Navient(US:NAVI)2021-02-26 21:16Financial Performance - Adjusted Core Earnings per share grew 29% from the prior year, with a three-year compound annual growth rate of 28%[37]. - 2020 GAAP net income was $412 million, down from $597 million in 2019, with diluted earnings per share of $2.12 compared to $2.56[74]. - 2020 Core Earnings net income was $631 million, an increase from $607 million in 2019, with diluted Core Earnings per share of $3.24 compared to $2.60[75]. - The Federal Education Loans segment reported a net income of $537 million, up 2%, and a net interest income increase of 8%[77]. - The company reported a net income of $631 million for the year, reflecting a decrease of 25.7% compared to the previous year[202]. - Total expenses for the year amounted to $973 million, with direct operating expenses contributing $687 million[202]. - The company reported a net interest income after provisions for loan losses of $1,106 million[202]. Shareholder Returns - Total share repurchases in 2020 amounted to $400 million, with a 14% reduction in shares outstanding[40]. - Dividends paid in 2020 totaled $123 million, down from $147 million in 2019[40]. - The company plans to continue returning excess capital to shareholders through dividends and share repurchases[38]. - The company repurchased $400 million (or 14%) of common shares outstanding, with $600 million repurchase authority remaining[77]. - The company purchased 30.6 million shares of common stock for $400 million in 2020, with $600 million remaining in share repurchase authority[163]. Loan Portfolio and Performance - Navient's portfolio includes $58.3 billion in federally guaranteed Federal Family Education Loan Program (FFELP) Loans and $21.1 billion in Private Education Loans[25][27]. - The company serviced approximately 5.6 million federal education loan customers on behalf of the U.S. Department of Education[26]. - The total education loan portfolio as of December 31, 2020, was $79.363 billion, compared to $86.820 billion in 2019, reflecting a decrease[134]. - The total portfolio of Private Education Loans as of December 31, 2020, was $21.1 billion, with a net interest margin of 3.20%[52]. - The ending balance of the FFELP loan portfolio decreased to $58,284 million in 2020 from $64,575 million in 2019, representing a decline of approximately 9.0%[137]. - The total FFELP loans, gross, amounted to $58,572 million in 2020, down from $64,094 million in 2019, a decrease of approximately 8.0%[139]. - The total private education loans net balance was $21,079 million in 2020, down from $22,245 million in 2019, indicating a decrease of about 5.3%[143]. Loan Loss Provisions and Delinquencies - Total provision for loan losses in 2020 was $155 million, primarily due to expected losses related to COVID-19[80]. - The provision for loan losses in 2020 was influenced by an increase in unemployment, a decrease in GDP, and an increase in consumer loan delinquency rates as a result of COVID-19[184]. - The delinquency rate for loans greater than 90 days for FFELP loans was 4.6% in 2020, down from 5.8% in 2019, indicating an improvement in loan performance[139]. - Private Education Loan delinquency rate decreased by 43% from 4.6% to 2.6%, while forbearance rate increased by 44% from 2.7% to 3.9%[77]. - The provision for Private Education Loan losses decreased by $86 million to $142 million in 2020[92]. Business Processing and Operations - Navient's Business Processing segment supports over 500 clients, leveraging technology and data-driven solutions[28]. - EBITDA for the Business Processing segment was $57 million in 2020, reflecting a 16% increase from 2019[57]. - Business processing revenue increased by $46 million, or 18%, from $258 million in 2019 to $304 million in 2020, driven by contracts for unemployment benefits and contact tracing services[122]. Liquidity and Capital Management - The company maintained a strong liquidity position with $1.7 billion in primary sources of liquidity as of December 31, 2020, including $1.2 billion in cash[84]. - The company has unsecured debt totaling $8.4 billion as of December 31, 2020, rated below investment grade by three credit rating agencies[161]. - The company reported unencumbered tangible assets of $5.4 billion as of December 31, 2020, which included $2.6 billion in unencumbered education loans[166]. - The company incurred provisions for loan losses totaling $155 million during the year[202]. Changes in Interest Income and Expenses - Total interest income decreased by $1,375 million (29%) from $4,673 million in 2019 to $3,298 million in 2020, primarily due to declines in FFELP and Private Education Loans[89]. - The company’s average rate on senior unsecured debt was 5.05% in 2020, compared to 6.63% in 2019, indicating a reduction in borrowing costs[171]. - Total interest income for the year ended December 31, 2020, was $3,274 million, with a net interest income of $1,261 million after provisions for loan losses[202]. Employee and Workforce Information - The company has a workforce of approximately 5,560 regular employees and 1,850 temporary employees as of December 31, 2020[67].