Last Thursday, Motley Fool Hidden Gems selection First Marblehead (NYSE:FMD) reported its first-quarter results, and, as is the custom, another round of skepticism and hand-wringing ensued.

The results themselves were quite good. They were also better than analysts had expected. But it is important to point out that the company does not provide quarterly or annual guidance, so variability is more likely here than it is with some other businesses. The company's financial results also don't lend themselves to comparisons, because the company didn't perform any securitizations in last year's first quarter.

With all that said, the company did report $301.8 million in revenue and $2.23 per diluted share in earnings. The company also improved its cash flow results by collecting more cash on its securitizations up front, a result of its securitizing BBB-rated loans for the first time. The questions now hanging over the company are those that revolve around how sustainable its results and growth rates are, and the continuing concern regarding how prepayments and defaults will affect its residuals (in terms of cash flows that are expected in the future). These rates are trending up a bit but are still within the company's estimates.

Other data within First Marblehead's business remains promising. The company increased its loans available for securitization by 38% over last year to $1.5 billion, and its rolling-12-month volume of loans available for securitization grew at a similar rate. But the larger dynamic is the tailwind the company appears to enjoy as the cost of a college education continues to increase and federal grants cover a smaller and smaller portion of that pie. On its conference call, the company also had a slide showing that it continues to increase its share of the private student loan market.

Going forward, it will be important to continue tracking the role that new customers General Electric (NYSE:GE) and KeyCorp (NYSE:KEY) play in First Marblehead's expansion and in reducing its dependence on Bank of America (NYSE:BAC) and JPMorgan (NYSE:JPM). It will also be wise to pay attention to competitive responses from Sallie Mae (NYSE:SLM) and Student Loan Corp. (NYSE:STU) as First Marblehead continues to grow. In the meantime, expect the ride to be a bit bumpy, because none of these items will become crystal clear in the short term.

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First Marblehead is a Motley Fool Hidden Gems pick. Bank of America and JP Morgan are Motley Fool Income Investor selections. All of our investing newsletters come with a free, 30-day trial.

At the time of publication, Nathan Parmelee owned shares in First Marblehead but had no financial interest in any of the other companies mentioned. The Motley Fool has an ironclad disclosure policy.