Slm Corporation · NASDAQ:SLM
Slm — Q3 2013 Earnings Presentation
20 slides from Slm's earnings presentation, Oct 17, 2013
Slide 1: 2013 3rd Quarter Review Earnings Call Presentation
2013 3RD QUARTER REVIEW EARNINGS CALL PRESENTATION OCTOBER 17, 2013 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 October 17, 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
Slide 3: 3rd Quarter 2013 Highlights
3rd Quarter 2013 Highlights ► High quality loan originations of $1.5 billion ► Quarterly charge-off rate declined to lowest level in five years ► Generated “Core Earnings” of $271 million 3 3
Slide 4: Strong Earnings – Core Earnings Basis
Strong Earnings – “Core Earnings” Basis ($ in millions, except per share amounts) Q3 13 Q2 13 Q3 12 "Core Earnings" $271 $462 $277 Operating Expenses $257 $244 $220 "Core Earnings" EPS (Reported) $0.60 $1.02 $0.58 Debt Repurchase Gains included in "Core Earnings" - $0.03 $0.06 4 4
Slide 5: Consumer Lending Segment – Core Earnings Basis
Consumer Lending Segment – “Core Earnings” Basis ($ in millions) Q3 13 Q2 13 Q3 12 Net Income $105 $107 $62 Private Education Loan Spread 4.60% 4.55% 4.44% Provision $195 $187 $252 31-60 Day Delinquency as a % of Repay 3.0% 2.5% 3.1% 61-90 Day Delinquency as a % of Repay 2.0% 1.6% 1.6% 90+ Day Delin
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 $0 2010 2011 2012 Projected 2013 Private Education Loan Originations ($ millions) Q3 13 Q3 12 Q3 11 Private Originations $1,498 $1,349 $1,077 Average FICO at Origination 746 749 75
Slide 8: Business Services Segment – Core Earnings Basis
Business Services Segment – “Core Earnings” Basis (in millions) Q3 13 Q2 13 Q3 12 Net Income $124 $167 $133 Intercompany Loan Servicing Revenue $123 $137 $164 Third-Party Loan Servicing Revenue $40 $33 $26 Guarantor Servicing Revenue $10 $10 $11 Contingency Revenue $104 $109 $85 Department of Educat
Slide 9: FFELP Loans Segment – Core Earnings Basis
FFELP Loans Segment – “Core Earnings” Basis ($ in millions) Q3 13 Q2 13 Q3 12 Net Income $92 $237 $94 Net Interest Income after Provision $251 $244 $298 FFELP Student Loan Spread 1.03% 0.97% 1.05% Average FFELP Loans $107,483 $113,981 $129,621 ► $257 million gain from residual interest sales in Q2 1
Slide 10: Q3 Capital Markets Summary
Q3 13 Capital Markets Summary ► Issued $624 million of Private ABS ► Issued $1.7 billion of FFELP ABS ► Issued $1.25 billion of long-term unsecured debt ► Closed on a $1.1 billion Private ABCP facility ► Maintained excess capital at Bank and SLM Corporation 10 10
Slide 11: GAAP Results
GAAP Results ($ in millions, except per share amounts) Q3 13 Q2 13 Q3 12 Net Income $260 $543 $188 EPS $0.57 $1.20 $0.39 Net Impact before Tax of Derivative Mark-to-Market ($19) $143 ($140) Accounting compared to "Core Earnings" 11 11
Slide 12: GAAP to Core Earnings Reconciliation
GAAP to “Core Earnings” Reconciliation ($ in millions, except per share amounts) Quarters Ended September 30, 2013 June 30, 2013 September 30, 2012 Dollars Diluted EPS Dollars Diluted EPS Dollars Diluted EPS GAAP net income $ 260 $0.57 $ 543 $1.20 $ 188 $0.39 Adjustment from GAAP to "Core Earnings"
Slide 13: Appendix
Appendix 13 13
Slide 14: 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 15: Loan Seasoning – June 30, 2013
Loan Seasoning June 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 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 Repayme
Slide 16: Loan Seasoning – September 30, 2012
Loan Seasoning September 30, 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 6,234 Loans in Forbearance 501 7.4% 150 2.4% 110 2.1% 57 1.5% 80 1.2% 898 3.1% Loans in Repay
Slide 17: Private Education Loan Portfolio Performance
Private Education Loan Portfolio Performance Q313 Q213 Q113 Q412 Q312 (1) 2.1% 2.1% 2.5% 3.4% 2.6% Charge-offs - Traditional Portfolio (1) 8.8% 9.1% 8.7% 13.2% 10.5% Charge-offs - Non-Traditional Portfolio (1) 2.6% 2.7% 3.0% 4.2% 3.2% Charge-offs - Total Portfolio 90+ Day Delinq as a % of Repay - Tr
Slide 18: Private Education Loan Portfolio Performance
Private Education Loan Portfolio Performance Traditional Loans with a Cosigner Q313 Q213 Q113 Q412 Q312 Outstanding Balance as a % of Total 65% 64% 63% 62% 62% 90+ Delinquency as a % of Repayment 2.4% 2.3% 2.4% 2.9% 3.2% Forbearance as a % of Repayment & Forbearance 3.2% 3.3% 3.2% 3.3% 2.9% (1) Char
Slide 19: High Percentage of Student Loans Funded to Term
High Percentage of Student Loans Funded to Term $144* Billion Student Loan Portfolio as of September 30, 2013 Fixed Spread Liabilities, $25 Bn Conduits, $11 Bn ► FFELP ABCP Conduit, $8 Bn ► Private ABCP Conduit $1 Bn Funded to Term, $107 Bn ► FHLB, $2 Bn ► FFELP Consolidation Term ABS, $59 Bn ► FFEL
Slide 20: Unsecured Debt Maturities
Unsecured Debt Maturities As of September 30, 2013 (par value, $ in billions) $10 $5 $3.7 $2.5 $2.8 $2.3 $1.5 $1.8 $1.6 $1.2 $1.5 $0 ► Total unsecured debt outstanding of $18.9 billion 20 20 Note: Does not include Sallie Mae Bank or Subsidiary funding