Navient Corporation · NASDAQ:NAVI
Navient — Q2 2021 Earnings Presentation
19 slides from Navient's earnings presentation, Jul 28, 2021
Slide 1: 2021 2nd Quarter Earnings Call Presentation
2021 2nd Quarter Earnings Call Presentation July 28, 2021
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, 2021 (unless otherwise noted) and should be read in connection with Navient Corporation’s “Navient” Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), file
Slide 3: Delivering Long-term Value
Delivering Long-term Value Federal Education Loans Consumer Lending Business Processing Segment Segment Segment Providing payment relief to Originated $1.3 billion of high- Over 3,600 Navient employees borrowers impacted by quality Private Education support our state and municipal COVID-19 Loa
Slide 4: Outlook
Outlook Increased 2021 EPS Guidance: $4.20 - $4.30 1 Key Company & Business Segment Metrics 2021 Year to Date 2021 Original 2 Targets Actuals Core Earnings Return on Equity 1 Low Twenties ✓ 39% Core Earnings Efficiency Ratio 1 ~52% ✓ 47% 6.3% Adjusted Tangible Equity Ratio 3 ~5.5% ✓ (Pro forma Adjus
Slide 5: Operating Results: Core Earnings Basis
Operating Results “Core Earnings ” Basis 1 Selected Financial Information and Ratios 2nd Quarter Highlights (In millions, except per Q2 21 Q1 21 Q2 20 • Adjusted Core Earnings 1 per share increased 8% to $0.98 share amounts) compared to $0.91 in the year ago quarter GAAP diluted EPS $1.05 $2.00 $0.6
Slide 6: Federal Education Loans Segment
Federal Education Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter Highlights ($ In millions) Q2 21 Q1 21 Q2 20 Federal Education Segment net interest margin 0.97% 0.97% 1.07% • Q2 21 Net Interest Margin: 97 basis points • Q2 21 Annualized Charge-off Rate: 4
Slide 7: Consumer Lending Segment
Consumer Lending Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter Highlights ($ In millions) Q2 21 Q1 21 Q2 20 Consumer Lending • Q2 21 Net Interest Margin: 295 basis points Segment net interest margin 2.95% 2.99% 3.20% • Q2 21 Annualized Charge-off Rate: 71 basis
Slide 8: Business Processing Segment
Business Processing Segment “Core Earnings” Basis Selected Financial Information and Ratios 2nd Quarter Highlights ($ In millions) Q2 21 Q1 21 Q2 20 Business Processing Government Services $66 $63 $43 • Q2 21 EBITDA Margin 1: 30% Healthcare RCM Services $64 $62 $21 • Revenue increased $66 million or
Slide 9: Q2 2021 Financing and Capital Management
Q2 2021 Financing and Capital Management Capital Management Financing ✓ Returned $227 million through share Issued $2.1 billion of Term Education Loan repurchases and dividends ABS transactions • Paid dividends of $27 million • On July 19, priced $1.0 billion of • Repurchased 11.8 million shares f
Slide 10: GAAP Results
GAAP Results (In millions, except per share Q2 21 Q1 20 Q2 20 amounts) Net income (loss) $185 $370 $125 Diluted earnings (loss) per common $1.05 $2.00 $0.64 share Operating expenses $252 $259 $213 Provision for loan losses $(1) $(87) $44 Average Education Loans $77,379 $80,221 $85,149 © 2021 Navient
Slide 11: Appendix
Appendix © 2021 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 $1.4 billion of cash flows in YTD 2021 FFELP Cash Flows 06/30/21 Secured • Paid down unsecured debt of $0.8 billion in YTD 2021 Residual (includ
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 Cash Flows assuming call option can be exercised at 10% Cash Flows assuming trusts run to maturity $1.2 $1.2 $1.1 $1.0 $1.0 $1.0
Slide 14: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities (par value, $ in billions) As of July 12th, called $750 million of unsecured debt that would have matured in January of 2022, reducing 2022 maturities to under $1 billion $1.8 $1.7 $1.5 $1.5 $1.4 $1.4 $1.1 $1.1 $0.7 $0.7 $0.6 $0.6 $0.6 $0.5 $0.5 $0.5 $0.2 $0.2 $0.0
Slide 15: Other Segment
Other Segment “Core Earnings” Basis YTD 2021 Unallocated Shared Services Expenses Shared Services Overview $131 million CEO, Corporate Marketing & Other • Shared services are related to the management of the entire company or shared by multiple reporting segments HR & Corporate Facilities 3% 9% Info
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: Jun. 30, Mar. 31, Jun. 30, (Dollars in Millions) 2021 2021 2020 GAAP net income (loss) $185 $370 $125 Net impact of derivative accounting (30) (91) 59 Net impact of goodwill and acquired intangible assets 5
Slide 19: Navient
NAVIENT.