Slide 1: SLM Corporation Earnings Presentation Second-Quarter 2015
SLM CORPORATION EARNINGS PRESENTATION SECOND-QUARTER 2015 JULY 23, 2015 1 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 July 22, 2015 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial results
Slide 3: Sallie Mae Bank Overview
Sallie Mae Bank Overview Sallie Mae Bank Key Portfolio Statistics for Q2 2015 − Portfolio of $9.2 billion of high quality Private Education Loans − 90% cosigned − Average Originations FICO of 747 − 79% of the loans have a FICO ≥ 700 − 30% of loans are in full principal and interest repayment − 52% o
Slide 4: Key Financial Metrics
Key Financial Metrics Q2 2015 Q1 2015 Q2 2014 ($Millions) Private Education Loans, Net $ 9,245 $ 9,701 $ 7,436 Net Interest Income $ 168 $ 171 $ 144 Net Interest Margin 5.49% 5.60% 5.32% Private Education Yield 7.96% 8.07% 8.22% Cost of Funds 1.17% 1.17% 0.94% Operating Expenses $ 90 $ 81 $ 61 Restr
Slide 5: High Quality Private Education Loan Originations Growth
High Quality Private Education Loan Originations Growth $5,000 $4,500 $4,300 $4,076 5% $4,000 $3,795 7% $3,500 $3,342 14% Originations ($MM) $3,000 $2,737 22% $2,500 $2,047 $2,000 8% YTD $1,500 $1,000 $500 $0 2011 2012 2013 2014 2015 Private Education Loan Originations Originations Statistics ($) Q2
Slide 6: Q2 Private Education Loan Delinquencies
Q2 Private Education Loan Delinquencies1,2,3 2Q 2015 1Q 2015 2Q 2014 ($ Thousands) Balance % Balance % Balance % Loans in repayment and percentage of each status: Loans current 5,570,389 98.3% 5,896,132 98.4% 4,396,772 99.3% Loans delinquent 31-60 days 57,884 1.0% 54,883 0.9 21,381 0.5% Loans delinq
Slide 7: Delinquency and Default Performance
Delinquency and Default Performance (As a % of Loans in P&I Repayment)4,5 10.0% 31-60 Day Delinquency 10.0% 61-90 Day Delinquency % of P&I Repayment Balance % of P&I Repayment Balance 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% Legacy SLM: 31-60 Delinquency SLM Bank: 31-60 Delinquency Legacy S
Slide 8: Earnings Metrics
Earnings Metrics6 Q2 2015 Q1 2015 Q2 2014 ($Millions, except per share amounts) GAAP Net Income $ 91 $ 48 $ 44 GAAP Net Income Diluted EPS 0.20 0.10 0.09 Hedge Effectiveness Adjustment - (1) 4 "Core Earnings" 91 46 48 "Core Earnings" Diluted EPS 0.20 0.10 0.10 Core ROA 2.8% 1.5% 1.7% Core ROCE 25.2%
Slide 9: 2015 Guidance
2015 Guidance Target 2015 Originations $4.3 Billion Operating Expenses $340 Million Additional Restructuring Expense $7 Million Loan Sales at 10.5% Premium $1.5 Billion Provision for Loan Losses, Private $95 Million “Core Earnings” diluted EPS $0.57-$0.59 9
Slide 10: Footnotes
Footnotes 1 For this slide, “Loans in Repayment” includes loans making interest only and fixed payments as well as loans that have entered full principal and interest repayments status. 2 Loans in forbearance includes loans for customers who have requested extension of grace period generally during
Slide 11: Important Information Regarding Historical Loan Performance Data
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 Corpo
Slide 12: Important Information Regarding Historical Loan Performance Data (cont.)
Important Information Regarding Historical Loan Performance Data (cont.) Smart Option Loan Portfolio Data for Charts on Page 7 of Presentation Legacy SLM Consolidated Smart Option Student Loan Portfolio Data prior to the Spin-Off Date, and Sallie Mae Bank-Only Smart Option Student Loan Data from and
Slide 13: "Core Earnings" to GAAP Reconciliation
“Core Earnings” to GAAP Reconciliation Quarters Ended Six Months Ended (Dollars in thousands, except per share amounts) June 30, March 31, June 30, June 30, June 30, “Core Earnings” adjustments to GAAP: 2015 2015 2014 2015 2014 GAAP net income attributable to SLM Corporation……….………….…….........……………