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As of | As of | |||||
June 30, 2014 | December 31, 2013 | |||||
Federally insured loans | ||||||
Stafford and other | $ | 6,479,493 | 6,686,626 | |||
Consolidation | 23,032,622 | 19,363,577 | ||||
Total | 29,512,115 | 26,050,203 | ||||
Non-federally insured loans | 67,670 | 71,103 | ||||
29,579,785 | 26,121,306 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (184,888 | ) | (158,595 | ) | ||
Allowance for loan losses – federally insured loans | (40,921 | ) | (43,440 | ) | ||
Allowance for loan losses – non-federally insured loans | (11,546 | ) | (11,682 | ) | ||
$ | 29,342,430 | 25,907,589 |
(a) | For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income. Remaining discounts and premiums for purchased loans are recognized in interest income over the remaining estimated lives of the loans. The Company continues to evaluate credit losses associated with purchased loans based on current information and changes in expectations to determine the need for any additional allowance for loan losses. At June 30, 2014 and December 31, 2013, "loan discount, net of unamortized loan premiums and deferred origination costs" included $29.9 million and $20.2 million, respectively, of non-accretable discount associated with purchased loans. |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Balance at beginning of period | $ | 54,628 | 49,409 | 55,122 | 51,902 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 2,000 | 5,000 | 5,000 | 11,000 | ||||||||
Non-federally insured loans | (500 | ) | — | (1,000 | ) | (1,000 | ) | |||||
Total provision for loan losses | 1,500 | 5,000 | 4,000 | 10,000 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (4,138 | ) | (3,340 | ) | (7,769 | ) | (9,330 | ) | ||||
Non-federally insured loans | (598 | ) | (592 | ) | (1,019 | ) | (1,364 | ) | ||||
Total charge-offs | (4,736 | ) | (3,932 | ) | (8,788 | ) | (10,694 | ) | ||||
Recoveries - non-federally insured loans | 339 | 442 | 710 | 810 | ||||||||
Purchase (sale) of federally insured loans, net | 150 | 275 | 250 | (1,943 | ) | |||||||
Transfer from repurchase obligation related to non-federally insured loans repurchased, net | 586 | 417 | 1,173 | 1,536 | ||||||||
Balance at end of period | $ | 52,467 | 51,611 | 52,467 | 51,611 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 40,921 | 39,848 | 40,921 | 39,848 | |||||||
Non-federally insured loans | 11,546 | 11,763 | 11,546 | 11,763 | ||||||||
Total allowance for loan losses | $ | 52,467 | 51,611 | 52,467 | 51,611 |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Beginning balance | $ | 15,413 | 15,011 | 16,143 | 16,130 | |||||||
Loans repurchased | (586 | ) | (417 | ) | (1,316 | ) | (1,536 | ) | ||||
Ending balance | $ | 14,827 | 14,594 | 14,827 | 14,594 |
As of June 30, 2014 | As of December 31, 2013 | As of June 30, 2013 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 3,095,741 | $ | 2,872,505 | $ | 2,983,795 | ||||||||||||||
Loans in forbearance | 3,593,891 | 3,370,025 | 3,320,101 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 19,164,660 | 84.0 | % | 16,337,922 | 82.5 | % | 15,355,379 | 83.6 | % | |||||||||||
Loans delinquent 31-60 days | 1,026,046 | 4.5 | 967,318 | 4.9 | 776,577 | 4.2 | ||||||||||||||
Loans delinquent 61-90 days | 674,918 | 3.0 | 550,333 | 2.8 | 531,339 | 2.9 | ||||||||||||||
Loans delinquent 91-120 days | 376,068 | 1.5 | 390,791 | 2.0 | 291,732 | 1.6 | ||||||||||||||
Loans delinquent 121-270 days | 1,133,527 | 5.0 | 1,117,936 | 5.6 | 1,016,571 | 5.5 | ||||||||||||||
Loans delinquent 271 days or greater | 447,264 | 2.0 | 443,373 | 2.2 | 413,240 | 2.2 | ||||||||||||||
Total loans in repayment | 22,822,483 | 100.0 | % | 19,807,673 | 100.0 | % | 18,384,838 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 29,512,115 | $ | 26,050,203 | $ | 24,688,734 |
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As of June 30, 2014 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 26,983,517 | 0.24% - 6.90% | 5/25/18 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 1,562,325 | 0.06% - 2.09% | 5/1/28 - 11/26/46 | ||||
Total variable-rate bonds and notes | 28,545,842 | ||||||
FFELP warehouse facilities | 1,139,750 | 0.15% - 0.25% | 1/17/16 - 6/11/17 | ||||
Unsecured line of credit | 65,000 | 1.65% | 6/30/19 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 96,457 | 3.61% | 9/15/61 | ||||
Other borrowings | 63,068 | 1.66% - 5.10% | 10/31/14 - 11/11/15 | ||||
29,910,117 | |||||||
Discount on bonds and notes payable | (417,557 | ) | |||||
Total | $ | 29,492,560 |
As of December 31, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 23,479,893 | 0.25% - 6.90% | 5/25/18 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 1,134,250 | 0.07% - 2.17% | 5/1/28 - 11/26/46 | ||||
Total variable-rate bonds and notes | 24,614,143 | ||||||
FFELP warehouse facilities | 1,396,344 | 0.17% - 0.25% | 1/17/16 - 6/12/16 | ||||
Unsecured line of credit | 45,000 | 1.67% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 96,457 | 3.62% | 9/15/61 | ||||
Other borrowings | 61,401 | 1.67% - 5.10% | 4/11/14 - 11/11/15 | ||||
26,213,345 | |||||||
Discount on bonds and notes payable | (258,056 | ) | |||||
Total | $ | 25,955,289 |
NHELP-III | NHELP-II | NFSLW-I (a) | Total | ||||||||||
Maximum financing amount | $ | 750,000 | 500,000 | 500,000 | 1,750,000 | ||||||||
Amount outstanding | 659,668 | 92,803 | 387,279 | 1,139,750 | |||||||||
Amount available | $ | 90,332 | 407,197 | 112,721 | 610,250 | ||||||||
Expiration of liquidity provisions | February 5, 2015 | September 30, 2014 | June 11, 2015 | ||||||||||
Final maturity date | January 17, 2016 | September 30, 2016 | June 11, 2017 | ||||||||||
Maximum advance rates | 92.2 - 95.0% | 84.5 - 94.5% | 92.0 - 98.0% | ||||||||||
Minimum advance rates | 92.2 - 95.0% | 84.5 - 94.5% | 84.0 - 90.0% | ||||||||||
Advanced as equity support | $ | 39,496 | 8,264 | 18,870 | 66,630 |
2014-1 | 2014-2 | 2014-3 | 2014-4 | 2014-5 | Total | ||||||||||||||||||||||||||||||
Class A-1 notes | Class A-2 notes | Class A-3 notes | 2014-2 total | Class A-1 notes | Class A-2 notes | 2014-4 total | |||||||||||||||||||||||||||||
Date securities issued | 2/6/14 | 3/12/14 | 3/12/14 | 3/12/14 | 3/12/14 | 4/30/14 | 5/23/14 | 5/23/14 | 5/23/14 | 6/18/14 | |||||||||||||||||||||||||
Total original principal amount | $ | 458,500 | 509,000 | 719,800 | 384,500 | 603,000 | $ | 2,674,800 | |||||||||||||||||||||||||||
Class A senior notes: | |||||||||||||||||||||||||||||||||||
Total original principal amount | $ | 445,000 | 191,000 | 222,000 | 84,000 | 497,000 | 700,700 | 267,500 | 107,500 | 375,000 | 587,000 | 2,604,700 | |||||||||||||||||||||||
Bond discount | — | — | — | (535 | ) | (535 | ) | — | — | — | — | — | (535 | ) | |||||||||||||||||||||
Issue price | $ | 445,000 | 191,000 | 222,000 | 83,465 | 496,465 | 700,700 | 267,500 | 107,500 | 375,000 | 587,000 | 2,604,165 | |||||||||||||||||||||||
Cost of funds (1-month LIBOR plus:) | 0.57 | % | 0.28 | % | 0.60 | % | 0.85 | % | 0.58 | % | 0.54 | % | 0.95 | % | 0.55 | % | |||||||||||||||||||
Final maturity date | 9/25/41 | 6/25/21 | 3/25/30 | 7/27/37 | 6/25/41 | 11/27/34 | 11/25/43 | 7/25/41 | |||||||||||||||||||||||||||
Class B subordinated notes: | |||||||||||||||||||||||||||||||||||
Total original principal amount | $ | 13,500 | 12,000 | 19,100 | 9,500 | 16,000 | 70,100 | ||||||||||||||||||||||||||||
Bond discount | (1,132 | ) | (1,046 | ) | (1,467 | ) | (1,138 | ) | (1,232 | ) | (6,015 | ) | |||||||||||||||||||||||
Issue price | $ | 12,368 | 10,954 | 17,633 | 8,362 | 14,768 | 64,085 | ||||||||||||||||||||||||||||
Cost of funds (1-month LIBOR plus:) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | |||||||||||||||||||||||||
Final maturity date | 10/25/47 | 6/25/41 | 10/25/50 | 9/25/51 | 5/25/49 |
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Maturity | Notional amount | ||||||
2021 | $ | 250,000 | |||||
2022 | 1,900,000 | ||||||
2023 | 3,650,000 | ||||||
2024 | 250,000 | ||||||
2026 | 800,000 | ||||||
2028 | 100,000 | ||||||
2036 | 700,000 | ||||||
2039 | (a) | 150,000 | |||||
2040 | (b) | 200,000 | |||||
$ | 8,000,000 | (c) |
(c) | The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2014 and December 31, 2013 was one-month LIBOR plus 3.5 basis points. |
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2014 | $ | 1,250,000 | 0.67 | % | $ | 1,750,000 | 0.71 | % | ||||||
2015 | 1,100,000 | 0.89 | 1,100,000 | 0.89 | ||||||||||
2016 | 750,000 | 0.85 | 750,000 | 0.85 | ||||||||||
2017 | 1,250,000 | 0.86 | 1,250,000 | 0.86 | ||||||||||
$ | 4,350,000 | 0.81 | % | $ | 4,850,000 | 0.81 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2036 | $ | 25,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 (b) | 2014 | 2013 (b) | |||||||||
Re-measurement of Euro Notes | $ | 2,751 | (14,691 | ) | 1,798 | 14,072 | ||||||
Change in fair value of cross-currency interest rate swaps | (2,999 | ) | 14,748 | (3,037 | ) | (20,096 | ) | |||||
Total impact to consolidated statements of income - income (expense) (a) | $ | (248 | ) | 57 | (1,239 | ) | (6,024 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
(b) | The 2013 operating results include the re-measurement of an additional €420.5 million of student loan asset-backed Euro notes and the change in fair value of a related cross-currency interest rate swap entered into in connection with the issuance of such notes. In November 2013, the principal amount outstanding on the notes was changed to U.S. dollars and the cross-currency interest swap was terminated. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||
1:3 basis swaps | $ | 31,510 | 18,490 | — | — | |||||||
Interest rate swaps - floor income hedges | 2,726 | 7,183 | 10,849 | 15,849 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 4,697 | 2,120 | ||||||||
Cross-currency interest rate swap | 33,797 | 36,834 | — | — | ||||||||
Total | $ | 68,033 | 62,507 | 15,546 | 17,969 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative assets | Gross amounts of recognized assets presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral received | Net asset (liability) | |||||||||
Balance as of June 30, 2014 | $ | 68,033 | (15,546 | ) | (323 | ) | 52,164 | ||||||
Balance as of December 31, 2013 | 62,507 | (15,437 | ) | (15,959 | ) | 31,111 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative liabilities | Gross amounts of recognized liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged | Net asset (liability) | |||||||||
Balance as of June 30, 2014 | $ | (15,546 | ) | 15,546 | — | — | |||||||
Balance as of December 31, 2013 | (17,969 | ) | 15,437 | 3,630 | 1,098 |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 858 | 782 | 1,739 | 1,692 | |||||||
Interest rate swaps - floor income hedges | (6,974 | ) | (8,534 | ) | (13,924 | ) | (16,839 | ) | ||||
Interest rate swaps - hybrid debt hedges | (256 | ) | (512 | ) | (508 | ) | (1,157 | ) | ||||
Cross-currency interest rate swaps | 158 | (93 | ) | 250 | (237 | ) | ||||||
Total settlements - expense | (6,214 | ) | (8,357 | ) | (12,443 | ) | (16,541 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | 11,910 | 9,630 | 13,020 | 11,563 | ||||||||
Interest rate swaps - floor income hedges | (2,813 | ) | 33,408 | 545 | 42,830 | |||||||
Interest rate swaps - hybrid debt hedges | (1,065 | ) | 5,450 | (2,578 | ) | 9,090 | ||||||
Cross-currency interest rate swaps | (2,999 | ) | 14,748 | (3,037 | ) | (20,096 | ) | |||||
Other | — | — | — | 342 | ||||||||
Total change in fair value - income (expense) | 5,033 | 63,236 | 7,950 | 43,729 | ||||||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | 2,751 | (14,691 | ) | 1,798 | 14,072 | |||||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 1,570 | 40,188 | (2,695 | ) | 41,260 |
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As of June 30, 2014 | As of December 31, 2013 | ||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses (a) | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||
Investments: | |||||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | $ | 124,556 | 7,090 | (212 | ) | 131,434 | 171,931 | 7,111 | (1,241 | ) | 177,801 | ||||||||||||||
Equity securities | 1,527 | 1,969 | (7 | ) | 3,489 | 1,502 | 1,783 | (3 | ) | 3,282 | |||||||||||||||
Total available-for-sale investments | $ | 126,083 | 9,059 | (219 | ) | 134,923 | 173,433 | 8,894 | (1,244 | ) | 181,083 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities | 6,566 | 10,957 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 141,489 | 192,040 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 6,921 | 7,285 |
(a) | As of June 30, 2014, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. |
(b) | As of June 30, 2014, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
(c) | Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
Affected line item in the consolidated statements of income - income (expense): | 2014 | 2013 | 2014 | 2013 | |||||||||
Other income | $ | 1,238 | 559 | 8,311 | 1,516 | ||||||||
Income tax expense | (458 | ) | (207 | ) | (3,075 | ) | (561 | ) | |||||
Net | $ | 780 | 352 | 5,236 | 955 |
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Cash and cash equivalents | $ | 326 | ||
Accounts receivable | 961 | |||
Property and equipment | 105 | |||
Other assets | 22 | |||
Intangible assets | 37,188 | |||
Excess cost over fair value of net assets acquired (goodwill) | 9,082 | |||
Other liabilities | (1,341 | ) | ||
Net assets acquired | $ | 46,343 |
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Weighted average remaining useful life as of June 30, 2014 (months) | As of June 30, 2014 | As of December 31, 2013 | ||||||
Amortizable intangible assets: | ||||||||
Customer relationships (net of accumulated amortization of $21,595 and $19,821, respectively) | 223 | $ | 29,884 | 6,132 | ||||
Computer software (net of accumulated amortization of $634 and $0, respectively) | 47 | 8,231 | — | |||||
Trade names (net of accumulated amortization of $39 and $0, respectively) | 239 | 6,383 | — | |||||
Covenants not to compete (net of accumulated amortization of $3 and $0, respectively) | 119 | 351 | — | |||||
Total - amortizable intangible assets | 192 | $ | 44,849 | 6,132 |
2014 (Q3 - Q4) | $ | 2,843 | |
2015 | 6,402 | ||
2016 | 5,982 | ||
2017 | 4,406 | ||
2018 | 4,000 | ||
2019 and thereafter | 21,216 | ||
$ | 44,849 |
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Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Asset Generation and Management | Total | |||||||||||
Balance as of December 31, 2013 | $ | 8,596 | 58,086 | 8,553 | 41,883 | 117,118 | |||||||||
Goodwill acquired during the period | — | 9,082 | — | — | 9,082 | ||||||||||
Balance as of June 30, 2014 | $ | 8,596 | 67,168 | 8,553 | 41,883 | 126,200 |
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Three months ended June 30, 2014 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 9 | 3 | — | 12 | 175,562 | 2,036 | (662 | ) | 176,948 | ||||||||||||||
Interest expense | — | — | — | — | 67,936 | 1,961 | (662 | ) | 69,235 | |||||||||||||||
Net interest income | 9 | 3 | — | 12 | 107,626 | 75 | — | 107,713 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 1,500 | — | — | 1,500 | ||||||||||||||||
Net interest income after provision for loan losses | 9 | 3 | — | 12 | 106,126 | 75 | — | 106,213 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 66,460 | — | — | 66,460 | — | — | — | 66,460 | ||||||||||||||||
Intersegment servicing revenue | 13,800 | — | — | 13,800 | — | — | (13,800 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 21,834 | — | 21,834 | — | — | — | 21,834 | ||||||||||||||||
Enrollment services revenue | — | — | 20,145 | 20,145 | — | — | — | 20,145 | ||||||||||||||||
Other income | — | — | — | — | 4,496 | 10,819 | — | 15,315 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 18 | — | — | 18 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 8,848 | (1,064 | ) | — | 7,784 | |||||||||||||||
Derivative settlements, net | — | — | — | — | (5,958 | ) | (256 | ) | — | (6,214 | ) | |||||||||||||
Total other income | 80,260 | 21,834 | 20,145 | 122,239 | 7,404 | 9,499 | (13,800 | ) | 125,342 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 33,093 | 11,112 | 4,132 | 48,337 | 570 | 4,981 | — | 53,888 | ||||||||||||||||
Cost to provide enrollment services | — | — | 13,311 | 13,311 | — | — | — | 13,311 | ||||||||||||||||
Depreciation and amortization | 2,819 | 1,845 | 41 | 4,705 | — | 509 | — | 5,214 | ||||||||||||||||
Other | 19,815 | 2,956 | 1,844 | 24,615 | 8,845 | 6,917 | — | 40,377 | ||||||||||||||||
Intersegment expenses, net | 1,124 | 1,404 | 944 | 3,472 | 13,968 | (3,640 | ) | (13,800 | ) | — | ||||||||||||||
Total operating expenses | 56,851 | 17,317 | 20,272 | 94,440 | 23,383 | 8,767 | (13,800 | ) | 112,790 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 23,418 | 4,520 | (127 | ) | 27,811 | 90,147 | 807 | — | 118,765 | |||||||||||||||
Corporate overhead allocation | (2,060 | ) | (687 | ) | (687 | ) | (3,434 | ) | (1,249 | ) | 4,683 | — | — | |||||||||||
Income before income taxes | 21,358 | 3,833 | (814 | ) | 24,377 | 88,898 | 5,490 | — | 118,765 | |||||||||||||||
Income tax (expense) benefit | (8,116 | ) | (1,456 | ) | 309 | (9,263 | ) | (33,781 | ) | (34 | ) | — | (43,078 | ) | ||||||||||
Net income | 13,242 | 2,377 | (505 | ) | 15,114 | 55,117 | 5,456 | — | 75,687 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 693 | — | 693 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 13,242 | 2,377 | (505 | ) | 15,114 | 55,117 | 4,763 | — | 74,994 | ||||||||||||||
Three months ended June 30, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 9 | — | — | 9 | 158,175 | 2,196 | (834 | ) | 159,546 | ||||||||||||||
Interest expense | — | — | — | — | 56,920 | 2,041 | (834 | ) | 58,127 | |||||||||||||||
Net interest income | 9 | — | — | 9 | 101,255 | 155 | — | 101,419 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income after provision for loan losses | 9 | — | — | 9 | 96,255 | 155 | — | 96,419 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 60,078 | — | — | 60,078 | — | — | — | 60,078 | ||||||||||||||||
Intersegment servicing revenue | 13,903 | — | — | 13,903 | — | — | (13,903 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 18,356 | — | 18,356 | — | — | — | 18,356 | ||||||||||||||||
Enrollment services revenue | — | — | 24,823 | 24,823 | — | — | — | 24,823 | ||||||||||||||||
Other income | — | — | — | — | 3,030 | 9,258 | — | 12,288 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 7,355 | — | — | 7,355 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 43,096 | 5,449 | — | 48,545 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (7,845 | ) | (512 | ) | — | (8,357 | ) | |||||||||||||
Total other income | 73,981 | 18,356 | 24,823 | 117,160 | 45,636 | 14,195 | (13,903 | ) | 163,088 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 28,091 | 9,427 | 4,809 | 42,327 | 592 | 4,513 | — | 47,432 | ||||||||||||||||
Cost to provide enrollment services | — | — | 16,787 | 16,787 | — | — | — | 16,787 | ||||||||||||||||
Depreciation and amortization | 2,731 | 1,132 | 61 | 3,924 | — | 396 | — | 4,320 | ||||||||||||||||
Other | 18,031 | 2,192 | 1,243 | 21,466 | 7,923 | 4,976 | — | 34,365 | ||||||||||||||||
Intersegment expenses, net | 851 | 1,494 | 1,130 | 3,475 | 14,108 | (3,680 | ) | (13,903 | ) | — | ||||||||||||||
Total operating expenses | 49,704 | 14,245 | 24,030 | 87,979 | 22,623 | 6,205 | (13,903 | ) | 102,904 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 24,286 | 4,111 | 793 | 29,190 | 119,268 | 8,145 | — | 156,603 | ||||||||||||||||
Corporate overhead allocation | (1,513 | ) | (504 | ) | (504 | ) | (2,521 | ) | (1,081 | ) | 3,602 | — | — | |||||||||||
Income before income taxes | 22,773 | 3,607 | 289 | 26,669 | 118,187 | 11,747 | — | 156,603 | ||||||||||||||||
Income tax (expense) benefit | (8,655 | ) | (1,370 | ) | (109 | ) | (10,134 | ) | (44,911 | ) | 299 | — | (54,746 | ) | ||||||||||
Net income | 14,118 | 2,237 | 180 | 16,535 | 73,276 | 12,046 | — | 101,857 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 614 | — | 614 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 14,118 | 2,237 | 180 | 16,535 | 73,276 | 11,432 | — | 101,243 | |||||||||||||||
Six months ended June 30, 2014 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 20 | 3 | — | 23 | 332,565 | 4,694 | (1,459 | ) | 335,823 | ||||||||||||||
Interest expense | — | — | — | — | 127,412 | 3,286 | (1,459 | ) | 129,239 | |||||||||||||||
Net interest income | 20 | 3 | — | 23 | 205,153 | 1,408 | — | 206,584 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 4,000 | — | — | 4,000 | ||||||||||||||||
Net interest income after provision for loan losses | 20 | 3 | — | 23 | 201,153 | 1,408 | — | 202,584 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 131,217 | — | — | 131,217 | — | — | — | 131,217 | ||||||||||||||||
Intersegment servicing revenue | 28,021 | — | — | 28,021 | — | — | (28,021 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 47,069 | — | 47,069 | — | — | — | 47,069 | ||||||||||||||||
Enrollment services revenue | — | — | 42,156 | 42,156 | — | — | — | 42,156 | ||||||||||||||||
Other income | — | — | — | — | 8,660 | 24,786 | — | 33,446 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 57 | — | — | 57 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 12,325 | (2,577 | ) | — | 9,748 | |||||||||||||||
Derivative settlements, net | — | — | — | — | (11,935 | ) | (508 | ) | — | (12,443 | ) | |||||||||||||
Total other income | 159,238 | 47,069 | 42,156 | 248,463 | 9,107 | 21,701 | (28,021 | ) | 251,250 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 65,400 | 21,139 | 8,512 | 95,051 | 1,179 | 10,142 | — | 106,372 | ||||||||||||||||
Cost to provide enrollment services | — | — | 27,786 | 27,786 | — | — | — | 27,786 | ||||||||||||||||
Depreciation and amortization | 5,608 | 3,273 | 88 | 8,969 | — | 1,028 | — | 9,997 | ||||||||||||||||
Other | 38,267 | 5,603 | 3,293 | 47,163 | 15,991 | 12,850 | — | 76,004 | ||||||||||||||||
Intersegment expenses, net | 2,207 | 2,824 | 1,950 | 6,981 | 28,339 | (7,299 | ) | (28,021 | ) | — | ||||||||||||||
Total operating expenses | 111,482 | 32,839 | 41,629 | 185,950 | 45,509 | 16,721 | (28,021 | ) | 220,159 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 47,776 | 14,233 | 527 | 62,536 | 164,751 | 6,388 | — | 233,675 | ||||||||||||||||
Corporate overhead allocation | (3,920 | ) | (1,307 | ) | (1,307 | ) | (6,534 | ) | (2,578 | ) | 9,112 | — | — | |||||||||||
Income before income taxes | 43,856 | 12,926 | (780 | ) | 56,002 | 162,173 | 15,500 | — | 233,675 | |||||||||||||||
Income tax (expense) benefit | (16,665 | ) | (4,911 | ) | 296 | (21,280 | ) | (61,625 | ) | (784 | ) | — | (83,689 | ) | ||||||||||
Net income | 27,191 | 8,015 | (484 | ) | 34,722 | 100,548 | 14,716 | — | 149,986 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 1,206 | — | 1,206 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 27,191 | 8,015 | (484 | ) | 34,722 | 100,548 | 13,510 | — | 148,780 | ||||||||||||||
Six months ended June 30, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 19 | — | — | 19 | 313,829 | 4,507 | (1,653 | ) | 316,702 | ||||||||||||||
Interest expense | — | — | — | — | 114,402 | 3,736 | (1,653 | ) | 116,485 | |||||||||||||||
Net interest income | 19 | — | — | 19 | 199,427 | 771 | — | 200,217 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 10,000 | — | — | 10,000 | ||||||||||||||||
Net interest income after provision for loan losses | 19 | — | — | 19 | 189,427 | 771 | — | 190,217 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 115,679 | — | — | 115,679 | — | — | — | 115,679 | ||||||||||||||||
Intersegment servicing revenue | 28,856 | — | — | 28,856 | — | — | (28,856 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 41,767 | — | 41,767 | — | — | — | 41,767 | ||||||||||||||||
Enrollment services revenue | — | — | 53,780 | 53,780 | — | — | — | 53,780 | ||||||||||||||||
Other income | — | — | — | — | 7,226 | 14,478 | — | 21,704 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 8,762 | — | — | 8,762 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 48,371 | 9,430 | — | 57,801 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (15,384 | ) | (1,157 | ) | — | (16,541 | ) | |||||||||||||
Total other income | 144,535 | 41,767 | 53,780 | 240,082 | 48,975 | 22,751 | (28,856 | ) | 282,952 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 56,535 | 18,786 | 10,576 | 85,897 | 1,154 | 8,286 | — | 95,337 | ||||||||||||||||
Cost to provide enrollment services | — | — | 36,429 | 36,429 | — | — | — | 36,429 | ||||||||||||||||
Depreciation and amortization | 5,520 | 2,270 | 122 | 7,912 | — | 785 | — | 8,697 | ||||||||||||||||
Other | 36,421 | 4,479 | 2,894 | 43,794 | 15,436 | 10,076 | — | 69,306 | ||||||||||||||||
Intersegment expenses, net | 1,786 | 2,919 | 2,279 | 6,984 | 29,250 | (7,378 | ) | (28,856 | ) | — | ||||||||||||||
Total operating expenses | 100,262 | 28,454 | 52,300 | 181,016 | 45,840 | 11,769 | (28,856 | ) | 209,769 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 44,292 | 13,313 | 1,480 | 59,085 | 192,562 | 11,753 | — | 263,400 | ||||||||||||||||
Corporate overhead allocation | (2,510 | ) | (836 | ) | (836 | ) | (4,182 | ) | (1,793 | ) | 5,975 | — | — | |||||||||||
Income before income taxes | 41,782 | 12,477 | 644 | 54,903 | 190,769 | 17,728 | — | 263,400 | ||||||||||||||||
Income tax (expense) benefit | (15,878 | ) | (4,741 | ) | (244 | ) | (20,863 | ) | (72,492 | ) | 162 | — | (93,193 | ) | ||||||||||
Net income | 25,904 | 7,736 | 400 | 34,040 | 118,277 | 17,890 | — | 170,207 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 885 | — | 885 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 25,904 | 7,736 | 400 | 34,040 | 118,277 | 17,005 | — | 169,322 | |||||||||||||||
|
|
|
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 137,567 | 137,567 | — | 188,279 | 188,279 | |||||||||||
Equity securities | 3,489 | — | 3,489 | 3,282 | — | 3,282 | ||||||||||||
Debt securities | 433 | — | 433 | 479 | — | 479 | ||||||||||||
Total investments | 3,922 | 137,567 | 141,489 | 3,761 | 188,279 | 192,040 | ||||||||||||
Fair value of derivative instruments | — | 68,033 | 68,033 | — | 62,507 | 62,507 | ||||||||||||
Total assets | $ | 3,922 | 205,600 | 209,522 | 3,761 | 250,786 | 254,547 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 15,546 | 15,546 | — | 17,969 | 17,969 | |||||||||||
Total liabilities | $ | — | 15,546 | 15,546 | — | 17,969 | 17,969 |
As of June 30, 2014 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 30,629,142 | 29,342,430 | — | — | 30,629,142 | |||||||||
Cash and cash equivalents | 92,099 | 92,099 | 92,099 | — | — | ||||||||||
Investments | 141,489 | 141,489 | 3,922 | 137,567 | — | ||||||||||
Restricted cash | 855,113 | 855,113 | 855,113 | — | — | ||||||||||
Restricted cash – due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Restricted investments | 6,921 | 6,921 | 6,921 | — | — | ||||||||||
Accrued interest receivable | 360,075 | 360,075 | — | 360,075 | — | ||||||||||
Derivative instruments | 68,033 | 68,033 | — | 68,033 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 29,493,178 | 29,492,560 | — | 29,493,178 | — | ||||||||||
Accrued interest payable | 24,339 | 24,339 | — | 24,339 | — | ||||||||||
Due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Derivative instruments | 15,546 | 15,546 | — | 15,546 | — |
As of December 31, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,641,383 | 25,907,589 | — | — | 26,641,383 | |||||||||
Cash and cash equivalents | 63,267 | 63,267 | 63,267 | — | — | ||||||||||
Investments | 192,040 | 192,040 | 3,761 | 188,279 | — | ||||||||||
Restricted cash | 727,838 | 727,838 | 727,838 | — | — | ||||||||||
Restricted cash – due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Restricted investments | 7,285 | 7,285 | 7,285 | — | — | ||||||||||
Accrued interest receivable | 314,553 | 314,553 | — | 314,553 | — | ||||||||||
Derivative instruments | 62,507 | 62,507 | — | 62,507 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 25,577,250 | 25,955,289 | — | 25,577,250 | — | ||||||||||
Accrued interest payable | 21,725 | 21,725 | — | 21,725 | — | ||||||||||
Due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Derivative instruments | 17,969 | 17,969 | — | 17,969 | — |
|
|
|
|
As of | As of | |||||
June 30, 2014 | December 31, 2013 | |||||
Federally insured loans | ||||||
Stafford and other | $ | 6,479,493 | 6,686,626 | |||
Consolidation | 23,032,622 | 19,363,577 | ||||
Total | 29,512,115 | 26,050,203 | ||||
Non-federally insured loans | 67,670 | 71,103 | ||||
29,579,785 | 26,121,306 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (184,888 | ) | (158,595 | ) | ||
Allowance for loan losses – federally insured loans | (40,921 | ) | (43,440 | ) | ||
Allowance for loan losses – non-federally insured loans | (11,546 | ) | (11,682 | ) | ||
$ | 29,342,430 | 25,907,589 |
(a) | For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income. Remaining discounts and premiums for purchased loans are recognized in interest income over the remaining estimated lives of the loans. The Company continues to evaluate credit losses associated with purchased loans based on current information and changes in expectations to determine the need for any additional allowance for loan losses. At June 30, 2014 and December 31, 2013, "loan discount, net of unamortized loan premiums and deferred origination costs" included $29.9 million and $20.2 million, respectively, of non-accretable discount associated with purchased loans. |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Balance at beginning of period | $ | 54,628 | 49,409 | 55,122 | 51,902 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 2,000 | 5,000 | 5,000 | 11,000 | ||||||||
Non-federally insured loans | (500 | ) | — | (1,000 | ) | (1,000 | ) | |||||
Total provision for loan losses | 1,500 | 5,000 | 4,000 | 10,000 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (4,138 | ) | (3,340 | ) | (7,769 | ) | (9,330 | ) | ||||
Non-federally insured loans | (598 | ) | (592 | ) | (1,019 | ) | (1,364 | ) | ||||
Total charge-offs | (4,736 | ) | (3,932 | ) | (8,788 | ) | (10,694 | ) | ||||
Recoveries - non-federally insured loans | 339 | 442 | 710 | 810 | ||||||||
Purchase (sale) of federally insured loans, net | 150 | 275 | 250 | (1,943 | ) | |||||||
Transfer from repurchase obligation related to non-federally insured loans repurchased, net | 586 | 417 | 1,173 | 1,536 | ||||||||
Balance at end of period | $ | 52,467 | 51,611 | 52,467 | 51,611 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 40,921 | 39,848 | 40,921 | 39,848 | |||||||
Non-federally insured loans | 11,546 | 11,763 | 11,546 | 11,763 | ||||||||
Total allowance for loan losses | $ | 52,467 | 51,611 | 52,467 | 51,611 |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Beginning balance | $ | 15,413 | 15,011 | 16,143 | 16,130 | |||||||
Loans repurchased | (586 | ) | (417 | ) | (1,316 | ) | (1,536 | ) | ||||
Ending balance | $ | 14,827 | 14,594 | 14,827 | 14,594 |
As of June 30, 2014 | As of December 31, 2013 | As of June 30, 2013 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 3,095,741 | $ | 2,872,505 | $ | 2,983,795 | ||||||||||||||
Loans in forbearance | 3,593,891 | 3,370,025 | 3,320,101 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 19,164,660 | 84.0 | % | 16,337,922 | 82.5 | % | 15,355,379 | 83.6 | % | |||||||||||
Loans delinquent 31-60 days | 1,026,046 | 4.5 | 967,318 | 4.9 | 776,577 | 4.2 | ||||||||||||||
Loans delinquent 61-90 days | 674,918 | 3.0 | 550,333 | 2.8 | 531,339 | 2.9 | ||||||||||||||
Loans delinquent 91-120 days | 376,068 | 1.5 | 390,791 | 2.0 | 291,732 | 1.6 | ||||||||||||||
Loans delinquent 121-270 days | 1,133,527 | 5.0 | 1,117,936 | 5.6 | 1,016,571 | 5.5 | ||||||||||||||
Loans delinquent 271 days or greater | 447,264 | 2.0 | 443,373 | 2.2 | 413,240 | 2.2 | ||||||||||||||
Total loans in repayment | 22,822,483 | 100.0 | % | 19,807,673 | 100.0 | % | 18,384,838 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 29,512,115 | $ | 26,050,203 | $ | 24,688,734 |
|
As of June 30, 2014 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 26,983,517 | 0.24% - 6.90% | 5/25/18 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 1,562,325 | 0.06% - 2.09% | 5/1/28 - 11/26/46 | ||||
Total variable-rate bonds and notes | 28,545,842 | ||||||
FFELP warehouse facilities | 1,139,750 | 0.15% - 0.25% | 1/17/16 - 6/11/17 | ||||
Unsecured line of credit | 65,000 | 1.65% | 6/30/19 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 96,457 | 3.61% | 9/15/61 | ||||
Other borrowings | 63,068 | 1.66% - 5.10% | 10/31/14 - 11/11/15 | ||||
29,910,117 | |||||||
Discount on bonds and notes payable | (417,557 | ) | |||||
Total | $ | 29,492,560 |
As of December 31, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 23,479,893 | 0.25% - 6.90% | 5/25/18 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 1,134,250 | 0.07% - 2.17% | 5/1/28 - 11/26/46 | ||||
Total variable-rate bonds and notes | 24,614,143 | ||||||
FFELP warehouse facilities | 1,396,344 | 0.17% - 0.25% | 1/17/16 - 6/12/16 | ||||
Unsecured line of credit | 45,000 | 1.67% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 96,457 | 3.62% | 9/15/61 | ||||
Other borrowings | 61,401 | 1.67% - 5.10% | 4/11/14 - 11/11/15 | ||||
26,213,345 | |||||||
Discount on bonds and notes payable | (258,056 | ) | |||||
Total | $ | 25,955,289 |
NHELP-III | NHELP-II | NFSLW-I (a) | Total | ||||||||||
Maximum financing amount | $ | 750,000 | 500,000 | 500,000 | 1,750,000 | ||||||||
Amount outstanding | 659,668 | 92,803 | 387,279 | 1,139,750 | |||||||||
Amount available | $ | 90,332 | 407,197 | 112,721 | 610,250 | ||||||||
Expiration of liquidity provisions | February 5, 2015 | September 30, 2014 | June 11, 2015 | ||||||||||
Final maturity date | January 17, 2016 | September 30, 2016 | June 11, 2017 | ||||||||||
Maximum advance rates | 92.2 - 95.0% | 84.5 - 94.5% | 92.0 - 98.0% | ||||||||||
Minimum advance rates | 92.2 - 95.0% | 84.5 - 94.5% | 84.0 - 90.0% | ||||||||||
Advanced as equity support | $ | 39,496 | 8,264 | 18,870 | 66,630 |
2014-1 | 2014-2 | 2014-3 | 2014-4 | 2014-5 | Total | ||||||||||||||||||||||||||||||
Class A-1 notes | Class A-2 notes | Class A-3 notes | 2014-2 total | Class A-1 notes | Class A-2 notes | 2014-4 total | |||||||||||||||||||||||||||||
Date securities issued | 2/6/14 | 3/12/14 | 3/12/14 | 3/12/14 | 3/12/14 | 4/30/14 | 5/23/14 | 5/23/14 | 5/23/14 | 6/18/14 | |||||||||||||||||||||||||
Total original principal amount | $ | 458,500 | 509,000 | 719,800 | 384,500 | 603,000 | $ | 2,674,800 | |||||||||||||||||||||||||||
Class A senior notes: | |||||||||||||||||||||||||||||||||||
Total original principal amount | $ | 445,000 | 191,000 | 222,000 | 84,000 | 497,000 | 700,700 | 267,500 | 107,500 | 375,000 | 587,000 | 2,604,700 | |||||||||||||||||||||||
Bond discount | — | — | — | (535 | ) | (535 | ) | — | — | — | — | — | (535 | ) | |||||||||||||||||||||
Issue price | $ | 445,000 | 191,000 | 222,000 | 83,465 | 496,465 | 700,700 | 267,500 | 107,500 | 375,000 | 587,000 | 2,604,165 | |||||||||||||||||||||||
Cost of funds (1-month LIBOR plus:) | 0.57 | % | 0.28 | % | 0.60 | % | 0.85 | % | 0.58 | % | 0.54 | % | 0.95 | % | 0.55 | % | |||||||||||||||||||
Final maturity date | 9/25/41 | 6/25/21 | 3/25/30 | 7/27/37 | 6/25/41 | 11/27/34 | 11/25/43 | 7/25/41 | |||||||||||||||||||||||||||
Class B subordinated notes: | |||||||||||||||||||||||||||||||||||
Total original principal amount | $ | 13,500 | 12,000 | 19,100 | 9,500 | 16,000 | 70,100 | ||||||||||||||||||||||||||||
Bond discount | (1,132 | ) | (1,046 | ) | (1,467 | ) | (1,138 | ) | (1,232 | ) | (6,015 | ) | |||||||||||||||||||||||
Issue price | $ | 12,368 | 10,954 | 17,633 | 8,362 | 14,768 | 64,085 | ||||||||||||||||||||||||||||
Cost of funds (1-month LIBOR plus:) | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | 1.50 | % | |||||||||||||||||||||||||
Final maturity date | 10/25/47 | 6/25/41 | 10/25/50 | 9/25/51 | 5/25/49 |
|
Maturity | Notional amount | ||||||
2021 | $ | 250,000 | |||||
2022 | 1,900,000 | ||||||
2023 | 3,650,000 | ||||||
2024 | 250,000 | ||||||
2026 | 800,000 | ||||||
2028 | 100,000 | ||||||
2036 | 700,000 | ||||||
2039 | (a) | 150,000 | |||||
2040 | (b) | 200,000 | |||||
$ | 8,000,000 | (c) |
(c) | The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2014 and December 31, 2013 was one-month LIBOR plus 3.5 basis points |
As of June 30, 2014 | As of December 31, 2013 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2014 | $ | 1,250,000 | 0.67 | % | $ | 1,750,000 | 0.71 | % | ||||||
2015 | 1,100,000 | 0.89 | 1,100,000 | 0.89 | ||||||||||
2016 | 750,000 | 0.85 | 750,000 | 0.85 | ||||||||||
2017 | 1,250,000 | 0.86 | 1,250,000 | 0.86 | ||||||||||
$ | 4,350,000 | 0.81 | % | $ | 4,850,000 | 0.81 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2036 | $ | 25,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 (b) | 2014 | 2013 (b) | |||||||||
Re-measurement of Euro Notes | $ | 2,751 | (14,691 | ) | 1,798 | 14,072 | ||||||
Change in fair value of cross-currency interest rate swaps | (2,999 | ) | 14,748 | (3,037 | ) | (20,096 | ) | |||||
Total impact to consolidated statements of income - income (expense) (a) | $ | (248 | ) | 57 | (1,239 | ) | (6,024 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
(b) | The 2013 operating results include the re-measurement of an additional €420.5 million of student loan asset-backed Euro notes and the change in fair value of a related cross-currency interest rate swap entered into in connection with the issuance of such notes. In November 2013, the principal amount outstanding on the notes was changed to U.S. dollars and the cross-currency interest swap was terminated. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
June 30, 2014 | December 31, 2013 | June 30, 2014 | December 31, 2013 | |||||||||
1:3 basis swaps | $ | 31,510 | 18,490 | — | — | |||||||
Interest rate swaps - floor income hedges | 2,726 | 7,183 | 10,849 | 15,849 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 4,697 | 2,120 | ||||||||
Cross-currency interest rate swap | 33,797 | 36,834 | — | — | ||||||||
Total | $ | 68,033 | 62,507 | 15,546 | 17,969 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative assets | Gross amounts of recognized assets presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral received | Net asset (liability) | |||||||||
Balance as of June 30, 2014 | $ | 68,033 | (15,546 | ) | (323 | ) | 52,164 | ||||||
Balance as of December 31, 2013 | 62,507 | (15,437 | ) | (15,959 | ) | 31,111 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative liabilities | Gross amounts of recognized liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged | Net asset (liability) | |||||||||
Balance as of June 30, 2014 | $ | (15,546 | ) | 15,546 | — | — | |||||||
Balance as of December 31, 2013 | (17,969 | ) | 15,437 | 3,630 | 1,098 |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 858 | 782 | 1,739 | 1,692 | |||||||
Interest rate swaps - floor income hedges | (6,974 | ) | (8,534 | ) | (13,924 | ) | (16,839 | ) | ||||
Interest rate swaps - hybrid debt hedges | (256 | ) | (512 | ) | (508 | ) | (1,157 | ) | ||||
Cross-currency interest rate swaps | 158 | (93 | ) | 250 | (237 | ) | ||||||
Total settlements - expense | (6,214 | ) | (8,357 | ) | (12,443 | ) | (16,541 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | 11,910 | 9,630 | 13,020 | 11,563 | ||||||||
Interest rate swaps - floor income hedges | (2,813 | ) | 33,408 | 545 | 42,830 | |||||||
Interest rate swaps - hybrid debt hedges | (1,065 | ) | 5,450 | (2,578 | ) | 9,090 | ||||||
Cross-currency interest rate swaps | (2,999 | ) | 14,748 | (3,037 | ) | (20,096 | ) | |||||
Other | — | — | — | 342 | ||||||||
Total change in fair value - income (expense) | 5,033 | 63,236 | 7,950 | 43,729 | ||||||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | 2,751 | (14,691 | ) | 1,798 | 14,072 | |||||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 1,570 | 40,188 | (2,695 | ) | 41,260 |
|
As of June 30, 2014 | As of December 31, 2013 | ||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses (a) | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||
Investments: | |||||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | $ | 124,556 | 7,090 | (212 | ) | 131,434 | 171,931 | 7,111 | (1,241 | ) | 177,801 | ||||||||||||||
Equity securities | 1,527 | 1,969 | (7 | ) | 3,489 | 1,502 | 1,783 | (3 | ) | 3,282 | |||||||||||||||
Total available-for-sale investments | $ | 126,083 | 9,059 | (219 | ) | 134,923 | 173,433 | 8,894 | (1,244 | ) | 181,083 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities | 6,566 | 10,957 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 141,489 | 192,040 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 6,921 | 7,285 |
(a) | As of June 30, 2014, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. |
(b) | As of June 30, 2014, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
(c) | Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
Affected line item in the consolidated statements of income - income (expense): | 2014 | 2013 | 2014 | 2013 | |||||||||
Other income | $ | 1,238 | 559 | 8,311 | 1,516 | ||||||||
Income tax expense | (458 | ) | (207 | ) | (3,075 | ) | (561 | ) | |||||
Net | $ | 780 | 352 | 5,236 | 955 |
|
Cash and cash equivalents | $ | 326 | ||
Accounts receivable | 961 | |||
Property and equipment | 105 | |||
Other assets | 22 | |||
Intangible assets | 37,188 | |||
Excess cost over fair value of net assets acquired (goodwill) | 9,082 | |||
Other liabilities | (1,341 | ) | ||
Net assets acquired | $ | 46,343 |
As of June 30, 2014 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 30,629,142 | 29,342,430 | — | — | 30,629,142 | |||||||||
Cash and cash equivalents | 92,099 | 92,099 | 92,099 | — | — | ||||||||||
Investments | 141,489 | 141,489 | 3,922 | 137,567 | — | ||||||||||
Restricted cash | 855,113 | 855,113 | 855,113 | — | — | ||||||||||
Restricted cash – due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Restricted investments | 6,921 | 6,921 | 6,921 | — | — | ||||||||||
Accrued interest receivable | 360,075 | 360,075 | — | 360,075 | — | ||||||||||
Derivative instruments | 68,033 | 68,033 | — | 68,033 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 29,493,178 | 29,492,560 | — | 29,493,178 | — | ||||||||||
Accrued interest payable | 24,339 | 24,339 | — | 24,339 | — | ||||||||||
Due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Derivative instruments | 15,546 | 15,546 | — | 15,546 | — |
As of December 31, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,641,383 | 25,907,589 | — | — | 26,641,383 | |||||||||
Cash and cash equivalents | 63,267 | 63,267 | 63,267 | — | — | ||||||||||
Investments | 192,040 | 192,040 | 3,761 | 188,279 | — | ||||||||||
Restricted cash | 727,838 | 727,838 | 727,838 | — | — | ||||||||||
Restricted cash – due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Restricted investments | 7,285 | 7,285 | 7,285 | — | — | ||||||||||
Accrued interest receivable | 314,553 | 314,553 | — | 314,553 | — | ||||||||||
Derivative instruments | 62,507 | 62,507 | — | 62,507 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 25,577,250 | 25,955,289 | — | 25,577,250 | — | ||||||||||
Accrued interest payable | 21,725 | 21,725 | — | 21,725 | — | ||||||||||
Due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Derivative instruments | 17,969 | 17,969 | — | 17,969 | — |
|
Weighted average remaining useful life as of June 30, 2014 (months) | As of June 30, 2014 | As of December 31, 2013 | ||||||
Amortizable intangible assets: | ||||||||
Customer relationships (net of accumulated amortization of $21,595 and $19,821, respectively) | 223 | $ | 29,884 | 6,132 | ||||
Computer software (net of accumulated amortization of $634 and $0, respectively) | 47 | 8,231 | — | |||||
Trade names (net of accumulated amortization of $39 and $0, respectively) | 239 | 6,383 | — | |||||
Covenants not to compete (net of accumulated amortization of $3 and $0, respectively) | 119 | 351 | — | |||||
Total - amortizable intangible assets | 192 | $ | 44,849 | 6,132 |
2014 (Q3 - Q4) | $ | 2,843 | |
2015 | 6,402 | ||
2016 | 5,982 | ||
2017 | 4,406 | ||
2018 | 4,000 | ||
2019 and thereafter | 21,216 | ||
$ | 44,849 |
|
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Asset Generation and Management | Total | |||||||||||
Balance as of December 31, 2013 | $ | 8,596 | 58,086 | 8,553 | 41,883 | 117,118 | |||||||||
Goodwill acquired during the period | — | 9,082 | — | — | 9,082 | ||||||||||
Balance as of June 30, 2014 | $ | 8,596 | 67,168 | 8,553 | 41,883 | 126,200 |
|
Three months ended June 30, 2014 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 9 | 3 | — | 12 | 175,562 | 2,036 | (662 | ) | 176,948 | ||||||||||||||
Interest expense | — | — | — | — | 67,936 | 1,961 | (662 | ) | 69,235 | |||||||||||||||
Net interest income | 9 | 3 | — | 12 | 107,626 | 75 | — | 107,713 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 1,500 | — | — | 1,500 | ||||||||||||||||
Net interest income after provision for loan losses | 9 | 3 | — | 12 | 106,126 | 75 | — | 106,213 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 66,460 | — | — | 66,460 | — | — | — | 66,460 | ||||||||||||||||
Intersegment servicing revenue | 13,800 | — | — | 13,800 | — | — | (13,800 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 21,834 | — | 21,834 | — | — | — | 21,834 | ||||||||||||||||
Enrollment services revenue | — | — | 20,145 | 20,145 | — | — | — | 20,145 | ||||||||||||||||
Other income | — | — | — | — | 4,496 | 10,819 | — | 15,315 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 18 | — | — | 18 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 8,848 | (1,064 | ) | — | 7,784 | |||||||||||||||
Derivative settlements, net | — | — | — | — | (5,958 | ) | (256 | ) | — | (6,214 | ) | |||||||||||||
Total other income | 80,260 | 21,834 | 20,145 | 122,239 | 7,404 | 9,499 | (13,800 | ) | 125,342 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 33,093 | 11,112 | 4,132 | 48,337 | 570 | 4,981 | — | 53,888 | ||||||||||||||||
Cost to provide enrollment services | — | — | 13,311 | 13,311 | — | — | — | 13,311 | ||||||||||||||||
Depreciation and amortization | 2,819 | 1,845 | 41 | 4,705 | — | 509 | — | 5,214 | ||||||||||||||||
Other | 19,815 | 2,956 | 1,844 | 24,615 | 8,845 | 6,917 | — | 40,377 | ||||||||||||||||
Intersegment expenses, net | 1,124 | 1,404 | 944 | 3,472 | 13,968 | (3,640 | ) | (13,800 | ) | — | ||||||||||||||
Total operating expenses | 56,851 | 17,317 | 20,272 | 94,440 | 23,383 | 8,767 | (13,800 | ) | 112,790 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 23,418 | 4,520 | (127 | ) | 27,811 | 90,147 | 807 | — | 118,765 | |||||||||||||||
Corporate overhead allocation | (2,060 | ) | (687 | ) | (687 | ) | (3,434 | ) | (1,249 | ) | 4,683 | — | — | |||||||||||
Income before income taxes | 21,358 | 3,833 | (814 | ) | 24,377 | 88,898 | 5,490 | — | 118,765 | |||||||||||||||
Income tax (expense) benefit | (8,116 | ) | (1,456 | ) | 309 | (9,263 | ) | (33,781 | ) | (34 | ) | — | (43,078 | ) | ||||||||||
Net income | 13,242 | 2,377 | (505 | ) | 15,114 | 55,117 | 5,456 | — | 75,687 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 693 | — | 693 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 13,242 | 2,377 | (505 | ) | 15,114 | 55,117 | 4,763 | — | 74,994 | ||||||||||||||
Three months ended June 30, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 9 | — | — | 9 | 158,175 | 2,196 | (834 | ) | 159,546 | ||||||||||||||
Interest expense | — | — | — | — | 56,920 | 2,041 | (834 | ) | 58,127 | |||||||||||||||
Net interest income | 9 | — | — | 9 | 101,255 | 155 | — | 101,419 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income after provision for loan losses | 9 | — | — | 9 | 96,255 | 155 | — | 96,419 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 60,078 | — | — | 60,078 | — | — | — | 60,078 | ||||||||||||||||
Intersegment servicing revenue | 13,903 | — | — | 13,903 | — | — | (13,903 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 18,356 | — | 18,356 | — | — | — | 18,356 | ||||||||||||||||
Enrollment services revenue | — | — | 24,823 | 24,823 | — | — | — | 24,823 | ||||||||||||||||
Other income | — | — | — | — | 3,030 | 9,258 | — | 12,288 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 7,355 | — | — | 7,355 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 43,096 | 5,449 | — | 48,545 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (7,845 | ) | (512 | ) | — | (8,357 | ) | |||||||||||||
Total other income | 73,981 | 18,356 | 24,823 | 117,160 | 45,636 | 14,195 | (13,903 | ) | 163,088 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 28,091 | 9,427 | 4,809 | 42,327 | 592 | 4,513 | — | 47,432 | ||||||||||||||||
Cost to provide enrollment services | — | — | 16,787 | 16,787 | — | — | — | 16,787 | ||||||||||||||||
Depreciation and amortization | 2,731 | 1,132 | 61 | 3,924 | — | 396 | — | 4,320 | ||||||||||||||||
Other | 18,031 | 2,192 | 1,243 | 21,466 | 7,923 | 4,976 | — | 34,365 | ||||||||||||||||
Intersegment expenses, net | 851 | 1,494 | 1,130 | 3,475 | 14,108 | (3,680 | ) | (13,903 | ) | — | ||||||||||||||
Total operating expenses | 49,704 | 14,245 | 24,030 | 87,979 | 22,623 | 6,205 | (13,903 | ) | 102,904 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 24,286 | 4,111 | 793 | 29,190 | 119,268 | 8,145 | — | 156,603 | ||||||||||||||||
Corporate overhead allocation | (1,513 | ) | (504 | ) | (504 | ) | (2,521 | ) | (1,081 | ) | 3,602 | — | — | |||||||||||
Income before income taxes | 22,773 | 3,607 | 289 | 26,669 | 118,187 | 11,747 | — | 156,603 | ||||||||||||||||
Income tax (expense) benefit | (8,655 | ) | (1,370 | ) | (109 | ) | (10,134 | ) | (44,911 | ) | 299 | — | (54,746 | ) | ||||||||||
Net income | 14,118 | 2,237 | 180 | 16,535 | 73,276 | 12,046 | — | 101,857 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 614 | — | 614 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 14,118 | 2,237 | 180 | 16,535 | 73,276 | 11,432 | — | 101,243 | |||||||||||||||
Six months ended June 30, 2014 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 20 | 3 | — | 23 | 332,565 | 4,694 | (1,459 | ) | 335,823 | ||||||||||||||
Interest expense | — | — | — | — | 127,412 | 3,286 | (1,459 | ) | 129,239 | |||||||||||||||
Net interest income | 20 | 3 | — | 23 | 205,153 | 1,408 | — | 206,584 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 4,000 | — | — | 4,000 | ||||||||||||||||
Net interest income after provision for loan losses | 20 | 3 | — | 23 | 201,153 | 1,408 | — | 202,584 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 131,217 | — | — | 131,217 | — | — | — | 131,217 | ||||||||||||||||
Intersegment servicing revenue | 28,021 | — | — | 28,021 | — | — | (28,021 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 47,069 | — | 47,069 | — | — | — | 47,069 | ||||||||||||||||
Enrollment services revenue | — | — | 42,156 | 42,156 | — | — | — | 42,156 | ||||||||||||||||
Other income | — | — | — | — | 8,660 | 24,786 | — | 33,446 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 57 | — | — | 57 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 12,325 | (2,577 | ) | — | 9,748 | |||||||||||||||
Derivative settlements, net | — | — | — | — | (11,935 | ) | (508 | ) | — | (12,443 | ) | |||||||||||||
Total other income | 159,238 | 47,069 | 42,156 | 248,463 | 9,107 | 21,701 | (28,021 | ) | 251,250 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 65,400 | 21,139 | 8,512 | 95,051 | 1,179 | 10,142 | — | 106,372 | ||||||||||||||||
Cost to provide enrollment services | — | — | 27,786 | 27,786 | — | — | — | 27,786 | ||||||||||||||||
Depreciation and amortization | 5,608 | 3,273 | 88 | 8,969 | — | 1,028 | — | 9,997 | ||||||||||||||||
Other | 38,267 | 5,603 | 3,293 | 47,163 | 15,991 | 12,850 | — | 76,004 | ||||||||||||||||
Intersegment expenses, net | 2,207 | 2,824 | 1,950 | 6,981 | 28,339 | (7,299 | ) | (28,021 | ) | — | ||||||||||||||
Total operating expenses | 111,482 | 32,839 | 41,629 | 185,950 | 45,509 | 16,721 | (28,021 | ) | 220,159 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 47,776 | 14,233 | 527 | 62,536 | 164,751 | 6,388 | — | 233,675 | ||||||||||||||||
Corporate overhead allocation | (3,920 | ) | (1,307 | ) | (1,307 | ) | (6,534 | ) | (2,578 | ) | 9,112 | — | — | |||||||||||
Income before income taxes | 43,856 | 12,926 | (780 | ) | 56,002 | 162,173 | 15,500 | — | 233,675 | |||||||||||||||
Income tax (expense) benefit | (16,665 | ) | (4,911 | ) | 296 | (21,280 | ) | (61,625 | ) | (784 | ) | — | (83,689 | ) | ||||||||||
Net income | 27,191 | 8,015 | (484 | ) | 34,722 | 100,548 | 14,716 | — | 149,986 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 1,206 | — | 1,206 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 27,191 | 8,015 | (484 | ) | 34,722 | 100,548 | 13,510 | — | 148,780 | ||||||||||||||
Six months ended June 30, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 19 | — | — | 19 | 313,829 | 4,507 | (1,653 | ) | 316,702 | ||||||||||||||
Interest expense | — | — | — | — | 114,402 | 3,736 | (1,653 | ) | 116,485 | |||||||||||||||
Net interest income | 19 | — | — | 19 | 199,427 | 771 | — | 200,217 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 10,000 | — | — | 10,000 | ||||||||||||||||
Net interest income after provision for loan losses | 19 | — | — | 19 | 189,427 | 771 | — | 190,217 | ||||||||||||||||
Other income: | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 115,679 | — | — | 115,679 | — | — | — | 115,679 | ||||||||||||||||
Intersegment servicing revenue | 28,856 | — | — | 28,856 | — | — | (28,856 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 41,767 | — | 41,767 | — | — | — | 41,767 | ||||||||||||||||
Enrollment services revenue | — | — | 53,780 | 53,780 | — | — | — | 53,780 | ||||||||||||||||
Other income | — | — | — | — | 7,226 | 14,478 | — | 21,704 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 8,762 | — | — | 8,762 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 48,371 | 9,430 | — | 57,801 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (15,384 | ) | (1,157 | ) | — | (16,541 | ) | |||||||||||||
Total other income | 144,535 | 41,767 | 53,780 | 240,082 | 48,975 | 22,751 | (28,856 | ) | 282,952 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 56,535 | 18,786 | 10,576 | 85,897 | 1,154 | 8,286 | — | 95,337 | ||||||||||||||||
Cost to provide enrollment services | — | — | 36,429 | 36,429 | — | — | — | 36,429 | ||||||||||||||||
Depreciation and amortization | 5,520 | 2,270 | 122 | 7,912 | — | 785 | — | 8,697 | ||||||||||||||||
Other | 36,421 | 4,479 | 2,894 | 43,794 | 15,436 | 10,076 | — | 69,306 | ||||||||||||||||
Intersegment expenses, net | 1,786 | 2,919 | 2,279 | 6,984 | 29,250 | (7,378 | ) | (28,856 | ) | — | ||||||||||||||
Total operating expenses | 100,262 | 28,454 | 52,300 | 181,016 | 45,840 | 11,769 | (28,856 | ) | 209,769 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 44,292 | 13,313 | 1,480 | 59,085 | 192,562 | 11,753 | — | 263,400 | ||||||||||||||||
Corporate overhead allocation | (2,510 | ) | (836 | ) | (836 | ) | (4,182 | ) | (1,793 | ) | 5,975 | — | — | |||||||||||
Income before income taxes | 41,782 | 12,477 | 644 | 54,903 | 190,769 | 17,728 | — | 263,400 | ||||||||||||||||
Income tax (expense) benefit | (15,878 | ) | (4,741 | ) | (244 | ) | (20,863 | ) | (72,492 | ) | 162 | — | (93,193 | ) | ||||||||||
Net income | 25,904 | 7,736 | 400 | 34,040 | 118,277 | 17,890 | — | 170,207 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 885 | — | 885 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 25,904 | 7,736 | 400 | 34,040 | 118,277 | 17,005 | — | 169,322 | |||||||||||||||
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As of June 30, 2014 | As of December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 137,567 | 137,567 | — | 188,279 | 188,279 | |||||||||||
Equity securities | 3,489 | — | 3,489 | 3,282 | — | 3,282 | ||||||||||||
Debt securities | 433 | — | 433 | 479 | — | 479 | ||||||||||||
Total investments | 3,922 | 137,567 | 141,489 | 3,761 | 188,279 | 192,040 | ||||||||||||
Fair value of derivative instruments | — | 68,033 | 68,033 | — | 62,507 | 62,507 | ||||||||||||
Total assets | $ | 3,922 | 205,600 | 209,522 | 3,761 | 250,786 | 254,547 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 15,546 | 15,546 | — | 17,969 | 17,969 | |||||||||||
Total liabilities | $ | — | 15,546 | 15,546 | — | 17,969 | 17,969 |
Cash and cash equivalents | $ | 326 | ||
Accounts receivable | 961 | |||
Property and equipment | 105 | |||
Other assets | 22 | |||
Intangible assets | 37,188 | |||
Excess cost over fair value of net assets acquired (goodwill) | 9,082 | |||
Other liabilities | (1,341 | ) | ||
Net assets acquired | $ | 46,343 |
As of June 30, 2014 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 30,629,142 | 29,342,430 | — | — | 30,629,142 | |||||||||
Cash and cash equivalents | 92,099 | 92,099 | 92,099 | — | — | ||||||||||
Investments | 141,489 | 141,489 | 3,922 | 137,567 | — | ||||||||||
Restricted cash | 855,113 | 855,113 | 855,113 | — | — | ||||||||||
Restricted cash – due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Restricted investments | 6,921 | 6,921 | 6,921 | — | — | ||||||||||
Accrued interest receivable | 360,075 | 360,075 | — | 360,075 | — | ||||||||||
Derivative instruments | 68,033 | 68,033 | — | 68,033 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 29,493,178 | 29,492,560 | — | 29,493,178 | — | ||||||||||
Accrued interest payable | 24,339 | 24,339 | — | 24,339 | — | ||||||||||
Due to customers | 98,005 | 98,005 | 98,005 | — | — | ||||||||||
Derivative instruments | 15,546 | 15,546 | — | 15,546 | — |
As of December 31, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,641,383 | 25,907,589 | — | — | 26,641,383 | |||||||||
Cash and cash equivalents | 63,267 | 63,267 | 63,267 | — | — | ||||||||||
Investments | 192,040 | 192,040 | 3,761 | 188,279 | — | ||||||||||
Restricted cash | 727,838 | 727,838 | 727,838 | — | — | ||||||||||
Restricted cash – due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Restricted investments | 7,285 | 7,285 | 7,285 | — | — | ||||||||||
Accrued interest receivable | 314,553 | 314,553 | — | 314,553 | — | ||||||||||
Derivative instruments | 62,507 | 62,507 | — | 62,507 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 25,577,250 | 25,955,289 | — | 25,577,250 | — | ||||||||||
Accrued interest payable | 21,725 | 21,725 | — | 21,725 | — | ||||||||||
Due to customers | 167,576 | 167,576 | 167,576 | — | — | ||||||||||
Derivative instruments | 17,969 | 17,969 | — | 17,969 | — |
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