Slm Corporation · NASDAQ:SLM
Slm — Barclays Global Financial Services Conference 2016
16 slides from Slm's conference presentation, Sep 13, 2016
Slide 1: SLM Corporation – Barclays Global Financial Services Conference
SLM CORPORATION RAYMOND J. QUINLAN- CHAIRMAN & CEO Barclays Global Financial Services Conference September 13, 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 July 20, 2016 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial resul
Slide 3: Sallie Mae Summary
3 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 Competitive
Slide 4: Sallie Mae Overview
4 Sallie Mae Overview Sallie Mae Key Statistics for Q2 2016 − $0.12 diluted earnings per share − 90% of Private Education Loans outstanding are cosigned − Average Q2 Private Education Loan originations FICO of 744 − 79% of Private Education Loans outstanding have a FICO ≥ 700 at origination − 35% of
Slide 5: Favorable Student Loan Market Trends
5 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 201
Slide 6: Higher Education Value Proposition
6 Higher Education Value Proposition Relationship Between Higher Education, Incremental Earnings From a College Degree Has Increased Income and Employment(5) For Generations(6) 1,800 12% 1,600 Average weekly income $ 17,500 10% $ 15,780 1,400 Unemployment $ 14,245 1,200 8% 1,000 6% $ 9,690 800 $ 7,4
Slide 7: Smart Option Overview
7 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 8: Analytical Approach to Credit
8 Analytical Approach to Credit Borrower/Cosigner Initial Screen Manual Review ► $1,000 minimum loan ► ~8% of applications ► Minimum FICO of 640 ► Asset expertise and rigorous ► Pass risk scores, but require further ► No existing SLM 30+ day past dues underwriting driven by large review due to credi
Slide 9: High Quality Private Education Loan Growth
9 High Quality Private Education Loan Growth $5,000 $4,600 $4,500 $4,330 6% $4,076 6% $4,000 $3,795 7% Disbursements ($MM) $3,500 $3,342 14% $3,000 $2,500 $2,226 $2,000 $1,500 $1,000 $500 $0 2012 2013 2014 2015 2016 Private Education Loan Disbursements Disbursement Statistics ($) 2012 2013 2014 2015
Slide 10: High Quality Private Education Portfolio
10 High Quality Private Education Portfolio Customer FICO at Original Approval Smart Option Payment Type <700 Interest Only 21% 780+ 22% 30% Deferred 700 - 740 47% 26% 740 - 780 Fixed Pay 23% 31% Weighted Average FICO: 746 Smart Option Loans: $11.7bn Portfolio by Originations Vintage Portfolio Inter
Slide 11: Cumulative Default Rate
11 Cumulative Defaults by P&I Repayment Vintage(7),(8),(9) Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years in P&I Repayment 10% 9% 8% 7% as a % of Original Balance 6.3% Cumulative Default Rate 6% 5.5% 5% 4% 4.1% 3.2% 3% 2.6% 2% 1% 1.0% 0% 0 1 2 3 4 5 6 7 Years in P&I Repaym
Slide 12: Conservative Funding Approach
12 Conservative Funding Approach YTD 2016 Target Low cost deposit base with no branch overhead — 80% of retail deposits are savings accounts 8% — Brokered deposits used as alternative funding source 20% Term funding / securitizations will augment deposit funding for future growth — Experienced capit
Slide 13: Sallie Mae Bank
13 Sallie Mae Bank • Market share leader in private student loan industry • High quality assets and conservatively funded balance sheet • Predictable balance sheet growth • Strong capital position and funding capabilities • A financial services company with high growth trajectory and excellent retur
Slide 14: Footnotes
14 Footnotes (1) Source: U.S. Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2022 (NCES, February 2014), Enrollment in Postsecondary Institutions (2) Source: Trends in College Pricing.© 2015 The College Board,. www.collegeboard.org, Note: Ac
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 Co
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 two separate sources of information: (1) Combined Smart Option Student Loan Portfolio Data for Legacy SLM, Navient and Sallie Mae
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