SLM (SLM) 27 Jul 232023 Q2 Earnings call transcript

Hello. And thank you for standing by. Welcome to Sallie Mae Second Quarter 2023 Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to Melissa Bronaugh. open. is floor the Ma’am

and Thank up you, Second pleasure to Mae's will our and be the CFO. prepared remarks, questions. Good XXXX Earnings morning, we CEO; Witter, Quarter Jon my the today welcome McGarry, Call. our here After call Sallie open with Towanda. Steve for It to is

different here. in will Form with the and filings forward-looking expectations can we keep SEC. the may to of Before future predictions, a begin, discussed the discussion other in refer factors. contain mind those from be due be Listeners company's materially Actual factors and on This to our results those of discussion variety XX-Q statements. the should

financial potential flows well For include, these of Sallie impact Mae, factors on and/or operations, an as conditions our any among COVID-XX of the pandemic results business. cash others,

to and call, core GAAP a XXXX. conference measures will June earnings. we XX-Q at press in XX, results along the release page for the description This Form earnings this full salliemae.com. of A the our quarter on with During measures earnings, ended our be can core Investors refer posted we found is call to GAAP reconciliation non-GAAP

call Thank you. now over I'll to the And Jon. turn

a hope goals. Good today. messages quarter Thank Mae's XXXX today on away to pleased and for second I'm our you, discuss continued take towards I quarter Melissa you successful Towanda. Thank three morning, report to Sallie and progress everyone. joining us you'll XXXX key results.

second First, first half we and of quarter year. the in results the delivered strong

federal our even headwinds that payments our resilient year or macroeconomic the core to should we have model of drive a are other loan materialize the to well drive customers. positioned by third, for we results Second, resumption to some results, And solid business conditions. related if and serve business continuing deliver

a quarter. in was compared In $X.XX $X.XX in diluted quarter per quarter's year-ago with the GAAP $X the to X.X%. on sale billion of closed EPS begin the Let's as loans approximately share the of second premium at May, results. we of XXXX in

in we the for levels April, of sale volatility. and billion mentioned loans the bank As of we valuation the potential further given accelerated market second

sale capital from to We were this work XX loan in to release the the quarter, repurchasing over corresponding put the proceeds successful million stock. our of and second able just common shares

Xst We and by January by the XXXX. outstanding since of since of January have X% reduced shares XX% XXXX

deep buyers. Our assets continue a to loan in be pool well-informed from demand of

in the loan economic to levels commence or quarter environment. at and course, of the early quarter, board conditions, approval depending sale an in on preferences subject, buyer third and beginning We the to our of careful capital close consideration expect next fourth market in of September uncertain and

the education up which over quarter were originations Private $XXX million, X% of quarter loan XXXX. is of the XXXX for second second

first for the originations are of of the for Our slightly year ahead XXXX. half our forecast

content, marketing seeing application of half our and as the growth. the techniques underclass of has first well the increased XX% to throughout volume We also strategies XXXX, year, our first are strong in channels. investments application integration of underclass compared half successful and by Sallie approximately driven as as Mae's Through nitro technology the

consistent of was Credit past years. originations quality with

of versus second XXX quarter of for quarter was versus second was the of the second FICO in the XX% XX% XXXX. XXXX. second the rate cosigner quarter Average Our for XXXX in of score XXXX quarter XXX

cosigner higher due non-traditional quarter rates to Seasonally, mix the has second of students. lower a

up quarter with is vintage reflecting fourth recent year. of that private annual most entered our levels. in in line in our graduation rate There charge-offs X.XX% loans the Net with were in to representing repayment quarter million, the of charge-offs, past the the from We the expect finish second average performance $XXX in repayment, loan the education seasonality QX year quarter. previous X.XX% year-ago cosigner of in

previously administration we in the an in changes, see are would second defaults credit quarter, result. for uptick With expected implemented appropriately that we reserved practice this our and we

a for year is charge-offs of for the average as of Our lower of XXXX. full our annualized the half repayment in loans first remains than the year percentage X.XX%, net plan and

strategically We credit continue to back operationally and and focus our path on to normalcy.

of case standards. credit peak re-examined prior the to is we As year our every season, the performance

that conditions were As we is as and of our consumer every segments elevated year, case of sub losses. levels changed, responsible market also the for found portfolio

We this have incorporating our new insight. refined underwriting standards,

originations pleased that are strong while been We have growth. we lower new maintaining on risk to able

continue to difficulty. to customers who we practices are addition, programs develop appropriately financial help and new In facing

implement to the wave. of enhancements early repayment in expect another to program November set prior We fall

over call pause. review spending from bill Steve which of lending the specifies repayment me student news address performance, to deeper federal the a Biden let turn I federal end President Before to federal related Washington for signed program. the loan date for the a the

loan Supreme administration's program. federal the addition, struck forgiveness down the Court proposed In

decisions not that federal to both It's the with Supreme consistent payment to business, and While underwriting related resumption. assume note models Sallie were expected one the payments directly historical debt ask and Mae. on might anticipated our our important and impacts Court of decision levels

habits long-term said, on medium-term With of determinants Therefore, outlook. we have hierarchy believe loan these that performance. important decisions permanent our do not federal and will are and impact short a credit

ensuring borrowers, taking loan seamless issues. the on for and The to business. in to impacts readiness ensure tried smooth transition vested of an near-term is is in federal we smooth administration Therefore, to may borrowers a transition our repayment. a have might a operational to role heavily resumption they Biden play steps payments important federal and servicers or consider what addition, these have In for experience transition have federal ensuring

steps. They two important such have taken

agencies. that of the Education delinquent, miss collection debt to monthly to in vulnerable October reported or are referred placed credit from Department borrowers on-ramp program not September First, a financially instituting payments is so XXXX XX-month XX, XXXX, default, to bureaus, X, who considered

that borrower's payments. go enhanced a lower will but administration regulations X, XXXX. effect Additionally, borrower July on finalizing These is would program eligibility, Biden only into the also income-driven increase repayment an not

of the payments end payment benefits However, will the are fall it some loan this to the department indicated implement due. before has pause prior and critical

will Our that many plan. understanding borrowers to under not payments this have make is monthly

For quarter and timing rules, earnings presentation. see of a our please these of six page second summary

our We help steps own resume. as are customers succeed taking to federal payments

We and are increasing programs have them loans to communication help that what are federal better resources to we in with addition to customers federal who them, the understand offer. services available

be on to staff our be help borrowers training to to are who struggling conversant these programs resources. federal more find available might We

potential performance our strategies. setting to be engagement monitoring as customer are we early and have information might in issues, refining this our increasing identify We expectations ensure good or helpful and indicators also of or

medium believe Based this, our credit outlook, term vigilant. but all represents on remain we however, believe watch of resumption item. point, do a this At will it represents risk not short we of to we payments a to the major

this consumer in loan Economists respectively. impact alone range of America not payment projected and average are minimal a of $XXX the payments considering We factors, overall. and of view. And on Bank have a $XXX, Moody's credit will size loan by that at student federal have resumption at federal the

financial Steve will the highlights of through you now Steve? additional some take quarter.

everyone. Thank Good Jon. morning, you,

another at loan of discussion morning's private our position. with loss our this commitments, billion, income our of liquidity key $X.X discussion look CECL unfunded components of unfunded X.X% sheet education allowance, commitments The the the reserve includes reserve, capital continue strong a at education drivers the a and loan including our statement, plus of a Let's $X.X exposure, the of accrued loan of balance and detailed for was loan interest which billion, look $X.X private or and total on under portfolio, receivable billion.

reserve are management. from quarter, was necessary overlays allowance when X.X% These CECL subject lower model to change deemed several portfolio Our inputs quarter-to-quarter preparing the at our than that our which We loan and is X.X%. incorporate inputs at for of by losses. slightly include prior

Economic weightings in take S-X look current Moody's we XX% drive at forecasts movement variables. Let's the S-X weighted In respectively. base quarters, quarter-to-quarter and forecasts, XX%, and the XX%, used and and major allowance. year-ago the a

forward, periods We expect this during extraordinary except going to of mix use uncertainty.

as economy, the did forecasts by There allowance no $XXX the the drivers. the million. Loan be continue to quarter of important such sales health provided reduce in speeds other the changes about inputs, by prepayment Moody's during concerns were model second the Despite stable. or

we accordingly. reserve quarter second large to not the is and new a quarter, begin book do commitments disbursement While year for academic the

unfunded new commitments in totaled for $XX the Provision second quarter. million

repayment, provision up QX, total XX-plus from loan in for our in in was statement X.XX% loans the education this quarter, Our losses, quarter. income Private X.X% booked from $XX loans year-ago of days X.XX% improved but were on delinquent million.

expect to of QXX. in continue remainder for mid-X% to the the remain delinquencies range day We XX-plus

year-ago in QX the X.XX% at the X.X% the QX, in quarter, Forbearance X.X% came X.XX% already the a of usage in at from to end Jon and Debt from was of quarter. and mentioned, quarter, X.X% in X.X% year-ago the end compared charge-offs, as down the decrease in second at quarter.

also seasonality principal Jon there new already into second interest As quarter mentioned, full as and the go in borrowers is repayment.

NIM we our result is worth than for lower points the at from XX for June came up reserve a for rate It As expect a credit to changes, year. in our did strong the X.XX%, continues X.XX%, and administration practice that the uptick plan year-ago implemented charge-offs. our again of quarter quarter. and this is charge-off be through previously annualized mentioning basis net in

rising rate environment. to continues the Our portfolio benefit from

from unchanged the but second-quarter period the Consistent from over expenses assessment in QX, year-ago million the quarter. the $XXX to essentially increase elevated $X higher million, FDIC year-ago fees. with operating Roughly $XXX million of guidance, were relates

the staffing our second to FDIC were as current $X OpEx quarter. increases in Volume than in XXXX. the servicing, last over the the in As in absorption XXXX increasing quarter. April, account fees in increase as both higher levels well collections increase we effects of we year's to in our year-ago million million in remaining $X our be of The the mentioned over of inflationary where environment, relates expect originations, assessment for they and

capital Tier XX.X%. than equity and XX.X%. XX.X%. look with positions Finally, of At ratio very ended Common liquidity was loan was the plus GAAP over higher X to We assets assets, end ratio risk-weighted a a at the quarter, equity total strong of at post-CECL stood are XX.X%. of loss our liquidity second we liquidity year-ago capital the XX.X% of like at the strong. quarter total In risk-based reserves

return shareholders capital business to We to grow positioned forward. and going are our well

Jon. to Back you,

Thanks, Steve.

with recently up wrap me our for outlook a announced additional comments our few acquisition Let and XXXX. on

back. night, and cash acquisition scholarship things advantages. It we the earn platform matching Along to scholarship scholarship search, administration excited are for has assets pleased of of a Sallie free a offers strengthening technology, opportunities. acquisition scholarship users key This with partners, a we more solution connect for Sallie on a aligned, report strategic to have our streamlined itself digital to is platform By last and content which to several variety top students as benefits announced closed a helping are Sallie offering the Offers, core with well connect one-stop the wide is has all our should [Ph] of ecosystem, deal a application. Sallie, pay As direct we also students with search to mission many families and business. scholarships. with shop as

provide now share Sallie advancing the we growth about education platform and and expected, at further need summary, Sallie it for Through our company. to help the are been and we are market are loans the that when Finally, they gaining with our as as excited offers has Mae, the time. scholarship an solutions we're same Mae we administration transactions In Credit borrowers future. performance originating and Sallie most. high-quality developing options new interesting Nitro programs

bipartisan to at a be back put discount call for intrinsic wake-up to come buying stock decision capital value. work, debt at prices we continue policymakers are for on appears together real to We federal The to believe Supreme to cancellation Court's a our reform.

building, to the proud have remain bills quarter results introduced, number reflected advocate solid about been years. future. new am report our and for of as the to ideas that Momentum practical of supporting many by be several excited of another we I appears being for

of discussion a guidance. Let me with XXXX conclude

strength of Origination's the higher or the will the and year of end We originations believe to year our the the the by are growth of of better. to end encouraged guidance months year end slightly closer first we six the closer through

all We are metrics. for guidance XXXX-XX the affirming key

call some let's Steve, up questions. you. open the Thank for that, With

from Thank Jeff with Instructions] comes Morgan Adelson you. line first question of Our Stanley. [Operator the

is line Your open.

just know September. could in on morning. made Jon comment that early hoping good billion the the Hey, was off I next you just you're dollars you loan said looking key of sales. off already kick to earlier I

this be at one point indications Just that had how if of you or went you curious market things last And stand billion to would willing to any of the there. you versus upside how interest about that kind just least related feel the dollars it off back billion and much then at capacity. buyback to of you thinking we be size how the that gives of another I $XXX should like time sale?

I'll is question. the Steve. that question and pass to the Jeff, this Jon the take it half Hey, first then back of second half for I'll of

have loan We buyers. a dialogue constant our with

mentioned remarks, report in is pretty there that loan in group sales. of Jon are the constantly our a large interested As buyers

So issue. puts go sale bit interest last buyers spreads typically, and credit Base that's the since rates which takes. have then, where to We've up but is some are the finance have not a tightened. on an all sensed purchases some been that little ABS,

of deal great a not it's change. So

point. pricing underlying be this can think in at the market I more

you of give as tend capital. same quarter good of Jeff, to question allocators your I'll I that answer think every I And give the upsizing, to

always shareholder nothing trading good always opportunity. considering of our are opportunities opportunity our That's X and to to at there's from What think is at the situation, ideas there to what look conditions But create of is to And value. billion? today that board management equity, market that's equity anticipating. plan We and value, if of point. is open we we we price shareholder will our sort create that are accepting a prevents that that there in

anything not this to we're at going So point. commit to more

would we had year. but if quarter. happening what's I we process end of to billion, same that the would slated X year it's keep this market again the acceleration it's Again, in And originally thought that the argue had every $X billion the existed. that from which half through led plan, right the go there's the Xst of what is at of our the into nothing And conditions

know credit, Okay, great. quarter on you. I is And quarter just for supposed this to be higher follow to up last seasonally

the so far How related new there period. the is that, is trajectory Just over performance about is grace reads of year. talk trending the rest any the and what to separately wondering, plan there, was quarter-to-date, IDR a early on And losses July? the maybe of

balance advantage sense how many any interim, you is take percentage are grace maybe for sheet, these Just kind have in of what contextualize the your that that IDR plan, curious, qualifying to do maybe versus any borrowers, contextual of and borrowers the the plans the population way what of period or just for to of size new or broader you?

then of Yes, annual the to that to says believe a Steve let changes can came me maybe talk point think briefly up there's IDR. about think credit, have on-brand I it bit on credit, I is combination that nothing affirming us there the and and and On little tag our this of I our to seen all, we guidance. that leads material guidance program

reserved what that seeing is can for. and And think we're expectations what July you so our with assume consistent I we're in

different or there. new So nothing

on really advantage that. people for I to of it's us many the will think think take hard on-brand estimate how program, I

payment really I new are just that of grips things more hierarchy, probably their do like. lot customer's card think else than payment various suggests equal, going obligations. that or student across have. with payments balances the it's going they in of balances being to due whatever may their to just because a near all lending think be credit a that all is probably be The or overall bottom card to other those are payment their federal come federal regard to loan other or forgiving be But it starting the to going and borrowers payments are I hierarchy when what

but in to powerful flexibility. we quite thing hard giving a think know customers still it's of a degree So

that pretty We studied borrowers walk are and Steve, subscribed the and extensively subscribed a why federal don't it program, payment going program through to those both But the and it is in for think terms reduction. benefits the short-term is today in we IDR of some have program already think the of details? heavily become rich think long-term you It is amazing heavily today. We to we more forward. will a

Sure, happy Jon. to

Education of make So look, a debt we've has. a a repayment plans the of how what on published assumptions much couple Department has you look about, for borrower at income-based taken example, and

for which which payment average they're a two repayment an have if steps So, rises payment substantially increases. a pretty years. $XXX, of the the that to fully the has in is as most be turns $XXX, borrower phase income-based that substantial coupon, much declines this the would federal $XX,XXX capped last $XX,XXX for time out they're that the as example, they so of loan a they IDR, drops savings. is example several X% amount over loans on been chain for and That right. but payment be with have they're And And is an that and the a by income-level code where borrower a underwritten making is income at gradually income-level before

a it's negative and So the additional program upon size loan. payments, loan giving the depending amortization benefits has really for powerful not the loan after that of as a capping on actually such the XXX

So if it. informed vast program they very, two that will it's futures think has advantage powerful of are the majority of very I that take a borrowers of

our in today. the And intelligence Jeff, borrowers tells income-driven the other federal I thing XX% program us repayment of add, would about are

would think Our borrowers time be number over to new makes And administration and apply. for enrolled go they more easier it as I as easier understanding that the people automatically up will expect this in and we is program to eligible. are

Great, thanks for appreciate all it. I that color

question. next our Please you. by for Thank stand

with is next question Rick from of Our the Shane JPM. line

is open. line Your

did name. didn't Hey, Shane, hear you Rick call? Is the I this

is line open. your Yes,

morning. Hey guys, questions thanks Thank this my for you. taking

you years the One of the couple that of that are a there things pointed can last of you is in out servicing outcomes. that lot influence the side, on ways

etcetera. into as your doing all of You've prepare this of we insight to sort work? them. borrowers borrowers with credit move about to Obviously, to talked forbearance, there have towards the are you proactively that things lot etcetera, of inbound asking experience are collections, from receive of borrowers, if a is you starting improving are curious about how you I'm the questions servicers calls profiles, already going and end

of but of want we on question, we very all not is in proactive to Rick, be remarks, this to it's some we're my bit me directly topics Yes, also not really government, on transition, this make the touched deeper, this little appropriate advising go helping our loan We're and caveat sure we and a don't a in good a we I obviously position purview. clients want and are not so servicer. a but get federal into the let customers our in are suddenly our that where navigate to federal

said, a which loans. with a that implementing But do certain of that federal so while, host of repayment, customers for date now we have we have are, under on been our know whole have consideration we a which programs

ability is too financial incredibly help we all executing themselves people in also them them and not communication the our into the have and for them resources spot, a opportunity frankly, program encourage to navigate helping we it the stages early this remind the using a begin are a obligations powerful are them understand We help know in to they that great difficult and at a get to of them, remind which problem. them, as available quite federal to to early to resources that if part really those resources, in of deep doing to period, outreach, that find

know quantitative are what from those example, focus by challenges are sort can the that qualitative, because up their stepped experiencing, describe in they absolutely as being facing, have we borrowers hearing, and of I way, up so what's understand Rick, both and federal directly communicated monitoring insights, them, sometimes, for to we mouths that of there the continue payments, groups in set qualitative types of to that and they by what respond fall, are we power, the We so they and talked will are would offer, quantitative have introducing that, actually doing enhancements we about if and be assess that will insights, we of will see we that mitigation next there. to the loss addition programs obviously look program are caused sort of those real we the the look, early wave at the programs, is to fact an we we we federal need quick to resumption unmet continue of our of

this but proactive be a the transition. So broad a and to recognizing it as help as can our is customers they we approach, want during program federal again, effectively is issue, pretty but successful

answer. Thank Terrific. you very It's interesting much. a really

next you. stand for by our Please Thank question.

Our with the Kaye next of question comes Fargo. line from Michael Wells

Your line is open.

me It morning. amount like of to the feels guidance Hi, reflects fair cautiousness. good a

not said you so on that NCO know on I is I not hear least tighten we to why your full-year plan, ahead, of payments that until your instance, the have X.XX% For times so year-to-date call the lower the thoughts is numerous guidance? but at the that. wanted NCOs October, resumptions than or of improve

Yes. X at end look, of is XX the the at the the uncertainty over biggest next the just to of months. play factor think Michael, of macro I the environment Well, day, the course

rate an instrument. not our unprecedented borrowers. By obviously rate increases. have potential interest just but the rate has That the debt borrowers, in rate seen denominated We stressing variable other have people who variable of variable way, rate of a

strong I unemployment various certainly but today, at there slowing if look least situation signs or the reports, a be softening the at to of you economy. is the continues of some think economic

what example, when were to are us to credit implemented. changes, relatively and various changes robust pull-through credit changes season these those us in our understand, by while we administration into have segment that performance, some I and continue permanent think versus of made is analytics given help new pretty for We patterns

a you typical more be in is when think uncertain year. I so outlook the than all a would this economic credit And of just case together, put those and things

end that we want of level the and so our reflect outlook, day, being prudent are And in of the in guidance. potential think think are we setting risk to how at we we I

refi to Okay. outlook about market. wanted very, now. right the know are the I refis I talk for very a low bit little

the mixed impact, some major going not hearing slated start, to saying refi resumption some of be signals to expecting With of been big some something more I is a the material. payments from players, have it

So I wanted thoughts lot that. to but are not now, stay way. likely higher a on also that get rates your they will know I

of a And then, thoughts so on any I hear lastly, defensive was in a potential to just which uplift before, I this. your refis? product failure, on a ahead was know you a one tried that thoughts wanted pilot

well thinks So, a a money Joe that to think maybe loan would X% opportunity student Michael, is need federal rates their which sort credit need spreads debt. loans, I and colleague, you bit the Jon your any entice then this the will on And refied Fisher, I the be make and to that friend you vicinity consolidation you to start refi actually business who the add loan is, is those is the level Steven, to gets the certainly vast consolidation/slash debt able holder to offer little and the color. he rate in his I of to former the to good earnings consolidate start will my in above of be X.X%, echo offerings. add appropriate, by and an program, under, and additional on If around response think, majority is X%, always interest described very federal I undercut that much call time game, today, well in five-year and where of be base it

being more the a the might programs potentially think important richness in that be we've income-based of the federal loan here. the repayment the benefits of that are in form describing time now the and lot I of factor second And offered situation spent

hard the look, long up right, think, think they quarters might years, future game rates enough acquire to be just take to have up be give fired think cost I think the considerably borrowers but the in before simply loan are down federal that benefits. do consolidation opportunity would I opportunity come if again, And and So not to warrant is going business. and lending of target the advantage our to of to to the industry big private an necessary you're I

the acquire So drag in our the or good expense seeing of so. Jon, we certainly you'd consolidated for feel good the that year we're pretty coming that shape to unfortunate away, add quarters pretty on our we growth to that? like portfolio and and anything cost think to

Yes, Michael, piece I'll of the sort defensive just to again back product harken this. and like given take calls I'll maybe I've answers on it, of

rate could today consolidations have current not a has said, economic in a defensive a need in compelling. that much really always been As we there's do Steve don't talked think be But I for would us the modest that but and think of business. think environment rates even at creates product the we we that, of future nor we've product a our outsized for as about these that it, part issue the been offer

a do question rates you the how becomes, offering so, And right to the just product proactively think with lower customers? about

of of cannibalization sort is described a offering What past the the what's cost to you defensive product cost the that versus of consolidate. consolidation may be than I offering that think away in map. would of otherwise more we've people

And down comes so, that to formula. it really

customers have models, financial better big the what future crack we But we're to point investment their I viable. that change the today, at to trying enough the to customers understand something. in immediately allow a in for after to think and journey do of and it's we've part think not economically the could we education past ample to had code able cannibalization better in situation. and through map higher future, into to in looking that this That I we've able is to those And not crack content like predictive be to enough with certainly us That code. might have felt their to don't insight that been data think our past, and map. increased cannibalization do change on in services the really product

and to than again, has So work better work a to what seen. capital it's able all date, been But enticing. in we've good math we the math allocators, to that haven't as make way

you. thank Okay,

you. for by our Please Thank stand next question.

next from Sakhrani Our line question comes KBW. Sanjay with of the

open. is line Your

Hi, in Kwok for answered. question. have filling guess this my them most Thanks been and I Sanjay. of is actually for asked Steven taking

the follow Thank come see Just bit just little wanted year. NIM. your NIM up outlook around you. NIM the and wanted the I sequentially for what's a on know the to down to did

Sure, Steve.

should year, a NIM that are think on. we that I is handles. that at And low our the stated the of five, beginning five have we certainly the trajectory

rates obviously of benefited the increases trying interest the for mid extent, in That's are very position but rates. decreases full to certain handle have margin. not net really ourselves a to for low our X% We on happy to And we're have a the year. interest to from we rise or outlook

so in I good think Yes, we're shape. pretty

sensitivity And not If in you position the our changed time. XX-Q, or our up look should rate this that down point interest NIM disclosure see at the have significantly at very go where you'll be a balanced we rates significantly. in

management. liability positioned about good asset we're pretty terms feel we now of So, in where

betas. Is Are I thus it there? anything it. your far? around, within expectations wanted follow Got up like, And you just deposit seeing to

the than we have move marketplaces the of banking So regional on different insured seeing obviously, rates their more the they I know deposit lot a participated pressure into, always we And as that in. they are banks. regional sort are in industry,

the today. insured, reminder, our deposits beginning as of basically that at and were is where year, Just remain XX%FDIC they a the

rate our In X.XX% terms it been cycle. of beta, bang in the the vicinity on entire throughout has

very nor pressure us. So we're the not has seeing favorable up for we easing been additional market are seeing and any any

Got taking question. it. Thanks for my

Thank of Cyganovich from comes you.[Operator Citi. Arren of next Our the question Instructions] line

Your line is open.

clarify you hoping gain was sale. the could I on

think that I X.X% quick when about you was potential the waiting sell sheet was X.X% just and a little had. versus better return. I bit a said you doing keeping talk on maybe level math, to just decision relative what loans balance the And for I at

loan premium. Arren. the give on you to sale bit color a little further Sure, Happy

loans the counterparty basically is our sheet. on in basically we X.X% for the So at balance look our Jon premium that the what quoted paid

sale, statement. book way. as the costs And always to costs, unamortized the and see that then transition write sort is which income in the lowers And -- then of off gain certain the we premium get case, you other have the acquisition the when accountants transaction on we on

was think There sale bit a where further a we quarter. our noise card disposed on write-down finally million portfolio, in which little of I line on gain that also in credit the of had we $X.X

on So of shakes accounting math the the and that's premium. sort the out how

million premium to as always people of of gain In a terms part reserve released we like that also of sale. that selling I'd on $XXX at X.X% remind

portfolio the is that X% roughly So the reserve sold. we of

we we in So you pretax the XX fallow of lying can is argue certainly bought And speak that earned buyback we many, and the X% I believe good often what makes many, because release, frequently, years. many that free sales, XX.X%, is we below the that measures. those value handle, back then X.X%, the sense do actually shares by for capital up share reserve and the premium we many the reserve in arbitrage of loss shares that is our intrinsic and closer perfectly to loan think with even is that we terms basically excluding for loan

So we all a transaction think is that. great

be bit little year? high lower second of that changes end would you particular pushing tends you same. the bit, the that be and Okay. for still then that the kind kind on pull And to the would a third highlighted I quarter, the guidance the some of up of expense kept Thanks. of about a always the highest Are of expenses, your sort areas might expenses think half above quarter that. little there indicated as we're which you that

to third appropriately, So high watermark is quarter and appropriately our we hit our spend do intend money as the marketing, the team typically to and are our guidance. expenses direct-to-consumer determined to manage look, Jon we management

what see in quarter, is the is and OpEx will do hit to OpEx And fourth what typically, sharply be that will then third higher guidance. quarter necessary you'll and lower the we in

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