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SLM (SLM)

Sallie Mae believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, the company provides financing and know-how to support access to college and offer products and resources to help customers make new goals and experiences, beyond college, happen.

Company profile

Ticker
SLM, SLMBP, SLMAF
Exchange
CEO
Jonathan Witter
Employees
Incorporated
Location
Fiscal year end
Former names
SLM HOLDING CORP, USA EDUCATION INC
SEC CIK
IRS number
522013874

SLM stock data

Analyst ratings and price targets

Last 3 months
Current price
Average target
$20.00
Low target
$19.00
High target
$21.00
Citigroup
Maintains
Buy
$21.00
2 May 22
Stephens & Co.
Downgraded
Equal-Weight
$19.00
18 Apr 22

Calendar

27 Apr 22
2 Jul 22
31 Dec 22
Quarter (USD) Mar 22 Dec 21 Sep 21 Jun 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Dec 21 Dec 20 Dec 19 Dec 18
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 3.45B 3.45B 3.45B 3.45B 3.45B 3.45B
Cash burn (monthly) 364.93M 243.43M (no burn) (no burn) (no burn) 2.71M
Cash used (since last report) 1.12B 746.23M n/a n/a n/a 8.3M
Cash remaining 2.33B 2.7B n/a n/a n/a 3.44B
Runway (months of cash) 6.4 11.1 n/a n/a n/a 1271.5

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
23 Jun 22 Matheson James D. Common Stock Grant Acquire A No No 0 1,116 0 77,235.568
23 Jun 22 Strong Robert S. Common Stock Grant Acquire A No No 0 1,116 0 99,511
23 Jun 22 Ted Manvitz Common Stock Grant Acquire A No No 0 1,116 0 16,959
23 Jun 22 Lavelle Mark L Common Stock Grant Acquire A No No 0 1,116 0 41,044
21 Jun 22 Child Paul G Common Stock Grant Acquire A No No 0 7,971 0 78,896
13F holders Current Prev Q Change
Total holders 304 315 -3.5%
Opened positions 28 39 -28.2%
Closed positions 39 47 -17.0%
Increased positions 99 72 +37.5%
Reduced positions 128 155 -17.4%
13F shares Current Prev Q Change
Total value 24B 6.48B +270.5%
Total shares 279.99M 291.39M -3.9%
Total puts 436.9K 259.9K +68.1%
Total calls 173.1K 300.1K -42.3%
Total put/call ratio 2.5 0.9 +191.4%
Largest owners Shares Value Change
Vanguard 33.57M $616.32M -0.8%
BLK Blackrock 23.21M $426.1M -5.2%
Massachusetts Financial Services 18.22M $334.56M +3.6%
Impactive Capital 17.09M $313.78M +43.5%
Ubs Global Asset Management Americas 15.44M $283.53M +22.3%
Boston Partners 14.97M $273.62M +37.0%
VA Partners I 14.5M $0 -25.9%
ValueAct 13.9M $255.22M -4.8%
STT State Street 7.9M $144.98M -2.8%
Dimensional Fund Advisors 5.54M $101.73M +0.8%
Largest transactions Shares Bought/sold Change
Barrow Hanley Mewhinney & Strauss 0 -7.48M EXIT
Impactive Capital 17.09M +5.18M +43.5%
VA Partners I 14.5M -5.08M -25.9%
Arrowstreet Capital, Limited Partnership 978.82K -4.1M -80.7%
Boston Partners 14.97M +4.04M +37.0%
Ubs Global Asset Management Americas 15.44M +2.82M +22.3%
Norges Bank 0 -2.79M EXIT
Polaris Capital Management 2.7M +2.7M NEW
Tiger Management L.L.C. 799.56K -2.29M -74.1%
Goldentree Asset Management 1.9M +1.9M NEW

Financial report summary

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Competition
Sigma Labs
Risks
  • The pandemic caused by a novel coronavirus, or COVID-19 (“COVID-19 pandemic”), and resulting adverse economic conditions have adversely impacted our business and results and, in the future, could have a more material adverse impact on our business, results of operations, financial condition, and/or cash flows. Any future pandemics could subject our business to the same or greater risks than the COVID-19 pandemic.
  • Our product offerings are primarily concentrated in loan products for higher education and deposit products for online depositors. Such concentrations and the competitive environment for those products subject us to risks that could adversely affect our financial position.
  • Consolidation or refinancing of existing Private Education Loans could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows.
  • Defaults on our loans, particularly Private Education Loans, could adversely affect our business, financial position, results of operations, and/or cash flows.
  • Our allowance for credit losses may not be adequate to cover actual losses, and we may be required to materially increase our allowance, which may adversely affect our capital, financial condition, and/or results of operations.
  • We are subject to the creditworthiness of third-parties other than borrowers and exposure to those third-parties could adversely affect our business, financial condition, results of operations, and/or cash flows.
  • Our ability to achieve our business goals will be heavily reliant on our ability to obtain deposits, obtain funding through asset-backed securitizations, and, for at least the next few years, sell loans at attractive prices to help fund any share repurchase programs that may be authorized from time to time. An inability to effectively manage our liquidity could negatively impact our ability to fund our business obligations and opportunities, which could lead to regulatory scrutiny and could have a material adverse effect on our business, financial condition, results of operations, and/or cash flows.
  • In structuring and facilitating securitizations or sales of Private Education Loans, administering securitization trusts, or servicing loans we have securitized or sold, we may incur liabilities to transaction parties. If those liabilities are significant, they could adversely affect our business, financial condition, results of operations, and/or cash flows.
  • The levels of or changes in interest rates could adversely affect our results of operations, financial condition, regulatory capital, and/or liquidity.
  • The interest rate and maturity characteristics of our earning assets do not fully match the interest rate and maturity characteristics of our funding arrangements, which may negatively impact the level of our net interest income. We are also subject to repayment and prepayment risks, which can increase uncertainty as we manage our interest rate risk and can adversely affect our business, financial condition, results of operations, and/or cash flows.
  • Our use of derivatives to manage interest rate sensitivity exposes us to credit and market risk that could have a material adverse effect on our earnings.
  • The Bank is subject to various regulatory capital requirements administered by the FDIC and the UDFI. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material adverse effect on our business, results of operations, and/or financial condition.
  • We operate in a highly regulated environment and the laws and regulations that govern our operations, or changes in these laws and regulations, or our failure to comply with them, may adversely affect us.
  • Failure to comply with consumer protection, privacy, data protection, or cybersecurity laws and requirements could subject us to civil and criminal penalties or litigation, including class actions, and have a material adverse effect on our business.
  • Our framework for managing risks, including model risk and data governance risk, may not be effective in mitigating our risk of loss and, if the framework is ineffective, could have a material adverse effect on us and our business.
  • POLITICAL/REPUTATIONAL RISK
  • Proposals of federal and state governments, or of various political candidates, affecting the student loan industry in particular, such as proposals for new federal education spending designed to make higher education “free” or substantially so regardless of financial need, or to create new federally funded programs to refinance private student loans, subject us to political risk and could have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
  • We are subject to reputational risk, which could damage our brand and have a material adverse impact on our business, results of operations, financial condition, and/or cash flows.
  • Failure or significant interruption of our operating systems or infrastructure or the inability to adapt to changes could disrupt our business, cause significant losses, result in regulatory action or litigation, or damage our reputation.
  • Our business processes are becoming increasingly dependent upon technological advancement, and we could lose market share if we are not able to keep pace with rapid changes in technology.
  • We depend on secure information technology and a breach of those systems or those of third-party vendors could result in significant losses, unauthorized disclosure of confidential customer information, and reputational damage, which could materially adversely affect our business, financial condition, and/or results of operations and could lead to significant financial, legal, and reputational exposure.
  • We depend significantly on third-parties for a wide array of our operations and customer services and key components of our information technology infrastructure, and a breach of security or service levels, or violation of law by one of these third-parties, could disrupt our business or provide our competitors with an opportunity to enhance their position at our expense.
  • We primarily rely upon Amazon Web Services to deliver our offerings to users on our platform, and any disruption of or interference with our use of Amazon Web Services could adversely impact our business and operations.
  • We may face risks from our operations related to litigation or regulatory actions that could result in significant legal expenses and settlement or damage awards.
  • Our internal controls over financial reporting and disclosure controls may be ineffective, which could have a material adverse effect on our financial condition and/or results of operations.
  • Our business operations and those of our third-party vendors may be adversely impacted by political events, terrorism, cyberattacks, public health issues, natural disasters, severe weather, climate change, infrastructure failure or outages, labor disputes, business interruptions, and other unpredictable catastrophic events.
  • Our ability to successfully make acquisitions is subject to significant risks, including the risk that governmental authorities may not provide any requisite approvals, the risk that integrating acquisitions may be more difficult, costly, or time consuming than expected, and the risk that the value of acquisitions may be less than anticipated.
  • Because of Navient’s indemnification obligations, we have significant exposures to risks related to its creditworthiness. If we are unable to obtain indemnification payments from Navient, we could experience higher than expected costs and operating expenses and our results of operations, cash flows, and/or financial condition could be materially and adversely affected.
  • The holders of our preferred stock have rights that are senior to those of our common shareholders.
  • We may be limited in our ability to receive dividends from the Bank, pay dividends on and repurchase our common stock, and make payments on our corporate debt.
  • Our business could be negatively affected if we are unable to attract, retain, and motivate skilled employees.
Management Discussion
  • Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations
  • References in this Form 10-Q to “we,” “us,” “our,” “Sallie Mae,” “SLM,” and the “Company” refer to SLM Corporation and its subsidiaries, except as otherwise indicated or unless the context otherwise requires.
  • This report contains “forward-looking” statements and information based on management’s current expectations as of the date of this report. Statements that are not historical facts, including statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements. This includes, but is not limited to: statements regarding future developments surrounding COVID-19 or any other pandemic, including, without limitation, statements regarding the potential impact of COVID-19 or any other pandemic on the Company’s business, results of operations, financial condition, and/or cash flows; our expectation and ability to pay a quarterly cash dividend on our common stock in the future, subject to the determination by our Board of Directors, and based on an evaluation of our earnings, financial condition and requirements, business conditions, capital allocation determinations, and other factors, risks, and uncertainties; the Company’s 2022 guidance; the Company’s three-year horizon outlook; the Company’s expectation and ability to execute loan sales and share repurchases; the Company’s projections regarding originations, net charge-offs, non-interest expenses, earnings, balance sheet position, and other metrics; any estimates related to accounting standard changes; and any estimates related to the impact of credit administration practices changes, including the results of simulations or other behavioral observations. Forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that may cause actual results to be materially different from those reflected in such forward-looking statements. These factors include, among others, the risks and uncertainties set forth in Item 1A. “Risk Factors” and elsewhere in our 2021 Form 10-K and subsequent filings with the SEC; the societal, business, and legislative/regulatory impact of pandemics and other public heath crises; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; failure to comply with consumer protection, banking, and other laws; changes in accounting standards and the impact of related changes in significant accounting estimates, including any regarding the measurement of our allowance for credit losses and the related provision expense; any adverse outcomes in any significant litigation to which we are a party; credit risk associated with our exposure to third-parties, including counterparties to our derivative transactions; and changes in the terms of education loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws). We could also be affected by, among other things: changes in our funding costs and availability; reductions to our credit ratings; cybersecurity incidents, cyberattacks, and other failures or breaches of our operating systems or infrastructure, including those of third-party vendors; damage to our reputation; risks associated with restructuring initiatives, including failures to successfully implement cost-cutting programs and the adverse effects of such initiatives on our business; changes in the demand for educational financing or in financing preferences of lenders, educational institutions, students, and their families; changes in law and regulations with respect to the student lending business and financial institutions generally; changes in banking rules and regulations, including increased capital requirements; increased competition from banks and other consumer lenders; the creditworthiness of our customers; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of our earning assets versus our funding arrangements; rates of prepayment on the loans that we own; changes in general economic conditions and our ability to successfully effectuate any acquisitions; and other strategic initiatives. The preparation of our consolidated financial statements also requires us to make certain estimates and assumptions, including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect. All forward-looking statements contained in this quarterly report on Form 10-Q are qualified by these cautionary statements and are made only as of the date of this report. We do not undertake any obligation to update or revise these forward-looking statements to conform such statements to actual results or changes in our expectations.    

Content analysis

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Positive
Negative
Uncertain
Constraining
Legalese
Litigous
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