Slide 1: Investor Presentation 2nd Quarter 2024
Investor Presentation 2nd Quarter 2024 Confidential and proprietary information. © 2024 Sallie Mae Bank. All rights reserved. 1
Slide 2: Cautionary Note and Disclaimer Regarding Forward Looking Statements
CAUTIONARY NOTE AND DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS The following information is current as of July 24, 2024 (unless otherwise noted) and should be read in connection with the most recent periodic report of SLM Corporation filed with the Securities and Exchange Commission (the “SEC”)
Slide 3: 2nd Quarter 2024 Highlights
Balance Sheet & Capital Allocation $691M $1.6B 2ndQuarter Private Education Loan Sale of Private Education 2024 Highlights Originations in Q2 2024 as Loans in Q2 2024. compared to $651 million in the year-ago quarter; 6% growth year-over-year. $0.11 51% (1) 14.7% Common stock dividend paid in Q2 Ret
Slide 4: Additional Key Performance Metrics
Loan Sales Funding & Liquidity Additional Key Performance $1.6B Deposit portfolio balances at the end of Q2 2024 were 1% 2% Metrics Private Education Loans, including $1.47 billion of lower than at the end of Q1 2024; Q2 2024 mix of brokered vs. retail Uninsured deposits as a percentage of total dep
Slide 5: A Compelling Investment Opportunity
A Compelling Outstanding financial track record with strong Investment EPS performance and ROCE Opportunity Well-positioned in large and growing private student loan market, with powerful brand recognition and attractive client base Consistent profitability, balance sheet strength and strong risk an
Slide 6: Sallie Mae is an Outstanding Franchise
Sallie Mae is an 57% Outstanding Franchise 2023 full-year market share of private student lending marketplace(5) Sallie Mae is the market-leading brand for private education loans driven by brand recognition, rigorous underwriting methodology and industry-leading customer service. 50.6% Return on Co
Slide 7: Progress on Our Value Creation Journey
Progress on Our Value Creation Journey Three years ago, we set course on a strategy that we believed could create significant value – Maintain a “flattish” balance sheet by selling loans and buying back shares FOCUS ON HIGH ROCE LOANS IS AT THE CENTER OF OUR STRATEGY LOAN SALE ARBITRAGE CAPITAL MANA
Slide 8: Providing Customers with Financial Backing, Information and Tools to Achieve Their Goals
SLM Portfolio Providing Customers with Financial Backing, Information and Tools to Achieve Their Goals PRIVATE Smart Option SALLIE Offers traditional savings EDUCATION Student Loans MAE products LOANS Emphasize in-school BANK • High-yield savings accounts payment features that can • Money market acc
Slide 9: Private Education Loan Portfolio
Originations Vintage Smart Option Payment Type (8) Private 8% 3% 2024 Pre 2014 3% 17% Education 2014 4% Interest Only 2015 29% 4% 48% Loan 2023 2016 Deferred 5% Portfolio $19.6B $17.2B 2017 Loans 5% Loans 2018 6% 2019 35% Fixed Pay 17% 6% 2022 2020 10% 2021 High Quality Private Education Loan Portfo
Slide 10: Sallie Mae's Smart Option Loan
Sallie Mae’s Smart Option Loan The Smart Option Loan product, introduced in 2009, consists of: Interest Only loans Fixed Pay loans Deferred loans • Smart Option payment option may Require full interest Require $25 fixed Do not require payments not be changed after selected at payments during in-scho
Slide 11: More Personalized, Flexible Financing Options that Set Students Up for Success
More Personalized, Flexible Financing Options that Set Students Up for Success Medical General Studies Sallie Mae Federal Student Loan Program Federal Direct Loan Loan Program Smart Option Student Loan Parent Plus (Subsidized & Unsubsidized) Dental Yr. 1 - $5,500 ($3,500 > subsidized) Undergraduate
Slide 12: Our Proven Strategy Aims to Maximize the Profitability and Growth of the Core Business
Our Proven Strategy Aims to Maximize the Profitability and Growth of the Core Business STRATEGIES TO MAXIMIZE REVENUE STRATEGIES TO MANAGE UNIT COSTS Drive penetration at all schools Maintain strong focus on fixed cost discipline Increase market share by bridging gaps in Drive towards reducing both
Slide 13: Optimize the Value of the Brand and Attractive Client Base
Optimize the Value of the Brand and Attractive Client Base WHAT Ensure products and services are Build products and services that Prioritize partnerships Look for opportunities WE DO consistent with our core mission leverage our customer affiliation and other capital efficient to optimize ROI and dr
Slide 14: Enhancing Shareholder Value Through Disciplined Balance Sheet Growth and Strategic Capital Return
Enhancing Shareholder Value Through Disciplined Balance Sheet Growth and Strategic Capital Return Strong Balance Expected to drive recurring Expected to support a Sheet & Recurring revenue and lead to steady consistent dividend with Earnings Growth double-digit earnings per the potential for future
Slide 15: Consumers Increasingly Rely on Borrowed Funds to Finance the Cost of a Higher Education
Roughly Half of Consumers Increasingly Rely Families USED BORROWED FUNDS on Borrowed Funds to Finance IN AY 2023-24 the Cost of a Higher Education Families’ out-of-pocket contributions covered half of college costs of costs covered by families’ 48% out-of-pocket contributions of costs covered by sch
Slide 16: Private Education Loan Trends
Private In School Cosigned Private Education Loan Originations(12) Average FICO at Approval(7) Payment Education Q2 Loan Trends * Full Year 2024 $3,273 Second quarter 2024 originations YTD at approximately $691 million, 6% 6% higher than the year-ago quarter. 2023 $3,093 $6,383 748 56% 87% Originati
Slide 17: Diversified Funding Optimizes Net Interest Margin
Diversified Funding Optimizes Net Interest Margin Long-Term Funding Outstanding borrowings consist of unsecured debt and secured Funding Strategy borrowings issued through our term asset-backed securitization program, totaling $1 billion and $4 billion, respectively, as of June 30, 2024. Deposits 14
Slide 18: Improving Political Environment
A Focus on Federal Lending Improving Political Environment National policymakers are focused on addressing federal student lending issues and reform, including: • Federal loan forgiveness • Federal PLUS limits We believe the current environment • Enhanced federal repayment programs presents opportun
Slide 19: Responsible and Ethical Business
Responsible and Ethical Business Our business and ESG strategy are deeply integrated and aligned with our mission to power confidence as students and families pursue their unique journeys to, through, and immediately after higher education. This approach positions our company to make significant soc
Slide 20: ABS Supplement
ABS Supplement 20
Slide 21: Sallie Mae Bank ABS Summary
Sallie Mae Bank ABS Summary* 14-A 15-A 15-B 15-C 16-A 16-B 16-C 17-A 17-B 18-A 18-B 18-C 19-A 19-B 20-A 20-B 21-B 21-D 21-E 22-C 23-A 23-C 24-C Issuance Date 8/7/14 4/23/15 7/30/15 10/27/15 5/26/16 7/21/16 10/12/16 2/8/17 11/8/17 3/21/18 6/20/18 9/19/18 3/13/19 6/12/19 2/12/20 8/12/20 5/19/21 8/18/2
Slide 22: Sallie Mae Bank ABS Structures
Sallie Mae Bank ABS Structures 22
Slide 23: Appendix
Appendix 23
Slide 24: Quarterly Financial Highlights
Quarterly Financial Highlights Q2 Q1 Q2 Q2 Q1 Q2 2024 2024 2023 2024 2024 2023 Income Statement ($ Millions) Key Performance Metrics Total interest income $641 $664 $634 Net Interest Margin 5.36% 5.49% 5.52% Total interest expense 269 277 247 Net Interest Income 372 387 387 Yield—Total Interest-earn
Slide 25: Credit Performance
Credit Performance (17)(18)(19)(20) Private Education Loans Held for Investment Quarters Ended JUN 30, 2024 MAR 31, 2024 JUN 30, 2023 ($ Thousands) Balance % Balance % Balance Loans in repayment and percentage of each status: Loans current $ 13,756,538 96.7% $ 14,451,606 96.6% $ 14,113,105 Loans del
Slide 26: Allowance for Credit Losses
Allowance for Credit Losses Consolidated Statements of Income – Provision for Credit Losses Reconciliation Factors affecting the Provision for Credit Losses 2nd Quarter Ended June 30, 2024 ($ THOUSANDS) BALANCE Quarter 2024 Private Education Loan provision for credit losses: Provision for loan losse
Slide 27: Footnotes
Footnotes 1. We calculate and report our Return on Common Equity (“ROCE”) as the ratio of (a) GAAP net income (loss) attributable to SLM Corporation common stock numerator (annualized) to (b) the net denominator, which consists of GAAP total average equity less total average preferred stock. 2. This