SLM Corp. (SLM:US), the student lender known as Sallie Mae, reported a fourth-quarter profit of $348 million as originations climbed.
Net income fell to 74 cents per share, for the three months ended Dec. 31, from $511 million, or 99 cents, in the year- earlier period, the Newark, Delaware-based company said today in a statement distributed by Business Wire. Excluding items such as the market gains and losses of derivatives contracts, SLM’s core earnings were $257 million, or 55 cents a share, the company said. That compared with an average estimate (SLM:US) of 53 cents by eight analysts surveyed by Bloomberg.
SLM is boosting private loan originations after legislation passed in 2010 cut companies out of the market for government- guaranteed lending. Sallie Mae made $514 million in education loans in the fourth quarter, a 12.5 percent increase from the year-ago period, according to the statement. The lender is forecasting at least $4 billion of originations in 2013.
The charge-off rate, or the percentage of loans that has been written off, rose to 4.2 percent from 3.5 percent, the company said. The proportion of payments more than 90 days late fell to 4.6 percent from 4.9 percent a year ago.
Originations are rising as education debt balloons. Rising higher-education costs have swelled the outstanding amount of U.S. student loans to $1 trillion. More than one in 10 borrowers defaulted on their federal loans in the first three years they are required to make payments, the Education Department said in a Sept. 28 report.
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