SLM Corporation SLM reported first-quarter 2026 earnings per share (EPS) of $1.54, beating the Zacks Consensus Estimate of $1.14. The metric rose 10% from the year-ago quarter.
The quarterly results benefited from a rise in net interest income (NII), lower provisions for credit losses, and disciplined decisions across funding, expenses and capital management, partially offset by a decline in non-interest income and an increase in expenses.
The company’s GAAP net income attributable to common stock was $304 million compared with $301 million in the year-ago quarter.
Sallie Mae’s NII & Expenses Rise
First-quarter NII totaled $375.4 million, up from $374.9 million in the prior-year quarter. The metric beat the Zacks Consensus Estimate by 2.4%.
The quarterly net interest margin was 5.29%, expanding 2 basis points year over year.
Quarterly non-interest income was $185 million, down from $206 million in the year-ago quarter.
Non-interest expenses increased 10.7% year over year to $171 million. Compensation and benefits expenses rose 13.9% year over year to $103 million. Other operating expenses were $62 million, up 24.1% year over year.
SLM’s Credit Quality Mixed
In the first quarter, the company reported provision benefits of $11 million, in contrast to provisions for credit losses of $23 million in the prior-year quarter.
Net charge-offs were $89 million in the reported quarter.
Delinquencies as a percentage of loans in repayment were 3.98% for the first quarter of 2026 compared with 3.58% in the prior-year quarter.
Loans in a hardship forbearance were 0.99% for the reported quarter compared with 0.92% in the year-ago quarter.
Sallie Mae’s Balance Sheet Position
As of March 31, 2026, deposits totaled $20.5 billion, up from $20.1 billion in the year-ago quarter.
Private education loans held for investment, net, were $19.9 billion, down from $21.1 billion in the prior-year quarter.
Average loans outstanding, net, totaled $23.3 billion in the quarter. In the reported quarter, private education loan originations increased 5% year over year.
Key Ratios of SLM
The efficiency ratio was 30.6% compared with 26.6% in the year-ago quarter.
Return on assets was 4.2%, stable with the prior-year quarter.
Return on common equity was 56.4% compared with 60.1% in the year-ago quarter.
Sallie Mae Lifts 2026 Outlook as Growth Initiatives Expand
Management raised the 2026 EPS guidance to $3.10-$3.20 (previous guidance was $2.70-$2.80). The updated view assumes full utilization of the $500-million share repurchase authorization in 2026 and roughly $1 billion of incremental loan sales beyond the initial plan.
Other elements of the company’s 2026 outlook were reaffirmed. Sallie Mae continues to expect year-over-year private education loan origination growth of 12-14%, net charge-offs of $345-$385 million and non-interest expenses of $750-$780 million. Executives also reiterated that the firm is preparing for expected multi-year growth tied to federal reforms affecting graduate lending, while continuing to build partnership capacity to support future flow sales.
Final Thoughts on SLM
Sallie Mae delivered a decent first-quarter performance, supported by stable NII, lower provisions for credit losses and strong loan sales. Growth in private education loan originations and continued capital deployment remain positives. However, higher expenses, a decline in non-interest income and elevated delinquency levels warrant close monitoring going forward.
SLM Corporation Price, Consensus and EPS Surprise
SLM Corporation price-consensus-eps-surprise-chart | SLM Corporation Quote
Currently, SLM carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Expectations of SLM’s Peers
Ally Financial’s ALLY first-quarter 2026 adjusted earnings of $1.11 per share surpassed the Zacks Consensus Estimate of 93 cents. The bottom line reflected a 90% jump from the year-ago quarter.
Results primarily benefited from a rise in net financing revenues and a sharp increase in other revenues. Lower expenses and an increase in loan and deposit balances were tailwinds for ALLY. However, a rise in provisions was an undermining factor.
Navient NAVI is scheduled to announce first-quarter 2026 results on April 29.
Over the past seven days, the Zacks Consensus Estimate for NAVI’s quarterly earnings has been unchanged at 17 cents. This implies a 39.3% decline from the prior-year quarter’s actual.
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This article originally published on Zacks Investment Research (zacks.com).