SLM - Earnings call 3 2023 | SLM Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Third Quarter 2023 Sallie Mae Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Melissa Bronaugh. Please go ahead.

Melissa Bronaugh

Carmen. you, Thank welcome Call. and Mae's Quarter Third Good to Earnings XXXX morning, Sallie It today Graham, be our to CFO is pleasure my XX. here Steve our McGarry, CFO; beginning October succeed CEO; our with and will Pete who as next Steve Witter, Jon remarks, open the for the questions. prepared After call we will

Actual mind from future the may materially different keep Before will predictions, in we in begin, expectations results contain discussed here. those discussion our and forward-looking statements. be

should to XX-Q This the variety with a refer could Listeners on Form to of factors. company's the due and factors those be discussion of filings SEC. the other

For cash others, results flows. Sallie of and/or include, conditions financial Mae, these factors operations among and

ended earnings, now our to quarter the page be XXXX. During the measures A And you. earnings for our the Jon. the release is with we a this GAAP at found to in on call press core earnings. XX-Q September full measures the GAAP Investors results call call, over conference reconciliation I'll will can posted Thank and along to refer XX, non-GAAP Form core of turn we description salliemae.com. This

Jonathan Witter

you'll Mae's Thank quarter for joining Sallie and Thank results. everyone. you you, to key discuss I Carmen. Melissa us messages X Good morning, take hope today. away third

a we First, had class increased under demand. highlighted by successful peak season

of guidance. on past CECL phase-in in Second, company, look EPS are of our third, our And of start ongoing the XXXX we we track year we prospects remain about to end deliver midpoint around period. particular, full the the to excited as the

discussion the of with sales. loan begin me Let

September early on conditions. the preferences sale next expected had the fourth quarter, third You market at or quarter, to in will we in last the and of beginning close our loan and buyer depending commence remember

of We are we which October closed $X pleased on report able in XX. billion were that latest sell our loans transaction, to to

with of the our XXXX our which sale at the changed confirms consistent execute to EPS prices loan we expectations. were We able have guidance, full not midpoint that year

We buy use a of the capital portion sale capital to stock gain back maintaining levels. plan prudent and the liquidity to while released from and

reminder, disconnect our a a and price sale been help As years little advantage between premiums the began the we loan the repurchase valuation believe ago share manage loan has strategy to and of successful. program also CECL and over period. sale during equity take capital phase-in very to We X the

bought outperformed have returns back shareholder have that and generated half time during indices and We approximately certain company relative meaningfully the have that competitors. key absolute and total

always that described time. a would strategy over While as successful, this medium-term have evolve we

still we to of it share about we pivoting also generation believe opportunity capability arbitrage, exciting the and think loan While balance grow our is to there business sheet. EPS growth is and advantage contemplate capital organic to of the the buyback as take sale

level the will as We growth for of timing sheet and balance our loan XXXX. to consider we guidance continue sales to and appropriate pivot develop

have year quarter, of Turning $X.XX prior we quarter's to $X was quarter. are the given quarter results. to XXXX GAAP that year $X.XX compared These third lower than billion earnings ago EPS of quarter in in GAAP loans diluted of the the the sold third million XXXX diluted the $XX quarter closed our been completed October just third XXXX third the in it sale, in loan that in we gains. quarter, At in would EPS. to approximately generated the $X.XX added

This lifetime a especially prior has which of the in the is of the QX billion, and important this peak serialization the to seen been were XXXX X% fueled education successful the XXXX up wraps which the have by same growth up is Through XXXX. greater of application we end $X.X originations given loan group. X% season. underclass most a potential third quarter since in and Private increase period XX% September, pandemic. volume application for value XXXX applications, over of This over

Credit with years. past consistent was quality originations of

XXXX was of at QX XXXX of versus slightly XXX score was for XXX from XX% QX Average rate cosigner XX%, in Our in up of QX XXXX. for QX XXXX. approval of FICO

to later-stage for on lower credit our than focus normalcy average are to a September X.XX% decline to for is XXXX as improvement in net delinquency our saw in full back and annualized that throughout continue year. X percentage months We and of path observed of and and repayment quarter. loans charge-offs entry first pleased the remains the our our rates continued delinquency plan buckets and the We

quarters in last which facing but our number are a can we that several implemented of over have customers, help there programs financial difficulty. recognize assist We borrowers are to ways the more who

develop to to Steve? Steve and help some continuing regain footing. their delinquent take strategies quarter. you existing highlights customers programs new through financial are We now will fine-tune of additional financial the

Steven McGarry

Good morning, John. everyone. you, Thank

student was billion total Let's plus our with exposure, or CECL and education $X.X receivable loan unfunded the sheet our reserve on-balance continue and under a of loss discussion private of portfolio X% of interest billion. accrued $X.X includes of $X.X loan loan commitments provision. which loan billion the The allowance another

improve rate the to at X.X% in to reserve X.X% and as second end XXXX. the this year of compared Our quarter continues of

losses used forecasts variables movement in our Let's Economic calculate wavings at to allowance quarter-to-quarter CECL. and credit now under look the drive allowance. the major for

XX%, SX base, forecasts, XX%, and respectively. use weighted Moody's and XX% to continue We SX

expect to speeds this related metric. meaningful changes to this resulting We mix no requirement were quarter, in going in QX the essentially prior to reserve compared use unchanged Prepay XXXX forward.

were year-over-year the However, speeds which year the prepaid to the in ago quarter, contributor reserve. than lower is change a

as view books positive time. our longer a to assets on slower for stay a to period real are as expected of continue our prepay We speeds

year and respectively. also the our ago in provision billion commitments of this peak a comparison, $X.X commitments million, billion which we $XXX are $X.X added of for lending million million. calculation. is unfunded quarter, provision unfunded important $X.X QX and added and a $XXX required the we season in New in commitments, required which $XX to year, In of billion QX

provision prior decrease a our on quarter. for statement total of increase from million in $XX million income million the but ago credit an $XXX quarter, quarter, was losses the from year of $XXX Our the

This but mentioning already quarter quarter's increases. has worth that by entirely have credit the unfunded the sign and of the third that XXXX, a commitments driven and of almost was reserve rate over both disbursements is strong volume reserve decreased. another positive It increase improvement in mentioned. indication increased again is Jon has This

of the down to quarter. charge-offs X.X% the education is from $XX of ago million, in X.X% compared year XX-plus delinquent Private QX an and QX, in That the Private ago charge-off quarter, X.X%, were education the XXXX repayment. X.X% the loans year at end a education flat quarter, annualized from the in loans unchanged as loans net In in from from slight were quarter. end rate and forbearance X.X% year at the private in ago of increase loans X.X% well. of days resulting quarter were but

As X.XX%, Jon quarter already the expectations. to the strong of charge-off X.XX% and be a at in mentioned, in for for from quarter. NIM X better stands the net continues the rate ago first at XXXX up than year X.XX% came annualized months our internal

the of full with year our our Our for year. do benefit past continued to our cost mid-X% XXXX. the funds We NIM rate interest-earning assets over low vicinity rising to has faster of expect repricing remain the the portfolio environment from in than will

$XXX ago compared were year million the Third increase $X year FDIC over $XXX quarter quarter. million of fees. operating in relates to Roughly expenses to higher million the ago the period assessment

in stable increase was The versus QX collection expected on in funding. including assessment of of fee center, mentioned quarters, the originations, increase sheet balance finally, to the by have and absorption due access general in consolidations an previous factors, and the inflationary FDIC XXXX higher of in the we increase As high-quality, having caused staffing more the and the cost several low-cost, a to was pressure. of of loans to part remainder slowdown our

our to Finally, third XX.X%. positions Equity of end XX.X%. business the like to return to that would was shareholders over of assets Jon. strong you, I Back assets. and remain At out ended forward. Tier quarter going XX.X%. risk-based remain capital liquidity equity X We the reserves GAAP liquidity loss of and total plus a Common total positioned quarter, at capital strong. stood very XX.X% with our the We capital grow was also point loan risk-weighted to

Jonathan Witter

Thanks, Steve.

the Chief we as at Melissa and Before call, joined today opening mentioned the Sallie beginning of are Mae's to Graham, Pete tomorrow will who turn Financial Officer. I Steve guidance, by become next

I played in me my and to Pete continues Steve capacity. for few with advisory been that company. I'd my to and you others so many Sallie the adviser introduce words, opportunity offering thank in service it's Mae, role to of a here his am as he for he Sallie importantly, celebrating like the retirement has next great months same to contributions him ensuring not a his With Pete and know Steve Pete's look trusted with be to his appropriately upcoming in and Before successful many alone wishing more best to time the to over for his forward transition. commitment pleasure countless several Mae during Graham. us an years that, at him years say friend to and to has most a I the during

Peter Graham

serves, have graduates. I'm been Like into everyone families so Jon, and journey, transition you, X team Sallie also of and Mae parent education career Thank many company. to critical access the to was higher my Sallie Steve that who on the helping the me personal college

mid-September, lending. a community meaningful the to alongside look to deep team to at I getting opportunity and a Steve shareholders. benefit from while Mae weeks student upcoming So connection a continued the same you, joining I'll that and and company back driving I I'm it particularly efficiency ahead. growth, the to built families, the to since of feel broadly, has Sallie and had experience in students in Jon. their the the mission. I've thrilled long-term time, to value and deep joining work be more months forward turn investment and know for knowledge powers confidence talented And them team. company's

Jonathan Witter

Thanks, Pete.

a XXXX with guidance. conclude me discussion Let of

moving there outlook our are in the been original for year, largely expectations. While that the pieces with several year line earnings throughout have we our pleased is

midpoint the common $X.XX per core to earnings narrowing and around range are $X.XX. non-GAAP we diluted such, for the share As $X.XX with still between

are such, we results morning, for As this range successful for we're thrilled cost to I in a the acquire. And absolutely revising quality, of quantity earlier terms and with season origination of growth peak mentioned the year. the as

origination We X% X% year full now to the of expect XXXX. growth for

better slightly we of slightly better XXXX are As credit than to our both the we pleased that with and the than full we also journey I our year-to-date, gross committed to expectations are discussed, will charge-offs expect finish are back year Steve continuing continuing Overall, original and outlook. stabilization normalcy. and

As loans opposed strategy more to you XXXX, remember, we implemented in-house in second new to the a of quarter sooner loans, third our selling parties. shifting of might defaulted as recovery for effort

and which, now change in this our slightly of factors XXXX. revise year to impact expect year finish contributed to impact $XXX recoveries, million. growth Several and is with and in with for charge-offs the performance, that full chief portfolio driven year to over increase our guidance among them be We repayments and portfolio upper and million of or our consolidations has of That, X.X% of of year. We net later total This original to range has approximately expenses. of that other expect We on along for expense million our to we a be guidance us above growth, inflationary by informed in XXXX. this acquisition the The guidance increased percentage will time. slowdown point the full our are noninterest between noninterest originations the tightening Scholly coupled in $XXX pressures to outlook expect a the end at recoveries expressed the variable year to meaningfully $XXX receive higher expect slightly slightly decision expenses average the caused better, loan end timing but now as higher that loans net the $XXX million. still expect charge-offs net to our to original the

us early XXXX specific too beyond. for it's While trajectory on XXXX your mind to is guidance, the question declare expense undoubtedly for and

the of this expense XX% driven was a fees. approximately noninterest significant increase FDIC context, year in by in As growth

individually rate we FDIC in anticipate Expenses for de related speak at FDIC, premiums while to cannot XXXX. approximately not of growth meaningful we this represent continuing future. certain were do collectively XX% grow While our and to in the investments the expense noninterest minimis, restructurings, in the

pressures is abated. in We view felt we noting that do rate. as also worth future expenses the It run being have inflationary somewhat not a these embedded ago our year

will historical we such, expense more in As growth with future consistent anticipate averages. longer-term be the noninterest

course, we detail this offer business expected that investors. XXXX. January quarter expense we continuing for growth for earnings on in we demonstrate will execute posted guidance the results more have are Of outlined to provide we plan The when we

the We are business and focusing value core on of our maximizing strengthening our brand.

loan arbitrage fourth our are our that the at to We month planning earlier a be to buyback discount. to the sale believe and excited trading while about this put we share what quarter, stock loan sale in are is work settled significant

questions. continue open end the As With Steve, that, NIM expense look to the of will we some focus on execution, forward results. management year, operational for to and let's to the we call drive up

Operator

comes our [Operator question first of Wells Instructions] from Kaye Michael line Fargo. the And with

Michael Kaye

provision for over go could you commitments. unfunded if see to wanted the I expense

XX-Q, commitments This the this percentage taking by million $X.X too, the from down X.X%, last way dynamic has percentage I the around began last $XXX like XX year. rate It Looking on in at being down. as provision count quarter over X% way billion. unfunded looks of divided Page with

wonder the in million that Was explain QX accounting? also, And that lower down, the QX. about schedule, that to digits I $XX speeds? could change other can you items due in prepayment in So teams you provision was jumped a this and also that talk if to versus mid-single step

Steven McGarry

or unfunded schedule to don't is his second Jon call prepared is an really a that was we the X.X% procedures. the and changes we earnings What Michael, compared in and in process in reserve were improvement prior mentioned into reserve you me. X.XX% There referenced quarter or no weeds down front have due got million remarks our seeing well. What CECL have the $XXX accounting have there. of quarter. are here that the the during credit I that for as that lower tightening in to I I year's in commitments

detailed again, offline my serving with that the in for real questions following you so and last And have don't Why there, thanks up. take one of terms call, this Melissa is that call? the we

Michael Kaye

rate $XXX There's there that million and new pieces. on and separate on do up commitments quarter-to-quarter. broken really way drastically like seeing to down provision when the very that million that That Okay. calc just jumps commitments like X the is This But provision $X.X percentage. side, high. is that then said, $XXX my other into around items, item putting I is one provision like I unfunded billion that

it's So that you're saying because do you think just of credit improvement?

Steven McGarry

we're to into Yes, declined that. absolutely. reserve than more get do as [indiscernible] questions, And a the need off-line. detailed to of that let's the happy function but

Michael Kaye

$XXX to that have for entire loan in about you the Okay. about By repurchase got left. about leaves closed we that million million accounted you about did authorization your Should in $XXX year share $XXX the share $XXX for you complete I QX. repurchases. in it talk wanted left assume a the so million sale, total million, my QX? calc, Obviously,

Jonathan Witter

share do we not on give specific our the pace of guidance repurchases. Michael, Yes,

that that the think about a longer-term of it would I a is authorization. was way repurchase think sort share I

valuation fit, conditions I shares run to continue the that, point think through And in through we as will see levels repurchase we at given will we that. run whatever have marketplace. we and

Operator

from line it Sakhrani the with And of KBW. comes Sanjay

Sanjay Sakhrani

I Steve, Number in next be question Jon meaningful like pleasure pretty working Steve, be been the dynamics your a could with you. be it feels guess, and because year favor. guys competitive to first for might is, X for question. X-part a congratulations. Maybe working seem you It's a year

of large if might do secondly, at for curious Would guys that? space. X curious then of are in you just share I'm you into of least players how the growth about And the gains? you've preparing has not? couple I'm contemplated a same heard the think kind I players talk of tactically lean sale portfolio. want what participate heard this if you there, their just to You've big moderating and

Jonathan Witter

Sanjay, of marketplace. all doing the that in we of growth to We want absolutely to take from advantage And I'm memory, can. has to every been Yes, advantage grown I the of the one think And take those let take me but possibly extent this can look of the high-quality data I save I each to since available. market for grow think we I opportunities have market company, maybe quarter share. continue will share joined we that where

At the teams with school end various strength of talked for we that. just the of serve. we about relationships and overall a universities the the day, levers I lot think can our there's pull We've

I think think commercial may only through of can. on our no their have the the opportunity think to I have and advantage I mind I Scholly. acquisitions that, appreciate And we been that said be And other made now, and there enhancements competitors doubt, improvements happy and Nitro we we've this to right and length talked on take recent those we're the the that that last certainly marketing that we've there at engines. extent great strengthened things the out call, to of about

have also now. as We really out other being good that them just they always as And there seriously. competitors lots as of distracted competing take have, and good solid aren't we we right they're hard who competitors view

the the customers take year we're of is So sure that couple many approached and going box. years, to after to that that care the all approach we look the within can. as last of going to way share make we resources will have we our which great to exact staffing fit next and We're go as the we've buy serve

of of the the for the sort market itself. day, share of sort And out play it will I think at end

the heard. all rumors heard sure heard portfolios, anything same of have terms of have not you have I In the sale declarative. I'm I that

another core our the people's in really of never is sort buying of of regulatory imagine you risk reputational hypothetically of we that other these kinds and can so buying do. the operational, high-quality to going speaking and we all marketing and business that would We never, portfolios. into We the with real assets. I are it what origination decision competency of factor for say were all any portfolio but not think brings would

relationships, bar I again, think use existing end new relationships. anything forming ever cut our but don't is us something we the that. would be of about to best a the would at buying higher like resources customer customer we But believe I And it of for day, think absolutely, off not think

Sanjay Sakhrani

how guess and you be follow-up possibly bit, of sort about little should we grow be I'm or I question, strategy as us to think just this P&L XXXX. growing implications Will related tactically, we look consider this to EPS? a in And could balance EPS a minimize wondering, a pivoting the Maybe might XXXX. little you to just is impact? to but bit the talked sheet help the about

Jonathan Witter

think Sanjay, of as a up. there's balance growth on made we ways not to imaginations a that. different Yes, have might are of that I time sort pace bring and sheet there many And one decision sequence to them sort as return

the balance last to of extensively so franchise. term, are of organic real the we've couple capital And right us really do in has EPS long generation trying pretty talked believe years. about and now longer is the growth CECL we now I impact big term and think not for on that we thing the capability that had actually in the this

in that we to to nonconducive absolutely the organic of part from recognize that great sale that while now over markets sort start to we've we always We've to ultimately, environments multiple strategy a the demonstrated power that improve to the the And equity loan right good the we years. the is think earnings said, With I manage that, enhance comes and growth are arbitrage that. and bit X the balance to did last talked But arbitrage valuation, of shareholders old-fashioned rate our want capital. view strategy why high-quality are. little a the drive sheet about share reasons way reward our was and

and loan are in desire think I balance to sales desire longer is continuing think the the we the timing, the the term. to near-term And be right buybacks with value what in opportunistic and creation to to additional balancing understand to share of that get through sheet so growth

that. any made on not we've decisions So

last of talking got think of a very XXXX the the As my obvious the I statement as seems said just to ago, CECL away. would long here January sort I those like thoughts next our of have XXXX certainly of installment I part when of with points, I in conclude X a payment our guidance. time we years expect But and

earnings XX When months last guidance, than less will we payment next that away. and for talk to you be

again, information right And start so to it time more with in what like. And to forward multiyear to us the about quarters appropriate sharing and context is looks that ahead. absolutely in planning of the a think look you for that we

Operator

of Next comes with the line Shane from JPMorgan. Rick

Richard Shane

in about miss And the love wanted we quarter, not would Can sort between mid-single provision. associated gain talk closely? appreciate this was sale any comment dimensionalize obviously sale a There's -- that of a more delve the net interrupt. so you mean years, be the the impact in gain queue. this all and the $X.XX $XXX you digits. low but a I Steve, relief and with I what is provision mix on you. to but bit -- to call so in on the that, pretax, we a on million way, to roughly There I gain thank more bit sorry, gratuitous implies to the on about will can of reference little over really that's on I'd sale conversations didn't little

Steven McGarry

pretty Rick, straightforward. think it's I

on we as like close are so the because our in securities transaction should that think in that and of not distributing is a release as the of all be precise we to pretty the buyers the the release Again, sheet balance you it. sale. gain involved too there the our process balance say we to we sample have be X% sell representative carry I that -- on

Operator

Adelson Jeff with Morgan line of Stanley. the from Comes

Jeffrey Adelson

congratulations. to And Steve, say wanted just I

I I charge-offs your part they're starting Just seem expectations the again but better, X.X% so stabilize know or your better. coming year the of in think the you've shape are line a on the back of to first on the range. the this of was similar of discussed like dynamics is net seasonality before. the much XX of half in guess expecting some from as you the with of year-to-date improves next months credit, do we about here, kind where earlier year

part that's fact question, And of are high the the of just year-over-year, years. starting are early a in you second of seeing indications part of kind any are kind right down hitting read you light several the over how thinking get delinquencies loan the of still And can that that, the improving you actually now? as to towards book or of this what student month, the X on low potentially this next on repayments

Jonathan Witter

Yes, free Jeff, to in if X, those handle I'll it's Jon. miss try anything. to and I Steve, feel jump

delinquencies the related X that year. absolutely I seasonality of And enter is waves to that trends, and largely spike is of charge-off charge-offs major in delinquency quarter-to-quarter. customers repayment. largely enter fact -- people of our sort On is there driven the exclusively, after the sort of earlier think there of by months and And early sort a really not sort an but repayment always

normalcy, of shape seasonality administration in a this remember back beginning about them have effects if basic effect we think path I of there. I the consistent. to putting in our operations year. happen effect of the they changes year, would was seasonality out in half charge-off changed is question we pretty of the the will rates larger and year of credit of if going second think If the team, a we out. those fashion were on to talk year largely -- the a most I would with And in talked were will you thought think the And absolutely there's think say our longer-term think So I I they're place practices, in I you sort change probably consistent to from but pretty slightly think that have play what view

as data different think have. we light based changes. of last had Every our I tightened year. performance year, we quarter, always experience And we those that most this in the we've recent last buybacks are did discussed underwriting the certainly year We on

I think pre-delinquency I what also as a would place as we've put we've in whole talked about, describe series of programs.

for based to customers delinquency. on be service is this profile a to even risk them they've helpful before programs So reached

we've term lot we've talked they again, those of could the in place, of second around the payments, this sort a that about enhanced programs, assistance talked and half we recovery think sort sort I could programs about interest made. of and of obviously the new be the And we've call on largely and changes extensions in put year be like. then the

We've gotten going changes think them not even year. to think all. in some more those next we're fine-tuning I And I that are into happen the fourth that I'm just quarter starting see the of at place, will to more effects things sure, play go now. out and of

continue reason sort to is economic believe feel conditions. of long-term fluctuate more back we So we I I think to there Xs, low future. can Xs think with obviously, don't isn't have getting to any charge-off down, rates to us opportunity they drive in our recognizing And high that our for

I think you're right.

I hard to the or continue predict. or I knowing to that's sort us condition for X fully take good make we have that again, X macroeconomic year of but an way expect next it effect think will can the other, to to another there, get think year progress

programs talked repayment, borrowers. think now extensively of to changes to we've student terms just pretty loan about restarted. year-long program that the you program. the payment In And has remember, federal if I It on-ramp are of generous available really has sort the

this of the there's that really We of be have point, good have risk said foreseeable dimensioned continue research, continue academic we of further And in potential over recently seen watch been we And it of studies impact have whatsoever to the material this But that at don't number impact de future. to out results. of again, students of sort we here a think as it's our sort minimis. pretty as our performance a view closely. the restart come no that I of sort to think the will and I

Jeffrey Adelson

if I expense of just growth from not year, this talked there. other. earlier. repeating, from XX% And FDIC could moving on XX% know follow parts couple up discussed about color the A you I you

then repeat next So like on that, of say confirm it like mid-single-digit it expense to growth longer-term year. fair to expenses your of kind looks potentially And that seems I view next a Is rate just growth XX% rate. will more year. want

You you historical, high-single-digit is or like line more that? double about think said growth that Or do with what low rate? in something a

Jonathan Witter

Yes. Great really I specific. question. to want again, And be

of changes elected some and I guidance of last it's too for the what of have of the specific I but the XX%, folks think to expense I Jeff, that's mid-single but over variety FDIC a I early, that the other direct could think offer sense of think And for result sort XX months any a in we whole would been is, experienced that inflationary expenses it. year have so of and expense tried to make get the and for that here, really staffing to I the of experienced And think for but the more dimension our the that permanent kind digits. that in we think this sort growth we us economy says reasons.

very clear we're at to We're level different a yet, but somewhat certainly saying pretty normal we were those a in year. abated. ZIP code than think we effects time inflationary back of this inflation not were I have last in

over evolve historic to think of I again, to more I continue growth the mid-single-digit last environment how would we be little low couple norm. than before rate be attention of set have very this would different inflationary we growth next And the consider paying to guidance. I think to to So we'll next does I year did a hope would months bit expense a year. But certainly a what we say is sort

Operator

comes it Citi. with And Arren from Cyganovich

Arren Cyganovich

taking demographically the that little The Congratulations, has is was up, been the you. years share happened? or with stronger -- marketplace? originations talk a had, something about maybe fun Or whether that a not Steve. you you It's mentioned working you're that additional in that bit applications you XX

Jonathan Witter

quarter Yes, latest yet. we don't have the Arren, data share

so to I it think demographic is So that. comment for But hard on me don't issue. it's a

part, of in large strategy continued demonstration sort employing. we've been maturation a is and think the at it I of least the

if in strategies. of down that go recently made, talked back we've stacks. But of things. We've and we a internally our as important change on So of really I made investments doubling length great what couple the technology a our some marketing think really think think biggest I is about you years, think, content-based couple I we've at

beyond more customers. to that And loans start we of at the to end student of services, the still the student are funnel that relationship, think up form us things day, help to student questions, I beyond but answers, sort related a with loans, top we can that for to if of insights customers lot open journey, and their the allows

have trying on seen our really page of really do direct through customers we to doing old what strictly And we of marketers sort are what the a what some to so is, search out mail, saying, here the of days, think old relying as days, are more content-based very paid brand to opposed and we channels. organic want borrow attract I is to best the and to

obviously of open lots and in. get who come a we strategy, customers wide That's

can those ROEs, ROEs loss selecting we that business. our high to customers think And so generate what really surprising buy continuing discipline seeing in that kind we're be in our of also in about we by we're would great and really show then I adjusted is it's applications. looking not that the pleased growth for box I'm real And our think only underwriting hit

a absolutely, results. function the it So we've I'm is somewhat set, large sure, in I'm but we feel in the to is made. And of about sure, those strategy due broader great changes competitive also, part it

Arren Cyganovich

start the like And increase payment? Sallie, bit maybe maybe a in there require much you'll we you to could that Is little It that pretty an that to expectation prepay. now bit didn't of still sounds government we loans the starting on have of talk side too about low. a have away terms consolidations remain an see in from

Steven McGarry

that. take I'll

program. the terms of difficult given structure very gain. in much outstanding look, repayment the it's to is forms richer over rates benefits program, income-based rate very, of that So the federal a the program right And loan very now, federal rates on interest and consolidations of loan And get undercut that just are of forgiveness time.

So even we interest twice about think rates. consolidating their at that beneficial people loans will think federal

note an consolidations we year-to-date, the they're see future will very So speeds. And sharply brings. down in but what we or a in increase anticipating are we prepayment not ramp-up

Jonathan Witter

I Steve if add sort Arren, said. Yes, to on just of what

thought of loans from pay then people makes cost in a of X, path on financial debt, for time. of back being sort for and consolidation of environment There think X now, refinance. move we've rates, next the a The a out of who see long-term might maybe phase people lower are there are their refinancing looking for rate who their that's their volume. loans quicker to chapter off period about But to total hire think lower there, that X group life. X, I changes. problematic and I we're of years that to segments longer

other, who people are looking said, are Steve payments. lower The to as

bit space of high have what squeeze a and said. Totally extra budget. to of might Steve are They their looking with out balances agree little

option. a the far If you refinance repayment you're programs that from than would income-based benefit in the richer a group, or see income-driven that repayment from government are federal anything

we or normalcy return X business. a see customers. things So different together, segments look others could we're to of strategies immediate future. that coming But think have on the I don't not at better or in the when anytime the be refinance It in those views we

Operator

the question line with Instructions] [Operator have of Philadelphia from Jordan Hymowitz Financial. a We

Jordon Hymowitz

question. First

final you back, #X helpful. numbers competitors your would like haven't growing the well? if and how be those That growth? seen the You is the But and #X share as market could noticed in much how guys you yet. is have market market causing the pulling much say I mean, back pulling

Jonathan Witter

don't is think, here, are If this I of enrollments try Jordan, rate pandemic, the I most a investments. which though, broadly, sort I have part absolutely peak sort because spring's those minimize to relevant them the, numbers saw growth for the hold and of We really and universities constant. certainly of think, in season, question I fall drive obviously, the question have during the little sort us, saw front don't of bit will next of we cost them more absolutely in fees. of

back more enrollment price think universities. of I sort for increase normal to a environment and we're

seen to them. growth but we of growth would the in have always share, that combination publicly the those numbers And happy once do, share have is growth So in market a and have share guess fourth the I both will we we we in market as quarter.

Jordon Hymowitz

eliminating XX% And especially word think on next returns most as or and you pick ROE gain towards an reducing year, the still digits? your heading environment Okay. is student financial in you do business consider single where sale lending are a

Steven McGarry

stretch, mean, class on Jordan, underwrite a now. those these hold that originate asset at XX% are high, business mid-XXs, to but in of I the right in continue and a returns we is are little the the to to to low this where extremely loans bit

Jordon Hymowitz

following it's think out to your had Okay. amount been but since that time do of respect the I'll you, tremendous just there. And I've I've 'XX. company for I a f*** of And Steve, leave get it

Operator

And you. comments. for final turn period. concludes will I the answer Thank it back this his Witter Q&A to Jon

Jonathan Witter

for and to service. thank specific done X, our for that, and But with closing X I'll for again thanks will calls. of Mae for I'm give one-on-one. and camaraderie call next couple your friendship you to little interest really goodbye everything your IR to months over appropriately, want look turn my follow-up a assistance, the you lot is last do as you in our X.X of say If there's you Melissa, much, Carmen. sure very you here all your to on to I questions, look a to Steve. saying it years with here. of and your Thank forward years we of the and help thank again, up always. team follow everyone back Sallie I investors bit forward business. Also, And will you've

Melissa Bronaugh

call Investors page A today. time salliemae.com. your questions and will at presentation for you replay and of this available the on Thank the be

If further you questions, This to today's concludes directly. have contact call. feel any me free

Operator

with gentlemen, now ladies may and And you that, disconnect.

SLM (SLM) 26 Oct 232023 Q3 Earnings call transcript