Sallie Mae (NYSE: SLM) reported Wednesday that the student loan lender posted a fourth-quarter profit, reversing its loss from last year, according to Associated Press.
The company cited higher revenue from interest and fees.
Despite the profit, the company’s performance missed Wall Street expectations, as the company recorded losses in relation to the sale of its mortgage purchased paper business.
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SLM Corp. said it earned $309 million, or 52 cents per share in the period, compared to a loss of $216 million, or 52 cents per share, last year.
Core earnings, which exclude loans bundled as securities and derivatives, were $249 million, or 41 cents per share. On that basis, analysts polled by Thomson Reuters expected a profit of 44 cents per share.
The lender's fourth-quarter results a year ago included an unrealized loss of $439 million, before taxes, on some derivative contracts.
For the full year, Sallie Mae said core earnings were $597 million, or 96 cents per share, compared to $526 million, or 89 cents per share in 2008. Analysts had forecast a profit of 97 cents per share for 2009.
Sallie Mae originated $4.5 billion in federal student loans in the fourth quarter, up 14 percent from last year. Private loan originations dropped to $381 million, down from $851 million a year ago.
In January 2008, Sallie Mae also discontinued "nontraditional loans," which were directed at students attending schools with low graduation rates.
Interest income from loans in the latest quarter was $320 million, compared to $161 million in the year-ago period.
Core fee income, which includes the gain on debt repurchases, was $503 million, compared to $237 million in the year-ago quarter.
Results for the latest quarter included a $98 million loss from the sale of the company's mortgage purchased paper business, a $34 million charge against its purchased consumer receivables, and a $33 million charge for early conversion of a portion of the company's series C preferred stock into common stock.
Offsetting the losses was a $46 million gain from debt repurchases.
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