What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 209 added, 192 removed, 1074 unchanged (27% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Loans and accrued interest receivable (net of allowance for loan losses of $ 102,142 and $ 104,643 , respectively)

55 unchanged sentences

(Dollars in thousands, except share data)

Three months ended Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

5 unchanged sentences

Net interest income 72,155 77,392 212,783 194,791

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

Less provision for loan losses 18,111 4,275 32,551 5,065

Net interest income after provision for loan losses 54,044 73,117 180,232 189,726

17 unchanged sentences

Total operating expenses 221,495 214,409 653,551 633,888

Income before income taxes 58,428 27,430 152,365 57,701

Income tax expense 14,753 10,187 37,936 18,273

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

(Loss) income before income taxes ( 2,223 ) 50,119 150,141 107,819

Income tax (benefit) expense ( 282 ) 10,512 37,653 28,785

Net (loss) income ( 1,941 ) 39,607 112,488 79,034

Net loss attributable to noncontrolling interests 4,329 4,747 8,398 18,705

11 unchanged sentences

(Dollars in thousands)

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

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

Other comprehensive income:

Net (loss) income $ ( 1,941 ) 39,607 112,488 79,034

Other comprehensive income (loss):

Net changes related to foreign currency translation adjustments $ 23 ( 8 ) 6 ( 11 )

Net changes related to available-for-sale debt securities:

Unrealized holding gains arising during period, net of losses 8,874 8,649 25,635 17,300

Unrealized holding gains (losses) arising during period, net 2,656 ( 4,566 ) 28,291 12,734

Reclassification of (gains) losses recognized in net income, net ( 1,721 ) ( 1,064 ) ( 3,326 ) 3,001

4 unchanged sentences

Income tax effect ( 15 ) 47 ( 80 ) 256 137 ( 433 ) 40 ( 123 )

Other comprehensive income 6,216 5,548 17,859 15,908

Comprehensive income 49,891 22,791 132,288 55,336

Other comprehensive income (loss) 829 ( 3,981 ) 18,688 11,927

Comprehensive (loss) income ( 1,112 ) 35,626 131,176 90,961

Comprehensive loss attributable to noncontrolling interests 4,329 4,747 8,398 18,705

7 unchanged sentences

Class A Class B

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

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

Net income (loss) — — — — — — — 44,354 — ( 4,747 ) 39,607

Other comprehensive income — — — — — — — — 5,548 — 5,548

Other comprehensive loss — — — — — — — — ( 3,981 ) — ( 3,981 )

Issuance of noncontrolling interests — — — — — — — — — 19,092 19,092

Distribution to noncontrolling interests — — — — — — — — — ( 40,057 ) ( 40,057 )

4 unchanged sentences

Repurchase of common stock — ( 5,948 ) — — — — ( 543 ) — — — ( 543 )

Balance as of September 30, 2023 — 26,655,651 10,668,460 $ — 267 107 14,165 3,296,370 ( 25,439 ) ( 48,331 ) 3,237,139

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

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) — — — — — — — 2,388 — ( 4,329 ) ( 1,941 )

Other comprehensive income — — — — — — — — 829 — 829

Issuance of noncontrolling interests — — — — — — — — — 20,999 20,999

Distribution to noncontrolling interests — — — — — — — — — ( 23,145 ) ( 23,145 )

4 unchanged sentences

Repurchase of common stock — ( 5,259 ) — — — — ( 576 ) — — — ( 576 )

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

Balance as of September 30, 2024 — 25,627,446 10,663,088 $ — 256 107 4,179 3,287,541 ( 1,431 ) ( 80,514 ) 3,210,138

See accompanying notes to consolidated financial statements.

5 unchanged sentences

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

Issuance of noncontrolling interests — — — — — — — — — 12,904 12,904

Net income (loss) — — — — — — — 97,739 — ( 18,705 ) 79,034

Other comprehensive income — — — — — — — — 11,927 — 11,927

Issuance of noncontrolling interests — — — — — — — — — 31,996 31,996

Distribution to noncontrolling interests — — — — — — — — — ( 53,026 ) ( 53,026 )

4 unchanged sentences

Repurchase of common stock — ( 47,195 ) — — — — ( 4,310 ) — — — ( 4,310 )

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 September 30, 2023 — 26,655,651 10,668,460 $ — 267 107 14,165 3,296,370 ( 25,439 ) ( 48,331 ) 3,237,139

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) — — — — — — — 120,886 — ( 8,398 ) 112,488

Other comprehensive income — — — — — — — — 18,688 — 18,688

Issuance of noncontrolling interests — — — — — — — — — 29,150 29,150

Distribution to noncontrolling interests — — — — — — — — — ( 49,715 ) ( 49,715 )

6 unchanged sentences

— — — — — — — ( 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

Balance as of September 30, 2024 — 25,627,446 10,663,088 $ — 256 107 4,179 3,287,541 ( 1,431 ) ( 80,514 ) 3,210,138

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Six months ended

Nine months ended

September 30,

Net income attributable to Nelnet, Inc.

8 unchanged sentences

Proceeds from termination of derivative instruments — 164,079

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

Payments to clearinghouse - initial and variation margin, net ( 4,404 ) ( 210,168 )

Loss on sale of loans 1,685 16,776

3 unchanged sentences

Impairment expense and provision for beneficial interests 36,865 2,588

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

Decrease in loan and investment accrued interest receivable 168,795 5,613

Decrease in accounts receivable 42,553 64,738

Decrease (increase) in other assets, net 39,667 ( 11,480 )

Decrease in other assets, net 48,059 7,069

Decrease in the carrying amount of ROU asset, net 2,857 3,859

Decrease in accrued interest payable ( 8,250 ) ( 123 )

Decrease in other liabilities ( 62,638 ) ( 8,916 )

(Decrease) increase in accrued interest payable ( 10,002 ) 342

(Decrease) increase in other liabilities ( 11,435 ) 19,132

Decrease in the carrying amount of lease liability ( 2,868 ) ( 3,908 )

19 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Six months ended

Nine months ended

September 30,

Cash flows from financing activities:

23 unchanged sentences

Receipt of asset-backed investment securities as consideration from sale of loans $ 20,250 58,182

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

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

Distribution to noncontrolling interests $ 46,128 50,508

Issuance of noncontrolling interests $ 22,095 585

(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.

(a) The Company utilized $ 34.0 million and $ 49.0 million of federal and state tax credits related primarily to renewable energy during the nine months ended September 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

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

September 30, 2024 December 31, 2023 September 30, 2023 December 31, 2022

Total cash and cash equivalents $ 219,684 168,112 187,690 118,146

9 unchanged sentences

The accompanying unaudited consolidated financial statements of Nelnet, Inc.

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.

and subsidiaries (the “Company”) as of September 30, 2024 and for the three and nine months ended September 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 and six months ended June 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024.

Operating results for the three and nine months ended September 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.

Prior period amounts have been corrected to conform to the current period presentation resulting in a reclassification of $ 6.4 million and $ 49.5 million for the three and nine months ended September 30, 2023, respectively.

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

Solar Tax Equity Investments

2 unchanged sentences

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.

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 $ 2.9 million and $ 6.0 million for the three and nine months ended September 30, 2023, respectively, partially offset by an increase in "net loss attributable to noncontrolling interests" of $ 1.7 million and $ 3.0 million for the three and nine months ended September 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.

was a reduction of $ 1.0 million and $ 2.3 million for the three and nine months ended September 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.

1 unchanged sentence

Loans and accrued interest receivable consisted of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Non-Nelnet Bank:

22 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.

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Non-Nelnet Bank:

3 unchanged sentences

Private education loans 1.04 % 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.

Consumer and other loans (b) 6.52 % 7.40 %

(a) As of September 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 20.7 % and 21.8 %, respectively.

(b) Decrease as of September 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 September 30, 2024 and 2023, the Company sold $ 1.1 million and $ 61.8 million, respectively, of consumer loans, and recognized losses from such sales of $ 0.1 million and $ 1.0 million, respectively.

During the nine months ended September 30, 2024 and 2023, the Company sold $ 335.0 million and $ 482.0 million, respectively, of FFELP and consumer loans, and recognized losses from such sales of $ 1.7 million and $ 16.8 million, respectively.

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

3 unchanged sentences

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

Three months ended September 30, 2024

Non-Nelnet Bank:

5 unchanged sentences

$ 96,764 17,859 ( 13,710 ) 1,229 102,142

Three months ended June 30, 2023

Three months ended September 30, 2023

Non-Nelnet Bank:

6 unchanged sentences

$ 114,263 4,120 ( 8,908 ) 618 110,093

Six months ended June 30, 2024

Nine months ended September 30, 2024

Non-Nelnet Bank:

5 unchanged sentences

$ 104,643 32,338 ( 37,278 ) 2,439 102,142

Six months ended June 30, 2023

Nine months ended September 30, 2023

Non-Nelnet Bank:

9 unchanged sentences

(negative provision) for loan losses

Three months ended June 30, 2024

Three months ended September 30, 2024

Non-Nelnet Bank

Consumer and other loans $ 11,026 ( 179 ) 10,847

Three months ended June 30, 2023

Three months ended September 30, 2023

Non-Nelnet Bank

Consumer and other loans $ 4,082 ( 6,384 ) ( 2,302 )

Six months ended June 30, 2024

Nine months ended September 30, 2024

Non-Nelnet Bank

Consumer and other loans $ 30,058 ( 12,874 ) 17,184

Six months ended June 30, 2023

Nine months ended September 30, 2023

Non-Nelnet Bank

1 unchanged sentence

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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

7 unchanged sentences

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 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.

As of September 30, 2024 and December 31, 2023, Nelnet Bank had a liability of approximately $ 371,000 and $ 158,000 , respectively, related to $ 29.9 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.

1 unchanged sentence

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,

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Provision for loan losses from allowance activity table above $ 17,859 4,120 32,338 4,933

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

Provision for unfunded loan commitments 252 155 213 132

Provision for loan losses reported in consolidated statements of income $ 18,111 4,275 32,551 5,065

Key Credit Quality Indicators

3 unchanged sentences

Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.

Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period (but, for purposes of the following tables, do not include those loans while they are in forbearance).

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

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

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

Federally insured loans - Non-Nelnet Bank:

41 unchanged sentences

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 212,498 $ 72,580 $ 131,147

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

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

Private education loans - Nelnet Bank (a):

14 unchanged sentences

Loans in deferment $ 3,073 1.5 % $ 103 0.1 % $ 95 0.2 %

Loans in forbearance — — — — 32 0.1

Loans in repayment status:

6 unchanged sentences

Accrued interest receivable 1,386 575 373

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

Loan premium, net of unaccreted discount 47 ( 6 ) ( 7 )

Allowance for loan losses ( 13,514 ) ( 5,351 ) ( 3,853 )

4 unchanged sentences

Nelnet Bank Private Education Loans

Loan balance as of June 30, 2024

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

Loan balance as of September 30, 2024

Nine months ended September 30, 2024 2023 2022 2021 2020 Total

FICO at origination:

17 unchanged sentences

Nelnet Bank Consumer and Other Loans

Loan balance as of June 30, 2024

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

Loan balance as of September 30, 2024

Nine months ended September 30, 2024 2023 2022 2021 2020 Prior years Total

FICO at origination:

16 unchanged sentences

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 June 30, 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 September 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 June 30, 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 September 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.

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

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

Nine months ended September 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 $ 218,027

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

Gross charge-offs - nine months ended September 30, 2024 $ — — — 84 208 3,962 4,254

Consumer and other loans - Non-Nelnet Bank:

11 unchanged sentences

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 212,498

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

Gross charge-offs - nine months ended September 30, 2024 $ 56 5,389 1,793 227 40 62 7,567

Private education loans - Nelnet Bank (a):

12 unchanged sentences

Total private education loans and accrued interest receivable, net of allowance for loan losses $ 357,868

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

Gross charge-offs - nine months ended September 30, 2024 $ 48 816 600 285 47 — 1,796

Nine months ended September 30, 2024 2023 2022 2021 2020 Prior years Total

Consumer and other loans - Nelnet Bank (a):

8 unchanged sentences

Accrued interest receivable 1,386

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

Loan premium, net of unaccreted discount 47

Allowance for loan losses ( 13,514 )

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 195,137

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

Gross charge-offs - nine months ended September 30, 2024 $ 503 7,811 — 221 20 80 8,635

(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 June 30, 2024

As of September 30, 2024

Interest rate

11 unchanged sentences

1/31/26 / 4/1/26

Consumer loan warehouse facility 6,760 5.54 % 11/14/25

Consumer loan warehouse facilities 90,277 5.15 % / 7.35 %

11/14/25 / 8/1/26

Variable-rate bonds and notes issued in private education loan asset-backed securitizations 60,222 6.40 % / 7.53 %

41 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 June 30, 2024.

The following table summarizes the Company's warehouse facilities as of September 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

3 unchanged sentences

Consumer (d) $ 100,000 5,277 94,723 11/14/2024 11/14/2025 70 % $ 2,364

Consumer (e) 125,000 85,000 40,000 1/1/2026 8/1/2026 60 % - 80 %

$ 225,000 90,277 134,723 $ 22,045

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

1 unchanged sentence

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.

On October 3, 2024, this facility was amended to reduce the maximum financing amount from $ 800 million to $ 600 million.

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

4 unchanged sentences

(d) On March 11, 2024, this facility was amended to reduce the maximum financing amount from $ 200 million to $ 150 million.

On September 6, 2024, this facility was amended to reduce the maximum financing amount from $ 150 million to $ 100 million.

(e) On July 1, 2024, the Company closed on this $ 125 million consumer loan facility.

Unsecured Line of Credit

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

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

As of September 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 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.

The outstanding balance under this agreement as of September 30, 2024 was $ 108.2 million.

The agreement has various maturity dates through December 20, 2024 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.

See note 6 for additional information about the private education loan asset-backed securities investments serving as collateral for this repurchase agreement.

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

As of September 30, 2024, the Company holds $ 309.5 million (par value) of its own FFELP asset-backed securities.

Debt Redemptions

Subsequent to September 30, 2024, in October 2024, the Company redeemed $ 169.3 million of FFELP loan asset-backed debt securities (bonds and notes payable) prior to their maturity.

The Company had the ability and intention to redeem these asset-

backed debt securities as of September 30, 2024.

As such, the remaining unamortized debt discount associated with these bonds as of September 30, 2024 was written-off, resulting in a $ 5.6 million non-cash expense recognized in September 2024.

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.

The expense related to the acceleration of unamortized debt discount costs described above 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 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.

1 unchanged sentence

Maturity Notional amount

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

2024 $ — 1,750,000

2 unchanged sentences

$ 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.

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 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 June 30, 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 September 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 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)

The following table summarizes the outstanding non-centrally cleared derivative instruments used by Nelnet Bank to hedge exposure to variability in cash flows related to variable rate intercompany deposits.

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

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

2028 $ 40,000 3.33 % $ 40,000 3.33 %

2029 25,000 3.37 — —

2030 (b) 50,000 3.06 50,000 3.06

2 unchanged sentences

$ 165,000 3.44 % $ 140,000 3.46 %

(a) For all interest rate derivatives, the Company receives payments based on SOFR that reset monthly or quarterly.

(a) For all interest rate derivatives, the Company receives monthly or quarterly payments based on SOFR that resets daily.

(b) These $ 25 million notional amount derivatives have forward effective start dates in April 2026 and May 2026, respectively.

7 unchanged sentences

Fair value of asset derivatives Fair value of liability derivatives

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

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

Interest rate swaps - Nelnet Bank $ 118 452 2,434 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

7 unchanged sentences

Interest rate swaps - Nelnet Bank ( 3,647 ) 1,948 ( 793 ) 3,057

Total change in fair value - income (expense) 1,533 2,005 9,497 ( 35,407 )

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

Total change in fair value - (expense) income ( 13,165 ) 3,140 ( 3,668 ) ( 32,266 )

Derivative market value adjustments and derivative settlements, net - (expense) income $ ( 11,525 ) 3,957 1,378 ( 8,047 )

Investments and Notes Receivable

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

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

As of September 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

32 unchanged sentences

Beneficial interest in loan securitizations (e):

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

Consumer loans, net of allowance for credit losses of $ 32,997 as of September 30, 2024

145,238 134,113

Private education loans 59,326 68,372

Federally insured student loans 20,790 22,594

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

Private education loans, net of allowance for credit losses of $ 901 as of September 30, 2024

55,211 68,372

Federally insured student loans, net of allowance for credit losses of $ 965 as of September 30, 2024

18,210 22,594

Total beneficial interest in loan securitizations, net of allowance 218,659 225,079

Solar (f) ( 197,582 ) ( 146,040 )

3 unchanged sentences

Total investments and notes receivable $ 1,903,561 $ 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 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.

(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 September 30, 2024, the par value and fair value of the securities subject to this agreement was $ 144.4 million and $ 128.5 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.

1 unchanged sentence

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.

These unrealized gains are being 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.

Under the HLBV method of accounting on its ALLO voting membership interests investment, the Company recognized no losses and $ 17.3 million of losses during the three months ended September 30, 2024 and 2023, respectively, and losses of $ 10.7 million and $ 49.7 million during the nine months ended September 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 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.

(d) As of September 30, 2024, the outstanding preferred membership interests and accrued and unpaid preferred return of ALLO held by the Company was $ 184.0 million and $ 11.4 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.

During the second and third quarter of 2024, the Company purchased an additional $ 29.0 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 $ 4.8 million and $ 2.3 million during the three months ended September 30, 2024 and 2023, respectively, and $ 11.4 million and $ 6.8 million during the nine months ended September 30, 2024 and 2023, respectively.

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

(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.

(e) The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments.

As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2024, the Company's ownership correlates to approximately $ 1.19 billion, $ 480 million, and $ 315 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations.

An increase in cumulative loss expectations on certain securitizations and loan vintages caused a change in estimate of future cash flows related to certain of the Company's beneficial interest securitization investments.

As a result, during the second and third quarter of 2024, the Company recorded a $ 5.9 million and $ 29.0 million allowance for credit losses (and related provision expense), respectively, related to these investments.

(f) The Company invests in solar tax equity investments.

Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the co-investor’s (syndication partner's) portion being presented as noncontrolling interests.

As of September 30, 2024, the Company has funded a total of $ 543.7 million in solar investments that remain outstanding, which includes $ 241.4 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 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.

As of September 30, 2024, the Company has earned a total of $ 524.6 million of tax credits on those projects that remain outstanding, which includes $ 238.7 million earned by syndication partners.

The solar investment negative carrying value on the consolidated balance sheet of $ 197.6 million as of September 30, 2024 represents the sum of total tax credits earned on solar projects placed-in-service through September 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 September 30, 2024, excluding the portion owned by syndication partners that is reflected as "noncontrolling interests" on the consolidated balance sheet, was $ 95.4 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 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,

The following table presents (i) the Company's recognized net losses, 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 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 excluding net 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 September 30, Nine months ended September 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

Net losses $ ( 11,238 ) ( 6,456 ) ( 11,068 ) ( 19,485 )

net losses attributed to noncontrolling interest investors (syndication partners) 3,936 3,278 5,568 14,706

Net losses, excluding activity attributed to noncontrolling interest investors $ ( 7,302 ) ( 3,178 ) ( 5,500 ) ( 4,779 )

As of September 30, 2024, the Company is committed to fund an additional $ 107.9 million on solar investments, of which $ 89.5 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 September 30, 2024:

As of September 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 47,185 19,619 21,154 138,564 226,522

Private education loan — — — 2,063 2,063

Other debt securities — 41,741 33,154 139,316 214,211

4 unchanged sentences

Held-to-maturity investments

Non-Nelnet Bank:

Debt securities $ 3,500 — — — 3,500

Fair value 3,500 — — — 3,500

FFELP loan asset-backed securities $ — 2,807 1,154 210,419 214,380

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

Total Nelnet Bank — 3,041 1,278 221,064 225,383

Fair value — 3,129 1,304 226,330 230,763

Total held-to-maturity investments at amortized cost $ — 2,807 1,154 218,519 222,480

4 unchanged sentences

(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

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

Carrying value Gross unrealized gains Gross unrealized losses Fair value

Asset-backed and other securities $ 222,480 5,106 — 227,586

Beneficial interest in loan securitizations 218,659 14,154 ( 159 ) 232,654

(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.

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

As of September 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 Six months ended

June 30, June 30,

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

6 unchanged sentences

Weighted average remaining useful life as of

June 30, 2024 (months)

June 30, 2024 December 31, 2023

September 30, 2024 (months)

September 30, 2024 December 31, 2023

Amortizable intangible assets, net:

4 unchanged sentences

Total amortizable intangible assets, net 97 $ 38,371 44,819

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 recorded amortization expense on its intangible assets of $ 2.1 million and $ 5.4 million for the three months ended September 30, 2024 and 2023, respectively, and $ 6.4 million and $ 11.6 million during the nine months ended September 30, 2024 and 2023, respectively.

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

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

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

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

2024 (October 1 - December 31) $ 2,043

2029 and thereafter 13,149

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

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

Nelnet Financial Services

5 unchanged sentences

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.

The following table presents the impairment charges and provision for beneficial interests by asset and reportable operating segment recognized by the Company.

These expense items are included in “impairment expense and provision for beneficial interests” in the consolidated statements of income.

Nelnet Financial Services

2 unchanged sentences

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

Three months ended September 30, 2024

Investments - beneficial interest in loan securitizations (a) $ — — 28,952 — — — 28,952

Investments - venture capital — — — — — 100 100

$ — — 28,952 — — 100 29,052

Six months ended June 30, 2024

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

Three months ended September 30, 2023

Leases, buildings, and associated improvements (b) $ 296 — — — — 4,678 4,974

Nine months ended September 30, 2024

Investments - beneficial interest in loan securitizations (a) $ — — 34,863 — — — 34,863

Investments - venture capital — — — — — 137 137

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

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

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

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

$ — — 34,863 — — 2,002 36,865

(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.

Nine months ended September 30, 2023

Leases, buildings, and associated improvements (b) $ 296 — — — — 4,678 4,974

(a) The Company recorded a non-cash allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain 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.

(b) In 2023, the Company recorded impairment charges related to operating lease assets and associated leasehold improvements, which included a $ 2.4 million lease termination fee paid to Union Bank, a related party.

The Company recorded this impairment as a result of its on-going evaluation of the use of office space when a large number of associates continued to work from home.

(c) In April 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, 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.

In April 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.

3 unchanged sentences

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.

The Company estimates incurring a charge of $ 7.1 million related to these staff reductions, of which $ 2.1 million and $ 4.1 million was recognized in the second and third quarter of 2024, respectively, which is included in "salaries and benefits" in the consolidated statements of income.

The remaining expense will be recognized during the fourth quarter of 2024.

Bank Deposits

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Retail and other savings $ 801,170 520,017

2 unchanged sentences

Total interest-bearing deposits $ 1,070,758 743,599

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

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

and its subsidiaries totaling $ 77.7 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 June 30, 2024:

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

One year or less $ 995

5 unchanged sentences

Total $ 269,588

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.

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

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

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.

The deposits exceeding the FDIC insurance limits as of September 30, 2024 was $ 44.5 million, the majority of which are intercompany deposits from Nelnet, Inc.

and its subsidiaries.

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 June 30,

Three months ended September 30,

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

3 unchanged sentences

Earnings per share - basic and diluted $ 0.07 0.07 0.07 1.18 1.18 1.18

Six months ended June 30,

Nine months ended September 30,

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

6 unchanged sentences

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

Three months ended June 30, 2024

Three months ended September 30, 2024

Nelnet Financial Services

37 unchanged sentences

$ ( 3,457 ) 20,417 ( 12,423 ) ( 3,615 ) 10,580 ( 9,116 ) — 2,388

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

Total assets as of September 30, 2024 $ 202,366 556,897 10,707,442 1,328,808 1,020,732 763,310 ( 495,427 ) 14,084,128

Three months ended September 30, 2023

Nelnet Financial Services

37 unchanged sentences

$ 18,597 16,810 30,827 1,747 6,894 ( 30,521 ) — 44,354

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

Total assets as of September 30, 2023 $ 243,697 444,631 14,111,517 1,089,565 1,096,494 931,853 ( 719,868 ) 17,197,889

Nine months ended September 30, 2024

Nelnet Financial Services

37 unchanged sentences

$ 10,402 76,112 31,700 ( 5,530 ) 33,409 ( 25,206 ) — 120,886

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

Total assets as of September 30, 2024 $ 202,366 556,897 10,707,442 1,328,808 1,020,732 763,310 ( 495,427 ) 14,084,128

Nine months ended September 30, 2023

Nelnet Financial Services

37 unchanged sentences

$ 50,702 59,216 44,111 3,038 23,486 ( 82,813 ) — 97,739

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

Total assets as of September 30, 2023 $ 243,697 444,631 14,111,517 1,089,565 1,096,494 931,853 ( 719,868 ) 17,197,889

Disaggregated Revenue

1 unchanged sentence

Loan Servicing and Systems

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

6 unchanged sentences

Education Technology Services and Payments

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Solar Construction

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

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

2 unchanged sentences

Solar construction revenue $ 19,321 6,301 42,741 19,687

(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 continue to decline from recent historical amounts as existing customer contracts are completed.

(a) In April 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 continue to decline from 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 June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Reinsurance premiums $ 16,619 6,287 44,250 10,638

Investment activity, net 8,529 ( 1,003 ) 7,447 ( 8,155 )

ALLO preferred return 4,783 2,299 11,353 6,822

Borrower late fee income 1,741 2,220 7,460 6,635

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

Administration/sponsor fee income 1,420 1,712 4,448 5,180

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

Investment advisory services (WRCM) 1,394 1,633 4,427 4,884

Loss from ALLO voting membership interest investment — ( 17,293 ) ( 10,693 ) ( 49,676 )

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

Loss from solar investments, net ( 11,238 ) ( 6,456 ) ( 11,068 ) ( 19,485 )

Other 9,077 7,539 20,433 15,860

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 $ 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.

Revenue earned by the Company related to this contract was $ 85.2 million and $ 100.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 277.7 million and $ 304.8 million for the nine months ended September 30, 2024 and 2023, respectively.

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

12 unchanged sentences

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

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

As of September 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 June 30, 2024

The methodologies for estimating the fair value of financial assets and liabilities are described in note 23 of the notes to consolidated financial statements included in the 2023 Annual Report.

As of September 30, 2024

Fair value Carrying value Level 1 Level 2 Level 3

4 unchanged sentences

Investments (at fair value) 1,046,140 1,046,140 286 975,695 —

Investments - held-to-maturity 234,263 228,883 — 234,263 —

Investments - held-to-maturity asset-backed securities 227,586 222,480 — 227,586 —

Notes receivable 27,778 27,778 — 27,778 —

16 unchanged sentences

Investments (at fair value) 1,006,810 1,006,810 172 955,804 —

Investments - held-to-maturity 163,622 162,738 — 163,622 —

Investments - held-to-maturity asset-backed securities 163,622 162,738 — 163,622 —

Notes receivable 53,747 53,747 — 53,747 —

9 unchanged sentences

Derivative instruments 1,976 1,976 — 1,976 —

The methodologies for estimating the fair value of financial assets and liabilities are described in note 23 of the notes to consolidated financial statements included in the 2023 Annual Report.

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