Slide 1: Investor Presentation 1st Quarter 2024
Investor Presentation 1st Quarter 2024 Confidential and proprietary information. © 2024 Sallie Mae Bank. All rights reserved. 1
Slide 2: Cautionary Note and Disclaimer Regarding Forward Looking Statements
CAUTIONARY NOTE AND DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS The following information is current as of April 24, 2024 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation announcing its financial results for the quarter ended March 31, 2024, the
Slide 3: 1st Quarter 2024 Highlights
Balance Sheet & Capital Allocation $2.6B 6.1% 1st Quarter 2024 Private Education Loan Originations in Q1 2024 as Private Education Loan allowance as a percentage of Highlights compared to $2.4 billion in the year-ago quarter; 6% the ending total loan balance and accrued interest to growth year-over-
Slide 4: Additional Key Performance Metrics
Loan Sales Funding & Liquidity Additional Key Performance $2.1B Deposit portfolio balances at the end of Q1 2024 were 2% Metrics Private Education Loans, including $1.95 billion of 3% lower than YE 2023; Q1 2024 mix of brokered vs. retail Uninsured deposits as a percentage of total deposits as princ
Slide 5: A Compelling Investment Opportunity
A Compelling Outstanding financial track record with strong EPS performance and ROCE Investment Opportunity Well-positioned in large and growing private student loan market, with powerful brand recognition and attractive client base Consistent profitability, balance sheet strength and strong risk an
Slide 6: Sallie Mae is an Outstanding Franchise
Sallie Mae is an 57% 2023 full-year market share Outstanding Franchise of private student lending marketplace(4) Sallie Mae is the market-leading brand for private education loans driven by brand recognition, rigorous underwriting methodology and industry-leading customer service. 65.6% Return on Co
Slide 7: Progress on Our Value Creation Journey
Progress on Our Value Creation Journey Three years ago, we set course on a strategy that we believed could create significant value – Maintain a “flattish” balance sheet by selling loans and buying back shares FOCUS ON HIGH ROCE LOANS IS AT THE CENTER OF OUR STRATEGY LOAN SALE ARBITRAGE CAPITAL MANA
Slide 8: Providing Customers with Financial Backing, Information and Tools to Achieve Their Goals
SLM Portfolio Providing Customers with Financial Backing, Information and Tools to Achieve Their Goals PRIVATE Smart Option SALLIE Offers traditional savings EDUCATION Student Loans MAE products LOANS Emphasize in-school BANK • High-yield savings accounts payment features that can • Money market acc
Slide 9: Private Education Loan Portfolio
Originations Vintage Smart Option Payment Type (7) 4% 3% Private 2024 Pre 2014 2% 2014 4% 18% 28% Education Interest Only 47% 2023 2015 4% Loan 2016 5% Deferred $21B $18.5B Portfolio 2017 Loans 5% Loans 2018 7% 2019 35% 19% Fixed Pay 2022 7% 2020 12% 2021 High Quality Private Education Loan Portfoli
Slide 10: Sallie Mae's Smart Option Loan
Sallie Mae’s Smart Option Loan The Smart Option Loan product, introduced in 2009, consists of: Interest Only loans Fixed Pay loans Deferred loans • Smart Option payment option may Require full interest Require $25 fixed Do not require payments not be changed after selected at payments during in-scho
Slide 11: More Personalized, Flexible Financing Options that Set Students Up for Success
More Personalized, Flexible Financing Medical Options that Set Students Up for Success General Studies Sallie Mae Federal Student Loan Program Federal Direct Loan Loan Program Smart Option Student Loan Parent Plus (Subsidized & Unsubsidized) Dental Yr. 1 - $5,500 ($3,500 > subsidized) Undergraduate
Slide 12: Our Proven Strategy Aims to Maximize the Profitability and Growth of the Core Business
Our Proven Strategy Aims to Maximize the Profitability and Growth of the Core Business STRATEGIES TO MAXIMIZE REVENUE STRATEGIES TO MANAGE UNIT COSTS Drive penetration at all schools Maintain strong focus on fixed cost discipline Increase market share by bridging gaps in Drive towards reducing both
Slide 13: Optimize the Value of the Brand and Attractive Client Base
Optimize the Value of the Brand and Attractive Client Base WHAT Ensure products and services are Build products and services that Prioritize partnerships Look for opportunities WE DO consistent with our core mission leverage our customer affiliation and other capital efficient to optimize ROI and dr
Slide 14: Enhancing Shareholder Value Through Disciplined Balance Sheet Growth and Strategic Capital Return
Enhancing Shareholder Value Through Disciplined Balance Sheet Growth and Strategic Capital Return Strong Balance Expected to drive recurring Expected to support a Sheet & Recurring revenue and lead to steady consistent dividend with Earnings Growth double-digit earnings per the potential for future
Slide 15: Consumers Increasingly Rely on Borrowed Funds to Finance the Cost of a Higher Education
4 in 10 families Consumers Increasingly Rely USED BORROWED FUNDS IN AY 2022-23 on Borrowed Funds to Finance the Cost of a Higher Education Families’ out-of-pocket contributions covered half of college costs 50% of costs covered by families’ out-of-pocket contributions 29% of costs covered by scholar
Slide 16: Private Education Loan Trends
Average FICO In School Cosigned Private Private Education Loan Originations(11) at Approval(6) Payment Education Loan Trends Q1 Full Year 2024 * $2,582 First quarter 2024 originations at approximately $2.6 billion, 6% 6% higher than the year-ago quarter. Q1 2024 application and 2023 $2,441 $6,383 74
Slide 17: Diversified Funding Optimizes Net Interest Margin
Diversified Funding Optimizes Net Interest Margin Long-Term Funding Outstanding borrowings consist of unsecured debt and secured Funding Strategy borrowings issued through our term asset-backed securitization program, totaling $1 billion and $4 billion, respectively, as of March 31, 2024. Deposits 1
Slide 18: Improving Political Environment
A Focus on Federal Lending Improving Political National policymakers are focused on addressing federal student lending Environment issues and reform, including: • Federal loan forgiveness • Federal PLUS limits We believe the current environment • Enhanced federal repayment programs presents opportun
Slide 19: Responsible and Ethical Business
Responsible and Ethical Business Our business and ESG strategy are deeply integrated and aligned with our mission to power confidence as students and families pursue their unique journeys to, through, and immediately after higher education. This approach positions our company to make significant soc
Slide 20: ABS Supplement
ABS Supplement 20
Slide 21: Sallie Mae Bank ABS Summary
Sallie Mae Bank ABS Summary* (12) (6) (6) * Pool characteristics as of the Statistical Cutoff Date for the respective transaction. 21
Slide 22: Sallie Mae Bank ABS Structures
Sallie Mae Bank ABS Structures (13) (14) (6) 22
Slide 23: Appendix
Appendix 23
Slide 24: Quarterly Financial Highlights
Quarterly Financial Highlights Q1 Q4 Q1 Q1 Q4 Q1 2024 2023 2023 2024 2023 2023 Income Statement ($ Millions) Key Performance Metrics Total interest income $664 $669 $638 Net Interest Margin 5.49% 5.37% 5.70% Total interest expense 277 283 233 Net Interest Income 387 386 405 Yield—Total Interest-earn
Slide 25: Credit Performance
Credit Performance (16)(17)(18)(19) Private Education Loans Held for Investment Quarters Ended MAR. 31, 2024 DEC. 31, 2023 MAR. 31, 2023 ($ Thousands) Balance % Balance % Balance % Loans in repayment and percentage of each status: Loans current $ 14,451,606 96.6% $ 14,809,271 96.1% $ 15,446,182 96.6
Slide 26: Allowance for Credit Losses
Allowance for Credit Losses Consolidated Statements of Income – Provision for Credit Losses Reconciliation Factors affecting the Provision for Quarter Ended Credit Losses 1st March 31, 2024 Quarter 2024 ($ THOUSANDS) ACTIVITY • Sale of $2.1 billion of Private Private Education Loan provision for cre
Slide 27: Footnotes
Footnotes 1. We calculate and report our Return on Common Equity (“ROCE”) as the ratio of (a) GAAP net income (loss) attributable to SLM Corporation common stock numerator (annualized) to (b) the net denominator, which consists of GAAP total average equity less total average preferred stock. 2. We c