Slm Corporation · NASDAQ:SLM
Slm — Barclays Americas Select Franchise Virtual Conference 2021
17 slides from Slm's conference presentation, May 18, 2021
Slide 1: Barclays Americas Select Franchise Virtual Conference
Barclays Americas Select Franchise Virtual Conference May 18, 2021 Steve McGarry, EVP and CFO 1
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 April 21, 2021 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial result
Slide 3: Sallie Mae is an Outstanding Franchise
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 2,400+ actively managed university relationships Indu
Slide 4: Simple But Powerful Investment Thesis
Simple But Powerful Investment Thesis • Consistent earnings expansion is driven by top line growth and efficiency Attractive Earnings Profile • 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 an
Slide 5: Clear Strategy to Prove this Investment Thesis
Clear Strategy to Prove this Investment Thesis Maximize the Optimize the value Better inform the Maintain a rigorous profitability and of our brand and external narrative and predictable growth of our core our attractive client about student capital allocation business base lending and Sallie and re
Slide 6: Maximize the Profitability and Growth of the Core Business
Maximize the Profitability and Growth of the Core Business Maximize Revenue Manage Unit Costs Drive penetration at all schools Strong fixed cost discipline Increase market share by fully meeting Efficiency effectiveness across all areas student funding needs We focus on top-line Enhanced risk-adjust
Slide 7: Optimize the Value of the Brand and Attractive Client Base
Optimize the Value of the Brand and Attractive Client Base 2M 91% We know our customers’ finances, Borrowers and Customers complete payment patterns and indebtedness cosigners their program7 We have the relationships and knowledge to assist our customers with their next Graduates who benefit from th
Slide 8: Better Inform the Narrative
Better Inform the Narrative In the current environment, there have been three main areas of focus from third parties that include free college, debt forgiveness and bankruptcy reform. We expect our business to perform well even under leading reform proposals.4 Free College Debt Forgiveness • Benefit
Slide 9: Maintain Rigorous Capital Allocation and Return Program
Maintain Rigorous Capital Allocation and Return Program Invest in High ROE Growth Share Repurchase • Continue to focus on high-quality Private Education • Since January 1, 2020, we have repurchased 26% of shares Loan originations, including deeper penetration of outstanding at that time. graduate sc
Slide 10: High Quality Private Education Loan Portfolio
High Quality Private Education Loan Portfolio Customer FICO at Original Approval10 Smart Option Payment Type Interest <700 780+ Only 23% 28% 20% Deferred 49% 700 - 390 Fixed Pay 27% 740 - 780 31% 22% Smart Option Loans: $18.5 billion Weighted Average FICO: 743 Portfolio by Originations Vintage23 Por
Slide 11: High Quality, Predictable Credit Program
High Quality, Predictable Credit Program Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years Since First P&I Repayment Period 10% Disbursed Principal Entering P & I Repayment 9% 8% Cumulative Defaults as a % of 7% 0.06415355 6% 5% 0.05108774 4% 0.04123424 3% 0.03134673 2% 0.019
Slide 12: Conservative Funding Optimizes Net Interest Margin
Conservative Funding Optimizes Net Interest Margin Secured Debt 18% Retail MMDA & CD 22% Brokered $12.1b As of 9/30/20 Retail $10.7b Secured Debt $4.2b Retail H.S.A. & 529 Brokered 17% Variable 34% Brokered Fixed 9% As of 3/31/21 12
Slide 13: Sallie Mae is an ESG Company
Sallie Mae is an ESG Company Providing Financial Education Serving our Customers & Assistance • Free Scholarship Search tool listing 6 million scholarships worth more than • Financing assistance to 1.5 million families since 2014 to provide access to $30 billion postsecondary education and opportuni
Slide 14: First quarter performance positive step towards 2021 targets
First quarter performance positive step towards 2021 targets Strengthening Economy • The average unemployment rate for the over 25 year-old college graduate population improved to 3.8% in Q1 2021 from 4.1% in Q4 2020.25 • Early reports from colleges and universities indicate they are expecting an on
Slide 15: Simple But Powerful Investment Thesis
Simple But Powerful Investment Thesis • Consistent earnings expansion is driven by top line growth and efficiency Attractive Earnings Profile • 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 an
Slide 16: Questions?
Questions?
Slide 17: Footnotes
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 CBA
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