NEWARK, DE — Sallie Mae (Nasdaq: SLM) reported lower second-quarter profit as declining interest income and higher operating expenses outweighed a rise in noninterest income, underscoring pressure on the private student lender’s core lending economics.
Net income attributable to common shareholders fell to $54.9 million, or 29 cents per diluted share, from $67.3 million, or 32 cents per share, a year earlier. Total net income declined to $58.5 million from $71.3 million.
Net interest income dropped 11.7% to $332.8 million from $376.8 million as loan interest income declined to $539.9 million from $597.6 million. Total interest expense also decreased, falling to $269.2 million from $279.9 million, but the reduction was not enough to offset weaker interest revenue.
The provision for credit losses fell to $125.7 million from $148.7 million, partially cushioning the decline in net interest income. Net interest income after the provision was $207.2 million, compared with $228.1 million a year earlier.
Noninterest income increased to $68.3 million from $26.8 million, driven by $14.9 million in gains on loan sales, $8 million in securities gains and higher other income. The prior-year quarter included a small loss on loan sales and a $2.6 million securities loss.
Those gains were offset by higher costs. Noninterest expenses rose 16.6% to $195 million as compensation and benefits increased to $100.3 million from $84.9 million and other operating expenses climbed to $88.9 million from $71.7 million.
For the first six months of 2026, net income attributable to common shareholders was $359.3 million, down from $367.9 million a year earlier. Diluted earnings per share increased to $1.85 from $1.72, reflecting a lower average share count following substantial stock repurchases.
Sallie Mae repurchased approximately 12.9 million common shares during the first half for about $293.1 million. The company had roughly 187.9 million common shares outstanding at June 30, down from 199.3 million at the end of 2025.
The lender declared common dividends of 13 cents per share during the quarter, unchanged from a year earlier.
Total assets declined to $28.6 billion at June 30 from $29.7 billion at the end of 2025. Loans held for investment, net of allowances, fell to $19.5 billion from $20.3 billion, while loans held for sale declined sharply to $172.5 million from $933.3 million.
Deposits decreased to $19.9 billion from $21.1 billion, while long-term borrowings increased to $5.8 billion from $5.4 billion. Cash and cash equivalents rose to $4.6 billion from $4.2 billion.
The filing covers the quarter ended June 30, 2026.
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