Navient Corporation · NASDAQ:NAVI
Navient — Q3 2022 Earnings Presentation
19 slides from Navient's earnings presentation, Oct 26, 2022
Slide 1: 2022 3rd Quarter Earnings Call Presentation
NAVIENT 2022 3rd Quarter Earnings Call Presentation October 26, 2022
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of September 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”), f
Slide 3: Navient Delivers Diversified, Long-term Value
Consumer Lending Business Processing Federal Education Loans Total revenue of Originated Technology enabled $148 million $447 million platform & reflects our continued of high-quality Private differentiated success in managing Education Loans expertise enhances interest rate risk the client
Slide 4: Operating Results
Operating Results Core Earnings Basis Selected Financial Information and Ratios 3rd Quarter 2022 Highlights Q3 22 Q2 22 Q3 21 • Adjusted Core Earnings1 per share of $0.75 (In millions, except per share amounts) - Core Earnings Return on Equity 1 of 15% - Inclusive of a 5-cent reduction in EPS as a G
Slide 5: Federal Education Loans Segment
Federal Education Loans Segment Core Earnings Basis Selected Financial Information and Ratios 3rd Quarter 2022 Highlights Q3 22 Q2 22 Q3 21 Federal Education ($ In millions) Q3 22 Net Interest Margin: 94 bps Segment net interest margin 0.94% 1.11% 1.04% Q3 22 Annualized Net Charge-off Rate: 12 bps F
Slide 6: Consumer Lending Segment
Consumer Lending Segment Core Earnings Basis Selected Financial Information and Ratios 3rd Quarter 2022 Highlights Q3 22 Q2 22 Q3 21 Consumer Lending ($ In millions) Q3 22 Net Interest Margin: 290 bps Segment net interest margin 2.90% 2.66% 2.98% Q3 22 Annualized Net Charge-off Rate : 201 bps Privat
Slide 7: Business Processing Segment
Business Processing Segment Core Earnings Basis Selected Financial Information and Ratios 3rd Quarter 2022 Highlights ($ In millions) Q3 22 Q2 22 Q3 21 Business Processing Government Services $47 $53 $75 Q3 22 EBITDA Margin 1: 16% Healthcare RCM Services $32 $34 $47 • Total revenue of $79 million ev
Slide 8: Financing and Capital Management
Financing and Capital Management Third Quarter Results & Upcoming Items Capital Management Returned $ 117 million through share repurchases and dividends ✓ Paid dividends of $22 million ✓ Repurchased 6.3 million shares for $95 million ✓ $685 million common share repurchase Board authority remains ou
Slide 9: GAAP Results
GAAP Results (In millions, except per share amounts) Q3 22 Q2 22 Q3 21 Net income $105 $180 $173 Diluted earnings per common share $0.75 $1.22 $1.04 Operating expenses $194 $190 $248 Provision for loan losses $28 $18 $22 Average Education Loans $68,751 $71,390 $76,373 © 2022 Navient Solutions, LLC.
Slide 10: 2022 Guidance
2022 Guidance 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 ✓ 18% Core Earnings Efficiency Ratio 1 ~54% ✓ 51% Adjusted Tangible Equity Ratio 1 ~6% ✓ 7.8% Net Interest Margin – Federal Educa
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 $1.5 billion of cash flows in YTD 2022 FFELP Cash Flows 09/30/2022 Secured • Returned $0.4 billion to shareholders through share Residual (inclu
Slide 13: Education Loan Portfolio Five Year Cash Flow
Education Loan Portfolio Five Year Cash Flow 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 $0.8 ($’s in Billions) ($’s in Billions) $0.8 $0.8 $0.7 $0.7 $0.6 $0.6 $0.4 $0.4 $0.3 $0.2 $0.2 $0.2 $0.0 $0.0 2022 2023
Slide 14: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities $1.5 $1.3 $1.4 $1.4 $1.1 $1.1 $0.9 $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+ (par value, $ in billions) As of September 30, 2022 As of September 30, 2021 Long-term Conservative Funding Approa
Slide 15: Other Segment
Other Segment Core Earnings Basis YTD 2022 Unallocated Shared Services Expense Shared Services Overview $180 million Shared services are related to the management of the entire company or shared Regulatory 3% by multiple reporting segments CEO, Corporate Related Costs Marketing & Other - Centralizat
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 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 performance and determ
Slide 18: Differences Between Core Earnings and GAAP
Differences Between Core Earnings and GAAP Quarters Ended Core Earnings adjustments to GAAP: Sept. 30, June 30, Sept. 30, (Dollars in Millions) 2022 2022 2021 GAAP net income (loss) $105 $180 $173 Net impact of derivative accounting (33) (72) (30) Net impact of goodwill and acquired intangible asset
Slide 19: NAVIENT
NAVIENT