Slm Corporation · NASDAQ:SLM
Slm — Barclays Global Financial Services Conference 2015
21 slides from Slm's conference presentation, Sep 16, 2015
Slide 1: Sallie Mae Investor Presentation
SALLIE MAE Investor Presentation Barclays Global Financial Services Conference SEPTEMBER 16, 2015
Slide 2: Forward-Looking Statements and Disclaimer
Forward-Looking Statements and Disclaimer Cautionary Note Regarding Forward-Looking Statements The following information is current as of August 24, 2015 (unless otherwise noted) and should be read in connection with the quarterly report on Form 10-Q of SLM Corporation (the “Company”) for the quarte
Slide 3: The Sallie Mae Brand
The Sallie Mae Brand ► #1 saving, planning and paying for education company with 40-years of leadership in the education lending market ► Top ranked brand: 6 out of 10 consumers of education finance recognize the Sallie Mae brand ► Industry leading market share in private education lending: 54% mark
Slide 4: Sallie Mae Summary Strategic Overview
Sallie Mae Summary - Leading private education Private Education Loan - loan franchise Originator and Servicer - Conservative credit and Deposits - funding Upromise Rewards - - Expanding consumer Credit Card - finance product suite Strategic Key Overview Businesses - National sales and Competitive B
Slide 5: Sallie Mae Highlights
Sallie Mae Highlights ► Over one year since legal separation from Navient on April 30, 2014 ► Completed the roll out of independent servicing and customer support capabilities October 13, 2014 ► Generated Earnings of $91 million in Q2 2015 and $139 million YTD ► Originated $4.1 billion of high quali
Slide 6: Favorable Student Loan Market Trends
Favorable Student Loan Market Trends Enrollment at Four-Year Degree Granting Institutions(2) Annual Cost of Education(3) Public Private (millions) (thousands) $41 $42 $38 $39 13.5 13.5 13.7 $35 $36 13.3 $32 $34 12.9 $29 $30 12.1 $19 $16 $17 $18 $18 $13 $14 $14 $15 $12 2008 2009 2010 2011 2012 2013 2
Slide 7: Higher Education Value Proposition
Higher Education Value Proposition Relationship Between Higher Education, Incremental Earnings From a College Degree Has Increased For Generations(7) Payment to Income Ratio(8) Income and Employment(6) 1,800 12% $ 17,500 1,600 Average weekly income $ 15,780 10% 1,400 Unemployment $ 14,245 1,200 8% $
Slide 8: Smart Option Overview
Smart Option Overview ► Product Features – Offers three repayment options while in school, which include Interest Only, $25 Fixed Payment and Deferred Repayment – Variable and Fixed Interest Rate Options – All loans are certified by the school’s financial aid office to ensure all proceeds are for ed
Slide 9: High Quality Private Student Loan Originations Growth
High Quality Private Student Loan Originations Growth $5,000 $4,500 $4,300 $4,076 5% $4,000 $3,795 7% $3,500 $3,342 14% Originations ($MM) $3,000 $2,737 22% $2,500 $2,047 $1,902 YTD $2,000 8% $1,500 $1,000 $500 $0 2011 2012 2013 2014 2015 Private Education Loan Originations Originations Statistics (
Slide 10: Analytical Approach to Credit
Analytical Approach to Credit Student Initial Screen Manual Review ► $1,000 minimum loan ► ~8% of applications ► Minimum FICO of 640 ► Asset expertise and rigorous ► Pass risk scores, but require further underwriting driven by large ► No existing SLM 30+ day past dues review due to credit concerns v
Slide 11: High Quality Private Education Portfolio
High Quality Private Education Portfolio Customer FICO at Origination Smart Option Payment Type <700 Interest 21% 780+ Only 30% 21% Deferred 700 - 740 47% Fixed Pay 26% 740 - 780 32% 23% Weighted Average FICO: 746 Smart Option Loans: $8.9bn Portfolio by Originations Vintage Portfolio Interest Rate T
Slide 12: Conservative Funding Approach
Conservative Funding Approach ► Low cost deposit base with no branch overhead — 90% of retail deposits are savings accounts 2014 Target — Brokered deposits used as alternative funding source ► Term funding / securitizations will augment deposit Retail deposits funding for future growth Brokered depo
Slide 13: Cumulative Default Rate
Cumulative Defaults by P&I Repayment Vintage(9),(10),(11) Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years in P&I Repayment 10.0% 9.0% 8.0% as a % of Original Balance 7.0% Cumulative Default Rate 6.0% 5.7% 5.0% 4.8% 4.0% 3.4% 3.0% 2.4% 2.0% 1.3% 1.0% 0.0% 0 1 2 3 4 5 6 7 Yea
Slide 14: Sallie Mae Bank
Sallie Mae Bank ► Market share leader in private student loan industry ► High quality assets and conservatively funded balance sheet ► Predictable balance sheet growth for the next several years ► Strong capital position and funding capabilities ► A financial services company with high growth trajec
Slide 15: Appendix
Appendix 15
Slide 16: “Core Earnings” to GAAP Reconciliation
“Core Earnings” to GAAP Reconciliation Quarters Ended Six Months Ended (Dollars in thousands, except per share amounts) June 30, March 31, June 30, June 30, June 30, “Core Earnings” adjustments to GAAP: 2015 2015 2014 2015 2014 GAAP net income attributable to SLM Corporation……….………….…….........……………
Slide 17: Smart Option Delinquency and Default Performance
Smart Option Delinquency and Default Performance (As a % of Loans in P&I Repayment)(9),(10),(12) 10.0% 31-60 Day Delinquency 10.0% 61-90 Day Delinquency % of P&I Repayment Balance % of P&I Repayment Balance 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% Legacy SLM: 31-60 Delinquency SLM Bank: 31-
Slide 18: Financial Review: Income Statement
Financial Review (in millions) Q2 2015 Q2 2014 Variance PSL $ 9,333 $ 7,491 $ 1,842 PSL Reserve (87) (54) (33) FFELP 1,182 1,364 (182) FFELP Reserve / Other (5) (6) 2 Total Loans 10,423 $ 8,794 1,629 Balance Sheet Cash 1,279 1,524 (245) Other Assets 1,173 1,061 112 Total Assets 12,875 11,379 1,496 B
Slide 19: Footnotes
Footnotes 1. Source: MeasureOne CBA Report as of June 2015 2. Source: U.S. Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2022 3. Source: Trends in College Pricing.© 2014 The College Board,. www.collegeboard.org, Note: Academic years, averag
Slide 20: Important Information Regarding Historical Loan Performance Data
Important Information Regarding Historical Loan Performance Data On April 30, 2014 (the “Spin-Off Date”), the former SLM Corporation legally separated (the “Spin-Off”) into two distinct publicly traded entities: an education loan management, servicing and asset recovery business called Navient Corpo
Slide 21: Important Information Regarding Historical Loan Performance Data (cont.)
Important Information Regarding Historical Loan Performance Data (cont.) Types of Smart Option Loan Portfolio Data The portfolio data we used in this presentation comes from two separate sources of information: (1) Combined Smart Option Student Loan Portfolio Data for Legacy SLM, Navient and Sallie
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