For Release: August 8, 2022

Investor Contact: Phil Morgan, 402.458.3038

Nelnet, Inc. supplemental financial information for the second quarter 2022

(All dollars are in thousands, except per share amounts, unless otherwise noted)

The following information should be read in connection with Nelnet, Inc.'s (the “Company's”) press release for second quarter 2022 earnings, dated August 8, 2022, and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 (the "Q2 2022 10-Q Quarterly Report").

Forward-looking and cautionary statements

This report contains forward-looking statements and information that are based on management's current expectations as of the date of this document. Statements that are not historical facts, including statements about the Company's plans and expectations for future financial condition, results of operations or economic performance, or that address management's plans and objectives for future operations, and statements that assume or are dependent upon future events, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “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.

The forward-looking statements are based on assumptions and analyses made by management in light of management's experience and its perception of historical trends, current conditions, expected future developments, and other factors that management believes are appropriate under the circumstances. These statements 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. These factors include, among others, the risks and uncertainties set forth in the “Risk Factors” section of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "2021 Annual Report"), the "Risk Factors" section of the Company's Q2 2022 10-Q Quarterly Report, and subsequent reports filed by the Company with the SEC and include such risks and uncertainties as:

•risks and uncertainties related to the severity, magnitude, and duration of the coronavirus disease 2019 (“COVID-19”) pandemic, including changes in the macroeconomic environment and consumer behavior, restrictions on various activities intended to combat the pandemic, and volatility in market conditions resulting from the pandemic, including interest rates, the value of equities, and other financial assets;

•risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and any future servicing contracts with the U.S. Department of Education (the "Department"), which current contracts accounted for 29 percent of the Company's revenue in 2021, risks to the Company related to the Department's initiatives to procure new contracts for federal student loan servicing, including the pending and uncertain nature of the Department's procurement process, risks that the Company may not be successful in obtaining any of such potential new contracts, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, Federal Family Education Loan Program (the "FFEL Program" or "FFELP"), private education, and consumer loans;

•loan portfolio risks such as interest rate basis and repricing risk resulting from the fact that the interest rate characteristics of the student loan assets do not match the interest rate characteristics of the funding for those assets, the risk of loss of floor income on certain student loans originated under the FFEL Program, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or investment interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans, and risks from changes in levels of loan prepayment or default rates;

•financing and liquidity risks, including risks of changes in the interest rate environment, such as risks from the recent increases in interest rates resulting from inflationary pressures and the transition from LIBOR to an alternative reference rate, and changes in the securitization and other financing markets for loans, including adverse changes resulting from recent market volatility resulting from rising interest rates and other economic pressures and from unanticipated repayment trends on student loans in the Company's securitization trusts that could accelerate or delay repayment of the associated bonds, which may increase the costs or limit the availability of financings necessary to purchase, refinance, or continue to hold student loans;

•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, such as changes resulting from the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") and the expected decline over time in FFELP

1

loan interest income due to the discontinuation of new FFELP loan originations in 2010 and government initiatives or proposals to consolidate existing FFELP loans to Federal Direct Loan Program loans, otherwise encourage or allow FFELP loans to be refinanced with Federal Direct Loan Program loans, and/or create additional loan forgiveness or broad debt cancellation programs;

•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 cybersecurity risks related to a disclosure of confidential loan borrower and other customer information, the potential disruption of the Company's systems or those of third-party vendors or customers, and/or the potential damage to the Company's reputation resulting from cyber-breaches;

•uncertainties inherent in forecasting future cash flows from student loan assets and related asset-backed securitizations;

•risks and uncertainties of the expected benefits from the November 2020 launch of Nelnet Bank operations, including the ability to successfully conduct banking operations and achieve expected market penetration;

•risks related to the expected benefits to the Company from its continuing investment in ALLO Holdings, LLC (referred to collectively with its subsidiary ALLO Communications LLC as "ALLO"), 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;

•risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom), acquisitions, and other activities, including activities that are intended to diversify the Company both within and outside of its historical core education-related businesses;

•risks and uncertainties associated with climate change, including extreme weather events and related natural disasters, which could result in increased loan portfolio credit risks and other asset and operational risks, as well as risks and uncertainties associated with efforts to address climate change; and

•risks and uncertainties associated with litigation matters and with maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, reputational and other risks, including the risk of increased regulatory costs resulting from the politicization of student loan servicing, 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.

All forward-looking statements contained in this supplement are qualified by these cautionary statements and are made only as of the date of this document. Although the Company may from time to time voluntarily update or revise its prior forward-looking statements to reflect actual results or changes in the Company's expectations, the Company disclaims any commitment to do so except as required by law.

2

Consolidated Statements of Income

(Dollars in thousands, except share data)

(unaudited)

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Interest income:
Loan interest			$	134,706					111,377						122,005						246,083						246,123
Investment interest			16,881						13,819						11,578						30,700						16,563
Total interest income			151,587						125,196						133,583						276,783						262,686
Interest expense on bonds and notes payable and bank deposits			73,642						48,079						49,991						121,721						77,764
Net interest income			77,945						77,117						83,592						155,062						184,922
Less provision (negative provision) for loan losses			9,409						(435)						374						8,974						(16,674)
Net interest income after provision for loan losses			68,536						77,552						83,218						146,088						201,596
Other income/expense:
Loan servicing and systems revenue			124,873						136,368						112,094						261,241						223,611
Education technology, services, and payment processing revenue			91,031						112,286						76,702						203,317						171,960
Other			12,647						9,877						22,921						22,524						18,317
Gain on sale of loans			—						2,989						15,271						2,989						15,271
Impairment expense and provision for beneficial interests, net			(6,284)						—						(500)						(6,284)						1,936
Derivative settlements, net			4,623						(2,809)						(5,374)						1,814						(9,678)
Derivative market value adjustments, net			40,401						145,734						(1,615)						186,135						37,194
Total other income/expense			267,291						404,445						219,499						671,736						458,611
Cost to provide education technology, services, and payment processing services			30,852						35,545						21,676						66,397						48,728
Operating expenses:
Salaries and benefits			141,398						149,414						118,968						290,813						234,759
Depreciation and amortization			18,250						16,956						20,236						35,206						40,419
Other expenses			36,940						39,499						32,587						76,439						69,286
Total operating expenses			196,588						205,869						171,791						402,458						344,464
Income before income taxes			108,387						240,583						109,250						348,969						267,015
Income tax expense			(25,483)						(55,697)						(26,237)						(81,180)						(61,098)
Net income			82,904						184,886						83,013						267,789						205,917
Net loss attributable to noncontrolling interests			2,225						1,761						854						3,987						1,548
Net income attributable to Nelnet, Inc.			$	85,129					186,647						83,867						271,776						207,465
Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted			$	2.26					4.91						2.16						7.18						5.36
Weighted average common shares outstanding - basic and diluted			37,710,214						38,041,834						38,741,486						37,875,108						38,672,902

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Condensed Consolidated Balance Sheets

(Dollars in thousands)

(unaudited)

			As of						As of						As of
			June 30, 2022						December 31, 2021						June 30, 2021
Assets:
Loans and accrued interest receivable, net			$	16,916,344					18,335,197						20,187,670
Cash, cash equivalents, and investments			2,116,949						1,714,482						1,480,946
Restricted cash			1,045,543						1,068,626						864,384
Goodwill and intangible assets, net			219,203						194,121						200,556
Other assets			325,974						365,615						295,307
Total assets			$	20,624,013					21,678,041						23,028,863
Liabilities:
Bonds and notes payable			$	16,115,269					17,631,089						19,381,835
Bank deposits			588,474						344,315						202,841
Other liabilities			829,125						749,799						615,569
Total liabilities			17,532,868						18,725,203						20,200,245
Equity:
Total Nelnet, Inc. shareholders' equity			3,097,382						2,951,206						2,833,800
Noncontrolling interests			(6,237)						1,632						(5,182)
Total equity			3,091,145						2,952,838						2,828,618
Total liabilities and equity			$	20,624,013					21,678,041						23,028,863

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Overview

The Company is a diverse, innovative company with a purpose to serve others and a vision to make dreams possible. The largest operating businesses engage in loan servicing and education technology, services, and payment processing, and the Company also has a significant investment in communications. A significant portion of the Company's revenue is net interest income earned on a portfolio of federally insured student loans. The Company also makes investments to further diversify both within and outside of its historical core education-related businesses including, but not limited to, investments in early-stage and emerging growth companies, real estate, and renewable energy (solar). The Company is also actively expanding its private education, consumer, and other loan portfolios, and in November 2020 launched Nelnet Bank.

GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments

The Company prepares its financial statements and presents its financial results in accordance with 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. A reconciliation of the Company's GAAP net income to net income, excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, is provided below.

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
GAAP net income attributable to Nelnet, Inc.			$	85,129					186,647						83,867						271,776						207,465
Realized and unrealized derivative market value adjustments			(40,401)						(145,734)						1,615						(186,135)						(37,194)
Tax effect (a)			9,696						34,976						(388)						44,672						8,927
Net income attributable to Nelnet, Inc., excluding derivative market value adjustments (b)			$	54,424					75,889						85,094						130,313						179,198
Earnings per share:
GAAP net income attributable to Nelnet, Inc.			$	2.26					4.91						2.16						7.18						5.36
Realized and unrealized derivative market value adjustments			(1.07)						(3.83)						0.04						(4.91)						(0.96)
Tax effect (a)			0.25						0.91						—						1.17						0.23
Net income attributable to Nelnet, Inc., excluding derivative market value adjustments (b)			$	1.44					1.99						2.20						3.44						4.63

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

(b) "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. 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. Consequently, 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.

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Operating Segments

The Company's reportable operating segments are described in note 1 of the notes to consolidated financial statements included in the 2021 Annual Report. They include:

•Loan Servicing and Systems ("LSS") - referred to as Nelnet Diversified Services ("NDS")

•Education Technology, Services, and Payment Processing ("ETS&PP") - referred to as Nelnet Business Services ("NBS")

•Asset Generation and Management ("AGM")

•Nelnet Bank

The Company earns fee-based revenue through its NDS and NBS operating segments. The Company earns net interest income on its loan portfolio, consisting primarily of FFELP loans, in its AGM operating segment. This segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes. The Company actively works to maximize the amount and timing of cash flows generated by its FFELP portfolio and seeks to acquire additional loan assets to leverage its servicing scale and expertise to generate incremental earnings and cash flow.

On November 2, 2020, the Company obtained final approval for federal deposit insurance from the Federal Deposit Insurance Corporation ("FDIC") and for a bank charter from the Utah Department of Financial Institutions ("UDFI") in connection with the establishment of Nelnet Bank, and Nelnet Bank launched operations. Nelnet Bank operates as an internet industrial bank franchise focused on the private education loan marketplace, with a home office in Salt Lake City, Utah.

Other business activities and operating segments that are not reportable are combined and included in Corporate and Other Activities ("Corporate"). Corporate and Other Activities also includes income earned on certain investments and interest expense incurred on unsecured and other corporate related debt transactions.

The information below provides the operating results (income (loss) before income taxes) for each reportable operating segment and Corporate and Other Activities for the three and six months ended June 30, 2022 and 2021.

			Three months ended June 30,
			2022						2021						Certain Items Impacting Comparability (All dollar amounts below are pre-tax)
NDS			$	13,488					15,513
NBS			14,687						17,232
AGM			99,348						78,916						•A net gain of $40.4 million related to changes in the fair values of derivative instruments that do not qualify for hedge accounting in the second quarter of 2022 as compared to a net loss of $1.6 million for the same period in 2021 •An increase of $8.2 million in net interest income due to an increase in FFELP core loan spread in 2022 as compared to 2021 •A decrease of $10.1 million in net interest income due to the decrease in the average balance of FFELP loans in the second quarter of 2022 as compared to 2021 •The recognition of an $8.8 million provision for loan losses in the second quarter of 2022, as compared to $0.3 million for the same period in 2021 •The recognition of a gain of $15.3 million on the sale of loans during the second quarter of 2021
Nelnet Bank			474						(268)
Corporate			(19,609)						(2,142)						•The recognition of a net loss of $16.9 million for the second quarter of 2022 related to the Company’s investment in ALLO, as compared to net income of $1.1 million for the same period in 2021. During the second quarter of 2021, the Company recorded an adjustment to reflect the cumulative net impact on prior periods (since the deconsolidation of ALLO on December 21, 2020) for the correction of an error that resulted in a $14.0 million increase to the Company’s ALLO investment balance and a corresponding pre-tax increase to income •The recognition of an impairment charge of $6.3 million in the second quarter of 2022 related primarily to a venture capital investment and certain real estate leases (as the Company continues to downsize its facility footprint as a result of associates working from home) •The recognition of a $15.2 million gain in the second quarter of 2022 as a result of the revaluation of the Company's previously held 50 percent ownership interests in NGWeb Solutions, LLC ("NextGen") (previously accounted for under the equity method) as a result of the Company purchasing an additional 30 percent ownership interests •Investment income of $3.1 million in the second quarter of 2022 as compared to $14.3 million for the same period in 2021. During the second quarter of 2021, the Company recognized realized and unrealized gains from certain real estate and venture capital investments, including realized gains of $6.0 million from the sale of certain real estate investments.
Income before income taxes			108,387						109,250
Income tax expense			(25,483)						(26,237)
Net loss attributable to noncontrolling interests			2,225						854
Net income			$	85,129					83,867

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			Six months ended June 30,
			2022						2021						Certain Items Impacting Comparability (All dollar amounts below are pre-tax)
NDS			$	25,580					31,596
NBS			47,800						48,206
AGM			312,777						220,524						•A net gain of $186.1 million related to changes in the fair values of derivative instruments that do not qualify for hedge accounting in the first half of 2022 as compared to a net gain of $37.2 million for the same period in 2021 •A decrease of $23.8 million in interest expense during the first quarter of 2021 as a result of the Company reversing a historical accrued interest liability on certain bonds, which liability the Company determined is no longer probable of being required to be paid •The recognition of provision for loan losses of $8.0 million in the first half of 2022 as compared to negative provision of $17.2 million for the same period in 2021 •The recognition of a gain of $15.3 million on the sale of loans during the second quarter of 2021 •An increase of $8.4 million in net interest income due to an increase in FFELP core loan spread in 2022 as compared to 2021 •A decrease of $18.4 million in net interest income due to the decrease in the average balance of FFELP loans in the first half of 2022 as compared to 2021 •An increase of $6.3 million in investment interest income in 2022 as compared to 2021 primarily related to AGM's investments in private education loan beneficial interests obtained throughout 2021 as securitizations were being completed by the joint venture to purchase and securitize loans sold by Wells Fargo, and an increase of $4.1 million in revenue recognized during the first half of 2022 from serving as administrator and sponsor for such securitizations
Nelnet Bank			1,434						(1,519)
Corporate			(38,623)						(31,792)						•The recognition of a net loss of $30.1 million for the first half of 2022 related to the Company’s investment in ALLO, as compared to a net loss of $21.1 million for the same period in 2021 •The recognition of a $15.2 million gain in the second quarter of 2022 as a result of the revaluation of the Company's previously held 50 percent ownership interests in NextGen (previously accounted for under the equity method) as a result of the Company purchasing an additional 30 percent ownership interests •Investment income of $11.9 million for the first half of 2022 as compared to $22.8 million for the same period in 2021. During the first half of 2021, the Company recognized realized and unrealized gains from certain real estate and venture capital investments, including realized gains of $11.1 million from the sale of certain real estate investments. •The recognition of an impairment charge of $6.3 million in the second quarter of 2022 related primarily to a venture capital investment and certain real estate leases (as the Company continues to downsize its facility footprint as a result of associates working from home)
Income before income taxes			348,969						267,015
Income tax expense			(81,180)						(61,098)
Net loss attributable to noncontrolling interests			3,987						1,548
Net income			$	271,776					207,465

Recent Developments

On April 19, 2022, the Department issued a press release, and the Department’s Office of Federal Student Aid (“FSA”) posted a related public announcement, which together announced, among other things, several adjustments, updates, and other changes under income-driven repayment (“IDR”) plans for federal student loans. In the announcements, the Department and FSA indicated that as part of these changes, any borrower with loans that have accumulated time in repayment, including time in certain forbearances and deferments, of at least 20 or 25 years will see automatic forgiveness, even if the borrower is not currently in an IDR plan, and that if a borrower has a commercially held FFEL Program loan, the borrower can only benefit from these changes if they consolidate their FFEL Program loan to a Federal Direct Loan Program loan before the Department completes implementation of these changes, which the Department estimates to be no sooner than January 1, 2023. In addition, on July 6, 2022, the Department announced the issuance of proposed regulations that would expand major student loan discharge programs under the Higher Education Act through changes related to borrower defense to repayment where there is a dispute with the higher education institution, the Public Service Loan Forgiveness program under the Federal Direct Loan Program, the interest capitalization rules, and closed school discharges, as well as other matters, which changes may also result in an increase in consolidations of FFELP loans into Federal Direct Loan Program loans. The announced changes have increased, and the Company currently believes these announced changes may continue to increase, FFEL Program loan prepayments. In addition, if the federal government and the Department initiate additional loan forgiveness or cancellation, other repayment options or plans, consolidation loan programs, or further extend the suspension of borrower payments under the CARES Act, such initiatives could also increase prepayments.

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A significant increase in FFEL Program loan prepayments could have a materially adverse impact in future periods on the Company’s net interest income in its AGM operating segment, FFELP servicing revenue in the Company’s LSS operating segment, investment advisory services revenue earned by the Company’s SEC-registered investment advisor subsidiary (Whitetail Rock Capital Management, LLC) on FFELP loan asset-backed securities under management, and interest income earned on the Company’s FFELP loan asset-backed securities investments. In addition, student loan forgiveness or discharge under the Federal Direct Loan Program as a result of the changes described in the announcements and proposals could have a materially adverse impact on future revenue earned by the LSS operating segment under the Company’s government servicing contracts, including software services revenue earned by the Company in providing remote hosted services to other government servicers.

See “Risk Factors” in the Company's Q2 2022 10-Q Quarterly Report for additional information.

8

Segment Reporting

The following tables include the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements.

			Three months ended June 30, 2022
			Loan Servicing and Systems						Education Technology, Services, and Payment Processing												Asset Generation and Management						Nelnet Bank						Corporate and Other Activities						Eliminations						Total
Total interest income			$	246					874												140,396						5,212						6,235						(1,376)						151,587
Interest expense			20						—												69,708						1,639						3,652						(1,376)						73,642
Net interest income			226						874												70,688						3,573						2,583						—						77,945
Less provision (negative provision) for loan losses			—						—												8,827						582						—						—						9,409
Net interest income after provision for loan losses			226						874												61,861						2,991						2,583						—						68,536
Other income/expense:
Loan servicing and systems revenue			124,873						—												—						—						—						—						124,873
Intersegment revenue			8,381						7												—						—						—						(8,388)						—
Education technology, services, and payment processing revenue			—						91,031												—						—						—						—						91,031
Other			611						—												5,133						157						6,747						—						12,647
Gain on sale of loans			—						—												—						—						—						—						—
Impairment expense and provision for beneficial interests, net			—						—												—						—						(6,284)						—						(6,284)
Derivative settlements, net			—						—												4,623						—						—						—						4,623
Derivative market value adjustments, net			—						—												40,401						—						—						—						40,401
Total other income/expense			133,865						91,038												50,157						157						463						(8,388)						267,291
Cost of services			—						30,852												—						—						—						—						30,852
Operating expenses:
Salaries and benefits			83,220						32,120												614						1,714						23,729						—						141,398
Depreciation and amortization			5,318						2,698												—						4						10,230						—						18,250
Other expenses			13,507						6,750												3,543						899						12,241						—						36,940
Intersegment expenses, net			18,558						4,805												8,513						57						(23,545)						(8,388)						—
Total operating expenses			120,603						46,373												12,670						2,674						22,655						(8,388)						196,588
Income (loss) before income taxes			13,488						14,687												99,348						474						(19,609)						—						108,387
Income tax (expense) benefit			(3,237)						(3,525)												(23,844)						(106)						5,228						—						(25,483)
Net income (loss)			10,251						11,162												75,504						368						(14,381)						—						82,904
Net loss attributable to noncontrolling interests			—						53												—						—						2,172						—						2,225
Net income (loss) attributable to Nelnet, Inc.			$	10,251					11,215												75,504						368						(12,209)						—						85,129

9

			Three months ended March 31, 2022
			Loan Servicing and Systems						Education Technology, Services, and Payment Processing												Asset Generation and Management						Nelnet Bank						Corporate and Other Activities						Eliminations						Total
Total interest income			$	67					339												118,598						3,030						3,992						(828)						125,196
Interest expense			24						—												46,003						856						2,026						(828)						48,079
Net interest income			43						339												72,595						2,174						1,966						—						77,117
Less provision (negative provision) for loan losses			—						—												(864)						429						—						—						(435)
Net interest income after provision for loan losses			43						339												73,459						1,745						1,966						—						77,552
Other income/expense:
Loan servicing and systems revenue			136,368						—												—						—						—						—						136,368
Intersegment revenue			8,480						3												—						—						—						(8,483)						—
Education technology, services, and payment processing revenue			—						112,286												—						—						—						—						112,286
Other			740						—												6,511						1,500						1,125						—						9,877
Gain on sale of loans			—						—												2,989						—						—						—						2,989
Impairment expense and provision for beneficial interests, net			—						—												—						—						—						—						—
Derivative settlements, net			—						—												(2,809)						—						—						—						(2,809)
Derivative market value adjustments, net			—						—												145,734						—						—						—						145,734
Total other income/expense			145,588						112,289												152,425						1,500						1,125						(8,483)						404,445
Cost of services			—						35,545												—						—						—						—						35,545
Operating expenses:
Salaries and benefits			91,972						31,286												591						1,554						24,012						—						149,414
Depreciation and amortization			4,954						2,315												—						3						9,684						—						16,956
Other expenses			16,213						5,764												3,033						682						13,804						—						39,499
Intersegment expenses, net			20,398						4,605												8,831						45						(25,396)						(8,483)						—
Total operating expenses			133,537						43,970												12,455						2,284						22,104						(8,483)						205,869
Income (loss) before income taxes			12,094						33,113												213,429						961						(19,013)						—						240,583
Income tax (expense) benefit			(2,903)						(7,947)												(51,223)						(223)						6,598						—						(55,697)
Net income (loss)			9,191						25,166												162,206						738						(12,415)						—						184,886
Net loss attributable to noncontrolling interests			—						—												—						—						1,761						—						1,761
Net income (loss) attributable to Nelnet, Inc.			$	9,191					25,166												162,206						738						(10,654)						—						186,647

10

			Three months ended June 30, 2021
			Loan Servicing and Systems						Education Technology, Services, and Payment Processing												Asset Generation and Management						Nelnet Bank						Corporate and Other Activities						Eliminations						Total
Total interest income			$	30					210												129,965						2,041						1,524						(187)						133,583
Interest expense			23						—												48,670						392						1,093						(187)						49,991
Net interest income			7						210												81,295						1,649						431						—						83,592
Less provision (negative provision) for loan losses			—						—												305						69						—						—						374
Net interest income after provision for loan losses			7						210												80,990						1,580						431						—						83,218
Other income/expense:
Loan servicing and systems revenue			112,094						—												—						—						—						—						112,094
Intersegment revenue			8,480						3												—						—						—						(8,483)						—
Education technology, services, and payment processing revenue			—						76,702												—						—						—						—						76,702
Other			701						—												2,316						4						19,900						—						22,921
Gain on sale of loans			—						—												15,271						—						—						—						15,271
Impairment expense and provision for beneficial interests, net			—						—												—						—						(500)						—						(500)
Derivative settlements, net			—						—												(5,374)						—						—						—						(5,374)
Derivative market value adjustments, net			—						—												(1,615)						—						—						—						(1,615)
Total other income/expense			121,275						76,705												10,598						4						19,400						(8,483)						219,499
Cost of services			—						21,676												—						—						—						—						21,676
Operating expenses:
Salaries and benefits			68,388						27,094												556						1,578						21,351						—						118,968
Depreciation and amortization			7,974						2,956												—						—						9,305						—						20,236
Other expenses			13,273						4,437												3,567						237						11,074						—						32,587
Intersegment expenses, net			16,134						3,520												8,549						37						(19,757)						(8,483)						—
Total operating expenses			105,769						38,007												12,672						1,852						21,973						(8,483)						171,791
Income (loss) before income taxes			15,513						17,232												78,916						(268)						(2,142)						—						109,250
Income tax (expense) benefit			(3,723)						(4,136)												(18,940)						64						497						—						(26,237)
Net income (loss)			11,790						13,096												59,976						(204)						(1,645)						—						83,013
Net loss attributable to noncontrolling interests			—						—												—						—						854						—						854
Net income (loss) attributable to Nelnet, Inc.			$	11,790					13,096												59,976						(204)						(791)						—						83,867

11

			Six months ended June 30, 2022
			Loan Servicing and Systems						Education Technology, Services, and Payment Processing												Asset Generation and Management						Nelnet Bank						Corporate and Other Activities						Eliminations						Total
Total interest income			$	313					1,213												258,994						8,241						10,227						(2,205)						276,783
Interest expense			44						—												115,711						2,494						5,678						(2,205)						121,721
Net interest income			269						1,213												143,283						5,747						4,549						—						155,062
Less provision (negative provision) for loan losses			—						—												7,963						1,011						—						—						8,974
Net interest income after provision for loan losses			269						1,213												135,320						4,736						4,549						—						146,088
Other income/expense:
Loan servicing and systems revenue			261,241						—												—						—						—						—						261,241
Intersegment revenue			16,860						10												—						—						—						(16,870)						—
Education technology, services, and payment processing revenue			—						203,317												—						—						—						—						203,317
Other			1,350						—												11,644						1,659						7,872						—						22,524
Gain on sale of loans			—						—												2,989						—						—						—						2,989
Impairment expense and provision for beneficial interests, net			—						—												—						—						(6,284)						—						(6,284)
Derivative settlements, net			—						—												1,814						—						—						—						1,814
Derivative market value adjustments, net			—						—												186,135						—						—						—						186,135
Total other income/expense			279,451						203,327												202,582						1,659						1,588						(16,870)						671,736
Cost of services			—						66,397												—						—						—						—						66,397
Operating expenses:
Salaries and benefits			175,192						63,406												1,205						3,268						47,742						—						290,813
Depreciation and amortization			10,272						5,013												—						7						19,914						—						35,206
Other expenses			29,721						12,514												6,576						1,584						26,045						—						76,439
Intersegment expenses, net			38,955						9,410												17,344						102						(48,941)						(16,870)						—
Total operating expenses			254,140						90,343												25,125						4,961						44,760						(16,870)						402,458
Income (loss) before income taxes			25,580						47,800												312,777						1,434						(38,623)						—						348,969
Income tax (expense) benefit			(6,139)						(11,472)												(75,066)						(328)						11,826						—						(81,180)
Net income (loss)			19,441						36,328												237,711						1,106						(26,797)						—						267,789
Net loss attributable to noncontrolling interests			—						53												—						—						3,934						—						3,987
Net income (loss) attributable to Nelnet, Inc.			$	19,441					36,381												237,711						1,106						(22,863)						—						271,776

12

			Six months ended June 30, 2021
			Loan Servicing and Systems						Education Technology, Services, and Payment Processing												Asset Generation and Management						Nelnet Bank						Corporate and Other Activities						Eliminations						Total
Total interest income			$	63					473												256,367						3,418						2,770						(405)						262,686
Interest expense			47						—												75,620						586						1,916						(405)						77,764
Net interest income			16						473												180,747						2,832						854						—						184,922
Less provision (negative provision) for loan losses			—						—												(17,165)						491						—						—						(16,674)
Net interest income after provision for loan losses			16						473												197,912						2,341						854						—						201,596
Other income/expense:
Loan servicing and systems revenue			223,611						—												—						—						—						—						223,611
Intersegment revenue			16,748						6												—						—						—						(16,754)						—
Education technology, services, and payment processing revenue			—						171,960												—						—						—						—						171,960
Other			1,814						—												2,760						26						13,716						—						18,317
Gain on sale of loans			—						—												15,271						—						—						—						15,271
Impairment expense and provision for beneficial interests, net			—						—												2,436						—						(500)						—						1,936
Derivative settlements, net			—						—												(9,678)						—						—						—						(9,678)
Derivative market value adjustments, net			—						—												37,194						—						—						—						37,194
Total other income/expense			242,173						171,966												47,983						26						13,216						(16,754)						458,611
Cost of services			—						48,728												—						—						—						—						48,728
Operating expenses:
Salaries and benefits			134,846						53,035												1,051						3,065						42,761						—						234,759
Depreciation and amortization			16,166						6,027												—						—						18,225						—						40,419
Other expenses			26,557						9,259												7,344						781						25,346						—						69,286
Intersegment expenses, net			33,024						7,184												16,976						40						(40,470)						(16,754)						—
Total operating expenses			210,593						75,505												25,371						3,886						45,862						(16,754)						344,464
Income (loss) before income taxes			31,596						48,206												220,524						(1,519)						(31,792)						—						267,015
Income tax (expense) benefit			(7,583)						(11,570)												(52,926)						351						10,630						—						(61,098)
Net income (loss)			24,013						36,636												167,598						(1,168)						(21,162)						—						205,917
Net loss attributable to noncontrolling interests			—						—												—						—						1,548						—						1,548
Net income (loss) attributable to Nelnet, Inc.			$	24,013					36,636												167,598						(1,168)						(19,614)						—						207,465

13

Loan Servicing and Systems Revenue

The following table provides disaggregated revenue by service offering for the Loan Servicing and Systems operating segment.

			Three month ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Government servicing			$	98,815					109,125						79,239						207,940						157,413
Private education and consumer loan servicing			12,122						12,873						12,816						24,995						21,364
FFELP servicing			4,011						4,248						4,703						8,259						9,373
Software services			7,907						7,400						7,374						15,308						15,827
Outsourced services and other			2,018						2,722						7,962						4,739						19,634
Loan servicing and systems revenue			$	124,873					136,368						112,094						261,241						223,611

Loan Servicing Volumes

			As of
			December 31, 2020						March 31, 2021						June 30, 2021						September 30, 2021						December 31, 2021						March 31, 2022						June 30, 2022
Servicing volume (dollars in millions):
Government			$	443,248					453,681						452,450						461,054						478,402						507,653						542,398
FFELP			30,763						30,084						29,361						28,244						26,916						25,646						24,224
Private and consumer			16,226						21,397						24,758						24,229						23,702						23,433						22,838
Total			$	490,237					505,162						506,569						513,527						529,020						556,732						589,460
Number of servicing borrowers:
Government			13,251,930						13,301,364						13,253,051						13,570,056						14,196,520						14,727,860						15,426,607
FFELP			1,300,677						1,233,461						1,198,863						1,150,214						1,092,066						1,034,913						977,785
Private and consumer			636,136						882,477						1,039,537						1,097,252						1,065,439						1,030,863						998,454
Total			15,188,743						15,417,302						15,491,451						15,817,522						16,354,025						16,793,636						17,402,846
Number of remote hosted borrowers:			6,555,841						4,307,342						4,338,570						4,548,541						4,799,368						5,487,943						5,738,381

Education Technology, Services, and Payment Processing

The following table provides disaggregated revenue by servicing offering for the Education Technology, Services, and Payment Processing operating segment.

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Tuition payment plan services			$	27,637					30,716						26,538						58,352						56,088
Payment processing			27,968						38,071						25,008						66,039						58,046
Education technology and services			34,956						43,251						24,930						78,207						57,457
Other			470						248						226						719						369
Education technology, services, and payment processing revenue			$	91,031					112,286						76,702						203,317						171,960

14

Other Income/Expense

The following table summarizes the components of "other" in "other income/expense" on the consolidated statements of income:

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Income/gains from investments, net			$	18,127					11,856						15,591						29,983						24,089
Borrower late fee income			2,436						2,431						744						4,867						1,184
ALLO preferred return			2,140						2,117						2,020						4,257						4,342
Administration/sponsor fee income			2,012						2,123						—						4,134						—
Investment advisory services			1,482						1,282						1,145						2,764						3,842
Loss from ALLO voting membership interest investment			(16,941)						(13,130)						1,094						(30,071)						(21,125)
Loss from solar investments			(1,854)						(1,030)						(2,302)						(2,884)						(3,982)
Other			5,245						4,228						4,629						9,474						9,967
Other income			$	12,647					9,877						22,921						22,524						18,317

Derivative Settlements

The following table summarizes the components of "derivative settlements, net" included in the attached consolidated statements of income.

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
1:3 basis swaps			$	931					396						(221)						1,327						(240)
Interest rate swaps - floor income hedges			3,692						(3,205)						(5,153)						487						(9,438)
Total derivative settlements - income (expense)			$	4,623					(2,809)						(5,374)						1,814						(9,678)

15

Loans and Accrued Interest Receivable and Allowance for Loan Losses

Loans and accrued interest receivable and allowance for loan losses consisted of the following:

			As of						As of						As of
			June 30, 2022						December 31, 2021						June 30, 2021
Non-Nelnet Bank:
Federally insured student loans:
Stafford and other			$	3,548,901					3,904,000						4,420,716
Consolidation			11,880,710						13,187,047						14,518,148
Total			15,429,611						17,091,047						18,938,864
Private education loans			272,943						299,442						350,094
Consumer and other loans			152,583						51,301						42,767
Non-Nelnet Bank loans			15,855,137						17,441,790						19,331,725
Nelnet Bank:
Federally insured student loans			77,428						88,011						97,167
Private education loans			346,125						169,890						93,404
Nelnet Bank loans			423,553						257,901						190,571
Accrued interest receivable			780,691						788,552						834,989
Loan discount, net of unamortized loan premiums and deferred origination costs			(22,613)						(25,933)						(23,896)
Allowance for loan losses:
Non-Nelnet Bank:
Federally insured loans			(92,593)						(103,381)						(120,802)
Private education loans			(15,253)						(16,143)						(19,403)
Consumer and other loans			(10,576)						(6,481)						(4,702)
Non-Nelnet Bank allowance for loan losses			(118,422)						(126,005)						(144,907)
Nelnet Bank:
Federally insured loans			(258)						(268)						(245)
Private education loans			(1,744)						(840)						(567)
Nelnet Bank allowance for loan losses			(2,002)						(1,108)						(812)
			$	16,916,344					18,335,197						20,187,670

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						As of
			June 30, 2022						December 31, 2021						June 30, 2021
Non-Nelnet Bank:
Federally insured student loans (a)			0.60		%				0.60		%				0.64		%
Private education loans			5.59		%				5.39		%				5.54		%
Consumer and other loans (b)			6.93		%				12.63		%				10.99		%
Nelnet Bank:
Federally insured student loans (a)			0.33		%				0.30		%				0.25		%
Private education loans			0.50		%				0.49		%				0.61		%

(a)    As of June 30, 2022, December 31, 2021, and June 30, 2021, 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 21.8%, 22.2%, and 23.8%, respectively, and for Nelnet Bank was 13.2%, 12.1%, and 10.0%, respectively.

(b)    During the second quarter of 2022, the Company purchased home equity loans that generally have lower default rates than unsecured consumer loans. As such, the allowance for loan losses as a percentage of the ending loan balance has decreased as of June 30, 2022 as compared to December 31, 2021.

16

Loan Activity

The following table sets forth the activity of the Company's loan portfolios:

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Non-Nelnet Bank:
Beginning balance			$	16,618,627					17,441,790						19,030,223						17,441,790						19,559,108
Loan acquisitions:
Federally insured student loans			43,747						10,202						697,738						53,949						762,469
Private education loans			6,484						1,026						63,413						7,510						86,451
Consumer and other loans			118,012						18,522						20,924						136,534						40,380
Total loan acquisitions			168,243						29,750						782,075						197,993						889,300
Repayments, claims, capitalized interest, participations, and other, net			(478,461)						(447,140)						(190,130)						(925,601)						(596,695)
Loans lost to external parties			(453,158)						(387,648)						(213,026)						(840,806)						(442,571)
Loans sold			(114)						(18,125)						(77,417)						(18,239)						(77,417)
Ending balance			$	15,855,137					16,618,627						19,331,725						15,855,137						19,331,725
Nelnet Bank:
Beginning balance			$	368,257					257,901						79,231						257,901						17,543
Federally insured student loan acquisitions			—						—						99,973						—						99,973
Private education loan originations			75,204						130,342						21,246						205,546						86,155
Repayments			(17,373)						(18,394)						(9,004)						(35,767)						(10,998)
Sales to AGM segment			(2,535)						(1,592)						(875)						(4,127)						(2,102)
Ending balance			$	423,553					368,257						190,571						423,553						190,571

The Company has also purchased partial ownership in certain private education, consumer, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "investments and notes receivable" in the Company's consolidated financial statements. As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2022, the Company’s ownership correlates to approximately $650 million, $160 million, and $430 million of private education, consumer, and federally insured student loans, respectively, included in these securitizations. The loans held in these securitizations are not included in the above table.

17

Loan Spread Analysis

The following table analyzes the loan spread on AGM’s portfolio of loans, which represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets.

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Variable loan yield, gross			3.59		%				2.75		%				2.63		%				3.16		%				2.67		%
Consolidation rebate fees			(0.85)						(0.85)						(0.84)						(0.85)						(0.85)
Discount accretion, net of premium and deferred origination costs amortization			0.03						0.03						0.01						0.03						0.01
Variable loan yield, net			2.77						1.93						1.80						2.34						1.83
Loan cost of funds - interest expense (a)			(1.73)						(1.09)						(1.04)						(1.41)						(1.06)
Loan cost of funds - derivative settlements (b) (c)			0.02						0.01						(0.01)						0.02						(0.00		)
Variable loan spread			1.06						0.85						0.75						0.95						0.77
Fixed rate floor income, gross			0.46						0.68						0.78						0.57						0.76
Fixed rate floor income - derivative settlements (b) (d)			0.09						(0.08)						(0.12)						0.01						(0.10)
Fixed rate floor income, net of settlements on derivatives			0.55						0.60						0.66						0.58						0.66
Core loan spread			1.61		%				1.45		%				1.41		%				1.53		%				1.43		%
Average balance of AGM's loans			$	16,437,861					17,208,909						18,958,042						16,823,385						19,226,022
Average balance of AGM's debt outstanding			15,923,648						16,773,698						18,656,465						16,335,310						18,905,249

(a)    During the first quarter of 2021, the Company reversed a historical accrued interest liability of $23.8 million on certain bonds, which liability the Company determined is no longer probable of being required to be paid. The liability was initially recorded when certain asset-backed securitizations were acquired in 2011 and 2013. The reduction of this liability is reflected in (a reduction of) "interest expense on bonds and notes payable and bank deposits" in the consolidated statements of income and the impact of this reduction to interest expense was excluded from the table above.

(b) Derivative settlements 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. Derivative accounting requires that net settlements with respect to derivatives that do not qualify for "hedge treatment" under GAAP be recorded in a separate income statement line item below net interest income. The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. As such, management believes derivative settlements for each applicable period should be evaluated with the Company’s net interest income (loan spread) as presented in this table. 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. See "Derivative Settlements" included in this supplement for the net settlement activity recognized by the Company for each type of derivative for the periods presented in the table.

A reconciliation of core loan spread, which includes the impact of derivative settlements on loan spread, to loan spread without

derivative settlements follows.

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Core loan spread			1.61		%				1.45		%				1.41		%				1.53		%				1.43		%
Derivative settlements (1:3 basis swaps)			(0.02)						(0.01)						0.01						(0.02)						0.00
Derivative settlements (fixed rate floor income)			(0.09)						0.08						0.12						(0.01)						0.10
Loan spread			1.50		%				1.52		%				1.54		%				1.50		%				1.53		%

(c)    Derivative settlements consist of net settlements received (paid) related to the Company’s 1:3 basis swaps.

(d)    Derivative settlements consist of net settlements received (paid) related to the Company’s floor income interest rate swaps.

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A trend analysis of AGM's core and variable loan spreads is summarized below.

(a)    The interest earned on a large portion of AGM's FFELP student loan assets is indexed to the one-month LIBOR rate. AGM funds a portion of its assets with three-month LIBOR indexed floating rate securities. The relationship between the indices in which AGM earns interest on its loans and funds such loans has a significant impact on loan spread. This table (the right axis) shows the difference between AGM's liability base rate and the one-month LIBOR rate by quarter.

The difference between variable loan spread and core loan spread is fixed rate floor income earned on a portion of AGM's federally insured student loan portfolio. A summary of fixed rate floor income and its contribution to core loan spread follows:

			Three months ended																		Six months ended
			June 30, 2022						March 31, 2022						June 30, 2021						June 30, 2022						June 30, 2021
Fixed rate floor income, gross			$	18,292					28,993						36,639						47,285						72,178
Derivative settlements (a)			3,692						(3,205)						(5,153)						487						(9,438)
Fixed rate floor income, net			$	21,984					25,788						31,486						47,772						62,740
Fixed rate floor income contribution to spread, net			0.55		%				0.60		%				0.66		%				0.58		%				0.66		%

(a)    Derivative settlements consist of net settlements received (paid) related to the Company's derivatives used to hedge student loans earning fixed rate floor income.

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Fixed Rate Floor Income

The following table shows AGM’s federally insured student loan assets that were earning fixed rate floor income as of June 30, 2022.

Fixed interest rate range						Borrower/lender weighted average yield						Estimated variable conversion rate (a)						Loan balance
3.5 - 3.99%						3.81%						1.17%						$	390,523
4.0 - 4.49%						4.20%						1.56%						812,050
4.5 - 4.99%						4.71%						2.07%						516,568
5.0 - 5.49%						5.22%						2.58%						355,095
5.5 - 5.99%						5.67%						3.03%						224,241
6.0 - 6.49%						6.19%						3.55%						263,638
6.5 - 6.99%						6.70%						4.06%						258,430
7.0 - 7.49%						7.17%						4.53%						96,676
7.5 - 7.99%						7.71%						5.07%						182,195
8.0 - 8.99%						8.18%						5.54%						424,181
> 9.0%						9.05%						6.41%						164,979
																		$	3,688,576

(a)    The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to a variable rate. As of June 30, 2022, the weighted average estimated variable conversion rate was 3.02% and the short-term interest rate was 100 basis points.

The following table summarizes the outstanding derivative instruments as of June 30, 2022 used by AGM to economically hedge loans earning fixed rate floor income.

			Maturity						Notional amount						Weighted average fixed rate paid by the Company (a)
						2023												$	250,000					0.32		%
			2024						2,250,000						0.35
			2026						500,000						1.02
			2031						100,000						1.53
									$	3,100,000					0.49		%

(a)    For all interest rate derivatives, the Company receives discrete three-month LIBOR.

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