Navient Corporation · NASDAQ:NAVI
Navient — Q2 2022 Earnings Presentation
19 slides from Navient's earnings presentation, Jul 27, 2022
Slide 1: 2022 2nd Quarter Earnings Call Presentation
nd 2022 2 Quarter Earnings Call Presentation July 27, 2022
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of June 30, 2022 (unless otherwise noted) and should be read in connection with Navient Corporation’s “Navient” Annual Report on Form 10-K for the year end December 31, 2021 (the “2021 Form 10-K”), filed
Slide 3: Delivering Long-term Value
Delivering Long-term Value Federal Education Loans Consumer Lending Business Processing Successfully assisted Originated $420 million of Navient employees continue borrowers in returning to high-quality Private Education to support our state and repayment Loans, targeting mid-teens municipal c
Slide 4: Operating Results "Core Earnings" Basis
Operating Results “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights (In millions, except per share amounts) Q2 22 Q1 22 Q2 21 • Adjusted Core Earnings 1 per share of $0.92 - Core Return on Equity 1 of 20% GAAP diluted EPS $1.22 $1.67 $1.05 • Increased FFELP
Slide 5: Federal Education Loans Segment "Core Earnings" Basis
Federal Education Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Federal Education Segment net interest margin 1.11% 1.04% 0.97% Q2 22 Net Interest Margin: 111 bps Q2 22 Annualized Charge-off Rate: 9 bps FFE
Slide 6: Consumer Lending Segment "Core Earnings" Basis
Consumer Lending Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Consumer Lending Segment net interest margin 2.66% 2.80% 2.95% Q2 22 Net Interest Margin: 266 bps Q2 22 Annualized Charge-off Rate : 140 bps Private
Slide 7: Business Processing Segment "Core Earnings" Basis
Business Processing Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter 2022 Highlights ($ In millions) Q2 22 Q1 22 Q2 21 Business Processing Government Services $53 $49 $66 Q2 22 EBITDA Margin 1: 16% Healthcare RCM Services $34 $45 $64 • Revenue of $87 million, as pa
Slide 8: Q2 2022 Financing and Capital Management
Q2 2022 Financing and Capital Management Capital Management Financing ✓ Returned $128 million through share repurchases and dividends Issued $715 million of Term Education Loan • Paid dividends of $23 million ABS transactions • Repurchased 6.9 million shares for $105 million No unsecured debt ma
Slide 9: GAAP Results
GAAP Results (In millions, except per share Q2 22 Q1 22 Q2 21 amounts) Net income (loss) $180 $255 $185 Diluted earnings (loss) per common $1.22 $1.67 $1.05 share Operating expenses $190 $205 $252 Provision for loan losses $18 $16 ($1) Average Education Loans $71,390 $73,415 $77,379 © 2022 Navient S
Slide 10: 2022 Guidance
2022 Guidance Increased Full Year 2022 EPS Guidance: $3.35 - $3.45 1 Original Full Year 2022 Guidance 2 Year to Date 2022 Actuals Core Earnings Return on Equity 1 Mid to High Teens ✓ 20% Core Earnings Efficiency Ratio 1 ~54% ✓ 50% Adjusted Tangible Equity Ratio 1 ~6% ✓ 7.5% Net Interest Margin – Fed
Slide 11: Appendix
Appendix © 2022 Navient Solutions, LLC. All rights reserved. 11
Slide 12: Education Loan Portfolio Generates Significant Cash Flows
Education Loan Portfolio Generates Significant Cash Flows Projected Life of Loan Cash Flows over ~20 Years Enhancing Cash Flows $’s in Billions • Generated $1.1 billion of cash flows in YTD 2022 FFELP Cash Flows 06/30/2022 Secured • Returned $0.3 billion to shareholders through share Residual (inclu
Slide 13: Education loan portfolio generates meaningful cash flows over the next five years
Education loan portfolio generates meaningful cash flows over the next five years Projected Annual Private Education Loan Cash Flows Projected Annual FFELP Loan Cash Flows $1.2 $1.2 $1.0 $1.0 $0.9 $1.0 $1.0 $0.8 $0.8 $0.8 ($’s in Billions) ($’s in Billions) $0.8 $0.8 $0.8 $0.7 $0.6 $0.5 $0.6 $0.5 $0
Slide 14: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities (par value, $ in billions) $1.7 $1.5 $1.3 $1.4 $1.4 $1.1 $1.1 $1.0 $0.7 $0.7 $0.6 $0.6 $0.5 $0.5 $0.5 $0.5 $0.2 $0.0 $0.0 $0.0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031+ As of June 30, 2022 As of June 30, 2021 Long-term Conservative Funding Approach • Navie
Slide 15: Other Segment "Core Earnings" Basis
Other Segment “Core Earnings” Basis YTD 2022 Unallocated Shared Services Expense Shared Services Overview $122 million Regulatory 2% Related Costs • Shared services are related to the management of the CEO, Corporate Marketing & Other entire company or shared by multiple reporting segments HR & Corp
Slide 16: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures (Dollars in Millions) In addition to financial results reported on a GAAP basis, Navient also provides certain performance measures which are non-GAAP financial measures. The following non-GAAP financial measures are presented within this Presentation: 1. Core Ea
Slide 17: Notes on Non-GAAP Financial Measures
Notes on Non-GAAP Financial Measures (Dollars in Millions) 4. Earnings before Interest, Taxes, Depreciation and Amortization Expense (“EBITDA”) – This metric measures the operating performance of the Business Processing segment and is used by management and our equity investors to monitor operating
Slide 18: Differences Between Core Earnings and GAAP
Differences Between Core Earnings and GAAP Quarters Ended Core Earnings adjustments to GAAP: June 30, Mar. 31, June 30, (Dollars in Millions) 2022 2022 2021 GAAP net income (loss) $180 $255 $185 Net impact of derivative accounting (72) (159) (30) Net impact of goodwill and acquired intangible assets
Slide 19: Navient
NAVIENT.