Navient Corporation Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2016; Reports Net Charge-Offs for the Fourth Quarter Ended December 31, 2016; Provides Earnings Guidance for the Year 2017
January 25, 2017 at 02:50 am IST
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Navient Corporation reported unaudited consolidated earnings results for the fourth quarter and year ended December 31, 2016. For the quarter, on GAAP basis, the company's net income attributable to the company of $145 million or $0.48 diluted earnings per share, compared with $283 million or $0.78 diluted earnings per share for the year-ago quarter. Return on assets was 0.49% against 0.86% a year ago. Net interest income was $378 million against $536 million a year ago. Net income from continuing operations was $145 million against $283 million a year ago. Income from continuing operations before income tax expense was $241 million against $447 million a year ago. On core basis, the company's net income attributable to the company was $129 million or $0.43 diluted earnings per share, compared with $169 million or $0.47 diluted earnings per share for the year-ago quarter. The decrease in diluted core earnings per share was primarily the result of a $72 million reduction in net interest income primarily due to the amortization of the portfolio and an $11 million increase in operating expenses, partially offset by an $18 million reduction in provisions for loan losses and fewer shares outstanding due to common share repurchases. Return on assets was 0.43% against 0.51% a year ago.
For the year, on GAAP basis, the company's net income attributable to the company of $681 million or $2.12 diluted earnings per share, compared with $984 million or $2.58 diluted earnings per share a year ago. Return on assets was 0.55% against 0.73% a year ago. The decrease in diluted earnings per share was primarily due to a $516 million decrease in net interest income, a $49 million decrease in net gains on derivative and hedging activities, a $36 million decrease in servicing revenue, a $33 million increase in operating expenses, a $20 million decrease in gains on debt repurchases and a $10 million decrease in other income. Net interest income was $1,705 million against $2,221 million a year ago. Income from continuing operations was $681 million against $983 million a year ago. Income from continuing operations before income tax expense was $1,108 million against $1,580 million a year ago. On core basis, the company's net income attributable to the company was $587 million or $1.82 diluted earnings per share, compared with $681 million or $1.79 diluted earnings per share a year ago. Return on assets was 0.48% against 0.50% a year ago.
For the quarter, the company reported total net charge-offs of $130 million, down $11 million from $141 million in fourth-quarter 2015.
For the year 2017, the company expects core earnings per share to be between $1.80 and $1.84, excluding expenses associated with regulatory costs.
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 Reports Unaudited Consolidated Earnings Results for the Fourth Quarter and Year Ended December 31, 2016; Reports Net Charge-Offs for the Fourth Quarter Ended December 31, 2016; Provides Earnings Guidance for the Year 2017