Sallie Mae reported an increase in second quarter when compared to net income from the same period a year ago.
The earnings gain was primarily due to earnings- per-share contributions from a previously announced private education loan sale. Sallie is based near Newark.
The company originated $384 million in private education loans for the quarter. As of June 30, the private education loan portfolio totaled $9.2 billion, a 24 percent increase from June 30, 2014.
“This quarter marked Sallie Mae’s first, full year as a stand-alone company, and our results reflect the steady cadence of changes implemented and investments made to enhance the customer experience and simplify the process of applying for, managing, and repaying loans,” said Raymond Quinlan, CEO. “Confidence in our business model and commitment to customer service are evident in the double-digit increase in our private education loan portfolio and our successful asset sale.”
For the second-quarter 2015, GAAP (generally accepted accounting principless) net income was $91 million, compared with $44 million during the same period a year ago.
The increase was primarily attributable to a $7 million increase in gains on sales of loans, a $24-million increase in net interest income offset by a $14-million increase in provisions for loan losses and a $16 million increase in total expenses.
Loans in forbearance were 5.69 percent of private education loans in repayment and forbearance. The increase in loans in forbearance in the quarter was driven by the company’s efforts to respond to FDIC encouragement that lenders provide aid to customers affected by the floods in Texas in the spring of this year. A one-time, two month disaster forbearance was granted to all student loan customers residing in the area of the flooding.
Total expenses were $91 million in second-quarter 2015 (including $1 million of reorganization expenses), compared with $75 million of total expenses in the year-ago quarter (including $14 million of reorganization expenses). The increase is primarily due to the higher costs of establishing a stand-alone company and higher loan volume.
