SLM Corporation (NYSE: SLM) annual loan originations grow 23%, total $15.2 billion

Company's total managed portfolio approaches $89 billion;
Fee-based businesses grow 25% in 2003

Reston, Va., Jan. 15, 2004—SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, today reported fourth-quarter and year-end results that include a record $15.2 billion in annual preferred-channel loan originations, a 23% increase from the prior year. Preferred-channel loans are originated through Sallie Mae's owned or affiliated brands, and provide the engine for the company's market leadership in education finance.
"Like the higher education industry that we serve, Sallie Mae grew dramatically in 2003," said Albert L. Lord, vice chairman and chief executive officer. "We expect more growth in 2004. We will deliver even better products and service. This formula satisfies school customers and rewards shareholders."

Sallie Mae reports financial results on a GAAP basis and also presents certain non-GAAP or "core cash" performance measures. The company's equity investors, credit rating agencies and debt capital providers use these "core cash" measures to monitor the company's business performance.

Sallie Mae reported fourth-quarter 2003 GAAP net income of $264 million, or $.57 per diluted share (split adjusted), compared to $306 million, or $.64 per diluted share (split adjusted), in the year-ago period. For the year ended Dec. 31, 2003, GAAP net income was $1.53 billion, or $3.29 per diluted share, compared to $792 million, or $1.64 per diluted share (both per diluted share figures split adjusted), in 2002.

"Core cash" net income for the quarter was $285 million, or $.62 per diluted share, up from $147 million or $.31 per diluted share (split adjusted) in the year-ago quarter. During the quarter, the company revised several accounting estimates driven primarily by the growth in loan consolidations. In addition, the company's tax provision was lower for the quarter as a result of favorable conclusions reached on certain tax matters. The cumulative effect from these changes on "core cash" net income was $55 million, recognized in the fourth quarter, or $.12 per diluted share.

"Core cash" net income for the year was $926 million, or $1.97 per diluted share (split adjusted), a 34% increase from the prior year's $690 million. "Core cash" net interest income was $482 million for the quarter, a 27% increase from the year-ago quarter's $379 million, exclusive of an impairment charge recognized in the fourth quarter 2002.

"Core cash" other income, which consists primarily of fees earned from guarantor servicing and debt management, was $192 million for the 2003 fourth quarter, and $644 million for the year, compared with $124 million for the year-ago quarter and $502 million for 2002. "Core cash" operating expenses were $248 million for the quarter and $781 million for the year, up from $171 million in the year-ago quarter and $663 million for 2002. The increases in both "core cash" other income and operating expenses were due largely to the sale of the company's headquarters building and a one-time donation of the net proceeds to The Sallie Mae Fund.

A description of the "core cash" treatment and a full reconciliation to the GAAP income statement can be found at www.salliemae.com.

Total equity for the company at Dec. 31, 2003, was $2.6 billion, up from the year ago total of $2.0 billion. Tangible capital was 2.0% of managed assets at Dec. 31, 2003, compared to 1.6% as of Dec. 31, 2002. The company continues to transition from a government-sponsored entity (GSE), and at quarter end, more than 78% of managed student loans were funded through non-GSE sources.

In May, the company announced a three-for-one stock split in the form of a stock dividend of two additional shares for every one share already outstanding effective June 20, 2003.

The company will host its regular earnings conference call today at noon. Sallie Mae executives will be on hand to discuss various highlights of the quarter and to answer questions related to the company's performance. Individuals interested in participating should call the following number today, Jan. 15, 2004, starting at 11:45 a.m. EST: (877) 356-5689 (USA and Canada) or (706) 679-0623 (International). The conference call will be replayed continuously beginning Thursday, Jan. 15, at 3:30 p.m. EST and concluding at 11:59 p.m. EST on Thursday, Jan. 22. Please dial (800) 642-1687 (USA and Canada) or dial (706) 645-9291 (International) and use access code 4801599. In addition, there will be a live audio Web cast of the conference call, which may be accessed at www.salliemae.com. A replay will be available 30-45 minutes after the live broadcast.

For more information, contact:

Investor Contacts:

Steve McGarry 703/810-7746
Nam Vu 703/810-7723

Media Contacts:

Tom Joyce 703/810-5610
Martha Holler 703/810-5178
 

SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading provider of education funding, managing nearly $89 billion in student loans for more than 7 million borrowers. The company primarily provides federally guaranteed student loans originated under the Federal Family Education Loan Program (FFELP), and offers comprehensive information and resources to guide students, parents and guidance professionals through the financial aid process. Sallie Mae was established in 1973 as a government-sponsored enterprise (GSE) called the Student Loan Marketing Association, and began the privatization process in 1997. Since then, the parent company name has changed, most recently to SLM Corporation. Through its specialized subsidiaries and divisions, Sallie Mae also provides an array of consumer credit loans, including those for lifelong learning and K-12 education, and business and technical products and services for colleges and universities. More information is available at http://www.salliemae.com. SLM Corporation and its subsidiaries, other than the Student Loan Marketing Association, are not sponsored by or agencies of the United States.

Supplemental Earnings Disclosure