Financial Data and Key Metrics Changes - In Q4 2025, core earnings per share were reported at $0.02, while the full-year core loss per share was $0.35 [13] - Total expenses for 2025 were $438 million, a decrease of nearly 50% compared to 2023, with Q4 total core operating expenses at $88 million, a 40% improvement year-over-year [24][26] - The adjusted tangible equity ratio stood at 9.1% [25] Business Line Data and Key Metrics Changes - Earnest achieved its highest-ever refi loan origination volume of $634 million in Q4 2025, bringing full-year refi originations to $2.1 billion, more than doubling from the previous year [8][15] - In-school lending originated $401 million in new loans in 2025, marking a significant increase [9] - Consumer lending segment net income for Q4 was $25 million, down from $37 million in Q4 2024, primarily due to lower outstanding balances [18] Market Data and Key Metrics Changes - The delinquency rate for private loans increased from 2.48% in Q3 to 2.24% in Q4, while 31+ day delinquency rates rose from 6.1% to 6.3% [19] - The total delinquency rate for federal education loans improved slightly from Q3, declining from 18.1% to 17.5% [21] Company Strategy and Development Direction - The company is targeting total loan originations of $4 billion in 2026, representing a growth of approximately 60% over 2025 [26] - The strategic focus includes a transition to a holding company management structure, with lower central costs and improved capital efficiency [11][12] - The company continues to invest in capabilities at Earnest and aims to leverage the capital released from existing portfolios to finance growth [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects for 2026, highlighting strong demand for refi products and a disciplined approach to market expansion [12][42] - The macroeconomic environment remains a concern, with management noting a deterioration in the macroeconomic scenario impacting credit metrics [32][69] Other Important Information - The company completed its fourth securitization of the year in Q4 2025, totaling nearly $2.2 billion in term ABS financing [25] - Share repurchases totaled 2.1 million shares at an average price of $12.67, with a total of $41 million returned to shareholders through repurchases and dividends [25][26] Q&A Session Summary Question: Credit metrics of the private legacy portfolio - Management noted a comprehensive review of assumptions regarding life of loan cash flows, leading to increased provisions due to macroeconomic deterioration and delinquency trends [30][32] Question: Reserve coverage for the legacy portfolio - The ending reserve rate for the legacy portfolio was in the mid-3% range, with expectations that this will shift as the portfolio mix changes [33][34] Question: Outlook for personal loans and Grad PLUS opportunity - The personal loan product is in a pilot phase, with expectations for growth in the Grad PLUS segment, estimated at around $3 billion for 2026 [40][42] Question: Delinquency trends in the private refi book - Management acknowledged a slight uptick in delinquencies but expressed confidence in the quality of loans originated and expected improvements moving forward [51][52] Question: Expectations for net interest margin and provisions - Management indicated a stable outlook for net interest margin and provisions, with expectations based on new originations and reserve levels [72]