Navient Corporation · NASDAQ:NAVI

Navient — Investor Presentation (July 2022)

41 slides from Navient's investor presentation, Jul 28, 2022

1. Slide 1: 2022 2nd Quarter Investor Deck

   2022 2nd Quarter Investor Deck July 28, 2022

2. 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

3. Slide 3: Navient provides technology-enabled education finance and business processing solutions

   Navient provides technology-enabled education finance and business processing solutions that simplify complex programs and help millions of people achieve success Our customer-focused, data-driven services deliver exceptional results for clients in education, health care and government Originations

4. Slide 4: 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

5. Slide 5: Navient is Focused on Cost Efficiency

   Navient is Focused on Cost Efficiency Industry-leading Efficiency Continuously Rationalizing Our Expense Base  Innovative financing reduces interest expense,  Focused on reducing expenses and improving maximizing cashflow and shareholder value efficiency across our businesses  Continuing to drive

6. Slide 6: Building Value and Driving Meaningful Returns

   Building Value and Driving Meaningful Returns Since 2014 Separation 1 Originated nearly Loan  Our competitive franchise, with its highly attractive return Originations $20 billion Private profile, leverages our core expertise to drive profits and growth Education Loans Loan Portfolios Acquired  Ac

7. Slide 7: Originating Education Loans is an Attractive Opportunity

   Originating Education Loans is an Attractive Opportunity Sizable Market With Attractive Yields 1 Leveraging Our Existing Infrastructure to Generate Value Estimated Total Market Annual Originations 2 and Yields ($’s in billions) • Private Education Refinance Loans: Grad PLUS - Using our data and expe

8. Slide 8: 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

9. Slide 9: Funding, Liquidity, & Cashflow

   Funding, Liquidity, & Cashflow © 2022 Navient Solutions, LLC. All rights reserved. 9

10. Slide 10: 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

11. Slide 11: FFELP ABS Transactions

    FFELP ABS Transactions NAVSL 2021-3 NAVSL 2021-2 Pricing Date: October 14, 2021 April 12, 2021 Settlement Date: October 28, 2021 April 22, 2021 Issuance $978,500,000 $1,011,600,000 Amount: U.S. Government Guaranteed U.S. Government Guaranteed Collateral: FFELP Consolidation and FFELP Non-Consolidati

12. Slide 12: Private Education Loan ABS Transactions

    Private Education Loan ABS Transactions NAVSL 2022-B NAVSL 2022-A Pricing Date: May 17, 2022 February 1, 2022 Settlement Date: May 25, 2022 February 10, 2022 Issuance $714,600,000 $951,900,000 Amount: Collateral: Private Education Refi Loans Private Education Refi Loans Prepayment 20% CPR 20% CPR Sp

13. Slide 13: 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

14. Slide 14: 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

15. Slide 15: FFELP Cash Flows Are Highly Predictable

    FFELP Cash Flows Are Highly Predictable $’s in millions as of 06/30/2022 2022 2023 2024 2025 2026 2027 2028 2029 Projected FFELP Average Balance $47,876 $44,256 $39,723 $35,342 $31,284 $27,381 $23,697 $20,231 Projected Excess Spread $299 $565 $496 $441 $415 $370 $320 $281 Projected Servicing Revenue

16. Slide 16: Secured Cash Flow

    Secured Cash Flow $ in Millions 2Q2022 2021 2020 2019 FFELP Term Securitized Servicing (Cash Paid) $ 92 $ 204 $ 227 $ 253 Net Residual1 (Excess Distributions) $ 258 $ 750 676 743 Other Secured FFELP 2 Net Cash Flow $ 12 $ 105 154 227 Total FFELP $ 362 $ 1,059 $ 1,057 $ 1,223 Private Credit Term Secu

17. Slide 17: Optimized Capital Structure

    Optimized 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 markets - We pursue opportunities to repurchase debt in the open market - We

18. Slide 18: 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

19. Slide 19: FFELP ABS

    FFELP ABS © 2022 Navient Solutions, LLC. All rights reserved. 19

20. Slide 20: FFELP ABS Issuance Characteristics

    FFELP ABS Issuance Characteristics FFELP ABS Transaction Features Collateral Characteristics • Issue size of $500M+ • Guarantee of underlying collateral insulates bondholders from most risk of • Senior and subordinate notes loss of principal 1 • Amortizing tranches with 1 to 10(+) year average lives

21. Slide 21: FFELP Loan Program Characteristics

    FFELP Loan Program Characteristics Parameter Subsidized Stafford Unsubsidized Stafford PLUS/Grad PLUS Consolidation Borrower Student Student Parents or Graduate Students Student or Parents Needs Based Yes No No N/A Federal Guarantee of Principal 97 - 100% 97 - 100% 97 - 100% 97 - 100% and Accrued In

22. Slide 22: Quarterly CPR - Stafford & PLUS Loan Prepayments

    Navient Stafford & PLUS Loan Prepayments • Higher prepayment activity in mid-2012 was related to the short-term availability of the Special Direct Consolidation Loan program • Prepayment increases occurred in 2015 and 2018 as we exercised our option to purchase assets from selected transactions to m

23. Slide 23: Quarterly CPR - Consolidation Loan Prepayments

    Navient Consolidation Loan Prepayments • CPRs for Consolidation ABS trusts declined significantly following legislation effective in 2006 that prevented in-school and re-consolidation of borrowers’ loans • Higher prepayment activity in mid 2012 was related to the short term availability of the Speci

24. Slide 24: Private Education Loan ABS

    Private Education Loan ABS © 2022 Navient Solutions, LLC. All rights reserved. 24

25. Slide 25: Private Education Loan ABS Issuance Characteristics

    Private Education Loan ABS Issuance Characteristics Private Education Loan ABS Transaction Features Collateral Characteristics • Issue size of $500M+ • Collateralized by loans made to students and parents to fund college tuition, room • Senior and subordinate notes and board - Seasoned assets benefi

26. Slide 26: Navient Private Education Loan Programs

    Navient Private Education Loan Programs Smart Option Undergrad/Grad/Med/Law/MBA Direct-to-Consumer (DTC) Origination Channel School School Direct-to-Consumer Typical Borrower Student Student Student Typical Co-signer Parent Parent Parent $10k avg orig bal, 10 yr avg term, in-school $10k avg orig bal

27. Slide 27: Navient Private Education Loan Programs

    Navient Private Education Loan Programs Consolidation (Legacy) Private Education Refi Private Education Origination Origination Channel Lender Lender School College Graduates & Select Non- Typical Borrower College Graduates Student Graduates Typical Co-signer Parent Parent Parent $15k avg orig bal,

28. Slide 28: Navient Private Education Trusts

    Navient Private Education Trusts As of the respective cutoff dates for each transaction 2020-2022YTD Navient Issuance Program NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV NAV 20-A 20-B 20-C 20-D 20-E 20-F 20-G 20-H 20-I 21-A 21-B 21-C 21-D 21-E 21-F 21-G 22-A 22-B Bond Amount

29. Slide 29: Constant Prepayment Rate (CPR)

    Navient Private Education Legacy Loan Trusts – Prepayment Analysis • Constant prepayment rates increased beginning 2014 on increased seasoning-related voluntary prepayment and the emergence of the external student loan refinance market • Prepayment activity declined in 2020 during the COVID-19 crisi

30. Slide 30: Navient Corporation Appendix

    Navient Corporation Appendix © 2022 Navient Solutions, LLC. All rights reserved. 30

31. Slide 31: 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

32. Slide 32: 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

33. Slide 33: 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

34. Slide 34: 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

35. Slide 35: 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

36. Slide 36: Navient Continues to Advance Environmental, Social and Governance Initiatives

    Navient Continues to Advance Environmental, Social and Governance Initiatives Social Initiatives Environmental Initiatives Community partnerships • Ongoing efforts to reduce already low carbon footprint • National partnership with Boys & Girls Clubs of America to • Enterprise-wide emphasis on electr

37. Slide 37: 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

38. Slide 38: 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

39. Slide 39: 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

40. Slide 40: Investor Relations Website

    Investor Relations Website www.navient.com/investors www.navient.com/abs • NAVI / SLM student loan trust data (Debt/asset backed securities – NAVI / SLM Student Loan Trusts) - Static pool information – detailed portfolio stratifications by trust as of the cutoff date - Accrued interest factors - Qua

41. Slide 41: Navient

    NAVIENT.

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