Navient : 1st Quarter 2026 Earnings Call

Published: 2026-04-29 06:41:08 ET NAVI

Published on 04/29/2026 at 06:41 am EDT

Key Messages: 1Q 2026

Continued strong momentum in high-quality loan growth

Strategic expense reduction complete, providing opportunity to grow while demonstrating operating leverage

Disciplined capital allocation includes opportunistic share repurchases

Monitoring macroeconomic environment and have flexibility to respond to changing conditions

Planned leadership transition underway

1Q 2026 Results

GAAP

Core Earnings 1

Revenue (Before Provision)

$131 million

$126 million

Provision for Loan Losses

$27 million

Operating Expense

$89 million

Net Income

$17 million

$19 million

Average Common Stock

Equivalents

96 million 96 million

"Our first quarter results reflect strong momentum in high quality loan growth, with originations more than 60% higher than the year ago period. The successful completion of our multi-year initiatives creates a foundation of a more strategically focused, flexible and efficient organization to support future growth. Our planned CEO leadership transition is underway and provides strategic continuity."

- David Yowan, CEO

Refinance Growth with Improving Credit Quality

10th consecutive quarter of originations growth, driven by strong demand generation and capture

+62%

+65%

+3 pts

1 Rate Check represents a potential customer who completes a soft credit pull to receive a personalized rate.

2 Average FICO at the time of origination, weighted by funded dollar amount, and associated with loans originated during the quarter.

Positioned to Capture Growing Graduate Demand

+5%

Performance Highlights:

Graduate market expected to grow

~3x in 2026

Originations on track; peak season readiness initiatives underway to capture on-strategy share

Consumer Lending -

1Q 2026 Core Earnings Results

Revenue (Before Provision)

1Q25

$116 million

1Q26

$103 million

Provision for Loan Losses

$22 million

$18 million

Operating Expense

$35 million

$39 million

Net Income

$46 million

$35 million

Originated $818 million of Private Education Loans compared to

$508 million in the year-ago quarter, an increase of 61%

Refinance Loan originations were

$778 million compared to $470 million

In-school Loan originations were

$40 million compared to $38 million

Net income was $35 million compared to net income of $46 million

Net interest income decreased

$13 million, primarily due to the changing product mix of the loan portfolio as well as the impact of decreasing interest rates on the different index resets for the segment assets and debt

Provision for loan losses decreased

$4 million

Expenses increased $4 million primarily as a result of marketing and other expenses associated with the growth of our lending businesses

Federal Education Loans -

1Q 2026 Core Earnings Results

Revenue (Before Provision)

1Q25

$59 million

1Q26

$54 million

Provision for Loan Losses

$8 million

$9 million

Operating Expense

$19 million

$16 million

Net Income

$24 million

$22 million

Net income was $22 million compared to

$24 million

Net interest income decreased by

$3 million primarily due to the paydown of

the loan portfolio

Provision for loan losses increased

$1 million. Provision was primarily the result of increased charge-offs due to prior disaster forbearance volume, as well as the continued extension of the portfolio.

Expenses were $3 million lower due to lower balances and our variable cost structure

1Q 2026 Allowance for Loan Losses

($ in millions)

$645

$(89)

$707

$18 $9

12/31/25 Allowance for Loan Losses1

Consumer Lending

Portfolio Provision

Federal Education Loan Portfolio Provision

Net Charge-Offs

3/31/26 Allowance for Loan Losses1

For illustrative purposes only, total bars shown not to scale. Numbers may not total due to rounding.

Our total provision expense was

$27 million in 1Q26

This consists of:

$18 million of provision related to

the Private Education portfolio,

$11 million of which related to new originations

$9 million for our FFELP portfolio

Net charge-offs of $89 million during 1Q26

Total Expense - Core Earnings Results1

($ in millions)

$900

$800

$700

$600

$500

$400

$300

$200

$100

Annual Total Expenses

$719

$438

$825

2023 2024 2025

$140

$120

$100

$80

$60

$40

$20

Year-over-Year Total Expenses

$130

$89

1Q25 1Q26

We are focused on becoming more

efficient across all segments

Total expenses for the quarter were

$89 million compared to

$130 million a year ago

Operating expenses for the quarter include $2 million of regulatory expenses compared to $1 million a year ago

There were no restructuring expenses in 1Q26 compared to

$3 million a year ago

1Q 2026 Capital Allocation

9.1%

0.1%

0.0%

-0.1%

8.9%

-0.1%

11%

10%

1 1

Adjusted Tangible Equity 1 ratio of

8.9%

We distributed $38 million in 1Q26 to shareholders through dividends and share repurchases

We expect to continue our opportunistic approach to share repurchases in 2026

We issued $683 million of ABS during the quarter

We ended the quarter with 79% of our Total Education Loan Portfolio funded to term

We ended 1Q26 with $5.3 billion in unsecured debt outstanding

For illustrative purposes only, total bars shown not to scale. Numbers may not total due to rounding.

Forward-Looking Statements and Non-GAAP Financial Measures

The following information is current as of March 31, 2026 (unless otherwise noted) and should be read in connection with Navient Corporation's "Navient" Annual Report on 2025 Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), filed by Navient with the Securities and Exchange Commission (the "SEC") on February 26, 2026 and subsequent reports filed by Navient with the SEC. Definitions for capitalized terms in this presentation not defined herein can be found in the 2025 Form 10-K. This presentation contains "forward-looking statements," within the meaning of the federal securities law, about our business, and prospectus and other information that is based on management's current expectations as of the date of this presentation. Statements that are not historical facts, including statements about our beliefs, opinions, or expectations and statements that assume or are dependent upon future events, are forward-looking statements and often contain words such as "expect," "anticipate," "assume", "intend," "plan," "believe," "seek," "see," "will," "would," "may," "could," "should," "goals," or "target." Such statements are based on management's expectations as of the date of this release and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements.

For Navient, these factors include, among other things:

general economic conditions, including the potential impact of inflation and interest rates on Navient and its clients and customers and on the creditworthiness of third parties; and

increased defaults on education loans held by us.

The company could also be affected by, among other things:

unanticipated repayment trends on education loans including prepayments or deferrals resulting from new interpretations or the timing of the execution and implementation of current laws, rules or regulations or future laws, executive orders or other policy initiatives that operate to encourage or require consolidation, abolish existing or create additional income-based repayment or debt forgiveness programs or establish other policies and programs or extensions of previously announced deadlines which may increase or decrease the prepayment rates on education loans and accelerate or slow down the repayment of the bonds in our securitization trusts;

a reduction in our credit ratings;

changes to applicable laws, rules, regulations and government policies and expanded regulatory and governmental oversight;

changes in the general interest rate environment, including the availability of any relevant money-market index rate or the relationship between the relevant money-market index rate and the rate at which our assets are priced;

the interest rate characteristics of our assets do not always match those of our funding arrangements;

adverse market conditions or an inability to effectively manage our liquidity risk or access liquidity could negatively impact us;

the cost and availability of funding in the capital markets; our ability to earn Floor Income and our ability to enter into hedges relative to that Floor Income are dependent on the future interest rate environment and therefore is variable;

our use of derivatives exposes us to credit and market risk;

our ability to continually and effectively align our cost structure with our business operations;

a failure or breach of our operating systems, infrastructure or information technology systems;

failure by any third party providing us material services or products or a breach or violation of law by one of these third parties;

our current or previous work with government clients exposes us to additional risks inherent in the government contracting environment;

acquisitions, strategic initiatives and investments or divestitures that we pursue;

shareholder activism; reputational risk and social factors; and

the other factors that are described in the "Risk Factors" section of Navient's Annual Report on Form 10-K for the year ended December 31, 2025, and in our other reports filed with the SEC.

The preparation of our consolidated financial statements also requires management to make certain estimates and assumptions including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect and actual results could differ materially. All forward-looking statements contained in this release are qualified by these cautionary statements and are made only as of the date of this release. The company does not undertake any obligation to update or revise these forward-looking statements except as required by law.

Navient reports financial results on a GAAP basis and also provides certain non-GAAP performance measures, including Core Earnings, Adjusted Tangible Equity Ratio, and various other non-GAAP financial measures derived from Core Earnings. When compared to GAAP results, Core Earnings exclude the impact of: (1) mark-to-market gains/losses on derivatives; and (2) goodwill and acquired intangible asset amortization and impairment. Navient provides Core Earnings measures because this is what management uses when making management decisions regarding Navient's performance and the allocation of corporate resources. Navient Core Earnings are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. For additional information, see Core Earnings in Navient's first quarter 2026 earnings release and page 12 for a complete reconciliation between GAAP net income and Core Earnings.

Differences Between GAAP and Core Earnings

Quarters Ended

We evaluate our business segments

on a basis that differs from GAAP

We refer to this different basis as

Core Earnings adjustments to GAAP: (Dollars in Millions)

Mar. 31,

2025

Mar. 31,

2026

Core Earnings 1

The two items we remove to result in Core Earnings are:

GAAP net income $(2) $17

Net impact of derivative accounting 39 (10)

Net impact of goodwill and acquired intangible 1 4

assets

Total Core Earnings adjustments to GAAP

Core Earnings net income 1

$26

$19

Net income tax effect (12) 8

mark-to-market gains/losses from our use of derivative instruments that:

hedge economic risks that do not qualify for hedge accounting treatment, or

do qualify for hedge accounting treatment but result in ineffectiveness

the accounting for goodwill and acquired intangible assets

Appendix

Delivering Value to Shareholders

Drive a scalable, lower-cost operating model

Shareholder Value Delivered

Maximize the cash flows from our loan portfolios and deploy them to reduce unsecured debt over time; invest or distribute excess

Maintain a strong balance sheet through disciplined capital allocation

Drive growth in core products and customer segments while exploring product and service extensions

Fund originations via ABS structures or opportunistic loan sales

Loan Portfolio Cash Flows Greater than Debt Outstanding

Projected loan portfolio cash flows as of March 31, 2026

Principally securitization trust distributions

Net interest income

Servicing fees

Cash Flow Projections 2

Return of initial equity

Remaining

2031-

Total

2026 2027

2028

2029

2030

2045

Loan Cash Flows Net of Secured Financing $ 11,817

$ 868 $ 1,259

$ 1,197

$ 1,103

$ 1,030

$ 6,359

Maturities of Unsecured Debt Principal (5,333)

(525) (703)

(516)

(951)

(530)

(2,108)

Cash Flow After Debt Repayment

$ 6,483

342 $

556

680

152

500

$ 4,251

($ in millions)

Total projected loan portfolio undiscounted cash flows after repayment of secured financings are

$6 billion over next 20 years

Secured financings include asset backed securities and secured funding facilities

Total unsecured debt principal outstanding is $5.3 billion as of the end of 1Q26

Approximately 50% of lifetime loan cash flows net of secured financing expected to be received in next

5 years

As of March 31, 2026, Navient held $621 million of unrestricted corporate cash which is not reflected in the table above. Unsecured debt interest and operating expenses are not reflected in the table above. Numbers may not total due to rounding. Cash flow projections assume the CPRs disclosed on pages 17 - 19 of this presentation.

Consumer Lending - Overview • Private Education Loan portfolio of

$16 billion

- Refinance education loan

$1,000

5-Year Projected Annual Private Education Cash Flows 2

($ in millions)

$548

$650

$692

$776

$817

$800

$600

$400

$200

Remaining 2026 2027 2028 2029 2030

originations since 2017

- In-school loan originations starting in

2019 and the seasoned loan portfolio

Holding equity capital against portfolio:

5% for refi loans

10% for new in-school loans

8% for seasoned loans

Projected cash flows from this portfolio

are based on:

cash flows from loans net of secured financing costs

assumed Constant Prepayment Rate of 10% for Refi and 8% for Legacy

projections of future loan originations

cash flows are not included

Undiscounted projected cash flows are:

$3.5 billion through end of 2030

$6.7 billion over 20 years

Federal Education Loans - Overview

$600

5-Year Projected Annual FFELP Cash Flows 2

($ in millions)

$320

$380

$411

$421

$442

$400

$200

Remaining 2026 2027 2028 2029 2030

FFELP portfolio of $27 billion

no newly originated FFELP loans since 2010

97-100% of principal and interest guaranteed by U.S. government

Holding 50 basis points of equity

capital against portfolio

Projected cash flows from this portfolio are based on:

cash flows from loans net of secured financing costs

assumed Constant Prepayment Rate of 3% through December 2028, and then 5% in years 2029 and later

Undiscounted projected cash flows are:

$2.0 billion through end of 2030

$5.2 billion over next 20 years

Projected

Portfolio Average Balance

$26,382 $24,767 $22,885 $20,843 $18,733

The cash flows reported above include revenue from excess spread and servicing from secured financings. Such servicing revenue is projected to be

$79 million remaining in 2026, $101 million in 2027, $95 million in 2028, $88 million in 2029, and $81 million in 2030.3

Total Education Loan Portfolio -

Projected Cash Flows

$1,500

5-Year Projected Annual Education Portfolio Cash Flows 2

($ in millions)

$817

$776

$692

$650

$548

$320

$442

$421

$411

$380

$1,200

$900

$600

$300

Remaining 2026 2027 2028 2029 2030

Total Education Loan portfolio of

$43 billion, undiscounted projected cash flows are:

$5.5 billion through end of 2030

$11.8 billion generated over 20 years

We continue to maximize these cash flows through:

helping borrowers manage their

loans

prudent interest rate risk management

asset / liability management and match funding through securitization

managing credit through

economic cycles

originating high-quality private refi and in-school loans with attractive economics

Responsibility to Our Customers and Communities

Supporting education and economic opportunity

Our education finance solutions help people pursue higher education and successfully manage their finances.

Refinanced more than $24 billion in student loans since 2014, helping borrowers save money

and accelerate their journey to successful repayment

Earnest recognized by U.S. News as Best Private Student Loan Lender, four years in a row

Strong corporate governance and compliance culture

Navient's Board of Directors shares a strong commitment to principles of accountability to

shareholders, customers, employees and other stakeholders.

Board brings diverse industry backgrounds, skills, and experiences

Adopted governance best practices, board refreshment policies, annual board and committee assessments

Learn more about Navient's Environmental, Social, and Governance (ESG) practices

in our Corporate Social Responsibility report at Navient.com/social-responsibility.

Empowering talent, encouraging development and fostering belonging

We are committed to creating a workplace where employees are supported and proud to deliver meaningful outcomes

Employee Resource Groups, a Culture Council, and robust wellbeing programs provide connection and care

Our Elevate program allows employees paid time away to volunteer for charities in their communities

For More Information

Environmental Social Governance (ESG) information

Navient Corporate Social Responsibility report

Student loan asset-backed security (ABS) trust data

Static pool information - detailed portfolio stratifications by trust as of the cutoff date

Accrued interest factors

Quarterly distribution factors

Historical trust performance - monthly charge-off, delinquency, loan status, CPR, etc. by trust

Since issued CPR - monthly CPR data by trust since issuance

Student loan performance by ABS trust

Current and historical monthly distribution reports

Distribution factors

Current rates

Prospectus for public transactions and Rule 144A transactions are available through underwriters

Webcasts, presentations & additional information

Details of the strategic update announced January 2024

Strategy updates from January and November 2025

Archived webcasts, transcripts and investor presentations

Disclaimer

Navient Corporation published this content on April 29, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 29, 2026 at 10:40 UTC.