What changed in this filing

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-08-06 compared with 2026-05-07 · 44 added, 19 removed, 131 unchanged (32% of the section changed)

6 unchanged sentences

The following table sets forth AGM’s loan assets and debt instruments by rate characteristics:

As of March 31, 2026 As of December 31, 2025

As of June 30, 2026 As of December 31, 2025

Dollars Percent Dollars Percent

14 unchanged sentences

The Company earned no variable-rate floor income in 2026 or 2025.

The following table shows AGM’s federally insured student loan assets that were earning fixed-rate floor income as of March 31, 2026:

The following table shows AGM’s federally insured student loan assets that were earning fixed-rate floor income as of June 30, 2026:

Fixed interest rate range Borrower/lender weighted-average yield Estimated variable conversion rate (a) Loan balance

5 unchanged sentences

(a) The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to a variable rate.

As of March 31, 2026, the weighted-average estimated variable conversion rate was 5.23% and the short-term interest rate was 386 basis points.

As of June 30, 2026, the weighted-average estimated variable conversion rate was 5.25% and the short-term interest rate was 380 basis points.

Absent the use of derivative instruments, a rise in interest rates will reduce the amount of floor income received and has an impact on earnings due to interest margin compression caused by increasing financing costs, until such time as the federally insured loans earn interest at a variable rate in accordance with their SAP formulas.

1 unchanged sentence

A summary of fixed-rate floor income earned by the AGM operating segment follows:

Three months ended March 31,

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

2026 2025 2026 2025

Fixed-rate floor income, gross $ 1,522 997 $ 3,086 1,972

6 unchanged sentences

This also results in student loan spread increasing in the short term in an increasing interest rate environment.

The following table presents AGM’s FFELP student loan assets and related funding for those assets arranged by underlying indices as of March 31, 2026:

The following table presents AGM’s FFELP student loan assets and related funding for those assets arranged by underlying indices as of June 30, 2026:

Index Frequency of variable resets Assets Funding of student loan assets

11 unchanged sentences

The Company entered into these derivative instruments to better match the interest rate characteristics on its student loan assets and the debt funding such assets.

The following table summarizes the Basis Swaps outstanding as of March 31, 2026:

The following table summarizes the Basis Swaps outstanding as of June 30, 2026:

Maturity Notional amount

1 unchanged sentence

(b) The interest rates on the Company's FFELP warehouse facility is indexed to asset-backed commercial paper rates and daily SOFR.

(c) As of March 31, 2026, the Company was sponsor for $10.9 million of outstanding asset-backed securities that were set and provide for interest rates to be periodically reset via a "dutch auction" (the “Auction Rate Securities”).

(c) As of June 30, 2026, the Company was sponsor for $10.9 million of outstanding asset-backed securities that were set and provide for interest rates to be periodically reset via a "dutch auction" (the “Auction Rate Securities”).

Since the auction feature has essentially been inoperable for substantially all auction rate securities since 2008, the Auction Rate Securities generally pay interest to the holder at a maximum rate as defined by the indenture.

10 unchanged sentences

Dollars Percent Dollars Percent Dollars Percent Dollars Percent

Three months ended March 31, 2026 Three months ended March 31, 2025

Three months ended June 30, 2026 Three months ended June 30, 2025

Effect on earnings:

3 unchanged sentences

Increase (decrease) in basic and diluted earnings per share $ (0.00) $ (0.01) $ (0.01) $ (0.03)

Six months ended June 30, 2026 Six months ended June 30, 2025

Effect on earnings:

Increase (decrease) in pre-tax net income before impact of derivative settlements $ (1,214) (0.9) % $ (3,642) (2.6) % $ (1,584) (0.5) % $ (4,750) (1.4) %

Impact of derivative settlements 694 0.5 2,083 1.5 694 0.2 2,083 0.6

Increase (decrease) in net income before taxes $ (520) (0.4) % $ (1,559) (1.1) % $ (890) (0.3) % $ (2,667) (0.8) %

Increase (decrease) in basic and diluted earnings per share $ (0.01) $ (0.03) $ (0.02) $ (0.06)

Interest Rate Risk - Nelnet Bank

1 unchanged sentence

To achieve this objective, the Company manages and mitigates Nelnet Bank’s exposure to fluctuations in market interest rates through several techniques, including managing the maturity, repricing, and mix of fixed- and variable-rate assets and liabilities and the use of derivative instruments.

The following table presents Nelnet Bank's loan assets, asset-backed security investments, deposits (including intercompany deposits), and bonds and notes payable (debt) by rate characteristics:

As of March 31, 2026 As of December 31, 2025

The following table presents Nelnet Bank's loan assets, asset-backed security investments, and deposits (including intercompany deposits) by rate characteristics:

As of June 30, 2026 As of December 31, 2025

Dollars Percent Dollars Percent

8 unchanged sentences

Variable-rate deposits (a) 1,468,033 58.6 1,127,667 64.0

Variable-rate debt 181,663 —

Total variable-rate deposits and debt 1,517,616 71.0 1,127,667 64.0

Total deposits and debt instruments $ 2,138,417 100.0 % $ 1,762,960 100.0 %

Total deposits $ 2,505,006 100.0 % $ 1,762,960 100.0 %

(a) Nelnet Bank uses derivative instruments to hedge exposure to variability in cash flows of variable-rate deposits to minimize the exposure to volatility in cash flows from future changes in interest rates.

The derivatives are not reflected in the above table.

See note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report for a summary of Nelnet Bank's derivatives outstanding as of March 31, 2026.

See note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report for a summary of Nelnet Bank's derivatives outstanding as of June 30, 2026.

Interest Rate and Market Risk - Investments

The following table presents the rates earned on the Company’s available-for-sale debt securities (investments), excluding securities (investments) held by Nelnet Bank.

Three months ended March 31,

Average balance Interest income Average yield Average balance Interest income Average yield

Three months ended June 30,

Asset-backed securities available-for-sale (a) (b) $ 597,297 7,865 5.28 % $ 620,800 8,110 5.24 %

Six months ended June 30,

Asset-backed securities available-for-sale (a) (b) $ 648,795 16,358 5.08 % $ 605,050 16,105 5.37 %

(a) The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market or retained such instruments upon initial issuance.

4 unchanged sentences

(b) The majority of the Company’s asset-backed securities earn floating rates with expected returns of approximately SOFR + 50 to 350 basis points to maturity.

As of March 31, 2026, $205.8 million (par value) of the Company’s asset-backed securities earn a weighted-average fixed rate of 3.72%.

As of June 30, 2026, $213.5 million (par value) of the Company’s asset-backed securities earn a weighted-average fixed rate of 3.95%.

The Company’s portfolio of asset-backed investment securities has limited liquidity, and the Company could incur a significant loss if the investments were sold prior to maturity at an amount less than the original purchase price.

As of March 31, 2026, the gross unrealized loss on the Company’s available-for-sale debt securities (including available-for-sale securities held at Nelnet Bank) was $21.2 million, and the aggregate fair value of available-for-sale debt securities with unrealized losses was $991.1 million.

As of June 30, 2026, the gross unrealized loss on the Company’s available-for-sale debt securities (including available-for-sale securities held at Nelnet Bank) was $18.0 million, and the aggregate fair value of available-for-sale debt securities with unrealized losses was $854.8 million.

The Company currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses.

9 unchanged sentences

Dollars Percent Dollars Percent Dollars Percent Dollars Percent

Three months ended March 31, 2026

Three months ended June 30, 2026

Effect on earnings:

6 unchanged sentences

Increase (decrease) in basic and diluted earnings per share $ 0.08 $ 0.29 $ (0.05) $ (0.09)

Three months ended March 31, 2025

Three months ended June 30, 2025

Effect on earnings:

6 unchanged sentences

Increase (decrease) in basic and diluted earnings per share $ 0.09 $ 0.34 $ (0.07) $ (0.16)

Six months ended June 30, 2026

Effect on earnings:

AGM operating segment (a) $ (1,738) $ 223 $ 4,023 $ 17,179

Nelnet Bank operating segment (b) 5,339 16,213 (5,241) (15,264)

NFS other operating segments (c) 2,097 6,290 (2,097) (6,290)

ETSP operating segment (d) 2,864 8,591 (2,864) (8,591)

Corporate and Other Activities (d) 967 2,901 (967) (2,901)

Increase (decrease) in net income before taxes $ 9,529 6.8 % $ 34,218 24.3 % $ (7,146) (5.1) % $ (15,867) (11.2) %

Increase (decrease) in basic and diluted earnings per share $ 0.20 $ 0.72 $ (0.15) $ (0.33)

Six months ended June 30, 2025

Effect on earnings:

AGM operating segment (a) $ 776 $ 10,520 $ 728 $ 6,709

Nelnet Bank operating segment (b) 1,018 3,054 (1,018) (3,054)

NFS other operating segments (c) 1,891 5,674 (1,891) (5,674)

ETSP operating segment (d) 2,826 8,478 (2,826) (8,478)

Corporate and Other Activities (d) 1,312 3,936 (1,312) (3,936)

Increase (decrease) in net income before taxes $ 7,823 2.3 % $ 31,662 9.2 % $ (6,319) (1.8) % $ (14,433) (4.2) %

Increase (decrease) in basic and diluted earnings per share $ 0.16 $ 0.66 $ (0.13) $ (0.30)

(a) Impact associated with variable-rate restricted cash, variable-rate loans, and variable-rate bonds and notes payable, including the impact of derivative settlements.

3 unchanged sentences

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

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk