Updated from 10:05 a.m. ESTSallie Mae ( SLM) CEO Albert Lord apologized Wednesday for using profanity on a conference call with analysts in December, as he met them anew on a call to discuss the student lending giant's swing to a fourth-quarter loss. Lord's apology came after Sallie reported a loss of $1.6 billion for its fourth quarter, due largely to a steep rise in loan-loss provisions as school loan defaults spike. It also disclosed in a regulatory filing that the Securities & Exchange Commission has sought information about company disclosures and actions last December before and after sales of the company's stock by its directors and executives. "My closing comments were offensive," Lord said on Wednesday, after acknowledging that he was not providing adequate answers to questions from analysts on the December call. "They were not meant to be my closing comments." The offensive comments were made after William Kavaler, a managing director of the French bank Societe Generale, pressed Lord repeatedly for insights about the interest in securities backed by Sallie Mae loans. "We're trying to figure out what your stock is going to be worth, and you've got to give us some guidance, you've got to give us some numbers," Kavaler said.
On its so-called "core basis," which uses Sallie Mae's preferred accounting methodology for reporting operating results, the company said its fourth-quarter loss totaled $139 million, or 36 cents a share, compared to last year's net income of $326 million, or 74 cents a share. Those results exclude forward contract mark-to-market losses. On that basis, its provisions for loan losses totaled $750 million, up from the $88 million it reported last year. On the call, Lord attributed the spike in loan defaults to a departure at Sallie Mae over the last several years from its traditional lending policies. "We lent too much money to students who have gone to schools without very good graduation records," said Lord. "Such students were responsible for 60% of our credit losses. "The good news is our business," said Lord. "We have a very good business, and it will continue to be a good business."