What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-23 · 370 added, 382 removed, 1894 unchanged (28% of the section changed)

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of the Federal Agricultural Mortgage Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of the Federal Agricultural Mortgage Corporation and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Valuation of AgVantage Farmer Mac Guaranteed Securities

As disclosed by management, the Company guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of the types of loans eligible for purchase under Farmer Mac's Agricultural Finance or Rural Infrastructure Finance lines of business, which are referred to as AgVantage securities.

As disclosed by management, the Company guarantees and purchases general obligations of lenders and other financial institutions that are secured by pools of the types of loans eligible for purchase under Farmer Mac's Agricultural Finance or Infrastructure Finance lines of business, which are referred to as AgVantage securities.

As described in Notes 5 and 13 to the consolidated financial statements, the total unpaid principal balance of AgVantage securities as of December 31, 2024 was $8.5 billion, and the fair value of the AgVantage securities of December 31, 2024 was $8.2 billion.

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(in thousands)

Cash and cash equivalents $ 888,707 $ 861,002

Cash and cash equivalents (includes restricted cash of $ 16,190 and $ 5,111 , respectively)

$ 1,024,007 $ 888,707

Investment securities:

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Total USDA Securities 2,371,352 2,355,412

Loans held for sale, at lower of cost or fair value 6,170 —

Loans held for investment, at amortized cost 11,183,408 9,623,119

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Preferred stock:

Series C, par value $ 25 per share, 3,000,000 shares authorized, issued and outstanding

73,382 73,382

Series C, par value $ 25 per share, 3,000,000 shares authorized, issued and outstanding as of December 31, 2023 (redemption value $ 75,000,000 )

Series D, par value $ 25 per share, 4,000,000 shares authorized, issued and outstanding

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Net interest income 353,867 327,547 270,940

(Provision for)/release of losses ( 858 ) ( 1,323 ) 860

Net interest income after (provision for)/release of losses 326,689 269,617 222,811

Provision for losses ( 11,579 ) ( 858 ) ( 1,323 )

Net interest income after provision for losses 342,288 326,689 269,617

Non-interest income/(expense):

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Gains on financial derivatives 2,636 2,882 22,631

Gains on sale of mortgage loans — — 6,539

Gains/(losses) on trading securities 24 ( 51 ) ( 115 )

Gains on sale of available-for-sale investment securities — — 253

(Provision for)/release of reserve for losses

Losses on sale of mortgage loans

( 1,147 ) — —

Gains on sale of available-for-sale investment securities

Release of/(provision for) reserve for losses 89 ( 278 ) 517

Other income 3,029 4,195 2,500

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Preferred stock dividends ( 25,146 ) ( 27,165 ) ( 27,165 )

Loss on retirement of preferred stock ( 1,619 ) — —

Net income attributable to common stockholders $ 180,428 $ 172,838 $ 150,979

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Net unrealized gains/(losses) on available-for-sale securities

39,078 59,640 ( 137,506 )

Net changes in held-to-maturity securities ( 636 ) ( 31,750 ) 259

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Other comprehensive income/(loss) before tax 35,440 13,542 ( 69,235 )

13,542 ( 69,235 ) 22,500

Income tax (expense)/benefit related to other comprehensive income/(loss) ( 7,442 ) ( 2,844 ) 14,539

( 2,844 ) 14,539 ( 4,724 )

Other comprehensive income/(loss) net of tax 27,998 10,698 ( 54,696 )

10,698 ( 54,696 ) 17,776

Comprehensive income $ 235,191 $ 210,701 $ 123,448

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Net Income — — — — — — 178,144 178,144

Other comprehensive income, net of tax

Other comprehensive loss, net of tax

— — — — — ( 54,696 ) — ( 54,696 )

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— — — — — — ( 41,006 ) ( 41,006 )

Issuance of Series G Preferred Stock 5,000 121,327 — — — — — 121,327

Issuance of Class C Common Stock — — 35 35 190 — — 225

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Net Income — — — — — — 200,003 200,003

Other comprehensive loss, net of tax

Other comprehensive income, net of tax

— — — — — 10,698 — 10,698

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Other comprehensive income, net of tax — — — — — 27,998 — 27,998

— — — — — 10,698 — 10,698

Cash dividends:

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— — — — — — ( 60,905 ) ( 60,905 )

Redemption of Series C preferred stock ( 3,000 ) ( 73,382 ) — — — — — ( 73,382 )

Loss on retirement of preferred stock — — — — — — ( 1,619 ) ( 1,619 )

Issuance of Class C Common Stock — — 49 49 287 — — 336

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Amortization of debt premiums, discounts, and issuance costs 21,242 31,421 19,656

Net change in fair value of trading securities, hedged items, and financial derivatives

Net change in fair value of trading securities, loans held for sale, hedged items, and financial derivatives

214,319 78,249 689,998

Gain on the sale of available-for-sale investment securities — — ( 253 )

Gain on the sale of mortgage loans — — ( 6,539 )

Losses on sale of mortgage loans

Gains on the sale of available-for-sale investment securities

( 1,052 ) — —

Total provision for/(release of) allowance for losses 11,490 1,136 806

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Cash flows from investing activities:

Purchases of equipment and leasehold improvements

( 5,272 ) — —

Purchases of available-for-sale and held-to-maturity investment securities

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Purchases of defaulted loans

( 4,447 ) — —

Proceeds from repayment of available-for-sale and held-to-maturity investment securities

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Proceeds from repayment of loans purchased as held for investment 1,655,784 1,363,588 1,321,989

Proceeds from sale of loans previously classified as held for investment — 9,000 301,393

Proceeds from sale of available-for-sale investment securities

Proceeds from sale of loans previously classified as held for investment

5,775 — 9,000

Proceeds from sale of Farmer Mac Guaranteed Securities

60,192 — 99,643

Net cash used in investing activities ( 1,682,473 ) ( 1,955,381 ) ( 3,042,959 )

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Proceeds from issuance of medium-term notes 8,545,837 8,274,618 9,031,116

Proceeds from third parties from issuance of debt securities of consolidated trusts 222,188 258,198 —

Proceeds from issuance of debt securities of consolidated trusts

588,250 222,188 258,198

Payments to redeem discount notes ( 59,308,438 ) ( 48,138,591 ) ( 54,085,418 )

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Proceeds from common stock issuance 287 233 192

Proceeds from preferred stock issuance, net of stock issuance costs — — 121,327

Tax payments related to share-based awards ( 5,351 ) ( 3,013 ) ( 1,835 )

Retirement of preferred stock

( 75,000 ) — —

Dividends paid on common and preferred stock ( 86,052 ) ( 74,817 ) ( 68,171 )

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Net change in cash and cash equivalents 135,300 27,705 ( 47,783 )

Cash and cash equivalents at beginning of period 861,002 908,785 1,033,941

Cash and cash equivalents at end of period $ 888,707 $ 861,002 $ 908,785

Cash, cash equivalents, and restricted cash at beginning of period

888,707 861,002 908,785

Cash, cash equivalents, and restricted cash at end of period

$ 1,024,007 $ 888,707 $ 861,002

Cash paid during the period for:

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Loans held for investment transferred to consolidated trusts 624,097 281,027 297,713

Reclassification of loans held for investment to loans held for sale — — 301,551

The accompanying notes are an integral part of these consolidated financial statements.

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Farmer Mac was originally created by the United States Congress to provide a secondary market for a variety of loans made to borrowers in rural America.

This secondary market is designed to increase the availability of long-term credit at stable interest rates to America's rural communities and to provide rural borrowers with the benefits of capital markets pricing and product innovation.

This secondary market is designed to increase the accessibility of finance at stable interest rates to America's rural communities and to provide rural borrowers with the benefits of capital markets pricing and product innovation.

Farmer Mac's secondary market activities include:

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• providing long-term standby purchase commitments ("LTSPCs") for eligible loans.

Farmer Mac conducts its secondary market activities through two lines of business — Agricultural Finance and Rural Infrastructure Finance.

Farmer Mac conducts its secondary market activities through two lines of business — Agricultural Finance and Infrastructure Finance.

For more information about those lines of business and the segments within them, see Note 14 - Business Segments.

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(1) Farmer Mac Mortgage Securities Corporation, whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities;

and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Securities included in the

Agricultural Finance line of business.

and (2) Farmer Mac II LLC, which operated

substantially all of the business related to the USDA Securities included in the Agricultural Finance line of business from 2010 through 2023 and continues to hold a "run-off" portfolio of USDA Securities.

The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

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Premiums, discounts, and other deferred costs are amortized to interest income using the effective interest method.

Farmer Mac generally receives compensation when loans with yield maintenance provisions underlying Farmer Mac Guaranteed Securities prepay.

Farmer Mac generally receives compensation when loans with yield maintenance provisions underlying AgVantage Farmer Mac Guaranteed Securities prepay.

These yield maintenance payments mitigate Farmer Mac's exposure to reinvestment risk and are calculated such that, when reinvested with the prepaid principal, they should generate substantially the same cash flows that would have been generated had the loans not prepaid.

Yield maintenance payments are recognized as interest income in the consolidated statements of operations upon receipt.

Interest Income Recognition on Interest-Only Farmer Mac Guaranteed Securities ("IO-FMGS")

Farmer Mac recognizes interest income for its IO-FMGS by applying the effective yield methodology required by GAAP for financial assets that are either not of high credit quality at the time of acquisition or can be contractually prepaid or otherwise settled in such a way that Farmer Mac would not recover substantially all of its recorded investment.

The amount of periodic interest income recognized is determined by applying the IO-FMGS effective interest rate to its amortized cost basis (or “reference amount”).

At the time of acquisition, the effective interest rate is calculated by solving for the single discount rate that equates the present value of Farmer Mac's best estimate of the amount and timing of the cash flows expected to be collected from the IO-FMGS to its purchase cost.

To prepare its best estimate of cash flows expected to be collected, Farmer Mac develops a number of assumptions about the future performance of the pool of mortgage loans that serve as collateral, including assumptions about the timing and amount of prepayments and credit losses.

In each subsequent quarterly reporting period, the amount and timing of cash flows expected to be collected from the IO-FMGS are re-estimated based upon current information and events.

Yield maintenance payments are recognized as interest income in the consolidated statements of operations.

Loans for which Farmer Mac has the positive intent and ability to hold for the foreseeable future are classified as held for investment and reported at their unpaid principal balance, net of unamortized purchase discounts or premiums.

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Securitization involves the transfer of financial assets to another entity in exchange for cash and/or beneficial interests in the assets transferred.

Farmer Mac or third parties transfer agricultural mortgage loans, Rural Infrastructure loans, or USDA securities into trusts that are used as vehicles for the securitization of the transferred financial assets.

Farmer Mac or third parties transfer agricultural mortgage loans, Infrastructure loans, or USDA securities into trusts that are used as vehicles for the securitization of the transferred financial assets.

The trusts issue Farmer Mac Guaranteed Securities that are beneficial interests in the assets of the trusts, to either Farmer Mac or third-party investors.

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If Farmer Mac repurchases a loan that is collateral for a Farmer Mac Guaranteed Security, Farmer Mac would have the right to enforce the terms of the loan, and in the event of a default, would have access to the underlying collateral.

Farmer Mac typically recovers its investment in the defaulted loans purchased

either through borrower payments, loan payoffs, payments by third parties, or foreclosure and sale of the collateral securing the loans.

Farmer Mac typically recovers its investment in the defaulted loans purchased either through borrower payments, loan payoffs, payments by third parties, or foreclosure and sale of the collateral securing the loans.

Farmer Mac has recourse to the USDA for any amounts advanced for the timely payment of principal and interest on Farmer Mac Guaranteed USDA Securities.

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Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of Farmer Mac's continuing involvement with the assets transferred.

Gains and losses stemming from transfers reported as sales are included in “Gain on sale of mortgage loans” in the accompanying consolidated statements of operations.

Gains and losses stemming from transfers reported as sales are included in the accompanying consolidated statements of operations when incurred.

Assets obtained and liabilities incurred in connection with transfers reported as sales are initially recognized in the consolidated balance sheets at fair value.

In fourth quarter 2021, Farmer Mac executed a structured securitization of a $ 299.4 million pool of Farm & Ranch loans.

The securitization consisted of two classes of securities, Class A and Class B.

The Class A securities are backed by 92.5 % of the pool and is guaranteed by Farmer Mac.

The Class B Tranche is backed by the remaining 7.5 % of the pool.

Credit losses on the entire pool are first allocated to the Class B securities.

As a result of the transaction, Farmer Mac recognized the following:

A guarantee asset and liability related to the guarantee fees and the obligation to stand ready to perform on the guarantee to the Class A security holders.

A servicing asset related to Farmer Mac’s role as Master and Central Servicer.

Farmer Mac will earn a related servicing fee.

A retained interest-only strip of a Farmer Mac Guaranteed Security (IO-FMGS) security.

The above assets and liabilities were initially recorded on the consolidated balance sheets at fair value.

For more information on fair value measurement see Footnote 13.

The securitization trust used to effect this transaction was a variable interest entity that Farmer Mac does not consolidate.

See Table 2.4 below for more information about these trusts.

Gains or losses arising from securitization are recorded as the difference between the transferred loans’ carrying values and the sum of (a) the initial fair value of the assets or liabilities received and (b) net cash proceeds.

For the year ended December 31, 2021, Farmer Mac recorded $ 6.5 million in gains attributable to securitization activity.

These gains were reported in “Gains on sale of mortgage loans” in the consolidated statements of operations.

Farmer Mac recorded no gains attributable to securitization activity for both the years ended December 31, 2023 and 2022.

(f) Financial Derivatives

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Master netting agreements provide for the netting of amounts receivable and payable from an individual counterparty, as well as posting of collateral in the form of cash depending on which party is in a liability position.

Farmer Mac has master netting agreements in place with most of our OTC derivative counterparties.

Farmer Mac has master netting agreements in place with all of our OTC derivative counterparties.

The market value of each counterparty's derivatives outstanding is calculated to determine the amount of our net credit exposure, which is equal to the market value of derivatives in net gain position by counterparty after giving consideration to collateral posted.

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(h) Allowance for Losses and Reserve for Losses

Farmer Mac's allowance for credit losses represents the difference between the carrying amount of the related financial instruments and the present value of their expected cash flows discounted at their effective interest rates, as of the respective balance sheet date.

Farmer Mac's reserve for credit losses represents the difference between the outstanding amount of off-balance sheet credit exposures and the present value of their expected cash flows discounted at their effective interest rates.

Farmer Mac maintains an allowance for credit losses to cover current expected credit losses as of the balance sheet date for on-balance sheet investment securities, loans held for investment, and Farmer Mac Guaranteed Securities (collectively referred to as "allowance for losses").

Farmer Mac maintains an allowance for credit losses to cover current expected credit losses as of the balance sheet date for on-balance sheet investment securities, loans held for investment, and AgVantage Farmer Mac Guaranteed Securities (collectively referred to as "allowance for losses").

Farmer Mac also maintains a reserve for credit losses to cover current expected credit losses as of the balance sheet date for off-balance sheet loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities (collectively referred to as "reserve for losses").

Both the allowance for losses and reserve for losses are based on historical information and reasonable and supportable forecasts.

Farmer Mac has never experienced a credit loss in its Rural Infrastructure Finance line of business.

Farmer Mac measures its expected credit losses for the expected life of all financial instruments, including its Rural Infrastructure Finance loans.

Farmer Mac has never experienced a credit loss in its Infrastructure Finance line of business.

Farmer Mac measures its expected credit losses for the expected life of all financial instruments, including its Infrastructure Finance loans.

To estimate expected credit losses on these loans, Farmer Mac relies upon industry historical credit loss data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities and renewable industries.

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Farmer Mac's estimation methodology includes the following key components:

• An economic model for each portfolio, including Agricultural Finance loans (Corporate AgFinance and Farm & Ranch), Rural Infrastructure Finance loans (Rural Utilities and Renewable Energy), and AgVantage Securities;

• An economic model for each portfolio, including Agricultural Finance loans (Corporate AgFinance and Farm & Ranch), Infrastructure Finance loans (Power & Utilities, Broadband Infrastructure, and Renewable Energy), and AgVantage Securities;

• A migration matrix for each portfolio that reasonably predicts the movement of each financial asset among various risk categories over the course of each asset's expected life (the migration matrix forms the basis for our estimate of the probability of default of each financial asset);

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Collateral Dependent Assets ("CDAs")

CDAs are loans, loans underlying LTSPCs, or off-balance sheet credit exposures in which the borrower is either in foreclosure or is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral by Farmer Mac.

CDAs are loan credit exposures in which the borrower is either in foreclosure or is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral by Farmer Mac.

Farmer Mac estimates the current expected credit loss on CDAs based upon the appraised value of the collateral, the costs to sell it, and any applicable credit protection such as a guarantee.

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Diluted EPS $ 180,428 10,975 $ 16.44 $ 172,838 10,937 $ 15.81 $ 150,979 10,883 $ 13.87

(1) For years ended December 31, 2023, 2022 and 2021, SARs and restricted stock units of 32,683 , 32,448 , and 39,326 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

(1) For the Years Ended December 31, 2024, 2023, and 2022, SARs and restricted stock units of 30,891 , 32,683 , and 32,448 , respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

For the Years Ended December 31, 2024, 2023, and 2022, contingent shares of unvested restricted stock units of 28,670 , 30,648 , and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

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If the service or performance conditions are not met, Farmer Mac reverses previously recognized compensation expense upon forfeiture.

Farmer Mac recognized $ 6.8 million, $ 4.6 million, and $ 4.3 million of compensation expense related to SARs and non-vested restricted stock unit awards for 2023, 2022, and 2021, respectively.

Farmer Mac recognized $ 8.1 million, $ 6.8 million, and $ 4.6 million of compensation expense related to SARs and non-vested restricted stock unit awards for the years ended December 31, 2024, 2023, and 2022, respectively.

(l) Comprehensive Income

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Balance as of January 1, 2022

Other comprehensive income before reclassifications 9,114 — 11,602 20,716

Amounts reclassified from AOCI ( 2,109 ) ( 6,676 ) 5,845 ( 2,940 )

Net comprehensive income/(loss) 7,005 ( 6,676 ) 17,447 17,776

Balance as of December 31, 2021 $ ( 6,932 ) $ 16,153 $ ( 5,368 ) $ 3,853

$ ( 6,932 ) $ 16,153 $ ( 5,368 ) $ 3,853

Other comprehensive (loss)/income before reclassifications

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Balance as of December 31, 2023 $ ( 68,447 ) $ ( 8,724 ) $ 37,026 $ ( 40,145 )

Other comprehensive income before reclassifications

31,715 — 13,947 45,662

Amounts reclassified from AOCI ( 843 ) ( 502 ) ( 16,319 ) ( 17,664 )

Net comprehensive income/(loss) 30,872 ( 502 ) ( 2,372 ) 27,998

Balance as of December 31, 2024 $ ( 37,575 ) $ ( 9,226 ) $ 34,654 $ ( 12,147 )

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the years ended December 31, 2024, 2023, and 2022:

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2024 2023 2022

Before Tax Provision (Benefit) After Tax Before Tax Provision (Benefit) After Tax Before Tax Provision (Benefit) After Tax

Before Tax Provision (Benefit) After Tax Before Tax Provision(Benefit) After Tax Before Tax Provision (Benefit) After

(in thousands)

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Unrealized holding gains/(losses) on available-for-sale securities

Less reclassification adjustments included in:

Net interest income (1)

$ 40,145 $ 8,430 $ 31,715 $ 59,640 $ 12,526 $ 47,114 $ ( 137,500 ) $ ( 28,876 ) $ ( 108,624 )

Less reclassification adjustments included in:

Gains on sale of available-for-sale investment securities (1)

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Unrealized gains on cash flow hedges

$ 17,655 $ 3,708 $ 13,947 $ 6,295 $ 1,322 $ 4,973 $ 69,225 $ 14,537 $ 54,688

Less reclassification adjustments included in:

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Other comprehensive income/(loss)

(1) Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

$ 35,440 $ 7,442 $ 27,998 $ 13,542 $ 2,844 $ 10,698 $ ( 69,235 ) $ ( 14,539 ) $ ( 54,696 )

(1) Represents realized gains and losses on sales of available-for-sale securities.

(2) Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

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LTSPCs and securitization trusts where Farmer Mac is not the primary beneficiary result in the creation of guarantee obligations for Farmer Mac.

Farmer Mac records, at the inception of a guarantee or LTSPC, a liability for the fair value of its obligation to stand ready to perform under the terms of each guarantee or LTSPC and an asset that is equal to the fair value of

the fees that will be received over the life of each guarantee or LTSPC.

The fair values of the guarantee obligation and asset at inception are based on the present value of expected cash flows using management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves, and discount rates commensurate with the risks involved.

The fair values of the guarantee obligation and asset at inception are based on the present value of expected cash flows using

management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves, and discount rates commensurate with the risks involved.

Because the cash flows of these instruments may be interest rate path dependent, these values and projected discount rates are derived using a Monte Carlo simulation model.

The guarantee obligation and corresponding asset are later amortized into guarantee and commitment fee income in relation to the decrease in the unpaid principal balance on the underlying Agricultural Finance real estate mortgage loans and Rural Infrastructure Finance loans.

See Note 2(h) for Farmer Mac's policy for estimating probable losses for LTSPCs.

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In such cases, an instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.

Farmer Mac's assessment of the significance of a particular input to the fair value measurement of an instrument requires judgment and consideration of factors

specific to the instrument.

While Farmer Mac believes its valuation methods are appropriate and consistent with those of other market participants, using different methodologies or assumptions to determine fair value could result in a materially different estimate of fair value for some financial instruments.

Farmer Mac's assessment of the significance of a particular input to the fair value measurement of an instrument requires judgment and consideration of factors specific to the instrument.

While Farmer Mac believes its valuation methods are appropriate and consistent with those of other market participants, using different methodologies or assumptions to

determine fair value could result in a materially different estimate of fair value for some financial instruments.

The following is a description of the fair value techniques used for instruments measured at fair value as well as the general classification of those instruments under the valuation hierarchy described above.

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For these trusts, the shared power provisions are substantive with respect to decision-making power and relate to the same activity (i.e., default mitigation).

For similar securitization transactions where the power to make decisions regarding default mitigation was shared with a related party, Farmer Mac determined that it was the primary beneficiary because the applicable accounting guidance does not permit parties within a related

party group to conclude that the power is shared.

In the event that a related party status changes, consolidation or deconsolidation of these securitization trusts could occur.

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For VIEs classified as investment securities, which include auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, Farmer Mac is determined not to be the primary beneficiary because of the lack of voting rights or other powers to direct the activities of the trust.

In 2021, Farmer Mac executed a structured securitization of a $ 299.4 million pool of Farm & Ranch loans.

For more information about this securitization, see Note 2(e) - Securitization.

The securitization trust used to effect this transaction was a variable interest entity that Farmer Mac has not consolidated.

Farmer Mac determined that it was not the primary beneficiary of the securitization trust because the subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer with or without cause.

The following tables present, by segment, details about the consolidation of VIEs:

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Farmer Mac's policy is to include the cash in the consolidated balance sheet as "Cash and cash equivalents" with an offsetting liability to "Accounts payable and accrued expenses" until the payment is contractually due, at which point the payment is applied to the loan.

The net change in the amount of this custodial cash will also be disclosed in the consolidated statements of cash flows as "Custodial deposit liability."

The net change in the amount of this custodial cash will also be disclosed in the consolidated statements of cash flows as "Custodial deposit liability." The balance of this liability was $ 157.1 million and $ 26.5 million as of December 31, 2024 and 2023, respectively.

(q) Business Segments

Farmer Mac's Chief Operating Decision Maker ("CODM") – its President and Chief Executive Officer – reviews financial information of seven operating segments, which are reportable segments.

The CODM reviews the financial information of the seven segments to make decisions about allocating resources and to assess the financial performance of those segments.

The seven reportable segments are:

During fourth quarter 2024, Farmer Mac's Chief Operating Decision Maker ("CODM") – its President and Chief Executive Officer – began to be provided with financial information of an additional operating segment, "Broadband Infrastructure." Prior to fourth quarter 2024, the financial information of the Broadband Infrastructure segment had been included within the Rural Utilities segment, which was renamed as "Power & Utilities" in fourth quarter 2024.

The CODM reviews segment core earnings to make decisions about allocating resources and to assess the financial performance of the segments.

Prior to fourth quarter 2024, the reportable segments were:

Farm & Ranch, Corporate AgFinance, Rural Utilities, Renewable Energy, Funding, Investments, and Corporate.

The purpose of the alignment of the company's segments is for the CODM to review and analyze financial performance according to the type of customer and market rather than according to the type of product offerings.

The financial information for the Funding and Investments segments allow the CODM to review the results of the company's Treasury activities.

All operating expenses are managed at the

enterprise level and are reported within the Corporate segment rather than allocated to any of the other segments.

The operations and financial results of the Farm & Ranch and Corporate AgFinance segments are within our Agricultural Finance line of business.

The Farm & Ranch segment includes the financial results of the USDA Securities portfolio and Farm & Ranch loans.

The Corporate AgFinance segment includes loans and AgVantage securities to larger and more complex farming operations, agribusinesses focused on food and fiber processing, and other supply chain production.

The Rural Utilities and Renewable Energy segments are within our Rural Infrastructure Finance line of business.

The Rural Utilities segment includes loans to rural electric generation and transmission cooperatives, distribution cooperatives, and telecommunications providers, as well as AgVantage securities secured by those types of loans.

The Renewable Energy segment includes loans to rural electric solar and wind energy projects.

The Funding segment includes the financial results of the company's debt issuance, hedging, asset/liability management, and capital allocation strategies.

The company allocates interest expense to each of the other segments (except Corporate) using a funds transfer pricing process.

That process also allocates the benefits and costs from the company's funding and hedging strategies to the Funding segment.

The Investments segment includes the financial results of the company's investment portfolio, which is held for liquidity purposes.

Interest expense is allocated to the Investments segment using the same funds transfer pricing process that is used to allocate interest expense to the other segments.

The Corporate segment includes all of the company's operating expenses, including compensation, general and administrative expenses, and regulatory fees.

The Corporate segment also includes items of other income and preferred stock dividend expense.

Farmer Mac uses the non-GAAP financial measure "core earnings" to measure corporate economic

performance and develop financial plans because, in management's view, core earnings is a useful

alternative measure in understanding Farmer Mac's economic performance, transaction economics, and

business trends.

The main difference between core earnings and net income attributable to common

stockholders is that core earnings excludes the effects of fair value fluctuations, which are not expected to

have a cumulative net impact on financial condition or results of operations reported in accordance with

generally accepted accounting principles if the related financial instruments are held to maturity, as is

generally expected.

Core earnings also differs from net income attributable to common stockholders by

excluding specified infrequent or unusual transactions that Farmer Mac believes are not indicative of

future operating results and that may not reflect the trends and economic financial performance of Farmer

Mac's core business.

This corporate economic performance measure may not be comparable to similarly

labeled measures disclosed by other companies.

Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest earning assets and the related net funding costs of these assets.

Net effective spread differs from net interest income and net interest yield because it excludes:

(1) the amortization of premiums and discounts on assets consolidated at fair value that are amortized as adjustments to yield in interest income over the contractual or estimated remaining lives of the underlying assets;

(2) interest income and interest expense related to consolidated trusts with beneficial interests owned by third parties (single-class), which are presented on Farmer Mac's consolidated balance sheets as "Loans held for investment in consolidated

trusts, at amortized cost";

and (3) the fair value changes of financial derivatives and the corresponding assets or liabilities designated in a fair value hedge accounting relationship.

Beginning in fourth quarter 2024, the reportable segments are:

Farm & Ranch, Corporate AgFinance, Power & Utilities, Broadband Infrastructure, Renewable Energy, Funding, and Investments.

The purpose of separately reporting the

financial results of the Broadband Infrastructure segment is for the CODM to separately review and analyze its financial performance according to this type of customer and market because it is meaningfully distinct from the Power & Utilities customer and market.

Prior to 2024, all operating expenses were allocated to a Corporate segment.

Beginning in fourth quarter 2024, operating expenses that are directly attributable to the operating segments are allocated to each respective segment.

The remaining operating expenses that are not directly attributable to operating segments are unallocated and reported as a reconciling adjustment between total segment results and consolidated net income.

For the three years ended December 31, 2024, 2023, and 2022, Farmer Mac has recast its segment results to reflect these changes.

See Note 14 for more information on segment profitability.

(r) New Accounting Standards

Recently Adopted Accounting Guidance

Standard Description Date of Adoption Effect on Consolidated Financial Statements

ASU 2020-04 and 2021-01 , Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting.

They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

January 1, 2020 During the second quarter 2023, Farmer Mac adopted optional expedients including those relating to qualifying hedging relationships and contract modification relief and, since September 30, 2023, has no further exposure to LIBOR.

To date, these elections did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.

ASU 2022-06 , Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848

The amendments in this Update deferred the sunset date in Topic 848 from December 31, 2022 to December 31, 2024.

December 21, 2022 Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.

ASU 2022-02 , Financial Instruments-Credit Losses (Topic 326):

Troubled Debt Restructurings and Vintage Disclosures

The Update addresses and amends areas identified by the Financial Accounting Standards Board as part of its post-implementation review of the accounting standard that introduced the current expected credit losses (“CECL”) model.

The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty.

In addition, the amendments require disclosure of current-period gross write offs for financing receivables and net investment in leases by year of origination in the vintage disclosures.

January 1, 2023 The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

ASU 2022-01 , Fair Value Hedging - Portfolio Layer Method

The Update introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method).

It also expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio, and provides that an entity may reclassify HTM debt securities identified within 30 days of the date of adoption to AFS if the entity applies portfolio layer method hedging to those debt securities.

January 1, 2023 Farmer Mac adopted this guidance as of January 1, 2023.

Farmer Mac does not currently hedge interest rate risk for single closed portfolios of financial assets, so adoption of this guidance had no effect on Farmer Mac's financial condition, results of operations, cash flows, or disclosures given current strategies.

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard Description Date of Adoption

Effect on Consolidated Financial Statements

ASU 2023-02 , Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

The amendments in this Update permit an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received.

January 1, 2024 The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

ASU 2023-07 , Segment Reporting (Topic 280):

2 unchanged sentences

This Update also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss.

Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this Update and existing disclosures in Topic 280.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments should be applied retrospectively.

Early adoption is permitted.

Farmer Mac is still assessing the effect on our annual consolidated financial statement disclosures, however, adoption will not have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods.

December 31, 2024 Farmer Mac adopted this ASU for the year-end December 31, 2024, and applied it retrospectively to all prior periods presented.

See note 14 to the consolidated financial statements.

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Effect on Consolidated Financial Statements

ASU 2023-09 , Income Taxes (Topic 740):

6 unchanged sentences

Farmer Mac is still assessing the impact of the new accounting standard but does not expect that adoption of the new guidance will have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

ASU 2024-03 , Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted.

(s) Reclassifications

18 unchanged sentences

Sales of Farmer Mac Guaranteed Securities 60,192 — 99,643

The purchases of loans from Zions under the Agricultural Finance line of business represented approximately 9.5 %, 12.9 %, and 8.0 % of Agricultural Finance mortgage loan purchases for the years ended December 31, 2023, 2022, and 2021, respectively, and 6.9 %, 9.6 % and 5.6 %, respectively, of total Agricultural Finance mortgage loan business volume (excluding AgVantage and USDA Securities).

The purchases of USDA Securities from Zions represented approximately 0.1 %, 1.5 %, and 2.1 % of total purchases of USDA Securities for the years ended December 31, 2023, 2022, and 2021, respectively.

Outstanding Agricultural Finance mortgage loans purchased and USDA Securities purchased from Zions represented 3.1 % and 3.5 %, respectively, of Farmer Mac's outstanding business volume (excluding loans serviced for others) as of December 31, 2023 and 2022.

Outstanding Agricultural Finance mortgage loans purchased and USDA Securities purchased from Zions represented 3.1 % of Farmer Mac's outstanding business volume (excluding loans serviced for others) as of both December 31, 2024 and 2023.

Zions retained servicing fees of $ 11.2 million, $ 11.2 million, and $ 10.4 million in 2024, 2023, and 2022, respectively, for its work as a Farmer Mac servicer.

National Rural Utilities Cooperative Financial Corporation :

Farmer Mac considers the National Rural Utilities Cooperative Financial Corporation ("CFC") a related party because CFC owns approximately 7.91 % of Farmer Mac's Class A voting common stock and because a member of Farmer Mac's board of directors had an affiliation with CFC through June 2021.

Farmer Mac considers the National Rural Utilities Cooperative Financial Corporation ("CFC") a related party because CFC owns approximately 7.91 % of Farmer Mac's Class A voting common stock.

The following transactions occurred between Farmer Mac and CFC during 2024, 2023, and 2022:

9 unchanged sentences

Total purchases and guarantees $ 653,972 $ 1,748,254 $ 1,087,419

The transactions with CFC represented 37.1 % of Farmer Mac's loan purchase volume under the Rural Infrastructure Finance line of business for 2023, compared to 46.7 % of Rural Infrastructure Finance loan purchase volume for 2022 and 36.9 % for 2021.

These transactions represented 33.8 %, 13.4 %, and 37.0 % of AgVantage securities volume for 2023, 2022, and 2021, respectively, and represented 22.6 %, 12.0 %, and 18.4 % of new business volume for 2023, 2022, and 2021, respectively.

Of Farmer Mac's total outstanding business volume (excluding loans serviced for others) as of December 31, 2023 and 2022, Rural Utilities loans, loans under LTSPCs, and AgVantage securities issued by CFC represented 20.4 % and 18.7 %, respectively.

Of Farmer Mac's total outstanding business volume (excluding loans serviced for others) as of December 31, 2024 and 2023, Power & Utilities loans, loans under LTSPCs, and AgVantage securities issued by CFC represented 19.0 % and 20.4 %, respectively.

Farmer Mac had interest receivable of $ 30.0 million and $ 27.0 million as of December 31, 2024 and 2023, respectively, and earned interest income of $ 158.4 million, $ 143.5 million, and $ 79.4 million during 2024, 2023, and 2022, respectively, related to its AgVantage transactions with CFC.

2 unchanged sentences

Farmer Mac considers CoBank a related party because CoBank owns approximately 32.6 % of Farmer Mac's Class B voting common stock.

Farmer Mac purchased $ 438.8 million, $ 376.0 million, and $ 207.5 million of loans and participations from CoBank, under the Rural Infrastructure Finance and Agricultural Finance lines of business in 2023, 2022, and 2021, respectively.

Farmer Mac purchased $ 442.7 million, $ 438.8 million, and $ 376.0 million of loans and participations from CoBank, under the Infrastructure Finance and Agricultural Finance lines of business in 2024, 2023, and 2022, respectively.

Of Farmer Mac's total outstanding business volume as of December 31, 2024 and 2023, CoBank's loans, participations, and unfunded commitments represented 7.1 % and 6.7 %, respectively, of total outstanding volume (excluding loans serviced for others).

2 unchanged sentences

Farmer Mac considers AgFirst Farm Credit Bank ("AgFirst") a related party because AgFirst owns approximately 16.8 % of Farmer Mac's Class B voting common stock.

AgFirst entered into no Agricultural Finance LTSPC transactions in either 2023 or 2022, and entered into $ 11.0 million of Agricultural Finance LTSPC transactions in 2021.

AgFirst entered into no Agricultural Finance LTSPC transactions in either 2024, 2023, or 2022.

The aggregate balance of Agricultural Finance LTSPCs outstanding as of December 31, 2024 and 2023 was $ 415.2 million and $ 447.3 million, respectively.

1 unchanged sentence

AgFirst owns certain securities backed by rural housing loans.

Farmer Mac guarantees the last ten percent of losses (based on the original principal balance at the time of pooling) from each loan in the pool

backing those securities.

Farmer Mac guarantees the last ten percent of losses (based on the original principal balance at the time of pooling) from each loan in the pool backing those securities.

As of December 31, 2024 and 2023, the outstanding balance of those securities owned by AgFirst was $ 1.5 million and $ 1.8 million, respectively.

3 unchanged sentences

Farmer Mac received from Farm Credit Bank of Texas commitment fees of $ 3.6 million, $ 3.4 million, and $ 2.9 million in 2024, 2023, and 2022, respectively.

The aggregate amount of Agricultural Finance LTSPCs outstanding with Farm Credit Bank of Texas as of December 31, 2023 and 2022 was $ 923.9 million and $ 881.6 million, respectively.

The aggregate amount of Agricultural Finance LTSPCs outstanding with Farm Credit Bank of Texas as of December 31, 2024 and 2023 was $ 1.2 billion and $ 923.9 million, respectively.

In each of 2024, 2023, and 2022, Farm Credit Bank of Texas retained $ 0.1 million in servicing fees for its work as a Farmer Mac central servicer.

Other Related Party Transactions

Farmer Mac considers Friona Industries LP and Farm Credit of Florida related parties because each of those entities has an affiliation with a member of Farmer Mac's board of directors.

In 2024, Farmer Mac purchased an Agricultural Finance loan participation in the amount of $ 46.2 million from an unrelated seller where Friona Industries LP was the borrower.

Farmer Mac did no t purchase any Agricultural Finance mortgage loans where Friona Industries LP was the borrower in 2023 or 2022.

Farmer Mac purchased $ 1.7 million in Agricultural Finance loans from Farm Credit of Florida in 2024.

Farmer Mac did no t purchase any Agricultural Finance mortgage loans from Farm Credit of Florida in 2023 or 2022.

INVESTMENT SECURITIES

Farmer Mac’s investment securities portfolio is comprised primarily of the following major security types, which is based on the Issuer and associated security characteristics:

• U.S Government guaranteed securities:

single-family and multi-family mortgage-backed securities issued by Government National Mortgage Association (Ginnie Mae) and pass-through securities issued by the Small Business Administration, which are guaranteed by the U.S.

Government Sponsored Enterprise (“GSE”) guaranteed securities:

single-family and multi-family mortgage-backed securities issued by Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac).

GSE securities are not guaranteed by the U.S.

Treasury Obligations:

sovereign debt issued by the United States of America.

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of December 31, 2024 and 2023:

8 unchanged sentences

Floating rate Government/GSE guaranteed mortgage-backed securities 2,317,032 ( 841 ) 2,316,191 — 3,484 ( 13,950 ) 2,305,725

Fixed rate GSE guaranteed mortgage-backed securities 1,727,669 ( 46,788 ) 1,680,881 — 6,558 ( 117,824 ) 1,569,615

Fixed rate Government/GSE guaranteed mortgage-backed securities

2,544,136 ( 66,845 ) 2,477,291 — 3,426 ( 142,750 ) 2,337,967

Floating rate U.S.

20 unchanged sentences

Floating rate Government/GSE guaranteed mortgage-backed securities 2,454,009 ( 1,138 ) 2,452,871 — 1,212 ( 29,649 ) 2,424,434

Fixed rate GSE guaranteed mortgage-backed securities 1,207,416 ( 30,321 ) 1,177,095 — 2,128 ( 130,837 ) 1,048,386

Fixed rate Government/GSE guaranteed mortgage-backed securities

1,727,669 ( 46,788 ) 1,680,881 — 6,558 ( 117,824 ) 1,569,615

Floating rate U.S.

Treasuries 50,000 ( 17 ) 49,983 — — ( 15 ) 49,968

Fixed rate U.S.

9 unchanged sentences

(3) The held-to-maturity investment securities had a weighted average yield of 6.7 % as of December 31, 2023.

During the year ended December 31, 2024, Farmer Mac sold floating rate government/GSE guaranteed mortgage-backed securities for $ 115.2 million from its available-for-sale investment portfolio, resulting in a gain of $ 1.1 million.

These sales were done to rebalance the liquidity investment portfolio given the lower level of business volume activity while demonstrating that the portfolio provides strong contingent liquidity.

Farmer Mac did no t sell any securities from its available-for-sale investment portfolio during the years ended December 31, 2023 and 2022.

During the year ended December 31, 2021, Farmer Mac received proceeds of $ 257.5 million, from the sale of securities from its available-for-sale investment portfolio, resulting in gains of $ 0.3 million.

As of December 31, 2024 and 2023, unrealized losses on available-for-sale investment securities were as follows:

11 unchanged sentences

Floating rate U.S.

49,969 ( 15 ) — —

Treasuries — — — —

Fixed rate U.S.

13 unchanged sentences

Fixed rate Government/GSE guaranteed mortgage-backed securities 384,305 ( 4,262 ) 905,759 ( 113,562 )

Floating rate U.S.

Treasuries 49,969 ( 15 ) — —

Fixed rate U.S.

2 unchanged sentences

Number of securities in loss position 91 162

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to December 31, 2023 and December 31, 2022, as applicable.

The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities.

3 unchanged sentences

Securities in unrealized loss positions for 12 months or longer have a fair value as of December 31, 2024 that is, on average, approximately 93.6 % of their amortized cost basis.

Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity, changes in credit spread, and changes in levels of interest rates.

Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity, changes in credit spread, or changes in levels of interest rates.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of December 31, 2024 are set forth below.

30 unchanged sentences

$ 814 $ 42 $ 856 $ — $ — $ ( 38 ) $ 818

(1) Amounts presented exclude $ 47.2 million, $ 67.4 million, and $ 42,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of December 31, 2023.

(1) Amounts presented exclude $ 57.5 million and $ 59.8 million of accrued interest receivable on available-for-sale and held-to-maturity securities, respectively, as of December 31, 2024.

(2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses.

21 unchanged sentences

$ 1,236 $ 64 $ 1,300 $ — $ — $ ( 59 ) $ 1,241

(1) Amounts presented exclude $ 51.5 million, $ 44.4 million, and $ 47,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of December 31, 2022.

(1) Amounts presented exclude $ 47.2 million and $ 67.4 million of accrued interest receivable on available-for-sale and held-to-maturity securities, respectively, as of December 31, 2023.

(2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses.

3 unchanged sentences

On July 1, 2023, Farmer Mac transferred $ 2.7 billion of AgVantage Securities from available-for-sale to held-to-maturity to reflect Farmer Mac's positive intent and ability to hold these securities until maturity or payoff.

Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment of unrealized losses of $ 31.9 million.

The accumulated unrealized losses were retained in accumulated other comprehensive income in the amount of $ 31.9 million.

Both the cost basis adjustment and accumulated unrealized depreciation will be amortized as an adjustment to the yield on the held-to-maturity AgVantage Securities over the remaining term of the transferred securities.

Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment due to unrealized losses of $ 31.9 million.

The accumulated unrealized losses were recorded in accumulated other comprehensive income in the amount of $ 31.9 million.

Both the cost basis adjustment and accumulated unrealized depreciation began amortizing as of the date of transfer and will continue be amortized as an adjustment to the yield on the held-to-maturity AgVantage Securities over the remaining term of the transferred securities.

As of December 31, 2024 and 2023, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

14 unchanged sentences

AgVantage $ 1,152,227 $ ( 12,889 ) $ 3,649,845 $ ( 314,587 )

Farmer Mac Guaranteed Securities — — — —

Total available-for-sale $ 1,152,227 $ ( 12,889 ) $ 3,649,845 $ ( 314,587 )

14 unchanged sentences

AgVantage $ 508,182 $ ( 5,716 ) $ 4,043,431 $ ( 303,695 )

Farmer Mac Guaranteed Securities 7,847 ( 2,775 ) — —

Total available-for-sale $ 508,182 $ ( 5,716 ) $ 4,043,431 $ ( 303,695 )

3 unchanged sentences

There were 45 and 53 held-to-maturity AgVantage securities with an unrealized loss as of December 31, 2024 and 2023, respectively.

As of December 31, 2023 and 2022, 62 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

As of December 31, 2024 and 2023, 54 and 62 available-for-sale AgVantage securities had been in a loss position for more than 12 months, respectively.

As of December 31, 2024 and 2023, there were 26 and 22 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three years ended December 31, 2023, 2022, and 2021 Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

During the three years ended December 31, 2024, 2023, and 2022.

Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of December 31, 2024 are set forth below.

22 unchanged sentences

Farmer Mac enters into financial derivative transactions to protect against risk from the effects of market price, or interest rate movements, on the value of certain assets, future cash flows, or debt issuance, and not for trading or speculative purposes.

Certain financial derivatives are designated as fair value hedges of

fixed rate assets, classified as available-for-sale, to protect against fair value changes in the assets related

to changes in a benchmark interest rate (e.g., SOFR).

Certain other financial derivatives are

designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate

Certain financial derivatives are designated as fair value hedges of fixed rate assets, classified as available-for-sale, to protect against fair value changes in the assets related to changes in a benchmark interest rate (e.g., SOFR).

Certain other financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt.

Certain financial derivatives are not designated in hedge accounting relationships.

Farmer Mac manages the interest rate risk related to loans it has committed to acquire, but has not yet

permanently funded, primarily through the use of futures contracts involving U.S.

Farmer Mac manages the interest rate risk related to loans it has committed to acquire, but has not yet permanently funded, primarily through the use of futures contracts involving U.S.

Treasury securities.

1 unchanged sentence

Gains or losses generated by these hedge transactions are expected to offset changes in funding costs.

All financial derivatives are recorded on the balance sheet at fair value as a freestanding

asset or liability.

All financial derivatives are recorded on the balance sheet at fair value as a freestanding asset or liability.

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements.

68 unchanged sentences

Income/(expense) related to interest settlements on fair value hedging relationships $ 86,661 $ 361,681 $ 137,862 $ ( 702,012 ) $ — $ ( 115,808 )

(Losses)/gains on fair value hedging relationships:

Gains/(losses) on fair value hedging relationships:

Recognized on derivatives $ 29,181 $ 52,494 $ 71,213 $ 105,355 $ — $ 258,243

Recognized on hedged items ( 28,502 ) ( 49,922 ) ( 66,852 ) ( 101,419 ) — ( 246,695 )

(Losses)/gains on fair value hedging relationships $ ( 973 ) $ ( 1,714 ) $ ( 1,842 ) $ ( 865 ) $ — $ ( 5,394 )

Gains/(losses) on fair value hedging relationships

$ 679 $ 2,572 $ 4,361 $ 3,936 $ — $ 11,548

Expense related to interest settlements on cash flow hedging relationships:

5 unchanged sentences

Gains on interest rate swaps

$ — $ — $ — $ — $ 2,424 $ 2,424

Interest expense on interest rate swaps — — — — ( 1,377 ) ( 1,377 )

1 unchanged sentence

Gains on financial derivatives not designated in hedge relationships

$ — $ — $ — $ — $ 2,636 $ 2,636

For the Year Ended December 31, 2023

8 unchanged sentences

Recognized on hedged items 33,488 183,396 63,133 ( 341,523 ) — ( 61,506 )

Discount amortization recognized on hedged items ( 754 ) — — ( 2,116 ) — ( 2,870 )

Premium/discount amortization recognized on hedged items

1,860 — — ( 2,865 ) — ( 1,005 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 70,725 $ 329,423 $ 127,781 $ ( 690,240 ) $ — $ ( 162,311 )

24 unchanged sentences

Recognized on hedged items 16,199 142,809 56,141 ( 132,406 ) — 82,743

Discount amortization recognized on hedged items — — — ( 1,118 ) — ( 1,118 )

Premium/discount amortization recognized on hedged items

( 754 ) — — ( 2,116 ) — ( 2,870 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 18,172 $ 123,323 $ 55,640 $ ( 196,463 ) $ — $ 672

Gains/(losses) on fair value hedging relationships:

(Losses)/gains on fair value hedging relationships:

Recognized on derivatives $ 104,722 $ 553,530 $ 351,116 $ ( 489,445 ) $ — $ 519,923

Recognized on hedged items ( 105,889 ) ( 553,393 ) ( 341,162 ) 486,323 — ( 514,121 )

Gains/(losses) on fair value hedging relationships $ 470 $ 1,948 $ ( 43 ) $ ( 2,715 ) $ — $ ( 340 )

(Losses)/gains on fair value hedging relationships $ ( 1,167 ) $ 137 $ 9,954 $ ( 3,122 ) $ — $ 5,802

Expense related to interest settlements on cash flow hedging relationships:

4 unchanged sentences

Gains on financial derivatives not designated in hedge relationships:

Losses on interest rate swaps $ — $ — $ — $ — $ ( 2,144 ) $ ( 2,144 )

Gains on interest rate swaps $ — $ — $ — $ — $ 13,012 $ 13,012

Interest expense on interest rate swaps — — — — ( 7,619 ) ( 7,619 )

7 unchanged sentences

Investment securities, Available-for-Sale, at fair value (1)

$ 1,477,880 $ 1,251,386 $ ( 117,137 ) $ ( 88,635 )

Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value (2)

5,478,484 5,497,948 ( 307,358 ) ( 257,436 )

Loans held for investment, at amortized cost 1,816,738 1,699,361 ( 372,444 ) ( 305,592 )

1 unchanged sentence

( 11,899,049 ) ( 13,350,111 ) 148,999 250,418

(1) Amortized cost of $ 1.6 billion and $ 1.4 billion as of December 31, 2024 and 2023, respectively.

(2) Amortized cost of $ 5.8 billion as of both December 31, 2024 and 2023.

(3) Carrying amount represents amortized cost.

1 unchanged sentence

December 31, 2024

Gross Amounts Not Offset in the Consolidated Balance Sheet

Gross Amount Recognized Gross Amounts offset in the Consolidated Balance Sheet Net Amount Presented in the Consolidated Balance Sheet

Gross Amounts Not Offset in the Consolidated Balance Sheet

Netting Adjustments Financial instruments pledged Cash Collateral

7 unchanged sentences

Total $ ( 77,788 ) $ 462 $ ( 77,326 ) $ 22,061 $ — $ 44,299 $ ( 10,966 )

(1) Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 15.2 million of collateral posted and $ 2.0 million of collateral received related to counterparties not subject to master netting agreements.

(1) Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount.

As of December 31, 2023, Farmer Mac had additional net exposure of $ 207.2 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position.

As of December 31, 2024, Farmer Mac had additional net exposure of $ 209.0 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position and $ 4.7 million due to instances where Farmer Mac's collateral from a counterparty exceeded the net derivative position.

December 31, 2023

Gross Amounts Not Offset in the Consolidated Balance Sheet

Gross Amount Recognized Gross Amounts offset in the Consolidated Balance Sheet Net Amount Presented in the Consolidated Balance Sheet (1)

Gross Amounts Not Offset in the Consolidated Balance Sheet

Netting Adjustments Financial instruments pledged Cash Collateral (2)

8 unchanged sentences

(1) Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 23.7 million of collateral posted related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 15.2 million of collateral posted and $ 2.0 million of collateral received related to counterparties not subject to master netting agreements.

(3) Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount.

6 unchanged sentences

Of Farmer Mac's $ 25.8 billion notional amount of interest rate swaps outstanding as of December 31, 2023, $ 20.5 billion were cleared through the CME.

During 2023 and throughout 2022, Farmer Mac continued the use of non-cleared basis swaps to prepare for the transition away from the use of LIBOR as a reference rate, which was completed as of the end of the second quarter of 2023.

NOTES PAYABLE

67 unchanged sentences

Total principal net of discounts $ 27,520,173 3.51 %

During the years ended December 31, 2023 and 2022, Farmer Mac called $ 233.0 million and $ 26.0 million of callable medium-term notes, respectively.

During the years ended December 31, 2024 and 2023, Farmer Mac called $ 1.9 billion and $ 233.0 million of callable medium-term notes, respectively.

Authority to Borrow from the U.S.

4 unchanged sentences

Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S.

Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the obligations from Farmer Mac.

obligations from Farmer Mac.

The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S.

2 unchanged sentences

Gains on Repurchases of Outstanding Debt

No outstanding debt repurchases were made in the year ended December 31, 2023.

During the years ended December 31, 2022 and 2021, Farmer Mac repurchased $ 27.0 million and $ 23.0 million of outstanding debt at a gain of $ 0.2 million and $ 0.0 million, respectively.

No outstanding debt repurchases were made in the years ended December 31, 2024 and 2023.

During 2022, Farmer Mac repurchased $ 27.0 million of outstanding debt at a gain of $ 0.2 million.

Farmer Mac classifies loans as either held for investment or held for sale.

Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments.

Loans held for sale are reported at the lower of cost or fair value determined on a pooled

As of both December 31, 2023 and 2022, Farmer Mac had no loans held for sale.

Loans held for sale are reported at the lower of cost or fair value determined on a pooled basis.

As of December 31, 2024, Farmer Mac had $ 6.2 million of loans held for sale and none as of December 31, 2023.

During the year ended December 31, 2024, Farmer Mac recorded $ 1.0 million of lower of cost or fair value adjustments and none during the year ended December 31, 2023.

During 2024, Farmer Mac sold a portion of a Corporate AgFinance agricultural storage and processing loan at a loss of $ 1.1 million to reduce the overall exposure to the borrower.

Under the Agricultural Finance line of business, Farmer Mac has two segments – Farm & Ranch and Corporate AgFinance.

The segments are characterized by similarities in risk attributes and the manner in which Farmer Mac monitors and assesses credit risk.

The following table includes loans held for investment and displays the composition of the loan balances as of December 31, 2023 and 2022:

The following table includes loans held for investment and loans held for sale and displays the composition of the loan balances as of December 31, 2024 and 2023:

As of December 31, 2024 As of December 31, 2023

5 unchanged sentences

Total Agricultural Finance loans 6,796,406 2,038,283 8,834,689 6,393,173 1,432,261 7,825,434

Rural Infrastructure Finance loans 3,534,763 — 3,534,763 3,021,266 — 3,021,266

Infrastructure Finance loans 4,774,483 — 4,774,483 3,534,763 — 3,534,763

Total unpaid principal balance (1)

14 unchanged sentences

Total Agricultural Finance loans

Rural Infrastructure Finance loans 9,147 8,314

Infrastructure Finance loans 12,712 9,147

Total $ 23,223 $ 16,031

The following is a summary of the changes in the allowance for losses for each year in the three-year period ended December 31, 2023:

Agricultural Finance loans Rural Infrastructure

The following is a summary of the changes in the allowance for losses for each year in the three-year

period ended December 31, 2024:

Agricultural Finance loans Infrastructure

Finance loans (3)

3 unchanged sentences

Balance as of December 31, 2021 $ 2,882 $ 560 $ 3,442 $ 10,599

$ 3,404 $ 341 $ 3,745 $ 10,087

(Release of)/provision for losses ( 1,576 ) 219 ( 1,357 ) 512

Recovery 1,054 — 1,054 —

Balance as of December 31, 2021 $ 2,882 $ 560 $ 3,442 $ 10,599

Provision for/(release of) losses 1,246 2,171 3,417 ( 2,285 )

4 unchanged sentences

Balance as of December 31, 2023 $ 3,936 $ 2,948 $ 6,884 $ 9,147

(1) As of December 31, 2023 and 2022, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $ 1.0 million and $ 1.9 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2) As of December 31, 2023 and 2022, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 0.0 million and $ 2.4 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3) As of December 31, 2023 and 2022, the allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $ 0.8 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the year ended December 31, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the year.

Provision for losses

1,297 6,828 8,125 3,565

Charge-offs ( 101 ) ( 4,397 ) ( 4,498 ) —

Balance as of December 31, 2024 $ 5,132 $ 5,379 $ 10,511 $ 12,712

(1) As of December 31, 2024, 2023, and 2022, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $ 1.2 million, $ 1.0 million, and $ 1.9 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2) As of December 31, 2024, 2023, and 2022, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 1.0 million, $ 0.0 million , and $ 2.4 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3) As of December 31, 2024, 2023, and 2022, the allowance for losses for Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $ 3.6 million net provision to the allowance for the Infrastructure Finance portfolio during the year ended December 31, 2024 was primarily attributable to new loan volume within the Broadband Infrastructure and Renewable Energy segments and a single renewable energy project that became substandard during fourth quarter 2024.

The $ 8.1 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the year ended December 31, 2024 was primarily attributable to two permanent planting borrower relationships and other risk rating downgrades.

During the year ended December 31, 2024, Farmer Mac

had charge-offs of $ 4.5 million, which was primarily related to a single permanent planting borrower that entered into bankruptcy during second quarter 2024, at which time $ 3.9 million was deemed uncollectible.

The $ 0.8 million net provision to the allowance for the Infrastructure Finance portfolio during the year ended December 31, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the year.

The $ 0.1 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the year ended December 31, 2023 was primarily attributable to increased loan volume.

The $ 2.3 million net release from the allowance for the Rural Infrastructure Finance portfolio during the year ended December 31, 2022 was primarily attributable to a risk rating upgrade on a single loan and improvements in forecasts of future economic conditions.

The risk rating upgrade on that loan reflected

that borrower's successful securitization of its large payable that arose during the arctic freeze that struck Texas in February 2021.

The $ 2.3 million net release from the allowance for the Infrastructure Finance portfolio during the year ended December 31, 2022 was primarily attributable to a risk rating upgrade on a single loan and improvements in forecasts of future economic conditions.

The risk rating upgrade on that loan reflected that borrower's successful securitization of its large payable that arose during the arctic freeze that struck Texas in February 2021.

The $ 3.4 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the year ended December 31, 2022 was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan, due to its ongoing bankruptcy proceedings.

The provision to the allowance for Rural Infrastructure Finance loan losses of $ 0.5 million recorded

during the year ended 2021 was primarily attributable to the impact of the Texas Arctic Freeze, partially

offset by the impact of improving economic factor forecasts.

The $ 1.4 million release from the allowance

for the Agricultural Finance mortgage loan portfolio during the year ended 2021 was primarily attributable

to a recovery on the payoff of the agricultural storage and processing loan secured by a specialized poultry

facility that had been partially charged off in 2020 and improving economic factor forecasts.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of December 31, 2024 and 2023:

7 unchanged sentences

Total Agricultural Finance loans 8,635,669 16,478 7,268 6,359 30,105 168,915 8,834,689

Rural Infrastructure Finance loans 3,534,763 — — — — — 3,534,763

Infrastructure Finance loans 4,774,483 — — — — — 4,774,483

Total $ 13,410,152 $ 16,478 $ 7,268 $ 6,359 $ 30,105 $ 168,915 $ 13,609,172

12 unchanged sentences

Total Agricultural Finance loans 7,729,928 15,326 3,953 10,991 30,270 65,236 7,825,434

Rural Infrastructure Finance loans 3,021,266 — — — — — 3,021,266

Infrastructure Finance loans 3,534,763 — — — — — 3,534,763

Total $ 11,264,691 $ 15,326 $ 3,953 $ 10,991 $ 30,270 $ 65,236 $ 11,360,197

5 unchanged sentences

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of December 31, 2023 and 2022, by year of origination:

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Infrastructure Finance loans held as of December 31, 2024 and 2023, by year of origination:

As of December 31, 2024

36 unchanged sentences

(in thousands)

Rural Infrastructure Finance loans (1) :

Infrastructure Finance loans (1) :

Internally Assigned Risk Rating:

48 unchanged sentences

(in thousands)

Rural Infrastructure Finance loans (1) :

Infrastructure Finance loans (1) :

Internally Assigned Risk Rating:

19 unchanged sentences

Except for the period from March 16, 2020 to March 10, 2021, Farmer Mac has had a common stock repurchase program in place since third quarter 2015.

On March 10, 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms (with a remaining authorization of up to $ 9.8 million in stock repurchases) and extended the expiration date of the program to March 2023.

Farmer Mac did no t repurchase any shares of its Class C non-voting common stock during that two-year period.

In March 2023, Farmer Mac's board of directors renewed the share repurchase program on its

previous terms (with a remaining authorization of up to $ 9.8 million in stock repurchases) and extended the expiration date of the program to March 2025.

Farmer Mac did no t repurchase any shares of its Class C non-voting common stock during 2023.

On March 10, 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms and extended the expiration date of the program to March 2023.

In February 2023, Farmer Mac's board of directors renewed the share repurchase program on its previous terms (with a remaining authorization of up to $ 9.8 million in stock repurchases) and extended the expiration date of the program to February 2025.

Farmer Mac has not

repurchased any shares of its Class C non-voting common stock since the repurchase program was reinstated in March 2021.

As of December 31, 2024, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $ 19.8 million under the share repurchase program since 2015.

Preferred Stock

The following table presents the Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock, and the Series G Preferred Stock (collectively referred to as the "Outstanding Preferred Stock") as of December 31, 2023:

On July 18, 2024, Farmer Mac redeemed all outstanding shares of its 6.000 % Fixed-to-Floating Rate Non-Cumulative Series C Preferred Stock, plus any declared and unpaid dividends through and including the redemption date.

As a result of this redemption, Farmer Mac recognized $ 1.6 million of loss on retirement of preferred stock in third quarter 2024, which was related to deferred issuance costs.

The following table presents the Series D Preferred Stock, the Series E Preferred Stock, the Series F Preferred Stock, and the Series G Preferred Stock (collectively referred to as the "Outstanding Preferred Stock") as of December 31, 2024:

Name Issuance Date Issuance Cost Shares Issued Annual Dividend Rate (1)

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First Possible Redemption Date (2)

June 20, 2014 $ 1,618,583 3,000,000 6.000 % $ 25.00 July 18, 2024

May 13, 2019 $ 3,340,456 4,000,000 5.700 % $ 25.00 July 17, 2024

2 unchanged sentences

Series G May 27, 2021 $ 3,661,677 5,000,000 4.875 % $ 25.00 July 17, 2026

(1) The Series C Preferred Stock pays an annual dividend rate of 6.00 % from the date of issuance to and including the quarterly payment date occurring on July 17, 2024, and thereafter, at a floating rate equal to three-month LIBOR plus 3.26 %, which Farmer Mac expects will be converted to the Term Loan Secured Overnight Financing Rate published by CME Group Benchmark Administration, Ltd., plus a spread adjustment based on the tenor of the securities, if not redeemed prior to that payment date.

(1) Dividends on all series of Outstanding Preferred Stock are non-cumulative, which means that if Farmer Mac's board of directors has not declared a dividend before the applicable dividend payment date for any dividend period, such dividend will not be paid or cumulate, and Farmer Mac will have no obligation to pay dividends for such dividend period, whether or not dividends on any series of Outstanding Preferred Stock are declared for any future dividend period.

(2) Farmer Mac has the right but not the obligation to redeem.

The following tables present the quarterly dividends paid by Farmer Mac on its outstanding preferred during 2023, 2022, and 2021:

The following tables present the quarterly dividends paid by Farmer Mac on its outstanding preferred stock during the years ended December 31, 2024, 2023, and 2022:

For the Year Ended December 31, 2024

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

9 unchanged sentences

0.3047 0.3047 0.3047 0.3047

For the Year Ended December 31, 2023

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

9 unchanged sentences

0.3047 0.3047 0.3047 0.3047

1st Quarter 2nd Quarter (1)

3rd Quarter 4th Quarter

For the Year Ended December 31, 2022

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

6.000 % Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C

8 unchanged sentences

0.3047 0.3047 0.3047 0.3047

(1) For second quarter 2021, dividend payment includes $ 0.1693 per share on the Series G Preferred Stock for the period from but not including May 27, 2021 (issuance date) to and including July 17, 2021.

Equity-Based Incentive Compensation Plans

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For all SARs granted, the exercise price is equal to the closing price of Farmer Mac's Class C non-voting common stock on the date of grant.

SARs granted during 2023, 2022, and 2021 have a weighted average exercise price per share of $ 135.12 , $ 120.38 and $ 88.68 , respectively.

During 2023, 2022, and 2021, restricted stock unit awards were granted to employees, officers, and directors with vesting periods of one to three years .

SARs granted during the years ended December 31, 2024, 2023, and 2022 have a weighted average exercise price per share of $ 198.54 , $ 135.12 and $ 120.38 , respectively.

During the years ended December 31, 2024, 2023, and 2022, restricted stock unit awards were granted to employees, officers, and directors with vesting periods of one to three years .

The following tables summarize SARs and non-vested restricted stock unit activity for the years ended December 31, 2024, 2023, and 2022:

19 unchanged sentences

Outstanding, end of year 96,939 156.37 114,353 120.13 100,025 91.84

The cancellations of SARs and non-vested restricted stock units during 2023, 2022, and 2021 were due to unvested awards terminating in accordance with the provisions of the applicable equity compensation plans or award agreements upon directors' or employees' departures from Farmer Mac.

The cancellations of non-vested restricted stock units during the years ended December 31, 2024, 2023, and 2022 were due to unvested awards terminating in accordance with the provisions of the applicable equity compensation plans or award agreements upon directors' or employees' departures from Farmer Mac.

Cash is not received from exercises of SARs or the vesting and issuance of restricted stock units.

During 2023, 2022, and 2021, the reduction of income taxes payable as a result of the deduction for the exercise of SARs and the vesting of restricted stock units was $ 1.7 million, $ 1.2 million, and $ 0.9 million, respectively.

During 2023, 2022, and 2021 , Farmer Mac recorded a net decrease to additional paid-in capital of $ 3.1 million, $ 1.9 million, and $ 1.3 million, respectively, related to stock-based compensation awards.

During the years ended December 31, 2024, 2023, and 2022, the reduction of income taxes payable as a result of the deduction for the exercise of SARs and the vesting of restricted stock units was $ 3.0 million, $ 1.7 million, and $ 1.2 million, respectively.

During the years ended December 31, 2024, 2023, and 2022 , Farmer Mac recorded a net decrease to additional paid-in capital of $ 5.4 million, $ 3.1 million, and $ 1.9 million, respectively, related to stock-based compensation awards.

As of December 31, 2024, Farmer Mac had no stock options outstanding.

22 unchanged sentences

145.00 - 159.99

— 0.0 years — 0.0 years — 0.0 years

160.00 - 174.99

— 0.0 years — 0.0 years — 0.0 years

175.00 - 189.99

— 0.0 years — 0.0 years — 0.0 years

190.00 - 204.99

15,465 2.3 years — 0.0 years 15,465 2.3 years

106,689 73,906 106,689

Non-vested Restricted Stock Units:

15 unchanged sentences

185.00 - 199.99

36,110 2.3 years 36,110 2.3 years

96,939 96,939

As of December 31, 2024 and 2023, the intrinsic value of SARs, and non-vested restricted stock units outstanding, exercisable, and vested or expected to vest was $ 28.4 million and $ 35.0 million, respectively.

During 2023, 2022, and 2021, the total intrinsic value of SARs exercised was $ 2.4 million, $ 1.1 million, and $ 0.9 million, respectively.

During the years ended December 31, 2024, 2023, and 2022, the total intrinsic value of SARs exercised was $ 4.6 million, $ 2.4 million, and $ 1.1 million, respectively.

As of December 31, 2024, there was $ 7.5 million of total unrecognized compensation cost related to non-vested SARs and restricted stock unit awards.

This cost is expected to be recognized over a weighted-average period of 1.7 years.

The weighted-average grant date fair values of SARs and restricted stock unit awards granted in 2023, 2022, and 2021 were $ 114.68 , $ 91.94 , and $ 65.48 per share, respectively.

Under the fair value-based method of accounting for stock-based compensation cost, Farmer Mac recognized compensation expense of $ 6.8 million, $ 4.6 million, and $ 4.3 million during 2023, 2022, and 2021, respectively.

The weighted-average grant date fair values of SARs and restricted stock unit awards granted in the years ended December 31, 2024, 2023, and 2022 were $ 159.08 , $ 114.68 , and $ 91.94 per share, respectively.

Under the fair value-based method of accounting for stock-based compensation cost, Farmer Mac recognized compensation expense of $ 8.1 million , $ 6.8 million, and $ 4.6 million during the years ended December 31, 2024, 2023, and 2022, respectively.

The fair value of SARs was estimated using the Black-Scholes option pricing model based on the following assumptions:

For the Year Ended December 31,

For the Years Ended December 31,

2024 2023 2022

5 unchanged sentences

Treasury yield curve in effect at the grant date.

Farmer Mac used historical data to estimate the timing of option exercises and stock option cancellation rates used in the model.

Farmer Mac used historical data to estimate the timing of SARs exercises used in the model.

Expected volatilities were based on historical volatility of Farmer Mac's Class C non-voting common stock.

2 unchanged sentences

Restricted stock unit awards also accrue dividends which are paid at vesting.

The weighted-average grant date fair value of the restricted stock units awarded in 2023, 2022, and 2021 was $ 135.56 , $ 120.14 , and $ 88.92 per unit, respectively, which is based on the closing price of Farmer Mac's Class C non-voting stock on the date granted.

The weighted-average grant date fair value of the restricted stock units awarded in the years ended December 31, 2024, 2023, and 2022 was $ 197.52 , $ 135.56 , and $ 120.14 per unit, respectively, which is based on the closing price of Farmer Mac's Class C non-voting stock on the date granted.

Capital Requirements

19 unchanged sentences

Excess tax benefits related to stock-based awards ( 1,755 ) ( 924 ) ( 401 )

( 3,260 ) — —

Other 1,724 871 543

20 unchanged sentences

Net deferred tax asset $ 1,544 $ 8,470

After the evaluation of both positive and negative objective evidence regarding the likelihood that its deferred tax assets will be realized, Farmer Mac established a valuation allowance of $ 35,000 and $ 32,000 , as of December 31, 2023 and 2022, respectively, which was attributable to capital loss carryforwards on investment securities.

Farmer Mac did not establish a valuation allowance for the remainder of its deferred tax assets because it believes it is more likely than not that those deferred tax assets will be realized.

As of December 31, 2023, no capital loss carryforwards expired.

As of December 31, 2023, the amount of capital loss carryforwards was $ 0.2 million.

These capital loss carryforwards will expire beginning in 2024 .

As of December 31, 2024 and 2023, Farmer Mac did not identify any uncertain tax positions.

10 unchanged sentences

(1) the amount established under EGTRRA and (2) a participant’s gross annual base salary, which for purposes of calculating employer credits under the NQDC Plan is capped at $ 750,000 for all other participants.

This fixed contribution percentage is the same formula used for determining employer contributions to Farmer Mac’s defined contribution retirement plan based on an employee’s gross annual base salary that is above the amount established under EGTRRA for that year.

contribution percentage is the same formula used for determining employer contributions to Farmer Mac’s defined contribution retirement plan based on an employee’s gross annual base salary that is above the amount established under EGTRRA for that year.

Expenses for the NQDC Plan were $ 0.2 million, $ 0.1 million, and $ 0.2 million, respectively, for the years ended December 31, 2024, 2023, and 2022.

1 unchanged sentence

Farmer Mac offers two credit enhancement alternatives to direct loan purchases that allow approved lenders the ability to retain the cash flow benefits of their loans and increase their liquidity and lending capacity:

(1) Farmer Mac Guaranteed Securities and (2) LTSPCs, both of which are available through each of the Agricultural Finance and Rural Infrastructure Finance lines of business.

(1) Farmer Mac Guaranteed Securities and (2) LTSPCs, both of which are available through each of the Agricultural Finance and Infrastructure Finance lines of business.

The contractual terms of Farmer Mac's off-balance sheet guarantees and LTSPCs range from less than 1 year to 30 years.

22 unchanged sentences

Farmer Mac Guaranteed Securities $ 426,310 $ 452,602

Rural Infrastructure Finance

Infrastructure Finance

Farmer Mac Guaranteed Securities — —

2 unchanged sentences

The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

For the Year Ended December 31,

For the Years Ended December 31,

2024 2023 2022

9 unchanged sentences

Farmer Mac Guaranteed Securities 21.2 years 21.9 years

AgVantage Securities 0.0 years 2.0 years

Long-Term Standby Purchase Commitments

12 unchanged sentences

Farmer Mac also has unfunded commitments and letters of credit under which Farmer Mac earns a nominal fee for the obligation to provide funding at a future date.

As of December 31, 2023 and 2022, Farmer Mac had $ 261.2 million and $ 130.2 million of these unfunded commitments and letters of credit under the Agricultural Finance and Rural Infrastructure lines of business.

As of December 31, 2024 and 2023, Farmer Mac had $ 602.6 million and $ 261.2 million of these unfunded commitments and letters of credit under the Agricultural Finance and Infrastructure lines of business.

Any optional loan purchase commitments are sold forward under optional commitments to deliver Farmer Mac Guaranteed Securities that may be canceled by Farmer Mac without penalty.

5 unchanged sentences

Agricultural Finance $ 1,431 $ 1,471

Rural Infrastructure Finance 240 614

Infrastructure Finance

Total $ 1,623 $ 1,711

The following is a summary of the changes in the reserve for losses for the three-year period ended December 31, 2023:

Agricultural Finance loans Rural Infrastructure Finance loans

The following is a summary of the net changes in the reserve for losses for the three-year period ended December 31, 2024:

Agricultural Finance loans Infrastructure Finance loans

Reserve for Losses Reserve for Losses

1 unchanged sentence

Balance as of December 31, 2021 $ 1,068 $ 882

$ 2,097 $ 1,180

Release of losses ( 249 ) ( 268 )

Balance as of December 31, 2022 $ 819 $ 614

Release of losses ( 249 ) ( 268 )

Provision for/(release of) losses

Balance as of December 31, 2023 $ 1,471 $ 240

1 unchanged sentence

Balance as of December 31, 2024 $ 1,431 $ 192

(1) Reserve for losses reflects the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020.

The release from the reserve for losses during 2024 for both Agricultural Finance and Infrastructure Finance was primarily due to ratings upgrades.

The provision for the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during the year ended December 31, 2023 was primarily due to an updated estimate of expected losses based on additional available industry data.

The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the year ended December 31, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data.

The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the year ended December 31, 2022 was primarily due to decreased volume and ratings upgrades.

The release from the reserve for losses in the Infrastructure Finance LTSPC portfolio recorded during the year ended December 31, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data.

The release from the reserve for losses in the Infrastructure Finance LTSPC portfolio recorded during the year ended December 31, 2022 was primarily due to decreased volume and ratings upgrades.

The release from the reserve for losses in the Agricultural Finance LTSPC portfolio was primarily due to ratings upgrades.

The release from the reserve for losses in both the Agricultural Finance and Rural Infrastructure Finance

LTSPC and Farmer Mac Guaranteed portfolios recorded during the year ended December 31, 2021 was

primarily due to improving economic factor forecasts and ratings upgrades.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of December 31, 2023 and 2022:

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Infrastructure Finance loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of December 31, 2024 and 2023:

As of December 31, 2024

4 unchanged sentences

$ 3,524,406 $ 1,421 $ 1,358 $ 7,603 $ 10,382 $ 3,534,788

Rural Infrastructure Finance:

Infrastructure Finance:

732,731 — — — — 732,731

Total $ 4,257,137 $ 1,421 $ 1,358 $ 7,603 $ 10,382 $ 4,267,519

(1) Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days of more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(1) Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

As of December 31, 2023

4 unchanged sentences

$ 3,390,918 $ 2,776 $ 2,366 $ 1,784 $ 6,926 $ 3,397,844

Rural Infrastructure Finance:

Infrastructure Finance:

535,013 — — — — 535,013

Total $ 3,925,931 $ 2,776 $ 2,366 $ 1,784 $ 6,926 $ 3,932,857

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of December 31, 2023 and 2022, by year of origination:

The following tables present credit quality indicators related to Agricultural Finance and Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of December 31, 2024 and 2023, by year of origination:

As of December 31, 2024

18 unchanged sentences

(in thousands)

Rural Infrastructure Finance:

Infrastructure Finance:

Internally Assigned Risk Rating:

29 unchanged sentences

(in thousands)

Rural Infrastructure Finance:

Infrastructure Finance:

Internally Assigned Risk Rating:

33 unchanged sentences

Total USDA Securities — — 818 818

Loans held for sale, at lower of cost or fair value — 6,160 — 6,160

— 6,160 — 6,160

Financial derivatives 47 27,742 — 27,789

12 unchanged sentences

Fixed rate GSE guaranteed mortgage-backed securities — 1,569,615 — 1,569,615

Floating rate U.S.

Treasuries 49,968 — — 49,968

Fixed rate U.S.

24 unchanged sentences

unrealized (losses)/gains included

in Income Unrealized gains

Unrealized gains/(losses)

included in Other

Comprehensive

Income Transfers Out (1)

Ending Balance

Income Ending Balance

(in thousands)

15 unchanged sentences

Total Assets at fair value $ 5,558,633 $ 677,400 $ ( 667,961 ) $ 81 $ ( 49,813 ) $ 21,882 $ 5,540,222

(1) Includes $ 2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

Level 3 Assets and Liabilities Measured at Fair Value for the Year Ended December 31, 2023

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized losses included

in Income Unrealized losses

unrealized gains included

Unrealized gains/(losses)

included in Other

Comprehensive

Income Ending Balance

Ending Balance

(in thousands)

16 unchanged sentences

Total Assets at fair value $ 7,632,487 $ 2,084,650 $ ( 1,563,860 ) $ 236 $ 91,607 $ ( 2,391 ) $ ( 2,684,096 ) $ 5,558,633

(1) Includes $ 2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

Level 3 Assets and Liabilities Measured at Fair Value for the Year Ended December 31, 2022

1 unchanged sentence

unrealized losses included

Unrealized gains

Unrealized losses

included in Other

Comprehensive

Income Ending Balance

Ending Balance

(in thousands)

45 unchanged sentences

because they generally have fixed maturity dates when the secured general obligations are due and do not prepay.

The significant unobservable inputs used in the fair value measurements of USDA Securities are the prepayment rate and discount rate commensurate with the risks involved.

Typically, significant increases (decreases) in any of these inputs in isolation may result in materially lower (higher) fair value measurements.

Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase and would likely expect a corresponding decrease in forecasted prepayment rates.

Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease and would likely expect a corresponding increase in forecasted prepayment rates.

Disclosures on Fair Value of Financial Instruments

25 unchanged sentences

These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3.

Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or

receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2.

Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2.

The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3.

Notes payable are valued by discounting the expected cash flows of these instruments using a yield curve derived from market prices observed for similar agency securities and are also classified as Level 3.

Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent, estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model.

Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent,

estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model.

Different market assumptions and estimation methodologies could significantly affect estimated fair value amounts.

BUSINESS SEGMENT REPORTING

The following table presents the alignment of the Farmer Mac's seven segments:

Agricultural Finance Rural Infrastructure Finance Treasury

Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Funding Investments Corporate

The financial information presented below reflects the accounts of Farmer Mac and its subsidiaries on a

consolidated basis.

Accordingly, the core earnings for Farmer Mac's segments would differ from any stand-alone financial statements of Farmer Mac's subsidiaries.

These differences would be due to various factors, including the exclusion of unrealized gains and losses related to fair value changes of trading assets and financial derivatives, as well as the allocation of certain expenses such as operating expenses, dividends and interest expense related to the issuance of capital and the issuance of indebtedness managed at the corporate level.

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the years ended December 31, 2023, 2022, and 2021.

Farmer Mac has seven reportable segments:

Farm & Ranch, Corporate AgFinance, Power & Utilities, Broadband Infrastructure, Renewable Energy, Funding, and Investments.

The Farm & Ranch segment includes the financial results of the USDA Securities portfolio, Farm & Ranch loans, and AgVantage securities.

The Power & Utilities segment includes loans to rural electric generation and transmission cooperatives and distribution cooperatives, as well as AgVantage securities secured by those types of loans.

The Broadband Infrastructure segment includes loans to rural fiber, cable/broadband, tower, wireless, local exchange carrier, and data center projects.

The Renewable Energy segment includes rural electric solar, wind, and gas projects.

The Funding segment includes the financial results of Farmer Mac's debt issuance, hedging, asset/liability management, and capital allocation strategies.

The company allocates interest expense to each of the other segments using a funds transfer pricing process.

That process also allocates the benefits and costs from the company's funding and hedging strategies to the Funding segment.

The Investments segment includes the financial results of the company's investment portfolio, which is held for liquidity purposes.

Interest expense is allocated to the Investments segment using the same funds transfer pricing process that is used to allocate interest expense to the other segments.

The following table presents Farmer Mac's seven segments:

Agricultural Finance Infrastructure Finance Treasury

Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments

The President and Chief Executive Officer serves as the CODM.

The CODM reviews segment core earnings to make decisions about allocating resources and to assess the financial performance of the segments.

The main difference between core earnings and net income is the exclusion of the effects of fair value fluctuations.

These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected.

Another difference is that core earnings excludes specified infrequent or unusual transactions that are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business.

The CODM also looks at changes in the segments' on- and off-balance sheet unpaid paid principal balances to assess the performance of the segments.

The following tables present segment core earnings and assets for the years ended December 31, 2024, 2023, and 2022.

Core Earnings by Business Segment

For the Year Ended December 31, 2024

Agricultural Finance Rural Infrastructure Treasury Corporate

Farm & Ranch Corporate AgFinance Rural

Renewable Energy Funding Investments Reconciling

Adjustments Consolidated Net Income

Agricultural Finance Rural Infrastructure Treasury

Farm & Ranch Corporate AgFinance Power &

Broadband Infrastructure

Renewable Energy Funding Investments Total

(in thousands)

Net interest income $ 137,079 $ 31,224 $ 25,187 $ 4,648 $ 128,415 $ 994 $ — $ — $ 327,547

Interest income

$ 615,016 $ 100,820 $ 260,636 $ 38,225 $ 54,188 $ 224,390 $ 310,241 $ 1,603,516

Interest expense (1)

( 475,248 ) ( 70,695 ) ( 240,600 ) ( 27,282 ) ( 40,471 ) ( 89,698 ) ( 305,655 ) ( 1,249,649 )

reconciling adjustments (2)(3)

2 unchanged sentences

Guarantee and commitment fees (3)

17,695 571 966 464 625 — — 20,321

Other income/(expense)

3,167 ( 2,055 ) — — — — 1,076 2,188

Total revenues 153,267 31,542 26,152 4,745 132,012 1,209 280 2,129 351,336

Release of/(provision for) losses 145 ( 207 ) ( 581 ) ( 219 ) — 4 — — ( 858 )

(Provision for)/release of reserve for losses ( 652 ) — 374 — — — — — ( 278 )

(Provision for)/release of losses

( 1,147 ) ( 6,850 ) 274 1,469 ( 5,236 ) — — ( 11,490 )

Operating expenses (1)

Total non-interest expense ( 652 ) — 374 — — — ( 97,099 ) — ( 97,377 )

Core earnings before income taxes 152,760 31,335 25,945 4,526 132,012 1,213 ( 96,819 ) 2,129 (4)

( 24,741 ) ( 7,905 ) ( 4,281 ) ( 3,666 ) ( 4,848 ) ( 10,855 ) ( 3,108 ) ( 59,404 )

Income tax (expense)/benefit ( 27,360 ) ( 2,916 ) ( 3,559 ) ( 1,934 ) ( 894 ) ( 23,949 ) ( 536 ) ( 61,148 )

Core earnings before preferred stock dividends 120,681 24,754 20,496 3,575 104,291 958 ( 76,434 ) 1,682 (4)

Preferred stock dividends — — — — — — ( 27,165 ) — ( 27,165 )

Segment core earnings/(losses) $ 120,681 $ 24,754 $ 20,496 $ 3,575 $ 104,291 $ 958 $ ( 103,599 ) $ 1,682 (4)

Segment core earnings

$ 102,924 $ 10,970 $ 13,387 $ 7,276 $ 3,364 $ 90,092 $ 2,018 $ 230,031

Reconciliation to net income:

Net effects of derivatives and trading securities

Unallocated (expenses)/income

Income tax effect related to reconciling items 10,238

Total Assets:

Total on- and off-balance sheet program assets at principal balance $ 18,808,801 $ 1,693,979 $ 7,480,723 $ 487,521 $ — $ — $ — $ — $ 28,471,024

Total on- and off-balance sheet segment assets at principal balance

$ 18,606,968 $ 1,887,705 $ 6,809,366 $ 802,466 $ 1,416,525 $ — $ — $ 29,523,030

Off-balance sheet assets under management

( 4,981,285 )

Unallocated assets

Total assets on the consolidated balance sheets

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts;

the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment;

and excludes the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships.

(3) Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.

(3) Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

(4) Net adjustments to reconcile to the corresponding income measures:

core earnings before income taxes reconciled to income before income taxes;

core earnings before preferred stock dividends reconciled to net income;

and segment core earnings reconciled to net income attributable to common stockholders.

Core Earnings by Business Segment

For the Year Ended December 31, 2023

Agricultural Finance Rural Infrastructure Treasury Corporate

Farm & Ranch Corporate AgFinance Rural

Renewable Energy Funding Investments Reconciling

Adjustments Consolidated Net Income

Agricultural Finance Rural Infrastructure Treasury

Farm & Ranch Corporate AgFinance Power &

Broadband Infrastructure

Renewable Energy Funding Investments Total

(in thousands)

Net interest income $ 133,218 $ 29,209 $ 16,175 $ 2,483 $ 96,613 $ ( 6,758 ) $ — $ — $ 270,940

Interest income

$ 559,730 $ 92,335 $ 232,106 $ 30,299 $ 18,923 $ 200,264 $ 258,631 $ 1,392,288

Interest expense (1)

( 422,651 ) ( 61,111 ) ( 215,763 ) ( 21,455 ) ( 14,275 ) ( 71,849 ) ( 257,637 ) ( 1,064,741 )

reconciling adjustments (2)(3)

2 unchanged sentences

Guarantee and commitment fees (3)

17,415 283 1,090 43 97 — — 18,928

Other income/(expense)

2,952 35 — — — 3 29 3,019

Total revenues 147,195 29,609 17,310 2,532 85,466 ( 6,758 ) 3 33,754 309,111

(Provision for)/release of losses

( 507 ) ( 207 ) 4,117 ( 4,324 ) ( 219 ) — 4 ( 1,136 )

Release of reserve for losses 247 — 270 — — — — — 517

Operating expenses (1)

Total non-interest expense ( 572 ) — 270 — — — ( 81,807 ) — ( 82,109 )

Core earnings before income taxes 145,160 27,473 20,331 2,038 85,466 ( 6,739 ) ( 81,804 ) 33,754 (4)

( 23,306 ) ( 5,540 ) ( 3,553 ) ( 2,415 ) ( 3,382 ) ( 11,037 ) ( 3,184 ) ( 52,417 )

Income tax (expense)/benefit ( 27,183 ) ( 5,418 ) ( 3,746 ) ( 453 ) ( 238 ) ( 25,405 ) 414 ( 62,029 )

Core earnings before preferred stock dividends 114,678 21,705 16,063 1,610 67,517 ( 5,323 ) ( 64,771 ) 26,665 (4)

Preferred stock dividends — — — — — — ( 27,165 ) — ( 27,165 )

Segment core earnings/(losses) $ 114,678 $ 21,705 $ 16,063 $ 1,610 $ 67,517 $ ( 5,323 ) $ ( 91,936 ) $ 26,665 (4)

Segment core earnings

$ 102,271 $ 20,377 $ 14,083 $ 1,695 $ 906 $ 95,570 $ ( 1,557 ) $ 233,345

Reconciliation to net income:

Net effects of derivatives and trading securities $ 1,954

Unallocated (expense)/income

Income tax effect related to reconciling items 8,931

Total Assets:

Total on- and off-balance sheet program assets at principal balance $ 17,728,792 $ 1,603,507 $ 6,359,613 $ 230,170 $ — $ — $ — $ — $ 25,922,082

Total on- and off-balance sheet segment assets at principal balance

$ 18,808,801 $ 1,693,979 $ 6,979,570 $ 501,153 $ 487,521 $ — $ — $ 28,471,024

Off-balance sheet assets under management

( 4,710,199 )

Unallocated assets

Total assets on the consolidated balance sheets

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts;

and excludes the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships.

(4) Net adjustments to reconcile to the corresponding income measures:

core earnings before income taxes reconciled to income before income taxes;

core earnings before preferred stock dividends reconciled to net income;

and segment core earnings reconciled to net income attributable to common stockholders.

Core Earnings by Business Segment

For the Year Ended December 31, 2022

Agricultural Finance Rural Infrastructure Treasury Corporate

Farm & Ranch Corporate AgFinance Rural

Renewable Energy Funding Investments Reconciling

Adjustments Consolidated Net Income

Agricultural Finance Rural Infrastructure Treasury

Farm & Ranch Corporate AgFinance Power &

Broadband Infrastructure

Renewable Energy Funding Investments Total

(in thousands)

Net interest income $ 118,289 $ 27,081 $ 8,224 $ 1,219 $ 66,581 $ 557 $ — $ — $ 221,951

Interest income

$ 421,139 $ 55,311 $ 152,990 $ 8,832 $ 5,811 $ ( 8,334 ) $ 81,099 $ 716,848

Interest expense (1)

( 287,921 ) ( 26,102 ) ( 141,176 ) ( 4,471 ) ( 3,328 ) 104,947 ( 87,857 ) ( 445,908 )

reconciling adjustments (2)(3)

2 unchanged sentences

Guarantee and commitment fees (3)

Gain on sale of

mortgage loans 6,539 — — — — — — — 6,539

16,718 139 1,187 51 49 — — 18,144

Other income/(expense)

1,420 261 — — — — — 1,681

Total revenues 138,219 27,129 9,359 1,239 70,208 557 ( 291 ) ( 2,730 ) 243,690

Release of/(provision for) losses 1,574 ( 210 ) ( 291 ) ( 198 ) — ( 15 ) — — 860

Release of reserve for losses 1,034 — 293 — — — — — 1,327

(Provision for)/release of losses

( 1,216 ) ( 2,136 ) 3,726 ( 705 ) ( 494 ) — 19 ( 806 )

Operating expenses (1)

Total non-interest expense 1,034 — 293 — — — ( 73,416 ) — ( 72,089 )

Core earnings before income taxes 140,827 26,919 9,361 1,041 70,208 542 ( 73,707 ) ( 2,730 ) (4)

( 23,332 ) ( 5,629 ) ( 3,198 ) ( 2,009 ) ( 1,690 ) ( 6,798 ) ( 1,950 ) ( 44,606 )

Income tax (expense)/benefit ( 25,756 ) ( 4,587 ) ( 2,819 ) ( 357 ) ( 73 ) ( 16,521 ) 1,825 ( 48,288 )

Core earnings before preferred stock dividends 111,253 21,266 7,396 822 55,464 428 ( 58,382 ) ( 2,158 ) (4)

Preferred stock dividends — — — — — — ( 24,677 ) — ( 24,677 )

Segment core earnings/(losses) $ 111,253 $ 21,266 $ 7,396 $ 822 $ 55,464 $ 428 $ ( 83,059 ) $ ( 2,158 ) (4)

Segment core earnings

$ 96,891 $ 17,257 $ 10,607 $ 1,341 $ 275 $ 62,147 $ ( 6,864 ) $ 181,654

Reconciliation to net income:

Net effects of derivatives and trading securities

Unallocated (expense)/income

Income tax effect related to reconciling items 753

Total Assets:

Total on- and off-balance sheet program assets at principal balance $ 16,094,640 $ 1,537,834 $ 5,895,226 $ 86,763 $ — $ — $ — $ — $ 23,614,463

Total on- and off-balance sheet segment assets at principal balance

$ 17,728,792 $ 1,603,507 $ 6,042,996 $ 316,617 $ 230,170 $ — $ — $ 25,922,082

Off-balance sheet assets under management

( 3,945,557 )

Unallocated assets

Total assets on the consolidated balance sheets

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts;

and excludes the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships.

(4) Net adjustments to reconcile to the corresponding income measures:

core earnings before income taxes reconciled to income before income taxes;

core earnings before preferred stock dividends reconciled to net income;

and segment core earnings reconciled to net income attributable to common stockholders.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data