SLM Corporation (SLM) or commonly know as Sallie Mae, reported third quarter core earnings of $164 million or 26 cents per share. Results were well ahead of the Zacks Consensus Estimate of 8 cents per share. The company had earned 19 cents in the year-ago period. Results reflected improvements in the credit market and an increase in loan originations. However, loan loss provisions remain high. Quarterly results included a gain of $74 million on the repurchase of debt and a $55 million accounting adjustment to reflect slower loan prepayments. Sallie Mae posted a net income attributable to common stock of $116.5 million, or 25 cents per share, compared with a loss of $186 million, or 40 cents, in the year-ago period. Core earnings return on assets was 0.31%, up 6 basis points (bps) year-over-year. Sallie Mae originated $6.9 billion in federal student loans in ...

The corporate ratings of student lender SLM Corp. or Sallie Mae (SLM) was downgraded by Fitch Ratings yesterday. The outlook assigned was negative. The ratings downgrade reflects the agency’s concern about the company’s business model. Fitch expects the company to continue to shift to a fee-for-service business model with its subsidiary Sallie Mae Bank originating higher-risk private education loans.   Fitch downgraded the long-term issuer default and senior debt ratings to "BBB-" from "BBB", while preferred stock was downgraded to "BB" from "BB+". The short-term issuer default rating and short-term debt ratings were affirmed at "F3". About $34.4 billion of debt and preferred stock is affected by these actions.   To restore the $92 billion student loan market, the House Education committee approved a legislation, which closes the Federal Family Education Loan Program and shifts most of the student lending into the Education Department's Direct Loan program. ...

Moody's Investors Service said on Thursday that is thinking about downgrading the long-term ratings of the nation's biggest student lender, SLM Corp. or Sallie Mae (SLM).   Previously, on May 13, Moody's cut Sallie Mae's ratings to junk, prompting the student loan provider to call the action "premature". The expected action by the rating agency would affect Sallie Mae's long-term Ba1 (non-investment grade) rating.   The agency is considering a possible downgrade as Sallie Mae faces significant uncertainties related to the political and consumer lending environment for student lenders. According to Moody’s, these issues could challenge the company's liquidity and funding position as it nears large unsecured debt maturities in 2010 and particularly in 2011.   The agency also cited that cash flow generation is taking on greater importance in the lender's credit profile because the firm's unsecured debt balance exceeds its unencumbered earning assets.   Higher funding ...

We think that the worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods -- there are still many significant challenges ahead. The banks are now able to tap the debt markets without FDICÕs support and also access the equity markets as the investor confidence returns in the stronger banks. Many banks have already repaid the TARP funds to the Treasury. Ê

While the bigger banks benefited greatly from the various programs launched by the Federal Reserve, the Treasury and the FDIC and are now in a much better shape, many smaller banks are still in a very weak financial state and the FDICÕs list of problem banks continues to grow. Further, the Government efforts have not succeeded in restoring the lending activity at the banks.ÊLower lending activity will continue to hurt the margins though the low interest rate environment should

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We think that the worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods -- there are still many significant challenges ahead. The banks are now able to tap the debt markets without FDICÕs support and also access the equity markets as the investor confidence returns in the stronger banks. Many banks have already repaid the TARP funds to the Treasury. Ê

While the bigger banks benefited greatly from the various programs launched by the Federal Reserve, the Treasury and the FDIC and are now in a much better shape, many smaller banks are still in a very weak financial state and the FDICÕs list of problem banks continues to grow. Further, the Government efforts have not succeeded in restoring the lending activity at the banks.ÊLower lending activity will continue to hurt the margins though the low interest rate environment should

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We think that the worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods -- there are still many significant challenges ahead. The banks are now able to tap the debt markets without the FDIC’s support, and also access the equity markets as the investor confidence returns in the stronger banks. Many banks have already repaid the TARP funds to the Treasury.   While the bigger banks benefited greatly from the various programs launched by the Federal Reserve, the Treasury and the FDIC and are now in much better shape, many smaller banks are still in a very weak financial state and the FDIC’s list of problem banks continues to grow. Further, government efforts have not succeeded in restoring the lending activity at the banks. Lower lending activity will continue to hurt margins, though the low interest rate environment ...

On July 7, 2009, SLM Corporation (SLM), commonly known as Sallie Mae, announced its support for the Student Loan Community's proposal to reform the student loan program.

The alternative proposal, put forth by a diverse group that includes non-profit, for-profit and state-based service providers and guaranty agencies seeks to enhance the Administration’s plan to better serve students, families, schools, and taxpayers. The plan also aims at retaining a significant role for private lenders in the student loan market.

The Administration’s plan is framed to provide certainty that funding will be available to students and save nearly $90 billion over the next decade by ending unnecessary public subsidies paid to banks. It would use the freed up resources to partially cover the cost of a permanent increase in grants for students from lower-income families.

Consequently, this would end all private originations of student loans and use only a small panel of financial firms

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* JP Morgan (NYSE:JPM) upgraded shares of Sallie Mae (NYSE:SLM) to "overweight," citing improved earnings visibility from its transition to primarily a loan service providers, which will lower interest-rate and funding risks

* Quantas Airlines cancelled orders for 15 Boeing (NYSE:BA) 787 Dreamliners scheduled for 2014-2015 delivery, and deferred orders for 15 more, citing the tough economic environment

* Potash (NYSE:POT) lowered its earnings guidance for the second quarter from $1.10-$1.50 to 70 cents, citing substantially lower than expected potash sales volume on deferrals by its global customers and lower realized prices for phosphate fertilizers

* UBS (NYSE:UBS) warned of a second quarter net loss, announcing $3.48 billion in capital-raising with a 293.3 million share offering at $11.91, a 6.9% discount to yesterday's close

* Goldman Sachs (NYSE:GS) lowered its 2010 earnings estimate and price target on Monsanto (NYSE:MON), citing lower glyphosate profits and lower seed price gains. The 2010 estimate was cut 50

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For Immediate Release

Chicago, IL - June 15, 2009 - Zacks.com releases the latest Industry Outlook. Today's interview is with senior analyst Neena Mishra, who talks about the U.S. Banks Industry, including Wilmington Trust Corporation (WL), KeyCorp (KEY), Zions Bancorp (ZION), Freddie Mac (FRE) and Sallie Mae (SLM).

A synopsis of today's Industry Outlook is presented below. The full article can be read at http://at.zacks.com/?id=2678.

As a result of a rise in charge-offs, the levels of reserve coverage have fallen over the past quarters and the banks will have to make higher provisions in the coming quarters, affecting the profitability. Also, the banks will also continue to take mark-downs in the investment portfolios, further hurting the bottom-line.

Banks with high exposure to housing and Commercial Real Estate loans, like Wilmington Trust Corporation (WL),

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The worst of the credit crisis is now probably behind us, but the banking system is not yet out of the woods, as there are still many significant challenges ahead.

Ten of the nation's largest banks have received the Treasury approval for TARP repayment, as they are now able to tap the debt markets without FDIC's support and also access the equity markets as the investor confidence returns in the stronger banks.

While the bigger banks have benefited a lot from the various programs launched by the Federal Reserve, the Treasury and the FDIC, and are now in a much better shape, many smaller banks are still in a very weak financial state, and the FDIC's list of problem banks continues to grow. Further, government efforts have not succeeded in restoring the lending activity at the banks. Lower lending activity will continue to hurt the margins, though the low interest rate environment

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