SLM Corporation (NASDAQ:SLM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 23, 2020 • 08:00 am ET


SLM Corporation (NASDAQ:SLM) Q2 2020 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the SLM Corporation Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Matthew Santora, Director of Investor Relations. Thank you. Please go ahead, sir.

Matthew Santora

Thank you, Ashley. Good morning and welcome to Sallie Mae's second quarter 2020 earnings call. It is my pleasure to be here today with Jon Witter, our CEO and Steve McGarry, our CFO. After the prepared remarks, we will open up the call for questions.

Before we begin, keep in mind our discussion will contain predictions, expectations and forward-looking statements. Actual results in the future may be materially different from those discussed here. This could be due to a variety of factors. Listeners should refer to the discussion of those factors on the Company's Form 10-Q and other filings with the SEC. For Sallie Mae, these factors include, among others, the potential impact of the COVID-19 pandemic on our business, results of operations, financial conditions and/or cash flows.

During this conference call, we will refer to non-GAAP measures we call our core earnings. A description of core earnings, a full reconciliation to GAAP measures and our GAAP results can be found in the Form 10-Q for the quarter ended June 30, 2020. This is posted along with the earnings press release on the Investors page at Thank you, and now I'll turn the call over to Jon.

Jonathan Witter

Ashley, Matt, thank you, and good morning everyone. Thank you for joining us for a discussion of Sallie Mae's second quarter results. During the quarter, we booked a GAAP loss of $0.23 per share and a core earnings loss of $0.22 per share. This was almost entirely driven by our substantial increase in our allowance for loan losses with some impact from our liquidity portfolio. While the economic environment continues to be challenging and is having a significant impact on our results, I would like to highlight several factors that give us confidence in our business.

We are focused on controlling the factors we can control and driving our core business; we're aggressively managing our expenses; we're continuing to develop and hone our loss mitigation strategies; we're reviewing our underwriting standards to determine any changes warranted by these new economic realities; we're caring for our teammates in this new work-from-home reality, while continuing to securely service our customers; and of course, we're taking steps to build our allowance for loan losses.

We see some early and encouraging signs. Our borrowers are transitioning from the forbearance granted at the beginning of the pandemic back into repayment. Our ASR program continues to run its natural and preset course. Our current stock price only increases the value of this program as we anticipate our counterparty will be able