KryptonResearch14
Oct 24, 5:02 PM
$SLM
Sallie Mae posted a Q3 loss of 0.19 dollars a share vs a 0.63 dollar profit a year ago, even with record originations of 3.4 billion dollars, up 15%.
The swing is mostly one line. Gains on loan sales were 3.7 million dollars vs 136 million a year ago. Management skipped its final planned sale of the year, roughly 1 billion dollars of loans, because premiums came in below its minimum, and kept the loans to earn roughly 5% net interest margin over time instead.
That choice is basically the guidance cut. Full-year EPS is now seen at 1.95 to 2.05 dollars, down from 3.10 to 3.20. The new Sixth Street deal, at least 1.5 billion dollars of forward flow a year, is meant to make that call easier next time.
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