Navient Corporation · NASDAQ:NAVI
Navient — Q1 2022 Earnings Presentation
19 slides from Navient's earnings presentation, Apr 27, 2022
Slide 1: 2022 1st Quarter Earnings Call Presentation
st 2022 1 Quarter Earnings Call Presentation April 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 March 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”), filed
Slide 3: Delivering Long-term Value
Delivering Long-term Value Federal Education Loans Consumer Lending Business Processing Successfully assisted Originated $966 million of Navient employees continue borrowers in returning to high-quality Private Education to support our state and repayment Loans, meeting our mid-teens municipal
Slide 4: Operating Results: Core Earnings Basis
Operating Results “Core Earnings ” Basis 1 Selected Financial Information and Ratios 1st Quarter 2022 Highlights (In millions, except per share Q1 22 Q4 21 Q1 21 • Adjusted Core Earnings 1 per share of $0.90 amounts) - Core Return on Equity 1 of 21% GAAP diluted EPS $1.67 ($0.07) $2.00 • Originated
Slide 5: Federal Education Loans Segment
Federal Education Loans Segment “Core Earnings” Basis Selected Financial Information and Ratios 1st Quarter 2022 Highlights ($ In millions) Q1 22 Q4 21 Q1 21 Federal Education Segment net interest margin 1.04 0.99% 0.97% Q1 22 Net Interest Margin: 104 basis points Q1 22 Annualized Charge-off Rate: 7
Slide 6: Consumer Lending Segment
Consumer Lending Segment “Core Earnings” Basis Selected Financial Information and Ratios 1st Quarter 2022 Highlights ($ In millions) Q1 22 Q4 21 Q1 21 Consumer Lending Segment net interest margin 2.80% 2.76% 2.99% Q1 22 Net Interest Margin: 280 basis points Q1 22 Annualized Charge-off Rate : 138 bas
Slide 7: Business Processing Segment
Business Processing Segment “Core Earnings” Basis Selected Financial Information and Ratios 1st Quarter 2022 Highlights ($ In millions) Q1 22 Q4 21 Q1 21 Business Processing Government Services $49 $54 $63 Q1 22 EBITDA Margin 1: 20% Healthcare RCM Services $45 $57 $62 • Revenue of $94 million, as pa
Slide 8: Q1 2022 Financing and Capital Management
Q1 2022 Financing and Capital Management Capital Management Financing ✓ Returned $139 million through share Issued $952 million of Term Education Loan repurchases and dividends ABS transactions • Paid dividends of $24 million • Repurchased 6 million shares for $115 No unsecured debt maturities u
Slide 9: GAAP Results
GAAP Results (In millions, except per share Q1 22 Q4 21 Q1 21 amounts) Net income (loss) $255 $(11) $370 Diluted earnings (loss) per common $1.67 $(0.07) $2.00 share Operating expenses $205 $448 $259 Provision for loan losses $16 $5 ($87) Average Education Loans $73,415 $75,066 $80,221 © 2022 Navien
Slide 10: 2022 Guidance
2022 Guidance Increased Full Year 2022 EPS Guidance: $3.20 - $3.30 1 Full Year 2022 Guidance Q1 2022 Actuals Core Earnings Return on Equity 1 Mid to High Teens ✓ 21% Core Earnings Efficiency Ratio 1 ~54% ✓ 51% Adjusted Tangible Equity Ratio 1 ~6% ✓ 7.0% Net Interest Margin – Federal Education Loan S
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 $0.5 billion of cash flows in Q1 2022 FFELP Cash Flows 03/31/22 Secured • Returned $0.1 billion to shareholders through share Residual (includin
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 $1.1 $1.0 $0.9 $1.0 $1.0 $0.9 $0.8 $0.8 $0.8 $0.8 $0.8 ($’s in Billions) ($’s in Billions) $0.8 $0.8 $0.7 $0.6 $0.6 $0
Slide 14: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities (par value, $ in billions) $1.5 $1.3 $1.4 $1.4 $1.1 $1.1 $1.0 $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 March 31, 2022 As of March 31, 2021 Long-term Conservative Funding Approach • Nav
Slide 15: Other Segment
Other Segment “Core Earnings” Basis Q1 2022 Unallocated Shared Services Expense 1 Shared Services Overview $66 million Regulatory 1% Related Costs CEO, Corporate Marketing & Other • Shared services are related to the management of the entire 5% company or shared by multiple reporting segments HR & C
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: Mar. 31, Dec. 31, Mar. 31, (Dollars in Millions) 2022 2021 2021 GAAP net income (loss) $255 ($11) $370 Net impact of derivative accounting (159) (85) (91) Net impact of goodwill and acquired intangible asset
Slide 19: Navient
NAVIENT.