SLM Corporation first-quarter 2004 loan originations top $5.8 billion, up 19 percent from year ago period
Portfolio of Managed Loans Now Exceeds $92 Billion
RESTON, Va., April 15, 2004—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported first-quarter 2004 earnings and performance results that include more than $5.8 billion in preferred-channel loan originations, a 19-percent increase from the year-ago quarter's $4.9 billion.
Preferred-channel loan originations are loans created by the company's owned or affiliated brands. These loans are a key measure of Sallie Mae's market share success and indicate future loan acquisition volume and earnings growth. The company's total managed-loan portfolio now exceeds $92 billion.
"We continue to build market share in a growing student loan market," said Albert L. Lord, vice chairman and chief executive officer, Sallie Mae. "This has enabled us to further accelerate our privatization and deliver good earnings growth."
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 2004 GAAP net income of $291 million, or $.64 per diluted share, compared to $417 million, or $.88 per diluted share, in the year-ago period. Included in these GAAP results are pre-tax gains on the securitization of student loans of $114 million, compared to $306 million in the year-ago quarter.
Core cash net income for the quarter was $231 million, or $.51 per diluted share, up from $203 million in the year-ago quarter, or $.43 per diluted share. Core cash net interest income was $433 million for the quarter, a 16-percent increase from the year-ago quarter's $372 million.
Core cash other income, which consists primarily of fees earned from guarantor servicing and collection activity, was $174 million for the 2004 first quarter, up 18 percent from the year-ago quarter's $147 million. Core cash operating expenses were $202 million, compared to $248 million in the prior quarter and $173 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, 2004, was $2.7 billion, up from $2.2 billion a year ago. The company's tangible capital increased to 1.94 percent of managed assets, compared to 1.81 percent as of March 31, 2003. During the first quarter 2004, the company completed $14.8 billion in term, non-government-sponsored-enterprise (GSE) funding. At March 31, 2004, less than $16 billion in student loans remained in the GSE.
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 15, 2004, 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 15, at 3:30 p.m. EDT and concluding at 11:59 p.m. EDT on Thursday, April 22. Please dial 800/642-1687 (USA and Canada) or dial 706/645-9291 (International) and use access code 6065208. 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.
View Supplemental Earnings Disclosure (29k PDF).
For more information, contact:
Investor Contacts:
Steve McGarry 703/810-7746
Nam Vu 703/810-7723
Media Contacts:
Tom Joyce 703/810-5610
Martha Holler 703/810-5178
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), commonly known as Sallie Mae, is the nation's leading provider of education funding, managing more than $92 billion in student loans for more than 7 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. Sallie Mae was established in 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, the parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, Sallie Mae also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical products and services for colleges and universities. More information is available at http://www.salliemae.com. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.