Navient(US:NAVI)2025-10-28 21:58Financial Performance - Navient reported a GAAP net loss of $86 million, translating to a diluted loss per share of $0.87 for Q3 2025[3]. - Core Earnings net loss was $83 million, with a diluted loss per share of $0.84[3]. - Net income for Q3 2025 was $(86) million, a decrease from $14 million in Q2 2025 and $(2) million in Q3 2024[19]. - Diluted earnings per share for Q3 2025 was $(0.87), compared to $0.13 in Q2 2025 and $(0.02) in Q3 2024[21]. - The company reported a significant increase in net income (loss) before income tax expense to $(117) million in Q3 2025, down from $18 million in Q2 2025 and $12 million in Q3 2024[21]. - Net loss for the nine months ended September 30, 2025, was $75 million, or $0.75 diluted loss per share, compared to net income of $107 million, or $0.95 diluted earnings per share for the same period last year[29]. Loan Loss Provisions - The company recorded a provision for loan losses of $168 million, with $155 million attributed to Consumer Lending due to elevated delinquency balances[3]. - Provisions for loan losses increased significantly to $168 million in Q3 2025, compared to $37 million in Q2 2025 and $42 million in Q3 2024[21]. - The allowance for loan losses increased to $186 million for FFELP Loans and $406 million for Private Education Loans as of September 30, 2025[23]. - The total provision for loan losses was $68 million, with a charge-off of $301 million during the period[39]. - The provision for FFELP Loan losses was $29 million in the current period, up from $(6) million in the year-ago period, reflecting elevated delinquency balances[29]. Interest Income and Expenses - Total interest income for Q3 2025 was $781 million, a slight increase from $778 million in Q2 2025 but a decrease of $167 million (18%) from $948 million in Q3 2024[21]. - Total interest income for the quarter ended September 30, 2025, was $781 million, with education loans contributing $760 million[54]. - The total interest expense for the quarter was $639 million, leading to a net interest income (loss) of $142 million before provisions[54]. - Net interest income after provisions for loan losses was $(26) million in Q3 2025, down from $91 million in Q2 2025 and $78 million in Q3 2024[21]. - Net interest income decreased by $1 million primarily due to the paydown of loan portfolios and decreasing interest rates, despite a $54 million decline in net premium amortization[31]. Share Repurchase and Equity - The company repurchased $26 million of common shares and authorized a new $100 million share repurchase program[4]. - The company repurchased 2.0 million shares of common stock for $26 million in Q3 2025, with $26 million of unused share repurchase authority remaining[43]. - The total stockholders' equity before treasury stock was $7.974 billion as of September 30, 2025, down from $8.071 billion a year prior[23]. Asset and Liability Management - Total assets decreased to $49.306 billion as of September 30, 2025, down from $53.440 billion a year earlier[23]. - Total liabilities were $46.867 billion as of September 30, 2025, compared to $50.746 billion a year prior[23]. - The company’s cash and cash equivalents decreased to $571 million as of September 30, 2025, down from $1.143 billion a year earlier[23]. - The company has $2.8 billion of unencumbered tangible assets, including $1.3 billion in unencumbered education loans[46]. Delinquency and Charge-Off Rates - The net charge-off rate for Private Education Loans increased to 2.48% in Q3 2025, up from 1.87% in Q3 2024[9][10]. - Private Education Loan delinquencies as a percentage of loans in repayment increased to 6.1% as of September 30, 2025, compared to 5.3% a year earlier[33]. - Net charge-offs for the quarter were $105 million, with $9 million for FFELP loans and $96 million for Private Education loans, resulting in a net charge-off percentage of 0.15% and 2.50% respectively[37]. Business Operations and Strategic Focus - The company plans to continue focusing on market expansion and new product development to drive future growth[66]. - The financial results indicate a need for strategic adjustments in response to the significant losses reported in the quarter[54]. - Core Earnings adjustments to GAAP resulted in an increase of $9 million for the quarter, primarily due to derivative accounting and goodwill adjustments[56].