Slide 1: Sallie Mae Investor Presentation First Quarter 2016
SALLIE MAE INVESTOR PRESENTATION FIRST QUARTER 2016 Exhibit 99.1
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: Sallie Mae Brand
| 3 Sallie Mae Brand • #1 saving, planning and paying for education company with 40 years of leadership in the education lending market • Top ranked brand: 6 out of 10 consumers of education finance recognize the Sallie Mae brand • Industry leading market share in private education lending: 54% mark
Slide 4: Sallie Mae Highlights
| 4 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 $1.
Slide 5: Sallie Mae Summary
| 5 ($B as of 12/31/15) Assets 15.2 - FFELP Loans 1.1 - Private Loans 10.5 - Deposits 11.5 - Preferred Equity 0.6 - Common Equity 1.5 - - National sales and marketing - Largest salesforce in the industry - Specialized underwriting capability - Capital markets expertise Sallie Mae Summary Private Edu
Slide 6: Favorable Student Loan Market Trends
| 6 $17 $17 $27 $27 $99 $31 $149 $53 Full-Time Private School Full-Time Public School Full-Time Private School Full-Time Public School Stafford Loan Limit Cost of Attendance Gap Favorable Student Loan Market Trends 12.9 13.3 13.4 13.5 13.4 13.5 2009 2010 2011 2012 2013 2014 (millions) Academic Year
Slide 7: Higher Education Value Proposition
| 7 Relationship Between Higher Education, Income and Employment(1) 0% 2% 4% 6% 8% 10% 12% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Less than H.S. High school Some college Associate Bachelor's Master's Doctorate Professional Unemployment Average weekly income Higher Education Value Propositio
Slide 8: Smart Option Overview
| 8 Product Features – Offers three repayment options while in school, which include Interest Only, $25 Fixed Payment and Deferred Repayment – Variable and Fixed Interest Rate Options – All loans are certified by the school’s financial aid office to ensure all proceeds are for educational expenses D
Slide 9: High Quality Private Education Loan Originations Growth
| 9 High Quality Private Education Loan Originations Growth Originations Statistics ($) 2011 2012 2013 2014 2015 % Cosigned 91% 9 % 9 % 9 % 9 % In School Payment 73 58 56 56 56 Average Originated FICO 48 746 745 749 748 $2,737 $3,342 $3,795 $4,076 $4,330 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3
Slide 10: Analytical Approach to Credit
| 10 Analytical Approach to Credit Student Initial Screen ► $1,000 minimum loan ► Minimum FICO of 640 ► No existing SLM 30+ day past dues ► No student loans 90+ day past dues ► No recent bankruptcy ► 2+ trades for cosigners and 4+ trades for non-cosigner ► Asset expertise and rigorous underwriting d
Slide 11: High Quality Private Education Portfolio
| 11 High Quality Private Education Portfolio Customer FICO at Origination Smart Option Payment Type Portfolio Interest Rate Type Variable 81% Fixed 19% 780+ 30% 740 - 780 23% 700 - 740 26% <700 21% Weighted Average FICO: 746 Portfolio by Originations Vintage [CATEGORY NAME] 21% [CATEGORY NAME] 32%
Slide 12: Conservative Funding Approach
| 12 Low cost deposit base with no branch overhead — 80% of retail deposits are savings accounts — Brokered deposits used as alternative funding source Term funding / securitizations will augment deposit funding for future growth — Experienced capital markets team — Capacity to securitize $2 – $3bn
Slide 13: Delinquencies: Legacy SLM vs. SLM Bank
| 13 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Mar- 12 Jun-1 2 Sep- 12 Dec- 12 Mar- 13 Jun-1 3 Sep- 13 Dec- 13 Mar- 14 Jun-1 4 Sep- 14 Dec- 14 Mar- 15 Jun-1 5 Sep- 15 Dec- 15 % of P&I Rep aym ent Bala nce Legacy SLM: 31-60 Delinquency SLM Bank: 31-60 Delinquency 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Mar- 12 Jun-1 2 S
Slide 14: Cumulative Defaults by P&I Repayment Vintage
| 14 Cumulative Defaults by P&I Repayment Vintage(1),(2),(3) Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years in P&I Repayment As of 12/31/15 (1) For important information regarding historical performance data, see pages 19 and 20. (2) Loans in ‘P&I Repayment’ include only t
Slide 15: Financial Review
| 15 Financial Review • Private Education Loan portfolio growth of 28% in 2015 vs. 2014 • Conservatively funded with 15.4% risk based capital at the end of 2015 • Stable deposit base coupled with term funding from securitizations • Full-year net interest margin of 5.48% • ROCE (Core) and ROA (Core)
Slide 16: Sallie Mae Bank
| 16 • Market share leader in private student loan industry • High quality assets and conservatively funded balance sheet • Predictable balance sheet growth for the next several years • Strong capital position and funding capabilities • A financial services company with high growth trajectory and ex
Slide 17: Smart Option Student Loan Historical Performance Data
| 17 Smart Option Student Loan Historical Performance Data Period ended December 31, 2015
Slide 18: Important Information Regarding Historical Loan Performance Data
| 18 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 19: Important Information Regarding Historical Loan Performance Data (cont.)
| 19 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 20: Smart Option Serviced Portfolio: 31-60 Day Delinquencies
| 20 Smart Option Serviced Portfolio: 31-60 Day Delinquencies 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% D e c -0 9 M a r- 1 0 J u n -1 0 S e p -1 0 D e c -1 0 M a r- 1 1 J u n -1 1 S e p -1 1 D e c -1 1 M a r- 1 2 J u n -1 2 S e p -1 2 D e c -1 2 M a r- 1 3 J u n -1 3 S e p -1 3 D e c -1 3 M a r- 1 4 J u n -1
Slide 21: Smart Option Serviced Portfolio: 61-90 Day Delinquencies
| 21 Smart Option Serviced Portfolio: 61-90 Day Delinquencies 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% D e c -0 9 Ma r- 1 0 J u n -1 0 S e p -1 0 D e c -1 0 Ma r- 1 1 J u n -1 1 S e p -1 1 D e c -1 1 Ma r- 1 2 J u n -1 2 S e p -1 2 D e c -1 2 Ma r- 1 3 J u n -1 3 S e p -1 3 D e c -1 3 Ma r- 1 4 J u n -1 4 S e
Slide 22: Smart Option Serviced Portfolio: 91+ Day Delinquencies
| 22 Smart Option Serviced Portfolio: 91+ Day Delinquencies 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% D e c -0 9 Ma r- 1 0 J u n -1 0 S e p -1 0 D e c -1 0 Ma r- 1 1 J u n -1 1 S e p -1 1 D e c -1 1 Ma r- 1 2 J u n -1 2 S e p -1 2 D e c -1 2 Ma r- 1 3 J u n -1 3 S e p -1 3 D e c -1 3 Ma r- 1 4 J u n -1 4 S e p
Slide 23: Smart Option Serviced Portfolio: Forbearance
| 23 Smart Option Serviced Portfolio: Forbearance Data as of December 31, 2015. (1) Loans in ‘P&I Repayment’ includes only those loans for which scheduled principal and interest payments are due. (2) On June 1, 2015 the FDIC published FIL-23-2015, which encouraged lenders to work constructively with
Slide 24: Smart Option Serviced Portfolio: Annualized Gross Defaults
| 24 Smart Option Serviced Portfolio: Annualized Gross Defaults Data as of December 31, 2015. (1) Loans in ‘P&I Repayment’ include only those loans for which scheduled principal and interest payments are due. Defaults occurring prior to ‘P&I Repayment’ are not represented in the data. (2) SLM Bank 2
Slide 25: Smart Option Vintage Data: Cumulative Gross Default by Loan Type
| 25 Smart Option Vintage Data: Cumulative Gross Default by Loan Type 6.0% 5.0% 3.6% 2.6% 1.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 0 1 2 3 4 5 6 7 8 9 10 11 C u m u la ti v e De fa u lt Ra te a s a % o f O ri g in a l Ba la n c e Years in P&I Repayment Smart Option Student Loans
Slide 26: Smart Option Vintage Data: Voluntary Prepayments
| 26 Smart Option Vintage Data: Voluntary Prepayments 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 % C P R Quarters Since Disbursement Smart Option Student Loans - Serviced Portfolio Voluntary CPR by Origination Vintage (1) Interest Only, Fixed Payment and Deferr
Slide 27: Smart Option Vintage Data: Total Prepayments
| 27 Smart Option Vintage Data: Total Prepayments ► Following the first year after disbursement, total prepayments have generally ranged around 4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 % C P R Quarters Since Disbursement Smart Option Student Loans - Servic
Slide 28: Smart Option: Cumulative Recoveries
| 28 Smart Option: Cumulative Recoveries ► Recoveries of charged-off Smart Option Student Loans® historically have occurred over a longer period than for many other types of unsecured consumer credit Data as of December 31, 2015. (1) Certain data used in the charts above was provided by Navient unde
Slide 29: Cohort Default Triangles: Definitions
| 29 The following cohort default triangles provide loan performance information for Legacy SLM, Navient and Sallie Mae Bank serviced Smart Option loans combined, thru the most recent period indicated (1) Terms and calculations used in the cohort default triangles are defined below: P&I Repaym
Slide 30: Cohort Default Triangles – Smart Option Combined
| 30 Cohort Default Triangles – Smart Option Combined (Interest Only, Fixed & Deferred) Data as of 12/31/2015. (1) Private education loans marketed under the Smart Option Student Loan brand. (2) Numerator is the amount of principal in each P&I Repayment Cohort that defaulted in each Year in P&I Repa
Slide 31: Cohort Default Triangles – Smart Option Interest Only
| 31 Cohort Default Triangles – Smart Option Interest Only Smart Option IO (P&I Repayment Status - No Co-Signer) Smart Option IO (P&I Repayment Status - Co-Signer) Smart Option IO (P&I Repayment Status - Total) Note: Certain data used in the charts above was provided by Navient under a data sharing
Slide 32: Cohort Default Triangles – Smart Option Fixed Payment
| 32 Cohort Default Triangles – Smart Option Fixed Payment Smart Option Fixed Payment (P&I Repayment Status – No Co-Signer) Smart Option Fixed Payment (P&I Repayment Status - Co-Signer) Smart Option Fixed Payment (P&I Repayment Status - Total) Note: Certain data used in the charts above was provided
Slide 33: Cohort Default Triangles – Smart Option Deferred Payment
| 33 Cohort Default Triangles – Smart Option Deferred Payment Smart Option Deferred (P&I Repayment Status – No Co-Signer) Smart Option Deferred (P&I Repayment Status - Co-Signer) Smart Option Deferred (P&I Repayment Status - Total) Note: Certain data used in the charts above was provided by Navient
Slide 34: ABS Supplement
| 34 ABS Supplement
Slide 35: Sallie Mae's Smart Option Loan Product Overview
| 35 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 Fix
Slide 36: SMB vs. Legacy SLM Private Education Loan ABS Summary
| 36 SMB vs. Legacy SLM Private Education Loan ABS Summary (1) Smart Option loans considered in ‘P&I Repayment’ only if borrowers are subject to full principal and interest payments on the loan. 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
Slide 37: Sallie Mae Bank ABS Structures
| 37 Sallie Mae Bank ABS Structures (1) Represents offered amount. SMB retained 5% of Classes A through B and all of Class C ($50mm). Total bond size was $714mm. (2) Overcollateralization for Class A & B bonds (3) Estimated based on a variety of assumptions concerning loan repayment behavior. Actual
Slide 38: SMB 2015-C Structure
| 38 SMB 2015-C Structure(1) (1) Estimated based on 2015-C collateral characteristics and current market pricing. Subject to change. (2) Estimated based on a variety of assumptions concerning loan repayment behavior. Actual average life and repayment characteristics may vary significantly from estim
Slide 39: SMB 2015-C Structure: Credit Enhancement
| 39 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 0 3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99 102105108111114117120123 M ill io n s C B A-3 A-2 A-1 Collateral C/E (%) SMB 2015-C Structure (1) Structu
Slide 40: SMB 2015-C Collateral Detail by Loan Type
| 40 ► Smart Option Interest Only and Fixed Pay loans require interest only payments or $25 fixed payments, respectively, while loans are in school, grace or deferment status ► 36.5% of Smart Option loans in the 2015-C pool are making interest only payments or $25 fixed payments ► 24.1% of Smart Opt
Slide 41: Sallie Mae Bank Servicing Policies
| 41 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 owned by Sallie Mae Bank sold to legacy SLM after becoming 90+ days past due Sallie Mae Bank collects delinquent lo
Slide 42: Sallie Mae Bank Collections
| 42 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 43: FFELP vs. Sallie Mae Bank Smart Option Private Education Loan Comparison
| 43 Sallie Mae Bank Smart Option Private Education Loans FFELP vs. Sallie Mae Bank Smart Option Private Education Loan Comparison FFELP Stafford Loans Sallie Mae Bank Smart Option Private Education Loans(1) Borrower Student Student or Parent Co-signer None Typically a parent Lender Eligible banks a
Slide 44: Private Education Loan Lifecycle for Deferred Loans
| 44 Private Education Loan Lifecycle for Deferred Loans Loan made to borrower/ co-signer In School Status (Additional Borrowing) Grace Status After graduation (generally 6 months) P&I Repayment Status Deferment Status (back to school) (up to 48 months) Default (120+ days delinquent) IN SCHOOL AND G
Slide 45: Appendix
| 45 APPENDIX
Slide 46: "Core Earnings" to GAAP Reconciliation
| 46 “Core Earnings” to GAAP Reconciliation (1) Derivative Accounting: “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP, as well as the periodic unrealized gains and losse