Slide 1: SLM Corporation Earnings Presentation Second Quarter 2023
SLM Corporation Earnings Presentation Second Quarter 2023 July 27, 2023
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 July 26, 2023 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial results
Slide 3: Balance Sheet & Capital Allocation
Balance Sheet & Capital Allocation 2nd Quarter 2023 • Paid common stock dividend of $0.11 per share in Q2 2023. Highlights • Sallie Mae Bank remains well capitalized with 14.1% Total risk-based capital ratio and CET1 capital ratio of 12.8%. • Completed $2.1 billion in private education loan sales du
Slide 4: Private Education Loan Originations
Private Education Loan Originations8 • Second quarter 2023 originations at $651 million, 6% higher than the year-ago period. • Year-to-Date 2023 originations 10% higher Fo re c a s t than year-to-date 2022. Ac tu a l • Through the first half of the year, our underclassmen application volume has incr
Slide 5: Credit Performance Impact of Federal Loan Payment Resumption
Key Credit Credit Performance Metrics • Q2 2023 net charge-offs for Private Education Loans totaled $103 million. for Q2 2023 • Annualized net charge-offs as a percentage of average loans in repayment for the first half of the year is 2.41% and remains lower than our plan for full-year 2023. • There
Slide 6: Support for Federal Student Loan Borrowers
Support for Federal Student Loan Borrowers 18 An “On Ramp” to Repayment 16 For all federal borrowers looking to resume payments of federal loans in August, a year-long “on-ramp” is being instituted by the Department of Education “so that financially vulnerable borrowers who miss monthly payments dur
Slide 7: Quarterly Financial Highlights
Quarterly Financial Highlights3 Q2 Q1 Q2 Q2 Q1 Q2 2023 2023 2022 2023 2023 2022 Income Statement ($ Millions) Key Performance Metrics Total interest income $634 $638 $463 Net Interest Margin 5.52% 5.70% 5.29% Total interest expense 247 233 100 Yield—Total Interest-earning assets 9.05% 8.97% 6.75% Ne
Slide 8: Credit Performance
Credit Performance10, 11, 12, 14 Private Education Loans Held for Investment Quarters Ended June 30, 2023 March 31, 2023 June 30, 2022 ($ Thousands) Balance % Balance % Balance % Loans in repayment and percentage of each status: Loans current $ 14,113,105 96.3% $ 15,446,182 96.6% $ 13,980,810 96.3%
Slide 9: Allowance for Credit Losses Q2 2023
Allowance for Credit Losses Q2 2023 Consolidated Statements of Income Factors affecting the Provision for Credit Losses Provisions for Credit Losses Reconciliation 2nd Quarter of 2023 Quarter Ended ($ Thousands) June 30, 2023 Private Education Loan provisions for credit losses: • Decrease to provisi
Slide 10: Guidance
Guidance13 For the full-year 2023, the Company expects: $2.50 - $2.70 5% - 6% Diluted Non-GAAP “Core Earnings”15 Private Education Loan Per Common Share Originations Year-Over-Year Growth $345 - $385 $610 - $620 million million Total Loan Portfolio Non-Interest Net Charge-Offs Expenses 10
Slide 11: Footnotes
Footnotes 1. Derivative Accounting: we provide non-GAAP “Core Earnings” because it is one of several measures management uses to evaluate management performance and allocate corporate resources. Non-GAAP “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value va
Slide 12: Footnotes (continued)
Footnotes (continued) 14. Accrued interest to be capitalized on loans in repayment includes interest on loans that are in repayment but have not yet entered into full principal and interest repayment status after any applicable grace period (but, for purposes of the table, does not include interest
Slide 13: Non-GAAP Core Earnings to GAAP Reconciliation
Non-GAAP “Core Earnings” to GAAP Reconciliation Quarters Ended ($ Thousands except per share amounts) June 30, 2023 March 31, 2023 June 30, 2022 Non-GAAP “Core Earnings” adjustments to GAAP: GAAP net income $265,065 $118,518 $342,073 Preferred stock dividends $4,274 $4,063 $1,757 GAAP net income att
Slide 14: Additional Information Related to our Recent Asset Acquisition
Ad d itio n a l In fo rm a tio n Re la te d to o u r Re c e n t As s e t Ac q u is itio n 14
Slide 15: We have a Clear and Consistent Investment Thesis
We have a Clear and Consistent Investment Thesis Strategic Imperatives: 1. 2. 3. 4. Maximize the Maximize Better inform Maintain a profitability the value of the external rigorous and and growth our brand narrative predictable of our core and about private capital business attractive student allocat
Slide 16: Strategy for Execution of our Investment Thesis
Strategy for Execution of our Investment Thesis 2. OUR DEFINITION OF #1 Reason A SUREFOOTED STRATEGY Maximize To protect and enhance our 1. Paid for through the direct benefit of the value of education lending business by reaching more customers our core lending business our brand at a lower cost th
Slide 17: Our Nitro College Acquisition in Early 2022
AN ACCELERATOR OF OUR SUREFOOTED STRATEGY: Our Nitro College Acquisition in Early 2022 Contributed to Stronger What We Acquired: Performance for our Education Lending Business 1. A platform that provides variety of free FY 2022: tools and resources to help students and families make informed decisio
Slide 18: The #1 College Scholarship App - Scholly
THE NEXT ACCELERATOR OF OUR SUREFOOTED STRATEGY: The #1 College Scholarship App - Scholly Provides a marketplace for students and families to find free money for college. Co-founded by Christopher Gray in 2013, who won $1.3 million in scholarships himself and wanted to offer the same opportunities f
Slide 19: Scholly is a solid strategic fit and further accelerates our mission
Scholly is a solid strategic fit and further accelerates our mission Key Benefits of this Asset Purchase: #1 College Scholarship App • A strong and well-known brand that attracts collaboration, celebrities, and media • A turnkey platform with a team that has a proven record of building engaging solu
Slide 20: Sallie Mae
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