Navient Corporation Announces Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2015; Reports Net Charge-Offs for the Fourth Quarter of 2015
January 27, 2016 at 02:45 am IST
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Navient Corporation announced unaudited consolidated earnings results for the fourth quarter and year ended December 31, 2015. For the fourth-quarter 2015, GAAP net income was $286 million or $0.79 diluted earnings per share, compared with $263 million or $0.64 diluted earnings per share for the year-ago quarter. Core earnings for the quarter were $172 million or $0.48 diluted earnings per share, compared with $217 million or $0.53 diluted earnings per share for the year-ago quarter. The decrease is primarily the result of a $72 million reduction in net interest income, partially offset by a $23 million decline in provision for loan losses. Excluding expenses associated with regulatory-related costs, fourth-quarter 2015 and 2014 diluted core earnings per share were $0.49 and $0.54, respectively. Net interest income was $536 million against $614 million a year ago. Net income from continuing operations was $286 million against $262 million a year ago. Income from continuing operations before income tax expense was $452 million against $421 million a year ago. The increase in net income was primarily due to a $115 million increase in net gains on derivative and hedging activities, a $23 million decrease in the provision for loan losses, a $21 million increase in gains on debt repurchases, $12 million increase in asset recovery revenue and a $10 million decrease in restructuring and other reorganization expenses. Net interest income decreased by $78 million, primarily due to a reduction in Private Education Loan net interest income resulting from a decline in the loan balance and net interest margin, as well as a reduction in the net interest margin on the FFELP Loans. Return on assets was 0.87% compared with 0.76% for the same period a year ago.
For 2015, GAAP net income was $997 million or $2.61 diluted earnings per share, compared with $1.1 billion or $2.69 diluted earnings per share for 2014. Core earnings for the year were $694 million or $1.82 diluted earnings per share, compared with $818 million or $1.93 diluted earnings per share for 2014. Excluding expenses associated with regulatory-related costs, 2015 and 2014 diluted core earnings per share were $1.85 and $2.10, respectively. Net interest income was $2,221 million against $2,667 million a year ago. Net income from continuing operations was $996 million against $1,149 million a year ago. Income from continuing operations before income tax expense was $1,600 million against $1,837 million a year ago. The decrease in net income was primarily due to a $446 million decline in net interest income, a $65 million decrease in other income, and a $21 million decrease in asset recovery revenue. Net interest income decreased by $446 million, of which $186 million related to the deemed distribution of SLM BankCo on April 30, 2014. Also contributing to the decrease was a reduction in Private Education Loan net interest income due to a decline in the loan balance and net interest margin, as well as a reduction in the net interest margin on the FFELP Loans. Return on assets was 0.74% compared with 0.81% for the same period a year ago.
For the quarter, the company reported total net charge-offs of $141 million against $174 million a year ago.
Navient Corporation provides technology-enabled education finance and business processing solutions. The Company operates through three segments: Federal Education Loans, Consumer Lending and Business Processing. In the Federal Education Loans segment, it owns Federal Family Education Loan Program (FFELP) loans and performs servicing on this portfolio. It also service FFELP Loans owned by other institutions. In the Consumer Lending segment, it owns originates and services in-school and refinance Private Education Loans. In the Business Processing segment, it provides business processing solutions, such as omnichannel contact center services, workflow processing, and revenue cycle optimization. It offers solutions to federal agencies, state governments, tolling and parking authorities, and other public sector clients. The Company's clients include hospitals, hospital systems, medical centers, large physician groups, other healthcare providers and public health departments.
Navient Corporation Announces Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2015; Reports Net Charge-Offs for the Fourth Quarter of 2015