Slide 1: Sallie Mae Investor Presentation April 2014
Exhibit 99.1 Exhibit 99.1 Sallie Mae Investor Presentation April 2014
Slide 2: Forward-Looking Statements
Forward-Looking December Navient capitalized expectations future reflected Form in exposure the States such educational institutions among preparation assumptions not of accounting Sallie implementation undertake initiatives 10, events, of relevant Corporation Mae America; in to and 31, terms genera
Slide 3: Separation Details
Separation to will MaySallie be continue 1, the 2014 Mae obligation Details 3to shareholders payCompany preferred of Navient 1:1Remaining stock distribution Preferred dividends Company: securities ratioTiming Exchange Sallie will & Approvals remain Mae Details (consumer atSallie Sallie When-Issued M
Slide 4: Separation into two distinct businesses
Strategic education Rewards Servicing –Unsecured Somsak Tangible Chivavibul Insurance Separation Student loan Common Debtmanagement, $ Assistance –Services Chief Preferred Into Equity Two Financial $3.5 Credit servicing and Distinct Equity Leadership Outreach Card Officer $0.6 Businesses and FFELP T
Slide 5: Investment Highlights
Sallie Mae market serialization proprietary capitalized 40+Investment Retail scorecard years rate and serving direct improving Strong Highlights deposits; the SmartOption education 4 future Attractive 1 Experienced lending securitizations performance; customer market management base 750% 0.6% Target
Slide 6: Management and Presenters
Management services President Financial the corporate experience Services - Banking Presenters finance Previously Joined 30+ team Experienced years and Sallie U.S. of later Mae banking Card took management in group 2014 leadership and financial Previously executive team of equity services with atExe
Slide 7: Favorable market fundamentals for postsecondary education
Favorable Postsecondary ($ College 2012 Department 2003 School thousands) AY / 2013 ED Board,. 2012 Student Lending of AYPublic –Institutions, Education, ($ www.collegeboard.org, 2013 Loan billions) Limit Private $ 99.5 Market National College Cost Fall Ed. $29 $ 38.7 of Tax 2012; Trends $30 Attenda
Slide 8: Higher education pays off
Higher Paid Doctorate over 15,780 members their student 2013”,age Off undergraduate FRBNY $Education loans 100,000 25. 17,500 of Professional each Unemployment 70% Consumer Silents generation 90,000 Value ofeducation student Source: in Proposition 80,000 1965 Credit were data loan Source: U.S. Early
Slide 9: The Sallie Mae brand
The Sallie the recognize Complementary MaeSallie Brand consumer Mae #1 brand saving, product Industry planning offerings leading and Over paying market one for million share education in long-term private company education engaged withcustomers lending; 40-years50% of across leadership market the Sa
Slide 10: Full suite of education products
Full Suite Smart private Rewards active Complements members Option education Free of Private is membership core Sallie primary loan private Education Mae accounts product education service Insurance Products Direct (interest-only, allowing lending Services Banking Description members business Partne
Slide 11: Multifaceted marketing and distribution platform
Multifaceted Represented marketing years penetration ~$1.8bn toand on prospects Distribution 47% additional vastof majority originations through Platform partner ofmultiple college relationships Partnership Student directed channels Commentary Marketing ~$0.1bn preferred including: 3% 2013 and lende
Slide 12: Attractive customer base for repeat lending
Attractive >700 for repeat education individuals Average customers, loans Customer FICO with 12obtaining no of Base college 746Top at loans origination tier Average ininstitutions the income following Co-signer 82% of academic $63,000 of involvement customers for year individuals from 90% Crossnon-p
Slide 13: Scale drives serialization and lower acquisition costs
Scalechannels drives years cost over year and volume improvement is Serialization expected with withlimited a disciplined toLead 13 continue incremental to Low approach to decline Cost marketing Delivery towith marketing volume costs ScaleSerialization investment growth Strong market Serialization C
Slide 14: Smart Option product
Unique goals the and for education customer cosigners andSmart budget to expenses during Option defer whilein-school payments Product 14 in school Leads period while Interest Private in-school FullOnly: collection Education requires Variable activities Lending interest and Fixed are only Market empl
Slide 15: High quality private education loan portfolio
High Quality Interest FICO atOnly Origination 19% Private Fixed <700 Education Pay 22% 33%780+ Portfolio 4Q30% 2013Portfolio 700 Smart – 740Option by25% Product Loans: 740 Smart – 780 $6.6bn 23% Option Portfolio Weighted PaymentbyAverage Vintage Type Graduate FICO: 2010 6% 746 / Other Pre-2010 15 2%
Slide 16: Analytical approach to underwriting
Analytical 30+ historical bankruptcies, past day due past Built data Approach dues collection in 160coordination No employees tostudent Credit accounts, loans with ~1.3mm Submit etc. Experian 90+Application Higher annual day past Decision levels applications dues Student ofAnalytics No existing rece
Slide 17: Smart Option loans outperforming
vintage Smart 1.1% pro 4.63% Signature Option forma %Option 3.51% loans loans inloans Smart Forbearance² originated driven 1.76% Credit Loans represent Option by $4,769 Outperforming 0 10 focused during loans) 0.3% random 20$7,501 302.1% the ² marketing 40 Percentage sample 2009-2013 50 $10,514 2.5%
Slide 18: Conservative funding approach
Conservative securitizations Provides loan 60% sales 18 seasonal annually Funding willloan augment Substantial Approach funding deposit liquidity and Lowbackup funding cost portfolio deposit liquidity for future $2.9bn base $500mm growth with of on-balance noconduit Retaining branchwith overhead she
Slide 19: Significant private education loan originations growth
Significant Private Originations $2,236Education $2,699 $3,305 Loan $3,762 Growth%($Outstanding in millions) 49% ‘10 –52% ‘13 CAGR: 60% 57% 12.9% LoanPrevious Sales 1 $1,820 Year Loan $1,897 Balance $2,639 Net$2,411 Loan %Growth of Originations $4,555 $5,172 81% $5,508 70% 80%$6,563 64%$617 ¹ Loan $
Slide 20: Strong capital position
Strong with Common preferred SLM1 Capital stock Tier Bank 1Position that RBC Subsidiary will ¹ Total Significant also RBC remain (4Q 2013) ¹available Note: withBank SLM. Financial capital Holding 20 data resources, Company as of December well (4Qin2013) excess 31,11.3% 2013 of regulatory ¹16.4% Incl
Slide 21: Illustrative unit economics
High rate on associating overhead Bank expected Cost Return current of expenses with Funds cumulative Business business new 1.70 Total loans; Model plan. %cohort Expenses Expected amortized 21– default Illustrative 1.40 lifeover rate %of Total Life of loan life~7%; of cost Pre-Tax loan Loan actual o
Slide 22: Pro forma financial statements
Financial Loans Liabilities 393 Restructuring 5.2 % Other 4.8 (netReview % Income: &ofEfficiency Equity allowance 1 2 Total –Gain Pro $ 11,285 Non-Interest Ratio Forma for on Sale losses Pro 40.3 Sallie ofForma of %Loans Expense $6) Mae 36.4Income 1,425 and % ($ ROA¹ in $Investments Other 273 millio
Slide 23: Key Financial Targets
Key Financial Targets Target Annual Originations $4 bn + Asset Growth 15.0% – 17.5% Earnings Growth 20% + Annual Loan Sales $1.5 – $2.5 bn ROA 2.0% + ROE 15% + Total RBC 14% 23
Slide 24: Business diversification opportunities
Business term Continued capital loan markets Diversification with focuscredit team on building Provides cardOpportunities likedeposit diversified features relationships Short Lending funding terms Funding Whole 24 and fixed Credit loanpayments sales Cards to third Personal Target parties recent Loan
Slide 25: Investment Highlights
Sallie5Mae base Disciplined Investment approach Highlights to credit 1 Experienced 6 Strong capital management position team and funding with deep capabilities industry knowledge 7 Targeting 2high Leading growth brand and in high thereturn education business lending 25 market 3 Simple low cost deliv