NELNET INC 10-Q

ITEM 1. FINANCIAL STATEMENTS NELNET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (unaudited) As of As of September 30, 2025 December 31, 2024 Assets: Loans and accrued interest receivable (net of allowance for loan losses of $ 107,532 and $ 114,890 , respectively) $ 10,227,261 9,992,744 Cash and cash equivalents: Cash and cash equivalents - not held at a related party 126,956 48,838 Cash and cash equivalents - held at a related party 89,469 145,680 Total cash and cash equivalents 216,425 194,518 Investments and notes receivable: Investments at fair value 1,391,888 1,160,320 Other investments and notes receivable, net 847,637 1,040,376 Total investments and notes receivable 2,239,525 2,200,696 Restricted cash 394,074 332,100 Restricted cash - due to customers 156,297 404,402 Accounts receivable (net of allowance for doubtful accounts of $ 2,831 and $ 2,877 , respectively) 147,822 159,934 Goodwill 158,029 158,029 Intangible assets, net 31,754 36,328 Property and equipment, net 93,174 95,185 Other assets 212,321 203,817 Total assets $ 13,876,682 13,777,753 Liabilities: Bonds and notes payable $ 7,822,531 8,309,797 Accrued interest payable 19,039 21,046 Bank deposits 1,476,765 1,186,131 Other liabilities 528,917 483,193 Due to customers 442,735 478,469 Total liabilities 10,289,987 10,478,636 Commitments and contingencies Equity: Nelnet, Inc. shareholders' equity: Preferred stock, $ 0.01 par value. Authorized 50,000,000 shares; no shares issued or outstanding — — Common stock: Class A, $ 0.01 par value. Authorized 600,000,000 shares; issued and outstanding 25,375,537 shares and 25,634,748 shares, respectively 254 256 Class B, convertible, $ 0.01 par value. Authorized 60,000,000 shares; issued and outstanding 10,616,675 shares and 10,658,604 shares, respectively 106 107 Additional paid-in capital 1,058 7,389 Retained earnings 3,648,375 3,340,540 Accumulated other comprehensive earnings, net 3,497 1,470 Total Nelnet, Inc. shareholders' equity 3,653,290 3,349,762 Noncontrolling interests ( 66,595 ) ( 50,645 ) Total equity 3,586,695 3,299,117 Total liabilities and equity $ 13,876,682 13,777,753 Supplemental information - assets and liabilities of consolidated education and other lending variable-interest entities: Loans and accrued interest receivable $ 8,981,044 9,122,609 Restricted cash 376,029 287,389 Bonds and notes payable ( 8,363,733 ) ( 8,452,614 ) Accrued interest payable and other liabilities ( 172,765 ) ( 88,200 ) Net assets of consolidated education and other lending variable-interest entities $ 820,575 869,184 See accompanying notes to consolidated financial statements. 2 NELNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except share data) (unaudited) Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 Interest income: Loan interest $ 162,717 190,211 501,260 609,064 Investment interest 43,241 50,272 124,815 143,086 Total interest income 205,958 240,483 626,075 752,150 Interest expense on bonds and notes payable and bank deposits 120,708 168,328 378,677 539,367 Net interest income 85,250 72,155 247,398 212,783 Less (negative provision) provision for loan losses ( 3,563 ) 18,111 29,704 32,551 Net interest income after provision for loan losses 88,813 54,044 217,694 180,232 Other income (expense): Loan servicing and systems revenue 151,052 108,175 392,517 344,428 Education technology services and payments revenue 129,321 118,179 394,836 378,627 Reinsurance premiums earned 23,165 16,619 73,964 44,250 Solar construction revenue 5,738 19,321 10,992 42,741 Other, net 35,730 15,706 82,401 33,807 Loss on sale of loans, net ( 2,472 ) ( 107 ) ( 1,562 ) ( 1,685 ) Gain on partial redemption of ALLO investment — — 175,044 — Derivative market value adjustments and derivative settlements, net ( 27 ) ( 11,525 ) ( 8,728 ) 1,378 Total other income (expense), net 342,507 266,368 1,119,464 843,546 Cost of services and expenses: Loan servicing contract fulfillment and acquisition costs 2,021 196 5,500 392 Cost to provide education technology services and payments 50,363 45,273 138,254 134,106 Cost to provide solar construction services 7,607 26,815 29,485 49,115 Total cost of services 59,991 72,284 173,239 183,613 Salaries and benefits 144,778 146,192 417,700 429,701 Depreciation and amortization 7,327 13,661 24,206 45,572 Reinsurance losses and underwriting expenses 19,962 16,761 67,836 39,066 Other expenses 53,669 44,685 153,200 138,820 Total operating expenses 225,736 221,299 662,942 653,159 Impairment expense and provision for beneficial interests 9,145 29,052 21,024 36,865 Total expenses 294,872 322,635 857,205 873,637 Income (loss) before income taxes 136,448 ( 2,223 ) 479,953 150,141 Income tax (expense) benefit ( 35,773 ) 282 ( 120,294 ) ( 37,653 ) 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 Net income attributable to Nelnet, Inc. $ 106,684 2,388 370,703 120,886 Earnings per common share: Net income attributable to Nelnet, Inc. shareholders - basic and diluted $ 2.94 0.07 10.18 3.29 Weighted average common shares outstanding - basic and diluted 36,316,315 36,430,485 36,426,188 36,703,314 See accompanying notes to consolidated financial statements. 3 NELNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (unaudited) Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net income (loss) $ 100,675 ( 1,941 ) 359,659 112,488 Other comprehensive income: Net changes related to foreign currency translation adjustments $ ( 13 ) 23 ( 160 ) 6 Net changes related to available-for-sale debt securities: Unrealized holding gains arising during period, net 8,637 2,656 5,212 28,291 Reclassification of gains recognized in net income, net ( 854 ) ( 1,721 ) ( 1,931 ) ( 3,326 ) Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity 27 64 168 186 Income tax effect ( 1,874 ) 5,936 ( 240 ) 759 ( 828 ) 2,621 ( 6,036 ) 19,115 Net changes related to cash flow hedges: Fair value adjustments during period, net ( 130 ) — ( 755 ) — Income tax effect 31 ( 99 ) — — 181 ( 574 ) — — Net changes related to equity method investee's other comprehensive income: (Loss) gain on cash flow hedge ( 156 ) 62 184 ( 570 ) Income tax effect 37 ( 119 ) ( 15 ) 47 ( 44 ) 140 137 ( 433 ) Other comprehensive income 5,705 829 2,027 18,688 Comprehensive income (loss) 106,380 ( 1,112 ) 361,686 131,176 Comprehensive loss attributable to noncontrolling interests 6,009 4,329 11,044 8,398 Comprehensive income attributable to Nelnet, Inc. $ 112,389 3,217 372,730 139,574 See accompanying notes to consolidated financial statements. 4 NELNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Dollars in thousands, except share data) (unaudited) Nelnet, Inc. Shareholders Preferred stock shares Common stock shares Preferred stock Class A common stock Class B common stock Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) earnings Noncontrolling interests Total equity Class A Class B Balance as of June 30, 2024 — 25,585,840 10,663,088 $ — 256 107 657 3,295,301 ( 2,260 ) ( 74,039 ) 3,220,022 Net income (loss) — — — — — — — 2,388 — ( 4,329 ) ( 1,941 ) Other comprehensive income — — — — — — — — 829 — 829 Issuance of noncontrolling interests — — — — — — — — — 20,999 20,999 Distribution to noncontrolling interests — — — — — — — — — ( 23,145 ) ( 23,145 ) Cash dividends on Class A and Class B common stock - $ 0.28 per share — — — — — — — ( 10,148 ) — — ( 10,148 ) Issuance of common stock, net of forfeitures — 46,865 — — — — 1,230 — — — 1,230 Compensation expense for stock based awards — — — — — — 2,868 — — — 2,868 Repurchase of common stock — ( 5,259 ) — — — — ( 576 ) — — — ( 576 ) Balance as of September 30, 2024 — 25,627,446 10,663,088 $ — 256 107 4,179 3,287,541 ( 1,431 ) ( 80,514 ) 3,210,138 Balance as of June 30, 2025 — 25,538,730 10,658,604 $ — 255 107 637 3,576,192 ( 2,208 ) ( 92,290 ) 3,482,693 Net income (loss) — — — — — — — 106,684 — ( 6,009 ) 100,675 Other comprehensive income — — — — — — — — 5,705 — 5,705 Issuance of noncontrolling interests — — — — — — — — — 39,404 39,404 Distribution to noncontrolling interests — — — — — — — — — ( 7,700 ) ( 7,700 ) Cash dividends on Class A and Class B common stock - $ 0.30 per share — — — — — — — ( 10,834 ) — — ( 10,834 ) Issuance of common stock, net of forfeitures — 12,728 — — — — 557 — — — 557 Compensation expense for stock based awards — — — — — — 3,468 — — — 3,468 Repurchase of common stock — ( 217,850 ) — — ( 2 ) — ( 3,604 ) ( 23,667 ) — — ( 27,273 ) Conversion of common stock — 41,929 ( 41,929 ) — 1 ( 1 ) — — — — — Balance as of September 30, 2025 — 25,375,537 10,616,675 $ — 254 106 1,058 3,648,375 3,497 ( 66,595 ) 3,586,695 See accompanying notes to consolidated financial statements. 5 NELNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Dollars in thousands, except share data) (unaudited) Nelnet, Inc. Shareholders Preferred stock shares Common stock shares Preferred stock Class A common stock Class B common stock Additional paid-in capital Retained earnings Accumulated other comprehensive (loss) earnings Noncontrolling interests Total equity Class A Class B Balance as of December 31, 2023 — 26,400,630 10,663,088 $ — 264 107 3,096 3,270,403 ( 20,119 ) ( 53,644 ) 3,200,107 Net income (loss) — — — — — — — 120,886 — ( 8,398 ) 112,488 Other comprehensive income — — — — — — — — 18,688 — 18,688 Issuance of noncontrolling interests — — — — — — — — — 29,150 29,150 Distribution to noncontrolling interests — — — — — — — — — ( 49,715 ) ( 49,715 ) Cash dividends on Class A and Class B common stock - $ 0.84 per share — — — — — — — ( 30,676 ) — — ( 30,676 ) Issuance of common stock, net of forfeitures — 116,779 — — 1 — 4,526 — — — 4,527 Compensation expense for stock based awards — — — — — — 8,703 — — — 8,703 Repurchase of common stock — ( 889,963 ) — — ( 9 ) — ( 12,146 ) ( 70,732 ) — — ( 82,887 ) Acquisition of remaining 20 % of GRNE Solar, net of tax — — — — — — — ( 2,340 ) — 2,093 ( 247 ) Balance as of September 30, 2024 — 25,627,446 10,663,088 $ — 256 107 4,179 3,287,541 ( 1,431 ) ( 80,514 ) 3,210,138 Balance as of December 31, 2024 — 25,634,748 10,658,604 $ — 256 107 7,389 3,340,540 1,470 ( 50,645 ) 3,299,117 Net income (loss) — — — — — — — 370,703 — ( 11,044 ) 359,659 Other comprehensive income — — — — — — — — 2,027 — 2,027 Issuance of noncontrolling interests — — — — — — — — — 45,583 45,583 Distribution to noncontrolling interests — — — — — — — — — ( 45,106 ) ( 45,106 ) Cash dividends on Class A and Class B common stock - $ 0.86 per share — — — — — — — ( 31,157 ) — — ( 31,157 ) Issuance of common stock, net of forfeitures — 138,755 — — 1 — 3,373 — — — 3,374 Compensation expense for stock based awards — — — — — — 9,819 — — — 9,819 Repurchase of common stock — ( 439,895 ) — — ( 4 ) — ( 19,523 ) ( 33,564 ) — — ( 53,091 ) Conversion of common stock — 41,929 ( 41,929 ) — 1 ( 1 ) — — — — — Acquisition of remaining 20 % of NextGen, net of tax — — — — — — — 1,853 — ( 5,383 ) ( 3,530 ) Balance as of September 30, 2025 — 25,375,537 10,616,675 $ — 254 106 1,058 3,648,375 3,497 ( 66,595 ) 3,586,695 See accompanying notes to consolidated financial statements. 6 NELNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Nine months ended September 30, 2025 2024 Net income attributable to Nelnet, Inc. $ 370,703 120,886 Net loss attributable to noncontrolling interests ( 11,044 ) ( 8,398 ) Net income 359,659 112,488 Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions: Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs 68,261 106,022 Loan discount and deferred lender fees accretion ( 58,107 ) ( 36,838 ) Provision for loan losses 29,704 32,551 Derivative market value adjustments 10,978 3,668 Payments to clearinghouse - initial and variation margin, net ( 5,015 ) ( 4,404 ) Gain on partial redemption of ALLO investment ( 175,044 ) — Loss on sale of loans, net 1,562 1,685 (Gain) loss on investments, net ( 47,076 ) 6,595 Loss from repurchases of debt, net 7,865 2 Deferred income tax benefit ( 82,465 ) ( 22,707 ) Non-cash compensation expense 10,064 8,954 Impairment expense and provision for beneficial interests 21,024 36,865 Changes in operating assets and liabilities: Decrease in loan and investment accrued interest receivable 14,894 168,795 Decrease in accounts receivable 12,219 42,553 Decrease in other assets 43,488 48,057 Decrease in the carrying amount of ROU asset 2,865 2,857 Decrease in accrued interest payable ( 6,329 ) ( 10,002 ) Increase (decrease) in other liabilities 79,713 ( 11,435 ) Decrease in the carrying amount of lease liability ( 4,365 ) ( 2,868 ) Other 1,475 ( 481 ) Total adjustments ( 74,289 ) 369,869 Net cash provided by operating activities 285,370 482,357 Cash flows from investing activities, net of acquisitions: Purchases and originations of loans, including cash paid for student loan trusts, net of cash and restricted cash acquired ( 1,984,778 ) ( 611,595 ) Purchases of loans from a related party ( 206,668 ) ( 104,198 ) Net proceeds from loan repayments, claims, and capitalized interest 2,081,162 2,745,084 Proceeds from sale of loans 240,398 91,999 Proceeds from sale of loans to a related party 290,164 199,694 Purchases of available-for-sale securities ( 416,084 ) ( 414,306 ) Proceeds from sales of available-for-sale securities 205,954 372,176 Proceeds from beneficial interest in loan securitizations 55,865 33,898 Purchases of other investments and issuance of notes receivable ( 249,990 ) ( 287,590 ) Proceeds from other investments and repayments of notes receivable 511,219 79,095 Redemption of held-to-maturity debt securities 10,549 11,890 Purchases of property and equipment ( 18,744 ) ( 38,280 ) Net cash provided by investing activities $ 519,047 2,077,867 7 NELNET, INC. AND SUBSIDIARIES (Continued) CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited) Nine months ended September 30, 2025 2024 Cash flows from financing activities, net of acquisitions: Payments on bonds and notes payable $ ( 1,739,244 ) ( 3,010,914 ) Proceeds from issuance of bonds and notes payable 557,371 85,037 Payments of debt issuance costs ( 4,803 ) ( 2,191 ) Increase in bank deposits, net 290,634 327,159 Decrease in due to customers ( 35,862 ) ( 21,185 ) Dividends paid ( 31,157 ) ( 30,676 ) Repurchases of common stock ( 53,091 ) ( 82,887 ) Proceeds from issuance of common stock 1,392 1,424 Acquisition of noncontrolling interest ( 3,944 ) ( 325 ) Issuance of noncontrolling interests 54,984 51,245 Distribution to noncontrolling interests ( 5,211 ) ( 3,587 ) Net cash used in financing activities ( 968,931 ) ( 2,686,900 ) Effect of exchange rate changes on cash and restricted cash 290 203 Net decrease in cash, cash equivalents, and restricted cash ( 164,224 ) ( 126,473 ) Cash, cash equivalents, and restricted cash, beginning of period 931,020 1,025,491 Cash, cash equivalents, and restricted cash, end of period $ 766,796 899,018 Supplemental disclosures of cash flow information: Cash disbursements made for interest $ 360,648 511,247 Cash disbursements made for income taxes, net of refunds and credits received (a) $ 50,443 13,441 Cash disbursements made for operating leases $ 3,933 3,615 Non-cash operating, investing, and financing activity: ROU assets obtained in exchange for lease obligations $ 6,550 1,048 Receipt of beneficial interest in consumer loan securitizations as consideration from sale of loans $ 28,137 13,799 Receipt of asset-backed investment securities as consideration from sale of loans $ 2,370 — Distribution to noncontrolling interests $ 39,895 46,128 Issuance of noncontrolling interests $ 9,401 22,095 (a) The Company utilized $ 43.8 million and $ 34.0 million of federal and state tax credits related primarily to renewable energy during the nine months ended September 30, 2025 and 2024, respectively. Supplemental disclosures of non-cash activities regarding the Company's acquisition of certain student loan trusts are contained in note 3. The following table presents a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total of the amounts reported in the consolidated statements of cash flows: As of As of As of As of September 30, 2025 December 31, 2024 September 30, 2024 December 31, 2023 Total cash and cash equivalents $ 216,425 194,518 219,684 168,112 Restricted cash 394,074 332,100 344,366 488,723 Restricted cash - due to customers 156,297 404,402 334,968 368,656 Cash, cash equivalents, and restricted cash $ 766,796 931,020 899,018 1,025,491 See accompanying notes to consolidated financial statements. 8 NELNET, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except per share amounts, unless otherwise noted) (unaudited) 1. Basis of Financial Reporting The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company” or "Nelnet") as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2024 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"). 2. Partial Redemption of ALLO Investment Nelnet had both voting and preferred membership interest investments in ALLO Holdings, LLC (referred to collectively with its subsidiary ALLO Communications LLC as "ALLO"). In June 2025, ALLO executed a financing transaction that resulted in gross proceeds to ALLO of $ 500 million (the “Financing”). In conjunction with the Financing, Nelnet, ALLO, and certain other ALLO investors entered into a Membership Unit Redemption Agreement (the “Redemption Agreement”) pursuant to which ALLO agreed to redeem certain of its membership interests from certain investors in ALLO, including Nelnet (the “Transaction”). As part of the Transaction, ALLO redeemed all of Nelnet's outstanding preferred membership interests on June 4, 2025, including the preferred return accrued on such membership interests through the Transaction's closing date. In addition, ALLO redeemed a portion of Nelnet’s voting membership interest in ALLO. Upon closing, Nelnet received cash proceeds of $ 410.9 million from ALLO for these redemptions and recognized a pre-tax gain of $ 175.0 million, which is included in "gain on partial redemption of ALLO investment" on the Company's consolidated statements of income. Following the closing of the Transaction, Nelnet no longer owns any preferred membership interests in ALLO, but maintains a significant voting equity investment in ALLO. Nelnet’s ownership of voting membership interest in ALLO decreased from 45 % to 27 %. Nelnet will continue to account for its remaining 27 % voting membership interest in ALLO under the Hypothetical Liquidation at Book Value (HLBV) method of accounting, with the carrying value of such interest remaining at $ 0 . 9 3. Loans and Accrued Interest Receivable and Allowance for Loan Losses Loans and accrued interest receivable consisted of the following: As of As of September 30, 2025 December 31, 2024 Non-Nelnet Bank: Federally insured loans: Stafford and other $ 1,889,476 2,108,960 Consolidation 5,970,781 6,279,604 Total (a) 7,860,257 8,388,564 Private education loans (b) 147,737 221,744 Consumer loans and other financing receivables (c) 840,739 345,560 Non-Nelnet Bank loans 8,848,733 8,955,868 Nelnet Bank: Federally insured loans: Stafford and other 24,745 — Consolidation 154,203 — Total (a) 178,948 — Private education loans (b) 529,396 482,445 Consumer and other loans 266,539 162,152 Nelnet Bank loans 974,883 644,597 Accrued interest receivable 558,912 549,283 Loan discount and deferred lender fees, net of unamortized loan premiums and deferred origination costs ( 47,735 ) ( 42,114 ) Allowance for loan losses: Non-Nelnet Bank: Federally insured loans ( 43,535 ) ( 49,091 ) Private education loans ( 7,103 ) ( 11,130 ) Consumer loans and other financing receivables ( 33,147 ) ( 38,468 ) Non-Nelnet Bank allowance for loan losses ( 83,785 ) ( 98,689 ) Nelnet Bank: Federally insured loans ( 707 ) — Private education loans ( 11,732 ) ( 10,086 ) Consumer and other loans ( 11,308 ) ( 6,115 ) Nelnet Bank allowance for loan losses ( 23,747 ) ( 16,201 ) $ 10,227,261 9,992,744 (a) During the third quarter of 2025, the Asset Generation and Management operating segment (Non-Nelnet Bank) contributed $ 77.5 million of federally insured loans to Nelnet Bank. (b) During the second quarter of 2025, the Asset Generation and Management operating segment (Non-Nelnet Bank) contributed $ 42.2 million of private education loans to Nelnet Bank. (c) In the third quarter of 2025, the Company began to purchase Pay Later receivables via a forward flow agreement from an unrelated third party. As of September 30, 2025, the balance of Pay Later receivables was $ 548.3 million and these loans are included in the "consumer loans and other financing receivables" in the above table. Pay Later receivables enable consumers to purchase goods or services at the time of the transaction and split their purchase into installment payments. The Company purchases Pay Later receivables at a discount, and accretes the discount into interest income over the estimated life of the receivable. 10 The following table summarizes the allowance for loan losses as a percentage of the ending loan balance for each of the Company's loan portfolios: As of As of September 30, 2025 December 31, 2024 Non-Nelnet Bank: Federally insured loans (a) 0.55 % 0.59 % Private education loans 4.81 % 5.02 % Consumer loans and other financing receivables (b) 3.94 % 11.13 % Nelnet Bank: Federally insured loans (a) 0.40 % — Private education loans 2.22 % 2.09 % Consumer and other loans 4.24 % 3.77 % (a) The allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty for Non-Nelnet Bank was 19.4 % and 20.6 % as of September 30, 2025 and December 31, 2024, respectively, and for Nelnet Bank was 17.4 % as of September 30, 2025. (b) In the third quarter of 2025, the Company began to purchase Pay Later receivables that have lower allowance rates. Consumer Loan Sales During the second quarter of 2024 and third quarter of 2025, the Company sold $ 133.8 million and $ 203.3 million, respectively, of consumer loans, and recognized losses from such transactions of $ 1.4 million and $ 2.5 million, respectively. For these transactions, the Company sold portfolios of loans to unrelated third parties who securitized such loans. As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that are included in "other investments and notes receivable, net" on the Company's consolidated balance sheets. Student Loan Trust Acquisitions In March 2025, the Company acquired the ownership interests in certain trusts giving the Company rights to the residual interest. The trusts included $ 646.9 million (par value) of federally insured Stafford and consolidation loans funded to term with $ 721.3 million (par value) of bonds and notes payable, $ 32.2 million of cash and restricted cash, and $ 27.4 million of other net assets. The Company has consolidated these trusts on its consolidated balance sheet as the Company is the primary beneficiary of the trusts. Upon acquisition, the Company recorded the student loans and bonds and notes payable at fair value, resulting in the recognition of a student loan net discount of $ 6.6 million and a bonds and notes payable discount of $ 31.1 million. These net discounts will be accreted using the effective interest method over the lives of the underlying assets and liabilities. 11 Activity in the Allowance for Loan Losses The following table presents the activity in the allowance for loan losses by portfolio segment: Balance at beginning of period Provision (negative provision) for loan losses (a) Charge-offs Recoveries Initial allowance on loans purchased with credit deterioration Loan sales Balance at end of period Three months ended September 30, 2025 Non-Nelnet Bank: Federally insured loans $ 47,627 843 ( 4,673 ) — — ( 262 ) 43,535 Private education loans 7,406 — ( 459 ) 156 — — 7,103 Consumer loans and other financing receivables 48,028 ( 8,217 ) ( 7,176 ) 512 — — 33,147 Nelnet Bank: Federally insured loans 355 113 ( 23 ) — — 262 707 Private education loans 12,360 1,177 ( 2,169 ) 364 — — 11,732 Consumer and other loans 9,573 2,186 ( 581 ) 130 — — 11,308 $ 125,349 ( 3,898 ) ( 15,081 ) 1,162 — — 107,532 Three months ended September 30, 2024 Non-Nelnet Bank: Federally insured loans $ 54,180 1,247 ( 4,593 ) — — — 50,834 Private education loans 13,065 ( 126 ) ( 1,414 ) 219 — — 11,744 Consumer loans and other financing receivables 14,135 10,847 ( 2,981 ) 379 — — 22,380 Nelnet Bank: Private education loans 3,559 565 ( 892 ) 438 — — 3,670 Consumer and other loans 11,825 5,326 ( 3,830 ) 193 — — 13,514 $ 96,764 17,859 ( 13,710 ) 1,229 — — 102,142 Nine months ended September 30, 2025 Non-Nelnet Bank: Federally insured loans $ 49,091 5,588 ( 10,882 ) — — ( 262 ) 43,535 Private education loans 11,130 ( 2,761 ) ( 1,916 ) 650 — — 7,103 Consumer loans and other financing receivables 38,468 13,943 ( 20,319 ) 1,055 — — 33,147 Nelnet Bank: Federally insured loans — 488 ( 43 ) — — 262 707 Private education loans 10,086 5,102 ( 5,303 ) 787 1,060 — 11,732 Consumer and other loans 6,115 6,920 ( 2,029 ) 302 — — 11,308 $ 114,890 29,280 ( 40,492 ) 2,794 1,060 — 107,532 Nine months ended September 30, 2024 Non-Nelnet Bank: Federally insured loans $ 68,453 ( 2,593 ) ( 15,026 ) — — — 50,834 Private education loans 15,750 ( 392 ) ( 4,254 ) 640 — — 11,744 Consumer loans and other financing receivables 11,742 17,184 ( 7,567 ) 1,021 — — 22,380 Nelnet Bank: Private education loans 3,347 1,576 ( 1,796 ) 543 — — 3,670 Consumer and other loans 5,351 16,563 ( 8,635 ) 235 — — 13,514 $ 104,643 32,338 ( 37,278 ) 2,439 — — 102,142 12 (a) 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 through provision. The following table presents the reduction to provision for loan losses as a result of consumer loan sales during the periods presented. Provision for current period Reduction to provision Provision (negative provision) for loan losses Three months ended September 30, 2025 Non-Nelnet Bank Consumer loans and other financing receivables $ 20,693 ( 28,910 ) ( 8,217 ) Three months ended September 30, 2024 Non-Nelnet Bank Consumer loans and other financing receivables $ 11,026 ( 179 ) 10,847 Nine months ended September 30, 2025 Non-Nelnet Bank Consumer loans and other financing receivables $ 42,853 ( 28,910 ) 13,943 Nine months ended September 30, 2024 Non-Nelnet Bank Consumer loans and other financing receivables $ 30,058 ( 12,874 ) 17,184 During the periods presented above, the primary item impacting provision for loan losses was the establishment of an initial allowance for loans originated and acquired during the periods. Provision for loan losses was also impacted by the reversal of provision for consumer loans sold. The Company recorded a negative provision for loan losses for its federally insured loan portfolio in 2024 due to an increase in prepayment assumptions. The following table summarizes annualized net charge-offs as a percentage of average loans for each of the Company's loan portfolios: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Non-Nelnet Bank: Federally insured loans 0.22 % 0.19 % 0.17 % 0.19 % Private education loans 0.79 % 1.97 % 0.95 % 1.89 % Consumer loans and other financing receivables 5.75 % 4.81 % 6.28 % 4.92 % Nelnet Bank: Federally insured loans 0.06 % — 0.06 % — Private education loans 1.38 % 0.51 % 1.19 % 0.46 % Consumer and other loans (a) 0.79 % 7.28 % 1.21 % 7.49 % (a) Decrease in annualized net charge-offs as a percentage of average loans was due to a change in mix of consumer loan portfolios that resulted in a portfolio of loans with an overall higher credit quality in 2025 compared with 2024 and Nelnet Bank exiting a consumer loan program in December 2024 that had previously incurred significant charge-offs. 13 Unfunded Loan Commitments As of September 30, 2025 and December 31, 2024, Nelnet Bank had a liability of approximately $ 751,000 and $ 326,000 , respectively, related to $ 80.1 million and $ 40.7 million, respectively, of unfunded private education, consumer, and other loan commitments. When a new loan commitment is made, the Company records an allowance that is included in "other liabilities" on the consolidated balance sheet by recording a provision for loan losses. When the loan is funded, the Company transfers the liability to the allowance for loan losses. Below is a reconciliation of the provision for loan losses reported in the consolidated statements of income. Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 (Negative provision) provision for loan losses from allowance activity table above $ ( 3,898 ) 17,859 29,280 32,338 Provision for unfunded loan commitments 335 252 424 213 (Negative provision) provision for loan losses reported in consolidated statements of income $ ( 3,563 ) 18,111 29,704 32,551 Key Credit Quality Indicators Loan Status and Delinquencies Key credit quality indicators for the Company’s federally insured, private education, and consumer and other loan portfolios are loan status, including delinquencies. The impact of changes in loan status is incorporated into the allowance for loan losses calculation. Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period. The following table presents the Company’s loan status and delinquency amounts: As of September 30, 2025 As of December 31, 2024 As of September 30, 2024 Federally insured loans - Non-Nelnet Bank: Loans in-school/grace/deferment $ 382,850 4.9 % $ 376,765 4.5 % $ 428,013 4.7 % Loans in forbearance 514,385 6.5 586,412 7.0 647,797 7.2 Loans in repayment status: Loans current 5,994,951 86.1 % 6,374,897 85.9 % 6,702,079 83.8 % Loans delinquent 31-60 days 254,998 3.7 243,348 3.3 348,833 4.4 Loans delinquent 61-90 days 166,763 2.4 166,474 2.2 190,379 2.4 Loans delinquent 91-120 days 100,575 1.4 113,838 1.5 148,417 1.9 Loans delinquent 121-270 days 317,151 4.6 380,823 5.1 419,730 5.2 Loans delinquent 271 days or greater 128,584 1.8 146,007 2.0 185,494 2.3 Total loans in repayment 6,963,022 88.6 100.0 % 7,425,387 88.5 100.0 % 7,994,932 88.1 100.0 % Total federally insured loans 7,860,257 100.0 % 8,388,564 100.0 % 9,070,742 100.0 % Accrued interest receivable 537,303 540,272 592,250 Loan discount, net of unamortized premiums and deferred origination costs ( 24,895 ) ( 21,513 ) ( 22,807 ) Allowance for loan losses ( 43,535 ) ( 49,091 ) ( 50,834 ) Total federally insured loans and accrued interest receivable, net of allowance for loan losses $ 8,329,130 $ 8,858,232 $ 9,589,351 Private education loans - Non-Nelnet Bank: Loans in-school/grace/deferment $ 4,232 2.9 % $ 5,997 2.7 % $ 7,504 3.2 % Loans in forbearance 2,653 1.8 2,089 0.9 1,979 0.8 Loans in repayment status: Loans current 137,678 97.8 % 206,825 96.8 % 218,425 97.2 % Loans delinquent 31-60 days 1,314 0.9 3,424 1.6 3,013 1.3 Loans delinquent 61-90 days 865 0.6 1,275 0.6 1,301 0.6 Loans delinquent 91 days or greater 995 0.7 2,134 1.0 2,073 0.9 Total loans in repayment 140,852 95.3 100.0 % 213,658 96.4 100.0 % 224,812 96.0 100.0 % Total private education loans 147,737 100.0 % 221,744 100.0 % 234,295 100.0 % Accrued interest receivable 1,291 2,019 2,248 Loan discount, net of unamortized premiums ( 4,740 ) ( 6,350 ) ( 6,772 ) Allowance for loan losses ( 7,103 ) ( 11,130 ) ( 11,744 ) Total private education loans and accrued interest receivable, net of allowance for loan losses $ 137,185 $ 206,283 $ 218,027 14 As of September 30, 2025 As of December 31, 2024 As of September 30, 2024 Consumer loans and other financing receivables - Non-Nelnet Bank: Loans in deferment $ 1,354 0.2 % $ 150 0.0 % $ 315 0.1 % Loans in repayment status: Loans current 828,408 98.7 % 335,355 97.1 % 239,128 97.9 % Loans delinquent 31-60 days 3,543 0.4 3,667 1.1 2,032 0.8 Loans delinquent 61-90 days 2,343 0.3 2,143 0.6 1,515 0.6 Loans delinquent 91 days or greater 5,091 0.6 4,245 1.2 1,562 0.7 Total loans in repayment 839,385 99.8 100.0 % 345,410 100.0 100.0 % 244,237 99.9 100.0 % Total consumer loans and other financing receivables 840,739 100.0 % 345,560 100.0 % 244,552 100.0 % Accrued interest receivable 1,102 1,868 1,115 Loan discount and deferred lender fees, net of unamortized premiums ( 16,215 ) ( 10,713 ) ( 10,789 ) Allowance for loan losses ( 33,147 ) ( 38,468 ) ( 22,380 ) Total consumer loans and other financing receivables and accrued interest receivable, net of allowance for loan losses $ 792,479 $ 298,247 $ 212,498 Federally insured loans - Nelnet Bank (a): Loans in-school/grace/deferment $ 6,705 3.7 % Loans in forbearance 9,263 5.2 Loans in repayment status: Loans current 146,308 89.8 % Loans delinquent 30-59 days 4,827 3.0 Loans delinquent 60-89 days 2,185 1.3 Loans delinquent 90-119 days 2,684 1.6 Loans delinquent 120-270 days 5,668 3.5 Loans delinquent 271 days or greater 1,308 0.8 Total loans in repayment 162,980 91.1 100.0 % Total federally insured loans 178,948 100.0 % Accrued interest receivable 11,253 Loan premium 945 Allowance for loan losses ( 707 ) Total federally insured loans and accrued interest receivable, net of allowance for loan losses $ 190,439 Private education loans - Nelnet Bank (a): Loans in-school/grace/deferment $ 58,753 11.1 % $ 31,674 6.6 % $ 29,396 8.3 % Loans in forbearance 1,476 0.3 3,061 0.6 2,364 0.7 Loans in repayment status: Loans current 460,142 98.1 % 439,569 98.2 % 318,090 99.2 % Loans delinquent 30-59 days 3,526 0.7 4,327 1.0 1,075 0.3 Loans delinquent 60-89 days 2,403 0.5 1,497 0.3 723 0.2 Loans delinquent 90 days or greater 3,096 0.7 2,317 0.5 1,006 0.3 Total loans in repayment 469,167 88.6 100.0 % 447,710 92.8 100.0 % 320,894 91.0 100.0 % Total private education loans 529,396 100.0 % 482,445 100.0 % 352,654 100.0 % Accrued interest receivable 6,400 4,103 3,098 Loan discount, net of unamortized premiums and deferred origination costs ( 6,652 ) ( 4,581 ) 5,786 Allowance for loan losses ( 11,732 ) ( 10,086 ) ( 3,670 ) Total private education loans and accrued interest receivable, net of allowance for loan losses $ 517,412 $ 471,881 $ 357,868 15 As of September 30, 2025 As of December 31, 2024 As of September 30, 2024 Consumer and other loans - Nelnet Bank (a): Loans in deferment $ 9,954 3.7 % $ 5,186 3.2 % $ 3,073 1.5 % Loans in repayment status: Loans current 254,720 99.2 % 155,772 99.2 % 198,613 97.3 % Loans delinquent 30-59 days 694 0.3 803 0.5 2,251 1.1 Loans delinquent 60-89 days 719 0.3 243 0.2 1,497 0.7 Loans delinquent 90 days or greater 452 0.2 148 0.1 1,784 0.9 Total loans in repayment 256,585 96.3 100.0 % 156,966 96.8 100.0 % 204,145 98.5 100.0 % Total consumer and other loans 266,539 100.0 % 162,152 100.0 % 207,218 100.0 % Accrued interest receivable 1,563 1,021 1,386 Loan premium, net of unaccreted discount 3,822 1,043 47 Allowance for loan losses ( 11,308 ) ( 6,115 ) ( 13,514 ) Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 260,616 $ 158,101 $ 195,137 (a) For the periods presented for Nelnet Bank, the delinquency bucket periods conform with the delinquency bucket periods reflected in Nelnet Bank's Call Reports filed with the Federal Deposit Insurance Corporation. 16 FICO Scores An additional key credit quality indicator for Nelnet Bank private education and consumer loans is FICO scores at the time of origination or purchase. The following tables highlight the gross principal balance of Nelnet Bank's portfolios, by year of origination, stratified by FICO score at the time of origination or purchase: Nelnet Bank Private Education Loans Loan balance as of September 30, 2025 Nine months ended September 30, 2025 2024 2023 2022 2021 Prior years Total Percent of total FICO at origination or purchase: Less than 705 $ 4,699 2,948 3,148 4,257 3,685 20,367 39,104 7.4 % 705 - 734 7,622 4,871 7,964 17,748 6,828 15,288 60,321 11.4 735 - 764 10,018 5,652 7,482 27,110 11,442 22,907 84,611 16.0 765 - 794 13,521 6,519 5,144 42,073 21,500 27,743 116,500 22.0 Greater than 794 19,279 14,419 12,753 59,625 42,567 73,155 221,798 41.9 No FICO score available or required (a) — 2,296 4,766 — — — 7,062 1.3 $ 55,139 36,705 41,257 150,813 86,022 159,460 529,396 100.0 % Loan balance as of December 31, 2024 2024 2023 2022 2021 2020 Prior years Total Percent of total FICO at origination or purchase: Less than 705 $ 2,566 3,578 4,759 4,182 331 15,485 30,901 6.4 % 705 - 734 3,736 8,874 19,666 7,531 426 12,349 52,582 10.9 735 - 764 4,398 8,629 29,918 12,775 1,286 17,920 74,926 15.5 765 - 794 4,600 6,115 46,340 24,073 1,105 23,867 106,100 22.0 Greater than 794 9,971 15,471 67,454 49,408 4,406 63,258 209,968 43.5 No FICO score available or required (a) 2,476 5,492 — — — — 7,968 1.7 $ 27,747 48,159 168,137 97,969 7,554 132,879 482,445 100.0 % Nelnet Bank Consumer and Other Loans Loan balance as of September 30, 2025 Nine months ended September 30, 2025 2024 2023 2022 2021 Prior years Total Percent of total FICO at origination: Less than 720 $ 14,112 17,370 1,624 — 287 1,342 34,735 13.0 % 720 - 769 25,308 38,313 3,870 16 5,582 7,329 80,418 30.2 Greater than 769 51,911 50,469 6,045 97 5,331 3,339 117,192 44.0 No FICO score available or required (a) 27,655 5,793 432 260 54 — 34,194 12.8 $ 118,986 111,945 11,971 373 11,254 12,010 266,539 100.0 % Loan balance as of December 31, 2024 2024 2023 2022 2021 2020 Prior years Total Percent of total FICO at origination: Less than 720 $ 19,264 1,762 — 376 675 1,170 23,247 14.3 % 720 - 769 41,217 4,502 19 6,152 5,448 3,105 60,443 37.3 Greater than 769 57,323 6,577 103 5,834 2,755 1,165 73,757 45.5 No FICO score available or required (a) 3,936 437 277 55 — — 4,705 2.9 $ 121,740 13,278 399 12,417 8,878 5,440 162,152 100.0 % (a) Loans with no FICO score available or required refers to loans issued to borrowers for which the Company cannot obtain a FICO score or are not required to under a special purpose credit program. Management proactively assesses the risk and size of this loan category and, when necessary, takes actions to mitigate the credit risk. 17 Nonaccrual Status The Company does not place federally insured loans on nonaccrual status due to the government guaranty. The amortized cost of private education, consumer, and other loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of September 30, 2025 and December 31, 2024, was not material. Amortized Cost Basis by Origination Year The following table presents the amortized cost of the Company's private education, consumer, and other loans by loan status and delinquency amount as of September 30, 2025 based on year of origination. Effective July 1, 2010, no new loan originations can be made under the Federal Family Education Loan Program (the "FFEL Program" or FFELP) and all new federal loan originations must be made under the Federal Direct Loan Program. As such, all of the Company’s federally insured loans were originated prior to July 1, 2010. Nine months ended September 30, 2025 2024 2023 2022 2021 Prior years Total Private education loans - Non-Nelnet Bank: Loans in-school/grace/deferment $ — — — 336 2,066 1,830 4,232 Loans in forbearance — — — 36 246 2,371 2,653 Loans in repayment status: Loans current — — 175 3,676 5,002 128,825 137,678 Loans delinquent 31-60 days — — — 21 39 1,254 1,314 Loans delinquent 61-90 days — — — — 21 844 865 Loans delinquent 91 days or greater — — — — 72 923 995 Total loans in repayment — — 175 3,697 5,134 131,846 140,852 Total private education loans $ — — 175 4,069 7,446 136,047 147,737 Accrued interest receivable 1,291 Loan discount, net of unamortized premiums ( 4,740 ) Allowance for loan losses ( 7,103 ) Total private education loans and accrued interest receivable, net of allowance for loan losses $ 137,185 Gross charge-offs - nine months ended September 30, 2025 $ — — — — 52 1,864 1,916 Consumer loans and other financing receivables - Non-Nelnet Bank: Loans in deferment $ — 452 902 — — — 1,354 Loans in repayment status: Loans current 766,123 35,952 24,275 1,549 238 271 828,408 Loans delinquent 31-60 days 1,449 1,374 550 170 — — 3,543 Loans delinquent 61-90 days 589 1,015 697 42 — — 2,343 Loans delinquent 91 days or greater 371 3,379 680 588 73 — 5,091 Total loans in repayment 768,532 41,720 26,202 2,349 311 271 839,385 Total consumer loans and other financing receivables $ 768,532 42,172 27,104 2,349 311 271 840,739 Accrued interest receivable 1,102 Loan discount and deferred lender fees, net of unamortized premiums ( 16,215 ) Allowance for loan losses ( 33,147 ) Total consumer loans and other financing receivables and accrued interest receivable, net of allowance for loan losses $ 792,479 Gross charge-offs - nine months ended September 30, 2025 $ 5,565 8,322 6,134 280 9 9 20,319 18 Nine months ended September 30, 2025 2024 2023 2022 2021 Prior years Total Private education loans - Nelnet Bank (a): Loans in-school/grace/deferment $ 21,876 20,602 9,206 5,577 285 1,207 58,753 Loans in forbearance — — 146 483 152 695 1,476 Loans in repayment status: Loans current 33,129 15,707 30,680 143,901 84,322 152,403 460,142 Loans delinquent 30-59 days 98 67 299 460 501 2,101 3,526 Loans delinquent 60-89 days 3 196 300 201 617 1,086 2,403 Loans delinquent 90 days or greater 33 133 626 191 145 1,968 3,096 Total loans in repayment 33,263 16,103 31,905 144,753 85,585 157,558 469,167 Total private education loans $ 55,139 36,705 41,257 150,813 86,022 159,460 529,396 Accrued interest receivable 6,400 Loan discount, net of unamortized premiums and deferred origination costs ( 6,652 ) Allowance for loan losses ( 11,732 ) Total private education loans and accrued interest receivable, net of allowance for loan losses $ 517,412 Gross charge-offs - nine months ended September 30, 2025 $ — 376 782 628 372 3,145 5,303 Consumer and other loans - Nelnet Bank (a): Loans in deferment $ 7,936 2,018 — — — — 9,954 Loans in repayment status: Loans current 111,040 108,582 11,778 373 11,085 11,862 254,720 Loans delinquent 30-59 days 10 499 114 — 61 10 694 Loans delinquent 60-89 days — 472 79 — 108 60 719 Loans delinquent 90 days or greater — 374 — — — 78 452 Total loans in repayment 111,050 109,927 11,971 373 11,254 12,010 256,585 Total consumer and other loans $ 118,986 111,945 11,971 373 11,254 12,010 266,539 Accrued interest receivable 1,563 Loan premium, net of unaccreted discount 3,822 Allowance for loan losses ( 11,308 ) Total consumer and other loans and accrued interest receivable, net of allowance for loan losses $ 260,616 Gross charge-offs - nine months ended September 30, 2025 $ 61 1,205 283 — 306 174 2,029 (a) For the periods presented for Nelnet Bank, the delinquency bucket periods conform with the delinquency bucket periods reflected in Nelnet Bank's Call Reports filed with the Federal Deposit Insurance Corporation. 19 4. Bonds and Notes Payable The following tables summarize the Company’s outstanding debt obligations by type of instrument: As of September 30, 2025 Carrying amount Interest rate range Final maturity Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations: Bonds and notes based on indices $ 6,258,938 4.68 % - 6.27 % 8/26/30 - 9/25/69 Bonds and notes based on auction 60,585 0.01 % - 5.50 % 3/22/32 - 3/1/42 Total FFELP variable-rate bonds and notes 6,319,523 Fixed-rate bonds and notes issued in FFELP loan asset-backed securitizations 312,850 1.42 % - 3.45 % 10/25/67 - 8/27/68 FFELP loan warehouse facilities 535,389 5.02 % - 5.19 % 1/29/27 / 5/1/27 Consumer loan warehouse and other facilities 625,570 5.43 % - 6.12 % 11/13/27 - 2/29/28 Variable-rate bonds and notes issued in private education loan asset-backed securitizations 39,924 5.65 % / 6.61 % 6/25/49 / 11/25/53 Fixed-rate bonds and notes issued in private education loan asset-backed securitizations 30,952 7.15 % 11/25/53 Unsecured line of credit — — 9/22/26 Participation agreements 1,648 5.05 % - 5.82 % 5/4/26 / 7/28/32 7,865,856 Discount on bonds and notes payable and debt issuance costs ( 43,325 ) Total $ 7,822,531 As of December 31, 2024 Carrying amount Interest rate range Final maturity Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations: Bonds and notes based on indices $ 6,923,824 4.89 % - 6.45 % 8/26/30 - 9/25/69 Bonds and notes based on auction 36,395 5.71 % - 5.72 % 3/22/32 - 8/25/37 Total FFELP variable-rate bonds and notes 6,960,219 Fixed-rate bonds and notes issued in FFELP loan asset-backed securitizations 346,359 1.42 % - 3.45 % 10/25/67 - 8/27/68 FFELP loan warehouse facilities 853,165 4.41 % - 4.69 % 1/31/26 / 4/1/26 Consumer loan warehouse facilities 90,000 4.46 % / 4.57 % 8/1/26 / 11/13/27 Variable-rate bonds and notes issued in private education loan asset-backed securitizations 54,973 5.90 % / 6.82 % 6/25/49 / 11/25/53 Fixed-rate bonds and notes issued in private education loan asset-backed securitizations 50,415 5.35 % / 7.15 % 12/28/43 / 11/25/53 Unsecured line of credit — — 9/22/26 Participation agreements 3,320 5.27 % - 5.82 % 5/4/25 / 1/30/33 8,358,451 Discount on bonds and notes payable and debt issuance costs ( 48,654 ) Total $ 8,309,797 20 Warehouse and Other Facilities The Company funds a portion of its loan acquisitions through the use of warehouse and other secured facilities. Loan warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements. The following table summarizes the Company's warehouse and other facilities as of September 30, 2025: Type of loans Maximum financing amount Amount outstanding Amount available Expiration of liquidity provisions Final maturity date Advance rate Advanced as equity support FFELP (a) $ 800,000 393,141 406,859 1/30/2026 1/29/2027 note (b) $ 29,556 FFELP (c) 375,000 142,248 232,752 5/1/2026 5/1/2027 92 % 12,197 $ 1,175,000 535,389 639,611 $ 41,753 Consumer loans and other financing receivables $ 925,000 625,570 299,430 11/13/2026 - 7/31/2027 11/13/2027 - 2/29/2028 50 % - 90 % $ 120,711 (a) On January 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to July 31, 2025 and July 31, 2026, respectively. On July 17, 2025, the Company increased the maximum financing amount from $ 600 million to $ 800 million and extended the liquidity provisions and final maturity date to January 30, 2026 and January 29, 2027, respectively. (b) This facility has a static advance rate until the expiration date of the liquidity provisions. The maximum advance rates for this facility are 90 % to 96 %, and the minimum advance rates are 84 % to 90 %. In the event the liquidity provisions are not extended, the valuation agent has the right to perform a one-time mark to market on the underlying loans funded in this facility, subject to a floor. The loans would then be funded at this new advance rate until the final maturity date of the facility. (c) On March 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to May 1, 2025 and May 1, 2026, respectively, and on April 10, 2025, extended the liquidity provisions and final maturity to May 1, 2026 and May 1, 2027, respectively. Unsecured Line of Credit The Company has a $ 495.0 million unsecured line of credit that has a maturity date of September 22, 2026. As of September 30, 2025, no amount was outstanding on the line of credit and $ 495.0 million was available for future use. Debt Repurchases The following table summarizes the Company's repurchases of its own debt. Gains/losses recorded by the Company from the repurchase of debt are included in "other, net" in "other income (expense)" on the Company's consolidated statements of income. Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Purchase price $ ( 385,853 ) ( 357 ) ( 528,723 ) ( 4,556 ) Par value 377,571 365 520,891 4,555 Remaining unamortized cost of issuance ( 22 ) ( 1 ) ( 33 ) ( 1 ) (Loss) gain, net $ ( 8,304 ) 7 ( 7,865 ) ( 2 ) The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market. For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial statements. However, these securities remain legally outstanding at the trust level and the Company could sell these notes to third parties or redeem the notes at par as cash is generated by the trust estate. Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale. As of September 30, 2025, the Company holds $ 499.5 million (par value) of its own FFELP asset-backed securities. 21 5. Derivative Financial Instruments Non-Nelnet Bank Derivatives The Company uses settled-to-market derivative financial instruments to manage interest rate risk. Derivative instruments used as part of the Company's interest rate risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2024 Annual Report. Basis Swaps The following table summarizes the Company’s outstanding basis swaps as of September 30, 2025 and December 31, 2024 used to hedge its basis risk and repricing risk on a portion of its FFELP student loan assets. For these derivative instruments, the Company receives payments indexed to three-month SOFR and makes payments based on the one-month SOFR index (plus or minus a spread) as defined in the agreements (the "Basis Swaps"). Maturity Notional amount 2026 $ 1,150,000 2027 250,000 $ 1,400,000 Interest Rate Swaps – Floor Income Hedges The following table summarizes the outstanding derivative instruments used by the Company as of September 30, 2025 and December 31, 2024 to economically hedge loans earning fixed-rate floor income. For these derivative instruments, the Company receives payments based on SOFR, the majority of which reset quarterly. Maturity Notional amount Weighted average fixed rate paid by the Company 2026 $ 200,000 3.92 % 2028 50,000 3.56 2029 (a) 50,000 3.17 2030 (b) 100,000 3.63 $ 400,000 3.71 % (a) This $ 50 million notional amount derivative has a forward effective start date in January 2026. (b) A $ 50 million notional amount derivative has a forward effective start date in November 2025. 22 Nelnet Bank Derivatives Nelnet Bank uses non-centrally cleared derivative instruments to hedge exposure to variability in cash flows from variable-rate intercompany and third-party deposits to minimize volatility from future changes in interest rates. Nelnet Bank has designated all of its derivative instruments as cash flow hedges; however, the derivatives that hedge intercompany deposits are not eligible for hedge accounting in the consolidated financial statements. Interest Rate Swaps - Intercompany Deposits The following table summarizes the outstanding derivative instruments used by Nelnet Bank to hedge intercompany deposits. For these derivative instruments, the Company receives monthly or quarterly payments based on SOFR that reset daily. As of September 30, 2025 As of December 31, 2024 Maturity Notional amount Weighted average fixed rate paid by the Company Notional amount Weighted average fixed rate paid by the Company 2028 $ 40,000 3.33 % $ 40,000 3.33 % 2029 25,000 3.37 25,000 3.37 2030 (a) 50,000 3.06 50,000 3.06 2032 (b) 25,000 4.03 25,000 4.03 2033 (c) 25,000 3.90 25,000 3.90 2035 (d) 30,000 3.79 — — $ 195,000 3.50 % $ 165,000 3.44 % (a) These $ 25 million notional amount derivatives have forward effective start dates in April 2026 and May 2026, respectively. (b) This $ 25 million notional amount derivative has a forward effective start date in February 2027. (c) This $ 25 million notional amount derivative has a forward effective start date in November 2025. (d) This $ 30 million notional amount derivative has a forward effective start date in May 2028. Interest Rate Swaps - Third-Party Deposits The following table summarizes the outstanding derivative instruments used by Nelnet Bank to hedge third-party deposits. For these derivative instruments, the Company receives monthly payments based on SOFR that reset monthly. As of September 30, 2025 Maturity Notional amount Weighted average fixed rate paid by the Company 2030 $ 25,000 3.57 % 2035 25,000 3.87 $ 50,000 3.72 % Nelnet Bank's derivatives used to hedge third-party deposits qualify for hedge accounting. As such, the changes in the fair value of these derivatives are recognized in other comprehensive income, net of tax, in the consolidated financial statements. Derivative settlements for cash flow hedges are included in "interest expense" on the consolidated statements of income, which were not material for the three and nine months ended September 30, 2025. 23 Consolidated Financial Statement Impact Related to Derivatives Balance Sheets Unlike the Company's Non-Nelnet Bank derivatives, Nelnet Bank's derivatives are not cleared post-execution at a regulated clearinghouse. As such, the Company records these derivative instruments in the consolidated balance sheets on a gross basis as either an asset (included in "other assets") or liability (included in "other liabilities") measured at fair value. The following table summarizes the fair value of the Company's Nelnet Bank derivatives as reflected in the consolidated balance sheets: Fair value of asset derivatives Fair value of liability derivatives As of September 30, 2025 As of December 31, 2024 As of September 30, 2025 As of December 31, 2024 Interest rate swaps - intercompany deposits $ 359 3,232 1,736 53 Interest rate swaps - third-party deposits (cash flow hedges) — — 755 — $ 359 3,232 2,491 53 Statements of Income The following table summarizes the components of "derivative market value adjustments and derivative settlements, net" included in the consolidated statements of income related to derivative instruments that do not qualify for hedge accounting: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Settlements: Basis swaps $ 156 159 463 773 Interest rate swaps - floor income hedges 438 1,200 1,293 3,583 Interest rate swaps - intercompany deposits 167 281 494 690 Total settlements - income 761 1,640 2,250 5,046 Change in fair value: Basis swaps ( 147 ) ( 125 ) ( 429 ) ( 710 ) Interest rate swaps - floor income hedges ( 314 ) ( 9,393 ) ( 5,993 ) ( 2,165 ) Interest rate swaps - intercompany deposits ( 327 ) ( 3,647 ) ( 4,556 ) ( 793 ) Total change in fair value - expense ( 788 ) ( 13,165 ) ( 10,978 ) ( 3,668 ) Derivative market value adjustments and derivative settlements, net - (expense) income $ ( 27 ) ( 11,525 ) ( 8,728 ) 1,378 24 6. Investments and Notes Receivable “Total investments and notes receivable” consisted of the following: As of September 30, 2025 As of December 31, 2024 Amortized cost Gross unrealized gains Gross unrealized losses Fair value Amortized cost Gross unrealized gains Gross unrealized losses Fair value Investments at fair value: Available-for-sale asset-backed securities Non-Nelnet Bank: FFELP loan $ 92,175 3,716 ( 664 ) 95,227 188,386 5,804 ( 896 ) 193,294 FFELP loan and other debt securities - restricted (a) 122,667 3,518 ( 200 ) 125,985 98,914 3,151 ( 78 ) 101,987 Private education loan (b) 206,153 76 ( 13,591 ) 192,638 237,288 — ( 18,118 ) 219,170 Other debt securities 77,564 2,387 ( 8 ) 79,943 32,552 2,500 — 35,052 Total Non-Nelnet Bank 498,559 9,697 ( 14,463 ) 493,793 557,140 11,455 ( 19,092 ) 549,503 Nelnet Bank: FFELP loan 221,313 5,931 ( 595 ) 226,649 231,543 6,060 ( 270 ) 237,333 Private education loan 14,293 — ( 2 ) 14,291 1,596 — — 1,596 Other debt securities 546,020 2,594 ( 1,280 ) 547,334 296,944 1,775 ( 1,325 ) 297,394 Total Nelnet Bank 781,626 8,525 ( 1,877 ) 788,274 530,083 7,835 ( 1,595 ) 536,323 Total available-for-sale asset-backed securities $ 1,280,185 18,222 ( 16,340 ) 1,282,067 1,087,223 19,290 ( 20,687 ) 1,085,826 Equity securities and funds measured at net asset value 109,821 74,494 Total investments at fair value 1,391,888 1,160,320 Other investments and notes receivable (not measured at fair value): Nelnet Bank: Held-to-maturity asset-backed securities FFELP loan 201,041 203,439 Private education loan — 7,335 Total Nelnet Bank held-to-maturity asset-backed securities 201,041 210,774 Venture capital, funds, and other: Measurement alternative (c) 230,319 200,782 Equity method 175,373 170,258 Total venture capital and funds 405,692 371,040 Real estate equity method 201,873 131,745 Investment in ALLO (d): Voting interest/equity method — — Preferred membership interests and accrued and unpaid preferred return — 225,614 Total investment in ALLO — 225,614 Beneficial interest in loan securitizations (e): Consumer loans, net of allowance for credit losses of $ 43,153 and $ 38,590 as of September 30, 2025 and December 31, 2024, respectively 140,742 142,764 Private education loans, net of allowance for credit losses of $ 4,970 and $ 901 as of September 30, 2025 and December 31, 2024, respectively 42,770 52,824 Federally insured student loans 18,288 18,221 Total beneficial interest in loan securitizations, net of allowance 201,800 213,809 Solar (f) ( 210,336 ) ( 155,048 ) Notes receivable 33,376 32,258 Tax liens, affordable housing, and other 14,191 10,184 Total other investments and notes receivable (not measured at fair value) 847,637 1,040,376 Total investments and notes receivable $ 2,239,525 $ 2,200,696 25 (a) Represent investments held in third-party trusts as collateral for the Company’s reinsurance business. (b) As sponsor of certain private education loan securitizations, the Company is required to provide a certain level of risk retention, and has purchased bonds issued in such securitizations to satisfy this requirement. The bonds purchased to satisfy the risk retention requirement are included in the above table. The Company must retain these investment securities until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33 % or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33 % or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell its investment securities (bonds) to a third party. (c) The Company has an investment in an unaffiliated third-party technology company (the “Investee”). 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. The Company redeemed a portion of its investment and received cash proceeds of $ 10.1 million and recognized a gain of $ 7.8 million. This gain is included in "other, net" in "other income (expense)" on the consolidated statements of income. 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. As a result of the Investee’s equity raise, the Company recognized a 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. This gain is included in "other, net" in "other income (expense)" on the consolidated statements of income. After the completion of this transaction, the Company's carrying amount of its remaining investment in the Investee is $ 31.7 million. The Company has an investment in Agile Sports Technologies, Inc. (doing business as “Hudl”). During the first quarter of 2025, the Company acquired additional ownership interests in Hudl for $ 3.8 million from existing Hudl investors. This transaction was not considered an observable market transaction (not orderly) because it was not subject to customary marketing activities. Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction value. As of September 30, 2025, the carrying amount of the Company's investment in Hudl was $ 172.5 million. David S. Graff, who has served on the Company's Board of Directors since May 2014, is CEO, co-founder, and a director of Hudl. (d) On June 4, 2025, the Company 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. See note 2 for additional information. The Company's voting membership interest in ALLO is accounted for using the HLBV method of accounting. Using the HLBV method of accounting, the Company recognized $ 10.7 million of losses during the first quarter of 2024, reducing the carrying value of the voting membership interest investment to $ 0 . Absent additional equity contributions with respect to ALLO's voting membership interest, the Company will not recognize additional losses for its voting membership interest in ALLO. Prior to redeeming all its outstanding preferred membership interests in June 2025, the Company recognized $ 4.8 million on its ALLO preferred membership interests during the three months ended September 30, 2024 and $ 14.4 million and $ 11.4 million during the nine months ended September 30, 2025 and 2024, respectively. The income statement activity from the Company's investment in ALLO is included in "other, net" in "other income (expense)" on the consolidated statements of income. (e) The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments. As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company's ownership correlates to approximately $ 1.07 billion, $ 400 million, and $ 280 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations. The Company has recorded an allowance for credit losses (and related provision expense) on these investments. See note 9 for additional information. (f) The Company invests in solar tax equity investments through investment partnerships. Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the third-party co-investor’s portion being presented as noncontrolling interests. As of September 30, 2025, the Company has invested a total of $ 306.1 million and its third-party investors have invested $ 307.5 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects. The carrying value of the Company’s investment in a solar project is reduced by tax credits earned when the solar project is placed in service. As of September 30, 2025, the Company and its third-party co-investors have earned $ 337.2 million and $ 295.7 million, respectively, of tax credits on those projects that remain outstanding. The solar investment negative carrying value on the consolidated balance sheet of $ 210.3 million as of September 30, 2025 represents the sum of total tax credits earned on solar projects placed in service through September 30, 2025 and the calculated HLBV cumulative net losses being larger than the total investment contributions made by the Company and its syndication partners on such projects. The solar investment negative carrying value as of September 30, 2025, excluding the portion owned by syndication partners that is reflected as "noncontrolling interests" on the consolidated balance sheet, was $ 109.8 million. The Company accounts for its solar investments using the HLBV method of accounting. For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment and gains recognized at the end of the contractual agreement (typically five years ). The following table presents (i) the Company's recognized HLBV losses and gains recognized from sales of certain investments, which include losses and gains attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net losses and gains attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the recognized pre-tax net loss attributable to the Company: 26 Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Losses from HLBV accounting (gross) $ ( 10,884 ) ( 11,238 ) ( 19,963 ) ( 15,276 ) Gains from sales (gross) — — 8,033 4,208 Losses from solar investments, net ( 10,884 ) ( 11,238 ) ( 11,930 ) ( 11,068 ) Less: losses attributable to noncontrolling members, net ( 5,659 ) ( 3,936 ) ( 9,863 ) ( 5,568 ) Net loss attributable to the Company $ ( 5,225 ) ( 7,302 ) ( 2,067 ) ( 5,500 ) The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of September 30, 2025: As of September 30, 2025 1 year or less After 1 year through 5 years After 5 years through 10 years After 10 years Total Available-for-sale asset-backed securities Non-Nelnet Bank: FFELP loan $ — 205 2,525 89,445 92,175 FFELP loan and other debt securities - restricted — 5,500 17,599 99,568 122,667 Private education loan — — — 206,153 206,153 Other debt securities — 7,790 34,128 35,646 77,564 Total Non-Nelnet Bank — 13,495 54,252 430,812 498,559 Fair value — 13,609 54,416 425,768 493,793 Nelnet Bank: FFELP loan 49,259 13,009 21,618 137,427 221,313 Private education loan — — 13,562 731 14,293 Other debt securities — 33,243 73,023 439,754 546,020 Total Nelnet Bank 49,259 46,252 108,203 577,912 781,626 Fair value 49,005 46,359 108,682 584,228 788,274 Total available-for-sale asset-backed securities at amortized cost $ 49,259 59,747 162,455 1,008,724 1,280,185 Total available-for-sale asset-backed securities at fair value $ 49,005 59,968 163,098 1,009,996 1,282,067 Held-to-maturity asset-backed securities Nelnet Bank: FFELP loan - amortized cost $ — 2,546 13,132 185,363 201,041 FFELP loan - fair value $ — 2,582 13,024 190,386 205,992 Beneficial interest in loan securitizations (a): Amortized cost $ — — — — 201,800 Fair value $ — — — — 213,278 (a) The Company's beneficial interest in loan securitizations is not due at a single maturity date. The following table summarizes the unrealized positions for held-to-maturity asset-backed securities investments and the beneficial interest in loan securitizations as of September 30, 2025: Carrying value Gross unrealized gains Gross unrealized losses Fair value Asset-backed securities $ 201,041 5,527 ( 576 ) 205,992 Beneficial interest in loan securitizations 201,800 13,170 ( 1,692 ) 213,278 27 The following table presents securities classified as available-for-sale that have gross unrealized losses as of September 30, 2025 and the fair value of such securities as of September 30, 2025. These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis. All securities in the table below have been evaluated to determine if a credit loss exists. As part of that assessment, the Company concluded it currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses. As of September 30, 2025 Unrealized loss position less than 12 months Unrealized loss position 12 months or more Total Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Fair value Available-for-sale asset-backed securities Non-Nelnet Bank: FFELP loan $ ( 179 ) 8,352 ( 485 ) 22,383 ( 664 ) 30,735 FFELP loan and other debt securities - restricted ( 110 ) 13,072 ( 90 ) 4,991 ( 200 ) 18,063 Private education loan — — ( 13,591 ) 152,779 ( 13,591 ) 152,779 Other debt securities ( 8 ) 8,038 — — ( 8 ) 8,038 Total Non-Nelnet Bank ( 297 ) 29,462 ( 14,166 ) 180,153 ( 14,463 ) 209,615 Nelnet Bank: FFELP loan ( 442 ) 60,836 ( 153 ) 11,698 ( 595 ) 72,534 Private education loan ( 2 ) 13,560 — — ( 2 ) 13,560 Other debt securities ( 412 ) 41,640 ( 868 ) 6,320 ( 1,280 ) 47,960 Total Nelnet Bank ( 856 ) 116,036 ( 1,021 ) 18,018 ( 1,877 ) 134,054 Total available-for-sale asset-backed securities $ ( 1,153 ) 145,498 ( 15,187 ) 198,171 ( 16,340 ) 343,669 The following table summarizes the gross proceeds received and gross realized gains and losses related to sales of available-for-sale asset-backed securities: Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 Gross proceeds from sales $ 96,345 105,628 205,954 372,176 Gross realized gains $ 1,145 1,791 2,701 4,362 Gross realized losses ( 291 ) ( 70 ) ( 770 ) ( 1,036 ) Net gains $ 854 1,721 1,931 3,326 28 7. Intangible Assets Intangible assets consisted of the following: Weighted average remaining useful life as of September 30, 2025 (months) As of As of September 30, 2025 December 31, 2024 Amortizable intangible assets, net: Customer relationships (net of accumulated amortization of $ 57,142 and $ 54,644 , respectively) 89 $ 30,702 34,960 Trade name (net of accumulated amortization of $ 263 and $ 205 , respectively) 79 507 565 Computer software (net of accumulated amortization of $ 1,175 and $ 917 , respectively) 19 545 803 Total amortizable intangible assets, net 88 $ 31,754 36,328 The Company recorded amortization expense on its intangible assets of $ 1.5 million and $ 2.1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 4.6 million and $ 6.4 million during the nine months ended September 30, 2025 and 2024, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of September 30, 2025, the Company estimates it will record amortization expense as follows: 2025 (October 1 - December 31) $ 1,525 2026 6,012 2027 5,714 2028 5,354 2029 4,008 2030 and thereafter 9,141 $ 31,754 8. Goodwill The following table presents the carrying amount of goodwill as of September 30, 2025 and December 31, 2024 by reportable operating segment: Nelnet Financial Services Loan Servicing and Systems Education Technology Services and Payments Asset Generation and Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Total Total goodwill $ 23,639 92,507 41,883 — — — 158,029 29 9. Impairment Expense and Provision for Beneficial Interests The following table presents the impairment charges and provision for beneficial interests, by asset and reportable operating segment, recognized by the Company. These expense items are included in “impairment expense and provision for beneficial interests” in the consolidated statements of income. Nelnet Financial Services Loan Servicing and Systems Education Technology Services and Payments Asset Generation and Management Nelnet Bank NFS Other Operating Segments Corporate and Other Activities Total Three months ended September 30, 2025 Investments - solar tax equity (a) $ — — — — — 5,761 5,761 Investments - beneficial interest in loan securitizations (b) — — 2,145 — — — 2,145 Property and equipment - internally developed software — 1,145 — — — — 1,145 Leases, buildings, and associated improvements (c) — — — — — 94 94 $ — 1,145 2,145 — — 5,855 9,145 Three months ended September 30, 2024 Investments - beneficial interest in loan securitizations (b) $ — — 28,952 — — — 28,952 Investments - venture capital — — — — — 100 100 $ — — 28,952 — — 100 29,052 Nine months ended September 30, 2025 Investments - solar tax equity (a) $ — — — — — 5,761 5,761 Investments - beneficial interest in loan securitizations (b) — — 8,632 — — — 8,632 Property and equipment - internally developed software — 1,145 — — — — 1,145 Leases, buildings, and associated improvements (c) — — — — 81 3,363 3,444 Property and equipment - solar facilities (d) — — — — — 1,902 1,902 Investments - venture capital — — — — — 140 140 $ — 1,145 8,632 — 81 11,166 21,024 Nine months ended September 30, 2024 Investments - beneficial interest in loan securitizations (b) — — 34,863 — — — 34,863 Property and equipment / other assets - solar facilities and inventory (e) — — — — — 1,865 1,865 Investments - venture capital — — — — — 137 137 $ — — 34,863 — — 2,002 36,865 (a) The Company recorded a non-cash impairment related to its ownership in a solar development project. (b) The Company recorded a non-cash allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations due primarily to an increase in cumulative loss expectations. (c) The Company recorded non-cash impairment charges related to operating lease assets and associated leasehold improvements as a result of the Company consolidating office space. (d) In the second quarter of 2025, the Company received notification of a customer contract cancellation. As a result, the Company recorded an impairment charge related to construction in progress for a solar facility. (e) In April 2024, the Company announced a change in its solar engineering, procurement, and construction (EPC) operations to focus exclusively on the commercial solar market and discontinued its residential solar operations. As a result, the Company recognized non-cash impairment charges on certain solar facilities and inventory related to the residential solar operations. 30 10. Bank Deposits The following table summarizes Nelnet Bank’s interest-bearing deposits, excluding intercompany deposits: As of As of September 30, 2025 December 31, 2024 Retail and other savings $ 1,180,088 916,475 Brokered CDs, net of brokered deposit fees 275,844 247,872 Retail and other CDs, net of issuance fees 20,833 21,784 Total interest-bearing deposits $ 1,476,765 1,186,131 As of September 30, 2025 and December 31, 2024, Nelnet Bank had intercompany deposits from Nelnet, Inc. and its subsidiaries totaling $ 256.3 million and $ 68.5 million, respectively, including a $ 40.0 million pledged deposit from Nelnet, Inc. as required under a Capital and Liquidity Maintenance Agreement with the FDIC. All intercompany deposits held at Nelnet Bank are eliminated for consolidated financial reporting purposes. The following table presents the remaining maturities of certificates of deposit as of September 30, 2025: One year or less $ 149,058 After one year to two years 74,996 After two years to three years 349 After three years to four years 51,215 After four years to five years — After five years 21,059 Total $ 296,677 Retail and other savings deposits included deposits from Educational 529 College Savings and Health Savings plans, retirement savings plans, Short Term Federal Investment Trust (STFIT), and FDIC sweep deposits. These deposits are large interest-bearing omnibus accounts structured to allow FDIC insurance to flow through to underlying individual depositors. Deposits that exceeded the FDIC insurance limits as of September 30, 2025 were $ 44.0 million, the majority of which were intercompany deposits from Nelnet, Inc. and its subsidiaries. Union Bank, a related party, is the program manager for certain of the Educational 529 College Savings plans and trustee for the STFIT. 31 11. Earnings per Common Share The following table presents the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share-based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock. Common shareholders Unvested restricted stock shareholders Total Common shareholders Unvested restricted stock shareholders Total Three months ended September 30, 2025 2024 Numerator: Net income attributable to Nelnet, Inc. $ 104,750 1,934 106,684 2,343 45 2,388 Denominator: Weighted-average common shares outstanding - basic and diluted 35,657,976 658,339 36,316,315 35,743,895 686,590 36,430,485 Earnings per share - basic and diluted $ 2.94 2.94 2.94 0.07 0.07 0.07 Nine months ended September 30, 2025 2024 Numerator: Net income attributable to Nelnet, Inc. $ 363,914 6,789 370,703 118,549 2,337 120,886 Denominator: Weighted-average common shares outstanding - basic and diluted 35,759,099 667,089 36,426,188 35,993,634 709,680 36,703,314 Earnings per share - basic and diluted $ 10.18 10.18 10.18 3.29 3.29 3.29 32 12. Segment Reporting See note 16 of the notes to consolidated financial statements included in the 2024 Annual Report for a description of the Company's operating segments. The following tables present the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements: Three months ended September 30, 2025 Reportable Segments Reconciling Items Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset Generation and Management Nelnet Bank Total Reportable Segments NFS Other Operating Segments Corporate and Other Activities Eliminations/ Reclassifications Total Interest income: Loan interest $ — — 145,984 16,733 162,717 — — — 162,717 Investment interest 531 8,564 12,051 14,849 35,995 14,985 3,134 ( 10,872 ) 43,241 Total interest income 531 8,564 158,035 31,582 198,712 14,985 3,134 ( 10,872 ) 205,958 Interest expense — — 113,350 16,179 129,529 1,359 692 ( 10,872 ) 120,708 Net interest income 531 8,564 44,685 15,403 69,183 13,626 2,442 — 85,250 Less (negative provision) provision for loan losses — — ( 7,374 ) 3,811 ( 3,563 ) — — — ( 3,563 ) Net interest income after provision for loan losses 531 8,564 52,059 11,592 72,746 13,626 2,442 — 88,813 Other income (expense): LSS revenue 151,052 — — — 151,052 — — — 151,052 ETSP revenue — 129,321 — — 129,321 — — — 129,321 Intersegment revenue 5,313 70 — — 5,383 — — ( 5,383 ) — Reinsurance premiums earned — — — — — 23,165 — — 23,165 Solar construction revenue — — — — — — 5,738 — 5,738 Other, net 105 — 195 1,308 1,608 5,674 28,336 112 35,730 Loss on sale of loans, net — — ( 2,472 ) — ( 2,472 ) — — — ( 2,472 ) Gain on partial redemption of ALLO investment — — — — — — — — — Derivative settlements, net — — 594 167 761 — — — 761 Derivative market value adjustments, net — — ( 461 ) ( 327 ) ( 788 ) — — — ( 788 ) Total other income (expense), net 156,470 129,391 ( 2,144 ) 1,148 284,865 28,839 34,074 ( 5,271 ) 342,507 Cost of services and expenses: Total cost of services 2,021 50,363 — — 52,384 — 7,607 — 59,991 Salaries and benefits 70,126 43,029 1,971 2,817 117,943 668 26,193 ( 26 ) 144,778 Depreciation and amortization 1,725 2,504 — 355 4,584 — 2,743 — 7,327 Reinsurance losses and underwriting expenses — — — — — 19,962 — — 19,962 Postage expense 8,735 8,735 ( 8,735 ) — Servicing fees 6,687 838 7,525 ( 7,525 ) — Other expenses (a) 10,862 9,537 1,243 1,916 23,558 1,103 17,901 11,107 53,669 Intersegment expenses, net 17,262 6,420 1,248 726 25,656 289 ( 25,741 ) ( 204 ) — Total operating expenses 108,710 61,490 11,149 6,652 188,001 22,022 21,096 ( 5,383 ) 225,736 Impairment expense and provision for beneficial interests — 1,145 2,145 — 3,290 — 5,855 — 9,145 Total expenses 110,731 112,998 13,294 6,652 243,675 22,022 34,558 ( 5,383 ) 294,872 Income (loss) before income taxes 46,270 24,957 36,621 6,088 113,936 20,443 1,958 112 136,448 Income tax (expense) benefit ( 11,105 ) ( 5,990 ) ( 8,783 ) ( 1,483 ) ( 27,361 ) ( 4,866 ) ( 3,547 ) — ( 35,773 ) Net income (loss) 35,165 18,967 27,838 4,605 86,575 15,577 ( 1,589 ) 112 100,675 Net (income) loss attributable to noncontrolling interests — — ( 27 ) — ( 27 ) ( 169 ) 6,317 ( 112 ) 6,009 Net income (loss) attributable to Nelnet, Inc. $ 35,165 18,967 27,811 4,605 86,548 15,408 4,728 — 106,684 Total assets as of September 30, 2025 $ 200,205 525,704 10,042,521 2,003,322 12,771,752 1,330,228 671,263 ( 896,561 ) 13,876,682 (a) Other expenses for each reportable segment includes: LSS - communications, professional fees, software, and computer services and subscriptions. ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel. AGM - trustee fees and professional fees. Nelnet Bank - marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fee expense. 33 Three months ended September 30, 2024 Reportable Segments Reconciling Items Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset Generation and Management Nelnet Bank Total Reportable Segments NFS Other Operating Segments Corporate and Other Activities Eliminations/ Reclassifications Total Interest income: Loan interest $ — — 180,571 9,639 190,210 — — — 190,211 Investment interest 894 9,734 18,970 12,522 42,120 12,415 3,105 ( 7,368 ) 50,272 Total interest income 894 9,734 199,541 22,161 232,330 12,415 3,105 ( 7,368 ) 240,483 Interest expense — — 161,142 11,606 172,748 2,245 704 ( 7,368 ) 168,328 Net interest income 894 9,734 38,399 10,555 59,582 10,170 2,401 — 72,155 Less (negative provision) provision for loan losses — — 11,968 6,143 18,111 — — — 18,111 Net interest income after provision for loan losses 894 9,734 26,431 4,412 41,471 10,170 2,401 — 54,044 Other income (expense): LSS revenue 108,175 — — — 108,175 — — — 108,175 ETSP revenue — 118,179 — — 118,179 — — — 118,179 Intersegment revenue 5,428 60 — — 5,488 — — ( 5,488 ) — Reinsurance premiums earned — — — — — 16,619 — — 16,619 Solar construction revenue — — — — — — 19,321 — 19,321 Other, net 690 — 4,918 841 6,449 5,751 3,506 — 15,706 Loss on sale of loans, net — — ( 107 ) — ( 107 ) — — — ( 107 ) Gain on partial redemption of ALLO investment — — — — — — — — — Derivative settlements, net — — 1,359 281 1,640 — — — 1,640 Derivative market value adjustments, net — — ( 9,518 ) ( 3,647 ) ( 13,165 ) — — — ( 13,165 ) Total other income (expense), net 114,293 118,239 ( 3,348 ) ( 2,525 ) 226,659 22,370 22,827 ( 5,488 ) 266,368 Cost of services and expenses: Total cost of services 196 45,273 — — 45,469 — 26,815 — 72,284 Salaries and benefits 76,820 41,053 1,220 2,973 122,066 398 23,852 ( 124 ) 146,192 Depreciation and amortization 4,854 2,616 — 343 7,813 — 5,848 — 13,661 Reinsurance losses and underwriting expenses — — — — — 16,761 — — 16,761 Postage expense 8,467 8,467 ( 8,467 ) — Servicing fees 7,011 285 7,296 ( 7,296 ) — Other expenses (a) 11,000 7,614 970 2,463 22,047 1,143 11,116 10,379 44,685 Intersegment expenses, net 18,399 4,604 1,276 581 24,860 200 ( 25,080 ) 20 — Total operating expenses 119,540 55,887 10,477 6,645 192,549 18,502 15,736 ( 5,488 ) 221,299 Impairment expense and provision for beneficial interests — — 28,952 — 28,952 — 100 — 29,052 Total expenses 119,736 101,160 39,429 6,645 266,970 18,502 42,651 ( 5,488 ) 322,635 Income (loss) before income taxes ( 4,549 ) 26,813 ( 16,346 ) ( 4,758 ) 1,160 14,038 ( 17,423 ) — ( 2,223 ) Income tax (expense) benefit 1,092 ( 6,450 ) 3,923 1,143 ( 292 ) ( 3,341 ) 3,915 — 282 Net income (loss) ( 3,457 ) 20,363 ( 12,423 ) ( 3,615 ) 868 10,697 ( 13,508 ) — ( 1,941 ) Net (income) loss attributable to noncontrolling interests — 54 — — 54 ( 117 ) 4,392 — 4,329 Net income (loss) attributable to Nelnet, Inc. $ ( 3,457 ) 20,417 ( 12,423 ) ( 3,615 ) 922 10,580 ( 9,116 ) — 2,388 Total assets as of September 30, 2024 $ 202,366 556,897 10,707,442 1,328,808 12,795,513 1,020,732 763,310 ( 495,427 ) 14,084,128 (a) Other expenses for each reportable segment includes: LSS - communications, professional fees, software, and computer services and subscriptions. ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel. AGM - trustee fees and professional fees. Nelnet Bank - marketing, consulting and professional fees, software, FDIC insurance, and management fee expense. 34 Nine months ended September 30, 2025 Reportable Segments Reconciling Items Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset Generation and Management Nelnet Bank Total Reportable Segments NFS Other Operating Segments Corporate and Other Activities Eliminations/ Reclassifications Total Interest income: Loan interest $ — — 457,752 43,508 501,260 — — — 501,260 Investment interest 1,875 20,921 37,462 41,278 101,536 32,676 8,107 ( 17,504 ) 124,815 Total interest income 1,875 20,921 495,214 84,786 602,796 32,676 8,107 ( 17,504 ) 626,075 Interest expense — — 347,719 42,928 390,647 3,558 1,976 ( 17,504 ) 378,677 Net interest income 1,875 20,921 147,495 41,858 212,149 29,118 6,131 — 247,398 Less (negative provision) provision for loan losses — — 16,770 12,934 29,704 — — — 29,704 Net interest income after provision for loan losses 1,875 20,921 130,725 28,924 182,445 29,118 6,131 — 217,694 Other income (expense): LSS revenue 392,517 — — — 392,517 — — — 392,517 ETSP revenue — 394,836 — — 394,836 — — — 394,836 Intersegment revenue 16,600 198 — — 16,798 — — ( 16,798 ) — Reinsurance premiums earned — — — — — 73,964 — — 73,964 Solar construction revenue — — — — — — 10,992 — 10,992 Other, net 331 — 11,697 1,842 13,870 12,050 56,176 304 82,401 Loss on sale of loans, net — — ( 1,562 ) — ( 1,562 ) — — — ( 1,562 ) Gain on partial redemption of ALLO investment — — — — — — 175,044 — 175,044 Derivative settlements, net — — 1,756 494 2,250 — — — 2,250 Derivative market value adjustments, net — — ( 6,422 ) ( 4,556 ) ( 10,978 ) — — — ( 10,978 ) Total other income (expense), net 409,448 395,034 5,469 ( 2,220 ) 807,731 86,014 242,212 ( 16,494 ) 1,119,464 Cost of services and expenses: Total cost of services 5,500 138,254 — — 143,754 — 29,485 — 173,239 Salaries and benefits 205,249 126,368 4,661 8,424 344,702 1,685 71,472 ( 160 ) 417,700 Depreciation and amortization 6,199 7,439 — 1,046 14,684 — 9,522 — 24,206 Reinsurance losses and underwriting expenses — — — — — 67,836 — — 67,836 Postage expense 25,861 25,861 ( 25,861 ) — Servicing fees 20,700 2,329 23,029 ( 23,029 ) — Other expenses (a) 32,793 28,489 4,595 5,243 71,120 4,080 45,183 32,817 153,200 Intersegment expenses, net 50,980 18,297 3,758 2,089 75,124 854 ( 75,413 ) ( 565 ) — Total operating expenses 321,082 180,593 33,714 19,131 554,520 74,455 50,764 ( 16,798 ) 662,942 Impairment expense and provision for beneficial interests — 1,145 8,632 — 9,777 81 11,166 — 21,024 Total expenses 326,582 319,992 42,346 19,131 708,051 74,536 91,415 ( 16,798 ) 857,205 Income (loss) before income taxes 84,741 95,963 93,848 7,573 282,125 40,596 156,928 304 479,953 Income tax (expense) benefit ( 20,338 ) ( 23,042 ) ( 22,508 ) ( 1,816 ) ( 67,704 ) ( 9,645 ) ( 42,945 ) — ( 120,294 ) Net income (loss) 64,403 72,921 71,340 5,757 214,421 30,951 113,983 304 359,659 Net (income) loss attributable to noncontrolling interests — 45 ( 67 ) — ( 22 ) ( 407 ) 11,777 ( 304 ) 11,044 Net income (loss) attributable to Nelnet, Inc. $ 64,403 72,966 71,273 5,757 214,399 30,544 125,760 — 370,703 Total assets as of September 30, 2025 $ 200,205 525,704 10,042,521 2,003,322 12,771,752 1,330,228 671,263 ( 896,561 ) 13,876,682 (a) Other expenses for each reportable segment includes: LSS - communications, professional fees, collection costs, software, and computer services and subscriptions. ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel. AGM - trustee fees and professional fees. Nelnet Bank - marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fee expense. 35 Nine months ended September 30, 2024 Reportable Segments Reconciling Items Loan Servicing and Systems (LSS) Education Technology Services and Payments (ETSP) Asset Generation and Management Nelnet Bank Total Reportable Segments NFS Other Operating Segments Corporate and Other Activities Eliminations/ Reclassifications Total Interest income: Loan interest $ — — 583,907 25,157 609,064 — — — 609,064 Investment interest 4,046 23,315 54,513 33,301 115,175 43,910 9,566 ( 25,565 ) 143,086 Total interest income 4,046 23,315 638,420 58,458 724,239 43,910 9,566 ( 25,565 ) 752,150 Interest expense — — 523,678 31,872 555,550 7,268 2,114 ( 25,565 ) 539,367 Net interest income 4,046 23,315 114,742 26,586 168,689 36,642 7,452 — 212,783 Less (negative provision) provision for loan losses — — 14,199 18,352 32,551 — — — 32,551 Net interest income after provision for loan losses 4,046 23,315 100,543 8,234 136,138 36,642 7,452 — 180,232 Other income (expense): LSS revenue 344,428 — — — 344,428 — — — 344,428 ETSP revenue — 378,627 — — 378,627 — — — 378,627 Intersegment revenue 18,419 166 — — 18,585 — — ( 18,585 ) — Reinsurance premiums earned — — — — — 44,250 — — 44,250 Solar construction revenue — — — — — — 42,741 — 42,741 Other, net 2,085 — 11,239 1,991 15,315 6,763 11,730 — 33,807 Loss on sale of loans, net — — ( 1,685 ) — ( 1,685 ) — — — ( 1,685 ) Gain on partial redemption of ALLO investment — — — — — — — — — Derivative settlements, net — — 4,356 690 5,046 — — — 5,046 Derivative market value adjustments, net — — ( 2,875 ) ( 793 ) ( 3,668 ) — — — ( 3,668 ) Total other income (expense), net 364,932 378,793 11,035 1,888 756,648 51,013 54,471 ( 18,585 ) 843,546 Cost of services and expenses: Total cost of services 392 134,106 — — 134,498 — 49,115 — 183,613 Salaries and benefits 224,172 121,956 3,529 8,491 358,148 1,129 72,159 ( 1,735 ) 429,701 Depreciation and amortization 15,304 8,012 — 944 24,260 — 21,312 — 45,572 Reinsurance losses and underwriting expenses — — — — — 39,066 — — 39,066 Postage expense 28,350 28,350 ( 28,350 ) — Servicing fees 24,503 711 25,214 ( 25,214 ) — Other expenses (a) 31,119 23,772 3,217 5,577 63,685 2,470 37,359 35,306 138,820 Intersegment expenses, net 55,955 14,216 3,756 1,729 75,656 665 ( 77,729 ) 1,408 — Total operating expenses 354,900 167,956 35,005 17,452 575,313 43,330 53,101 ( 18,585 ) 653,159 Impairment expense and provision for beneficial interests — — 34,863 — 34,863 — 2,002 — 36,865 Total expenses 355,292 302,062 69,868 17,452 744,674 43,330 104,218 ( 18,585 ) 873,637 Income (loss) before income taxes 13,686 100,046 41,710 ( 7,330 ) 148,112 44,325 ( 42,295 ) — 150,141 Income tax (expense) benefit ( 3,284 ) ( 24,035 ) ( 10,010 ) 1,800 ( 35,529 ) ( 10,550 ) 8,426 — ( 37,653 ) Net income (loss) 10,402 76,011 31,700 ( 5,530 ) 112,583 33,775 ( 33,869 ) — 112,488 Net (income) loss attributable to noncontrolling interests — 101 — — 101 ( 366 ) 8,663 — 8,398 Net income (loss) attributable to Nelnet, Inc. $ 10,402 76,112 31,700 ( 5,530 ) 112,684 33,409 ( 25,206 ) — 120,886 Total assets as of September 30, 2024 $ 202,366 556,897 10,707,442 1,328,808 12,795,513 1,020,732 763,310 ( 495,427 ) 14,084,128 (a) Other expenses for each reportable segment includes: LSS - communications, professional fees, software, and computer services and subscriptions. ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, travel, and provision for losses. AGM - trustee fees and professional fees. Nelnet Bank - marketing, consulting and professional fees, software, FDIC insurance, and management fee expense. 36 13. Disaggregated Revenue The following tables present disaggregated revenue for the Company's fee-based operating segments: Loan Servicing and Systems Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Government loan servicing (a) $ 112,798 85,215 285,896 277,705 Private education and consumer loan servicing 24,293 13,057 69,721 38,634 FFELP loan servicing 2,035 2,945 6,909 9,570 Software services 10,584 5,197 27,027 14,617 Outsourced services 1,342 1,761 2,964 3,902 Loan servicing and systems revenue $ 151,052 108,175 392,517 344,428 (a) Upon reaching a final agreement with the Department of Education (the "Department"), the Company recognized $ 32.9 million of non-recurring revenue during the third quarter of 2025 on a contract modification for services previously performed. Education Technology Services and Payments Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Tuition payment plan services $ 32,971 31,659 109,057 104,702 Payment processing 59,484 55,813 148,535 137,926 Education technology services 36,323 30,080 136,499 133,306 Other 543 627 745 2,693 Education technology services and payments revenue $ 129,321 118,179 394,836 378,627 Other Income (Expense) The following table presents the components of "other, net" in "other income (expense)" on the consolidated statements of income: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Investment activity, net $ 42,317 8,529 56,216 7,447 Administration/sponsor fee income 2,267 1,420 4,978 4,448 Investment advisory services (WRCM) 2,010 1,394 4,987 4,427 Borrower late fee income 1,817 1,741 5,046 7,460 ALLO preferred return — 4,783 14,400 11,353 Loss from ALLO voting membership interest investment — — — ( 10,693 ) Loss from solar investments, net ( 10,884 ) ( 11,238 ) ( 11,930 ) ( 11,068 ) (Loss) gain on debt repurchases ( 8,304 ) 7 ( 7,865 ) ( 2 ) Other 6,507 9,070 16,569 20,435 Other, net $ 35,730 15,706 82,401 33,807 37 14. Reinsurance The following table presents reinsurance premiums written and earned and loss reserves, commissions, and broker fees: Three months ended Nine months ended September 30, September 30, 2025 2024 2025 2024 Premiums written: Assumed $ 51,244 43,395 147,178 115,546 Ceded ( 19,709 ) ( 21,558 ) ( 53,678 ) ( 57,552 ) Net premiums written $ 31,535 21,837 93,500 57,994 Premiums earned: Assumed $ 42,178 33,585 133,981 88,978 Ceded ( 19,013 ) ( 16,966 ) ( 60,017 ) ( 44,728 ) Net premiums earned $ 23,165 16,619 73,964 44,250 Loss reserve, commissions, and broker fees: Assumed $ 37,490 33,195 125,231 77,712 Ceded ( 17,528 ) ( 16,434 ) ( 57,395 ) ( 38,646 ) Reinsurance losses and underwriting expenses $ 19,962 16,761 67,836 39,066 The Company’s loss reserve balance, net of amounts ceded to reinsurers, was $ 63.5 million and $ 33.1 million as of September 30, 2025 and December 31, 2024, respectively, which is included in "other liabilities" on the consolidated balance sheets. 15. Major Customer Government Loan Servicing The Company earns loan servicing revenue from a servicing contract with the Department. Revenue earned by the Company related to this contract was $ 112.8 million and $ 85.2 million for the three months ended September 30, 2025 and 2024, respectively, and $ 285.9 million and $ 277.7 million for the nine months ended September 30, 2025 and 2024, respectively. The Company's legacy student loan servicing contract with the Department was scheduled to expire on December 14, 2023. In April 2023, Nelnet Servicing received a contract award from the Department, pursuant to which it was selected to provide continued servicing capabilities for the Department's student aid recipients under a new Unified Servicing and Data Solution (USDS) contract which replaced the legacy Department student loan servicing contract. The USDS contract became effective in April 2023 and has a five-year base period, with 2 two-year and 1 one-year possible extensions. The Department's total loan servicing volume of existing borrowers was allocated by the Department to the Company and four other third-party servicers that were awarded a USDS contract. Servicing under the USDS contract went live on April 1, 2024 and the Company recognized revenue in accordance with this new contract beginning in the second quarter of 2024. The Company earned revenue for servicing borrowers under the legacy servicing contract with the Department through March 31, 2024. The Company earns less revenue from the Department on a per-borrower blended basis under the new USDS servicing contract as compared with the legacy servicing contract. 38 16. Fair Value The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis: As of September 30, 2025 As of December 31, 2024 Level 1 Level 2 Total Level 1 Level 2 Total Assets: Investments: Asset-backed debt securities - available-for-sale $ 100 1,281,967 1,282,067 100 1,085,726 1,085,826 Equity securities 23,731 — 23,731 455 — 455 Equity securities measured at net asset value (a) 86,090 74,039 Total investments 23,831 1,281,967 1,391,888 555 1,085,726 1,160,320 Derivative instruments — 359 359 — 3,232 3,232 Total assets $ 23,831 1,282,326 1,392,247 555 1,088,958 1,163,552 Liabilities: Derivative instruments $ — 2,491 2,491 — 53 53 Total liabilities $ — 2,491 2,491 — 53 53 (a) In accordance with the Fair Value Measurements Topic of the FASB Accounting Standards Codification, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets. The methodologies for estimating the fair value of financial assets and liabilities are described in note 24 of the notes to consolidated financial statements included in the 2024 Annual Report. As of September 30, 2025 Fair value Carrying value Level 1 Level 2 Level 3 Financial assets: Loans receivable $ 10,120,177 9,668,349 — — 10,120,177 Accrued loan interest receivable 558,912 558,912 — 558,912 — Cash and cash equivalents 216,425 216,425 216,425 — — Investments at fair value 1,391,888 1,391,888 23,831 1,281,967 — Investments - held-to-maturity asset-backed securities 205,992 201,041 — 205,992 — Notes receivable 33,376 33,376 — 33,376 — Beneficial interest in loan securitizations 213,278 201,800 — — 213,278 Restricted cash 394,074 394,074 394,074 — — Restricted cash – due to customers 156,297 156,297 156,297 — — Derivative instruments 359 359 — 359 — Financial liabilities: Bonds and notes payable 7,846,287 7,822,531 — 7,846,287 — Accrued interest payable 19,039 19,039 — 19,039 — Bank deposits 1,469,701 1,476,765 1,007,606 462,095 — Due to customers 442,735 442,735 442,735 — — Derivative instruments 2,491 2,491 — 2,491 — 39 As of December 31, 2024 Fair value Carrying value Level 1 Level 2 Level 3 Financial assets: Loans receivable $ 10,008,165 9,443,461 — — 10,008,165 Accrued loan interest receivable 549,283 549,283 — 549,283 — Cash and cash equivalents 194,518 194,518 194,518 — — Investments at fair value 1,160,320 1,160,320 555 1,085,726 — Investments - held-to-maturity asset-backed securities 216,164 210,774 — 216,164 — Notes receivable 32,258 32,258 — 32,258 — Beneficial interest in loan securitizations 229,510 213,809 — — 229,510 Restricted cash 332,100 332,100 332,100 — — Restricted cash – due to customers 404,402 404,402 404,402 — — Derivative instruments 3,232 3,232 — 3,232 — Financial liabilities: Bonds and notes payable 8,343,565 8,309,797 — 8,343,565 — Accrued interest payable 21,046 21,046 — 21,046 — Bank deposits 1,172,707 1,186,131 744,721 427,986 — Due to customers 478,469 478,469 478,469 — — Derivative instruments 53 53 — 53 — 17. Subsequent Event 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. The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions. 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. The business currently services loans for 2.4 million borrowers on proprietary technology platforms. The operating results of this acquisition will be included in the Loan Servicing and Systems reportable operating segment following the closing of the transaction.