Acadian Asset Management LLC Has $385000 Position in Nelnet, Inc. (NYSE:NNI)

Acadian Asset Management LLC boosted its stake in shares of Nelnet, Inc. (NYSE:NNI) by 281.9% during the second quarter, according to its most …

Nelnet logoAcadian Asset Management LLC boosted its stake in shares of Nelnet, Inc. (NYSE:NNI) by 281.9% during the second quarter, according to its most recent disclosure with the SEC. The institutional investor owned 6,496 shares of the credit services provider’s stock after purchasing an additional 4,795 shares during the period. Acadian Asset Management LLC’s holdings in Nelnet were worth $385,000 at the end of the most recent reporting period.

Other institutional investors and hedge funds also recently made changes to their positions in the company. Burney Co. purchased a new stake in Nelnet in the 1st quarter worth approximately $205,000. BNP Paribas Arbitrage SA increased its stake in shares of Nelnet by 143.1% in the first quarter. BNP Paribas Arbitrage SA now owns 4,177 shares of the credit services provider’s stock worth $230,000 after acquiring an additional 2,459 shares during the last quarter. SG Americas Securities LLC purchased a new stake in shares of Nelnet during the first quarter worth $231,000. DekaBank Deutsche Girozentrale purchased a new stake in shares of Nelnet during the first quarter worth $232,000. Finally, Bessemer Group Inc. purchased a new stake in shares of Nelnet during the second quarter worth $284,000. 34.98% of the stock is currently owned by hedge funds and other institutional investors.

Shares of NYSE NNI opened at $67.51 on Tuesday. The business’s 50-day moving average price is $64.99 and its two-hundred day moving average price is $59.65. The company has a debt-to-equity ratio of 9.15, a current ratio of 70.11 and a quick ratio of 70.11. Nelnet, Inc. has a one year low of $47.59 and a one year high of $68.51. The company has a market capitalization of $2.63 billion, a P/E ratio of 12.04 and a beta of 0.41.

Nelnet (NYSE:NNI) last issued its earnings results on Thursday, August 8th. The credit services provider reported $1.32 earnings per share for the quarter, topping the consensus estimate of $1.24 by $0.08. The company had revenue of $241.97 million for the quarter, compared to analyst estimates of $281.00 million. Nelnet had a return on equity of 9.61% and a net margin of 7.45%. During the same period in the prior year, the firm posted $1.30 EPS.

The company also recently declared a quarterly dividend, which will be paid on Friday, September 13th. Investors of record on Friday, August 30th will be paid a $0.18 dividend. The ex-dividend date of this dividend is Thursday, August 29th. This represents a $0.72 annualized dividend and a dividend yield of 1.07%.

Nelnet Company Profile

Nelnet, Inc provides education related products and services, and loan asset management services worldwide. The company’s Loan Servicing and Systems is involved in loan servicing activities, such as loan conversion, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliation, and claim processing activities for student loan portfolio and third-party clients.

See Also: The Role of a Fiduciary and Individual Investors

Institutional Ownership by Quarter for Nelnet (NYSE:NNI)

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This startup aims to solve funding crunch for kids already in college

And they’ve got two well-known, deep-pocketed firms backing the venture—Bank of New York Mellon and Chicago venture-capital firm Lightbank.

“People don’t understand the scale of this problem,” Wright says.

The loans won’t be available for students who haven’t yet begun college. Instead, they are for those who are at least juniors and have excellent grades at four-year colleges and universities. “That’s the kid we want to make the bet on,” he says.

Targeted local schools, apart from UIC, include the University of Chicago, Northwestern University, DePaul University, Loyola University Chicago and others. There are more than 65,000 undergrads in those institutions, with the average unmet financial need per student of more than $20,000, according to data compiled by Lightbank.

Lightbank believes the national market for students in need of these bridge loans to finish school is between $11 billion and $15 billion, says Eric Ong, vice president at Lightbank and the firm’s point person on the transaction. “It’s a big market, and no one’s going after it,” he says.

Neither Lightbank nor A.M. Money would disclose the amount of Lightbank’s equity investment. Likewise, a Bank of New York spokeswoman says no one there can discuss the bonds financing the loans due to securities law restrictions.

Several large banks have expressed interest in underwriting future bonds to finance these loans, Ong says. He expects numerous banks to get involved, assuming A.M. Money establishes the business model.

“We’re really, really bullish about it,” Ong says.

The key to the product is that no co-signer is required. The private lending industry typically demands that parents or others shoulder the risk if a borrower doesn’t repay the loan over a period ranging from five to 20 years. And rates are generally higher than the 7 percent or so A.M. Money is charging.

For example, interest rates on student loans at one of the nation’s largest private student lenders, Riverwoods-based Discover Financial, averaged 8.59 percent in the second quarter, according to investor disclosures.

Underwriting is relatively straightforward. The questions the firm asks and attempts to answer are, “Who is going to graduate? Are they employable?” Rogers says.

The federal government keeps statistics on the performance of loans at specific colleges. Students at schools that perform well are eligible for A.M. Money loans. Those at online schools or for-profit colleges don’t qualify.

Students provide their transcripts. Those with good grades at qualifying schools get loans. “Most of the process is automated,” Rogers says.

Private lending without a co-signer sounds risky. Nationally, for students who began paying off their debt in 2013, the most recent default rate on federal loans was 11.3 percent. For four-year, public institutions, the average default rate for students who attended four or more years was 7.3 percent, according to the U.S. Department of Education.

But, essentially, A.M. Money is betting on the quality of the schools whose students it’s willing to bankroll.

UIC, for example, has a student default rate of 2.8 percent for the group that began repaying their loans in 2013, according to the Department of Education. The University of Chicago’s student default rate from the same year is just 0.9 percent. And Northwestern’s is 1.3 percent.

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Plaid’s Lowell Putnam: ‘Liabilities gives student lenders access to a whole new set of data points’

Lowell was also the founder of Quovo, a data aggregation competitor with strength in the investment industry that Plaid acquired earlier in 2019.

Tearsheet has been covering the data aggregation industry because it’s our contention that getting this right is one of the underpinnings of modern finance. Sharing clean data between banks and apps may be somewhat of a boring business but it’s an important one.

Plaid recently launched Liabilities, a product that gives PFMs and student loan providers and refinancers access to the liabilities side of their potential clients’ balance sheets. This is a very active area of fintech and should help to propel things forward.

Plaid’s Lowell Putnam joins us on the podcast to talk about the new product and how clients are using it in their applications. Lowell was also the founder of Quovo, a data aggregation competitor with strength in the investment industry that Plaid acquired earlier in 2019. He talks about the combined entity and provides some insight into the product roadmap the company plans to execute on.

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The following excerpts were edited for clarity.

Launching the Liabilities product

We’ve always lived with a very accounting-driven mindset. Liabilities is a departure from that core data set into what I’d call metadata, for lack of a better term. Liabilities represents the access to a whole new set of data points that are unique to liabilities financial accounts. The APR on your credit card or student loans didn’t traditionally have a home in our database. But we found a lot of companies were coming to us for a data set that was slightly more diverse that we didn’t offer.

It made a lot of sense to start with student loan accounts. We have a crisis of student debt in this country. There is a lot of interest in solving the crisis but there hasn’t been a lot of ability. There’s been a real asymmetry for the demand for products to help people with their student loans and the ability of those products to really be effective. We realized it was a data challenge.

What fintech is doing with liabilities data

Over the past year, the proliferation of high yield savings accounts and debit cards coming out of fintech companies has us all leaning toward a rebundling mindset. I guess the current trend in fintech is to go broad, rather than deep.

In the case of student debt repayment, the breadth story may be a little different. I don’t know if the breadth of these new student loan repayment firms includes dropping a high yield savings account. To me, it feels more like one leg of a PFM stool — helping you manage your overall budgeting life. I can see this more of a feature attached to other savings or PFM features. It’s pretty early to tell and it will take a while to see the benefit of student loan consolidation or repayment.

If I had to guess, you might see some of the rebundled incumbents like Acorns, Stash, Betterment or SoFi adding more sophisticated repayment tools as an ancillary product or feature.

The Plaid audience

The folks looking to add a debt management solution onto their existing stack, like MoneyLion, desperately need information about existing liabilities if they want to get people on a path to a better financial life. In this case, they’re expanding their product set into a new silo.

Some others can’t get to first base on a new product without access to things like APR. Today, it’s student loans. But the Liabilities product touches on metadata points like next repayment date, current APR, APR changes over time and delinquency rates. We’ll be moving into mortgages and credit cards and other debt classes. That will open a whole new set of products, too.

The combined Plaid and Quovo

There were convergent evolutions of our product sets so that about a year ago, we found ourselves highly competitive. It wasn’t like that historically. Plaid grew up in the bank instant authentication space and where it’s excelled from the early days. Quovo started doing brokerage account aggregation. We seemed very different back in 2013.

Quovo’s wealth clients started pulling us closer to the banking space because of their interest in banking and lending — this is part of the rebundling effort that you’ve recently covered. At the same time, Plaid was pulled into much more sophisticated PFM-style use cases.

We woke up and we were real competitors. Zach and I have known each other for a while. 2019 could have gone two very different ways. We could have beaten each other up in the market and pricing probably would have suffered. Or, we could join forces and play to our strengths. We got through the deal in about 50 days from beginning to end.

Commoditization of data

Nobody says I love ConEd. We are in a lot of ways a utility, but the commodity we have is literally the lifeblood of the companies we work with. When you have water and it works, you generally don’t think about the quality of the water. We have to do a better job explaining that there is dirty and clean water.

For a fintech starting out, if Plaid gets the data right from a small credit union in the midwest, it saves you a support ticket you would have otherwise gotten from another aggregator. That has ripple effects. There are hidden costs to poor data quality.

The product roadmap

Everything we’re doing here — at its core — is providing the raw data or first-order derived data that a fintech needs to really make an impact. The Liabilities launch is a good example of that: There was no place in our dataset to put an APR, but we had demand from customers for these data points.

I would expect to see a lot more from us over the next year, listening to our customers, and adding in data points they want but we don’t have. We’ll add them in in an expandable, replicatable way. We’re not just going to get one student loan — one element — for you. If we can’t cover eighty to ninety five percent of the market, we’re not very useful. So, adding breadth as well as depth will be part of our product roadmap. You’ll be seeing more liabilities asset classes later this year, including credit cards, mortgages, HELOCs.

The work we’ve done on investments which came from rolling in a lot of the Quovo technology — that’s already been initially launched this year. We need to keep doubling down on it because investments are probably the most complicated of any account type we work with. So, we’re really just at the tip of the iceberg for investment assets.

Whatever that one data point you need, we want to be able to source that one piece of insight you need to service your customers.

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Discover Financial Services Reports Second Quarter Net Income of $753 Million or $2.32 Per …

The company’s return on equity for the second quarter of 2019 was 26%. … Shares of common stock outstanding declined by 1.8% from the prior …

2019 Capital Plan

On June 27, 2019, the Company announced that its capital plan for the four quarters ending June 30, 2020 contemplates share repurchases of up to $1.63 billion and an increase in the company’s quarterly dividend from $0.40 to $0.44 per share of common stock.

The capital plan contemplates actions that maintain capital ratios to meet regulatory and legal requirements and support the company’s funding and other capital markets activities. The timing and exact amount of repurchases under the new repurchase program will be based on market conditions and other factors, including Accounting Standards Update 2016-13, Financial Instruments – Credit Losses, commonly known as CECL, which becomes effective on January 1, 2020, and will change how financial institutions, including the company, account for expected credit losses.

Conference Call and Webcast Information

The company will host a conference call to discuss its first quarter results on Tuesday, July 23, 2019, at 4:00 p.m. Central time. Interested parties can listen to the conference call via a live audio webcast at

About Discover

Discover Financial Services (DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America’s cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business. It operates the Discover Global Network, comprised of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance around the world. For more information, visit

A financial summary follows. Financial, statistical, and business related information, as well as information regarding business and segment trends, is included in the financial supplement filed as Exhibit 99.2 to the company’s Current Report on Form 8-K filed today with the Securities and Exchange Commission (“SEC”). Both the earnings release and the financial supplement are available online at the SEC’s website ( and the company’s website (

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which speak to our expected business and financial performance, among other matters, contain words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Such statements are based upon the current beliefs and expectations of the company’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. These forward-looking statements speak only as of the date of this press release, and there is no undertaking to update or revise them as more information becomes available.

The following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: changes in economic variables, such as the availability of consumer credit, the housing market, energy costs, the number and size of personal bankruptcy filings, the rate of unemployment, the levels of consumer confidence and consumer debt, and investor sentiment; the impact of current, pending and future legislation, regulation, supervisory guidance, and regulatory and legal actions, including, but not limited to, those related to tax reform, financial regulatory reform, consumer financial services practices, anti-corruption, and funding, capital and liquidity; the actions and initiatives of current and potential competitors; the company’s ability to manage its expenses; the company’s ability to successfully achieve card acceptance across its networks and maintain relationships with network participants; the company’s ability to sustain and grow its non-card products; difficulty obtaining regulatory approval for, financing, closing, transitioning, integrating or managing the expenses of acquisitions of or investments in new businesses, products or technologies; the company’s ability to manage its credit risk, market risk, liquidity risk, operational risk, compliance and legal risk, and strategic risk; the availability and cost of funding and capital; access to deposit, securitization, equity, debt and credit markets; the impact of rating agency actions; the level and volatility of equity prices, commodity prices and interest rates, currency values, investments, other market fluctuations and other market indices; losses in the company’s investment portfolio; limits on the company’s ability to pay dividends and repurchase its common stock; limits on the company’s ability to receive payments from its subsidiaries; fraudulent activities or material security breaches of key systems; the company’s ability to remain organizationally effective; the company’s ability to increase or sustain Discover card usage or attract new customers; the company’s ability to maintain relationships with merchants; the effect of political, economic and market conditions, geopolitical events and unforeseen or catastrophic events; the company’s ability to introduce new products or services; the company’s ability to manage its relationships with third-party vendors; the company’s ability to maintain current technology and integrate new and acquired systems; the company’s ability to collect amounts for disputed transactions from merchants and merchant acquirers; the company’s ability to attract and retain employees; the company’s ability to protect its reputation and its intellectual property; and new lawsuits, investigations or similar matters or unanticipated developments related to current matters. The company routinely evaluates and may pursue acquisitions of or investments in businesses, products, technologies, loan portfolios or deposits, which may involve payment in cash or the company’s debt or equity securities.

Additional factors that could cause the company’s results to differ materially from those described in the forward-looking statements can be found under “Risk Factors,” “Business – Competition,” “Business – Supervision and Regulation” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Annual Report on Form 10-K for the year ended December 31, 2018, and “Management’s Discussion & Analysis of Financial Condition and Results of Operations” in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which are filed with the SEC and available at the SEC’s internet site (

(unaudited, in millions, except per share statistics)
Quarter Ended
June 30, 2019 March 31, 2019 June 30, 2018
Interest Income




Interest Expense




Net Interest Income




Discount/Interchange Revenue




Rewards Cost




Discount and Interchange Revenue, net




Protection Products Revenue




Loan Fee Income




Transaction Processing Revenue




Other Income




Total Other Income




Revenue Net of Interest Expense




Provision for Loan Losses




Employee Compensation and Benefits




Marketing and Business Development




Information Processing & Communications




Professional Fees




Premises and Equipment




Other Expense




Total Other Expense




Income Before Income Taxes




Tax Expense




Net Income




Net Income Allocated to Common Stockholders




Basic EPS




Diluted EPS




Common Stock Price (period end)




Book Value per share




Direct Banking




Payment Services








Total Assets




Total Liabilities




Total Equity




Total Liabilities and Stockholders’ Equity




Ending Loans 1, 2




Average Loans 1, 2




Interest Yield




Gross Principal Charge-off Rate




Gross Principal Charge-off Rate excluding PCI Loans 3




Net Principal Charge-off Rate




Net Principal Charge-off Rate excluding PCI Loans 3




Delinquency Rate (30 or more days) excluding PCI Loans 3




Delinquency Rate (90 or more days) excluding PCI Loans 3




Gross Principal Charge-off Dollars




Net Principal Charge-off Dollars




Net Interest and Fee Charge-off Dollars




Loans Delinquent 30 or more days 3




Loans Delinquent 90 or more days 3




Allowance for Loan Loss (period end)




Reserve Change Build/(Release) 4




Reserve Rate




Reserve Rate excluding PCI Loans 3




Ending Loans




Average Loans




Interest Yield




Gross Principal Charge-off Rate




Net Principal Charge-off Rate




Delinquency Rate (30 or more days)




Delinquency Rate (90 or more days)




Gross Principal Charge-off Dollars




Net Principal Charge-off Dollars




Loans Delinquent 30 or more days




Loans Delinquent 90 or more days




Allowance for Loan Loss (period end)




Reserve Change Build/(Release)




Reserve Rate




Total Discover Card Volume




Discover Card Sales Volume




Rewards Rate




PULSE Network




Network Partners




Diners Club International 5




Total Payment Services




Discover Network – Proprietary








1 Total Loans includes Home Equity and other loans.
2 Purchased Credit Impaired (“PCI”) loans are loans that were acquired in which a deterioration in credit quality occurred between the origination date and the acquisition date. These loans were initially recorded at fair value and accrete interest income over the estimated lives of the loans as long as cash flows are reasonably estimable, even if the loans are contractually past due. PCI loans are private student loans and are included in total loan receivables.
3 Excludes PCI loans (described above) which are accounted for on a pooled basis. Since a pool is accounted for as a single asset with a single composite interest rate and aggregate expectation of cash flows, the past-due status of a pool, or that of the individual loans within a pool, is not meaningful. Because the Company is recognizing interest income on a pool of loans, it is all considered to be performing.
4 Allowance for loan loss includes the net change in reserves on PCI pools having no remaining non-accretable difference which does not impact the reserve change build/(release) in provision for loan losses.
5 Volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment.
Note: See Glossary for definitions of financial terms in the financial supplement which is available online at the SEC’s website ( and the Company’s website (

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