NEWARK, Del. (AP) -- Sallie Mae reported Wednesday that its fourth-quarter profit fell as the student lender set aside more money for bad loans.
It also forecast 2013 earnings short of Wall Street expectations and its shares slipped in after-hours trading Wednesday on the news.
Sallie Mae, based in Newark, Del., has seen an increase in demand for private loans as higher education costs rise. But it has also suffered financially as the economy has hindered students' ability to repay their debts.
The company said loan origination increased 12.5 percent for the quarter to $514 million. But its provision for private education loan losses was $296 million for the quarter, versus $255 million the year earlier. And its charge-off rate, or the percentage of loans that have been written off, rose to 4.19 percent, up from 3.52 percent.
Sallie Mae earned $343 million, or 74 cents per share, for the quarter that ended Dec. 31. That is down from $506 million, or 99 cents per share, earned in the same quarter last year.
Its core earnings, which adjust for a number of factors, were 55 cents per share. Analysts polled by FactSet were expecting it to earn 53 cents per share.
Sallie Mae expects to earn $2.30 per share for 2013. Analysts polled by FactSet were expecting the company to earn $2.32 per share. It anticipates private loan originations of at least $4 billion in 2013.
Shares of the company, formerly known as SLM Corp., fell about 2 percent in after-hours trading on the news to $17. Its shares had been on a fairly steady gain since May and are up about 25 percent in the past year.