What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 321 added, 493 removed, 790 unchanged (51% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Loans and accrued interest receivable (net of allowance for loan losses of $ 120,076 and $ 114,890 , respectively)

4 unchanged sentences

Total cash and cash equivalents 220,517 194,518

Investments and notes receivable (including investments at fair value of $ 996,385 and $ 988,841 , respectively)

1,903,561 1,846,707

Investments and notes receivable:

Investments at fair value 1,238,903 1,160,320

Other investments and notes receivable, net 1,063,647 1,040,376

Total investments and notes receivable 2,302,550 2,200,696

Restricted cash 317,139 332,100

Restricted cash - due to customers 294,471 404,402

Restricted investments 49,755 17,969

Accounts receivable (net of allowance for doubtful accounts of $ 2,617 and $ 2,877 , respectively)

27 unchanged sentences

Retained earnings 3,412,939 3,340,540

Accumulated other comprehensive loss, net ( 1,431 ) ( 20,119 )

Accumulated other comprehensive (loss) earnings, net ( 429 ) 1,470

Total Nelnet, Inc.

3 unchanged sentences

Total liabilities and equity $ 14,191,958 13,777,753

Supplemental information - assets and liabilities of consolidated education and other lending

variable interest entities:

Supplemental information - assets and liabilities of consolidated education and other lending variable interest entities:

Loans and accrued interest receivable $ 9,369,071 9,122,609

7 unchanged sentences

(Dollars in thousands, except share data)

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Interest income:

9 unchanged sentences

Education technology services and payments revenue 147,330 143,539

Reinsurance premiums earned 24,687 12,780

Solar construction revenue 3,995 13,726

Other, net 23,694 4,082

Loss on sale of loans ( 107 ) ( 1,022 ) ( 1,685 ) ( 16,776 )

Impairment expense and provision for beneficial interests ( 29,052 ) ( 4,974 ) ( 36,865 ) ( 4,974 )

Gain (loss) on sale of loans, net 909 ( 141 )

Derivative market value adjustments and derivative settlements, net ( 5,578 ) 9,721

Total other income (expense), net 315,778 310,908

Cost of services:

Cost of services and expenses:

Loan servicing contract fulfillment and acquisition costs 1,633 —

Cost to provide education technology services and payments 48,047 48,610

1 unchanged sentence

Total cost of services 57,508 62,839

Operating expenses:

Salaries and benefits 138,223 143,875

Depreciation and amortization 9,255 16,769

Reinsurance losses and underwriting expenses 22,212 11,317

Other expenses 48,226 45,528

Total operating expenses 217,916 217,489

(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

Impairment expense and provision for beneficial interests 1,591 37

Total expenses 277,015 280,365

Income before income taxes 106,140 93,937

Income tax expense 25,010 23,181

Net income 81,130 70,756

Net loss attributable to noncontrolling interests 1,430 2,652

4 unchanged sentences

shareholders - basic and diluted

$ 0.07 1.18 3.29 2.61

Weighted average common shares outstanding - basic and diluted

4 unchanged sentences

(Dollars in thousands)

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

2024 2023 2024 2023

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

Other comprehensive income (loss):

Three months ended March 31,

Net income $ 81,130 70,756

Other comprehensive (loss) income:

Net changes related to foreign currency translation adjustments $ ( 16 ) 5

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

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

Unrealized holding (losses) gains arising during period, net ( 2,767 ) 16,761

Reclassification of gains recognized in net income, net ( 483 ) ( 552 )

Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 47 71

3 unchanged sentences

Income tax effect ( 174 ) 551 232 ( 735 )

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

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

Other comprehensive (loss) income ( 1,899 ) 11,643

Comprehensive income 79,231 82,399

Comprehensive loss attributable to noncontrolling interests 1,430 2,652

5 unchanged sentences

(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 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 loss — — — — — — — — ( 3,981 ) — ( 3,981 )

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

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

Cash dividends on Class A and Class B common stock - $ 0.26 per share

— — — — — — — ( 9,701 ) — — ( 9,701 )

Issuance of common stock, net of forfeitures — 15,109 — — 1 — 499 — — — 500

Compensation expense for stock based awards — — — — — — 4,095 — — — 4,095

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

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 )

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

— — — — — — — ( 10,148 ) — — ( 10,148 )

Issuance of common stock, net of forfeitures — 46,865 — — — — 1,230 — — — 1,230

Compensation expense for stock based awards — — — — — — 2,868 — — — 2,868

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

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.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Dollars in thousands, except share data)

Class A Class B

9 unchanged sentences

Repurchase of common stock — ( 396,724 ) — — ( 4 ) — ( 6,221 ) ( 29,244 ) — — ( 35,469 )

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

Balance as of December 31, 2024 — 25,634,748 10,658,604 $ — 256 107 7,389 3,340,540 1,470 ( 50,645 ) 3,299,117

Net income (loss) — — — — — — — 82,560 — ( 1,430 ) 81,130

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

Other comprehensive loss — — — — — — — — ( 1,899 ) — ( 1,899 )

Issuance of noncontrolling interests — — — — — — — — — 2,297 2,297

5 unchanged sentences

Repurchase of common stock — ( 38,491 ) — — — — ( 4,458 ) — — — ( 4,458 )

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

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

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

Balance as of March 31, 2025 — 25,697,581 10,658,604 $ — 257 107 6,649 3,412,939 ( 429 ) ( 56,514 ) 3,363,009

See accompanying notes to consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Nine months ended

September 30,

Three months ended

Net income attributable to Nelnet, Inc.

2 unchanged sentences

Net income 81,130 70,756

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions:

Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs 23,123 33,957

2 unchanged sentences

Derivative market value adjustments 6,324 ( 7,964 )

Proceeds from termination of derivative instruments — 164,079

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

Loss on sale of loans 1,685 16,776

Loss on investments, net 6,595 73,296

Deferred income tax benefit ( 22,707 ) ( 25,403 )

(Payments to) proceeds from clearinghouse - initial and variation margin, net ( 810 ) 4,054

(Gain) loss on sale of loans, net ( 909 ) 141

(Gain) loss on investments, net ( 8,307 ) 8,183

Deferred income tax expense (benefit) 4,316 ( 2,173 )

Non-cash compensation expense 3,115 3,166

Impairment expense and provision for beneficial interests 1,591 37

Changes in operating assets and liabilities:

Decrease in loan and investment accrued interest receivable 13,488 79,841

Decrease in accounts receivable 30,087 61,494

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

(Increase) decrease in other assets, net ( 18,886 ) 10,443

Decrease in the carrying amount of ROU asset, net 954 953

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

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

Decrease in accrued interest payable ( 2,974 ) ( 3,408 )

Decrease in other liabilities ( 37,102 ) ( 50,218 )

Decrease in the carrying amount of lease liability ( 897 ) ( 1,025 )

Other 996 ( 73 )

Total adjustments 10,039 140,803

Net cash provided by operating activities 91,169 211,559

Cash flows from investing activities:

Purchases and originations of loans ( 611,595 ) ( 556,255 )

Cash flows from investing activities, net of acquisitions:

Purchases and originations of loans, including cash paid for student loan trusts,

net of cash and restricted cash acquired ( 173,931 ) ( 157,047 )

Purchases of loans from a related party ( 136,667 ) —

1 unchanged sentence

Proceeds from sale of loans 72,502 269

Proceeds from sale of loans to a related party 59,939 199,694

Purchases of available-for-sale securities ( 139,007 ) ( 181,897 )

Purchases of restricted available-for-sale securities ( 23,288 ) —

Proceeds from sales of available-for-sale securities 74,781 153,373

Proceeds from sales of restricted available-for-sale securities 1,280 —

Proceeds from beneficial interest in loan securitizations 18,948 5,875

1 unchanged sentence

Proceeds from other investments and repayments of notes receivable 15,668 11,176

Purchases of held-to-maturity debt securities — ( 11,325 )

Redemption of held-to-maturity debt securities 3,776 1,779

1 unchanged sentence

Net cash provided by investing activities $ 136,357 1,086,435

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Nine months ended

September 30,

Cash flows from financing activities:

AND SUBSIDIARIES (Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

Three months ended

Cash flows from financing activities, net of acquisitions:

Payments on bonds and notes payable $ ( 347,217 ) ( 1,276,160 )

6 unchanged sentences

Proceeds from issuance of common stock 341 374

Acquisition of noncontrolling interest ( 325 ) —

Issuance of noncontrolling interests 8,869 14,098

11 unchanged sentences

ROU assets obtained in exchange for lease obligations $ 84 48

Receipt of beneficial interest in consumer loan securitizations as consideration from sale of loans $ 13,799 63,878

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

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

Distribution to noncontrolling interests $ 4,886 5,907

Issuance of noncontrolling interests $ 6,572 12,566

(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.

(a) The Company utilized $ 14.1 million and $ 8.6 million of federal and state tax credits related primarily to renewable energy during the three months ended March 31, 2025 and 2024, respectively.

Supplemental disclosures of non-cash activities regarding the Company's acquisition of certain student loan trusts are contained in note 3.

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

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

March 31, 2025 December 31, 2024 March 31, 2024 December 31, 2023

Total cash and cash equivalents $ 220,517 194,518 179,682 168,112

9 unchanged sentences

The accompanying unaudited consolidated financial statements of Nelnet, Inc.

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.

and subsidiaries (the “Company” or "Nelnet") as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2024 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 nine months ended September 30, 2024 are not necessarily indicative of the results for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results for the year ending December 31, 2025.

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, 2024 (the "2024 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 September 30, 2024 presentation.

Reclassification and Immaterial Error Corrections

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 $ 6.4 million and $ 49.5 million for the three and nine months ended September 30, 2023, respectively.

Prior period amounts have been corrected to conform to the current period presentation resulting in a reclassification of $ 0.1 million for the three months ended March 31, 2024.

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

3 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 $ 2.9 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.

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 $ 0.2 million for the three months ended March 31, 2024, offset by an increase in "net loss attributable to noncontrolling interests" of $ 0.4 million.

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

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.

was an increase of $ 0.2 million for the three months ended March 31, 2024.

Consolidated "total equity" on the consolidated balance sheet was reduced $ 21.8 million as of December 31, 2023, which reflects 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:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Non-Nelnet Bank:

6 unchanged sentences

Non-Nelnet Bank loans 9,260,006 8,955,868

Federally insured loans:

Stafford and other 10,336 —

Consolidation 99,851 —

Total 110,187 —

Private education loans 489,451 482,445

9 unchanged sentences

Non-Nelnet Bank allowance for loan losses ( 103,204 ) ( 98,689 )

Federally insured loans ( 362 ) —

Private education loans ( 9,893 ) ( 10,086 )

3 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.

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Non-Nelnet Bank:

1 unchanged sentence

Private education loans 4.98 % 5.02 %

Consumer and other loans (b) 9.15 % 13.66 %

Private education loans 1.04 % 0.93 %

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.

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 September 30, 2024

Non-Nelnet Bank:

Federally insured loans $ 54,180 1,247 ( 4,593 ) — 50,834

Private education loans 13,065 ( 126 ) ( 1,414 ) 219 11,744

Consumer and other loans 11.52 % 11.13 %

Federally insured loans (a) 0.33 % —

Private education loans 2.02 % 2.09 %

Consumer and other loans 4.08 % 3.77 %

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

Three months ended September 30, 2023

(a) The allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty for non-Nelnet Bank was 20.2 % and 20.6 % as of March 31, 2025 and December 31, 2024, respectively, and for Nelnet Bank was 16.3 % as of March 31, 2025.

Student Loan Trust Acquisitions

In March 2025, the Company acquired the ownership interests in certain trusts giving the Company rights to the residual interest.

The trusts included $ 646.9 million (par value) of federally insured Stafford and consolidation loans funded to term with $ 721.3 million (par value) of bonds and notes payable, $ 32.2 million of cash and restricted cash, and $ 27.4 million of other net assets.

The Company has consolidated these trusts on its consolidated balance sheet as the Company is the primary beneficiary of the trusts.

Upon acquisition, the Company recorded the student loans and bonds and notes payable at fair value, resulting in the recognition of a student loan net discount of $ 6.6 million and a bonds and notes payable discount of $ 31.1 million.

These net discounts will be accreted using the effective interest method over the lives of the underlying assets and liabilities.

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 Balance at end of period

Three months ended March 31, 2025

Non-Nelnet Bank:

6 unchanged sentences

$ 114,890 15,465 ( 10,896 ) 617 120,076

Nine months ended September 30, 2024

Non-Nelnet Bank:

Federally insured loans $ 68,453 ( 2,593 ) ( 15,026 ) — 50,834

Private education loans 15,750 ( 392 ) ( 4,254 ) 640 11,744

Consumer and other loans 11,742 17,184 ( 7,567 ) 1,021 22,380

Private education loans 3,347 1,576 ( 1,796 ) 543 3,670

Consumer and other loans 5,351 16,563 ( 8,635 ) 235 13,514

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

Nine months ended September 30, 2023

Three months ended March 31, 2024

Non-Nelnet Bank:

2 unchanged sentences

Consumer and other loans 11,742 8,590 ( 1,952 ) 381 18,761

Federally insured loans 170 ( 15 ) ( 7 ) — 148

Private education loans 3,347 757 ( 446 ) 2 3,660

1 unchanged sentence

$ 104,643 10,929 ( 10,238 ) 674 106,008

(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 September 30, 2024

Non-Nelnet Bank

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

Three months ended September 30, 2023

Non-Nelnet Bank

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

Nine months ended September 30, 2024

Non-Nelnet Bank

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

Nine months ended September 30, 2023

Non-Nelnet Bank

Consumer and other loans $ 41,388 ( 49,461 ) ( 8,073 )

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 September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Non-Nelnet Bank:

4 unchanged sentences

Private education loans 1.06 % 0.49 %

Consumer and other loans 7.28 % 5.69 % 7.49 % 3.00 %

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.

Consumer and other loans (a) 1.25 % 8.01 %

(a) Decrease in annualized net charge-offs as a percentage of average loans was due to a change in mix of consumer loan portfolios that resulted in a portfolio of loans with an overall higher credit quality in 2025 as compared with 2024 and Nelnet Bank exiting a consumer loan program in December 2024 that had previously incurred significant charge-offs.

The Company recorded a provision for loan losses for the three months ended March 31, 2025 due primarily to the establishment of an initial allowance for loans originated and acquired during the period.

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.

Unfunded 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.

As of March 31, 2025 and December 31, 2024, Nelnet Bank had a liability of approximately $ 198,000 and $ 326,000 , respectively, related to $ 28.8 million and $ 40.7 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 Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Provision for loan losses from allowance activity table above $ 15,465 10,929

Provision for unfunded loan commitments 252 155 213 132

Negative provision for unfunded loan commitments ( 128 ) ( 101 )

Provision for loan losses reported in consolidated statements of income $ 15,337 10,828

6 unchanged sentences

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

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

As of March 31, 2025 As of December 31, 2024 As of March 31, 2024

Federally insured loans - Non-Nelnet Bank:

41 unchanged sentences

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 329,945 $ 298,247 $ 132,305

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

As of March 31, 2025 As of December 31, 2024 As of March 31, 2024

Federally insured loans - Nelnet Bank (a):

Loans in-school/grace/deferment $ 3,000 2.7 %

Loans in forbearance 5,433 4.9

Loans in repayment status:

Loans current 92,027 90.4 %

Loans delinquent 30-59 days 3,725 3.7

Loans delinquent 60-89 days 1,447 1.4

Loans delinquent 90-119 days 1,063 1.0

Loans delinquent 120-270 days 2,423 2.4

Loans delinquent 271 days or greater 1,069 1.1

Total loans in repayment 101,754 92.4 100.0 %

Total federally insured loans 110,187 100.0 %

Accrued interest receivable 5,065

Loan premium 1,307

Allowance for loan losses ( 362 )

Total federally insured loans and accrued interest receivable, net of allowance for loan losses $ 116,197

Private education loans - Nelnet Bank (a):

9 unchanged sentences

Accrued interest receivable 4,636 4,103 2,445

Deferred origination costs, net of unaccreted discount 5,786 5,608 5,578

Loan discount, net of unamortized premiums and deferred origination costs ( 3,973 ) ( 4,581 ) 5,692

Allowance for loan losses ( 9,893 ) ( 10,086 ) ( 3,660 )

2 unchanged sentences

Loans in deferment $ 7,295 4.5 % $ 5,186 3.2 % $ 141 0.1 %

Loans in forbearance — — — — 32 0.1

Loans in repayment status:

10 unchanged sentences

(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.

An additional key credit quality indicator for Nelnet Bank private education and consumer loans is FICO scores at the time of origination.

The following tables highlight the gross principal balance of Nelnet Bank's portfolios, by year of origination, stratified by FICO score at the time of origination.

An additional key credit quality indicator for Nelnet Bank private education and consumer loans is FICO scores at the time of origination or purchase.

The following tables highlight the gross principal balance of Nelnet Bank's portfolios, by year of origination, stratified by FICO score at the time of origination or purchase.

Nelnet Bank Private Education Loans

Loan balance as of September 30, 2024

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

FICO at origination:

Loan balance as of March 31, 2025

Three months ended March 31, 2025 2024 2023 2022 2021 Prior years Total

FICO at origination or purchase:

Less than 705 $ 857 3,037 3,291 4,633 3,989 15,620 31,427

6 unchanged sentences

Loan balance as of December 31, 2024

2023 2022 2021 2020 Total

FICO at origination:

2024 2023 2022 2021 2020 Prior years Total

FICO at origination or purchase:

Less than 705 $ 2,566 3,578 4,759 4,182 331 15,485 30,901

6 unchanged sentences

Nelnet Bank Consumer and Other Loans

Loan balance as of September 30, 2024

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

Loan balance as of March 31, 2025

Three months ended March 31, 2025 2024 2023 2022 2021 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 September 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 March 31, 2025 and December 31, 2024, 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 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.

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, 2025 based on year of origination.

Effective July 1, 2010, no new loan originations can be made under the Federal Family Education Loan Program (the "FFEL Program" or FFELP) and all new federal loan originations must be made under the Federal Direct Loan Program.

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

Three months ended March 31, 2025 2024 2023 2022 2021 Prior years Total

Private education loans - Non-Nelnet Bank:

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Total private education loans and accrued interest receivable, net of allowance for loan losses $ 194,133

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

Gross charge-offs - three months ended March 31, 2025 $ — — — — — 933 933

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 $ 329,945

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

Gross charge-offs - three months ended March 31, 2025 $ — 2,076 2,847 127 9 119 5,178

Three months ended March 31, 2025 2024 2023 2022 2021 Prior years Total

Private education loans - Nelnet Bank (a):

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Accrued interest receivable 4,636

Deferred origination costs, net of unaccreted discount 5,786

Loan discount, net of unamortized premiums and deferred origination costs ( 3,973 )

Allowance for loan losses ( 9,893 )

Total private education loans and accrued interest receivable, net of allowance for loan losses $ 480,221

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

Gross charge-offs - three months ended March 31, 2025 $ — 139 119 105 84 947 1,394

Consumer and other loans - Nelnet Bank (a):

11 unchanged sentences

Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 157,338

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

Gross charge-offs - three months ended March 31, 2025 $ — 192 242 — 77 58 569

1 unchanged sentence

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

As of September 30, 2024

As of March 31, 2025

Interest rate

16 unchanged sentences

Fixed-rate bonds and notes issued in private education loan asset-backed securitizations 39,508 7.15 %

12/28/43 / 11/25/53

Unsecured line of credit — — 9/22/26

1 unchanged sentence

5/4/25 / 1/30/33

Repurchase agreement 108,182 5.54 % - 6.75 %

11/27/24 / 12/20/24

Other - due to related party 4,669 5.00 % 11/15/28 - 11/15/30

Discount on bonds and notes payable and debt issuance costs ( 75,249 )

14 unchanged sentences

1/31/26 / 4/1/26

Consumer loan warehouse facility 23,691 5.70 % 11/14/25

Consumer loan warehouse facilities 90,000 4.46 % / 4.57 %

8/1/26 / 11/13/27

Variable-rate bonds and notes issued in private education loan asset-backed securitizations 54,973 5.90 % / 6.82 %

5 unchanged sentences

5/4/25 / 1/30/33

Repurchase agreement 208,164 6.35 % - 6.81 %

1/22/24 - 12/20/24

Other - due to related party 5,778 5.00 % - 6.05 %

3/1/24 - 11/15/30

Discount on bonds and notes payable and debt issuance costs ( 48,654 )

3 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 September 30, 2024.

The following table summarizes the Company's warehouse facilities as of March 31, 2025.

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

2 unchanged sentences

$ 975,000 821,803 153,197 $ 62,819

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 %

Consumer $ 100,000 3,877 96,123 11/13/2026 11/13/2027 70 % $ 1,775

Consumer 125,000 65,000 60,000 1/1/2026 8/1/2026 60 % - 80 %

$ 225,000 68,877 156,123 $ 23,074

(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.

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

(a) On January 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to July 31, 2025 and July 31, 2026, respectively.

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

2 unchanged sentences

The loans would then be funded at this new advance rate until the final maturity date of the facility.

(c) On April 2, 2024, this facility was amended to reduce the maximum financing amount from $ 432 million to $ 375 million, and to extend the expiration of liquidity provisions and final maturity date to April 1, 2025 and April 1, 2026, respectively.

(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.

(c) On March 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to May 1, 2025 and May 1, 2026, respectively, and on April 10, 2025, extended the liquidity provisions and final maturity to May 1, 2026 and May 1, 2027, respectively.

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 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 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.

As of March 31, 2025, no amount was outstanding on the line of credit and $ 495.0 million was available for future use.

Debt Repurchases

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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 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.

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.

As of March 31, 2025, the Company holds $ 97.4 million (par value) of its own FFELP asset-backed securities.

Derivative Financial Instruments

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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 2024 Annual Report.

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").

The following table summarizes the Company’s outstanding basis swaps as of March 31, 2025 and December 31, 2024 used to hedge its basis risk and repricing risk on a portion of its FFELP student loan assets.

For these derivative instruments, the Company receives payments indexed to three-month SOFR and makes payments based on the one-month SOFR index (plus or minus a spread) as defined in the agreements (the "Basis Swaps").

Maturity Notional amount

September 30, 2024 December 31, 2023

2026 $ 1,150,000

2026 1,150,000 1,150,000

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 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 September 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 March 31, 2025 and December 31, 2024 to economically hedge loans earning fixed rate floor income.

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

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During the first quarter of 2023, the Company received $ 183.2 million, which included $ 19.1 million related to 2023 settlements, to terminate $ 2.8 billion in notional amount of floor income interest rate swaps prior to their final maturity.

Nelnet Bank Derivatives

Interest Rate Swaps

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)

The following table summarizes the outstanding non-centrally cleared derivative instruments used by Nelnet Bank as of March 31, 2025 and December 31, 2024, 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)

2028 $ 40,000 3.33 %

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Fair value of asset derivatives Fair value of liability derivatives

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

As of March 31, 2025 As of December 31, 2024 As of March 31, 2025 As of December 31, 2024

Interest rate swaps - Nelnet Bank $ 1,473 3,232 822 53

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 September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Basis swaps $ 153 365

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Investments and Notes Receivable

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

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

“Total investments and notes receivable” consisted of the following:

As of March 31, 2025 As of December 31, 2024

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

Restricted available-for-sale investments (at fair value):

FFELP loan and other debt securities $ 47,799 2,044 ( 88 ) 49,755 16,993 1,069 ( 93 ) 17,969

Non-restricted available-for-sale investments (at fair value):

Investments at fair value:

Available-for-sale asset-backed securities

Non-Nelnet Bank:

FFELP loan $ 129,556 4,157 ( 3,175 ) 130,538 188,386 5,804 ( 896 ) 193,294

Private education loan (a) 247,633 — ( 20,344 ) 227,289 281,791 — ( 28,874 ) 252,917

FFELP loan and other debt securities - restricted (a) 120,355 3,535 ( 372 ) 123,518 98,914 3,151 ( 78 ) 101,987

Private education loan (b) 226,575 — ( 17,160 ) 209,415 237,288 — ( 18,118 ) 219,170

Other debt securities 38,942 2,692 ( 10 ) 41,624 32,552 2,500 — 35,052

Total Non-Nelnet Bank 515,428 10,384 ( 20,717 ) 505,095 557,140 11,455 ( 19,092 ) 549,503

FFELP loan (b) 226,522 6,011 ( 299 ) 232,234 304,555 4,488 ( 2,286 ) 306,757

FFELP loan 239,694 6,330 ( 632 ) 245,392 231,543 6,060 ( 270 ) 237,333

Private education loan 5,888 — ( 1 ) 5,887 1,596 — — 1,596

5 unchanged sentences

Other investments and notes receivable (not measured at fair value):

Held-to-maturity investments

Non-Nelnet Bank:

Debt securities — 4,700

FFELP loan asset-backed securities (b) 214,380 149,938

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

Total Nelnet Bank 222,480 158,038

Total held-to-maturity investments 222,480 162,738

Venture capital and funds:

Measurement alternative 197,515 194,084

Held-to-maturity asset-backed securities

FFELP loan 202,739 203,439

Private education loan 4,618 7,335

Total Nelnet Bank held-to-maturity asset-backed securities 207,357 210,774

Venture capital, funds, and other:

Measurement alternative (c) 205,749 200,782

Equity method 163,258 170,258

Total venture capital and funds 369,007 371,040

Equity method 125,424 103,811

Investment in ALLO:

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

Preferred membership interest and accrued and unpaid preferred return (d) 195,353 155,047

Real estate equity method 138,123 131,745

Investment in ALLO (d):

Voting interest/equity method — —

Preferred membership interests and accrued and unpaid preferred return 234,030 225,614

Total investment in ALLO 234,030 225,614

Beneficial interest in loan securitizations (e):

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

145,238 134,113

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

Consumer loans, net of allowance for credit losses of $ 39,826 and $ 38,590 as of March 31, 2025 and December 31, 2024, respectively

137,961 142,764

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

Private education loans, net of allowance for credit losses of $ 1,175 and $ 901 as of March 31, 2025 and December 31, 2024, respectively

50,389 52,824

Federally insured student loans 18,017 18,221

Total beneficial interest in loan securitizations, net of allowance 206,367 213,809

2 unchanged sentences

Tax liens, affordable housing, and other 11,530 10,184

Total investments (not measured at fair value) 907,176 857,866

Total other investments and notes receivable (not measured at fair value) 1,063,647 1,040,376

Total investments and notes receivable $ 2,302,550 $ 2,200,696

(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.

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 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 $ 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 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 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.

(a) Represent investments held in third-party trusts as collateral for the Company’s reinsurance business.

(b) As sponsor of certain private education loan securitizations, the Company is required to provide a certain level of risk retention, and has purchased bonds issued in such securitizations to satisfy this requirement.

The bonds purchased to satisfy the risk retention requirement are included in the above table.

The Company must retain these investment securities until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33 % or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33 % or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell its investment securities (bonds) to a third party.

(doing business as “Hudl”).

During the first quarter of 2025, the Company acquired additional ownership interests in Hudl for $ 3.8 million from existing Hudl investors.

This transaction was not considered an observable market transaction (not orderly) because it was not subject to customary marketing activities.

Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction value.

As of March 31, 2025, the carrying amount of the Company's investment in Hudl is $ 172.5 million.

Graff, who has served on the Company's Board of Directors since May 2014, is CEO, co-founder, and a director of Hudl.

(d) The Company has both a voting and preferred membership interest investment in ALLO Holdings, LLC (referred to collectively with its subsidiary ALLO Communications LLC as "ALLO").

The Company's voting membership interest in ALLO is accounted for under the HLBV method of accounting.

Under the HLBV method of accounting, the Company recognized $ 10.7 million of losses during the three months ended March 31, 2024, reducing the carrying value of the voting membership interest investment to $ 0 .

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

As of March 31, 2025, the outstanding preferred membership interests and accrued and unpaid preferred return of ALLO held by the Company was $ 225.6 million and $ 8.4 million, respectively.

The Company earns a preferred return of 13.50 % and 20.00 % on $ 169.1 million and $ 56.5 million, respectively, of the Company's preferred membership interests of ALLO.

The Company recognized income on its ALLO preferred membership interests of $ 8.4 million and $ 2.4 million during the three months ended March 31, 2025 and 2024, respectively.

The income statement activity from the Company's investment in ALLO is included in "other, net" in "other income (expense)" on the consolidated statements of income.

In April 2025, the Company executed a transaction that is expected to close in late May 2025.

Upon closing, the Company expects all of its outstanding preferred membership interests, including the preferred return accrued on such membership interests, to be redeemed by ALLO.

In addition, a portion of its voting membership interest will also be redeemed.

The Company expects to receive aggregate cash proceeds of approximately $ 410 million from ALLO and recognize a pre-tax gain of approximately $ 175 million as a result of this transaction.

See note 16 for additional information.

(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.

As of the latest remittance reports filed by the various trusts prior to or as of March 31, 2025, the Company's ownership correlates to approximately $ 1.10 billion, $ 440 million, and $ 280 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations.

The Company recorded an additional $ 1.5 million allowance for credit losses (and related provision expense) during the three months ended March 31, 2025 on these investments.

This expense is included in "impairment expense and provision for beneficial interests" on the consolidated statement of income.

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

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 third-party co-investor’s portion being presented as noncontrolling interests.

As of March 31, 2025, the Company has invested a total of $ 309.9 million and its third-party investors have invested $ 280.4 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects.

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 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.

As of March 31, 2025, the Company and its third-party co-investors have earned $ 331.0 million and $ 265.1 million, respectively, of tax credits on those projects that remain outstanding.

The solar investment negative carrying value on the consolidated balance sheet of $ 167.0 million as of March 31, 2025 represents the sum of total tax credits earned on solar projects placed in service through March 31, 2025 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 March 31, 2025, excluding the portion owned by syndication partners that is reflected as "noncontrolling interests" on the consolidated balance sheet, was $ 94.0 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 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 $ ( 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

The following table presents (i) the Company's recognized HLBV losses and gains recognized from sales of certain investments at the end of the contractual agreement (typically five years ), which include losses and gains 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 and gains 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 gain excluding amounts 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 March 31,

Losses from HLBV accounting (gross) $ ( 2,616 ) ( 1,427 )

Gains from sales (gross) 3,072 4,207

Gains from solar investments, net 456 2,780

losses attributable to noncontrolling members, net ( 1,046 ) ( 1,641 )

Net gain, excluding amounts attributed to noncontrolling interest investors $ 1,502 4,421

The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of March 31, 2025:

As of March 31, 2025

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

Available-for-sale asset-backed securities

Restricted Investments:

FFELP loan and other debt securities $ — 10,258 3,015 34,526 47,799

Fair value — 10,331 3,041 36,383 49,755

Non-Nelnet Bank:

FFELP loan $ — 204 2,514 126,838 129,556

FFELP loan and other debt securities - restricted — 5,500 15,951 98,904 120,355

Private education loan — — — 226,575 226,575

9 unchanged sentences

Total available-for-sale asset-backed securities at fair value $ 44,682 54,830 125,103 933,447 1,158,062

Held-to-maturity investments

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

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

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

Total held-to-maturity investments at fair value $ — 2,876 1,177 223,533 227,586

Held-to-maturity asset-backed securities

FFELP loan $ — 2,684 11,759 188,296 202,739

Private education loan — — — 4,618 4,618

Total held-to-maturity asset-backed securities at amortized cost $ — 2,684 11,759 192,914 207,357

Total held-to-maturity asset-backed securities at fair value $ — 2,743 11,627 198,534 212,904

Beneficial interest in loan securitizations (a):

2 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 September 30, 2024:

The following table summarizes the unrealized positions for held-to-maturity asset-backed securities investments and the beneficial interest in loan securitizations as of March 31, 2025:

Carrying value Gross unrealized gains Gross unrealized losses Fair value

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

Asset-backed securities $ 207,357 6,074 ( 527 ) 212,904

Beneficial interest in loan securitizations 206,367 16,824 ( 1,200 ) 221,991

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.

The following table presents securities classified as available-for-sale that have gross unrealized losses as of March 31, 2025 and the fair value of such securities as of March 31, 2025.

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 September 30, 2024

As of March 31, 2025

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

1 unchanged sentence

Available-for-sale asset-backed securities

Restricted Investments:

FFELP loan and other debt securities $ ( 88 ) 8,160 — — ( 88 ) 8,160

Non-Nelnet Bank:

FFELP loan $ ( 240 ) 10,614 ( 2,935 ) 46,474 ( 3,175 ) 57,088

FFELP loan and other debt securities - restricted ( 141 ) 12,037 ( 231 ) 2,288 ( 372 ) 14,325

Private education loan — — ( 17,160 ) 209,415 ( 17,160 ) 209,415

Other debt securities ( 10 ) 1,990 — — ( 10 ) 1,990

Total Non-Nelnet Bank ( 391 ) 24,641 ( 20,326 ) 258,177 ( 20,717 ) 282,818

FFELP loan ( 418 ) 52,348 ( 214 ) 16,408 ( 632 ) 68,756

Private education loan ( 1 ) 4,611 — — ( 1 ) 4,611

Other debt securities ( 752 ) 29,220 ( 1,115 ) 13,948 ( 1,867 ) 43,168

2 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 Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Gross proceeds from sales $ 74,781 153,373

1 unchanged sentence

Gross realized losses ( 450 ) ( 502 )

Net gains (losses) $ 1,721 1,064 3,326 ( 3,001 )

Net gains $ 483 552

Intangible Assets

1 unchanged sentence

Weighted average remaining useful life as of

September 30, 2024 (months)

September 30, 2024 December 31, 2023

March 31, 2025 (months)

March 31, 2025 December 31, 2024

Amortizable intangible assets, net:

4 unchanged sentences

Total amortizable intangible assets, net 93 $ 34,803 36,328

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 recorded amortization expense on its intangible assets of $ 1.5 million and $ 2.1 million for the three months ended March 31, 2025 and 2024, respectively.

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

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

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

As of March 31, 2025, the Company estimates it will record amortization expense as follows:

2025 (April 1 - December 31) $ 4,574

2030 and thereafter 9,141

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

The following table presents the carrying amount of goodwill as of March 31, 2025 and December 31, 2024 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 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

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 September 30, 2024

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

Investments - venture capital — — — — — 100 100

$ — — 28,952 — — 100 29,052

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 (c) — — — — — 1,170 1,170

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

$ — — 34,863 — — 2,002 36,865

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) 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

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.

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 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:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Retail and other savings $ 1,030,449 916,475

2 unchanged sentences

Total interest-bearing deposits $ 1,313,407 1,186,131

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

As of March 31, 2025 and December 31, 2024, Nelnet Bank had intercompany deposits from Nelnet, Inc.

and its subsidiaries totaling $ 68.6 million and $ 68.5 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 September 30, 2024:

The following table presents certificates of deposit remaining maturities as of March 31, 2025:

One year or less $ 63,507

5 unchanged sentences

Total $ 282,958

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.

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

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 September 30, 2024 was $ 44.5 million, the majority of which are intercompany deposits from Nelnet, Inc.

The deposits exceeding the FDIC insurance limits as of March 31, 2025 were $ 44.7 million, the majority of which are intercompany deposits from Nelnet, Inc.

and its subsidiaries.

Union Bank, a related party, is the program manager for certain of the Educational 529 College Savings plans and trustee for the STFIT.

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 September 30,

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

Net income attributable to Nelnet, Inc.

$ 2,343 45 2,388 43,409 945 44,354

Weighted-average common shares outstanding - basic and diluted 35,743,895 686,590 36,430,485 36,699,510 798,563 37,498,073

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

Nine months ended September 30,

Three months ended March 31,

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 September 30, 2024

Nelnet Financial Services

Loan Servicing and Systems Education Technology Services and Payments Asset

Three months ended March 31, 2025

Reportable Segments Reconciling Items

Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset

Generation and

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

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

Interest income:

4 unchanged sentences

Net interest income 721 6,939 52,935 12,390 72,985 8,050 1,679 — 82,714

Less provision (negative provision) for loan losses — — 11,968 6,143 — — — 18,111

Less provision for loan losses — — 13,012 2,325 15,337 — — — 15,337

Net interest income after provision for loan losses 721 6,939 39,923 10,065 57,648 8,050 1,679 — 67,377

Other income (expense):

Loan servicing and systems revenue 108,175 — — — — — — 108,175

LSS revenue 120,741 — — — 120,741 — — — 120,741

Intersegment revenue 5,684 64 — — 5,748 — — ( 5,748 ) —

Education technology services and payments revenue — 118,179 — — — — — 118,179

ETSP revenue — 147,330 — — 147,330 — — — 147,330

Reinsurance premiums earned — — — — — 24,687 — — 24,687

Solar construction revenue — — — — — — 3,995 — 3,995

Other, net 112 — 3,995 142 4,249 1,110 18,238 97 23,694

Loss on sale of loans — — ( 107 ) — — — — ( 107 )

Impairment expense and provision for beneficial interests — — ( 28,952 ) — — ( 100 ) — ( 29,052 )

Gain (loss) on sale of loans, net — — 909 — 909 — — — 909

Derivative settlements, net — — 582 164 746 — — — 746

1 unchanged sentence

Total other income (expense), net 126,537 147,394 1,691 ( 2,223 ) 273,399 25,797 22,233 ( 5,651 ) 315,778

Cost of services:

Cost to provide education technology services and payments — 45,273 — — — — — 45,273

Cost to provide solar construction services — — — — — 26,815 — 26,815

Cost of services and expenses:

Total cost of services 1,633 48,047 — — 49,680 — 7,828 — 57,508

Operating expenses:

Salaries and benefits 69,574 41,741 1,221 2,816 115,352 478 22,496 ( 104 ) 138,223

Depreciation and amortization 2,654 2,430 — 339 5,423 — 3,833 — 9,255

Other expenses 19,663 7,614 2,775 2,570 17,904 11,116 — 61,642

Reinsurance losses and underwriting expenses — — — — — 22,212 — — 22,212

Postage expense 7,575 7,575 ( 7,575 ) —

Servicing fees 6,911 667 7,578 ( 7,578 ) —

Other expenses (a) 10,832 9,048 888 1,358 22,126 772 15,586 9,741 48,226

Intersegment expenses, net 16,478 5,605 1,250 710 24,043 244 ( 24,055 ) ( 232 ) —

Total operating expenses 107,113 58,824 10,270 5,890 182,097 23,706 17,860 ( 5,748 ) 217,916

Income (loss) before income taxes ( 4,549 ) 26,813 ( 16,346 ) ( 4,758 ) 14,038 ( 17,423 ) — ( 2,223 )

Income tax (expense) benefit 1,092 ( 6,450 ) 3,923 1,143 ( 3,341 ) 3,915 — 282

Net income (loss) ( 3,457 ) 20,363 ( 12,423 ) ( 3,615 ) 10,697 ( 13,508 ) — ( 1,941 )

Net loss (income) attributable to noncontrolling interests — 54 — — ( 117 ) 4,392 — 4,329

Net income (loss) attributable to Nelnet, Inc.

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

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

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 $ — — 230,816 5,608 — — — 236,423

Investment interest 1,098 8,934 18,062 9,563 13,021 3,232 ( 5,783 ) 48,128

Total interest income 1,098 8,934 248,878 15,171 13,021 3,232 ( 5,783 ) 284,551

Interest expense — — 197,393 9,456 5,661 432 ( 5,783 ) 207,159

Net interest income 1,098 8,934 51,485 5,715 7,360 2,800 — 77,392

Less provision (negative provision) for loan losses — — 2,348 1,927 — — — 4,275

Net interest income after provision for loan losses 1,098 8,934 49,137 3,788 7,360 2,800 — 73,117

Other income (expense):

Loan servicing and systems revenue 127,892 — — — — — — 127,892

Intersegment revenue 6,944 77 — — — — ( 7,021 ) —

Education technology services and payments revenue — 113,796 — — — — — 113,796

Solar construction revenue — — — — — 6,301 — 6,301

Other, net 687 — 2,776 565 9,861 ( 16,950 ) — ( 3,062 )

Loss on sale of loans — — ( 1,022 ) — — — — ( 1,022 )

Impairment expense and provision for beneficial interests — — 1,510 — 1,510 81 — — 1,591

Derivative settlements, net — — 621 196 — — — 817

Derivative market value adjustments, net — — 1,192 1,948 — — — 3,140

Total other income (expense), net 135,227 113,873 3,567 2,709 9,861 ( 15,327 ) ( 7,021 ) 242,888

Cost of services:

Cost to provide education technology services and payments — 43,694 — — — — — 43,694

Cost to provide solar construction services — — — — — 7,783 — 7,783

Total cost of services — 43,694 — — — 7,783 — 51,477

Operating expenses:

Salaries and benefits 73,310 39,776 1,242 2,520 288 24,731 ( 663 ) 141,204

Depreciation and amortization 5,023 3,030 — 259 — 13,522 — 21,835

Other expenses 15,629 8,309 2,952 1,290 7,522 15,670 — 51,370

Intersegment expenses, net 17,894 5,875 7,948 129 191 ( 25,679 ) ( 6,358 ) —

Total operating expenses 111,856 56,990 12,142 4,198 8,001 28,244 ( 7,021 ) 214,409

Total expenses 108,746 106,871 11,780 5,890 233,287 23,787 25,688 ( 5,748 ) 277,015

Income (loss) before income taxes 18,512 47,462 29,834 1,952 97,760 10,060 ( 1,776 ) 97 106,140

4 unchanged sentences

$ 14,069 36,105 22,661 1,518 74,353 7,551 657 — 82,560

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

Loan Servicing and Systems Education Technology Services and Payments Asset

Total assets as of March 31, 2025 $ 184,142 469,706 10,362,549 1,689,633 12,706,030 874,667 873,211 ( 261,950 ) 14,191,958

(a) Other expenses for each reportable segment includes:

LSS - communications, professional fees, collection costs, software, and computer services and subscriptions.

ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel.

AGM - trustee fees and professional fees.

Nelnet Bank - marketing, consulting and professional fees, software, insurance, and management fee expense.

Three months ended March 31, 2024

Reportable Segments Reconciling Items

Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset

Generation and

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

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

Interest income:

4 unchanged sentences

Net interest income 1,894 7,866 40,558 7,567 57,885 13,198 3,139 — 74,222

Less provision (negative provision) for loan losses — — 14,199 18,352 — — — 32,551

Less provision for loan losses — — 6,455 4,373 10,828 — — — 10,828

Net interest income after provision for loan losses 1,894 7,866 34,103 3,194 47,057 13,198 3,139 — 63,394

Other income (expense):

Loan servicing and systems revenue 344,428 — — — — — — 344,428

LSS revenue 127,201 — — — 127,201 — — — 127,201

Intersegment revenue 6,886 49 — — 6,935 — — ( 6,935 ) —

Education technology services and payments revenue — 378,627 — — — — — 378,627

ETSP revenue — 143,539 — — 143,539 — — — 143,539

Reinsurance premiums earned — — — — — 12,780 — — 12,780

Solar construction revenue — — — — — — 13,726 — 13,726

Other, net 710 — 4,983 375 6,068 161 ( 2,147 ) — 4,082

Loss on sale of loans — — ( 1,685 ) — — — — ( 1,685 )

Impairment expense and provision for beneficial interests — — ( 34,863 ) — — ( 2,002 ) — ( 36,865 )

Gain (loss) on sale of loans, net — — ( 141 ) — ( 141 ) — — — ( 141 )

Derivative settlements, net — — 1,555 202 1,757 — — — 1,757

1 unchanged sentence

Total other income (expense), net 134,797 143,588 12,103 2,835 293,323 12,941 11,579 ( 6,935 ) 310,908

Cost of services:

Cost to provide education technology services and payments — 134,106 — — — — — 134,106

Cost to provide solar construction services — — — — — 49,115 — 49,115

Cost of services and expenses:

Total cost of services — 48,610 — — 48,610 — 14,229 — 62,839

Operating expenses:

Salaries and benefits 76,722 40,167 1,195 2,721 120,805 358 23,521 ( 807 ) 143,875

Depreciation and amortization 5,109 2,683 — 260 8,052 — 8,716 — 16,769

Other expenses 59,861 23,772 9,985 5,765 41,536 37,359 — 178,278

Reinsurance losses and underwriting expenses — — — — — 11,317 — — 11,317

Postage expense 10,605 10,605 ( 10,605 ) —

Servicing fees 8,951 233 9,184 ( 9,184 ) —

Other expenses (a) 8,933 7,558 1,109 1,111 18,711 485 13,402 12,931 45,528

Intersegment expenses, net 19,332 4,801 1,208 557 25,898 217 ( 26,845 ) 730 —

Total operating expenses 120,701 55,209 12,463 4,882 193,255 12,377 18,794 ( 6,935 ) 217,489

Income (loss) before income taxes 13,686 100,046 41,710 ( 7,330 ) 44,325 ( 42,295 ) — 150,141

Income tax (expense) benefit ( 3,284 ) ( 24,035 ) ( 10,010 ) 1,800 ( 10,550 ) 8,426 — ( 37,653 )

Net income (loss) 10,402 76,011 31,700 ( 5,530 ) 33,775 ( 33,869 ) — 112,488

Net loss (income) attributable to noncontrolling interests — 101 — — ( 366 ) 8,663 — 8,398

Net income (loss) attributable to Nelnet, Inc.

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

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

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 $ — — 689,633 15,079 — — — 704,712

Investment interest 3,193 20,237 47,726 26,013 54,481 8,826 ( 30,643 ) 129,835

Total interest income 3,193 20,237 737,359 41,092 54,481 8,826 ( 30,643 ) 834,547

Interest expense — — 618,905 24,841 24,860 1,793 ( 30,643 ) 639,756

Net interest income 3,193 20,237 118,454 16,251 29,621 7,033 — 194,791

Less provision (negative provision) for loan losses — — ( 772 ) 5,837 — — — 5,065

Net interest income after provision for loan losses 3,193 20,237 119,226 10,414 29,621 7,033 — 189,726

Other income (expense):

Loan servicing and systems revenue 389,138 — — — — — — 389,138

Intersegment revenue 21,980 198 — — — — ( 22,178 ) —

Education technology services and payments revenue — 357,258 — — — — — 357,258

Solar construction revenue — — — — — 19,687 — 19,687

Other, net 1,900 — 6,939 1,395 15,087 ( 52,617 ) — ( 27,297 )

Loss on sale of loans — — ( 16,776 ) — — — — ( 16,776 )

Impairment expense and provision for beneficial interests — — — — — — 37 — 37

Derivative settlements, net — — 23,940 279 — — — 24,219

Derivative market value adjustments, net — — ( 35,323 ) 3,057 — — — ( 32,266 )

Total other income (expense), net 412,722 357,456 ( 21,220 ) 4,731 15,087 ( 37,608 ) ( 22,178 ) 708,989

Cost of services:

Cost to provide education technology services and payments — 131,804 — — — — — 131,804

Cost to provide solar construction services — — — — — 25,204 — 25,204

Total cost of services — 131,804 — — — 25,204 — 157,008

Operating expenses:

Salaries and benefits 234,012 116,040 3,093 6,881 717 78,686 ( 808 ) 438,620

Depreciation and amortization 14,400 8,424 — 315 — 33,976 — 57,114

Other expenses 42,760 26,063 12,083 3,696 12,223 41,327 — 138,154

Intersegment expenses, net 58,030 17,559 24,789 302 447 ( 79,757 ) ( 21,370 ) —

Total operating expenses 349,202 168,086 39,965 11,194 13,387 74,232 ( 22,178 ) 633,888

Total expenses 120,701 103,819 12,463 4,882 241,865 12,377 33,060 ( 6,935 ) 280,365

Income (loss) before income taxes 15,990 47,635 33,743 1,147 98,515 13,762 ( 18,342 ) — 93,937

4 unchanged sentences

$ 12,152 36,217 25,644 888 74,901 10,368 ( 11,864 ) — 73,408

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

Total assets as of March 31, 2024 $ 212,381 389,990 12,315,238 1,125,122 14,042,731 1,111,587 803,709 ( 583,815 ) 15,374,212

(a) Other expenses for each reportable segment includes:

LSS - occupancy, communications, professional fees, software, and computer services and subscriptions.

ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, travel, and provision for losses.

AGM - trustee fees and professional fees.

Nelnet Bank - consulting and professional fees, software, and insurance.

Disaggregated Revenue

The following tables present disaggregated revenue by service offering or customer type for the Company's fee-based operating segments.

The following tables present disaggregated revenue for the Company's fee-based operating segments.

Loan Servicing and Systems

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

2024 2023 2024 2023

Three months ended March 31,

Government loan servicing $ 87,358 105,474

5 unchanged sentences

Education Technology Services and Payments

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

2024 2023 2024 2023

Three months ended March 31,

Tuition payment plan services $ 40,072 38,880

1 unchanged sentence

Education technology services 55,695 56,021

Other 627 932 2,693 2,511

Education technology services and payments revenue $ 147,330 143,539

Solar Construction

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

2024 2023 2024 2023

Three months ended March 31,

Commercial revenue $ 3,989 11,920

2 unchanged sentences

(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.

As a result, residential revenue will 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 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 )

Three months ended March 31,

ALLO preferred return $ 8,416 2,409

Investment activity, net 5,161 ( 1,298 )

Borrower late fee income 1,587 3,133

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

Investment advisory services (WRCM) 1,473 1,508

Administration/sponsor fee income 1,305 1,546

Gain from solar investments, net 456 2,780

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

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

Other 5,296 4,697

Other, net $ 23,694 4,082

The following table presents reinsurance premiums written and earned and loss reserves, commissions, and broker fees.

Three months ended March 31,

Premiums written:

Assumed $ 60,853 30,887

Ceded ( 23,229 ) ( 15,443 )

Net premiums written $ 37,624 15,444

Premiums earned:

Assumed $ 47,723 25,504

Ceded ( 23,036 ) ( 12,724 )

Net premiums earned $ 24,687 12,780

Loss reserve, commissions, and broker fees:

Assumed $ 42,641 22,842

Ceded ( 20,429 ) ( 11,525 )

Reinsurance losses and underwriting expenses $ 22,212 11,317

The Company’s loss reserve balance, net of amounts ceded to reinsurers, was $ 46.0 million and $ 33.1 million as of March 31, 2025 and December 31, 2024, respectively, which is included in "other liabilities" on the consolidated balance sheets.

Major Customer

Government Loan Servicing

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 $ 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 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 $ 87.4 million and $ 105.5 million for the three months ended March 31, 2025 and 2024, respectively.

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

In April 2023, Nelnet Servicing received a contract award from the Department, pursuant to which it was selected to provide continued servicing capabilities for the Department's student aid recipients under a new Unified Servicing and Data Solution (USDS) contract (the "New Government Servicing Contract") which replaced the legacy Department student loan servicing contract.

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 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 recognized revenue in accordance with this new contract beginning in the second quarter of 2024.

In April 2023, Nelnet Servicing received a contract award from the Department, pursuant to which it was selected to provide continued servicing capabilities for the Department's student aid recipients under a new Unified Servicing and Data Solution (USDS) contract which replaced the legacy Department student loan servicing contract.

The USDS contract became effective in April 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 was allocated by the Department to the Company and four other third-party servicers that were awarded a USDS contract.

Servicing under the USDS 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.

The New Government Servicing Contract has multiple revenue components with tiered pricing based on borrower volume, while revenue earned under the legacy servicing contract was primarily based on borrower status.

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 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 Company earns less revenue from the Department on a per borrower blended basis under the new USDS servicing contract as compared with the legacy servicing contract.

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

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

As of March 31, 2025 As of December 31, 2024

Level 1 Level 2 Total Level 1 Level 2 Total

10 unchanged sentences

The methodologies for estimating the fair value of financial assets and liabilities are described in note 24 of the notes to consolidated financial statements included in the 2024 Annual Report.

As of September 30, 2024

As of March 31, 2025

Fair value Carrying value Level 1 Level 2 Level 3

35 unchanged sentences

Derivative instruments 53 53 — 53 —

Subsequent Event - Partial Redemption of ALLO Investment

Nelnet has both a voting and preferred membership interest investment in ALLO.

On April 18, 2025, ALLO executed a financing transaction that will result in gross proceeds to ALLO of $ 500 million (the “Financing”).

In conjunction with the Financing, on April 18, 2025, Nelnet, ALLO, and certain other ALLO investors entered into a Membership Unit Redemption Agreement (the “Redemption Agreement”) pursuant to which ALLO will redeem certain of its membership interests from certain investors in ALLO, including Nelnet (the “Transaction”).

As part of the Transaction, ALLO will redeem all of Nelnet's outstanding preferred membership interests, including the preferred return accrued on such membership interests as of the closing date.

In addition, ALLO will redeem a portion of Nelnet’s voting membership interest of ALLO.

The Transaction is expected to close in late May 2025, subject to customary closing conditions.

Upon closing, Nelnet expects to receive aggregate cash proceeds of approximately $ 410 million from ALLO for these redemptions and recognize a pre-tax gain of approximately $ 175 million.

Immediately following the closing of the Transaction, Nelnet will not own any preferred membership interests of ALLO, but will maintain a significant voting equity investment in ALLO.

Nelnet’s ownership of ALLO will decrease from 45 % to approximately 26 %.

Nelnet will continue to account for its remaining voting membership interest of ALLO under the HLBV method of accounting, with the carrying value of such interest remaining at $ 0 as of the closing date of the Transaction.

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