Student lender Sallie Mae reported higher earnings in the third quarter. The company is based near Newark. Student lender
“Our continued focus on customer experience enhancements and application process efficiencies have resulted in another outstanding peak season with undergraduates, graduates, and parents selecting Sallie Mae to make the dream of higher education a reality,” said Raymond J. Quinlan, CEO, Sallie Mae. “Strong brand perception, credit quality, and repayment performance are the foundation of our expanding franchise.”
For the third-quarter 2018, GAAP (generally accepted accounting principles) net income was $104 million, compared with $76 million in the year-ago quarter.
The year-over-year increase was primarily attributable to a $75 million increase in net interest income and a $20 million decrease in income tax expense as a result of the reduction of the federal rate from 35 to 21 percent. The gains were partially offset by $15 million increase in provisions for credit losses, a $7 million increase in losses on derivatives and hedging activities, net; and a $34 million increase in total non-interest expenses.
Earlier this year, Sallie Mae indicated its intention to invest $40 million to accelerate the diversification of its consumer lending platform into the personal loan and credit card businesses and to migrate our technology infrastructure to the cloud.
The regulatory capital ratios of the company’s Sallie Mae Bank subsidiary continue to exceed guidelines for institutions considered “well capitalized.”
