Navient Corporation · NASDAQ:NAVI
Navient — Q1 2017 Earnings Presentation
15 slides from Navient's earnings presentation, Apr 19, 2017
Slide 1: 2017 1st Quarter Earnings Call Presentation
2017 1st Quarter Earnings Call Presentation April 19, 2017
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of March 31, 2017 (unless otherwise noted) and should be read in connection with Navi ent Corporation’s (Navient) Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 Form 10-K”), fi
Slide 3: Operating Results: Core Earnings Basis
Operating Results “Core Earnings” Basis Selected Financial Information 1st Quarter Highlights (In millions, except per share Q1 17 Q4 16 Q1 16 • Significant education portfolio acquisitions amounts) Adjusted Core EPS before $0.37 $0.47 $0.44 regulatory-related costs and • Continued growth in our fee
Slide 4: FFELP Loans Segment: Core Earnings Basis
FFELP Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios Q1 2017 Performance ($ In millions) Q1 17 Q4 16 Q1 16 • Acquired $686 million of FFELP loans Net income $51 $68 $66 • Charge-offs declined 19% from the prior year to $13 million Average FFELP Loans $86,752 $88,914 $9
Slide 5: Private Education Loans Segment: Core Earnings Basis
Private Education Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios Q1 2017 Performance ($ In millions) Q1 17 Q4 16 1Q 16 • Acquired $112 million of Private Education loans Net income $35 $41 $61 Average Private Education $23,500 $24,237 $26,577 • Charge-offs declined 5%
Slide 6: Business Services Segment: Core Earnings Basis
Business Services Segment “Core Earnings” Basis Selected Financial Information and Ratios Q1 2017 Performance (In Millions) Q1 17 Q4 16 Q1 16 • Multiple contract wins across business processing solutions Net income $77 $71 $75 Number of accounts serviced for 6.1 6.2 6.3 Department of Education • Exc
Slide 7: 1st Quarter 2017 Capital Markets Summary
1st Quarter 2017 Capital Markets Summary • Acquired $798 million of education loans • Issued two FFELP ABS transactions totaling $1.9 billion - FFELP ABS spreads continue to improve - On April 10, 2017 priced an additional $1.0 billion FFELP ABS transaction • Issued $843 million of long-term unsecur
Slide 8: GAAP Results
GAAP Results (In millions, except per share amounts) 1Q 17 Q4 16 1Q 16 Net income $88 $145 $181 EPS $0.30 $0.48 $0.53 Operating expenses $238 $246 $247 Provision $107 $102 $111 Average Student Loans $110,252 $113,151 $122,298 Confidential and proprietary information © 2017 Navient Solutions, LLC. Al
Slide 9: NAVIENT.
NAVIENT.
Slide 10: Appendix
Appendix Confidential and proprietary information © 2017 Navient Solutions, LLC. All rights reserved. 10
Slide 11: LIBOR Basis Risk Management
LIBOR Basis Risk Management Exposure to Funding Mix1 • From 2010 to 2015, the average spread between 1ML and Average spread between 1ML and 3ML 3ML was 11 basis points. 40 - In Q1 17, the average spread was 22 basis points. 35 30 Basis points • Navient uses floor contracts and other derivatives to c
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 • Generated $0.7 billion of cash flows in 1Q 2017 $’s in Billions FFELP Cash Flows 03/31/17 • Issued $0.8 billion of unsecured debt and paid down $0.6 Secured billion in 1Q
Slide 13: Private Education Loans Segment Troubled Debt Restructurings (TDR)
Private Education Loans Segment Troubled Debt Restructurings (TDR) Delinquency & Forbearance Usage Allowance for Loan Loss TDR Loans ($ in millions) 1Q 17 4Q 16 1Q 16 March 31, 2017 Ending Allow ance as Total delinquencies $1,240 $1,365 $1,164 ($ in millions) Allow ance Balance % of Ending Balance T
Slide 14: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities (par value, $ in billions) $2.6 $2.5 $2.4 $2.1 $2.1 $1.7 $1.5 $1.5 $1.7 $1.6 $1.5 $1.4 $1.4 $1.4 $1.0 $0.6 $0.8 $0.5 $0.1 $0.1 $0.0 $0.0 $0.0 $0.0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028+ As of March 31, 2016 As of March 31, 2017 Long Term Conse
Slide 15: Differences between Core Earnings and GAAP
Differences between “Core Earnings” and GAAP Quarters Ended Mar. 31, Dec. 31, Mar. 31, “Core Earnings” adjustments to GAAP: 2017 2016 2016 “Core Earnings” net income $107 $129 $147 Net impact of derivative accounting (23) 50 54 Net impact of goodwill and acquired intangible assets (6) (13) (4) Net i