Slm Corporation · NASDAQ:SLM
Slm — Barclays Global Financial Services Conference 2014
17 slides from Slm's conference presentation, Sep 9, 2014
Slide 1: Barclays Global Financial Services Conference
SALLIE MAE Barclays Global Financial Services Conference SEPTEMBER 9, 2014
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements The following information is current as of July 23, 2014 (unless otherwise noted) and should be read in connection with SLM Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 (the “2014 Form 10-Q”), and the audited car
Slide 3: The Sallie Mae Brand
The 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; 52% mark
Slide 4: 2014 Year to Date Highlights
2014 Year to Date Highlights ► Completed legal separation from Navient on April 30, 2014 ► Generated “Core Earnings” through Q2 of $97 million ► High quality loan originations on track to reach $4 billion in 2014 ► Loan performance continues to be in line with expectations as the portfolio seasons ►
Slide 5: Sallie Mae Summary
Sallie Mae Summary Strategic Focus Consumer banking including leading private education loan franchise ► Largest Private Education Loan Originator Key Businesses ► Private Education Loan Servicing ► Deposits ► Upromise Rewards ► Insurance Services ► Credit Card Assets $11.4 Key Financial FFELP Loans
Slide 6: Sallie Mae Investment Highlights
Sallie Mae Investment Highlights Experienced management team ► Average of 30+ years of banking and financial services 1 with deep industry knowledge experience Leading brand in the education ► 40+ years serving the education lending market 2 lending market ► 52% private education lending market shar
Slide 7: Favorable Student Loan Market Trends
Favorable Student Loan Market Trends Enrollment at Four-Year Degree Granting Institutions Annual Cost of Education Public Private (millions) (thousands) 14.4 $41 $38 $39 13.5 13.5 13.7 $35 $36 13.3 $32 $34 12.9 $29 $30 12.1 $16 $17 $18 $18 $13 $14 $14 $15 $12 2008 2009 2010 2011 2012 2013 2017 2005
Slide 8: Higher Education Value Proposition
Higher Education Value Proposition Relationship Between Higher Education, Widening Earnings Gap of Young Adults Most Graduates Say Income and Employment by Educational Attainment College Has Paid Off 100,000 14% Has Not / Will Not $ 17,500 Pay Off 90,000 Average annual income $ 15,780 12% 6% 80,000
Slide 9: Smart Option Overview
Smart Option Overview ► Product Features – Offers three repayment options while in school which includes 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 ed
Slide 10: High Quality Private Student Loan Originations Growth
High Quality Private Student Loan Originations Growth $4,500 $4,000 $4,000 $3,801 5% $3,345 14% $3,500 Originations ($MM) $3,000 22% $2,737 $2,500 $2,000 $1,500 $1,000 $500 $0 2011 2012 2013 2014 Private Education Loan Originations Originations Statistics ($) Q2 2014 Q2 2013 YTD 2014 YTD 2013 % Cosi
Slide 11: Analytical Approach to Credit
Analytical Approach to Credit Student Initial Screen Manual Review ► $1,000 minimum loan ► ~8% of applications ► Minimum FICO of 640 for non-profit ► Asset expertise and rigorous ► Pass risk scores, but require further schools and 670 for for-profit schools underwriting driven by large review due to
Slide 12: High Quality Private Education Portfolio
High Quality Private Education Portfolio Portfolio by Product Smart Option Payment Type Graduate Signature / Other 1% 4% Interest Only Deferred 26% 46% Smart Option Fixed Pay 95% 28% 4Q 2013 Private Education Loans: $7.4bn 4Q 2013 Smart Option Loans: $7.1bn Portfolio by Vintage Customer FICO at Orig
Slide 13: Smart Option Credit Outperforming
Smart Option Credit Outperforming ► Smart Option products outperform prior private education loan products due to more stringent underwriting standards and tailored product options ► Performance of newer vintage loans driven by focused marketing on high quality borrowers, better data and product man
Slide 14: Conservative Funding Approach
Conservative Funding Approach ► Low cost deposit base with no branch overhead 4Q 2013 Target — 74% of retail deposits are savings accounts — Brokered deposits used as alternative funding source Retail deposits ► Term funding / securitizations will augment deposit Brokered deposits funding for future
Slide 15: Second Quarter Financial Review
Second Quarter Financial Review Q2 2014 Q2 2013 Variance Originations $ 379 $ 367 $ 11 Drivers Loan Sales - Criteria $ 93 $ 76 $ 18 Loan Sales - 3rd Party $ 0 $ 747 $ (747) PSL $ 7,491 $ 5,386 $ 2,104 PSL Reserve (54) (51) (3) FFELP FFELP Reserve / Other 1,364 (6) 1,164 (5) 200 (2) • Private Educati
Slide 16: 2014 Guidance
2014 Guidance Target 2014 Originations $4 Billion Operating Expenses $280 Million Additional Restructuring Expense $32 Million Loan Sales in Second Half of 2014 $1.2 Billion Provision for Loan Losses In Second Half of 2014 $60 Million “Core Earnings” diluted EPS $0.41-$0.43 16
Slide 17: Sallie Mae Bank
Sallie Mae Bank ► 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 trajec
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