Nelnet's GAAP Profit Falls as Consumer Loans Expand

The Tip Desk · November 7, 2026 · 4 min read

GAAP net income was $76.2 million, or $2.13 a share, as AGM bought $3.23 billion of consumer loans and booked a $34.5 million loss provision.

Nelnet (NNI), the education-finance and loan-servicing company, reported GAAP net income of $76.2 million, or $2.13 a share, for the third quarter of 2026, down from $106.7 million, or $2.94 a share, a year earlier.

Net income excluding derivative market value adjustments was $67.9 million, or $1.89 a share, compared with $107.3 million, or $2.95 a share, in the year-ago quarter. Sequentially, GAAP earnings rose from $66.7 million, or $1.85 a share, in the second quarter.

Chief executive Jeff Noordhoek said the company delivered strong operating performance, increased its dividend, and continued to repurchase shares. In October the company announced FACTS Compass, a scholarship-support product tied to the Federal Scholarship Tax Credit, and the acquisition of Entab, a school management technology provider in India.

Asset Generation and Management, the Nelnet Financial Services segment that earns interest on loans, was the operating pivot. AGM acquired $3.23 billion of consumer loans in the three months ended September 30, 2026, including $3.06 billion of short-duration Pay Later receivables the company began buying in August 2025, versus $1.52 billion of consumer loans acquired a year earlier. The consumer loan portfolio stood at $1.30 billion at quarter-end, up from $840.7 million a year earlier.

AGM loan and investment net interest income was $65.2 million, versus $44.7 million a year earlier. The company said the increase was primarily driven by higher loan spreads and growth in the consumer loan portfolio, partially offset by continued runoff of the legacy FFELP book. The average FFELP balance declined to $6.46 billion from $8.25 billion a year earlier. AGM’s total loan portfolio was $7.63 billion as of September 30, 2026.

The credit charge flipped with the buying. AGM recorded a provision for loan losses of $34.5 million ($26.2 million after tax), versus a negative provision of $7.4 million ($5.6 million after tax) a year earlier. The company said the provision in each period was significantly impacted by the initial allowance established on loans acquired during the period under CECL; in the third quarter of 2025 it also reduced its allowance by $28.9 million ($22.0 million after tax) related to consumer loan sales. AGM net income after tax was $33.9 million, versus $27.8 million a year earlier.

Nelnet Bank’s loan and investment net interest income increased to $20.4 million from $15.4 million a year ago, which the company attributed to growth in the loan and investment portfolios, partially offset by a decrease in net interest margin. The bank’s loan portfolio was $1.70 billion and its investment portfolio $1.64 billion, with total deposits of $2.81 billion. Nelnet Bank net income after tax was $12.0 million, versus $4.6 million a year earlier.

Loan Servicing and Systems revenue was $139.8 million, down from $151.1 million a year earlier. The company recognized $5.3 million of Department contract-modification revenue in the third quarter of 2026 versus $32.9 million in 2025; excluding that item, segment revenue increased year over year, primarily due to the NDS Canada acquisition, which contributed $16.5 million. The company was servicing $523.6 billion in loans for 15.4 million borrowers. Segment net income after tax was $12.5 million, versus $35.2 million a year earlier.

Education Technology Services and Payments revenue was $132.9 million, versus $129.3 million a year earlier. Revenue less direct costs was $83.4 million, versus $79.0 million. Segment net income after tax was $19.4 million, versus $19.0 million.

Consolidated net interest income was $101.4 million. The provision for loan losses was $39.4 million. Reinsurance premiums earned were $44.5 million.

During the first nine months of 2026 the company repurchased 731,932 Class A shares for $93.7 million, including 415,332 shares for $53.1 million in the third quarter. Subsequent to September 30 it bought another 295,990 shares for $37.0 million. The board declared a fourth-quarter cash dividend of $0.36 a share, payable December 15, 2026.