Slm Corporation · NASDAQ:SLM
Slm — ABS Vegas 2016 Conference
27 slides from Slm's conference presentation, Feb 28, 2016
Slide 1: Sallie Mae Investor Presentation
SALLIE MAE INVESTOR PRESENTATION ABS Vegas 2016 Conference February 28, 2016- March 2, 2016
Slide 2: Forward-Looking Statements and Disclaimer
| 2 Forward-Looking Statements and Disclaimer Cautionary Note Regarding Forward-Looking Statements The following information is current as of January 20, 2016 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial
Slide 3: Corporate Overview
| 3 Corporate Overview
Slide 4: Sallie Mae Summary
| 4 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 Competiti
Slide 5: Sallie Mae Highlights
| 5 Sallie Mae Highlights • Originated $4.3 billion of high quality Private Education Loans in 2015 (+6% vs. 2014) • Grew Private Education Loan portfolio 28% from 2014 to 2015 • Grew market share in 2014 and 2015 to 54% • Generated earnings1 of $255 million in 2015, up 40% from 2014 • Completed $1.
Slide 6: Favorable Student Loan Market Trends
| 6 Favorable Student Loan Market Trends Academic Year Enrollment at Four-Year Degree Granting Institutions(1) Annual Cost of Education(2) Public Private (millions) (thousands) $42 $44 $39 $41 $36 $38 13.4 13.5 13.4 13.5 $34 $35 13.3 $32 12.9 $17 $18 $18 $19 $20 $14 $15 $16 $14 2009 2010 2011 2012 2
Slide 7: Higher Education Value Proposition
| 7 Higher Education Value Proposition Relationship Between Higher Education, Incremental Earnings From a College Degree Has Increased For Generations(2) Payment to Income Ratio(4) Income and Employment(1) 1,800 12% $ 17,500 1,600 Average weekly income 10% $ 15,780 1,400 Unemployment $ 14,245 1,200
Slide 8: Smart Option Student Loan Program
| 8 Smart Option Student Loan Program
Slide 9: Sallie Mae's Smart Option Loan Product Overview
| 9 Sallie Mae’s Smart Option Loan Product Overview • The Smart Option loan product was introduced by Smart Option Loan Program Sallie Mae in 2009 Origination Channel School Typical Borrower Student • The Smart Option loan program consists of: Typical Co-signer Parent $10,000 avg orig bal, 5 to 15 y
Slide 10: High Quality Private Education Loan Originations Growth
| 10 High Quality Private Education Loan Originations Growth $5,000 $4,500 $4,330 $4,076 6% $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 $0 2011 2012 2013 2014 2015 Private Education Loan Originations Originations Statistics ($) 2011 2012 2
Slide 11: High Quality Private Education Portfolio
| 11 High Quality Private Education Portfolio Customer FICO at Origination Smart Option Payment Type <700 Interest Only 21% 780+ 21% 30% Deferred 700 - 740 47% 26% Fixed Pay 740 - 780 32% 23% Weighted Average FICO: 746 Smart Option Loans: $10.2bn Portfolio by Originations Vintage Portfolio Interest
Slide 12: Sallie Mae Bank Servicing Policies
| 12 Sallie Mae Bank Servicing Policies Policy Pre-Spin, Legacy SLM Serviced Post-Spin, Sallie Mae Bank Serviced(1) Delinquencies All loans serviced by an affiliate of legacy SLM; loan Sallie Mae Bank collects delinquent loans thru charge-off, placing owned by Sallie Mae Bank sold to legacy SLM afte
Slide 13: Sallie Mae Bank Collections
| 13 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 coll
Slide 14: Smart Option Student Loan Historical Performance Data
| 14 Smart Option Student Loan Historical Performance Data Period ended December 31, 2015
Slide 15: Important Information Regarding Historical Loan Performance Data
| 15 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
Slide 16: Important Information Regarding Historical Loan Performance Data (cont.)
| 16 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 three separate sources of information: (1) Combined Smart Option Student Loan Portfolio Data for Legacy SLM, Navient and Sallie
Slide 17: Delinquency and Default Performance
| 17 Delinquency and Default Performance 10.0% 10.0% (As a % of Loans in P&I Repayment)(1),(2),(3) Repayment Balance Repayment Balance 8.0% 8.0% 31-60 Day Delinquency 61-90 Day Delinquency 10.0% 10.0% 6.0% 6.0% % of P&I Balance % of P&I Balance 8.0% 8.0% 4.0% 4.0% % of P&I Repayment % of P&I Repayme
Slide 18: Prepayments and Cumulative Defaults by P&I Repayment Vintage
| 18 Prepayments and Cumulative Defaults by P&I Repayment Vintage Smart Option Cumulative Gross Defaults Smart Option Vintage Data: Total Prepayments (1),(2) by P&I Repayment Vintage and Years in P&I Repayment (3),(4),(5) 14.0% 10.0% as a % of Original Balance Cumulative Default Rate 12.0% 9.0% 8.0%
Slide 19: Funding and ABS Overview
| 19 Funding and ABS Overview
Slide 20: Conservative Funding Approach
| 20 Conservative Funding Approach 2015 Target Low cost deposit base with no branch overhead — 80% of retail deposits are savings accounts 8% — Brokered deposits used as alternative funding source 30% Term funding / securitizations will augment deposit funding for future growth — Experienced capital
Slide 21: SMB vs. Legacy SLM Private Education Loan ABS Summary
| 21 SMB vs. Legacy SLM Private Education Loan ABS Summary SLM Private Education Trusts Sum m ary Inform ation Legacy SLM Navient Sallie Mae Bank 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 15-B 15-C 14-A 15-A 15-B 15-C Total Bond Amount ($mil) 562 825 721 547 891 1,135 640
Slide 22: Sallie Mae Bank ABS Structures
| 22 Sallie Mae Bank ABS Structures SMB 2015-B SMB 2015-C Size $630.8MM(1) $701.0MM Pricing Date July 23, 2015 October 19, 2015 Smart Option Smart Option Collateral Private Education Loans Private Education Loans Servicer Sallie Mae Bank Sallie Mae Bank Overcollateralization (2) 13% 14% Pricing Prep
Slide 23: SMB 2015-C Structure
| 23 SMB 2015-C Structure(1) ► Sallie Mae Bank is the loan originator, loan servicer, and transaction sponsor ► SMB 2015-C utilizes a sequential structure Pct of Total Bond Wtd Avg Life to Call Principal Window to Call Expected Maturity to Class Bond Balance Balance Ratings (M/S) Index (4% CPR)(2) (
Slide 24: SMB 2015-C Structure
| 24 SMB 2015-C Structure Projected Class A Deal Credit Enhancement(2,4) Reserve WAL to Call(1) (4% CPR) Principal Window to Call(1) Credit Enhancement(3) Non- Class A Class B Target(3)(5) Floor(5) A1 A2 A3 B C A1 A2 A3 B C 12 mo 24 mo 36 mo 60 mo declining SMB 23% 14% 30% 11% 0.25% 1.23 4.97 8.20 9
Slide 25: Appendix
| 25 APPENDIX
Slide 26: Financial Review
| 26 Financial Review (in millions) Q4 2015 Q4 2014 Variance 2015 2014 Variance PSL $ 10,624 $ 8,325 $ 2,299 $ 10,624 $ 8,325 $ 2,299 PSL Reserve (109) (79) (30) (109) (79) (30) FFELP 1,119 1,268 (150) 1,119 1,268 (150) FFELP Reserve (4) (5) 2 (4) (5) 2 • Private Education Loan Total Loans 11,631 9,
Slide 27: "Core Earnings" to GAAP Reconciliation
| 27 “Core Earnings” to GAAP Reconciliation Quarters Ended Years Ended December 31, December 31, 2015 2014 2015 2014 (Dollars in thousands, except per share amounts) “Core Earnings” adjustments to GAAP: GAAP net income attributable to SLM Corporation……….………….…….........………………… $ 89,845 $ 19,717 $ 27
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