SLM Corp., the student lender known as Sallie Mae, fell to the lowest in a week after the company said long-term delinquencies rose last quarter.
The shares dropped 1.2 percent to $16.96 in New York, the lowest since Oct. 10, according to data compiled by Bloomberg.
The Newark, Delaware-based lender said in a statement that delinquencies of more than 90 days rose to 5.3 percent in the three months ended Sept. 30, up from 5 percent in the year-ago period. The company’s third-quarter core earnings, excluding items such as the market gains and losses of derivatives contracts, were $277 million, or 58 cents a share, exceeding the 54 cent estimate of nine analysts surveyed by Bloomberg.
“I can’t confess to being particularly happy about the near-term credit picture,” Chief Executive Officer Albert Lord said on a conference call to discuss the results with analysts and investors. “The fact is the economy remains very slow,” increasing the number of borrowers in delinquency.
More Americans than forecast filed applications for unemployment benefits last week, according to a Labor Department report today. Initial jobless claims increased to 388,000 in the week ended Oct. 13, up from a revised 342,000 in the prior period, and more than the 365,000 median estimate of economists surveyed by Bloomberg.
Sallie Mae is forecasting $3.2 billion of private education loan originations in 2012, and expects that number to increase in 2013, Lord said on the call. “We do see the market growing,” he said. “We intend to grow it by more aggressively marketing.” Legislation passed in 2010 cut companies out of the market for government-guaranteed lending.
Outstanding student loans are now more than $1 trillion, as student borrowing has surpassed credit cards as the largest source of unsecured consumer debt, according to the Consumer Financial Protection Bureau.