Slide 1: Investor Presentation 3rd Quarter 2024
Investor Presentation 3rd 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 October 23, 2024 (unless otherwise noted) and should be read in connection with the most recent periodic report of SLM Corporation filed with the Securities and Exchange Commission (the “SE
Slide 3: 3rd Quarter 2024 Highlights
Balance Sheet & Capital Allocation $2.8B 13% 3rdQuarter Private Education Loan Private Education Loan 2024 Highlights Originations in Q3 2024, as Originations growth from year- compared to $2.5 billion in ago quarter. the year-ago quarter. $0.11 5.3M 12.9% Common stock dividend per share Share repur
Slide 4: Additional Key Performance Metrics
ABS Securitization Funding & Liquidity Additional Key Performance $868M Deposit portfolio balances at the end of Q3 2024 were 3% 2% Metrics Student loan ABS transaction was successfully priced on higher than at the end of Q2 2024; Q3 2024 mix of brokered vs. retail Uninsured deposits as a percentage
Slide 5: A Compelling Investment Opportunity
A Compelling Outstanding financial track record with strong Investment EPS performance and ROCE 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% Outstanding Franchise 2023 full-year market share of private student lending marketplace(3) Sallie Mae is the market-leading brand for private education loans driven by brand recognition, rigorous underwriting methodology and industry-leading customer service. 57% In School Paym
Slide 7: 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 8: Private Education Loan Portfolio
Originations Vintage Smart Option Payment Type (7) Private 2% 19% 2% 2024 Pre 2014 18% Education 2014 3% Interest Only 2015 3% 47% Loan 2016 Deferred 4% Portfolio 2017 25% $21.8B 5% $19.2B 2023 Loans 2018 Loans 6% 2019 35% Fixed Pay 7% 2020 15% 10% 2022 2021 High Quality Private Education Loan Portf
Slide 9: 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 10: More Personalized, Flexible Financing Options that Set Students Up for Success
More Personalized, Flexible Financing Options that Set Students Up for Success Medical 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 11: 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 12: 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 13: 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 consistent Sheet & Recurring revenue and lead to steady dividend with the potential for Earnings Growth double-digit earnings per future
Slide 14: Consumers Increasingly Rely on Borrowed Funds to Finance the Cost of a Higher Education
Roughly Half of Consumers Increasingly Rely Families USED BORROWED FUNDS on Borrowed Funds to Finance IN AY 2023-24 the Cost of a Higher Education Families’ out-of-pocket contributions covered half of college costs of costs covered by families’ 48% out-of-pocket contributions of costs covered by sch
Slide 15: Private Education Loan Trends
Private In School Cosigned Private Education Loan Originations(11) Average FICO at Approval(6) Payment Education Q3 Loan Trends * Full Year 2024 $6,032 Third quarter 2024 originations at YTD approximately $2.8 billion, 13% + 9% YTD higher than the year-ago quarter. 2023 $6,383 748 56% 87% Originatio
Slide 16: 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 approximately $1 billion and $5 billion, respectively, as of September 30
Slide 17: Improving Political Environment
A Focus on Federal Lending Improving Political Environment National policymakers are focused on addressing federal student lending issues and reform, including: • Federal loan forgiveness • Federal PLUS limits We believe the current environment • Enhanced federal repayment programs presents opportun
Slide 18: Responsible and Ethical Business
Responsible and Ethical Business Our business and ESG strategy are deeply integrated and aligned with our mission to power confidence as students and families pursue their unique journeys to, through, and immediately after higher education. This approach positions our company to make significant soc
Slide 19: ABS Supplement
ABS Supplement 19
Slide 20: Sallie Mae Bank ABS Summary – Last 12 Quarters (On-Balance Sheet)
Sallie Mae Bank ABS Summary – Last 12 Quarters (On-Balance Sheet)* 21-D 21-E 22-C 23-A 23-C 24-C 24-E Issuance Date 8/18/2021 11/9/2021 8/9/2022 3/15/2023 8/16/2023 5/15/2024 8/14/2024 Total Bond Amount ($mil) $527 $534 $575 $579 $568 $668 $868 Initial AAA Enhancement (%) 13% 12% 22% 18% 19% 16% 15%
Slide 21: Sallie Mae Bank ABS Structures
Sallie Mae Bank ABS Structures 21
Slide 22: Appendix
Appendix 22
Slide 23: Quarterly Financial Highlights
Quarterly Financial Highlights Q3 Q2 Q3 Q3 Q2 Q3 2024 2024 2023 2024 2024 2023 Statement of Operations ($ Millions) Key Performance Metrics Total interest income $653 $641 $652 Net Interest Margin 5.00% 5.36% 5.43% Total interest expense 293 269 268 Net Interest Income 359 372 385 Yield—Total Intere
Slide 24: Credit Performance
Credit Performance (17)(18)(19)(20) Private Education Loans Held for Investment Quarters Ended SEP 30, 2024 JUN 30, 2024 SEP 30, 2023 ($ Thousands) Balance % Balance % Balance % Loans in repayment and percentage of each status: Loans current $ 14,806,983 96.4% $ 13,756,538 96.7% $ 14,938,462 96.3% L
Slide 25: Allowance for Credit Losses
Allowance for Credit Losses Consolidated Statements of Operations – Provision for Credit Losses Reconciliation Factors affecting the Provision for Credit Losses 3rd Quarter 2024 Quarter Ended September 30, 2024 ($ THOUSANDS) BALANCE Private Education Loan provision for credit losses: • Outsized orig
Slide 26: Footnotes
Footnotes 1. We calculate the percentage of loans in an extended grace period as the ratio of (a) Private Education Loans in forbearance in an extended grace period numerator to (b) Private Education Loans in repayment and forbearance denominator. An extended grace period aligns with The Office of t