MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: (Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three and six months ended June 30, 2025 and 2024.
+Added: (Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three and nine months ended September 30, 2025 and 2024.
All dollars are in thousands, except per share amounts, unless otherwise noted.)
7 unchanged sentences
These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements.
−Removed: These factors include, among others, the risks and uncertainties set forth in the “Risk Factors” sections of the 2024 Annual Report and this report and include such risks and uncertainties as:
+Added: These factors include, among
+Added: others, the risks and uncertainties set forth in the “Risk Factors” sections of the 2024 Annual Report and this report and include such risks and uncertainties as:
• risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, FFEL Program, private education, and consumer loans;
9 unchanged sentences
• risks and uncertainties associated with climate change;
−Removed: • risks and uncertainties associated with litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, including changes to the regulatory environment from the change in presidential administration, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the Company’s consolidated financial statements.
+Added: • risks and uncertainties associated with litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, including recent changes to the regulatory environment in the United States, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the Company’s consolidated financial statements.
All forward-looking statements contained in this report are qualified by these cautionary statements and are made only as of the date of this document.
4 unchanged sentences
The Company also makes and manages investments to further diversify both within and outside of its historical core education-related businesses including, but not limited to, investments in a fiber communications company (ALLO), early-stage and emerging growth companies (venture capital investments), real estate, reinsurance, and renewable energy (solar).
−Removed: In the Nelnet Financial Services division, which includes Nelnet Bank, the Company is also actively expanding its private education, consumer, and other loan portfolios.
+Added: In the Nelnet Financial Services division, which includes the Asset Generation and Management and Nelnet Bank reportable operating segments, the Company is also actively expanding its private education, consumer, and other loan portfolios.
GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments
2 unchanged sentences
A reconciliation of the Company's GAAP net income to Non-GAAP net income excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, are provided below.
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
16 unchanged sentences
As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item.
−Removed: Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will equal zero over the life of the contract.
+Added: Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will generally equal zero over the life of the contract.
However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.
4 unchanged sentences
(b) The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.
−Removed: Recent Development - Partial Redemption of ALLO Investment
−Removed: Nelnet had both voting and preferred membership interest investments in ALLO.
−Removed: On June 4, 2025, Nelnet redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025.
−Removed: The Company received cash proceeds of $410.9 million from ALLO and recognized a pre-tax gain of $175.0 million as a result of this transaction.
−Removed: See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this transaction.
Operating Segments
11 unchanged sentences
Other operating segments included in the NFS division include the Company's U.S.
−Removed: Securities and Exchange Commission (SEC)-registered investment advisor subsidiary, property and casualty reinsurance activities, investment activities in real estate, and investment debt securities (primarily student loan and other asset-backed securities) and interest expense incurred on debt used to finance such investments.
+Added: Securities and Exchange Commission (SEC)-registered investment advisor subsidiary (Whitetail Rock Capital Management LLC or "WRCM"), property and casualty reinsurance activities, investment activities in real estate, and investments in investment debt securities (primarily student loan and other asset-backed securities).
Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities ("Corporate").
1 unchanged sentence
In addition, Corporate includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.
−Removed: The information below presents the operating results (net income (loss) before taxes) for each of the Company's reportable and certain other operating segments reconciled to the consolidated financial statements for the three and six months ended June 30, 2025 and 2024.
+Added: The information below presents the operating results (net income (loss) before taxes) for each of the Company's reportable and certain other operating segments reconciled to the consolidated financial statements for the three and nine months ended September 30, 2025 and 2024.
See "Results of Operations" for additional detail regarding each reportable operating segment, the NFS operating segments, and Corporate and Other Activities under this Item 2.
−Removed: Three months ended June 30, Six months ended June 30, Certain Items Impacting Comparability
−Removed: (All dollar amounts below are pre-tax)
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
−Removed: NDS $ 19,959 2,243 38,471 18,234 • An increase in before tax operating margin due to an increase in private education and consumer loan servicing volume and a decrease in total expenses obtained through cost-saving measures.
−Removed: This was partially offset for the six months ended June 30, 2025 compared with the same period in 2024 due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
−Removed: NBS 23,542 25,599 71,005 73,235 • ETSP revenue increased to $118.2 million and $265.5 million for the three and six months ended June 30, 2025 compared with $116.9 million and $260.4 million for the same periods in 2024.
−Removed: However, NBS experienced a decrease in before tax operating margin due to a decrease in FACTS education services revenue and an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
−Removed: Net income and before tax operating margin will continue to be impacted by these items throughout 2025 compared with 2024.
+Added: NDS $ 46,270 (4,549) 84,741 13,686
+Added: NBS 24,957 26,813 95,963 100,046
Nelnet Financial Services division:
−Removed: AGM 27,393 24,310 57,226 58,055 • The recognition of $11.1 million in provision for loan losses and $4.2 million in negative provision for loan losses for the three months ended June 30, 2025 and 2024, respectively, and $24.1 million and $2.2 million in provision for loan losses for the six months ended June 30, 2025 and 2024, respectively.
−Removed: Increase was due to an increase of loan acquisitions in the first half of 2025.
−Removed: • A decrease of $1.1 million and $10.1 million in investment interest income for the three and six months ended June 30, 2025 compared with the same periods in 2024 due to a decrease of interest earned on restricted cash driven by lower balances and a decrease in interest rates, which, for the three month period, was partially offset by an increase of interest income from beneficial interest investments.
−Removed: • A net loss of $2.2 million compared to net income of $0.9 million, and a net loss of $6.0 million compared to net income of $6.6 million, for the three and six months ended June 30, 2025 and 2024, respectively, related to changes in the fair values of derivative instruments that do not qualify for hedge accounting.
−Removed: • An increase in net loan interest income of $10.1 million and $26.6 million for the three and six months ended June 30, 2025 compared with the same periods in 2024 due to an increase in loan spread driven by an increase in loans funded with operating cash (versus funded with debt), partially offset by a decrease in the average balance of loans.
−Removed: Nelnet Bank (465) (3,718) 1,487 (2,571) • An increase of $5.6 million and $10.4 million in net interest income for the three and six months ended June 30, 2025 compared with the same periods in 2024 due to an increase in the average balance of loans and investments and an increase in net interest margin.
−Removed: • A net loss of $1.7 million compared to net income of $0.6 million, and a net loss of $4.2 million compared to net income of $2.9 million, for the three and six months ended June 30, 2025 and 2024, respectively, related to changes in the fair values of derivative instruments that do not qualify for hedge accounting.
−Removed: NFS other operating segments 10,091 16,525 20,152 30,286 • Net interest income earned on investment debt securities (primarily student loan and other asset-backed securities) was $6.4 million and $13.2 million for the three and six months ended June 30, 2025, respectively, compared with $12.2 million and $24.4 million for the same periods in 2024.
−Removed: This decrease was due to a decrease in the average balance of investments outstanding and a decrease in interest rates.
−Removed: Unallocated corporate costs (11,923) (9,056) (21,911) (19,101) • During the second quarter 2025, the Company recognized a non-cash impairment charge of $3.3 million related to operating lease assets as a result of the Company consolidating office space.
−Removed: Solar tax equity investments (1,892) (2,580) (686) (266) • Includes operating results of the Company's tax equity investments in renewable energy solar partnerships.
−Removed: These results include results attributable to third-party noncontrolling interest investors.
−Removed: See note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
−Removed: Nelnet Renewable Energy - solar construction (17,601) (4,752) (24,175) (8,788) • Includes the operating results of Nelnet Renewable Energy (NRE), the Company’s solar construction business that provides full-service engineering, procurement, and construction (EPC) services to commercial entities.
−Removed: Since the acquisition of GRNE Solar in 2022, NRE has incurred low and, in many cases, negative margins on legacy projects.
−Removed: The Company has a handful of remaining legacy construction contracts that it is obligated to complete, down from over 30 at the beginning of 2024.
−Removed: During the second quarter 2025, NRE recognized $12.9 million in contract loss reserves that represents NRE's estimate of costs it will incur to complete the remaining legacy contracts.
−Removed: In addition, uncertain economic conditions and legislation activity have impacted new construction projects being initiated which has adversely impacted and will continue to adversely impact revenue.
−Removed: See Part II, Item 1A "Risk Factors" of this report for additional information on the adverse impacts on NRE's business related to the enactment of the One Big Beautiful Bill.
−Removed: ALLO investment 185,236 3,940 193,651 (4,653) • The recognition of a $175.0 million gain in the three months ended June 30, 2025 on a partial redemption of the Company's investment in ALLO.
−Removed: • The recognition of no loss in the six months ended June 30, 2025 compared with a loss of $10.7 million for the same period in 2024 related to the Company's ALLO voting membership interest investment.
−Removed: The loss recognized in the first quarter of 2024 reduced the Company's carrying value of its voting membership interest to $0.
−Removed: 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.
−Removed: • The recognition of income of $6.0 million and $14.4 million for the three and six months ended June 30, 2025 compared with $4.2 million and $6.6 million for the same periods in 2024 on the Company's preferred membership interests in ALLO.
−Removed: All preferred membership interests were redeemed as part of the second quarter 2025 redemption transaction;
−Removed: thus, no preferred return will be recognized in future periods.
−Removed: Venture capital investments 1,340 3,417 5,560 2,711 • Includes operating results of the Company's venture capital investments.
−Removed: These investments may create volatility in earnings from recognizing results of certain equity method investees, periodic adjustment of certain fund investments to their respective fair value, and, when applicable, observable price changes on certain measurement alternative investments.
+Added: AGM 36,621 (16,346) 93,848 41,710
+Added: Nelnet Bank 6,088 (4,758) 7,573 (7,330)
+Added: WRCM 1,933 1,276 4,726 4,033
+Added: Nelnet Insurance Services 4,061 944 7,268 7,925
+Added: Real estate investments 1,513 1,865 (429) (2,223)
+Added: Investment securities 12,936 9,953 29,031 34,590
+Added: Unallocated corporate costs (9,909) (10,287) (31,819) (29,389)
+Added: Solar tax equity investments (15,497) (8,509) (16,184) (8,775)
+Added: Nelnet Renewable Energy - solar construction (6,025) (10,125) (30,201) (18,913)
+Added: ALLO investment 1,137 6,606 194,789 1,953
+Added: Venture capital investments 33,520 2,136 39,080 4,848
Other corporate activities (1,268) 2,756 1,263 7,981
1 unchanged sentence
Net income before taxes 136,448 (2,223) 479,953 150,141
−Removed: Income tax expense (59,510) (14,753) (84,521) (37,936)
−Removed: Net loss attributable to noncontrolling interests 3,605 1,416 5,035 4,069 • The majority of noncontrolling interests represents losses attributed to noncontrolling membership interests related to the Company’s solar tax equity investments.
+Added: Income tax (expense) benefit (35,773) 282 (120,294) (37,653)
+Added: Net loss attributable to noncontrolling interests 6,009 4,329 11,044 8,398
Net income $ 106,684 2,388 370,703 120,886
+Added: 2025 Operating Highlights
+Added: Certain transactions have impacted the Company's operating results in 2025.
+Added: These transactions are summarized below.
+Added: Partial Redemption of ALLO Investment
+Added: Nelnet had both voting and preferred membership interest investments in ALLO.
+Added: On June 4, 2025, Nelnet redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025.
+Added: The Company received cash proceeds of $410.9 million from ALLO and recognized a pre-tax gain of $175.0 million as a result of this transaction.
+Added: See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this transaction.
+Added: Government Servicing Contract
+Added: Upon reaching a final agreement with the Department of Education, the Company's Loan Servicing and Systems operating segment (NDS) recognized $32.9 million of non-recurring revenue in the third quarter 2025 on a contract modification for services previously performed.
+Added: Sale of Consumer Loans - Reversal of Allowance
+Added: During the third quarter of 2025, the Company's AGM operating segment sold $203.3 million of consumer loans to an unrelated third party who securitized such loans.
+Added: As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that is included in "other investments and notes receivable, net" on the Company's consolidated balance sheet.
+Added: Once a loan is classified as held for sale, any allowance for loan losses that existed immediately prior to the reclassification to held for sale is reversed.
+Added: During the third quarter of 2025, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million (that increased income) related to this loan sale.
+Added: Venture Capital Investment
+Added: The Company has an investment in an unaffiliated third-party technology company (the “Investee”).
+Added: On August 11, 2025, the Investee completed an additional equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds.
+Added: The Company redeemed a portion of its investment and received cash proceeds of $10.1 million and recognized a pre-tax gain of $7.8 million.
+Added: The Company accounts for its investment in the Investee using the measurement alternative method, which requires it to adjust its carrying value of the investment for changes resulting from observable market transactions.
+Added: As a result of the Investee’s equity raise, the Company recognized a pre-tax gain of $22.4 million during the third quarter of 2025 to adjust its carrying value of its remaining investment in the Investee to reflect the August 2025 transaction value.
+Added: Recent Developments
+Added: Canadian Student Loan Servicing Acquisition
+Added: On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement with DH Corporation, a wholly owned subsidiary of Finastra Holdings Limited (“Finastra”), pursuant to which Nelnet Canada, Inc., a wholly owned subsidiary of the Company, will acquire Finastra’s Canadian student loan servicing business for a purchase price of approximately $93 million in cash.
+Added: The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions.
+Added: Finastra’s Canadian student loan servicing business is the leading provider of student loan servicing solutions to governments and financial institutions in Canada providing technology enabled managed services across the loan lifecycle.
+Added: The business currently services loans for 2.4 million borrowers on proprietary technology platforms.
+Added: The operating results of this acquisition will be included in the Loan Servicing and Systems reportable operating segment following the closing of the transaction.
+Added: Nelnet Foundation
+Added: The Nelnet Foundation was established to help the Company fulfill its core value of giving back to the communities where we live and work.
+Added: Historically, the Company has contributed annually to the Foundation to support this mission.
+Added: Due to recent tax law changes and strong operating performance in 2025, the Company’s Board of Directors has approved a contribution of up to $35 million to the Foundation.
+Added: The Company expects this amount will cover its 2025 annual contribution as well as contributions for the foreseeable future.
+Added: The full contribution will be expensed in the fourth quarter of 2025.
CONSOLIDATED RESULTS OF OPERATIONS
−Removed: An analysis of the Company's consolidated operating results for the three and six months ended June 30, 2025 compared with the same periods in 2024 is provided below.
+Added: An analysis of the Company's consolidated operating results for the three and nine months ended September 30, 2025 compared with the same periods in 2024 is provided below.
The Company operates as distinct reportable operating segments as described above.
1 unchanged sentence
Since the Company monitors and assesses its operations and results based on these segments, the discussion following the consolidated results of operations is presented on a reportable segment basis.
−Removed: Three months ended Six months ended
−Removed: June 30, June 30,
+Added: Three months ended Nine months ended
+Added: September 30, September 30,
2025 2024 2025 2024 Additional information
Loan interest $ 162,717 190,211 501,260 609,064 Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.
−Removed: Investment interest 40,185 40,737 81,574 92,814 Includes income from unrestricted interest-earning deposits and investments, and restricted cash in asset-backed securitizations.
−Removed: Decrease was due to a decrease in interest earned on restricted cash in asset-backed securitizations due to lower balances and a decrease in interest rates.
−Removed: The decrease was partially offset for the three month period due to an increase in interest earned on the Company's partial ownership in loan securitizations that are accounted for as held-to-maturity beneficial interest investments.
+Added: Investment interest 43,241 50,272 124,815 143,086 Includes income from interest-earning deposits and investments and restricted cash in asset-backed securitizations.
+Added: Decrease was due to a decrease in interest rates and interest earned on restricted cash in asset-backed securitizations due to lower balances.
+Added: These decreases were partially offset by an increase in the average balance of investments.
Total interest income 205,958 240,483 626,075 752,150
1 unchanged sentence
Net interest income 85,250 72,155 247,398 212,783
−Removed: Less provision for loan losses 17,930 3,611 33,267 14,440 Represents the current period provision to reflect the lifetime expected credit losses related to the Company's loan portfolio.
+Added: Less (negative provision) provision for loan losses (3,563) 18,111 29,704 32,551 Represents the current period provision to reflect the lifetime expected credit losses related to the Company's loan portfolio.
+Added: During the third quarter of 2025 and second quarter of 2024, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $12.6 million, respectively, related to consumer loan sales.
See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for the factors impacting provision for loan losses for the periods presented.
9 unchanged sentences
Other, net 35,730 15,706 82,401 33,807 See table below for the components of "other, net."
−Removed: Gain (loss) on sale of loans, net — (1,438) 909 (1,579) The Company recognizes gains/losses from selling loans.
+Added: Loss on sale of loans, net (2,472) (107) (1,562) (1,685) The Company recognizes gains/losses from selling loans.
See NFS division - results of operations - AGM operating segment.
5 unchanged sentences
Derivative market value adjustments, net (788) (13,165) (10,978) (3,668) Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP.
−Removed: The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of the Company's floor income interest rate swaps and derivatives at Nelnet Bank.
+Added: The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of AGM's floor income interest rate swaps and derivatives at Nelnet Bank.
Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the Company's floor income interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.
8 unchanged sentences
The Company has a handful of remaining legacy construction contracts it is obligated to complete, down from over 30 at the beginning of 2024.
−Removed: During the second quarter 2025, NRE recognized $12.9 million in contract loss reserves that represents NRE's estimate of costs it will incur to complete the remaining legacy contracts.
+Added: NRE continues to recognize loss reserves that represent NRE's estimate of costs it will incur to complete the remaining legacy contracts.
Total cost of services 59,991 72,284 173,239 183,613
−Removed: Salaries and benefits 134,699 139,634 272,922 283,509 Decrease was primarily due to staff reductions announced in June 2024 in LSS after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform.
+Added: Salaries and benefits 144,778 146,192 417,700 429,701 Decrease was primarily due to staff reductions announced in June 2024 in the LSS operating segment after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform.
These staff reductions took place during the second half of 2024.
+Added: These reductions were partially offset by an increase in headcount at the ETSP operating segment to support the growth of its customer base and the investment in the development of new technologies.
Depreciation and amortization 7,327 13,661 24,206 45,572 Includes depreciation of property and equipment and the amortization of intangibles from prior business acquisitions.
3 unchanged sentences
Increase was primarily due to an increase in overall property volume and new business.
+Added: Increase was also related to increased claims development in several commercial auto programs, which the Company has exited;
+Added: however, adverse development of related expenses may continue to be recognized in future periods.
Other expenses 53,669 44,685 153,200 138,820 Includes expenses such as postage and distribution, consulting and professional fees, servicing fees, marketing, travel, communications, and certain information technology-related costs.
+Added: Increase was primarily due to certain information technology activities moved to cloud computing and such expenses are classified as other expenses.
+Added: See corresponding decrease to depreciation and amortization above.
Total operating expenses 225,736 221,299 662,942 653,159
−Removed: Impairment expense and provision for beneficial interests 10,288 7,776 11,879 7,813 Represents the provision expense of recognized non-cash allowances for the Company's beneficial interest in certain loan securitizations due primarily to an increase in cumulative loss expectations and impairment expenses primarily related to operating lease assets.
+Added: Impairment expense and provision for beneficial interests 9,145 29,052 21,024 36,865 Represents primarily the provision expense of recognized non-cash allowances for the Company's beneficial interest in certain loan securitizations due to an increase in cumulative loss expectations and non-cash impairment charges related to operating lease assets and a solar development project.
See note 9 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
Total expenses 294,872 322,635 857,205 873,637
−Removed: Income before income taxes 237,364 58,428 343,504 152,365
−Removed: Income tax expense 59,510 14,753 84,521 37,936 The effective tax rate was 24.70% for the three months ended June 30, 2025 compared with 24.65% for the same period in 2024 and 24.25% for each of the six months ended June 30, 2025 and 2024, respectively.
−Removed: The Company expects its tax rate will range between 23% and 25% for the remainder of 2025.
−Removed: Net income 177,854 43,675 258,983 114,429
+Added: Income (loss) before income taxes 136,448 (2,223) 479,953 150,141
+Added: Income tax (expense) benefit (35,773) 282 (120,294) (37,653) The year-to-date effective tax rate was 24.50% and 23.75% for the nine months ended September 30, 2025 and 2024, respectively.
+Added: The Company expects its effective tax rate for the year ending December 31, 2025 will range between 23% and 25%.
+Added: Net income (loss) 100,675 (1,941) 359,659 112,488
Net loss attributable to noncontrolling interests 6,009 4,329 11,044 8,398 Represents the net income/loss attributable to the holders of noncontrolling membership interests.
10 unchanged sentences
The following table summarizes the components of "other, net" in "other income (expense)" on the consolidated statements of income:
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
Investment activity, net (a) $ 42,317 8,529 56,216 7,447 See note (b) below for additional information.
−Removed: ALLO preferred return 5,985 4,160 14,400 6,569 See Corporate - results of operations.
−Removed: Borrower late fee income 1,642 2,584 3,231 5,718 See NFS division - results of operations - AGM operating segment.
−Removed: Investment advisory services (WRCM) 1,504 1,524 2,977 3,033 See NFS division - results of operations - NFS other operating segments.
Administration/sponsor fee income 2,267 1,420 4,978 4,448 See NFS division - results of operations - AGM operating segment.
−Removed: Loss from ALLO voting membership interest investment — — — (10,693) See Corporate - results of operations.
−Removed: (Loss) gain from solar investments, net (1,502) (2,610) (1,046) 170 See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: Investment advisory services (WRCM) 2,010 1,394 4,987 4,427 See NFS division - results of operations - NFS other operating segments.
+Added: Borrower late fee income 1,817 1,741 5,046 7,460 See NFS division - results of operations - AGM operating segment.
+Added: ALLO preferred return — 4,783 14,400 11,353 See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: Loss from ALLO voting membership interest investment — — — (10,693) See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: Loss from solar investments, net (10,884) (11,238) (11,930) (11,068) See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: (Loss) gain on debt repurchases (8,304) 7 (7,865) (2) See NFS division - results of operations - AGM operating segment and note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Other 6,507 9,070 16,569 20,435
1 unchanged sentence
(a) The Company anticipates fluctuations in future periodic earnings resulting from investment purchases, sales, and valuation adjustments.
−Removed: (b) Investment activity by operating segment and investment type follows:
+Added: (b) During the third quarter of 2025, the Company recognized a $7.8 million realized gain as a result of redeeming a portion of a venture capital investment and a $22.4 million unrealized gain to adjust the carrying value of its remaining equity interests in this investment to the transaction value.
+Added: See note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
+Added: Investment activity by operating segment and investment type follows:
Real Estate Venture Capital and Funds Equity / Bonds Total Real Estate Venture Capital and Funds Equity / Bonds Total
−Removed: Three months ended June 30,
+Added: Three months ended September 30,
NFS - AGM $ — 4,453 — 4,453 — 1,778 — 1,778
3 unchanged sentences
$ 1,888 38,918 1,511 42,317 2,116 4,475 1,938 8,529
−Removed: Six months ended June 30,
+Added: Nine months ended September 30,
NFS - AGM $ — 9,601 — 9,601 — (600) — (600)
5 unchanged sentences
Loan Servicing Volumes
+Added: September 30,
+Added: 2025 June 30,
2025 March 31,
4 unchanged sentences
2024 December 31,
−Removed: Servicing volume (dollars in millions):
+Added: Servicing volume
+Added: (dollars in millions):
Government $ 458,679 465,689 482,786 489,877 492,142 489,298 495,409 494,691
10 unchanged sentences
Summary and Comparison of Operating Results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
5 unchanged sentences
Intersegment servicing revenue will continue to decrease as AGM's FFELP portfolio pays off.
−Removed: Other income 113 685 225 1,395 Represents revenue earned from providing administrative support services.
+Added: Other income 105 690 331 2,085 Decrease was due to administrative support services provided in 2024 that are no longer being provided.
+Added: The 2025 activity represents revenue earned from leasing available owned office space to third parties.
Total other income 156,470 114,293 409,448 364,932
4 unchanged sentences
Depreciation 1,725 4,854 6,199 15,304 Decrease was due to certain information technology activities moved to cloud computing and incurred at the corporate level and such costs are classified as other expenses and intercompany expenses, respectively.
−Removed: Postage expense 9,551 9,277 17,127 19,883 Increase during the three months ended June 30, 2025 compared with the same period in 2024 was primarily due to an increase in consumer loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp.
+Added: Postage expense 8,735 8,467 25,861 28,350 Increase during the three months ended September 30, 2025 compared with the same period in 2024 was primarily due to an increase in consumer loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp.
during the fourth quarter of 2024 and first quarter of 2025 and higher postage rates.
−Removed: The decrease in the six months ended June 30, 2025 compared with the same period in 2024 was due to a non-recurring volume-based credit earned from the Company's mail provider and recognized in the first quarter of 2025.
+Added: The decrease in the nine months ended September 30, 2025 compared with the same period in 2024 was due to a non-recurring volume-based credit earned from the Company's mail provider and recognized in the first quarter of 2025.
Other expenses 10,862 11,000 32,793 31,119 The total of other expenses and intercompany expenses decreased due to moving to one platform in 2024 and continued focus on expense reductions.
3 unchanged sentences
Total expenses 110,731 119,736 326,582 355,292
−Removed: Income before income taxes 19,959 2,243 38,471 18,234
−Removed: Income tax expense (4,790) (538) (9,233) (4,376) Represents income tax expense at an effective tax rate of 24%.
−Removed: Net income $ 15,169 1,705 29,238 13,858
−Removed: Before tax operating margin 16.0 % 1.9 % 15.4 % 7.3 % Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income.
+Added: Income (loss) before income taxes 46,270 (4,549) 84,741 13,686
+Added: Income tax (expense) benefit (11,105) 1,092 (20,338) (3,284) Represents income tax expense at an effective tax rate of 24%.
+Added: Net income (loss) $ 35,165 (3,457) 64,403 10,402
+Added: GAAP before tax operating margin 30.0 % (4.0) % 21.0 % 3.8 % Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income.
The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it provides additional information to facilitate an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.
−Removed: Before tax operating margin increased due to an increase in private education and consumer loan servicing volume and a decrease in total expenses obtained through cost-saving measures executed primarily in 2024.
−Removed: This was partially offset for the six months ended June 30, 2025 compared with the same period in 2024 due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
+Added: Before tax operating margin, excluding the $32.9 million of non-recurring government loan servicing revenue recognized in the third quarter of 2025 as discussed below, increased due to an increase in private education and consumer loan servicing volume and a decrease in total expenses obtained through cost-saving measures executed primarily in 2024.
+Added: This was partially offset for the nine months ended September 30, 2025 compared with the same period in 2024 due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
+Added: Non-recurring government loan servicing revenue (19.0) — (7.0) —
+Added: Non-GAAP before tax operating margin, excluding non-recurring government loan servicing revenue 11.0 % (4.0) % 14.0 % 3.8 %
Loan servicing and systems revenue
The following table presents disaggregated revenue by service offering for each reporting period:
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
Government loan servicing $ 112,798 85,215 285,896 277,705 Represents revenue from the Company's servicing contract with the Department.
−Removed: Decrease was due to a decrease in the number of borrowers serviced, and for the six months ended June 30, 2025 compared to the same period in 2024 was also due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
+Added: Upon reaching a final agreement with the Department, the Company recognized $32.9 million of non-recurring revenue in the third quarter of 2025 on a contract modification for services previously performed.
+Added: Excluding the non-recurring revenue, the decrease was due to a decrease in the number of borrowers serviced, and for the nine months ended September 30, 2025 compared to the same period in 2024 was also due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
The Company expects the number of borrowers serviced under this contract will continue to decrease through the fourth quarter of 2025 as volume is transferred from the Company to its remote hosted servicing customer at the Department's direction to stand-up and establish the new servicer.
In addition, volume is expected to decrease beginning in the fourth quarter of 2025 due to borrowers exiting the CARES forbearance period that have not made payments.
−Removed: These borrowers are expected to be transferred to the Debt Management and Collections System who is responsible for managing and facilitating the collection of defaulted federal student loans.
+Added: These borrowers are expected to be transferred to the Debt Management and Collections System that is operated by the Department of Education and used to manage and facilitate the collection of defaulted federal student loans.
Private education and consumer loan servicing 24,293 13,057 69,721 38,634 Increase was due to an increase in loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp.
12 unchanged sentences
Summary and Comparison of Operating Results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
11 unchanged sentences
Total operating expenses 61,490 55,887 180,593 167,956
+Added: Impairment expense 1,145 — 1,145 — The Company recorded a non-cash impairment charge related to capitalized software during the third quarter of 2025.
Total expenses 112,998 101,160 319,992 302,062
4 unchanged sentences
In April 2025, the Company acquired the remaining 20.0% of NextGen for $3.9 million.
−Removed: Net income $ 17,892 19,478 53,998 55,696 The Company expects net income to be impacted in 2025 compared with 2024 due to a decrease in contribution from FACTS education services as a result of the end of funding of the EANS program in 2024 as described in the revenue table below and an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
+Added: Net income $ 18,967 20,417 72,966 76,112 Net income has been negatively impacted in 2025 compared with 2024 due to a decrease in contribution from FACTS education services as a result of the end of funding of the EANS program in 2024 as described in the revenue table below and an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
Education technology services and payments revenue
The following table presents disaggregated revenue by service offering and before tax operating margin for each reporting period:
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
1 unchanged sentence
Payment processing 59,484 55,813 148,535 137,926 Increase was due to an increase in payment volumes for both the K-12 and higher education markets due to new customers and an increase in volume from existing customers.
−Removed: Education technology services 44,481 47,205 100,177 103,227 Decrease was due to a decrease in FACTS education services revenue which resulted from the winding down of economic aid provided to private schools in response to the COVID-19 pandemic.
−Removed: Instructional services revenue provided to private schools has been funded by the Emergency Assistance to Non-Public Schools (EANS) program.
+Added: Education technology services 36,323 30,080 136,499 133,306 Increase was due to an increase in professional development services and instructional services from non-Emergency Assistance to Non-Public Schools (EANS) funding sources, in addition to increases in revenue from the Company's financial aid management and enrollment services.
+Added: The timing and amount of revenue recognition for professional development and instructional services depends on both the availability of government funding to schools and each school's decision regarding when and how to use those funds.
+Added: This increase was partially offset by a decrease in FACTS education services revenue which resulted from the winding down of economic aid provided to private schools in response to the COVID-19 pandemic.
+Added: Instructional services revenue provided to private schools has been funded by the EANS program.
The EANS II program funding ended on September 30, 2024.
Although schools still have allocated funds to spend, future instructional services revenue will be adversely impacted compared to recent historical results due to the EANS funding ending in 2024.
−Removed: Revenue earned under the EANS program was $0.1 million and $1.7 million for the three and six months ended June 30, 2025 compared with $8.8 million and $18.9 million for the same periods in 2024.
−Removed: This decrease was partially offset by an increase in revenue from the Company’s professional development services, financial aid management, enrollment services, and instructional services from non-EANS funding sources.
+Added: Revenue earned under the EANS program was $1.6 million and $0.1 million for the first and second quarters of 2025 ($1.7 million earned year to date through September 30, 2025) and $2.4 million and $21.4 million for the three and nine month periods ended September 30, 2024.
Other 543 627 745 2,693
5 unchanged sentences
The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it facilitates an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.
−Removed: Before tax operating margin, excluding net interest income, decreased due to a decrease in FACTS education services revenue and an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
+Added: Before tax operating margin, excluding net interest income, decreased primarily due to an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
Before tax operating margin will continue to be impacted by these items throughout 2025 compared with 2024.
4 unchanged sentences
Loan Portfolio
−Removed: As of June 30, 2025, the AGM operating segment had an $8.9 billion loan portfolio, consisting primarily of federally insured loans.
−Removed: For a summary of the Company’s loan portfolio as of June 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: As of September 30, 2025, the AGM operating segment had an $8.8 billion loan portfolio, consisting primarily of federally insured loans.
+Added: For a summary of the Company’s loan portfolio as of September 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Activity
The following table sets forth the activity of loans in the AGM operating segment:
−Removed: FFELP Private Consumer and other Total
−Removed: Three months ended June 30, 2025
−Removed: Balance as of March 31, 2025 $ 8,670,284 208,507 381,215 9,260,006
−Removed: Loan acquisitions 626 — 142,503 143,129
+Added: FFELP Private Consumer loans and other financing receivables Total
+Added: Three months ended September 30, 2025
+Added: Balance as of June 30, 2025 $ 8,367,085 156,614 411,470 8,935,169
+Added: Loan acquisitions (a) 70,301 — 1,516,370 1,586,671
Repayments, claims, capitalized interest, participations, and other, net (214,179) (8,084) (883,850) (1,106,113)
2 unchanged sentences
Loans contributed to Nelnet Bank (77,497) — — (77,497)
+Added: Balance as of September 30, 2025 $ 7,860,257 147,737 840,739 8,848,733
+Added: Three months ended September 30, 2024
Balance as of June 30, 2024 $ 9,483,733 247,437 179,447 9,910,617
−Removed: Three months ended June 30, 2024
−Removed: Balance as of March 31, 2024 $ 10,383,052 261,582 155,308 10,799,942
Loan acquisitions 104,914 — 129,202 234,116
2 unchanged sentences
Loans sold — — (1,146) (1,146)
−Removed: Balance as of June 30, 2024 $ 9,483,733 247,437 179,447 9,910,617
−Removed: Six months ended June 30, 2025
+Added: Balance as of September 30, 2024 $ 9,070,742 234,295 244,552 9,549,589
+Added: Nine months ended September 30, 2025
Balance as of December 31, 2024 $ 8,388,564 221,744 345,560 8,955,868
−Removed: Loan acquisitions 703,425 — 272,290 975,715
+Added: Loan acquisitions (a) 773,727 — 1,788,660 2,562,387
Repayments, claims, capitalized interest, participations, and other, net (681,548) (29,539) (1,090,082) (1,801,169)
2 unchanged sentences
Loans contributed to Nelnet Bank (77,497) (42,173) — (119,670)
−Removed: Balance as of June 30, 2025 $ 8,367,085 156,614 411,470 8,935,169
−Removed: Six months ended June 30, 2024
+Added: Balance as of September 30, 2025 $ 7,860,257 147,737 840,739 8,848,733
+Added: Nine months ended September 30, 2024
Balance as of December 31, 2023 $ 11,686,207 277,320 85,935 12,049,462
3 unchanged sentences
Loans sold (199,692) — (135,341) (335,033)
−Removed: Balance as of June 30, 2024 $ 9,483,733 247,437 179,447 9,910,617
+Added: Balance as of September 30, 2024 $ 9,070,742 234,295 244,552 9,549,589
+Added: (a) The Company began to acquire Pay Later receivables during the third quarter of 2025.
+Added: Consumer loan acquisitions excluding Pay Later receivables was $169.9 million and $442.2 million during the three and nine months ended September 30, 2025, respectively.
The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements.
−Removed: As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2025, the Company’s ownership correlates to approximately $1.70 billion of loans included in these securitizations.
+Added: As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company’s ownership correlates to approximately $1.75 billion of loans included in these securitizations.
The loans held in these securitizations are not included in the above table.
1 unchanged sentence
Beginning in late 2021, the Company experienced accelerated run-off of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans as a result of the CARES Act payment pause on Department-held loans and the initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness under various programs.
−Removed: However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024 that has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
+Added: However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs
−Removed: For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of AGM’s loan portfolios as of June 30, 2025 and December 31, 2024;
−Removed: and the activity in AGM's allowance for loan losses and net charge-offs as a percentage of average loans for the three and six months ended June 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of AGM’s loan portfolios as of September 30, 2025 and December 31, 2024;
+Added: and the activity in AGM's allowance for loan losses and net charge-offs as a percentage of average loans for the three and nine months ended September 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Spread Analysis
1 unchanged sentence
The spread amounts included in the following table are calculated by using the notional dollar values found in the table under the caption "Net loan interest income, including settlements on derivatives" below, divided by the average balance of loans or debt outstanding.
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
1 unchanged sentence
Consolidation rebate fees (0.83) (0.80) (0.82) (0.80)
−Removed: Premium and deferred origination costs amortization, net of discount accretion (0.15) 0.07 (0.14) 0.07
+Added: Discount accretion, net of premium and deferred origination costs amortization 0.50 (0.02) 0.07 0.04
Variable loan yield, net 6.56 7.34 6.62 7.34
−Removed: Loan cost of funds - interest expense (5.60) (6.50) (5.50) (6.50)
−Removed: Loan cost of funds - derivative settlements (a) (b) 0.01 0.01 0.01 0.01
+Added: Loan cost of funds - interest expense (a) (5.34) (6.44) (5.45) (6.48)
+Added: Loan cost of funds - derivative settlements (b) (c) 0.01 0.01 0.01 0.01
Variable loan spread 1.23 0.91 1.18 0.87
Fixed-rate floor income, gross 0.05 0.01 0.05 0.01
−Removed: Fixed rate floor income - derivative settlements (a) (c) 0.02 0.04 0.02 0.04
+Added: Fixed-rate floor income - derivative settlements (b) (d) 0.02 0.05 0.02 0.04
Fixed-rate floor income, net of settlements on derivatives 0.07 0.06 0.07 0.05
2 unchanged sentences
Average balance of AGM's debt outstanding 7,775,269 9,296,236 8,219,778 10,280,527
−Removed: (a) Derivative settlements represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.
+Added: (a) The Company recognized $5.6 million in non-cash interest expense during the third quarter of 2024 as a result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity.
+Added: This non-cash expense was excluded from the respective periods in the table above.
+Added: (b) Derivative settlements represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.
Derivative accounting requires that net settlements with respect to derivatives that do not qualify for "hedge treatment" under GAAP be recorded in a separate income statement line item below net interest income.
2 unchanged sentences
The Company reports this non-GAAP information because the Company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management.
−Removed: There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.
+Added: There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information,
+Added: which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.
See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information on the Company's Non-Nelnet Bank derivative instruments, including the net settlement activity recognized by the Company for each type of derivative for the 2025 and 2024 periods presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income" in note 5 and in this table.
A reconciliation of core loan spread, which includes the impact of derivative settlements on loan spread, to loan spread without derivative settlements follows:
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024
3 unchanged sentences
Loan spread 1.27 % 0.91 % 1.22 % 0.87 %
−Removed: (b) Derivative settlements consist of net settlements received related to the Company’s basis swaps.
−Removed: (c) Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.
+Added: (c) Derivative settlements consist of net settlements received related to the Company’s basis swaps.
+Added: (d) Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.
The relationship between the indices in which AGM earns interest on its loans and funds such loans has a significant impact on loan spread.
2 unchanged sentences
This also results in student loan spread increasing in the short term in an increasing interest rate environment.
−Removed: Variable loan spread was higher during the three and six months ended June 30, 2025 compared with the same periods in 2024 due to an increase in loans funded by the Company with operating cash (versus funded with debt).
−Removed: As of June 30, 2025, AGM had $576.1 million (par value) of unencumbered federally insured, private education, consumer, and other loans (as compared to $253.5 million, $194.1 million, and $77.0 million as of December 31, 2024, June 30, 2024, and December 31, 2023, respectively).
+Added: Variable loan spread was higher during the three and nine months ended September 30, 2025 compared with the same periods in 2024 due to an increase in loans funded by the Company with operating cash (versus funded with debt).
+Added: As of September 30, 2025, AGM had $291.9 million (par value) of unencumbered federally insured, private education, consumer, and other loans (as compared to $253.5 million, $249.2 million, and $77.0 million as of December 31, 2024, September 30, 2024, and December 31, 2023, respectively).
The difference between variable loan spread and core loan spread is fixed-rate floor income earned on a portion of AGM's federally insured student loan portfolio.
1 unchanged sentence
Summary and Comparison of Operating Results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
1 unchanged sentence
Loan interest $ 145,984 180,571 457,752 583,907 See table below for additional analysis.
−Removed: Investment interest 12,641 13,709 25,411 35,544 Represents primarily investment interest earned on beneficial interest investments and restricted cash included in student loan securitizations and other secured borrowings.
−Removed: Decrease was due to a decrease of interest earned on restricted cash due to lower balances and a decrease in interest rates, which was partially offset for the three months period by an increase of interest earned on beneficial interest investments.
−Removed: AGM earned $7.7 million and $3.8 million of interest income on beneficial interest investments for the three months ended June 30, 2025 and 2024, respectively, and $16.4 million and $17.0 million for the six months ended June 30, 2025 and 2024, respectively.
+Added: Investment interest 12,051 18,970 37,462 54,513 Decrease was due to less investment interest earned on beneficial interest investments and restricted cash included in student loan securitizations and other secured debt facilities.
+Added: AGM earned $7.3 million and $10.5 million of interest income on beneficial interest investments for the three months ended September 30, 2025 and 2024, respectively, and $23.7 million and $27.5 million for the nine months ended September 30, 2025 and 2024, respectively.
+Added: Interest earned on restricted cash decreased due to lower balances and a decrease in interest rates.
Total interest income 158,035 199,541 495,214 638,420
3 unchanged sentences
and (ii) AGM issued bonds held by Nelnet, Inc.
−Removed: Decrease was due to a decrease in interest rates and a decrease in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc.
+Added: Increase for the three months ended September 2025 compared with the same period in 2024 was due to an increase in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc., partially offset by a decrease in interest rates.
+Added: Decrease for the nine months ended September 2025 compared with the same period in 2024 was due to a decrease in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc.
+Added: and a decrease in interest rates.
Intercompany interest is eliminated for consolidated financial reporting purposes.
Net interest income 44,685 38,399 147,495 114,742
−Removed: Less provision (negative provision) for loan losses 11,133 (4,225) 24,144 2,230 See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for factors impacting provision (negative provision) for loan losses for the periods presented.
+Added: Less (negative provision) provision for loan losses (7,374) 11,968 16,770 14,199 During the third quarter of 2025 and second quarter of 2024, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $12.6 million, respectively, related to consumer loan sales.
+Added: See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information and other factors impacting provision for loan losses for the periods presented.
Net interest income after provision for loan losses 52,059 26,431 130,725 100,543
−Removed: Other income, net 7,507 1,337 11,502 6,321 Represents primarily borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures.
+Added: Other income, net 195 4,918 11,697 11,239 Represents primarily gain/loss on debt repurchases, borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures.
See "Overview - Consolidated Results of Operations" for further detail included in other income.
−Removed: Increase was due to an increase in income from investments, partially offset by a decrease in borrower late fees due to the continued amortization of the Company's FFELP portfolio.
−Removed: (Loss) gain on sale of loans, net — (1,438) 909 (1,579) The Company recognizes gains/losses from selling portfolios of loans.
−Removed: See above under "Loan Activity" for loans sold during the three and six months ended June 30, 2025 and 2024.
+Added: Loss on sale of loans, net (2,472) (107) (1,562) (1,685) The Company recognizes gains/losses from selling portfolios of loans.
+Added: See above under "Loan Activity" for loans sold during the three and nine months ended September 30, 2025 and 2024.
Derivative settlements, net 594 1,359 1,756 4,356 The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility.
8 unchanged sentences
Decrease was due to the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS.
−Removed: Intercompany servicing expense of $4.8 million and $5.9 million during the three months ended June 30, 2025 and 2024, respectively, and $9.7 million and $12.5 million during the six months ended June 30 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
+Added: Intercompany servicing expense of $4.5 million and $5.2 million during the three months ended September 30, 2025 and 2024, respectively, and $14.2 million and $17.7 million during the nine months ended September 30 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
Other expenses 1,243 970 4,595 3,217 Increase was due to an increase in costs associated with the Company actively expanding into new asset loan classes.
Intersegment expenses 1,248 1,276 3,758 3,756 Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.
−Removed: Total operating expenses 12,295 12,065 22,565 24,527 Total operating expenses were 53 and 46 basis points of the average balance of loans for the three months ended June 30, 2025 and 2024, respectively, and 48 and 45 for the six months ended June 30, 2025 and 2024, respectively.
−Removed: Increase in expenses compared to the average balance of loans is due to upfront costs associated with the Company actively expanding into new asset classes.
+Added: Total operating expenses 11,149 10,477 33,714 35,005 Total operating expenses were 51 and 43 basis points of the average balance of loans for the three months ended September 30, 2025 and 2024, respectively, and 49 and 44 for the nine months ended September 30, 2025 and 2024, respectively.
+Added: Increase in expenses compared to the average balance of loans was due to an increase in costs associated with the Company actively expanding into new asset classes.
Provision for beneficial interests 2,145 28,952 8,632 34,863 During the periods presented, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations.
1 unchanged sentence
Total expenses 13,294 39,429 42,346 69,868
−Removed: Income before income taxes 27,393 24,310 57,226 58,055
−Removed: Income tax expense (6,569) (5,835) (13,725) (13,933) Represents income tax expense at an effective tax rate of 24%.
−Removed: Net income 20,824 18,475 43,501 44,122
+Added: Income (loss) before income taxes 36,621 (16,346) 93,848 41,710
+Added: Income tax (expense) benefit (8,783) 3,923 (22,508) (10,010) Represents income tax expense at an effective tax rate of 24%.
+Added: Net income (loss) 27,838 (12,423) 71,340 31,700
Net income attributable to noncontrolling interests (27) — (67) —
−Removed: Net income $ 20,801 18,475 43,461 44,122
+Added: Net income (loss) $ 27,811 (12,423) 71,273 31,700
Additional information:
−Removed: GAAP net income $ 20,801 18,475 43,461 44,122 See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information.
−Removed: Increase in net income, excluding derivative market value adjustments, was due to an increase in net loan interest income and a decrease in intercompany interest expense, partially offset by a decrease in investment interest income and an increase in provision for loan losses.
+Added: GAAP net income (loss) $ 27,811 (12,423) 71,273 31,700 See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information.
+Added: Increase in net income, excluding derivative market value adjustments, was due to (1) an increase in net loan interest income due to an increase in core loan spread, offset by the decrease in the average balance of loans outstanding;
+Added: (2) the reduction of allowance (and negative provision) related to loans sold in the third quarter of 2025;
+Added: and (3) a reduction of provision expense related to beneficial interest investments.
+Added: These items were offset by an increase in an initial provision expense for loans purchased during the periods and a decrease in investment interest income.
Derivative market value adjustments, net 461 9,518 6,422 2,875
Tax effect (111) (2,284) (1,541) (690)
−Removed: Non-GAAP net income, excluding derivative market value adjustments $ 22,446 17,764 47,991 39,074
+Added: Non-GAAP net income (loss), excluding derivative market value adjustments $ 28,161 (5,189) 76,154 33,885
Net loan interest income, including settlements on derivatives
The following table summarizes the components of "loan interest," "loan interest expense," and "derivative settlements, net:"
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
1 unchanged sentence
Consolidation rebate fees (18,172) (19,687) (55,817) (63,870) Decrease was due to a decrease in the average consolidation loan balance.
−Removed: Premium and deferred origination costs amortization, net of discount accretion (3,406) 1,705 (6,471) 3,994 Net premium amortization in the three and six months ended June 30, 2025 was due to consumer and other loans purchased at a premium during 2024 and the first half of 2025 that have a short estimated life, offset by purchases of loans at a net discount over the last several years that have substantially longer estimated lives.
−Removed: Net discount accretion for the three and six months ended June 30, 2024 was due to the Company's purchases of loans at a net discount over the last several years.
+Added: Discount accretion, net of premium and deferred origination costs amortization 11,029 (495) 4,558 3,500 Increase in net discount accretion for the three and nine months ended September 30, 2025 was due to a new forward flow agreement of Pay Later receivables purchased during the third quarter of 2025 that have a short estimated life and purchased at a discount.
Variable interest income, net 144,957 180,346 454,753 583,344
4 unchanged sentences
Derivative settlements, net (a) 438 1,200 1,293 3,583 Represents net derivative settlements received related to the Company's floor income interest rate swaps.
+Added: Decrease was due to lower interest rates.
Fixed-rate floor income, net of settlements on derivatives 1,465 1,425 4,292 4,146
1 unchanged sentence
(a) Net loan interest income, including derivative settlements (core loan interest income) is a non-GAAP financial measure.
−Removed: For an explanation of GAAP accounting for derivative settlements and the reasons why the Company reports these non-GAAP measures (and the limitations thereof), see footnote (a) to the table immediately under the caption “Loan Spread Analysis” above.
−Removed: See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each type of derivative referred to in the "Additional information" column of this table, for the 2025 and 2024 periods presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income" in note 5 and in this table.
+Added: For an explanation of GAAP accounting for derivative settlements and the reasons why the Company reports these non-GAAP measures (and the limitations thereof), see footnote (b) to the table immediately under the caption “Loan Spread Analysis” above.
+Added: See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative referred to in the "Additional information" column of this table, which is presented in the table in note 5 under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income".
Nelnet Bank Operating Segment
Loan Portfolio
−Removed: As of June 30, 2025, Nelnet Bank had an $827.6 million loan portfolio.
−Removed: For a summary of the Company’s loan portfolio as of June 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: As of September 30, 2025, Nelnet Bank had a $974.9 million loan portfolio.
+Added: For a summary of Nelnet Bank’s loan portfolio as of September 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Activity
1 unchanged sentence
FFELP Private Consumer and other Total
−Removed: Three months ended June 30, 2025
−Removed: Balance as of March 31, 2025 $ 110,187 489,451 161,995 761,633
+Added: Three months ended September 30, 2025
+Added: Balance as of June 30, 2025 $ 106,555 516,663 204,423 827,641
Loan acquisitions and originations — 36,175 74,654 110,829
1 unchanged sentence
Loans contributed from AGM 77,497 — — 77,497
+Added: Balance as of September 30, 2025 $ 178,948 529,396 266,539 974,883
+Added: Three months ended September 30, 2024
Balance as of June 30, 2024 $ — 354,412 187,939 542,351
−Removed: Three months ended June 30, 2024
−Removed: Balance as of March 31, 2024 $ — 364,766 118,957 483,723
Loan acquisitions and originations — 10,843 36,409 47,252
Repayments — (12,601) (17,130) (29,731)
−Removed: Balance as of June 30, 2024 $ — 354,412 187,939 542,351
−Removed: Six months ended June 30, 2025
+Added: Balance as of September 30, 2024 $ — 352,654 207,218 559,872
+Added: Nine months ended September 30, 2025
Balance as of December 31, 2024 $ — 482,445 162,152 644,597
2 unchanged sentences
Loans contributed from AGM 77,497 42,173 — 119,670
−Removed: Balance as of June 30, 2025 $ 106,555 516,663 204,423 827,641
−Removed: Six months ended June 30, 2024
+Added: Balance as of September 30, 2025 $ 178,948 529,396 266,539 974,883
+Added: Nine months ended September 30, 2024
Balance as of December 31, 2023 $ — 360,520 72,352 432,872
1 unchanged sentence
Repayments — (36,814) (41,391) (78,205)
−Removed: Balance as of June 30, 2024 $ — 354,412 187,939 542,351
+Added: Balance as of September 30, 2024 $ — 352,654 207,218 559,872
Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs
−Removed: For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of Nelnet Bank's loan portfolios as of June 30, 2025 and December 31, 2024;
−Removed: and the activity in Nelnet Bank's allowance for loan losses and net charge-offs as a percentage of average loans for the three and six months ended June 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
−Removed: As of June 30, 2025, Nelnet Bank had $1.53 billion of deposits, which included $149.9 million from Nelnet, Inc.
+Added: For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of Nelnet Bank's loan portfolios as of September 30, 2025 and December 31, 2024;
+Added: and the activity in Nelnet Bank's allowance for loan losses and net charge-offs as a percentage of average loans for the three and nine months ended September 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: As of September 30, 2025, Nelnet Bank had a $1.01 billion investment portfolio, consisting primarily of asset-backed securities.
+Added: For a summary of Nelnet Bank's asset-backed securities investments as of September 30, 2025 and December 31, 2024, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: As of September 30, 2025, Nelnet Bank had $1.73 billion of deposits, which included $256.3 million from Nelnet, Inc.
(parent company) and its subsidiaries (intercompany), and thus have been eliminated for consolidated financial reporting purposes.
−Removed: For a summary of deposits as of June 30, 2025 and December 31, 2024, see note 10 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: For a summary of deposits as of September 30, 2025 and December 31, 2024, see note 10 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Average Balance Sheet
The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities:
−Removed: Three months ended June 30, (a)
−Removed: Six months ended June 30, (a)
+Added: Three months ended September 30, (a)
+Added: Nine months ended September 30, (a)
2025 2024 2025 2024
20 unchanged sentences
Summary and Comparison of Operating Results
−Removed: Three months ended June 30, Six months ended June 30,
+Added: Three months ended September 30, Nine months ended September 30,
2025 2024 2025 2024 Additional information
22 unchanged sentences
Servicing fees 838 285 2,329 711 Represents primarily fees paid to LSS for servicing certain of Nelnet Bank's loans.
−Removed: Intercompany servicing expense of $0.7 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $1.2 million and $0.3 million for the six months ended June 30, 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
+Added: Intercompany servicing expense of $0.7 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $1.9 million and $0.5 million for the nine months ended September 30, 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
Other expenses 1,916 2,463 5,243 5,577 Represents various expenses such as marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fees.
1 unchanged sentence
Total operating expenses 6,652 6,645 19,131 17,452
−Removed: (Loss) income before income taxes (465) (3,718) 1,487 (2,571)
−Removed: Income tax benefit (expense) 101 916 (333) 657 Represents income tax expense at an effective tax rate of 21.6% and 24.6% for the three months ended June 30, 2025 and 2024, respectively, and 22.4% and 25.6% for the six months ended June 30, 2025 and 2024, respectively.
−Removed: Net (loss) income $ (364) (2,802) 1,154 (1,914)
+Added: Income (loss) before income taxes 6,088 (4,758) 7,573 (7,330)
+Added: Income tax (expense) benefit (1,483) 1,143 (1,816) 1,800 Represents an effective tax rate of 24.4% and 24.0% for the three months ended September 30, 2025 and 2024, respectively, and 24.0% and 24.6% for the nine months ended September 30, 2025 and 2024, respectively.
+Added: Net income (loss) $ 4,605 (3,615) 5,757 (5,530)
Additional information:
−Removed: Net (loss) income $ (364) (2,802) 1,154 (1,914)
+Added: Net income (loss) $ 4,605 (3,615) 5,757 (5,530)
See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional details about non-GAAP financial information.
7 unchanged sentences
WRCM (a) Nelnet Insurance Services (b) Real estate investments (c) Investment securities (d) Total
−Removed: Three months ended June 30, 2025
+Added: Three months ended September 30, 2025
Investment interest $ 4 2,552 — 12,429 14,985
11 unchanged sentences
Net income (loss) $ 1,322 3,087 1,168 9,831 15,408
−Removed: Three months ended June 30, 2024
+Added: Three months ended September 30, 2024
Investment interest $ 4 1,354 95 10,962 12,415
12 unchanged sentences
WRCM (a) Nelnet Insurance Services (b) Real estate investments (c) Investment securities (d) Total
−Removed: Six months ended June 30, 2025
+Added: Nine months ended September 30, 2025
Investment interest $ 11 7,009 — 25,656 32,676
12 unchanged sentences
Net income (loss) $ 3,232 5,524 (276) 22,064 30,544
−Removed: Six months ended June 30, 2024
+Added: Nine months ended September 30, 2024
Investment interest $ 11 3,693 380 39,826 43,910
12 unchanged sentences
(a) The Company provides investment advisory services through Whitetail Rock Capital Management, LLC (WRCM), the Company's SEC-registered investment advisor subsidiary, under various arrangements.
−Removed: WRCM earned management and performance fees of $1.5 million for each of the three months ended June 30, 2025 and 2024, respectively, and $3.0 million for each of the six months ended June 30, 2025 and 2024, respectively.
+Added: WRCM earned management and performance fees of $2.0 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively, and $5.0 million and $4.4 million for the nine months ended September 30, 2025 and 2024, respectively.
Fees earned by WRCM are included in "other income, net" in the table above.
(b) Represents primarily the operating results of the Company’s reinsurance treaties on property and casualty policies.
−Removed: The increase in reinsurance premiums and associated reinsurance losses and underwriting expenses in the three and six months ended June 30, 2025 compared with the same periods in 2024 was primarily due to an increase in overall property volume and new business.
−Removed: Reinsurance losses and underwriting expenses also increased related to several commercial auto programs, which the Company has exited;
+Added: The increase in reinsurance premiums and associated reinsurance losses and underwriting expenses in the three and nine months ended September 30, 2025 compared with the same periods in 2024 was primarily due to an increase in overall property volume and new business.
+Added: Reinsurance losses and underwriting expenses also increased related to increased claims development in several commercial auto programs, which the Company has exited;
however, adverse development of related expenses may continue to be recognized in future periods.
−Removed: All other operating expenses also increased to support the growth of this business.
+Added: Other operating expenses have also increased to support the growth of this business.
(c) Represents the operating results of the Company’s real estate investments and the administrative costs to manage this portfolio.
−Removed: Included in "other income, net" in the table above are primarily the net losses recognized related to the Company's proportionate share of certain real estate investments accounted for under the equity method.
−Removed: Operating results for the three and six months ended June 30, 2025 also includes a realized gain of $1.6 million as a result of the sale of a certain real estate investment during the second quarter.
+Added: Included in "other income, net" in the table above are primarily the net gains/losses recognized related to the Company's proportionate share of certain real estate investments accounted for under the equity method, and realized gains from the sale of real estate investments.
(d) Represents interest income earned on investment debt securities (primarily student loan and other asset-backed securities, including Nelnet-owned asset-backed securities which it has repurchased and are eliminated in consolidation), interest income on certain notes receivable, unrealized gains/losses on marketable equity securities, realized gains/losses on marketable equity securities and investment debt securities, and other costs to manage these investments.
−Removed: Also includes interest expense incurred on debt used to finance such investments.
−Removed: The decrease in investment interest income and interest expense in 2025 compared with 2024 was primarily due to a decrease in the average balance of investment debt securities and debt outstanding, respectively, and a decrease in interest rates.
+Added: The activity also includes interest expense incurred on debt used to finance such investments.
+Added: The increase in investment interest for the three months ended September 30, 2025 compared with the same period in 2024 was primarily due to an increase in the average balance of investment securities as a result of the Company repurchasing $377.6 million of its own debt during the third quarter of 2025.
+Added: The decrease in investment interest income and interest expense for the nine months ended September 30, 2025 compared with the same period in 2024 was primarily due to a decrease in the average balance of investment securities and debt outstanding, respectively, and a decrease in interest rates earned on such investments.
As of December 31, 2024, the majority of debt used to finance such investments had been repaid.
7 unchanged sentences
Shared services (a) Solar tax equity investments (b) Nelnet Renewable Energy (c) ALLO investment (d) Venture capital investments (e) Other Total
−Removed: Three months ended June 30, 2025
+Added: Three months ended September 30, 2025
Investment interest $ — — — — — 3,134 3,134
3 unchanged sentences
Other income, net 600 (8,766) — (161) 33,824 2,839 28,336
−Removed: Gain on partial redemption of ALLO investment — — — 175,044 — — 175,044
Cost to provide solar construction services — — (7,607) — — — (7,607)
8 unchanged sentences
Net (loss) income $ (7,531) (6,977) (4,579) 864 25,475 (2,524) 4,728
−Removed: Three months ended June 30, 2024
+Added: Three months ended September 30, 2024
Investment interest $ — 1 1 — — 3,103 3,105
14 unchanged sentences
Shared services (a) Solar tax equity investments (b) Nelnet Renewable Energy (c) ALLO investment (d) Venture capital investments (e) Other Total
−Removed: Six months ended June 30, 2025
+Added: Nine months ended September 30, 2025
Investment interest $ — 6 — — — 8,101 8,107
14 unchanged sentences
Net (loss) income $ (24,182) (3,349) (22,953) 148,040 29,701 (1,497) 125,760
−Removed: Six months ended June 30, 2024
+Added: Nine months ended September 30, 2024
Investment interest $ — 2 32 — — 9,532 9,566
17 unchanged sentences
Also includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.
−Removed: During the second quarter 2025, the Company recognized a non-cash impairment charge of $3.3 million related to operating lease assets as a result of the Company consolidating office space.
(b) Includes operating results of the Company's tax equity investments in renewable energy solar partnerships.
−Removed: The Company accounts for these investments using the HLBV method of accounting, which commonly results in accelerated losses in the initial years of the investment.
−Removed: In the periods presented, these HLBV net losses are offset by gains recognized from sales of certain investments at the end of the contractual agreement (typically five years).
+Added: The Company accounts for these investments using the HLBV method of accounting, which commonly results in accelerated losses in the initial years of the investment and gains recognized at the end of the contractual agreement (typically five years).
+Added: In the periods presented, the Company recognized net HLBV losses.
These losses are also offset by revenue earned by the Company related to management, consulting, and performance fees provided on tax equity investments syndicated to third parties.
Due to the recognition pattern (accelerated losses in initial years and gains upon sale at the end of the contractual agreement), these investments may create volatility in earnings.
+Added: During the third quarter of 2025, the Company recognized a non-cash impairment charge of $5.8 million related to its ownership in a solar development project.
For additional information on the results of this operating segment, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
4 unchanged sentences
The Company has a handful of remaining legacy construction contracts it is obligated to complete, down from over 30 at the beginning of 2024.
−Removed: During the second quarter 2025, NRE recognized $12.9 million in contract loss reserves that represents NRE's estimate of costs it will incur to complete the remaining legacy contracts.
−Removed: The loss reserve expense is included in "costs to provide solar construction services" in the table above.
+Added: NRE continues to recognize loss reserves that represent NRE's estimate of costs it will incur to complete the remaining legacy contracts.
+Added: The loss reserve expense is included in "cost to provide solar construction services" in the table above.
In addition, uncertain economic conditions and legislation activity have impacted new construction projects being initiated which has adversely impacted and will continue to adversely impact revenue.
6 unchanged sentences
These investments may create volatility in earnings from recognizing results of certain equity method investees, periodic adjustment of certain fund investments to their respective fair value, and, when applicable, observable price changes on certain measurement alternative investments.
+Added: For instance, during the third quarter 2025, the Company recognized a realized gain of $7.8 million as a result of redeeming a portion of its investment in an unaffiliated third-party technology company (the "Investee"), and an unrealized gain of $22.4 million to adjust its carrying value of its remaining investment in the Investee to the transaction value.
+Added: For additional information, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
LIQUIDITY AND CAPITAL RESOURCES
7 unchanged sentences
Sources of Liquidity
−Removed: As of June 30, 2025, the Company's sources of liquidity included:
+Added: As of September 30, 2025, the Company's sources of liquidity included:
Cash and cash equivalents $ 216,425
9 unchanged sentences
Unused capacity on unsecured line of credit (e) 495,000
−Removed: Sources of liquidity as of June 30, 2025
+Added: Sources of liquidity as of September 30, 2025
(a) Cash and investments held at Nelnet Bank are generally not available for Company activities outside of Nelnet Bank.
10 unchanged sentences
(e) The Company has a $495.0 million unsecured line of credit that matures on September 22, 2026.
−Removed: As of June 30, 2025, there was no amount outstanding on the unsecured line of credit and $495.0 million was available for future use.
+Added: As of September 30, 2025, there was no amount outstanding on the unsecured line of credit and $495.0 million was available for future use.
The Company intends to use its liquidity position to capitalize on market opportunities, including FFELP, private education, consumer, and other loan acquisitions (or investment interests therein);
2 unchanged sentences
The timing and size of these opportunities will vary and will have a direct impact on the Company's cash and investment balances.
−Removed: Recent Development - Partial Redemption of ALLO Investment
+Added: On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement to purchase a Canadian student loan servicing business for a purchase price of approximately $93 million in cash.
+Added: The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions.
+Added: See note 17 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this acquisition.
+Added: Partial Redemption of ALLO Investment
Nelnet had both voting and preferred membership interest investments in ALLO.
3 unchanged sentences
The majority of the proceeds from this transaction were used by the Company to pay down third-party debt that was used to fund loan assets and repurchase certain of the Company's own asset-backed securities (bonds and notes payable) in the secondary market.
+Added: During the three months ended September 30, 2025, the Company repurchased $377.6 million (par value) of its own debt.
The Company has historically generated positive cash flow from operations.
−Removed: During the six months ended June 30, 2025 and 2024, the Company generated $172.9 million and $345.3 million, respectively, in cash from operating activities.
+Added: During the nine months ended September 30, 2025 and 2024, the Company generated $285.4 million and $482.4 million, respectively, in cash from operating activities.
The decrease in 2025 compared with 2024 was due to:
−Removed: • Adjustments to net income for certain non-cash items, including the gain recognized on the partial redemption of the Company's ALLO investment, deferred income tax benefit, loan discount and deferred lender fees accretion, and gain/loss on investments;
−Removed: • The impact of changes to accrued interest receivable during the six months ended June 30, 2025 compared with the same period in 2024.
+Added: • Adjustments to net income for certain non-cash items, including the gain recognized on the partial redemption of the Company's ALLO investment, deferred income tax benefit, loan discount and deferred lender fees accretion, depreciation and amortization, and gain/loss on investments;
+Added: • The impact of changes to accrued interest receivable and accounts receivable during the nine months ended September 30, 2025 compared with the same period in 2024.
These factors were partially offset by:
• An increase in net income;
−Removed: • Adjustments to net income for the non-cash change in derivative market value adjustments and provision for loan losses;
−Removed: • The impact of changes to other liabilities during the six months ended June 30, 2025 compared with the same period in 2024.
+Added: • The impact of changes to other liabilities during the nine months ended September 30, 2025 compared with the same period in 2024.
The primary items included in the statement of cash flows for investing activities are the purchase, origination, repayment, and sale of loans, the purchase and sale of available-for-sale securities, and the purchase and sale of other investments.
1 unchanged sentence
The proceeds from the ALLO redemption are included in investing activities on the statement of cash flows.
−Removed: The primary items included in financing activities are the payments on bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity at Nelnet Bank, and the change in due to customers.
−Removed: Cash provided by investing activities and used in financing activities for the six months ended June 30, 2025 was $709.8 million and $1.01 billion, respectively.
−Removed: Cash provided by investing activities and used in financing activities for the six months ended June 30, 2024 was $1.82 billion and $2.25 billion, respectively.
+Added: The primary items included in financing activities are the payments on and proceeds from bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity at Nelnet Bank, issuance of noncontrolling interests, and repurchases of common stock.
+Added: Cash provided by investing activities and used in financing activities for the nine months ended September 30, 2025 was $519.0 million and $968.9 million, respectively.
+Added: Cash provided by investing activities and used in financing activities for the nine months ended September 30, 2024 was $2.08 billion and $2.69 billion, respectively.
Investing and financing activities are further addressed in the discussion that follows.
1 unchanged sentence
The following table shows AGM's debt obligations outstanding that are secured by loan assets and related collateral:
−Removed: As of June 30, 2025
+Added: As of September 30, 2025
Carrying amount
1 unchanged sentence
Bonds and notes issued in asset-backed securitizations $ 6,703,249 8/26/30 - 9/25/69
−Removed: FFELP and consumer loan warehouse facilities 621,339 7/31/26 - 2/29/28
+Added: FFELP and consumer loan warehouse and other facilities 1,160,959 1/29/27 - 2/29/28
Bonds and Notes Issued in Asset-backed Securitizations
1 unchanged sentence
Cash generated from student loans funded in asset-backed securitizations provides the source of liquidity to satisfy all obligations related to the outstanding bonds and notes issued in such securitizations.
−Removed: In addition, due to (i) the difference between the yield AGM receives on the loans and cost of financing within these transactions, and (ii) the servicing and administration fees that AGM earns from these transactions, AGM has created a portfolio that will generate earnings and significant cash flow over the life of these transactions.
−Removed: As of June 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio to be approximately $1.07 billion as detailed below.
+Added: In addition, due to (i) the difference between the yield AGM receives on the loans and cost of financing within these transactions, and (ii) the servicing and administration fees that AGM earns from these transactions, AGM has created a portfolio that the Company expects to generate earnings and significant cash flow over the life of these transactions.
+Added: As of September 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio to be approximately $1.04 billion as detailed below.
The actual timing of cash flows released from the securitizations could be impacted based on when and if the Company terminates a securitization by exercising clean-up calls on the underlying securities when the assets in such securitization reach a certain threshold.
−Removed: The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of June 30, 2025, the majority of which are federally insured student loans.
−Removed: As of June 30, 2025, AGM had $7.9 billion of loans included in asset-backed securitizations, which represented 88.7% of its total loan portfolio.
−Removed: The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered federally insured, private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to June 30, 2025, and loans owned by Nelnet Bank.
+Added: The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of September 30, 2025, the majority of which are federally insured student loans.
+Added: As of September 30, 2025, AGM had $7.4 billion of loans included in asset-backed securitizations, which represented 84.0% of its total loan portfolio.
+Added: The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered federally insured, private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to September 30, 2025, and loans owned by Nelnet Bank.
Asset-backed Securitization Cash Flow Forecast
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(dollars in millions)
−Removed: The forecasted future undiscounted cash flows of approximately $1.07 billion include approximately $0.74 billion (as of June 30, 2025) of overcollateralization included in the asset-backed securitizations.
−Removed: These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.33 billion, or approximately $0.25 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the June 30, 2025 balance.
+Added: The forecasted future undiscounted cash flows of approximately $1.04 billion include approximately $0.74 billion (as of September 30, 2025) of overcollateralization included in the asset-backed securitizations.
+Added: These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.30 billion, or approximately $0.23 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the September 30, 2025 balance.
The Company uses various assumptions, including prepayments and future interest rates, when preparing its cash flow forecast.
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Beginning in late 2021, the Company experienced accelerated run-off (prepayments) of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans to qualify for loan forgiveness under various initiatives and programs offered by the federal government and the Department.
−Removed: However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024 that has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
+Added: However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
The following table summarizes the estimated impact to the above forecasted cash flows if prepayments were greater than the prepayment rate assumptions used to calculate the forecasted cash flows:
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4x $0.20 billion $0.84 billion
−Removed: If the entire AGM student loan portfolio was prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.74 billion (as of June 30, 2025);
+Added: If the entire AGM student loan portfolio was prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.74 billion (as of September 30, 2025);
however, the Company would not receive the $0.30 billion ($0.23 billion after tax) of estimated future earnings from the portfolio.
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See Item 3, "Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk — AGM Operating Segment" for additional information about various interest rate risks which may impact future cash flows from AGM's loan assets.
−Removed: Warehouse Facilities
+Added: Warehouse and Other Facilities
Warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements.
−Removed: For a summary of the Company's warehouse facilities outstanding as of June 30, 2025, see note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
−Removed: Upon termination or expiration of the warehouse facilities, the Company would expect to access the securitization market, obtain replacement warehouse facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.
+Added: For a summary of the Company's warehouse and other facilities outstanding as of September 30, 2025, see note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: Upon termination or expiration of the warehouse and other secured facilities, the Company would expect to access the securitization market, obtain replacement facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.
Asset-backed Securities Transactions
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Such asset-backed securitization transactions would be used to refinance loans included in its warehouse facilities and existing asset-backed securitizations and/or finance loans purchased from third parties and loans that are currently unencumbered.
−Removed: There were no asset-backed securitization transactions completed during the six months ended June 30, 2025.
+Added: There were no asset-backed securitization transactions completed during the nine months ended September 30, 2025.
Other Uses of Liquidity
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The Company maintains an agreement with Union Bank, a related party, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loans.
−Removed: As of June 30, 2025, $583.2 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
+Added: As of September 30, 2025, $721.7 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
The agreement automatically renews annually and is terminable by either party upon five business days' notice.
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As such, the FFELP loan asset-backed securities subject to this agreement are included on the Company's consolidated balance sheets as "investments at fair value" and the participation interests outstanding have been accounted for by the Company as a secured borrowing.
−Removed: As of June 30, 2025, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
+Added: As of September 30, 2025, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
Liquidity Impact Related to Beneficial Interest in Loan Securitizations
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These residual interests were acquired by the Company or have been received by the Company as consideration from selling portfolios of loans to unrelated third parties who securitized such loans.
−Removed: As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2025, the Company's ownership correlates to approximately $1.70 billion of loans included in these securitizations.
+Added: As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company's ownership correlates to approximately $1.75 billion of loans included in these securitizations.
Investment interest income earned by the Company from the beneficial interest in loan securitizations is included in "investment interest" on the Company's consolidated statements of income and is not a component of the Company's loan interest income.
−Removed: As of June 30, 2025, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $190.9 million.
+Added: As of September 30, 2025, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $201.8 million.
For a summary of this investment balance, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
The Company's partial ownership percentage in each loan securitization grants the Company the right to receive the corresponding percentage of cash flows generated by the securitization.
−Removed: As of June 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $279.7 million.
+Added: As of September 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $291.7 million.
The vast majority of these cash flows are expected to be received over the next 5 years.
−Removed: The difference between the total estimated future undiscounted cash flows from these residual interests ($279.7 million) and the investment carrying value ($190.9 million) of $88.8 million, or $67.5 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the June 30, 2025 balance.
+Added: The difference between the total estimated future undiscounted cash flows from these residual interests ($291.7 million) and the investment carrying value ($201.8 million) of $89.9 million, or $68.3 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the September 30, 2025 balance.
The undiscounted future cash flows from the consumer and private education loan securitizations are highly subject to credit risk (defaults).
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Nelnet Bank was funded by the Company with an initial capital contribution of $100 million and the Company made a pledged deposit of $40.0 million with Nelnet Bank, as required under an agreement with the FDIC as discussed below.
−Removed: The Company has contributed an additional $118 million, including $42 million of private education loans, to Nelnet Bank since its inception.
+Added: The Company has contributed an additional $126 million to Nelnet Bank since its inception (which includes cash, investments, loans, and equity in a student loan trust).
Based on Nelnet Bank's business plan for growth and current financial condition, the Company believes it will make additional capital contributions to the bank in future periods.
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Brokered deposits are sourced through a network of brokers and provide a stable source of funding.
−Removed: In addition, Nelnet
−Removed: Bank accepts certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors.
+Added: In addition, Nelnet Bank accepts certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors.
The deposits are diversified with deposits from Educational 529 College Savings and Health Savings plans, STFIT, and FDIC sweep deposits.
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and (iv) establish and maintain a pledged deposit of $40.0 million with Nelnet Bank.
−Removed: As of June 30, 2025, Nelnet Bank's leverage ratio of capital to total assets was 12.8%.
+Added: As of September 30, 2025, Nelnet Bank's leverage ratio of capital to total assets was 12.7%.
Liquidity Impact Related to Solar Tax Equity Investments
The Company makes solar tax equity investments in renewable energy solar partnerships that support the development and operations of solar projects.
−Removed: As of June 30, 2025, the Company has funded a total of $300.6 million in tax equity investments which remain outstanding for itself and $285.8 million on behalf of its syndication partners, for a funded total of $586.4 million.
+Added: As of September 30, 2025, the Company has funded a total of $306.1 million in tax equity investments which remain outstanding for itself and $307.5 million on behalf of its syndication partners, for a funded total of $613.6 million.
These investments provide a federal income tax credit under the Internal Revenue Code, currently equaling 30% to 70% of the eligible project cost, with the tax credit available when the project is placed in service.
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Treasury due to earning of the tax credit, the net amount of capital funded to solar tax equity investments at any point in time is not significant and has a minimal impact on the Company’s liquidity.
−Removed: As of June 30, 2025, the Company is committed to fund an additional $63.5 million directly in solar tax equity investments and $115.7 million will be funded by its syndication partners, for a total commitment of $179.2 million.
+Added: As of September 30, 2025, the Company is committed to fund an additional $86.7 million directly in solar tax equity investments and $115.9 million will be funded by its syndication partners, for a total commitment of $202.6 million.
+Added: In periods in which the Company makes significant investments in solar tax equity investments, operating results are negatively impacted due to the accelerated losses recognized in the initial years of investment.
+Added: However, given the timing and amount of cash flows expected to be generated over the life of these investments, the Company considers these investments a good use of capital.
+Added: Through September 30, 2025, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $70 million on its tax equity investments currently outstanding.
+Added: The Company expects its current investments (assuming no additional investments are made subsequent to September 30, 2025) to generate approximately $110 million of pre-tax earnings (excluding noncontrolling interests) over the life of the investments.
+Added: Accordingly, the Company expects to recognize approximately $180 million in pre-tax income (excluding noncontrolling interests) on such investments between October 1, 2025 and June 30, 2031 (the remaining years of its current investments).
Liquidity Impact Related to Hedging Activities
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All Non-Nelnet Bank over-the-counter derivative contracts executed by the Company are cleared post-execution at a regulated clearinghouse.
−Removed: Clearing is a process by which a third party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default.
+Added: Clearing is a process by which a third party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-
+Added: market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default.
Nelnet Bank derivative contracts have protection against counterparty risk provided by International Swaps and Derivatives Association, Inc.
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The Company’s exposure related to the Nelnet Bank derivatives is limited to the value of the derivative contracts in a gain position, less any collateral held by us.
−Removed: Based on the derivative portfolio outstanding as of June 30, 2025, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives.
+Added: Based on the derivative portfolio outstanding as of September 30, 2025, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives.
Unsecured Line of Credit
As discussed above, the Company has a $495.0 million unsecured line of credit with a maturity date of September 22, 2026.
−Removed: As of June 30, 2025, the unsecured line of credit had no amount outstanding and $495.0 million was available for future use.
+Added: As of September 30, 2025, the unsecured line of credit had no amount outstanding and $495.0 million was available for future use.
Upon the maturity date of this facility, there can be no assurance that the Company will be able to maintain this line of credit, increase or maintain the amount outstanding under the line, or find alternative funding if necessary.
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In 2022, the Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ended May 8, 2025.
−Removed: That program expired on May 8, 2025.
−Removed: On May 8, 2025, the Company announced that its Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028.
−Removed: The five million shares authorized under the new program include the remaining unpurchased shares from the prior program, which the new program replaces.
−Removed: As of June 30, 2025, 4,822,191 shares remained authorized for repurchase under the Company's stock repurchase program.
+Added: On May 8, 2025, the Company announced that its Board of Directors authorized a new stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028.
+Added: The five million shares authorized under the new program include the remaining unpurchased shares from the prior program, which the new program replaced.
+Added: As of September 30, 2025, 4,610,575 shares remained authorized for repurchase under the Company's stock repurchase program.
Shares may be repurchased from time to time on the open market, in private transactions (including with related parties), or otherwise, depending on various factors, including share prices and other potential uses of liquidity.
−Removed: Shares repurchased by the Company during the first half of 2025 are shown below.
+Added: Shares repurchased by the Company during the first three quarters of 2025 are shown below.
Certain of these repurchases were made pursuant to trading plans adopted by the Company in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.
−Removed: For additional information on stock repurchases during the second quarter of 2025, see "Stock Repurchases" under Part II, Item 2 of this report.
+Added: For additional information on stock repurchases during the third quarter of 2025, see "Stock Repurchases" under Part II, Item 2 of this report.
Total shares repurchased Purchase price (in thousands) Average price of shares repurchased (per share) (a)
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Quarter ended June 30, 2025 183,554 21,360 116.37
+Added: Quarter ended September 30, 2025 217,850 27,273 125.19
Total 439,895 $ 53,091 120.69
−Removed: (a) The average price of shares repurchased for the three months ended June 30, 2025 includes excise taxes.
−Removed: On June 16, 2025, the Company paid a second quarter 2025 cash dividend on the Company's Class A and Class B common stock of $0.28 per share.
−Removed: In addition, the Company's Board of Directors has declared a third quarter 2025 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.30 per share.
−Removed: The third quarter cash dividend will be paid on September 16, 2025 to shareholders of record at the close of business on September 2, 2025.
+Added: (a) The average price of shares repurchased for each period presented includes excise taxes.
+Added: On August 25, 2025, the Company repurchased, in a privately negotiated transaction under the Company’s existing stock repurchase program, a total of 41,929 shares of the Company’s Class A common stock from a certain significant shareholder.
+Added: The shares were repurchased at a discount to the closing market price of the Company’s Class A common stock as of August 21, 2025, and the transaction was separately approved by the Company’s Board of Directors and its Nominating and Corporate Governance Committee.
+Added: On September 16, 2025, the Company paid a third quarter 2025 cash dividend on the Company's Class A and Class B common stock of $0.30 per share.
+Added: In addition, the Company's Board of Directors has declared a fourth quarter 2025 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share.
+Added: The fourth quarter cash dividend will be paid on December 15, 2025 to shareholders of record at the close of business on December 1, 2025.
The Company plans to continue making regular quarterly dividend payments, subject to future earnings, capital requirements, financial condition, and other factors.
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Management has identified the allowance for loan losses as a critical accounting policy and estimate, as discussed further under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates – Allowance for Loan Losses” in the Company’s 2024 Annual Report.
−Removed: For additional information regarding changes in the Company’s allowance for loan losses for the three and six months ended June 30, 2025 and 2024, see the caption “Activity in the Allowance for Loan Losses” in note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
+Added: For additional information regarding changes in the Company’s allowance for loan losses for the three and nine months ended September 30, 2025 and 2024, see the caption “Activity in the Allowance for Loan Losses” in note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
There have been no material changes to the Company’s critical accounting policy and estimate since December 31, 2024.
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This guidance will be effective for the Company for the year ending December 31, 2025 annual financial statements, with early adoption permitted.
−Removed: The guidance will be applied on a prospective basis.
−Removed: The Company intends to adopt the standard when it becomes effective for the year ending December 31, 2025.
+Added: The Company intends to adopt the standard when it becomes effective for the year ending December 31, 2025 and apply the standard on a retrospective basis.
Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements.
+Added: Based upon this review, the Company has not yet identified nor does it anticipate a material impact to its financial statement disclosures.
+Added: Presentation changes include new disclosures for the tax rate in percentages and dollars, pre-defined breakouts, and cash payments to the Company's most significant jurisdictions.
In November 2024, the FASB issued accounting guidance to increase disclosure requirements primarily through enhanced disclosures about types of expenses (including employee compensation, depreciation, and amortization) in commonly presented expense captions.
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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.