Navient Corporation · NASDAQ:NAVI
Navient — Q4 2022 Earnings Presentation
19 slides from Navient's earnings presentation, Jan 25, 2023
Slide 1: Navient 2022 4th Quarter
NAVIENT 2022 4th Quarter
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of December 31, 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”), fi
Slide 3: Consumer Lending, Business Processing, Federal Education Loans highlights
Consumer Lending Business Processing Federal Education Loans Total revenue of Originated Generated $138 million $169 million $70 million in reflects our continued of high-quality Private revenue success in managing Education Loans interest rate risk Revenue from In-School originations trad
Slide 4: Operating Results
Operating Results Selected Financial Information and Ratios 4th Quarter & Full Year 2022 Highlights Q4 22 Q4 21 2022 2021 (In millions, except per share amounts) • Adjusted Core EPS1, 2 of $0.85 in Q4 22 and $3.43 in FY22 GAAP Diluted EPS $0.78 ($0.07) $4.49 $4.18 - Core Earnings Return on Equity 15
Slide 5: Federal Education Loans Segment
Federal Education Loans Segment Selected Financial Information and Ratios 4th Quarter & Full Year 2022 Highlights Q4 22 Q4 21 2022 2021 Federal Education Loans ($ In millions) Q4 22 Net Interest Margin: 94 bps Segment net interest margin 0.94% 0.99% 1.01% 0.99% Q4 22 Annualized Net Charge-off Rate:
Slide 6: Consumer Lending Segment
Consumer Lending Segment Selected Financial Information and Ratios 4th Quarter & Full Year 2022 Highlights Q4 22 Q4 21 2022 2021 Consumer Lending ($ In millions) Q4 22 Net Interest Margin: 287 bps Segment net interest margin 2.87% 2.76% 2.81% 2.92% Q4 22 Annualized Net Charge-off Rate : 156 bps Cons
Slide 7: Business Processing Segment
Business Processing Segment Selected Financial Information and Ratios 4th Quarter & Full Year 2022 Highlights ($ In millions) Q4 22 Q4 21 2022 2021 Business Processing Government Services $39 $54 $187 $258 Revenue Q4 22 EBITDA Margin 1: 11% Healthcare RCM Services FY 22 EBITDA Margin 1: 16% $31 $57
Slide 8: Financing and Capital Management
Financing and Capital Management Full Year 2022 Results Capital Management Returned $491 million through share repurchases & dividends ✓ Paid dividends of $91 million ✓ Repurchased 24.8 million shares at an average price of $16.13 ✓ $600 million common share repurchase Board authority remains outsta
Slide 9: GAAP Results
GAAP Results (In millions, except per share amounts) Q4 22 Q4 21 2022 2021 Net income (loss) $105 $(11) $645 $717 Diluted earnings (loss) per $0.78 $(0.07) $4.49 $4.18 common share Operating expenses $187 $448 $776 $1,207 Provision for loan losses $17 $5 $79 ($61) Average Education Loans $65,370 $75
Slide 10: 2023 Outlook
2023 Outlook 2023 Full Year Adjusted Core EPS Guidance: $3.15 - $3.30 1 Full Year 2023 Guidance Core Earnings Return on Equity 1 Mid-Teens Core Earnings Efficiency Ratio 1 55% – 58% Adjusted Tangible Equity Ratio 1 8% – 9% Net Interest Margin – Federal Education Loans 1.00% – 1.10% Segment Net Charg
Slide 11: Appendix
Appendix Confidential and proprietary information © 2023 Navient Solutions, LLC. All rights reserved. 11
Slide 12: Education Loan Portfolio Generates Significant Cash Flows
Education Loan Portfolio Generates Significant Cash Flows Projected Projected Life Life of of Loan Loan Cash Cash Flows Flows over over ~20 ~20 Years Years Enhancing Cash Flows $’s in Billions • Generated $1.9 billion of cash flows in FY22 FFELP Cash Flows 12/31/2022 Secured • Returned $0.5 billion
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 $0.9 $1.0 $0.9 $0.9 $0.8 $0.8 $0.8 $0.8 ($’s in Billions) ($’s in Billions) $0.8 $0.8 $0.7 $0.7 $0.6 $0.6 $0.6 $0
Slide 14: Navient Conservatively Manages its Capital Structure
Navient Conservatively Manages its Capital Structure Long-Term Conservative Funding Approach Managing Unsecured Debt Maturities • Important to maintain our credit ratings which (par value, $ in billions) support ongoing access to the unsecured debt market • We pursue opportunities to repurchase debt
Slide 15: Other Segment
Other Segment Core Earnings Basis Full Year 2022 Unallocated Shared Services Expense Shared Services Overview $242 million Shared services are related to the Regulatory 3% management of the entire company or shared CEO, Corporate Related Costs Marketing & by multiple reporting segments Other 5% - Ce
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. Core Earnings Efficiency Ratio – The Core Earnings Efficiency Ratio measures the company’s Adjusted Core Earnings expenses, which exclude restructuring and regulatory-related expenses, relative to its Adjusted Core Earnings revenue. This
Slide 18: Differences Between Core Earnings and GAAP
Differences Between Core Earnings and GAAP Quarters Ended Years Ended Core Earnings adjustments to GAAP: Dec. 31, Dec. 31, 2022 2021 (Dollars in Millions) 2022 2021 GAAP net income (loss) $105 ($11) $645 $717 Net impact of derivative accounting (1) (85) (266) (235) Net impact of goodwill and acquire
Slide 19: Navient
NAVIENT.