Good morning. Welcome to Nelnet's 2021 annual meeting of shareholders. I would now like to turn the call over to the Chairman of today's meeting, Mike Dunlap.
Thank you. I'd like to call the 2021 Nelnet Annual Meeting of Shareholders to order and welcome everyone who's participating this morning. I'd also like to introduce several people that are in the room or on the call with us today. Our executive team, Jeffrey Noordhoek, CEO. Want to raise your hand, Jeff. Terry Heimes, Chief Operating Officer. Tim Tewes, President. Jim Kruger, CFO. Bill Munn, Secretary and General Counsel. Sorry. Our board of directors, Jim Abel, Chief Deputy Officer of NEBCO. Preeta Bansal, former corporate lawyer, White House Counsel, and Solicitor General of New York. Wilson Fanny, Chairman and Chief Executive Officer, Mapes Industries . Kathy Farrell, Dean, College of Business, University of Nebraska–Lincoln. David Graff, Chief Executive Officer, Hudl. JoAnn Martin, Vice Chair, Ameritas. Thomas E. Henning, President and Chief Executive Officer of Assurity, and Kimberly Rath, Co-Chair, Talent Plus.
Others in attendance, Tim Sabo, Executive Director of Internal Audit, serving as our Inspector of Elections for today's meeting. Shaun Stoker , our KPMG audit partner. Shaun is available to respond to any questions that shareholders may have this morning. Bill Munn, Nelnet Secretary, will now report on the mailing of the notice of the meeting and the presence of a quorum.
Thanks, Mike. The company posted a notice of annual meeting with shareholders on the website on April 8th, 2021. On the same date, we mailed a notice of internet availability of proxy materials to each shareholder of record as of March 29, 2021, who's entitled to vote. Immediately prior to this meeting, our Inspector of Election counted 34,310,184 shares of company's Class A and Class B common stock, representing 133,926,918 total votes present in person or by proxy. This represents 96.41% of the combined voting power of all classes of the stock. Accordingly, I declare a quorum is present at this meeting. I'd like to thank everyone that voted in advance of today's meeting. Based on the votes cast in advance, the shareholders have approved all three items of business. However, the polls will remain open throughout the meeting for shareholders that wish to vote individually today.
The final results of voting for each proposal will be reported on Form 8-K filed with the Securities and Exchange Commission within the next four business days. As a reminder, if you already voted in advance of the meeting by proxy, there's no need to vote today unless you want to change your vote.
Thanks, Bill. Based on the votes cast in advance, the shareholders have approved all three items of business. Proposal one related to the election of the board of directors. Kathy Farrell, Chair of the Nominating and Corporate Governance Committee, will report on this item.
Mr. Chairman, the company's articles of incorporation classify the board of directors into three classes, with directors in each class serving staggered three-year terms. For this year's annual meeting, the company's Nominating and Corporate Governance Committee nominated, and the shareholders approved three Class 1 directors to serve for the three-year terms until the 2024 annual meeting. The individuals named in the company's proxy statement who have been reelected to the board are Mike Dunlap, Executive Chairman, Nelnet, Preeta Bansal, former corporate lawyer and White House General Counsel and Solicitor General of New York, and JoAnn Martin, current Vice Chair and former CEO of Ameritas.
For those voting this morning or those that wish to change their vote on the election of the directors, please do so now. The next item of business was to ratify the board's appointment of KPMG as the company's independent registered public accounting firm. To report on this item, I recognize Tom Henning, Chairman of the Audit Committee.
Mr. Chairman, the Audit Committee was assigned the responsibility of recommending the independent registered public accounting firm to be appointed by the board of directors. The committee was established in August of 2003, and since its inception, has consisted entirely of directors who are independent of corporate management. It's had direct access to both the outside and internal auditors. Since inception, the committee has worked closely with KPMG, has had substantial opportunity to evaluate their work, and has found it to be of consistent high quality. The committee recommended KPMG, and the shareholders have ratified the board's appointment of KPMG to audit the consolidated financial statements of Nelnet and its subsidiaries as of and for the year ending 2021.
For those voting this morning or those that wish to change their vote on the appointment of KPMG as our independent auditor, please do so now. The next item of business was an advisory vote on the compensation of the company's named executive officers. I'd like to call upon Kimberly Rath, Chairman of the People Development and Compensation Committee, to report on this proposal.
Mr. Chairman, the company is required to give its shareholders the opportunity to cast an advisory vote on the compensation of the company's named executive officers. The Compensation Committee is responsible for designing and administering the company's executive compensation program. The committee values the opinions expressed by shareholders in their vote on this proposal and considers the shareholders' vote when making future compensation decisions.
We believe the compensation structure for the named executive officers is competitive, equitable, and designed to encourage focus on the long-term performance objectives of the company. The shareholders have agreed by their approval of the compensation of the named executive officers as disclosed in the company's proxy statement.
For those voting this morning or those that wish to change their vote on the advisory vote on the compensation of the company's named executive officers, please do so now. As it appears all votes have been submitted for those voting online this morning, I hereby declare the polls closed. Thank you to our shareholders for your votes in favor of all the items on the agenda. Since no other agenda items have been introduced, I'll adjourn the meeting and call on Jeffrey Noordhoek and Jim Kruger to provide a business and financial update. After their prepared remarks, we'll answer any questions that shareholders may have.
Good morning, welcome to our 2021 shareholder meeting. It is May 21st, and as of this week, we officially started welcoming our associates back in the office. Every year this week is what we deem Nelnet Week, with our all directors meeting, our board meetings, and our annual shareholder meeting. The theme of our meetings this week is Forward Together. From the Nelnet perspective, this pandemic is at its tail end, and we are ready to move forward. Given the success of the vaccines, I'm confident this will be our last virtual shareholder meeting for many years to come. We want to see people in person. We want to have live interaction with our shareholders and interested constituents. 25 years ago, we started a finance company that is now Nelnet.
I know that because it's also my 25th wedding anniversary, and I gave my notice at my last job 25 years ago to join Nelnet on the day I got back from my honeymoon. 25 years, so much has happened. Who could imagine that we could have a year, 2020, to bring on a global pandemic that would challenge how we lead our lives and run our businesses, and at the same time, propel us into new thought processes in how we work and communicate. In the midst of chaos and uncertainty of the pandemic, we accomplished so many feats. Just to name a small few. We successfully launched a bank. We acquired two new businesses in NBS. We recapitalized ALLO for growth. We nearly doubled the size of our private loan servicing business. We are launching new servicing and origination platforms, and we booked record earnings.
The financial outcome, over $9 per share is unbelievable. For perspective, the year we went public, we booked approximately $1 per share in earnings. During the last year alone in NBS, we processed over $45 billion in payments. We served 11.5 million students globally. We are expanding internationally as our products are now utilized in 56 countries and growing. In our loan servicing division, we now service over $500 billion in loans across multiple loan types, touching over 15 million people on a regular basis. In ALLO, we grew from 48,000 customers to over 60,000 customers and launched our service in four new communities. We accomplished incredible things in one of the most difficult years in modern human history. Just a couple of years ago, we had serious debates around if we should let people work from their homes.
Now we're moving to a corporate-endorsed hybrid work model for our over 7,000 associates. It has the potential to be a key change in all of our processes, hiring, onboarding, training, career pathing, cost structures, and corporate culture. We have big, hairy opportunities for growth. I've labeled them BHAGs. We intend to grow all of our businesses, grow the bank, grow our payments processing, our loan servicing diversification, grow ALLO, and grow a diversified loan portfolio. Lots of BHAGs. We were recently picked as one of the best places to work in our core locations in Denver, Colorado; Madison, Wisconsin; and we are also named in the top three in our hometown bank in Nebraska. We were recently named as healthiest employers in Nebraska, Wisconsin, Minnesota, and Texas. In addition, we were recently picked in the Forbes list of best employers for diversity.
However, we are not resting on our laurels. We have many opportunities to create better opportunities for the people in Nelnet. I like to call it boppin. We want this place to be boppin. We have expanded initiatives on culture, innovation, diversity and inclusion, training, personal development, and growth. Yes, as always, and with all businesses, we have some roadblocks, some headwinds. We have an outstanding bid on the government servicing business. The nation is looking at a potential increase in corporate tax rates, ever-increasing government regulations, government inaction, and government action. 14 million borrower customers who have been in deferment will be entering into repayment in our portfolio alone in October. We are currently in the process of hiring over 1,000 new associates over the next few months. Given increasing asset prices across virtually every sector in the economy, there is potentially an economic bubble that could pop.
We are living in a world where everyone is wondering what to do next, given how much the world has changed in the last 14 months. We don't see these as scary things, but opportunities to accomplish even greater success. I want to thank you for your continued investment in our company and trust in our management team. Now we'll turn it over to Jim Kruger to discuss our financial results. Jim?
Thanks, Jeff, and good morning, everyone. To reiterate, 2020 was a year like we have never seen before. Not only is it related to the pandemic, but also in terms of our outstanding operating results, especially when you consider the headwinds created by the disruption during 2020. Moving on to the first slide, we have a list of items here I want to cover that kind of highlight 2020. First is the impact of the pandemic. In the first quarter of 2020, Nelnet recognized just under $100 million in pre-tax charges related to the pandemic as we boosted our reserves for loan losses. We recognized the provision related to our partial ownership in certain consumer loan securitizations, and we impaired certain venture investments. These charges were appropriate given the economic forecast at the time, which was predicting a doom and gloom outlook for key economic metrics such as unemployment and GDP.
We began to recover a portion of these reserves in the second half of 2020 as economic conditions improved. As of our recently reported Q1 results, all reserves that were established at the start of the pandemic have now been fully recovered. As far as our Hudl investment, during the midst of the pandemic in May of 2020, Hudl completed a capital raise in which Nelnet participated and invested an additional $26 million into the business. Pretty incredible feat for Hudl to raise capital during a pandemic when sports had been paused across the globe. We account for our Hudl investment using the measurement alternative method, which requires an adjustment to the carrying value for a change in fair value from an observable transaction. This capital raise was considered an observable transaction.
As a result, Nelnet recognized a $51 million pre-tax gain in the second quarter of 2020 to mark our investment to fair value. This increased the carrying value of our investment in Hudl to $129 million. Moving on to Nelnet Bank. In March of 2020, Nelnet received approval from the FDIC and the Utah Department of Financial Institutions to establish a Utah-based industrial bank. In November of 2020, just eight short months later, in the midst of the pandemic, Nelnet Bank launched operations, and Nelnet funded the bank with $100 million of capital. The amount of capital we are willing to put into the bank gives you a sense of how enthused we are about serving a critical customer problem related to education finance, while at the same time growing our bank's balance sheet.
The end of Q1 of 2021, Nelnet Bank had nearly an $80 million private student loan portfolio in just a few months of operations. We are thrilled to have the bank charter and excited what the bank can contribute to the enterprise over the long term. As far as ALLO recapitalization, the value of ALLO's high-speed broadband products in the market was never more obvious than during the pandemic, as both work and school transitioned to a remote environment. In the fourth quarter of 2020, Nelnet entered into agreements to recapitalize the balance sheet and provide additional funding for future growth of the business with our new partner, SDC Capital Partners. As a result of the recapitalization, Nelnet's ownership interest was reduced to 45%, while SDC and management own the remaining 55% equity interest.
Nelnet deconsolidated ALLO from our operating results in December 2020 as a result of our ownership interest in ALLO dropping below 50% and our lack of control over the operations. Nelnet recognized a pre-tax gain of $259 million upon deconsolidation of ALLO in the fourth quarter of 2020. The recapitalization, along with ALLO accessing the credit markets, enabled ALLO to redeem a total of $260 million of preferred security interest held by Nelnet in late 2020 and early 2021. At the end of the first quarter of 2021, Nelnet holds roughly $130 million of preferred securities, which earn a preferred annual return of 6.25% that ALLO will use best efforts to redeem by April of 2024. Nelnet will account for its remaining 45% equity interest in ALLO using the hypothetical liquidation at book value method of accounting, HLBV for short.
Suffice it to say, the HLBV method of accounting, along with our right to utilize tax losses from ALLO's operations, may result in the recognition of earnings or losses that will not correspond to our membership interest in ALLO. Don't let the HLBV GAAP accounting treatment mask the value being created from the tax-efficient structure of the transaction that will benefit Nelnet's long-term cash flow. While we are on the topic of HLBV accounting, Nelnet has invested approximately $150 million in renewable energy, specifically solar projects, through March of 2021. These investments also utilize the HLBV method, which result in accelerated losses in the initial years of the investment. Again, the GAAP accounting treatment in the early years does not reflect the long-term positive cash flow and attractive returns that are being generated by the investment. Moving on to NDS and NBS operating performance.
Our primary operating businesses performed exceptionally well during a worldwide pandemic that decimated many other sectors. Both segments had strong top-line results given the circumstances, and expenses were managed proactively, or in other cases, expenses were just not being incurred due to the circumstances surrounding the pandemic. We continue to generate strong operating results from both of these business units while making strategic investments in products and services to serve the customer and create long-term value for the business. Lastly, the loan portfolio. Our loan portfolio performed at a high level once again in 2020. Lower interest rates during 2020 resulted in a strong core student loan spread just north of 130 basis points, or 15 basis points higher than 2019. The lower interest rate environment benefits the portion of the FFELP portfolio, which earns fixed rate floor income.
This legacy FFELP guaranteed portfolio continues to slowly melt away, but we are encouraged by the launch of Nelnet Bank, which will generate quality private education loan assets to offset some of the portfolio amortization that will invariably occur with our legacy FFELP assets. Moving on to the next slide. Got a graph for our consolidated adjusted EPS. As I mentioned earlier, here's a graph that will paint a picture of how 2020 was indeed like no other year that we've ever had. Our earnings per share in fiscal year 2020 was $9.57 per share, our best year ever in terms of earnings per share. We've talked about many of the reasons why we had such superb results. We had the gain on the deconsolidation of ALLO. We marked the Hudl investment to fair value.
Strong operating performances from our NDS and NBS businesses, our net interest margin improvement on the loan portfolio were some of the drivers that led to these outstanding earnings results. Moving on to the next slide, our results of operations by operating segment. A few items to highlight related to the results when you look at it from an operating segment lens. First, we had strong bottom-line contributions from NDS and NBS, combining for more than $2.30 per share of earnings per share. ALLO was a drag on earnings in 2020. No surprise, given the capital-intensive nature of the business. AGM, which is our loan portfolio, continues to provide the most significant contribution to the bottom line, which has been the case historically.
Our corporate and other activities is normally a cost center, but with the gain on the deconsolidation of ALLO, it had a positive contribution in 2020. What a year, with EPS of nearly $10 a share based on $374 million of adjusted net income. Moving to the next slide, our balance sheet and the cash provided by operating activity. A few highlights from our balance sheet and our cash flow. Nelnet remains extremely well-capitalized, with $2.6 billion of capital or an 11% capital ratio with minimal operating debt. Nelnet has a strong liquidity position with significant cash and liquid investments, and a $455 million operating line of credit that had no amount drawn at the end of Q1 of 2021.
Lastly, we generated nearly $200 million of cash from operations in 2020, and we expect our portfolio of loan assets that are financed to term to generate more than $2 billion of cash over the next 10-15 years. Pretty incredible cash projection as we look forward. Moving on to the final slide, our Nelnet corporate performance versus the S&P 500. This last chart is our marching fits to our shareholders. This chart puts into context Nelnet's performance relative to the S&P 500 in terms of return on investment. I think the takeaway here is we continue to operate the business to generate long-term sustainable cash flow, which will create value for our shareholders well into the future. The 17+% compound annual growth rate since we went public demonstrates our ability to invest capital and achieve returns well in excess of the S&P 500.
We want to thank you for your investment in Nelnet and your continued confidence in the team. That concludes our prepared remarks. We will now open up the floor to questions.