SLM Corp., the student lender known as Sallie Mae, reported a second-quarter profit of $543 million as private education delinquencies fell.

Net income rose to $1.20 per share for the three months ended June 30, compared with $292 million, or 59 cents, in the year-earlier period, the Newark, Delaware-based company said today in a statement distributed by Business Wire. Excluding items such as the market gains and losses of derivatives contracts, SLM's core earnings were $462 million, or $1.02 a share, the company said. That compared with an average estimate of $1 a share by seven analysts surveyed by Bloomberg.

Sallie Mae is remaking its business after legislation passed in 2010 cut companies out of the market for government- guaranteed debt. The lender is splitting into two firms, separating its education loan arm from its consumer lending unit.

Both companies will initially be owned by existing shareholders, according to a May 29 regulatory filing. Assets under the so-called education loan management business will consist of about $118.1 billion in debt under the government's Federal Family Education Loan Program, $31.6 billion in private education loans and $7.9 billion of other holdings.

The consumer banking business, to be called Sallie Mae Bank, is projected to have about $9.9 billion of total assets, including private education loans and related origination and servicing platforms, according to the filing.

Sallie Mae made $368 million in private education loans in the second quarter, a 15 percent increase from the year-ago period, according to the statement.

The charge-off rate, or the percentage of loans that have been written off, was 2.7 percent, down from 3.1 percent a year ago, the company said. The proportion of payments more than 90 days late fell to 3.6 percent from 4.5 percent during the same period of 2012.

The delinquency rates are down even as student loans balloon. U.S. education debt grew by $20 billion to $986 billion during the first quarter of 2013, according to the Federal Reserve Bank of New York. The segment was the fastest growing in household borrowing, outpacing an $11 billion increase in auto debt, the New York Fed said in a May report. Credit card balances fell by $19 billion.

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