SOURCE: The First Marblehead Corporation

The First Marblehead Corporation

April 26, 2010 08:00 ET

First Marblehead Enters Into Loan Program Agreement With SunTrust

BOSTON, MA--(Marketwire - April 26, 2010) -  The First Marblehead Corporation (NYSE: FMD) (the "Company") has announced that it has entered into a loan program agreement (the "Agreement") with SunTrust Bank. 

Pursuant to the Agreement, the Company will perform a range of services in support of a school-certified private education loan program to be funded by SunTrust, including loan processing, production support, program support and portfolio management, and program administration services. The Company expects to facilitate approximately $200 million in loans over the term of the program.

This loan program would be the first based on the Company's Monogram product offering, which enables lenders to customize a loan program to meet defined risk control and return objectives. The Agreement is expected to become effective during the quarter ending September 30, 2010, following execution of certain ancillary documents and satisfaction of other specified conditions.

Daniel Meyers, the Company's Chief Executive Officer and President, said, "Partnering with SunTrust provides First Marblehead a meaningful opportunity to structure, process and originate private student loans in this new market paradigm of credit, risk management, and revenue sharing. This loan program will put our Monogram structure into the marketplace and demonstrate that our revenue model does not require a capital markets takeout." 

Mark Smith, SunTrust's Executive Vice President for Specialty Lending, said, "We are pleased that this partnership with First Marblehead will enhance the options we offer for families and students seeking assistance to fund the rising costs of college."

The Company has filed a current report on Form 8-K with the Securities and Exchange Commission providing additional information relating to the terms and conditions of the Agreement, including the conditions to its effectiveness. We refer you to the filing, which can be accessed through the EDGAR or IDEA systems on the SEC website at www.sec.gov.

About The First Marblehead Corporation -- First Marblehead helps meet the growing demand for private education loans by offering national and regional financial institutions and educational institutions an integrated suite of design, implementation and capital market services for student loan programs. First Marblehead supports responsible lending 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; please see www.SmartBorrowing.org. For more information, go to www.firstmarblehead.com.

About SunTrust Banks, Inc.
SunTrust Banks, Inc., headquartered in Atlanta, is one of the nation's largest banking organizations, serving a broad range of consumer, commercial, corporate and institutional clients. As of March 31, 2010, SunTrust had total assets of $171.8 billion and total deposits of $118.7 billion. The Company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic states and a full array of technology-based, 24-hour delivery channels. The Company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through various subsidiaries the Company provides mortgage banking, insurance, brokerage, investment management, equipment leasing and capital markets services. SunTrust's Internet address is SunTrust.com.

Statements in this press release regarding the loan program (the "Loan Program") contemplated by the loan program agreement (the "Agreement") among The First Marblehead Corporation, First Marblehead Education Resources, Inc. and SunTrust Bank, including statements regarding the expected effectiveness of the Agreement, the provision of services by us pursuant to the Agreement and the volume of loans to be facilitated pursuant to the Loan Program, 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 April 26, 2010. 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, including the effectiveness of the Agreement and facilitated loan volumes, loan portfolio performance or revenues related to the Loan Program, or the timing of events, to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: market acceptance of, and demand for, loans pursuant to the Loan Program; demand for private education financing generally; competition for providing private education financing; our success in delivering our services to SunTrust Bank; our ability to negotiate and execute the additional agreements contemplated by the Agreement; the satisfaction of additional conditions specified in the Agreement; and the other factors set forth under the caption "Part II - Item 1A. Risk Factors" in First Marblehead's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on February 9, 2010. We disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

© 2010 The First Marblehead Corporation

Contact Information

  • Contact:

    Lee Jacobson
    Investor Relations
    First Marblehead
    800 Boylston Street, 34th FL
    Boston, MA 02199
    617.638.2065