Nelnet(US:NNI)2024-11-07 21:17Financial Performance - Total interest income for Q3 2024 was $240,483,000, a decrease of 15.5% compared to $284,551,000 in Q3 2023[4] - Net interest income after provision for loan losses was $54,044,000, down 26.1% from $73,117,000 in the same quarter last year[4] - Net loss attributable to Nelnet, Inc. was $2,388,000, compared to a net income of $44,354,000 in Q3 2023[4] - The company reported a net income per share of $0.07 for Q3 2024, significantly lower than $1.18 in Q3 2023[4] - GAAP net income attributable to Nelnet, Inc. for Q3 2024 was $2.388 million, compared to $44.354 million in Q3 2023, reflecting a significant decrease[8] - Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments, was $12.393 million for Q3 2024, up from $41.968 million in Q3 2023[8] - The Company reported a net income of $2.4 million for the three months ended September 30, 2024, compared to a net income of $44.4 million for the same period in 2023[15] - The company reported a net loss attributable to noncontrolling interests of $8.40 million for the nine months ended September 30, 2024, compared to a net loss of $18.70 million in 2023, showing an improvement[20][22] Revenue and Expenses - Loan servicing and systems revenue reached $108,175,000, a decline of 15.4% from $127,892,000 in Q3 2023[4] - The company incurred total operating expenses of $221.5 million for the three months ended September 30, 2024[16] - The company incurred a total operating expense of $653.55 million for the nine months ended September 30, 2024, compared to $633.89 million in 2023, reflecting an increase of about 3.1%[20][22] - Total operating expenses for the three months ended June 30, 2024, were $214.568 million, slightly higher than $214.409 million in the previous quarter[18][19] Loan Loss Provisions - The provision for loan losses increased to $18,111,000, compared to $4,275,000 in Q3 2023, indicating a rise in credit risk[4] - The Company recognized a provision for loan losses of $6.1 million in Q3 2024, compared to $1.9 million in Q3 2023, indicating a rise in expected credit losses[12] - The provision for loan losses was $32.55 million for the nine months ended September 30, 2024, compared to $5.07 million in 2023, indicating a significant increase[20][22] Assets and Liabilities - Total assets decreased to $14,084,128,000 from $17,197,889,000 in Q3 2023, reflecting a decline of 18.2%[6] - Total liabilities reduced to $10,873,990,000, down 22.2% from $13,960,751,000 in the same period last year[6] - Cash, cash equivalents, and investments increased to $2,123,245,000 from $2,108,585,000 in Q3 2023, showing a slight growth of 0.7%[6] Segment Performance - The Loan Servicing and Systems (LSS) segment reported a net loss of $4.549 million in 2024, down from a profit of $24.469 million in 2023, due to decreased revenue and increased expenses[9] - The Education Technology Services and Payments (ETSP) segment generated $26.813 million in net income for Q3 2024, an increase from $22.123 million in Q3 2023, attributed to higher revenue[12] - The Asset Generation and Management (AGM) segment reported a net loss of $16.346 million in Q3 2024, compared to a profit of $40.562 million in Q3 2023, impacted by provisions for loan losses and derivative market value adjustments[12] - Nelnet Bank experienced a net loss of $4.758 million in Q3 2024, compared to a profit of $14.038 million in Q3 2023, primarily due to increased provisions for loan losses[12] Strategic Initiatives - The company anticipates continued challenges in maintaining and increasing allocated volumes of student loans serviced under existing contracts[2] - The Company launched Nelnet Bank in November 2020, expanding its private education and consumer loan portfolios[7] - The Company is actively pursuing new third-party servicing opportunities to improve future segment performance[12] - The Company plans to focus exclusively on the commercial solar market and discontinue residential solar operations as of April 2024[14] Solar and Investment Activities - The Company recorded an expense of $8.8 million related to estimated losses on legacy solar construction projects during Q3 2024[14] - The company’s investment activity net income for the three months ended September 30, 2024, was $8,529 million, compared to a loss of $(1,003) million for the same period in 2023[31] - The Company recognized no loss from ALLO voting membership interest investment for the three months ended September 30, 2024, compared to a loss of $17.3 million for the same period in 2023[14] - Income from preferred membership interests in ALLO was $4.8 million for the three months ended September 30, 2024, up from $2.3 million in the same period in 2023[14] Loan Metrics - The company’s private education loans showed a delinquency rate of 5.01% as of September 30, 2024, down from 5.78% a year earlier[38] - Nelnet Bank's total loans reached $559.87 million as of September 30, 2024, an increase from $468.81 million a year prior[39] - The allowance for loan losses as a percentage of risk-sharing component for federally insured loans not covered by federal guaranty was 20.7% as of September 30, 2024[38] - Total loan servicing volume reached $526,553 million as of September 30, 2024, reflecting a slight increase from $523,750 million as of June 30, 2024[26]