Sallie Mae Surpasses Expectations with Strong Q4 and Full-Year 2024 Results
Sallie Mae, a leading provider of private education loans, has announced its fourth-quarter and full-year 2024 earnings, exceeding expectations in terms of originations volume and credit quality. In a conference call on January 23, 2025, the company's CEO, Jonathan Witter, highlighted three key messages from the results: strong performance in 2024, exceeded expectations for originations, and a solid outlook for 2025.
Private education loan originations for the fourth quarter of '24 were $982 million, with new unfunded commitments reaching $817 million. This represents an increase of 17% compared to the prior year quarter. For the full year, Sallie Mae originated $7 billion of private education loans, a 10% growth over 2023 and exceeding its revised full-year guidance of 8% to 9%. The company's CEO noted that it had acquired "what we believe to be our fair share, if not slightly more" of the market opportunity created by recent changes in competitive dynamics.
The company's total balance sheet growth was 3.1% for the full year 2024, with its private education loan portfolio growing at 5.7%. GAAP diluted EPS in the fourth quarter was $0.50, and the full-year GAAP diluted EPS was $2.68 compared to $2.41 in 2023, an 11.2% increase year-over-year.
One of the key highlights from the results is the improvement in credit quality of originations for the year. Cosigner rates increased from 87% in '23 to 90% in '24, and the average FICO score at approval increased from 748 to 752 over the same period. Credit performance also remained strong throughout the year, with net charge-offs for the private education loan portfolio decreasing by 25 basis points from the full year of '23.
Sallie Mae continued its capital return strategy in the fourth quarter, repurchasing 2 million shares at an average price of $23.05. The company has reduced the shares outstanding since January 1, 2024 by 11.6 million at an average price of $21.59 and by 52% since January 1, 2020 at an average price of $16.22.
The company also announced a preliminary agreement on indicative pricing terms for the sale of approximately $2 billion of private education loans, which is expected to close in early February. Sallie Mae expects to sell additional loans in 2025, with market conditions dictating the timing and volume driven by its balance sheet growth targets.
The company's CEO emphasized that it has strong momentum entering 2025 and is well-positioned to deliver on its strategy and investment thesis outlined a year ago. With these impressive results and a solid outlook for the future, Sallie Mae continues to be a leader in the private education loan market.
