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Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-05-05 · 290 added, 219 removed, 864 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 three months ended March 31, 2026.

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.

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Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements.

These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "likely," "intends," "often," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing our:

These statements typically include terms such as "aims," "anticipates," "believes," "continues," "designed," "estimates," "expects," "forecasts," "likely," "intends," "often," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing our:

• prospects for earnings;

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We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities.

We also provide investment opportunities to entities, such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions, that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During first quarter 2026, we:

We also provide investment opportunities through our debt issuances to entities, such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions, that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During second quarter 2026, we:

• provided $4.0 billion in liquidity and lending capacity to lenders serving rural America;

• maintained strong liquidity in our investment portfolio, averaging 282 days of liquidity during 2026, well above the regulatory requirement of a minimum of 90 days of liquidity;

• maintained our strong capital position, with capital of $0.7 billion in excess of the minimum regulatory capital requirement, and maintained uninterrupted access to the debt capital markets.

• issued $100 million of 6.875% non-cumulative perpetual Series I preferred stock;

• delivered record net income, contributing to a $41.5 million increase in retained earnings and a capital position $0.7 billion above the minimum regulatory requirement;

• maintained uninterrupted access to the debt capital markets.

The discussion below of our 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

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 March 31, 2026 June 30, 2025

(in thousands)

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Core earnings 58,766 51,741 47,365

The $11.2 million and $11.7 million sequential increases in net income attributable to common stockholders and core earnings, respectively, were both primarily attributable to a $11.7 million decrease in the provision for credit losses in the first quarter of 2026 .

The $7.8 million year-over-year increase in net income attributable to common stockholders for the first quarter of 2026 was primarily attributable to a $10.5 million increase in net interest income ("NII"), partially offset by a $2.6 million increase in the provision for credit losses.

The $5.8 million year-over-year increase in core earnings for the first quarter of 2026 was primarily attributable to a $12.0 million increase in net effective spread ("NES") and a $1.2 million increase in guarantee and commitment fees.

These impacts were partially offset by a $2.6 million increase in the provision for credit losses and a $3.9 million increase in operating expenses.

Net income attributable to common stockholders and core earnings each increased $7.0 million from the prior quarter.

The increase in net income attributable to common stockholders was primarily driven by a $16.7 million increase in net interest income ("NII"), while the increase in core earnings was primarily driven by a $15.4 million increase in net effective spread ("NES").

These increases were partially offset by

a $2.8 million increase in operating expenses, a $2.7 million increase in the provision for credit losses, and a $2.6 million increase in income tax expense during the second quarter of 2026 .

Net income attributable to common stockholders increased $9.7 million and core earnings increased $11.4 million year-over-year in the second quarter of 2026.

The increase in net income attributable to common stockholders was primarily attributable to a $21.3 million increase in NII, while the increase in core earnings was primarily driven by a $23.5 million increase in NES.

These increases were partially offset by a $6.7 million increase in operating expenses and a $4.3 million increase in income tax expense.

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 MD&A—Results of Operations .

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For the Three Months Ended

March 31, 2026 December 31, 2025 March 31, 2025

June 30, 2026 March 31, 2026 June 30, 2025

(in thousands)

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Net effective spread % 1.26 % 1.16 % 1.19 %

The sequential decrease of $3.1 million in NII for the first quarter 2026 was primarily attributable to the effects of f air value changes on fair value hedge relationships and e xpenses related to undesignated financial derivatives, partially offset by net volume growth .

The sequential decrease of 10 basis points (bps) in net interest yield was primarily comprised of a decline due to the effects of derivatives, and two fewer days in the period, which disproportionately impacts revenue from our fastest-growing, highest-spread segments.

In addition, we saw a mix shift toward growth in our lower‑spread Farm & Ranch AgVantage securities and somewhat lower contribution from the investment portfolio.

NES increased sequentially by $0.6 million driven primarily by net volume growth, led by the Farm & Ranch and Power & Utilities portfolios.

The contribution of net volume growth to NES was partially offset by the impact of two fewer days in the quarter, primarily affecting the Renewable Energy and Broadband portfolios, and a decline in investment NES resulting from lower spreads in the liquidity portfolio.

NES yield saw a 6bps sequential decline primarily driven by fewer days in the period, which disproportionately impacts revenue from our fastest-growing, highest-spread segments.

In addition, we saw a mix shift toward growth in our lower‑spread Farm & Ranch AgVantage securities and somewhat lower contribution from the investment portfolio.

The year-over-year increase of $10.5 million in NII and $12.0 million in NES were both primarily driven by an $11.5 million increase related to net volume growth, primarily in Infrastructure Finance and Farm & Ranch.

The sequential increase of $16.7 million and $15.4 million in NII and NES, respectively, for the second quarter 2026 was primarily attributable to the effects of net volume growth , led by the Farm & Ranch and Renewable Energy portfolios, and collection of $7.4 million of previously unrecognized interest through resolution of a defaulted asset within our Corporate AgFinance segment.

The recognition of this income was a nonrecurring event that favorably impacted net interest income during the second quarter 2026 .

The year-over-year increase of $21.3 million in NII and $23.5 million in NES were both primarily driven by the effects of net volume growth, led by the Farm & Ranch and Renewable Energy portfolios, and the impact of the $7.4 million collection of default interest recognized in second quarter 2026.

See MD&A—Use of Non-GAAP Measures for more information about our use of NES as a financial measure and Table 9 in MD&A—Results of Operations—Net Interest Income for a reconciliation of NII to NES.

Business Volume

Our outstanding business volume was $34.8 billion as of March 31, 2026, a net increase of $1.5 billion from December 31, 2025 after taking into account all new business, maturities, sales, and paydowns on existing assets.

Our outstanding business volume was $37.2 billion as of June 30, 2026, a net increase of $2.4 billion from March 31, 2026 after taking into account all new business, maturities, sales, and paydowns on existing assets.

The net increase was due to new volume during the quarter totaling $4.0 billion, partially offset by scheduled maturities and repayments of $1.6 billion.

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For more information about our business volume, see MD&A—Results of Operations—Business Volume .

Throughout this MD&A , references to “Agricultural Finance Mortgage Loans” include on‑balance sheet agricultural mortgage loans as well as off‑balance sheet exposures, consisting of LTSPCs, unfunded commitments, and Farmer Mac Guaranteed Securities and references to "Infrastructure Finance Loans" include on-balance sheet infrastructure finance loans as well as off-balance sheet LTSPCs and unfunded commitments.

Credit Quality

Our allowance for losses increased $2.1 million from December 31, 2025 to March 31, 2026, primarily due to $4.3 million in net provision expense offset by a $2.2 million charge-off.

These changes are primarily attributed to new volume growth across all of our segments and portfolio credit migration.

For more information about our provision, see Note 4—Loans to the consolidated financial statements and MD&A—Results of Operations .

The following table presents Agricultural Finance mortgage loans and Infrastructure Finance loans classified as substandard, in dollars and as a percentage of the respective portfolio as of March 31, 2026 and December 31, 2025:

As of March 31, 2026

As of December 31, 2025

Throughout this MD&A , credit quality and credit risk disclosures make references to "Agricultural Finance Mortgage Loans" which include on‑balance sheet agricultural mortgage loans and off‑balance sheet exposures, consisting of LTSPCs, unfunded commitments, and Farmer Mac Guaranteed Securities and references to "Infrastructure Finance Loans" include on-balance sheet infrastructure finance loans and off-balance sheet LTSPCs and unfunded commitments.

Our allowance for losses increased $9.4 million from December 31, 2025 to June 30, 2026, primarily due to an $11.4 million provision expense offset by $2.0 million in charge-offs, net of recoveries during the six months ended June 30, 2026.

The increase in our allowance for losses was primarily attributable to new volume growth across all of our segments and portfolio credit migration.

For more information about our allowance for losses, see Note 4—Loans to the consolidated financial statements and MD&A—Results of Operations .

As of June 30, 2026 As of December 31, 2025

Substandard Assets % of Portfolio Substandard Assets % of Portfolio

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58,740 0.6 % 75,546 1.0 %

$ 651,288 $ 569,763

Total substandard assets increased $81.5 million from December 31, 2025 to March 31, 2026, with the amount of substandard assets as a percentage of the portfolio increasing from 3.52% at December 31, 2025 to 4.12% at March 31, 2026 for Agricultural Finance loans and decreasing from 0.96% at December 31, 2025 to 0.69% at March 31, 2026 for Infrastructure Finance .

The increase in substandard assets for Agricultural Finance loans was primarily driven by credit downgrades in crops and agricultural storage and processing while the decrease in substandard assets for Infrastructure Finance was related to a credit upgrade in the renewable energy segment.

The following table presents 90-day delinquency rates for our Agricultural Finance mortgage loans and Infrastructure Finance loans, in dollars and as a percentage of total outstanding business volume as of March 31, 2026 and December 31, 2025:

As of March 31, 2026

As of December 31, 2025

Total $ 635,228 $ 569,763

Total substandard assets increased $65.5 million from December 31, 2025 to June 30, 2026, with the amount of substandard assets as a percentage of the portfolio increasing from 3.5% at December 31, 2025 to 3.9% at June 30, 2026 for Agricultural Finance loans and decreasing from 1.0% at December 31, 2025 to 0.6% at June 30, 2026 for Infrastructure Finance.

The increase in substandard assets for Agricultural Finance loans was primarily driven by credit downgrades while the decrease in substandard assets for Infrastructure Finance was related to a credit upgrade in the Renewable Energy segment.

As of June 30, 2026 As of December 31, 2025

Delinquencies % of Total Outstanding Volume

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Infrastructure Finance

$ 179,817 0.52 % $ 132,550 0.40 %

Across all of our lines of business, 90-day delinquency rates increased modestly in first quarter 2026 as compared to Q4 2025, but continue to remain at low levels.

Total $ 139,128 0.37 % $ 132,550 0.40 %

Across all of our lines of business, 90-day delinquency rates decreased modestly in second quarter 2026 as compared to fourth quarter 2025.

For more details on credit risk management and credit quality indicators, see MD&A—Risk Management—Credit Risk—Loans and Guarantees .

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NES excludes the following:

• Interest income and interest expense associated with single-class consolidated trusts with beneficial interests owned by third parties and for which we guarantees all classes of securities issued ("single-class consolidated trusts") and reclassifies that activity to guarantee and commitment fees in determining our core earnings.

• Interest income and interest expense associated with single-class consolidated trusts with beneficial interests owned by third parties and for which we guarantee all classes of securities issued ("single-class consolidated trusts") and reclassifies that activity to guarantee and commitment fees in determining our core earnings.

This reclassification reflects our view that the net interest income earned on single-class consolidated trusts is effectively a guarantee fee.

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For the Three Months Ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

(in thousands, except per share amounts)

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Less reconciling items:

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 11) 184 (639)

Gains on hedging activities due to fair value changes 889 2,709

Unrealized gains/(losses) on trading securities 59 (65)

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value (1)

Net effects of terminations or net settlements on financial derivatives (1,017) 255

Income tax effect related to reconciling items (30) (480)

Sub-total 111 1,805

Core earnings $ 58,766 $ 47,365

Composition of Core Earnings:

Net effective spread (2)

$ 117,438 $ 93,893

Guarantee and commitment fees (3)

Total revenues 125,224 100,509

Credit related expense (GAAP):

Provision for losses

Other credit related expense/(income)

Total credit related expense

Operating expenses (GAAP):

Compensation and employee benefits 23,706 17,631

General and administrative 11,591 10,859

Regulatory fees 862 1,000

Total operating expenses 36,159 29,490

Net earnings 81,696 63,146

Income tax expense (5)

14,856 10,114

Preferred stock dividends (GAAP) 8,074 5,667

Core earnings $ 58,766 $ 47,365

Basic $ 5.42 $ 4.33

Diluted $ 5.40 $ 4.32

Weighted-average shares:

Basic 10,849 10,933

Diluted 10,882 10,963

(1) 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.

(2) NES is a non-GAAP measure.

See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information and Table 9 for a reconciliation of NII to NES.

(3) Includes NII of $1.0 million and $1.0 million for the three months ended June 30, 2026 and 2025, respectively, related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees.

(4) Reflects reconciling adjustments for the reclassification to exclude expenses related to undesignated financial derivatives 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.

(5) Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.

Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings

For the Six Months Ended

June 30, 2026 June 30, 2025

(in thousands, except per share amounts)

Net income attributable to common stockholders $ 110,709 $ 93,155

Less reconciling items:

Losses on undesignated financial derivatives due to fair value changes (see Table 11)

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Gains on hedging activities due to fair value changes 1,251 3,808

Unrealized gains on trading securities

Unrealized gains/(losses) on trading securities 112 (56)

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value (1)

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Guarantee and commitment fees (3)

13,759 11,362

Total revenues 235,123 197,302

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See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information and Table 9 for a reconciliation of NII to NES.

(3) Includes NII of $0.9 million and $1.0 million for the three months ended March 31, 2026 and 2025, respectively, related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees.

(3) Includes NII of $2.0 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively, related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees.

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Reconciliation of GAAP Basic EPS to Core Earnings - Basic EPS

For the Three Months Ended

March 31, 2026 March 31, 2025

For the Three Months Ended For the Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

(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 11)

(0.06) (0.23)

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 11) 0.02 (0.06) (0.05) (0.29)

Gains on hedging activities due to fair value changes

Unrealized gains on trading securities

0.07 0.25 0.12 0.35

Unrealized gains/(losses) on trading securities 0.01 (0.01) 0.01 (0.01)

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — 0.01 0.01

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Reconciliation of GAAP Diluted EPS to Core Earnings - Diluted EPS

For the Three Months Ended

March 31, 2026 March 31, 2025

For the Three Months Ended For the Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

(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 11)

(0.06) (0.23)

Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 11) 0.02 (0.06) (0.05) (0.29)

Gains on hedging activities due to fair value changes

Unrealized gains on trading securities

0.07 0.25 0.11 0.35

Unrealized gains/(losses) on trading securities 0.01 (0.01) 0.01 (0.01)

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — 0.01 —

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Net Interest Income .

The following tables provide information about interest-earning assets and funding, composition of changes in NII due to rate and volume, and a reconciliation of NII to NES for the three months ended March 31, 2026 and 2025.

See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information about the differences between NII and NES.

See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information about differences between NII and NES.

Our interest-earning assets include:

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For the Three Months Ended

March 31, 2026 March 31, 2025

June 30, 2026 June 30, 2025

Balance Income/

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$ 38,043,992 $ 118,075 1.24 % $ 32,385,956 $ 96,797 1.20 %

For the Three Months Ended March 31, 2026

For the Six Months Ended

June 30, 2026 June 30, 2025

Balance Income/

Expense Average

Balance Income/

Expense Average

(dollars in thousands)

Interest-earning assets:

Liquidity investments

$ 8,206,291 $ 169,699 4.14 % $ 7,377,693 $ 172,293 4.67 %

Program Assets

28,841,080 696,522 4.83 % 24,670,846 608,143 4.93 %

Total interest-earning assets 37,047,371 866,221 4.68 % 32,048,539 780,436 4.87 %

Total interest-bearing liabilities

34,745,467 646,750 3.72 % 29,932,098 592,700 3.96 %

Net non-interest-bearing funding 2,301,904 — 2,116,441 —

Total funding 37,047,371 646,750 3.49 % 32,048,539 592,700 3.70 %

Net interest income/yield

$ 37,047,371 $ 219,471 1.18 % $ 32,048,539 $ 187,736 1.17 %

For the Six Months Ended June 30, 2026

Compared to Same Period in 2025

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$ 3,695 $ 28,040 $ 31,735

For the Three Months Ended

March 31, 2026 March 31, 2025

Dollars Yield Dollars Yield

For the Three Months Ended For the Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Dollars Yield Dollars Yield Dollars Yield Dollars Yield

(dollars in thousands)

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Net effective spread $ 117,438 1.26 % $ 93,893 1.19 % $ 219,437 1.21 % $ 183,883 1.18 %

See Note 9 — Business Segment s to the consolidated financial statements for more information about NII and NES from our business segments.

The $21.3 million and $23.5 million year-over-year increase in NII and NES, respectively, for the second quarter 2026 compared to the second quarter 2025 were largely driven by net new business volume in Renewable Energy and Farm & Ranch, in addition to the impact of collecting $7.4 million of default interest recognized in second quarter 2026.

The $31.7 million and $35.6 million year-over-year increase in NII and NES, respectively, for the six months ended June 30, 2026 compared to the same period in the prior year, were largely driven by net new business volume in Renewable Energy and Farm & Ranch, in addition to the impact of collecting $7.4 million of default interest recognized in second quarter 2026

See Note 9—Business Segments to the consolidated financial statements for more information about NII and NES from our business segments.

See MD&A—Supplemental Information for quarterly NES by line of business.

Provision for Allowance for Losses .

The following table summarizes the components of our total allowance for losses for the three month period ended March 31, 2026 and 2025:

For the Three Months Ended

As of March 31, 2026 As of March 31, 2025

The following table summarizes the components of our total allowance for losses for the three and six months ended June 30, 2026 and 2025:

For the Three Months Ended For the Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Allowance for Losses

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Provision for losses

7,017 7,713 11,325 9,397

(42) (2,840) (2,217) (2,840)

Recovery 246 40 246 123

Ending Balance $ 47,353 $ 30,350 $ 47,353 $ 30,350

Our allowance for loan loss increased $2.1 million from December 31, 2025 to March 31, 2026, primarily due to $4.3 million in provision expense offset by $2.2 million in charge-offs.

The $4.3 million provision to the allowance during the three months ended March 31, 2026 is primarily attributed to new volume growth across all of our segments and portfolio credit migration.

During the second quarter 2026, we recorded a $7.0 million net provision to the allowance, which is attributable to new volume growth and portfolio credit migration.

For additional information, see Note 4—Loans to the consolidated financial statements and MD&A—Risk Management—Credit Risk—Loans and Guarantees .

Gains/(losses) on financial derivatives .

The components of gains and losses on financial derivatives for the three months ended March 31, 2026 and 2025 are summarized in the following table:

For the Three Months Ended

March 31, 2026 March 31, 2025 $ %

The components of gains and losses on financial derivatives for the three and six months ended June 30, 2026 and 2025 are summarized in the following table:

For the Three Months Ended For the Six Months Ended

Change Change

June 30, 2026 June 30, 2025 $ % June 30, 2026 June 30, 2025 $ %

(dollars in thousands)

Losses on undesignated financial derivatives due to fair value changes

$ (679) $ (2,573) $ 1,894 (74) %

Gains/(losses) on undesignated financial derivatives due to fair value changes $ 184 $ (639) $ 823 (129) % $ (495) $ (3,212) $ 2,717 (85) %

Accrual of contractual payments 556 (208) 764 (367) % 1,525 110 1,415 1,286 %

Gains/(losses) due to terminations or net settlements

850 (381) 1,231 (323) %

(Losses)/gains due to terminations or net settlements (516) 927 (1,443) (156) % 334 546 (212) (39) %

Gains/(losses) on financial derivatives

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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)/gains due to terminations or net settlements" in the table above.

See Note 3—Financial Derivatives to the consolidated financial statements for more information about our financial derivatives.

Operating Expenses .

The following table summarizes components of operating expenses for the three months ended March 31, 2026 and 2025:

For the Three Months Ended

March 31, 2026 March 31, 2025 $ %

The following table summarizes components of operating expenses for the three and six months ended June 30, 2026 and 2025:

For the Three Months Ended For the Six Months Ended

Change Change

June 30, 2026 June 30, 2025 $ % June 30, 2026 June 30, 2025 $ %

(dollars in thousands)

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Total Operating Expenses $ 36,159 $ 29,490 $ 6,669 23 % $ 69,541 $ 59,000 $ 10,541 18 %

The year-over-year increase in compensation and employee benefits expenses for the three months ended March 31, 2026 was largely due to increased head count and increased bonus accruals associated with strong financial performance compared to targets in 2025 .

The year-over-year increase in general and administrative expenses for the three months ended March 31, 2026 was primarily attributable to transactional legal fees.

The year-over-year increase in compensation and employee benefits expenses for the three and six months ended June 30, 2026 was driven by increased head count, higher bonus accruals associated with strong financial performance, and the timing of compensation expense recognition within 2026 .

The year-over-year increase in general and administrative expenses for the three and six months ended June 30, 2026 was primarily attributable to higher consulting and licensing costs.

Income Tax Expense .

The following table presents income tax expense and the effective income tax rate for the three months ended March 31, 2026 and 2025:

For the Three Months Ended

March 31, 2026 March 31, 2025 $ %

The following table presents income tax expense and the effective income tax rate for the three and six months ended June 30, 2026 and 2025:

For the Three Months Ended For the Six Months Ended

Change Change

June 30, 2026 June 30, 2025 $ % June 30, 2026 June 30, 2025 $ %

(dollars in thousands)

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Effective tax rate 18.2 % 16.2 % 2.0 % 17.7 % 18.7 % (1.0) %

The year-over-year decrease in income tax expense and the effective tax rate for the three months ended March 31, 2026 was primarily attributable to increased purchases of renewable energy investment tax credits.

During the first quarter of 2026, we purchased $45.0 million of tax credits at prices ranging from approximately $0.91 to $0.93 per $1.00 of credit, resulting in a benefit of $4.2 million.

We did not purchase any tax credits during the first quarter of 2025.

The year-over-year increase in income tax expense for the three and six months ended June 30, 2026 was primarily attributable to increased taxable income in 2026.

The changes in our effective tax rate are impacted by the volume of purchases of renewable energy investment tax credits.

During the three and six months ended June 30, 2026, we purchased $21.4 million and $66.4 million, respectively, of tax credits at prices ranging from approximately $0.91 to $0.93 per $1.00 of credit, resulting in a benefit of $2.0 million and $6.3 million, respectively.

During both the three and six months ended June 30, 2025, we purchased $35.6 million in renewable energy investment tax credits at prices of approximately $0.91 per $1.00 of credit.

All of the renewable energy investment tax credits purchased are with projects that have been placed into service.

As a result of these purchases, we recognized a tax benefit of $3.2 million for both the three and six months ended June 30, 2025.

Business Volume .

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Outstanding Business Volume

As of March 31, 2026 As of December 31, 2025

As of June 30, 2026

As of December 31, 2025

(in thousands)

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Total $ 37,197,138 $ 33,351,569

The following table presents the net growth or decrease in our lines of business for the three months ended March 31, 2026 and 2025:

The following table presents the net growth or decrease in our lines of business for the three and six months ended June 30, 2026 and 2025:

Net New Business Volume

For the Three Months Ended

March 31, 2026 March 31, 2025

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

For the Three Months Ended For the Six Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

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

(in thousands)

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Total $ 2,351,084 $ 831,916 $ 3,845,569 $ 1,064,229

Our outstanding business volume was $34.8 billion as of March 31, 2026, a net increase of $1.5 billion from December 31, 2025.

The increase in outstanding business volume during the first quarter of 2026, was attributable to a $0.8 billion increase in the Agricultural Finance portfolio and a $0.7 billion increase in outstanding business volume in the Infrastructure Finance portfolio.

The increase in the Agricultural Finance portfolio during the first quarter of 2026 primarily consisted of a $0.7 billion increase in Farm & Ranch, largely due to net growth in Loans and AgVantage Securities.

Our outstanding business volume was $37.2 billion as of June 30, 2026, a net increase of $2.4 billion from March 31, 2026.

The increase in outstanding business volume during the second quarter of 2026, was attributable to a $1.8 billion increase in the Agricultural Finance portfolio and a $0.6 billion increase in the Infrastructure Finance portfolio.

The increase in the Agricultural Finance portfolio during the second quarter of 2026 primarily consisted of a $1.7 billion increase in Farm & Ranch, largely due to net growth in AgVantage Securities and Loans and other securities.

Volume in AgVantage Securities across both Farm & Ranch and Corporate AgFinance increased by $1.2 billion reflecting $1.5 billion in purchases, partially offset by $0.4 billion in repayment activity.

The increase in the Infrastructure Finance portfolio consisted of a $0.1 billion increase in Power & Utilities, a $0.2 billion increase in Broadband Infrastructure, and a $0.4 billion increase in Renewable Energy.

The Renewable Energy segment experienced strong growth in the first quarter of 2026 with Loans and unfunded commitments combining to add $0.8 billion in new volume, partially offset by scheduled maturity and repayment activity of $0.4 billion.

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 March 31, 2026:

Schedule of Principal Amortization as of March 31, 2026

The $0.6 billion increase in the Infrastructure Finance portfolio was comprised of a $0.3 billion increase in Power & Utilities, a $0.2 billion increase in Broadband Infrastructure, and a $0.1 billion increase in Renewable Energy.

The increase in Power & Utilities was largely attributable to the purchase of a $197.3 million pool of loans in that portfolio in June 2026.

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, 2026:

Schedule of Principal Amortization as of June 30, 2026

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 $ 18,619,095 $ 5,503,887 $ 2,698,950 $ 26,821,932

Of the $34.8 billion outstanding business volume as of March 31, 2026, $8.8 billion were AgVantage securities included in the Agricultural Finance and Infrastructure Finance lines of business.

Of the $37.2 billion outstanding business volume as of June 30, 2026, $9.9 billion were AgVantage Securities included in the Agricultural Finance and Infrastructure Finance lines of business.

Unlike business volume from our other products, 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.

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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 March 31, 2026:

AgVantage Balances by Year of Maturity

March 31, 2026

The following table summarizes by maturity date the outstanding principal amount of AgVantage Securities as of June 30, 2026:

AgVantage Security Balances by Year of Maturity

June 30, 2026

(in thousands)

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(1) Includes various maturities ranging from 2031 to 2055.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 5.6 years as of March 31, 2026.

The weighted-average remaining maturity of the outstanding AgVantage Securities shown in the table above was 5.7 years as of June 30, 2026.

Business Outlook

Products and Portfolio

We play a vital role in serving rural America by offering liquidity, capital, and risk management tools as a secondary market to help increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure.

We play a vital role in serving rural America by providing secondary market liquidity, capital, and risk management tools that expand access to financing for American agriculture and rural infrastructure.

Our growth trajectory is closely tied to the capital and liquidity needs of the lending institutions that serve agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors.

Several factors continue to influence our business volume growth dynamics.

Because the Farm & Ranch portfolio contains a significant share of legacy low‑rate loans, refinance incentives remain muted, keeping prepayment rates below historical norms.

Because the Farm & Ranch portfolio contains a significant share of legacy low‑rate loans, refinance incentives remain muted, keeping prepayment rates at or below historical norms.

Also, a tightening agricultural economy is creating the need for more 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 during first quarter 2026 and we anticipate this growth to persist throughout the rest of 2026.

We experienced an increase in wholesale finance volume during first quarter 2026, driven by financings drawn from numerous AgVantage facilities, including a large issuance from a facility put in place in late 2025.

The net effect of these forces contributed to strong Farm & Ranch loan purchase portfolio growth during second quarter of 2026 and we anticipate this growth to persist throughout the rest of 2026 .

Opportunities for future business volume growth include our potential role in alleviating liquidity, capital, and return-on-equity challenges faced by lenders.

In 2026, there has been an increase in Farm & Ranch business volume from capital-constrained lending institutions, highlighting the value our secondary market services bring to the industry.

We experienced an increase in wholesale finance volume during second quarter of 2026 , driven by financings drawn from numerous AgVantage facilities, including a large issuance from a facility put in place in late 2025 with a new counterparty.

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 our 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, along with the overall need for energy generation and transmission capacity for rural America, provided significant opportunities for Infrastructure Finance during first quarter 2026.

We expect these opportunities to persist for the remainder of the year.

Opportunities for profitable future business volume growth include our potential role in alleviating liquidity, capital, and return-on-equity challenges faced by agricultural and infrastructure lenders.

Our suite of products includes loan and loan portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, and risk-transfer financial securities.

Ongoing business and product development efforts continue to attract private lenders, institutional investors, and non-traditional originators, resulting in the diversification of our customer base and product set, which could potentially generate increased product demand from new sources.

Our expanded loan servicing capabilities enhance our loan portfolio purchase value proposition, adding new product offerings to an increasingly diverse customer base.

Growing relationships with larger agriculture lenders, industry consolidation, interest rate volatility, general market uncertainty, and financial institutions' increasing focus on capital efficiency and liquidity, are expected to continue to provide increased opportunities for our loan purchase, risk management, and wholesale funding solutions.

The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and infrastructure industries present further opportunities for our loan purchase products and other financing solutions.

Investments supporting consumer and food, fuel and fiber 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 and renewable energy projects.

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

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However, that expected overall improvement obscures a bifurcation across agricultural sectors.

Namely, crop producers face headwinds from tepid commodity prices and elevated input costs that have compressed margins, while livestock producers are expected to benefit again in 2026 from robust consumer and export demand and falling feed costs.

Shifts in the outlook for trade could have a meaningful impact on commodity prices and farm incomes.

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agricultural exports increasing modestly in 2026.

One notable development during first quarter 2026 was a global spike in energy prices due to recent events in the Middle East.

The spike in energy markets drove fuel and fertilizer prices higher ahead of the 2026 U.S.

growing season.

Some producers may have been financially insulated for this growing season, as it is common to contract for inputs before planting.

However, industry estimates vary regarding the proportion of growers who had purchased fuel and fertilizer ahead of the recent events in the Middle East, and the proportion of inputs procured in advance likely varies by geography and production type.

At the same time, higher energy prices have historically been supportive of commodity prices.

T he impact on prices has varied significantly across crop types, though, and may continue to do so.

All told, higher fuel and fertilizer prices might pressure margins this year if producers do not see a corresponding increase in the prices for commodities they grow.

Ultimately, the total financial impact on growers will likely be determined by the duration of the energy market disruption.

Global energy prices spiked in first quarter 2026 and remained volatile in second quarter 2026 due to events in the Middle East.

The disruption of Middle East energy flows corresponded with an increase in fuel, fertilizer, and many agricultural commodity prices.

Prices remained volatile for numerous agricultural inputs and commodities in the second quarter 2026 as a result of the market and supply chain disruptions.

Ultimately, agricultural profitability levels will likely be dependent on individual marketing and risk management plans throughout the growing season

A divergence in commodity prices between row crops and proteins combined with elevated input costs could lead to competing and compounding impacts on loan performance and agricultural credit demand.

Constraints on cash flow and additional market volatility could cause loan delinquencies to rise above historical averages, most likely in commodities experiencing negative market conditions, such as some

grains and permanent crops.

Cash flow constraints and heightened uncertainty can also 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%).

Farmland transaction data, like the USDA survey results, show weaker farmland sales prices in 2025.

The Farmer Mac Farmland Price Index Powered by AcreValue ® decreased 2% in fourth quarter 2025 relative to the same period in 2024.

Farmland transaction data show farmland sales prices moving higher in 2026.

The Farmer Mac Farmland Price Index Powered by AcreValue ® rose 6% in first quarter 2026 relative to the same period in 2025.

Basing this index on actual farmland transactions can lead to greater volatility, as many economic factors affecting land markets are highly localized and some markets may experience greater volatility in farmland values than state or national averages indicate.

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Some of the external market conditions that have affected, and could continue to adversely affect, the farm and food sectors in 2026 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions.

Another notable factor that emerged in second quarter 2026 was the detection of New World Screwworm (NWS) in a number of southern states.

NWS can have localized impacts on beef supply, as it can be fatal if left untreated, potentially leading to higher monitoring costs for producers in affected regions.

NWS cannot be transmitted through processed beef, which potentially mitigates the impact to overall demand for U.S.

beef, both domestically and from abroad.

Previous outbreaks of NWS in the U.S.

have been contained through the deployment of sterile NWS flies and other actions.

As such, the USDA is currently expanding sterile fly production to help eliminate NWS from the U.S.

Water availability is a perennial concern for many agricultural producers.

Drought conditions increased modestly in intensity and prevalence in first quarter 2026, largely across several southern, southwestern, and southeastern states.

Drought conditions increased modestly in intensity and prevalence in second quarter 2026, largely across several southern, southwestern, and southeastern states.

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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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.

The spike in energy prices in first quarter 2026 is also potentially supportive of biofuel margins.

A spike in energy prices in the first half of 2026 is also potentially supportive of biofuel margins.

However, the durability of elevated energy prices remains unclear and volatility remains elevated in both biofuel markets and the broader energy sector.

A large number of planned biofuel projects and new facilities for 2026 and 2027 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 into 2026.

Trade policy uncertainty, labor availability, changes to consumer demand due to health policy and pharmaceuticals (e.g., GLP-1 class drugs), and a high risk of global economic stress could pose challenges for these sectors into 2026.

Still, consumer spending held steady throughout 2024 and 2025, providing stable conditions for value-added food, feed, fiber, and biofuel consumption.

Consumer demand, particularly for animal protein products, is expected to provide a good tailwind for many food processors and agribusinesses in 2026.

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 clears up.

Consumer demand is expected to generate both tailwinds and headwinds for food processors and agribusinesses in 2026, as shifting preferences around nutrition, protein consumption, wellness, and discretionary spending continue to influence purchasing behavior and market opportunities.

Infrastructure Finance Industry Outlook

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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 2025, with an annual increase in sales of 1.5% and an increase in revenue of 7.3%, respectively, in the last 12 months through January 2026 compared to January 2025.

This increase was the result of higher residential and commercial electricity sales combined with a sizable increase in average prices paid for electricity relative to the previous year.

Electricity demand was consistently strong in 2025, and power producers are continuing to invest in more capacity to meet the rising demand from consumers and data centers.

Energy Information Administration, sales and the revenue from

the sale of electricity to customers continued climbing in 2026, with an annual increase in sales of 1.0% and an increase in revenue of 7.4%, respectively, in the last 12 months through April 2026 compared to April 2025.

This increase was the result of higher commercial electricity sales combined with a sizable increase in average prices paid for electricity relative to the previous year.

Electricity demand was consistently strong in 2025 and into 2026, and power producers are continuing to invest in more capacity to meet the rising demand from consumers and data centers.

Continued geopolitical uncertainty in the Middle East and Eastern Europe have led to higher energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices, as evidenced by higher retail electricity prices in 2025 and 2026.

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According to data from the U.S.

Energy Information Administration, renewable energy net generation grew by 38% in the last five years, compared to a non-renewable electricity net generation increase of 4%.

Energy Information Administration, renewable energy net generation grew by 52% in the last five years, compared to a 1% decline in non-renewable electricity net generation.

The volatile cost of fossil fuel-based inputs, combined with policy initiatives and the falling costs of renewable power generation, influenced this change in generation capacity.

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As these tax credits phase out, new power projects are still likely to be financed, but the marginal costs of electricity generation may be higher without subsidies.

Increased political and policy uncertainty and higher cost

structures could decrease the overall renewable power investment market growth velocity over the next five years.

Increased political and policy uncertainty and higher cost structures could decrease the overall renewable power investment market growth velocity over the next five years.

Wood Mackenzie estimates U.S.

solar installations dropped 14% in 2025 relative to the total gigawatts installed in 2024.

However, due to the substantial increase in demand for electricity and need for new power generation, we expect to continue to participate in renewable energy power project finance transactions for both new projects and refinancing opportunities of existing projects.

As of March 31, 2026, we have calculated approximately $30 million of remaining capacity to use renewable energy tax credits to carry back to the prior three years' federal corporate income tax liability.

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.

At the same time, Wood Mackenzie’s forecast for utility-scale solar deployments over the next decade in second quarter 2026 was nearly unchanged from the second quarter 2025 forecast.

This underscores expectations for a continued robust solar energy development in the U.S., even after accounting for the tax credit phaseout, in response to rising energy demand.

We expect to continue to participate in renewable energy power project finance transactions for both new projects and refinancing opportunities of existing projects.

As of June 30, 2026, we have utilized the majority of our remaining capacity to use renewable energy investment tax credits to carry back to the prior three years' federal corporate income tax liability, however, we will continue to pursue opportunities to purchase renewable energy investment tax credits to apply to the current tax year and future tax years to the extent possible.

We focus on purchasing renewable energy investment tax credits for projects in rural areas or associated with agriculture, such as credits

generated through the production of cleaner transportation fuels.

1's phase-outs of future renewable energy investment tax credits, projects eligible for renewable energy investment tax credits generally must be placed in service by December 31, 2027 unless construction begins by July 4, 2026.

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In addition to capital projects spurred by government-backed support programs, we could see an increase in financing opportunities for other telecommunications providers in rural areas.

For example, fiber line expansion, wireless broadband deployment, industry consolidation and efficiency through mergers and acquisitions, and data processing center buildouts are all increasingly important to rural economic opportunity, and the food and agriculture industries require constant connectivity.

For example, fiber line expansion, wireless broadband deployment, industry consolidation and efficiency through mergers and acquisitions, and data processing center build-outs are all increasingly important to rural economic opportunity, and the food and agriculture industries require constant connectivity.

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.

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The following table summarizes our balance sheet as of the periods indicated:

March 31, 2026 December 31, 2025 $ %

June 30, 2026 December 31, 2025 $ %

(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 decrease in equity was primarily driven by a decline in accumulated other comprehensive income, reflecting higher unrealized losses on available-for-sale securities during the period due to market conditions, partially offset by an increase in retained earnings.

The increase in total equity was primarily due to an increase of $96.8 million related to the

issuance of 4.0 million shares of 6.875% non-cumulative perpetual Series I preferred stock in addition to

an increase in retained earnings.

Risk Management

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Agricultural Finance - Direct Credit Exposure

Our direct credit exposure to Agricultural Finance mortgage loans as of March 31, 2026 was $14.4 billion across 48 states.

Our direct credit exposure to Agricultural Finance mortgage loans as of June 30, 2026 was $15.0 billion across 48 states.

When analyzing the credit quality of our Agricultural Finance mortgage loans, we consider the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio.

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The following table disaggregates the Agricultural Finance mortgage loans by portfolio segment and by internally assigned risk ratings.

As of March 31, 2026

As of June 30, 2026

Agricultural Finance mortgage loans by internally assigned risk rating

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$ 13,610,545 $ 779,498 $ 576,488 14,966,531

Agricultural Finance mortgage loans classified as substandard increased $98.2 million to $592.4 million, or 4.1% of the portfolio, as of March 31, 2026 from $494.2 million, or 3.5% of the portfolio, as of December 31, 2025.

The increase in substandard assets for Agricultural Finance loans was primarily driven by credit downgrades in crops and agricultural storage and processing sectors.

Agricultural Finance mortgage loans classified as substandard increased $82.3 million to $576.5 million, or 3.9% of the portfolio, as of June 30, 2026 from $494.2 million, or 3.5% of the portfolio, as of December 31, 2025.

The increase in substandard assets for Agricultural Finance loans was primarily driven by credit downgrades.

Our 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.

As of March 31, 2026, 90-day delinquencies on Agricultural Finance mortgage loans with direct credit exposure were $179.8 million, 1.25% of the portfolio, up slightly from $132.6 million, or 0.94% of the portfolio as of December 31, 2025.

The sequential 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.

As of June 30, 2026, 90-day delinquencies on Agricultural Finance mortgage loans with direct credit exposure were $139.1 million, or 0.93% of the portfolio, an improvement over the $179.8 million in 90-day delinquencies, or 1.25% of the portfolio, as of March 31, 2026.

The sequential fluctuations in quarter-end delinquency rates presented in the table below 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.

While delinquency rates are monitored as an early indicator of credit risk, management believes that the allowance for credit losses appropriately reflects current credit conditions in the portfolio, including the impact of collateral characteristics.

The following table presents historical information about our contractural 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which we have direct credit exposure:

The following table presents historical information about our contractual 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which we have direct credit exposure:

Agricultural Finance Mortgage Loans 90-Day

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(dollars in thousands)

June 30, 2026 $ 14,966,531 $ 139,128 0.93 %

March 31, 2026 14,385,557 179,817 1.25 %

$ 14,385,557 $ 179,817 1.25 %

December 31, 2025 14,045,056 132,550 0.94 %

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June 30, 2024 11,409,396 62,063 0.54 %

March 31, 2024 11,184,817 76,825 0.69 %

For Farm & Ranch loans, we consider a loan's original loan-to-value ("LTV") ratio as one of many factors in evaluating loss severity.

LTV depends on the market value of a property, as determined in accordance with our collateral valuation standards.

As of March 31, 2026 and December 31, 2025, the average unpaid principal balances for Farm & Ranch loans outstanding and to which we have direct credit exposure was $846,000 and $836,000, respectively.

As of June 30, 2026 and December 31, 2025, the average unpaid principal balances for Farm & Ranch loans outstanding and to which we have direct credit exposure was $859,000 and $836,000, respectively.

We calculate the "original LTV" ratio of a loan by dividing the original loan principal balance by the original appraised property value.

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The original LTV ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis.

The weighted-average original LTV ratio for Farm & Ranch mortgage loans purchased during first quarter 2026 was 52%, compared to 51% for loans purchased during first quarter 2025.

The weighted-average original LTV ratio for exposure related to on- and off-balance sheet Farm & Ranch mortgage loans was 52% as of both March 31, 2026 and December 31, 2025.

The weighted-average original LTV ratio for 90-day delinquencies for Farm & Ranch loans was 52% and 54% as of March 31, 2026 and December 31, 2025, respectively.

The weighted-average original LTV ratio for Farm & Ranch mortgage loans purchased during second quarter 2026 was 52%, compared to 51% for loans purchased during second quarter 2025.

The weighted-average original LTV ratio for exposure related to on- and off-balance sheet Farm & Ranch mortgage loans was 53% and 52% as of June 30, 2026 and December 31, 2025, respectively.

The weighted-average original LTV ratio for 90-day delinquencies for Farm & Ranch loans was 53% and 54% as of June 30, 2026 and December 31, 2025, respectively.

Analysis of portfolio performance indicates that commodity type is the primary determinant of our exposure to loss on a given loan.

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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 March 31, 2026

As of June 30, 2026

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 March 31, 2026

Agricultural Finance Mortgage Loans Cumulative Credit Losses by Origination Year and Commodity Type

As of June 30, 2026

Agricultural Finance Mortgage Loans Cumulative Credit Losses/(Recoveries) by Origination Year and Commodity Type

Crops Permanent

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Infrastructure Finance - Direct Credit Exposure

Our direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of March 31, 2026 was $8.6 billion across 45 states.

As of March 31, 2026 and December 31, 2025, there were no delinquencies in our Infrastructure F inance line of business.

Substandard assets within the Infrastructure Finance portfolio decreased to $58.9 million as of March 31, 2026 compared to $75.5 million as of December 31, 2025 due to a credit upgrade within the Renewable Energy portfolio.

Our direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of June 30, 2026 was $9.2 billion across 45 states.

As of June 30, 2026 and December 31, 2025, there were no delinquencies in our Infrastructure F inance line of business.

Substandard assets within the Infrastructure Finance portfolio decreased to $58.7 million as of June 30, 2026 compared to $75.5 million as of December 31, 2025 due to a credit upgrade within the Renewable Energy portfolio.

The following table disaggregates the Infrastructure Finance loans by portfolio segment and by internally assigned risk ratings:

As of March 31, 2026

As of June 30, 2026

Infrastructure Finance loans by internally assigned risk rating

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Therefore, we believe there is little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business.

As of March 31, 2026, we had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and do not expect to incur any such losses in the future.

As of June 30, 2026, we had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and do not expect to incur any such losses in the future.

Because we do not expect credit losses on this portfolio, we do not provide an allowance for losses on the USDA portfolio.

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• interest rate swap counterparties.

As of March 31, 2026, we have had no credit losses on AgVantage securities over the life of the program.

The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of March 31, 2026 and December 31, 2025:

As of March 31, 2026 As of December 31, 2025

As of June 30, 2026, we have had no credit losses on AgVantage Securities over the life of the program.

The following table provides information about the issuers of AgVantage Securities and the required collateralization levels for those transactions as of June 30, 2026 and December 31, 2025:

As of June 30, 2026 As of December 31, 2025

Counterparty Balance Required Collateralization Balance Required Collateralization

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Total outstanding $ 9,948,716 $ 8,428,131

(1) Consists of AgVantage securities issued by 10 and 9 different issuers as of March 31, 2026 and December 31, 2025, respectively.

(1) Consists of AgVantage Securities issued by 11 and 9 different issuers as of June 30, 2026 and December 31, 2025, respectively.

We require many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to our standards, the accuracy of provided loan data, and other requirements related to the loans.

During the three months ended March 31, 2026, there have been no breaches of representations and warranties by sellers requiring a selle r to cure, replace, or repurchase a loan.

During the six months ended June 30, 2026, there have been no breaches of representations and warranties by sellers requiring a selle r to cure, replace, or repurchase a loan.

We also contract with other institutions to undertake servicing responsibilities for a portion of our Agricultural Finance mortgage loans in accordance with our specified servicing requirements or accepted servicing standards established by the servicing institution.

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Credit Risk – Other Investments .

The management of the credit risk inherent in these investments is governed the Liquidity and Investment Regulations and our internal policies.

The management of the credit risk inherent in these investments is governed by the Liquidity and Investment Regulations and our internal policies.

The Liquidity and Investment Regulations and our internal policies establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor.

While the Liquidity and Investment Regulations limit our total credit exposure to any single entity, issuer, or obligor of securities to 10% of our regulatory capital ($177.4 million as of March 31, 2026), our current policy limit is 5% of our regulatory capital ($88.7 million as of March 31, 2026).

While the Liquidity and Investment Regulations limit our total credit exposure to any single entity, issuer, or obligor of securities to 10% of our regulatory capital ($192.3 million as of June 30, 2026), our current policy limit is 5% of our regulatory capital ($96.1 million as of June 30, 2026).

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

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Actual results may differ to the extent there are material changes to our financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes.

The following schedule summarizes our MVE and NES sensitivity analysis as of March 31, 2026 and December 31, 2025 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:

The following schedule summarizes our MVE and NES sensitivity analysis as of June 30, 2026 and December 31, 2025 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 March 31, 2026

As of December 31, 2025

Interest Rate Scenario As of June 30, 2026 As of December 31, 2025

+100 basis points (2.3) % (2.9) %

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Percentage Change in NES from Base Case

Interest Rate Scenario As of March 31, 2026 As of December 31, 2025

Interest Rate Scenario As of June 30, 2026 As of December 31, 2025

+100 basis points (0.4) % (1.3) %

-100 basis points 2.4 % 2.4 %

As of March 31, 2026, we reported a positive effective duration gap of 3.0 months, compared to positive 3.7 months as of December 31, 2025.

As of June 30, 2026, we reported a positive effective duration gap of 2.9 months, compared to positive 3.7 months as of December 31, 2025.

The yield curve increased in 2026, with yields on the 2‑year and 10‑year U.S.

Treasury notes rising by approximately 70 and 30 basis points, respectively.

These interest rate movements contributed to an extension of Farmer Mac’s liabilities, thereby narrowing the duration gap.

These interest rate movements contributed to an extension of our liabilities, thereby narrowing the duration gap.

Financial Derivatives Transactions

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We enter into interest rate swaps to more closely match the cash flow and duration characteristics of our interest-earning assets with those of our debt.

As of March 31, 2026, we had $26.5 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $11.7 billion were pay-fixed interest rate swaps, $14.5 billion were receive-fixed interest rate swaps, and $0.4 billion were basis swaps.

As of June 30, 2026, we had $28.7 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $12.6 billion were pay-fixed interest rate swaps, $15.8 billion were receive-fixed interest rate swaps, and $0.3 billion were basis swaps.

Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as AFS or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g.

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All of our interest rate swap transactions are conducted under standard collateralized agreements that limit our potential credit exposure to any counterparty.

As of both March 31, 2026 and December 31, 2025, we had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.

As of both June 30, 2026 and December 31, 2025, we had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.

Re-funding and repricing risk

2 unchanged sentences

Changes in our funding costs relative to the asset's benchmark market index rate can cause changes to NII when debt matures and is reissued at then-current interest rates to continue funding those assets.

As of March 31, 2026, we held $9.4 billion of floating rate assets in our lines of business and our investment portfolio that reset based on floating rate market indices, such as SOFR.

As of March 31, 2026, we had $11.7 billion of pay-fixed interest rate swaps outstanding.

As of June 30, 2026, we held $10.2 billion of floating rate assets in our lines of business and our investment portfolio that reset based on floating rate market indices, such as SOFR.

As of June 30, 2026, we had $12.6 billion of pay-fixed interest rate swaps outstanding.

Liquidity and Capital Resources

We regularly access the debt capital markets for funding, and we maintained steady access to the debt capital markets through the first quarter of 2026 and throughout 2025.

As of March 31, 2026, we had outstanding discount notes of $2.1 billion, medium-term notes that mature within one year of $9.4 billion, and medium-term notes that mature after one year of $20.8 billion.

We regularly access the debt capital markets for funding, and we maintained steady access to the debt capital markets through the second quarter of 2026 and throughout 2025.

Assuming continued access to the debt capital markets, we believe we have sufficient liquidity and capital resources to support our operations for the next 12 months and for the foreseeable future.

We have a contingency funding plan to manage unanticipated disruptions in our access to the debt capital markets, which requires us to 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, we maintained a monthly average of 301 days of liquidity in the first quarter of 2026 and had 296 days of liquidity as of March 31, 2026.

The following table presents our liquidity investments as of March 31, 2026 and December 31, 2025:

As of March 31, 2026 As of December 31, 2025

In accordance with the methodology for calculating available days of liquidity under those regulations, we maintained a monthly average of 282 days of liquidity in the second quarter of 2026 and had 264 days of liquidity as of June 30, 2026.

The following table presents our liquidity investments as of June 30, 2026 and December 31, 2025:

As of June 30, 2026 As of December 31, 2025

(in thousands)

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Total $ 8,161,357 $ 7,780,889

The objectives of the liquidity investment portfolio as of March 31, 2026 and December 31, 2025 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 liquidity investment portfolio as of June 30, 2026 and December 31, 2025 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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We must comply with the higher of the minimum capital requirement and the risk-based capital requirement.

As of March 31, 2026, we were in compliance with our statutory capital requirements and were classified within "level 1" (the highest compliance level).

March 31, 2026 December 31, 2025

As of June 30, 2026, we were in compliance with our statutory capital requirements and were classified within "level 1" (the highest compliance level).

June 30, 2026 December 31, 2025

(in thousands)

1 unchanged sentence

Capital in excess of minimum capital level required 730,689 677,695

The capital in excess of the minimum capital level required decreased from December 31, 2025 to March 31, 2026 primarily reflecting increased capital requirements associated with growth in on‑balance sheet assets.

As earnings do not yet reflect a full‑period contribution of the growth in on-balance assets, the increase in the minimum capital requirements exceeded the increase in capital resulting in a decrease in the capital in excess of minimum required cap ital and were further reduced by the impact of share repurchases completed during the period.

The capital in excess of the minimum capital level required increased from December 31, 2025 to June 30, 2026 primarily reflecting increased equity due to the issuance of preferred stock and net income generated during the period.

This increase was partially offset by the capital impact due to growth in on‑balance sheet assets.

In accordance with the FCA's rule on capital planning, our 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 March 31, 2026 and December 31, 2025, our Tier 1 capital ratio was 13.0% and 13.3%, respectively.

As of March 31, 2026, we were in compliance with the capital adequacy policy.

We do not expect ongoing compliance with FCA's rule on capital planning, including our policy on Tier 1 capital, to materially affect our operations or financial condition.

As of June 30, 2026 and December 31, 2025, our Tier 1 capital ratio was 13.2% and 13.3%, respectively.

As of June 30, 2026, we were in compliance with the capital adequacy policy.

We expect to continue complying with the FCA's capital planning requirements, including our Tier 1 capital policy, and do not expect such compliance to have a material effect on our operations or financial condition.

See Note 7—Equity to the consolidated financial statements for more information about our capital position.

4 unchanged sentences

Agricultural Finance Infrastructure Finance

Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total

Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total

(in thousands)

For the quarter ended:

June 30, 2026 $ 2,509,370 $ 191,248 $ 368,836 $ 415,577 $ 564,851 $ 4,049,882

March 31, 2026 1,710,467 368,345 204,675 367,560 788,665 3,439,712

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June 30, 2024 698,787 288,740 132,958 102,075 271,890 1,494,450

March 31, 2024 665,916 290,525 113,545 2,250 347,898 1,420,134

For the year ended:

3 unchanged sentences

Agricultural Finance Infrastructure Finance

Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total

Ranch Corporate

AgFinance Power & Utilities Broadband

Infrastructure Renewable

(in thousands)

2 unchanged sentences

Unscheduled 248,374 56,184 51,114 — — 355,672

June 30, 2026 $ 746,889 $ 161,040 $ 77,830 $ 253,823 $ 444,605 $ 1,684,187

Scheduled $ 720,792 $ 153,348 $ 50,998 $ 209,618 $ 344,187 $ 1,478,943

Unscheduled 297,604 113,224 38,667 — — 449,495

March 31, 2026 $ 1,018,396 $ 266,572 $ 89,665 $ 209,618 $ 344,187 $ 1,928,438

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June 30, 2024 $ 1,095,067 $ 231,141 $ 95,221 $ 16,062 $ 138,725 $ 1,576,216

Scheduled $ 402,088 $ 118,885 $ 90,096 $ 36,218 $ 93,112 $ 740,399

Unscheduled 150,903 99,325 32,481 — — 282,709

March 31, 2024 $ 552,991 $ 218,210 $ 122,577 $ 36,218 $ 93,112 $ 1,023,108

For the year ended:

7 unchanged sentences

Agricultural Finance Infrastructure Finance

Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total

Ranch Corporate

AgFinance Power & Utilities Broadband

Infrastructure Renewable

(in thousands)

June 30, 2026 $ 21,987,822 $ 2,082,762 $ 8,266,639 $ 1,851,902 $ 3,008,013 $ 37,197,138

March 31, 2026 20,240,198 2,052,309 7,975,632 1,690,148 2,887,767 34,846,054

6 unchanged sentences

June 30, 2024 18,504,501 1,816,893 7,008,276 553,197 875,472 28,758,339

March 31, 2024 18,900,906 1,766,294 6,970,537 467,186 742,307 28,847,230

On-Balance Sheet Outstanding Business Volume

1 unchanged sentence

(in thousands)

June 30, 2026 $ 15,897,521 $ 3,839,002 $ 11,434,387 $ 31,170,910

March 31, 2026 14,822,103 3,693,296 10,428,336 28,943,735

6 unchanged sentences

June 30, 2024 14,064,831 3,273,764 6,850,137 24,188,732

March 31, 2024 14,166,500 3,194,246 6,849,237 24,209,983

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of March 31, 2026 by year of origination, geographic region, commodity/collateral type, original LTV ratio, and range in the size of borrower exposure:

Agricultural Finance Mortgage Loans 90-Day Delinquencies as of March 31, 2026

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of June 30, 2026 by year of origination, geographic region, commodity/collateral type, original LTV ratio, and range in the size of borrower exposure:

Agricultural Finance Mortgage Loans 90-Day Delinquencies as of June 30, 2026

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

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2025 16 % 2,452,544 4,974 0.20 %

2026 11 % 1,592,553 1,430 0.09 %

Total 100 % $ 14,966,531 $ 139,128 0.93 %

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Total 100 % $ 14,966,531 $ 139,128 0.93 %

By original LTV ratio:

By original loan-to-value ratio:

Less than 40.00% 16 % $ 2,440,295 $ 10,520 0.43 %

23 unchanged sentences

(4) Includes aggregated loans to single borrowers or borrower-related entities.

The following table presents our cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of March 31, 2026 by year of origination, geographic region, and commodity/collateral type.

The following table presents our cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of June 30, 2026 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 Agricultural Finance purchases, guarantees, and commitments.

Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative

Original Loans, Guarantees, and LTSPCs as of March 31, 2026

Original Loans, Guarantees, and LTSPCs as of June 30, 2026

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

39 unchanged sentences

Agricultural Finance Infrastructure Finance Treasury

Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments Net Effective Spread

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

Yield Dollars

4 unchanged sentences

Yield Dollars

(dollars in thousands)

For the quarter ended:

June 30, 2026 $ 40,063 $ 16,769 $ 6,962 $ 6,578 $ 10,773 $ 35,229 $ 1,064 $ 117,438

1.01 % 3.76 % 0.36 % 2.30 % 1.72 % 0.38 % 0.05 % 1.26 %

March 31, 2026 37,673 8,939 6,491 5,828 9,079 32,647 1,342 101,999

2 unchanged sentences

1.06 % 2.07 % 0.34 % 2.42 % 1.74 % 0.41 % 0.11 % 1.22 %

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

6 unchanged sentences

0.96 % 1.95 % 0.32 % 2.34 % 1.76 % 0.42 % 0.15 % 1.16 %

September 30, 2024 35,755 6,397 4,785 2,794 3,810 30,912 943 85,396

2 unchanged sentences

0.98 % 1.91 % 0.32 % 2.16 % 1.86 % 0.41 % 0.04 % 1.14 %

March 31, 2024 32,843 7,971 4,890 2,342 2,049 32,474 475 83,044

0.95 % 2.05 % 0.30 % 2.08 % 1.75 % 0.45 % 0.03 % 1.14 %

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

Core Earnings by Quarter End

March 2026 December 2025 September 2025 June 2025 March 2025 December 2024 September 2024 June 2024 March 2024

(in thousands)

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

Core Earnings by Quarter Ended

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

Net effective spread $ 117,438 $ 101,999 $ 101,389 $ 97,769 $ 93,893 $ 89,990 $ 87,528 $ 85,396 $ 83,596

5 unchanged sentences

Other credit related expense/(income)

352 889 1,267 (44) 160 (33) 99 26 51

Total credit related expense/(income) 7,369 5,197 17,253 7,433 7,873 1651 3872 3454 6,230

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Reconciling items:

(Losses)/gains on undesignated financial derivatives due to fair value changes $ (679) $ 447 $ 882 $ (639) $ (2,573) $ 3,084 $ (1,064) $ (359) $ 1,683

Gains/(losses) on undesignated financial derivatives due to fair value changes $ 184 $ (679) $ 447 $ 882 $ (639) $ (2,573) $ 3,084 $ (1,064) $ (359)

Gains/(losses) on hedging activities due to fair value changes

889 362 3,107 (137) 2,709 1,099 5,737 205 2,604

Unrealized gains/(losses) on trading assets

59 53 (66) (4) (65) 9 (83) 99 (87)

Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 26 44 24 26 25 28 (39) 27 26

4 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