SLM Corporation

Please stand by. Your program is about to begin. If you need audio assistance during today's program, please press star zero. Welcome to the Sallie Mae First Quarter 2025 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 one 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 headset for best quality. Lastly, if you should require operator assistance, please press star 0. I would now like to turn the call over to Kate DeLacy, Senior Director and Head of Investor Relations. Please go ahead.

Thank you, Margo. Good evening, and welcome to Sallie Mae's first quarter 2025 earnings call. It's my pleasure to be here today with John Witter, our CEO, Pete Graham, our CFO, and Melissa Verdahl, Managing Vice President of Strategic Finance. 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-K and other filings with the SEC. For Sally 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, Thursday, April 24, 2025. Thank you, and now I'll turn the call over to John.

Thank you, Kate and Margo. Good evening, everyone. Thank you for joining us today to discuss Sallie Mae's first quarter 2025 results. I'm pleased to report on a successful quarter and progress toward our 2025 goals. I hope you'll take away three key messages today. First, we're off to a strong start for 2025. Second, we are encouraged by our early credit performance. And third, we believe we have positive momentum for the rest of the year, despite uncertainties in the broader macroeconomic environment. Let's begin with the quarter's results. GAAP diluted EPS in the first quarter was $1.40 per share, as compared to $1.27 in the year-ago quarter. Loan originations for the first quarter were $2.8 billion, an increase of 7.3% from the year-ago quarter, a strong start to 2025. The credit quality of originations continues to be solid with incremental improvement compared to Q1 of 2024. Our cosigner rate for the first quarter was 93% compared to 91% in the year-ago quarter, and average FICO at approval was 753 for the first quarter compared to 748 in the first quarter of 2024. The first quarter also reflected strong credit quality. Net private education loan charge-offs in Q1 were $76 million, representing 1.88% of average loans in repayment. This is down 26 basis points from the first quarter of 2024 and ahead of expectations. Our positive credit performance in the first quarter of this year was driven by several key factors. Seasonality played a role as the first quarter historically delivers stronger credit outcomes compared to the rest of the year. We also continue to see benefits from enhancements in our collection practices and the effectiveness of our expanded loss mitigation programs. While we are pleased with this early performance, we remain mindful of the uncertainty created by recent policy changes and their potential implications for the broader macroeconomic environment. The $2 billion loan sale that we executed in the first quarter generated $188 million in gains, a high single-digit premium, an increase of $45 million from our Q1 2024 sale. We expect to sell additional loans this year with market conditions dictating the timing and our private student loan portfolio growth targets dictating the volume. For the first quarter of 2025, we continued our capital return strategy, repurchasing 1 million shares at an average price of $29.65 per share. We have reduced the shares outstanding since we began this strategy in 2020 by 53% at an average price of $16.29. We expect to continue to programmatically and strategically buy back stock throughout the year. Pete will now take you through some additional financial highlights of the quarter. Pete, over to you.