First Financial Bankshares Inc. in Abilene said it has sold $50 million of student loans this quarter for a pretax premium of $1.5 million, but it also said it is unsure it can continue to profit from that business line.
The $3 billion-asset multibank holding company said late Monday that future revenue from such loan sales is doubtful, because of legislative changes and turmoil in the liquidity markets.
First Financial said the main buyer of the loans has said it would no longer offer premiums or enhanced borrower benefits and may suspend acquisitions as of July 1 if it cannot obtain needed funds.
“We have closely monitored the student loan legislation and liquidity markets for the past 18 months and now have doubt that we will be able to recognize the sales and premiums we have experienced in the past,” F. Scott Dueser, the chairman, president, and chief executive officer of First Financial, said in a press release.
Its first-quarter earnings from student loan sales increased about 73% from a year earlier, to $283,000. Full-year earnings from the sales fell about 11% last year, to $1.9 million.
