Reston-based student lending giant SLM Corp.’s second quarter earnings were up 33 percent compared with the first three months of the year, the company reported Tuesday.
The firm, better known as Sallie Mae, posted earnings of $966 million, or $1.06 per share.
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The quarterly increase was attributed to strong performance in its hedging and derivatives businesses.
The company, already the country’s largest student lender, also reported that its student loan portfolio grew 18 percent in the most recent quarter. The portfolio now totals $153 billion.
“Our loan portfolio continues to register strong growth, and our internal brands are outpacing the market,” Sallie Mae Chief Executive Officer C.E. Andrews said when announcing the earnings.
“We are delivering best-in-class products and services to schools, students and families to help them access higher education.”
However, the company’s core earnings — which do not include earnings from derivatives and certain futures contracts — were down sharply from last year and fell short of Wall Street expectations. Core earnings were $189 million, or 43 cents per share, down from $320 million, or 72 cents per share, during the same quarter last year.
According to an analyst survey conducted by Thompson Financial, Sallie Mae was expected to post earnings of 72 cents per share.
The lower-than-expected core earnings come amid the uncertain status of a takeover deal in which a group of investors, led by private equity firm J.C. Flowers and Co., was to buy the company.
The group said the deal could fall through if pending legislation mandating tighter controls over the industry and an interest rate cut on government-backed loans becomes law. Shares of Sallie Mae were down slightly in midday trading, hovering just below the $52 mark after a close of nearly $53 Monday.
