SLM Corporation loan originations exceed $5.1 billion, growth of 24-percent
Company’s total managed portfolio tops $85 billion
Reston, Va., Oct. 16, 2003—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported third-quarter results that include a record $5.1 billion in preferred channel loan originations, a 24-percent increase from the year-ago quarter. These originations through the company’s family brands are a leading indicator of future acquisition volume.
“We continue to put assets on our books at a faster rate than we expected,” said Albert L. Lord, vice chairman and chief executive officer. “With colleges creating new seats and students responding to the low interest rates of the federal loan program, we see strong growth continuing for several years.”
Sallie Mae reports financial results on a GAAP basis and also presents certain non-GAAP or “core cash” performance measures. The company's equity investors, credit rating agencies and debt capital providers use these “core cash” measures to monitor the company’s business performance.
Sallie Mae reported third-quarter 2003 GAAP net income of $480 million, or $1.04 per diluted share, after cumulative effect of accounting change, compared to a loss of $(62) million, or $(.14) per diluted share (split adjusted), in the year-ago period. For the nine months ended Sept. 30, 2003, GAAP net income was $1.3 billion compared to $486 million in the year-ago period.
“Core cash” net income for the quarter was $228 million, or $.49 per diluted share, up from $194 million or $.40 per diluted share (split adjusted) in the year-ago quarter, a per share increase of 23 percent. “Core cash” net interest income was $404 million for the quarter, a 13-percent increase from the year-ago quarter’s $358 million.
“Core cash” other income, which consists primarily of fees earned from guarantor servicing and debt management, was $168 million for the 2003 third quarter, up from $137 million for the prior quarter and from $134 million for the year-ago quarter. “Core cash” operating expenses were $177 million for the quarter, down from $183 million in the prior quarter, and up from $169 million in the year-ago quarter.
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 Sept. 30, 2003, was $2.6 billion, an increase of $820 million from the year ago total of $1.8 billion. Tangible capital was 2.06 percent of managed assets, compared to 1.41 percent as of Sept. 30, 2002. The company continues to dissolve the government-sponsored entity (GSE), and at quarter end, more than 70 percent of managed student loans were funded through non-GSE sources.
In May, the company announced a three-for-one stock split in the form of a stock dividend of two additional shares for every one share already outstanding effective June 20, 2003.
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, Oct. 16, 2003, starting at 11:45 a.m. EDT: 877/356-5689 (USA and Canada) or 706/679-0623 (International). The conference call will be replayed continuously beginning Thursday, Oct. 16, at 3:30 p.m. EDT and concluding at 11:59 p.m. EDT on Thursday, Oct. 23. Please dial 800/642-1687 (USA and Canada) or dial 706/645-9291 (International) and use access code 2854518. 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.
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 $85 billion in student loans for more than seven million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Celebrating its 30th anniversary this year, the company opened its doors in May 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, Sallie Mae's parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, the company also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical outsourcing services for colleges and universities. 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.
Supplemental Earnings Disclosure