What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 397 added, 161 removed, 869 unchanged (39% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

March 31, 2024 December 31, 2023

Loans and accrued interest receivable (net of allowance for loan losses of $ 106,008 and

$ 104,643 , respectively)

June 30, 2024 December 31, 2023

Loans and accrued interest receivable (net of allowance for loan losses of $ 96,764 and $ 104,643 , respectively)

$ 10,939,519 13,108,204

54 unchanged sentences

(Dollars in thousands, except share data)

Three months ended

Three months ended Six months ended

June 30, June 30,

2024 2023 2024 2023

Interest income:

4 unchanged sentences

Net interest income 66,407 50,879 140,628 117,398

Less provision for loan losses 10,928 34,275

Less provision (negative provision) for loan losses 3,611 ( 11,380 ) 14,440 791

Net interest income after provision for loan losses 62,796 62,259 126,188 116,607

4 unchanged sentences

Other, net 28,871 ( 9,167 ) 45,734 ( 24,235 )

(Loss) gain on sale of loans, net ( 41 ) 11,812

Loss on sale of loans ( 1,438 ) ( 5,461 ) ( 1,579 ) ( 15,753 )

Impairment expense and provision for beneficial interests ( 7,776 ) — ( 7,813 ) —

Derivative market value adjustments and derivative settlements, net 3,182 2,070 12,903 ( 12,005 )

18 unchanged sentences

shareholders - basic and diluted

$ 1.23 0.73 3.22 1.43

Weighted average common shares outstanding - basic and diluted

4 unchanged sentences

(Dollars in thousands)

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net income $ 43,675 17,243 114,429 39,428

7 unchanged sentences

Net changes related to equity method investee's other comprehensive income:

(Loss) gain on cash flow hedge ( 967 ) 2

Gain (loss) on cash flow hedge 335 ( 501 ) ( 632 ) ( 499 )

Income tax effect ( 80 ) 255 120 ( 381 ) 152 ( 480 ) 120 ( 379 )

10 unchanged sentences

Class A Class B

Balance as of December 31, 2022 — 26,461,651 10,668,460 $ — 265 107 1,109 3,234,844 ( 37,366 ) 943 3,199,902

Balance as of March 31, 2023 — 26,623,662 10,668,460 $ — 266 107 4,639 3,243,985 ( 27,006 ) ( 16,197 ) 3,205,794

Issuance of noncontrolling interests — — — — — — — — — 11,703 11,703

7 unchanged sentences

Repurchase of common stock — ( 4,734 ) — — — — ( 465 ) — — — ( 465 )

Balance as of June 30, 2023 — 26,646,490 10,668,460 $ — 266 107 10,114 3,261,717 ( 21,458 ) ( 22,619 ) 3,228,127

Balance as of March 31, 2024 — 26,055,314 10,663,088 $ — 261 107 1,101 3,304,197 ( 8,476 ) ( 61,470 ) 3,235,720

Issuance of noncontrolling interests — — — — — — — — — 6,618 6,618

Net income (loss) — — — — — — — 45,091 — ( 1,416 ) 43,675

Other comprehensive income — — — — — — — — 6,216 — 6,216

Distribution to noncontrolling interests — — — — — — — — — ( 19,864 ) ( 19,864 )

Cash dividends on Class A and Class B common stock - $ 0.28 per share

— — — — — — — ( 10,158 ) — — ( 10,158 )

Issuance of common stock, net of forfeitures — 18,506 — — — — 2,171 — — — 2,171

Compensation expense for stock based awards — — — — — — 2,733 — — — 2,733

Repurchase of common stock — ( 487,980 ) — — ( 5 ) — ( 5,348 ) ( 41,489 ) — — ( 46,842 )

Acquisition of remaining 20 % of GRNE Solar, net of tax

— — — — — — — ( 2,340 ) — 2,093 ( 247 )

Balance as of June 30, 2024 — 25,585,840 10,663,088 $ — 256 107 657 3,295,301 ( 2,260 ) ( 74,039 ) 3,220,022

See accompanying notes to consolidated financial statements.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in thousands, except share data)

Preferred stock shares Common stock shares Preferred stock Class A common stock Class B common stock Additional paid-in capital Retained earnings Accumulated other comprehensive loss Noncontrolling interests Total equity

Class A Class B

Balance as of December 31, 2022 — 26,461,651 10,668,460 $ — 265 107 1,109 3,227,680 ( 37,366 ) ( 8,596 ) 3,183,199

8 unchanged sentences

Repurchase of common stock — ( 41,247 ) — — — — ( 3,767 ) — — — ( 3,767 )

Balance as of March 31, 2024 — 26,055,314 10,663,088 $ — 261 107 1,101 3,312,869 ( 8,476 ) ( 48,082 ) 3,257,780

Balance as of June 30, 2023 — 26,646,490 10,668,460 $ — 266 107 10,114 3,261,717 ( 21,458 ) ( 22,619 ) 3,228,127

Balance as of December 31, 2023 — 26,400,630 10,663,088 $ — 264 107 3,096 3,270,403 ( 20,119 ) ( 53,644 ) 3,200,107

Issuance of noncontrolling interests — — — — — — — — — 8,151 8,151

Net income (loss) — — — — — — — 118,498 — ( 4,069 ) 114,429

Other comprehensive income — — — — — — — — 17,859 — 17,859

Distribution to noncontrolling interests — — — — — — — — — ( 26,570 ) ( 26,570 )

Cash dividends on Class A and Class B common stock - $ 0.56 per share

— — — — — — — ( 20,528 ) — — ( 20,528 )

Issuance of common stock, net of forfeitures — 69,914 — — 1 — 3,297 — — — 3,298

Compensation expense for stock based awards — — — — — — 5,834 — — — 5,834

Repurchase of common stock — ( 884,704 ) — — ( 9 ) — ( 11,570 ) ( 70,732 ) — — ( 82,311 )

Acquisition of remaining 20 % of GRNE Solar, net of tax

— — — — — — — ( 2,340 ) — 2,093 ( 247 )

Balance as of June 30, 2024 — 25,585,840 10,663,088 $ — 256 107 657 3,295,301 ( 2,260 ) ( 74,039 ) 3,220,022

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three months ended

Six months ended

Net income attributable to Nelnet, Inc.

4 unchanged sentences

Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs 69,623 93,573

Loan discount accretion ( 7,433 ) ( 7,676 )

Loan discount and deferred lender fees accretion ( 22,538 ) ( 15,412 )

Provision for loan losses 14,440 791

2 unchanged sentences

Proceeds from (payments to) clearinghouse - initial and variation margin, net 5,716 ( 209,886 )

Loss (gain) on sale of loans, net 41 ( 11,812 )

Loss on investments, net of gains 8,348 24,344

Loss on sale of loans 1,579 15,753

Loss on investments, net 6,985 49,834

Deferred income tax benefit ( 4,814 ) ( 16,613 )

Non-cash compensation expense 6,004 7,810

Decrease in loan and investment accrued interest receivable 79,841 16,630

Impairment expense and provision for beneficial interests 7,813 —

Decrease (increase) in loan and investment accrued interest receivable 150,907 ( 4,884 )

Decrease in accounts receivable 36,329 59,142

8 unchanged sentences

Purchases and originations of loans ( 430,575 ) ( 411,868 )

Purchases of loans from a related party — ( 467,519 )

Net proceeds from loan repayments, claims, and capitalized interest 2,125,052 1,348,827

7 unchanged sentences

Proceeds from other investments and repayments of notes receivable 53,635 14,982

Purchases of held-to-maturity debt securities — ( 2,889 )

Redemption of held-to-maturity debt securities 5,041 1,487

3 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Three months ended

Six months ended

Cash flows from financing activities:

2 unchanged sentences

Payments of debt issuance costs ( 693 ) ( 2,214 )

Increase (decrease) in bank deposits, net 58,462 ( 15,555 )

Increase in bank deposits, net 146,873 39,724

Decrease in due to customers ( 36,642 ) ( 48,728 )

2 unchanged sentences

Proceeds from issuance of common stock 967 890

Acquisition of noncontrolling interest ( 325 ) —

Issuance of noncontrolling interests 27,396 14,018

13 unchanged sentences

Receipt of asset-backed investment securities as consideration from sale of loans $ — 58,182

Transfer of available-for-sale securities to restricted $ 8,262 —

Distribution to noncontrolling interests $ 24,235 11,050

Issuance of noncontrolling interests $ 19,245 1,114

(a) The Company utilized $ 8.6 million and $ 5.7 million of federal and state tax credits related primarily to renewable energy during the three months ended March 31, 2024 and 2023, respectively.

(a) The Company utilized $ 20.3 million and $ 13.9 million of federal and state tax credits related primarily to renewable energy during the six months ended June 30, 2024 and 2023, respectively.

The following table presents a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total of the amounts reported in the consolidated statements of cash flows.

As of As of As of As of

March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022

June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022

Total cash and cash equivalents $ 145,478 168,112 121,769 118,146

9 unchanged sentences

The accompanying unaudited consolidated financial statements of Nelnet, Inc.

and subsidiaries (the “Company”) as of March 31, 2024 and for the three months ended March 31, 2024 and 2023 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2023 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented.

and subsidiaries (the “Company”) as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2023 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented.

The preparation of financial statements in conformity with U.S.

1 unchanged sentence

Actual results could differ from those estimates.

Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results for the year ending December 31, 2024.

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024.

The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report").

Reclassifications and Immaterial Error Corrections

During the second quarter of 2024, the Company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the June 30, 2024 presentation.

The Company determined the reversal of provision for loan losses resulting from the sale of loans should be presented as a reduction to the provision for loan losses rather than the historical presentation as a gain/(loss) on sale of loans included in "other income (expense)" on the consolidated statements of income.

Prior period amounts have been corrected to conform to the current period presentation resulting in a reclassification of $ 21.0 million and $ 43.1 million for the three and six months ended June 30, 2023, respectively.

This correction had no impact on previously reported consolidated assets, liabilities, total equity, net income, and cash flows from operating activities.

Solar Tax Equity Investments

The Company relies on audited financial statements provided by third parties to record its share of earnings or losses on its solar tax equity investments.

The Company determined that the Hypothetical Liquidation at Book Value (HLBV) method of accounting was not consistently adopted by all third parties in such audited financial statements for those solar tax equity investments made under a lease pass-through structure.

The adoption of the HLBV method of accounting accelerates accounting losses in the initial years of the investment but has no impact on the overall economics of the transaction.

During the second quarter of 2024, the Company fully adopted HLBV accounting for these investments and prior period amounts have been corrected, resulting in an increase in solar investment losses included in "other, net" in "other income (expense)" on the consolidated statements of income of $ 2.2 million and $ 3.2 million for the three and six months ended June 30, 2023, respectively, partially offset by an increase in "net loss attributed to noncontrolling interests" of $ 1.0 million and $ 1.3 million for the three and six months ended June 30, 2023, respectively.

The after-tax net income impact to Nelnet, Inc.

was a reduction of $ 0.8 million and $ 1.4 million for the three and six months ended June 30, 2023, respectively.

Consolidated "total equity" on the consolidated balance sheet was reduced $ 21.8 million as of December 31, 2023 and $ 16.7 million as of December 31, 2022, with the 2022 impact reflecting the cumulative impact of this correction through such date.

Loans and Accrued Interest Receivable and Allowance for Loan Losses

Loans and accrued interest receivable consisted of the following:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Non-Nelnet Bank:

10 unchanged sentences

Accrued interest receivable 619,472 764,385

Loan discount, net of unamortized loan premiums and deferred origination costs ( 32,674 ) ( 33,872 )

Loan discount and deferred lender fees, net of unamortized loan premiums and deferred origination costs ( 36,157 ) ( 33,872 )

Allowance for loan losses:

9 unchanged sentences

The following table summarizes the allowance for loan losses as a percentage of the ending loan balance for each of the Company's loan portfolios.

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Non-Nelnet Bank:

1 unchanged sentence

Private education loans 5.28 % 5.68 %

Consumer and other loans (b) 7.88 % 13.66 %

Private education loans 1.00 % 0.93 %

Consumer and other loans 6.29 % 7.40 %

(a) As of June 30, 2024 and December 31, 2023, the allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty was 20.9 % and 21.8 %, respectively.

(b) Decrease as of June 30, 2024 compared with December 31, 2023 is due to the change in the mix of loans outstanding at the end of each period reported.

During the three months ended June 30, 2024 and 2023, the Company sold $ 133.8 million and $ 158.3 million, respectively, of consumer loans, and recognized losses from such sales of $ 1.4 million and $ 5.5 million, respectively.

During the six months ended June 30, 2024 and 2023, the Company sold $ 333.9 million and $ 420.2 million, respectively, of FFELP and consumer loans, and recognized losses from such sales of $ 1.6 million and $ 15.8 million, respectively.

For certain of these loan sales, the Company has sold portfolios of loans to unrelated third parties who securitized such loans.

As partial consideration received for the loans sold, the Company received residual interest in the loan securitizations and asset-backed investment securities that are included in "investments and notes receivable" on the Company's consolidated balance sheets.

Activity in the Allowance for Loan Losses

The following table presents the activity in the allowance for loan losses by portfolio segment.

Balance at beginning of period Provision (negative provision) for loan losses (a) Charge-offs Recoveries Balance at end of period

Three months ended June 30, 2024

Non-Nelnet Bank:

Federally insured loans $ 61,723 ( 1,970 ) ( 5,573 ) — 54,180

Private education loans 14,736 — ( 1,827 ) 156 13,065

Consumer and other loans 18,761 ( 2,255 ) ( 2,634 ) 263 14,135

(a) As of March 31, 2024 and December 31, 2023, the allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty was 21.7 % and 21.8 %, respectively.

The Company has sold portfolios of loans to unrelated third parties who securitized such loans.

As partial consideration received for the loans sold, the Company received residual interest in the loan securitizations that are included in "investments and notes receivable" on the Company's consolidated balance sheets.

The following table summarizes the loans sold and gains/losses recognized by the Company during the three months ended March 31, 2024 and 2023.

(par value) Gain (loss) Loan type Residual interest received in securitization

Three months ended March 31, 2024

March 27 $ 199,694 — FFELP —

March 28 405 ( 41 ) Home equity —

Private education loans 3,660 255 ( 460 ) 104 3,559

Consumer and other loans 7,128 7,519 ( 2,837 ) 15 11,825

$ 106,008 3,549 ( 13,331 ) 538 96,764

Three months ended March 31, 2023

January 31 $ 97,350 ( 1,441 ) Home equity 64.8 % (a)

January 31 42,275 4,350 Consumer 13.3

March 2 122,132 8,966 Consumer 24.6 (a)

March 22 145 ( 63 ) Home equity —

Three months ended June 30, 2023

Non-Nelnet Bank:

Federally insured loans $ 79,331 — ( 5,270 ) — 74,061

Private education loans 15,175 — ( 1,069 ) 216 14,322

Consumer and other loans 35,317 ( 12,873 ) ( 2,880 ) 441 20,005

Federally insured loans 160 ( 4 ) ( 2 ) — 154

Private education loans 2,894 517 ( 506 ) — 2,905

Consumer and other loans 1,827 989 — — 2,816

$ 134,704 ( 11,371 ) ( 9,727 ) 657 114,263

(a) In addition to receiving a residual interest in the securitizations, the Company also received $ 14.5 million and $ 43.7 million of asset-backed investment securities as part of the January 31 and March 2, 2023 transactions, respectively, that are included in "investments and notes receivable" on the Company's consolidated balance sheet.

Activity in the Allowance for Loan Losses

The following table presents the activity in the allowance for loan losses by portfolio segment.

Balance at beginning of period Provision (negative provision) for loan losses Charge-offs Recoveries Loan sales Balance at end of period

Three months ended March 31, 2024

Six months ended June 30, 2024

Non-Nelnet Bank:

5 unchanged sentences

$ 104,643 14,478 ( 23,569 ) 1,212 96,764

Three months ended March 31, 2023

Six months ended June 30, 2023

Non-Nelnet Bank:

6 unchanged sentences

$ 131,827 814 ( 19,419 ) 1,041 114,263

(a) The following table presents the reduction to provision for loan losses as a result of the loan sales described under "Loan Sales" above.

Provision for current period Loan sale reduction to provision Provision

(negative provision) for loan losses

Three months ended June 30, 2024

Non-Nelnet Bank

Consumer and other loans $ 10,340 ( 12,595 ) ( 2,255 )

Three months ended June 30, 2023

Non-Nelnet Bank

Consumer and other loans $ 8,098 ( 20,971 ) ( 12,873 )

Six months ended June 30, 2024

Non-Nelnet Bank

Consumer and other loans $ 19,030 ( 12,695 ) 6,335

Six months ended June 30, 2023

Non-Nelnet Bank

Consumer and other loans $ 37,307 ( 43,077 ) ( 5,770 )

The following table summarizes annualized net charge-offs as a percentage of average loans for each of the Company's loan portfolios.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Non-Nelnet Bank:

5 unchanged sentences

Consumer and other loans 7.44 % — 7.66 % —

The Company recorded a negative provision for loan losses for the three months ended March 31, 2024 for its Non-Nelnet Bank federally insured and private education loan portfolios primarily due to the amortization of these portfolios.

The primary item impacting provision for loan losses for Non-Nelnet Bank consumer loans and Nelnet Bank's loan portfolios for the three months ended March 31, 2024 was the establishment of an initial allowance for loans originated and acquired during the period.

The Company recorded a provision for loan losses for the three months ended March 31, 2023 due to (i) management's estimate of declining economic conditions as of March 31, 2023 in comparison to management's estimate of economic conditions used to determine the allowance for loan losses as of December 31, 2022;

and (ii) the establishment of an initial allowance for loans originated and acquired during the period.

These amounts were partially offset by the amortization of the federally insured loan portfolio.

The primary items impacting provision for loan losses during the periods presented above were the establishment of an initial allowance for consumer and other loans originated and acquired and the reversal of provision for consumer and other loans sold.

The Company recorded a negative provision for loan losses for its federally insured loan portfolio in 2024 due to the amortization of this portfolio and an increase in prepayment assumptions.

Unfunded Loan Commitments

As of March 31, 2024 and December 31, 2023, Nelnet Bank had a liability of approximately $ 57,000 and $ 158,000 , respectively, related to $ 9.1 million and $ 12.3 million, respectively, of unfunded private education, consumer, and other loan commitments.

The liability for unfunded loan commitments is included in "other liabilities" on the consolidated balance sheets.

During the three months ended March 31, 2024 and 2023, Nelnet Bank recognized negative provision for loan losses of approximately $ 101,000 and $ 15,000 , respectively, related to unfunded loan commitments.

As of June 30, 2024 and December 31, 2023, Nelnet Bank had a liability of approximately $ 119,000 and $ 158,000 , respectively, related to $ 11.5 million and $ 12.3 million, respectively, of unfunded private education, consumer, and other loan commitments.

When a new loan commitment is made, the Company records an allowance that is included in "other liabilities" on the consolidated balance sheet by recording a provision for loan losses.

When the loan is funded, the Company transfers the liability to the allowance for loan losses.

Below is a reconciliation of the provision for loan losses reported in the consolidated statements of income.

Three months ended Six months ended

June 30, June 30,

2024 2023 2024 2023

Provision for loan losses from allowance activity table above $ 3,549 ( 11,371 ) 14,478 814

Provision (negative provision) for unfunded loan commitments 62 ( 9 ) ( 38 ) ( 23 )

Provision (negative provision) for loan losses reported in consolidated statements of income $ 3,611 ( 11,380 ) 14,440 791

Key Credit Quality Indicators

4 unchanged sentences

The following table presents the Company’s loan status and delinquency amounts.

As of March 31, 2024 As of December 31, 2023 As of March 31, 2023

As of June 30, 2024 As of December 31, 2023 As of June 30, 2023

Federally insured loans - Non-Nelnet Bank:

28 unchanged sentences

Total private education loans and accrued interest receivable, net of allowance for loan losses $ 229,585 $ 256,186 $ 218,113

As of March 31, 2024 As of December 31, 2023 As of March 31, 2023

Consumer and other loans - Non-Nelnet Bank:

8 unchanged sentences

Accrued interest receivable 763 861 2,246

Loan discount, net of unamortized premiums ( 5,451 ) ( 2,474 ) 913

Loan discount and deferred lender fees, net of unamortized premiums ( 9,205 ) ( 2,474 ) 750

Allowance for loan losses ( 14,135 ) ( 11,742 ) ( 20,005 )

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 156,870 $ 72,580 $ 172,318

As of June 30, 2024 As of December 31, 2023 As of June 30, 2023

Private education loans - Nelnet Bank (a):

22 unchanged sentences

Accrued interest receivable 1,219 575 214

Loan premium, net of unaccreted discount 1,359 ( 6 ) 1

Loan discount, net of unamortized premiums ( 1,037 ) ( 6 ) —

Allowance for loan losses ( 11,825 ) ( 5,351 ) ( 2,816 )

4 unchanged sentences

Nelnet Bank Private Education Loans

Loan balance as of March 31, 2024

Three months ended March 31, 2024 2023 2022 2021 2020 Total

Loan balance as of June 30, 2024

Six months ended June 30, 2024 2023 2022 2021 2020 Total

FICO at origination:

4 unchanged sentences

Greater than 794 1,760 17,464 72,638 53,755 4,801 150,418

No FICO score available or required 2,488 6,055 — — — 8,543

No FICO score available or required (a) 2,610 6,082 — — — 8,692

$ 7,780 53,011 179,601 105,728 8,292 354,412

7 unchanged sentences

Greater than 794 15,057 77,996 58,695 5,226 156,974

No FICO score available or required 4,052 — — — 4,052

No FICO score available or required (a) 4,052 — — — 4,052

$ 46,907 190,466 114,278 8,869 360,520

Nelnet Bank Consumer and Other Loans

Loan balance as of March 31, 2024

Three months ended March 31, 2024 2023 2022 2021 2020 Total

Loan balance as of June 30, 2024

Six months ended June 30, 2024 2023 2022 2021 2020 Prior years Total

FICO at origination:

2 unchanged sentences

Greater than 769 35,957 19,243 106 4,899 2,262 1,062 63,529

No FICO score available or required 230 441 282 55 — 1,008

No FICO score available or required (a) 1,153 440 281 54 — — 1,928

$ 91,267 67,053 412 13,201 9,680 6,326 187,939

Loan balance as of December 31, 2023

2023 2022 2021 2020 Total

2023 2022 2021 2020 Prior years Total

FICO at origination:

2 unchanged sentences

Greater than 769 16,484 109 — — — 16,593

No FICO score available or required 386 284 55 — 725

No FICO score available or required (a) 386 284 55 — — 725

$ 71,853 444 55 — — 72,352

(a) Loans with no FICO score available or required refers to loans issued to borrowers for which the Company cannot obtain a FICO score or are not required to under a special purpose credit program.

Management proactively assesses the risk and size of this loan category and, when necessary, takes actions to mitigate the credit risk.

Nonaccrual Status

The Company does not place federally insured loans on nonaccrual status due to the government guaranty.

The amortized cost of private education, consumer, and other loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of March 31, 2024 and December 31, 2023, was not material.

The amortized cost of private education, consumer, and other loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of June 30, 2024 and December 31, 2023, was not material.

Amortized Cost Basis by Origination Year

The following table presents the amortized cost of the Company's private education, consumer, and other loans by loan status and delinquency amount as of March 31, 2024 based on year of origination.

The following table presents the amortized cost of the Company's private education, consumer, and other loans by loan status and delinquency amount as of June 30, 2024 based on year of origination.

Effective July 1, 2010, no new loan originations can be made under the FFEL Program and all new federal loan originations must be made under the Federal Direct Loan Program.

As such, all the Company’s federally insured loans were originated prior to July 1, 2010.

Three months ended March 31, 2024 2023 2022 2021 2020 Prior years Total

Six months ended June 30, 2024 2023 2022 2021 2020 Prior years Total

Private education loans - Non-Nelnet Bank:

12 unchanged sentences

Total private education loans and accrued interest receivable, net of allowance for loan losses $ 229,585

Gross charge-offs - three months ended March 31, 2024 $ — — — 76 36 901 1,013

Gross charge-offs - six months ended June 30, 2024 $ — — — 76 36 2,728 2,840

Consumer and other loans - Non-Nelnet Bank:

8 unchanged sentences

Accrued interest receivable 763

Loan discount, net of unamortized premiums ( 5,451 )

Loan discount and deferred lender fees, net of unamortized premiums ( 9,205 )

Allowance for loan losses ( 14,135 )

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 156,870

Gross charge-offs - three months ended March 31, 2024 $ — 733 1,076 101 21 26 1,957

Three months ended March 31, 2024 2023 2022 2021 2020 Prior years Total

Gross charge-offs - six months ended June 30, 2024 $ — 2,611 1,678 213 23 61 4,586

Private education loans - Nelnet Bank (a):

12 unchanged sentences

Total private education loans and accrued interest receivable, net of allowance for loan losses $ 359,063

Gross charge-offs - three months ended March 31, 2024 $ — 178 146 122 — — 446

Gross charge-offs - six months ended June 30, 2024 $ — 324 348 234 — — 906

Six months ended June 30, 2024 2023 2022 2021 2020 Prior years Total

Consumer and other loans - Nelnet Bank (a):

8 unchanged sentences

Accrued interest receivable 1,219

Loan premium, net of unaccreted discount 1,359

Loan discount, net of unamortized premiums ( 1,037 )

Allowance for loan losses ( 11,825 )

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 176,296

Gross charge-offs - three months ended March 31, 2024 $ — 1,967 — — — — 1,967

Gross charge-offs - six months ended June 30, 2024 $ 73 4,724 — — — 7 4,804

(a) For the periods presented for Nelnet Bank, the delinquency bucket periods conform with the delinquency bucket periods reflected in Nelnet Bank's Call Reports filed with the Federal Deposit Insurance Corporation.

1 unchanged sentence

The following tables summarize the Company’s outstanding debt obligations by type of instrument:

As of March 31, 2024

As of June 30, 2024

Interest rate

22 unchanged sentences

Other - due to related party 4,856 5.00 % 11/15/28 - 11/15/30

4/30/24 - 11/15/30

Discount on bonds and notes payable and debt issuance costs ( 67,093 )

31 unchanged sentences

Loan warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements.

The following table summarizes the Company's warehouse facilities as of March 31, 2024.

The following table summarizes the Company's warehouse facilities as of June 30, 2024.

Type of loans Maximum financing amount Amount outstanding Amount available Expiration of liquidity provisions Final maturity date Advance rate Advanced as equity support

4 unchanged sentences

(a) Effective March 6, 2024, the maximum financing amount on this facility was reduced from $ 1.25 billion to $ 950 million.

On May 17, 2024, this facility was amended to reduce the maximum financing amount from $ 950 million to $ 875 million, and to extend the expiration of liquidity provisions and final maturity date to July 15, 2024 and July 15, 2025, respectively.

On July 15, 2024, this facility was amended to reduce the maximum financing amount from $ 875 million to $ 800 million, and to extend the expiration of liquidity provisions and final maturity date to January 31, 2025 and January 31, 2026, respectively.

(b) This facility has a static advance rate until the expiration date of the liquidity provisions.

6 unchanged sentences

The Company has a $ 495.0 million unsecured line of credit that has a maturity date of September 22, 2026.

As of March 31, 2024, no amount was outstanding on the line of credit and $ 495.0 million was available for future use.

As of June 30, 2024, no amount was outstanding on the line of credit and $ 495.0 million was available for future use.

Repurchase Agreement

The Company has a repurchase agreement with a non-affiliated third party, the proceeds of which are collateralized by certain private education loan asset-backed securities (bond investments).

The outstanding balance under this agreement as of March 31, 2024 was $ 114.5 million.

The outstanding balance under this agreement as of June 30, 2024 was $ 111.2 million.

The agreement has various maturity dates through December 20, 2024 or earlier if either party provides 180 days’ prior written notice, and the Company is subject to margin deficit payment requirements if the fair value of the securities subject to the agreement is less than the original purchase price of such securities on any scheduled reset date.

5 unchanged sentences

Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.

As of March 31, 2024, the Company holds $ 310.3 million (par value) of its own FFELP asset-backed securities.

As of June 30, 2024, the Company holds $ 311.7 million (par value) of its own FFELP asset-backed securities.

In April 2023, the Company redeemed $ 188.6 million of FFELP loan asset-backed debt securities (bonds and notes payable) prior to their maturity.

The remaining unamortized debt discount associated with these bonds at the time of redemption was written-off, resulting in a $ 25.9 million non-cash expense recognized in April 2023.

This expense is included in "interest expense on bonds and notes payable and bank deposits" on the consolidated statements of income.

Derivative Financial Instruments

2 unchanged sentences

Derivative instruments used as part of the Company's interest rate risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2023 Annual Report.

A tabular presentation of such derivatives outstanding as of March 31, 2024 and December 31, 2023 is presented below.

The following table summarizes the Company’s outstanding basis swaps as of March 31, 2024 and December 31, 2023, in which the Company receives and pays the term adjusted Secured Overnight Financing Rate (SOFR) plus the tenor spread adjustment to LIBOR.

A tabular presentation of such derivatives outstanding as of June 30, 2024 and December 31, 2023 is presented below.

The following table summarizes the Company’s outstanding basis swaps, in which the Company receives and pays the term adjusted Secured Overnight Financing Rate (SOFR) plus the tenor spread adjustment to LIBOR.

Prior to the discontinuation of LIBOR on June 30, 2023, the Company received three-month LIBOR set discretely in advance and paid one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps").

Maturity Notional amount

June 30, 2024 December 31, 2023

2024 $ — 1,750,000

2026 1,150,000 1,150,000

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of March 31, 2024 and December 31, 2023 was the term adjusted SOFR (plus the tenor spread adjustment relating to LIBOR) plus 10.1 basis points.

2027 250,000 250,000

$ 1,400,000 3,150,000

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2024 and December 31, 2023 was the term adjusted SOFR (plus the tenor spread adjustment relating to LIBOR) plus 10.4 basis points and 10.1 basis points, respectively.

Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company as of March 31, 2024 and December 31, 2023, to economically hedge loans earning fixed rate floor income.

The following table summarizes the outstanding derivative instruments used by the Company as of June 30, 2024 and December 31, 2023 to economically hedge loans earning fixed rate floor income.

Maturity Notional amount Weighted average fixed rate paid by the Company (a)

10 unchanged sentences

Interest Rate Swaps

The following table summarizes the outstanding non-centrally cleared derivative instruments used by Nelnet Bank as of March 31, 2024 and December 31, 2023, to hedge exposure to variability in cash flows related to variable rate intercompany deposits.

The following table summarizes the outstanding non-centrally cleared derivative instruments used by Nelnet Bank as of June 30, 2024 and December 31, 2023 to hedge exposure to variability in cash flows related to variable rate intercompany deposits.

Maturity Notional amount Weighted average fixed rate paid by the Company (a)

14 unchanged sentences

Fair value of asset derivatives Fair value of liability derivatives

As of March 31, 2024 As of December 31, 2023 As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023 As of June 30, 2024 As of December 31, 2023

Interest rate swaps - Nelnet Bank $ 2,112 452 780 1,976

1 unchanged sentence

The following table summarizes the components of "derivative market value adjustments and derivative settlements, net" included in the consolidated statements of income.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

1:3 basis swaps $ 249 ( 65 ) 614 794

10 unchanged sentences

"Restricted investments" and “investments and notes receivable” consisted of the following:

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Amortized cost Gross unrealized gains Gross unrealized losses Fair value Amortized cost Gross unrealized gains Gross unrealized losses Fair value

7 unchanged sentences

Total Non-Nelnet Bank 512,139 8,952 ( 23,892 ) 497,199 594,963 6,903 ( 35,542 ) 566,324

FFELP loan 300,235 7,171 ( 1,611 ) 305,795 304,555 4,488 ( 2,286 ) 306,757

FFELP loan (b) 227,124 8,090 ( 1,350 ) 233,864 304,555 4,488 ( 2,286 ) 306,757

Private education loan — — — — 17,083 20 ( 10 ) 17,093

8 unchanged sentences

Debt securities 3,500 4,700

FFELP loan asset-backed securities 148,438 149,938

FFELP loan asset-backed securities (b) 217,283 149,938

Private education loan asset-backed securities 8,100 8,100

7 unchanged sentences

Investment in ALLO:

Voting interest/equity method (b) — 10,693

Preferred membership interest and accrued and unpaid preferred return (c) 157,456 155,047

Voting interest/equity method (c) — 10,693

Preferred membership interest and accrued and unpaid preferred return (d) 176,092 155,047

Total investment in ALLO 176,092 165,740

Beneficial interest in loan securitizations (d):

Consumer loans 147,076 134,113

Beneficial interest in loan securitizations (e):

Consumer loans, net of allowance for credit losses of $ 5,911 as of June 30, 2024

163,853 134,113

Private education loans 59,326 68,372

1 unchanged sentence

Total beneficial interest in loan securitizations 243,969 225,079

Solar (e) ( 133,772 ) ( 121,779 )

Solar (f) ( 176,105 ) ( 146,040 )

Notes receivable 28,565 53,747

2 unchanged sentences

Total investments and notes receivable $ 1,896,433 $ 1,846,707

(a) A portion of the private education loan asset-backed securities were subject to a repurchase agreement with a third party, as discussed in note 3 under "Repurchase Agreement." As of March 31, 2024, the par value and fair value of these securities was $ 151.9 million and $ 135.3 million, respectively.

(b) The Company accounts for its voting membership interests in ALLO under the Hypothetical Liquidation at Book Value (HLBV) method of accounting.

The Company recognized losses under the HLBV method of accounting on its ALLO voting membership interests investment of $ 10.7 million and $ 20.2 million during the three months ended March 31, 2024 and 2023, respectively.

(a) A portion of the private education loan asset-backed securities were subject to a repurchase agreement with a third party, as discussed in note 4 under "Repurchase Agreement." As of June 30, 2024, the par value and fair value of these securities was $ 148.1 million and $ 130.7 million, respectively.

(b) On May 22, 2024, securities at Nelnet Bank with a fair value of $ 70.6 million were transferred from available-for-sale to held-to-maturity.

The securities were reclassified at fair value at the time of the transfer, and such transfer represented a non-cash transaction.

Accumulated other comprehensive income as of May 22, 2024 included pre-tax unrealized gains of $ 3.4 million related to the transfer.

These unrealized gains will be amortized, consistent with the amortization of any premiums on such securities, over the remaining lives of the respective securities as an adjustment of yield.

(c) The Company accounts for its voting membership interests in ALLO under the Hypothetical Liquidation at Book Value (HLBV) method of accounting.

Under the HLBV method of accounting on its ALLO voting membership interests investment, the Company recognized no losses and $ 12.2 million of losses during the three months ended June 30, 2024 and 2023, respectively, and losses of $ 10.7 million and $ 32.4 million during the six months ended June 30, 2024 and 2023, respectively.

Losses from the Company's investment in ALLO are included in "other, net" in "other income (expense)" on the consolidated statements of income.

Absent additional equity contributions, the Company will not recognize additional losses for its voting membership interests in ALLO.

(c) As of March 31, 2024, the outstanding preferred membership interests and accrued and unpaid preferred return of ALLO held by the Company was $ 155.0 million and $ 2.4 million, respectively.

The preferred membership interests of ALLO held by the Company historically earned a preferred annual return of 6.25 % that increased to 10.00 % on April 1, 2024.

The Company recognized income on its ALLO preferred membership interests of $ 2.4 million and $ 2.2 million during the three months ended March 31, 2024 and 2023, respectively.

Absent additional equity contributions with respect to ALLO's voting membership interests, the Company will not recognize additional losses for its voting membership interests in ALLO.

(d) As of June 30, 2024, the outstanding preferred membership interests and accrued and unpaid preferred return of ALLO held by the Company was $ 169.5 million and $ 6.6 million, respectively.

The Company historically earned a preferred annual return of 6.25 % that increased to 10.00 % on April 1, 2024 for $ 155.0 million of preferred membership interests of ALLO held by the Company.

During the second quarter of 2024, the Company purchased an additional $ 14.5 million of preferred membership interests of ALLO, which earn a preferred annual return of 20.0 %.

The Company recognized income on its ALLO preferred membership interests of $ 4.2 million and $ 2.3 million during the three months ended June 30, 2024 and 2023, respectively, and $ 6.6 million and $ 4.5 million during the six months ended June 30, 2024 and 2023, respectively.

This income is included in "other, net" in "other income (expense)" on the consolidated statements of income.

(d) The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations.

As of the latest remittance reports filed by the various trusts prior to or as of March 31, 2024, the Company's ownership correlates to approximately $ 965 million, $ 490 million, and $ 335 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations.

(e) As of March 31, 2024, the Company has funded a total of $ 491.8 million in solar investments, which includes $ 208.9 million funded by syndication partners.

(e) The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations.

As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2024, the Company's ownership correlates to approximately $ 1.12 billion, $ 500 million, and $ 315 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations.

During the three months ended June 30, 2024, the Company recorded a $ 5.9 million allowance for credit losses (and related provision expense) related to certain of the Company's beneficial interest in consumer loan securitizations.

As of June 30, 2024, the Company's estimate of future cash flows from the beneficial interest in certain consumer loan securitizations was lower than previously anticipated due to increased consumer loan defaults within such securitizations.

(f) As of June 30, 2024, the Company has funded a total of $ 502.8 million in solar investments that remain outstanding, which includes $ 219.8 million funded by syndication partners.

The carrying value of the Company’s investment in a solar project is reduced by tax credits earned when the solar project is placed-in-service.

As of March 31, 2024, the Company has earned a total of $ 511.6 million of tax credits, which includes $ 248.6 million earned by syndication partners.

The solar investment carrying value on the consolidated balance sheet of $( 133.8 ) million as of March 31, 2024 represents the sum of total tax credits earned on solar projects placed-in-service through March 31, 2024 and the calculated HLBV cumulative net losses being larger than the total investment contributions made by the Company and its syndication partners on such projects.

The solar investment balance as of March 31, 2024, excluding the portion owned by syndication partners and reflected as "noncontrolling interests" on the consolidated balance sheet, was $( 70.1 ) million.

As of June 30, 2024, the Company has earned a total of $ 474.4 million of tax credits on those projects that remain outstanding, which includes $ 218.4 million earned by syndication partners.

The solar investment negative carrying value on the consolidated balance sheet of $ 176.1 million as of June 30, 2024 represents the sum of total tax credits earned on solar projects placed-in-service through June 30, 2024 and the calculated HLBV cumulative net losses being larger than the total investment contributions made by the Company and its syndication partners on such projects.

The solar investment negative carrying value as of June 30, 2024 excluding the portion owned by syndication partners, which is reflected as "noncontrolling interests" on the consolidated balance sheet, was $ 84.0 million.

The Company accounts for its solar investments using the HLBV method of accounting.

For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment.

The Company recognized net gains of $ 3.0 million and net losses of $ 1.9 million on its solar investments during the three months ended March 31, 2024 and 2023, respectively.

These amounts, which include net losses attributable to third-party noncontrolling interest investors (syndication partners), are included in “other, net” in "other income (expense)" on the consolidated statements of income.

Solar net losses attributed to noncontrolling interest investors was $ 1.2 million and $ 2.7 million for the three months ended March 31, 2024 and 2023, respectively, and is reflected in “net loss attributable to noncontrolling interests” in the consolidated statements of income.

Excluding net losses attributed to noncontrolling interest investors, the Company recognized net gains on its solar investments of $ 4.2 million and $ 0.8 million during the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, the Company is committed to fund an additional $ 146.6 million on solar investments, of which $ 76.2 million is expected to be provided by syndication partners.

The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of March 31, 2024:

As of March 31, 2024

The following table presents (i) the Company's recognized net (losses) gains, which include net losses attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net gains (losses) attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the Company's recognized net (losses) gains excluding net gains (losses) attributed to noncontrolling interest investors (such amount reflecting the before tax net income impact of such solar tax equity investments to the Company).

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Net (losses) gains $ ( 2,610 ) ( 10,086 ) 170 ( 13,030 )

net gains (losses) attributed to noncontrolling interest investors (syndication partners) 8 ( 8,430 ) ( 1,633 ) ( 11,428 )

Net (losses) gains, excluding activity attributed to noncontrolling interest investors $ ( 2,618 ) ( 1,656 ) 1,803 ( 1,602 )

As of June 30, 2024, the Company is committed to fund an additional $ 125.7 million on solar investments, of which $ 83.0 million is expected to be provided by syndication partners.

The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of June 30, 2024:

As of June 30, 2024

1 year or less After 1 year through 5 years After 5 years through 10 years After 10 years Total

10 unchanged sentences

FFELP loan 53,474 21,141 23,908 128,601 227,124

Private education loan — — 15,940 13,500 29,440

Other debt securities — 33,107 16,374 109,128 158,609

16 unchanged sentences

Fair value $ — — — — 261,850

(a) The Company's beneficial interest in loan securitizations are not due at a singe maturity date.

The following table summarizes the unrealized positions for held-to-maturity investments and the beneficial interest in loan securitizations as of March 31, 2024:

(a) The Company's beneficial interest in loan securitizations are not due at a single maturity date.

The following table summarizes the unrealized positions for held-to-maturity investments and the beneficial interest in loan securitizations as of June 30, 2024:

Carrying value Gross unrealized gains Gross unrealized losses (a) Fair value

1 unchanged sentence

Beneficial interest in loan securitizations 243,969 20,512 ( 2,631 ) 261,850

(a) None of the unrealized losses at March 31, 2024 were due to credit losses.

The following table presents securities classified as available-for-sale that have gross unrealized losses at March 31, 2024 and the fair value of such securities as of March 31, 2024.

(a) None of the unrealized losses presented in the above table at June 30, 2024 were due to credit losses.

The following table presents securities classified as available-for-sale that have gross unrealized losses at June 30, 2024 and the fair value of such securities as of June 30, 2024.

These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis.

1 unchanged sentence

As part of that assessment, the Company concluded it currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses.

As of March 31, 2024

As of June 30, 2024

Unrealized loss position less than 12 months Unrealized loss position 12 months or more Total

12 unchanged sentences

The following table summarizes the gross proceeds received and gross realized gains and losses related to sales of available-for-sale asset-backed securities.

Three months ended

Three months ended Six months ended

June 30, June 30,

2024 2023 2024 2023

Gross proceeds from sales $ 113,173 85,375 266,547 577,548

5 unchanged sentences

Weighted average remaining useful life as of

March 31, 2024 (months)

March 31, 2024 December 31, 2023

June 30, 2024 (months)

June 30, 2024 December 31, 2023

Amortizable intangible assets, net:

3 unchanged sentences

Computer software (net of accumulated amortization of $ 745 and $ 574 , respectively)

37 1,061 1,146

Total amortizable intangible assets, net 98 $ 40,521 44,819

The Company recorded amortization expense on its intangible assets of $ 2.1 million and $ 2.7 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recorded amortization expense on its intangible assets of $ 2.1 million and $ 3.5 million for the three months ended June 30, 2024 and 2023, respectively, and $ 4.3 million and $ 6.2 million during the six months ended June 30, 2024 and 2023, respectively.

The Company will continue to amortize intangible assets over their remaining useful lives.

As of March 31, 2024, the Company estimates it will record amortization expense as follows:

2024 (April 1 - December 31) $ 6,342

As of June 30, 2024, the Company estimates it will record amortization expense as follows:

2024 (July 1 - December 31) $ 4,193

2029 and thereafter 13,149

The following table presents the carrying amount of goodwill as of March 31, 2024 and December 31, 2023 by reportable operating segment:

The following table presents the carrying amount of goodwill as of June 30, 2024 and December 31, 2023 by reportable operating segment:

Nelnet Financial Services

3 unchanged sentences

Total goodwill $ 23,639 92,507 41,883 — — — 158,029

Impairment Expense, Provision for Beneficial Interests, and Restructure Charges

Impairment Expense and Provision for Beneficial Interests

The following table presents the non-cash impairment charges by asset and reportable operating segment recognized by the Company during 2024.

No impairment charges were recognized during the first six months of 2023.

The Company’s impairment charges are included in “impairment expense and provision for beneficial interests” in the consolidated statements of income.

Nelnet Financial Services

Loan Servicing and Systems Education Technology Services and Payments Asset

Generation and

Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Total

Three months ended June 30, 2024

Investments - beneficial interest in consumer loan securitizations (a) $ — — 5,911 — — — 5,911

Property and equipment - solar facilities (b) — — — — — 1,170 1,170

Other assets - solar inventory (b) — — — — — 695 695

$ — — 5,911 — — 1,865 7,776

Six months ended June 30, 2024

Investments - beneficial interest in consumer loan securitizations (a) $ — — 5,911 — — — 5,911

Investments - venture capital — — — — — 37 37

Property and equipment - solar facilities (b) — — — — — 1,170 1,170

Other assets - solar inventory (b) — — — — — 695 695

$ — — 5,911 — — 1,902 7,813

(a) During the three months ended June 30, 2024, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in consumer loan securitizations.

See note 6 for additional information.

(b) On April 12, 2024, the Company announced a change in its solar engineering, procurement, and construction (EPC) operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations.

As a result, during the three months ended June 30, 2024, the Company recognized non-cash impairment charges on certain solar facilities and inventory related to the residential solar operations.

Restructure Charges

On April 12, 2024, the Company announced a change in its solar EPC operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations.

The restructuring plan included a reduction in headcount of approximately 40 associates.

The Company incurred a restructure charge of $ 1.6 million related to these staff reductions and commissions paid for canceled contracts, which is included in "salaries and benefits" in the consolidated statements of income.

Loan Servicing and Systems (LSS)

In June 2024, the Company announced a reduction in headcount after the completion of the transfer of direct loan servicing volume to one platform and the required servicing platform enhancements for the Company's new student loan servicing contract with the Department of Education.

Approximately 220 associates who work in LSS, including some in related shared services that support LSS, were notified their positions were being eliminated.

The Company estimates incurring a charge of $ 7.1 million related to these staff reductions, of which $ 2.1 million was recognized in the second quarter of 2024, which is included in "salaries and benefits" in the consolidated statements of income.

The remaining expense will be recognized during the third and fourth quarters of 2024.

Bank Deposits

The following table summarizes Nelnet Bank’s interest-bearing deposits, excluding intercompany deposits:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Retail and other savings $ 622,080 520,017

Brokered CDs, net of brokered deposit fees 246,156 203,522

Retail and other CDs (commercial and institutional) 19,320 20,060

Commercial 2,835 2,057

Retail and other CDs, net of issuance fees 22,236 20,060

Total interest-bearing deposits $ 890,472 743,599

As of March 31, 2024 and December 31, 2023, Nelnet Bank had intercompany deposits from Nelnet, Inc.

As of June 30, 2024 and December 31, 2023, Nelnet Bank had intercompany deposits from Nelnet, Inc.

and its subsidiaries totaling $ 143.0 million and $ 104.0 million, respectively, including a $ 40.0 million pledged deposit from Nelnet, Inc.

1 unchanged sentence

All intercompany deposits held at Nelnet Bank are eliminated for consolidated financial reporting purposes.

The following table presents certificates of deposit remaining maturities as of March 31, 2024:

The following table presents certificates of deposit remaining maturities as of June 30, 2024:

One year or less $ 982

5 unchanged sentences

Total $ 268,392

Retail and other deposits include savings deposits from Educational 529 College Savings, Short Term Federal Investment Trusts, and Health Savings plan deposits.

Retail and other savings deposits include deposits from Educational 529 College Savings and Health Savings plans, Short Term Federal Investment Trust (STFIT), and consumer savings.

These deposits are large interest-bearing omnibus accounts structured to allow FDIC insurance to flow through to underlying individual depositors.

There were no deposits exceeding the FDIC insurance limits as of March 31, 2024, with the exception of $ 45.0 million, which includes the commercial deposit, the pledged deposit from Nelnet, Inc., and an earmarked deposit required for intercompany transactions.

The deposits exceeding the FDIC insurance limits as of June 30, 2024, was $ 44.9 million, which includes a portion of the pledged deposit from Nelnet, Inc., and an earmarked deposit required for intercompany transactions.

Earnings per Common Share

2 unchanged sentences

Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.

Three months ended March 31,

Three months ended June 30,

Common shareholders Unvested restricted stock shareholders Total Common shareholders Unvested restricted stock shareholders Total

3 unchanged sentences

Earnings per share - basic and diluted $ 1.23 1.23 1.23 0.73 0.73 0.73

Six months ended June 30,

Common shareholders Unvested restricted stock shareholders Total Common shareholders Unvested restricted stock shareholders Total

Net income attributable to Nelnet, Inc.

$ 116,178 2,320 118,498 52,270 1,115 53,385

Weighted-average common shares outstanding - basic and diluted 36,119,876 721,351 36,841,227 36,625,819 781,024 37,406,843

Earnings per share - basic and diluted $ 3.22 3.22 3.22 1.43 1.43 1.43

Segment Reporting

1 unchanged sentence

The following tables present the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements.

Three months ended March 31, 2024

Three months ended June 30, 2024

Nelnet Financial Services

2 unchanged sentences

Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Eliminations Total

Interest income:

Loan interest $ — — 193,707 8,422 — — — 202,129

Investment interest 1,258 5,715 13,709 10,811 15,880 2,646 ( 9,282 ) 40,737

Total interest income 1,258 5,715 207,416 19,233 15,880 2,646 ( 9,282 ) 242,866

1 unchanged sentence

Net interest income 1,258 5,715 35,784 8,464 13,274 1,913 — 66,407

Less provision for loan losses — — 6,555 4,373 — — — 10,928

Less provision (negative provision) for loan losses — — ( 4,225 ) 7,836 — — — 3,611

Net interest income after provision for loan losses 1,258 5,715 40,009 628 13,274 1,913 — 62,796

5 unchanged sentences

Other, net 685 — 1,337 775 15,702 10,372 — 28,871

(Loss) gain on sale of loans, net — — ( 41 ) — — — — ( 41 )

Loss on sale of loans — — ( 1,438 ) — — — — ( 1,438 )

Impairment expense and provision for beneficial interests — — ( 5,911 ) — — ( 1,865 ) — ( 7,776 )

Derivative settlements, net — — 1,442 207 — — — 1,649

17 unchanged sentences

$ 1,705 19,478 18,475 ( 2,802 ) 12,461 ( 4,227 ) — 45,091

Total assets as of March 31, 2024 $ 212,381 389,990 12,315,238 1,125,122 1,111,587 880,107 ( 635,763 ) 15,398,662

Three months ended March 31, 2023

Total assets as of June 30, 2024 $ 264,381 478,077 11,315,210 1,185,302 1,038,068 778,549 ( 558,394 ) 14,501,193

Three months ended June 30, 2023

Nelnet Financial Services

2 unchanged sentences

Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Eliminations Total

Interest income:

Loan interest $ — — 237,906 5,139 — — — 243,045

Investment interest 1,058 5,268 15,857 8,522 22,800 3,055 ( 15,578 ) 40,982

Total interest income 1,058 5,268 253,763 13,661 22,800 3,055 ( 15,578 ) 284,027

1 unchanged sentence

Net interest income 1,058 5,268 21,450 5,490 15,429 2,184 — 50,879

Less provision for loan losses — — 31,858 2,417 — — — 34,275

Less provision (negative provision) for loan losses — — ( 12,873 ) 1,493 — — — ( 11,380 )

Net interest income after provision for loan losses 1,058 5,268 34,323 3,997 15,429 2,184 — 62,259

5 unchanged sentences

Other, net 605 — 1,319 620 5,967 ( 17,677 ) — ( 9,167 )

(Loss) gain on sale of loans, net — — 11,812 — — — — 11,812

Loss on sale of loans — — ( 5,461 ) — — — — ( 5,461 )

Impairment expense and provision for beneficial interests — — — — — — — —

Derivative settlements, net — — ( 18 ) 83 — — — 65

17 unchanged sentences

$ 12,942 13,696 13,455 1,348 12,766 ( 26,779 ) — 27,426

Total assets as of March 31, 2023 $ 232,667 424,742 14,939,324 1,000,659 1,206,023 1,002,249 ( 723,055 ) 18,082,609

Total assets as of June 30, 2023 $ 173,926 482,922 14,667,357 1,005,043 1,099,212 970,987 ( 613,757 ) 17,785,690

Six months ended June 30, 2024

Nelnet Financial Services

Loan Servicing and Systems Education Technology Services and Payments Asset

Generation and

Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Eliminations Total

Interest income:

Loan interest $ — — 403,335 15,518 — — — 418,853

Investment interest 3,152 13,580 35,544 20,779 31,495 6,461 ( 18,197 ) 92,814

Total interest income 3,152 13,580 438,879 36,297 31,495 6,461 ( 18,197 ) 511,667

Interest expense — — 362,537 20,266 5,024 1,409 ( 18,197 ) 371,039

Net interest income 3,152 13,580 76,342 16,031 26,471 5,052 — 140,628

Less provision (negative provision) for loan losses — — 2,230 12,210 — — — 14,440

Net interest income after provision for loan losses 3,152 13,580 74,112 3,821 26,471 5,052 — 126,188

Other income (expense):

Loan servicing and systems revenue 236,252 — — — — — — 236,252

Intersegment revenue 12,991 106 — — — — ( 13,097 ) —

Education technology services and payments revenue — 260,449 — — — — — 260,449

Solar construction revenue — — — — — 23,420 — 23,420

Other, net 1,395 — 6,321 1,150 28,644 8,224 — 45,734

Loss on sale of loans — — ( 1,579 ) — — — — ( 1,579 )

Impairment expense and provision for beneficial interests — — ( 5,911 ) — — ( 1,902 ) — ( 7,813 )

Derivative settlements, net — — 2,997 409 — — — 3,406

Derivative market value adjustments, net — — 6,642 2,855 — — — 9,497

Total other income (expense), net 250,638 260,555 8,470 4,414 28,644 29,742 ( 13,097 ) 569,366

Cost of services:

Cost to provide education technology services and payments — 88,832 — — — — — 88,832

Cost to provide solar construction services — — — — — 22,300 — 22,300

Total cost of services — 88,832 — — — 22,300 — 111,132

Operating expenses:

Salaries and benefits 147,353 80,903 2,308 5,518 732 48,307 ( 1,611 ) 283,509

Depreciation and amortization 10,450 5,395 — 601 — 15,464 — 31,911

Other expenses 40,198 16,158 7,210 3,194 23,632 26,243 — 116,637

Intersegment expenses, net 37,555 9,612 15,009 1,493 465 ( 52,648 ) ( 11,486 ) —

Total operating expenses 235,556 112,068 24,527 10,806 24,829 37,366 ( 13,097 ) 432,057

Income (loss) before income taxes 18,234 73,235 58,055 ( 2,571 ) 30,286 ( 24,872 ) — 152,365

Income tax (expense) benefit ( 4,376 ) ( 17,585 ) ( 13,933 ) 657 ( 7,209 ) 4,511 — ( 37,936 )

Net income (loss) 13,858 55,650 44,122 ( 1,914 ) 23,077 ( 20,361 ) — 114,429

Net loss (income) attributable to noncontrolling interests — 46 — — ( 249 ) 4,272 — 4,069

Net income (loss) attributable to Nelnet, Inc.

$ 13,858 55,696 44,122 ( 1,914 ) 22,828 ( 16,089 ) — 118,498

Total assets as of June 30, 2024 $ 264,381 478,077 11,315,210 1,185,302 1,038,068 778,549 ( 558,394 ) 14,501,193

Six months ended June 30, 2023

Nelnet Financial Services

Loan Servicing and Systems Education Technology Services and Payments Asset

Generation and

Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Eliminations Total

Interest income:

Loan interest $ — — 458,818 9,471 — — — 468,288

Investment interest 2,095 11,304 29,664 16,449 41,460 5,594 ( 24,860 ) 81,707

Total interest income 2,095 11,304 488,482 25,920 41,460 5,594 ( 24,860 ) 549,995

Interest expense — — 421,511 15,385 19,198 1,362 ( 24,860 ) 432,597

Net interest income 2,095 11,304 66,971 10,535 22,262 4,232 — 117,398

Less provision (negative provision) for loan losses — — ( 3,119 ) 3,910 — — — 791

Net interest income after provision for loan losses 2,095 11,304 70,090 6,625 22,262 4,232 — 116,607

Other income (expense):

Loan servicing and systems revenue 261,247 — — — — — — 261,247

Intersegment revenue 15,036 121 — — — — ( 15,157 ) —

Education technology services and payments revenue — 243,462 — — — — — 243,462

Solar construction revenue — — — — — 13,386 — 13,386

Other, net 1,213 — 4,164 830 5,226 ( 35,667 ) — ( 24,235 )

Loss on sale of loans — — ( 15,753 ) — — — — ( 15,753 )

Impairment expense and provision for beneficial interests — — — — — — — —

Derivative settlements, net — — 23,319 83 — — — 23,402

Derivative market value adjustments, net — — ( 36,515 ) 1,108 — — — ( 35,407 )

Total other income (expense), net 277,496 243,583 ( 24,785 ) 2,021 5,226 ( 22,281 ) ( 15,157 ) 466,102

Cost of services:

Cost to provide education technology services and payments — 88,110 — — — — — 88,110

Cost to provide solar construction services — — — — — 17,422 — 17,422

Total cost of services — 88,110 — — — 17,422 — 105,532

Operating expenses:

Salaries and benefits 160,701 76,264 1,851 4,361 429 53,955 ( 145 ) 297,416

Depreciation and amortization 9,377 5,393 — 56 — 20,454 — 35,279

Other expenses 27,131 17,755 9,131 2,406 4,701 25,657 — 86,781

Intersegment expenses, net 40,136 11,684 16,841 173 256 ( 54,078 ) ( 15,012 ) —

Total operating expenses 237,345 111,096 27,823 6,996 5,386 45,988 ( 15,157 ) 419,476

Income (loss) before income taxes 42,246 55,681 17,482 1,650 22,102 ( 81,459 ) — 57,701

Income tax (expense) benefit ( 10,139 ) ( 13,393 ) ( 4,196 ) ( 362 ) ( 5,240 ) 15,056 — ( 18,273 )

Net income (loss) 32,107 42,288 13,286 1,288 16,862 ( 66,403 ) — 39,428

Net loss (income) attributable to noncontrolling interests — 119 — — ( 269 ) 14,107 — 13,957

Net income (loss) attributable to Nelnet, Inc.

$ 32,107 42,407 13,286 1,288 16,593 ( 52,296 ) — 53,385

Total assets as of June 30, 2023 $ 173,926 482,922 14,667,357 1,005,043 1,099,212 970,987 ( 613,757 ) 17,785,690

Disaggregated Revenue

1 unchanged sentence

Loan Servicing and Systems

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Government loan servicing $ 87,014 95,736 192,490 204,618

5 unchanged sentences

Education Technology Services and Payments

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Tuition payment plan services $ 34,164 30,825 73,043 65,012

4 unchanged sentences

Solar Construction

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Commercial revenue $ 8,777 2,329 20,355 8,205

2 unchanged sentences

(a) On April 12, 2024, the Company announced a change in its solar engineering, procurement, and construction operations to focus exclusively on the commercial solar market and will discontinue its residential solar operations.

As a result, residential revenue will decline in future periods as existing customer contracts are completed.

As a result, residential revenue will continue to decline from recent historical amounts as existing customer contracts are completed.

Other Income (Expense)

The following table presents the components of "other, net" in "other income (expense)" on the consolidated statements of income:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

2024 2023 2024 2023

Reinsurance premiums $ 14,851 3,816 27,631 4,351

Borrower late fee income 3,133 2,247

Gain (loss) from solar investments, net 2,971 ( 1,947 )

ALLO preferred return 4,160 2,274 6,569 4,523

Administration/sponsor fee income 1,546 1,772

Borrower late fee income 2,584 2,168 5,718 4,414

Investment advisory services (WRCM) 1,524 1,639 3,033 3,251

Loss from ALLO voting membership interest investment ( 10,693 ) ( 20,213 )

Administration/sponsor fee income 1,482 1,697 3,028 3,468

Investment activity, net 217 ( 3,574 ) ( 1,082 ) ( 7,154 )

Loss from ALLO voting membership interest investment — ( 12,169 ) ( 10,693 ) ( 32,382 )

(Loss) gain from solar investments, net ( 2,610 ) ( 10,086 ) 170 ( 13,030 )

Other 6,663 5,068 11,360 8,324

3 unchanged sentences

Nelnet Servicing, a subsidiary of the Company, earns loan servicing revenue from a servicing contract with the Department of Education (the "Department").

Revenue earned by the Company related to this contract was $ 105.5 million and $ 108.9 million for the three months ended March 31, 2024 and 2023, respectively.

Revenue earned by the Company related to this contract was $ 87.0 million and $ 95.7 million for the three months ended June 30, 2024 and 2023, respectively, and $ 192.5 million and $ 204.6 million for the six months ended June 30, 2024 and 2023, respectively.

The Company's legacy student loan servicing contract with the Department was scheduled to expire on December 14, 2023.

1 unchanged sentence

The New Government Servicing Contract became effective April 24, 2023 and has a five year base period, with 2 two-year and 1 one-year possible extensions.

The Department's total loan servicing volume of existing borrowers will be allocated by the Department to Nelnet Servicing and four other third-party servicers that were awarded a USDS contract based on service and performance levels.

The Department's total loan servicing volume of existing borrowers was allocated by the Department to Nelnet Servicing and four other third-party servicers that were awarded a USDS contract.

Under the New Government Servicing Contract, Nelnet Servicing immediately began to make required servicing platform enhancements, for which it will be compensated from the Department on certain of these investments.

Servicing under the New Government Servicing Contract went live on April 1, 2024 and the Company will recognize revenue in accordance with this new contract beginning in the second quarter of 2024.

Servicing under the New Government Servicing Contract went live on April 1, 2024 and the Company recognized revenue in accordance with this new contract beginning in the second quarter of 2024.

The Company earned revenue for servicing borrowers under the legacy servicing contract with the Department through March 31, 2024.

1 unchanged sentence

Assuming borrower volume remains consistent under the New Government Servicing Contract, the Company expects revenue earned on a per borrower blended basis will decrease under the New Government Servicing Contract versus the legacy contract.

However, consistent with the legacy contract, the Company expects to earn additional revenue from the Department under the New Government Servicing Contact for change requests and other support services.

However, consistent with the legacy contract, the Company expects to earn additional revenue from the Department under the New Government Servicing Contract for change requests and other support services.

In addition, the Company has executed an agreement with a third-party servicer awarded a USDS contract to license its servicing software to such entity.

The Company began earning remote hosted servicing revenue from this new customer during the second quarter of 2024.

The amount of revenue earned by the Company from this new customer will depend on the number of servicing borrowers allocated by the Department to this servicer.

The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis.

As of March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Level 1 Level 2 Total Level 1 Level 2 Total

9 unchanged sentences

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:

As of March 31, 2024

As of June 30, 2024

Fair value Carrying value Level 1 Level 2 Level 3

37 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements