Sallie Mae Q3 Earnings Lag on Higher Expenses, Provisions Decline Y/Y

Sallie Mae SLM reported third-quarter 2025 earnings per share (EPS) of 63 cents, which missed the Zacks Consensus Estimate of 84 cents. In the prior-year quarter, the company reported a loss of 23 cents per share.

The quarterly results were affected by an increase in expenses. Nonetheless, a rise in net interest income (NII) and non-interest income, along with lower provisions for credit losses, offered some support.

The company’s GAAP net income was $136 million against the net loss of $45 million in the prior-year quarter.

Sallie Mae’s NII & Expenses Rise

Third-quarter NII totaled $372.9 million, up 3.8% year over year. However, the reported figure missed the Zacks Consensus Estimate by 0.8%. The quarterly net interest margin was 5.18%, up 18 basis points from the prior-year quarter's level.

Non-interest income amounted to $172.7 million, significantly up from $24.5 million in the year-ago quarter.

Non-interest expenses rose 4.9% year over year to $180.4 million.

SLM’s Credit Quality: Mixed Bag

Provision for credit losses was $179.4 million, down 33.8% million from the prior-year quarter.

Net charge-offs for private education loans were $78 million, up 1.3% year over year.

Private education loans held for investment net charge-offs, as a percentage of average private education loans held for investment in repayment (annualized), were 1.95%. The figure contracted 13 basis points year over year.

Sallie Mae’s Balance Sheet Position: Mixed Bag

As of Sept. 30, 2025, deposits were $20 billion, down 2.3% sequentially.

Private education loans held for investment were $21.6 billion, up 5.6% from the prior-year quarter.

In the reported quarter, the company’s private education loan originations increased 6% from the year-ago quarter.

SLM’s Share Repurchase Update

In the third quarter, SLM repurchased 5.6 million shares for $166 million under its 2024 share buyback program.

Sallie Mae’s 2025 Outlook Reaffirmed

The company expects diluted earnings per share in the range of $3.20-$3.30.

SLM anticipates total loan portfolio net charge-offs as a percentage of average loans in repayment of 2.0%-2.2%.

Private education loan originations are expected to grow 5%-6% year over year.

SLM’s non-interest expenses are expected to be in the range of $655-$675 million.

Final Thoughts on SLM

Sallie Mae’s overall financial performance seems decent. Robust loan origination, a rise in net interest income, and higher non-interest income were encouraging. However, a rise in expenses is a major near-term headwind.

SLM Corporation Price, Consensus and EPS Surprise

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.

Performances of Other Banks

Hancock Whitney Corp.’s HWC third-quarter 2025 earnings per share of $1.49 exceeded the Zacks Consensus Estimate of $1.41. Further, the bottom line rose 12% from the prior-year quarter.

HWC’s results benefited from an increase in non-interest income and net interest income (NII) alongside lower provisions. Also, higher loans were another positive. However, higher adjusted expenses alongside lower deposit balances were headwinds.

Synovus Financial Corp. SNV reported third-quarter 2025 adjusted earnings per share of $1.46, which surpassed the Zacks Consensus Estimate of $1.36 per share. This compares favorably with earnings of $1.23 per share a year ago.

SNV’s results benefited from strong year-over-year growth in NII and non-interest revenues, along with a fall in provisions for credit losses. Also, improving loan balances was a tailwind. However, an increase in expenses was a major headwind.

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This article originally published on Zacks Investment Research (zacks.com).

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