Slm Corporation · NASDAQ:SLM
Slm — Investor Presentation (May 2022)
28 slides from Slm's investor presentation, May 17, 2022
Slide 1: Investor Presentation Second Quarter 2022
Exhibit 99.1 Investor Presentation Second Quarter 2022 sallie mae’ ] fit
Slide 2: Forward-Looking Statements and Disclaimer
Forward-Looking Statements and Disclaimer salle mae Cautionary Note Regarding Forward-Looking Statements The following information is current as of April 27, 2022 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the "Company”) announcing its financ
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 § @ Industry leading and award-winning technologie
Slide 4: Strengthening Economy and Strong Strategic Execution
sallie mae Strengthening Economy - Average unemployment rate for the over 25-year-old college graduate population improved to 2.2% in Q1 2022 from 3.8% in Q1 2021.75 + In an internal survey of our top 100 school relationships on early enrollment trends for AY 2022-2023, 83% expect their enrollment t
Slide 5: Revenue, Operating Expenses, Earnings/Capital
Revenue • • Total Operating Expenses • Earnings/Capital • • • •
Slide 6: Originations Statistics
Originations Statistics ($) 2018 2019 2020 2021 Q1 2022 Q1 2021 % Cosigned 87% 87% 86% 86% 88% 89% % In School Payment 57% 58% 60% 59% 57% 59% Average FICO at Approval 10 746 746 749 750 748 751
Slide 7: Higher Education Value Proposition Remains Attractive
Higher Education Value Proposition Remains Attractive sallg, Federal Loans Private $84B Education Loans Other $11B $13B Grants $139B Family Contribution $222B Higher Education Spend* (Academic Year 2020-2021) Expanding Addressable Market » Private Education Loans represent 2-3% of the overall spend
Slide 8: High Quality Private Education Loan Portfolio
High Quality Private Education Loan Portfolio As of 3/31/22 Customer FICO at Original Approval Weighted Average FICO: 743 740-780 22% Portfolio by Originations Vintage Pre 2014 Weighted Average Smart Option Payment Type Interest Only 20% Deferred Mb yaaind 48% $19.5B Fixed Pay 32% Portfolio Interest
Slide 9: Conservative Funding Optimizes Net Interest Margin
Conservative Funding Optimizes Net Interest Margin Retail MMDA & CD 22% Retail $11.2B Brokered $9.9B Secured Debt $4.6B Brokered Variable 22% As of 3/31/22
Slide 10: Simple But Powerful Investment Thesis
Simple But Powerful Investment Thesis salle Attractive Earnings Profile Manageable Risk Disciplined Capital Allocation Consistent earnings expansion is driven by top line growth and efficiency Sallie Mae is the leader in the private education loan market that is growing 6+% a year » Well-proven and
Slide 11: Clear Strategy to Prove this Investment Thesis
Clear Strategy to Prove this Investment Thesis sali, Strategic Imperatives: 1. [ant Maximize the profitability and growth of our core 990 2. ii 3. C1 Maximize the Better inform value of our the external brand and narrative about attractive private student customer base lending and Sallie Mae busines
Slide 12: Maximize the Profitability and Growth of the Core Business
sallie mae Maximize the Profitability and Growth of the Core Business Manage Unit Costs Maximize Revenue Drive penetration at all schools Strong fixed cost discipline Increase market share by fully Efficiency effectiveness across all meeting student funding needs areas Enhanced risk-adjusted pricing
Slide 13: Optimize the Value of the Brand and Attractive Client Base
sallie mae Optimize the Value of the Brand and _ Attractive Client Base 2M 91% Borrowers and Customers complete cosigners their program’ Graduates who benefit from the investment’ $52,600 31% ~698 Average annual Owna_ Self-reported compensation home FICO score Q What We Do Build products and Ensure
Slide 14: Changing the Narrative
Changing the Narrative sallie mae 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 » Benefits of subsid
Slide 15: We allocate capital with discipline
• • • • • • We allocate capital with discipline • • •
Slide 16: Diverse Student Loan Portfolio Driving Increased Shareholder Value
Diverse Student Loan Portfolio Driving sale, Increased Shareholder Value @ Zz Undergraduate Graduate Q A 9) RATE TYPE Variable & Fixed Variable & Fixed Medical Health Dental Variable: SOFR + Variable: SOFR + Professions INTEREST RATE 1 O00% -SORR- 2200 8c SORE RANGES 12. 375% 11. 875% Fixed: 4.00% -
Slide 17: Sallie Mae is an ESG Company Committed to an Ethical & Diverse Workplace
Sallie Mae is an ESG Company Committed to an Ethical & Diverse Workplace • Board of Directors composition is 33% women, has been recognized by 50/50 Women On Boards as a company with a 3+ Board rating • Appointed the first woman to serve as chair of Board of Directors in 2020 • Committed to best-in-
Slide 18: ABS Supplement
ABS Supplement
Slide 19: Smart Option Loan Product Overview
Sallie Mae’s Smart Option Loan Product Overview The Smart Option loan product was introduced by Sallie Mae in 2009 The Smart Option loan program consists of: Smart Option Interest Only loans Require full interest payments during in- school, grace, and deferment periods Smart Option Fixed Pay loans R
Slide 20: Sallie Mae Bank ABS Summary
Sallie Mae Bank ABS Summary28 14-A 15-A 15-B 15-C 16-A 16-B 16-C 17-A 17-B 18-A 18-B 18-C 19-A 19-B 20-A 20-B 21-B 21-D 21-E Issuance Date 8/7/2014 4/23/2015 7/30/2015 10/27/2015 5/26/2016 7/21/2016 10/12/2016 2/8/2017 11/8/2017 3/21/2018 6/20/2018 9/19/2018 3/13/2019 6/12/2019 2/12/2020 8/12/2020 5
Slide 21: Sallie Mae Bank ABS Structures
Sallie Mae Bank ABS Structures SMB 2021-E SMB 2021-D SMB 2021-B
Slide 22: Appendix
Appendix
Slide 23: Commitments vs Disbursements
Commitments vs Disbursements Provision for New Loans • Directly impacted by the timing of Commitments and not Disbursements Additional Provision Impacts • New Loans, DCF accretion, loan sales, model updates and overlays Unfunded Commitments • Remain a liability for accounting purposes • Once the loa
Slide 24: CECL Update
CECL Update13 Adopted on January 1, 2020. • The company’s 2020 financial results reflect a transition adjustment that increased the allowance for loan losses by $1.1 bil lion, increased the liability representing its off-balance sheet exposure for unfunded commitments by $116 million and increased t
Slide 25: Quarterly Financial Highlights
Quarterly Financial Highlights” 2022 2021 Income Statement ($ Millions) Total interest income $465 $458 $436 Total interest expense 90 a 105 Net Interest Income 375 367 331 Less: provisions for credit losses 98 ) (226) Total non-interest income 2 183 413 Total non-interest expenses 133 125 126 Incom
Slide 26: Sallie Mae vs Federal Student Loans
Sallie Mae vs Federal Student Loans As of 5/13/22 Undergraduate Graduate Loan Program Sallie Mae Smart Option Student Loan $1,000 - Cost of Attendance Federal Student Loan Program™ Federal Direct Loan (Subsidized & Unsubsidized) Yr1_ = $5,500 ($3,500 > subsidized) Yr2_ = $6,500 ($4,500 > subsidized)
Slide 27: Non-GAAP Core Earnings to GAAP Reconciliation
Non-GAAP “Core Earnings” to GAAP Reconciliation salle mae Quarters Ended in thousands, ex share amoun' Mar. 31, 2022 Dec. 31, 2021 31,2021 Non-GAAP “Core Earnings” adjustments to GAAP: GAAP net income $128,812 $306,265 $641,207 Preferred stock dividends $1,275 $1,177 $1,201 GAAP net income attributa
Slide 28: Footnotes
Footnotes 110. 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/cee. ‘Source: MeasureOne CBA Repor