SLM Corporation

Welcome to the Sally Mae Fourth Quarter and Full Year 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 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 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, Chloe. Good evening and welcome to Sally Mae's fourth quarter and full year 2025 earnings call. It is my pleasure to be here today with John Witter, our CEO, Pete Graham, our CFO, and Melissa Bernoff, Managing Vice President of Strategic Finance. After this 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 FDC. For Sally and I, 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. Additionally, this discussion and the earnings presentation include non-GAAP financial information, including non-GAAP delinquencies, including strategic partnerships in repayment, non-GAAP reserve rates, including strategic partnership warehouse loans, and non-GAAP NCOs as a percentage of average loans in repayment. All non-GAAP financial information should be considered a supplemental to, not a substitute for or superior to, the financial measure calculated in accordance with GAAP. The company believes that these non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of the company's performance across periods. There are many limitations related to the use of these non-GAAP financial measures and their nearest GAAP equivalents. For example, the company's descriptions of non-GAAP financial measures may differ from the non-GAAP measures used by other companies. For descriptions of the non-GAAP financial information included herein, and reconciliation to the most directly comparable GAAP measures, please refer to the appendix to the earnings presentation beginning at slide 13. We undertake no obligation to update or revise any predictions, expectations, or forward-looking statements, including non-GAAP forward-looking statements, to reflect events or circumstances that occur after today, Thursday, January 22nd, 2026. Thank you, and now I'll turn the call over to John.

Thank you, Kate and Chloe. Good evening, everyone. Thank you for joining us to discuss Sally Mae's fourth quarter and full year 2025 results. I'm pleased to report on a successful year and discuss our strong outlook for 2026. Overall, the private student lending sector remains robust and is positioned for further success. College enrollment and specifically enrollment trends for many of our largest tier one schools are up. indicating students and parents continue to see the value of higher education. Our cosigner rates for new originations have also increased, indicating parents and loved ones are willing to co-invest in the education for their students. Recognizing that some recent graduates are feeling the impact of current economic uncertainty and technological change, unemployment rates for recent graduates are still comparatively low, and most are finding gainful employment within six months of graduation. As AI transforms the professional landscape, we believe education will be even more important as students acquire the skills necessary to remain competitive in the future. Undoubtedly, schools and programs will evolve, creating new areas of study to meet those needs. We look forward to supporting our school partners and students throughout this evolution. We are excited about the opportunity created by the recent federal student lending reforms. These changes should reduce the likelihood of students and families taking on unsustainable levels of student debt. These reforms also create the opportunity for us to help more students and families. We believe that, when fully phased in, plus reform could contribute an estimated $5 billion in annual originations for Sallie Mae, representing approximately 70% originations growth over 2025. In 2025, Sallie Mae delivered our inaugural private credit strategic partnership. This innovative first-of-its-kind agreement combines the more predictable earnings profile of our bank with the capital efficiency and risk transfer benefits of our loan sale program. We believe the economic value of this partnership is comparable or superior to other funding models. This arrangement includes no clawbacks and the supplemental fee, which represents the smallest portion of the overall economics, is tied to clear, reasonably achievable return thresholds. In addition to the strategic progress, we also delivered well against our guidance for the year. GAAP diluted EPS in the fourth quarter was $1.12, and our full year GAAP diluted EPS was $3.46 compared to $2.68 in 2024. Private education loan originations for the fourth quarter of 2025 were $1.02 billion, And for the full year, we originated $7.4 billion of private education loans, 6% over 2024, and at the higher end of our revised full-year guidance. Net charge-offs for our private education loan portfolio were $98 million in the fourth quarter of 2025 and $346 million for the full year, representing 2.15% of average private education loans in repayment, which is down four basis points from the full year of 2024. Pete will now take you through some additional highlights. Pete? Thank you, John.