in repayment.
- Core net interest margin, before loan loss provision, of 4.05 percent, up from 4.03 percent.
- The portfolio balance, net of loan loss allowance, grew to $37 billion from $36 billion.
Sallie Mae’s business services segment includes fees from servicing, collections and college savings businesses.Business services core earnings were $131 million in third-quarter 2012, compared with $139 million in the year-ago quarter. Federally Guaranteed Student Loans (FFELP) This segment represents earnings from Sallie Mae’s amortizing portfolio of federally guaranteed student loans. Core earnings for the segment were $94 million in third-quarter 2012, compared with the year-ago quarter’s $107 million. The decrease was primarily due to lower net interest income in the current quarter resulting from higher funding costs and the declining balance of the FFELP loan portfolio. Year-to-date Sept. 30, 2012, the company acquired $3.1 billion of FFELP loans. At Sept. 30, 2012, the company held $128 billion of FFELP loans compared with $141 billion at Sept. 30, 2011.