Navient reported higher earnings in the second quarter, despite challenges posed by coronavirus.
The student loan services company is based in Wilmington.
“The COVID-19 crisis continues to challenge our nation, customers and clients. We have actively responded to the needs of the people we serve, providing immediate payment relief options to more than six million borrowers and assisting states in implementing important programs to benefit their residents,” said Jack Remondi, CEO of Navient. “The quarter’s exceptional results benefited from our high-quality education loan portfolio, a favorable interest rate environment, our continued focus on efficiency, and the innovation and commitment of our more than 6,000 employees.”
Highlights
- Core Earnings were $146 million compared to $131 million in the year-ago quarter.
- Net interest income increased $26 million primarily due to an increase in unhedged floor income as a result of the decrease in interest rates
- Charge-offs were $12 million compared with $7 million in second-quarter 2019. CECL requires the charge-offs to include the premium or discount related to defaulted loans which increased the second-quarter 2020 charge-offs by $4 million
- Delinquencies greater than 30 days were $3.5 billion compared with $5.8 billion in second-quarter 2019.
- Forbearances were $15.5 billion, up $7.2 billion from $8.2 billion in second-quarter 2019.
- Other revenue decreased $28 million primarily due to a $20 million decrease in asset recovery revenue, which was primarily a result of the natural decline in the contingent collections receivable inventory as well as the impact of COVID-19 on certain collection activities.
- Operating expenses were $19 million lower primarily as a result of the decrease in asset recovery volume discussed above as well as improvements in operating efficiencies.
Shares of Navient are trading at about $8, down from $14 in February.
