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Investing.com -- Sallie Mae (NASDAQ:SLM) reported second quarter earnings that fell well short of analyst expectations, sending shares down 3% in trading.
The student loan provider posted earnings per share of $0.32 for the second quarter of 2025, missing the analyst consensus estimate of $0.49 by $0.17. The company’s provision for credit losses surged to $149 million, compared with just $17 million in the same quarter last year, primarily due to a release of provision from a loan sale in Q2 2024, an increase in loan commitments, and changes in economic outlook.
Despite the earnings miss, Sallie Mae saw its private education loan portfolio grow, with average loans outstanding reaching $22.6 billion, up 10% from Q2 2024. The company originated $686 million in private education loans during the quarter.
"Our solid performance in the second quarter and first half of the year reflects the strength of our core business, resilience of our customers, and continued execution of our strategy," said Jonathan Witter, CEO of Sallie Mae.
Net interest margin for the quarter was 5.31%, a decrease of 5 basis points from the same period last year. Total (EPA:TTEF) net charge-offs as a percentage of average loans in repayment increased to 2.36% from 2.19% in Q2 2024.
For the full year 2025, Sallie Mae expects GAAP diluted earnings per common share of $3.00 to $3.10, with private education loan originations growth of 6% to 8% YoY. The company also forecasts total loan portfolio net charge-offs of 2.0% to 2.2% as a percentage of average loans in repayment and non-interest expenses between $655 million and $675 million.
During the quarter, Sallie Mae repurchased 2.4 million shares for $70 million and paid a common stock dividend of $0.13 per share.
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