SOURCE: The First Marblehead Corporation

December 07, 2007 08:41 ET

First Marblehead Announces Quarterly Cash Dividend

BOSTON, MA--(Marketwire - December 7, 2007) - The First Marblehead Corporation (NYSE: FMD) announced today that its Board of Directors has declared a quarterly cash dividend of $0.12 per share on the Company's Common Stock, which is the amount paid in the comparable quarter last year. The company paid a cash dividend of $0.275 per share last quarter. The dividend is payable on December 21, 2007 to stockholders of record at the close of business on December 17, 2007.

The company also announced today that it has elected not to execute a securitization transaction this fiscal quarter.

"Due to uneconomic terms in the current capital markets, we have elected not to securitize private student loans this quarter. We are exploring non-securitization and securitization alternatives for future quarters to enhance our business model and provide long-term capacity to the private student loan market in a manner that benefits our shareholders. Our business volumes remain strong and we see many opportunities to facilitate and process private student loans," said Jack Kopnisky, Chief Executive Officer and President of The First Marblehead Corporation. "Our Board of Directors determined it was prudent to continue to return capital to our shareholders this quarter even during these challenging times."

"With regard to the current credit environment, First Marblehead continues to monitor closely the performance of the portfolio," added Kopnisky. "The credit quality of the overall portfolio remains strong with average FICO scores in excess of 700. Steps have been taken to tighten underwriting criteria related to lower credit tiers. The collection and recovery processes are being modified, including reaching out earlier to borrowers, and to co-borrowers who frequently have higher credit scores than borrowers. These new processes are being implemented and the results are not yet reflected in the performance of the portfolio. We remain focused on providing long term value to our shareholders, our clients, and students."

About The First Marblehead Corporation -- First Marblehead provides financial solutions that help students achieve their dreams. The Company helps meet the growing demand for private education loans by providing national and regional financial institutions and educational institutions, as well as businesses and other enterprises, with an integrated suite of design, implementation and securitization services for student loan programs. First Marblehead supports responsible lending for borrowers and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally guaranteed loans before considering private education loans. For more information, go to

Statements in this press release regarding First Marblehead's future business growth, capital markets transactions, and the future performance of the securitized portfolio, as well as any other statements that are not purely historical, constitute forward-looking statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our historical performance, and on our plans, estimates and expectations as of December 6, 2007. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future results, plans, estimates or expectations contemplated by us will be achieved. You are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause our actual financial or operational results to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: prolonged volatility in the capital markets generally or in the private student loan asset-backed securities sector specifically; our success in structuring securitizations or alternative financings; the size, structure and timing of such securitizations or alternative financings; degradation of credit quality or performance of the loan portfolios of the trusts that we structure; any variance between the actual performance of securitization trusts and the key assumptions we have used to estimate the present value of additional structural advisory fees and residual revenues; our loan facilitation volumes; our relationships with key clients; and the other factors set forth under the caption "Item 1A. Risk Factors" in First Marblehead's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2007. Important factors that could cause or contribute to differences between the actual performance of the securitization trusts and our key assumptions include economic, regulatory, competitive and other factors affecting prepayment, default and recovery rates on the underlying securitized loan portfolio, capital market receptivity to private student loan asset-backed securities and interest rate trends. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

Contact Information

  • Contact:

    Janice D. Walker
    Vice President
    Corporate Communications

    Lee Jacobson
    Vice President
    Investor Relations