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SLM Nasdaq· SLM Corp
Earnings report Q3 2023

SLM Corporation Reports Decrease in Revenue in the Third Quarter of 2023

Segments of Revenue

SLM Corporation, commonly known as Sallie Mae, reported a decrease in revenue across its segments in the third quarter of 2023. The company operates in the consumer banking and finance industry, primarily focusing on student loans.

  • Net interest income for the quarter was $150 million, compared to $117 million in the same quarter last year.
  • Fee income amounted to $13 million, reflecting a decrease from $6 million in the year-ago quarter.

Strengths

Despite the decrease in revenue, SLM Corporation showcased several strengths in its financial performance. The company's effective income tax rate decreased to 27.7 percent in the third quarter of 2023, compared to 28.2 percent in the same quarter last year. This decrease was primarily attributed to an increase in tax credits, which positively impacted the company's bottom line.

Additionally, SLM Corporation reported a net income attributable to common stock of $25 million in the third quarter of 2023, compared to $73 million in the year-ago quarter. While this represents a decline, it is important to note that the company's basic and diluted earnings per common share remained relatively stable, with a decrease of only $0.18 or 62 percent.

Challenges

SLM Corporation faced challenges in its financial performance during the third quarter of 2023. The company experienced a decrease in net interest income, which can be attributed to various factors such as changes in interest rates, loan repayment patterns, and market conditions. The decline in fee income further contributed to the overall decrease in revenue.

Noteworthy

It is noteworthy that SLM Corporation's income tax expense decreased significantly from $30 million in the year-ago quarter to $11 million in the third quarter of 2023. This decrease was primarily driven by an increase in tax credits, which positively impacted the company's effective income tax rate.

Summary

SLM Corporation reported a decrease in revenue in the third quarter of 2023, primarily driven by a decline in net interest income and fee income. However, the company showcased strengths in its financial performance, including a decrease in the effective income tax rate and relatively stable earnings per common share. SLM Corporation faced challenges in its financial performance, which can be attributed to factors such as changes in interest rates and market conditions. Overall, the company's performance in the latest quarter reflects the ongoing dynamics of the consumer banking and finance industry, particularly in the student loan sector.

Source documents

Form 10-Q  filed on Oct 25, 2023
81 pages scanned

Reference data

Company financials Q3 revenue 427M
Analyst estimates Q3 EPS missed by -18.27%
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