Sallie Mae reports fourth-quarter profit

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Student loan lender SLM Corp. reported a $309 million profit for its fourth quarter, up from a $216 million loss last year.

The Reston-based company, however, did not meet analysts’ expectations, in part because of a $98 million loss from the sale of its mortgage purchased paper business and charges on consumer receivables and conversion of stock.

The company reported core earnings of $249 million compared with $65 million during the same period last year. The company and analysts use these core earnings to measure the company’s performance.

“We enter 2010 with stronger capital, asset quality and liquidity,” CEO and Vice Chairman Albert Lord said in a statement. “We will continue to build balance sheet strength in this difficult economy as we begin to grow our earnings again.”

The company reported full-year core earnings of $597 million, compared to $526 million the previous year.

Sallie Mae sold $17.6 billion in federal loans during the fourth quarter. Private loans were down 55 percent for the quarter because of tighter underwriting standards.

Education loan charge-offs fell to $298 million during the quarter, compared with $443 million in the third quarter.

The company offered a new private education loan in 2009 called the Smart Option Student Loan that reduces total cost by requiring interest payments while the student is still in school.

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