I would use the Live Paint Bucket tool.
Assuming your text has been expanded and you are working with paths now:
- select both: letter object and your navy background
- go to Live Paint Bucket tool
- set default fill color to white
- hit overlapping area
This technique gives you a huge flexibility – you can freely change position of your objects and Illustrator will update/recalculate the overlapping area fully automatically!
I hope this helps
Regards,
Pawel Kuc