JULY 18, 2013
Forward-Looking Statements; Non-GAAP Financial Measures
The following information is current as of July 18, 2013 (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 reports filed with the Securities and Exchange Commission (the “SEC”). Definitions for capitalized terms in this
presentation not defined herein can be found in the 2012 Form 10-K (filed with the SEC on February 26, 2013).
This Presentation contains forward-looking statements and information based on management’s current expectations as of the date of this presentation. Statements that are not
historical facts, including statements about the company’s beliefs or expectations and statements that assume or are dependent upon future events, are forward-looking statements.
Forward-looking statements are subject to risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those reflected in such
forward-looking statements. These factors include, among others, the risks and uncertainties set forth in Item 1A “Risk Factors” and elsewhere in the company’s Annual Report on Form
10-K for the year ended Dec. 31, 2012 and subsequent filings with the Securities and Exchange Commission; increases in financing costs; limits on liquidity; increases in costs
associated with compliance with laws and regulations; changes in accounting standards and the impact of related changes in significant accounting estimates; any adverse outcomes in
any significant litigation to which the company is a party; credit risk associated with the company’s exposure to third parties, including counterparties to the company’s derivative
transactions; and changes in the terms of student loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws).
The company could also be affected by, among other things: changes in its funding costs and availability; reductions to its credit ratings or the credit ratings of the United States of
America; failures of its operating systems or infrastructure, including those of third-party vendors; damage to its reputation; failures to successfully implement cost-cutting and adverse
effects of such initiatives on its business; risks associated with restructuring initiatives, including the company’s recently announced strategic plan to separate its existing operations
into two separate publicly traded companies; changes in the demand for educational financing or in financing preferences of lenders, educational institutions, students and their
families; changes in law and regulations with respect to the student lending business and financial institutions generally; increased competition from banks and other consumer lenders;
the creditworthiness of its customers; changes in the general interest rate environment, including the rate relationships among relevant money-market instruments and those of its
earning assets vs. its funding arrangements; changes in general economic conditions; and changes in the demand for debt management services. The preparation of the company’s
consolidated financial statements also requires management to make certain estimates and assumptions including estimates and assumptions about future events. These estimates or
assumptions may prove to be incorrect. All forward-looking statements contained in this release are qualified by these cautionary statements and are made only as of the date of this
release. The company does not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual results or changes in its expectations
The Company reports financial results on a GAAP basis and also provides certain core earnings performance measures. The difference between the Company’s core earnings and GAAP
results for the periods presented were the unrealized, mark-to-market gains/losses on derivative contracts and the goodwill and acquired intangible asset amortization and impairment.
These items are recognized in GAAP but not in core earnings results. The Company provides core earnings measures because this is what management uses when making management
decisions regarding the Company’s performance and the allocation of corporate resources. The Company’s core earnings are not defined terms within GAAP and may not be comparable
to similarly titled measures reported by other companies. For additional information, see “Core Earnings — Definition and Limitations” in the Company’s first quarter earnings release
for a further discussion and a complete reconciliation between GAAP net income and core earnings.
3 3
High quality loan originations increased 15% compared to prior year
Delinquencies, forbearance and charge-offs all declined from Q2 2012
Returned nearly $200 million to shareholders through common share repurchases1 and announced additional $400 million authorization for common share repurchases
Sold residual interests in two transactions resulting in a $257 million gain
2nd Quarter 2013 Highlights
1 During the second quarter of 2013, the Company repurchased 9 million shares of common stock.
4 4
Strong Earnings – “Core Earnings” Basis
($ in millions, except per share amounts) Q2 13 Q1 13 Q2 12
"Core Earnings" $462 $283 $243
Operating Expenses $258 $250 $231
"Core Earnings" EPS (Reported) $1.02 $0.61 $0.49
Debt Repurchase Gains included in "Core Earnings" $0.03 $0.04 $0.03
5 5
Estimated Growth from
Private Credit Originations 75%
6 6
($ in millions) Q2 13 Q1 13 Q2 12
Net Income $107 $87 $85
Private Education Loan Spread 4.55% 4.56% 4.55%
Provision $187 $225 $225
31-60 Day Delinquency as a % of Repay 2.5% 2.3% 3.4%
61-90 Day Delinquency as a % of Repay 1.6% 1.6% 2.1%
90+ Day Delinquency as a % of Repay 3.6% 3.9% 4.5%
Forbearance as a % of Forbearance & Repay 3.5% 3.4% 4.3%
Charge-offs as a % of Repay 2.7% 3.0% 3.1%
Operating Expenses as a % of Average Private Education Loans 0.80% 0.71% 0.68%
30+ and 90+ Delinquencies as a % of Repayment
2%
4%
6%
8%
10%
12%
14%
30+
90+
Consumer Lending Segment – High Quality Portfolio
8 8
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Originations Year over Year Growth
Consumer Lending Segment – High Quality Originations
57% of Smart option borrowers chose an in-school payment option in Q2 13
Grew Q2 2013 originations by 15%
($ millions) Q2 13 Q2 12 Q2 11
Private Originations $368 $321 $264
Average FICO at Origination 743 746 736
Average % of Cosigners at Origination 78% 81% 81%
9 9
(in millions) Q2 13 Q1 13 Q2 12
Net Income $166 $125 $137
Servicing Revenue $200 $205 $227
Contingency Revenue $109 $99 $87
Department of Education Accounts Serviced 5.2 4.8 3.8
10 10
($ in millions) Q2 13 Q1 13 Q2 12
Net Income $237 $104 $44
Net Interest Income after Provision $244 $245 $228
FFELP Student Loan Spread 0.97% 0.93% 0.80%
Average FFELP Loans $113,981 $121,855 $134,893
$257 and $55 million gain from residual interest sales in Q2 13 and Q1 13, respectively
11 11
Issued $1.1 billion of Private ABS
Issued $2.5 billion of FFELP ABS
Sold residual interests in two separate transactions for $257 million of gains
Returned nearly $200 million to shareholders through common share repurchases announced additional $400 million authorization for common share repurchases
Maintained excess capital at Bank and SLM Corporation
Q2 13 Capital Markets Summary
12 12
GAAP Results
($ in millions, except per share amounts) Q2 13 Q1 13 Q2 12
Net Income $543 $346 $292
EPS $1.20 $0.74 $0.59
Accounting compared to "Core Earnings"
$143 $110 $82
($ in millions, except per share amounts) Quarters Ended
June 30, 2013 March 31, 2013 June 30, 2012
Dollars Diluted EPS Dollars Diluted EPS Dollars Diluted EPS
GAAP net income 543$ $1.20 346$ $0.74 292$ $0.59
Adjustment from GAAP to "Core Earnings"
Net impact of derivative accounting (143) (110) (82)
Net impact of goodwill and acquired intangible assets 4 4 5
Total "Core Earnings" Adjustments before net tax effect (139) (106) (77)
Net tax effect 58 43 28
Total "Core Earnings" Adjustments (81) (63) (49)
"Core Earnings" $462 $1.02 $283 $0.61 $243 $0.49
14 14 14
Not Yet in Repayment 5,475
Loans in Forbearance 498 7.8% 170 3.2% 149 2.7% 86 1.9% 112 1.3% 1,015 3.4%
Loans in Repayment- Current 5,249 81.8% 4,683 89.2% 4,996 91.0% 4,169 93.1% 8,121 95.2% 27,218 90.2%
Loans in Repayment- Delinq 31-60 days 201 3.1% 126 2.4% 117 2.1% 84 1.9% 122 1.4% 650 2.1%
Loans in Repayment- Delinq 61-90 days 137 2.1% 77 1.5% 73 1.3% 45 1.0% 63 0.7% 395 1.3%
Loans in Repayment- Delinq 90 + days 334 5.2% 193 3.7% 155 2.8% 95 2.1% 115 1.4% 892 3.0%
6,419 $ 100% 5,249 $ 100% 5,490 $ 100% 4,479 $ 100% 8,533 $ 100% 30,170 $ 100%
Charge-offs as a % of loans in repayment 4.8% 2.3% 1.7% 1.2% 0.9% 2.1%
Non-Traditional Portfolio
Not Yet in Repayment 421
Loans in Forbearance 86 12.1% 22 5.1% 13 3.4% 10 2.8% 14 1.8% 145 5.5%
Loans in Repayment- Current 422 59.2% 313 72.5% 307 79.0% 286 83.3% 650 87.8% 1,978 75.6%
Loans in Repayment- Delinq 31-60 days 53 7.4% 26 6.1% 20 5.1% 15 4.4% 28 3.8% 142 5.4%
Loans in Repayment- Delinq 61-90 days 44 6.2% 18 4.1% 13 3.4% 9 2.7% 16 2.2% 100 3.8%
Loans in Repayment- Delinq 90 + days 108 15.1% 53 12.2% 35 9.1% 23 6.8% 33 4.4% 252 9.6%
713 $ 100% 432 $ 100% 388 $ 100% 343 $ 100% 741 $ 100% 2,617 $ 100%
Charge-offs as a % of loans in repayment 17.4% 10.6% 6.6% 4.2% 3.1% 9.1%
Total
Not Yet in Repayment 5,896
Loans in Forbearance 584 8.2% 192 3.4% 162 2.8% 96 2.0% 126 1.4% 1,160 3.5%
Loans in Repayment- Current 5,671 79.5% 4,996 87.9% 5,303 90.2% 4,455 92.4% 8,771 94.6% 29,196 89.0%
Loans in Repayment- Delinq 31-60 days 254 3.6% 152 2.7% 137 2.3% 99 2.1% 150 1.6% 792 2.4%
Loans in Repayment- Delinq 61-90 days 181 2.5% 95 1.7% 86 1.5% 54 1.1% 79 0.9% 495 1.5%
Loans in Repayment- Delinq 90 + days 442 6.2% 246 4.3% 190 3.2% 118 2.4% 148 1.6% 1,144 3.5%
7,132 $ 100% 5,681 $ 100% 5,878 $ 100% 4,822 $ 100% 9,274 $ 100% 32,787 $ 100%
Charge-offs as a % of loans in repayment 6.1% 2.9% 2.1% 1.5% 1.1% 2.7%
More than 48 payments Total
Total Loans in Repayment or Forbearance
Total Loans in Repayment or Forbearance
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments
Total
Total Loans in Repayment or Forbearance
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments
16 16
Not Yet in Repayment 5,959
Loans in Forbearance 502 7.8% 166 3.1% 134 2.4% 71 1.6% 93 1.1% 966 3.2%
Loans in Repayment- Current 5,191 80.8% 4,837 89.6% 5,033 91.3% 4,214 93.8% 7,797 95.5% 27,072 90.3%
Loans in Repayment- Delinq 31-60 days 198 3.1% 116 2.2% 111 2.0% 72 1.6% 100 1.2% 597 2.0%
Loans in Repayment- Delinq 61-90 days 147 2.3% 77 1.4% 68 1.2% 45 1.0% 56 0.7% 393 1.3%
Loans in Repayment- Delinq 90 + days 386 6.0% 201 3.7% 165 3.0% 92 2.0% 116 1.4% 960 3.2%
6,424$ 100% 5,397$ 100% 5,511$ 100% 4,494$ 100% 8,162$ 100% 29,988$ 100%
Charge-offs as a % of loans in repayment 6.1% 2.4% 1.8% 1.4% 0.9% 2.5%
Non-Traditional Portfolio
Not Yet in Repayment 475
Loans in Forbearance 85 11.1% 18 4.7% 11 2.9% 8 2.4% 13 1.8% 135 5.1%
Loans in Repayment- Current 454 59.5% 319 73.0% 312 78.5% 291 84.7% 621 87.9% 1,997 75.5%
Loans in Repayment- Delinq 31-60 days 54 7.1% 23 5.2% 21 5.3% 13 3.9% 23 3.2% 134 5.1%
Loans in Repayment- Delinq 61-90 days 42 5.4% 18 4.2% 14 3.5% 9 2.7% 15 2.1% 98 3.7%
Loans in Repayment- Delinq 90 + days 127 16.7% 59 13.6% 39 9.8% 23 6.5% 34 4.9% 282 10.7%
762$ 100% 437$ 100% 397$ 100% 344$ 100% 706$ 100% 2,646$ 100%
Charge-offs as a % of loans in repayment 16.8% 10.1% 6.3% 4.1% 3.0% 8.7%
Total Managed
Not Yet in Repayment 6,434
Loans in Forbearance 587 8.2% 184 3.2% 145 2.5% 79 1.6% 106 1.2% 1,101 3.4%
Loans in Repayment- Current 5,645 78.6% 5,156 88.4% 5,345 90.5% 4,505 93.1% 8,418 94.9% 29,069 89.1%
Loans in Repayment- Delinq 31-60 days 252 3.5% 139 2.4% 132 2.2% 85 1.8% 123 1.4% 731 2.2%
Loans in Repayment- Delinq 61-90 days 189 2.6% 95 1.6% 82 1.4% 54 1.1% 71 0.8% 491 1.5%
Loans in Repayment- Delinq 90 + days 513 7.1% 260 4.5% 204 3.4% 115 2.4% 150 1.7% 1,242 3.8%
7,186$ 100% 5,834$ 100% 5,908$ 100% 4,838$ 100% 8,868$ 100% 32,634$ 100%
Charge-offs as a % of loans in repayment 7.2% 3.0% 2.1% 1.6% 1.1% 3.0%
Total
Total Loans in Repayment or Forbearance
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments
More than 48 payments Total
Total Loans in Repayment or Forbearance
Total Loans in Repayment or Forbearance
Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments
17 17
Trad it ional Port f o lio
M ont hly Scheduled Payment s D ue
Loan St at us 0-12 payments 13-24 payments 25-36 payments 37-48 payments M ore than 48 payments Total
Not Yet in Repayment 5,529
Loans in Forbearance 717 9.3% 190 3.1% 131 2.5% 66 1.8% 82 1.3% 1,186 4.1%
Loans in Repayment- Current 5,881 76.0% 5,504 89.2% 4,799 90.6% 3,344 93.0% 6,141 95.1% 25,669 87.7%
Loans in Repayment- Delinq 31-60 days 380 4.9% 173 2.8% 139 2.6% 71 2.0% 99 1.5% 862 2.9%
Loans in Repayment- Delinq 61-90 days 240 3.1% 95 1.5% 77 1.4% 39 1.1% 47 0.7% 498 1.7%
Loans in Repayment- Delinq 90 + days 521 6.7% 209 3.4% 152 2.9% 75 2.1% 89 1.4% 1,046 3.6%
Tot al Loans in R epayment o r Forbearance 7,73 9$ 10 0 % 6 ,171$ 10 0 % 5,2 9 8$ 10 0 % 3 ,59 5$ 10 0 % 6 ,4 58$ 10 0 % 2 9 ,2 6 1$ 10 0 %
C harge- o f f s as a % o f loans in repayment 5.1% 2 .4 % 1.6 % 1.3 % 0 .9 % 2 .5%
N on- Trad it ional Port f o lio
M ont hly Scheduled Payment s D ue
Loan St at us 0-12 payments 13-24 payments 25-36 payments 37-48 payments M ore than 48 payments Total
Not Yet in Repayment 569
Loans in Forbearance 121 12.0% 24 4.9% 16 3.8% 8 2.5% 13 2.2% 182 6.4%
Loans in Repayment- Current 525 52.0% 343 70.8% 329 77.3% 277 84.1% 507 86.1% 1,981 69.8%
Loans in Repayment- Delinq 31-60 days 98 9.7% 34 7.1% 25 5.9% 16 4.6% 23 3.9% 196 6.9%
Loans in Repayment- Delinq 61-90 days 81 8.0% 24 4.9% 16 3.8% 9 2.9% 15 2.6% 145 5.1%
Loans in Repayment- Delinq 90 + days 185 18.3% 60 12.3% 39 9.2% 19 5.9% 31 5.2% 334 11.8%
Tot al Loans in R epayment o r Forbearance 1,0 10$ 10 0 % 4 8 5$ 10 0 % 4 2 5$ 10 0 % 3 2 9$ 10 0 % 58 9$ 10 0 % 2 ,8 3 8$ 10 0 %
C harge- o f f s as a % o f loans in repayment 17.8 % 10 .2 % 5.1% 3 .5% 3 .4 % 9 .8 %
Tot al
M ont hly Scheduled Payment s D ue
Loan St at us 0-12 payments 13-24 payments 25-36 payments 37-48 payments M ore than 48 payments Total
Not Yet in Repayment 6,098
Loans in Forbearance 838 9.6% 214 3.2% 147 2.6% 74 1.9% 95 1.3% 1,368 4.3%
Loans in Repayment- Current 6,406 73.2% 5,847 87.9% 5,128 89.6% 3,621 92.3% 6,648 94.4% 27,650 86.1%
Loans in Repayment- Delinq 31-60 days 478 5.5% 207 3.1% 164 2.9% 87 2.2% 122 1.7% 1,058 3.3%
Loans in Repayment- Delinq 61-90 days 321 3.6% 119 1.8% 93 1.6% 48 1.2% 62 0.9% 643 2.0%
Loans in Repayment- Delinq 90 + days 706 8.1% 269 4.0% 191 3.3% 94 2.4% 120 1.7% 1,380 4.3%
Tot al Loans in R epayment o r Forbearance 8 ,74 9$ 10 0 % 6 ,6 56$ 10 0 % 5,72 3$ 10 0 % 3 ,9 2 4$ 10 0 % 7,0 4 7$ 10 0 % 3 2 ,0 9 9$ 10 0 %
C harge- o f f s as a % o f loans in repayment 6 .6 % 2 .9 % 1.9 % 1.5% 1.1% 3 .1%
Loan Seasoning
18 18
Private Education Loan Portfolio Performance
(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented
Q213 Q113 Q412 Q312 Q212
Charge-offs - Traditional Portfolio (1) 2.1% 2.5% 3.4% 2.6% 2.5%
Charge-offs - Non-Traditional Portfolio (1) 9.1% 8.7% 13.2% 10.5% 9.8%
Charge-offs - Total Portfolio (1) 2.7% 3.0% 4.2% 3.2% 3.1%
90+ Day Delinq as a % of Repay - Traditional Portfolio 3.1% 3.3% 3.9% 4.4% 3.7%
90+ Day Delinq as a % of Repay - Non-Traditional Portfolio 10.2% 11.2% 12.6% 14.6% 12.6%
90+ Day Delinq as a % of Repay - Total Portfolio 3.6% 3.9% 4.6% 5.3% 4.5%
Forb as a % of Forb & Repay - Traditional Portfolio 3.4% 3.2% 3.3% 3.1% 4.1%
Forb as a % of Forb & Repay - Non-Traditional Portfolio 5.5% 5.1% 5.1% 5.0% 6.4%
Forb as a % of Forb & Repay - Total Portfolio 3.5% 3.4% 3.5% 3.2% 4.3%
Allowance as a % of Loans in Repay - Traditional Portfolio 5.6% 5.7% 5.7% 5.8% 5.7%
Allowance as a % of Loans in Repay - Non-Traditional Portfolio 21.0% 21.0% 20.7% 21.5% 22.5%
Allowance as a % of Loans in Repay - Total Portfolio 6.8% 6.9% 6.9% 7.1% 7.1%
19 19
Private Education Loan Portfolio Performance
(1) Charge-offs as a percentage of average loans in repayment annualized for the quarters presented
Traditional Loans with a Cosigner Q213 Q113 Q412 Q312 Q212
Outstanding Balance as a % of Total 64% 63% 62% 62% 60%
90+ Delinquency as a % of Repayment 2.3% 2.4% 2.9% 3.2% 2.7%
Forbearance as a % of Repayment & Forbearance 3.3% 3.2% 3.3% 2.9% 3.8%
Charge-Offs as a % of Repayment (1)
1.4% 1.6% 2.1% 1.6% 1.5%
Traditional Loans without a Cosigner Q213 Q113 Q412 Q312 Q212
Outstanding Balance as a % of Total 29% 29% 30% 30% 31%
90+ Delinquency as a % of Repayment 4.6% 5.1% 5.8% 6.7% 5.5%
Forbearance as a % of Repayment & Forbearance 3.6% 3.3% 3.4% 3.3% 4.5%
Charge-Offs as a % of Repayment (1)
3.7% 4.3% 5.9% 4.5% 4.3%
Non-Traditional Loans with a Cosigner Q213 Q113 Q412 Q312 Q212
Outstanding Balance as a % of Total 2% 2% 3% 3% 3%
90+ Delinquency as a % of Repayment 8.7% 9.5% 10.9% 12.3% 10.3%
Forbearance as a % of Repayment & Forbearance 6.8% 6.6% 6.5% 6.2% 7.6%
Charge-Offs as a % of Repayment (1)
6.2% 5.6% 8.8% 6.9% 6.6%
Non-Traditional Loans without a Cosigner Q213 Q113 Q412 Q312 Q212
Outstanding Balance as a % of Total 5% 6% 6% 6% 6%
90+ Delinquency as a % of Repayment 10.9% 12.0% 13.3% 15.6% 13.5%
Forbearance as a % of Repayment & Forbearance 5.0% 4.5% 4.6% 4.5% 5.9%
Charge-Offs as a % of Repayment (1)
10.3% 10.0% 15.0% 11.9% 11.1%
20 20
$146* Billion Student Loan Portfolio as of June 30, 2013
* Gross loans, Numbers may not add due to rounding.
Funded to Term, $110 Bn
FFELP Consolidation Term ABS, $60 Bn
FFELP Non-Consolidation Term ABS, $30 Bn
Private Term ABS, $20 Bn
Fixed Spread Liabilities, $24 Bn
Conduits, $12 Bn
FHLB, $2 Bn
Note: Does not include Sallie Mae Bank or Subsidiary funding
Total unsecured debt outstanding of $17.5 billion