Investor Presentation 4 th Quarter & Full-Year 2025 © 2026 Sallie Mae Bank. All rights reserved. © 2026 Sallie Mae Bank. All rights reserved. 1 CAUTIONARY NOTE AND DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS The following information is current as of January 22, 2026 (unless otherwise noted) and should be read in connection with the press release of SLM Corporation (the "Company") announcing its financial results for the quarter December 31, 2026, furnished to the Securities and Exchange Commission ("SE ...

Group 1: Ares Capital Overview - Ares Capital (NASDAQ: ARCC) is the world's largest business development corporation (BDC) with a forward dividend yield of 9.9%, but sustaining this yield is becoming challenging as interest rates decline [1] - Ares finances "middle market" companies, investing in 603 companies across a $29.5 billion portfolio, with 60.5% allocated to first-lien secured loans and 5% to second-lien secured loans to mitigate credit risk [2] Group 2: Interest Rate Impact - Ares' floating-rate loans are influenced by the Fed's benchmark rate, requiring these rates to remain in a "Goldilocks" zone for consistent profits; higher rates can boost net income but also create macro headwinds for portfolio companies [4] - The Fed's rate changes have led to a decrease in Ares' EPS from $2.68 in 2023 to $1.86 in 2025, which is below its forward dividend rate of $1.92 per share [5] Group 3: Comparison with Realty Income - Realty Income (NYSE: O) is highlighted as a more attractive investment compared to Ares, owning over 15,500 commercial properties and being one of the largest real estate investment trusts (REITs) [6] - REITs like Realty Income generally grow faster than BDCs as interest rates decline, making property acquisition cheaper and tenant acquisition easier; Realty Income has maintained an occupancy rate above 96% since its IPO in 1994 [7][8] - Realty Income pays monthly dividends and has raised its payout 133 consecutive times, offering a forward yield of 5.1% [8]

Financial Data and Key Metrics Changes - The company reported a return on average tangible equity of 15.8% for Q4 and 16.3% for the full year, with an effective tax rate of 24.8% in Q4, expected to normalize to 23.2% going forward [7][17] - Net interest income for Q4 was $170.3 million, a $1 million increase from the prior quarter, with a net interest margin (NIM) of 3.21%, up 2 basis points from the previous quarter [12][7] - Total loans grew by $183 million in the quarter, representing a 5.2% annualized growth rate [10] Business Line Data and Key Metrics Changes - Retail and commercial deposits increased by $233 million, while public deposits declined by $447 million, resulting in a net increase of $214 million in deposits for Q4 [11] - Non-interest income was reported at $55.6 million, while non-interest expense for Q4 was $125.1 million [13] Market Data and Key Metrics Changes - The unemployment rate in the state was 2.2% in November, significantly lower than the national rate of 4.5% [6] - Year-to-date spending through November was $19.6 billion, up about 6% compared to the same period last year [6] Company Strategy and Development Direction - The company anticipates full-year loan growth in the range of 3%-4%, primarily driven by commercial real estate (CRE) and commercial and industrial (C&I) loans [17] - The company has a new stock repurchase authorization of $250 million, indicating a strong capital position and flexibility for future growth initiatives [9][60] Management's Comments on Operating Environment and Future Outlook - Management noted that credit risk remains low and stable, with no broad signs of weakness observed in consumer or commercial books [14] - The company expects non-interest income to remain stable at approximately $220 million for the year, with expenses projected to be around $520 million in 2026 [17][54] Other Important Information - The company repurchased about 1 million shares during the quarter, utilizing the remaining $26 million of its $100 million purchase authorization for 2025 [9] - The allowance for credit losses increased to $168.5 million, with coverage rising to 118 basis points of total loans and leases [16] Q&A Session Summary Question: Loan growth trends and pipeline - Management indicated that loan growth was broad-based, with some payoffs in the CRE portfolio affecting expectations, but they anticipate more normalized growth in the second half of the year [24][25] Question: Payoffs and paydowns in the industry - Management noted that payoffs have been occurring sooner than expected due to increased competition from permanent lenders, but they expect this trend to normalize [26][28] Question: Deposit trends and NIM expansion - Management confirmed that the margin guide reflects the ability to continue cutting deposit rates, with expectations of a lower deposit beta going forward [30][31] Question: Full year loan growth guidance - Management suggested that loan growth may start lower in the first half of the year but expects a pickup in the second half [44] Question: M&A activity and ideal targets - Management reiterated their focus on organic growth but remains open to M&A opportunities, looking for well-managed firms with strong deposit franchises [72][73]

Financial Data and Key Metrics Changes - The net interest margin (NIM) expanded to 3.21%, up 2 basis points from the prior quarter [10] - Net interest income increased to $170.3 million, $1 million higher than the previous quarter [10] - Return on average tangible equity was 15.8% for the fourth quarter and 16.3% for the full year [6] - The effective tax rate for the fourth quarter was 24.8%, expected to return to about 23.2% going forward [6] Business Line Data and Key Metrics Changes - Total loans grew by $183 million in the quarter, or 5.2% on an annualized basis, with significant growth in commercial and industrial (C&I) loans [8] - Retail and commercial deposits increased by $233 million, while public deposits declined by $447 million, resulting in a net increase of $214 million in deposits [10] - Non-interest income was reported at $55.6 million, while non-interest expense was $125.1 million for the fourth quarter [11] Market Data and Key Metrics Changes - The state unemployment rate was 2.2% in November, significantly lower than the national rate of 4.5% [5] - Total visitor arrivals were down 0.2% year-over-year, with spending up 6% to $19.6 billion [5] - The median single-family home price on Oahu was $1.1 million, up 4.3% from the previous year, while the median condo sales price was $512,000, down 5.2% [5][6] Company Strategy and Development Direction - The company expects full-year loan growth to be in the 3%-4% range, driven primarily by commercial real estate (CRE) and C&I loans [15] - Non-interest income is anticipated to remain stable at about $220 million for the year, with expenses expected to be around $520 million in 2026 [15] - The company has a new stock repurchase authorization of $250 million, providing flexibility for capital return [8][59] Management's Comments on Operating Environment and Future Outlook - Management noted that credit risk remains low and stable, with no broad signs of weakness in consumer or commercial books [12] - The company expects to see more normalized growth in the second half of the year, following a period of payoffs in the CRE portfolio [22][28] - Management expressed confidence in maintaining a strong capital position, with a CET1 target of 12% and current levels above 13% [59] Other Important Information - The company repurchased about 1 million shares, utilizing the remaining $26 million of its $100 million purchase authorization for 2025 [8] - The allowance for credit losses increased to $168.5 million, with coverage at 118 basis points of total loans and leases [13] Q&A Session Summary Question: Loan growth trends and pipeline - Management indicated that loan growth was broad-based, with some payoffs in the CRE portfolio affecting expectations, but they anticipate more normalized growth in the future [22][23] Question: Payoffs and paydowns in the industry - Management noted that payoffs have been occurring sooner than expected due to increased competition from permanent lenders, but they expect this trend to normalize [27][28] Question: Deposit trends and NIM expansion - Management confirmed that the interest-bearing deposit beta is expected to decrease to 30%-35% after two rate cuts, with continued focus on reducing deposit costs [29][48] Question: Full year loan growth guidance - Management suggested that loan growth may start lower in the first half of the year but expects a pickup in the second half [44] Question: M&A activity and ideal targets - Management remains open to M&A opportunities, focusing on strong management teams and disciplined lending cultures, particularly in the western U.S. [71][72]

Financial Data and Key Metrics Changes - The company reported net income of $7.6 million, or $0.25 per diluted share, compared to a loss of $67.5 million, or $2.22 per share, in the previous quarter [6] - Non-performing loans decreased to $106.8 million, down $12 million from the prior quarter, representing 1.47% of total loans [7] - Total non-performing assets declined by $24 million to $108.9 million, representing 1.04% of total assets, down from 1.23% in the prior quarter [7] - The allowance for credit losses ended the quarter at $159.6 million, or 2.19% of total loans [8] - Tangible common equity to tangible assets is 10.87%, with a Tier 1 leverage ratio of 10.17% and CET1 at 13.83% [10] Business Line Data and Key Metrics Changes - Net interest income grew by $144,000 to $68.3 million, with a net interest margin (NIM) decline of five basis points to 2.38% [9][10] - Non-interest income increased to $12.2 million compared to $2.5 million in the previous quarter, primarily due to non-reoccurring losses and gains from SBIC investments [10] - Non-interest expense rose by $17.9 million to $59.8 million, driven by costs associated with the disposition of held-for-sale loans and valuation adjustments [10] Market Data and Key Metrics Changes - The company experienced a reduction in brokered deposits by $602 million while increasing core deposits by $692 million during 2025 [11] - The CRE concentration ratio declined to 322%, and the ADC concentration ratio decreased to 88% as of year-end [9] Company Strategy and Development Direction - The company is focusing on transitioning from remediation to execution, with an emphasis on consistent performance and improved asset quality [4][14] - The strategy includes reducing loan concentrations and enhancing balance sheet quality to support sustainable earnings [4][14] - The company anticipates a meaningful expansion in net interest margin, forecasting NIM to range between 2.6% and 2.8% for the year [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ability to expand pre-provision net revenue despite a smaller average balance sheet [11][12] - The company is cautious about capital management and will continue to monitor the criticized and classified loan levels before making further decisions [28] - Management noted that while there are signs of improvement, they will remain vigilant in monitoring credit quality and potential risks [33][34] Other Important Information - The company has $4.7 billion in available liquidity, maintaining two-times coverage of uninsured deposits [11] - The company is actively hiring producers in the C&I sector to support growth [72] Q&A Session Summary Question: Can you provide more details on the asset dispositions and expected timing? - The company has $90.7 million of loans held for sale, with two-thirds scheduled for resolution in the first quarter [19] Question: What is the potential for further moves into held-for-sale? - There could be situations where selling loans is the best strategy, but the pace is not expected to match 2025 [21] Question: What trends are being seen in the multifamily sector? - There are signs of stabilization and improvement in multifamily loans, with strong valuations compared to the office market [22] Question: How do you view the current reserves and future provisioning? - The company expects to see a decline in the allowance for credit losses as the criticized classified loan portfolio continues to decline [39] Question: Can you discuss the buyer interest in the secondary market? - Buyer interest is high, with a range of investors looking to purchase loans, including local developers and existing ownership [37] Question: What is the outlook for loan growth in the C&I sector? - The growth seen in the fourth quarter is not expected to be sustainable, but the C&I platform is expected to continue growing [55] Question: What is the current level of brokered deposits and plans for reduction? - The company has $1.56 billion in brokered deposits, with plans to reduce this significantly throughout 2026 [58][60]

Core Insights - Competition among major banks is intensifying as they prepare for fourth-quarter earnings, with JPMorgan Chase, Bank of America, Citi, Goldman Sachs, and Morgan Stanley set to report [1][2] - Analysts indicate that banks are facing the toughest competition in years, with a focus on capturing new business across various sectors [2][3] Group 1: Earnings and Competition - The upcoming earnings season is expected to highlight strong competition in dealmaking, talent acquisition, and technology [1][2] - Analysts predict a significant rebound in dealmaking, with worldwide M&A value rising approximately 45% year over year, despite a slight decline in the number of deals [6][8] - Investment banking advisory bonuses are projected to increase by as much as 20% compared to the previous year, indicating a strong year for banking and trading [4] Group 2: Hiring and Talent - The resurgence in dealmaking is leading to increased hiring competition, with firms willing to pay competitively to retain top talent [9][10] - Industry insiders report that the best talent is being actively recruited, especially in a favorable market environment [10] Group 3: Credit Quality - Credit quality remains stable, although there are concerns about potential isolated problems in the credit market, particularly among midsize firms [11][12] - Analysts caution that while large banks are unlikely to face major surprises, credit cycles often begin with specific issues [12][13] Group 4: Technological Advancements - Goldman Sachs is focusing on its OneGS 3.0 initiative, aimed at enhancing profitability and productivity through AI [13][14] - The banking industry is shifting from experimental AI projects to making AI a core strategic priority, with expectations for detailed plans on AI deployment from banking leaders [15][16]

Core Insights - The US corporate bond market shows signs of potential downgrades, with a significant increase in bonds nearing junk status, rising from $37 billion at the end of 2024 to $63 billion currently [1][3] - Despite the increase in high-yield rated bonds, demand from investors remains strong, and earnings are expected to be robust in the near term, keeping spreads relatively stable [2] Group 1: Credit Ratings and Trends - Approximately $55 billion of US corporate bonds transitioned from investment-grade to junk status in 2025, significantly higher than the $10 billion of firms upgraded to high-grade status [3] - BBB- rated debt constitutes only 7.7% of JPMorgan's US high-grade corporate index, marking a record low, indicating a higher susceptibility to downgrades [4] Group 2: Financial Pressures - Companies are facing increased pressure on their balance sheets due to rising interest expenses as they continue to refinance debt, which may lead to more ratings pressure on weaker credits [2][5] - Overall indebtedness is rising relative to earnings, driven by higher yields post-pandemic, increased spending on artificial intelligence, and acquisitions, suggesting underlying weaknesses in credit profiles [5]

Group 1 - Goldman Sachs raised the price target on Synchrony (SYF) to $98 from $85 while maintaining a Buy rating on the shares [1] - Regional banks underperformed the market by 200-300 basis points in 2025 due to macro concerns and credit worries, although stocks rallied 13% late in the year [1] - Looking ahead to 2026, factors such as solid loan growth, net interest income momentum, positive operating leverage, and improving returns indicate continued multi-year fundamental improvement, with credit risk being the main wildcard [1]

Group 1 - Goldman Sachs lowered the price target on UWM Holdings (UWMC) to $5 from $6 while maintaining a Neutral rating on the shares [1] - Regional banks underperformed the market by 200-300 basis points in 2025 due to macro concerns and credit worries, despite a 13% rally in stocks late in the year [1] - For 2026, factors such as solid loan growth, net interest income momentum, positive operating leverage, and improving returns indicate continued multi-year fundamental improvement, with credit risk being the main wildcard [1]

Core Insights - MercadoLibre (MELI) is entering 2026 with a credit profile significantly exposed to borrower stress, funding cost fluctuations, and macroeconomic volatility, as lending expansion becomes the primary driver of fintech growth [1] - The Zacks Consensus Estimate for MELI's fourth-quarter 2025 fintech revenues is projected at $3.63 billion, reflecting a 45% year-over-year increase, but this growth increasingly relies on consumer lending rather than lower-risk payment volumes [1] Group 1: Credit Risk and Macroeconomic Conditions - The rapid pace of credit expansion raises credit risk due to a higher share of early-stage cohorts that have not been tested through a complete economic cycle, leading to increased default volatility [2] - Argentina's inflation accelerated to 31.4% in November 2025, reversing earlier disinflation trends, which erodes real purchasing power and increases repayment stress for unsecured borrowers [3] - MELI's credit card launch in Argentina coincides with renewed price instability, placing first-year cohorts at risk [3] Group 2: Competitive Landscape - MercadoLibre faces intense competition from Sea Limited and Nu Holdings, which adopt a more cautious approach to credit expansion, thereby reducing balance-sheet exposure [5] - Sea Limited prioritizes payments-led growth, while Nu Holdings operates under a regulated banking framework, allowing for more gradual credit scaling with tighter underwriting discipline [5] Group 3: Share Price Performance and Valuation - MELI shares have declined by 21% over the past six months, underperforming the Zacks Internet-Commerce industry and the Zacks Retail-Wholesale sector, which saw increases of 1.6% and 1.5%, respectively [6] - Currently, MELI stock trades at a forward 12-month Price/Sales ratio of 2.71X, compared to the industry's 2.12X, indicating a relatively higher valuation [10] - The Zacks Consensus Estimate for MELI's fourth-quarter 2025 earnings is $11.66 per share, reflecting a 7.53% year-over-year decline [12]