Slide 1: Sallie Mae Investor Presentation Third Quarter 2015
SALLIE MAE Investor Presentation THIRD QUARTER 2015 Exhibit 99.1
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Slide 3: 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 22, 2015 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial resul
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Slide 5: The Sallie Mae Brand
3 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% market s
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Slide 7: Sallie Mae Highlights
4 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 quality Pri
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Slide 9: Sallie Mae Summary
5 Sallie Mae Summary Strategic Overview Key Businesses Balance Sheet Competitive Advantage - National sales and marketing - Largest salesforce in the industry - Specialized underwriting capability - Capital markets expertise Private Education Loan - Originator and Servicer Deposits - Upromise Reward
Slide 10: Cost of Attendance Funding Gap
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Slide 11: Favorable Student Loan Market Trends
6 Favorable Student Loan Market Trends Enrollment at Four-Year Degree Granting Institutions (1) Annual Cost of Education (2) Federal Loans $99 Family Contributions $151 Grants $124 Estimated Total Cost of Education – 2014 / 2015 AY (3) Cost of College (Based on a Four-Year Term) (4) 12.1 12.9 13.3 1
Slide 12: Generational Demographics
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Slide 13: Higher Education Value Proposition
7 Higher Education Value Proposition Relationship Between Higher Education, Income and Employment (1) Incremental Earnings From a College Degree Has Increased For Generations (2) Payment to Income Ratio (4) 0% 2% 4% 6% 8% 10% 12% 1,000 1,200 1,400 1,600 1,800 Less than H.S. High school Some college
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Slide 15: Smart Option Overview
8 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 16: Private Education Loan Originations
Y SallieMae\\ $3,342 14% 4 a 2013 2014 1 Private Education Loan Originations
Slide 17: High Quality Private Student Loan Originations Growth
9 High Quality Private Student Loan Originations Growth Originations Statistics ($) 2011 2012 2013 2014 Q2 2014 Q2 2015 % Cosigned 91% 90% 90% 90% 90% 90% % In School Payment 73% 58% 56% 56% 52% 52% Average Originated FICO
Slide 18: Sallie Mae
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Slide 19: Analytical Approach to Credit
10 Analytical Approach to Credit Student Initial Screen $1,000 minimum loan Minimum FICO of 640 No existing SLM 30+ day past dues No student loans 90+ day past dues No recent bankruptcy 2+ trades for cosigners and 4+ trades for non-cosigner Asset expertise and rigorous underwriting driven by large v
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Slide 21: High Quality Private Education Portfolio
11 High Quality Private Education Portfolio Customer FICO at Origination Smart Option Payment Type Portfolio Interest Rate Type 780+ 30% 740 - 780 23% 700 - 740 26% <700 21% Portfolio by Originations Vintage Variable 81% Fixed 19% Interest Only 21% Fixed Pay 32% Deferred 47% 2016 16% 2013 26% 2014 3
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Slide 23: Conservative Funding Approach
12 60% 40% 60% 40% Conservative Funding Approach 2014 Target Low cost deposit base with no branch overhead — 90% of retail deposits are savings accounts — Brokered deposits used as alternative funding source Term funding / securitizations will augment deposit funding for future growth — Experienced
Slide 24: Cumulative Defaults chart
INN SallieMae\\ p | § i : 3 5 é S 3 4 ‘Years in P&I Repayment —2010 —2011 —2012 —2013 2014
Slide 25: Cumulative Defaults by P&I Repayment Vintage
13 Cumulative Defaults by P&I Repayment Vintage (1),(2),(3) Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years in P&I Repayment As of June 30, 2015 (1) For important information regarding historical performance data, see pages 19 and 20. (2) Loans in ‘P&I Repayment’ include on
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Slide 27: Smart Option Delinquency and Default Performance
Smart Option Delinquency and Default Performance (As a % of Loans in P&I Repayment) (1),(2),(3) 14 31-60 Day Delinquency 91+ Day Delinquency 61-90 Day Delinquency Annualized Gross Default Rate As of June 30, 2015 (1) For important information regarding historical performance data, see pages 19 and 2
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Slide 29: Core Earnings to GAAP Reconciliation
15 “Core Earnings” to GAAP Reconciliation 15 (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……….………….…….........………………… 91,016 $ 47,699 $ 44,12
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Slide 31: Financial Review
16 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) Total Loans 10,423 8,794 $ 1,629 Cash 1,279 1,524 (245) Other Assets 1,173 1,061 Total Assets 12,875 11,379 1,496 Brokered Deposits
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Slide 33: Sallie Mae Bank
17 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 trajectory an
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Slide 35: Smart Option Student Loan Historical Performance Data
18 Smart Option Student Loan Historical Performance Data Period ended June 30, 2015 Appendix
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Slide 37: Important Information Regarding Historical Loan Performance Data
19 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 Co
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Slide 39: Important Information Regarding Historical Loan Performance Data (cont.)
20 Important Information Regarding Historical Loan Performance Data (cont.) Types of Smart Option Loan Portfolio Data The portfolio data we used in this report comes from two separate sources of information: (1) Combined Smart Option Student Loan Portfolio Data for Legacy SLM, Navient and Sallie Mae
Slide 40: Smart Option Student Loans - Serviced Portfolio: 31-60 Day Delinquencies
‘Smart Option Student Loans - Serviced Portfolio ‘Smart Option Student Loans - Serviced Portfolio 31-60 Day Delinquencies ae 2% of Loans in P&I 31-80 Day Delinquencies as a % of Loans in P&I Repayment Datator Legacy Stith Api 3, 2018 and Sl ae Bank fF DataforLegacy Stith April30,201 an Sale Mae Bank
Slide 41: Smart Option Serviced Portfolio: 31-60 Day Delinquencies
21 Smart Option Serviced Portfolio: 31-60 Day Delinquencies (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. (2) SLM Bank 2010 ‘P&I Repayment’ vintage not included due to insufficient data. Note: Legacy SLM portfolio serviced pursuan
Slide 42: Smart Option Student Loans - Serviced Portfolio: 61-90 Day Delinquencies
‘Smart Option Student Loans - Serviced Portfolio ‘Smart Option Student Loans - Serviced Portfolio 61-00 Day Delinquencies ae 2% of Loans in P&I Repayment 61-90 Day Delinquencies ae a % of Loans in P&I Repayment © Datafr Legacy SLi Api, 201 and Sle Mae Bank since May 12014 DataforLagacy Stith prt, 20
Slide 43: Smart Option Serviced Portfolio: 61-90 Day Delinquencies
22 Smart Option Serviced Portfolio: 61-90 Day Delinquencies (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. (2) SLM Bank 2010 ‘P&I Repayment’ vintage not included due to insufficient data. Note: Legacy SLM portfolio serviced pursuan
Slide 44: Smart Option Student Loans - 91+ Day Delinquencies
‘smart Option student Loans - Serviced Portoto gmat Option Student Loans -SeucedPetolo ‘91+ Day Delinquencies as a % of Loans in P&I Repayment ator ogacy StM hand Sale Mae Bank since saforogny St th Api, 2th and Sa sea ico $2014 aay SN ages D010 UTS ney 20K i a i i Percentot Pat Repayment Balance —
Slide 45: Smart Option Serviced Portfolio: 91+ Day Delinquencies
23 Smart Option Serviced Portfolio: 91+ Day Delinquencies (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. (2) SLM Bank 2010 ‘P&I Repayment’ vintage not included due to insufficient data. Note: Legacy SLM portfolio serviced pursuant
Slide 46: Forbearance chart
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Slide 47: Smart Option Serviced Portfolio: Forbearance
24 Smart Option Serviced Portfolio: Forbearance (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. (2) On June 1, 2015 the FDIC published FIL-23-2015, which encouraged lenders to work constructively with borrowers impacted by the flood
Slide 48: Annualized Gross Defaults chart
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Slide 49: Smart Option Serviced Portfolio: Annualized Gross Defaults
25 Smart Option Serviced Portfolio: Annualized Gross Defaults (1) Loans in ‘P&I Repayment’ include only those loans for which scheduled principal and interest payments are due. Defaults occurring prior to ‘P&I Repayment’ are not represented in the data. (2) SLM Bank 2010 ‘P&I Repayment’ vintage not
Slide 50: Cumulative Defaults by Loan Type
NN SallieMae\\ ‘Smart Option Student Loans - Serviced Portfolio: All Products ‘Cumulative Defaults by P&I Repayment Vintage and Years in P&I Repayment Datafor Legacy SLi Mavient ond Salter Bank Combined thou Present ‘Yeats n PL Repayment ‘Smart Option Student Loans - Serviced Portfolio: Fixed Pay Cu
Slide 51: Smart Option Vintage Data: Cumulative Gross Default by Loan Type
26 Smart Option Vintage Data: Cumulative Gross Default by Loan Type (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. Data as of June 30, 2015. (2) Certain data used in the charts above was provided by Navient under a data sharing agr
Slide 52: Voluntary CPR by Origination Vintage
‘Smart Option StudentLoans - Serviced Portfolio ‘Smart Option StudentLoans- Serviced Portfolio Voluntary CPR by Origination Vintage Voluntary CPR by Origination Vintage and Product" Totcet Only, Feed Payne od Dero Products Interest 0 Datafor Legacy Stitt Apt, 2014 an Sale ie Bak since May 1,208 Daat
Slide 53: Smart Option Vintage Data: Voluntary Prepayments
27 Smart Option Vintage Data: Voluntary Prepayments Following the first year after disbursement, voluntary prepayments have generally ranged from between 2-3% for the Smart Option Deferred loan product, to 5-6% for the Interest Only product (1) Data for all loans from initial disbursement, whether o
Slide 54: Total CPR by Origination Vintage
‘Smart Option StudentLoans- Serviced Portfolio. Total CPR by Origination Vintage Iuttst ly, Feed Pyne and Det rote Dattor Legacy Stith A, 244 ad Salle eB sinc May 1, 2014 7e 9 0n 2B Cuarters Since Disbursement —n0vitsge 21 Vinage —z012veuage ni vinage 2014 Vinage ‘Smart Option StudentLoans - Service
Slide 55: Smart Option Vintage Data: Total Prepayments
28 Smart Option Vintage Data: Total Prepayments Following the first year after disbursement, total prepayments have generally ranged around 4% (1) Data for all loans from initial disbursement, whether or not scheduled payments are due. Total CPR includes both voluntary prepayments and defaults. (2)
Slide 56: Smart Option Loan Cumulative Recovery Rate
SallieMae)) ‘Smart Option Loan Cumulative Recovery Rate for Combined Charge-Offs Since 2010 ‘Datafor Legacy SLM and Hae Jane 9, 2015 i : H i z : i 0 4 8 12 1 1 M4 2 92 96 40 48 46 52 56 60 Monthly Periods Since Charge Of combine Charge os Recovninea 2% of Charge. Peep 3 ‘Smart Option Loan Cumulative
Slide 57: Smart Option: Cumulative Recoveries
29 Smart Option: Cumulative Recoveries Recoveries of charged-off Smart Option Student Loans ® historically have occurred over a longer period than for many other types of unsecured consumer credit (1) Certain data used in the charts above was provided by Navient under a data sharing agreement. Salli
Slide 58: Sallie Mae
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Slide 60: Cohort Default Triangles
30 30 Cohort Default Triangles
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Slide 62: Smart Option Loan Program Cohort Default Triangles
31 Smart Option Loan Program Cohort Default Triangles The following cohort default triangles provide loan performance information for Legacy SLM, Navient and Sallie Mae Bank serviced Smart Option loans combined, thru the most recent period indicated (1) Terms and calculations used in the cohort defa
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Slide 64: Cohort Default Triangles – Smart Option Combined
32 Cohort Default Triangles – Smart Option Combined (IO, Fixed & Deferred) Smart Option Combined (P&I Repayment Status - No Co-Signer) Smart Option Combined (P&I Repayment Status - Co-Signer) Smart Option Combined (P&I Repayment Status - Total) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
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Slide 66: Cohort Default Triangles – Smart Option Interest Only
33 Cohort Default Triangles – Smart Option Interest Only Smart Option IO (P&I Repayment Status - No Co-Signer) Smart Option IO (P&I Repayment Status - Co-Signer) Smart Option IO (P&I Repayment Status - Total) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0
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Slide 68: Cohort Default Triangles – Smart Option Fixed Payment
34 Cohort Default Triangles – Smart Option Fixed Payment Smart Option Fixed Payment (P&I Repayment Status – No Co-Signer) Smart Option Fixed Payment (P&I Repayment Status - Co-Signer) Smart Option Fixed Payment (P&I Repayment Status - Total) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0
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Slide 70: Cohort Default Triangles – Smart Option Deferred Payment
35 Cohort Default Triangles – Smart Option Deferred Payment Smart Option Deferred (P&I Repayment Status – No Co-Signer) Smart Option Deferred (P&I Repayment Status - Co-Signer) Smart Option Deferred (P&I Repayment Status - Total) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% P&I Repayment Disbursed P
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Slide 72: ABS Supplement
36 ABS Supplement
Slide 73: Sallie Mae
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Slide 74: Sallie Mae's Smart Option Loan Product Overview
37 Sallie Mae’s Smart Option Loan Product Overview Smart Option Loan Program 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
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Slide 78: Sallie Mae
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Slide 79: Sallie Mae Bank Servicing Policy
39 Sallie Mae Bank Servicing Policy Policy Pre-Spin, Legacy SLM Serviced Post-Spin, Sallie Mae Bank Serviced (1) Delinquencies All loans serviced by an affiliate of legacy SLM; loan owned by Sallie Mae Bank sold to legacy SLM after becoming 90+ days past due Sallie Mae Bank collects delinquent loans
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Slide 81: Sallie Mae Bank Collections
40 Sallie Mae Bank Collections Each customer is approached individually, and the account manager is educated and empowered to identify optimal resolution Co-borrowers are contacted and collected with similar efforts as the primary borrower Sallie Mae Bank employs a front-loaded, stage based collecti
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Slide 83: Post-Default Recoveries
41 Post-Default Recoveries Recovery Operations In the near term, Sallie Mae Bank plans to sell the majority of the charged-off loans to third parties following charge-off at 120+ days past due – Recoveries realized immediately – Practical and predictable economics – Manageable compliance and vendor
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Slide 85: Private Education Loan Characteristics
42 Private Education Loan Characteristics Unsecured consumer loans made to qualified borrowers and co-signers to fund the cost of undergraduate, graduate and other forms of post-secondary education Unlike FFELP Loans, private education loans are not guaranteed against losses by the Department of Edu
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Slide 87: FFELP vs. Sallie Mae Bank Smart Option Private Education Loan Comparison
43 Sallie Mae Bank Smart Option Private Education Loans FFELP vs. Sallie Mae Bank Smart Option Private Education Loan Comparison FFELP Stafford Loans Sallie Mae Bank Smart Option Private Education Loans (1) Borrower Student Student or Parent Co-signer None Typically a parent Lender Eligible banks an
Slide 88: Sallie Mae
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Slide 89: Private Education Loan Lifecycle for Deferred Loans
44 Private Education Loan Lifecycle for Deferred Loans IN SCHOOL AND GRACE P&I REPAYMENT Loan made to borrower/ co-signer In School Status (Additional Borrowing) Grace Status After graduation (generally 6 months) P&I Repayment Status Deferment Status (back to school) (up to 48 months) Default (120+