Sallie Mae SLM reported fourth-quarter 2024 earnings per share of 50 cents, which missed the Zacks Consensus Estimate of 54 cents. The bottom line decreased from the prior-year quarter’s 72 cents. 

Find the latest earnings estimates and surprises on the Zacks Earnings Calendar.

A rise in non-interest expenses negatively impacted SLM’s results. However, lower provisions for credit losses and robust loan originations, along with a rise in net interest income (NII), acted as tailwinds.

The company’s GAAP net income was $112 million compared with $168 million in the prior-year quarter.

In 2024, earnings of $2.68 per share missed the consensus estimate of $2.72. However, the metric rose from $2.41 in 2023. Net income was $608 billion, up 46.8% from the prior-year quarter.

Sallie Mae’s NII & Expenses Climb

Fourth-quarter NII totaled $362 million, up 0.8% year over year. However, the reported figure missed the Zacks Consensus Estimate by 2.5%. The quarterly net interest margin was 4.9%, down 45 basis points from the prior-year quarter's level.

For 2024, NII was $1.48 billion, which missed the Zacks Consensus Estimate of $1.49 billion. Also, the top line declined 5.2% year over year.

Non-interest income amounted to $28 million, up 16.7% year over year.

Non-interest expenses inched up 12.8% year over year to $150 million.

SLM’s Credit Quality: Mixed Bag

Provision for credit losses was $108 million, up from $16 million reported in the prior-year quarter.

Net charge-offs for private education loans were $93 million, up marginally 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), was 2.38%. The figure contracted 5 basis points year over year.

Sallie Mae’s Balance Sheet Position: Mixed Bag

As of Dec. 31, 2024, deposits were $21.1 billion, down 1.7% sequentially.

Private education loans held for investment were $20.9 billion, up marginally  from the prior year quarter reported figure.

In the reported quarter, the company’s private education loan originations increased 10% from the year-ago quarter.

SLM’s Share Repurchase Update

In the fourth quarter, SLM repurchased 11.6 million shares for $250 million under its 2024 share buyback program.

Sallie Mae’s 2025 Outlook

The company expects diluted earnings per share to be in the range of $3-$3.10.

It anticipates total loan portfolio net charge-offs as a percentage of average loans in repayment in the band of 2-2.2%.

Private education loan originations are expected to grow 6-8% 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, rise in NII and lower provisions for credit loss are positives. However, a rise in non-interest expenses was 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 fourth-quarter 2024 earnings per share of $1.40 easily beat the Zacks Consensus Estimate of $1.28. The bottom line compared favorably with $1.26 reported in the year-ago quarter.

The results benefited from the increase in non-interest income and NII. Lower expenses and provisions were other positives. However, the decline in total loans was a headwind for HWC.

Bank OZK’s OZK fourth-quarter 2024 earnings per share of $1.56 handily surpassed the Zacks Consensus Estimate of $1.45. The bottom line reflects a rise of 4% from the prior-year quarter’s actual.

OZK’s results benefited from a rise in NII, driven by improvement in loans and deposit balances. Lower non-interest expenses and provisions were also positives. However, lower non-interest income and rising funding costs were the undermining factors.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SLM Corporation (SLM) : Free Stock Analysis Report

Hancock Whitney Corporation (HWC) : Free Stock Analysis Report

Bank OZK (OZK) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research