SLM Corporation

Welcome to the Sallie Mae Third Quarter 2024 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions following the prepared remarks. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Melissa Bernal, Head of Investor Relations. Please go ahead.

Thank you, Madison. Good evening and welcome to Sallie Mae's third quarter 2024 earnings call. It is my pleasure to be here today with John Witter, our CEO, and Pete Graham, our CFO. After the prepared remarks, we will open the call for questions. Before we begin, keep in mind our discussion will contain predictions, expectations, and forward-looking statements. Actual results in the future may be materially different from those discussed here due to a variety of factors. Listeners should refer to the discussion of those factors in the company's Form 10-Q and other filings with the SEC. For Sallie Mae, these factors include, among others, results of operations, financial conditions, and or cash flows, as well as any potential impacts of various external factors on our business. We undertake no obligation to update or revise any predictions, expectations, or forward-looking statements to reflect events or circumstances that occur after today, Wednesday, October 23rd, 2024. Thank you, and now I'll turn the call over to John.

Thank you, Melissa and Madison. Good evening, everyone. Thank you for joining us today to discuss Sallie Mae's third quarter results. I hope you'll take away three key messages today. First, we had a very successful peak season. Second, we remain encouraged by the sustained improvements we are seeing in our credit performance. And third, we believe we are well positioned to deliver strong results for the year by continuing to drive our business and serve our customers. Let me begin with the discussion of peak season results. Last quarter, we hypothesized that the fast-form delays would elongate peak season but not have a material impact on demand. While this shift in peak season timing has played out as we expected, we outperformed even our own estimates with originations growth of 13% in the quarter compared to the year-ago period. Private education loan originations for the third quarter of 24 were $2.8 billion, and our new unfunded commitments in the quarter were $3.9 billion. In total, our committed volume increased almost $1 billion, or 17%, when compared to the prior year quarter. This wraps up a very successful 2024 peak season. And year to date, through the end of September, we have seen 9% growth in total originations. Turning to the quarter's results, GAAP net loss per common share was 23 cents. These results were lower than the prior year quarter, primarily due to the allowance that we were required to build for new commitments, which was significant this quarter due to our peak season success. We were also pleased to see our credit performance continue to improve. Private education loan net charge-offs in Q3 of 2024 were 77 million, representing 2.08 percent of average private education loans in repayment. Credit quality of originations continued to show improvement. Cosigner rates increased to 92 percent in Q3 of 24, from 90 percent in the year-ago quarter, and the average FICO score at approval for Q3 of 24 was 754 versus 749 in the year-ago quarter. Our enhanced payment programs are helping our borrowers who need assistance establish positive payment habits. We were pleased to see the usage of loan modification programs stabilize throughout the quarter. September enrollment was down 50 million compared to August, a trend we anticipate will continue. We continue our capital return strategy in the third quarter, repurchasing 5.3 million shares at an average share price of $21.58. We have reduced the shares outstanding since we began this strategy in 2020, by 52 percent at an average price of $16.16. Additionally, we are excited to announce that we will be increasing our fourth quarter common dividend from $0.11 per common share to $0.13, which will be paid in December. Pete will now take you through some additional financial highlights of the quarter. Pete?