Sallie Mae Enters $200M Accelerated Share Buyback Agreement

Sallie Mae SLM announced that it has entered into a $200 million accelerated share repurchase agreement (ASR) with Goldman Sachs & Co. LLC GS. The transaction is part of its broader $500 million share repurchase program authorized by the company’s board of directors on Jan. 22, 2026, which will remain in place through Feb. 4, 2028.

SLM will prefund a $200 million ASR with Goldman Sachs and expects to receive and retire a significant portion of the shares shortly after execution, providing the company with prompt share count reduction.

The final number of shares bought back will depend on the stock’s average trading price during the ASR period. At settlement, the company may receive extra shares, or it may have to provide shares or cash depending on the agreement terms. The transaction under ASR agreement is expected to be completed before the end of the second quarter of 2026, enabling a rapid reduction in outstanding shares.

Prior to entering into this accelerated repurchase, SLM had repurchased approximately $91 million of common stock in 2026. Management’s decision to implement the ASR reflects a disciplined approach to capital allocation, aimed at efficiently returning capital to shareholders in the current market environment.

In addition to its share repurchase program, the company pays quarterly dividend. It increased the quarterly dividend to 13 cents per share in October 2024 and has maintained that level since. At the closing price of $19.98 on March 9, 2026, its dividend yield stands at 2.60%, well above the industry average of 1.98%, with a modest payout ratio of 15%. Over the past five years, the company has increased its dividend twice.

Dividend Yield

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Sallie Mae maintains a decent liquidity position. As of Dec. 31, 2025, the company held $4.5 billion in cash and cash equivalents, with $498 million in short-term debt and $5.7 billion in long-term debt. Given its liquidity profile, the company is well-positioned to support ongoing operations and pursue opportunistic share repurchases, while retaining flexibility to manage its long-term debt.

SLM’s Price Performance & Zacks Rank

SLM shares have plunged 31.1% in the past six months compared with the industry’s decline of 14.8%.

Price Performance

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Currently, SLM carries a Zacks Rank #3 (Hold).

Capital Deployment Actions of Other Financial Firms

Last week, Starwood Property Trust STWD authorized a $400 million share repurchase program, signaling management’s confidence in the company’s valuation and long-term earnings capacity.

Beyond repurchases, Starwood Property Trust maintains a quarterly dividend of 48 cents per share. With $499.5 million in cash and reduced debt of $2.3 billion as of Dec. 31, 2025, Starwood Property Trust remains well-positioned to execute capital returns efficiently.

In February 2026, Valley National Bancorp’s VLY board of directors announced a stock repurchase program, authorizing the buyback of up to 25 million shares of its common stock. The new program will become effective on April 27, 2026, and will remain in place through April 27, 2028.

Apart from its stock repurchase initiatives, Valley National Bancorp has consistently maintained a quarterly dividend payment of 11 cents per share since 2018. Given a decent liquidity position, Valley National Bancorp remains well-positioned to comfortably meet its near-term debt obligations. This financial strength also supports the continuation of efficient capital distribution initiatives.