So thanks so much for joining us today. I'm Jill Shea, Equity Research here at UBS, and I'm pleased to be joined by Peter Graham, Executive Vice President and CFO of Sallie Mae. So Peter, thanks so much for joining us today. Yeah, glad to be here. So I thought I would dive right in. You're over one year from when you laid out your strategic plans at the December 2023 Investor Forum. That strategy called for strong and predictable balance sheet growth. So perhaps we can just start with the growth in 2024. You had total balance sheet growth of 3.1%. I think that was relative to your guidance of 2%-3%, and that was up from your previous guidance of flattish. Can you just talk about the factors that played into your balance sheet growth and how loan sales played a role this past year? Sure, I'll do that. Just start with one caveat that the framework that we laid out at the Investor Forum was an analytical tool and not intended to be multi-year guidance. And so as we go through time and people are referencing back to that, just do want to make that point. So on the balance sheet growth, that's another maybe tie-in to the forum. Because that was a simplified framework, we used total asset growth as a proxy for loan growth. And so if you think about what we delivered in 2024, we had 3%-ish balance sheet growth, but that also was in the context of divesting of the runoff FFELP book that we had been carrying for some time. And our actual growth in the loan book was over 5%. So really an acceleration versus what we had really anticipated in the first year of executing on the framework. We feel really good about the growth that we had year over year. We feel that it sets us up very well in terms of growth of NIM in the future. Great. And then perhaps just talking about 2024 originations, you originated $7 billion of private education loans, and that was up 10% from 2023 and ahead of your expectations of 8%-9%. And it appeared you expanded your share of private student lending market share. In terms of that, can you just talk about your share gains? And should we think about those gains as done, or is there more to do in terms of market share positioning? Yeah, so if you think about the context of this year with the exit of Discover from the space, we knew that that would present an opportunity for sort of outsized growth in originations year over year, and the other thing to keep in mind about our business is we follow an academic calendar in terms of our cyclicality and not a true calendar calendar, and so what that means is we'll have peak origination in the fall, and that contributed to the 10% year over year growth for this year, but then we'll also have a follow-on sort of second wave. We refer to it as mini peak that will happen in the first quarter. That will sort of be the totality of the impact from that market opportunity of the Discover exit. And then we think we'll go back to a more normalized sort of run rate of growth in origination opportunity going forward. In terms of the originations this year, we feel really good about the market share gains that we had. We think we took our fair share and maybe a little bit more of what was on offer with the exit of a major competitor and feel really good about the credit quality of originations. All the metrics that we look to to indicate credit quality of the origination cohort all improved year over year. So feel really good about that. Perhaps just talking about EPS in 2024, just given the origination growth was a bit higher than what you had expected, it did put some EPS pressure as you built the required reserves. As a result, you finished about $0.02 below your guidance for 2024. Can you just talk about the trade-off as you think about growing versus the EPS, and how does that set you up for additional earnings support in 2025? Yeah, sure. So that really is the crux of the investor framework that we laid out, which is having a modest rate of growth of the balance sheet and the loan book, acknowledging the fact that the reserve requirement to fund that growth and the capital requirement to fund that growth is pretty substantial. And so we laid out that framework as a way to articulate that we could step into modest balance sheet growth, which will drive growing organic earnings and still at the same time have meaningful capital to return to shareholders. So we feel good about what we've accomplished in 2024. I think if you look at it from a perspective of when we started the year, we had much larger originations growth than what we had originally anticipated. Our expenses came in below the midpoint of our original guidance range, even though we absorbed a much higher expense load from the higher originations. Credit quality came in terms of net charge-offs below the original range we had established. And although we missed our revised guidance by $0.02, we were actually in the upper end of the original guidance range we had given for the year. So we feel pretty good about the performance we had in 2024. And we think the ability to sort of take a little more growth in the loan book going into this year sets us up very well. Perhaps pivoting to 2025, at the year two Investor Forum, numbers included balance sheet growth stepping up to the 5% in year two, and with 2024 pace having shaped up a bit better than you previously planned, can you just talk about the range of balance sheet growth that you would be comfortable with in 2025? I think you've noted that it might be slightly above that 5%. Yeah, I think, again, looking at the actual loan balances, I think that 5% rate is probably a good sort of benchmark. The framework is somewhat flexible to allow us to sort of react to conditions on the ground. But we feel like we have been rewarded in terms of share price realization as we've executed on year one of the strategy. And we feel like it's resonating with investors, and we're going to stick with it. Great. And then perhaps just in terms of the cadence of the growth, and you had mentioned this in one of your earlier comments, but can you just talk about the pacing of growth as we think about the opportunity into the spring of 2025 as well as into the second half of 2025 as you start lapping sort of the larger fall originations that you had? So can you just talk about how that ties into your overall growth of 6%-8% loan origination growth for the year? And it's obviously lower than the 10% from 2024. Yeah, I think what we saw in the first quarter of last year was some outsized growth in originations, possibly from Discover kind of stepping back a little bit, even though they were still originating in the first quarter, and as I said, we expect that we'll have really strong growth this first quarter as a sort of follow-on to the strong peak season that we had last fall, and then as we go into the peak this year, we think it's going to be a more normalized sort of environment. All of the players have kind of absorbed their piece of the market share, so there's not an outside catalyst to give us that outsized opportunity for growth. Perhaps just touching on the loan sales, you noted in your last earnings call that you reached a preliminary agreement for the sale of approximately $2 billion of private education loans that was expected to close in early February. Could you just speak to your use of loan sales to moderate growth in 2025? Yeah, so the framework really calls for us to use the loan sales to moderate that rate of growth. I think if you look at the percentage growth in originations and how that translates into dollars of volume into the loan book, you can sort of benchmark the absolute sort of magnitude of loan sales that would be required each year. It's going to be somewhere in the kind of $3-$4 billion kind of a range. And we've completed the first tranche of that in the first part of this year. What you saw last year was market conditions were very favorable, and we did both of those transactions in the first half of the year. We'll see how this year shapes up, but we were very pleased with the market and appetite for the loans in that first couple of weeks of January. Perhaps we can touch on that a little bit, just the loan sale appetite. Private credit has entered the space, so could you just touch on the demands that you're seeing on loan sales, and how would you characterize the appetite and environment that you see today? Yeah, what I would say is there's been some large bank exits from the student loan space over the last few years, Wells and then Discover. And with those exits, there were large portfolio sales of student loan assets. And that got a lot of interest from private credit players and others to be part of those processes. Obviously, there was only one winning bidder in each of those transactions, but what that meant was a lot of people have done work on the space, on the asset class, the business model, and they like it. And so that's what we've seen is those same players are being involved more in our normal loan processes. So I think that's supportive in general of continued loan sales to support our strategy. Great. So perhaps turning to regulation with a new presidential administration, could you just touch on the potential for PLUS reforms? I'm realizing there's no specific proposals offered, so it makes it difficult to put estimates around. But perhaps you can just walk us through the PLUS program and the Grad PLUS program and how your view might differ relative to those two programs, the size of the opportunity, what might fit into your credit box, just any color there. Yeah, so I guess starting out to say that obviously until we see what the actual proposals are, it's a little bit of a theoretical response. We do feel good about the potential for something to happen in terms of reform, probably in the context of a pay for in some sort of a reconciliation bill that would be brought sometime this year. In terms of overall sizing of the program, the PLUS programs are about $25 billion annually, with Grad being about $14 billion and the Parent PLUS being the other part of that. The Grad PLUS probably is the most creditworthy of that mix, just given the nature of that lending and probably one that would, I think, probably do well in the context of a private underwritten loan offering. The Parent PLUS is more of a mixed bag. I mean, it's a program that's not underwritten by the government and is more just given out based on the total cost of college. And in our view, there's people that are borrowing under that program that really probably shouldn't be borrowing. It's part of the cause of the overborrowing that's happened in the federal program. So it'll be interesting to see what form the reform shapes up to take. We do believe that there's, on balance, a potential opportunity there and one that we continue to monitor. Okay. So perhaps turning to the net interest margin, you did have some NIM compression due to your funding rates catching up to your asset yields, which drove the majority of the decrease in the NIM in 2024. Can you just talk about the near-term NIM dynamics with the longer-term funding that was put on a much lower rate maturing in the first part of 2025? Like how much compression could we see and when should that pressure abate? Yeah, again, it's at the margins. We put on some longer-term brokered money three and five years ago in a totally different rate environment. The last pieces of that are coming up for maturity in the first half of this year. We also have a dynamic of things, shorter-term deposits that we took on a year ago that are going to reprice at lower rates. So on balance, there's a little bit of pressure there, but we feel good about the guidance that we've given around this and feel that it's eminently manageable. The other thing that impacts our NIM is the liquidity we carry. We tend to build liquidity in advance of our peak seasons. That's something that we're looking at at the margins as well as we go into this year. If there are sort of tweaks at the margins, we can make there to reduce that drag that the liquidity causes for us. Okay. And then perhaps just in terms of the longer-term margin, can you speak to a normalized net interest margin? I think your baseline expectations are the low-to-mid 5% type of range. Beyond rates, is there anything important? Are there any other important assumptions that underpin that 5% type of range? No, that's the primary thing. I mean, keep in mind we have a pricing opportunity every fall peak season that helps us in managing that. At the margins also, the continued use of loan sales sort of naturally helps balance out the book as well. We feel good about that longer-term guidance and think that that's a good way to think about NIM for the company. Perhaps on funding and deposits, can you just talk about your funding outlook and what are you seeing in terms of the competitive dynamics on the deposit side? Yeah, so on the deposit side, we're competing in a marketplace of digital-only rate-based deposit gatherers. We're not the largest of those by a long stretch, and so we tend to be kind of a follower rather than a leader in terms of price movements. We have a team that's monitoring on a weekly basis what's going on. We have the ability to move rates up or down to either attract or shed deposit at different tenors as we need to do our asset liability matching, so I feel pretty good about our capabilities there, and it's been a very useful tool for funding the bank balance sheet. Okay. And perhaps just stepping out a bit and looking at the macro, I mean, with all the commentary and your growth notwithstanding, what's your view on the macro from your seat? And how do you think about the economic outlook, the rate outlook, and how it plays out over the next year or two? Yeah, I think I'm not an economist by training, and I think with all of the headline risk, I'll avoid making any broad assumptions about what's going to happen in the economy. I think in terms of sort of rate outlook, which is probably the most relevant for our business, our baseline assumption is two rate cuts this year. We'll see if that turns out to be true or not. But I think we run a relatively well-matched book. And so if it's a little bit more rate cuts or a little bit higher for longer, we feel like we're well-positioned to weather that. Perhaps on that last point, just in terms of the rate outlook, could you sensitize your expectations if we get more or less cuts than the two that are embedded in the baseline? Yeah, again, I think it's at the margins. We feel comfortable being able to hit our guidance that we've given, even if there is some variability in the overall rate outlook versus what we have in our base plan. Okay. That's helpful. Perhaps turning to expenses, there was outperformance on the expenses in 2024. You came in below the midpoint of your guidance. Can you talk about how you achieved the outperformance in 2024, particularly in light of the fact that additional expenses were associated with the higher originations? Yeah, we've had a really strong focus, even going back before the Investor Forum around beginning to drive operating expense leverage into the business. So we've got teams of people that are looking at finding efficiencies in the operation. We've had a multi-year effort around making tech investments to improve the customer journey, but those improvements to customer journey also do have an efficiency benefit for us as well. And so we've shifted to be much more of a fixed cost base versus variable cost base. And so as we begin to grow, we'll start to see some benefits of those investments that we've made. And we continue to look for opportunities to leverage the tech investments to improve the operation as well. Perhaps on the 2025 expense guidance, you have the $655 million-$675 million. The bottom end of the range is consistent with the Investor Forum target of the 2%-3% growth, while the top end of the range implies 5% growth. Perhaps you can just talk about the factors that would take you to the bottom end of the range versus the top end of the range on expenses. Yeah, again, I think the bottom end of the range is going to be acceleration of some of those benefits in the operation that we've talked about. At the margins, the top end of the range could be additional variable expenses associated with being at the top end of the originations guidance we've given. So again, it's all kind of within the balance of what potentially could happen this year. Perfect, and then perhaps just turning to the long-term efficiency. At the 2023 Investor Forum, you assumed the OpEx was growing at the 2%-3% over a two-year period, and then there was an assumption that you would grow expenses at 60% of revenues in years three through five, so clearly you've shown that disciplined expense growth is a priority. Can you just provide any color in terms of how you plan to execute on the priority over the longer term, and where do you think you can drive operating efficiency of the company over time? Yeah, I think that sort of range of operating efficiency is like a good broad-based long-term target to aim for. We'll have some years where we're better than that, and we'll probably have some years where we're a little worse than that. But I think over the long term, that's the right way to think about it. Again, I think it's going to be leveraging investments in technology and creating more opportunities for self-service for our borrowers, looking at ways that we can level out the peaks and valleys in terms of origination seasonality and credit seasonality by looking at different options for how we staff our call centers. Those are the main things that I think are going to be needle movers in terms of our efficiency. Great. So perhaps turning to credit quality, credit quality improved in both 2023 and 2024, and a driver of some of that improvement were the various programs, including the enhanced loss mitigation program. You've been able to observe the performance over the course of a year now. Can you just speak to the performance and how that supports your confidence in achieving your longer-term target on that trade-off? Sure, sure. So maybe just taking a step back, the highest period of stress in our portfolio is called the first 24 months of being in repayment. So I think undergrads, graduating, getting their first job, and establishing sort of their adult lives in positive payment patterns. And so we really designed our programs to target assistance to borrowers in that kind of first 24-month period. That comes in the form of extended grace on the new in repayment folks, but then also targeted payments for people that need a little bit more help. We're really pleased with the design of the programs. We feel like the early indicators of success in terms of success making payments and persistence of that from 80% plus at making those payments at three months, 70% plus at six months, that's an indicator of a well-designed program. People are able to be successful. We're a year in now, so we've got another year before those folks will ultimately graduate back out. So that's something that we'll continue to monitor. But we feel good about the design of the program thus far, and that gives us confidence in terms of our longer-term guide on target rate range for net charge-offs. And perhaps just on that last point, the target range, so I think you're targeting the high 1% to low 2% range on net charge-off. Just given your changes to underwriting and operational changes, where do you see the most likely path of net charge-offs over the next year? Yeah, I think we'll continue to see incremental improvement. You see that in our guidance for this year in terms of net charge-offs. That's the sort of near-term impact of the program. So I think the underwriting changes will take a little bit longer to come through. Because keep in mind, if we originated to a freshman, it's going to be four years before they're in repayment. So that'll be something that'll, I think, start to come in next year, and we'll start to have that as a little bit of a tailwind going forward. Turning to the reserve rate, your total allowance is down six basis points year over year to 5.83%. As you realize the benefits from your loan modification programs and improvement in credit quality, you also noted that you'd see incremental improvement in the reserve rate over time. Can you just talk about the degree of improvement that we should expect in the allowance over time? Yeah, I think it's going to be modest. It's really hard to guide to a specific number on reserve rate. There's just too many inputs into the CECL modeling. We have the FASB to thank for that. So I wouldn't want to give a specific guide on the rate. I think if you look at the recent trend, I wouldn't see that as being unreasonable to assume going forward. All that caveated with not having a major sort of macroeconomic downturn or something like that. Perhaps switching gears to capital. So at the end of 2023, you evolved the investment thesis to include a principle of strong capital return, and you announced the $650 million share buyback authorization with a rough split of 50/50 in 2024 and 2025. Can you speak to the factors that led to the buyback coming in a little bit less in 2024? And then can you talk about the share buyback dynamics and factors at play that influenced your pace over the next year or so? Yeah. So in terms of the buyback this year, part of that was driven by the run-up in stock price and the way we had designed the 10b5-1 plans. So that was an impact at the margins. I think the other factor was the actual amount of loan growth being at over 5.5%. And the core PSL loans take a higher capital charge than the guaranteed FFELP loans did. And so that's another consumer of capital that sort of gets lost when you look at the total balance sheet growth of 3%. We actually had 5.5% plus growth in the loan book, and that took a little more capital. In terms of the price sensitivity on the buyback, can you just talk about the guardrails? I think you had mentioned that you buy back more stock when the average price is trailing below the trending price line. Do those guardrails still remain in place for 2025? Can you talk about that? Yeah, we will put programs in place as we complete each of the loan sales to programmatically buy back our stock, and we will attempt to design those so that they will buy more when the price is trending lower and buy less when the price is trending higher, but really with a focus of being in the market every day. Okay, helpful. And then perhaps just on capital and liquidity, your liquidity and capital positions are solid with liquidity of 20% of total assets, Common Equity Tier 1 at 11%. Can you just talk about your target capital levels over the medium term? Yeah, I think like any other bank, we run our annual processes around stress testing and scenarios. That then informs dialogue with the board around thresholds and buffers to the regulatory minimums. What I would say is the levels that we have been operating at recently are probably about the right levels to be thinking about. I wouldn't expect any drastic changes up or down in terms of our capital levels. Okay, perfect. Great. So in terms of the buyback, you've bought back 52% of your shares outstanding since the beginning of 2020, which is quite remarkable. And at some point, you have noted that buybacks will hit diminishing returns with the float affected. So maybe a two-part question here. Over what time horizon do you think you hit that point of diminishing returns? And then second, you have talked about exploring alternative uses of capital beyond buybacks. So maybe you can just hit on dividends and acquisitions. Sure. I think the first part of your question is somewhat theoretical because it gets into what's the float of the stock and is there a pressure on liquidity. We haven't seen any indication of that as of yet. So I would put that in the category of we're open to evaluating it, but we haven't seen anything that causes us concern in terms of continuing to execute on buyback. In the context of dividend, we laid out a multi-part framework for capital return that basically said as we begin to grow the balance sheet and generate organic earnings growth, that would feed into a growing dividend. And so we raised our dividend in the fourth quarter after having outsized success in terms of originations, which gives us more balance going into future years. And I think that's the way that we'll approach growing the dividend going forward. Okay, thanks for that, and then maybe just on acquisitions, is there anything that you would be interested on the acquisition side? Yeah, John's been pretty focused on us sticking to our core mission, which is power and confidence in students to, through, and immediately beyond higher education. So we divested some non-core businesses that didn't fit that model. But the acquisitions we have done do fit that model. The other factor that goes into that is really kind of a three-part test. They have to be mission aligned, which is kind of the first point that I raised. They have to be small in size so that they're a manageable acquisition and not going to take us away from our core strategy. And the third piece is they really have to pay for themselves with benefits to the core business and have some interesting optionality that we could leverage in the future. And so the Scholly acquisition and the Nitro acquisition definitely fit that mold. Anything we do in the future would likely fit that same sort of three-part criteria. And then perhaps on those two acquisitions, are there any products that you could potentially deliver to your consumers and maybe bolster those two acquisitions, Nitro and Scholly? Yeah, so the Nitro acquisition was really interesting because we essentially acquired one of the largest aggregators in our space and took that into our four walls. We've continued to grow that, and it's been a huge success in terms of both expanding our reach in digital originations, but also having a pretty dramatic impact on our cost to acquire. The Scholly acquisition similarly gives us a toolkit that we can provide to students in terms of helping them find free money through scholarship search. There are interesting opportunities for us to host scholarships on that and develop some B2B capabilities. Those are the types of things that we would be looking to sort of leverage in that business. Helpful. If there are any questions from the audience, feel free to raise your hand, and we'll send a mic over. In the meantime, maybe just on dividends, and you touched on this already that you increased the dividend, but perhaps longer term, how can we think about the dividend payout ratio over time? Yeah, we've been contemplating what's the right payout ratio. We haven't completely decided on that and therefore haven't given any guidance on that. But it's certainly something that we're being thoughtful about, how to set the right sort of level of translation of organic earnings growth into how much of that we're going to pay out to shareholders. So it's definitely something that's on our mind. And we know that that part of the strategy is important to a growing set of investors in the stock. Great. Is there a question? Yeah, hi, Peter. How do you feel the competitive dynamics changing in private education lending with banks getting out of the space and private credit getting in? Yeah, I think what we've seen both when Wells exited as well as the most recent Discover exit is that the smaller private competitors are very able competitors. They have pretty strong backing in terms of some larger private equity and private credit funds, and so we feel it's a good balanced competitive landscape. Again, we feel good about the share gains we were able to make this year, and we think we got our fair share and maybe a little bit more of the Discover volume that was on offer, but I think on a run rate basis, we've got a pretty balanced and dynamic competitive environment that we operate in. Has there been any noticeable shifts in underwriting and quality standards? On our part, we've actually taken the opportunity to tighten our underwriting standards, and you see that in improvements in combined FICO and co-signer rates for the new originations in the last couple of peak seasons. So I think we've taken the opportunity to continue to make adjustments at the corners of the buy box to improve the overall quality of the book while at the same time still growing. So perhaps some last few questions for me, if there's no other questions from the audience. Just in terms of the overall guidance and EPS, you're calling for the $3-$3.10 in terms of GAAP earnings per share. Broadly speaking, do you see more opportunities for upside versus downside risk? I think it's a pretty balanced outlook. To the extent we trend to the higher end of our originations guidance, that'll put earnings pressure as we have to fund the reserve build for that. So I think when you take that context, I think it's a pretty balanced achievable earnings, but not a layup either. And then perhaps one last one for me. So your strategy of loan growth and operating leverage should provide a basis for stronger recurring EPS and return on capital. So drilling down on both of those pieces, what type of EPS growth range do you expect to generate over the longer term? And what's your degree of confidence in the consistency of that? And then as you think about strong ROE, where do you think returns can go over time? Yeah, so I think the investor framework is probably the best place we could give for you to look to that. But I think our view is, given the originations profile of our business, continued demand for loan sales, we feel like we should be able to generate double-digit EPS growth and maintain the high ROEs that we have while we're continuing to return value to shareholders through a growing dividend as well as ongoing share buyback. Great. So with that, we'll end there. So thanks so much, Peter, for joining us. Really appreciate it. Thanks for having me. Thank you.