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Item 2. Management’s Discussion and Analysis

2025-11-03 compared with 2025-08-07 · 306 added, 348 removed, 1124 unchanged (37% of the section changed)

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").

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.

In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation and its subsidiaries 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.

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• 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;

• legislative, regulatory, or current or future 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;

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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;

During third quarter 2025, Farmer Mac:

• provided $2.5 billion in liquidity and lending capacity to lenders serving rural America;

• added $96.9 million in equity through the issuance of 4.0 million shares of 6.500% non-cumulative perpetual Series H preferred stock;

• maintained strong liquidity in our investment portfolio well above regulatory requirements;

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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.

During fourth quarter 2025 to date, Farmer Mac repurchased 30,395 shares of Class C non-voting common stock at a cost of approximately $5.0 million.

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").

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For the Three Months Ended

June 30, 2025 March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025 September 30, 2024

(in thousands)

1 unchanged sentence

Core earnings 49,622 47,365 44,907

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.

The $0.5 million sequential decrease in net income attributable to common stockholders was primarily attributable to a $1.1 million decrease in the fair value of financial derivatives and a $1.1 million increase in income tax expense primarily related to fewer purchases of renewable energy investment tax credits in t hird quarter 2025 compared to second quarter 2025.

These decreases in net income were partially offset by a $1.7 million increase in net interest income.

The $6.4 million year-over-year increase in net income attributable to common stockholders was primarily attributable to a $11.7 million increase in net interest income partially offset by a $4.2 million increase in the provision for credit losses.

The $2.3 million sequential increase in core earnings was primarily attributable to a $3.9 million increase in net effective spread and a $0.4 million decrease in the provision for credit losses.

These impacts were partially offset by a $1.8 million increase in income tax expense due to fewer purchases of renewable energy investment tax credits in third quarter 2025 compared to second quarter 2025.

The $4.7 million year-over-year increase in core earnings was primarily attributable to a $12.4 million increase in net effective spread, a $1.1 million increase in guarantee and commitment fees, and a $0.7 million decrease in income tax expense primarily related to purchases of renewable energy investment tax credits in third quarter 2025.

These impacts were partially offset by a $4.2 million increase in the provision for credit losses and a $5.2 million increase in operating expenses.

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."

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For the Three Months Ended

June 30, 2025 March 31, 2025 June 30, 2024

September 30, 2025 June 30, 2025 September 30, 2024

(in thousands)

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Net effective spread % 1.20 % 1.19 % 1.16 %

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.

The $1.7 million and $3.9 million sequential increases in net interest income and net effective spread, respectively, were both primarily due to a $3.6 million increase from net new business volume and a $3.2 million decrease in funding costs.

These changes were partially offset by a $1.9 million decrease in interest income related to an increase in loans on non-accrual during third quarter 2025.

The sequential change in net interest income was further offset by a $2.8 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives).

This impact is excluded from net effective spread.

The decreases in the fair value of designated financial derivatives and the reversal of interest income related to non-accrual loans resulted in a 2 basis point sequential decrease in net interest yield.

The year-over-year increase of $11.7 million in net interest income and $12.4 million in net effective spread for third quarter 2025 compared to third quarter 2024 were primarily attributable to the same drivers, which include a $9.6 million increase from net new business volume and a $3.9 million decrease in funding costs.

These impacts were partially offset by a $1.3 million decrease in interest income related to an increase in loans on non-accrual.

The year-over-year increase in net interest income was further offset by a $0.3 million decrease in the fair value of designated financial derivatives, the impact of which is excluded from net effective spread.

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.

Our outstanding business volume was $31.1 billion as of September 30, 2025, a net increase of $0.5 billion from June 30, 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.

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."

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(in thousands)

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Capital in excess of minimum capital level required 723,370 583,527

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.

The capital in excess of the minimum capital level required increased from December 31, 2024 to September 30, 2025 primarily as a result of the issuance of the Series H preferred stock noted above and an increase in retained earnings, partially offset by the capital impact due to growth in total assets.

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:

During third quarter 2025, we charged off $4.4 million primarily related to three specific borrower relationships for an agricultural storage and processing loan, a crop loan, and a permanent planting 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 September 30, 2025, June 30, 2025, and December 31, 2024:

On-Balance Sheet Off-Balance Sheet

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(dollars in thousands)

September 30, 2025 $ 461,155 4.8 % $ 59,960 1.7 %

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 %

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Increase/(decrease) from prior year-ending 94,143 0.6 % 28,720 0.8 %

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.

The increase of $46.0 million in on-balance sheet Agricultural Finance substandard assets during third quarter 2025 was primarily driven by credit downgrades in crops and permanent plantings.

On-balance sheet substandard assets within Infrastructure Finance were $72.2 million as of September 30, 2025, unchanged from the balance reported as of June 30, 2025.

For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 23 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

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:

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 September 30, 2025, June 30, 2025, and December 31, 2024:

On-Balance Sheet Off-Balance Sheet

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(dollars in thousands)

September 30, 2025 $ 164,753 1.7 % $ 13,006 0.4 %

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 %

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Increase/(decrease) from prior year-ending 63,413 0.6 % 5,402 0.2 %

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”).

The increase of $41.4 million and $10.5 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 approximately half of the aggregate 90-day delinquencies as of September 30, 2025.

As of both September 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 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."

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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.

For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "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:

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For the Three Months Ended

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

(in thousands, except per share amounts)

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Less reconciling items:

Losses on undesignated financial derivatives due to fair value changes (see Table 13)

Gains on hedging activities due to fair value changes

Unrealized losses on trading securities

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 12)

(Losses)/gains on hedging activities due to fair value changes

Unrealized (losses)/gains on trading securities

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 26 27

Net effects of terminations or net settlements on financial derivatives (1,934) (503)

Issuance costs on the retirement of preferred stock — (1,619)

Income tax effect related to reconciling items 245 260

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Guarantee and commitment fees (2)

Gain on sale of investment securities (GAAP)

Loss on sale of mortgage loan (GAAP)

Total revenues 105,086 91,526

Credit related expense/(income) (GAAP):

Credit related expense (GAAP):

Provision for losses

REO operating expenses

Total credit related expense/(income)

Total credit related expense

Operating expenses (GAAP):

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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.

(2) Includes net interest income of $1.1 million for both the three months ended September 30, 2025 and 2024, 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.

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Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings

For the Six Months Ended

June 30, 2025 June 30, 2024

For the Nine Months Ended

September 30, 2025 September 30, 2024

(in thousands, except per share amounts)

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(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 12)

(3,212) 1,324

Gains on hedging activities due to fair value changes

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Net effects of terminations or net settlements on financial derivatives (2,749) (2,200)

Issuance costs on the retirement of preferred stock — (1,619)

Income tax effect related to reconciling items 291 (830)

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(2) Includes net interest income of $3.1 million and $3.5 million for the nine months ended September 30, 2025 and 2024, respectively, 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.

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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

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

(in thousands, except per share amounts)

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Less reconciling items:

(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13)

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 12)

0.08 (0.09) (0.21) 0.02

Gains on hedging activities due to fair value changes

(Losses)/gains on hedging activities due to fair value changes

(0.01) 0.02 0.33 0.54

Unrealized losses on trading securities

Unrealized gains/(losses) on trading securities

— 0.01 (0.01) —

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Net effects of terminations or net settlements on financial derivatives (0.18) (0.05) (0.25) (0.20)

Issuance costs on the retirement of preferred stock — (0.15) — (0.15)

Income tax effect related to reconciling items 0.02 0.02 0.03 (0.08)

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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

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

(in thousands, except per share amounts)

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Less reconciling items:

(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 13)

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 12)

0.08 (0.09) (0.21) 0.02

Gains on hedging activities due to fair value changes

(Losses)/gains on hedging activities due to fair value changes

(0.01) 0.02 0.33 0.53

Unrealized losses on trading securities

Unrealized gains/(losses) on trading securities

— 0.01 (0.01) —

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Net effects of terminations or net settlements on financial derivatives (0.17) (0.05) (0.25) (0.20)

Issuance costs on the retirement of preferred stock — (0.15) — (0.15)

Income tax effect related to reconciling items 0.02 0.02 0.03 (0.08)

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The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are:

(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.

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.

Gains/(losses) on financial derivatives due to fair value changes, including:

(a) Gains/(losses) on undesignated financial derivatives due to fair value changes;

and (b) (Losses)/gains on hedging activities due to fair value changes.

Unrealized losses on trading securities are reported on Farmer Mac's Consolidated Statements of Operations which represent changes during the period in fair values for trading assets remaining on our balance sheet as of the end of the reporting period.

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.

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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 following table provides information about interest-earning assets and funding for the three and nine months ended September 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.

For the Three Months Ended

June 30, 2025 June 30, 2024

September 30, 2025 September 30, 2024

Balance Income/

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Net interest income/yield $ 33,376,388 $ 98,477 1.18 % $ 30,310,275 $ 86,791 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).

(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).

(1) Excludes interest income of $9.9 million and $9.6 million in third quarter 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(2) Excludes interest expense of $8.8 million and $8.6 million in third 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

For the Nine Months Ended

September 30, 2025 September 30, 2024

Balance Income/

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Net interest income/yield $ 32,491,155 $ 286,213 1.17 % $ 30,205,470 $ 260,499 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).

(1) Excludes interest income of $29.8 million and $28.5 million in the first nine months of 2025 and 2024, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(2) Excludes interest expense of $26.7 million and $25.0 million in the first nine months 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 $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 $11.7 million year-over-year increase in net interest income for third quarter 2025 compared to third quarter 2024 was primarily attributable to a $9.6 million increase from net new business volume and a $3.9 million decrease in funding costs.

These impacts were partially offset by a $1.3 million decrease in interest income related to an increase in loans on non-accrual and a $0.3 million decrease in the fair value designated financial derivatives.

The $25.7 million increase in net interest income for the nine months ended September 30, 2025 , compared to the same period in the prior year was primarily attributable to a $25.6 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.

For the Six Months Ended June 30, 2025

For the Nine Months Ended September 30, 2025

Compared to Same Period in 2024

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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.

For the Three Months Ended For the Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Dollars Yield Dollars Yield Dollars Yield Dollars Yield

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Net effective spread $ 97,769 1.20 % $ 85,396 1.16 % $ 281,652 1.19 % $ 252,036 1.15 %

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.

The $12.4 million, or 4 basis point, year-over-year increase in net effective spread for third quarter 2025 compared to third quarter 2024 was primarily due to a $9.6 million increase from net new business volume and a $3.9 million decrease in funding costs, partially offset by a $1.3 million decrease in interest income related to an increase in loans on non-accrual.

The $29.6 million, or 4 basis point, increase in net effective spread for the nine months ended September 30, 2025, compared to the same period in the prior year, was primarily due to a $22.2 million increase in net new business volume, reflecting continued growth in the Renewable Energy and Broadband Infrastructure segments and a $7.5 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.

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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:

As of June 30, 2025 As of June 30, 2024

The following table summarizes the components of Farmer Mac's total allowance for losses for the three and nine months ended September 30, 2025 and 2024:

As of September 30, 2025 As of September 30, 2024

Losses Reserve

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Beginning Balance $ 30,350 $ 1,620 $ 31,970 $ 16,924 $ 1,693 $ 18,617

Provision for losses

Provision for/(release of) losses 7,477 (44) 7,433 3,428 (170) 3,258

(4,423) — (4,423) — — —

Charge-offs (2,840) — (2,840) (4,043) — (4,043)

Recovery 2,229 — 2,229 — — —

Ending Balance $ 35,633 $ 1,576 $ 37,209 $ 20,352 $ 1,523 $ 21,875

For the Six Months Ended

For the Nine Months Ended

Beginning Balance $ 23,670 $ 1,622 $ 25,292 $ 16,589 $ 1,711 $ 18,300

Provision for/(release of) losses 16,874 (46) 16,828 7,806 (188) 7,618

Charge-offs (2,840) — (2,840) (4,043) — (4,043)

(7,263) — (7,263) (4,043) — (4,043)

Recovery 2,352 — 2,352 — — —

Ending Balance $ 35,633 $ 1,576 $ 37,209 $ 20,352 $ 1,523 $ 21,875

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.

During third quarter 2025, we recorded a $7.4 million net provision to the total allowance, which related to an increase in expected credit losses on existing assets and on new volume.

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."

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:

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."

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:

For the Three Months Ended For the Six Months Ended

Losses on financial derivatives .

The components of gains and losses on financial derivatives for the three and nine months ended September 30, 2025 and 2024 are summarized in the following table:

For the Three Months Ended For the Nine Months Ended

Change Change

June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ %

September 30, 2025 September 30, 2024 $ % September 30, 2025 September 30, 2024 $ %

(dollars in thousands)

(Losses)/gains on undesignated financial derivatives due to fair value changes

Gains/(losses) on undesignated financial derivatives due to fair value changes

$ 882 $ (1,064) $ 1,946 (183) % $ (2,330) $ 260 $ (2,590) (996) %

Accrual of contractual payments (707) (858) 151 (18) % (597) (1,379) 782 (57) %

Gains/(losses) due to terminations or net settlements

Losses due to terminations or net settlements

(1,237) (12) (1,225) 10,208 % (691) (535) (156) 29 %

Gains/(losses) on financial derivatives

Losses on financial derivatives

$ (1,062) $ (1,934) $ 872 (45) % $ (3,618) $ (1,654) $ (1,964) 119 %

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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.

Treasury security futures and initial cash payments received

upon the inception of certain undesignated swaps are included in "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:

For the Three Months Ended For the Six Months Ended

The components of operating expenses for the three and nine months ended September 30, 2025 and 2024 are summarized in the following table:

For the Three Months Ended For the Nine Months Ended

Change Change

June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ %

September 30, 2025 September 30, 2024 $ % September 30, 2025 September 30, 2024 $ %

(dollars in thousands)

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Total Operating Expenses $ 29,795 $ 24,587 $ 5,208 21 % $ 88,795 $ 76,293 $ 12,502 16 %

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.

The increase in compensation and employee benefits expenses for the three and nine months ended September 30, 2025 compared to 2024 was largely due to increased headcount.

The increase in G&A expenses for the three and nine months ended September 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.

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:

For the Three Months Ended For the Six Months Ended

The following table presents income tax expense and the effective income tax rate for the three and nine months ended September 30, 2025 and 2024:

For the Three Months Ended For the Nine Months Ended

Change Change

June 30, 2025 June 30, 2024 $ % June 30, 2025 June 30, 2024 $ %

September 30, 2025 September 30, 2024 $ % September 30, 2025 September 30, 2024 $ %

(dollars in thousands)

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Effective tax rate 17.5 % 20.0 % (2.5) % 18.3 % 20.6 % (2.3) %

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.

The decrease in the effective tax rate in 2025 is primarily attributable to the purchase of $59.8 million in renewable energy investment tax credits during the nine months ended September 30, 2025.

The purchases of renewable energy investment tax credits have been at prices that range from approximately $0.91 to $0.94 per $1.00 of credit, resulting in a benefit of $4.7 million year-to-date 2025, of which $1.5 million was recognized during the three months ended September 30, 2025.

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:

The following table sets forth the net growth or decrease in our lines of business for the three and nine months ended September 30, 2025 and 2024:

Net New Business Volume

For the Three Months Ended For the Six Months Ended

Balance Sheet June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

For the Three Months Ended For the Nine Months Ended

Balance Sheet September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Net Growth/(Decrease) Net Growth/(Decrease) Net Growth/(Decrease) Net Growth/(Decrease)

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(3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

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

Farmer Mac's outstanding business volume was $31.1 billion as of September 30, 2025, a net increase of $0.5 billion from June 30, 2025 which was primarily attributable to increases in the Infrastructure Finance portfolio after taking into account all new business, maturities, sales, and paydowns on existing assets.

The increase in outstanding business volume during third quarter 2025 was attributable to a $0.6 billion increase in outstanding business volume in the Infrastructure Finance portfolio, consisting of a $0.1 billion increase in Power & Utilities, a $0.1 billion increase in Broadband Infrastructure, and a $0.3 billion increase in Renewable Energy.

These increases in volume were primarily driven by $1.2 million in new purchases, partially offset by $0.6 million in scheduled maturities and repayments during the quarter.

The increase in the Infrastructure Finance portfolio was partially offset by a $61.4 million decrease in volume in the Agricultural Finance portfolio during third quarter 2025, primarily driven by maturing AgVantage securities in both the Farm & Ranch and Corporate AgFinance portfolios.

Total Farm & Ranch business volume remained relatively flat when comparing September 30, 2025 to June 30, 2025 as net growth in Farm & Ranch loans was substantially offset by maturities of AgVantage securities that counterparties did not re-issue.

Farmer Mac's outstanding business volume was $28.5 billion as of September 30, 2024, a net increase of $0.3 billion from June 30, 2024 after taking into account all new business, maturities, sales, and paydowns on existing assets.

The $0.4 billion net decrease in Farm & Ranch during third quarter 2024 resulted from $1.2 billion of scheduled maturities and repayments, partially offset by $0.8 billion of new purchases, commitments, and guarantees.

Included in the $0.8 billion is the purchase of $271.9 million of Farm & Ranch loans.

Scheduled loan maturities and repayments in the aggregate amount of $133.1 million partially offset those

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.

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

The net increase in Renewable Energy loan purchases and unfunded commitments primarily

reflects the continued strong demand for renewable power generation and storage.

Scheduled loan maturities and repayments in the aggregate amount of $157.4 million partially offset those purchases.

During third quarter 2024, a total of $0.5 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 $25.9 million net increase in Corporate AgFinance during third quarter 2024 resulted from $307.3 million of new purchases and unfunded loan commitments, which was partially offset by $281.4 million of scheduled maturities, repayments, sales, and paydowns on revolving commitments.

The $0.2 billion net decrease in Power & Utilities during third quarter 2024 resulted from $361.0 million of new purchases, which was partially offset by $574.8 million of scheduled maturities and repayments.

The $0.1 billion net increase in Broadband Infrastructure during third quarter 2024 resulted from $187.0 million of new purchases and unfunded commitments, which was partially offset by $94.5 million of scheduled maturities and repayments.

The $0.2 billion net increase in Renewable Energy during third quarter 2024 primarily reflects $357.7 million in loan purchases and unfunded commitments, partially offset by $138.1 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.

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The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated:

For the Three Months Ended For the Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

(dollars in thousands)

AgVantage Securities

$ 350,000 $ 663,145 $ 784,125 $ 1,349,345

Loans securitized and held in consolidated trusts with beneficial interests owned by third parties (structured and single-class)

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Total Farmer Mac Guaranteed Securities Issuances $ 350,000 $ 663,145 $ 1,124,551 $ 1,679,826

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.

During the three and nine months ended September 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.

During the three and nine months ended September 30, 2025 and 2024, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed Securities.

The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated:

Outstanding Business Volume

Balance Sheet As of June 30, 2025 As of December 31, 2024

Balance Sheet As of September 30, 2025 As of December 31, 2024

(in thousands)

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(3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

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:

Schedule of Principal Amortization as of June 30, 2025

Schedule of Principal Amortization as of September 30, 2025

Loans Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs USDA Securities and Farmer Mac Guaranteed USDA Securities Total

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Total $ 15,721,111 $ 4,676,662 $ 2,622,567 $ 23,020,340

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.

Of the $31.1 billion outstanding business volume as of September 30, 2025, $7.7 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 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:

The following table summarizes by maturity date the outstanding principal amount of AgVantage securities as of September 30, 2025:

AgVantage Balances by Year of Maturity

June 30, 2025

September 30, 2025

(in thousands)

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(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.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.8 years as of September 30, 2025.

Business Outlook

5 unchanged sentences

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.

The net effect of these forces contributed to strong Farm & Ranch loan purchase portfolio growth in third 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.

Farmer Mac experienced a decrease in wholesale finance volume during third 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 third quarter 2025, Farmer Mac closed a new AgVantage facility with a maximum borrowing capacity of $4.3 billion with a counterparty, demonstrating the continued interest in this unique wholesale finance product.

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.

Continued strong interest in data centers, broadband expansion, and constructing and completing renewable energy projects before the sunset of tax credits, and the overall need for energy generation and transmission capacity for rural America, provide significant opportunities for Infrastructure Finance for the remainder of 2025 and into future years.

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.

Ongoing business and product development efforts continue to attract private lenders, institutional investors and nontraditional originators, 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.

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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

support fiber and broadband-related transactions, including significant market activity and investments in wholesale data centers, as well as renewable energy projects.

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.

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 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.

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.

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.

Farmer Mac anticipates ongoing increases in operating expenses over the next several years, aligned with our planned expansion of investments in technology, business infrastructure, and human capital.

These investments are designed to enhance capacity and efficiency in support of market growth opportunities and long-term strategic objectives.

By investing in infrastructure and business platforms, Farmer Mac aims to scale more efficiently in tandem with future portfolio and earnings growth.

These initiatives are expected to improve product delivery, business operations, and scalability, allowing Farmer Mac to take advantage of future market growth opportunities.

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.

Technology enhancements and process re-engineering are planned for the next several years 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

Overall farm profitability has compressed in the last two years.

Overall farm profitability has moved lower after peaking several years ago.

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

government support payments are not guaranteed annually, but can help offset poor market conditions for producers.

The USDA has reported that annual net cash farm income decreased 25% in 2023, and declined an additional 10% in 2024.

For 2025, however, the USDA forecasts that net cash farm income will increase by 29% relative to 2024.

The projected turnaround in farm incomes is largely driven by government support, which the USDA forecasts will surpass $40 billion in 2025.

Approximately $33 billion of government payments to agricultural producers was authorized in 2024 in the American Relief Act.

In total, 2025 net cash farm income would reach one of the highest inflation-adjusted levels in history if the current USDA projection is realized.

Ad-hoc and supplemental 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.

Annual crop prices stabilized in first quarter 2025, but have since faced renewed downward pressure in second and third quarter 2025.

Conversely, tree nut prices, outside of a brief dip in third quarter 2025, continued to rise throughout 2025

to higher levels than last year.

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.

Within the livestock and animal protein sector, producers benefited from lower feed costs and robust export demand in the first three quarters of 2025, particularly the cattle sector.

Overall farm expenses remained somewhat stable in 2025, but they remain elevated compared to pre-2020 levels.

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.

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.

is rapidly evolving its trade posture and tariff levels, which increases uncertainty of foreign demand for U.S.

agricultural commodities, including soybeans, cotton, almonds, pistachios, and several other crops and livestock products.

Any extended disruption to trade could therefore potentially cause increased domestic inventories and potentially weigh on prices.

Conversely, new trade agreements could lead to a boost in demand if foreign trade barriers are reduced.

is rapidly evolving its trade posture and tariff levels, which increases the 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.

Similar to many other sectors, the agricultural industry will likely remain acutely focused on trade into 2026.

Beyond developments related to trade, changing environmental regulations and immigration laws 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.

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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.

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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.

According to the survey data, California farm real estate average value increased 2.2% overall and 3.5% for cropland.

Farmland value growth rates, as measured by transaction prices, continued to moderate in 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 6% in second quarter 2025 relative to the same period last year.

Basing this index on actual farmland transactions can lead to greater volatility.

However, regional data from Federal Reserve banks underscores bifurcation in farmland prices.

The Federal Reserve Bank of Chicago, for example, reported that farmland values rose 3% in the Seventh District in second 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.

Meanwhile, the Federal Reserve Banks of Kansas City and St.

Louis reported that non-irrigated farmland values decreased 2% and 3% in the Tenth and Eighth Districts, respectively, in second quarter 2025.

Farmland value growth rates have trended consistently lower in many Federal Reserve districts over the last several years, and could stay subdued in the remainder of 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.

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agriculture exports will drop to $173 billion in 2025, 1% lower than 2024 and down 12% relative to peak levels in 2022.

The USDA incorporated the expected impact of tariffs in its May Outlook for U.S.

The USDA incorporated the expected impact of tariffs in its August 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.

Through July 2025, agricultural export values were 1% 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.

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.

Drought conditions increased modestly in intensity and prevalence in third quarter 2025.

Through the first half of 2025, drought conditions in the continental U.S.

were largely concentrated 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.

Drought conditions emerged across much of the eastern half of the U.S.

in third quarter 2025, including several Corn Belt states such as Illinois, which was facing severe drought conditions or worse across 50% of the state as of October 2025.

It is unclear what impact drought conditions across the central and eastern portions of the U.S.

might have on U.S.

However, the emergence of drought conditions in these areas occurred relatively late in the growing season, potentially minimizing the impact.

In total, approximately 23% 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.

was classified as being in severe to exceptional drought as of October 2025 according to data from the National Center for Environmental Information, the National Drought Mitigation Center, USDA, and the National Oceanic and Atmospheric Administration.

The ongoing implementation of groundwater management regulation, especially in California, continues to influence land values in many regions of the state.

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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.

The production of food, feed, fiber, and biofuels has been economically viable in the past few years, but some factors continued to evolve throughout 2025.

Rising consumer inflation boosted the profitability of the food processing and supply chains in 2021 and 2022.

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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.

A large number of planned biofuel projects and new facilities for 2025 and 2026 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.

Still, consumer spending held steady throughout 2024 and 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.

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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.

Energy Information Administration, sales and the revenue from the sale of electricity to customers advanced in 2025, with an annual increase in sales of 2.1% and an increase in revenue of 5.9%, respectively, in the last 12 months through July 2025 compared to July 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.

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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

credits we have purchased are on projects that have been placed in service.

Through September 30, 2025, we have purchased approximately $89.0 million in renewable energy investment tax credits at prices that range from approximately $0.91 to $0.94 per $1.00 of credit.

All of the tax 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.

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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.

These industry tailwinds are creating additional investments in rural telecommunications infrastructure, which is aided by access to many federally funded programs, such as the U.S.

Department of Commerce'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.

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, trade, and immigration laws, as well as energy cost and availability, 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.

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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.

New data center infrastructure requires significant demand for power, so delays in grid hookups or electricity capacity could delay some capital or infrastructure deployment.

Legislative, Regulatory, and Political Outlook

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Tariffs and Trade Restrictions

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.

The Administration has entered into negotiations with several countries on tariff and non-tariff matters including Indonesia, Vietnam, the Philippines, South Korea, the United Kingdom, the European Union and Japan.

Export markets drive demand for some U.S.

agricultural products like almonds, pistachios, grains, and livestock.

agricultural products like soybeans, almonds, pistachios, cotton, 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

Farmer Mac will continue to closely monitor trade developments throughout 2025 for impacts on its lines of business.

1 (One Big Beautiful Bill Act)

1 includes many provisions that have the potential to impact Farmer Mac and it’s stakeholders, including farmers, ranchers, and the renewable energy industry.

1 was enacted into law on July 4, 2025.

It includes many provisions that have the potential to impact Farmer Mac and its 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.

These updates typically would have been addressed during a farm bill reauthorization.

Farm bill programs not reauthorized by H.R.

1 expired on September 30, 2025.

Congress will need to act on these sections of the farm bill that were not eligible for inclusion in the H.R.

1 budget reconciliation legislation.

1 did not include a suspension of permanent law that is typically done through the farm bill reauthorization.

Permanent law refers to the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949.

These laws support a limited number of commodities and are considered outdated and potentially disruptive if implemented.

Without a suspension of permanent law, these outdated statutes would become effective.

Reversion to permanent law is used as an incentive to pass new farm bills or extend existing farm bills.

We expect Congress to consider options to address the suspension of permanent law and remaining sections of the farm bill as part of a package later this year.

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.

• 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:

June 30, 2025 December 31, 2024 $ %

September 30, 2025 December 31, 2024 $ %

(in thousands)

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The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of loan volume.

The increase in total equity was primarily due to an increase in retained earnings.

The increase in total equity was primarily due to an increase of $96.9 million related to the issuance of 4.0 million shares of 6.500% non-cumulative perpetual Series H preferred stock in addition to an increase in retained earnings.

Risk Management

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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's direct credit exposure to Agricultural Finance mortgage loans as of September 30, 2025 was $13.1 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.

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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.

For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of September 30, 2025, were $177.8 million (1.35% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to $125.9 million (0.98% of the Agricultural Finance mortgage loan portfolio) as of June 30, 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 106 delinquent loans as of September 30, 2025, compared to 75 delinquent loans as of June 30, 2025 and 62 delinquent loans as of December 31, 2024.

The increase in the number of 90-day delinquencies during third quarter 2025 was primarily driven by an increase in permanent plantings and crop loans 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.

The top ten borrower exposures over 90 days delinquent represent approximately half of the 90-day delinquencies as of September 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.

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.

Farmer Mac's 90-day delinquency rate of 1.35% as of September 30, 2025 was above 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.

The increase in delinquency rate is consistent with prior historical trends for which delinquency rates tend to peak in the first and third quarters of the year, based in part on the timing of semi-annual and quarterly payment due dates.

We continue to monitor delinquency rates for sustained increases that may result from more than expected

cyclical trends such as changes in the general economy or unforeseen and idiosyncratic events like adverse weather events.

The 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:

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(dollars in thousands)

September 30, 2025 $ 13,122,678 $ 177,759 1.35 %

June 30, 2025 12,836,478 125,868 0.98 %

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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:

Agricultural Finance Mortgage Loans 90-Day Delinquencies as of June 30, 2025

Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.57% of total outstanding business volume as of September 30, 2025, compared to 0.37% as of December 31, 2024 and 0.51% as of September 30, 2024.

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of September 30, 2025 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure:

Agricultural Finance Mortgage Loans 90-Day Delinquencies as of September 30, 2025

Distribution of Agricultural Loans Agricultural Loans 90-Day Delinquencies (1)

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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 %

Less than 40.00% 17 % $ 2,173,744 $ 30,163 1.39 %

40.00% to 60.00% 53 % 7,005,127 119,205 1.70 %

60.01% to 80.00% 23 % 3,024,847 28,391 0.94 %

2 % 262,534 1,526 0.58 %

80.01% to 100% — % 24,057 — — %

— % 27,397 — — %

Greater than 100% — % 3,271 — — %

Enterprise Value (4)

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(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.

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.

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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.

As of September 30, 2025, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $521.1 million (4.0% of the portfolio), compared to $453.0 million (3.5% of the portfolio) as of June 30, 2025, and $398.3 million (3.2% of the portfolio) as of December 31, 2024.

Those substandard assets comprised 409 loans as of September 30, 2025, 367 loans as of June 30, 2025, and 336 loans as of December 31, 2024.

The increase of $68.1 million in Agricultural Finance substandard assets during third quarter 2025 was primarily attributable to credit risk rating downgrades in crops and 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 percentage of Agricultural Finance substandard assets within the portfolio of 4.0% as of September 30, 2025 is in line with 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.

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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.

As of September 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 $825,000 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.

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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.

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 weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans purchased during third quarter 2025 was 50%, compared to 52% for loans purchased during third quarter 2024.

The weighted-average original loan-to-value ratio for all 90-day delinquencies was 52% and 53% as of September 30, 2025 and December 31, 2024, respectively.

Farmer Mac calculates the "current loan-to-value" ratio of a loan by dividing either the original appraised value or, where available, the most recent value (which may include an updated appraisal, an updated estimate of enterprise value or other estimate of value, as applicable), by the current outstanding loan amount adjusted to reflect loan amortization.

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:

Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of June 30, 2025

Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of September 30, 2025

Acceptable Special Mention Substandard Total

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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

Less than 40.00% $ 3,488,935 $ 94,948 $ 113,298 $ 3,697,181

40.00% to 60.00% 5,708,288 275,962 204,208 6,188,458

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80.01% to 100% 39,190 12,161 23,569 74,920

80.01% and greater 8,079 34,979 26,585 69,643

Greater than 100% 35,557 31,434 27,670 94,661

Enterprise Value (1)

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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 following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of September 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.

Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative

Original Loans, Guarantees, and LTSPCs as of June 30, 2025

Original Loans, Guarantees, and LTSPCs as of September 30, 2025

Cumulative Original Loans, Guarantees and LTSPCs Cumulative Net Credit Losses/(Recoveries) Cumulative Loss Rate

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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:

As of June 30, 2025

As of September 30, 2025

Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region

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Southeast (AL, FL, GA, MS, NC, SC, TN).

As of June 30, 2025

As of September 30, 2025

Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type

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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.

Farmer Mac's direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of September 30, 2025 was $7.3 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.

One of the downgraded loans was a Renewable Energy solar project and the other was a Broadband Infrastructure loan.

As of September 30, 2025, there were no delinquencies in Farmer Mac's portfolio of Infrastructure Finance loans.

Substandard assets within the Infrastructure Finance portfolio increased from $72.2 million as of June 30, 2025 to $75.2 million as of September 30, 2025.

Farmer Mac evaluates credit risk of Infrastructure Finance assets by reviewing a variety of borrower credit risk characteristics.

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The following table disaggregates Farmer Mac’s portfolio of Infrastructure Finance loans by portfolio segment and by internally assigned risk ratings.

As of June 30, 2025

As of September 30, 2025

Infrastructure Finance portfolio by internally assigned risk rating

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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.

As of September 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.

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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.

During the three months ended September 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.

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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.

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 September 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.

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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.

As of September 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

The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $3.9 billion as of September 30, 2025 and

$5.0 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:

As of June 30, 2025 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 $3.7 billion as of September 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 September 30, 2025 and December 31, 2024:

As of September 30, 2025 As of December 31, 2024

Counterparty Balance Required Collateralization Balance Required Collateralization

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Total outstanding $ 7,681,646 $ 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.

(1) Consists of AgVantage securities issued by 9 different issuers as of both September 30, 2025 and December 31, 2024.

Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness.

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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.

As of September 30, 2025, Farmer Mac had $0.9 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.

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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).

However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($86.5 million as of September 30, 2025).

These exposure limits do not apply to obligations of U.S.

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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 $0.9 billion of cash and cash equivalents held as of September 30, 2025 mature within three months.

As of September 30, 2025, $3.1 billion of the $6.7 billion of investment securities (47%) 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.

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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.

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:

The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of September 30, 2025 and December 31, 2024 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:

Percentage Change in MVE from Base Case

Interest Rate Scenario As of June 30, 2025 As of December 31, 2024

Interest Rate Scenario As of September 30, 2025 As of December 31, 2024

+100 basis points (2.5) % (4.0) %

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Percentage Change in NES from Base Case

Interest Rate Scenario As of June 30, 2025 As of December 31, 2024

Interest Rate Scenario As of September 30, 2025 As of December 31, 2024

+100 basis points 0.4 % (0.8) %

-100 basis points 1.3 % 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.

As of September 30, 2025, Farmer Mac maintained a positive effective duration gap of 3.6 months, compared to 3.7 months as of 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 63 and 42 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.

This shift in interest rates shortened the duration profile of Farmer Mac’s funded assets relative to its liabilities, resulting in a decrease in the duration gap.

Financial Derivatives Transactions

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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.

As of September 30, 2025, Farmer Mac had $24.6 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $10.9 billion were pay-fixed interest rate swaps, $13.1 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.

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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.

As of both September 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

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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 September 30, 2025, Farmer Mac held $7.6 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indices, such as SOFR.

As of the same date, Farmer Mac also had $10.9 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily SOFR.

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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.

As of September 30, 2025, Farmer Mac had outstanding discount notes of $1.7 billion, medium-term notes that mature within one year of $8.4 billion, and medium-term notes that mature after one year of $19.1 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.

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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.

In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac maintained a monthly average of 323 days of liquidity throughout third quarter 2025 and had 317 days of liquidity as of September 30, 2025.

Farmer Mac maintains cash, cash equivalents (including U.S.

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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.

The following table presents these assets as of June 30, 2025 and December 31, 2024:

As of June 30, 2025 As of December 31, 2024

The following table presents these assets as of September 30, 2025 and December 31, 2024:

As of September 30, 2025 As of December 31, 2024

(in thousands)

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Total $ 7,565,784 $ 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.

The objectives of the investment portfolio as of September 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 .

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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).

As of September 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.

As of September 30, 2025 and December 31, 2024, Farmer Mac's Tier 1 capital ratio was 13.9% and 14.2%, respectively.

As of September 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.

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For the quarter ended:

September 30, 2025 $ 1,069,422 $ 236,940 $ 225,017 $ 262,322 $ 732,888 $ 2,526,589

June 30, 2025 896,499 280,331 185,563 280,350 482,276 2,125,019

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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:

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Unscheduled 216,005 89,015 32,139 — — 337,159

September 30, 2025 $ 1,032,536 $ 291,406 $ 98,854 $ 137,666 $ 390,359 $ 1,950,821

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

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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:

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(in thousands)

September 30, 2025 $ 18,218,755 $ 1,891,228 $ 7,426,517 $ 1,299,097 $ 2,283,565 $ 31,119,162

June 30, 2025 18,217,905 1,953,523 7,300,354 1,174,441 1,941,036 30,587,259

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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

On-Balance Sheet Outstanding Business Volume

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(in thousands)

September 30, 2025 $ 14,600,861 $ 3,529,567 $ 7,724,118 $ 25,854,546

June 30, 2025 14,644,420 3,488,344 7,197,147 25,329,911

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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

The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:

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For the quarter ended:

September 30, 2025 $ 34,840 $ 9,047 $ 5,910 $ 4,379 $ 7,730 $ 34,777 $ 1,086 $ 97,769

1.04 % 2.16 % 0.34 % 2.30 % 1.75 % 0.43 % 0.05 % 1.20 %

June 30, 2025 35,710 8,609 5,636 3,932 6,227 31,668 2,111 93,893

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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 %

The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders:

Core Earnings by Quarter End

June 2025 March 2025 December 2024 September 2024 June 2024 March 2024 December 2023 September 2023 June 2023

September 2025 June 2025 March 2025 December 2024 September 2024 June 2024 March 2024 December 2023 September 2023

(in thousands)

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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)

Gains/(losses) on undesignated financial derivatives due to fair value changes $ 882 $ (639) $ (2,573) $ 3,084 $ (1,064) $ (359) $ 1,683 $ (836) $ 2,921

(Losses)/gains on hedging activities due to fair value changes (137) 2,709 1,099 5,737 205 2,604 3,002 (3,598) 3,210

Unrealized (losses)/gains on trading assets (4) (65) 9 (83) 99 (87) (14) (37) 1,714

5 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis