STOCK TITAN

Nelnet Reports Third Quarter 2024 Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags

Nelnet (NYSE: NNI) reported Q3 2024 GAAP net income of $2.4 million ($0.07 per share), down from $44.4 million ($1.18 per share) in Q3 2023. The quarter included significant charges: a $29.0 million provision expense related to loan securitizations, $5.6 million in debt discount write-offs, $11.2 million in solar tax equity investment losses, and $8.8 million in solar construction project losses. The company's loan servicing segment saw revenue decrease to $108.2 million from $127.9 million year-over-year, while Education Technology Services revenue increased to $118.2 million from $113.8 million. The Board declared a Q4 dividend of $0.28 per share.

Nelnet (NYSE: NNI) ha riportato un reddito netto GAAP di $2,4 milioni ($0,07 per azione) per il terzo trimestre del 2024, in diminuzione rispetto ai $44,4 milioni ($1,18 per azione) del terzo trimestre del 2023. Il trimestre ha comportato costi significativi: una spesa per accantonamenti di $29,0 milioni relativa alle cartolarizzazioni dei prestiti, $5,6 milioni in svalutazioni di sconto sul debito, $11,2 milioni in perdite su investimenti fiscali in energia solare e $8,8 milioni in perdite su progetti di costruzione solare. Il segmento di servicing dei prestiti dell'azienda ha visto un calo dei ricavi a $108,2 milioni rispetto ai $127,9 milioni dell'anno precedente, mentre i ricavi dei Servizi Tecnologici per l'Istruzione sono aumentati a $118,2 milioni rispetto ai $113,8 milioni. Il Consiglio ha dichiarato un dividendo per il quarto trimestre di $0,28 per azione.

Nelnet (NYSE: NNI) reportó un ingreso neto GAAP de $2.4 millones ($0.07 por acción) en el tercer trimestre de 2024, una disminución con respecto a los $44.4 millones ($1.18 por acción) en el tercer trimestre de 2023. El trimestre incluyó cargos significativos: un gasto de provisión de $29.0 millones relacionado con la securitización de préstamos, $5.6 millones en bajas de descuentos de deuda, $11.2 millones en pérdidas de inversiones fiscales en energía solar, y $8.8 millones en pérdidas de proyectos de construcción solar. El segmento de servicios de préstamos de la empresa vio disminuir los ingresos a $108.2 millones desde $127.9 millones en comparación con el año anterior, mientras que los ingresos de Servicios Tecnológicos Educativos aumentaron a $118.2 millones desde $113.8 millones. La Junta declaró un dividendo para el cuarto trimestre de $0.28 por acción.

Nelnet (NYSE: NNI)는 2024년 3분기 GAAP 순이익이 240만 달러(주당 0.07달러)로, 2023년 3분기의 4440만 달러(주당 1.18달러)에서 감소했다고 보고했습니다. 이번 분기에는 다음과 같은 중대한 비용이 포함되었습니다: 대출 유동화와 관련된 2900만 달러의 충당금 비용, 부채 할인 상각으로 인한 560만 달러, 태양광 세금 투자 손실 1120만 달러, 태양광 건설 프로젝트 손실 880만 달러. 회사의 대출 서비스 부문은 수익이 연간 1279만 달러에서 1082만 달러로 감소한 반면, 교육 기술 서비스 수익은 1138만 달러에서 1182만 달러로 증가했습니다. 이사회는 4분기 주당 0.28달러의 배당금을 선언했습니다.

Nelnet (NYSE: NNI) a annoncé un revenu net GAAP de 2,4 millions de dollars (0,07 $ par action) pour le troisième trimestre 2024, en baisse par rapport à 44,4 millions de dollars (1,18 $ par action) pour le troisième trimestre 2023. Ce trimestre a inclus des charges significatives : une dépense de provision de 29,0 millions de dollars liée aux titrisations de prêts, 5,6 millions de dollars en amortissements de remises sur la dette, 11,2 millions de dollars en pertes sur investissements fiscaux solaires, et 8,8 millions de dollars en pertes sur des projets de construction solaire. Le segment de services de prêts de la société a vu ses revenus diminuer à 108,2 millions de dollars contre 127,9 millions de dollars d'une année sur l'autre, tandis que les revenus des Services Technologiques pour l'Éducation ont augmenté à 118,2 millions de dollars par rapport à 113,8 millions de dollars. Le Conseil d'administration a déclaré un dividende de 0,28 $ par action pour le quatrième trimestre.

Nelnet (NYSE: NNI) berichtete über einen GAAP-Nettoeinkommen von 2,4 Millionen US-Dollar (0,07 US-Dollar pro Aktie) für das dritte Quartal 2024, was einen Rückgang gegenüber 44,4 Millionen US-Dollar (1,18 US-Dollar pro Aktie) im dritten Quartal 2023 darstellt. Im Quartal gab es erhebliche Kosten: eine Rückstellung von 29,0 Millionen US-Dollar im Zusammenhang mit der Verbriefung von Darlehen, 5,6 Millionen US-Dollar an Schuldenabschreibungen, 11,2 Millionen US-Dollar an Verlusten aus Solarsteuerbeteiligungen und 8,8 Millionen US-Dollar an Verlusten aus Solarbauprojekten. Der Umsatz im Kreditservice-Segment des Unternehmens sank im Jahresvergleich von 127,9 Millionen US-Dollar auf 108,2 Millionen US-Dollar, während die Einnahmen aus Bildungstechnologiediensten von 113,8 Millionen US-Dollar auf 118,2 Millionen US-Dollar stiegen. Der Vorstand erklärte eine Dividende von 0,28 US-Dollar pro Aktie für das vierte Quartal.

Positive
  • Education Technology Services revenue increased to $118.2M from $113.8M YoY
  • Education Technology segment net income grew to $20.4M from $16.8M YoY
  • Total loan servicing portfolio remains substantial at $526.6B across 15.5M borrowers
Negative
  • GAAP net income declined 94.6% to $2.4M from $44.4M YoY
  • Loan Servicing segment reported $3.5M loss vs $18.6M profit YoY
  • Average loan balance decreased from $13.2B to $9.8B YoY
  • $29M provision expense for loan securitizations
  • Nelnet Bank reported $3.6M loss vs $1.7M profit YoY

Insights

The Q3 2024 results reveal significant challenges, with GAAP net income dropping to $2.4 million ($0.07 per share) from $44.4 million ($1.18 per share) year-over-year. Several non-cash items impacted the results, including a $29 million provision expense for loan securitizations and $11.2 million in solar tax equity investment losses. The core loan servicing business faces pressure from lower revenue under the new USDS contract, while the Education Technology segment shows resilience with revenue growth to $118.2 million. The AGM segment's loan portfolio continues its expected decline, down to $9.8 billion from $13.2 billion year-over-year. Despite maintaining the $0.28 quarterly dividend, the multiple headwinds and transitional challenges suggest near-term pressure on earnings.

Nelnet Bank's performance raises concerns with a $3.6 million net loss compared to $1.7 million profit last year. The $6.1 million provision for loan losses, primarily for new loan originations, suggests conservative risk management but impacts near-term profitability. The bank maintains a solid balance sheet with $559.9 million in loans and $680.3 million in investments, supported by $1.15 billion in total deposits. However, the increased provisioning and transition to a loss position indicates challenges in the current interest rate environment and potential credit quality concerns that warrant monitoring.

LINCOLN, Neb., Nov. 7, 2024 /PRNewswire/ -- Nelnet (NYSE: NNI) today reported GAAP net income of $2.4 million, or $0.07 per share, for the third quarter of 2024, compared with GAAP net income of $44.4 million, or $1.18 per share, for the same period a year ago.

Net income, excluding derivative market value adjustments1, was $12.4 million, or $0.34 per share, for the third quarter of 2024, compared with $42.0 million, or $1.12 per share, for the same period in 2023.

The third quarter 2024 operating results included the following items.

  • A non-cash provision expense of $29.0 million ($22.0 million after tax, or $0.60 per share) related to the company's ownership of beneficial interest in loan securitizations. A credit allowance was recorded on certain of these investments due to a change in estimate of future cash flows caused primarily by an increase in cumulative net loss rates for certain transactions and loan vintages. Over the life of these securitizations, the company still anticipates attractive returns on the overall pool of these investments.

  • A non-cash expense of $5.6 million ($4.3 million after tax, or $0.12 per share) as a result of writing off the remaining unamortized debt discount costs related to the early redemption of certain higher-cost debt securities.

  • Losses of $11.2 million ($5.5 million after tax and noncontrolling interest, or $0.15 per share) related to tax equity investments in solar. The accounting for these investments under the Hypothetical Liquidation at Book Value method of accounting accelerates losses in the initial years of these transactions, but has no impact on the expectations of overall attractive returns on these investments.

  • An expense of $8.8 million ($6.7 million after tax, or $0.18 per share) related to estimated losses on legacy solar construction projects. As previously disclosed, the company believes its solar engineering, procurement, and construction (EPC) business is making progress in repositioning the business for long-term profitable success.

Nelnet has four reportable operating segments, earning interest income on loans in its Asset Generation and Management (AGM) and Nelnet Bank segments, both part of the company's Nelnet Financial Services (NFS) division, and fee-based revenue in its Loan Servicing and Systems (referred to as Nelnet Diversified Services (NDS)) and Education Technology Services and Payments (referred to as Nelnet Business Services (NBS)) segments. Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate Activities.

"Despite the third quarter's noise, Nelnet remains a strong, diversified company," said Jeff Noordhoek, chief executive officer of Nelnet. "Nelnet's primary businesses include consumer lending, loan servicing, payments, and technology all with a large customer emphasis in education. All these areas are well positioned for long-term growth. As we enter the fourth quarter, NBS is having a great year, NFS is advancing our asset investment strategy as legacy guaranteed student loan assets runoff, and while NDS is transitioning to the USDS contract, we are optimistic about the future with our existing and new loan servicing opportunities."

Asset Generation and Management

The AGM operating segment reported loan and investment net interest income of $38.4 million during the third quarter of 2024, compared with $51.5 million for the same period a year ago. As discussed above, net interest income for the third quarter of 2024 included a $5.6 million expense recognized by the company as a result of redeeming bonds prior to their maturity. Although an increase in loan spread2 partially offset the decrease, the remaining decrease in net interest income in 2024 compared to 2023 resulted from the anticipated runoff of the Federal Family Education Loan Program (FFELP) loan portfolio. The average balance of loans outstanding decreased from $13.2 billion for the third quarter of 2023 to $9.8 billion for the same period in 2024.

Included in AGM's operating results for the third quarter of 2024 was a provision expense of $29.0 million  ($22.0 million after tax) related to certain of the company's residual ownership investments in loan securitizations, as discussed above, and a provision for loan losses of $12.0 million ($9.1 million after tax) related to the company's loan portfolio.

In addition, AGM recognized a loss of $9.5 million ($7.2 million after tax) related to changes in the fair value of derivative instruments that do not qualify for hedge accounting, compared with income of $1.2 million ($0.9 million after tax) for the same period in 2023.

AGM recognized a net loss after tax of $12.4 million for the three months ended September 30, 2024, compared with net income of $30.8 million for the same period in 2023.

__________________________________________

1

Net income, excluding derivative market value adjustments, is a non-GAAP measure. See "Non-GAAP Performance Measures" at the end of this press release and the "Non-GAAP Disclosures" section below for explanatory information and reconciliations of GAAP to non-GAAP financial information.



2

Loan spread represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets.

Nelnet Bank

As of September 30, 2024, Nelnet Bank had a $559.9 million and $680.3 million loan and investment portfolio, respectively, and total deposits, including intercompany deposits, of $1.15 billion. Nelnet Bank reported a net loss after tax for the three months ended September 30, 2024 of $3.6 million, compared with net income of $1.7 million for the same period in 2023. Nelnet Bank recognized provision for loan losses in the third quarter of 2024 of $6.1 million ($4.6 million after tax), due primarily from the establishment of an initial allowance for loans originated and acquired during the period.

Loan Servicing and Systems

Revenue from the Loan Servicing and Systems segment was $108.2 million for the third quarter of 2024, compared with $127.9 million for the same period in 2023. On April 1, 2024, the company began to earn revenue under its new Unified Servicing and Data Solution (USDS) contract which replaced its legacy student loan servicing contract with the Department of Education (Department). Revenue earned under the USDS contract on a per borrower blended basis is lower than the legacy contract.

As of September 30, 2024, the company was servicing $526.6 billion in government-owned, FFELP, private education, and consumer loans for 15.5 million borrowers, compared with $539.3 billion in servicing volume for 16.2 million borrowers as of September 30, 2023.

In June 2024, following the completion of significant technology initiatives due to the transition from the legacy servicing contract to the new USDS contract, the company incurred a restructuring charge of which $4.1 million ($3.1 million after tax, or $0.09 per share) was recognized in the third quarter of 2024.

The Loan Servicing and Systems segment reported a net loss after tax of $3.5 million for the three months ended September 30, 2024, compared with net income of $18.6 million for the same period in 2023. The company expects this segment's operating results will improve in future periods as the full impact of its cost-saving measures take effect and new third-party servicing opportunities convert to the company's platform.

Education Technology Services and Payments

For the third quarter of 2024, revenue from the Education Technology Services and Payments operating segment was $118.2 million, an increase from $113.8 million for the same period in 2023. Revenue less direct costs to provide services for the third quarter of 2024 was $72.9 million, compared with $70.1 million for the same period in 2023.

Net income after tax for the Education Technology Services and Payments segment was $20.4 million for the three months ended September 30, 2024, compared with $16.8 million for the same period in 2023.

Corporate Activities

Included in Corporate Activities are the operating results of the company's 45 percent voting membership interest in ALLO Holdings LLC, a holding company for ALLO Communications LLC (ALLO). During the third quarter of 2023, the company recognized a loss on its ALLO voting membership interest investment of $17.3 million ($13.1 million after tax). The company has no remaining carrying value related to this investment in ALLO. Accordingly, no losses were recognized on this investment in the third quarter of 2024, and absent additional voting membership equity contributions, the company will not recognize future losses on this investment.

For the third quarter of 2024, the company reported a loss of $10.1 million ($7.7 million after tax) in its solar EPC business, compared with a loss of $4.9 million ($3.0 million after tax and noncontrolling interest) for the same period in 2023. The 2024 loss includes the estimated losses on legacy construction projects as discussed above. The company has a handful of remaining legacy construction contracts to complete, down from over 30 at the beginning of 2024.

Board of Directors Declares Fourth Quarter Dividend

The Nelnet Board of Directors declared a fourth-quarter cash dividend on the company's outstanding shares of Class A common stock and Class B common stock of $0.28 per share. The dividend will be paid on December 16, 2024, to shareholders of record at the close of business on December 2, 2024.

Forward-Looking and Cautionary Statements

This press release contains forward-looking statements within the meaning of federal securities laws. The words "anticipate," "assume," "believe," "continue," "could," "ensure," "estimate," "expect," "forecast," "future," "intend," "may," "plan," "potential," "predict," "scheduled," "should," "will," "would," and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements. These statements are based on management's current expectations as of the date of this release and are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the company under existing and future servicing contracts with the Department of Education, risks related to unfavorable contract modifications or interpretations, and risks related to the company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, FFEL Program, private education, and consumer loans; loan portfolio risks such as prepayments, credit risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFEL Program, private education, consumer, and other loans, or investment interests therein, and initiatives to purchase additional FFEL Program, private education, consumer, and other loans; financing and liquidity risks, including risks of changes in the interest rate environment; risks from changes in the terms of education loans and in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets; risks related to a breach of or failure in the company's operational or information systems or infrastructure, or those of third-party vendors, including disclosure of confidential or personal information and/or damage to reputation resulting from cyber breaches; risks related to use of artificial intelligence; uncertainties inherent in forecasting future cash flows from student loan assets and related asset-backed securitizations; risks related to the ability of Nelnet Bank to achieve its business objectives and effectively deploy loan and deposit strategies and achieve expected market penetration; risks related to the expected benefits to the company from its continuing investment in ALLO and Hudl, and risks related to investments in solar projects, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and rising construction costs; risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, and other activities (including risks associated with errors that occasionally occur in converting loan servicing portfolios to a new servicing platform), including activities that are intended to diversify the company both within and outside of its historical core education-related businesses; risks from changes in economic conditions and consumer behavior; risks related to the company's ability to adapt to technological change; risks related to the exclusive forum provisions in the company's articles of incorporation; risks related to the company's executive chairman's ability to control matters related to the company through voting rights; risks related to related party transactions; risks and uncertainties associated with climate change; risks related to natural disasters, terrorist activities, or international hostilities; and risks and uncertainties associated with litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the company's businesses, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the company's consolidated financial statements.

For more information, see the "Risk Factors" sections and other cautionary discussions of risks and uncertainties included in documents filed or furnished by the company with the Securities and Exchange Commission. All forward-looking statements in this release are as of the date of this release. Although the company may voluntarily update or revise its forward-looking statements from time to time to reflect actual results or changes in the company's expectations, the company disclaims any commitment to do so except as required by law.

Non-GAAP Performance Measures

The company prepares its financial statements and presents its financial results in accordance with U.S. GAAP. However, it also provides additional non-GAAP financial information related to specific items management believes to be important in the evaluation of its operating results and performance. Reconciliations of GAAP to non-GAAP financial information, and a discussion of why the company believes providing this additional information is useful to investors, is provided in the "Non-GAAP Disclosures" section below.

 

Consolidated Statements of Income
(Dollars in thousands, except share data)
(unaudited)



Three months ended



Nine months ended



September 30,
2024


June 30,
2024


September 30,
2023

(1)


September 30,
2024



September 30,
2023

(1)

Interest income:













Loan interest

$             190,211


202,129


236,423



609,064



704,712


Investment interest

50,272


40,737


48,128



143,086



129,835


 Total interest income

240,483


242,866


284,551



752,150



834,547


Interest expense on bonds and notes payable 
 and bank deposits

168,328


176,459


207,159



539,367



639,756


 Net interest income

72,155


66,407


77,392



212,783



194,791


  Less provision for loan losses

18,111


3,611


4,275



32,551



5,065


 Net interest income after provision for loan
 losses

54,044


62,796


73,117



180,232



189,726


Other income (expense):













 Loan servicing and systems revenue

108,175


109,052


127,892



344,428



389,138


 Education technology services and payments
   revenue

118,179


116,909


113,796



378,627



357,258


 Solar construction revenue

19,321


9,694


6,301



42,741



19,687


 Other, net

32,325


28,871


(3,062)



78,057



(27,297)


 Loss on sale of loans

(107)


(1,438)


(1,022)



(1,685)



(16,776)


 Impairment expense and provision for
   beneficial interests

(29,052)


(7,776)


(4,974)



(36,865)



(4,974)


 Derivative market value adjustments and
   derivative settlements, net

(11,525)


3,182


3,957



1,378



(8,047)


  Total other income (expense), net

237,316


258,494


242,888



806,681



708,989


Cost of services:













 Cost to provide education technology
   services and payments

45,273


40,222


43,694



134,106



131,804


 Cost to provide solar construction services

26,815


8,072


7,783



49,115



25,204


  Total cost of services

72,088


48,294


51,477



183,221



157,008


Operating expenses:













 Salaries and benefits

146,192


139,634


141,204



429,701



438,620


 Depreciation and amortization

13,661


15,142


21,835



45,572



57,114


 Other expenses

61,642


59,792


51,370



178,278



138,154


  Total operating expenses

221,495


214,568


214,409



653,551



633,888


  (Loss) income before income taxes

(2,223)


58,428


50,119



150,141



107,819


Income tax benefit (expense)

282


(14,753)


(10,512)



(37,653)



(28,785)


Net (loss) income

(1,941)


43,675


39,607



112,488



79,034


  Net loss attributable to noncontrolling
  interests

4,329


1,416


4,747



8,398



18,705


Net income attributable to Nelnet, Inc.

$                2,388


45,091


44,354



120,886



97,739


Earnings per common share:













Net income attributable to Nelnet, Inc.
  shareholders - basic and diluted

$                  0.07


1.23


1.18



3.29



2.61


Weighted average common shares 
  outstanding - basic and diluted

36,430,485


36,525,482


37,498,073



36,703,314



37,437,587




(1)

During the second quarter of 2024, the company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the September 30, 2024 presentation. Refer to the company's quarterly report on Form 10-Q for the three months ended September 30, 2024 that was filed with the Securities and Exchange Commission on November 7, 2024 for additional information.

 

Condensed Consolidated Balance Sheets
(Dollars in thousands)
(unaudited)



As of


As of



As of



September 30, 2024


December 31, 2023

(1)


September 30, 2023

(1)

Assets:








Loans and accrued interest receivable, net

$                10,572,881


13,108,204



13,867,557


Cash, cash equivalents, and investments

2,123,245


2,014,819



2,108,585


Restricted cash and investments

729,089


875,348



604,855


Goodwill and intangible assets, net

196,400


202,848



228,812


Other assets

462,513


511,165



388,080


Total assets

$                14,084,128


16,712,384



17,197,889


Liabilities:








Bonds and notes payable

$                  8,938,446


11,828,393



12,448,109


Bank deposits

1,070,758


743,599



718,053


Other liabilities

864,786


940,285



794,589


Total liabilities

10,873,990


13,512,277



13,960,751


Equity:








Total Nelnet, Inc. shareholders' equity

3,290,652


3,253,751



3,285,470


Noncontrolling interests

(80,514)


(53,644)



(48,332)


Total equity

3,210,138


3,200,107



3,237,138


Total liabilities and equity

$                14,084,128


16,712,384



17,197,889




(1)

During the second quarter of 2024, the company identified certain immaterial errors in the previously issued consolidated financial statements that have been corrected to conform to the September 30, 2024 presentation. Refer to the company's quarterly report on Form 10-Q for the three months ended September 30, 2024 that was filed with the Securities and Exchange Commission on November 7, 2024 for additional information.

Non-GAAP Disclosures
(Dollars in thousands, except share data)
(unaudited)

Non-GAAP financial measures disclosed by management are meant to provide additional information and insight relative to business trends to investors and, in certain cases, to present financial information as measured by rating agencies and other users of financial information. These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. The company reports this non-GAAP information because the company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.

Net income, excluding derivative market value adjustments


Three months ended September 30,


2024


2023

GAAP net income attributable to Nelnet, Inc.

$                  2,388


44,354

 Realized and unrealized derivative market value adjustments (a)

13,165


(3,140)

 Tax effect (b)

(3,160)


754

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market
value adjustments

$                12,393


41,968

Earnings per share:




GAAP net income attributable to Nelnet, Inc.

$                    0.07


1.18

 Realized and unrealized derivative market value adjustments (a)

0.36


(0.08)

 Tax effect (b)

(0.09)


0.02

Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market
value adjustments

$                    0.34


1.12



(a)

"Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the current period to settle with derivative instrument counterparties the economic effect of the company's derivative instruments based on their contractual terms.




The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria is met. Management has structured all of the company's derivative transactions with the intent that each is economically effective; however, the company's derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value of derivative instruments is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the company plans to hold to maturity will equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.




The company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the company's management utilizes operating results excluding these items for comparability purposes when making decisions regarding the company's performance and in presentations with credit rating agencies, lenders, and investors.

(b)

The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.

 

Cision View original content:https://www.prnewswire.com/news-releases/nelnet-reports-third-quarter-2024-results-302299298.html

SOURCE Nelnet, Inc.

FAQ

What was Nelnet's (NNI) earnings per share in Q3 2024?

Nelnet reported GAAP earnings of $0.07 per share in Q3 2024, down from $1.18 per share in Q3 2023.

How much was Nelnet's (NNI) Q4 2024 dividend?

Nelnet declared a Q4 2024 dividend of $0.28 per share, payable on December 16, 2024, to shareholders of record as of December 2, 2024.

What was Nelnet's (NNI) loan servicing volume in Q3 2024?

Nelnet was servicing $526.6 billion in loans for 15.5 million borrowers as of September 30, 2024.

Nelnet, Inc.

NYSE:NNI

NNI Rankings

NNI Latest News

NNI Stock Data

4.51B
25.70M
38.34%
48.77%
0.88%
Credit Services
Personal Credit Institutions
Link
United States of America
LINCOLN