SLM (SLM) 24 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Melissa Bronaugh	executive
Jonathan Witter	executive
Peter Graham	executive
Moshe Orenbuch	analyst
Sanjay Sakhrani	analyst
Mark DeVries	analyst
Terry Ma	analyst
Michael Kaye	analyst
Jeffrey Adelson	analyst
Richard Shane	analyst
John Hecht	analyst
Jon Arfstrom	analyst

Call transcript

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Operator

Good day, everyone, and welcome to the Sallie Mae Second Quarter 2024 Earnings Conference Call. [Operator Instructions] The floor will be opened for your questions following the prepared remarks. [Operator Instructions]. And now at this time, I would like to turn things over to Melissa Bronaugh of Investor Relations. Please go ahead, ma'am.

Melissa Bronaugh

Thank you, Bo. to Second welcome Call. XXXX and evening, Sallie Quarter Mae's Earnings Good prepared open is here Pete CEO; the be pleasure Graham, we with CFO. After It to our today my questions. call the for Jon Witter, our remarks, will and

those in the factors. the Before in due contain other predictions, Actual may to in discussed Listeners here be to materially factors a our expectations we mind, of SEC. Form discussion of forward-looking should company's and refer XX-Q discussion with begin, filings statements. those variety keep future results the different from and the

For among well forward-looking over obligation predictions, to And financial as operations, these business. external that Sallie as impacts John. or XX, or circumstances to conditions or Wednesday, potential our call any you. XXXX. Mae, no after various of factors others, results Thank events the undertake to any flows factors update include, and/or occur cash turn on of revise reflect today, now I'll July statements We expectations

Jonathan Witter

you, Thank first for And drive our key customers. hope results delivered we solid serve discuss evening, XXXX report third, results believe the by progress I We remain well the credit performance. to core [indiscernible] joining our a XXXX year away and Quarter of deliver our second take successful encouraged quarter and we continuing year. we for half everyone. We our pleased on results I'm by toward you Good the Mae's business in trends the positioned to Second to quarter Sallie goals. today messages and us today. you'll X Thank Melissa. strong to in are

share second the diluted GAAP Let's XXXX $X.XX begin quarter. $X.XX in the quarter's to was compared in with quarter as the of year ago EPS results. per

quarter business in is million, of the sale originations over XXX. year-over-year the second up have Our quarter, XXXX. In Loan improvements the from XX% seen quality the results credit trends increasing average combination were of the cosigner of and gain a $XXX with increasing of in score our the which to of XXXX FICO by for to slight points second second performance, credit quarter X loan and XXXX quarter on of XX% XXX strong we rates year. driven a were second originations improvements X% in from

credit of continue with than We were in to down our QX from loan of the and better quarter. expectations. is This million, points X.XX% be loans education XXXX representing pleased Net and through our private XX second performance private basis second quarter $XX education repayment. the average charge-offs

the as to performance be habits. We Our adversity future enhanced to roll payment rate observed quarter. establishing through programs payment forbearance and late-stage remain optimistic positive saw decline this quarter of work delinquencies our second as $XX.XX. time for last helping $X billion price we The to remained return strategy X%. sale growth capital by quarter the gains. this generated our the XXXX, million year at average in X.X In sheet an balance in executed in compared over are improvements and year-ago million quarter loan second our the proving that we both buckets shares year. The while expectations about continued We $XXX X% of at a tool to periods repurchasing continued useful borrowers $X we delinquency

average strategy reduced we XX% in the XXXX this began an outstanding price of since $XX.XX. have We by shares at

additional you through gain the back to the some to We sales use and buy year. released of Pete will and highlights loan now to from quarter. capital take strategically throughout continue financial Pete? the expect stock programmatically

Peter Graham

you, Thank Good John. evening, everyone.

discussion of Let's key continue with drivers a of earnings.

equates net which X.X%. of interest XXXX, income of interest quarter margin earned For million we net the $XXX of to a second

plan business with yields, asset in expected performance. compression catch of rates NIM we XXXX up our funding our to the pleased we and are NIM as While ahead

to target. mid- low appropriate to continue range X% that the is NIM We the the over that term, long believe

for quarter release with was $XXX income new XXXX. during private from affected economic that $XX our the of credit offset the primarily by Our second this total associated originations. losses of statement we volume provision on $X.X million loan completed quarter, an was million loan the provision the billion outlook, education The sale in growth quarter improved by

which sheet reserve X.X% receivable of includes plus Our of end the [ portfolio of $X.X accrued ] billion. or private the education is the $X.X billion at steel our quarter on-balance the total second interest loan exposure,

is improvements as with positive reserve the in marginal first at decrease credit year trend seasoning ago rate X.X% the practices the our our quality credit education the consistent both the well the year rate the of improvements delinquent or loans at of end experienced repayment quarter. a from ago the days Our shows of originations. Higher well reserve in collections the from X.X% improvement and X.X% as end and as quarter in more reported levels XX loans as quarter the This in over and reflects quarter. X.X% of at the of or first of end the

quarter that their delinquencies on more we X.X% about increased that earlier, quarter. We remove usage who quarter or borrowers programs in the borrowers X.X% Loans to the are they ago last while our our forbearance. helping of this of days year just of at loans the loss and believe programs enhanced mitigation repayment mitigation manage the both are through modified and spoke in establish discussed effect becomes and had compared adversity end X.X% loss payment XX the and as delinquent at to adjusting repayments the of rate. our patterns. When delinquency mentioned John positive I and the make numbers periods As

launch rate and for programs with majority and these second the for status. Approximately payments observed their end The our of as are as these first enhanced borrowers pleased exit And of our modification vast payments quarter making of in X current programs borrowers enrollments of payments of exited or within those loan to in programs working is we're new expectations programs loss those in May loan qualifying returning have grace better program, of As the enrollments making in the to stay We borrowers the the loan in we programs of payments quarter XX% June. and and in line the borrowers financial are making delinquencies the since believe extended which been enhanced success than expectations. The pre-COVID. their early increase intended drove covariance completing of normalizing. in XX% loans the days, the borrowers programs quarter, have footing. level have with helping most our our of in compared success. The our over past enrolled our performance while at that mitigation their majority level with our in

As we an be continue the us there monitor opportunity for further to performance, programs. these to optimize for may eligibility

and $XXX million the prior was in noninterest quarter to of the million increase quarter million $XXX quarter ago compared were expenses year This second 'XX. quarter. the to $XXX Second in a X% compared

and capital was equity are with total XX.X%. assets. solid. liquidity the liquidity risk-based quarter the and positions Tier end quarter, XX.X% capital our We At total X common of second of was capital ended Finally, the XX.X% of

sheet is to to shareholders turn grow was to return back now assets of measure the we're risk-weighted GAAP very forward. capital business equity which loss the well John. XX.X%. a our and on reserves capacity continue strong going believe Another over loss balance plus I'll loan call We absorption positioned to

Jonathan Witter

Thanks, XXXX. we momentum in that full second and of share well the year that Pete. we the agree positive hope you my I that for quarter executed belief you have

fast and complexity reform delays for the recent on touch with in overall Department been fast technical briefly business. The reforms its me the and rollout has process. the the implications Education's of Let the issues to of of our due new delay associated primarily the launch

led delayed students that high completed school are to schools regarding exact families to financial school. Through faster and processing rates the causing families. amount packages mid-July, for seniors for students loans the in This families Given availability, uncertainty aid many for completion private down the needed delayed to the be and and dollar later delivering approximately date, aligned issues form has our still primarily improvements us this caused decline to have XX% first volume and allowed this through applications. year-over-year offset small of remains processed. we due volume our in At have with marketing a in decline believe the expectations, X that months these operational being completion to XXXX. To application plan with point, corrections

of the peak our rebound season with school possible. Internally, be for peak our but our perform true other season self-service to into [indiscernible] be and and fast decline that EPS as available able that help the catch taking our an translates we range. The improved frictionless to we remedied up enhanced will with be expectation peak guidance staffing assist confident other our enrollments, back-end incorporated with volume to assumes elongated with other although allowance through expectations families the in we and compressed. this and applications end at range. impact elongated to applications. In opportunity our in to Our that we end higher will schools provide the we season Through and are on with on does decline the digital minimal at financial the end process compression If we this us case, prepared likely Externally, process. issues materials calculation are the as aid make our enrollment remain here continue would our are scholarship higher will to our of on the originations year, not in schools and partner families, is the for have and and less into guidance capabilities back-end year the tools overall search website, capabilities actions. a

discussion Let conclude guidance. XXXX the me of with

were this and to mentioned activity prices favorable line loan the I at that with been for year earlier in sale As expectations. evening, our has slightly our

reduction XXXX, X rates originally we yet months into guidance. the seen we expected addition, set interest in not have when In

now this $X.XX net to we be share. The the better-than-expected on continuation factors to trend credit GAAP that usage led and the of and updating revise X continue enhanced performance well as GAAP earnings impact our us portfolio expect these as and be should of caused for remainder per outlook of expect the to believe diluted months performance, common $X.XX million programs first $XXX per our year. now through mitigation has success We to $XXX loan to success are million. year through the XXXX this which X charge-offs between Given has we credit loss diluted range total positive between date XXXX The of share. we EPS full of with the

communicated some between net for are guidance percentage charge-offs earnings year-over-year that go that, call reaffirming last XXXX be and noninterest of this X.X% ahead the don't our expense expect metrics. and loans questions. the we We growth X.X%. At to open as call repayment for expressed well average we as on time, as a private why loan originations up and With education Pete, the we

Operator

[Operator today We'll Instructions]. TD first Cowen. go Orenbuch at to Moshe

Moshe Orenbuch

Great. -- a guess, like how and successful also bit know how And you origination just unsuccessful therefore, And this of competitive the stage? you're [ college John, talk when what's be? Faxes viewing you essentially kind in I ] enrollments at environment will loan outlook the and of your or will could the about terms little the

Jonathan Witter

Yes. questions. those Moshe. to Happy touch on [indiscernible] both those

think we fair day. I and all, gaining book ] the are [ call, of I'll confidence First the, more catch-up say in to each fast what it's every

peak are of versus track narrow our into school is a on sort time. We application rates volumes seniors years. for obviously we of we That application this narrowing. season gap sort over tend that high year's day seeing So gap basis, completion past

starting So I described remarks. see of positive to we prepared are believe I of signs my what we sort think in

of will the likely students the to certainly, likely of guess have potentially that some good sense So enrollment. stretch the But bit you a and give later really closing they waiting because Not than will good be expect into sort bills, time we think schools third I of there it progress. do could to situations and into gap more ends and translating see the will little we be it, the peak quarter, catching be but of of some my a sending I we school-by-school, is even season don't of up of get it at how in before not a schools sort think We quarter. fourth loss we in think will it schools expect it, the will be feel, -- remit. And later do pretty want quarter I I we end a the is have of good to into think sound normally by third should of I we're them. true smart to the signs sense think end about that early sort day, the

answer seeing competitive always part compete And get season. a discipline peak see your maybe competitive the return. it's that out discussed to years. going I [indiscernible] of there nicely think We've sort marketing and in have good in not we and of strong to sort and we in do. We more a aggressiveness think that that question, to But the our the where here we'll think in got causes intensity, little like given even I sort serve think nothing exercise past who I at of the we spending think around continue very place spend, of applications my great part is optimizing of especially same channels the we us marketing market. early to the Moshe, year, undue the competitors want touch concern don't delays. we're lot I sound, this some second a too, customers of coming because of We slowness

So sort I we within of and And to how peak like season that forward seeing unfold. goals think of and to we meet originations our continues well to range positioned for all somewhere year the are look that.

Moshe Orenbuch

you Great. And credit did programs. other about just modification side, on and success the of the the talk

like potentially Just perform you protections maybe what for X could those terms have the little And Pete, or that causes you not? -- wondering what talk happens to a that mean, a bit. on eligibility that said and investors programs. just in them further these you things. expand could I touch about how I'm if successful have of they're if be the you or optimize

Jonathan Witter

and sort of I Pete don't that why free here. Moshe, feel see in to I weigh take if can

targeted its of had more more flexibility. What In each that think in terms series who segmented employing, to very And optimization, you we've the programs flexible, very broad been back is program. closely we've needs previously about and of worked a the assistance. match we the a of if strategy and you replace working forbearance customers our requesting been well it with of that is go

those we've little with as think bit opened up wider we opened programs, a I up eligibility. have

a a is there down possibility bit. think I to us for tighten that little

also on a we the be in moving they would margin, ability not people qualifying or So generous of their that slightly avenue it the from pay to people to assistance that tightening terms of willingness further. actually programs. slight slightly that could both pursue tightening more terms for has because generous could And less be the believe want and without co-signer programs and to sort of in

I we and put a of control analytical pretty sort framework we've important to that note rigorous and structure and think have it's that. that around test

making in sort the qualifying there? absolute they the coming once the that Do other after relative like customers think time the we we payment? look Those on way I to early they absolute current? their metrics delinquency sort a and absolute of immediately by, we the program an we would stay want time in basis. On Are to as customers Are against and understand drives like What's more back performance ultimately, in programs would is an of at success basis, the these characteristics. look at. And the stage those would greater perform certainly, they're scenarios So after both program. they of be kinds of the goes they their metrics look how a then throughout leave and of sort sort have even on with window that payments?

in our that relative capability. and of a way do also test We kind through control

for relative what on versus terms we're had not expected a that well perform lift the have on against would is what that getting and people we're both basis metrics ultimately, looking program been we absolute So offered.

Operator

Thank now Sanjay Sakhrani go Woods. to you. Keefe, at next We Bruyette &

Sanjay Sakhrani

relates gains their to officially gain now competitor might on market. second across I read of of assuming on size year, mean, is portfolio. we a big then towards guys are the pretty as I I a you mean on sold any look what a share at sale? the for they their get guess you note, as it Question And portfolio potentially just out half the attractive on the that? this gain to there related sale of as

Jonathan Witter

take let Why second and it's first, I take Sanjay, X of don't I'll the the John. questions. Pete your

question. think built left plan, true into the I a of [indiscernible], and we us originations of competitors other versus bonus in of think our we that for large maybe our in to marketplace. what business certainly a your space those a to have we've from exactly is absolutely look sort Yes, gains do gone And part competitors seen answer our otherwise But from when have gains the would a past. To I that ours. would the or large competitor competitor it's types you leaving the come of share hard series competitor track at It to leaving That give large is of expectations. proxies.

for we our from in So competitors new at how line originations have, of trade look their customers farm that to are can many coming example, say, bureau. who

know of we with And we are X the trade that It the months time. a what that, accelerate have the coming first offers. don't new-to-firm I have to what seen ] seeing competitor consistent the with trade line would expected nice about. And from increase we any originations are is happened. over the our of increase customers year of that is asking [ that that exactly in a line you be XXX% is think products we Now for. of for what have But competitor could

enrollment. spring If mini effectively season business exited competitor this the you the of peak remember, after

that better first accelerate true get second a as that you are the in to But of expected little a continue the better quarter. truly seeing expect have have grow, into on the done season and quarter, loan first for in little Pete, maybe we where are [indiscernible] time. we bit maybe peak those to improvement for up customers would we we competition to So to heart really perhaps the the sales.

Peter Graham

yes, on Second part, loan the sale.

margins caveat it's on think not was because apples-to-apples credit books. of there's in that one that slightly I our had business necessarily an the book better quality competitor comparison overall the than

kind would that that's basis loan slightly on So a better one. I overall recent got. premium probably our premium the than a gross sale say of they

of reflective size higher a And -- they so transactions. of much a but marginally they've got quality had probably that's book, bigger credit

size some it for there. discount So took

I in overall backdrop that did demand of the And were bidders that that and consortiums that our the the for the of ready take think just down builds there on. get asset terms up though, class. be speed one only to class to invest is we're expectation entire and the that this multiple work to to bidding asset portfolio ready were on

there And for who a the demand in were money work. process after so were but saw benefit a also eager when of what we whole the funding has in for studied sales space. was, asset gets both class securitization terms regularly and to the that lot demand [indiscernible] on loan done similar we're put of people And to that

success encouraged we're the of by So transaction. that

Sanjay Sakhrani

impacts. success on as one now? hitting you maybe charge-off mitigation loss the that point you where it programs, of to where remigrating. the a of or do go you Just can better given sort lower? steady-state sort thought Are rates could think sense we Or -- So us I anticipate give you than of see of follow-up these I mean would be before? the just be charge-off guess program

Peter Graham

for this And consistently at of Xs, sort touching the rate. X% still updated the Again, end as think the Yes. term. of of high being of sort for we're the guidance the kind that long-term for viewing this year end range top low year, noting our that low longer is of guidance goal charge-off net I

And we real overall goal already in our So it's on, the the looking were we're to. no accelerating view long-term encouraged we of that change by that programs. in terms but the success journey thought of we're we think

Operator

next go We Bank. DeVries at Deutsche Mark now to

Mark DeVries

of loss release, the to kind of Where some roll it the Yes. early alluded you believe is Thanks. to mitigation of [ looks kind of metrics But of efforts improvement from ] that some your we in can in on most the DK see rates. stage. kind manifested? credit default I like improvements the

Jonathan Witter

quite that population normalize impact sort terms the stages the program I way sort of in would it rates Mark, of through should of are continue early as at you think numerator the think and programs, I bit I here of stage and later most little about end flow not to the delinquency. I on, fewer very a entry There's so customers think cure think in for help potential the of credit see delinquency. Maybe you through is in will the denominator as math those that of of sort more much the bucket. and

rate customers delinquency my really is about. should metrics low their how we guess Because that help see to net of high that I of But is impact might to depending ultimately, the earlier attention getting charge-offs. the in how you'll mix counterintuitive different X, change is buckets, the actually mid-stage at to X real So on charge-off journey. buckets, through But sort you you those of happening in -- most Pete the close will of later what payoff are points talked what's we think, net there. customers effectively the kind to see pay some

I that's at. ultimately, look would So what

Mark DeVries

a to Okay. who do to in drop how from borrowers you there rates repayments might are of get Great. sell Is can loans And around we sales appear of you be risk? material risk kind managing here? if about off higher the interest thinking anything loan

Jonathan Witter

given levels environment. interest Yes, believe today below think Mark, rate certainly I sort that of consolidations the normal are we

a but COVID, it of sort drag and low overall of of environment sort interest was though, during the to of of of post business. through to think a a performance major the remind not kind certainly as modest the even was that the of nuisance I financial incredibly volume historical business, a course performance folks recession great would rate sort consolidation matter I the

of drag were as day, low end And think the rates I at so incredibly wasn't if it a when at the major they got.

will is saw. it we're -- while our certainly to belief rate going almost the months of the course ahead, quarters think the probably some I decline see back not of sort we and we we'll over levels that

give context. Mark, I as again, just that, historical you So

think we within to that ways look are context, likely customers to proactively continue I for identify to attrit. who

not at We that have of of certainly code those doing strategies. us expect that economic have to of to relationships of look for proactively, sort yet deeper deeper math of our And doing refinance develop luck the go us we data We candidly, the which found to continue better cannibalization with customers and all sort sense we at allows today. customers, the future. we're and sort that just doesn't in perhaps make as today. But would

Operator

now Terry to with We'll Barclays. go Ma next

Terry Ma

mods that? the of how So and delinquency loans if delinquency? that of ex guess, sequentially kind much improved your basis of versus rate but like modification I kind is of increased just the about by of percentage points. we those some at basis loans XX How exited should I of look interpret And seasonal XX increase, going as into of repay, kind points a kind loans the

Peter Graham

Yes. noise be in Again, I going quarter-to-quarter there's those think to some metrics.

success of the the broader I at borrowers. we're is trends overall looking think and those thing that

try parse much those. into too So I wouldn't quarter-on-quarter and movements necessarily read and in

Jonathan Witter

those numbers. in And meaningful do seasonality I there is think

know distress repayment. customers certainly more early that experience financial after we example, For

the of large And bit and the year, has throughout waves you a November little so can course lumpiness other wave smaller of prepayment with as Pete get described. the

Terry Ma

Got it.

we repay So the metrics? delinquencies a periods. then have just kind of credit kind now this that charge-offs. But exits your into seasonality of expect the interaction [indiscernible] X they extended roll entry of question. grace my waves followed and Historically, the was kind to the follow-up margin Should emerge have big new between with you and

kind merge? we sort kind to Or should some it of just seasonality of is of So be to expect just lumpy? going new

Jonathan Witter

fabulous that I example, be we year absolutely really reemerge. customers if don't certainly, I is new like have experience enough probably those yet sort trip only there brand some grace curves program and Yes, who [ a We have at things think OX.] advantage again, taking X will actually if think from just gotten we of early-stage customers estimate there coming know an repayment. are. But delinquent anyway. those it extended that of to some for elongate what very to they for bunch are delinquency which could of certainly That think of are customers in prevent will people new targeted would barely to their

of kind out. have those effects of playing you So both

like. guidance I change experience little what answer delinquency by great provide the expect that think sort not simple look sure more but would is, yes, we I maybe So the quarter-by-quarter, may a I'm than trends enough bit, to of month on month would gives to have exactly those and gets

Operator

Kaye hear Wells Fargo. next We'll with Michael from

Michael Kaye

CECL don't by lower little implied lower second talk in but that's EPS some back is first seems wanted midpoint half a If other half. by on perhaps large about you peak the just any QX bit just quarter, consensus for any reserving to happening. the new conservatism it maybe too. give a probably EPS the ] mean QX Is really there quarterly [ guide drivers? and EPS that season? I -- dynamic given than $X.XX have for know at million. is about EPS? I Or where Is $XXX that a half, the implies I likely the out EPS ] million [ $XXX estimates guide in lot our the driven second The just loss you a

Peter Graham

Yes.

of earnings for in on because season most driver range going originations. the John of year CECL trend around second assumes assumption provisioning half the to would provision upfront remarks lower made you coming guidance year. that's primary be the our And I to prepared and originations out our have to in we're comment pull peak going where comes of the we towards think higher in I a our And end of that originations. his that the to back new provisioning of that's

strip to we I you of historical half. sort that half think the have we do loan of sales, in year if the and earnings quarterly you'd think second back see I first look lower quarterly tend trends at than out the in

Michael Kaye

right. All divided the only I XXX to And Are first committed still in you repurchased about [ to like my the XXXX? repurchases like, half. about taking X. looks doing according million just share second [ authorization question repurchases. in by ] in ] the share $XXX And was it was that get $XX million math, by

Peter Graham

Yes.

in to which So I back programs the would complete programmatic repurchases is going our we you to with and started sales. we're we the point be the we're loan to going what first throughout share as sort stage of year in quarter,

So second generated loan in quarter, been amount the that of when implemented completed of another we that when deployed that generated capital capital that we in that program running a second an and and could that's put be loan the into completed out February, we the we plan. the sale sale

you'll obviously, the we that versus a continuing and move So will you tick year. up see second as quarter through see first,

Michael Kaye

was slower in seems I mean I programmatic ] the [ pace million the expecting. a mean, least do is a $XXX it lot intention year? what than I at to plus this

Peter Graham

to guidance to what Yes. split broad was Again, as authorization we roughly the going was how and that gave out. some

exactly obtained We this given on guidance year. we specific have not we were that or level the

Jonathan Witter

But guidance has the not broad changed.

Operator

with now next Adelson Stanley. Morgan Jeff to We go

Jeffrey Adelson

the like looks did with model the new up that looking come level, I rate it going you at future to forward. implemented guess a Yes. reserve loan default I notice XX-Q,

change the level some us what I model? process such from might to into So the sort reserve able of we color expect a decision the maybe guess that. to be just change in changes And in give or

Peter Graham

Yes.

tools I no difference different plus was result, not around improve I an fulsome in process the there model that of absolute process look second we're precision capabilities in take development the process. when prior our employing organizations we completed their that model say material most reduced the think were the and as We the models. overlays in -- in process modeling. more of those. new But what you level we overlays is to improvement computational would of a that in are quarter. The just And models have a plus old the difference, improvement the the And generation continually we're an that implement over a were in those and model themselves involved overlays, models regard. of implement very as

Jeffrey Adelson

little I curious bit not a into pre-COVID maybe in grace the more? expand you extended performance side. And on success versus dive Got for the maybe just rather doing follow-up, that also or like lot were how the little just it. just as successful, why are given or the forbearance level the on the higher -- was Just of differences of thinking just that you're programs. retain the you on And on circle you'd loss you're more eligibility that rates just the back bit to my about maybe a commentary that guess and growing up for they're you on you're almost could -- I tightening think modification I finding on revenue a if seeing too in mitigation side?

Jonathan Witter

think the your optimize. question why I Jeff, on on

that regain more the every a that difficulty, First do say It experiencing want and And answer. and day, they importantly, at we great the financial so. financial think foremost, answer. willingness we ability great help their sort to is to it's have a is customer customer think end footing to of economic I the important if of is

that have to By a said, their a time impactful help policies that ways to it every there's want cost way, for the the that single someone cost do economic be if to can who some so of to be the that help us. again, by which more them. is we the a rate has can has total we there way, we through footing, that, willingness, be reduction. and can economic increases some of It through the And a that financial expense the also and With be ability elongating customer, sort to makes [indiscernible]. And interest expensive of customer the that regain rate can potential there. alone,

could the impossible want And people. And individual think can exact to where of that's as them case wanted. case And person and would level a no to their really they for of world, that give more. precision so have you you I want as tailored you how precise is program be what to each in you kind tailor know made and as It's this people perfect in you a be an needed never we individual and way, impossible by that to accommodation with the execute. to operate. help

not that So help they right for to is I to think begin need the to sort whole people of get the exact continue with test-and-learn program, amount feet, on them point shareholders which optimization more capability that. great a of that may than not us helping not or but great [indiscernible]. for as for back their [indiscernible] be as individual as may our be them hopefully

to that. is think ability to goal So customers if are and again, back get the to will make that I on willingness good the to helping really do so. want to But have always optimize we they financial the look sure I we stress, footing

imagine, as don't In to terms the those and grace extended of Pete you versus of the difference we've terms regular programs. material of data. the any performance of sort relative of expectation rate seen programs, can get I think success in other I

we're the them. see think material or with really distance space programs of any both and of don't I performance between those sort happy absolute

Operator

Rich JPMorgan. to Shane We next go now with

Richard Shane

has of the of ever position what one repurchase. cash I'd like season coincident pickup your a peak also in bit your be into your peak in should to strongest been the But strongest that little sort extent headed your One as on historically ever. some makes or sense high buyback. that To deeper is dive seasons it's observation, with been.

think should So how about I'm we that. curious

under $XXX million that in there's of runs remaining million $XXX some press even authorization. about say that that, in quarters. Is should release, correct? the out remaining And that I the assume distribution believe that we sort that X horizon? You over

Peter Graham

would and You'll years. quarter, to the X said half first that it program. when a half obtained that X-year recall deploy was And what look in was authorization roughly over we that we we authorization the

] with the and to capability. year, transparent operate repurchase in completed to I that, previously what proceeds loan that of sequentially [ very sales program funded terms of the said in with coupled we're from how And this deployment programmatic so be share the prior question, going we've been

we during of the so your But elevated for the we themselves. the cash comment balance, do that. reason part but to really that's peak tend on anticipate other season, point, for can't the and So build than to needing funding also programs that, I

Richard Shane

Got it.

of originations? in Is different second quarter the the on to it data? question. randomness different nature Or Is small a second A is the sort The cosign rate in year. type? a in drives quarter that there dip Okay. every borrower Is something constituency of it seeing weird down seems it that? just

Peter Graham

Yes.

that's you enrollment think think a and about of cycle and if I traditional it's enrollments, spring disbursements fall are. college the cycle, kind and just where

So nature, to it's off our of year. to by be quarter is that going second during cycle. types disbursements be its of time be going -- that going nontraditional smallest it's quarter to And the It's traditionally period.

Richard Shane

I what That's observation. seem be thought. don't schools later it. one going Got Jonathan, And to then year. this Anecdotally,

Jonathan Witter

[indiscernible], but We experience. a We'd in I are, hear hope are that. want your kids having Please interested and know be some experience. to great us about send your I

Operator

at Hecht to We'll Jefferies. John next now go

John Hecht

trends as and am interest have on my actually the margin -- pricing your but and curious that I in answered, influence quarters? primary how to net deposit questions perspective been asked coming I might

Peter Graham

we're not leader in a setting terms deposits. Yes. market of Look, pricing and

of to a in and of the we terms the rates rate to pack in of middle that's follower I a into posted year, tend aggressive up will kind bit in some coming in we reducing market regularly, so monitor be sort be And of and that base say little backed and rates the their of quarter. second tend on leaders that the this were gatherers. deposit pretty posted

lockstep as changed as we and expectation into see you'll overall the lag CD in the my with -- of pricing to pricing funds whole are rate But lot. is rates there's space. deposit continue in going tenors modest get a term ebbs those the And needs move terms flows environment at you'll deposits. of And sort of a depending the has to that rate cutting the different that see decreases. to in gatherers, rate on of for volatility deposits So posted kind primary some on start of not Fed demand

John Hecht

Okay. going third a follow-up your good this excuse to a think the tied of and quarter buyback do the follow-up loan your me, a cadence thinking I the mean to -- cadence or That's I went first me, And is I sale were the answer. excuse is of year -- into you in quarter. a sales.

key, do You've the know of Is Or market it the going along think sales? prioritize forward? how are how is it you done first the modeling But about X there in obviously, -- originations. conditions there of us for any timing way I you with quarters. kind to do loan

Peter Graham

I loan the year, Yes. sale. we took we to And was kind in hard I conditions to this would half just the say volatility that of on appreciate sales thought something with an the environment in it's execute what advantage be second second quarter for definitely second optimal market of model be been that's our could market-driven. But we're the largely year. what done of of to this glad think very year, we given

Operator

We RBC. go of next now to John Arfstrom

Jon Arfstrom

Witter, may a closer issues, terms issues thinking estimate questions. your mentioned faster that in of took John how that to couple he caused Jon first for expectation. be the in to would decline you you some a for X% Any small of -- these was you're volumes the in without But of much my you X X% as earlier have months.

Jonathan Witter

I the where for think we're we thought would largely we be exactly year.

said and spring. tale growth our in cities. year [indiscernible] a would I be two of think follow this that John, the follows, business, spring we've always fall,

of this last fall. the done So year season had we up really we've peak the originations follow

to think was to growth origination really gains one higher share chance to get and phenomena. I that of to the season peak the start pick up questions a earlier

exits would then a fall. expect just I next big large do the of hopefully to you see starting expect we'll happen will do year. But X hopefully we the the be again we that to think that competitor year better as we It now. And follow question, be because in will X in market, this better and dealing medium said to come that all should see not that previous spring, there. with years something call also So share it won't while we're X

And a despite things the expected season did that proud and we them like be really think hard peak a for think seeing. applications we exactly for get. be. marketing So fact of to bit channel incredibly kind on funnel that sort we're I of working little fall we applications, where phenomenon But optimization team program you're the -- a pull-through the get optimization I the and year to better spring below it's thought again, versus we would of where around are

Jon Arfstrom

Okay. you, is end high That's And about for end color. one expenses, the the to a simply there? thanks cleanup on of something versus there driven? for volume Or else is the Pete, then, range, good, low think the that

Peter Graham

evaluate the some marketing. of of -- thrown is through volume we've peak problem to our the extent delivering people Yes. a think and exposure, guidance the type given spend But and there. on variable going less focus the on to end largely That's that self-service year. It's into think the that I we'll focused rate capabilities I No. against be I more on we begun like this organization. have at largely, more heavily of and technology, fixed to we transition mean

tight as the as And it [indiscernible]. is so is range that's why

Operator

Point. And question from Bellona ] final our we'll Compass at Juliano [ take

Unknown Analyst

and record curious curious a higher The registration if the fixating, should loan of think over I one a start lower should that our exceeded there's we next sense to about next was, you over few there's I'm quarter. I'm direct at about curious to how thing very the [indiscernible] here? see the on kind about mix was Congrats where cadence sales the that little question this when quarters any obviously, quarters trend think of few how yield just loan well. about least of

Peter Graham

mix label ] question, floating [ on If I originations. fixed your versus I that got right. think

Unknown Analyst

the I'm the points trend about linked drove down that think count bit the XX how to should little expect on anything basis specifically? We over to here? Or curious How think if about few and -- to quarter. came a the there's that yield if next also lower we yield continue quarters. portfolio to

Peter Graham

Yes.

couple over currently trended trend peak and originations the expectation have more fixed is seasons, couple of more come to rate. origination skewed our over will or and XX-XX be to time retention, rate rate a points more So overall book of XX-XX. that has variable last One, back of there. that more fixed norms of the back mix versus we historic

of terms in So that future, outlook for point be my there. the would

not the quarter-to-quarter, of read reprice it's that I don't in more we're a rate, loan terms that heavy of as because fixed given going changes the into I rate taking But rate on we've that [indiscernible] towards and the basis. much really sales that year that more -- a will primarily the anything driven move the skew blended rate of quarter-to-quarter. think selling slice wouldn't impact in I kind to to probably than this on that portfolio. monthly is by done overall portion the during all floating That's dynamic. The book off. the the of period book

Operator

no comments. appears today. Witter, further Ladies any back to to and sir, for closing questions gentlemen, it you, Mr. I'd turn have we things like

Jonathan Witter

to and you today, And third interest to closing help results. to your Melissa, Sallie thanks for back in everyone forward with that, going Mae. some for and quarter look in much talking dialing quarter so turn Thanks business. your next the about We you to I'm it for

Melissa Bronaugh

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

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

Operator

Bronaugh. Quarter Webcast. a wonderful this XXXX today's time, again, Sallie Earnings at Please Mae Ladies and this Call evening. Goodbye. your line Ms. disconnect and concludes Second you, Conference Thanks. Thank and have gentlemen,

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