Q1 2025 SLM Corp Earnings Call
2025 earnings conference call at this time, all participants have been placed on a listen only mode and the floor will be opened for your questions. Following the prepared remarks, if you would like to ask a question at that time. Please press star one on your telephone keypad. If at any point. Your question has been answered you may remove yourself from the queue by pressing star two.
So others can hear your questions clearly, we ask that you pick up your headset for best quality.
Lastly, if you should require operator assistance. Please press star Zero I would now like to turn the call over to Katie <unk> Senior director and head of Investor Relations. Please go ahead.
Katie: Thank you Margo and good evening and welcome to Sallie Mae's first quarter 2025 earnings call. It's my pleasure to be here today with John Winter, our CEO, Pete Graham, our CFO and Melissa Murdoch managing Vice President of strategic Finance.
Speaker Change: 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.
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 those factors in the Companys Form 10-K, and other filings with the SEC.
Speaker Change: <unk> made 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 Thursday April 24 2025.
John: Thank you and now I'll turn the call over to John.
John: Thank you Margo and good evening, everyone. Thank you for joining us today to discuss Sallie Maes first quarter 2025 results.
John: I am pleased to report on a successful quarter and progress toward our 2025 goals.
John: I hope you'll take away three key messages today first we're off to a strong start for 2025.
John: Second we are encouraged by our early credit performance and third we believe we have positive momentum for the rest of the year despite uncertainties in the broader macroeconomic environment.
John: Let's begin with the quarter's results.
John: GAAP diluted EPS in the first quarter was $1 40 per share as compared to $1 27 in the year ago quarter.
John: Loan originations for the first quarter were $2 8 billion, an increase of seven 3% from the year ago quarter.
John: Our strong start to 2025.
John: The credit quality of originations continues to be solid with incremental improvement compared to Q1 of 2024.
Our cosigner rate for the first quarter was 93% compared to 91% in the year ago quarter and average FICO at approval was $7 53 for the first quarter compared to $7 48 in the first quarter of 2024.
John: The first quarter also reflected strong credit quality net private education loan charge offs in Q1 were $76 million, representing 188% of average loans in repayment.
John: This is down 26 basis points from the first quarter of 2024 and ahead of expectations.
John: Our positive credit performance in the first quarter of this year was driven by several key factors seasonality played a role as the first quarter historically delivers stronger credit outcomes compared to the rest of the year.
John: We also continue to see benefits from enhancements in our collection practices and the effectiveness of our expanded loss mitigation programs.
John: While we are pleased with this early performance we remain mindful of the uncertainty created by recent policy changes and their potential implications for the broader macroeconomic environment.
John: The $2 billion loan sale that we executed in the first quarter generated $188 million in gains a high single digit premium.
John: An increase of $45 million from our Q1 2020 for sale.
John: We expect to sell additional loans this year with market conditions dictate the timing and our private student loan portfolio growth targets dictating the volume.
John: For the first quarter of 2025, we continued our capital return strategy.
John: Purchasing 1 million shares at an average price of $29 65 per share.
John: We have reduced the shares outstanding since we began this strategy in 2020 by 53% at an average price of $16 29.
John: We expect to continue to programmatically and strategically buy back stock throughout the year.
John: Pete will now take you through some additional financial highlights of the quarter Pete over to you.
Pete: Thank you John Good evening, everyone.
John: Continue with a discussion of key drivers of earnings.
John: For the first quarter of 2025, we earned $375 million of net interest income this.
John: This is down $12 million from the prior year quarter, but ahead of the fourth quarter of 2024 by $13 million.
During the first quarter, we completed a $500 million unsecured bond transaction, which was used to redeem our November 2025 maturity.
John: Our net interest margin was 527% for the quarter 35 basis points ahead of the prior quarter.
John: We continue to believe that over the longer term low to mid 5% to an appropriate NIM target.
John: Our provision for credit losses was $23 million in the first quarter of 2025.
John: Up from $12 million in the prior year quarter.
John: The increase was largely driven by loan growth related to the mini peak origination season, and partially offset by a $116 million reserve release associated with the $2 billion loan sale completed during the quarter.
John: Despite the higher provision or allowance as a percentage of total private education loan exposure was five 7% sleep.
John: Slightly down from $5, 99% in the year ago quarter.
John: This represented a 14 basis point increase from the fourth quarter, which is consistent with the seasonal impact of higher originations in the first quarter of the year.
John: Our reserve rate has remained relatively consistent year over year.
John: Selecting a balanced view of credit performance and the broader macroeconomic environment.
John: While we are encouraged by the ongoing benefits from our loan modification programs and the continued strength in the credit quality of originations we remain cautious.
John: Economic outlook continues to be a key variable in our reserve modeling and we will closely monitor any changes in the environment that could impact future estimates.
John: Private education loans delinquent 30 days or more were three 6% of loans in repayment.
John: The decrease from three 7% at the end of 2024.
John: Although higher than the three 4% at the end of the year ago quarter.
John: We remain pleased with the performance of our enhanced loss mitigation programs.
John: Which we've now had the opportunity to observe over more than a full year.
John: The volume of loan modification enrollments has decreased by approximately 50% from pause in the third quarter of 2024, as we have optimized our eligibility criteria.
John: We're pleased with the trajectory of this program.
John: Positive performance is an important step towards achieving our long term net charge off targets.
John: Yeah.
John: First quarter noninterest expenses were $155 million compared to $150 million in the prior quarter and $162 million in the year ago quarter.
John: This was a 4% decrease compared to the first quarter of 2024.
John: Despite an increase in application and originations volume in the quarter.
John: Finally, our liquidity and capital positions remain solid.
John: We ended the quarter with liquidity of 16, 8% of total assets.
John: At the end of the first quarter total risk based capital was 12, 9% and common equity tier one capital was 11, 6%.
John: Another measure of loss absorption capacity of the balance sheet is GAAP equity plus loan loss reserves over risk weighted assets, which was a very strong 16, 4%.
John: We continue to believe we are well positioned to grow our business and return capital to shareholders going forward.
John: Now I'll turn the call back to John.
Speaker Change: Thanks, Pete I.
John: I hope you agree that we executed well in the first quarter and that you share my belief that we have positive momentum for the full year of 2025.
John: Let me close with a few comments on our 2025 guidance as I mentioned earlier. This evening the strength of our first quarter origination season, the positive momentum in credit performance and the successful execution of our first loan sale this year.
John: Reflect a solid start and meaningful progress toward our goals.
John: While we remain confident in our trajectory and expect continued normalization in the performance of our programs over the medium term. We also recognized a broader macroeconomic uncertainty that persists as such we will continue to monitor developments closely and will provide updates in future earnings calls as we.
John: Gain greater clarity throughout the year at.
John: At this time, we are reaffirming the 2025 guidance that we shared on our last earnings call for all key metrics.
John: With that Pete why don't we go ahead and open up the call for some questions.
Speaker Change: Thank you and as a reminder, ladies and gentlemen, if you'd like to ask a question that is star one on your telephone keypad.
Speaker Change: Move yourself from the queue at any time by pressing star two.
Speaker Change: Again that is star one for a question we will take our first question from Jeff Adelson with Morgan Stanley. Please go ahead.
Jeff Adelson: Yeah, Hey, thanks for taking my questions. Your credit your charge offs did really well this quarter I know you gave some color on the seasonality and you continue to be pleased with the loss mitigation programs.
Jeff Adelson: Would you attribute most of that outperformance versus what you've seen over the last few years to the loss mitigation programs youre, putting on or is there anything else, we should be aware of under the Hood and then.
Jeff Adelson: Any sort of early color or anything you're noticing are you expecting from some of the impact to the government programs, where you know recently, we saw the announcement that the government is intending to turn back on collections and wage garnishment for those in default and Theres been a number of that in the federal program have not been paying their loans for some time.
Jeff Adelson: Yes, Geoff it's John Let me, let me take both of those and I'll invite Peter to chime in if I Miss anything on the charge offs I think we've been pretty consistent about this I think we would point to a number of contributing factors as I said in my comments, there's obviously a little bit of seasonality. If you look back at Q1 of last year for <unk>.
Jeff Adelson: Ample you would see in that.
Jeff Adelson: Charge off rate that was a.
Jeff Adelson: A little bit lower than the full year. So that is certainly a part of it.
Jeff Adelson: Thank the the loss mitigation programs is a part of it and it's not just the introduction of those programs, but really the continued optimization of those programs over time.
Speaker Change: Thank Pete mentioned, the fact that we're optimizing around enrollments, but we're also optimizing around other components of their programs as well so that they better meet the needs of our customers.
Speaker Change: Think we've said sort of repeatedly we've also over the last number of years engaged in on the margin, but we think powerful set of changes and enhancements to our underwriting capabilities. Those are a little bit of a longer burn time item just given the amount of time, our students spend in school before they enter repayment.
Speaker Change: But thats, obviously, a part of the answer as well and we will continue to be a part of the answer in the future. So I don't think theres anything new that I would add to that I think it's the same basic recipe that we have that we've talked about.
Speaker Change: To your second question, which we could probably spend all night talking about.
Speaker Change: Obviously, there is a lot of changes in.
Speaker Change: Sort of focus of this administration may have talked about a whole variety of different things first and foremost reporting of.
Delinquency and default status and federal loans to the bureaus.
Speaker Change: There is a number of articles that came out several weeks ago about that and then I think really spearheaded by an op Ed piece in the last couple of days by the.
Speaker Change: Secretary of education, and focus on more active sort of collections and sort of payment activities.
Speaker Change: Related to that population.
Speaker Change: We've dug into this a number of different ways.
Speaker Change: And I'll preface this by saying, we don't have perfect data on our customers and their federal loan programs in use but.
Speaker Change: We look pretty carefully for example at FICO and we have seen.
Speaker Change: For our customers, who have federal loans no material.
Speaker Change: A change in the average FICO performance, there's always as you would expect.
Some people, who go a little bit up and some people who go a little bit down but the averages have stayed very very steady and even as we've dug into some of those sort of joint customers customers of us and the federal government, whose FICO have declined we've not seen any material or meaningful.
Speaker Change: <unk> and their ability to pay or payment sort of metrics.
Speaker Change: Or behaviors or pattern so.
Speaker Change: FICO stock seems to be a really pretty steady.
Speaker Change: We also did a fair amount of sort of what I would describe as one time special analysis on this and.
Speaker Change: And we looked at all of our customers, who also have federal loans and I think there were some things that we saw that were pretty interesting there.
Speaker Change: Our joint customers again, federal and Sallie Mae.
Speaker Change: Seem to have a lower delinquency rate on their federal loans then.
Speaker Change: The federal population as a whole and I need to caveat that by saying the data on delinquencies out of the federal loan program is not great but good.
Speaker Change: That we've been able to piece that together and.
Speaker Change: And I think even more interestingly if you look at.
Speaker Change: Those customers those joint customers, who are delinquent on their federal loans, 85% of those joint customers are actually current on their Sallie Mae loans.
Jeff Adelson: And so I think when you put all of that together, Jeff It says at least to me.
Jeff Adelson: I would suggest two really important things.
Jeff Adelson: Our average customer is just different from the federal customer as a whole.
Jeff Adelson: Simply most of Sallie mae's customers have a federal loan.
Jeff Adelson: But lots of a federal borrowers do not have Sallie Mae loans right. The two populations, we really believe are different.
Jeff Adelson: And I think that performance also speaks to the strategy that we enacted several years ago of getting our customers back into positive repayment habits sort of early after the.
Jeff Adelson: The <unk>.
Corona virus situation abated, and I think we are seeing sort of a positive impact of those those habits.
Jeff Adelson: I think that says.
Jeff Adelson: Or at least validates to a certain amount that that overall strategy. So probably more data than you were looking for but at least as of this time, we're just not seeing a lot of impact of that obviously as those federal strategies continue to season, we will continue to monitor and if we see something different that we think is.
Jeff Adelson: Of course, we'll talk about that.
Speaker Change: No that's great. Thanks for all that color that's really helpful. Maybe the other side of that coin is.
Jeff Adelson: Some of the changes or.
Speaker Change: Forthcoming changes of the department of education, or also maybe incentivizing some more activity from borrowers to go private I am just wondering if youre seeing any of that yet.
That overall strategy, so probably more data than you were looking for but at least as of this time, we're just not seeing a lot of impact of that obviously as those federal strategies continue to season, we will continue to monitor and if we see something different.
Speaker Change: I know, we're still waiting on changes in the plus programs potentially down the line, but are you noticing an uptick in graduate borrowers maybe coming to you or maybe you could share any.
What percent of your originations are coming from graduate if that's if that's increased at all.
We think there's material of course, we'll talk about that.
Jeff Adelson: Jeff Yes.
Speaker Change: Yeah, that's great. Thanks for all that color that's really helpful.
Speaker Change: First of all I think it is.
It is sort of early and hard to know.
Speaker Change: The other side of that coin is.
Speaker Change: We have talked about I think often in our business spring follows fall followed those and following spring. So an awful lot of the originations and disbursements that we're doing now are really follow on business from the fall.
Speaker Change: Some of the changes or forthcoming changes of the department of education or also maybe incentivizing some more activity from our borrowers to go private I am just wondering if you're seeing any of that yet.
Speaker Change: I know, we're still waiting on changes in the plus programs potentially down the line, but are you noticing an uptick in graduate borrowers maybe coming to you or maybe you could share any.
Speaker Change: With that said.
Speaker Change: I think there are some very sort of initial signs that there may be some increased activity there, but it is way too early for us to have a strong point of view on that I think in terms of that swap in swap out behavior if that happens.
Speaker Change: What percent.
Speaker Change: One of your originations are coming from graduate if that's if that's increased at all.
Speaker Change: Jeff first of all I think it is is sort of early and hard to know as we have talked about I think often in our business spring follows fall followed those and following spring. So an awful lot of the originations and disbursements that we're doing now are really following.
Speaker Change: We would really expect to see that during peak season. This summer.
Great. Thanks for taking my questions.
Well next go to Terry MA with Barclays. Please go ahead.
Terry MA: Hey, Thank you good evening.
Wanted to follow up on credit the delinquency rate improved sequentially.
Speaker Change: <unk> business from the fall.
Speaker Change: With that said.
Terry MA: But it was up 18 basis points year over year, a lot of that was driven by the early stage bucket.
Speaker Change: I think there are some very sort of initial signs that there may be some increased activity there, but it is way too early for us to have a strong point of view on that I think in terms of that swap in swap out behavior. If that happens we would really expect to see that.
Terry MA: But it was pretty flat year over year last two quarters. So any color on kind of what went on there.
Terry MA: I think one of the things that sort of.
Terry MA: Impacting delinquencies in the quarter as the sort of.
Speaker Change: During peak season this summer.
Terry MA: The impact of the folks that are in their qualifying periods in the mod programs.
Speaker Change: Great. Thanks for taking my questions can I.
Terry: Well next go to Terry MA Barclays. Please go ahead.
Terry MA: Comparing prior first quarter to this quarter.
Terry MA: Hey, Thank you good evening.
Terry MA: Cigna.
Terry MA: Significant change in practice, if you adjust for those folks in the Mod programs that are in the delinquency buckets.
Terry MA: Just wanted to follow up on credit the delinquency rate improved sequentially.
Terry MA: But it was up 18 basis points year over year, a lot of that was driven by the early stage bucket.
Terry MA: The number for this quarter is a 3% number.
So I think that's a big piece of some of the trend that you're referring to there.
Terry MA: The bucket was pretty flat year over year last two quarters. So any color on kind of what went on there.
Terry MA: I think one of the things that's.
Got it alright, so if I look at kind of your extended Grace there has been much higher usage over the last year.
Terry MA: Sort of impacting delinquencies in the quarter as the sort of.
Terry MA: The impact of the folks that are in their qualifying periods in the mod programs.
Terry MA: I guess like how should we kind of interpret that and is there kind of any color that you can give on borrower behavior kind of wants to exit extended grace. Thank you.
Terry MA: Yes.
Terry MA: Uh huh.
Terry MA: Comparing prior first quarter to this quarter.
Terry MA: So it's a significant change in practice, if you adjust for those folks in the mud programs that are in the delinquency buckets.
Terry MA: Yes, I think.
Terry MA: The changes we made to the to the program were really designed to.
Terry MA: Sure.
Provides that extra assistance that was allowed under the regulations for.
That number for this quarter is a 3% number.
Terry MA: So I think that's a big piece of <unk>.
Terry MA: Those borrowers that are new to repayment, that's the highest period of stress.
Terry MA: Some of the trend that you're referring to there.
Terry MA: That we see in the portfolio as people are.
Terry MA: Got it alright, so if I look at kind of your extended Grace there has been much higher usage over the last year.
Graduating getting their lives in order and going into.
Terry MA: Establishing good payment payment patterns and their lives.
Terry MA: I guess like how should we kind of interpret that and is there kind of any color that you can give on borrower behavior or kind of what's the exit extended grace. Thank you.
Terry MA: And so we feel like.
Terry MA: The usage of the.
As we've rolled out that program is.
Indicative of it operating as intended.
Terry MA: Yes, I think.
Terry MA: The changes we made to the to the program were really designed to.
Terry MA: At the margins the level of people.
Terry MA: Applying to that I don't think are indicative of anything broader than in.
Terry MA: Provide that extra assistance that was allowed under the regulations for those borrowers that are new to repayment, that's the highest period of stress.
Terry MA: And the overall economy.
Sure.
Terry MA: We view that as.
Speaker Change: A very strong program that are helping people be successful.
Terry MA: That we see in the portfolio as people are.
Terry MA: Graduating getting their lives in order and going into <unk>.
Moderator: Thank you we'll next go to Moshe Orenbuch with TD Cowen. Please go ahead.
Terry MA: Establishing good payment premium patterns in their lives.
Speaker Change: Great. Thanks.
Terry MA: And so we feel like.
Terry MA: The usage of that.
Speaker Change: John I know that you mentioned that the the growth of the balance sheet would kind of be driven.
Terry MA: As we've rolled out that program is.
Terry MA: Indicative of it operating as intended.
Or I should say.
Speaker Change: The amount of the loan sales would be driven by your balance sheet growth targets. Maybe if you could just kind of talk a little bit about now that <unk> is in the rearview mirror the seasonal phasing.
Terry MA: At the margins the level of people.
Terry MA: Applying to that I don't think are indicative of anything broader in the in.
Terry MA: And the overall economy.
How you are thinking about both.
Terry MA: Sure.
We view that as.
You know a very strong program that are helping people be successful.
Speaker Change: Growth in the balance sheet.
Speaker Change: Capital return.
Speaker Change: Yes, Moshe happy to and again Pete jump in if I Miss anything here.
Speaker Change: Thank you we'll next go to Moshe Orenbuch with TD Cowen. Please go ahead.
Speaker Change: <unk>.
Speaker Change: For anyone who is not a partner, but I would encourage folks to go back and look at our December 2023, Investor Forum presentation.
Moshe Orenbuch: Great. Thanks.
Terry MA: Yeah.
Speaker Change: John I know that you mentioned that the growth of the balance sheet would kind of be driven.
Speaker Change: While that was certainly not meant to be.
Speaker Change: Or I should say the amount of the loan sales would be driven by your balance sheet growth targets. Maybe if you could just kind of talk a little bit about now that the seasonal is in the rearview mirror the sea salt phasing.
Speaker Change: I'll tie year commitment in any way shape or form I think it was really meant to sort of give us clear evidence as we can of sort of how we think strategically about the business.
Moshe Orenbuch: And I think Moshe to answer your question.
Speaker Change: How you are thinking about both.
Moshe Orenbuch: What we really like in the business right now as we move past fall seasonal phase and.
Speaker Change: Growth in the balance sheet and.
Speaker Change: Capital return.
Moshe Orenbuch: Is <unk>.
Speaker Change: Yes, Moshe happy to and again, please jump in if I Miss anything here.
Moshe Orenbuch: Moderator.
Moshe Orenbuch: Accelerating and predictable balance sheet growth.
Speaker Change: And for.
Speaker Change: For anyone who is not a part of it I would encourage folks to go back and look at our December 2023, Investor Forum presentation.
Moshe Orenbuch: We think there is a real value in growing the balance sheet, we think theres a real value in the kind of growth of predictable steady kind of NIM based.
Speaker Change: While that was certainly not meant to be.
Moshe Orenbuch: Earnings that come from that.
Moshe Orenbuch: And.
Moshe Orenbuch: I'll tie year commitment in any way shape or form I think it was really meant to sort of give us clear evidence as we can of sort of how we think strategically about the business and I think Moshe to answer your question.
Moshe Orenbuch: We like that overall that overall view.
Moshe Orenbuch: We do want to put sort of thoughtful.
Moshe Orenbuch: Kind of limits or Govs, if you will on how quickly we do grow the balance sheet.
Moshe Orenbuch: What we really like in the business right now as we move past fall seasonal phase and.
Moshe Orenbuch: Growing the balance sheet consumes meaningful capital.
Is.
Moshe Orenbuch: So in the balance sheet.
Moshe Orenbuch: Moderate.
Moshe Orenbuch: Accelerating and predictable balance sheet crowd.
Moshe Orenbuch: <unk>.
Moshe Orenbuch: Stress on the liquidity portion.
Moshe Orenbuch: Of our business and by the way you know.
Moshe Orenbuch: We think there is a real value in growing the balance sheet, we think theres a real value in the kind of growth of predictable steady kind of NIM based.
Moshe Orenbuch: For.
Moshe Orenbuch: Our strategy has evolved over the last five years <unk> has committed to strong capital return and capital discipline as I think anybody in and we also like saving room and our plan to continue to return meaningful capital to shareholders. So that kind of moderate plan allows us to in our mind yet.
Moshe Orenbuch: Earnings that come from that.
Moshe Orenbuch: And we.
We like that overall that overall view.
Moshe Orenbuch: We do though want to put sort of thoughtful.
Moshe Orenbuch: Limits or Govs, if you will on how quickly we do grow the balance sheet.
A bit of a goldilocks, where we can grow the balance sheet thoughtfully and still every year.
Moshe Orenbuch: Growing the balance sheet consumes meaningful capital growing the balance sheet.
Moshe Orenbuch: Have meaningful capital to return in the form of share buybacks really fueled through our loan sale proceeds but also what we what we also like us.
Moshe Orenbuch: Puts.
Moshe Orenbuch: Stress on the liquidity portion.
Moshe Orenbuch: <unk> of our business and by the way.
Moshe Orenbuch: No.
Moshe Orenbuch: Yeah, how our.
Moshe Orenbuch: <unk> evolved over the last five years I am is committed to strong capital return and capital discipline as I think anybody in and we also like saving room and our plan to continue to return meaningful capital to shareholders.
The potential for a strong and over time potentially growing dividend.
That would really be fueled by that by that balance sheet growth. So I think we laid all of that out in sort of that Investor Forum document in more detail I think the guidance that we've given for this year is completely consistent with that and in fact, I think we're sort of a year ahead of where we thought we would be on that journey.
Moshe Orenbuch: So that kind of moderate plan allows us to in our mind and get a little bit of a goldilocks, where we can grow the balance sheet thoughtfully and still every year.
Moshe Orenbuch: We have meaningful capital to return in the form of share buybacks really fueled through our loan sale proceeds.
Moshe Orenbuch: On sort of virtually every metrics and we feel great about the value that that's been able to create for us so far.
Moshe Orenbuch: Great.
Moshe Orenbuch: And then you did mentioned that <unk>.
Moshe Orenbuch: But also what we what we also like us.
Moshe Orenbuch: <unk> were down 4% year on year, despite higher applications.
Moshe Orenbuch: The potential for a strong and over time potentially growing dividend that.
Moshe Orenbuch: And I know that you.
Moshe Orenbuch: Kind of draw.
Moshe Orenbuch: That would really be fueled by that by that balance sheet growth. So I think we laid all of that out in sort of that Investor Forum document in more detail I think the guidance that we've given for this year is completely consistent with that and in fact, I think we're sort of a year ahead of where we thought we would be on that journey.
Driving better unit economics, it's always been part of the thesis.
Moshe Orenbuch: Talk a little bit about what you've done to achieve that and how sustainable is that or how you think about that going forward.
Speaker Change: I'll take that one I think.
Moshe Orenbuch: As you stated it's been.
Moshe Orenbuch: An ongoing focus of ours to continue to drive operating leverage in the business and each year.
Moshe Orenbuch: On sort of virtually every metrics and we feel great about the value that that's been able to create for us so far.
Moshe Orenbuch: We set out our guidance, we have that in mind as we set our targets for the year I think in regards to any one quarter there can be Gibson guests in the quarter that.
Moshe Orenbuch: Great.
Moshe Orenbuch: And then you did mentioned that at <unk>.
Moshe Orenbuch: Spencers were down 4% year on year, despite higher applications.
Moshe Orenbuch: And I know that you.
Moshe Orenbuch: Swing things, one way or the other.
Moshe Orenbuch: Kind of draw.
Moshe Orenbuch: Driving better unit economics, it's always been part of the thesis.
Moshe Orenbuch: But we're we're happy with the expense performance we've had.
Moshe Orenbuch: Talk a little bit about what you've done to achieve that and how sustainable is that or how you think about that going forward.
Moshe Orenbuch: And committed to.
Moshe Orenbuch: So the overall guidance that we put out for this year.
Moshe Orenbuch: Thanks very much.
Moshe Orenbuch: I'll take that one yeah I think.
Speaker Change: Thank you and we'll take our next question from Michael Kaye with Wells Fargo. Please go ahead.
Moshe Orenbuch: As you stated it's been.
Moshe Orenbuch: An ongoing focus of ours to continue to drive operating leverage in the business and each year as we set out our guidance we have that in mind as we set our targets for the year I think in regards to any one quarter. There can be Gibson gets in the quarter that.
Michael Kaye: Good evening.
Michael Kaye: It's off to a really good start this year much harder than Q1 consensus estimates.
Michael Kaye: We can hear you EPS guidance for the year was unchanged I'm trying to figure out is that just cautiousness as we're early in the year and maybe some pickup and macro uncertainty.
Moshe Orenbuch: Swing things, one way or the other.
Michael Kaye: Keeping the guidance unchanged or is something else at play and.
Moshe Orenbuch: But we're we're happy with the expense performance we've had.
Michael Kaye: Are you actually running ahead of plan thus far.
Moshe Orenbuch: <unk> committed to.
Michael Kaye: Yes, Hey, Michael.
Moshe Orenbuch: To the overall guidance that we put out for this year.
Pete: Michael It's Pete here.
Speaker Change: I guess, what I would say is I would break that down.
Moshe Orenbuch: Yeah.
Moshe Orenbuch: Thanks very much.
Speaker Change: Thank you and we'll take our next question from Michael Kaye with Wells Fargo. Please go ahead.
Pete: As follows.
Pete: You know kind of one of the key performance drivers.
Pete: For the quarter was the loan sale that we completed.
Michael Kaye: Good evening.
Speaker Change: It's off to a really good start this year much harder than Q1 consensus estimates.
Pete: In.
Pete: In February and.
We knew what the results of that were when we set our guidance for this year. So.
Speaker Change: And then your EPS guidance for the year was unchanged I'm trying to figure out is that just cautiousness as we're early in the year and maybe some pickup in macro uncertainty that's keeping the guidance unchanged or is something else at play and.
Pete: Again, we're committed to our overall guidance for the year I think there is some amount of macro uncertainty in the world, but we havent seen anything.
Pete: That's impacting our results yet so we haven't made any real adjustments.
Speaker Change: Are you actually running ahead of plan thus far.
Pete: Yeah, Hey, Michael it's Pete here.
Pete: As regards to that.
Speaker Change: I guess, what I would say is I would break that down.
Pete: Back to the buyback it looks like it's off to a very slow start for sure.
Speaker Change: As follows.
Speaker Change: You know kind of one of the key performance drivers for the quarter was the loan sale that we completed.
Pete: And just like $31 million.
Pete: Plenty to come anywhere near close to completing that.
In.
Speaker Change: In February.
Speaker Change: And.
Pete: $272 million that's what.
Speaker Change: We knew what the results of that were when we set our guidance for this year. So.
Pete: Yes.
Pete: I think if you look at the share.
Speaker Change: Again, we're committed to our overall guidance for the year I think.
Pete: Back pattern that we had in 2024 and you compare that to.
Speaker Change: There is some amount of macro uncertainty in the world, but we havent seen anything.
Pete: Our start to the year I think they're relatively consistent I'll remind everyone.
Speaker Change: The impact.
Speaker Change: Impacting our results yet so we haven't made any real adjustments yet.
Pete: Last year, we set out to create a more programmatic approach to share buybacks and we fund.
Speaker Change: As regards to that.
Speaker Change: Back to the buyback seems like it's off to a very slow start this year.
Pete: Those share plans with the proceeds from the loan sales as they occur.
Speaker Change: And just like $31 million.
Pete: And we're running the same sort of playbook. This year. So we've completed a loan sale in February.
Speaker Change: Plant that come anywhere near close to completing that.
It's $272 million that that's what.
Pete: We put in a program.
Pete: With the proceeds from that loan sale that started executing very shortly thereafter so.
Speaker Change: Yes.
Speaker Change: I think our if you look at the.
Speaker Change: The share buyback pattern that we had in two.
Pete: I wouldn't necessarily read anything into the pace of the store.
Speaker Change: 2024, and you compare that to.
Speaker Change: Our start to the year I think they're relatively consistent I'll remind everyone.
Pete: To the year.
Pete: Okay alright, thank you.
Pete: Well next go to meet Richard with Bank of America. Please go ahead.
Speaker Change: Last year, we set out to create a more programmatic approach to share buybacks and we fund.
Speaker Change: Good afternoon My question.
Speaker Change: Our additions in the quarter were pretty solid.
Speaker Change: Those share plans with the proceeds from the loan sales as they occur.
Speaker Change: Would've thought growth would've been a little faster given the share gains you made late last year and the strength we saw in two ways 2024.
Speaker Change: And we're running the same sort of playbook. This year. So we completed a loan sale in February.
Speaker Change: And I realize you are reiterating guidance for the full year, but just curious to hear your thoughts on another quarter shook out versus your expectations and if you expect a relatively consistent growth rate from here or the normal step down that would probably expect from like from a you're lapping that share gain.
Speaker Change: We put in a program.
Speaker Change: With the proceeds from that loan sale that started executing very shortly thereafter so.
Speaker Change: I wouldn't necessarily read any anything into the pace of the start.
Speaker Change: Yes, Nate I think in terms of originations I think were sort of well within our expectations for the year. We had a lot of discussion last year, when we set guidance about the fact that.
Speaker Change: For the year.
Speaker Change: Okay all right. Thank you.
Richard: Well next go to Richard <unk> with Bank of America. Please go ahead.
Richard: Good afternoon.
Richard: My question originations in the quarter were pretty solid.
Speaker Change: With the competitive changes in the marketplace those changes would be spread over two years there'd be a fall of fact, which we really experienced last year and there'll be a Springer fact, which we experienced this year a little bit smaller I think we feel like we're sort of right on our plan and right, where we expected to be for the spring effect.
I'd have thought growth would've been a little faster given the share gains you made late last year and the strength we saw in two weeks 2024.
Richard: And I realize you're reiterating guidance for the full year, but just curious to hear your thoughts on how the quarter shook out versus your expectations and if you expect a relatively consistent growth rate from here or the normal step down that would probably expect from like a familiar of lapping that share gain.
Speaker Change: I do think you should expect that this fall will not sort of matched last fall in terms of the.
Speaker Change: Yes, Nate I think in terms of originations I think were sort of well within our expectations for the year. We had a lot of discussion last year, when we set guidance about the fact that.
Speaker Change: The overall growth rate, because you don't get competitors, leaving the marketplace.
Speaker Change: At the same competitor, leaving the marketplace two years in a row.
But I think we believe what we're seeing in the first quarter is consistent with the guidance that we've given for the year.
Speaker Change: With the competitive changes in the marketplace those changes would be spread over two years there'd be a fall of fact, which we really experienced last year and there'd be a Springer fact, which we experienced this year a little bit smaller I think we feel like we're sort of right on our plan and right, where we expected to be for the spring effect.
Michael Kaye: Got it. Thank you and then I want to go back to Moshe's question really quickly.
Michael Kaye: Because the expense efficiencies were really solid and <unk>, but I'm just curious if you can give us some additional color on what the puts and takes for the full year outlook and like what could push it to the high end of the range. At this point is it like variability on the loan volumes you do in the fall season or other spending like investments in just marketing in general.
Speaker Change: I do think you should expect that this fall will not sort of matched last fall in terms of.
Michael Kaye: Yes again.
Michael Kaye: We're off to a good start for this year.
Speaker Change: The overall growth rate, because you don't get competitors, leaving the marketplace.
Michael Kaye: And.
Michael Kaye: We feel good about the level of efficiency, we've been driving into the business.
Speaker Change: At the same competitor, leaving the marketplace two years in a row.
Speaker Change: But I think we believe what we're seeing in the first quarter is consistent with the guidance that we've given for the year.
Michael Kaye: To a degree that we can generate.
Michael Kaye: More efficiencies that will give us some flexibility to accelerate investment in other.
Michael Kaye: Got it. Thank you and then I will go back to Moshe's question really quickly.
Michael Kaye: Because the expense efficiencies were really solid and <unk>, but I'm just curious if you can give us some additional color on the puts and takes for the full year outlook and like what could push it to the high end of the range. At this point is it like variability on the loan volumes you do in the fall season or the other spending like investments in just marketing in general.
Technologies or other things.
Michael Kaye: Further efficiency gains in the future.
Michael Kaye: <unk>.
Michael Kaye: We've got a fairly tight expense range of guidance for the full year and so.
Michael Kaye: I think that's appropriate for us to.
Michael Kaye: Yeah again.
Michael Kaye: Sort of keep to our commitments at this juncture in the year I don't see anything thats going to wildly swing us beyond the guidance.
Michael Kaye: We're off to a good start for this year.
Michael Kaye: And.
Michael Kaye: We feel good about the level of efficiency, we've been driving into the business.
Michael Kaye: That we've given.
Michael Kaye: Thank you.
We'll take our next question from John Hecht with Jefferies. Please go ahead.
Michael Kaye: To a degree that we can generate.
Michael Kaye: More efficiencies that will give us some flexibility to accelerate investment in other tech.
John Hecht: Afternoon, Thanks for taking my question.
John Hecht: First question I'm, just going back to some policy stuff.
Michael Kaye: Technologies or other things.
John Hecht: I think we've all become aware of some headlines about.
Michael Kaye: Further efficiency gains in the future.
John Hecht: Some potential changes a reduction in funding.
Michael Kaye: We've got a fairly tight expense range of guidance for the full year and so.
John Hecht: Large universities.
Michael Kaye: I think that's appropriate for us to.
John Hecht: Along with your sort of general over.
Michael Kaye: Sort of keep to our commitments at this juncture in the year I don't see anything thats going to wildly swing us beyond the guidance that.
John Hecht: Government cutbacks and a lot of factors.
John Hecht: But I'm wondering if that happens it seems like some of that would also.
Michael Kaye: That we've given.
John Hecht: Some of that.
Speaker Change: Thank you.
John Hecht: It would go to the private markets.
Speaker Change: We will take our next question from John Hecht with Jefferies. Please go ahead.
Speaker Change: Have you guys given that much consideration and there is there anything else, we should be thinking about.
John Hecht: Afternoon, Thanks for taking my questions.
John Hecht: Is that.
John Hecht: Trend does occur.
Speaker Change: First question I'm, just going back to some policy stuff.
Speaker Change: Yes, John its John and yes, we've been following the same news reports that you are in and I think it's a little bit of a difficult question because the unknown at this point is how to colleges and universities respond and how long lasting and how.
Speaker Change: I think we've all become aware of some headlines about some.
Speaker Change: Potential changes or reduction in funding.
Speaker Change: Several large universities.
Speaker Change: Along with your sort of general over.
Speaker Change: Government cutbacks and a lot of factors.
John Hecht: Sort of how fully.
Speaker Change: Are the various proposed actions followed through on but.
Speaker Change: But I'm wondering if that happens it seems like some of that would also.
Speaker Change: I think there are gives and gas.
Speaker Change: Some of that.
Speaker Change: We'll go to the private markets.
Speaker Change: Certainly if universities are under greater.
Speaker Change: Have you guys given that much consideration and there is there anything else, we should be thinking about that.
Speaker Change: Financial pressure.
Speaker Change: And implies perhaps for some.
Speaker Change: Is that.
Speaker Change: Trend does occur.
Speaker Change: That there is less money there for financial aid that probably leaves a larger gap for families to make up on and that is the core of our business that gap financing.
Speaker Change: Yeah, John It's John and yes, we've been following the same news reports that you are in and I think it's a little bit of a difficult question because the unknown at this point is how to colleges and universities respond and how long lasting and how.
Speaker Change: That could certainly be a slight positive to two.
Speaker Change: So our originations outlook.
Speaker Change: Sort of how fully.
Speaker Change: I would also say on the on the opposite side just as an example.
Speaker Change: Are the various proposed actions followed through on but.
Speaker Change: I think there are gives and gas.
Speaker Change: For example, fewer international students come because of visa or other issues, that's not a big part of our business today, but we do do business with.
Speaker Change: Certainly as universities are under greater.
Speaker Change: Financial pressure.
Speaker Change: And implies perhaps for some.
With some international students if they have an appropriate cosigner.
Speaker Change: That there is less money there for financial aid that probably leaves a larger gap for families to make up on and that is the core of our business that gap financing.
Speaker Change: And that could be a very slight sort of headwind to the overall originations. So I think it's really too early to tell I think theres too many gives and gets there.
Speaker Change: That could certainly be a slip.
Speaker Change: Don't think we are envisioning it having a material impact as we know it at this point for this year.
Speaker Change: <unk> positive to <unk>.
Speaker Change: So our originations outlook.
Speaker Change: I would also say on the on the opposite side just as an example.
Speaker Change: But certainly as the breadth and depth of those policy changes comes more into focus breadth being number of schools impacted in depth of course being the magnitude of the impact I think will be in a better position to understand and.
Speaker Change: If for example, fewer international students come because of visa or other issues.
Speaker Change: It's not a big part of our business today, but we do do business with.
Speaker Change: With some international students if they have an appropriate cosigner.
Speaker Change: If that changes our originations outlook, we'll of course update that in a future earnings call.
Speaker Change: And that could be a very slight sort of headwind to the overall originations. So I think it's really too early to tell I think there is too many gives and gets there I don't think we are envision it having a material impact as we know it at this point for this year.
Speaker Change: Okay. That's helpful. Thanks, and then a second.
Speaker Change: Second question.
Speaker Change: Big Big Big sale, this quarter and a really strong gain.
Speaker Change: I'm wondering.
Speaker Change: The character of the buyers.
Speaker Change: Has that been changing I mean, I think we're all aware of the massive amount of flows in the private credit funds are you seeing a shift toward more bids from that group is it still or is it still kind of Bbs more general credit buyers.
Speaker Change: But certainly as the breadth and depth of those policy changes comes more into focus breadth being number of schools impacted in depth of course being the magnitude of the impact I think will be in a better position to understand them.
Speaker Change: At this point.
Speaker Change: No real difference in.
Speaker Change: If that changes our originations outlook, we'll of course update that in a future earnings call.
Speaker Change: In the process.
Speaker Change: This year versus last.
Speaker Change: Okay. That's helpful. Thanks, and then a second.
Speaker Change: No real change in makeup of the bidders on the transactions.
Speaker Change: Second question.
Speaker Change: Big Big Big sale, this quarter and a really strong gain.
Speaker Change: And.
Speaker Change: Although it hasnt occurred yet my expectation is.
Speaker Change: I'm wondering.
Speaker Change: The character of the buyers.
Speaker Change: The buyer will.
Speaker Change: Has that been changing I mean, I think we're all aware of the massive amount of phones in the private credit funds are you seeing a shift toward more beds from that group is it still or is it still kind of food and get some more general credit buyers.
Speaker Change: B using our securitization framework for.
Speaker Change: For their funding takeout sometime here in the near future.
Speaker Change: Okay. Thanks very much.
Speaker Change: Yes, we will.
Speaker Change: At this point.
Speaker Change: Take our next question from Rick Shane with Jpmorgan. Please go ahead.
Speaker Change: No real difference in.
Speaker Change: In the process.
Rick Shane: Hey, guys. Thanks for taking my questions.
Speaker Change: This year versus last.
Speaker Change: Look one of the things that's.
Speaker Change: No real change in makeup of the bidders on the transactions.
Speaker Change: Emerging is that the job market for graduating seniors is going to be a little bit more challenging.
Speaker Change: And.
Speaker Change: This year than we've seen.
Speaker Change: Although it hasnt occurred yet my expectation is.
In the last four or five years I'm curious.
Speaker Change: The buyer will.
Speaker Change: When you might start to see that.
Speaker Change: B using our securitization framework for.
Speaker Change: Or how that plays through your numbers.
Speaker Change: Is it something you would see in the third quarter or does it not really emerge until the following year if that becomes a challenge.
Speaker Change: For their funding takeout sometime here in the near future.
Speaker Change: Okay. Thanks very much.
Speaker Change: Yes.
Rick Shane: Yeah Rick.
Speaker Change: Take our next question from Rick Shane with Jpmorgan. Please go ahead.
Rick Shane: I've seen I'm sure some of the same articles and coverage there that.
Rick Shane: Hey, guys. Thanks for taking my questions.
Rick Shane: That you have seen.
Rick Shane: Look one of the constants.
Rick Shane: A couple of thoughts and perspectives.
Rick Shane: Emerging is that the job market for graduating seniors this is going to be a little bit more challenging this.
Rick Shane: One as you can imagine we do regular kind of research and touch bases with our customers and try to understand how they are feeling about things.
Rick Shane: This year than we've seen.
The last four or five years I'm curious.
Rick Shane: And when you might start to see that.
Rick Shane: It recently as work that we did late last fall.
Rick Shane: Or how that plays through your numbers.
Rick Shane: Is it something that you would see in the third quarter or does it not really emerge until the following year if that becomes a challenge.
Rick Shane: We were still seeing a very high degree of optimism among sort of recent grads about their ability to meet their financial obligations. So a lot can change in a few months, but I think that is sort of a relevant sort of data point or sort of factoring to sort of start with.
Rick Shane: Yeah Rick.
Rick Shane: I've seen I am sure some of the same articles and coverage there that that you have seen.
Rick Shane: A couple of thoughts and perspectives.
Rick Shane: I think the second thing is.
Rick Shane: Yes.
Rick Shane: One as you can imagine we do regular kind of research and touch bases with our customers and try to understand how they are feeling about things.
Rick Shane: College kids transitioning and finding that first job and recognizing that it may take in some instances more or less time for people to find and land there right first opportunity.
Rick Shane: As recently as work that we did late last fall.
Rick Shane: That's been happening to greater or lesser extent since we started in this business and there is a reason why we invest as deeply and thoughtfully.
Rick Shane: We're still seeing a very high degree of optimism among sort of recent grads about their ability to meet their financial obligations. So yes, a lot can change in a few months, but I think that is sort of a relevant sort of data point or sort of factoring to sort of start with.
Rick Shane: In communication programs readiness programs, but also things like our extended Grace program and really target them at that transition point, because we know it's always going to be a hard point and quite frankly, if there was a little more or little less unemployment during that period I'm not sure it change.
Rick Shane: The second thing is yes.
Rick Shane: College kids transitioning and finding that first job and recognizing that it may take in some instances more or less time for people to find and land there right first opportunity.
Is sort of distressed or bad.
Rick Shane: Materially.
Rick Shane: Kind of a good case in point of that is even with a slightly elevated unemployment rates that we're seeing today.
Rick Shane: That's been happening to greater or lesser extent since we started in this business and there is a reason why we invest as deeply and thoughtfully and communication programs readiness programs, but also things like our extended Grace program and really target.
Rick Shane: Among recent college grads.
Rick Shane: Youre not seeing that flow through into our net charge off rates in the quarter. So so this is a part of the business. We are well familiar with this is not a new phenomenon for us. This is something that if you're a private student lender and you're good at your craft you you kind of know how to deal with it.
Rick Shane: At that transition point.
Rick Shane: As we know it is always going to be a hard point and quite frankly, if there was a little more or little less unemployment during that period I'm not sure it changes sort of distressed or bad.
Rick Shane: To answer your question specifically.
Rick Shane: I think if you were to see stress it would be associated with the same kind of repayment waves.
Rick Shane: Sort of materially.
Rick Shane: And I think kind of a good case in point of that is even with a slightly elevated unemployment rates that we're seeing today.
Rick Shane: In the fall and the spring repayment waves that youre used to seeing and I think if you look back at sort of delinquency trends over quarters. You would expect if you were to have a real issues being caused by.
Among recent college grads.
Rick Shane: We're not seeing that flow through into our net charge off rates in the quarter. So so this is a part of the business. We are well familiar with this is not a new phenomenon for us. This is something that if you're a private student lender and you're good at your craft you you kind of know how to deal with it.
Rick Shane: Early to graduate.
Rick Shane: Unemployment rates I think you would expect them to play out over roughly those same timelines.
Rick Shane: Got it okay. That's helpful.
Rick Shane: It actually ties into the second part of my question, which is that.
Rick Shane: To answer your question specifically.
Rick Shane: I assume that the extended grace.
Rick Shane: I think if you were to see stress it would be associated with the same kind of repayment waves.
Rick Shane: Forbear extended grace loan loans on extended Grace periods are particularly correlated to loans in the 1% to 12 months payment.
Rick Shane: Paul in the spring repayment waves that youre used to seeing.
And I think if you look back at sort of delinquency trends over quarters. You would expect if you were to have a real issues being caused by.
Payment bucket, perhaps leaking into the 13% to 24.
Rick Shane: If we look at the growth in extended Grace it's.
Rick Shane: It's been about two X the growth of loans in the first 12 month bucket.
Rick Shane: Early to graduate.
Rick Shane: Unemployment rates I think you would expect them to play out over roughly those same timelines.
Rick Shane: Is that really a reflection of the change in policy is that what we should sort of expect to see going forward or is that starting to incorporate some of the economic factors that we're describing here.
Rick Shane: Got it okay. That's helpful. I'm looking it actually ties into the second part of my question, which is that.
Rick Shane: I assume that the extended grace.
Rick Shane: Yes, Rick My my sense of it extended Grace is a program that has a tight eligibility window you are only eligible for that program within various certain time periods of coming out of school.
Rick Shane: Forebear extended grace loan loans on extended Grace period are particularly correlated to loans in the 1% to 12 months.
Rick Shane: <unk> bucket, perhaps leaking into the 13% to 24.
Rick Shane: One of the strategic decisions that we made as we transitioned away from our former forbearance programs.
Rick Shane: If we look at the growth and extended Grace.
Rick Shane: It's been about two X the growth of loans in the first 12 month bucket.
Rick Shane: Because that is a kind of a stipulated program was to do a lot more work about educating.
Rick Shane: Is that really a reflection of the change in policy is that what we should sort of expect to see going forward or is that starting to incorporate some of the <unk>.
Rick Shane: Our customers as to the availability of that program for them because if you Miss the on ramp you missed the on ramp.
Rick Shane: Economic factors that we're describing here.
Speaker Change: Yes, Rick My my sense of it extended Grace is a program that has a tight eligibility window you are only eligible for that program within very certain time periods of coming out of school one of the strategic decisions that we made as we transitioned away from <unk>.
Rick Shane: As as the regulations go and so I think our view is what we're seeing is a very positive outcome. We are educating our students on their programs that are available to them. We are helping them make use of a program that is only available to them at the very beginning if they miss that on ramp they would have to go to a different program.
Rick Shane: Our former forbearance programs.
Rick Shane: Which then limits their eligibility for other programs down the road through.
Rick Shane: Because that is a kind of a stipulated program was to do a lot more work about educating.
Rick Shane: Through various restrictions in counters and so we view this as a really positive thing and as Pete said, we do not view those volume trends as being sort of unhealthy we view it as a really positive step in us helping these customers as they go through that transition.
Rick Shane: Our customers as to the availability of that program for them because if you Miss the on ramp you missed the on ramp.
Rick Shane: As the regulations go and so I think our view is what we're seeing is a very positive outcome. We are educating our students on their programs that are available to them. We are helping them make use of a program that is only available to them at the very beginning if they miss that on ramp they would have to go to a different price.
Speaker Change: Got it I appreciate it and as the parent of a graduating senior I will embrace your enthusiasm for the.
Rick Shane: Market as it evolves.
Speaker Change: Yes.
Speaker Change: Great that Rick and good luck to your child.
Thank you take care guys will.
Speaker Change: We will take our next question from Mark Devries from Deutsche Bank. Please go ahead.
Rick Shane: Graham, which then limits their eligibility for other programs down the road.
Speaker Change: Yes.
Rick Shane: True.
Speaker Change: Student loan ABS traded.
Rick Shane: Through various restrictions in counters and so we view this as a really positive thing and as Pete said, we do not view those volume trends as being sort of unhealthy we view it as a really positive step in us helping these customers as they go through that transition.
Speaker Change: Since your digital loan sale any sense for.
Speaker Change: What type of gain you would generate today.
Speaker Change: We sold to the current spreads.
Speaker Change: That's a very good question I think there has been.
Speaker Change: As with all of the markets there has been a good amount of volatility in the west.
Rick Shane: Got it I appreciate it and as the parent of a graduating senior I will embrace your enthusiasm for the.
You know call it month or so.
Speaker Change: My understanding market currently is fairly stable.
Rick Shane: Market as it evolves.
Speaker Change: I appreciate that Rick and good luck to your child.
Speaker Change: There is a.
Speaker Change: Somewhat of a cyclicality of.
Rick Shane: Take care guys.
Rick Shane: We'll take our next question from Mark Devries from Deutsche Bank. Please go ahead.
Speaker Change: Issuances coming in after earnings calls.
Yes.
Speaker Change: Typically led each quarter by the auto issuers primarily in that.
Speaker Change: Student loan ABS traded.
Rick Shane: Since you did your loan sale any sense for.
Speaker Change: Those have been in the market. This week my understanding is the markets functioning pretty well.
Rick Shane: What type of gain you would generate today it could be sold to the current spreads.
Speaker Change: So I don't have a specific answer in terms of.
Speaker Change: That's a very good question I think there has been.
Speaker Change: The gain on sale.
Speaker Change: As with all of the markets there has been a good amount of volatility in the west.
Speaker Change: As it pertains to spreads in February versus now, but I don't believe that theres been a material widening of spreads.
Speaker Change: Call it month or so.
Speaker Change: My understanding market currently is fairly stable.
Speaker Change: That has been.
Speaker Change: Persistent I think theres been some points in time, obviously were.
Speaker Change: There is a.
Speaker Change: Somewhat of a cyclicality of.
Speaker Change: Because of the broader.
Speaker Change: Macro volatility spreads.
Speaker Change: Issuances coming in after earnings calls.
Speaker Change: Blue and then come back home.
Speaker Change: Typically led each quarter by the auto issuers primarily in that.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Subsequent point of view I think the market is functioning.
Speaker Change: <unk> been in the market. This week my understanding is the markets functioning pretty well.
Speaker Change: And.
Speaker Change: We will monitor it as we go into into the rest of the year here for the optimal time to do the.
Speaker Change: So I don't have a specific answer in terms of.
Speaker Change: The gain on sale.
Speaker Change: Thanks.
Thanks Sue.
Speaker Change: As it pertains to spreads in February versus now, but I don't believe that theres been a material widening of spreads.
Speaker Change: Okay got it that's helpful. Thanks.
Speaker Change:
This concludes the Q&A portion of today's call I would now like to turn the floor over to Mr. John <unk> for closing remarks.
Speaker Change: That has been.
Speaker Change: Persistent I think theres been some points in time, obviously were.
Speaker Change: Well. Thank you everyone for dialing in and I'm sure everyone is anxious to get off to the to the NFL draft. This evening and I Hope your team gets the selection that they wanted I appreciate your interest in Sallie Mae and obviously, if you have follow up questions.
Speaker Change: Because of the broader <unk>.
Speaker Change: Macro volatility spreads.
Speaker Change: And then come back.
Speaker Change: Yes.
Speaker Change: Subsequent point of view I think the market is functioning well.
Speaker Change: Kate and her team are more than happy to be standing by and we.
Speaker Change: And we.
Speaker Change: We will monitor it as we go into into the rest of the year here for the optimal time to do the <unk>.
Speaker Change: We will take whatever you need from here and so I think with that Kate I'm going to turn it back over to you for some last minute business.
Sue: Thanks Sue.
Kate: Thanks, John Thank you for your time and questions today, a replay of this call and the presentation will be available on the investors age at Sallie Mae Dot Com. If you have any further questions.
Speaker Change: Okay got it that's helpful. Thanks.
Speaker Change: Mhm.
Speaker Change: This concludes the Q&A portion of today's call I would now like to turn the floor over to Mr. John <unk> for closing remarks.
Speaker Change: Free to contact me directly.
Speaker Change: On today's call.
Speaker Change: Well. Thank you everyone for dialing in I'm sure everyone is anxious to get off to the to the NFL draft. This evening and I Hope your team gets.
Speaker Change: Yeah.
Speaker Change: Thank you and this concludes today's Sallie Maes first quarter 2025 earnings conference call and webcast. Please disconnect. Your line at this time and have a.
Speaker Change: The selection that they wanted I appreciate your interest in Sallie Mae and obviously, if you have follow up questions and Kate and her team are more than happy to be standing by and we.
Speaker Change: We will take whatever you need from here and so I think with that Kate I'm going to turn it back over to you for some last minute business.
Speaker Change: Thanks, John Thank you for your time and 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.
Speaker Change: Free to contact me directly this concludes.
Speaker Change: On today's call.
Speaker Change: Yeah.
Speaker Change: Thank you and this concludes today's Sallie Maes first quarter 2025 earnings conference call and webcast. Please disconnect. Your line at this time and have a wonderful evening.
Speaker Change: Hum.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].