Sallie Mae Tops Q4 Earnings on Y/Y Rise in NII & Non-Interest Income

Sallie Mae SLM reported fourth-quarter 2025 earnings per share (EPS) of $1.12, which increased from 50 cents in the prior-year quarter. The metric topped the Zacks Consensus Estimate by 18.2%.

The quarterly results benefited from a rise in net interest income (“NII”), lower provisions for credit losses and higher non-interest income, partially offset by an increase in expenses.

The company’s GAAP net income attributable to common stock was $229 million compared with $107 million in the year-ago quarter. 

For 2025, EPS of $3.46 increased from $2.68 in 2024. The metric topped the Zacks Consensus Estimate by 18.2%. The company’s GAAP net income attributable to common stock was $729 million compared with $590 million in the year-ago quarter.

Sallie Mae’s NII & Expenses Rise

Fourth-quarter NII totaled $377 million, up from $362 million in the prior-year quarter. The reported figure beat the Zacks Consensus Estimate by 0.4%. The quarterly net interest margin was 5.21%, expanding 29 basis points year over year.

Full-year 2025 NII was $1.5 billion, up from $1.48 billion in 2024. The reported figure matched the Zacks Consensus Estimate.

Quarterly non-interest income was $77 million, significantly higher than $28 million in the year-ago quarter.

Non-interest expenses increased 4.7% year over year to $157 million.

SLM’s Credit Quality Mixed

In the fourth quarter, the company reported provision benefits of $19 million, in contrast to provisions of credit losses of $108 million in the prior-year quarter, primarily reflecting the release of reserves associated with loan sales.

Net charge-offs for private education loans were $98 million, up from $95 million in the year-ago quarter.

Private education loan net charge-offs, as a percentage of average loans in repayment (annualized), were 2.42%, marginally higher than 2.38% in the prior-year quarter.

Sallie Mae’s Balance Sheet Position

As of Dec. 31, 2025, deposits totaled $21.1 billion, relatively flat compared with the year-ago quarter.

Private education loans held for investment, net, were $20.3 billion, down modestly from $20.9 billion in the prior-year quarter.

In the reported quarter, private education loan originations increased 4% year over year to approximately $1.0 billion.

SLM’s Share Repurchase Update

In the fourth quarter, SLM repurchased 3.8 million shares for $106 million.

For the full-year 2025, the company repurchased 12.8 million shares for $373 million under its 2024 share buyback program.

Final Thoughts on SLM

Sallie Mae delivered a strong fourth-quarter performance, driven by solid net interest income growth, higher non-interest income and a favorable provision for credit losses. Stable loan originations and continued capital return remain positives. However, elevated charge-off levels warrant close monitoring going forward.

SLM Corporation Price, Consensus and EPS Surprise

SLM Corporation price-consensus-eps-surprise-chart | SLM Corporation Quote

Currently, SLM carries a Zacks Rank #5 (Strong Sell).

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 fourth-quarter 2025 earnings per share of $1.49 beat the Zacks Consensus Estimate by a penny. Further, the bottom line rose 6.4% from the prior year quarter.

HWC’s results benefited from an increase in non-interest income and NII. Higher loans and deposits were another positive. However, higher expenses alongside increased provisions were headwinds. 

WaFd, Inc.’s WAFD first-quarter fiscal 2026 (ended Dec. 31) earnings of 79 cents per share beat the Zacks Consensus Estimate of 76 cents. The bottom line also jumped 46% year over year. 

WAFD’s results reflected higher NII, a surge in non-interest income and lower expenses. However, credit costs remained elevated, with provisions for credit losses recorded in the quarter.

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

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