SOURCE: The First Marblehead Corporation

The First Marblehead Corporation

November 10, 2014 09:00 ET

First Marblehead and Firstmark Services Form Strategic Partnership to Deliver Loan Origination Services

BOSTON, MA--(Marketwired - Nov 10, 2014) - The First Marblehead Corporation (NYSE: FMD) and Firstmark Services, a Nelnet company, have formed a strategic partnership pursuant to which Firstmark Services will provide certain private student loan origination services for the Monogram®-based loan programs offered by First Marblehead's lender clients. First Marblehead will continue to perform all of the quantitative and analytical related activities for all of the Monogram-based loan programs, such as product design, credit decisioning, pricing and portfolio management functions. Firstmark Services will perform application intake, call center services, the majority of loan processing services and certain program support functions. 

"By partnering with Firstmark Services, we believe that our student and family customers will continue to enjoy the highest quality service experience when selecting a Monogram-based loan, and we expect that the transition for our lender clients will be seamless and will provide a scalable platform for growth in the future," said Daniel Meyers, First Marblehead's Chairman and Chief Executive Officer. "Additionally, we believe that this will make our operating budget materially more efficient, shifting costs from fixed to variable, and in the first full operating year we expect that our overall financial results will improve by $3-4 million dollars."

First Marblehead expects that the transition of loan processing functions to Firstmark Services will be completed during the third quarter of fiscal 2015. First Marblehead's subsidiary Cology LLC will continue to offer private education loan processing and disbursement services for lenders through its own proprietary platform.

About The First Marblehead Corporation: First Marblehead helps meet the need for education financing by offering national and regional financial institutions and educational institutions the Monogram® platform, an integrated suite of design, implementation and credit risk management services for private label, customizable private education loan programs. For more information, please see www.firstmarblehead.com. 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. Through its subsidiary, Union Federal Savings Bank, First Marblehead offers money market and time deposit products. For more information, please see www.unionfsb.com. Following the dissolution of Union Federal, First Marblehead will cease to offer banking services through Union Federal. First Marblehead also offers outsourced tuition planning, billing, payment technology services and refund management services through its subsidiary Tuition Management Systems LLC. For more information, please see www.afford.com. Through its subsidiary, Cology LLC, First Marblehead offers private education loan processing and disbursement services for lenders. For more information, please see www2.cology.com.

About Firstmark Services: Firstmark Services has provided origination and servicing of private educational loans since 2002. Our products and services have been created specifically to meet the needs of private student loan borrowers, their families, the schools they attend, and the lenders who serve them. We provide loan application entry, automated credit decisioning, loan disbursement, document management, customer service, account management, remittance processing, and debt management. The combination of state-of-the-art technology provided by Nelnet, our parent company, and the personalized service from our team of dedicated private loan servicing professionals provides a one of a kind experience for our clients.

Statements in this press release regarding First Marblehead's future financial and operating results, prospects of First Marblehead following the transition of services to Firstmark Services, the partnership between First Marblehead and Firstmark Services, including the loan origination services agreement between First Marblehead and Firstmark Services, the timing of the transition of services to Firstmark Services by First Marblehead, provision of future services by Firstmark Services, and the benefits of the parties' relationship, including anticipated cost savings for First Marblehead, 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 First Marblehead's historical performance and on First Marblehead's plans, estimates and expectations as of November 10, 2014. The inclusion of this forward-looking information should not be regarded as a representation by First Marblehead or any other person that the future results, plans, estimates, intentions or expectations expressed or implied by First Marblehead 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 First Marblehead's actual financial or operating results, including anticipated cost savings for First Marblehead, 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: First Marblehead's and Firstmark Services' ability to transition loan processing services to Firstmark Services; the successful integration of Firstmark Services' loan processing functions with First Marblehead's Monogram-based platform; First Marblehead's success in delivering its various services to its lender clients; Firstmark Services' success in delivering loan processing services to First Marblehead and its lender clients; customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with customers or clients) that are greater than expected following the transition of services; the possibility that First Marblehead may be unable to achieve expected operating efficiencies following the transition of services to Firstmark Services within the expected time-frames or at all; demand for private education financing generally; competition for providing private education financing; other business effects, including the effects of industry, economic or political conditions outside of First Marblehead's or Firstmark Services' control, and the other factors set forth under the caption "Part I -- Item 1A. Risk Factors" in First Marblehead's annual report on Form 10-K filed with the Securities and Exchange Commission on September 10, 2014. First Marblehead specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, and you should not rely on those statements as representing First Marblehead's views as of any date subsequent to the date of this press release.

Contact Information

  • Contact:
    Alan Breitman
    Managing Director, Chief Financial Officer
    The First Marblehead Corporation
    800 Boylston Street, 34th FL
    Boston, MA 02199
    617.638.2065