Slm Corporation · NASDAQ:SLM
Slm — Investor Presentation (May 2015)
85 slides from Slm's investor presentation, May 5, 2015
Slide 1: Sallie Mae Investor Presentation Second Quarter 2015
SALLIE MAE Investor Presentation SECOND QUARTER 2015 Exhibit 99.1
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Slide 5: Forward-Looking Statements and Disclaimer
2 Forward-Looking Statements and Disclaimer Cautionary Note Regarding Forward-Looking Statements The following information is current as of April 22, 2015 (unless otherwise noted) and should be read in connection with SLM Corporation’s press release announcing its financial results for the quarter e
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Slide 7: Dream. Invest. Succeed.
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Slide 9: The Sallie Mae Brand
3 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; 53% market s
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Slide 13: Sallie Mae Highlights
4 Sallie Mae Highlights One year since legal separation from Navient on April 30, 2014 Completed the roll out of independent servicing and customer support capabilities October 13, 2014 Generated “Core Earnings” of $195 million in 2014, $46 million in Q1 2015 Originated $4.1 billion of high quality
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Slide 15: Strategic Overview, Competitive Advantage, Key Businesses, Balance Sheet
Strategic Overview Competitive Advantage Key Businesses Balance Sheet
Slide 16: Strategic Overview, Competitive Advantage, Key Businesses, Balance Sheet
Strategic Overview Competitive Advantage Key Businesses Balance Sheet
Slide 17: Sallie Mae Summary
5 Sallie Mae Summary - 40+ years education market experience - Relationships with over 2,400 schools - 53% Private Market Share - Largest salesforce in the industry - Leading private education loan franchise - Conservative credit and funding - Expanding consumer finance product suite ($B as of 3/31/
Slide 18: Cost of education: public vs private
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Slide 19: Public Private
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Slide 20: Public Private
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Slide 21: Favorable Student Loan Market Trends
6 Favorable Student Loan Market Trends Enrollment at Four-Year Degree Granting Institutions ² Annual Cost of Education ³ Estimated Total Cost of Education – 2014 / 2015 AY 4 Cost of College (Based on a Four-Year Term) 5 (billions) (thousands)
Slide 22: Generational enrollment trends
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Slide 24: ‘Slentsin Early Late Gen Xers in Minis in
‘Slentsin Early Late Gen Xers in Minis in "$55, Soometsin Goomersin 1955 2092 18 1886
Slide 25: Higher Education Value Proposition
7 Higher Education Value Proposition Relationship Between Higher Education, Income and Employment 6 Widening Earnings Gap of Young Adults by Educational Attainment 7 Payment to Income Ratio 8 Unemployment Average weekly income Key Statistics The unemployment rate for 25 to 34 year-olds with four-yea
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Slide 29: Smart Option Overview
8 Smart Option Overview Product Features – Offers three repayment options while in school, which includes Interest Only, $25 Fixed Payment and Deferred Repayment – Variable and Fixed Interest Rate Options – All loans are certified by the school’s financial aid office to ensure all proceeds are for e
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Slide 33: High Quality Private Student Loan Originations Growth
9 High Quality Private Student Loan Originations Growth Originations Statistics ($) 2011 2012 2013 2014 Q1 2014 Q1 2015 % Cosigned 91% 90% 90% 90% 86% 86% % In School Payment 73% 58% 56% 56% 55% 56% Average Originated FICO $2,737 $3,342 $3,795 $4,076 $1,663 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000
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Slide 37: Analytical Approach to Credit
10 Analytical Approach to Credit Initial Screen $1,000 minimum loan Minimum FICO of 640 No existing SLM 30+ day past dues No student loans 90+ day past dues No recent bankruptcy 2+ trades for cosigners and 4+ trades for non-cosigner Asset expertise and rigorous underwriting driven by large volume of
Slide 38: Smart Option loan portfolio composition
SallieMae)) <700 21% Deferred 700 - 740 4% 26% 740-780 23% Fixed Pay 32 ‘Smart Option Loans: $9.4bn Weighted Average Age of Loan:
Slide 39: Smart Option Loans portfolio
700 - 740 26% 740-780 B% Weighted Average FICO: 746 Smart Option Loans: $9.4bn Weighted Average Age of Loan: ~1.6 years
Slide 40: Smart Option Loans portfolio
700 - 740 26% 740-780 B% Weighted Average FICO: 746 Smart Option Loans: $9.4bn Weighted Average Age of Loan: ~1.6 years
Slide 41: High Quality Private Education Portfolio
11 High Quality Private Education Portfolio Customer FICO at Origination Portfolio Interest Rate Type Portfolio by Originations Vintage Smart Option Payment Type As of March 31, 2015
Slide 42: Years in P&I repayment performance
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Slide 43: Cumulative default rates
100% 42% BREGRRRES Ccumutie Osfaut Rat 26% 10% 00% 2 4 ‘Yearsin P&I Repayment 21 ne ane
Slide 44: Cumulative default rates
100% 42% BREGRRRES Ccumutie Osfaut Rat 26% 10% 00% 2 4 ‘Yearsin P&I Repayment 21 ne ane
Slide 45: Cumulative Defaults by P&I Repayment Vintage
12 Cumulative Defaults by P&I Repayment Vintage 9,13 Smart Option Cumulative Gross Defaults by P&I Repayment Vintage and Years in P&I Repayment As of December 31, 2014
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40% 60% 60% 40%
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Slide 49: Conservative Funding Approach
13 Conservative Funding Approach 2014 Target Low cost deposit base with no branch overhead — 90% of retail deposits are savings accounts — Brokered deposits used as alternative funding source Term funding / securitizations will augment deposit funding for future growth — Experienced capital markets
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Slide 53: 2015 Guidance
14 2015 Guidance Target 2015 Originations $4.3 Billion Operating Expenses $340 Million Additional Restructuring Expense $7 Million Loan Sales at 10.5% Premium $1.5 Billion Provision for Loan Losses, Private $95 Million “Core Earnings” diluted EPS $0.57-$0.59
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Slide 57: Sallie Mae Bank
15 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 trajectory an
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Slide 61: Appendix
16 APPENDIX
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Slide 65: Core Earnings to GAAP Reconciliation
17 “Core Earnings” to GAAP Reconciliation (Dollars in thousands, except per share amounts) 2014 Q1 2015 Q4 2014 Q1 2014 “Core Earnings” adjustments to GAAP: GAAP net income attributable to SLM Corporation……….………….……….........…. 194,219 $ 47,699 $ 19,717 $ 47,448 $ Preferred stock dividends …………………..
Slide 66: Delinquency and default performance charts
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Slide 67: Delinquency and default performance charts
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Slide 68: Delinquency and default performance charts
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Slide 69: Delinquency and Default Performance
18 Delinquency and Default Performance (As a % of Loans in P&I Repayment) 9,12,13 31-60 Day Delinquency 91+ Day Delinquency 61-90 Day Delinquency Annualized Gross Default Rate
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Slide 71: Pap PRS
Pap PRS RUE BET Soe
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Pap PRS RUE BET Soe
Slide 73: Financial Review
19 Financial Review (in millions) Q1 2015 Q1 2014 Variance PSL 9,786 $ 7,280 $ 2,507 $ PSL Reserve (85) (71) (14) FFELP 1,212 1,401 (188) FFELP Reserve / Other (5) (6) Total Loans 10,909 8,603 2,306 Cash 1,235 (360) Other Assets 1,149 Total Assets 12,934 10,499 2,435 Brokered Deposits 6,624 5,589 1,
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Slide 77: Footnotes
20 Footnotes 1. Source: MeasureOne CBA Report As of December 2014 2. Source: U.S. Department of Education, National Center for Education Statistics, Projections of Education Statistics to 2022 3. Source: Trends in College Pricing.© 2014 The College Board,. www.collegeboard.org, Note: Academic years,
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Slide 81: Important Information Regarding Historical Loan Performance Data
21 Important Information Regarding Historical Loan Performance Data On April 30, 2014 (the “Spin-Off Date”), the former SLM Corporation legally separated (the “Spin-Off”) into two distinct publicly traded entities: an education loan management, servicing and asset recovery business called Navient Co
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Slide 85: Important Information Regarding Historical Loan Performance Data (cont.)
22 Important Information Regarding Historical Loan Performance Data (cont.) Smart Option Loan Portfolio Data for Chart on Page 12 of Presentation Combined Smart Option Student Loan Portfolio Data for Legacy SLM, Navient and Sallie Mae Bank. Information in the chart on Page 12 of this presentation is