3Q 2023 Earnings Call Presentation Confidential and proprietary information © 2023 Navient Solutions, LLC. All rights reserved. 1 Delivering Value to Shareholders | --- | --- | |----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | Maximize the cash flows from our loan portfolios | • Manage credit and interest rate risk and help borrowers man ...

Confidential and proprietary information © 2023 Navient Solutions, LLC. All rights reserved. 1 2 Federal Education Loans Business Processing Solutions Federally guaranteed loans • Seasoned Private Education Loan Portfolio Strategic Imperatives Continuously simplify the business and increase efficiency Enhance the value of our growth businesses • Continuously strengthening our control environment Federal Education Loans – Overview • FFELP portfolio of $41 billion 5-Year Projected Annual FFELP Cash Flows 1 - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36228 Navient Corporation (Exact name of registrant as specified in its charter) Delaware 46-4054283 (State or other jurisdictio ...

Financial Data and Key Metrics Changes - The company reported core earnings per share of $1.73 year-to-date through Q2 2023, with updated full-year guidance of $3.15 to $3.30 per share, including $22 million in regulatory and restructuring expenses [42][67] - The net interest margin (NIM) for the Federal Education Loan segment was 97 basis points, down from 111 basis points a year ago, primarily due to a lower balance of loans eligible to earn income [61] - The overall efficiency ratio was maintained at 56%, consistent with full-year guidance of 55% to 58% [48][67] Business Line Data and Key Metrics Changes - In the Consumer Lending segment, net interest income for the quarter was $143 million, with a NIM of 297 basis points, an improvement of 31 basis points compared to the prior year [44] - The company originated $197 million in private education loans during the quarter, consisting of $142 million in refinancing and $55 million in new in-school loans [62] - Revenue from the Business Processing Solutions (BPS) segment increased to $83 million, with an EBITDA margin rising to 10% from 7% [46] Market Data and Key Metrics Changes - The company anticipates that the resumption of federal student loan payments will not significantly impact the current rate environment, as the addressable market for refinancing loans is expected to remain low [62][67] - The percentage of borrowers in repayment for the consumer lending portfolio is over 95%, reflecting a recovery from pandemic-related relief programs [36] Company Strategy and Development Direction - The company's strategy focuses on maximizing cash flows from loan portfolios, enhancing growth business value, maintaining a strong balance sheet, and simplifying operations for increased efficiency [6][24] - The management is conducting a comprehensive review of the business to identify opportunities for delivering greater shareholder value, emphasizing a flexible approach to capital allocation [29][106] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impact of external economic factors on borrowers, particularly with over $1.5 trillion in education loan balances held by the U.S. government that will require repayments [64] - The company remains optimistic about its ability to manage interest rate risks and funding elements effectively, despite the current economic challenges [33][102] Other Important Information - The company has a strong capital allocation framework, maintaining an adjusted tangible equity ratio of 8.4%, up from 7.5% a year ago [65] - The company plans to return $100 million to shareholders through dividends and share repurchases, having reduced its share count by 4% [47][65] Q&A Session Summary Question: Can you talk about cash flows and commitment to capital returns? - Management emphasized the importance of cash flows and indicated a commitment to returning capital to shareholders [50][52] Question: What is the outlook for refinancing volumes as student loan repayments resume? - Management does not expect a significant increase in refinancing volumes due to the current rate environment and the resumption of payments [73][97] Question: How does the company view the competitive landscape for in-school originations? - Management feels confident about the products offered through the Earnest subsidiary and is focused on disciplined margins and returns [71][72] Question: What percentage of the FFELP book is enrolled in IDR plans? - Approximately 35% of borrowers and 45% of balances in the FFELP portfolio are currently enrolled in IDR plans [128] Question: What is the focus of the strategic review being undertaken? - The review aims to optimize the cost structure while also exploring growth opportunities across different business segments [130][106]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36228 Navient Corporation (Exact name of registrant as specified in its charter) Delaware 46-4054283 (State or other jurisdicti ...

Shared services are related to the management of the entire company or shared by multiple reporting segments Notes on Non-GAAP Financial Measures (Dollars in Millions) Confidential and proprietary information © 2023 Navient Solutions, LLC. All rights reserved. 16 5. 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 perform ...

Financial Data and Key Metrics Changes - The company reported an adjusted core EPS of $1.06 for the first quarter, with a return on equity (ROE) of 19% and an efficiency ratio of 53% [3][32] - The adjusted tangible equity ratio increased to 8.5% from 7% a year ago, and the company returned $106 million to shareholders through dividends and share repurchases [4][32] - GAAP net income for the first quarter was $111 million or $0.86 per share, compared to $255 million or $1.67 per share from the previous year [38] Business Line Data and Key Metrics Changes - In the Federal Education Loans segment, the net interest margin (NIM) was 112 basis points, up from 104 basis points a year ago, with a full-year NIM expectation of 100 to 110 basis points [33][24] - The Consumer Lending segment achieved a net interest income of $153 million with a NIM of 312 basis points, an improvement of 32 basis points compared to the prior year [125] - Revenue from traditional business processing services increased by 26% year-over-year, with a forecast of 10% revenue growth and high teens EBITDA margin for the full year [30][37] Market Data and Key Metrics Changes - The company noted a decrease in self-delinquency rates to 14.4% from 15.6% and forbearance rates decreased to 16.9% from 18.1% [24] - The origination of private education loans totaled $168 million, with $33 million from new in-school volume and $135 million from refinanced loans, reflecting a decline in refinancing due to a higher rate environment [36][125] - The company anticipates a net charge-off rate between 10 basis points and 20 basis points for the full year 2023 [24] Company Strategy and Development Direction - The company aims to double loan originations in 2023, focusing on the in-school market driven by new student enrollments, which are rebounding post-COVID [10][124] - The strategy includes maximizing loan portfolio performance, improving operating efficiency, and disciplined capital management [19][22] - The company is leveraging its experience in servicing student loans to expand into government services, healthcare, and transportation sectors [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting full-year guidance despite start-up costs impacting profitability by $0.03 per share [20][32] - The company anticipates continued improvements in credit performance, with lower delinquency and default rates than pre-pandemic levels [120] - Management highlighted the importance of strong asset liability and capital management, with 85% of the education loan portfolio funded to term [65] Other Important Information - The company recorded a $52 million benefit from an accounting rule change for modified loans, which reduced the provision for loan losses [31] - The company expects to repurchase $225 million worth of shares for the remainder of the year [4] - The company has seen a significant decline in prepayment activity, which is expected to increase the life of the portfolio [61] Q&A Session Summary Question: Can you elaborate on the revenue growth from government healthcare services? - Management noted strong growth in government services, winning a large new contract that involves inbound and outbound telephony and customer communication [41] Question: What are the remaining pandemic-related revenues in the segment? - Management confirmed that there are no pandemic-related services expected to continue [127] Question: What is the company's market share potential in the in-school channel? - The company aspires to be a top 3 lender in the in-school origination market and believes it can achieve this [90] Question: How does the company view the impact of interest rates on refinancing demand? - Management indicated that demand for refinancing is lower due to rising interest rates, and a more stable rate environment is needed to see a return in demand [92] Question: What are the expectations for the net interest margin (NIM) going forward? - Management expects NIM to remain stable, with potential fluctuations based on prepayment speeds and interest rate changes [83][104]

Financial Performance - Navient's Federal Education Loans portfolio was valued at $43.5 billion, with a net interest margin of 1.01% in 2022[40]. - The company originated $2.0 billion in Private Education Loans in 2022, with a total Private Education Loan portfolio of $18.7 billion[29]. - Net income for 2022 was $645 million, a decrease from $717 million in 2021, with diluted earnings per share of $4.49[64]. - The return on common stockholders' equity was 22% in 2022, down from 27% in 2021[64]. - The company generated EBITDA of $53 million in 2022, down $83 million, or 61%, from 2021, primarily due to a $158 million decrease in revenue[48]. - Total capital returned to shareholders in 2022 was $491 million, including $400 million in share repurchases and $91 million in dividends[37]. - 2022 GAAP net income was $645 million, or $4.49 diluted earnings per share, down from $717 million, or $4.18 diluted earnings per share in 2021, representing a 10% decrease[66][74]. - 2022 Core Earnings net income was $458 million, or $3.19 diluted Core Earnings per share, compared to $551 million, or $3.21 diluted Core Earnings per share in 2021, reflecting a decrease of 17%[67]. Loan Portfolio and Originations - Navient's total loan originations in 2022 were $2.0 billion, down from $6.0 billion in 2021[45]. - In 2022, Private Education Refinance Loans originations were $1.7 billion, a significant decrease from $5.8 billion in 2021, attributed to rising interest rates[44]. - In-school loan originations increased by 52% to $322 million in 2022 compared to $212 million in 2021[44]. - The average balance of Private Education Loans was $20.524 billion in 2022, down from $21.225 billion in 2021[102]. - The ending balance of Private Education Loans, net, was $18.725 billion in 2022, compared to $20.171 billion in 2021[102]. - The company originated $2,051 million in new loans in 2022, a decrease from $6,104 million in 2021, reflecting a decline of approximately 66.4%[122]. Interest Income and Expenses - Total interest income increased by $575 million to $3,223 million in 2022, a rise of 22% compared to 2021[73]. - Net interest income decreased by $211 million to $1,121 million in 2022, primarily due to the paydown of loan portfolios and rising interest rates[76]. - The net interest margin decreased to 2.81% in 2022 from 2.92% in 2021, primarily due to a higher proportion of lower-yielding Private Education refinance loans[102]. - The total interest expense for 2021 was $1,316 million, a decrease from $2,046 million in 2020, reflecting a decline of approximately 35.8%[189]. Loan Loss Provisions and Charge-offs - Provisions for loan losses increased by $140 million, from a negative provision of $(61) million in 2021 to $79 million in 2022[74][76]. - Net charge-offs for Private Education Loans increased to $343 million from $153 million[99]. - The total provision for loan losses in 2022 was $79 million, reflecting a focus on managing credit risk[126]. - The allowance for loan losses for Private Education Loans was $800 million at the end of 2022, down from $1,089 million in 2020[126]. Compliance and Risk Management - The company emphasizes compliance with various federal and state regulations, maintaining a robust compliance management system[36]. - The company maintains comprehensive risk management practices to identify and control significant risks[209]. - Risk management responsibilities are assigned at various levels within the organization, including the board of directors[210]. Shareholder Returns and Equity - Navient's share repurchase program authorized the purchase of up to $1 billion, with $600 million remaining as of December 31, 2022[36]. - The company repurchased 24.8 million shares of common stock in 2022, reducing the average outstanding diluted shares by 16%[75]. - Adjusted Tangible Equity Ratio was reported at 7.7% as of December 31, 2022, an increase from 5.9% in 2021[36]. Economic Conditions and Future Outlook - The company anticipates potential negative impacts on the loan portfolio due to the end of payment relief and stimulus benefits in 2023[155]. - The company noted a decline in forecasted economic conditions, including increased unemployment rates and decreased GDP, impacting the allowance for loan losses[155]. - The company is subject to significant uncertainty regarding the potential impact of the SDR Plan changes on its financial results, which may differ from estimates[180].

Navient Corporation (NASDAQ:NAVI) Q4 2022 Earnings Conference Call January 25, 2023 8:00 AM ET Company Participants Jennifer Earyes - Head of Investor Relations Jack Remondi - President and Chief Executive Officer Joe Fisher - Executive Vice President and Chief Financial Officer Conference Call Participants William Ryan - Seaport Research Partners Sanjay Sakhrani - Keefe, Bruyette, & Woods, Inc. Mark DeVries - Barclays Bank PLC Moshe Orenbuch - Credit Suisse Richard Shane - JPMorgan Chase & Co. Giuliano And ...

Confidential and proprietary information © 2023 Navient Solutions, LLC. All rights reserved. 3 The company could also be affected by, among other things: Federal Education Loans Segment Selected Financial Information and Ratios January 25, 2023 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"), filed by Navient with the ...