Slide 1: SLM Corporation Earnings Presentation Fourth Quarter 2020
SLM Corporation Earnings Presentation Fourth Quarter 2020 January 28, 2021
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 January 27, 2021 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial resu
Slide 3: Proven Resiliency During the COVID-19 Pandemic
Proven Resiliency During the COVID-19 Pandemic Credit Return to School16 And • Held-for investment loans in forbearance as a Originations % of loans held-for-investment in repayment • The Spring 2021 semester is expected to be and forbearance has been reduced from the 9% fully on campus, 8% remote,
Slide 4: Clear Strategy to Ensure Appropriate Valuation
Clear Strategy to Ensure Appropriate Valuation Maximize the Optimize the value Change the Maintain a profitability and of our brand and narrative around rigorous and growth of our core our attractive private student predictable capital business client base lending to address allocation and real and
Slide 5: Maximize the Profitability and Growth of our Core Business
Maximize the Profitability and Growth of our Core Business Revenue • Net Income of $433 million in Q4 2020 compared to $141 million in Q4 2019. • Originated $627 million in Private Education Loans in Q4 2020 (-13% vs. Q4 2019). Non-interest Expenses • Non-interest expenses of $124 million in Q4 2020
Slide 6: Quarterly Financial Highlights
Quarterly Financial Highlights3 4Q 3Q 4Q 4Q 3Q 4Q 2020 2020 2019 2020 2020 2019 Income Statement ($ Millions) Key Performance Metrics Total interest income $480 $482 $600 Net Interest Margin 4.82% 4.79% 5.41% Total interest expense 113 118 181 Net Interest Income 367 365 419 Yield—Total Interest-ear
Slide 7: Annual Financial Highlights
Annual Financial Highlights3 2020 2019 2020 2019 Income Statement ($ Millions) Key Performance Metrics Total interest income $2,022 $2,331 Net Interest Margin 4.81% 5.76% Total interest expense 542 708 Net Interest Income 1,480 1,623 Yield—Total Interest-earning assets 6.57% 8.27% Less: provisions f
Slide 8: Private Education Loan Originations
Private Education Loan Originations9 $6,000 $5,625 6% (5%) $5,500 $5,315 $5,321 11% $5,000 $4,800 $4,666 3% 8% $4,500 $4,330 $4,000 Originations ($MM) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 2015 2016 2017 2018 2019 2020 Actuals Originations Statistics Q4 2020 Q4 2019 2020 2019 Origination
Slide 9: Credit Performance
Credit Performance11,12,13,19 Private Education Loans Held for Investment Quarters Ended December 31, 2020 September 30, 2020 December 31, 2019 ($ Thousands) Balance % Balance % Balance % Loans in repayment and percentage of each status: Loans current $ 13,898,948 97.2% $ 15,375,006 97.0% $ 16,315,6
Slide 10: Provisions for Credit Losses Q3 2020
Provisions for Credit Losses Q3 2020 Moody's U.S. Unemployment Forecast14,15 Moody's College Graduate Age>25 Unemployment Forecast14,17 11.00% 6.00% 10.00% 5.50% 9.00% 5.00% 8.00% 4.50% 7.00% 4.00% 6.00% 3.50% 5.00% 3.00% 4.00% 2.50% 3.00% 2.00% Jul-21 Jul-22 Apr-21 May-21 Jun-21 Apr-22 May-22 Jun-2
Slide 11: Guidance
Guidance14 For the full-year 2021, the company expects the following: Metrics 2021 Full-Year Guidance GAAP diluted earnings per share $ 2.20 - $2.40 Private Education Loan originations year- 6-7% over-year growth Total loan portfolio net charge-offs $ 260 million - $280 million Non-interest expenses
Slide 12: Footnotes
Footnotes 1. Derivative Accounting: we provide “Core Earnings” because it is one of several measures management uses to evaluate management performance and allocate corporate resources. “Core Earnings” exclude periodic unrealized gains and losses caused by the mark-to-fair value valuations on deriva
Slide 13: Footnotes (continued)
Footnotes (continued) 15. Source based on U.S. Bureau of Labor Statistics (BLS): Current Population Survey (CPS); Moody's Analytics Forecasted. September Base- U.S. based on Baseline Scenario (September 2020): Household Survey: Unemployment Rate, (%, SA) (FLBR.IUSA) as of 09/08/2020. September Sever
Slide 14: “Core Earnings” to GAAP Reconciliation
“Core Earnings” to GAAP Reconciliation Quarters Ended Years Ended Dec. 31, 2020 Sept. 30, 2020 Dec. 31, 2019 2020 2019 Dollars in thousands, except per share amounts “Core Earnings” adjustments to GAAP: GAAP net income $432,700 $171,028 $141,352 $880,690 $578,276 Preferred stock dividends $1,734 $2,