SLM Corporation's Q4 2024: Navigating Contradictions in NIM, Delinquencies, and Loan Consolidations

Strong Financial Performance:
- Sallie Mae delivered $982 million in private education loan originations for Q4 2024, with new unfunded commitments at $817 million, representing a 17% increase compared to the prior year quarter.
- The company's full year originations totaled $7 billion, 10% over 2023, and their GAAP diluted EPS for Q4 was $0.50, surpassing the prior year.
- This growth was driven by increased market share expansion and higher credit quality of originations.

Balance Sheet Growth and Strategy:
- Sallie Mae's total balance sheet growth was 3.1% for the full year 2024, with its Private Education Loan portfolio growing at 5.7%.
- The company believes in maintaining modest balance sheet growth, which they expect to continue in 2025, with a target of 5% growth.
- This strategy enables them to balance growth with funding constraints and risk management.

Credit Quality and Loss Mitigation Programs:
- The company achieved a co-signer rate increase from 87% in 2023 to 90% in 2024, with an average FICO score at approval rising from 748 to 752.
- Credit performance remained strong, with net charge-offs at 2.2% of average private education loans and repayments for the full year, down from 2.4% in 2023.
- The success of enhanced loss mitigation programs and improved underwriting standards contributed to the positive credit trends.

Capital Return and Shareholder Value:
- Sallie Mae repurchased 2 million shares in Q4 and reduced shares outstanding by $11.6 million since January 1, 2024, at an average price of $21.59.
- The company is committed to a robust capital return strategy, with plans to continue share buybacks and dividends to enhance shareholder value.