Investing.com -- SLM Corporation (NASDAQ:SLM), more commonly known as Sallie Mae, increased diluted earnings per share by 40% over the first quarter as its rapidly expanding private education loan portfolio continued to grow at a high rate.
Sallie Mae, which was established by the U.S. federal government as a Government Sponsored Entity (GSE) in 1973 to service federal education loans, has seen its role evolve rapidly in recent years. In April, 2014, Sallie Mae spun off its loan servicing operation into a publicly traded company called Navient Cor (NASDAQ:NAVI), while SLM Corporation continued to provide consumer banking operations.
Over the previous quarter, Sallie Mae increased its net profits from $47.7 million to $65.9 million, while originating $1.8 billion in private student loans. It came as SLM Corporation expanded its private student loan portfolio by 24% to $12.02 billion. On a per-share basis, Sallie Mae's earnings jumped 40% to 0.14, significantly above analysts' forecasts of 0.10.
"Sallie Mae is off to a very good start in 2016. We’re seeing continued and consistent growth in our portfolio while maintaining high credit quality," said Raymond J. Quinlan, Sallie Mae chairman and CEO. "We expect these positive trends to continue as the portfolio seasons and as we leverage infrastructure and customer experience investments to help more students and their families make college happen."
At the same time, Sallie Mae generated net interest income of $210 million, up 23% on a year-over-year basis and net interest margin of 5.77%, an increase of 17 basis points over the last 12 months. The average yield in the company's education loan portfolio fell slightly to 8.03%, down four basis points from the same quarter last year.
Sallie Mae also reaffirmed its full-year guidance on Wednesday. The company expects full-year diluted core earnings per share between 0.49 and 0.51 on full-year private education loan originations of $4.6 billion.