NAVI - Earnings call 2 2023 | Navient Corporation

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Operator

Good day, and thank you for standing by. Welcome to the Navient Second Quarter 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jen Earyes, Vice President, Investor Relations. Please go ahead.

Jen Earyes

Thank you, Shannon. welcome XXXX. Earnings and Second for morning, of Quarter good to Call Navient's the Hello, today Dave me CFO. With are Fisher, and Navient Joe Yowan, Navient CEO; their call open After we questions. for the remarks, prepared up will

of This useful as date results variety mind business the and and due filings the on view refer expectations presentation. other this forward-looking in factors management's before including company's may on presentation from a those You that should will the on during future keep contain Actual current other different can call, in with materially Form to download the those may this of begin, statements our and the of is discussion slides based to information slides, of could you about SEC. find be our we factors. Listeners expectations, discussed discussion Navient.com/investors. But here. be XX-K predictions,

refer tangible various including call, measures, to we financial this measures financial core non-GAAP ratio During equity derived earnings. that are will conference from non-GAAP also adjusted and earnings, core other

Navient.com/investors. non-GAAP Our in which measures description on and also of financial GAAP disclosure, second our earnings posted quarter can the be XXXX results supplemental is found

Page You a you. release. about measures will in XX Thank disclosure. core included XXXX the reconciliation these find earnings quarter of of There beginning more second full on Navient's also information earnings is to GAAP

now call the over will turn I Dave. And to

David L. Yowan

they've call I joining the to Good for new for Jen. warm Team begin my Thanks, since to assumed the interest and and thanks colleagues, in open me role. everyone. for you I welcome with Thank your this Navient. want morning, provided Navient,

with capabilities XX to transitioned of of the you and Navient's of Navient most than foundation Navient a Mainly, why a call, I that time become potential. business, that our also the share with weeks and reduce many I halfway people. familiar are today's company specifically of to These a simplify of great with Directors risk through you I of a spend want I have I ahead. On information share strong under activities my found member to and about I group quarter, in deliver board my efficiency. the held full plan role where And underway belt, more value know, remain CEO. more reaffirmed. value perspectives see steam I'd I from shareholders. our member of on on the today assets to future little and of more some as well the to And undertaking improve sharing work and Board As second the can some also Navient, the views work been we to talented about

view I our As that when Board in was appointed to I right we communicated and and explore May, shared time the consider change. it the was

process. as in any report actions review. soon too direction look from but also such, observations it's deliver or informed any At As business a of of our shareholders. around range point move to this review and the we to we be this of intend I holistic journey, I'm have to value through early of about Board and and and forward review, take. greater The thoughtful opportunities sense our a our currently this of to goal with you alternative in-depth identifying decisions keeping analysis undertaking sense urgency in an may I comprehensive to the the

Turning business. my current of now views the to

start with Slide X. me Let

The Lending of of Federal in Business might from to Education who be vast those Navient comes our Processing margin the segment; segment; revenue organized X portfolio majority for newer refresher, the quick around segment. our organization, Loan is Federal business Consumer segment segments: a As the FFELP the and loans. and

revenue in of includes margin past by source portfolio Navient Lending private and and originated several parts. consists refi distinct from Consumer One loans portfolio. segment's our the of in-school is primary That years. X loan Our

XXXX. The our to variety well Processing that other second third consists in prior of services government business the management seasoned and cycle entities of loans, healthcare the providers. businesses And Business state, vast were segment, which includes majority to segment, revenue provide federal local creation services Navient's of a as for as orientated and

growth efficiency. Our our Slide on you cash loan strategy continuously from is portfolio; see and of underpinned a by enhance balance flows excess value capital; sheet strong simplify maximize business and and the our the increase X businesses; X: maintain the distribute imperatives the

our meet help their these customers strengthen imperatives, and which in continue we executing operate. be in the continuously financial environment communities needs, we control While to citizens good

substantial Now our are cash over we FFELP next flows of to overview few receive to provide years. There project portfolio. the an

As secured a cash forecasts flow after these are the facilities are reminder, related paid.

flows education current assumptions On few financing as X secured cash flows. snapshot the years consumer over on the net which We projections for side years. loans flows these a flow X, not future our inflows, we more portfolio. FFELP our provided cash originations. estimates, These projected from of the investor see Slides cash cash onto the include make loan clear, sheet plan existing Slide in Loan to are is cash used X on outflows. We've balance the right-hand quarter. net those basis you'll and do we like each new receive our now. bring the to They will our even additional project to same to continue several be flows these from Slide any lending cash presentation include provide of X, from this substantial you'll private To flows key see the from next On loan projected portfolio of cash projections.

the refi in-school In years, target originations. and several XXXX X over originations with you year of Slide last full reminds for fact, the loan our along

as a finance from products. of refi of begin the in for The unique third you students year period other declined current fall the loans rate consumer the the environment. semesters, origination As peak know, during those has higher addressable market their in-school occurs quarter cycle

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fact, In is a loan routinely recognized as such Earnest top sites student U.S. as by lender

in has to News, NerdWallet according journey as supports These industry accolades financial team. some other ways ratings Trustpilot their Earnest our well. and are of in Reviews. the highest the students in testament to customer-focused

cash X that provides loan these offers grants the focused navigate in on into some understand what identify, segments from Going Earnest digital Merry we help tools and a flows insights by our them and growing X and combines students substantial number of to portfolios. are scholarships. Slide

cash years. will portfolios ballpark As you projections the the $X.X each see, next X the of billion flows that of shy show each just can next years of our produce --

have funding effectively interest these rate, net in the portfolios. loan also proven record elements managing credit We and of a

net interest interest variations environment. in been to the Our margin, or relatively NIM, rate has resilient

emerged point, at range. Slides being the at pre-pandemic pandemic Slide the stable recovery This allowance the pandemic starting the period since shows X to both rate with X year XXX the rates one fed increases measured X-plus and charge-offs loan period, net and rate incredible basis credit of the time NIM the full from these against by portfolios our point the relatively relatively on includes portfolios interest pressures narrow onset Fed XX during QX cycle period. a range QX fed portfolios cut X of As as proof and performance inflationary NIM a interest loss Even a speeds of same remained by rate, in XX on on these funds the as shows over XXXX. coverage XXXX.

stable XX allowance FFELP how has Specifically, period. this remained Slide shows relatively coverage over

X% federal borrower guarantee of interest principal government The pandemic programs, other levels. as remained a and reflects more this or and guarantees the the balances portfolio charge-offs this XX% all and percent in on period on a actually of which principal federal know, interest. Net you low relief over these and included forbearance period, of outstanding allowance declined. but As

increase have, of have borrowers programs, occurred the to pandemic. charge-offs charge-offs the As We of otherwise period would catch-up those a that be during attribute net as have increased. this expected, exited

runs return consumer changes portfolio while net pandemic catch-up relief as absent charge-off the pandemic borrowers levels borrower lending FFELP: loss changing as course, relief programs. Loan mix programs over were as in expect place, here coverage We exited levels cycle and macroeconomic as trends are decreasing of charge-off portfolio increases time. levels the by dynamics The allowance similar to in to expected variables. the reflect the this in historical charge-offs its primarily explained

lower credit rate as securities, Our Because substantial FFELP the of against over growing allowance performance, This were loans you FFELP-backed percent allowance a trend on prepayments profile of trust total refi portfolio and the our during seasoned the loan refi They loans against than has of or is outstanding. Using loans. its the lower risk the occurring Navient-sponsored period. sense in-school a environment. same performance a held FFELP lowered loan of loss held the demonstrated portfolio. the and of gain the allowance originations low percent the significant represent can ABS,

the reduction half on in year. loans increase As can the who might the into FFELP by there of direct see in you was administration's in Slide prepayment that increase This last expectation borrowers in driven prepayment part XX, large consolidated they rates during participate an debt proposals. second federal was

by this year. talk payments declined pandemic to our of we has the reducing of portfolios. relates XX lot Future of in is in administration's debt. There's repayment news time. vast levels repayment. shows under remain and offered Within relief a U.S. activity been of hear portfolios, of programs the prepayment resumption payments the loan student fall. at percentage that borrowers loans loan student see prepayment and federal news the in resuming declined The can government, that outset the about announced at in Slide that the about half the our that majority active consumer you portfolio the in entered stabilized lending our borrowers direct this owned only recently first You proposals on actions student uncertain of as not the

those first For XXXX. ended programs the of most borrowers, in quarter

repayment over portfolio XX% is currently in As status. result, of a this

Business touch years. in millions Now serve Processing Business and array our third segment business shows over segments overview XXX broad the We and this of Slide division. government our X people customer diversified XX of Slide for in over of an our Solutions revenue clients on Processing the gives of served tens last business. healthcare and segment. services XX

that to of thanks the see pandemic we variety over took period, decreased You is, significantly were contracts that good revenue the phased then as has strongly on grown from this of Normalizing you revenue BPS steadily revenue, contracts, our can work traditional, team. non-pandemic that see for total the and to as came that can an end. a pandemic-related services out and rose those as

largest as from In our we this capital it segment, moment other contracts to year. I this and to this were our project fact, you and longstanding recently allocation again awarded framework, revenues contract ever reiterate take Slide want on XX. growth see can in revenue

excess to on strong we on to may as are earlier how operating These well substantial shareholders. Slide as items the such changes in We provides There before loan committed a The expenses expenses. through to unsecured on free the capital I've also respond from consolidated function couple is to servicing others. Navient some and taxes, of about a our corporate and color additional returning its strategic all One portfolios. I among expenses our described economic to retain balance which support cash showed expenses, things debt loan what cash business to cash environments from mention as committed flows are are and has XX flows this repayments business the I expenses, imperatives. projections flow here. slides growth want we as include page. additional covered experienced many footprint. consider to are adverse be the sheet flexibility we and unexpected think

we changes Education after of appropriately XXXX loan For needs. example, the represented servicing significant ensure acquisition others XXXX. efficiency, scale our decided of in originated operations in changes our acquisitions of business subsidiary. contract largely and Department our of future began with the it and to Solutions is loans Navient and current in scale conducting want on the in-depth created to These transferred Earnest was our exit Business and in aligned review through the refi starting and business Processing of We the We immediately scale in the scope with that and operations. In focusing simplicity XXXX.

efficiency to loan when around appropriate flows to where simplicity and return maximizing the are our addition, value financial and we designed capital variable, enhance cash free our seek businesses more more of strategic imperatives are will possible, the operating provides to growth flexibility. expense to These In cash and make flows and base and that available shareholders. which increase

keep as to will in this how to apprised We later over decisions cash to best ways of these you we look for and it additional questions call. a with increase Joe of I make on that, identify, deploy we them. With as your sense urgency, results, to I will quarter's flows and forward a review turn the

Joe Fisher

thank in today's Navient. for Dave, everyone and interest on you, to you Thank call your

During my review updated remainder guidance will results XXXX quarter prepared remarks, the for second provide I the year. of for the and

like would earnings longer core per share. of adjusted no the be will note we non-GAAP I financial to that First, providing measure

follow easier expectations for consistency regulatory per year and include full We restructuring reported for earnings Our to provide coverage and now it will this XXXX in earnings our expenses. our greater believe estimates. share make our will guidance

made no longer range published extent in including To in presentation, we of changes find addition, materials may we've earnings our information this XX-Q. still In the the to provide, appears you formatting presentation. it full the

Turning to results.

guidance Our a to now expected reported months, regulatory second The per the X for regulatory expenses $X.XX range and updated $XX guidance with to related was of first per million, full along of updating rest core year core includes to our through share. occurred restructuring that year-to-date positive earnings ongoing we earnings $X.XX, of quarter, $X.XX expense through are our $X.XX or the XXXX. the share and expense

for margin net Education by range is will quarter to position to CEO primarily the on prior key year consistent and of GAAP EPS detail restructuring of expenses that eligible the lower period to Loans driven revenues Education which took Slide net for core FFELP and the adjusted EPS $XXX NIM returning Federal of including results compared positive beginning the provide with overall In XX, earn XX%; from core in originations the XXX May. and through while of to processing income. quarter's place increase million, XX an XX on segment, with by net the points; million points Compared second year additional basis a of transition beginning that interest $XXX efficiency of from to quarter well first highlights which and $X.XX $XX loans ratio with second of $X.XX, achieved basis The million basis quarter segment, decline saw year, a us of both million; private ago. basis XXX the full XX. remainder points, we primarily Loan we Slide XX of maintained a associated business to a year. the was repurchases. I'll of balance with basis dividends and $XX XX basis of charge-offs of X.X%, the XX anticipate in The Federal rate tangible of equity ratio points; shareholders decline of points the ago an charge-off points year NIM include fall

that cash with in are to an the experiencing results expected While the trends within expected slowdown in along expectations, are which we of flows life prepayments increase our is the future in increase portfolio, future defaults. credit

our compared let's Consumer improvement XX. basis points in segment Net income interest to to an in year, Now of resulted million basis by the our prior XXX Lending of improved and $XXX largely spreads. Slide turn points, margin quarter XX a driven interest was net on the funding

refinance XXXX, driven expect loan of in loans. quarter, to an of benefiting This this of overall rate origination at fall volume origination with quarterly of current rate environment. was and new the refi we to interest payments throughout as income. In the current of in-school continue $XXX environment, originated refi to million anticipate interest refi prior Department from loan incentive We as of million volume. no have primarily origination provide $XXX The originations levels which Education fixed decline lower the in rate in comprised was impact we the million is prepayment borrowers higher remain restart slowdown private volume net the environment. year of in volume speeds a significant see rates $XX these the the education in to less portfolio We by

an in to first quarter, net X.XX%, the As and X.X%. anticipated, from quarter. X.XX% total improved improvement rates seeing Compared the are delinquencies X.X% from credit improved we first from to charge-off to

Turning to was our losses the high given allowance portfolio. loan on of education for are $X.X confident over quarter, XX. that the expected loan our of for and well-seasoned billion life the our adequately quality credit loan end losses for Slide and allowance reserved related We for losses, of loan just entire At second coverage the remain portfolio. we

metrics but over on in since $X.X payments are to March improving, credit sheet as cautious loan trillion our education the balances we in will for outlook balance U.S. required XXXX. not While by remain held Government making borrowers of first our the are that with be time start

the to reserved additional loans education the million $X of of private which million $X extension a million is related While and an life related to volume. primarily origination largely projected new FFELP loans, portfolio for $X amortizing, portfolio we in for is the

increased it for from the as to year of to Slide to X%, benefit continue BPS to efficiency $XX margin million to XX% first Processing second increased services $XX ongoing our EBITDA million. be Business segment. the the from we and the quarter The Revenue initiatives. XX in half we Let's expect high from review from our teens

year least expect contracts. government of the $XXX by new XXXX, We million addition full revenue services at the for of to driven see primarily

financing Let's on highlighted to that our allocation capital XX. Slide activity is turn and

our term. of funded XX% We continue loan capital to to liability and asset education maintain management with strong portfolio

million unsecured million issued asset-backed of During we securities. the debt of quarter, and $XXX $XXX

with from up in we total, X% shares. and In of we quarter, million In to our ratio through count returned dividends. X% range repurchase X% by Our of ago. adjusted to X.X% shareholders our the through equity of million repurchases X.X% targeted tangible a and year line share share reduced is X.X the $XXX

from Our in million of a $XXX share remainder XXXX count reduction includes further the share for projected repurchases EPS guidance the of the year.

results segment Let's in earning expenses to a steps the an XX% overall have maintain expenses results. in XX% in of a services in upcoming in portfolio. core for expenses success to marketing is consistent the improve with saw to season. strong achieved XX% in-school lending The to on Education of increases capital XX%. In our the the guidance year turn and the decline reflect lines and We a FFELP across related business quarter, efforts XX% of origination quarter's closing, primarily Slide operating the to decline consumer and we the second quarterly XX. provide were ratio Federal The lower efficiency of all contributed of efficiency continued peak the in to $X.XX We transition our which to face the strong rate levels simplify taken volatile environment. business, consistency full due

EPS for a of as our $X.XX remainder restructuring all of costs $X.XX to performance and for core the XXXX. full of date updated which incurred guidance the result to year, range includes and regulatory outlook quarter's Our this strong

based that Our recent rate an federal that scenario assumes speeds not we changes see related a curve of the in student to forward on acceleration prepayment outlook do loan programs. and the is

all increasing to value for for you Navient I'd continued and Dave in-depth for Thank your to commitment mentioned like we stakeholders. to remarks, in that thank continue his the conduct As Team time. reviews the dedication

questions. And now call will the for I open

Operator

[Operator Partners. of Bill with comes the Instructions] Ryan Seaport Our Research first line from question

William Ryan

some returns. little business talked and kind -- you a may what maybe lines ready the yet of and I individual appreciate not commitment about you're more of capital to other areas. flows to you bit and cash But deemphasizing and emphasizing be discuss

questions One been years. of It's the about I had fairly EPS. the stable was several last

about hitting side you're directional the inflection a are think EPS? how to of in But businesses at initiatives the change going looking question be of some you're the part growing could doing, revenue at recurring you're runoff. a looking As where than that faster the obviously it's point Because next the expect EPS equation. we maybe I year, the maybe

Joe Fisher

Sure.

Bill. related a obviously thought services, guidance. business growth we of the So perspective. in growth. we but providing BPS at as achieve long those of XX% certainly think year yet historically, that business take one term, growing not we that I'll of about terms in guidance organic thanks, of that just And a we're XXXX to look the from non-pandemic That's terms target here,

But are we're with that so growth, We also that margins. on focused exceeding far far this year. XX% teens high throughout

I target translate EPS that is EBITDA continue about would for how at we'll margin that and you high think teens then that look your XX% that to next So to to assumptions. can XXXX year levels,

William Ryan

Okay. quick follow-up. And one

a origination of you in-school in originations. early the talk little landscape on you're could maybe If competitive quarter. about kind bit the Obviously, for peak

originations how and If you double this the offering received you talk about product could roughly in do being is marketplace, to expect Navient's still year?

David L. Yowan

providing we're reviews with customers soon call, you the some on quarter has We quarter And season. simple the we that about good is but hope peak very channels being We're give margins being about I'm So to products feel be more nice to it's that Bill. third on look, on we feel your we're Thanks offering achieve that as volumes. and loan subsidiary. really But a you through in sure meet the focused early too to with originations, great focused from distribution to the ready on products Earnest question. call the about at our and disciplined for And we'll experience know, The third that. we Earnest the you, very too have. a the returns the team a offering update the we really gotten on certainly good in make robust season us. to feel

little year. -- a it's call that. on this and see So it early It's I think to too is wait on for make in-school a

Operator

the line question next Jeff Stanley. comes from Adelson Our of with Morgan

Jeffrey Adelson

the new on role. welcome And congratulations Dave, and

year. refi later don't get start loan that repayments benefit made to as Just comment Joe you meaningful volumes maybe this to going on any on student expect the

their that a they to Another lender saying loans are has refi-ing some be longer-term look space there's the borrowers aware monthly differences any payment. be are they're market and we something should and pitching expecting? not you're just are lower that this is of? in or approach been your noise more there as that I'm to going coming, Or in that curious, ramp this that expecting making these big to into idiosyncratic

David L. Yowan

thanks all welcome, it a for pause. rate-driven thanks Look, market. remarks, aren't -- much Jeff, market indicated increase think in of for because in and as very that, insight into our one but So the the at And we the fact, our a more experience and rates fact I the question. don't his increasing least we here, Fed Joe of the may that them is given market is payment the declining, significantly see time addressable

our And of so view that's it.

in demand. our We has But Earnest to see there's at and market you'll flexibility that was increased more forecast open demonstrated the not slides I financial full are if in got scale. we've business. a the operational to, for again those for included loan capacity that absolutely the year. effectively We've spoke loans that

business, So We're rates decline. open that addressable but see. until a see wait increase unless significant for begin we to and in market and don't

Jeffrey Adelson

That's NIM question it. one me think just outlook. for helpful. Got on I And other the

of impacts construct? under impacts from any asset management old change from liability to LIBOR, in about what SOFR as should Just your was thinking transition the are rates the think here away the be wondering trajectory happening and versus about there on we how

Joe Fisher

No.

we original to don't into point. baked any was from going change changes that had LIBOR actually smoothly and our have obviously So systems, And things guidance I guidance our this provided, the the have implemented are point. at to we SOFR, this at that so changed

Operator

of the with Shane Our JPMorgan. Rick from next question comes line

Richard Shane

really about you Consumer the providing way little student appreciate guidance. I segment things. talk and to a It's change the Lending private wanted the to We slides Two lending. the and bit helpful. additional guys are

in-school going expect then look when is you Slide I'm as reflection years of just we loans why that in over we X a assuming to starts the growth the repayment, 'XX. to First, of with spike And speed. and cash would decay see the next flows sort the at X, in it that's prepayment

Joe Fisher

in flow of it no not originations. get future out. do there projected of the the a originations actually if benefit actually, those cash the good a But to so run we cutoff were So as It's are is portfolio slides, X/XX we call out.

increase, that that actually certain the of has years. do those to taking outer with financings are in place terms In

Rick, have know, trusts over- collateralization. then existing facilities against borrow we that use you repurchase As we various that and fund to

So debt. that those after what securitizations this more that reflects down trusts is at into refinancing time them traditional paying and calling

with an to is versus we increase, it has So but it do the way originations. finance today new

Richard Shane

Joe, to segment that's you well. ask helpful. as Wanted I to apologize. And Welcome. related really David, a question this

a decade the X you if to created bank As way it a or you're review, strategic than different create your ago. decades out even conducting go were and a today, bank very you would look

about was chasing a it market you evolve business do the marketing does preferred business there, what growing the think done will lenders you do market decade in different reentering lending about direct if more you online? that ago? create the could is see way about you As that it student it and than share private lists, perhaps and XXXX? How Is or strategically

David L. Yowan

and for Trying exclusively, consumer that's in Thanks information that. for lending, feedback the slides. to welcome, Rick, the think helpful provide We It's that a and clear see simple provide upfront not customers what if particularly largely, what is digital. experience. experience we which I do designed to can you to you. we've Look, an for done and thanks and Earnest, look the on appreciate is with today

you that's first marketing need not people when to funnel of for if those, about information know, think they financial the readily a many available. you because As lot you products, they lose engage provide

bank clear simplicity point focused I need to We a be -- so at of And don't it's in point we order it's think simple have sale at we that sale. on. about be don't to of

wide of of a is capacity, -- way team terms through cost-effective at loans. other can I as we In financial variety former you, to of environments. capital sources a loans. feel associated tell our really finding financial with a cost finance team treasurer, risks other rates obviously managing capital these the lot scenarios like here the The we Navient a -- is history our and of There's elements really here and to and interest effective market have good a in structure, of managing of

of So ways business. today driven, cetera, better, be it's payment all I looking about and compete that capabilities simplicity rate having whether a our products, We assets but effectively. financial the us capacity it's point feel driven, that the think allow those to and we good to feel innovations in businesses that we strong for of offering about support to at of we across et like have We'll have today. foundation sale, do

Operator

Our the Instructions] line KBW. question comes with of Sakhrani [Operator Sanjay next from

Sanjay Sakhrani

review what before. undertaking. apply process Maybe the in you're might a you just the bit you I the you before. the a was philosophy little you on that you as just more But well. could versus mentioned the and were on touched little it know elaborate bit also case elaborate on could you're I on Obviously, you hoping was Board

this how a in could a we of lay you give a should land the about just on terms go-forward maybe of bit basis. think So of little us

David L. Yowan

Sanjay, for question. the Thanks,

imperatives the I that think on. on I'm the call things to the are focused you Those put I'd we that page. X

focusing maximizing while distributing efficient, being the our growth. your X more and think your capital more simple those cash -- flows, sheet our to in new. -- and not as retaining are things growth, balance value point, a strong on I suggested shareholders of They're to enhancing

before, we've imperatives. things way is a at I aperture I wider thinking those that's would with a when what had how the in at you than characterize of and any think does sort I'm change about leadership lens looking different look perhaps X

what I charged my describe lens, think different think I the right any wider those imperatives new I'm about. would at, don't are about But I changing X the look so to think different the in things think aperture for in have a this. we experience, a having with company. looks you a way. at leader you and see as those I as Board in

the off of to company as put little decision our would some Mae exit Segment, you significantly table. changes days, some because changed to resumption on imagine, it's originator, here. -- of at contract, beginning, too thinking a that, a is the significant the a whether that. I do operations. bit being end to of and here if the in that its our I'm you This the my nothing go pretty servicing ed can the scope of say So undergone scale about anything and Business not the sort has that footprint, table on loan back acquisition talked soon Processing is servicing it's some the the loan Sallie of to

about is And needs. I talked with expenses. our so also business sure operations trying scale making the that future of of I our business, talked aligned the current about scale variabilize to our and

a platform and I sold our is think expense that's that effectively fixed the critical doing parts whether FFELP, ago record pay-by-the-drink a servicing has revenue And some whether, you're growing as like here, that. or of in We declining. into our expense. of couple business of company converted years a

and going good we've I think we're that. opportunities more historically, look for that's done to do to like of example a things what

Sanjay Sakhrani

guess sort I Got of out just I just that as CFPB to sort process. have amenable terms of it. I'm And there. you a mean the us on at, in looming well. might ways in of outcome same where still maybe update that some how you can different we're curious is litigation be along lines, those

David L. Yowan

sure. Yes,

XXXX. May judgments really in both you date have summary So confident trial set We been those motions. as motions for know, of feel been hearing or for No parties motions would Those parties has to a briefed. filed acceptable and But solution case. that to would that's the behind that, certainly matter like think the said about find open us. all we put having our I are strength of

Operator

[Operator Instructions] question Courtney from with Our Barclays. Bahlman next comes

Courtney Bahlman

Most repurchases quick liability apologize already really a have or about missed, to for questions is Just change been operations one if bond all management of in I exercises course you but way any here? that are I my the there me. of thinking answered. the

Joe Fisher

we're in of upcoming good in position our No, maturities. a Courtney. terms From no there's change, perspective, our very

cash We $X.X have billion hand. on of

that well described future of coming quarters loans OC just $X.X as ability another over next have over of unencumbered we billion to We and the several that billion our in $X as have against. the presentation flows cash we the borrow

address you very opportunities opportunities upcoming discount, there's And we the good as So there spoken here But to certainly maturities. recently. at to bonds position in many with I've before, just that. we feel a those been a if get evaluate as haven't

Operator

question Bill Ryan follow-up Research from is with next a Our Partners. Seaport

William Ryan

forgiveness. changes some like which see any process What's from time changes second, kind been on made in And you IDR potential those and debt There's follow-up. on your do those would segment? changes of federal what proposals by loan the the be implemented, quick portfolios impact to frame? a specifically Just

Joe Fisher

Bill. Sure,

have and think federal announced borrowers about that repayment various have the here announced programs So way that options years just I are student there been over the to programs that available XX is the different over today. loan been

again to ways I to are payments And option view have forgiveness. another there reduce more this So host of that's as the attractive.

actually year a So a the forgiveness. we saw debt obviously ago the prepayments or less year ago surrounding with with than increase announcement -- just

While prepayment anticipate past, this over forgiveness, portfolio it's I've been look very program, just of well-seasoned early debt would as in rate this the some level interest at And a has time. activity would got said there gauge that just FFELP what to like. various at significant the it's another years, IBR with opportunities point, we've programs. we too reductions, whether But

there's been each introduction, of with less an impact. and So less

William Ryan

they frame implemented what And is? or then as kind time about get a Okay. Would thinking be so? year now are it from we of a if

Joe Fisher

tell, way think frame a about one but that's right I your the think to it. to I is time Yes, tough think

Operator

with Compass next Bologna from line Giuliano Our Point. comes question the of

Giuliano Anderes-Bologna

to currently, role. some curious bit to of I'd follow-up the provide IDR Congratulations enrolled that newer a of might percentage is just can just is of to through One about, sense and on IDR your how be the what could to new think it FFELP flow you about I'd of a a in plans be question this as if way on. curious what little a book related be Bill plans. forgiveness touching was programs

Joe Fisher

Yes.

overall programs of balances. portfolio, terms XX% the and it's today percent So borrowers about a in of IDR of of XX% as

Giuliano Anderes-Bologna

Or opportunities curious, is the Or realize Then of the businesses? growth new versa. if in versus you is I out get different you to when or a trying to kind questions focus these do forms. there's lot structure? the of on have asked different on focus But on the it inclusive? in figure you all figure think cost optimize helpful. vice think side, many to an a trying to emphasis process, very is Just about think out review That verticals there a on growth there's the I'd be been greater ways cutting for a other sense enhanced cost greater

David L. Yowan

Yes.

think -- we at question. Again, the that very so I a thanks broad I aperture point, think for have. this it's

us And from businesses to as But simplicity growth as and our -- expenses can. so flows growth idea and more is variabilize it trying efficiency, it the our businesses. operating at carefully, to and/or it definitely those capacity scope finding that efficient we -- at includes from portfolios to return greater enhancing And looking under many requires invest indicated, cash the the includes as of flexibility -- includes if greater really and increase operations shareholders. capital that the in our gives behind and I've looking expenses, free to and value becoming also scale ways of

can able versus we're on flows. point. those to point, other going call the and is a too we're you cash share it's how that. to think at But undertake if with to that, step And first I deploy then free at Our make do we we'll increase see as to one soon this this

Giuliano Anderes-Bologna

that follow-up one Maybe quick thread. on right. All

structure, cash now kind capital if You you'd platforms, kind looking flow. them you obviously manufacturing have obviously the at or build asset of come internally. asset curious be from can consider you internally for a platforms I'd if growth good of position and M&A with a great funding think or

David L. Yowan

would I education but confident think on loans. capabilities to about we say the guess things. the feel really say good originate finance I'd say we I first, have and table, I everything's private X that I'd

a at the finance loans, education I a has good really loans has way in an pleased we that Earnest has in to returns way low think and refi produced environment, our for feel are demonstrated, in originate shareholders. particularly scale rate that ability customers

capacity platform has think and I -- we've it. got more So I in think -- we has think that

comfortable loans moment. at I I originate we ability education table, to our So wouldn't I take anything with where at the we think feel off pretty about the are. pretty good feel but private do scale

Operator

remarks. would Jen conference hand to I now back closing over Earyes like for the to

Jen Earyes

today's today's Thank if call. you, me questions. you on for Shannon. Please us to everyone concludes follow-up contact We'd call. thank like any This joining have

Operator

This you Thank concludes for today's call. participating. conference

You may now disconnect.

Navient (NAVI) 26 Jul 232023 Q2 Earnings call transcript