Q1 2024 SLM Corp Earnings Call
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Speaker Change: Welcome to the Sallie Mae first quarter 2024 earnings conference call. At this time, all participants have been placed in a listen only mode and the floor will be opened for your questions. Following the prepared remarks.
Speaker Change: Like to ask a question at that time, Please press the star and one on your telephone keypad.
Speaker Change: If at any point. Your question has been answered you may remove yourself from the queue by pressing star and too.
Speaker Change: So that others can hear your questions clearly, we ask that you pick up your handset for best sound quality.
Speaker Change: Lastly, if you should require operator assistance, please press star zero.
Speaker Change: I would now like to turn the call over to Melissa <unk> head of Investor Relations. Please go ahead.
Melissa: Thank you David and good evening and welcome to Sallie Mae's first quarter 2024 earnings call. It is my pleasure to be here today with John Winter, our CEO and Pete Graham our CFO.
Melissa: After the prepared remarks, we will open the call for questions.
Speaker Change: Before we begin keep in mind, our discussion will contain predictions expectations and forward looking statements.
Speaker Change: Actual results in the future may be materially different from those discussed here due to a variety of factors listeners should refer to the discussion of the factors in the company's form.
Speaker Change: Thank you and other filings with the SEC.
Speaker Change: For Sallie Mae. These factors include among others results of operations financial condition, and our cash flows as well as any potential impacts of various external factors on our business.
Speaker Change: We undertake no obligation to update or revise any predictions expectations are forward looking statements to reflect events or circumstances that occur. After today Wednesday April 24 2024.
Speaker Change: You and now I'll turn the call over to John.
Unknown Executive: Thank you Melissa and David Good evening to everyone. Thank you for joining us today to discuss Sallie Maes first quarter 2024 results.
Unknown Executive: Pleased to report on a successful quarter and progress towards our 2004 goals.
Unknown Executive: I hope you'll take away three key messages today first we're off to a fast start in 2024.
Unknown Executive: Second we are encouraged by the trends we have seen in our credit performance.
Unknown Executive: Third we believe we have positive momentum for the rest of the year.
Unknown Executive: Let's begin with the quarters results.
Unknown Executive: GAAP diluted EPS in the first quarter of 'twenty four was $1 27 per share as compared to <unk> 47 in the year ago quarter. Our results for the first quarter were driven by a combination of.
Unknown Executive: This does performance.
Unknown Executive: Caribbean and credit trends.
Unknown Executive: And again on our first loan sale of the year.
Loan originations for the first quarter of 'twenty four were $2 6 billion, which is up 6% over the first quarter of 'twenty three we.
Unknown Executive: We have seen our application volume grow as well, increasing 4% year over year.
Unknown Executive: We believe that this is a solid start to 2024.
Unknown Executive: Credit quality of originations was consistent with past years.
Unknown Executive: Our cosigner rate for the first quarter of 'twenty, four was 91% versus 89% in the first quarter of 2023.
Operator: BF-WATCH TV 2021. Please stand by.
Average FICO score for the first quarter of 2024 was 748 versus 746 in the first quarter of 2023.
Unknown Executive: The credit improvement that we observed in 2023 and has continued through the first quarter of 2024.
Operator: Please stand by; your program is about to begin.
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Unknown Executive: Private education loan charge offs in Q1 were $83 million.
Operator: Welcome to the Sallie Mae first quarter 2024 earnings conference call. At this time, all participants have been placed in a listen only mode, and the floor will be open for your questions following the prepared remarks. If you would like to ask a question at that time, please press the star and 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star and 2.
Unknown Executive: Presenting to one 4% of average loans in repayment.
Unknown Executive: This is down 29 basis points from fourth quarter of 2023 and better than expectations.
Unknown Executive: Although we are still in the early stages of implementation. We are pleased with the medium term performance of our loss mitigation programs and are seeing improvement in our wall to default rates.
Operator: So that others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star 0. I would now like to turn the call over to Melissa Bronaugh, Head of Investor Relations. Please go ahead.
Unknown Executive: As well as positive performance trends in all stages of delinquency.
Unknown Executive: As we mentioned in our year end call. We did see a rise in delinquencies in the fourth quarter due to what we described at that point as the mechanical results of borrowers entering into new payment programs.
Melissa Bronaugh: Thank you, David. Good evening, and welcome to Sallie Mae's First Quarter 2024 Earnings Call. It is my pleasure to be here today with Jon Witter, our CEO, and Pete Graham, our CFO. After the prepared remarks, we will open the call for questions. Before we begin, keep in mind our discussion will contain predictions, expectations, and forward-looking statements. However, actual results in the future may be materially different from those discussed here due to a variety of factors.
Unknown Executive: And of the qualifying period.
Unknown Executive: <unk> added additional disclosure around both our delinquency and forbearance metrics and are seeing the desired results.
Unknown Executive: Calling those borrowers that are in their loan modification qualifying period delinquencies are down quarter over quarter from three 1% in Q1 of 2023 to two 7% in Q1 of 2024.
Melissa Bronaugh: Listeners should refer to the discussion of those factors in the company's forum by Tim Hugh and other filings with the SEC. For Sallie Mae, these factors include, among others, results of operations, financial conditions, and or cash flows, as well as any potential impacts of various external factors on our business. We undertake no obligation to update or revise any predictions, expectations, or forward-looking statements to reflect events or circumstances that occur after today, Wednesday, April 24, 2024. Thank you, and now I'll turn the call over to Jon.
Unknown Executive: Loans in disaster or hardship forbearance or 1% at the end of Q1 2024.
Unknown Executive: <unk> performance in Q1 of 'twenty three.
Unknown Executive: The $2 $1 billion loan sale that we were able to execute in the first quarter generated $143 million in games. We are encouraged by the price we received which is in line with our expectations.
Unknown Executive: We still expect to sell additional loans in 2024 with market conditions dictating the timing.
Unknown Executive: And our balance sheet growth targets dictating the volume.
Jonathan W. Witter: Thank you, Melissa and David. Good evening, everyone.
Unknown Executive: The balance sheet growth expectations for the year remains at two 8%.
Jonathan W. Witter: Thank you for joining us today to discuss Sally May's fourth quarter 2024 results. I'm pleased to report on a successful quarter and progress towards our 24 goals. I hope you'll take away three key messages today.
Unknown Executive: In the first quarter of 2024, we continued our capital return strategy.
Jonathan W. Witter: First, we're off to a fast start in 2024. Second, we're encouraged by the trends we have seen in our credit performance, and third, we believe we have positive momentum for the rest of the year. Let's begin with the quarter results. Gap diluted EPS in the first quarter of 24 was $1.27 per share, as compared to 47 cents in the year-ago quarter.
Repurchasing one 3 million shares at an average price of $20 and 32.
We have reduced the shares outstanding since we began this strategy in 2020 by just over 50% at an average price of $15 95.
Unknown Executive: We expect to continue to use the game and capital released from future loan sales.
Jonathan W. Witter: Our results for the first quarter were driven by a combination of strong business performance, improvement in credit trends, and the gain on our first loan sale of the year. Loan originations for the first quarter of 24 were $2.6 billion, which is up 6% over the first quarter of 23. We have seen our application volume grow as well, increasing 4% year over year.
Unknown Executive: Programmatically and strategically buyback stock throughout the year.
Unknown Executive: Pete will now take you through some additional finance financial highlights of the quarter.
Peter M. Graham: Thank you John.
Peter M. Graham: Everyone.
Peter M. Graham: Before we jump into the key drivers of earnings for the quarter I wanted to mention a change to our guidance metrics that you may have.
Peter M. Graham: Noticed in our earnings release and Investor presentation.
Peter M. Graham: We have discontinued reporting non-GAAP core earnings and its related metrics.
Peter M. Graham: As it has been identical to our GAAP earnings for the last eight quarters, including this quarter.
Jonathan W. Witter: We believe that this is a solid start to 2024. Credit quality of originations was consistent with past years. Our cosigner rate for the first quarter of 2024 was 91% versus 89% in the first quarter of 2023. The average FICO score for the first quarter of 2024 was 748 versus 746 in the first quarter of 2023. The credit improvement that we observed in 2023 has continued through the first quarter of 2024. Net private education loan charge-offs in Q1 were $83 million, representing 2.14% of average loans and repayments.
Peter M. Graham: As such for purposes of our 2020 for guidance.
Peter M. Graham: Using GAAP earnings and placement non core earnings and the calculation of earnings per common share metric.
Peter M. Graham: However, the guidance range is unchanged.
Peter M. Graham: At $2 60 to $2 70.
Peter M. Graham: Now for a discussion of key drivers of earnings.
Peter M. Graham: Year after year, a quality loan portfolio generates significant net interest income.
For the first quarter of 2024.
Peter M. Graham: We earned $387 million of net interest income.
Peter M. Graham: This is down 4% from the prior year quarter and level with the fourth quarter of 2023.
Jonathan W. Witter: This is down 29 basis points from the fourth quarter of 2023 and better than expectations. Although we are still in the early stages of implementation, we are pleased with the medium-term performance of our loss mitigation programs and are seeing improvement in our roll-to-default rate, as well as positive performance trends in all stages of delinquency. As we mentioned in our year-end call, we did see a rise in delinquencies in the fourth quarter due to what we described at that point as the mechanical results of borrowers entering into new payment programs who were in their qualifying period.
Peter M. Graham: Although the average yields on interest, earning assets are up about 45 basis points over the year ago quarter.
Peter M. Graham: Average interest, earning asset balances are down slightly.
Peter M. Graham: Which resulted in a $26 million decrease in interest income from a year ago period.
Peter M. Graham: Interest expense was $44 million higher.
Peter M. Graham: As borrowing rates increased approximately 75 basis points from the prior year.
Peter M. Graham: Net interest margin for the first quarter was five 5%.
Peter M. Graham: Compared to five 7% in the year ago quarter.
Peter M. Graham: We continue to believe over the long term that low to mid 5% is the appropriate target.
Jonathan W. Witter: We have added additional disclosure around both our delinquencies and forbearance metrics and are seeing the desired results. Excluding those borrowers that are in their loan modification qualifying period, delinquencies are down quarter over quarter from 3.1% in Q1 of 2023 to 2.7% in Q1 of 2024. Loans in disaster or hardship forbearance were 1% at the end of Q1 2024, consistent with performance in Q1 of 2023. The $2.1 billion loan sale that we were able to execute in the first quarter generated $143 million in gains.
Peter M. Graham: Our total provision for credit losses in the income statement was $12 million first quarter of 2024.
This is comprised of an increase in provision of $145 million related to volume.
Payment assumption updates.
Peter M. Graham: Offset by a release of $133 million associated with the $2 $1 billion loan sale, we completed during the quarter.
Peter M. Graham: The majority of the increased provision is related to origination volume during the mini peak that occurs in the first quarter of each year.
Peter M. Graham: Additionally, we reduced our long term prepayment assumptions.
Peter M. Graham: Which accounted for approximately 26% of the increase during the quarter.
Peter M. Graham: Although this change in assumption has a negative impact on provision.
Jonathan W. Witter: We are encouraged by the price we received, which is in line with our expectations. We still expect to sell additional loans in 2024, with market conditions dictating the timing and our balance sheet growth targets dictating the volume. The balance sheet for growth expectations for the year remains at 2-3%. In the first quarter of 2024, we continued our capital return strategy by repurchasing 1.3 million shares at an average price of $20.32. We have reduced the number of shares outstanding since we began this strategy in 2020 by just over 50% at an average price of $15.95.
Peter M. Graham: So long term positive as we will continue to keep our interest earning assets on our balance sheet for a longer period of time.
Net charge offs for our private education loan portfolio in the first quarter.
Peter M. Graham: With $83 million or two 1% consistent with the year ago quarter.
Peter M. Graham: Our private education loan reserve at the end of the first quarter is $1 4 billion.
Peter M. Graham: Six 1% total student loan exposure.
Peter M. Graham: Which includes beyond balance sheet portfolio.
Peter M. Graham: The accrued interest receivable.
Peter M. Graham: Billion.
Peter M. Graham: Our reserve rate shows improvement over the six 4% in the prior year quarter and is consistent with levels at the end of 2023.
Peter M. Graham: We expect to continue to use the gain and capital released from future loan sales to programmatically and strategically buy back stock throughout the year. Pete will now take you through some additional financial highlights of the quarter. Thank you, Jon. Good evening, everyone.
Peter M. Graham: Private education loans, delinquent 30 days or more three 4% of loans in repayment decreased from three 9%.
Peter M. Graham: 2023 and.
Peter M. Graham: And consistent with the three 4%.
Good quarter.
Peter M. Graham: As John mentioned earlier, we've refined our disclosure around both delinquencies improving.
Peter M. Graham: Before we jump into the key drivers of earnings for the quarter, I wanted to mention a change to our guidance not. As you may have noticed in our earnings release and investor presentation, we have discontinued reporting non-GAAP core earnings and its related metrics, as it has been identical to our gap earnings for the last eight quarters. As such, for purposes of our 2024 guide, we are now using GAAP earnings in place of non-GAAP quarters in the calculation of the earnings per common share metric. However, the guidance range is unchanged at $2.60 to $2.70.
More visibility into our credit performance.
Peter M. Graham: When adjusting the numbers that I just discussed to remove the borrowers within a three month qualifying period.
Peter M. Graham: And one of our new programs.
Improvements in delinquencies is compelling.
We ended the first quarter loans delinquent 30 days or more becomes two 7% lots of repayment is.
Peter M. Graham: As compared to three 2%.
Peter M. Graham: 2023, and three 1% a year ago quarter.
Peter M. Graham: We believe that this medium term indicators of success winning programs and we'll continue to monitor and disclosed performance in the coming quarters.
Peter M. Graham: First quarter operating expenses were $160 million compared to $143 million in the prior quarter and $155 million in the year ago quarter.
Peter M. Graham: Now for a discussion of key drivers of a, Year after year, our quality loan portfolio generates significant, not interesting, revenue for the first quarter of 2024. $387,000,000. Although average yields of interest earning assets are up about 45 basis points over the year ago quarter, average interest earning asset balances are down slightly, which resulted in a $26 million decrease in interest income from the year ago period. Interest expense was $44 million higher as borrowing rates increased by approximately 75 basis points from the prior year.
Peter M. Graham: This was a 4% increase compared to the first quarter of 2023 <unk>.
A majority of this increase relates to increase in volume in the quarter compared to the prior year with applications increasing 4%.
Peter M. Graham: First notes increasing 6%.
Peter M. Graham: Total noninterest expenses in the first quarter were $162 million $202 million in the prior quarter and 100.
Peter M. Graham: $57 million in the year ago quarter.
Peter M. Graham: Finally.
Peter M. Graham: Our liquidity and capital positions are solid.
Peter M. Graham: Ended the quarter with <unk>.
Peter M. Graham: <unk> was 19, 1% of total assets.
Peter M. Graham: At the end of the first quarter total risk based capital was 13, 5%.
Peter M. Graham: The net interest margin for the first quarter was 5.5%, compared to 5.7% a year ago. We continue to believe, over the long term, that a low to mid 5% is the appropriate minimum target. Our total provision for credit losses in the income statement was $12 million in the first quarter of 2020. This is comprised of an increase in provision of $145 million related to volume and prepayment assumption updates, offset by a release of $133 million associated with the $2.1 billion loan sale we completed during the quarter. The majority of the increase in provision is related to origination volume during the mini-peak that occurs in the first quarter of each year. Additionally, we reduced our long-term prepayment of, which accounted for approximately 26% of the increase during the quarter. However, this change in assumption has a negative impact on provision.
Peter M. Graham: And come up with equity tier one capital was 12, 3%.
Peter M. Graham: Another measure of the loss absorption capacity of the balance sheet, because GAAP equity plus loan loss reserves over risk weighted assets, which was a very strong 16, 2%.
Peter M. Graham: We believe we're well positioned to continue to grow our business and return capital to shareholders going forward.
Peter M. Graham: Now I'll turn the call over to John.
Unknown Executive: Thanks Pete.
Unknown Executive: I hope you agree that we have executed well in the first quarter and that you share my belief that we have positive momentum for the full year of 2024.
Unknown Executive: There has been some question about the potential implications of delays and technical issues associated with the department of Education has long chain of the new fast football.
Unknown Executive: At this point, we do not believe that these issues will cause material impact on volume, but it may likely condense and already short peak season.
Unknown Executive: Externally, we continue to partner with our schools to assist families through this process.
Peter M. Graham: So the long-term positive is as we will continue to keep our interest-earning assets on the balance sheet for a longer period of time. Net charge-offs for our private education loan portfolio in the first quarter were $83 million, or 2.1%, consistent with the Year Ago. Our private education loan reserve at the end of the first quarter was $1.4 billion, or 6.1% of the total student loan exposure, which includes the on-balance sheet portfolio plus the accrued interest receivable of $1.4 billion.
Unknown Executive: Through the calculation tools available on our website, our scholarship search capabilities available through Skylake and other materials. We provide to families. We are there to help make this piece peak season as frictionless as possible.
Unknown Executive: Internally, we are preparing for a condensed peak with enhanced staffing.
<unk> digital and other self service capabilities and other actions.
Unknown Executive: While early we are also paying attention to the impact of one of our major competitors exiting the market.
Unknown Executive: Believe this will afford the opportunity to compete for new business, while too early to declare a definitive way.
Peter M. Graham: Our reserve rate shows improvement over the 6.4% in the prior year quarter and is consistent with levels at the end of 2020. Private Education Loans Delinquent 30 Days or More: 3.4% of loans in repayment, a decrease from 3.9% at the end of 2023.
Unknown Executive: Early analysis suggests a slight volume increase from borrowers that previously had a relationship with that competitor.
Unknown Executive: We expect to see the first real signs of opportunity during peak season over the summer and into the fall.
Peter M. Graham: Consistent with the 3.4% at the end of the year, though, quarter. As Jon mentioned earlier, we've refined our disclosure around both delinquencies and full barons to get more visibility into our credit portfolio when adjusting the numbers that I just discussed to remove the borrowers who were in a three-month qualifying period related to one of our new programs. The improvement in delinquency is compelling. At the end of the first quarter, loans delinquent 30 days or more accounted for 2.7% of loans in repayment.
Unknown Executive: In addition to our originations growth in the first quarter. Keith also mentioned the continuation of slower prepayment speeds both of them.
Unknown Executive: Which are positives for balance sheet growth and interest income as we look towards the second quarter of the year.
Unknown Executive: We will continue to focus on operational execution and expense management and NIM to drive results.
Unknown Executive: Let me conclude with a discussion of 2020 guidance.
Unknown Executive: As I mentioned earlier. This evening, we are encouraged by both the successful Q1 origination season. The positive trends, we are seeing with credit performance and our first loan sale execution of the year.
Peter M. Graham: 0 0 0 0 0 0 0 0, We believe that this is a medium-term indicator of the success of the new programs, and we'll continue to monitor and disclose performance in the coming quarters. First quarter operating expenses were $160 million.
We are also optimistic that these things will lead to a successful 2024, we.
Unknown Executive: We believe medium term success of our programs will continue to normalize and we will look forward to updating you on that performance progress throughout the year.
At this time, we are reaffirming the 2024 guidance that we communicated on our last earnings call for all key metrics with that let's go ahead and open up the call for some questions.
Peter M. Graham: This was a 4% increase compared to the first quarter of 2023. The majority of this increase relates to an increase in volume in the quarter compared to the prior year, with applications increasing 4% and disbursements increasing 6%. Total non-interest expenses in the first quarter were $162 million compared to $202 million in the prior quarter and $157 million in the year before.
Speaker Change: The floor is now open for questions. At this time, if you have a question or comment Please press star and one on your telephone keypad if.
Speaker Change: If at any point. Your question is answered you may remove yourself from the queue by pressing star and two.
Speaker Change: Again, we ask that you pick up your handset when posing your question to provide optimal sound quality.
Peter M. Graham: Finally, our liquidity and capital positions are solid, entering the quarter with liquidity of 19.1% of total assets. At the end of the first quarter, total risk-based capital was 13.5%. Another measure of the loss absorption capacity of a balance sheet is gap equity plus loan loss reserves over risk-weighted assets, which was a very strong 16.2%.
J zaccone: Our first question is coming from some J zaccone with K B W. Please go ahead. Your line is open.
J zaccone: Hi, This is actually Steven Kwok filling in for Sanjay. Thanks for taking my question I guess, the first question I have the system around the quarter relative to your original expectations. How did the quarter come in just because I'm trying to tie that back to give guidance.
J zaccone: That was maintained.
Jonathan W. Witter: We believe we're well positioned to continue to grow our business and return capital to shareholders going forward. Thanks, Pete. I hope you agree that we have executed well in the first quarter and that you share my belief that we have positive momentum for the full year 2024. There have been some questions about the potential implications of delays and technical issues associated with the Department of Education's launch of the new FAFSA form.
J zaccone: <unk> was in line or was it out of the expectations that that it's early in the year and Thats youre maintaining your guidance. Thanks.
Speaker Change: Yes, I'd say its largely in line with what we expected it would be in.
Speaker Change: Although there are some positive trends and developments in the quarter as John said.
Speaker Change: So earlier in the year, so we'll wait and see.
Speaker Change: See how things develop.
Speaker Change: Over the coming quarters, but we feel good about the story.
Speaker Change: Got it and then just around the credit side and then it's nice to see that the credit trends are trending positively.
Jonathan W. Witter: At this point, we do not believe that these issues will cause a material impact on volume but may likely condense an already short peak season. Externally, we continue to partner with our schools to assist families through this process. Through the calculation tools available on our website, our scholarship search capabilities available through Scholly, and other materials we provide to families, we are there to help make this peak season as frictionless as possible.
Speaker Change: As we look at the reserve rate.
Speaker Change: As credit metrics improved.
Speaker Change: How should we think about what can we sort of break into two over time.
Speaker Change: Yes, I don't think that were ready to call a number for the for the absolute reserve rate over time, but I think that.
Speaker Change: <unk>.
Speaker Change: It makes sense, but as we continue to see improvements.
Jonathan W. Witter: Internally, we are preparing for a condensed peak with enhanced staffing, improved digital and other self-service capabilities, and other actions. While early, we are also paying attention to the impact of one of our major competitors leaving the market. We believe this will afford the opportunity to compete for new business. While too early to declare definitively, early analysis suggests a slight volume increase from borrowers that previously had a relationship with that competitor.
Speaker Change: Credit metrics like charge offs et cetera that we would continue to see.
Speaker Change: Modest improvements in the overall level of reserves that were required to put up.
Speaker Change: Coupled with.
Speaker Change: The changes in underwriting that we've we've made as we continue to sort of tweak each year.
Speaker Change: The origination quality is very strong.
There will be reversed itself overtime as well.
Speaker Change: Great. Thanks for taking my question.
Jonathan W. Witter: We expect to see the first real signs of opportunity during peak season over the summer and into the fall. In addition to our originations growth in the first quarter, Pete also mentioned the continuation of slower prepayment speeds, both of which are positives for balance sheet growth and interest income as we look toward the second quarter of the year. We will continue to focus on operational execution, expense management, and NIM to drive results.
Speaker Change: We will take our next question from Terry MA with Barclays. Please go ahead. Your line is open.
Terry Ma: Hey, Thanks, good afternoon.
So it looks like Youre getting some pretty positive results from their own bond programs.
Terry Ma: So maybe just talk about what more.
Terry Ma: You need to see what more has to happen before.
Terry Ma: You get some more confidence in kind of updating your guide for the year.
Terry Ma: Yes, Terry it's John I'll take that one.
Jonathan W. Witter: Let me conclude with a discussion of 2024 guidelines. As I mentioned earlier this evening, we are encouraged by both the successful Q1 origination season, the positive trends we are seeing with credit performance, and our first loan sale execution of the year. We are also optimistic that these things will lead to a successful 2024. We believe the medium-term success of our programs will continue to normalize, and we'll look forward to updating you on that performance progress throughout the year. At this time, we are reaffirming the 2024 guidance that we communicated on our last earnings call for all key metrics. With that, Pete, let's go ahead and open up the call to some questions.
Unknown Executive: As you indicated we are very pleased with the progress and the results that we've seen so far.
Unknown Executive: All of the metrics that we can look at the early stages of a customer entering alone Mod.
Our meeting or modestly exceeding our expectations. So examples of those types of metrics would be things like what is the success rate of people, making their qualifying either through a qualifying payments. So we like all of them and I think we sort of described it as.
Unknown Executive: Is that a positive medium term results.
Unknown Executive: Ultimately, though the real proof here is.
Unknown Executive: Do folks graduating from their programs.
Operator: The floor is now open for questions. At this time, if you have a question or comment, please press star and one on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star and 2. Again, we ask that you pick up your handset when posing your question to provide optimal sound quality. Our first question is coming from Sanjay Sakhrani with KBW. Please go ahead. Your line is open.
Unknown Executive: Do they enjoy strong financial success on the other side of those programs.
Unknown Executive: That's just something that we will gain more and more confidence and with each passing month and each passing quarter.
Unknown Executive: But I think given it was still relatively early stages I think we felt like we wanted to see a bit more of that seasoning are before we thought about updating guidance.
Great. That's helpful. Thank you.
Steven J. McGarry: Hi, this is actually Steven Park filling in for Sanjay. Thanks for taking my questions. I guess the first question I have is just around the quarter. Relative to your original expectations, how did the quarter come in? Just because you're trying to tie that back to your guidance that was maintained. Was it that the quarter was in line, or was it better than your expectations because it's early in the year and thus, you're maintaining your guidance?
Unknown Executive: We will take our next question with Jeff Adelson from Morgan Stanley. Please go ahead. Your line is open.
Jeffrey David Adelson: Hey, good evening guys.
Jeffrey David Adelson: My questions.
Jeffrey David Adelson: Yes, just along the same lines of credit.
Jeffrey David Adelson: I guess.
As we look at the increased use of these mods in the extended Grace periods.
Jeffrey David Adelson: Are there any kind of metrics you can point us to and the success rate is there I know you just alluded to that how you are seeing a qualifying payments et cetera, but I guess I'm. Just wondering if you looked at I don't know if this is the right way to look at it but if you look at the delinquency rate the percentage of extended grace period, and the percent and hardship where Bernstein.
Unknown Executive: Yeah, I'd say it's largely in line with what we expected it would be. And, you know, although there are some positive trends and developments in the quarter, as Jon said, we'll wait and see how things develop in the coming quarters, but we feel good about the start.
Jeffrey David Adelson: Number has gone up versus year ago. So.
Steven J. McGarry: Got it. And then just on the credit side, it's nice to see that the credit trends are trending positively. Just as we look at the reserve rate, like as your credit metrics continue to improve, how should we think about, you know, what the reserve rate can get to over time? Thanks.
Jeffrey David Adelson: How do you give us that confidence that those are going to perform as expected.
Jeffrey David Adelson: And help your credit even in a year from now and you're not just putting them into a bucket where the default rate isn't going to show up for now.
Speaker Change: Yeah, Jeff looks fair fair question.
Jeffrey David Adelson: We can certainly go away and think about is there additional disclosure that we want to make there how we have not done that today.
Unknown Executive: Yeah, I don't think that we're ready to call a number for the absolute reserve rate over time, but I think it makes sense that as we continue to see improvements in credit metrics like charge-offs, etc., that we continue to see modest improvements in the overall level of reserves that we're trying to. I think that coupled with, you know, the changes in underwriting that we've made and we continue to sort of tweak each year, origin And that'll be it. Thanks for your time.
Speaker Change: Yes, certainly rest assure we look very hard at those very metrics internally.
Speaker Change: These are the very same metrics that we then project out forward when do we start to think about guidance for the year as well as the long term normalization of guidance sort of back to the one 9% to 1% range.
Speaker Change: But ultimately the way that we're all going to get comfortable with that as the <unk> program is fully phased in over the next several quarters and.
Speaker Change: And get back to that target delinquency rate that we think is the right delinquency and net charge off rate for us to be shooting for.
Steven J. McGarry: Right. Thanks for taking my question.
Terry Ma: We'll take our next question from Terry Ma with Barclays. Please go ahead. Your line is open.
Speaker Change: So we'll think about the question of additional.
Speaker Change: Sort of disclosure thank you for that.
Terry Ma: Hey, thanks. Good afternoon. So it looks like you're getting some pretty positive results from your loan bond programs. Can you maybe just talk about what more you need to see or what more has to happen before you get some more confidence in kind of updating your guide for the year?
Speaker Change: But I think we feel very comfortable that what we're seeing is consistent with the guidance that we have done.
Speaker Change: Okay got it and just to circle back on that.
Speaker Change: A comment about your your competitor exiting.
Speaker Change: You kind of alluded to a slight benefit from their existing customers showing interest.
Speaker Change: Yes.
Wouldn't there be a more meaningful benefit I mean, you've got the peak summer season, coming with pressuring them to score it seems like it might be more meaningful than just more of a <unk>.
Jonathan W. Witter: Yeah, Terry, it's Jon. I'll take that one. You know, as you indicated, we are very pleased with the progress and the results that we've seen so far. All of the metrics that we can look at at the early stages of a customer entering a loan bot are meeting or, you know, modestly exceeding our expectations. So, examples of those types of metrics would be things like, you know, what is the success rate of people making their qualifying or their pre-qualifying payment?
Speaker Change: Slater.
Speaker Change: Modest benefit given their presence in the market before.
Slater: Yes, Chad.
Chad: Think the way I would explain that is you have to remember that the competitor in question did not leave the mark until after they had fulfilled there.
Slater: Their commitment and sort of.
Slater: Maybe opportunity.
Slater: For the spring loans that they had already committed to.
Jonathan W. Witter: So we like all of that, and I think we sort of described it as sort of positive medium-term results. Ultimately, though, the real proof here is whether folks graduate from their programs. Do they enjoy strong financial success on the other side of those programs? And I think that's just something that we will gain more and more confidence in with each passing month and each passing quarter. But, given it was still relatively early stage, I think we felt like we wanted to see a bit more of that seasoning before we thought about updating guidance.
Slater: So I think we talk often about the fact that in our business spring follows fall ball doesn't fall the spring.
Slater: That sort of second semester follow on business. The die is largely cast for that in.
Slater: In the first quarter. So I think we've been extremely consistent in saying, we expected there to be really very little impact of this strategic move.
Slater: As competitor until we got to the summer peak season.
We were pleasantly surprised at.
Slater: Sort of a modest improvement and.
Slater: Sort of additional incremental business that we saw there when we looked at it our.
Slater: Customers that had existing relationships with this competitor because quite frankly, we really werent expecting any in the spring semester.
Terry Ma: Great, that's helpful. Thank you.
Jeffrey David Adelson: We'll take our next question with Jeff Adelson from Morgan Stanley. Please go ahead; your line is open.
Slater: To your second question of why you wouldn't see more I think it's because the peak season for kids going back to school in the fall.
Jeffrey David Adelson: Hey, good evening, guys. Thanks for taking my questions. Yeah, just along the same lines of credit, I guess. As we look at the increased use of these mods and the extended grace periods, are there any kind of metrics you can point us to on the success rates? I know you just alluded to that, how you're seeing qualifying payments, etc. But I guess I'm just wondering if you look at, I don't know if this is the right way to look at it, but if you look at the delinquency rate, the percent in the extended grace period, and the percent in hardship forbearance, that number has gone up versus a year ago.
Slater: Doesn't start until June at the earliest I hadn't really gets going in earnest in July August and so.
Slater: I think we will start to have an early read of that just to set expectations in the second quarter earnings, but I think it will still be preliminary.
Slater: Where we will really sort of fully understand.
Slater: Net of the benefit in our success in competing for this new business is when we report out on key performance, which is obviously always been a third quarter type of type of conversation.
Jeffrey David Adelson: So how do you give us, you know, that confidence that those are going to perform as expected and help your credit, even a year from now? And you know, you're not just putting them into a bucket where the default rate isn't going to show up for now?
Slater: Great.
Slater: Thank you guys appreciate it appreciate it.
Slater: We will take our next question from John Hecht with Jefferies. Please go ahead. Your line is open.
John Hecht: Afternoon, Thanks for taking my questions.
John Hecht: Just looking at margin NIM.
John Hecht: It looks like.
John Hecht: While the direct to consumer posits are stabilizing.
Unknown Executive: Yeah, Jeff, look, fair, fair question. You know, we can certainly go away and think about whether there is additional disclosure that we want to make there. We have not done that to date. You know, certainly rest assured, you know; we look very hard at those very metrics internally. Those are the very same metrics that we then project out forward when we start to think about guidance for the year, as well as the long-term normalization of guidance, you know, sort of back to the beginning.
John Hecht: I'm wondering kind of given the yield curve outlook, what we should think about the NIM kind of fluctuations as I think you have about two thirds fixed rate loans and one third adjustable rate loans and so.
John Hecht: Maybe you could kind of give us some details about kind of how the recent period looks for that group.
John Hecht: And then thinking about kind of CD maturities and repricing of that what we should think about kind of the cost of liabilities and how that affects NIM over the next few quarters.
John Hecht: Okay.
Speaker Change: Yes I.
I don't necessarily want to get into all of the mechanical parts of those but what I would say is when we originally set our guidance we were expecting five rate cuts this year.
And we also talked about.
Speaker Change: In the last call that.
Speaker Change: Mildly asset sensitive.
Speaker Change: And then and then flip to being liability sensitive over a longer period of time, and so the sort of higher for longer at least in the short term is mildly beneficial to us because we'll earn more on the ASO side.
Unknown Executive: Okay, I got it.
Speaker Change: Over the over the near term as sort of short term rates.
It lowered as quickly.
Speaker Change: So the margins, it's probably net positive towards.
Speaker Change: Towards NIM for the year.
Speaker Change: Maybe the NIM compression that we anticipated happening doesn't happen as fast, but we'll wait and see.
Unknown Executive: Yeah, Jeff, you know, I think the way I would explain that is, you know, you have to remember that the competitor in question did not leave the market until after they had fulfilled their commitment and sort of made the opportunity for the spring loans that they had already committed to. So, you know, I think we talk often about the fact that, in our business, spring follows fall, fall doesn't follow spring, you know, that sort of, you know, second semester follow-on business, the die is largely cast for that in the first quarter.
Speaker Change: See how that develops over the course.
Speaker Change: Okay, and then remind us remind me when.
Speaker Change: When the reset of the adjustable rate occurs and what is reset often.
Speaker Change: Also our loans.
Speaker Change: Our software based and largely sort of a monthly reset.
Speaker Change: Obviously the deposits are.
Unknown Executive: So I think we've been extremely consistent in saying that we expected there to be really very little impact of this strategic move by this competitor until we got to the summer peak season. I think we were pleasantly surprised at the, you know, sort of modest improvement and, you know, sort of additional incremental business that we saw.
Speaker Change: Yet in the market.
Speaker Change: Both generally referencing off roads.
Speaker Change: Fed funds or other short term rates.
Speaker Change: Competitively priced.
In terms of deposit flows.
Speaker Change: And then the.
<unk> is also software based.
Speaker Change: But generally the reset periods can be slightly longer than that.
Speaker Change: Okay, that's very helpful. Thanks.
Speaker Change: Once again, if you have a question you May press star and on your telephone keypad.
Speaker Change: We will take our next question from Rick Shane with J P. Morgan. Please go ahead. Your line is open.
Richard Barry Shane: Thanks, everybody for taking my question this afternoon.
Richard Barry Shane: I'd like to pull a little harder on the thread that just started.
Richard Barry Shane: Which is thinking about sort of.
Richard Barry Shane: Or how to calibrate for loans and modification.
Speaker Change: I think it would be really helpful. If you would show it.
Speaker Change: As you show with the dollars of loans in forbearance, the dollars of loans in Mod as well.
Speaker Change: I'd like to talk a little bit about the migration we've seen this quarter. So if we go back to last quarter implicitly there were about 70 basis points of loans that were.
Speaker Change: In the qualifying period Thats the difference between the $3 nine in the three two.
Speaker Change: That represents call it $105 million worth of loans, what percentage of that $105 million actually was successful.
Jeffrey David Adelson: Great Thank you, guys. I appreciate it. I appreciate it.
John Hecht: We'll take our next question from John Hecht with Jeffreys. Please go ahead, your line is open.
And emerged from that period.
John Hecht: Afternoon. Thanks for taking my questions.
John Hecht: Just looking at margin NIM, it looks like, you know, well, the direct-to-consumer deposits are stabilizing. I'm wondering, kind of given the yield curve outlook, what we should think about, you know, the NIM kind of fluctuations, as I think you have about two-thirds fixed rate loans and one-third adjustable rate loans. And so, you know, maybe you could kind of give us some details about kind of how the reset period looks for that group, and then thinking about kind of CD maturities and repricing of that, what we should think about kind of the cost of liabilities and how that affects NIM over the next few quarters.
Speaker Change: And is now fully modified.
Speaker Change: Yeah, Rick I think the way that I would think about it is.
Speaker Change: Alone would only show up as being modified if they were successful at making their three qualifying payments yes.
And then they would go into and be counted as.
Speaker Change: A modified loan for the duration of whatever that is.
<unk> program was if it was a.
Speaker Change: If it was.
Speaker Change: A short term rate reduction.
Speaker Change: That would be a certain timeframe. If it were a longer term program that would be a different timeframe, but you don't get you.
Unknown Executive: Yeah, I don't necessarily want to get into all of the mechanical parts of it, but what I would say is when we originally set our guidance, we were expecting five rate cuts this year. And we also talked about, you know, in the last call that we're mildly asset sensitive and then and then flipped to being liability sensitive over a longer period of time. And so the sort of higher for longer, at least in the short term, is mildly beneficial to us because we'll earn more on the asset side over the near term, as those short-term rates don't don't get lower this quickly. So at the margins, it's probably net positive towards. [inaudible]
Speaker Change: You don't get counted in those numbers.
Speaker Change: Unless you have major three qualifying payments and if you fail to make or three qualifying payments generally as a rule you are putting back into that.
Speaker Change: Delinquency bucket at the level that you would have been given that payment history. So.
Speaker Change: It is a in my mind pretty clean cast the customers that are in here are the ones that have been successful at qualifying for those payments over the course of a quarter three months.
Speaker Change: And if you don't if you don't qualify then you moved very quickly back into.
Speaker Change: <unk> set up the rest of the delinquency buckets and you continue to age and perform as you would as a result.
Speaker Change: Got it.
Speaker Change: Here's what I'm trying to understand so.
Speaker Change: And correct me, if I'm wrong I understand that $2 seven this quarter three two last quarter.
Unknown Executive: Okay, and then remind us or remind me when the reset of the adjustable rate occurs and what it's reset off of.
Speaker Change: Difference between the $3 90 to $3 two last quarter to be people, who had been offered loan modifications, but have not yet met the three payment standard. So they are still showing up as delinquent as delinquent, but the expectation is that if they need that staff.
Unknown Executive: So our loans are SOFR based and largely, you know, sort of a monthly reset. Obviously, the deposits are set in the market, but generally referencing off of [inaudible]. But generally, the reset periods can be slightly longer. Okay, that's very helpful.
Speaker Change: <unk> they will migrate.
And what I'm looking at is in the last quarter. There were $107 million specifically are implicitly of loans that were in that test period.
Speaker Change: This quarter sequentially delinquencies declined $90 million, so what I'm trying to understand is of that 107 that.
John Hecht: Okay, that's very helpful. Thanks.
Speaker Change: Rolled through and improve your delinquencies how much did that 107 contribute to the $90 million improvement we saw.
Operator: Once again, if you have a question, you may press star and one on your telephone keypad. We'll take our next question from Rick Shang of J.P. Morgan. Please go ahead. Your line is open. Thanks.
Speaker Change: Yes, I understand that question I don't think we have provided that level Rick.
Detail.
Speaker Change: Disclosure.
Richard Barry Shane: on the thread that Jeff started, which is thinking about sort of how to calibrate for loans in modification. I think it would be really helpful if you would show, as you show with the dollars of loans and forbearance, the dollars of loans in MOD as well. I'd like to talk a little bit about the migration we've seen this quarter.
Speaker Change: Got it okay.
Speaker Change: I appreciate it.
Speaker Change: Yeah.
Speaker Change: I'll just add theres, some additional sort of tabular disclosure on the dollar amounts of bulk and modification.
Speaker Change: For if you look at that and that doesn't give you what you need to do the calculation you are looking for them to reach back out to Melissa we can reconfigure doable.
Unknown Executive: So if we go back to last quarter, implicitly, there were about 70 basis points of loans that were in the qualifying period. That's the difference between the 3.9 and the 3.2, and that represents call it 105 million dollars worth of loans. What percentage of that 105 million actually was successful and emerged from that period and is now fully modified? Yeah, Rick. I think the way that I would think about it is, a loan would only show up as being modified if they were successful at making their three qualifying payments, and then they would go into and be counted as a modified loan for the duration of whatever that particular program was.
Speaker Change: Terrific I appreciate it.
Speaker Change: If I can indulge one last question.
Speaker Change: How do you when a loan is modified.
Speaker Change: Do the economics change because presumably changes the cash flows does it change the GAAP accruals from an income perspective.
Speaker Change: Yes.
Speaker Change: Digital is the modification will depend on which of the programs where there is.
Speaker Change: Whether it's a rate based program whether it's.
Tom based per volume boost program et cetera, and then again once those qualifying payments or news that came out of the delinquency bucket and they go back into the book and whatever.
Speaker Change: Modify the terms of our will drive the accruals.
Speaker Change: Right.
Speaker Change: I realize that had some pretty.
Speaker Change: In the weeds questions. Thank you guys very much.
Speaker Change: Sure.
Speaker Change: We will take our next question from John Armstrong with RBC capital markets. Please go ahead.
Unknown Executive: So, if it was a, you know, if it was a, you know, a short-term rate reduction, that would be a certain time frame. If it were a longer-term program, that would be a different time frame.
John Armstrong: Great. Thanks, good afternoon.
John Armstrong: Yeah.
John Armstrong: Good afternoon.
John Armstrong: You guys made a comment about.
Unknown Executive: But you don't get counted in those, you know, those numbers unless you've made your three qualifying payments. And if you fail to make your three qualifying payments, generally, as a rule, you are put back into the delinquency bucket at the level that you would have been given that payment. So it is, in my mind, a pretty clean task.
John Armstrong: Slower prepayment speeds and.
John Armstrong: Curious if that was a surprise at all for you anything to read into that and do you expect that to continue.
Speaker Change: No it's gorgeous.
Speaker Change: Each time, we run through the process, we look at recent performance trends.
Speaker Change: We have seen.
Speaker Change: Over the recent past continuing improvement.
Speaker Change: The sort of overall level of lower levels of prepayment.
Richard Barry Shane: You know, the customers that are in here are the ones that have been successful at qualifying for those payments over the course of a quarter, three months. And if you don't, you know, if you don't qualify, then you move very quickly back into sort of the rest of the delinquency pockets and you continue to age and perform as you would as a result, got it but but here's what i'm trying to understand so in in correct me if i'm wrong i understand that 2.7 this quarter 3.2 last quarter the difference between the 3.9 and the 3.2 last quarter to be people who have been offered loan modifications but have not yet met the three payment standard so they are still showing up as delinquents is delinquent but the expectation is that if they meet that standard they will migrate and what i'm looking at is in the last quarter there were 107 million dollars specifically or implicitly of loans that were in that test period, This quarter, sequentially, delinquencies declined $90 million.
Speaker Change: And as we looked at that trend.
Speaker Change: Kind of roll that forward in another quarter.
Speaker Change: It caused us to make.
Assumption regarding our longer term outlook.
For for prepayment.
Speaker Change: And John I think the thing I would add because I think.
Speaker Change:
Speaker Change: We have seen there is a number of factors that influence prepayment obviously rate environment is a big part of.
Speaker Change: That's sort of calculus there.
Speaker Change: And so I think that changing rate outlook from the beginning of the year. If you had said to me the rates behave this way or the way that they behaved are you surprised that consolidations.
Speaker Change: It has continued to slow I would have said no I'm not surprised by that I think we were all expected at the beginning of the year a different rate environment and I think that goes into the equation as well.
Speaker Change: Okay fair enough.
Speaker Change: And then just one more.
Speaker Change: <unk> done well recently I think you deserve it.
Speaker Change: Or are we still in the Green zone.
Speaker Change: On the buyback just curious how aggressive you'd like to be on that if you could provide us with any color on your thinking.
Richard Barry Shane: So what I'm trying to understand is, of that 107 that could have rolled through and improved your delinquencies, how much did that 107 contribute to the $90 million improvement we saw? Yeah, I understand that question. But I don't think we have provided that level of detail and disclosure.
Speaker Change: Yes, again, we reassess that.
Speaker Change: Point in time.
Speaker Change: As you probably have observed the rates market's been fairly volatile.
Speaker Change: To start the year.
Speaker Change: And that will be sort of a game time call as we will.
Evaluating tolerability.
Richard Barry Shane: Got it. Okay. I appreciate it.
Speaker Change: Next transactions.
Speaker Change: Yes.
Unknown Executive: I'll just add, there's some additional, you know, sort of tabular disclosure on the dollar amounts of modification in footnote 4. If you look at that, and that doesn't give you what you need to do the calculation you're looking for, then just reach back out to Melissa, and we can dig into it more.
Speaker Change: This transaction when we go down in the first quarter was.
Speaker Change: So at a point in time.
Speaker Change: Sure.
Speaker Change: Rates were a little little more favorable.
Speaker Change: Spot.
Speaker Change: The expectation is as we move through this year that will be other opportunities.
Presentment tools.
Speaker Change: Alright.
Speaker Change: Okay.
Richard Barry Shane: Terrific. I appreciate that. And, if I can indulge myself,
Speaker Change: The question I was asking on the buyback the share repurchase program, how aggressive would go yes. It was.
Richard Barry Shane: If I can indulge one last question. How do economics change when a loan is modified? Does it presumably change the cash flows? Does it change the gap of pools from an income perspective? Yeah, it will, because the modification will depend on which of the programs, whether it's a rate-based program, whether it's a term-based program, et cetera, and then, again, once those qualifying payments are made, they come out of the delinquency bucket, and they go back into the book, and whatever the modified terms are will drive the accruals.
Speaker Change: Yes, so as I say.
Speaker Change: In the <unk>.
Speaker Change: Australia, So we're going to be more programmatic around.
Speaker Change: The buyback program, which you do so.
Speaker Change: With the.
Speaker Change: With the first launch.
Speaker Change: So we completed in the quarter we.
Speaker Change: Put a plan in place to buy back shares.
Speaker Change: And we're gonna be programmatic across.
Speaker Change: It was to try and be in the market across all of the previous year this year as opposed to it.
Speaker Change:
In periods of time.
Speaker Change: Okay.
Alright, Thank you very much.
Speaker Change: This does conclude the Q&A portion of today's call I would now like to turn the floor over to Mr. Jon Witter for closing remarks.
Unknown Executive: Hey, I realized I had some pretty deep in the weeds questions. Thank you guys very much.
David Thank you and thank you to everyone, who joined in and joined US This evening.
Jon Glenn Arfstrom: We'll take our next question from Jon Arfstrom with RBC Capital Markets. Please go ahead. Thanks. Good afternoon.
Jonathan W. Witter: We are excited about the first quarter performance I think we are excited about the outlook for the year.
Jonathan W. Witter: Look forward to continuing to discuss our performance with you as the quarters unfold as always if there's more detailed questions or things that we didn't get to face feel free to reach out to Melissa and our team and happy to follow up over the course of the next couple of days and until we talk to you next quarter. Thank you again for your interest in Sallie Mae have a great evening.
Jon Glenn Arfstrom: You guys made a comment about slower prepayment speeds, and I'm curious if that was a surprise at all for you, anything to read into that, and whether you expect that to continue.
Unknown Executive: No, it's more just, you know, each time we run through the process, we look at recent performance trends, and we've seen, you know, over the recent past, continuing improvement in the sort of overall level of lower levels of prepayment. And, you know, as we look at that trend and, you know, kind of roll that forward another quarter, it has caused us to make a different assumption regarding our longer-term outlook for prepayment.
I'm, sorry, I must have back to you for some closing business.
Speaker Change: Thank you for your timing questions today, a replay of this call and the presentation will be available on the investors page at Sallie Mae Dot Com. If you have any further questions feel free to contact me directly. This concludes today's call.
Speaker Change: Thank you. This concludes today's Sallie Mae first quarter 2024 earnings conference call and webcast. Please disconnect. Your line at this time and have a wonderful evening.
Speaker Change: Hum.
Unknown Executive: And Jon, I think the thing I would add, you know, because I think we have seen there's a number of factors that influence prepayment; obviously, the rate environment is a big part of the sort of calculus there. And so, you know, I think the changing rate outlook from the beginning of the year, you know, if you had said to me, rates would behave this way, or the way that they behaved, would you be surprised that consolidation would have continued to slow? I would have said, No, I'm not surprised by that. I think we were all expecting a different rate environment at the beginning of the year. And I think that goes into the equation.
Speaker Change: [music].
Jon Glenn Arfstrom: Okay, fair enough. And then just one more. Your stock's done well recently. I think you deserve it. But are we still in the green zone on the buyback? And just curious how aggressive you'd like to be on that, if you can provide us with any color and what you're thinking.
Unknown Executive: Yeah, again, we reassessed that at each point in time. And as you probably observed, the rates market has been fairly volatile, you know, to start the year. And that'll be sort of a game-time call as we evaluate the timing of any next transactions. But, you know, it's This transaction we got done in the first quarter was at a point in time when rates were a little more favorable than maybe they are on the spot today, but the expectation is, as we move through this year, that
Unknown Executive: I think I confused the question, Pete, but I was asking about the buyback, the share repurchase program, how aggressive you guys were. Yes, it was.
Unknown Executive: Yes, as I said in the last earnings call, we're going to be more programmatic around the buyback program this year. And so, with the, you know, with the first loan sales we completed in the quarter, we put a plan in place to buy back shares. And we're going to be programmatic across to try and be in the market across the trading days of the year this year, as opposed to being in and out.
Jonathan W. Witter: This does conclude the Q&A portion of today's call. I would now like to turn the floor over to Mr. John Witter for closing remarks.
Jonathan W. Witter: You know, again, we are excited about the first quarter performance. I think we are excited about the outlook for the year and look forward to continuing to discuss our performance with you as the quarters unfold. As always, if there are more detailed questions or things that we didn't get to, please feel free to reach out to Melissa and our team; we'll be happy to follow up over the course of the next couple of days. And until we talk to you next quarter, thank you again for your interest in Sally Met. Have a great evening. And I'm sorry, Melissa; back to you for some closing business. Thank you for your...
Melissa Bronaugh: Thank you for your time and questions today. A replay of this call and the presentation will be available on the investors page at sallymay.com. If you have any further questions, feel free to contact me directly. This concludes today's call.
Operator: Thank you. This concludes today's Sallie Mae first quarter 2024 earnings conference call and webcast. Please disconnect your line at this time and have a wonderful evening.
unknown: [inaudible]