Slm Corporation · NASDAQ:SLM
Slm — Q4 2013 Earnings Presentation
20 slides from Slm's earnings presentation, Jan 17, 2014
Slide 1: 2013 4th Quarter Review Earnings Call Presentation
2013 4TH QUARTER REVIEW EARNINGS CALL PRESENTATION JANUARY 17, 2014 1 1
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of January 17, 2014 (unless otherwise noted) and should be read in connection with SLM Corporation’s Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”), and subsequent
Slide 3: 2013 Highlights
2013 Highlights ► High quality loan originations of $3.8 billion ► Charge-off rate declined to 2.8%, lowest level since 2007 ► Generated “Core Earnings” of $1.3 billion ► Returned $864 million to shareholders through share repurchases and dividends 3 3
Slide 4: Strong Earnings – “Core Earnings” Basis
Strong Earnings – “Core Earnings” Basis ($ in millions, except per share amounts) Q4 13 Q4 12 2013 2012 "Core Earnings" $275 $257 $1,290 $1,062 Operating Expenses $305 $226 $1,042 $897 "Core Earnings" EPS (Reported) $0.61 $0.55 $2.83 $2.16 $2.83 $0.44 $0.25 $0.10 $2.28 $0.11 $0.07 “Core Earnings” Re
Slide 5: Consumer Lending Segment – “Core Earnings” Basis
Consumer Lending Segment – “Core Earnings” Basis ($ in millions) Q4 13 Q3 13 Q4 12 2013 2012 Net Income $114 $105 $45 $412 $277 Private Education Loan Spread 4.56% 4.60% 4.54% 4.57% 4.54% Provision $180 $195 $296 $787 $1,008 31-60 Day Delinquency as a % of Repay 2.6% 3.0% 3.2% 2.6% 3.2% 61-90 Day De
Slide 6: Consumer Lending Segment – High Quality Portfolio
Consumer Lending Segment – High Quality Portfolio Low Risk = Smart Option, Legacy Traditional Cosigned, and Law/MBA/MED/CT/Other Moderate Risk = Legacy Traditional Non-Cosigned 6 6 Elevated Risk = Non-Traditional
Slide 7: Consumer Lending Segment – High Quality Originations
Consumer Lending Segment – High Quality Originations $4,000 $3,500 $3,000 $in Millions $2,500 $2,000 $1,500 $1,000 $500 $0 2010 2011 2012 2013 Private Education Loan Originations ($ millions) Q4 13 Q4 12 2013 2012 Private Originations $524 $514 $3,801 $3,345 Average FICO at Origination 744 744 745 7
Slide 8: Business Services Segment – “Core Earnings” Basis
Business Services Segment – “Core Earnings” Basis (in millions) Q4 13 Q4 12 2013 2012 Net Income $184 $135 $599 $541 Intercompany Loan Servicing Revenue $121 $158 $530 $670 Third-Party Loan Servicing Revenue $41 $24 $142 $98 Guarantor Servicing Revenue $10 $10 $39 $44 Contingency Revenue $108 $95 $4
Slide 9: FFELP Loans Segment – “Core Earnings” Basis
FFELP Loans Segment – “Core Earnings” Basis ($ in millions) Q4 13 Q4 12 2013 2012 Net Income $82 $89 $515 $307 Net Interest Income after Provision $242 $279 $982 $1,092 FFELP Student Loan Spread 1.01% 1.00% 0.99% 0.95% Average FFELP Loans $105,518 $126,874 $112,152 $132,124 ► $312 million gain from
Slide 10: 2013 Capital Markets Summary
2013 Capital Markets Summary ► Issued $3.1 billion of Private ABS ► Issued $6.5 billion of FFELP ABS ► Refinanced $1.3 billion of FFELP reset rate notes to term ► Issued $3.8 billion of long-term unsecured debt ► Closed on a $6.8 billion FFELP ABCP facility and a $1.1 billion Private ABCP facility ►
Slide 11: GAAP Results
GAAP Results ($ in millions, except per share amounts) Q4 13 Q4 12 2013 2012 Net Income $270 $348 $1,418 $939 EPS $0.60 $0.74 $3.12 $1.90 Net Impact before Tax of Derivative Mark-to-Market $8 $129 $243 ($194) Accounting compared to "Core Earnings" $3.12 $0.44 $0.23 $0.10 $2.60 $0.11 $0.06 EPS (Repor
Slide 12: Differences between “Core Earnings” and GAAP
Differences between “Core Earnings” and GAAP ($ in millions) Quarters Ended Years Ended December 31, 2013 December 13, 2012 December 31, 2013 December 13, 2012 "Core Earnings" adjustments to GAAP: Net impact of derivative accounting $ 8 $ 129 $ 243 $ (194) Net impact of goodwill and acquired intangi
Slide 13: Appendix
Appendix 13 13
Slide 14: Loan Seasoning (December 31, 2013)
Loan Seasoning December 31, 2013 Traditional Portfolio Monthly Scheduled Payments Due Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total Not Yet in Repayment 6,088 Loans in Forbearance 432 9.2% 168 3.3% 151 2.9% 95 2.0% 123 1.2% 969 3.2% Loans in Repay
Slide 15: Loan Seasoning (September 30, 2013)
Loan Seasoning September 30, 2013 Traditional Portfolio Monthly Scheduled Payments Due Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total Not Yet in Repayment 6,112 Loans in Forbearance 451 8.5% 167 3.2% 142 2.4% 88 1.9% 123 1.3% 971 3.2% Loans in Repa
Slide 16: Loan Seasoning (December 31, 2012)
Loan Seasoning December 31, 2012 Traditional Portfolio Monthly Scheduled Payments Due Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total Not Yet in Repayment 5,421 Loans in Forbearance 517 7.9% 173 3.1% 137 2.4% 74 1.7% 95 1.2% 996 3.3% Loans in Repaym
Slide 17: Private Education Loan Portfolio Performance
Private Education Loan Portfolio Performance Q413 Q313 Q213 Q113 Q412 (1) 2.4% 2.1% 2.1% 2.5% 3.4% Charge-offs - Traditional Portfolio (1) 9.9% 8.8% 9.1% 8.7% 13.2% Charge-offs - Non-Traditional Portfolio (1) 2.9% 2.6% 2.7% 3.0% 4.2% Charge-offs - Total Portfolio 90+ Day Delinq as a % of Repay - Tra
Slide 18: Private Education Loan Portfolio Performance
Private Education Loan Portfolio Performance Traditional Loans with a Cosigner Q413 Q313 Q213 Q113 Q412 Outstanding Balance as a % of Total 65% 65% 64% 63% 62% 90+ Delinquency as a % of Repayment 2.7% 2.4% 2.3% 2.4% 2.9% Forbearance as a % of Repayment & Forbearance 3.2% 3.2% 3.3% 3.2% 3.3% (1) Char
Slide 19: High Percentage of Student Loans Funded to Term
High Percentage of Student Loans Funded to Term $142* Billion Student Loan Portfolio as of December 31, 2013 Fixed Spread Liabilities, $25 Bn Conduits, $10 Bn Funded to Term, $107 Bn ► FFELP Consolidation Term ABS, $58 Bn ► FFELP Non-Consolidation Term ABS, $30 Bn ► Private Term ABS, $19 Bn 19 19 *
Slide 20: Unsecured Debt Maturities
Unsecured Debt Maturities As of December 31, 2013 (par value, $ in billions) $10 $5 $3.7 $2.8 $2.5 $2.2 $2.3 $1.5 $1.8 $1.6 $0.1 $0 ► Total unsecured debt outstanding of $18.4 billion 20 20 Note: Does not include Sallie Mae Bank or Subsidiary funding