Navient(US:NAVI)2025-01-28 23:21Financial Performance - GAAP net income for Q4 2024 was $24 million, with a diluted earnings per share of $0.22, while core earnings showed a loss of $25 million, translating to a diluted loss per share of $0.24[2] - Full year 2024 GAAP net income reached $131 million, equating to $1.18 diluted earnings per share, and core earnings totaled $221 million, or $2.00 diluted earnings per share[2] - Net loss for the quarter was $20 million, a significant decline from net income of $8 million in the previous period[4] - Fee revenue decreased to $43 million, down $38 million primarily due to the sale of the healthcare services business[4] - EBITDA was $(25) million, a decrease of $37 million compared to the previous period[4] - EBITDA margin fell to (167)%, down from 15% in the prior period[4] - The company reported a $28 million loss on the sale of subsidiaries, linked to the agreement to sell government services businesses[4] - The company reported a net income of $24 million for the quarter, down from a loss of $2 million in the previous quarter[61][65] - Net income for the quarter was a loss of $28 million, compared to a profit of $52 million in the previous quarter[71] Revenue and Income Sources - Total interest income for the quarter was $862 million, a decrease of 9% compared to $948 million in the previous quarter[26] - Net interest income after provisions for loan losses was $90 million, up 15% from $78 million in the previous quarter[26] - Total interest income for the quarter ended December 31, 2024, was $862 million, with education loans contributing $837 million[61] - Total other income for the same quarter was $88 million, which included servicing revenue of $6 million and asset recovery revenue of $43 million[61] - Total interest income for the year ended December 31, 2024, is projected to be $3,809 million, with education loans expected to contribute $3,655 million[73] - Total other income for the year is expected to be $616 million, with significant contributions from asset recovery and business processing revenue[73] Loan Performance and Provisions - The provision for loan losses in the Consumer Lending segment was $38 million, down from $50 million in the same quarter last year, with net charge-offs of $71 million[9][11] - The provision for Private Education Loan losses increased to $112 million in 2024 from $67 million in 2023, reflecting a rise in delinquency balances[36] - The provision for FFELP Loan losses was $1 million in 2024, a significant decrease from $56 million in 2023, attributed to increased prepayment activity[35] - Total provision for loan losses in Q4 2024 was $45 million, with a total of $7 million for FFELP loans and $38 million for Private Education Loans[44] - The allowance for loan losses at the end of the period was $832 million, with $215 million for Private Education Loans and $617 million for FFELP Loans[46] Operating Expenses - Operating expenses for the quarter were $143 million, excluding $3 million of regulatory-related expenses, reflecting a $3 million increase from the previous quarter[3] - Operating expenses were $146 million, down 21% from $184 million in the previous quarter[26] - Total expenses for the quarter were $152 million, with direct operating expenses at $93 million and unallocated shared services expenses at $53 million[61] - Total expenses for the year were projected to be $865 million, leading to an expected net income of $131 million[73] Shareholder Actions - The company repurchased $65 million of common shares, with $111 million remaining under the common share repurchase authority[3] - The company repurchased 11.5 million shares of common stock in 2024, resulting in a 10% decrease in average outstanding diluted shares compared to the previous year[40] - The company repurchased 4.4 million shares of common stock for $65 million in Q4 2024, with $111 million of unused share repurchase authority remaining[50] Asset and Liability Management - Total assets decreased from $61,375 million as of December 31, 2023, to $51,789 million as of December 31, 2024, representing a decline of approximately 15.6%[28] - Total liabilities decreased from $58,615 million as of December 31, 2023, to $49,148 million as of December 31, 2024, a reduction of approximately 16.2%[28] - As of December 31, 2024, the company had $1.196 billion in total primary liquidity, which includes $722 million in unrestricted cash and $232 million in unencumbered FFELP Loans[51] - Total unencumbered tangible assets amounted to $2.9 billion, with $1.3 billion related to unencumbered education loans[53] Future Outlook and Strategy - The company expects to close the transaction for the sale of its government services businesses in Q1 2025, which is anticipated to enhance future operational efficiency[3] - The company plans to continue focusing on operational efficiency and market expansion strategies in the upcoming quarters[59] - Future guidance indicates a potential increase in interest income driven by growth in education loans and improved asset recovery strategies[75] Tax and Equity - The effective income tax rate decreased from 23% in the year-ago quarter to 9% in the current quarter, primarily due to the recognition of a deferred tax asset[33] - The adjusted tangible equity ratio increased to 10.0% as of December 31, 2024, up from 8.2% in 2023[88] - The cumulative impact of derivative accounting under GAAP increased equity by approximately $8 million as of December 31, 2024[82]