Executive Summary

GAAP diluted EPS was $0.63, with net income to common of $132M; NIM was 5.18% (down 13 bps q/q on seasonal liquidity, up 18 bps y/y). Q3 also included a $136M gain on a ~$1.94B private education loan sale, and non-interest expenses of $180M .
Versus S&P Global consensus, EPS and revenue missed: $0.63 vs $0.81 and $366.2M vs $382.7M, respectively, while Q4 EPS consensus stands at $0.873* (Street estimates) (see Estimates Context) [Values retrieved from S&P Global].
Guidance: FY25 GAAP EPS raised to $3.20–$3.30 (from $3.00–$3.10), originations growth trimmed to 5–6% (from 6–8%), and NCOs (2.0–2.2%) and non-interest expenses ($655–$675M) reaffirmed; the EPS raise primarily reflects CECL reserve release on loans designated HFS ahead of an expected multi‑year partnership/loan sale program .
Credit performance remained constructive: NCOs improved to 1.95% (y/y -13 bps), late-stage delinquencies/roll rates were stable, and delinquencies at 4.01% were largely driven by last year’s modification‑eligibility change; allowance stood at 5.93% of exposure .
Capital return remained active (5.6M shares repurchased for $166M) and capital ratios strong (CET1 11.3%, TRBC 12.6%), while the common dividend of $0.13 for Q4 was declared .

What Went Well and What Went Wrong

What Went Well

Strong non-interest income from loan sales: ~$1.94B of private education loan sales generated ~$136M gain, supporting earnings mix .
Credit quality: Net charge-offs improved to 1.95% (y/y down from 2.08%); late-stage delinquencies and roll rates stable; loan mod enrollments are about half pre‑change levels .
Clear capital allocation and liquidity: 5.6M shares repurchased for $166M; CET1 11.3% and total risk-based capital 12.6% provide flexibility .
Management tone: “We delivered another solid quarter in line with our expectations… strong credit performance, lower net charge-offs, stabilization in late-stage delinquencies, and continued lower levels of loan modification enrollments compared to the prior year.” – CEO Jonathan Witter .

What Went Wrong

Miss vs Street: GAAP EPS ($0.63) missed consensus ($0.81*); revenue ($366.2M*) also below ($382.7M*) [Values retrieved from S&P Global].
NIM down sequentially: NIM of 5.18% fell 13 bps q/q due to peak-season liquidity drag (though still up 18 bps y/y) .
Higher reported delinquencies: 4.01% of loans in repayment (vs 3.60% y/y), partly from last year’s change to mod eligibility which pushes some borrowers into delinquency buckets before qualifying for mods .
Operating expense uptick: Non‑interest expenses rose to $180M (from $167M in Q2) .

Financial Results

P&L and Key Metrics

Metric	Q3 2024	Q2 2025	Q3 2025
Net Interest Income ($M)	$359	$377	$373
Total Non-Interest Income ($M)	$24	$27	$173
Provision for Credit Losses ($M)	$271	$149	$179
Total Non-Interest Expenses ($M)	$172	$167	$180
Net Income (Loss) Attributable to Common ($M)	$(50)	$67	$132
Diluted EPS ($)	$(0.23)	$0.32	$0.63
Net Interest Margin (%)	5.00%	5.31%	5.18%

Credit and Portfolio KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Private Ed. Loan NCOs (% of avg loans in repayment, annualized)	2.08%	2.36%	1.95%
Delinquencies (% of loans in repayment)	3.60%	3.51%	4.01%
Loans in Hardship Forbearance (%)	1.01%	0.91%	1.00%
Allowance as % of Private Ed. Loan Exposure	—	—	5.93%
Private Ed. Loans HFI, net ($M)	$20,460	$21,160	$21,615
Deposits ($M)	$21,445	$20,482	$20,012
Private Ed. Loan Sales ($M)	$—	$—	$1,936
Gain (Loss) on Loan Sales ($M)	$(0.03)	$(0.01)	$135.96
CET1 Capital Ratio (%)	—	11.5%	11.3%

Estimates vs. Actuals (S&P Global)

Metric (Q3 2025)	Consensus	Actual
EPS ($)	0.8095*	0.63
Revenue ($M)	382.7*	366.2*

Note: Values with asterisks were retrieved from S&P Global.

Segment breakdown: SLM primarily reports as a single lending/banking franchise; no separate operating segment P&L was disclosed in the 8‑K materials .

Guidance Changes

Metric	Period	Previous Guidance (Q2 2025)	Current Guidance (Q3 2025)	Change
GAAP Diluted EPS	FY 2025	$3.00–$3.10	$3.20–$3.30	Raised
Private Ed. Loan Originations Growth (y/y)	FY 2025	6%–8%	5%–6%	Lowered
Total Loan Portfolio NCOs (% of avg loans in repayment)	FY 2025	2.0%–2.2%	2.0%–2.2%	Maintained
Non-Interest Expenses ($M)	FY 2025	$655–$675	$655–$675	Maintained
Accounting/Implementation Note	FY 2025	—	EPS outlook reflects CECL reserve release on loans designated HFS ahead of expected partnership/sale; no gain‑on‑sale embedded	Clarified
Common Dividend	Q4 2025	$0.13/share paid each quarter YTD	Declared $0.13 for Q4 (payable Dec. 15)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Credit/delinquency and mods	Q1: “Stable credit performance with positive trends”; NCOs 1.88%; delinquencies 3.58% . Q2: NCOs 2.36%; delinquencies 3.51% .	NCOs 1.95%; delinquencies 4.01% (policy‑driven); late-stage/roll rates stable; mod enrollments ~50% of prior levels .	Stable to improving losses; headline delinquencies elevated by policy change.
NIM/liquidity	Q1 NIM 5.27% ; Q2 5.31% .	5.18% (q/q -13 bps) due to peak-season liquidity; long‑term “low‑to‑mid‑5%” target reaffirmed .	Seasonal dip within targeted range.
Loan sales and funding model	Q1: $2.0B sales . Q2: No sales .	~$1.94B sold with $136M gain; moving toward multi‑year private‑credit partnership; loans to be designated HFS; CECL release to flow before deal closing .	Building “third leg” of funding with fee-like economics.
Federal “Plus Reform” opportunity	Optimism on reforms enabling growth .	Reiterated long‑term opportunity; fully implemented potential $4–$5B annual origination uplift phased over years .	Expanding opportunity set.
Capital return	Q1 buybacks $31M ; Q2 $70M .	Q3 $166M; continued commitment to aggressive buybacks as conditions allow .	Increasing deployment amid volatility.

Management Commentary

CEO framing: “We delivered another solid quarter in line with our expectations… strong credit performance, lower net charge-offs, stabilization in late-stage delinquencies, and continued lower levels of loan modification enrollments compared to the prior year.” – Jonathan Witter .
EPS guidance mechanics: “We now expect our GAAP EPS for 2025 to be between $3.20 and $3.30… we anticipate selling both a small portfolio of seasoned loans and a portion of recent peak-season originations… we expect to designate a portion of our loans as held for sale prior to the end of the year.” – CEO .
Gain-on-sale not in outlook: “We have not assumed anything in our guidance about a gain on sale… reserve release is contemplated; any Q4 closing would be upside to the number.” – CEO .
NIM/Provision detail: NIM down q/q from liquidity; provision benefited from ~$119M release tied to the Q3 loan sale .
Credit posture: “We continue to see stability in late-stage delinquencies and roll rates” and mods performing with ~80% payment success after a year .

Q&A Highlights

Credit outlook despite higher reported delinquencies: Management attributes ~25 bps of delinquency to last year’s mod eligibility changes; expects late‑stage/roll rates to remain stable and long‑term NCOs in the 1.9–2.1% range through cycle .
Held-for-sale accounting and guidance: Loans designated HFS release CECL; guidance reflects that release; exact reclassification amount undisclosed; gain-on-sale not embedded in outlook .
Strategic partnership: Multi‑year private credit partnership anticipated; initial pool to include current book; structure aims for more stable fee‑like earnings and high capital efficiency .
Gain‑on‑sale margins: Historically mid‑to‑high single-digit range depending on spread levels and buyer leverage structure .
Marketing/underwriting: Continued discipline; origination growth achieved while improving mix/ROE; cost of acquisition trending down over time .

Estimates Context

Q3 2025 actuals vs S&P Global consensus: EPS $0.63 vs $0.8095*, Revenue $366.2M* vs $382.7M*. Q4 2025 EPS consensus: $0.8734* [Values retrieved from S&P Global].
Directionally, the Street may need to incorporate: (i) CECL reserve release on HFS designation (timing dependent), (ii) ongoing loan sale cadence and gain variability, and (iii) seasonal NIM dynamics tied to liquidity .

Key Takeaways for Investors

EPS and revenue missed consensus*, but the quality of earnings benefited from a sizable loan sale gain; NIM pressure was seasonal, not structural .
Raised FY25 EPS guidance to $3.20–$3.30 driven by CECL release on HFS loans; no gain-on-sale embedded—deal timing could present upside risk to Q4 .
Credit remains manageable: NCOs improved, late-stage delinquency/roll rates steady; headline delinquency reflects mod-policy mechanics rather than worsening credit .
Strategic pivot toward a multi-year private credit partnership could create a more stable, capital‑light, fee‑like earnings stream over time .
Capital return remains a core pillar (5.6M shares/$166M in Q3) with strong CET1 (11.3%) providing cushion for execution and potential volatility .
Near-term trading catalyst: further detail on the partnership structure/closing and any additional HFS designations; medium-term: Plus Reform ramp, originations mix, and trajectory of NIM within the low‑to‑mid‑5% band .

Additional reference materials:

Q3 2025 press release and 8‑K including detailed financial tables .
Q2 2025 8‑K for trend comparisons .
Q1 2025 8‑K for trend comparisons .
Q3 2025 earnings call transcript for commentary, guidance mechanics, and Q&A .
Dividend declaration for Q4 2025 .

SLM Corp (SLM)·Q3 2025 Earnings Summary