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Navient Corporation NAVI has reported first-quarter 2025 adjusted earnings per share (EPS) of 28 cents, surpassing the Zacks Consensus Estimate of 19 cents. It reported earnings of 63 cents in the prior-year quarter.
Results were driven by lower expenses. However, a rise in provision for loan losses and a decrease in net interest income (NII) were headwinds.
Navient’s GAAP net loss was $2 million against a net income of $73 million in the prior-year quarter.
Navient’s NII & Expenses Decline
NII fell 11.7% year over year to $144 million in the first quarter. It topped the Zacks Consensus Estimate by 7.4%.
Total other income decreased 80.1% year over year to $26 million.
Provision for loan losses was $30 million, up from $12 million in the prior-year quarter.
Total expenses decreased 29.9% year over year to $131 million.
NAVI’s Quarterly Performance of Segments
Federal Education Loans: The segment generated a net income of $24 million, which declined 40% year over year.
As of March 31, 2025, the company’s net FFELP loans were $30.2 billion, down 1.9% sequentially.
Consumer Lending: This segment reported a net income of $46 million, which decreased 36.9% from the year-ago quarter.
The private education loan delinquency rate greater than 30 days was 6.4% compared with 5% in the prior-year quarter.
As of March 31, 2025, the company’s private education loans were $15.7 billion, which decreased marginally from the prior quarter. Navient originated $470 million of private education refinance loans in the reported quarter.
Business Processing: The company reported a segmental net income of $2 million compared with $6 million in the year-ago quarter.
Navient’s Liquidity
To meet liquidity needs, NAVI expects to utilize various sources, including cash and investment portfolio, predictable operating cash flows provided by operating activities, the repayment of principal on unencumbered education loan assets, and distributions from securitization trusts. It may also draw down on the secured FFELP Loan and Private Education Loan facilities, issue term asset-backed securities (ABS), enter additional Private Education Loan and ABS repurchase facilities, or issue additional unsecured debt.
Notably, the company had $642 million of total unrestricted cash and liquid investments as of March 31, 2025.
Navient’s Capital Distribution Activities
In the first quarter, the company paid out $16 million in common stock dividends.
In the reported quarter, Navient repurchased shares of common stock for $35 million. As of March 31, 2025, there was $76 million of the remaining share-repurchase authority.