NEWARK, Del. Sallie Mae reported a tripling of first quarter net income to $346 million on another big swing in the company’s financial derivatives trading.
The first quarter net compares to a $112 million profit for the same quarter last year and included a $31 million loss on the value of company’s derivatives portfolio, down from a $372 million loss for the first quarter last year. Sallie Mae, which uses derivatives to hedge its huge student loan portfolio, is constantly buffeted by changing values in its derivatives.
This year’s first quarter also included a $55 million gain from the sale of the company’s share in a federally guaranteed loan trust, $12 million of lower loan loss reserves and $8 million gains on the repurchase of the company’s debt.
The company said it originated $1.4 billion in private student loans in the first quarter and now manages a $37 billion portfolio of private loans. The private loan delinquency ratio for 90 days and more declined to 3.9%, from 4.4% from a year ago, and an annualized charge-off rate of 3.0% of average loans in repayment for both the current and year-ago quarters.
At March 31, 2013, the company held $119 billion of FFELP loans compared with $136 billion at March 31, 2012, as the federally guaranteed student loan program continues to wind down.
