Slide 1: ABS Vegas Investor Presentation
SALLIE MAE ABS Vegas Investor Presentation FEBRUARY 2015
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The following information is current as of January 22, 2015 (unless otherwise noted) and should be read in connection with SLM Corporation’s press release announcing its financial results for the quarter and year ended December 31, 2014, and the a
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; 53% mark
Slide 4: 2014 Sallie Mae Highlights
2014 Sallie Mae Highlights ► Completed legal separation from Navient on April 30, 2014 ► Generated “Core Earnings” of $195 million ► Originated $4.1 billion of high quality Private Education Loans, 7% increase year-over-year ► Grew Private Education Loan portfolio by 27% ► Completed loan sales of $1
Slide 5: Sallie Mae Summary
Sallie Mae Summary - Leading private education Private Education Loan Originator - loan franchise and Servicer - Conservative credit and Deposits - funding Upromise Rewards - - Expanding consumer Insurance Services - finance product suite Strategic Key Credit Card - Overview Businesses ($B as of 12/
Slide 6: Favorable Student Loan Market Trends
Favorable Student Loan Market Trends Enrollment at Four-Year Degree Granting Institutions1 Annual Cost of Education2 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 2005
Slide 7: Higher Education Value Proposition
Higher Education Value Proposition Relationship Between Higher Education, Widening Earnings Gap of Young Adults by Educational Attainment6 Payment to Income Ratio7 Income and Employment5 1,800 12% $ 17,500 1,600 Average weekly income $ 15,780 10% 1,400 Unemployment $ 14,245 1,200 8% $ 9,690 1,000 6%
Slide 8: Smart Option Overview
Smart Option Overview ► Product Features – Offers three repayment options while in school which includes 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 $4,500 $4,076 $4,000 $3,795 7% $3,500 $3,342 14% Originations ($MM) $3,000 $2,737 22% $2,500 $2,000 $1,500 $1,000 $500 $0 2011 2012 2013 2014 Private Education Loan Originations Originations Statistics ($) 2011 2012 2013 2014 % Cosigned 91% 90% 9
Slide 10: High Quality Private Education Portfolio
High Quality Private Education Portfolio Customer FICO at Origination Smart Option Payment Type <700 Interest 21% 780+ Only 30% Deferred 25% 700 - 740 47% 26% 740 - 780 Fixed Pay 23% 28% Weighted Average FICO: 749 Smart Option Loans: $7.9bn Portfolio by Vintage Portfolio Rate Mix Pre 2011 4% 2011 10
Slide 11: Smart Option Credit Outperforming
Smart Option Credit Outperforming ► Smart Option products outperform prior private education loan products due to more stringent underwriting standards and tailored product options ► Performance of newer vintage loans driven by focused marketing on high quality borrowers, better data and product man
Slide 12: Portfolio Migrating to Full Principal and Interest Status
Portfolio Migrating to Full Principal and Interest Status9 Estimated Gross Loss Emergence Curve – Loans in P&I % of Loans in Repayment % of Loans in Repayment 3% 3.0% 9% 2.5% 25% Interest Only/In School PERIODIC DEFAULT RATE 2.0% $25 Fixed/In School 1.5% <1 Year P&I 28% 1-2 Years P&I 1.0% 2+ Years P
Slide 13: Sallie Mae Bank ABS Program
Sallie Mae Bank ABS Program 13
Slide 14: Sallie Mae Legacy ABS Program
Sallie Mae Legacy ABS Program Sallie Mae, prior to the company separation, was one of the largest issuers of ABS globally, having issued over $250 billion in Private and FFELP ABS transactions In recent years, Sallie Mae was the predominant issuer of private education loan ABS Executed 3 trans
Slide 15: Conservative Funding Approach
Conservative Funding Approach ► Low cost deposit base with no branch overhead 2014 Target — 90% of retail deposits are savings accounts — Brokered deposits used as alternative funding source Retail deposits ► Term funding / securitizations will augment deposit Brokered deposits funding for future gr
Slide 16: Sallie Mae Bank vs Legacy Sallie Mae ABS Structures
Sallie Mae Bank vs Legacy Sallie Mae ABS Structures SMB 2014-A Navient 2015-A Size $382MM $689MM Pricing Date July 30, 2014 January 13, 2015 Collateral Smart Option Smart Option and Legacy Sallie Mae Private Education Loans Private Education Loans Servicer/Subservicer Sallie Mae Bank/Navient (3) Nav
Slide 17: Legacy Sallie Mae vs Sallie Mae Bank Private Education Loan ABS Comparison
Legacy Sallie Mae vs Sallie Mae Bank Private Education Loan ABS Comparison Legacy SLM Private Education Loan ABS Navient SMB ABS 11-A 11-B 11-C 12-A 12-B 12-C 12-D 12-E 13-A 13-B 13-C 14-A 14-A 15-A 2014-A Total Bond Amount ($mil) 562 825 721 547 891 1,135 640 976 1,108 1,135 624 676 664 689 382 Ini
Slide 18: Sallie Mae Investor Relations Website
Sallie Mae Investor Relations Website For more information visit: www.salliemae.com/investors 18
Slide 19: Footnotes
Footnotes 1 Source: U.S. Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2022 2 Source: Trends in College Pricing.© 2014 The College Board,. www.collegeboard.org, Note: Academic years, average published tuition, fees, room and board charges a