First Marblehead experienced a net loss increase of $23.0 million from the previous year's comparable quarter.
According to the company, which released financial results today, this was mostly driven by a rise in the provision for loan losses of $17.8 million from its securitization trusts segment.
The firm recorded a consolidated net loss of $88.0 million, or $0.87 per share, for the first quarter of the 2012 fiscal year. This is versus the previous 2011 fiscal quarter consolidated net loss of $65.0 million, or $0.64 per share.
Meanwhile, the student lender's education financing segment had a net loss of $18.1 million, or $0.18 per share. This is versus a net loss of $16.1 million, or $0.16 per share, for the same quarter a year ago.
First Marblehead presents two distinct reporting segments: securitization trusts and education financing, the firm reported.
Its securitization trusts segment comprises the results of 14 consolidated trusts such as 11 trusts where the firm has no ownership interest.
Meanwhile, the education financing segment includes First Marblehead's services in designing and implementing its different private education loan programs as well as other services.
The firm stated that for the quarter ended Sept.30, the net loss for the securitization trusts segment was $69.3 million, or $0.68 per share. This is compared to a net loss of $49.1 million, or $0.49 per share, for the same quarter a year ago.
The student loan company attributed the rise in the net loss between periods to an increase in the provision for loan losses of $17.8 million aside from a dip in net interest income of $8.9 million on lower average gross loan principal outstanding. This was partially offset by a cash distribution of $6.9 million received under TERI's confirmed plan of reorganization.
Included in the securitization trusts segment are the firm's three GATE trusts for which it owns 100% of the residual interests. Net income from the GATE Trusts for the three-month periods ended Sept. 30 for both 2011 and 2010 were $1.6 million, or $0.02 per share, for each period.
The accumulated deficit for this segment was $1.20 billion as of Sept. 30 compared with $1.13 billion at June 30.
As of Sept. 30, the student loan firm had $245.4 million in cash, cash equivalents and short-term investments, compared to $267.4 million at June 30.
During the quarter, the student lender used $10.5 million in cash to fund MBS purchases to further diversify Union Federal's assets.