Wilmington-based Navient posted lower second-quarter 2014 earnings – the first since the launch as an independent publicly traded company earlier in the year.
The company’s results did show improvement in student loan portfolio credit quality with 90-plus day delinquencies on its federal and private loan portfolio declining to the lowest levels since 2008. During the quarter, the company received an extension of its loan servicing contract from the U.S. Department of Education.
“Navient’s first earnings release demonstrates that strong financial performance and industry-leading customer success go hand in hand,” said Jack Remondi, president and CEO, Navient. “Our approach to loan servicing continues to help more customers successfully manage their student loan payments and avoid the consequences of default, as reflected in the improving credit quality of the loans we service. As the leader in default prevention, we assisted 667,000 borrowers to pay off their student loans in full over the past year. Looking ahead, Navient is well positioned to grow as more institutions turn to us for loan servicing and asset recovery solutions that focus on customer success and compliance.”
Core earnings for the quarter were $241 million, compared with $447 million for the year-ago quarter. The company stated that expenses related to the separation of Sallie Mae and Navient were factors in the lower earnings.
Sallie Mae, now a banking entity, is based near Newark.
On June 13, the U.S. Department of Education extended its servicing contract with Navient to service Direct Student Loan Program federal loans for five more years. Navient services about 5.8 million accounts under this contract.
The company, like its predecessor, remains under fire in many quarters, with Democrats in the U.S. Senate criticizing the decision by the government
In June 2014, Navient paid a common stock dividend of $0.15 per share which was equal to the prior quarterly common stock dividend paid by SLM Corporation prior to the spin-off.
