Navient(US:NAVI)2025-04-29 22:39Financial 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% compared to $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%, with FFELP Loan prepayments decreasing to $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%[24] - Net charge-offs in the Consumer Lending segment were $71 million, down from $99 million year-over-year, with a net charge-off rate of 1.87%[9] - The company reported a loss on derivative and hedging activities of $(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% from 17% in the prior year, driven by state tax expenses and changes in valuation allowances[29] Cash and Assets - The company reported unrestricted cash of $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% and an adjusted tangible equity ratio of 9.9%[3] - Total tangible equity stood at $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]