Navient (NAVI) Investor update summary

Corporate structure and strategy

• A newly formed holding company owns separate legacy and continuing subsidiaries, with consolidated SEC reporting; the subsidiaries have standalone statements and boards, preserving the option of a fuller separation.

• The legacy subsidiary holds FFELP, legacy private and Earnest loans originated through Dec. 31, 2026; Earnest originates and services new loans and receives related intangible assets.

• The structure focuses the legacy business on cash generation and Earnest on growth; Earnest is assessed on return on attributable equity, while legacy performance centers on cash after unsecured debt service.

Legacy portfolio and cash generation

• Total loan assets were $42.2B at June 30, 2026, down from $46.6B at Dec. 31, 2024; non-strategic assets were $31.9B, including $26.6B FFELP and $5.4B private legacy.

• Runoff and declining securitization leverage are expected to weigh on earnings and ROE; roughly three-quarters of the June-end portfolio was in loan types no longer originated.

• Through 2045, projected net sources are $12.0B after portfolio inflows and variable servicing expense, less $5.3B unsecured debt principal and $1.9B interest; projected discretionary cash before overhead and taxes is $4.7B.

• Estimated lifetime third-party servicing expense is $600M; outsourcing made costs variable and avoided materially higher expense.

• Discretionary cash may support Earnest growth or shareholder distributions, including buybacks; allocation depends on relative returns and circumstances, with no fixed formula.

Earnest growth and efficiency

• Originations are forecast at $3.8B in 2026, versus $1.401B in 2024 and less than $1B in 2023; weighted-average FICO through June 2026 was 774, versus 756 in 2024.

• Direct non-marketing operating expenses are forecast at 2.2% of originations in 2026, versus 4.6% in 2024; AAA debt funded 94% of Refinance through June 2026, versus 89% in 2024.

• Originations are shifting toward higher-quality assets and more efficient financing; additional products may offer marketing and customer-acquisition cost synergies.

• Higher rates challenge refinance affordability; In-School and personal loan offerings provide scope to balance growth and margins.