SLM (SLM) Barclays 22nd Annual Global Financial Services Conference summary

Origination and balance sheet trends

• Origination activity remained strong through September, with guidance for full-year originations expected at the high end of the range, up 7%-8% year-over-year.

• FAFSA delays compressed the origination season but did not materially impact overall volume or guidance.

• Loan sales for the year are likely complete, with any additional sales expected to be smaller; balance sheet growth is trending toward the high end of the 2%-3% guidance.

• For 2025, balance sheet growth is projected at 5%-6%, with loan sales used to manage growth pace.

Market dynamics and competition

• Exit of major banks like Discover has led to private equity-backed entrants, but competition remains rational with disciplined pricing and marketing spend.

• Demand for loan sales is strong, with premiums above expectations and increased investor interest following recent market exits.

• No specific market share target is set; focus remains on maximizing originations that meet return thresholds.

• Barriers to entry are low, but established relationships and sales force provide a competitive edge.

Credit quality and risk management

• Early-stage delinquencies rose due to seasonality and extended grace periods, but no concerns for net charge-off guidance, which remains in the high 1% to low 2% range.

• Loan modification programs, introduced in 2022, are performing well and are key to maintaining long-term charge-off targets.

• Payment prioritization trends remain stable, with tailored support for borrowers transitioning post-graduation.