Slide 1: Investor Presentation Second Quarter 2022
Investor Presentation Second Quarter 2022
Slide 2: Forward-Looking Statements and Disclaimer
Forward-Looking Statements and Disclaimer sallle 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 finan
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. service! C®D) 8D 56% Market share of private education loan originations? 54% Return on Com
Slide 4: Strengthening Economy and Strong Strategic Execution
ily sallie mae Strengthening Economy II - 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. + In an internal survey of our top 100 school relationships on early enrollment trends for AY 2022-2023, 83% expect their enrollm
Slide 5: Revenue, Total 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 Approval10 746 746 749 750 748 751
Slide 7: Higher Education Value Proposition Remains Attractive
Higher Education Value Proposition Remains Attractive® sallig Federal Loans Private $84B Education Loans Other $11B $13B Grants Famil ‘amily $139B Contribution $222B Higher Education Spend* (Academic Year 2020-2021) Expanding Addressable Market * Private Education Loans represent 2-3% of the overall
Slide 8: High Quality Private Education Loan Portfolio
High Quality Private Education Loan Portfolio As of 3/31/22 Customer FICO at Original Approval Smart Option Payment Type Interest Only 20% Weighted Deferred Manaus Average 48% $19.5B FICO: 743 ATED 7A0 -780 Fixed Pay 27% 22% 32% Portfolio by Originations Vintage Portfolio Interest Rate Type Pre 2014
Slide 9: Conservative Funding Optimizes Net Interest Margin
Conservative Funding Optimizes Net Interest Margin As of 3/31/22 Retail MMDA & CD 22% Retail $11.2B Brokered $9.9B Secured Debt $4.6B Brokered Variable 22% Brokered Fixed 18% sallie mae Jl
Slide 10: Simple But Powerful Investment Thesis
Simple But Powerful Investment Thesis 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 discip
Slide 11: Clear Strategy to Prove this Investment Thesis
Clear Strategy to Prove this Investment Thesis Strategic Imperatives: 1. [ant Maximize the profitability and growth of our core business 990 2. sy? Maximize the value of our brand and attractive customer base 3. (J Better inform the external narrative about private student lending and Sallie Mae 11
Slide 12: Maximize the Profitability and Growth of the Core Business
Maximize the Profitability and Growth of the Core Business All Maximize Revenue Drive penetration at all schools Increase market share by fully meeting student funding needs Enhanced risk-adjusted pricing and underwriting Improved marketing, digital, and data capabilities 3- *=] Manage Unit Costs St
Slide 13: Optimize the Value of the Brand and Attractive Client Base
ily sallie mae Optimize the Value of the Brand and M 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 () What We Do Build products and E
Slide 14: Changing the Narrative
Changing the Narrative il/ sallie mae “al 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 proposals4 Free College * Benefits of
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 salle, Increased Shareholder Value ©) > Undergraduate Graduate g (Y% 9) RATE TYPE Variable & Fixed Variable & Fixed Medical Health Dental Variable: SOFR + Variable: SOFR + " 1.500% - SOFR + 2.250% - SOFR + Professions INTEREST RATE 12.375% 1.875% Fixed: 4.00% -
Slide 17: Sallie Mae is an ESG Company
Sallie Mae is an ESG Company Providing Financial Education Serving our Customers & Assistance • Free Scholarship Search tool listing more than 6 million scholarships worth • Financing assistance to 1.4 million families since 2014 to provide access to up to $30 billion postsecondary education and opp
Slide 18: ABS Supplement
ABS Supplement JI
Slide 19: Sallie Mae's 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 • Smart Option payment option may not be The Smart Option loan changed after selected at origination program consists of: • Fixed-rate loans or variable-rate loans • Consumer credit und
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 JI
Slide 23: Commitments vs Disbursements
Commitments vs Disbursements 2021 Actuals Commitments vs Disbursements 52% 38% 38% 23% 15% 14% 10% 10% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Commitments Disbursements Provision for New Loans Additional Provision Impacts Unfunded Commitments • Directly impacted by the timing of • New Loans, DCF accretion,
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 $116 million and increased t
Slide 25: Quarterly Financial Highlights
Quarterly Financial Highlights'*: © cdl, bcoz | corn | sor soe | corn | sor Income Statement ($ Millions) Key Performance Metrics Total interest income $465 $458 $436 Net Interest Margin 5.29% 5.13% 440% Total interest expense 90 91 105 Yield—Total I 4 i 56% 40% 80% Net Interest Income 375 367 331 i
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 ($3,500 > subsidized) Parent Plus Loan Program Graduate
Slide 27: Non-GAAP Core Earnings to GAAP Reconciliation
Non-GAAP “Core Earnings” to GAAP Reconciliation ‘$ in thousands, except per share amounts) Mar. 31, 2022 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 attributable to SLM Corporation common stoc
Slide 28: Footnotes
Footnotes 1 2 3. 4 5. J.D. 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/cce. Source: MeasureO