FEDERAL AGRICULTURAL MORTGAGE CORP 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The objective of this section of the report is to provide a discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's financial condition and results of operations for the quarter ended June 30, 2025. Financial information included in this report is consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with: (1) the interim unaudited consolidated financial statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed with the SEC on February 21, 2025 (the "2024 Annual Report"). FORWARD-LOOKING STATEMENTS In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation unless otherwise stated or unless the context otherwise requires. Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "intends," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing Farmer Mac's: • prospects for earnings; • prospects for growth in business volume; • trends in net interest income and net effective spread; • trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for expected credit losses; • assessment of economic and market trends; • trends in expenses; • trends in investment securities; • prospects for asset impairments and allowance for losses; • changes in capital position; • future dividend payments; and • other business and financial matters. Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the 56 forward-looking statements, including the factors discussed under "Risk Factors" in Part I, Item 1A of Farmer Mac's 2024 Annual Report, as well as uncertainties about: • the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms; • legislative, regulatory, or political developments that could affect Farmer Mac, its sources of business, or agricultural or infrastructure industries; • fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries; • the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac; • the general rate of growth in agricultural mortgage and infrastructure indebtedness; • the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or infrastructure lending, borrower repayment capacity, or collateral values, including inflation, fluctuations in interest rates, changes in U.S. trade policies (including tariffs and trade restrictions), fluctuations in export demand for U.S. agricultural products and foreign currency exchange rates, supply chain disruptions, increases in input costs, labor availability, and volatility in commodity prices; • the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes; • developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac; • the effects of the Federal Reserve’s efforts to achieve monetary policy normalization to respond to inflation and employment levels; and • other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, or fluctuations in agricultural real estate values. Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this report. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this report is not necessarily indicative of future results. 57 Overview Farmer Mac is driven by its mission to increase the accessibility of financing to provide vital liquidity for American agriculture and infrastructure. Our secondary market provides liquidity to our nation's agricultural and infrastructure businesses, supporting a vibrant and strong rural America. We offer a wide range of solutions to help meet financial institutions’ growth, liquidity, risk management, and capital relief needs across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Farmer Mac also serves as a critical investment tool for a number of entities – such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions – by offering investment opportunities that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars. During second quarter 2025, Farmer Mac: • exceeded $30 billion in outstanding business volume; • provided $2.1 billion in liquidity and lending capacity to lenders serving rural America; • maintained strong liquidity in our investment portfolio well above regulatory requirements; and • increased our strong capital position, well above regulatory requirements, and maintained uninterrupted access to the debt capital markets. On August 5, 2025, Farmer Mac's board of directors revised the terms of the company's share repurchase program to increase the total authorized amount of repurchases from $9.8 million to $50 million and to extend the expiration date of the program to August 5, 2027. The discussion below of Farmer Mac's financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." Net Income and Core Earnings The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings is a non-GAAP measure that differs from net income attributable to common stockholders by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions. Table 1 For the Three Months Ended June 30, 2025 March 31, 2025 June 30, 2024 (in thousands) Net income attributable to common stockholders $ 49,170 $ 43,985 $ 40,313 Core earnings 47,365 45,966 39,777 58 The $5.2 million sequential increase in net income attributable to common stockholders was primarily attributable to a $4.6 million after-tax increase in net interest income, a $3.2 million increase in federal income tax benefit from the purchase of renewable energy investment tax credits, and a $2.1 million after-tax increase in the fair value of financial derivatives. These increases were partially offset by a $4.9 million after-tax increase in the provision for credit losses. The $8.9 million year-over-year increase in net income attributable to common stockholders was primarily attributable to a $7.5 million after-tax increase in net interest income, a $3.2 million increase in federal income tax benefit from the purchase of renewable energy investment tax credits, and a $1.5 million after-tax increase in the fair value of financial derivatives. These factors were partially offset by a $4.0 million after-tax increase in operating expenses and a $1.2 million after-tax increase in the provision for credit losses. The $1.4 million sequential increase in core earnings was primarily attributable to a $3.1 million after-tax increase in net effective spread and a $3.2 million increase in federal income tax benefit from the purchase of renewable energy investment tax credits, partially offset by a $4.9 million after-tax increase in the provision for credit losses. The $7.6 million year-over-year increase in core earnings was primarily attributable to a $8.1 million after-tax increase in net effective spread and a $3.2 million increase in federal income tax benefit from the purchase of renewable energy investment tax credits, partially offset by a $4.0 million after-tax increase in operating expenses and a $1.2 million after-tax increase in the provision for credit losses. For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." Net Interest Income and Net Effective Spread The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income. Table 2 For the Three Months Ended June 30, 2025 March 31, 2025 June 30, 2024 (in thousands) Net interest income $ 96,797 $ 90,939 $ 87,340 Net interest yield % 1.20 % 1.15 % 1.15 % Net effective spread $ 93,893 $ 89,990 $ 83,596 Net effective spread % 1.19 % 1.17 % 1.14 % 59 The $5.9 million, or 5 basis points, sequential increase in net interest income was primarily due to a $3.6 million increase from net new business volume and a $1.6 million increase in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). The $9.5 million year-over-year increase in net interest income for second quarter 2025 compared to second quarter 2024 was primarily attributable to a $7.4 million increase from net new business volume. The $3.9 million sequential increase in net effective spread was primarily attributable to a $3.6 million increase from net new business volume. The $10.3 million, or 5 basis points, year-over-year increase in net effective spread for second quarter 2025 compared to second quarter 2024 was primarily due to a $7.4 million increase from net new business volume, a $1.4 million contribution from our Investments segment and a $1.4 million decrease in funding costs. For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income." Business Volume Our outstanding business volume was $30.6 billion as of June 30, 2025, a net increase of $0.8 billion from March 31, 2025 after taking into account all new business, maturities, sales, and paydowns on existing assets. The net increase was primarily attributable to a net increase of $0.6 billion in the Infrastructure Finance line of business and $0.2 billion in the Agricultural Finance line of business. For more information about Farmer Mac's business volume, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Business Volume." Capital Table 3 As of June 30, 2025 December 31, 2024 (in thousands) Core capital $ 1,561,972 $ 1,501,173 Capital in excess of minimum capital level required 602,106 583,527 The increase in capital in excess of the minimum capital level required was primarily attributable to an increase in retained earnings, partially offset by the capital impact due to growth in total assets. 60 Credit Quality During second quarter 2025, we recorded a charge-off of $2.8 million primarily related to two specific borrower relationships for a permanent planting loan and a crop loan to reflect the amount of each loan that we deemed uncollectible. The following table presents Agricultural Finance on- and off-balance sheet substandard assets, in dollars and as a percentage of the respective portfolio as of June 30, 2025, March 31, 2025, and December 31, 2024: Table 4 On-Balance Sheet Off-Balance Sheet Substandard Assets % of Portfolio Substandard Assets % of Portfolio (dollars in thousands) June 30, 2025 $ 415,185 4.4 % $ 37,785 1.1 % March 31, 2025 428,150 4.8 % 37,800 1.1 % December 31, 2024 367,012 4.2 % 31,240 0.9 % Increase/(decrease) from prior quarter-ending $ (12,965) (0.4) % $ (15) — % Increase/(decrease) from prior year-ending 48,173 0.2 % 6,545 0.2 % The decrease of $13.0 million in on-balance sheet substandard assets during second quarter was primarily driven by credit upgrades in crops and agricultural storage and processing, partially offset by downgrades in permanent plantings. Substandard assets within the Infrastructure Finance portfolio increased from $42.2 million as of March 31, 2025 to $72.2 million as of June 30, 2025, primarily as a result of two borrowers that were downgraded to substandard during the quarter. One of the downgraded loans was a Renewable Energy solar project and the other was a Broadband Infrastructure loan. For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 25 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 61 The following table pres ents 90-day delinquencies for the on- and off-balance sheet Agricultural Finance portfolios in dollars and as a percentage of the respective balance sheet category as of June 30, 2025, March 31, 2025, and December 31, 2024: Table 5 On-Balance Sheet Off-Balance Sheet 90-Day Delinquencies % of Portfolio 90-Day Delinquencies % of Portfolio (dollars in thousands) June 30, 2025 $ 123,393 1.3 % $ 2,475 0.1 % March 31, 2025 155,438 1.8 % 4,539 0.1 % December 31, 2024 101,340 1.1 % 7,604 0.2 % Increase/(decrease) from prior quarter-ending $ (32,045) (0.5) % $ (2,064) — % Increase/(decrease) from prior year-ending 22,053 0.2 % (5,129) (0.1) % The decrease of $32.0 million and $2.1 million in on- and off-balance sheet Agricultural Finance assets, respectively, that are 90 or more days delinquent is primarily attributable to crops and permanent plantings. The top ten borrower exposures over 90 days delinquent in either the on- or off-balance sheet Agricultural Finance portfolio represented over half of the aggregate 90-day delinquencies as of June 30, 2025. As of both June 30, 2025 and December 31, 2024, there were no 90-day delinquencies in Farmer Mac's portfolio of Infrastructure Finance loan purchases and loans underlying Long-Term Standby Purchase Commitments (“LTSPCs”). For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." Use of Non-GAAP Measures In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per common share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends. The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP. 62 Core Earnings and Core Earnings Per Common Share The main difference between core earnings and core earnings per common share ("Core EPS"), which are non-GAAP measures, and net income attributable to common stockholders and earnings per common share ("EPS"), which are GAAP measures, is that those non-GAAP measures exclude 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 these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and Core EPS, which is consistent with Farmer Mac's historical treatment of any losses on the retirement of preferred stock. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of EPS to Core EPS, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." Net Effective Spread Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of those assets. As further explained below, net effective spread differs from net interest income by excluding certain items from net interest income and including certain other items that net interest income does not contain. Net effective spread excludes the interest income and interest expense associated with consolidated trusts with beneficial interests owned by third parties (single-class) and the average balance of the loans underlying these trusts to reflect management's view that the net interest income earned on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Net effective spread also excludes the fair value changes of financial derivatives and the corresponding average balances of assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity. Farmer Mac uses net effective spread to show the complete net spread between its interest-earning assets and all related net funding costs, including any associated derivatives, whether or not they are designated in a hedge accounting relationship. Accordingly, the net effective spread includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "Gains/(losses) on financial derivatives" on the Consolidated Statements of Operations. Net effective spread also differs from net interest income because it includes the net effects of terminations or net settlements on undesignated financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. 63 For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income." Results of Operations Reconciliations of net income attributable to common stockholders and EPS to core earnings and Core EPS are presented in the following tables along with information about the composition of core earnings: 64 Table 6 Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings For the Three Months Ended June 30, 2025 June 30, 2024 (in thousands, except per share amounts) Net income attributable to common stockholders $ 49,170 $ 40,313 Less reconciling items: Losses on undesignated financial derivatives due to fair value changes (see Table 13) (639) (359) Gains on hedging activities due to fair value changes 2,709 2,604 Unrealized losses on trading securities (65) (87) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 25 26 Net effects of terminations or net settlements on financial derivatives 255 (1,505) Income tax effect related to reconciling items (480) (143) Sub-total 1,805 536 Core earnings $ 47,365 $ 39,777 Composition of Core Earnings: Revenues: Net effective spread (1) $ 93,893 $ 83,596 Guarantee and commitment fees (2) 5,874 5,256 Gain on sale of investment securities (GAAP) — 1,052 Loss on sale of mortgage loan (GAAP) — (1,147) Other (3) 742 481 Total revenues 100,509 89,238 Credit related expense/(income) (GAAP): Provision for losses 7,812 6,230 REO operating expenses 148 — Gains on REO (87) — Total credit related expense/(income) 7,873 6,230 Operating expenses (GAAP): Compensation and employee benefits 17,631 14,840 General and administrative 10,859 8,904 Regulatory fees 1,000 725 Total operating expenses 29,490 24,469 Net earnings 63,146 58,539 Income tax expense (4) 10,114 11,970 Preferred stock dividends (GAAP) 5,667 6,792 Core earnings $ 47,365 $ 39,777 Core EPS: Basic $ 4.33 $ 3.66 Diluted $ 4.32 $ 3.63 Weighted-average shares: Basic 10,933 10,879 Diluted 10,963 10,956 (1) Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information and Table 10 for a reconciliation of net interest income to net effective spread. (2) Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. 65 (3) Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. (4) Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings. Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings For the Six Months Ended June 30, 2025 June 30, 2024 (in thousands, except per share amounts) Net income attributable to common stockholders $ 93,155 $ 87,268 Less reconciling items: (Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13) (3,212) 1,324 Gains on hedging activities due to fair value changes 3,808 5,606 Unrealized losses on trading securities (56) (101) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 53 57 Net effects of terminations or net settlements on financial derivatives (815) (1,697) Income tax effect related to reconciling items 46 (1,090) Sub-total (176) 4,099 Core earnings $ 93,331 $ 83,169 Composition of Core Earnings: Revenues: Net effective spread (1) $ 183,883 $ 166,640 Guarantee and commitment fees (2) 11,362 10,238 Gain on sale of investment securities (GAAP) — 1,052 Loss on sale of mortgage loan (GAAP) — (1,147) Other (3) 2,057 1,558 Total revenues 197,302 178,341 Credit related expense/(income) (GAAP): Provision for losses 9,395 4,360 REO operating expenses 148 — Gain on REO (19) — Total credit related expense/(income) 9,524 4,360 Operating expenses (GAAP): Compensation and employee benefits 35,383 33,097 General and administrative 21,617 17,159 Regulatory fees 2,000 1,450 Total operating expenses 59,000 51,706 Net earnings 128,778 122,275 Income tax expense (4) 24,114 25,523 Preferred stock dividends (GAAP) 11,333 13,583 Core earnings $ 93,331 $ 83,169 Core EPS: Basic $ 8.55 $ 7.66 Diluted $ 8.51 $ 7.59 Weighted-average shares: Basic 10,915 10,863 Diluted 10,973 10,966 66 (1) Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information and Table 10 for a reconciliation of net interest income to net effective spread. (2) Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. (3) Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. (4) Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings. Table 7 Reconciliation of GAAP Basic EPS to Core Earnings - Basic EPS For the Three Months Ended For the Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (in thousands, except per share amounts) GAAP - Basic EPS $ 4.50 $ 3.71 $ 8.53 $ 8.04 Less reconciling items: (Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13) (0.06) (0.03) (0.29) 0.12 Gains on hedging activities due to fair value changes 0.25 0.24 0.35 0.52 Unrealized losses on trading securities (0.01) (0.01) (0.01) (0.01) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — 0.01 0.01 Net effects of terminations or net settlements on financial derivatives 0.03 (0.14) (0.08) (0.16) Income tax effect related to reconciling items (0.04) (0.01) — (0.10) Sub-total 0.17 0.05 (0.02) 0.38 Core Earnings - Basic EPS $ 4.33 $ 3.66 $ 8.55 $ 7.66 Shares used in per share calculation (GAAP and Core Earnings) 10,933 10,879 10,915 10,863 Reconciliation of GAAP Diluted EPS to Core Earnings - Diluted EPS For the Three Months Ended For the Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (in thousands, except per share amounts) GAAP - Diluted EPS $ 4.48 $ 3.68 $ 8.49 $ 7.96 Less reconciling items: (Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13) (0.06) (0.03) (0.29) 0.12 Gains on hedging activities due to fair value changes 0.25 0.24 0.35 0.51 Unrealized losses on trading securities (0.01) (0.01) (0.01) (0.01) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — — 0.01 Net effects of terminations or net settlements on financial derivatives 0.02 (0.14) (0.07) (0.16) Income tax effect related to reconciling items (0.04) (0.01) — (0.10) Sub-total 0.16 0.05 (0.02) 0.37 Core Earnings - Diluted EPS $ 4.32 $ 3.63 $ 8.51 $ 7.59 Shares used in per share calculation (GAAP and Core Earnings) 10,963 10,956 10,973 10,966 67 The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are: 1. (Losses)/gains on financial derivatives due to fair value changes, including: (a) (Losses)/gains on undesignated financial derivatives due to fair value changes; and (b) Gains on hedging activities due to fair value changes. 2. Unrealized losses on trading securities are reported on Farmer Mac's Consolidated Statements of Operations and represent changes during the period in fair values for trading assets remaining on our balance sheet as of the end of the reporting period. 3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value reflects the amortization recorded during the reporting period on those assets for which the premium, discount, or deferred gain was a result of consolidation accounting rather than a cash transaction. 4. The net effects of terminations or net settlements on financial derivatives relate to forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities, which are used as a short-term economic hedge of the issuance of debt. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the Consolidated Statements of Operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years. The following sections provide more detail about specific components of our results of operations. Net Interest Income . The following table provides information about interest-earning assets and funding for the three and six months ended June 30, 2025 and 2024. The average balance of loans in consolidated trusts with beneficial interests owned by third parties (single-class) and for which Farmer Mac guarantees all classes of securities issued is excluded from the average balances of interest-earning assets and interest-bearing liabilities and, instead, is disclosed in the net effect of consolidated trusts along with the associated net interest income. Table 8 For the Three Months Ended June 30, 2025 June 30, 2024 Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate (dollars in thousands) Interest-earning assets: Cash and investments $ 7,557,352 $ 88,985 4.71 % $ 6,229,727 $ 84,538 5.43 % Loans, Farmer Mac Guaranteed Securities and USDA Securities (1) 23,958,468 300,072 5.01 % 23,229,634 309,277 5.33 % Total interest-earning assets 31,515,820 389,057 4.94 % 29,459,361 393,815 5.35 % Funding: Total interest-bearing liabilities (2) 29,437,344 293,247 3.98 % 27,458,620 307,846 4.48 % Net non-interest-bearing funding 2,078,476 — 2,000,741 — Total funding 31,515,820 293,247 3.72 % 29,459,361 307,846 4.18 % Net interest income/yield prior to consolidation of certain trusts 31,515,820 95,810 1.22 % 29,459,361 85,969 1.17 % Net effect of consolidated trusts (3) 870,136 987 0.45 % 907,509 1,371 0.60 % Net interest income/yield $ 32,385,956 $ 96,797 1.20 % $ 30,366,870 $ 87,340 1.15 % (1) Excludes interest income of $10.0 million and $9.9 million in second quarter 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). 68 (2) Excludes interest expense of $9.0 million and $8.5 million in second quarter 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). (3) Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class). For the Six Months Ended June 30, 2025 June 30, 2024 Average Balance Income/ Expense Average Rate Average Balance Income/ Expense Average Rate (dollars in thousands) Interest-earning assets: Cash and investments $ 7,377,693 $ 172,293 4.67 % $ 6,237,051 $ 169,462 5.43 % Loans, Farmer Mac Guaranteed Securities and USDA Securities (1) 23,800,045 588,283 4.94 % 23,035,820 611,679 5.31 % Total interest-earning assets 31,177,738 760,576 4.88 % 29,272,871 781,141 5.34 % Funding: Total interest-bearing liabilities (2) 29,061,297 574,838 3.96 % 27,299,257 609,856 4.47 % Net non-interest-bearing funding 2,116,441 — 1,973,614 — Total funding 31,177,738 574,838 3.69 % 29,272,871 609,856 4.17 % Net interest income/yield prior to consolidation of certain trusts 31,177,738 185,738 1.19 % 29,272,871 171,285 1.17 % Net effect of consolidated trusts (3) 870,801 1,998 0.46 % 880,196 2,423 0.55 % Net interest income/yield $ 32,048,539 $ 187,736 1.17 % $ 30,153,067 $ 173,708 1.15 % (1) Excludes interest income of $19.9 million and $18.9 million in the first half of 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). (2) Excludes interest expense of $17.9 million and $16.5 million in the first half of 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). (3) Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class). The $9.5 million year-over-year increase in net interest income for second quarter 2025 compared to second quarter 2024 was primarily attributable to a $7.4 million increase from net new business volume. The $14.0 million increase in net interest income for the six months ended June 30, 2025, compared to the same period in the prior year was primarily attributable to a $13.8 million increase from net new business volume. The following table sets forth information about changes in the components of Farmer Mac's net interest income for the periods indicated prior to consolidation of trusts with beneficial interests owned by third parties (single-class) and for which Farmer Mac guarantees all classes of securities issued. For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by prior rate), and changes in rate (change in rate multiplied by old volume), and then allocated based on the relative size of rate and volume changes from the prior period. Table 9 For the Six Months Ended June 30, 2025 Compared to Same Period in 2024 Increase/(Decrease) Due to Rate Volume Total (in thousands) Income from interest-earning assets: Cash and investments $ (25,698) $ 28,529 $ 2,831 Loans, Farmer Mac Guaranteed Securities and USDA Securities (57,622) 19,798 (37,824) Total (83,320) 48,327 (34,993) Expense from other interest-bearing liabilities (72,756) 37,738 (35,018) Change in net interest income prior to consolidation of certain trusts (1) $ (10,564) $ 10,589 $ 25 (1) Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties (single-class). 69 The following table presents a reconciliation of net interest income to net effective spread. Net effective spread is measured by including: (1) expenses related to undesignated financial derivatives, which consist of income or expense related to contractual amounts due on financial derivatives not designated in hedge accounting relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (1) the amortization of premiums and discounts on assets consolidated at fair value, (2) the net effects of consolidated trusts with beneficial interests owned by third parties (single-class), and (3) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information about net effective spread. Table 10 For the Three Months Ended For the Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Dollars Yield Dollars Yield Dollars Yield Dollars Yield (dollars in thousands) Net interest income $ 96,797 1.20 % $ 87,340 1.15 % $ 187,736 1.17 % $ 173,708 1.15 % Net effects of consolidated trusts (987) 0.02 % (1,371) 0.02 % (1,998) 0.02 % (2,423) 0.02 % Expense related to undesignated financial derivatives (208) — % (486) (0.01) % 110 — % (521) — % Amortization of premiums/discounts on assets consolidated at fair value (22) — % (21) — % (47) — % (48) — % Amortization of losses due to terminations or net settlements on financial derivatives 1,022 0.01 % 738 0.01 % 1,890 0.01 % 1,530 0.01 % Fair value changes on fair value hedge relationships (2,709) (0.04) % (2,604) (0.03) % (3,808) (0.02) % (5,606) (0.04) % Net effective spread $ 93,893 1.19 % $ 83,596 1.14 % $ 183,883 1.18 % $ 166,640 1.14 % The $10.3 million, or 5 basis point, year-over-year increase in net effective spread for second quarter 2025 compared to second quarter 2024 was primarily due to a $7.4 million increase from net new business volume, a $1.4 million contribution from our Investments segment and a $1.4 million decrease in funding costs. The $17.3 million, or 4 basis point, increase in net effective spread for the six months ended June 30, 2025, compared to the same period in the prior year, was primarily due to a $13.8 million increase in net new business volume, reflecting continued growth in the Renewable Energy and Broadband Infrastructure segments, a $2.8 million contribution from the Investments segment, and a $0.5 million decrease in funding costs. See Note 10 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business. 70 Provision for and Release of Allowance for Losses and Reserve for Losses . The following table summarizes the components of Farmer Mac's total allowance for losses for the three and six months ended June 30, 2025 and 2024: Table 11 As of June 30, 2025 As of June 30, 2024 Allowance for Losses Reserve for Losses Total Allowance for Losses Allowance for Losses Reserve for Losses Total Allowance for Losses (in thousands) For the Three Months Ended Beginning Balance $ 25,437 $ 1,521 $ 26,958 $ 14,788 $ 1,642 $ 16,430 Provision for losses 7,713 99 7,812 6,179 51 6,230 Charge-offs (2,840) — (2,840) (4,043) — (4,043) Recovery 40 — 40 — — — Ending Balance $ 30,350 $ 1,620 $ 31,970 $ 16,924 $ 1,693 $ 18,617 For the Six Months Ended Beginning Balance $ 23,670 $ 1,622 $ 25,292 $ 16,589 $ 1,711 $ 18,300 Provision for/(release of) losses 9,397 (2) 9,395 4,378 (18) 4,360 Charge-offs (2,840) — (2,840) (4,043) — (4,043) Recovery 123 — 123 — — — Ending Balance $ 30,350 $ 1,620 $ 31,970 $ 16,924 $ 1,693 $ 18,617 During second quarter 2025, we recorded a $7.8 million net provision to the total allowance for losses of which $2.8 million resulted from two specific borrower relationships for a permanent planting loan and a crop loan. During second quarter 2025, we recorded a charge-off of $2.8 million related to these two specific borrower relationships to reflect the amount of each loan that we deemed uncollectible. The remaining $5.0 million net provision recorded during the second quarter 2025 was due to downgrades in Infrastructure Finance, declining economic forecast factors of commercial and industrial loan performance and agricultural land values, and new volume growth in Broadband Infrastructure and Renewable Energy. See Notes 5 and 6 to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 71 Guarantee and Commitment Fees . The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the three and six months ended June 30, 2025 and 2024: Table 12 For the Three Months Ended For the Six Months Ended Change Change June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ % (dollars in thousands) Contractual guarantee and commitment fees $ 4,795 $ 3,945 $ 850 22 % $ 9,224 $ 7,849 $ 1,375 18 % Guarantee obligation amortization 1,572 1,270 302 24 % 3,328 3,052 276 9 % Guarantee asset fair value changes (1,551) (1,418) (133) (9) % (3,257) (3,187) (70) 2 % Guarantee and commitment fee income $ 4,816 $ 3,797 $ 1,019 27 % $ 9,295 $ 7,714 $ 1,581 20 % Guarantee and commitment fee income increased for the three and six months ended June 30, 2025 compared to 2024, which was primarily attributable to increased business volume in unused commitments in the Infrastructure Finance line of business. As adjusted for the non-GAAP core earnings presentation, guarantee and commitment fees were $5.9 million and $11.4 million for the three and six months ended June 30, 2025, respectively, compared to $5.3 million and $10.2 million for the three and six months ended June 30, 2024, respectively. In Farmer Mac's presentation of non-GAAP core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities. Farmer Mac has also excluded changes in the fair values of guarantee assets from the presentation of core earnings because management does not expect these fluctuations to have a cumulative net impact on Farmer Mac's financial condition, results of operations, or cash flows if Farmer Mac fulfills its guarantee obligation throughout the term of the guaranteed securities, as is expected. For more information about net income attributable to common stockholders, the composition of non-GAAP core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." 72 Gains/(losses) on financial derivatives . The components of gains and losses on financial derivatives for the three and six months ended June 30, 2025 and 2024 are summarized in the following table: Table 13 For the Three Months Ended For the Six Months Ended Change Change June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ % (dollars in thousands) (Losses)/gains on undesignated financial derivatives due to fair value changes $ (639) $ (359) $ (280) 78 % $ (3,212) $ 1,324 $ (4,536) (343) % Accrual of contractual payments (208) (486) 278 (57) % 110 (521) 631 (121) % Gains/(losses) due to terminations or net settlements 927 (954) 1,881 (197) % 546 (523) 1,069 (204) % Gains/(losses) on financial derivatives $ 80 $ (1,799) $ 1,879 (104) % $ (2,556) $ 280 $ (2,836) (1013) % These changes in fair value are primarily the result of fluctuations in long-term interest rates. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "Gains/(losses) due to terminations or net settlements" in the table above. See Note 4 to the consolidated financial statements for more information about our financial derivatives. Operating Expenses . The components of operating expenses for the three and six months ended June 30, 2025 and 2024 are summarized in the following table: Table 14 For the Three Months Ended For the Six Months Ended Change Change June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ % (dollars in thousands) Compensation and employee benefits $ 17,631 $ 14,840 $ 2,791 19 % $ 35,383 $ 33,097 $ 2,286 7 % General and administrative 10,859 8,904 1,955 22 % 21,617 17,159 4,458 26 % Regulatory fees 1,000 725 275 38 % 2,000 1,450 550 38 % Total Operating Expenses $ 29,490 $ 24,469 $ 5,021 21 % $ 59,000 $ 51,706 $ 7,294 14 % The increase in compensation and employee benefits expenses for the three and six months ended June 30, 2025 compared to 2024 was largely due to increased headcount. The increase in G&A expenses for the three and six months ended June 30, 2025 compared to 2024 was primarily attributable to an increase in information technology infrastructure costs, transactional legal fees, hiring expenses, and servicing advance expenses. 73 Income Tax Expense . The following table presents income tax expense and the effective income tax rate for the three and six months ended June 30, 2025 and 2024: Table 15 For the Three Months Ended For the Six Months Ended Change Change June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ % (dollars in thousands) Income tax expense $ 10,594 $ 12,113 $ (1,519) (13) % $ 24,068 $ 26,613 $ (2,545) (10) % Effective tax rate 16.2 % 20.5 % (4.3) % 18.7 % 20.9 % (2.2) % The decrease in the effective tax rate in 2025 is primarily attributable to the purchase of $35.6 million in renewable energy investment tax credits during the second quarter 2025. The purchases of renewable energy investment tax credits have been at prices of approximately $0.91 per $1.00 of credit and resulted in a benefit in the amount of $3.2 million. 74 Business Volume . The following table sets forth the net growth or decrease in our lines of business for the three and six months ended June 30, 2025 and 2024: Table 16 Net New Business Volume For the Three Months Ended For the Six Months Ended On or Off Balance Sheet June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Net Growth/(Decrease) Net Growth/(Decrease) Net Growth/(Decrease) Net Growth/(Decrease) (in thousands) Agricultural Finance: Farm & Ranch: Loans On-balance sheet $ 129,535 $ (108,724) $ 215,870 $ 5,369 Loans held in consolidated trusts: Beneficial interests owned by third-party investors (single-class) (1) On-balance sheet (6,812) 51,444 (7,873) 37,688 Beneficial interests owned by third-party investors (structured) (1) On-balance sheet 276,386 300,514 244,844 291,406 IO-FMGS (2) On-balance sheet (168) (170) (341) (347) USDA Securities On-balance sheet 49,790 4,556 56,224 (9,422) AgVantage Securities (1) On-balance sheet (230,000) (560,000) (735,000) (400,000) LTSPCs and unfunded loan commitments Off-balance sheet (10,829) (77,051) (51,023) (192,619) Other Farmer Mac Guaranteed Securities (3) Off-balance sheet (15,123) (7,021) (27,142) (15,780) Loans serviced for others Off-balance sheet (69,389) 47 (84,622) (20,595) Total Farm & Ranch $ 123,390 $ (396,405) $ (389,063) $ (304,300) Corporate AgFinance: Loans On-balance sheet $ 79,394 $ 27,661 $ 68,922 $ 26,444 AgVantage Securities (1) On-balance sheet (7,790) (9,738) (20,359) 70,748 Unfunded loan commitments Off-balance sheet (7,444) 32,676 17,255 25,722 Total Corporate AgFinance $ 64,160 $ 50,599 $ 65,818 $ 122,914 Total Agricultural Finance $ 187,550 $ (345,806) $ (323,245) $ (181,386) Infrastructure Finance: Power & Utilities: Loans On-balance sheet $ 142,321 $ 79,313 $ 276,220 $ 130,857 AgVantage Securities (1) On-balance sheet (19,700) (19,279) 255,706 (38,454) LTSPCs and unfunded loan commitments Off-balance sheet (10,233) (22,297) (40,938) (63,698) Total Power & Utilities $ 112,388 $ 37,737 $ 490,988 $ 28,705 Broadband Infrastructure: Loans On-balance sheet $ 90,912 $ 52,852 $ 126,541 $ 15,326 Unfunded loan commitments Off-balance sheet 108,694 33,161 245,434 36,719 Total Broadband Infrastructure $ 199,606 $ 86,013 $ 371,975 $ 52,045 Renewable Energy: Loans On-balance sheet $ 142,433 $ 160,320 $ 307,412 $ 298,292 Unfunded loan commitments Off-balance sheet 189,939 (27,155) 217,099 89,659 Total Renewable Energy $ 332,372 $ 133,165 $ 524,511 $ 387,951 Total Infrastructure Finance $ 644,366 $ 256,915 $ 1,387,474 $ 468,701 Total $ 831,916 $ (88,891) $ 1,064,229 $ 287,315 (1) Categories of Farmer Mac Guaranteed Securities. (2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. (3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties. 75 Farmer Mac's outstanding business volume was $30.6 billion as of June 30, 2025, a net increase of $0.8 billion from March 31, 2025 after taking into account all new business, maturities, sales, and paydowns on existing assets. The $0.1 billion net increase in Farm & Ranch during second quarter 2025 was primarily attributable to net loan growth partially offset by maturities of AgVantage securities that counterparties did not re-issue. The $0.1 billion net increase in Power & Utilities during second quarter 2025 was primarily attributable to loan purchases. The $0.2 billion net increase in Broadband Infrastructure during second quarter 2025 was primarily attributable to $0.3 billion in loan purchases and commitments, partially offset by repayments. The $0.3 billion net increase in Renewable Energy during second quarter 2025 was primarily attributable to $0.5 billion in loan purchases and commitments, partially offset by repayments. The net increase in Renewable Energy loan purchases and commitments primarily reflects the continued strong demand for renewable power generation and storage. Farmer Mac's outstanding business volume was $28.8 billion as of June 30, 2024, a net increase of $0.1 billion from March 31, 2024 after taking into account all new business, maturities, and paydowns on existing assets. The $0.4 billion net decrease in Farm & Ranch during second quarter 2024 resulted from $1.1 billion of scheduled maturities and repayments, partially offset by $0.7 billion of new purchases, commitments, and guarantees. Included in the $0.7 billion is the purchase of $390.2 million of Farm & Ranch loans. Scheduled loan maturities and repayments in the aggregate amount of $133.1 million partially offset those purchases. During second quarter 2024, a total of $0.8 billion in Farm & Ranch AgVantage Securities matured without refinancing, which primarily reflected slower loan growth resulting in less liquidity needs from Farmer Mac's AgVantage counterparties. The $0.8 billion in maturities and repayments were partially offset by $0.2 billion in new purchases. The $0.1 billion net increase in Corporate AgFinance during second quarter 2024 resulted from $0.3 billion of new purchases and unfunded loan commitments, which was partially offset by $0.2 billion of scheduled maturities, repayments, sales, and paydowns on revolving commitments. Included in the $0.3 billion is $243.7 million of purchases of Corporate AgFinance loans and unfunded commitments, which was partially offset by $172.4 million of scheduled repayments. The net increase in Corporate AgFinance loan purchases and unfunded commitments primarily reflected a more active market for agribusiness transactions during the quarter. The $37.7 million net increase in Power & Utilities during second quarter 2024 resulted from $133.0 million of new purchases and unfunded loan commitments, which was partially offset by $95.2 million of scheduled maturities and repayments. 76 The $0.1 billion net increase in Broadband Infrastructure during second quarter 2024 resulted from $102.1 million of new purchases and unfunded commitments, which was partially offset by $16.1 million of scheduled maturities and repayments. The $0.1 billion net increase in Renewable Energy during second quarter 2024 primarily reflects $271.9 million in loan purchases and unfunded commitments, partially offset by $138.7 million in repayments. The net increase in Renewable Energy loan purchases and unfunded commitments primarily reflects the continued strong demand for renewable power generation and storage. The level and composition of Farmer Mac’s outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from period to period. This relationship in turn depends on a variety of factors both internal and external to Farmer Mac. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report. The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated: Table 17 For the Three Months Ended For the Six Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (dollars in thousands) AgVantage securities $ 129,250 $ 274,650 $ 434,125 $ 686,200 Loans securitized and held in consolidated trusts with beneficial interests owned by third parties (structured and single-class) 314,403 314,545 340,426 330,481 Total Farmer Mac Guaranteed Securities Issuances $ 443,653 $ 589,195 $ 774,551 $ 1,016,681 During the three and six months ended June 30, 2025 and 2024, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the Consolidated Balance Sheets. During the three and six months ended June 30, 2025 and 2024, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed USDA Securities or AgVantage Securities. 77 The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated: Table 18 Outstanding Business Volume On or Off Balance Sheet As of June 30, 2025 As of December 31, 2024 (in thousands) Agricultural Finance: Farm & Ranch: Loans On-balance sheet $ 5,630,602 $ 5,414,732 Loans held in consolidated trusts: Beneficial interests owned by third-party investors (single-class) (1) On-balance sheet 877,422 885,295 Beneficial interests owned by third-party investors (structured) (1) On-balance sheet 1,397,832 1,152,988 IO-FMGS (2) On-balance sheet 8,369 8,710 USDA Securities On-balance sheet 2,458,647 2,402,423 AgVantage Securities (1) On-balance sheet 3,985,000 4,720,000 LTSPCs and unfunded loan commitments Off-balance sheet 3,019,531 3,070,554 Other Farmer Mac Guaranteed Securities (3) Off-balance sheet 399,168 426,310 Loans serviced for others Off-balance sheet 441,334 525,956 Total Farm & Ranch $ 18,217,905 $ 18,606,968 Corporate AgFinance: Loans On-balance sheet $ 1,450,596 $ 1,381,674 AgVantage Securities (1) On-balance sheet 259,938 280,297 Unfunded loan commitments Off-balance sheet 242,989 225,734 Total Corporate AgFinance $ 1,953,523 $ 1,887,705 Total Agricultural Finance $ 20,171,428 $ 20,494,673 Infrastructure Finance: Power & Utilities: Loans On-balance sheet $ 3,162,796 $ 2,886,576 AgVantage Securities (1) On-balance sheet 3,776,849 3,521,143 LTSPCs and unfunded loan commitments Off-balance sheet 360,709 401,647 Total Power & Utilities $ 7,300,354 $ 6,809,366 Broadband Infrastructure: Loans On-balance sheet $ 748,748 $ 622,207 Unfunded loan commitments Off-balance sheet 425,693 180,259 Total Broadband Infrastructure $ 1,174,441 $ 802,466 Renewable Energy: Loans On-balance sheet $ 1,573,112 $ 1,265,700 Unfunded loan commitments Off-balance sheet 367,924 150,825 Total Renewable Energy $ 1,941,036 $ 1,416,525 Total Infrastructure Finance $ 10,415,831 $ 9,028,357 Total $ 30,587,259 $ 29,523,030 (1) A type of Farmer Mac Guaranteed Security. (2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. (3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties. 78 The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of June 30, 2025: Table 19 Schedule of Principal Amortization as of June 30, 2025 Loans Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs USDA Securities and Farmer Mac Guaranteed USDA Securities Total (in thousands) 2025 $ 459,205 $ 303,466 $ 58,637 $ 821,308 2026 862,985 547,190 121,076 1,531,251 2027 805,531 470,382 119,185 1,395,098 2028 1,110,330 316,160 119,369 1,545,859 2029 1,041,891 432,635 120,317 1,594,843 Thereafter 10,561,166 2,564,519 2,101,725 15,227,410 Total $ 14,841,108 $ 4,634,352 $ 2,640,309 $ 22,115,769 Of the $30.6 billion outstanding business volume as of June 30, 2025, $8.0 billion were AgVantage securities included in the Agricultural Finance and Infrastructure Finance lines of business. Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. Changes in quarterly AgVantage securities volume are primarily driven by the generally larger transaction sizes for that product, scheduled maturity amounts for a particular quarter, the liquidity needs of Farmer Mac’s AgVantage counterparties, and changes in the pricing and availability of wholesale funding. Based on these factors, we expect business volumes in AgVantage securities to continue to fluctuate. The following table summarizes by maturity date the outstanding principal amount of AgVantage securities as of June 30, 2025: Table 20 AgVantage Balances by Year of Maturity As of June 30, 2025 (in thousands) 2025 $ 1,140,844 2026 1,328,515 2027 1,191,393 2028 693,367 2029 1,058,784 Thereafter (1) 2,608,884 Total $ 8,021,787 (1) Includes various maturities ranging from 2030 to 2044. The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.8 years as of June 30, 2025. 79 Outlook Business Outlook Products and Portfolio Farmer Mac serves a vital role in serving rural America by offering liquidity, capital, and risk management tools as a secondary market to help increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. The growth trajectory of Farmer Mac is closely tied to the capital and liquidity needs of the lending institutions serving agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors. Several factors continue to influence business volume growth dynamics. The persistently elevated market interest rates have had a direct effect on Farmer Mac’s Farm & Ranch product interest rates, which have continued to slow portfolio loan prepayments. Also, a tightening agricultural economy is creating the need for additional liquidity and working capital for borrowers managing through this agricultural cycle. The net effect of these forces contributed to strong Farm & Ranch loan purchase portfolio growth in second quarter 2025. Future changes in monetary policy, sustained elevated product interest rates, the impact of changes to global trade policies (including tariffs and trade restrictions), and the financial health of borrowers are anticipated to influence the demand for agricultural real estate mortgage loans and the pace of prepayments. Farmer Mac experienced a decrease in wholesale finance volume during second quarter 2025, driven by slower market loan growth and a tightening of market credit spreads that resulted in less liquidity and diversification needs from our counterparties. During first quarter 2025, Farmer Mac closed a new AgVantage facility with a large counterparty, demonstrating the continued interest in this unique wholesale finance product, and funded a new $100 million AgVantage security for that counterparty in second quarter 2025. Future wholesale finance growth will likely be influenced by market interest rates and credit spreads, overall economic conditions and loan growth opportunities, and the relative value of Farmer Mac’s product versus the broader market. Opportunities for profitable future business volume growth include Farmer Mac's potential role in alleviating liquidity, capital, and return-on-equity challenges faced by agricultural and infrastructure lenders. The suite of Farmer Mac's offerings encompasses loan and loan portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, and securitizations. Ongoing business and product development efforts continue to attract institutional investors and nontraditional lenders, resulting in the diversification of Farmer Mac's customer base and product set, potentially generating increased product demand from new sources. Farmer Mac’s expanded loan servicing capabilities enhance our loan portfolio purchase value proposition, adding new product offerings to an increasingly diverse customer base. Growing relationships with larger agriculture lenders, industry consolidation, interest rates, and market volatility, as well as financial institutions' focus on capital efficiency and liquidity, are expected to continue to provide increased opportunities for Farmer Mac's loan purchase, risk management, and wholesale funding solutions. Any such growth may lead to an increase in the average transaction size within Farmer Mac’s lines of business. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and infrastructure industries present further opportunities for Farmer Mac’s loan purchase products and other financing solutions. And investments supporting consumer and food supply demand may increase financing needs in the food and agriculture supply chain, potentially requiring incremental capital support through the secondary market. Deepening relationships with eligible infrastructure counterparties are expected to continue to create opportunities to 80 support fiber and broadband-related transactions, including significant market activity and investments in wholesale data centers, as well as renewable energy projects. Changes associated with governmental policies, including but not limited to fiscal, monetary, trade, tax, and regulatory policies and executive orders implemented by the federal executive administration, have the potential to impact the primary business sectors served by Farmer Mac, which could affect business volume growth and opportunities. Funding Farmer Mac's business may benefit from natural business hedges that help mitigate vulnerability to effects from interest rate volatility. When interest rates rise, prepayments tend to decline, but interest earned on excess cash and capital could increase. Conversely, when interest rates decline, loan purchase volume often increases, but prepayments tend to rise as well. Although these natural business dynamics may not be perfect offsets, they tend to provide some counterbalance to mitigate volatility from changes in short-term interest rates. Operations Farmer Mac anticipates ongoing increases in operating expenses over the next several years, aligned with our planned expansion of investments in human capital, technology, and business infrastructure. These investments are designed to enhance capacity and efficiency in support of growth opportunities and long-term strategic objectives. By investing in infrastructure and funding platforms, Farmer Mac aims to scale more efficiently in tandem with future portfolio and earnings growth. These initiatives are expected to improve product delivery and funding efficiency, potentially generating more benefits for future growth. Another focus of our planned infrastructure investments is a continued effort to expand our servicing capabilities and to enhance the efficiency of processes associated with loan onboarding and servicing. Farmer Mac expects to continue to leverage technology enhancements and servicing standardization efforts to drive scalability and consistency. Technology enhancements and process re-engineering are planned for the remainder of 2025 to continue to incorporate all Farmer Mac loan portfolios onto our servicing platform and to provide flexibility in accessing loan portfolio information, increase standardization of data and processing, as well as streamlining operational workflows. Agricultural Finance Industry Outlook Farm Incomes Overall farm profitability has compressed in the last two years. According to the USDA, net cash farm income peaked at $210.1 billion in 2022, a record for both nominal and inflation-adjusted farm profits. The primary driver of profitability in 2022 was higher cash revenues, in contrast to 2019 and 2020, when elevated government support payments supported farm incomes. The USDA has reported that annual net cash farm income decreased 25% in 2023 but currently estimates that it rebounded 2% higher in 2024. For 2025, the USDA forecasts an additional 22% increase in net cash farm income, fueled by a $33 billion increase in government support payments from the American Relief Act enacted in 2024. On July 9, 2025, the USDA announced that $16 billion in funding for the Supplemental Disaster Relief Program authorized in the American Relief Act would be available in two stages. This first stage opened in July 2025 to producers with eligible crop losses that received assistance under crop insurance or the Noninsured Crop Disaster Assistance Program during 2023 and 2024. The second stage will begin in the fall of 2025 for eligible shallow or uncovered losses. In total, 2025 net cash farm income would reach the third-highest inflation-adjusted level in history if the current USDA projection is realized. Ad-hoc and supplemental 81 government support payments are not guaranteed annually, but can help offset poor market conditions for producers. Commodity prices may continue to see elevated volatility in the remainder of 2025. Rising global inventories put downward pressure on grain prices for much of 2024. Annual crop prices stabilized in first quarter 2025, and even increased modestly for some crops, before facing renewed downward pressure in second quarter 2025. Conversely, tree nut prices continued to rise in second quarter 2025. Tree nut producers have reduced new plantings in recent years, which, combined with robust exports this marketing year, has provided moderate support for prices. Tree nut prices, including almonds and walnuts, had faced pressure in recent years from increased production. But relatively stable production in 2024 helped limit and even partially alleviate the buildup in inventories. Within the livestock and animal protein sector, producers benefited from lower feed costs and robust export demand in first half 2025, particularly the cattle sector. Overall farm expenses remained somewhat stable in first half 2025, but remained higher than the period before the most recent surge in farm incomes from 2020-2022. Agricultural sector revenues remained elevated overall in first half 2025 compared to pre-2020 as well. The USDA shows a similar pattern for agricultural sector revenues and expenses leading up to the 2013 peak in farm incomes and the years thereafter. Revenues have declined further for some agricultural subsectors in first half 2025 than others, including annual crops. Demand for corn and soybean by-products could see a boost in the remainder of 2025 as renewable diesel and sustainable aviation fuel markets continue to mature. U.S. trade policy continues to evolve, resulting in potential challenges and opportunities for the agricultural sector. Exports have historically been a substantial demand source for many U.S. agricultural commodities, including almonds, pistachios, and several crops and livestock products. Any extended disruption to trade could therefore potentially cause domestic inventories to increase and potentially weigh on prices. Conversely, new trade agreements could lead to an immediate boost in demand if foreign trade barriers are reduced. The U.S. is rapidly evolving its trade posture and tariff levels, which increases uncertainty of foreign demand for U.S. agricultural products. Similar to many other sectors, the agricultural industry will likely remain acutely focused on trade for the rest of 2025. Beyond developments related to trade, changing environmental regulations and immigration laws under the federal executive administration could result in significant impacts on agricultural producers and the sector as a whole. These changes could lead to both favorable and unfavorable conditions, different labor costs and availability, and new regulatory frameworks. The agricultural sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near term. Lower prices for several agricultural commodities could have multiple competing effects on loan performance and agricultural credit demand. Constraints on cash flow and additional market volatility could cause loan delinquencies to continue to rise above historical averages, most likely in commodities experiencing negative market conditions like some grain and permanent crops. Simultaneously, cash flow constraints and heightened uncertainty can increase demand for debt capital to reorganize balance sheets and replace lost incomes. Farmer Mac believes that its portfolio and market strategy is sufficiently diversified by borrower, industry, and region to maintain robust portfolio performance through the current cycle to be positioned to support any expansion of the farm mortgage market that may arise in the coming quarters. 82 Land Values Record-setting farm incomes in 2021 and 2022, combined with historically low interest rates in 2020 and 2021, drove a rapid rise in land values and a decrease in farm delinquencies and bankruptcies. Momentum for farmland values persisted throughout 2023 due to high levels of farm liquidity and a constrained supply of farmland for sale. Land values slowed in some markets in 2024 and 2025 due to higher interest rates and lower profitability for some agricultural subsectors. Land value survey data from the USDA shows a 4.3% increase in average farm real estate values from June 2024 to June 2025. Annual farm real estate value gains were highest in the Southern Plains (5.9%) and the Lake states (5.7%) and still strong but slowing in the Northern Plains (4.9%), the Southeast (4.7%) and the Corn Belt (4.0%). According to the survey data, California farm real estate average value increase 2.2% overall and 3.5% for cropland. Farmland value growth rates continued to moderate in the first half of 2025 in the face of continued higher market interest rates and stagnating prices for some commodities. The Farmer Mac Farmland Price Index Powered by Acrevalue ® decreased 3% in first quarter 2025 relative to the same period last year. While basing this index on actual farmland transactions can lead to greater volatility, the underlying slowdown in farmland value growth is also supported by Federal Reserve data. The Federal Reserve Bank of Chicago AgLetter reported farmland values rose 1% in the Seventh District in first quarter 2025. This followed a 1% annual decrease in 2024, which was the first decline in 5 years. The Federal Reserve Bank of Kansas City reported that non-irrigated farmland values decreased 2% in the Tenth District in first quarter 2025. Farmland value growth rates have trended consistently lower in many Federal Reserve districts over the last several years, and could remain subdued in second half 2025. Lower prices for some commodities, an elevated interest rate environment, and concerns about water availability represent headwinds to farmland values, particularly in states like California. Despite these headwinds, a relatively low supply of available farmland in many regions and persistent demand for the asset class across a wide variety of investors have helped maintain balance in farmland transaction markets. While regional averages for farmland values generally provide a good barometer for the overall changes in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate. Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors. Markets and Weather Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector. Some of the external market conditions that have and could continue to adversely affect the farm and food sectors for the remainder of 2025 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions. The U.S. agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms and food. The USDA projects that U.S. agriculture exports will drop to $170.5 billion in 2025, 3% lower than 2024 and down 13% relative to peak levels in 2022. The USDA incorporated the expected impact of tariffs in its May Outlook for U.S. Agricultural Trade report, but the export forecast could shift depending on the implementation of future trade policies. Through May 2025, agricultural export values were 3% lower in 2025 relative to 2024. Slower global growth could be a headwind for consumer-oriented products like animal proteins, dairy, fruits, and nuts. Ukrainian corn and wheat export shipments continue to rebound and have approached pre-2022 levels. Looking ahead, economic and geopolitical uncertainties could lead to higher volatility for the U.S. dollar throughout the rest of 2025. 83 Severe weather conditions continue to shape some agricultural subsectors. In 2024, the U.S. experienced 27 separate billion-dollar weather disasters, as tracked by the National Oceanic and Atmospheric Administration ("NOAA"). Many of those events affected agriculture, including midwestern storms, flooding, western wildfires, excessive heat, and drought. Through June 30, 2025, Farmer Mac's portfolio had not experienced any material performance degradation as a result of disruptive weather events from 2024 or 2025. Federal crop insurance provides a strong mitigator against this risk, but farmers and ranchers face increasingly severe weather incidents and production volatility. Drought conditions increased modestly in intensity and prevalence in second quarter 2025, largely across several western and southwestern states. Nearly one-quarter of California was classified as in severe drought in second quarter 2025, up from 0% at the beginning of 2024. Farmer Mac had minimal exposure to the areas affected by the southern California wildfires in early 2025. Several other Southwest states continue to face prevalent drought conditions as well, including Arizona, Utah, and New Mexico, although agricultural production is significantly less prominent in those states compared to California. In total, approximately 16% of the continental U.S. was classified as being in severe to exceptional drought according to data from the National Center for Environmental Information, the National Drought Mitigation Center, USDA, and NOAA. The ongoing implementation of groundwater management regulation, especially in California, continues to influence land values in many regions of the state. Farmer Mac works closely with water consultants and collateral valuation professionals to identify properties influenced by changing water availability. For loans in areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting standards include an assessment of anticipated long-term water availability for the related property and how water availability impacts the collateral value and the borrower's liquidity position to mitigate that risk. Agricultural Processing and Food Supply Chain The production of food, feed, fiber, and biofuels has been economically viable in the past few years, but some factors continued to evolve through the first half of 2025. Rising consumer inflation boosted the profitability of the food processing and supply chains in 2021 and 2022. Moderating consumer prices in 2023 and 2024 increased the volume of consumer spending but also limited the profit expansion of food and fiber businesses. Biofuels have gained demand due to low-carbon regulations in several states and incremental tax benefits for the production of renewable diesel and sustainable aviation fuel. A large number of planned biofuel projects and new facilities for 2025 could provide support for raw materials such as corn and soybeans, but markets for these fuels are nascent and could evolve or erode rapidly in the coming quarters. Trade policy uncertainty, labor availability, changes to consumer demand due to health policy and pharmaceuticals, and a high risk of global economic stress could pose challenges for these sectors for the remainder of 2025 and into 2026. Still, consumer spending held steady throughout 2024 and the first half 2025, providing stable conditions for value-added food, feed, fiber, and biofuel consumption. Credit demand in these sectors could grow in the next few quarters if interest rate policy maintains course or loosens, inflation rises again, mergers and acquisitions activity increases, or economic and trade policy uncertainty clear up. 84 Infrastructure Finance Industry Outlook Power & Utilities Economic conditions affecting rural power and electricity markets typically follow those in the general economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers advanced in early 2025, with an annual increase in sales of 3.1% and an increase in revenue of 6.5%, respectively, in the last 12 months through April 2025 compared to April 2024. This increase was the result of higher residential and commercial electricity sales combined with slightly higher average prices paid for electricity relative to 2024. Electricity demand has been consistently strong in the first half of 2025, and power producers are continuing to invest in additional capacity to meet the rising demand from consumers and data centers. Continued geopolitical uncertainty in the Middle East and Eastern Europe could increase energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices, as evidenced by higher retail electricity prices in 2022, 2023, and early 2025. Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure. These growth opportunities may be affected by the demand for electric power in rural areas, increased power demand from regional data centers, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry. Generally, these investments are expected to continue at, or above, historical levels based on the replacement and modernization of existing and new infrastructure. Renewable Energy Investment in renewable energy generation and deployment of energy storage technologies in the last five years deepened Farmer Mac's relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable energy net generation grew by 70% in the last five years, compared to a non-renewable electricity net generation decrease of 3%. The volatile cost of fossil fuel-based inputs combined with policy initiatives and the falling costs of renewable power generation influenced this change in generation capacity. In response to this expansion, Farmer Mac hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represented a rapidly developing market opportunity for Farmer Mac. Recent changes to tax policy may alter the trajectory and velocity of investments in U.S. renewable energy. H.R. 1, commonly referred to as the "One Big Beautiful Bill Act," which President Trump signed into law on July 4, 2025, phases out tax credits that have been routinely used to support renewable power project investments. As these tax credits phase out, new power projects are still likely to be financed, but the marginal costs of electricity generation may be higher without subsidization. Increased policy uncertainty and higher cost structures could decrease the overall renewable power investment market growth velocity over the next five years. However, due to the substantial increase in demand for electricity and need for new power generation, Farmer Mac expects to continue to participate in renewable energy power project finance transactions for both new projects and refinancing opportunities of existing projects. We have calculated approximately $115 million of capacity to use renewable energy tax credits to apply against our 2024 federal corporate income tax liability and to carry back to claim refunds for federal corporate income taxes paid in 2021, 2022 and 2023. We began purchasing renewable energy tax credits in fourth quarter 2024. Through June 30, 2025, we have purchased approximately $64.8 million in renewable energy investment tax credits at prices of approximately $0.91 per $1.00 of credit. All of the tax 85 credits we have purchased are on projects that have been placed in service. We are focused on purchasing renewable energy tax credits for projects in rural areas or associated with agriculture, such as renewable gas generation from dairy waste. Under H.R. 1's phase-outs of future renewable energy investment tax credits, projects eligible for renewable energy investment tax credits generally must be placed in service by December 31, 2027 unless construction begins by July 4, 2026. Broadband Infrastructure Rural telecommunication and data connectivity has proven to be of vital economic importance in the last decade, as more households and agricultural enterprises require more data and connectivity to thrive. The rapid growth in digital technologies, including the ongoing interest and investment in artificial intelligence, advancements in cloud computing, and wireless network densification, will require significantly more computing and storage capabilities as well as investment in additional fiber network capacity. These industry tailwinds are creating additional investments in rural telecommunications infrastructure, which is aided by access to many federally funded programs, such as USDA's Broadband Equity Access and Deployment Program (BEAD), the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF), and the USDA’s ReConnect program. In addition to capital projects spurred by these programs, Farmer Mac could see an increase in financing opportunities for other telecommunications providers in rural areas, with fiber line expansion, wireless broadband deployment, industry consolidation and efficiency through mergers and acquisitions, and data processing center buildouts all increasingly important to rural economic opportunity and the constant connectivity required by the food and agriculture industries. However, some types of "leapfrog" technology advances in the broadband infrastructure sector, such as low orbit satellite communication systems, could put pressure on the profitability of the providers of older digital technologies. Changes in tax policy as well as trade and immigration laws could result in significant challenges and opportunities to infrastructure borrowers. These changes could lead to delays in completing current projects and slow future investments in renewable energy and battery storage projects as well as the deployment of fiber and broadband infrastructure in rural areas. Any lack of availability or increased costs of components or technology that results from tariffs or trade restrictions also could lead to delays in completion or slow future investments in infrastructure projects. The infrastructure sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near-term. The potential for disruption in these sectors due to policy changes may be somewhat mitigated by the historically strong market demand for connectivity, the ongoing diversification of infrastructure providers, and continued strong investments in data centers and fiber infrastructure. 86 Legislative, Regulatory, and Political Outlook Farmer Mac continues to closely monitor executive branch actions and potential legislative and regulatory changes that could significantly impact Farmer Mac, its regulatory environment, the borrowers under the loans it owns or guarantees, or its stakeholders, including: Tariffs and Trade Restrictions • Export markets drive demand for some U.S. agricultural products like almonds, pistachios, grains, and livestock. Tariffs and trade restrictions also may lead to supply chain disruptions for materials and technology used in some renewable energy and broadband infrastructure projects that may result in higher material and project costs while the market adjusts. Tariffs and trade restrictions may lead to higher domestic inventory levels of agricultural commodities—resulting in lower prices that affect the profitability of farmers and ranchers—while also impacting the cost and availability of farm inputs such as fertilizers, pesticides, and machinery, which is particularly challenging for producers with tight profit margins. • While tariffs and trade restrictions may create uncertainty for the agricultural economy, new trade agreements could boost demand for U.S. commodities in the long-term if foreign barriers are reduced. Farmer Mac will continue to closely monitor trade developments throughout 2025 for impacts on its lines of business. H.R. 1 (One Big Beautiful Bill Act) H.R. 1 includes many provisions that have the potential to impact Farmer Mac and it’s stakeholders, including farmers, ranchers, and the renewable energy industry. Notably, the bill contains several updates to the federal crop insurance and revenue protection programs, including expanded coverage for some permanent crop and livestock producer types. These programs are typically addressed during the reauthorization of the farm bill by Congress. The remaining farm bill programs not reauthorized by H.R. 1 are set to expire on September 30, 2025 unless Congress passes an extension or reauthorization. The bill also contains tax provisions that directly impact Farmer Mac and its stakeholders. These include an amendment to the Internal Revenue Code that excludes 25% of net interest income on qualifying rural or agricultural real-property loans originated after the enactment of the bill from gross income for banks, insurers, and Farmer Mac. Beyond this, the bill also includes a provision to gradually phase out tax credits for renewable energy projects with project deadlines to retain eligibility for different project tax credits. Farmer Mac will continue to monitor and assess the impacts of H.R. 1 on Farmer Mac and the industries we serve in the coming quarters. Farm Credit Administration • On January 20, 2025, President Trump designated Jeffery Hall, who had already been serving on the board of the FCA, as the board chairman and CEO of FCA, the safety and soundness regulator of Farmer Mac. On March 31, 2025, FCA board member Vincent Logan announced his retirement from federal service. His departure created a vacancy on the FCA board that the Administration will have the opportunity to fill, subject to the advice and consent of the U.S. Senate. 87 • On June 2, 2025, the Administration nominated Glen Smith for the position of Under Secretary of Agriculture for Rural Development at the U.S. Department of Agriculture. While his nomination is pending before the Senate, Mr. Smith will continue to serve on the FCA board. • Chairman Hall and Mr. Smith continue to serve on the FCA board in “holdover status.” They will remain in these roles until the Administration nominates, and the Senate confirms, new members to the FCA board. Balance Sheet Review The following table summarizes Farmer Mac's balance sheet as of the periods indicated: Table 22 As of Change June 30, 2025 December 31, 2024 $ % (in thousands) Assets Cash and cash equivalents $ 1,030,329 $ 1,024,007 $ 6,322 1 % Investment securities 6,697,258 5,973,301 723,957 12 % Farmer Mac Guaranteed Securities 7,862,498 8,232,234 (369,736) (4) % USDA Securities 2,407,198 2,371,352 35,846 2 % Loans, net of allowance 12,205,432 11,166,984 1,038,448 9 % Loans held in trusts 2,274,551 2,037,654 236,897 12 % Other 518,643 519,210 (567) — % Total assets $ 32,995,909 $ 31,324,742 $ 1,671,167 5 % Liabilities Notes Payable $ 28,843,331 $ 27,371,174 $ 1,472,157 5 % Debt securities of consolidated trusts held by third parties 2,157,962 1,929,628 228,334 12 % Other 450,309 534,914 (84,605) (16) % Total liabilities $ 31,451,602 $ 29,835,716 $ 1,615,886 5 % Total equity 1,544,307 1,489,026 55,281 4 % Total liabilities and equity $ 32,995,909 $ 31,324,742 $ 1,671,167 5 % Assets . The increase in total assets was primarily attributable to new loan volume and a larger investment portfolio. Liabilities . The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of loan volume. Equity . The increase in total equity was primarily due to an increase in retained earnings. 88 Risk Management Credit Risk – Loans and Guarantees . Farmer Mac is exposed to both direct and indirect credit risk. We have direct credit exposure to our Agricultural Finance mortgage loans, Infrastructure Finance loans, and loans underlying LTSPCs. We have indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure Finance loans that secure AgVantage securities because, in the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. Agricultural Finance - Direct Credit Exposure Farmer Mac's direct credit exposure to Agricultural Finance mortgage loans as of June 30, 2025 was $12.8 billion across 48 states. Farmer Mac applies credit underwriting standards and methodologies to help assess exposures to loan purchases, which may include collateral valuation, financial metrics, and other appropriate borrower financial and credit information. For Corporate AgFinance loans, which are often larger loan exposures to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity. For more information about Farmer Mac's underwriting and collateral valuation standards for Agricultural Finance mortgage loans, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch" and "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance" in Farmer Mac's 2024 Annual Report. Farmer Mac's 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of June 30, 2025, were $125.9 million (0.98% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to $160.0 million (1.29% of the Agricultural Finance mortgage loan portfolio) as of March 31, 2025 and $108.9 million (0.88% of the Agricultural Finance mortgage loan portfolio) as of December 31, 2024. Those 90-day delinquencies consisted of 75 delinquent loans as of June 30, 2025, compared to 99 delinquent loans as of March 31, 2025 and 62 delinquent loans as of December 31, 2024. The decrease in the number of 90-day delinquencies during second quarter 2025 was primarily driven by a decrease in permanent plantings and crop loans; although 90-day delinquencies remain concentrated in those two commodity groups within the Southwest region. This reflects compressed profitability in certain agricultural commodity segments, including permanent planting and crops. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of June 30, 2025. Farmer Mac believes that it remains adequately collateralized on its delinquent loans. Farmer Mac's 90-day delinquency rate of 0.98% as of June 30, 2025 was slightly below our historical average of approximately 1%, which is based on the average 90-day delinquency rate as a percentage of the Agricultural Finance mortgage loan portfolio over the last 15 years. In the near-term, our delinquency rate may continue to be near or exceed our historical average due to the current agricultural cycle or changes in the general economy or unforeseen and idiosyncratic events like adverse weather events. The 89 highest 90-day delinquency rate observed during the last 15 years occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's ethanol loan portfolio. The following table presents historical information about Farmer Mac's 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure: Table 23 Agricultural Finance Mortgage Loans 90-Day Delinquencies Percentage (dollars in thousands) As of: June 30, 2025 $ 12,836,478 $ 125,868 0.98 % March 31, 2025 12,389,478 159,977 1.29 % December 31, 2024 12,369,477 108,944 0.88 % September 30, 2024 11,466,670 144,407 1.26 % June 30, 2024 11,409,396 62,063 0.54 % March 31, 2024 11,184,817 76,825 0.69 % December 31, 2023 11,223,276 34,677 0.31 % September 30, 2023 11,014,678 42,443 0.39 % June 30, 2023 10,826,201 45,368 0.42 % Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.41% of total outstanding business volume as of June 30, 2025, compared to 0.37% as of December 31, 2024 and 0.22% as of June 30, 2024. The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of June 30, 2025 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure: 90 Table 24 Agricultural Finance Mortgage Loans 90-Day Delinquencies as of June 30, 2025 Distribution of Agricultural Loans Agricultural Loans 90-Day Delinquencies (1) Percentage (dollars in thousands) By year of origination: 2015 and prior 8 % $ 983,598 $ 5,319 0.54 % 2016 3 % 395,978 9,185 2.32 % 2017 4 % 465,858 7,657 1.64 % 2018 4 % 526,749 8,622 1.64 % 2019 5 % 711,276 24,816 3.49 % 2020 14 % 1,849,280 20,885 1.13 % 2021 19 % 2,421,184 5,596 0.23 % 2022 12 % 1,532,280 27,370 1.79 % 2023 8 % 1,029,073 15,513 1.51 % 2024 13 % 1,684,791 905 0.05 % 2025 10 % 1,236,411 — — % Total 100 % $ 12,836,478 $ 125,868 0.98 % By geographic region (2) : Northwest 11 % $ 1,447,644 $ 7,094 0.49 % Southwest 29 % 3,640,208 92,364 2.54 % Mid-North 27 % 3,450,837 12,680 0.37 % Mid-South 18 % 2,345,377 6,419 0.27 % Northeast 4 % 526,221 2,480 0.47 % Southeast 11 % 1,426,191 4,831 0.34 % Total 100 % $ 12,836,478 $ 125,868 0.98 % By commodity/collateral type: Crops 49 % $ 6,321,956 $ 34,662 0.55 % Permanent plantings 20 % 2,530,878 72,348 2.86 % Livestock 19 % 2,447,582 11,076 0.45 % Part-time farm 4 % 518,213 7,782 1.50 % Ag. Storage and Processing 8 % 981,033 — — % Other — % 36,816 — — % Total 100 % $ 12,836,478 $ 125,868 0.98 % By original loan-to-value ratio: 0.00% to 40.00% 16 % $ 2,116,831 $ 7,881 0.37 % 40.01% to 50.00% 21 % 2,662,425 26,877 1.01 % 50.01% to 60.00% 33 % 4,193,686 72,417 1.73 % 60.01% to 70.00% 21 % 2,697,450 17,167 0.64 % 70.01% to 80.00% (3) 2 % 262,534 1,526 0.58 % 80.01% to 90.00% (3) — % 27,397 — — % Enterprise Value (4) 7 % 876,155 — — % Total 100 % $ 12,836,478 $ 125,868 0.98 % By size of borrower exposure (5) : Less than $1,000,000 27 % $ 3,451,172 $ 14,239 0.41 % $1,000,000 to $4,999,999 40 % 5,130,623 42,920 0.84 % $5,000,000 to $9,999,999 14 % 1,750,769 31,105 1.78 % $10,000,000 to $24,999,999 12 % 1,477,599 — — % $25,000,000 and greater 7 % 1,026,315 37,604 3.66 % Total 100 % $ 12,836,478 $ 125,868 0.98 % (1) Includes loans held and 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. (2) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). (3) Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance. 91 (4) "Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques. (5) Includes aggregated loans to single borrowers or borrower-related entities. Another indicator that Farmer Mac considers in analyzing the credit quality of its Agricultural Finance mortgage loans is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" 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 June 30, 2025, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $453.0 million (3.5% of the portfolio), compared to $466.0 million (3.8% of the portfolio) as of March 31, 2025, and $398.3 million (3.2% of the portfolio) as of December 31, 2024. Those substandard assets comprised 367 loans as of June 30, 2025, 380 loans as of March 31, 2025, and 336 loans as of December 31, 2024. The decrease of $13.0 million in Agricultural Finance substandard assets during second quarter 2025 was primarily attributable to credit risk rating upgrades in crops and agricultural storage and processing, partially offset by downgrades in permanent plantings. Credit performance within the crops and livestock commodities continues to revert toward historical averages after those commodities were supported by higher commodity prices and federal government support payments in previous years. The percentage of Agricultural Finance substandard assets within the portfolio of 3.5% as of June 30, 2025 was below the historical average of approximately 4% calculated based on substandard assets as a percentage of Agricultural Finance loans over the last 15 years. The highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's ethanol portfolio. If Farmer Mac's substandard asset rate increases from current levels on a sustained basis, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses would also increase. Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its Agricultural Finance portfolio, which Farmer Mac believes is adequately collateralized. Within Agricultural Finance, Farmer Mac considers a Farm & Ranch loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards. As of June 30, 2025 and December 31, 2024, the average unpaid principal balances for Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $815,000 and $817,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans purchased during second quarter 2025 was 51%, compared to 49% for loans purchased during second quarter 2024. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 52% as of both June 30, 2025 and December 31, 2024. The weighted-average original loan-to-value ratio for all 90-day delinquencies was 55% and 53% as of June 30, 2025 and December 31, 2024, respectively. 92 Farmer Mac calculates the "current loan-to-value" ratio of a loan by dividing the original appraised value (or most recently obtained valuation, if available) by the current outstanding loan amount adjusted to reflect loan amortization. The weighted-average current loan-to-value ratio for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 47% and 46% as of June 30, 2025 and December 31, 2024, respectively. The following table presents the current loan-to-value ratios for the Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, as disaggregated by internally assigned risk ratings: Table 25 Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of June 30, 2025 Acceptable Special Mention Substandard Total (in thousands) Current loan-to-value ratio: 0.00% to 40.00% $ 3,363,621 $ 97,265 $ 83,316 $ 3,544,202 40.01% to 50.00% 2,830,331 166,887 67,406 3,064,624 50.01% to 60.00% 2,925,368 130,416 141,326 3,197,110 60.01% to 70.00% 1,661,946 127,302 48,874 1,838,122 70.01% to 80.00% 144,481 47,466 54,673 246,620 80.01% and greater 8,079 34,979 26,585 69,643 Enterprise Value (1) 845,367 — 30,790 876,157 Total $ 11,779,193 $ 604,315 $ 452,970 $ 12,836,478 (1) "Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques. 93 The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of June 30, 2025 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized credit losses relative to original Farm & Ranch purchases, guarantees, and commitments. Table 26 Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative Original Loans, Guarantees, and LTSPCs as of June 30, 2025 Cumulative Original Loans, Guarantees and LTSPCs Cumulative Net Credit Losses/(Recoveries) Cumulative Loss Rate (dollars in thousands) By year of origination: 2015 and prior $ 21,197,530 $ 33,270 0.16 % 2016 1,640,916 971 0.06 % 2017 1,750,537 4,311 0.25 % 2018 1,475,633 — % 2019 1,683,730 1,165 0.07 % 2020 3,119,959 1,588 0.05 % 2021 3,466,711 446 0.01 % 2022 2,087,154 455 0.02 % 2023 1,465,736 3,819 0.26 % 2024 1,872,815 — — % 2025 1,312,731 — % Total $ 41,073,452 $ 46,025 0.11 % By geographic region (1) : Northwest $ 4,991,259 $ 12,162 0.24 % Southwest 13,231,807 15,114 0.11 % Mid-North 10,240,448 17,165 0.17 % Mid-South 6,272,991 (612) (0.01) % Northeast 2,142,957 1,224 0.06 % Southeast 4,193,990 972 0.02 % Total $ 41,073,452 $ 46,025 0.11 % By commodity/collateral type: Crops $ 18,925,959 $ 4,958 0.03 % Permanent plantings 8,575,886 15,724 0.18 % Livestock 8,984,886 3,814 0.04 % Part-time farm 2,032,860 1,090 0.05 % Ag. Storage and Processing 2,301,035 20,439 0.89 % Other 252,826 — — % Total $ 41,073,452 $ 46,025 0.11 % (1) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). 94 Analysis of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. The following tables present concentrations of Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit losses by origination year and commodity type: Table 27 As of June 30, 2025 Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region Crops Permanent Plantings Livestock Part-time Farm Ag. Storage and Processing Other Total (dollars in thousands) By geographic region (1) : Northwest $ 711,295 $ 225,806 $ 341,001 $ 128,833 $ 39,118 $ 1,591 $ 1,447,644 5.5 % 1.8 % 2.7 % 1.0 % 0.3 % — % 11.3 % Southwest 776,251 1,854,799 625,762 120,262 240,459 22,675 3,640,208 6.0 % 14.4 % 4.9 % 0.9 % 1.9 % 0.2 % 28.3 % Mid-North 2,771,270 10,655 294,772 79,265 292,573 2,302 3,450,837 21.6 % 0.1 % 2.3 % 0.6 % 2.3 % — % 26.9 % Mid-South 1,329,863 93,661 771,338 72,609 72,252 5,654 2,345,377 10.4 % 0.7 % 6.0 % 0.6 % 0.6 % — % 18.3 % Northeast 221,524 51,774 71,740 49,706 131,358 119 526,221 1.7 % 0.4 % 0.6 % 0.4 % 1.0 % — % 4.1 % Southeast 511,753 294,183 342,969 67,538 205,273 4,475 1,426,191 4.0 % 2.3 % 2.7 % 0.5 % 1.6 % — % 11.1 % Total $ 6,321,956 $ 2,530,878 $ 2,447,582 $ 518,213 $ 981,033 $ 36,816 $ 12,836,478 49.2 % 19.7 % 19.2 % 4.0 % 7.7 % 0.2 % 100.0 % (1) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). 95 Table 28 As of June 30, 2025 Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type Crops Permanent Plantings Livestock Part-time Farm Ag. Storage and Processing Total (in thousands) By year of origination: 2015 and prior $ 2,887 $ 9,784 $ 3,836 $ 1,090 $ 15,673 $ 33,270 2016 971 — — — — 971 2017 — — — — 4,311 4,311 2018 — — — — — — 2019 1,165 — — — — 1,165 2020 (65) 1,675 (22) — — 1,588 2021 — 446 — — — 446 2022 — — — — 455 455 2023 — 3,819 — — — 3,819 2024 — — — — — — 2025 — — — — — — Total $ 4,958 $ 15,724 $ 3,814 $ 1,090 $ 20,439 $ 46,025 For more information about the credit quality of Farmer Mac's Agricultural Finance mortgage loans and the associated allowance for losses please refer to Note 5 and Note 6 to the consolidated financial statements. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses." Infrastructure Finance - Direct Credit Exposure Farmer Mac's direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of June 30, 2025 was $6.6 billion across 45 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Infrastructure Finance loans, see "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac's 2024 Annual Report. As of June 30, 2025, there were no delinquencies in Farmer Mac's portfolio of Infrastructure Finance loans. Substandard assets within the Infrastructure Finance portfolio increased from $42.2 million as of March 31, 2025 to $72.2 million as of June 30, 2025, primarily as a result of two borrowers that were downgraded to substandard during the quarter. One of the downgraded loans was a Renewable Energy solar project and the other was a Broadband Infrastructure loan. Farmer Mac evaluates credit risk of Infrastructure Finance assets by reviewing a variety of borrower credit risk characteristics. These characteristics can include (but are not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment. The following table disaggregates Farmer Mac’s portfolio of Infrastructure Finance loans by portfolio segment and by internally assigned risk ratings. 96 Table 29 As of June 30, 2025 Infrastructure Finance portfolio by internally assigned risk rating Acceptable Special Mention Substandard Total (in thousands) Distribution Cooperative $ 2,785,168 $ — $ — $ 2,785,168 Generation and Transmission Cooperative 738,337 — — 738,337 Renewable Energy 1,910,372 — 30,664 1,941,036 Broadband Infrastructure 1,123,197 9,699 41,545 1,174,441 Infrastructure Finance Total $ 6,557,074 $ 9,699 $ 72,209 $ 6,638,982 For more information about the credit quality of Farmer Mac's Infrastructure Finance portfolio and the associated allowance for losses please refer to Notes 5 and 6 of the consolidated financial statements. Other Considerations Regarding Credit Risk Related to Loans and Guarantees The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States. Therefore, Farmer Mac believes that we have little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business because of the USDA guarantee. As of June 30, 2025, Farmer Mac had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Securities. Farmer Mac requires many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to Farmer Mac's standards, the accuracy of loan data provided to Farmer Mac, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has the ability to require a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's decision to purchase the loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred by the seller to Farmer Mac. During the three months ended June 30, 2025, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan. In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Infrastructure Finance loans on which it has direct credit exposure. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria. For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac's 2024 Annual Report. Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements. Servicers are responsible to Farmer Mac for material errors in the servicing of those loans. If a servicer materially breaches the terms of its servicing 97 agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. In September 2024, Farmer Mac notified a field servicer of a breach of its servicing duties and the termination of the servicing relationship for two large borrower relationships effective October 1, 2024. In April 2025, Farmer Mac terminated the entire seller/servicer relationship with that field servicer and assumed field servicing duties on all loans sold to Farmer Mac by that entity. Those two actions against one field servicer were Farmer Mac's only exercise of remedies or taking of formal action against any servicers during the previous three years ended June 30, 2025. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Servicing" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac's 2024 Annual Report. Credit Risk – Counterparty Risk . Farmer Mac is exposed to credit risk arising from its business relationships with other institutions, which include: • issuers of AgVantage securities; • approved lenders and servicers; and • interest rate swap counterparties. Farmer Mac approves AgVantage counterparties and manages institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's standards for creditworthiness for the particular counterparty type and transaction. The required collateralization level is established when the AgVantage facility is entered into with the counterparty and does not change during the life of the AgVantage securities issued under the facility without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute eligible loans that are current in payment or pay down the AgVantage securities to maintain the minimum required collateralization level. In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure loans that secure AgVantage securities. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, Farmer Mac also typically requires that the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower loan-to-value ratio thresholds and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. As of June 30, 2025, Farmer Mac had not experienced any credit losses on any AgVantage securities over the life of the program. For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Other Products – Infrastructure Finance—AgVantage Securities" in Farmer Mac's 2024 Annual Report. The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $4.2 billion as of June 30, 2025 and $5.0 98 billion as of December 31, 2024. The unpaid principal balance of on-balance sheet AgVantage securities secured by loans eligible for the Infrastructure Finance line of business totaled $3.8 billion as of June 30, 2025 and $3.5 billion as of December 31, 2024. The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of June 30, 2025 and December 31, 2024: Table 30 As of June 30, 2025 As of December 31, 2024 Counterparty Balance Required Collateralization Balance Required Collateralization (dollars in thousands) AgVantage: CFC $ 3,776,849 100% $ 3,521,143 100% MetLife 2,050,000 103% 2,050,000 103% Rabo AgriFinance 1,385,000 105% 2,020,000 105% Other (1) 809,938 100% to 125% 930,297 100% to 125% Total outstanding $ 8,021,787 $ 8,521,440 (1) Consists of AgVantage securities issued by 10 and 9 different issuers as of June 30, 2025 and December 31, 2024, respectively. Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness. Farmer Mac monitors the financial condition of those institutions by evaluating financial statements and credit rating agency reports. For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac's 2024 Annual Report. Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that vary based on the market value of its swap portfolio with each counterparty. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 6 to the consolidated financial statements. Credit Risk – Other Investments . As of June 30, 2025, Farmer Mac had $1.0 billion of cash and cash equivalents and $6.7 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's internal policies as well as FCA regulations, which can be found at 12 C.F.R. §§ 652.1-652.45 ("Liquidity and Investment Regulations"). In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's investment policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets. 99 The Liquidity and Investment Regulations and Farmer Mac's internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held. The Liquidity and Investment Regulations and Farmer Mac's internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. The Liquidity and Investment Regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor of securities to 10% of Farmer Mac's regulatory capital ($159.4 million as of June 30, 2025). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($79.7 million as of June 30, 2025). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE. Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework. Interest Rate Risk . Farmer Mac is subject to interest rate risk on all interest-earning assets on its balance sheet because of timing differences in the cash flows due to maturity, paydown, or repricing of the assets and debt together with financial derivatives. Cash flow mismatches due to changing interest rates can reduce the earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac could realize a decline in income if assets repay more slowly than originally forecasted and the associated maturing debt must be replaced by debt issuances at higher interest rates. Interest Rate Risk Management The goal of interest rate risk management at Farmer Mac is to manage the balance sheet in a manner that generates stable earnings and value across a variety of interest rate environments. Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac regularly assesses this exposure and, if necessary, adjusts its portfolio of interest-earning assets, debt, and financial derivatives. Farmer Mac seeks to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's board of directors. Farmer Mac's management-level Asset and Liability Committee ("ALCO") provides oversight, establishes guidelines, and approves strategies to maintain interest rate risk within the board-established limits. Farmer Mac's primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and convexity characteristics and help mitigate 100 impacts from interest rate changes across the yield curve. As part of this strategy, Farmer Mac seeks to issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows. Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its debt issuance strategy. Portions of Farmer Mac's callable debt is issued to mitigate prepayment risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, asset prepayments typically increase, and Farmer Mac may be able to economically extinguish certain callable debt issuances. In addition, Farmer Mac enters into financial derivatives, primarily interest rate swaps, to better match the durations of Farmer Mac's assets and liabilities, thereby reducing overall sensitivity to changing interest rates. Taking into consideration the prepayment provisions and the default probabilities associated with its portfolio of interest-earning assets, Farmer Mac incorporates behavioral models when projecting and valuing cash flows associated with these assets. In recognition that borrowers' behaviors in various interest rate environments may change over time, Farmer Mac periodically evaluates the effectiveness of these models compared to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts. Changes in interest rates may affect the timing of asset prepayments which may, in turn, impact durations and values of the assets. Declining interest rates generally result in increased prepayments, which shortens the duration of these assets, while rising interest rates generally result in lower prepayments, thereby extending the duration of the assets. Farmer Mac is subject to interest rate risk on loans and securities it has committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When Farmer Mac commits to purchase these assets, it is exposed to interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of these loans. Farmer Mac manages the interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Farmer Mac's $1.0 billion of cash and cash equivalents held as of June 30, 2025 mature within three months. As of June 30, 2025, $3.0 billion of the $6.7 billion of investment securities (44%) were floating rate securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Farmer Mac's floating rate investment securities are primarily funded with floating rate debt. The fixed rate investment securities are generally funded in a manner consistent with Farmer Mac's overall funding strategy that approximates a duration and convexity match. Interest Rate Risk Metrics Farmer Mac regularly evaluates and conducts interest rate shock simulations on its portfolio of financial assets, debt, and financial derivatives and examines a variety of metrics to quantify and manage its exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted net effective spread ("NES") as well as a duration gap analysis. 101 MVE represents management's estimate of the present value of all future cash flows from its current portfolio of on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. The MVE sensitivity analysis measures the degree to which the market values of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates. Farmer Mac's NES simulation represents the difference between projected income over the next twelve months from the current portfolio of interest-earning assets and interest expense produced by the related funding, including associated financial derivatives. Farmer Mac's NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of funded assets and debt together with the associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest rates across the yield curve as well as the composition of Farmer Mac's portfolio. The NES simulation represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of Farmer Mac's NES income sensitivity to interest rate shocks. Duration is a measure of a financial instrument's fair value sensitivity to small changes in interest rates. Duration gap is calculated using the net estimated durations of Farmer Mac's interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and financial derivatives. Duration gap provides a relatively concise measure of the interest rate risk inherent in Farmer Mac's outstanding portfolio. A positive duration gap denotes that the duration of Farmer Mac's interest-earning assets is greater than the duration of its debt and financial derivatives. A positive duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is more sensitive than the fair value change of its debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets are less sensitive than the fair value change of its debt and financial derivatives. A duration gap of zero indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is effectively offset by the fair value change of its debt and financial derivatives. Each of the interest rate risk metrics is quantified using asset/liability models and derived based on management's best estimates of factors such as implied forward interest rates across the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes. 102 The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of June 30, 2025 and December 31, 2024 to an immediate and instantaneous uniform or "parallel" shift in the yield curve: Table 31 Percentage Change in MVE from Base Case Interest Rate Scenario As of June 30, 2025 As of December 31, 2024 +100 basis points (3.8) % (4.0) % -100 basis points 3.7 % 3.6 % Percentage Change in NES from Base Case Interest Rate Scenario As of June 30, 2025 As of December 31, 2024 +100 basis points (0.5) % (0.8) % -100 basis points 1.8 % 1.6 % As of June 30, 2025, Farmer Mac maintained a positive effective duration gap of 3.7 months, which was relatively unchanged compared to December 31, 2024. Since the end of 2024, the yield curve has declined, with the yields on the 2‑year and 10‑year U.S. Treasury Notes falling by approximately 52 and 34 basis points, respectively. This change in interest rates resulted in a relatively similar decline in the duration of Farmer Mac’s funded assets, liabilities, and financial derivatives. Financial Derivatives Transactions The economic effects of financial derivatives are included in Farmer Mac's MVE, NES, and duration gap analyses. Farmer Mac typically enters into the following types of financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of interest-earning assets, future cash flows, and debt issuance, and not for trading or speculative purposes: • "pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties; • "receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties; • "basis swaps," in which Farmer Mac pays floating rates of interest based on one index to, and receives floating rates of interest based on a different index from, counterparties; and • exchange-traded futures contracts involving U.S. Treasury securities. As of June 30, 2025, Farmer Mac had $24.1 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $10.7 billion were pay-fixed interest rate swaps, $12.8 billion were receive-fixed interest rate swaps, and $0.6 billion were basis swaps. Farmer Mac enters into interest rate swaps to more closely match the cash flow and duration characteristics of its interest-earning assets with those of its debt. For example, Farmer Mac transacts pay-fixed interest rate swaps and issues floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. Farmer Mac evaluates the overall cost of using interest rate swaps in conjunction with debt issuance as a funding alternative to duration-matched debt and enters into interest rate swaps to manage interest rate risks across the balance sheet. 103 Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available-for-sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt. All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both June 30, 2025 and December 31, 2024, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps. Re-funding and repricing risk Farmer Mac is subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. Re-funding and repricing risk arises from potential changes in funding costs resulting from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that on average may have longer maturities. Changes in Farmer Mac's funding costs relative to the benchmark market index rate to which the assets are indexed can cause changes to net interest income when debt matures and is reissued at then current interest rates to continue funding those assets. Farmer Mac is subject to re-funding and repricing risk on a portion of its fixed rate assets as a result of its use of pay-fixed receive-floating interest rate swaps that effectively convert the required funding needed from fixed rate to floating rate. These fixed rate assets are then effectively floating rate assets that require floating rate funding. Farmer Mac can meet floating rate funding needs in several ways, including: • issuing short-term fixed rate discount notes with maturities that match the reset period of the assets; • issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded; • issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or • issuing non-maturity matched, fixed rate discount notes or medium-term notes swapped to floating rate to match the interest rate reset dates of the assets. To meet certain floating rate funding needs, Farmer Mac frequently issues shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with a received-fixed interest rate swap because these funding alternatives generally provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's overall debt issuance and liquidity management strategies. However, if the funding cost of Farmer Mac’s discount notes or medium-term notes increased relative to the benchmark market index of the associated assets during the time between when these floating rate assets were first funded and when Farmer Mac refinanced the associated debt, Farmer Mac would be exposed to a commensurate reduction of net effective spread. Conversely, if the funding cost on Farmer Mac’s discount notes or medium-term notes decreased relative to the benchmark market index during that time, Farmer Mac would benefit from a commensurate increase to net effective spread. 104 Farmer Mac's debt issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's risk tolerance. Farmer Mac regularly adjusts its funding strategies to mitigate the effects of interest rate variability and seeks to maintain an effective mixture of funding structures in the context of its overall liability and liquidity management strategies. As of June 30, 2025, Farmer Mac held $7.4 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indices, such as the Secured Overnight Financing Rate ("SOFR"). As of the same date, Farmer Mac also had $10.7 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily SOFR. Liquidity and Capital Resources Farmer Mac's primary sources of funds to meet its liquidity and funding needs are the proceeds of its debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and repayments of AgVantage and investment securities. Farmer Mac regularly accesses the debt capital markets for funding, and Farmer Mac maintained steady access to the debt capital markets throughout 2025. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the debt capital markets. As of June 30, 2025, Farmer Mac had outstanding discount notes of $2.0 billion, medium-term notes that mature within one year of $8.3 billion, and medium-term notes that mature after one year of $18.6 billion. Assuming continued access to the debt capital markets, Farmer Mac believes it has sufficient liquidity and capital resources to support its operations for the next 12 months and for the foreseeable future. Farmer Mac has a contingency funding plan to manage unanticipated disruptions in its access to the debt capital markets. Farmer Mac must maintain a minimum of 90 days of liquidity under the Liquidity and Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac maintained a monthly average of 303 days of liquidity throughout second quarter 2025 and had 310 days of liquidity as of June 30, 2025. Farmer Mac maintains cash, cash equivalents (including U.S. Treasury securities, operational deposits, and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs. Farmer Mac's liquidity investments must comply with policies adopted by Farmer Mac's board of directors and with FCA's Liquidity and Investment Regulations, which establish limitations on asset class, dollar amount, issuer concentration, and credit quality. 105 The following table presents these assets as of June 30, 2025 and December 31, 2024: Table 32 As of June 30, 2025 As of December 31, 2024 (in thousands) Cash and cash equivalents $ 1,030,329 $ 1,024,007 Investment securities: Guaranteed by U.S. Government and its agencies 1,840,078 1,634,951 Guaranteed by GSEs 4,823,448 4,307,857 Asset-backed securities 19,475 19,476 Total $ 7,713,330 $ 6,986,291 The objectives of the investment portfolio as of June 30, 2025 and December 31, 2024 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity and to support program asset growth. Capital Requirements . Farmer Mac is subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of June 30, 2025, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level). In accordance with the FCA's rule on capital planning, Farmer Mac's board of directors 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). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of June 30, 2025 and December 31, 2024, Farmer Mac's Tier 1 capital ratio was 13.6% and 14.2%, respectively. As of June 30, 2025, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with the FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition. For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and the FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—Capital Standards." See Note 8 to the consolidated financial statements for more information about Farmer Mac's capital position. Other Matters None. 106 Supplemental Information The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume: Table 36 New Business Volume Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) For the quarter ended: June 30, 2025 $ 896,499 $ 280,331 $ 185,563 $ 280,350 $ 482,276 $ 2,125,019 March 31, 2025 548,509 270,966 486,961 229,649 301,315 1,837,400 December 31, 2024 1,034,489 313,123 78,018 209,729 496,437 2,131,796 September 30, 2024 776,023 307,325 360,950 187,021 357,659 1,988,978 June 30, 2024 698,787 288,740 132,958 102,075 271,890 1,494,450 March 31, 2024 665,916 290,525 113,545 2,250 347,898 1,420,134 December 31, 2023 1,282,045 188,272 404,908 29,603 225,986 2,130,814 September 30, 2023 1,384,273 275,932 557,043 50,936 17,390 2,285,574 June 30, 2023 1,574,169 218,136 205,236 89,056 71,611 2,158,208 For the year ended: December 31, 2024 $ 3,175,215 $ 1,199,713 $ 685,471 $ 501,075 $ 1,473,884 $ 7,035,358 December 31, 2023 4,709,500 885,551 1,757,599 262,414 404,734 8,019,798 107 Table 37 Repayments of Assets Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) For the quarter ended: Scheduled $ 513,179 $ 135,868 $ 32,388 $ 80,744 $ 149,904 $ 912,083 Unscheduled 190,374 80,303 40,787 — — 311,464 June 30, 2025 $ 703,553 $ 216,171 $ 73,175 $ 80,744 $ 149,904 $ 1,223,547 Scheduled $ 786,956 $ 169,532 $ 77,976 $ 57,279 $ 109,176 $ 1,200,919 Unscheduled 258,599 99,776 30,385 — — 388,760 March 31, 2025 $ 1,045,555 $ 269,308 $ 108,361 $ 57,279 $ 109,176 $ 1,589,679 Scheduled $ 41,265 $ 231,672 $ 38,003 $ 52,970 $ 174,920 $ 538,830 Unscheduled 120,505 36,526 25,084 — — 182,115 December 31, 2024 $ 161,770 $ 268,198 $ 63,087 $ 52,970 $ 174,920 $ 720,945 Scheduled $ 1,079,136 $ 239,596 $ 548,161 $ 94,513 $ 138,123 $ 2,099,529 Unscheduled 117,538 41,842 26,629 — — 186,009 September 30, 2024 $ 1,196,674 $ 281,438 $ 574,790 $ 94,513 $ 138,123 $ 2,285,538 Scheduled $ 752,473 $ 141,565 $ 62,237 $ 16,062 $ 138,725 $ 1,111,062 Unscheduled 342,594 89,576 32,984 — — 465,154 June 30, 2024 $ 1,095,067 $ 231,141 $ 95,221 $ 16,062 $ 138,725 $ 1,576,216 Scheduled $ 402,088 $ 118,885 $ 90,096 $ 36,218 $ 93,112 $ 740,399 Unscheduled 150,903 99,325 32,481 — — 282,709 March 31, 2024 $ 552,991 $ 218,210 $ 122,577 $ 36,218 $ 93,112 $ 1,023,108 Scheduled $ 827,122 $ 133,468 $ 40,122 $ 13,492 $ 69,040 $ 1,083,244 Unscheduled 106,041 102,131 18,469 — — 226,641 December 31, 2023 $ 933,163 $ 235,599 $ 58,591 $ 13,492 $ 69,040 $ 1,309,885 Scheduled $ 922,223 $ 110,383 $ 75,031 $ 5,967 $ 14,716 $ 1,128,320 Unscheduled 108,960 104,999 20,578 — — 234,537 September 30, 2023 $ 1,031,183 $ 215,382 $ 95,609 $ 5,967 $ 14,716 $ 1,362,857 Scheduled $ 1,050,480 $ 81,386 $ 553,860 $ 5,084 $ 52,203 $ 1,743,013 Unscheduled 96,507 55,976 13,138 — — 165,621 June 30, 2023 $ 1,146,987 $ 137,362 $ 566,998 $ 5,084 $ 52,203 $ 1,908,634 For the year ended: Scheduled $ 2,274,962 $ 731,718 $ 738,497 $ 199,763 $ 544,880 $ 4,489,820 Unscheduled 731,540 267,269 117,178 — — 1,115,987 December 31, 2024 $ 3,006,502 $ 998,987 $ 855,675 $ 199,763 $ 544,880 $ 5,605,807 Scheduled $ 3,079,501 $ 403,719 $ 711,488 $ 77,877 $ 147,383 $ 4,419,968 Unscheduled 542,796 391,360 109,539 — — 1,043,695 December 31, 2023 $ 3,622,297 $ 795,079 $ 821,027 $ 77,877 $ 147,383 $ 5,463,663 108 Table 38 Outstanding Business Volume Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) As of: June 30, 2025 $ 18,217,905 $ 1,953,523 $ 7,300,354 $ 1,174,441 $ 1,941,036 $ 30,587,259 March 31, 2025 18,094,515 1,889,363 7,187,966 974,835 1,608,664 29,755,343 December 31, 2024 18,606,968 1,887,705 6,809,366 802,465 1,416,525 29,523,029 September 30, 2024 18,090,374 1,842,780 6,794,435 645,706 1,095,008 28,468,303 June 30, 2024 18,504,501 1,816,893 7,008,276 553,197 875,472 28,758,339 March 31, 2024 18,900,906 1,766,294 6,970,537 467,186 742,307 28,847,230 December 31, 2023 18,808,801 1,693,979 6,979,570 501,153 487,521 28,471,024 September 30, 2023 18,461,835 1,741,306 6,633,252 485,043 330,575 27,652,011 June 30, 2023 18,116,503 1,680,756 6,171,818 440,074 327,901 26,737,052 Table 39 On-Balance Sheet Outstanding Business Volume Fixed Rate 5- to 10-Year ARMs & Resets 1-Month to 3-Year ARMs Total Held in Portfolio (in thousands) As of: June 30, 2025 $ 14,644,420 $ 3,488,344 $ 7,197,147 $ 25,329,911 March 31, 2025 14,397,557 3,393,642 6,892,411 24,683,610 December 31, 2024 14,356,171 3,370,540 6,815,034 24,541,745 September 30, 2024 14,328,691 3,311,001 6,265,792 23,905,484 June 30, 2024 14,064,831 3,273,764 6,850,137 24,188,732 March 31, 2024 14,166,500 3,194,246 6,849,237 24,209,983 December 31, 2023 14,133,794 3,171,672 6,455,359 23,760,825 September 30, 2023 13,727,280 3,019,317 6,255,690 23,002,287 June 30, 2023 13,721,129 3,003,560 5,493,104 22,217,793 109 The following table presents the quarterly net effective spread (a non-GAAP measure) by segment: Table 40 Net Effective Spread Agricultural Finance Infrastructure Finance Treasury Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments Net Effective Spread Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield (dollars in thousands) For the quarter ended: June 30, 2025 $ 35,710 $ 8,609 $ 5,636 $ 3,932 $ 6,227 $ 31,668 $ 2,111 $ 93,893 1.07 % 2.07 % 0.33 % 2.24 % 1.68 % 0.40 % 0.11 % 1.19 % March 31, 2025 33,885 8,640 5,329 3,566 5,112 31,604 1,854 89,990 1.01 % 2.09 % 0.32 % 2.27 % 1.55 % 0.41 % 0.10 % 1.17 % December 31, 2024 32,556 7,891 5,059 3,414 4,859 31,242 2,507 87,528 0.96 % 1.95 % 0.32 % 2.34 % 1.76 % 0.42 % 0.15 % 1.16 % September 30, 2024 35,755 6,397 4,785 2,794 3,810 30,912 943 85,396 1.05 % 1.56 % 0.30 % 2.21 % 1.78 % 0.42 % 0.05 % 1.16 % June 30, 2024 34,156 7,866 5,253 2,393 2,999 30,268 661 83,596 0.98 % 1.91 % 0.32 % 2.16 % 1.86 % 0.41 % 0.04 % 1.14 % March 31, 2024 32,843 7,971 4,890 2,342 2,049 32,474 475 83,044 0.95 % 2.05 % 0.30 % 2.08 % 1.75 % 0.45 % 0.03 % 1.14 % December 31, 2023 33,329 8,382 4,916 2,426 1,540 33,361 597 84,551 0.98 % 2.06 % 0.31 % 2.06 % 1.69 % 0.47 % 0.04 % 1.19 % September 30, 2023 32,718 8,250 3,979 2,383 1,150 34,412 532 83,424 0.97 % 2.05 % 0.26 % 2.15 % 1.46 % 0.49 % 0.04 % 1.20 % June 30, 2023 34,388 7,444 3,681 2,127 1,100 32,498 594 81,832 1.03 % 1.92 % 0.25 % 2.25 % 1.47 % 0.48 % 0.04 % 1.20 % 110 The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders: Table 41 Core Earnings by Quarter End June 2025 March 2025 December 2024 September 2024 June 2024 March 2024 December 2023 September 2023 June 2023 (in thousands) Revenues: Net effective spread $ 93,893 $ 89,990 $ 87,528 $ 85,396 $ 83,596 $ 83,044 $ 84,551 $ 83,424 $ 81,832 Guarantee and commitment fees 5,874 5,488 5,086 4,997 5,256 4,982 4,865 4,828 4,581 Gain on sale of investment securities — — — — 1,052 — — — — Loss on sale of mortgage loan — — — — (1,147) — — — — Other 742 1,315 (491) 1,133 481 1,077 767 1,056 409 Total revenues 100,509 96,793 92,123 91,526 89,238 89,103 90,183 89,308 86,822 Credit related expense/(income): Provision for/(release of) losses 7,812 1,583 3,872 3,258 6,230 (1,870) (575) (181) 1,142 REO operating expenses 148 — — 196 — — — — — (Gain)/loss on REO (87) 68 — — — — — — — Total credit related expense/(income) 7,873 1,651 3,872 3,454 6,230 (1,870) (575) (181) 1,142 Operating expenses: Compensation and employee benefits 17,631 17,752 15,641 15,237 14,840 18,257 15,523 14,103 13,937 General and administrative 10,859 10,758 12,452 8,625 8,904 8,255 8,916 9,100 9,420 Regulatory fees 1,000 1,000 1,000 725 725 725 725 831 831 Total operating expenses 29,490 29,510 29,093 24,587 24,469 27,237 25,164 24,034 24,188 Net earnings 63,146 65,632 59,158 63,485 58,539 63,736 65,594 65,455 61,492 Income tax expense 10,114 14,000 9,938 12,681 11,970 13,553 13,881 13,475 12,539 Preferred stock dividends 5,667 5,666 5,666 5,897 6,792 6,791 6,791 6,792 6,791 Core earnings $ 47,365 $ 45,966 $ 43,554 $ 44,907 $ 39,777 $ 43,392 $ 44,922 $ 45,188 $ 42,162 Reconciling items: (Losses)/gains on undesignated financial derivatives due to fair value changes $ (639) $ (2,573) $ 3,084 $ (1,064) $ (359) $ 1,683 $ (836) $ 2,921 $ 2,141 Gains/(losses) on hedging activities due to fair value changes 2,709 1,099 5,737 205 2,604 3,002 (3,598) 3,210 (4,901) Unrealized (losses)/gains on trading assets (65) 9 (83) 99 (87) (14) (37) 1,714 (57) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 25 28 (39) 27 26 31 88 29 29 Net effects of terminations or net settlements on financial derivatives 255 (1,070) 534 (503) (1,505) (192) (800) (79) 583 Issuance costs on the retirement of preferred stock — — — (1,619) — — — — — Income tax effect related to reconciling items (480) 526 (1,939) 260 (143) (947) 1,089 (1,638) 464 Net income attributable to common stockholders $ 49,170 $ 43,985 $ 50,848 $ 42,312 $ 40,313 $ 46,955 $ 40,828 $ 51,345 $ 40,421 111