SLM Corporation loan originations jump 22 percent from year ago, driving earnings growth
Portfolio of managed loans now exceeds $80 billion mark
RESTON, Va., April 17, 2003—SLM Corporation (NYSE: SLM) , commonly known as Sallie Mae, today reported first-quarter 2003 earnings and performance results that include a 22-percent increase in preferred-channel loan originations from the year-ago quarter.
Preferred-channel loan originations consist of those loans created by the company’s owned or affiliated brands. These loans form a key measure of Sallie Mae’s market share success and, as an indicator of future loan acquisition volume, drive the company’s earnings growth and increase its managed-loans portfolio. That portfolio now exceeds $80 billion.
"We are fortunate to be operating in a growing market, but we are driven to outperform that market, and we are achieving our goal," said Albert L. Lord, vice chairman and chief executive officer, Sallie Mae. "Our team continues to focus on service to our customers. It helps that our customers and our employees feel passionate about the product: higher education."
Sallie Mae reports financial results on a GAAP basis and presents certain non-GAAP or "core cash" performance measures. The company's equity investors, credit rating agencies and debt capital providers request these “core cash” measures to monitor the company's business performance.
Sallie Mae reported first-quarter 2003 GAAP net income of $417 million, or $2.64 per diluted share, compared to $422 million, or $2.63 per diluted share, in the year-ago period. Included in these GAAP results are $306 million in pre-tax gains on student loan securitizations and a $114 million pre-tax, market-value gain in derivatives.
"Core cash" net income for the quarter was $203 million, or $1.28 per diluted share, a 22-percent increase from the year-ago quarter. "Core cash" net interest income was $372 million for the quarter, a 12-percent increase from the year-ago quarter's $334 million.
"Core cash" other income, which consists primarily of fees earned from guarantor servicing and collection activity, was $147 million for the 2003 first quarter, up from $124 million for the prior quarter and up from $121 million for the year-ago quarter. "Core-cash" operating expenses were $173 million, up slightly from $171 million in the prior quarter, and $161 million in the year-ago quarter.
Both a description of the "core cash"treatment and a full reconciliation to the GAAP income statement can be found at www.SallieMae.com.
Total equity for the company at March 31, 2003, was $2.2 billion, an increase of $290 million from a year ago. In addition, the company's tangible capital increased to 1.81 percent of managed assets, as compared to 1.61 percent as of March 31, 2002.
The company will host its regular earnings conference call today at noon. Sallie Mae executives will be on hand to discuss various highlights of the quarter and to answer questions related to the company’s performance. Individuals interested in participating should call the following number today, April 17, 2003, starting at 11:45 a.m. EDT: 877/356-5689 (USA and Canada) or 706/679-0623 (International). The conference call will be replayed continuously beginning Thursday, April 17, at 3:30 p.m. EDT and concluding at 11:59 p.m. EDT on Thursday, April 24. Please dial 800/642-1687 (USA and Canada) or dial 706/645-9291 (International) and use access code 9393614. In addition, there will be a live audio Web cast of the conference call, which may be accessed at www.salliemae.com. A replay will be available 30-45 minutes after the live broadcast.
For more information, contact:
Jim Boyle 703/810-5605 (media)
Martha Holler 703/810-5178 (media)
Jeff Heinz 703/810-7751 (investors)
Nam Vu 703/810-7723 (investors)
Statements in this release referring to expectations as to future market share, the successful consummation of any business acquisitions and other future developments are forward-looking statements, which involve risks, uncertainties and other factors that may cause the actual results to differ materially from such forward-looking statements. Such factors include, among others, changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, and changes in the general interest rate environment. For more information, see the company's filings with the Securities and Exchange Commission.
SLM Corporation (NYSE: SLM) is the nation’s leading provider of education funding, managing nearly $81 billion in student loans for more than seven million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Celebrating its 30th anniversary this year, the company opened its doors in May 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, Sallie Mae’s parent company name has changed, most recently to SLM Corporation (effective May 17, 2002). Through its specialized subsidiaries and divisions, the company also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical outsourcing services for colleges and universities. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.
Supplemental Earnings Disclosure