FEDERAL AGRICULTURAL MORTGAGE CORP 10-Q

Item 1. Financial Statements FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited) As of March 31, 2025 December 31, 2024 (in thousands) Assets: Cash and cash equivalents (includes restricted cash of $ 16,346 and $ 16,190 , respectively) $ 1,048,135 $ 1,024,007 Investment securities: Available-for-sale, at fair value (amortized cost of $ 6,329,188 and $ 6,105,116 , respectively) 6,230,080 5,953,014 Held-to-maturity, at amortized cost 9,125 9,270 Other investments 13,281 11,017 Total Investment Securities 6,252,486 5,973,301 Farmer Mac Guaranteed Securities: Available-for-sale, at fair value (amortized cost of $ 5,859,630 and $ 5,835,658 , respectively) 5,623,384 5,514,546 Held-to-maturity, at amortized cost 2,451,407 2,717,688 Total Farmer Mac Guaranteed Securities 8,074,791 8,232,234 USDA Securities: Trading, at fair value 651 818 Held-to-maturity, at amortized cost 2,376,690 2,370,534 Total USDA Securities 2,377,341 2,371,352 Loans: Loans held for sale, at lower of cost or fair value 6,045 6,170 Loans held for investment, at amortized cost 11,636,815 11,183,408 Loans held for investment in consolidated trusts, at amortized cost 2,005,680 2,038,283 Allowance for losses ( 25,056 ) ( 23,223 ) Total loans, net of allowance 13,623,484 13,204,638 Financial derivatives, at fair value 27,867 27,789 Accrued interest receivable (includes $ 16,524 and $ 28,563 , respectively, related to consolidated trusts) 262,809 310,592 Guarantee and commitment fees receivable 49,888 50,499 Deferred tax asset, net — 1,544 Prepaid expenses and other assets 87,138 128,786 Total Assets $ 31,803,939 $ 31,324,742 Liabilities and Equity: Liabilities: Notes payable $ 27,975,196 $ 27,371,174 Debt securities of consolidated trusts held by third parties 1,894,920 1,929,628 Financial derivatives, at fair value 63,389 77,326 Accrued interest payable (includes $ 9,281 and $ 12,387 , respectively, related to consolidated trusts) 221,954 195,113 Guarantee and commitment obligation 47,679 48,326 Accounts payable and accrued expenses 71,232 212,527 Deferred tax liability, net 2,402 — Reserve for losses 1,521 1,622 Total Liabilities 30,278,293 29,835,716 Commitments and Contingencies (Note 6) Equity: Preferred stock: Series D, par value $ 25 per share, 4,000,000 shares authorized, issued and outstanding 96,659 96,659 Series E, par value $ 25 per share, 3,180,000 shares authorized, issued and outstanding 77,003 77,003 Series F, par value $ 25 per share, 4,800,000 shares authorized, issued and outstanding 116,160 116,160 Series G, par value $ 25 per share, 5,000,000 shares authorized, issued and outstanding 121,327 121,327 Common stock: Class A Voting, $ 1 par value, no maximum authorization, 1,030,780 shares outstanding 1,031 1,031 Class B Voting, $ 1 par value, no maximum authorization, 500,301 shares outstanding 500 500 Class C Non-Voting, $ 1 par value, no maximum authorization, 9,401,649 shares and 9,360,083 shares outstanding, respectively 9,402 9,360 Additional paid-in capital 134,500 135,894 Accumulated other comprehensive loss, net of tax ( 1,808 ) ( 12,147 ) Retained earnings 970,872 943,239 Total Equity 1,525,646 1,489,026 Total Liabilities and Equity $ 31,803,939 $ 31,324,742 The accompanying notes are an integral part of these consolidated financial statements. 3 FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the Three Months Ended March 31, 2025 March 31, 2024 (in thousands, except per share amounts) Interest income: Investments and cash equivalents $ 83,308 $ 84,924 Farmer Mac Guaranteed Securities and USDA Securities 126,342 166,813 Loans 171,764 144,580 Total interest income 381,414 396,317 Total interest expense 290,475 309,949 Net interest income 90,939 86,368 (Provision for)/release of losses ( 1,684 ) 1,801 Net interest income after (provision for)/release of losses 89,255 88,169 Non-interest income/(expense): Guarantee and commitment fees 4,479 3,917 (Losses)/gains on financial derivatives ( 2,636 ) 2,079 Release of reserve for losses 101 69 Other income 1,436 1,249 Non-interest income 3,380 7,314 Operating expenses: Compensation and employee benefits 17,752 18,257 General and administrative 10,758 8,255 Regulatory fees 1,000 725 Operating expenses 29,510 27,237 Income before income taxes 63,125 68,246 Income tax expense 13,474 14,500 Net income 49,651 53,746 Preferred stock dividends ( 5,666 ) ( 6,791 ) Net income attributable to common stockholders $ 43,985 $ 46,955 Earnings per common share: Basic earnings per common share $ 4.04 $ 4.33 Diluted earnings per common share $ 4.01 $ 4.28 The accompanying notes are an integral part of these consolidated financial statements. 4 FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) For the Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Net income $ 49,651 $ 53,746 Other comprehensive income/(loss): Net unrealized gains on available-for-sale securities 21,762 39,952 Net changes in held-to-maturity securities ( 303 ) ( 634 ) Net unrealized (losses)/gains on cash flow hedges ( 8,371 ) 6,286 Other comprehensive income before tax 13,088 45,604 Income tax expense related to other comprehensive income ( 2,749 ) ( 9,577 ) Other comprehensive income net of tax 10,339 36,027 Comprehensive income $ 59,990 $ 89,773 The accompanying notes are an integral part of these consolidated financial statements. 5 FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (unaudited) Accumulated Additional Other Preferred Stock Common Stock Paid-In Comprehensive Retained Total Shares Amount Shares Amount Capital Loss Earnings Equity (in thousands) Balance as of December 31, 2024 16,980 $ 411,149 10,891 $ 10,891 $ 135,894 $ ( 12,147 ) $ 943,239 $ 1,489,026 Net Income — — — — — — 49,651 49,651 Other comprehensive income, net of tax — — — — — 10,339 — 10,339 Cash dividends: Preferred stock — — — — — — ( 5,666 ) ( 5,666 ) Common stock (cash dividend of $ 1.50 per share) — — — — — — ( 16,352 ) ( 16,352 ) Issuance of Class C Common Stock — — 42 42 79 — — 121 Stock-based compensation cost — — — — 3,529 — — 3,529 Other stock-based award activity — — — — ( 5,002 ) — — ( 5,002 ) Balance as of March 31, 2025 16,980 $ 411,149 10,933 $ 10,933 $ 134,500 $ ( 1,808 ) $ 970,872 $ 1,525,646 Balance as of December 31, 2023 19,980 $ 484,531 10,842 $ 10,842 $ 132,919 $ ( 40,145 ) $ 823,716 $ 1,411,863 Net Income — — — — — — 53,746 53,746 Other comprehensive income, net of tax — — — — — 36,027 — 36,027 Cash dividends: Preferred stock — — — — — — ( 6,791 ) ( 6,791 ) Common stock (cash dividend of $ 1.40 per share) — — — — — — ( 15,186 ) ( 15,186 ) Issuance of Class C Common Stock — — 27 27 64 — — 91 Stock-based compensation cost — — — — 3,483 — — 3,483 Other stock-based award activity — — — — ( 2,890 ) — — ( 2,890 ) Balance as of March 31, 2024 19,980 $ 484,531 10,869 $ 10,869 $ 133,576 $ ( 4,118 ) $ 855,485 $ 1,480,343 The accompanying notes are an integral part of these consolidated financial statements. 6 FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Cash flows from operating activities: Net income $ 49,651 $ 53,746 Adjustments to reconcile net income to net cash provided by operating activities: Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities ( 4,781 ) ( 7,295 ) Amortization of debt premiums, discounts, and issuance costs 18,053 11,586 Net change in fair value of trading securities, loans held for sale, hedged items, and financial derivatives ( 108,740 ) 123,519 Losses on sale of real estate owned 69 — Total provision for/(release of) allowance for losses 1,583 ( 1,870 ) Excess tax benefits related to stock-based awards ( 659 ) ( 120 ) Deferred income taxes 1,198 2,688 Stock-based compensation expense 3,529 3,483 Proceeds from repayment of loans purchased as held for sale 19,928 12,769 Net change in: Interest receivable 43,542 40,273 Guarantee and commitment fees receivable ( 36 ) 5 Other assets 41,298 ( 12,471 ) Accrued interest payable 26,841 21,053 Custodial deposit liability ( 141,384 ) ( 18,632 ) Other liabilities 89 4,601 Net cash provided by operating activities ( 49,819 ) 233,335 Cash flows from investing activities: Purchases of equipment and leasehold improvements — ( 1,638 ) Purchases of available-for-sale and held-to-maturity investment securities ( 553,122 ) ( 606,698 ) Purchases of other investment securities ( 2,264 ) ( 83 ) Purchases of Farmer Mac Guaranteed Securities and USDA Securities ( 378,516 ) ( 462,055 ) Purchases of loans held for investment ( 987,524 ) ( 690,986 ) Purchases of defaulted loans ( 1,298 ) — Proceeds from repayment of available-for-sale and held-to-maturity investment securities 332,698 520,194 Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities 614,238 254,722 Proceeds from repayment of loans purchased as held for investment 629,185 461,071 Proceeds from sale of real estate owned 725 — Net cash used in investing activities ( 345,878 ) ( 525,473 ) Cash flows from financing activities: Proceeds from issuance of discount notes 16,578,544 12,851,600 Proceeds from issuance of medium-term notes 3,355,631 1,774,926 Payments to redeem discount notes ( 16,884,950 ) ( 12,695,146 ) Payments to redeem medium-term notes ( 2,535,000 ) ( 1,713,000 ) Payments to third parties on debt securities of consolidated trusts ( 67,501 ) ( 45,068 ) Proceeds from common stock issuance 79 64 Tax payments related to share-based awards ( 4,960 ) ( 2,863 ) Dividends paid on common and preferred stock ( 22,018 ) ( 21,977 ) Net cash provided by financing activities 419,825 148,536 Net change in cash and cash equivalents 24,128 ( 143,602 ) Cash, cash equivalents, and restricted cash at beginning of period 1,024,007 888,707 Cash, cash equivalents, and restricted cash at end of period $ 1,048,135 $ 745,105 Non-cash activity: Loans securitized as Farmer Mac Guaranteed Securities 26,023 15,936 The accompanying notes are an integral part of these consolidated financial statements. 7 FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation ("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Farmer Mac and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted as permitted by SEC rules and regulations. The December 31, 2024 consolidated balance sheet presented in this report has been derived from Farmer Mac's audited 2024 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2024 consolidated financial statements of Farmer Mac and subsidiaries included in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 21, 2025. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain updated information for the three months ended March 31, 2025. Principles of Consolidation The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries: (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. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary. 8 Table 1.1 Consolidation of Variable Interest Entities As of March 31, 2025 Agricultural Finance Treasury Total (in thousands) On-Balance Sheet: Consolidated VIEs: Loans held for investment in consolidated trusts, at amortized cost $ 2,005,680 $ — $ 2,005,680 Debt securities of consolidated trusts held by third parties (1)(2) 1,894,920 — 1,894,920 Unconsolidated VIEs: Farmer Mac Guaranteed Securities: Carrying value 58,580 — 58,580 Maximum exposure to loss (3) 58,219 — 58,219 Investment securities: Carrying value (4) — 4,476,698 4,476,698 Maximum exposure to loss (3)(4) — 4,730,044 4,730,044 Off-Balance Sheet: Unconsolidated VIEs: Farmer Mac Guaranteed Securities: Maximum exposure to loss (3)(5) 414,291 — 414,291 (1) Includes borrower remittances of $ 0.2 million. The borrower remittances had not been passed through to third-party investors as of March 31, 2025. (2) Includes $ 110.5 million in unamortized discount related to structured securitization transactions. (3) Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss. (4) Includes auction-rate certificates, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments. (5) The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause. Consolidation of Variable Interest Entities As of December 31, 2024 Agricultural Finance Treasury Total (in thousands) On-Balance Sheet: Consolidated VIEs: Loans held for investment in consolidated trusts, at amortized cost $ 2,038,283 $ — $ 2,038,283 Debt securities of consolidated trusts held by third parties (1)(2) 1,929,628 — 1,929,628 Unconsolidated VIEs: Farmer Mac Guaranteed Securities: Carrying value 59,317 — 59,317 Maximum exposure to loss (3) 58,985 — 58,985 Investment securities: Carrying value (4) — 4,212,258 4,212,258 Maximum exposure to loss (3)(4) — 4,547,397 4,547,397 Off-Balance Sheet: Unconsolidated VIEs: Farmer Mac Guaranteed Securities: Maximum exposure to loss (3)(5) 426,310 — 426,310 (1) Includes borrower remittances of $ 4.7 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2024. (2) Includes $ 113.2 million in unamortized discount related to a structured securitization transaction. (3) Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss. 9 (4) Includes auction-rate certificates, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments. (5) The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause. (a) Earnings Per Common Share Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding. Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock unit awards. The following schedule reconciles basic and diluted EPS for the three months ended March 31, 2025 and 2024: Table 1.2 For the Three Months Ended March 31, 2025 March 31, 2024 Net Income Weighted-Average Shares $ per Share Net Income Weighted-Average Shares $ per Share (in thousands, except per share amounts) Basic EPS Net income attributable to common stockholders $ 43,985 10,896 $ 4.04 $ 46,955 10,847 $ 4.33 Effect of dilutive securities (1) SARs and restricted stock units — 87 ( 0.03 ) — 122 ( 0.05 ) Diluted EPS $ 43,985 10,983 $ 4.01 $ 46,955 10,969 $ 4.28 (1) For the three months ended March 31, 2025 and 2024, SARs and restricted stock units of 58,539 and 49,371 , respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended March 31, 2025 and 2024, contingent shares of unvested restricted stock units of 29,507 and 29,918 , 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. (b) Comprehensive Income Comprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes. 10 The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three months ended March 31, 2025 and 2024. Table 1.3 As of March 31, 2025 As of March 31, 2024 Available-for-Sale Securities Held-to-Maturity Securities Cash Flow Hedges Total Available-for-Sale Securities Held-to-Maturity Securities Cash Flow Hedges Total (in thousands) For the Three Months Ended: Beginning Balance $ ( 37,575 ) $ ( 9,226 ) $ 34,654 $ ( 12,147 ) $ ( 68,447 ) $ ( 8,724 ) $ 37,026 $ ( 40,145 ) Other comprehensive income/(loss) before reclassifications 17,194 — ( 3,591 ) 13,603 31,565 — 9,256 40,821 Amounts reclassified from AOCI ( 3 ) ( 239 ) ( 3,022 ) ( 3,264 ) ( 4 ) ( 500 ) ( 4,290 ) ( 4,794 ) Net comprehensive income/(loss) 17,191 ( 239 ) ( 6,613 ) 10,339 31,561 ( 500 ) 4,966 36,027 Ending Balance $ ( 20,384 ) $ ( 9,465 ) $ 28,041 $ ( 1,808 ) $ ( 36,886 ) $ ( 9,224 ) $ 41,992 $ ( 4,118 ) 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 three months ended March 31, 2025 and 2024: Table 1.4 For the Three Months Ended March 31, 2025 March 31, 2024 Before Tax Provision (Benefit) After Tax Before Tax Provision (Benefit) After Tax (in thousands) Other comprehensive income: Available-for-sale-securities: Unrealized holding gains on available-for-sale securities $ 21,766 $ 4,572 $ 17,194 $ 39,957 $ 8,392 $ 31,565 Less reclassification adjustments included in: Other income (1) ( 4 ) ( 1 ) ( 3 ) ( 5 ) ( 1 ) ( 4 ) Total $ 21,762 $ 4,571 $ 17,191 $ 39,952 $ 8,391 $ 31,561 Held-to-maturity securities: Less reclassification adjustments included in: Net interest income (2) ( 303 ) ( 64 ) ( 239 ) ( 634 ) ( 134 ) ( 500 ) Total $ ( 303 ) $ ( 64 ) $ ( 239 ) $ ( 634 ) $ ( 134 ) $ ( 500 ) Cash flow hedges Unrealized (losses)/gains on cash flow hedges $ ( 4,546 ) $ ( 955 ) $ ( 3,591 ) $ 11,717 $ 2,461 $ 9,256 Less reclassification adjustments included in: Net interest income (3) ( 3,825 ) ( 803 ) ( 3,022 ) ( 5,431 ) ( 1,141 ) ( 4,290 ) Total $ ( 8,371 ) $ ( 1,758 ) $ ( 6,613 ) $ 6,286 $ 1,320 $ 4,966 Other comprehensive income $ 13,088 $ 2,749 $ 10,339 $ 45,604 $ 9,577 $ 36,027 (1) Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities. (2) Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income. (3) Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI. 11 (c) New Accounting Standards Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements Standard Description Effect on Consolidated Financial Statements ASU 2023-09 , Income Taxes (Topic 740): Improvements to Income Tax Disclosures The Update provides guidance on improvements to annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Additionally, public entities must provide a separate disclosure for any reconciling item that meets a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The amendments should be applied on a prospective basis. Early adoption is permitted. 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. 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. 12 2. 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; • 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. government; • 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 March 31, 2025 and December 31, 2024: Table 2.1 As of March 31, 2025 Amount Outstanding Unamortized Premium/(Discount) Amortized Cost (1) Allowance for losses (2) Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,700 $ — $ 19,700 $ ( 27 ) $ — $ ( 320 ) $ 19,353 Floating rate Government/GSE guaranteed mortgage-backed securities 2,404,113 ( 1,174 ) 2,402,939 — 3,046 ( 13,888 ) 2,392,097 Fixed rate Government/GSE guaranteed mortgage-backed securities 2,661,093 ( 65,956 ) 2,595,137 — 15,589 ( 106,814 ) 2,503,912 Fixed rate U.S. Treasuries 1,320,517 ( 9,105 ) 1,311,412 — 4,726 ( 1,420 ) 1,314,718 Total available-for-sale 6,405,423 ( 76,235 ) 6,329,188 ( 27 ) 23,361 ( 122,442 ) 6,230,080 Held-to-maturity: Floating rate Government/GSE guaranteed mortgage-backed securities (3) 9,125 — 9,125 — 309 — 9,434 Total held-to-maturity $ 9,125 $ — $ 9,125 $ — $ 309 $ — $ 9,434 (1) Amounts presented exclude $ 27.1 million of accrued interest receivable on investment securities as of March 31, 2025. (2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors. (3) The held-to-maturity investment securities had a weighted average yield of 6.4 % as of March 31, 2025. 13 As of December 31, 2024 Amount Outstanding Unamortized Premium/(Discount) Amortized Cost (1) Allowance for losses (2) Unrealized Gains Unrealized Losses Fair Value (in thousands) Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,700 $ — $ 19,700 $ ( 27 ) $ — $ ( 197 ) $ 19,476 Floating rate Government/GSE guaranteed mortgage-backed securities 2,317,032 ( 841 ) 2,316,191 — 3,484 ( 13,950 ) 2,305,725 Fixed rate Government/GSE guaranteed mortgage-backed securities 2,544,136 ( 66,845 ) 2,477,291 — 3,426 ( 142,750 ) 2,337,967 Fixed rate U.S. Treasuries 1,302,677 ( 10,743 ) 1,291,934 — 2,604 ( 4,692 ) 1,289,846 Total available-for-sale 6,183,545 ( 78,429 ) 6,105,116 ( 27 ) 9,514 ( 161,589 ) 5,953,014 Held-to-maturity: Floating rate Government/GSE guaranteed mortgage-backed securities (3) 9,270 — 9,270 — 270 — 9,540 Total held-to-maturity $ 9,270 $ — $ 9,270 $ — $ 270 $ — $ 9,540 (1) Amounts presented exclude $ 22.3 million of accrued interest receivable on investment securities as of December 31, 2024. (2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors. (3) The held-to-maturity investment securities had a weighted average yield of 6.4 % as of December 31, 2024. Farmer Mac did no t sell any securities from its available-for-sale or held-to-maturity investment portfolios during the three months ended March 31, 2025 and 2024. As of March 31, 2025 and December 31, 2024, unrealized losses on available-for-sale investment securities were as follows: Table 2.2 As of March 31, 2025 Available-for-Sale Securities Unrealized loss position for less than 12 months Unrealized loss position for more than 12 months Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in thousands) Floating rate auction-rate certificates backed by Government guaranteed student loans $ — $ — $ 19,353 $ ( 320 ) Floating rate Government/GSE guaranteed mortgage-backed securities 480,450 ( 593 ) 1,014,378 ( 13,295 ) Fixed rate Government/GSE guaranteed mortgage-backed securities 487,530 ( 7,324 ) 971,658 ( 99,490 ) Fixed rate U.S. Treasuries 309,390 ( 1,266 ) 46,048 ( 154 ) Total $ 1,277,370 $ ( 9,183 ) $ 2,051,437 $ ( 113,259 ) Number of securities in loss position 64 157 14 As of December 31, 2024 Available-for-Sale Securities Unrealized loss position for less than 12 months Unrealized loss position for more than 12 months Fair Value Unrealized Loss Fair Value Unrealized Loss (dollars in thousands) Floating rate auction-rate certificates backed by Government guaranteed student loans $ — $ — $ 19,476 $ ( 197 ) Floating rate Government/GSE guaranteed mortgage-backed securities 269,862 ( 420 ) 1,025,360 ( 13,530 ) Fixed rate Government/GSE guaranteed mortgage-backed securities 999,793 ( 17,682 ) 946,166 ( 125,068 ) Fixed rate U.S. Treasuries 590,307 ( 4,375 ) 58,523 ( 317 ) Total $ 1,859,962 $ ( 22,477 ) $ 2,049,525 $ ( 139,112 ) Number of securities in loss position 90 155 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 March 31, 2025 and December 31, 2024, as applicable. The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities. As of both March 31, 2025 and December 31, 2024, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government, a U.S. government sponsored enterprise, or had credit ratings of at least "AA+." Securities in unrealized loss positions for 12 months or longer have a fair value as of March 31, 2025 that is, on average, approximately 94.8 % 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, 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 March 31, 2025 are set forth below. Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets. Table 2.3 As of March 31, 2025 Available-for-Sale Securities Amortized Cost Fair Value Weighted- Average Yield (dollars in thousands) Due within one year $ 598,357 $ 599,403 3.75 % Due after one year through five years 2,331,405 2,326,662 4.10 % Due after five years through ten years 2,491,567 2,407,741 3.82 % Due after ten years 907,859 896,274 4.71 % Total $ 6,329,188 $ 6,230,080 4.04 % 15 3. FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of March 31, 2025 and December 31, 2024: Table 3.1 As of March 31, 2025 Unpaid Principal Balance Unamortized Premium/(Discount) Amortized Cost (1) Allowance for losses (2) Unrealized Gains Unrealized Losses Fair Value (in thousands) Held-to-maturity: AgVantage $ 2,428,184 $ ( 26,322 ) $ 2,401,862 $ ( 162 ) $ 9,967 $ ( 14,490 ) $ 2,397,177 Farmer Mac Guaranteed USDA Securities 49,682 25 49,707 — 344 ( 1,013 ) 49,038 Total Farmer Mac Guaranteed Securities 2,477,866 ( 26,297 ) 2,451,569 ( 162 ) 10,311 ( 15,503 ) 2,446,215 USDA Securities 2,358,530 18,160 2,376,690 — 4,824 ( 210,102 ) 2,171,412 Total held-to-maturity $ 4,836,396 $ ( 8,137 ) $ 4,828,259 $ ( 162 ) $ 15,135 $ ( 225,605 ) $ 4,617,627 Available-for-sale: AgVantage $ 5,851,094 $ — $ 5,851,094 $ ( 186 ) $ 16,400 $ ( 252,796 ) $ 5,614,512 Farmer Mac Guaranteed Securities (3) — 8,536 8,536 — 336 — 8,872 Total available-for-sale $ 5,851,094 $ 8,536 $ 5,859,630 $ ( 186 ) $ 16,736 $ ( 252,796 ) $ 5,623,384 Trading: USDA Securities (4) $ 645 $ 36 $ 681 $ — $ — $ ( 30 ) $ 651 (1) Amounts presented exclude $ 59.3 million and $ 47.7 million of accrued interest receivable on available-for-sale and held-to-maturity securities, respectively, as of March 31, 2025. (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. Amount excludes unrealized losses relating to non-credit factors. (3) Fair value includes $ 8.9 million of an interest-only security with a notional amount of $ 222.1 million. (4) The trading USDA securities had a weighted average yield of 5.68 % as of March 31, 2025. 16 As of December 31, 2024 Unpaid Principal Balance Unamortized Premium/(Discount) Amortized Cost (1) Allowance for losses (2) Unrealized Gains Unrealized Losses Fair Value (in thousands) Held-to-maturity: AgVantage $ 2,694,492 $ ( 26,928 ) $ 2,667,564 $ ( 178 ) $ 5,978 $ ( 21,592 ) $ 2,651,772 Farmer Mac Guaranteed USDA Securities 50,275 27 50,302 — 246 ( 1,220 ) 49,328 Total Farmer Mac Guaranteed Securities 2,744,767 ( 26,901 ) 2,717,866 ( 178 ) 6,224 ( 22,812 ) 2,701,100 USDA Securities 2,351,334 19,200 2,370,534 — 180 ( 258,190 ) 2,112,524 Total held-to-maturity $ 5,096,101 $ ( 7,701 ) $ 5,088,400 $ ( 178 ) $ 6,404 $ ( 281,002 ) $ 4,813,624 Available-for-sale: AgVantage $ 5,826,948 $ — $ 5,826,948 $ ( 236 ) $ 6,295 $ ( 327,476 ) $ 5,505,531 Farmer Mac Guaranteed Securities (3) — 8,710 8,710 — 305 — 9,015 Total available-for-sale $ 5,826,948 $ 8,710 $ 5,835,658 $ ( 236 ) $ 6,600 $ ( 327,476 ) $ 5,514,546 Trading: USDA Securities (4) $ 814 $ 42 $ 856 $ — $ — $ ( 38 ) $ 818 (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. Amount excludes unrealized losses relating to non-credit factors. (3) Fair value includes $ 9.0 million of an interest-only security with a notional amount of $ 228.0 million. (4) The trading USDA securities had a weighted average yield of 5.47 % as of December 31, 2024. As of March 31, 2025 and December 31, 2024, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows: Table 3.2 As of March 31, 2025 Held-to-Maturity and Available-for-Sale Securities Unrealized loss position for less than 12 months Unrealized loss position for more than 12 months Fair Value Unrealized Loss Fair Value Unrealized Loss (in thousands) Held-to-maturity: AgVantage $ 258,468 $ ( 1,047 ) $ 1,232,355 $ ( 13,443 ) Farmer Mac Guaranteed USDA Securities 30,584 ( 446 ) 8,088 ( 567 ) USDA Securities — — 1,806,718 ( 210,102 ) Total held-to-maturity $ 289,052 $ ( 1,493 ) $ 3,047,161 $ ( 224,112 ) Available-for-sale: AgVantage $ 428,719 $ ( 1,375 ) $ 3,442,179 $ ( 251,421 ) Total available-for-sale $ 428,719 $ ( 1,375 ) $ 3,442,179 $ ( 251,421 ) 17 As of December 31, 2024 Held-to-Maturity and Available-for-Sale Securities Unrealized loss position for less than 12 months Unrealized loss position for more than 12 months Fair Value Unrealized Loss Fair Value Unrealized Loss (in thousands) Held-to-maturity: AgVantage $ 998,200 $ ( 3,326 ) $ 1,187,464 $ ( 18,266 ) Farmer Mac Guaranteed USDA Securities 30,912 ( 529 ) 8,070 ( 691 ) USDA Securities 8,938 ( 164 ) 2,099,695 ( 258,026 ) Total held-to-maturity $ 1,038,050 $ ( 4,019 ) $ 3,295,229 $ ( 276,983 ) Available-for-sale: AgVantage $ 1,152,227 $ ( 12,889 ) $ 3,649,845 $ ( 314,587 ) Total available-for-sale $ 1,152,227 $ ( 12,889 ) $ 3,649,845 $ ( 314,587 ) The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to March 31, 2025 and December 31, 2024, as applicable. The credit exposure related to Farmer Mac's USDA Securities in the Agricultural Finance line of business is covered by the full faith and credit guarantee of the United States of America. The unrealized losses from AgVantage securities were on 56 and 66 available-for-sale securities as of March 31, 2025 and December 31, 2024, respectively. There were 37 and 45 held-to-maturity AgVantage securities with an unrealized loss as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, 51 and 54 available-for-sale AgVantage securities had been in a loss position for more than 12 months, respectively. As of March 31, 2025 and December 31, 2024, there were 28 and 26 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months. During the three months ended March 31, 2025 and 2024, 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. 18 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 March 31, 2025 are set forth below. The balances presented are based on their contractual maturities, although the actual maturities may differ due to prepayments of the underlying assets. Table 3.3 As of March 31, 2025 Available-for-Sale Securities Amortized Cost (1) Fair Value Weighted- Average Yield (dollars in thousands) Due within one year $ 781,516 $ 778,790 4.55 % Due after one year through five years 2,947,494 2,892,428 3.77 % Due after five years through ten years 1,180,000 1,089,435 3.55 % Due after ten years 950,620 862,731 3.99 % Total $ 5,859,630 $ 5,623,384 3.86 % (1) Amounts presented exclude $ 59.3 million of accrued interest receivable. As of March 31, 2025 Held-to-Maturity Securities Amortized Cost (1) Fair Value Weighted- Average Yield (dollars in thousands) Due within one year $ 1,106,610 $ 1,096,081 3.62 % Due after one year through five years 748,491 745,365 4.89 % Due after five years through ten years 311,220 283,590 3.76 % Due after ten years 2,661,938 2,492,591 4.29 % Total $ 4,828,259 $ 4,617,627 4.24 % (1) Amounts presented exclude $ 47.7 million of accrued interest receivable. 4. FINANCIAL DERIVATIVES 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 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. Treasury securities. Farmer Mac aims to achieve a duration-matched hedge ratio between the hedged item and the hedge instrument. 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. 19 The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements. The table below includes accrued interest on cleared swaps, but excludes $ 27.6 million and $ 15.8 million of accrued interest receivable and $ 3.0 million and $ 4.9 million of accrued interest payable on uncleared swaps as of March 31, 2025 and December 31, 2024, respectively. The aforementioned accrued interest on uncleared swaps is included within Accrued Interest Receivable and Accrued Interest Payable on the consolidated balance sheets. Table 4.1 As of March 31, 2025 Fair Value Weighted- Average Pay Rate Weighted- Average Receive Rate Weighted- Average Forward Price Weighted- Average Remaining Term (in years) Notional Amount Asset (Liability) (dollars in thousands) Fair value hedges: Interest rate swaps: Receive fixed non-callable $ 6,668,512 $ 771 $ ( 8,174 ) 4.65 % 3.40 % 1.53 Pay fixed non-callable 9,777,601 108 ( 11,160 ) 2.75 % 4.48 % 9.01 Receive fixed callable 4,890,883 13,666 ( 44,321 ) 4.47 % 3.79 % 2.81 Cash flow hedges: Interest rate swaps: Pay fixed non-callable 518,000 13,602 ( 184 ) 1.90 % 4.83 % 3.32 No hedge designation: Interest rate swaps: Pay fixed non-callable 166,769 588 ( 48 ) 2.89 % 4.67 % 3.21 Receive fixed non-callable 1,340,287 7 ( 4 ) 4.44 % 4.26 % 0.27 Basis swaps 640,384 7 ( 378 ) 4.61 % 4.50 % 3.67 Treasury futures 6,700 1 ( 3 ) 111.20 Netting adjustments (1) — ( 883 ) 883 Total financial derivatives $ 24,009,136 $ 27,867 $ ( 63,389 ) (1) Amounts represent the application of the netting requirements that allow Farmer Mac to settle positive and negative positions, including accrued interest, held or placed with the same clearing agent. 20 As of December 31, 2024 Fair Value Weighted- Average Pay Rate Weighted- Average Receive Rate Weighted- Average Forward Price Weighted- Average Remaining Term (in years) Notional Amount Asset (Liability) (dollars in thousands) Fair value hedges: Interest rate swaps: Receive fixed non-callable $ 7,460,685 $ 174 $ ( 12,165 ) 4.71 % 3.40 % 1.53 Pay fixed non-callable 9,657,181 5,134 ( 97 ) 2.67 % 4.56 % 9.12 Receive fixed callable 4,592,077 5,119 ( 65,167 ) 4.54 % 3.67 % 2.65 Cash flow hedges: Interest rate swaps: Pay fixed non-callable 540,000 16,903 ( 2 ) 1.92 % 4.87 % 3.43 No hedge designation: Interest rate swaps: Pay fixed non-callable 157,776 819 ( 1 ) 2.92 % 4.75 % 3.40 Receive fixed non-callable 1,803,328 48 ( 2 ) 4.52 % 4.43 % 0.30 Basis swaps 655,384 8 ( 354 ) 4.69 % 4.52 % 3.83 Treasury futures 29,900 46 — 108.91 Netting adjustments (1) — ( 462 ) 462 Total financial derivatives $ 24,896,331 $ 27,789 $ ( 77,326 ) (1) Amounts represent the application of the netting requirements that allow Farmer Mac to settle positive and negative positions, including accrued interest, held or placed with the same clearing agent. As of March 31, 2025, Farmer Mac expects to reclassify $ 9.1 million after-tax from accumulated other comprehensive income to earnings over the next twelve months related to cash flow hedges. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after March 31, 2025. During the three months ended March 31, 2025 and 2024, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur. 21 The following tables summarize the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three months ended March 31, 2025 and 2024: Table 4.2 For the Three Months Ended March 31, 2025 Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives Net Interest Income Non-Interest Income Total Interest Income Investments and Cash Equivalents Interest Income Farmer Mac Guaranteed Securities and USDA Securities Interest Income Loans Total Interest Expense Losses on financial derivatives (in thousands) Total amounts presented in the consolidated statement of operations $ 83,308 $ 126,342 $ 171,764 $ ( 290,475 ) $ ( 2,636 ) $ 88,303 Income/(expense) related to interest settlements on fair value hedging relationships: Recognized on derivatives 7,085 22,059 12,386 ( 28,494 ) — 13,036 Recognized on hedged items 13,130 55,871 18,968 ( 103,878 ) — ( 15,909 ) Premium/discount amortization recognized on hedged items 431 — — ( 660 ) — ( 229 ) Income/(expense) related to interest settlements on fair value hedging relationships $ 20,646 $ 77,930 $ 31,354 $ ( 133,032 ) $ — $ ( 3,102 ) (Losses)/gains on fair value hedging relationships: Recognized on derivatives $ ( 34,009 ) $ ( 82,485 ) $ ( 44,554 ) $ 75,600 $ — $ ( 85,448 ) Recognized on hedged items 33,978 82,017 44,981 ( 74,429 ) — 86,547 (Losses)/gains on fair value hedging relationships $ ( 31 ) $ ( 468 ) $ 427 $ 1,171 $ — $ 1,099 Expense related to interest settlements on cash flow hedging relationships: Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 3,825 $ — $ 3,825 Recognized on hedged items — — — ( 6,345 ) — ( 6,345 ) Discount amortization recognized on hedged items — — — — — — Expense recognized on cash flow hedges $ — $ — $ — $ ( 2,520 ) $ — $ ( 2,520 ) Losses on financial derivatives not designated in hedging relationships: Losses on interest rate swaps $ — $ — $ — $ — $ ( 2,703 ) $ ( 2,703 ) Interest expense on interest rate swaps — — — — 318 318 Treasury futures — — — — ( 251 ) ( 251 ) Losses on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ ( 2,636 ) $ ( 2,636 ) 22 For the Three Months Ended March 31, 2024 Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives Net Interest Income Non-Interest Income Total Interest Income Investments and Cash Equivalents Interest Income Farmer Mac Guaranteed Securities and USDA Securities Interest Income Loans Total Interest Expense Gains on financial derivatives (in thousands) Total amounts presented in the consolidated statement of operations: $ 84,924 $ 166,813 $ 144,580 $ ( 309,949 ) $ 2,079 $ 88,447 Income/(expense) related to interest settlements on fair value hedging relationships: Recognized on derivatives 10,297 40,332 17,849 ( 83,551 ) — ( 15,073 ) Recognized on hedged items 9,948 51,705 16,598 ( 106,433 ) — ( 28,182 ) Premium/discount amortization recognized on hedged items 445 — — ( 747 ) — ( 302 ) Income/(expense) related to interest settlements on fair value hedging relationships $ 20,690 $ 92,037 $ 34,447 $ ( 190,731 ) $ — $ ( 43,557 ) Gains/(losses) on fair value hedging relationships: Recognized on derivatives $ 27,789 $ 81,586 $ 48,180 $ ( 54,717 ) $ — $ 102,838 Recognized on hedged items ( 27,521 ) ( 80,743 ) ( 47,061 ) 55,489 — ( 99,836 ) Gains/(losses) on fair value hedging relationships $ 268 $ 843 $ 1,119 $ 772 $ — $ 3,002 Expense related to interest settlements on cash flow hedging relationships: Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 5,431 $ — $ 5,431 Recognized on hedged items — — — ( 8,091 ) — ( 8,091 ) Discount amortization recognized on hedged items — — — ( 14 ) — ( 14 ) Expense recognized on cash flow hedges $ — $ — $ — $ ( 2,674 ) $ — $ ( 2,674 ) Gains on financial derivatives not designated in hedge relationships: Gains on interest rate swaps $ — $ — $ — $ — $ 754 $ 754 Interest expense on interest rate swaps — — — — ( 34 ) ( 34 ) Treasury futures — — — — 1,359 1,359 Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 2,079 $ 2,079 23 The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of March 31, 2025 and December 31, 2024: Table 4.3 Hedged Items in Fair Value Relationship Carrying Amount of Hedged Assets/(Liabilities) Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities) March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 (in thousands) Investment securities, Available-for-Sale, at fair value (1) $ 1,633,772 $ 1,477,880 $ ( 83,159 ) $ ( 117,137 ) Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value (2) 5,586,662 5,478,484 ( 225,341 ) ( 307,358 ) Loans held for investment, at amortized cost 1,880,996 1,816,738 ( 327,463 ) ( 372,444 ) Notes Payable (3) ( 11,480,083 ) ( 11,899,049 ) 74,570 148,999 (1) Amortized cost of $ 1.7 billion and $ 1.6 billion as of March 31, 2025 and December 31, 2024, respectively. (2) Amortized cost of $ 5.8 billion as of both March 31, 2025 and December 31, 2024. (3) Carrying amount represents amortized cost. The following tables present the fair value of financial assets and liabilities, based on the terms of Farmer Mac's master netting arrangements as of March 31, 2025 and December 31, 2024: Table 4.4 March 31, 2025 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 Net Amount (1) (in thousands) Assets: Uncleared derivatives $ 27,867 $ — $ 27,867 $ ( 23,657 ) $ — $ ( 4,167 ) $ 43 Cleared derivatives 883 ( 883 ) — — — — — Total $ 28,750 $ ( 883 ) $ 27,867 $ ( 23,657 ) $ — $ ( 4,167 ) $ 43 Liabilities: Uncleared derivatives $ ( 52,806 ) $ — $ ( 52,806 ) $ 23,657 $ — $ 17,971 $ ( 11,178 ) Cleared derivatives ( 11,466 ) 883 ( 10,583 ) — 10,583 — — Total $ ( 64,272 ) $ 883 $ ( 63,389 ) $ 23,657 $ 10,583 $ 17,971 $ ( 11,178 ) (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 March 31, 2025, Farmer Mac had additional net exposure of $ 212.1 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position and $ 8.1 million due to instances where Farmer Mac's collateral from a counterparty exceeded the net derivative position. 24 December 31, 2024 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 Net Amount (1) (in thousands) Assets: Uncleared derivatives $ 22,759 $ — $ 22,759 $ ( 22,061 ) $ — $ ( 652 ) $ 46 Cleared derivatives 5,492 ( 462 ) 5,030 — ( 5,030 ) — — Total $ 28,251 $ ( 462 ) $ 27,789 $ ( 22,061 ) $ ( 5,030 ) $ ( 652 ) $ 46 Liabilities: Uncleared derivatives $ ( 77,326 ) $ — $ ( 77,326 ) $ 22,061 $ — $ 44,299 $ ( 10,966 ) Cleared derivatives ( 462 ) 462 — — — — — Total $ ( 77,788 ) $ 462 $ ( 77,326 ) $ 22,061 $ — $ 44,299 $ ( 10,966 ) (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, 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. Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets. Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets. If Farmer Mac had breached certain provisions of the derivative contracts as of March 31, 2025 or December 31, 2024, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral. As of March 31, 2025 and December 31, 2024, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge. Of Farmer Mac's $ 24.0 billion notional amount of interest rate swaps outstanding as of March 31, 2025, $ 18.2 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME"). Of Farmer Mac's $ 24.9 billion notional amount of interest rate swaps outstanding as of December 31, 2024, $ 19.1 billion were cleared through the CME. 5. LOANS 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 basis. As of March 31, 2025, Farmer Mac had $ 6.0 million of loans held for sale and $ 6.2 million as of December 31, 2024. 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. 25 The following table includes loans held for investment and loans held for sale and displays the composition of the loan balances as of March 31, 2025 and December 31, 2024: Table 5.1 As of March 31, 2025 As of December 31, 2024 Unsecuritized In Consolidated Trusts Total Unsecuritized In Consolidated Trusts Total (in thousands) Agricultural Finance loans Farm & Ranch $ 5,501,067 $ 2,005,680 $ 7,506,747 $ 5,414,732 $ 2,038,283 $ 7,453,015 Corporate AgFinance 1,371,202 — 1,371,202 1,381,674 — 1,381,674 Total Agricultural Finance loans 6,872,269 2,005,680 8,877,949 6,796,406 2,038,283 8,834,689 Infrastructure Finance loans 5,108,990 — 5,108,990 4,774,483 — 4,774,483 Total unpaid principal balance (1) 11,981,259 2,005,680 13,986,939 11,570,889 2,038,283 13,609,172 Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments ( 338,399 ) — ( 338,399 ) ( 381,311 ) — ( 381,311 ) Total loans 11,642,860 2,005,680 13,648,540 11,189,578 2,038,283 13,227,861 Allowance for losses ( 24,356 ) ( 700 ) ( 25,056 ) ( 22,594 ) ( 629 ) ( 23,223 ) Total loans, net of allowance $ 11,618,504 $ 2,004,980 $ 13,623,484 $ 11,166,984 $ 2,037,654 $ 13,204,638 (1) Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business. Allowance for Losses The following table is a summary, by asset type, of the allowance for losses as of March 31, 2025 and December 31, 2024: Table 5.2 March 31, 2025 December 31, 2024 Allowance for Losses Allowance for Losses (in thousands) Loans: Agricultural Finance loans Farm & Ranch $ 5,071 $ 5,132 Corporate AgFinance 6,298 5,379 Total Agricultural Finance loans 11,369 10,511 Infrastructure Finance loans 13,687 12,712 Total $ 25,056 $ 23,223 26 The following is a summary of the changes in the allowance for losses for the three months ended March 31, 2025 and 2024: Table 5.3 For the Three Months Ended March 31, 2025 March 31, 2024 Agricultural Finance loans Infrastructure Finance loans (3) Agricultural Finance loans Infrastructure Finance loans (3) Farm & Ranch (1) Corporate AgFinance (2) Total Farm & Ranch (1) Corporate AgFinance (2) Total (in thousands) Beginning Balance $ 5,132 $ 5,379 $ 10,511 $ 12,712 $ 3,936 $ 2,948 $ 6,884 $ 9,147 (Release of)/provision for losses ( 61 ) 836 775 975 599 ( 379 ) 220 ( 1,963 ) Recovery — 83 83 — — — — — Ending Balance $ 5,071 $ 6,298 $ 11,369 $ 13,687 $ 4,535 $ 2,569 $ 7,104 $ 7,184 (1) As of March 31, 2025 and 2024, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $ 0.7 million and $ 1.4 million allowance for collateral dependent assets secured by agricultural real estate, respectively. (2) As of March 31, 2025 and 2024, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 1.0 million and $ 0.0 million allowance for collateral dependent assets secured by agricultural real estate, respectively. (3) As of both March 31, 2025 and 2024, the allowance for losses for Infrastructure Finance loans includes no allowance for collateral dependent assets. The $ 1.0 million net provision to the allowance for the Infrastructure Finance portfolio during the quarter ended March 31, 2025 was primarily attributable to new loan volume within the Renewable Energy and Power & Utilities segments. The $ 0.8 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended March 31, 2025 was primarily attributable to new loan volume. The $ 2.0 million net release from the allowance for the Infrastructure Finance portfolio during the quarter ended March 31, 2024 was primarily attributable to a single telecommunications loan that completed a restructuring, which resulted in an improved collateral position and a paydown of approximately 15 % of its previously unpaid principal balance. The $ 0.2 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended March 31, 2024 was primarily attributable to increased loan volume. Although substandard Agricultural Finance loans increased $ 73.0 million from December 31, 2023, there was not a significant provision for loss associated with that increase because of the net realizable value of those loans. 27 The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of March 31, 2025 and December 31, 2024: Table 5.4 As of March 31, 2025 Accruing Current 30-59 Days 60-89 Days 90 Days and Greater (2) Total Past Due Nonaccrual loans (3)(4) Total Loans (in thousands) Loans (1) : Agricultural Finance loans Farm & Ranch $ 7,320,821 $ 17,004 $ 7,031 $ 10,096 $ 34,131 $ 151,795 $ 7,506,747 Corporate AgFinance 1,320,794 5,494 — — 5,494 44,914 1,371,202 Total Agricultural Finance loans 8,641,615 22,498 7,031 10,096 39,625 196,709 8,877,949 Infrastructure Finance loans 5,108,990 — — — — — 5,108,990 Total $ 13,750,605 $ 22,498 $ 7,031 $ 10,096 $ 39,625 $ 196,709 $ 13,986,939 (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Includes loans in consolidated trusts with beneficial interests owned by third parties (single-class) that are 90 days or more past due. (3) Includes loans 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. (4) Includes $ 36.4 million of nonaccrual loans for which there was no associated allowance. During the three months ended March 31, 2025, Farmer Mac received $ 1.3 million in interest on nonaccrual loans. As of December 31, 2024 Accruing Current 30-59 Days 60-89 Days 90 Days and Greater (2) Total Past Due Nonaccrual loans (3)(4) Total Loans (in thousands) Loans (1) : Agricultural Finance loans Farm & Ranch $ 7,299,364 $ 16,478 $ 7,268 $ 6,359 $ 30,105 $ 123,546 $ 7,453,015 Corporate AgFinance 1,336,305 — — — — 45,369 1,381,674 Total Agricultural Finance loans 8,635,669 16,478 7,268 6,359 30,105 168,915 8,834,689 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 (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Includes loans in consolidated trusts with beneficial interests owned (single-class) by third parties that are 90 days or more past due. (3) Includes loans 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. (4) Includes $ 41.5 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2024, Farmer Mac received $ 4.9 million in interest on nonaccrual loans. 28 Credit Quality Indicators The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Infrastructure Finance loans held as of March 31, 2025 and December 31, 2024, by year of origination: Table 5.5 As of March 31, 2025 Year of Origination: 2025 2024 2023 2022 2021 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance - Farm & Ranch loans (1) : Internally Assigned Risk Rating: Acceptable $ 311,988 $ 962,820 $ 499,416 $ 983,198 $ 1,541,249 $ 2,179,587 $ 377,473 $ 6,855,731 Special mention (2) 25,067 159,529 34,085 37,548 18,739 40,774 19,369 335,111 Substandard (3) 2,328 17,821 36,679 60,541 27,741 150,413 20,382 315,905 Total $ 339,383 $ 1,140,170 $ 570,180 $ 1,081,287 $ 1,587,729 $ 2,370,774 $ 417,224 $ 7,506,747 For the Three Months Ended March 31, 2025: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of March 31, 2025 Year of Origination: 2025 2024 2023 2022 2021 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance - Corporate AgFinance (1) : Internally Assigned Risk Rating: Acceptable $ 49,143 $ 208,911 $ 137,905 $ 64,537 $ 207,574 $ 213,314 $ 261,089 $ 1,142,473 Special mention (2) — — 36,874 — — 74,549 5,061 116,484 Substandard (3) — — 7,311 7,310 28,317 47,617 21,690 112,245 Total $ 49,143 $ 208,911 $ 182,090 $ 71,847 $ 235,891 $ 335,480 $ 287,840 $ 1,371,202 For the Three Months Ended March 31, 2025: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. 29 As of March 31, 2025 Year of Origination: 2025 2024 2023 2022 2021 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Infrastructure Finance loans (1) : Internally Assigned Risk Rating: Acceptable $ 295,563 $ 1,172,130 $ 520,026 $ 601,968 $ 175,924 $ 1,761,509 $ 529,965 $ 5,057,085 Special mention (2) — — — 9,724 — — — 9,724 Substandard (3) — — 13,122 29,059 — — — 42,181 Total $ 295,563 $ 1,172,130 $ 533,148 $ 640,751 $ 175,924 $ 1,761,509 $ 529,965 $ 5,108,990 For the Three Months Ended March 31, 2025: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of December 31, 2024 Year of Origination: 2024 2023 2022 2021 2020 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance - Farm & Ranch loans (1) : Internally Assigned Risk Rating: Acceptable $ 987,444 $ 525,559 $ 1,079,933 $ 1,577,305 $ 1,019,779 $ 1,287,334 $ 404,950 $ 6,882,304 Special mention (2) 139,297 34,290 32,886 24,204 7,533 23,099 22,087 283,396 Substandard (3) 8,077 28,790 52,350 24,733 60,418 92,594 20,353 287,315 Total $ 1,134,818 $ 588,639 $ 1,165,169 $ 1,626,242 $ 1,087,730 $ 1,403,027 $ 447,390 $ 7,453,015 For the Three Months Ended March 31, 2024: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. 30 As of December 31, 2024 Year of Origination: 2024 2023 2022 2021 2020 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance - Corporate AgFinance loans (1) : Internally Assigned Risk Rating: Acceptable $ 210,807 $ 152,918 $ 64,860 $ 235,493 $ 80,085 $ 161,354 $ 262,295 $ 1,167,812 Special mention (2) — 37,010 — 14,557 75,440 — 7,158 134,165 Substandard (3) — 7,309 7,652 — 14,335 33,479 16,922 79,697 Total $ 210,807 $ 197,237 $ 72,512 $ 250,050 $ 169,860 $ 194,833 $ 286,375 $ 1,381,674 For the Three Months Ended March 31, 2024: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of December 31, 2024 Year of Origination: 2024 2023 2022 2021 2020 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Infrastructure Finance loans (1) : Internally Assigned Risk Rating: Acceptable $ 1,158,427 $ 521,143 $ 578,882 $ 174,232 $ 574,135 $ 1,229,626 $ 461,162 $ 4,697,607 Special mention (2) — — 34,388 — — — — 34,388 Substandard (3) — 13,356 29,132 — — — — 42,488 Total $ 1,158,427 $ 534,499 $ 642,402 $ 174,232 $ 574,135 $ 1,229,626 $ 461,162 $ 4,774,483 For the Three Months Ended March 31, 2024: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (3) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. 31 6. GUARANTEES AND COMMITMENTS The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of March 31, 2025 and December 31, 2024, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans: Table 6.1 Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities As of March 31, 2025 As of December 31, 2024 (in thousands) Agricultural Finance Farmer Mac Guaranteed Securities $ 414,291 $ 426,310 Total off-balance sheet Farmer Mac Guaranteed Securities $ 414,291 $ 426,310 Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors. The following table summarizes the cash flows received from trusts used for Farmer Mac securitizations: Table 6.2 For the Three Months Ended March 31, 2025 March 31, 2024 (in thousands) Guarantee fees received $ 404 $ 449 Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets. The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities: Table 6.3 As of March 31, 2025 As of December 31, 2024 (dollars in thousands) Guarantee and commitment obligation $ 5,423 $ 5,595 Weighted average remaining maturity: Farmer Mac Guaranteed Securities 21.0 years 21.2 years 32 Long-Term Standby Purchase Commitments Farmer Mac has recorded a liability for its obligation to stand ready under the commitment in the guarantee and commitment obligation on the consolidated balance sheets. The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs: Table 6.4 As of March 31, 2025 As of December 31, 2024 (dollars in thousands) Guarantee and commitment obligation (1) $ 42,256 $ 42,731 Maximum principal amount 4,146,719 4,029,019 Weighted-average remaining maturity 14.6 years 14.5 years (1) Relates to LTSPCs issued or modified on or after January 1, 2003. Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities The following table is a summary, by asset type, of the reserve for losses as of March 31, 2025 and December 31, 2024: Table 6.5 March 31, 2025 December 31, 2024 Reserve for Losses Reserve for Losses (in thousands) Agricultural Finance $ 1,335 $ 1,431 Infrastructure Finance 186 192 Total $ 1,521 $ 1,623 33 The following is a summary of the net changes in the reserve for losses for the three month period ended March 31, 2025 and 2024: Table 6.6 For the Three Months Ended March 31, 2025 March 31, 2024 Reserve for Losses Reserve for Losses (in thousands) Agricultural Finance Beginning Balance $ 1,431 $ 1,471 (Release of)/provision for losses ( 96 ) ( 64 ) Ending Balance $ 1,335 $ 1,407 Infrastructure Finance Beginning Balance $ 192 $ 240 (Release of)/provision for losses ( 6 ) ( 5 ) Ending Balance $ 186 $ 235 The release from the reserve for losses during first quarter 2025 for both Agricultural Finance and Infrastructure Finance was primarily due to ratings upgrades. 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 March 31, 2025 and December 31, 2024: Table 6.7 As of March 31, 2025 Current 30-59 Days 60-89 Days 90 Days and Greater (1) Total Past Due Total Loans (in thousands) Agricultural Finance: $ 3,493,817 $ 9,785 $ 3,386 $ 4,540 $ 17,711 $ 3,511,528 Infrastructure Finance: 865,926 — — — — 865,926 Total $ 4,359,743 $ 9,785 $ 3,386 $ 4,540 $ 17,711 $ 4,377,454 (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, 2024 Current 30-59 Days 60-89 Days 90 Days and Greater (1) Total Past Due Total Loans (in thousands) Agricultural Finance: $ 3,524,406 $ 1,421 $ 1,358 $ 7,603 $ 10,382 $ 3,534,788 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 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. 34 Credit Quality Indicators The following tables present credit quality indicators related to Agricultural Finance and Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of March 31, 2025 and December 31, 2024, by year of origination: Table 6.8 As of March 31, 2025 Year of Origination: 2025 2024 2023 2022 2021 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance: Internally Assigned Risk Rating: Acceptable $ 18,183 $ 86,202 $ 163,699 $ 249,627 $ 551,903 $ 1,842,141 $ 473,476 $ 3,385,231 Special mention (1) — — 7,839 12,444 7,717 48,271 12,226 88,497 Substandard (2) — — — 1,246 14,130 22,095 329 37,800 Total $ 18,183 $ 86,202 $ 171,538 $ 263,317 $ 573,750 $ 1,912,507 $ 486,031 $ 3,511,528 For the Three Months Ended March 31, 2025: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of March 31, 2025 Year of Origination: 2025 2024 2023 2022 2021 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Infrastructure Finance: Internally Assigned Risk Rating: Acceptable $ — $ — $ — $ — $ — $ 347,889 $ 518,037 $ 865,926 Special mention (1) — — — — — — — — Substandard (2) — — — — — — — — Total $ — $ — $ — $ — $ — $ 347,889 $ 518,037 $ 865,926 For the Three Months Ended March 31, 2025: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. 35 As of December 31, 2024 Year of Origination: 2024 2023 2022 2021 2020 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Agricultural Finance: Internally Assigned Risk Rating: Acceptable $ 70,757 $ 163,646 $ 267,551 $ 563,747 $ 583,598 $ 1,312,988 $ 452,909 $ 3,415,196 Special mention (1) — 5,963 4,920 15,954 4,354 44,964 12,197 88,352 Substandard (2) — — 1,246 1,135 6,345 21,297 1,217 31,240 Total $ 70,757 $ 169,609 $ 273,717 $ 580,836 $ 594,297 $ 1,379,249 $ 466,323 $ 3,534,788 For the Three Months Ended March 31, 2024: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of December 31, 2024 Year of Origination: 2024 2023 2022 2021 2020 Prior Revolving Loans - Amortized Cost Basis Total (in thousands) Infrastructure Finance: Internally Assigned Risk Rating: Acceptable $ — $ — $ — $ — $ — $ 355,848 $ 376,883 $ 732,731 Special mention (1) — — — — — — — — Substandard (2) — — — — — — — — Total $ — $ — $ — $ — $ — $ 355,848 $ 376,883 $ 732,731 For the Three Months Ended March 31, 2024: Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ — (1) Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2) Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. 7. NOTES PAYABLE Farmer Mac's borrowings consist of discount notes and medium-term notes, both of which are unsecured general obligations of Farmer Mac. Discount notes generally have original maturities of 1 year or less, whereas medium-term notes generally have maturities of 0.5 years to 25.0 years. 36 The following tables set forth information related to Farmer Mac's borrowings as of March 31, 2025 and December 31, 2024: Table 7.1 March 31, 2025 Outstanding as of March 31 Average Outstanding During the Quarter Amount Weighted- Average Rate Amount Weighted- Average Rate (dollars in thousands) Due within one year: Discount notes $ 1,874,562 4.24 % $ 2,015,154 4.32 % Medium-term notes 2,813,359 4.45 % 2,339,633 5.37 % Current portion of medium-term notes 5,420,306 2.91 % Total due within one year $ 10,108,227 3.59 % Due after one year: Medium-term notes due in: Two years $ 5,703,854 3.05 % Three years 3,420,124 3.83 % Four years 2,957,557 4.20 % Five years 2,845,939 4.31 % Thereafter 3,014,065 2.67 % Total due after one year $ 17,941,539 3.52 % Total principal net of discounts $ 28,049,766 3.55 % Hedging adjustments ( 74,570 ) Total $ 27,975,196 December 31, 2024 Outstanding as of December 31 Average Outstanding During the Year Amount Weighted- Average Rate Amount Weighted- Average Rate (dollars in thousands) Due within one year: Discount notes $ 2,167,258 4.42 % $ 1,928,884 5.11 % Medium-term notes 2,343,264 4.64 % 1,000,290 5.28 % Current portion of medium-term notes 5,927,101 3.20 % Total due within one year $ 10,437,623 3.77 % Due after one year: Medium-term notes due in: Two years $ 4,844,538 2.66 % Three years 3,822,999 3.53 % Four years 2,732,980 4.13 % Five years 2,491,831 4.41 % Thereafter 3,190,202 2.63 % Total due after one year $ 17,082,550 3.34 % Total principal net of discounts $ 27,520,173 3.51 % Hedging adjustments ( 148,999 ) Total $ 27,371,174 37 The maximum amount of Farmer Mac's discount notes outstanding at any month end during each of the three months ended March 31, 2025 and 2024 was $ 2.1 billion and $ 1.9 billion, respectively. Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date. The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2025 as of March 31, 2025: Table 7.2 Debt Callable in 2025 as of March 31, 2025, by Maturity Amount Weighted-Average Rate (dollars in thousands) Maturity: 2026 $ 1,512,624 2.16 % 2027 853,491 2.78 % 2028 573,260 3.75 % 2029 353,497 4.25 % Thereafter 1,797,394 2.19 % Total $ 5,090,266 2.60 % The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of March 31, 2025, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date: Table 7.3 Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding Amount Weighted-Average Rate (dollars in thousands) Debt with interest rate resets, or debt maturities in: 2025 $ 10,388,191 3.66 % 2026 5,224,255 2.94 % 2027 3,813,258 3.69 % 2028 2,727,135 4.10 % 2029 2,354,686 4.38 % Thereafter 3,542,241 2.98 % Total principal net of discounts $ 28,049,766 3.55 % During the three months ended March 31, 2025 and 2024, Farmer Mac called $ 488.5 million and $ 354.5 million of callable medium-term notes, respectively. Authority to Borrow from the U.S. Treasury Farmer Mac's statutory charter authorizes it, upon satisfying certain conditions, to borrow up to $ 1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely to fulfill Farmer Mac's guarantee obligations. 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 38 obligations from Farmer Mac. The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S. Treasury within a reasonable time. As of March 31, 2025, Farmer Mac had not used this borrowing authority. Gains on Repurchases of Outstanding Debt No outstanding debt repurchases were made in the three months ended March 31, 2025 and 2024. 8. EQUITY Common Stock During first quarter 2025, Farmer Mac paid a quarterly dividend of $ 1.50 per share on all classes of its common stock. For each quarter in 2024, Farmer Mac paid a quarterly dividend of $ 1.40 per share on all classes of its common stock. In February 2025, 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 2027. Farmer Mac has no t repurchased any shares of its Class C non-voting common stock since the repurchase program was reinstated in March 2021. Capital Requirements Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of both March 31, 2025 and December 31, 2024, the minimum capital requirement was greater than the risk-based capital requirement. Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements. As of March 31, 2025, Farmer Mac's minimum capital requirement was $ 926.7 million and its core capital level was $ 1.5 billion, which was $ 600.8 million above the minimum capital requirement as of that date. As of December 31, 2024, Farmer Mac's minimum capital requirement was $ 917.6 million and its core capital level was $ 1.5 billion, which was $ 583.5 million above the minimum capital requirement as of that date. In accordance with a rule of the Farm Credit Administration ("FCA") on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac has adopted a policy for maintaining a sufficient level of Tier 1 capital (consisting of retained earnings, paid-in-capital, common stock, and qualifying preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds. 39 9. FAIR VALUE DISCLOSURES Fair Value Classification and Transfers The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value: Table 9.1 Assets and Liabilities Measured at Fair Value as of March 31, 2025 Level 1 Level 2 Level 3 (1) Total (in thousands) Recurring: Assets: Investment Securities: Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ — $ — $ 19,353 $ 19,353 Floating rate Government/GSE guaranteed mortgage-backed securities — 2,392,097 — 2,392,097 Fixed rate GSE guaranteed mortgage-backed securities — 2,503,912 — 2,503,912 Fixed rate U.S. Treasuries 1,314,718 — — 1,314,718 Total Available-for-sale Investment Securities 1,314,718 4,896,009 19,353 6,230,080 Farmer Mac Guaranteed Securities: Available-for-sale: AgVantage — — 5,614,512 5,614,512 Farmer Mac Guaranteed Securities — — 8,872 8,872 Total Farmer Mac Guaranteed Securities — — 5,623,384 5,623,384 USDA Securities: Trading — — 651 651 Total USDA Securities — — 651 651 Loans: Loans held for sale, at lower of cost or fair value — 6,045 — 6,045 Total Loans — 6,045 — 6,045 Financial derivatives 1 27,866 — 27,867 Guarantee Asset — — 5,297 5,297 Total Assets at fair value $ 1,314,719 $ 4,929,920 $ 5,648,685 $ 11,893,324 Liabilities: Financial derivatives $ 3 $ 63,386 $ — $ 63,389 Total Liabilities at fair value $ 3 $ 63,386 $ — $ 63,389 (1) Level 3 assets represent 18 % of total assets and 47 % of financial instruments measured at fair value. 40 Assets and Liabilities Measured at Fair Value as of December 31, 2024 Level 1 Level 2 Level 3 (1) Total (in thousands) Recurring: Assets: Investment Securities: Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ — $ — $ 19,476 $ 19,476 Floating rate Government/GSE guaranteed mortgage-backed securities — 2,305,725 — 2,305,725 Fixed rate GSE guaranteed mortgage-backed securities — 2,337,967 — 2,337,967 Fixed rate U.S. Treasuries 1,289,846 — — 1,289,846 Total Available-for-sale Investment Securities 1,289,846 4,643,692 19,476 5,953,014 Farmer Mac Guaranteed Securities: Available-for-sale: AgVantage — — 5,505,531 5,505,531 Farmer Mac Guaranteed Securities — — 9,015 9,015 Total Farmer Mac Guaranteed Securities — — 5,514,546 5,514,546 USDA Securities: Trading — — 818 818 Total USDA Securities — — 818 818 Loans: Loans held for sale, at lower of cost or fair value — 6,160 — 6,160 Total Loans — 6,160 — 6,160 Financial derivatives 47 27,742 — 27,789 Guarantee Asset — — 5,382 5,382 Total Assets at fair value $ 1,289,893 $ 4,677,594 $ 5,540,222 $ 11,507,709 Liabilities: Financial derivatives $ — $ 77,326 $ — $ 77,326 Total Liabilities at fair value $ — $ 77,326 $ — $ 77,326 (1) Level 3 assets represent 18 % of total assets and 48 % of financial instruments measured at fair value. There were no material assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2025 or December 31, 2024. Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period. During the three months ended March 31, 2025 and 2024, there were no transfers within the fair value hierarchy. 41 The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three months ended March 31, 2025 and 2024. Table 9.2 Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2025 Beginning Balance Purchases Settlements Allowance for Losses Realized and unrealized gains included in Income Unrealized (losses)/gains included in Other Comprehensive Income Ending Balance (in thousands) Recurring: Assets: Investment Securities: Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,476 $ — $ — $ — $ — $ ( 123 ) $ 19,353 Total available-for-sale 19,476 — — — — ( 123 ) 19,353 Farmer Mac Guaranteed Securities: Available-for-sale: AgVantage 5,505,531 300,000 ( 275,854 ) 50 82,066 2,719 5,614,512 Farmer Mac Guaranteed Securities 9,015 — ( 174 ) — — 31 8,872 Total available-for-sale 5,514,546 300,000 ( 276,028 ) 50 82,066 2,750 5,623,384 USDA Securities: Trading 818 — ( 175 ) — 8 — 651 Total USDA Securities 818 — ( 175 ) — 8 — 651 Guarantee and commitment obligations: Guarantee Asset 5,382 — ( 86 ) — 1 — 5,297 Total Guarantee and commitment obligations 5,382 — ( 86 ) — 1 — 5,297 Total Assets at fair value $ 5,540,222 $ 300,000 $ ( 276,289 ) $ 50 $ 82,075 $ 2,627 $ 5,648,685 42 Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2024 Beginning Balance Purchases Settlements Allowance for Losses Realized and unrealized losses included in Income Unrealized gains/(losses) included in Other Comprehensive Income Ending Balance (in thousands) Recurring: Assets: Investment Securities: Available-for-sale: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,082 $ — $ — $ 1 $ — $ 198 $ 19,281 Total available-for-sale 19,082 — — 1 — 198 19,281 Farmer Mac Guaranteed Securities: Available-for-sale: AgVantage 5,522,712 50,000 ( 63,955 ) 27 ( 80,694 ) 29,107 5,457,197 Farmer Mac Guaranteed Securities 9,767 — ( 177 ) — — ( 99 ) 9,491 Total available-for-sale 5,532,479 50,000 ( 64,132 ) 27 ( 80,694 ) 29,008 5,466,688 USDA Securities: Trading 1,241 — ( 174 ) — ( 1 ) — 1,066 Total USDA Securities 1,241 — ( 174 ) — ( 1 ) — 1,066 Guarantee and commitment obligations: Guarantee Asset 5,831 — ( 85 ) — ( 13 ) — 5,733 Total Guarantee and commitment obligations 5,831 — ( 85 ) — ( 13 ) — 5,733 Total Assets at fair value $ 5,558,633 $ 50,000 $ ( 64,391 ) $ 28 $ ( 80,708 ) $ 29,206 $ 5,492,768 43 The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of March 31, 2025 and December 31, 2024: Table 9.3 As of March 31, 2025 Financial Instruments Fair Value Valuation Technique Unobservable Input Range (Weighted-Average) (in thousands) Assets: Investment securities: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,353 Indicative bids Range of broker quotes 98.4 % - 98.4 % ( 98.4 %) Farmer Mac Guaranteed Securities: AgVantage $ 5,614,512 Discounted cash flow Discount rate 4.7 % - 5.1 % ( 4.8 %) Farmer Mac Guaranteed Securities $ 8,872 Discounted cash flow Discount rate 8.0 % CPR 3 % USDA Securities $ 651 Discounted cash flow Discount rate 5.0 % - 5.2 % ( 5.1 %) CPR 11 % - 14 % ( 13 %) Guarantee Asset $ 5,297 Discounted cash flow Discount rate 8.0 % CPR 3 % As of December 31, 2024 Financial Instruments Fair Value Valuation Technique Unobservable Input Range (Weighted-Average) (in thousands) Assets: Investment securities: Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,476 Indicative bids Range of broker quotes 99.0 % - 99.0 % ( 99.0 %) Farmer Mac Guaranteed Securities: AgVantage $ 5,505,531 Discounted cash flow Discount rate 5.0 % - 5.5 % ( 5.1 %) Farmer Mac Guaranteed Securities $ 9,015 Discounted cash flow Discount rate 7.9 % CPR 3 % USDA Securities $ 818 Discounted cash flow Discount rate 5.3 % - 5.4 % ( 5.3 %) CPR 12 % - 12 % ( 12 %) Guarantee Asset $ 5,382 Discounted cash flow Discount rate 7.9 % CPR 3 % The significant unobservable input used in the fair value measurements of AgVantage Farmer Mac Guaranteed Securities is the discount rate commensurate with the risks involved. Typically, significant increases (decreases) in this input 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. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease. CPR are not presented in the table above for AgVantage securities 44 because they generally have fixed maturity dates when the secured general obligations are due and do not prepay. Disclosures on Fair Value of Financial Instruments The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of March 31, 2025 and December 31, 2024: Table 9.4 As of March 31, 2025 As of December 31, 2024 Fair Value Carrying Amount Fair Value Carrying Amount (in thousands) Financial assets: Cash and cash equivalents $ 1,048,135 $ 1,048,135 $ 1,024,007 $ 1,024,007 Investment securities 6,252,795 6,252,486 5,973,571 5,973,301 Farmer Mac Guaranteed Securities 8,069,599 8,074,791 8,215,646 8,232,234 USDA Securities 2,172,063 2,377,341 2,113,342 2,371,352 Loans 13,476,915 13,623,484 12,924,604 13,204,638 Financial derivatives 27,867 27,867 27,789 27,789 Guarantee and commitment fees receivable 56,159 49,888 57,562 50,499 Financial liabilities: Notes payable 27,479,303 27,975,196 26,759,873 27,371,174 Debt securities of consolidated trusts held by third parties 1,911,578 1,894,920 1,910,302 1,929,628 Financial derivatives 63,389 63,389 77,326 77,326 Guarantee and commitment obligations 53,950 47,679 55,388 48,326 The carrying value of cash and cash equivalents is a reasonable estimate of their approximate fair value and is classified as Level 1. The fair value of investments in U.S. Treasuries are valued based on unadjusted quoted prices in active markets and are classified as Level 1. A significant portion of Farmer Mac's investment portfolio is valued using a reputable nationally recognized third-party pricing service. The prices obtained are non-binding and generally representative of recent market trades and are classified as Level 2. Farmer Mac internally models the fair value of its loan portfolio, including loans held for investment and loans held for investment in consolidated trusts, Farmer Mac Guaranteed Securities, and USDA Securities by discounting the projected cash flows of these instruments at projected interest rates. The fair values 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. 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. 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, 45 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. 10. BUSINESS SEGMENT REPORTING 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 secured by 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 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. Farmer Mac allocates interest expense to each of the other segments using a funds transfer pricing process. That process also allocates the benefits and costs from Farmer Mac's funding and hedging strategies to the Funding segment. The Investments segment includes the financial results of Farmer Mac'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 Chief Operating Decision Maker ("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. 46 The following tables present segment core earnings and assets for the three months ended March 31, 2025 and 2024. Table 10.1 Core Earnings by Business Segment For the Three Months Ended March 31, 2025 Agricultural Finance Infrastructure Finance Treasury Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments Total (in thousands) Interest income $ 149,681 $ 25,122 $ 64,995 $ 10,833 $ 20,315 $ 32,978 $ 77,490 $ 381,414 Interest expense (1) ( 114,789 ) ( 16,482 ) ( 59,638 ) ( 7,267 ) ( 15,203 ) ( 1,460 ) ( 75,636 ) ( 290,475 ) Less: reconciling adjustments (2)(3) ( 1,007 ) — ( 28 ) — — 86 — ( 949 ) Net effective spread 33,885 8,640 5,329 3,566 5,112 31,604 1,854 89,990 Guarantee and commitment fees (3) 4,551 197 221 336 183 — — 5,488 Other income/(expense) 1,222 — — — — — 22 1,244 Release of/(provision for) losses 193 ( 828 ) ( 77 ) 229 ( 1,100 ) — — ( 1,583 ) Operating expenses (1) ( 6,595 ) ( 2,133 ) ( 1,123 ) ( 1,052 ) ( 1,708 ) ( 2,800 ) ( 823 ) ( 16,234 ) Income tax (expense)/benefit ( 6,982 ) ( 1,235 ) ( 913 ) ( 647 ) ( 522 ) ( 6,049 ) ( 221 ) ( 16,569 ) Segment core earnings $ 26,274 $ 4,641 $ 3,437 $ 2,432 $ 1,965 $ 22,755 $ 832 $ 62,336 Reconciliation to net income: Net effects of derivatives and trading securities $ ( 2,535 ) Unallocated (expenses)/income ( 13,245 ) Income tax effect related to reconciling items 3,095 Net income $ 49,651 Total Assets: Total on- and off-balance sheet segment assets at principal balance $ 18,094,515 $ 1,889,363 $ 7,187,966 $ 974,835 $ 1,608,664 $ — $ — $ 29,755,343 Off-balance sheet assets under management ( 5,071,733 ) Unallocated assets 7,120,329 Total assets on the consolidated balance sheets $ 31,803,939 (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 "(Losses)/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. 47 Core Earnings by Business Segment For the Three Months Ended March 31, 2024 Agricultural Finance Infrastructure Finance Treasury Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments Total (in thousands) Interest income $ 152,204 $ 24,888 $ 66,306 $ 8,695 $ 8,149 $ 60,239 $ 75,836 $ 396,317 Interest expense (1) ( 118,315 ) ( 16,917 ) ( 61,383 ) ( 6,353 ) ( 6,100 ) ( 25,520 ) ( 75,361 ) ( 309,949 ) Less: reconciling adjustments (2)(3) ( 1,046 ) — ( 33 ) — — ( 2,245 ) — ( 3,324 ) Net effective spread 32,843 7,971 4,890 2,342 2,049 32,474 475 83,044 Guarantee and commitment fees (3) 4,484 87 256 93 62 — — 4,982 Other income/(expense) 995 12 — — — — 4 1,011 (Provision for)/release of losses ( 497 ) 378 174 2,836 ( 1,022 ) — 1 1,870 Operating expenses (1) ( 6,129 ) ( 1,850 ) ( 1,131 ) ( 827 ) ( 1,068 ) ( 2,564 ) ( 729 ) ( 14,298 ) Income tax (expense)/benefit ( 6,656 ) ( 1,386 ) ( 880 ) ( 933 ) ( 4 ) ( 6,281 ) 52 ( 16,088 ) Segment core earnings $ 25,040 $ 5,212 $ 3,309 $ 3,511 $ 17 $ 23,629 $ ( 197 ) $ 60,521 Reconciliation to net income: Net effects of derivatives and trading securities $ 4,479 Unallocated (expense)/income ( 12,842 ) Income tax effect related to reconciling items 1,588 Net income $ 53,746 Total Assets: Total on- and off-balance sheet segment assets at principal balance $ 18,900,906 $ 1,766,294 $ 6,970,538 $ 467,185 $ 742,307 $ — $ — $ 28,847,230 Off-balance sheet assets under management ( 4,637,247 ) Unallocated assets 5,562,208 Total assets on the consolidated balance sheets $ 29,772,191 (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 "(Losses)/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. 48