Navient (NASDAQ: NAVI) reported Q2 EPS of $0.40, in-line with the analyst estimate of $0.40.

Federally Guaranteed Student Loans (FFELP)

In its FFELP loans segment, Navient acquires and finances FFELP loans.

Core earnings for the segment were $93 million in second-quarter 2015, compared with the year-ago quarter's $72 million. This increase was primarily the result of a $30 million increase in servicing fees and a $9 million reduction in expenses. This was partially offset by an $18 million decrease in net interest income due to a decline in the net interest margin.

The company acquired $1.0 billion of FFELP loans in the second-quarter 2015 for a total of $1.8 billion of FFELP loans acquired year to date. At June 30, 2015, Navient held $100.3 billion of FFELP loans, compared with $99.7 billion of FFELP loans held at June 30, 2014.

Private Education Loans

In its private education loans segment, Navient acquires, finances and services private education loans.

Core earnings for the segment were $22 million in second-quarter 2015, compared with the year-ago quarter's $86 million. This decrease is primarily the result of a $54 million decrease in net interest income due to a decline in the net interest margin and the balance of the portfolio. In addition, there was a $46 million increase in the provision for private education loan losses. This increase in provision was primarily the result of an increase in the amount of loans exiting deferment status in 2014 over prior years and those loans experiencing unfavorable credit trends compared to loans that exited deferment in prior years. This segment of borrowers returned to school during the recession, deferred payment on their existing loans, and exited deferment status in 2014.

Core earnings second-quarter 2015 private education loan portfolio results vs. second-quarter 2014 are as follows:

• Delinquencies of 90 days or more of 3.3 percent of loans in repayment, up from 3.2 percent.
• Total delinquencies of 6.8 percent of loans in repayment, down from 7.1 percent.
• Excluding the amount described below, the second-quarter 2015 charge-off rate was 2.7 percent of average loans in repayment, up from 2.5 percent. In the second quarter of 2015, the portion of the loan amount charged off at default increased from 73 percent to 79 percent. This did not impact the provision for loan losses as previously this had been reserved through the allowance for loan losses. This change resulted in a $330 million reduction to the balance of the receivable for partially charged-off loans.
• Net interest margin of 3.55 percent, down from 4.00 percent.
• Provision for private education loan losses of $191 million, up from $145 million.

At June 30, 2015, Navient held $28.1 billion of private education loans, compared with $30.3 billion of private education loans held at June 30, 2014.

For earnings history and earnings-related data on Navient (NAVI) click here.