Salie Mae Revenue from Collections Near $250 million for Year

In its latest earnings release, issued Thursday morning, Sallie Mae (NYSE: SLM) touted the expansion of its fee-based services, and the revenues those services brought in, in the headline of the release.  Sallie Mae’s fee-based businesses generate non-interest income and primarily include fees earned on guarantor servicing, debt management operations and collection activities.

Sallie Mae said that its’ fee-based businesses generated more than $1 billion in 2006, a first for the company.  In fact, fee-based business brought in $1.1 billion last year in “core earnings.” 

Sallie Mae uses a fairly complicated and somewhat icky “core earnings” vs. GAAP reconciliation model explained in the release: Sallie Mae reports financial results on a GAAP basis and also presents certain "core earnings" performance measures on a basis that differs from GAAP. The company’s management, equity investors, credit rating agencies and debt capital providers use these "core earnings" measures to monitor the company’s business performance.

For the year, revenue from collections – on a “core earnings” basis – stood at $239.8 million, up from $166.8 million in 2005.  This total puts Sallie Mae in rarified air when it comes to collection giants.

For the fourth quarter of 2006, Sallie Mae reported revenue of $57.88 million from collections.  This was up from the total of Q4 2005, $48.3 million, but down slightly from the third quarter of 2006 which saw collection revenue of $57.91 million.