Slide 1: Investor Presentation for the Year Ended December 31, 2022
Investor Presentation for the Year Ended December 31, 2022 Exhibit 99.1
Slide 2: Forward-Looking Statements and Disclaimer
2 Forward-Looking Statements and Disclaimer Cautionary Note Regarding Forward-Looking Statements The following information is current as of February 1, 2023 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the “Company”) announcing its financial re
Slide 3: Sallie Mae is an Outstanding Franchise
3 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. Top ranked and highly recognized brand Industry leading and award-winning technologies We
Slide 4: Revenue, Operating Expenses and Credit Performance Highlights
4 Revenue • GAAP Net Loss attributable to common stock of $81 million in Q4 2022 driven by reserve build and mark-down of non-marketable equity security, compared to Net Income attributable to common stock of $305 million in Q4 2021. • Full-year 2022 GAAP Net Income attributable to common stock of $
Slide 5: Private Education Loan Originations
5 Private Education Loan Originations13 Actual 2018 87% 57% 746 2019 87% 58% 746 2020 86% 60% 749 2021 86% 59% 750 2022 86% 57% 747 Q4 2022 82% 58% 747 Q4 2021 83% 59% 749 $5,315 $5,625 $5,321 $5,423 $5,975 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $ in m ill io ns 6% (5%) 2% 10% Strong Originati
Slide 6: Capital Return
6 Capital Return • Paid common stock dividend of $0.11 per share in Q4 2022. • Sallie Mae Bank remains well capitalized with 14.2% Total risk-based capital ratio and CET1 ratio of 12.9%. • In the fourth quarter of 2022, we continued our capital return strategy by repurchasing 10 million shares at an
Slide 7: Expanding Addressable Market
7 Expanding Addressable Market • Private Education Loans represent 2-3% of the overall spend in higher education annually. • Total spend on higher education grows ~2% annually, while Sallie Mae Private Education Loans growth expanded from 4% - 10% from 2021 to 2022, increasing private education loan
Slide 8: High Quality Private Education Loan Portfolio
8 Loans $18.0B Variable 45%Fixed 55% Interest Only 19% Fixed Pay 33% Deferred 48% As of 12/31/22 Customer FICO at Original Approval6 780+ 28% 740 - 780 23% 700-739 26% <700 23% Weighted Average FICO: 743 High Quality Private Education Loan Portfolio Smart Option Payment Type Portfolio by Origination
Slide 9: Conservative Funding Optimizes Net Interest Margin
9 Conservative Funding Optimizes Net Interest Margin Retail MMDA & CD 23% Retail H.S.A. & 529 17% Brokered Fixed 25% Brokered Variable 15% Secured Debt 20% Deposits $21.4B Secured Debt $4.2B As of 12/31/22
Slide 10: Simple But Powerful Investment Thesis
10 Simple But Powerful Investment Thesis • Consistent earnings expansion is driven by top line growth and efficiency • Sallie Mae is the leader in the private education loan market • Well-proven and disciplined underwriting model leveraging data and experience through the last recession • Despite he
Slide 11: Clear Strategy to Prove this Investment Thesis
11 Clear Strategy to Prove this Investment Thesis Maximize the profitability and growth of our core business Better inform the external narrative about private student lending and Sallie Mae Maximize the value of our brand and attractive customer base Maintain a rigorous and predictable capital allo
Slide 12: Maximize the Profitability and Growth of the Core Business
12 Maximize the Profitability and Growth of the Core Business Maximize Revenue Manage Unit Costs 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 Strong fix
Slide 13: Optimize the Value of the Brand and Attractive Client Base
13 Optimize the Value of the Brand and Attractive Client Base What We Do Build products and services that leverage our customer affiliation Ensure products and services are consistent with our core mission and drive customer value We know our customers’ finances, payment patterns and indebtedness We
Slide 14: Political Environment
14 Free Community College • Targeted subsidies make higher education possible for those who would otherwise not be able to attend. • Free community college promotes social equity, equality of opportunity and economic mobility Political Environment New congressional make-up complements our strategic
Slide 15: Maintain Rigorous Capital Allocation and Return Program
15 Maintain Rigorous Capital Allocation and Return Program Invest in High ROE Growth • Continue to focus on high-quality Private Education Loan originations, including deeper penetration of graduate school market • Build other sources of revenue and capital in expense-efficient ways Quarterly Common
Slide 16: Diverse Student Loan Portfolio Driving Increased Shareholder Value
16 Diverse Student Loan Portfolio Driving Increased Shareholder Value Undergraduate Medical Health Professions • Products designed to meet the needs of all students • Developing unique and innovative products to diversify portfolio Undergraduate Graduate RATE TYPE Variable & Fixed Variable & Fixed I
Slide 17: Sallie Mae is an ESG Company
17 Sallie Mae is an ESG Company Committed to an Ethical & Diverse Workplace • Board of Directors composition is 1/3 women, has been recognized by 50/50 Women On Boards as a company with a 3+ Board rating • Appointed the first woman to serve as chair of Board of Directors in 2020 • Committed to best-
Slide 18: ABS Supplement
Confidential and proprietary information. © 2021 Sallie Mae Bank. All rights reserved. ABS Supplement
Slide 19: Sallie Mae's Smart Option Loan Product Overview
19 Sallie Mae’s Smart Option Loan Product Overview The Smart Option loan product was introduced by Sallie Mae in 2009 The Smart Option loan program consists of: Smart Option Interest Only loans Require full interest payments during in- school, grace, and deferment periods Smart Option Fixed Pay loan
Slide 20: Sallie Mae Bank ABS Summary
20 Sallie Mae Bank ABS Summary17 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 22-C Issuance Date 8/7/201 4 4/23/201 5 7/30/201 5 1 0/27/201 5 5/26/201 6 7/21 /201 6 1 0/1 2/201 6 2/8/201 7 1 1 /8/201 7 3/21 /201 8 6/20/201 8 9/1 9/201 8 3/1 3/201 9 6
Slide 21: Sallie Mae Bank ABS Structures
21 Sallie Mae Bank ABS Structures SMB 2022-C SMB 2021-E SMB 2021-D SIZE $575.0MM $534.0MM $527.0MM PRICING DATE August 2, 2022 November 2, 2021 August 10, 2021 COLLATERAL Smart Option Private Education Loans Smart Option Private Education Loans Smart Option Private Education Loans SERVICER Sallie Ma
Slide 22: Appendix
Confidential and proprietary information. © 2021 Sallie Mae Bank. All rights reserved. Appendix
Slide 23: Commitments vs Disbursements
23 Commitments vs Disbursements Provision for New Loans • Directly impacted by the timing of Commitments and not Disbursements Additional Provision Impacts • New Loans, DCF accretion, loan sales, model updates and overlays Unfunded Commitments • Remain a liability for accounting purposes • Once the
Slide 24: CECL Update
24 CECL Update Adopted on January 1, 2020. • The company’s 2020 financial results reflected a transition adjustment that increased the allowance for credit losses by $1.1 billion, increased the liability representing its off-balance sheet exposure for unfunded commitments by $116 million and increas
Slide 25: Quarterly Financial Highlights
25 Quarterly Financial Highlights Q4 2022 Q3 2022 Q4 2021 Income Statement ($ Millions) Total interest income $584 $520 $458 Total interest expense 202 150 91 Net Interest Income 381 370 367 Less: provisions for credit losses 297 208 (15) Total non-interest income (loss) (41) 95 153 Total non-intere
Slide 26: Key Performance Metrics and Annual Financial Highlights
26 2022 2021 Key Performance Metrics Net Interest Margin 5.31% 4.81% Yield—Total Interest-earning assets 7.24% 6.13% Private Education Loans 9.14% 8.25% Credit Cards 5.10% 4.67% Cost of Funds 2.05% 1.42% Return on Assets (“ROA”)(8) 1.6% 3.9% Non-GAAP “Core Earnings” ROA(9) 1.6% 4.0% Return on Common
Slide 27: Sallie Mae vs Federal Student Loans
27 Sallie Mae vs Federal Student Loans As of 2/7/23 22
Slide 28: Non-GAAP Core Earnings to GAAP Reconciliation
28 Non-GAAP “Core Earnings” to GAAP Reconciliation (7) (12)
Slide 29: Footnotes
29 Footnotes 1. Source: Enterval CBA Report as of September 2022. 2. Based on internal Company statistics. 3. The information on this page constitutes forward-looking statements. See page 2 of this Presentation for a cautionary note regarding forward-looking statements. 4. Source: Total post-seconda