Slide 1: Investor Presentation Third Quarter 2022
Investor Presentation Third Quarter 2022 Exhibit 99.1
Slide 2: Forward-Looking Statements and Disclaimer
2 Forward-Looking Statements and Disclaimer Cautionary Note Regarding Forward-Looking Statements The following information is current as of July 27, 2022 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial resul
Slide 3: Sallie Mae is an Outstanding Franchise
3 Sallie Mae is an Outstanding Franchise Sallie Mae is the market-leading brand for private education loans driven by brand recognition, rigorous underwriting methodology and industry- leading customer service. Top ranked and highly recognized brand Industry leading and award-winning technologies JD
Slide 4: Strong Return to Campus
4 Strong Return to Campus • Through July 1, 2022, FAFSA completion for the high school class of 2022 has returned to near pre-pandemic numbers with 52.1% of the senior class completing the application (4.6% increase year over year).25 • Through the first half of the year, our underclass application
Slide 5: Maximize the profitability and growth of our core business
5 Maximize the profitability and growth of our core business 1. Revenue • GAAP Net Income of $342 million in Q2 2022, compared to $140 million in Q2 2021. • Originated $616 million in Private Education Loans in Q2 2022 (16% increase vs. Q2 2021). Total Operating Expenses • Total operating expenses o
Slide 6: Private Education Loan Originations
6 Private Education Loan Originations23 Sallie Mae Annual Originations ($ millions) Actual Forecast Originations Statistics ($) 2018 2019 2020 2021 Q2 2022 Q2 2021 % Cosigned 87% 87% 86% 86% 74% 76% % In School Payment 57% 58% 60% 59% 56% 57% Average FICO at Approval1 0 746 746 749 750 746 750 $5,31
Slide 7: Expanding Addressable Market
7 Expanding Addressable Market • Private Education Loans represent 2-3% of the overall spend in higher education annually. • Total spend on higher education grows ~2% annually, while Private Education Loans grew 5-7% annually (pre-pandemic), primarily due to increases in cost of attendance. Strong S
Slide 8: High Quality Private Education Loan Portfolio
8 Variable 50% Fixed 50% As of 6/30/22 Customer FICO at Original Approval 780+ 27% 740 - 780 23% 700-739 27% <700 23% Weighted Average FICO: 743 High Quality Private Education Loan Portfolio Smart Option Payment Type Portfolio by Originations Vintage Portfolio Interest Rate Type Pre 2014 5% 2014 5%
Slide 9: Conservative Funding Optimizes Net Interest Margin
9 Conservative Funding Optimizes Net Interest Margin Retail MMDA & CD 22% Retail H.S.A. & 529 18% Brokered Fixed 20% Brokered Variable 19% Secured Debt 21% Retail $11.0B Brokered $9.0B Secured Debt $4.2B As of 6/30/22
Slide 10: Simple But Powerful Investment Thesis
10 Simple But Powerful Investment Thesis • Consistent earnings expansion is driven by top line growth and efficiency • Sallie Mae is the leader in the private education loan market that is growing 6+% a year • Well-proven and disciplined underwriting model leveraging data and experience through the
Slide 11: Clear Strategy to Prove this Investment Thesis
11 Clear Strategy to Prove this Investment Thesis Maximize the profitability and growth of our core business Better inform the external narrative about private student lending and Sallie Mae Maximize the value of our brand and attractive customer base Maintain a rigorous and predictable capital allo
Slide 12: Maximize the Profitability and Growth of the Core Business
12 Maximize the Profitability and Growth of the Core Business Maximize Revenue Manage Unit Costs Drive penetration at all schools Increase market share by fully meeting student funding needs Enhanced risk-adjusted pricing and underwriting Improved marketing, digital, and data capabilities Strong fix
Slide 13: Optimize the Value of the Brand and Attractive Client Base
13 Optimize the Value of the Brand and Attractive Client Base What We Do Build products and services that leverage our customer affiliation Ensure products and services are consistent with our core mission and drive customer value We know our customers’ finances, payment patterns and indebtedness We
Slide 14: Changing the Narrative: Free College, Debt Forgiveness, Bankruptcy Reform
14 Free College • Benefits of subsidizing college tuition for those who would otherwise not be able to attend • Promotes social equity, equality of opportunity and economic mobility • 23 States offer varying levels of free tuition programs; 18 States have school-specific free tuition programs • In t
Slide 15: Maintain Rigorous Capital Allocation and Return Program
15 Maintain Rigorous Capital Allocation and Return Program Invest in High ROE Growth • Continue to focus on high-quality Private Education Loan originations, including deeper penetration of graduate school market • Build other sources of revenue and capital in expense-efficient ways Quarterly Common
Slide 16: Diverse Student Loan Portfolio Driving Increased Shareholder Value
16 Diverse Student Loan Portfolio Driving Increased Shareholder Value Undergraduate Medical Health Professions • Products designed to meet the needs of all students • Developing unique and innovative products to diversify portfolio Undergraduate Graduate RATE TYPE Variable & Fixed Variable & Fixed I
Slide 17: Sallie Mae is an ESG Company
17 Sallie Mae is an ESG Company Committed to an Ethical & Diverse Workplace • Board of Directors composition is 36% women, has been recognized by 50/50 Women On Boards as a company with a 3+ Board rating • Appointed the first woman to serve as chair of Board of Directors in 2020 • Committed to best-
Slide 18: ABS Supplement
Confidential and proprietary information. © 2021 Sallie Mae Bank. All rights reserved. ABS Supplement
Slide 19: Sallie Mae's Smart Option Loan Product Overview
19 Sallie Mae’s Smart Option Loan Product Overview The Smart Option loan product was introduced by Sallie Mae in 2009 The Smart Option loan program consists of: Smart Option Interest Only loans Require full interest payments during in- school, grace, and deferment periods Smart Option Fixed Pay loan
Slide 20: Sallie Mae Bank ABS Summary
20 Sallie Mae Bank ABS Summary28 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 Issuance Date 8/7/201 4 4/23/201 5 7/30/201 5 1 0/27/201 5 5/26/201 6 7/21 /201 6 1 0/1 2/201 6 2/8/201 7 1 1 /8/201 7 3/21 /201 8 6/20/201 8 9/1 9/201 8 3/1 3/201 9 6
Slide 21: Sallie Mae Bank ABS Structures
21 Sallie Mae Bank ABS Structures SMB 2022-C SMB 2021-E SMB 2021-D SIZE $575.0MM $534.0MM $527.0MM PRICING DATE August 2, 2022 November 2, 2021 August 10, 2021 COLLATERAL Smart Option Private Education Loans Smart Option Private Education Loans Smart Option Private Education Loans SERVICER Sallie Ma
Slide 22: Appendix
Confidential and proprietary information. © 2021 Sallie Mae Bank. All rights reserved. Appendix
Slide 23: Commitments vs Disbursements
23 Commitments vs Disbursements Provision for New Loans • Directly impacted by the timing of Commitments and not Disbursements Additional Provision Impacts • New Loans, DCF accretion, loan sales, model updates and overlays Unfunded Commitments • Remain a liability for accounting purposes • Once the
Slide 24: CECL Update
24 CECL Update13 Adopted on January 1, 2020. • The company’s 2020 financial results reflect a transition adjustment that increased the allowance for loan losses by $1.1 billion, increased the liability representing its off-balance sheet exposure for unfunded commitments by $116 million and increased
Slide 25: Quarterly Financial Highlights
25 Quarterly Financial Highlights14, 15 Q2 2022 Q1 2022 Q2 2021 Income Statement ($ Millions) Total interest income $463 $465 $435 Total interest expense 100 90 96 Net Interest Income 363 375 339 Less: provisions for credit losses 31 98 70 Total non-interest income 258 22 52 Total non-interest expen
Slide 26: Sallie Mae vs Federal Student Loans
26 Sallie Mae vs Federal Student Loans As of 8/15/22 Sallie Mae Loan Program Smart Option Student Loan20 Federal Direct Loan (Subsidized & Unsubsidized) Parent Plus Loan Limits $1,000 - Cost of Attendance No Aggregate Limit Yr 1 - $5,500 ($3,500 > subsidized) Yr 2 - $6,500 ($4,500 > subsidized) Yr 3
Slide 27: Non-GAAP Core Earnings to GAAP Reconciliation
27 Non-GAAP “Core Earnings” to GAAP Reconciliation Quarters Ended ($ in thousands, except per share amounts) Jun. 30, 2022 Mar. 31, 2022 Jun. 30, 2021 Non-GAAP “Core Earnings” adjustments to GAAP: GAAP net income $342,073 $128,812 $140,201 Preferred stock dividends $1,757 $1,275 $1,192 GAAP net inco
Slide 28: Footnotes
28 Footnotes 1. J.D. Power 2019 Certified Customer Service Program recognition is based on successful completion of an evaluation and exceeding a customer satisfaction benchmark through a survey of recent servicing interactions. For more information, visit www.jdpower.com/ccc. 2. Source: MeasureOne