Navient(NAVI) - 2025 Q1 - Quarterly Results

Financial Performance - GAAP net loss of $2 million, with core earnings of$26 million, resulting in a diluted loss per share of $0.02 and earnings per share of$0.25 respectively[2] - Net income for Q1 2025 was $(2) million, a decrease of 108$24 million in Q4 2024 and a decrease of 103% from $73 million in Q1 2024[22] - Diluted earnings per share for Q1 2025 was$(0.02), down from $0.22 in Q4 2024 and$0.64 in Q1 2024, representing a 109% decrease year-over-year[22] - Total revenue for the Federal Education Loans segment was $51 million, down from$69 million in the same quarter last year, while total revenue for the Consumer Lending segment was $94 million, down from$127 million[5][8] - Total other income for Q1 2025 was $26 million, with servicing revenue contributing$13 million[52] Loan Performance - Federal Education Loans segment reported net income of $24 million and a net interest margin of 0.61$256 million from $1.6 billion year-over-year[3] - Consumer Lending segment generated net income of$46 million, with a net interest margin of 2.76% and originated $508 million in Private Education Loans, including$470 million in refinance loans[8][9] - The ending total education loans, net, was $45,934 million as of March 31, 2025, a decrease from$46,568 million at the end of Q4 2024 and $52,487 million at the end of Q1 2024[22] - The allowance for loan losses at the end of the period for FFELP loans was$182 million and for Private Education loans was $397 million, totaling$579 million[34] - The ending total loans for the quarter were $30.426 billion for FFELP loans and$16.087 billion for Private Education loans, totaling $46.513 billion[34] Expenses and Charges - Operating expenses were$127 million, with $10 million related to transition services for strategic initiatives expected to be completed by the end of 2025[3] - Operating expenses decreased to$127 million in Q1 2025 from $146 million in Q4 2024, a reduction of 13$71 million, down from $99 million year-over-year, with a net charge-off rate of 1.87$(25) million in Q1 2025, compared to a gain of $59 million in Q4 2024, indicating a significant volatility in this area[24] - The total provision for loan losses in the quarter ended March 31, 2025, was$30 million, compared to $45 million in the previous quarter[34] Shareholder Actions - The company repurchased$35 million of common shares, with $76 million remaining in common share repurchase authority[3] - The company repurchased 2.6 million shares of common stock for$35 million in the first quarter of 2025, with $76 million of unused share repurchase authority remaining[41] - The company repurchased 2.6 million shares of common stock in both the first quarters of 2025 and 2024, resulting in a 12 million share decrease in average outstanding diluted shares[30] Regulatory and Market Risks - The company continues to face risks related to regulatory changes and market conditions that could impact its financial performance and operational strategies[18] - The effective income tax rate increased to 54$642 million as of March 31, 2025, down from $722 million at the end of December 2024[42] - The average unrestricted cash balance for the quarter was$572 million, compared to $737 million in the previous quarter[42] - As of March 31, 2025, the company reported total unencumbered tangible assets of$2.8 billion, including $1.3 billion in unencumbered education loans[44] - The company had$4.8 billion of encumbered net assets as of March 31, 2025, with $0.7 billion in outstanding repurchase facility borrowings[44] Equity and Tangible Assets - The company reported a GAAP equity-to-asset ratio of 5.1$2.2 billion as of March 31, 2025, unchanged from the previous quarter[46] - The company reported a tangible equity of $2,152 million as of March 31, 2025, down from$2,204 million on December 31, 2024[78]