What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-07-31 compared with 2025-08-05 · 314 added, 330 removed, 1702 unchanged (27% of the section changed)

51 unchanged sentences

The colle ctive ACL includes the measure of expected credit losses on a collective (pool) basis for those loans that share similar risk characteristics.

The Company estimates the collective ACL using a probability of default (PD) and loss given default (LGD) methodology.

The Company segments its loan portfolio into pools based on member-borrower type, which is

based on the utility sector of the borrower, and further by internal borrower risk ratings.

The Company estimates the collective ACL using a probability of default (PD) and loss given default

(LGD) methodology.

The Company segments its loan portfolio into pools based on member-borrower type, which is based on the utility sector of the borrower, and further by internal borrower risk ratings.

The Company then applies loss factors, consisting of the PD and LGD, to the scheduled loan-level amortization amounts over the life of the loans.

19 unchanged sentences

We have served as the Company’s auditor since 2013.

McLean, Virginia

August 5, 2025

Baltimore, Maryland

July 31, 2026

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

5 unchanged sentences

Net interest income 301,766 260,954 254,263

Benefit (provision) for credit losses 8,111 5,516 ( 603 )

Net interest income after benefit (provision) for credit losses 269,065 259,779 314,618

Benefit for credit losses 10,362 8,111 5,516

Net interest income after benefit for credit losses 312,128 269,065 259,779

Non-interest income:

3 unchanged sentences

82,166 ( 5,851 ) 392,037

Investment securities gains (losses)

5,674 10,772 ( 4,974 )

Investment securities gains 1,128 5,674 10,772

Total non-interest income 112,013 23,420 425,601

22 unchanged sentences

Defined benefit plan adjustments 337 ( 468 ) ( 1,944 )

Other comprehensive income (loss)

( 820 ) ( 9,759 ) 6,085

Other comprehensive loss ( 133 ) ( 820 ) ( 9,759 )

Total comprehensive income 262,603 139,194 544,557

58 unchanged sentences

Net income 1,100 60,599 228,059 263,591 553,349 — 553,349 967 554,316

Other comprehensive income — — — — — 6,085 6,085 — 6,085

Other comprehensive loss — — — — — ( 9,759 ) ( 9,759 ) — ( 9,759 )

Patronage capital retirement — ( 138,482 ) 25,353 — ( 113,129 ) — ( 113,129 ) — ( 113,129 )

1 unchanged sentence

Balance as of May 31, 2024 $ 3,576 $ 928,232 $ 1,455,564 $ 605,506 $ 2,992,878 $ ( 1,416 ) $ 2,991,462 $ 20,707 $ 3,012,169

Net income 1,100 60,599 228,059 263,591 553,349 — 553,349 967 554,316

Net income (loss) 1,100 67,140 176,045 ( 104,552 ) 139,733 — 139,733 281 140,014

Other comprehensive loss

3 unchanged sentences

Balance as of May 31, 2025 $ 3,624 $ 948,526 $ 1,631,609 $ 500,954 $ 3,084,713 $ ( 2,236 ) $ 3,082,477 $ 20,989 $ 3,103,466

Net income (loss)

1,100 67,140 176,045 ( 104,552 ) 139,733 — 139,733 281 140,014

Net income 1,100 71,517 171,739 17,756 262,112 — 262,112 624 262,736

Other comprehensive loss

12 unchanged sentences

Amortization of deferred loan fees ( 2,629 ) ( 2,978 ) ( 6,463 )

Amortization of debt issuance costs and discount 33,862 29,827 28,744

Amortization of guarantee fee 19,584 20,679 19,300

Amortization of debt issuance costs and discounts 36,273 33,862 29,827

Amortization of guarantee fees 18,503 19,584 20,679

Depreciation and amortization 13,966 12,615 10,469

Provision (benefit) for credit losses ( 8,111 ) ( 5,516 ) 603

Unrealized (gains) losses on equity and debt securities ( 8,241 ) ( 16,461 ) 1,090

Benefit for credit losses ( 10,362 ) ( 8,111 ) ( 5,516 )

Unrealized gains on equity and debt securities ( 1,006 ) ( 8,241 ) ( 16,461 )

Derivative forward value (gains) losses

11 unchanged sentences

Investments in fixed assets, net ( 1,763 ) ( 4,697 ) ( 6,154 )

Purchases of trading securities

— — ( 117,288 )

Proceeds from sales and maturities of trading securities

1 unchanged sentence

Proceeds from redemption of equity securities

Principal payments received under sales-type leases 968 574 167

Cash impact of VIE deconsolidation — — ( 10,341 )

20 unchanged sentences

( 52,978 ) ( 46,846 ) ( 110,202 )

Repayments for membership fees, net

Additions (repayments) for membership fees, net 4 — ( 436 )

Repayment of finance leases ( 972 ) ( 576 ) ( 167 )

Net cash provided by financing activities 1,078,558 1,969,037 1,579,093

10 unchanged sentences

Cash paid for income taxes 771 680 578

Noncash financing and investing activities:

Equity investment, at cost, obtained in exchange for loan held for investment $ — $ — $ 7,778

Noncash investing and financing activities:

Finance lease ROU assets obtained in exchange for lease obligations $ 1,107 $ 4,870 $ 2,575

Recognition of net investment in lease through exchange of lease ROU assets 1,107 4,870 2,575

Derecognition of lease ROU assets ( 1,107 ) ( 4,870 ) ( 2,575 )

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

7 unchanged sentences

As a cooperative, CFC is owned by and exclusively serves its membership, which consists of not-for-profit entities or subsidiaries or affiliates of not-for-profit entities.

National Cooperative Services Corporation (“NCSC”) is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association.

National Cooperative Services Corporation (“NCSC”), doing business as Utility Capital Solutions, is a taxable cooperative incorporated in 1981 in the District of Columbia as a member-owned cooperative association.

NCSC’s principal purpose is to provide financing to its members and associates, which consists of two classes:

7 unchanged sentences

Cooperative Securities LLC (“Cooperative Securities”) is a limited liability company organized and incorporated in 2021 in Delaware and a wholly owned subsidiary of NCSC.

Cooperative Securities is a broker-dealer registered with the U.S.

Securities and Exchange Commission (“SEC”), and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

Cooperative Securities is a broker-dealer registered with the United States Securities and Exchange Commission (“SEC”), and is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation.

Cooperative Securities provides institutional debt placement services, which may include advising, arranging and structuring private debt financing transactions, for NCSC’s members, and for-profit and not-for-profit entities that are owned, operated or controlled by, or provide a significant benefit to, certain rural utility providers.

6 unchanged sentences

While management makes its best judgments, actual amounts or results could differ from these estimates.

Certain reclassifications and updates have been made to the presentation of information in prior periods to conform to the current-period presentation.

Certain reclassifications have been made to the presentation of information in prior periods to conform to the current-period presentation.

These reclassifications had no effect on prior years’ net income (loss) or equity.

16 unchanged sentences

NCSC meets the definition of a VIE because it does not have sufficient equity investment at risk to finance its activities without additional financial support.

We consolidate the results of NCSC with CFC because CFC is the primary beneficiary holder.

Prior to December 1, 2023, Rural Telephone Finance Cooperative (“RTFC”) qualified as a VIE that was required to be consolidated by CFC.

RTFC was a taxable Subchapter T cooperative association that provided financing for its rural telecommunications members and their affiliates.

Subsequent to December 1, 2023, in connection with the sale of RTFC’s business to NCSC, as discussed under “RTFC Sale Transaction” in “Note 1—Summary of Significant Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (“2024 Form 10-K”), CFC is no longer a primary beneficiary of RTFC and therefore did not consolidate RTFC after this date in its consolidated financial statements.

We consolidate the results of NCSC with CFC because CFC is the primary beneficiary.

Cash and Cash Equivalents

1 unchanged sentence

Restricted Cash

Restricted cash, which consists primarily of member funds held in escrow for certain specifically designed cooperative programs, totaled $ 8 million as of both May 31, 2025 and 2024.

Restricted cash, which consists primarily of member funds held in escrow for certain specifically designed cooperative programs , totaled $ 9 million and $ 8 million as of May 31, 2026 and 2025, respectively.

Investment Securities

6 unchanged sentences

Interest income is generally recognized over the contractual life of the securities based on the effective yield method.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans to Members

1 unchanged sentence

Loans that we have the ability and intent to hold for the foreseeable future are classified as held for investment a nd are reported based on the unpaid principal balance, net of principal charge-offs, and deferred loan origination costs.

Loans that we intend to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale and are recorded at the lower of cost or fair value.

Loans that we intend to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale and are recorded at the lower of

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

cost or fair value.

These loan sales are made at par value, concurrently or within a short period of time with the closing of the loan or participation agreement.

5 unchanged sentences

Interest Income

Interest income on performing loans is accrued and recognized as interest income based on the contractual rate of interest.

Interest income is accrued and recognized based on the contractual rate of interest.

Deferred loan origination costs are amortized using the straight-line method, which approximates the effective interest method into interest income over the life of the loan.

2 unchanged sentences

Cooperative Securities is compensated through a placement agent fee for private placement of securities, which is recognized as an income at a point in time when the performance obligation is satisfied, typically the closing of the sale of securities of the nonpublic companies.

We recognized an immaterial amount of private placement fee income during FY2025 and FY2024, which was included in fee and other income in our consolidated statements of operations.

Cooperative Securities had not served as a placement agent for any transactions and accordingly had no placement agent fee income recognized during FY2023 .

We recognized an immaterial amount of private placement fee income during FY2026, FY2025 and FY2024, which was included in fee and other income in our consolidated statements of operations.

Loan Modifications to Borrowers Experiencing Financial Difficulty

2 unchanged sentences

As modifications offered to borrowers experiencing financial difficulty are typically not at market terms, such modifications are generally accounted for as a continuation of the existing loan.

As discussed below under “Allowance for Credit Losses—Loan Portfolio—Asset-Specific Allowance,” loans modified to troubled borrowers are evaluated on an individual basis in estimating expected credit losses.

Similarly, credit losses for anticipated modification to troubled borrowers are identified when there is a reasonable expectation that a modification will be executed and when we expect the modification to affect the timing or amount of payments and/or the payment term.

As discussed below under “Allowance for Credit Losses—Loan Portfolio—Asset-Specific Allowance,” loans modified to borrowers experiencing financial difficulty are evaluated on an individual basis in estimating expected credit losses.

If a loan is current at the time of modification, it may remain on accrual status and its performance is monitored for 12 months following the modification.

If the borrower fails to perform under the modified terms and applicable nonaccrual criteria are met, the loan is placed on nonaccrual status, although in many cases such loans were already on nonaccrual status prior to modification.

The accrual of interest on these loans may be resumed, if the borrower performs under the modified terms and we expect the borrower to continue to perform in accordance with the modified terms.

Loans on Nonaccrual Status

We place a loan on nonaccrual status when:

(i) interest or principal payments on the loan are 90 days or more past due, unless management concludes, based on the borrower's financial condition and other relevant facts, that all contractual principal and interest remain fully collectible;

(ii) management determines that collection of interest or principal in

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We generally classify loans modified with borrowers experiencing financial difficulty as nonperforming and place the loan on nonaccrual status, although in many cases such loans were already classified as nonperforming prior to modification.

These loans may be returned to performing status, and the accrual of interest resumed, if the borrower performs under the modified terms for an extended period of time, and we expect the borrower to continue to perform in accordance with the modified terms.

In certain limited circumstances in which such loan is current at the modification date, the loan may remain on accrual status at the time of modification.

Nonperforming Loans

We classify loans as nonperforming when contractual principal or interest is 90 days past due or when we believe the collection of principal and interest in full is not reasonably assured.

When a loan is classified as nonperforming, we generally place the loan on nonaccrual status.

Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against current-period interest income.

accordance with the contractual terms is not reasonably assured;

(iii) the borrower has filed for bankruptcy or legal action has been initiated;

or (iv) the loan is in foreclosure or other legal proceedings.

A loan is not placed on nonaccrual status solely because it has passed its contractual maturity date where the loan is in the process of renewal or extension, the delay is administrative or attributable to factors other than borrower credit deterioration, and management concludes that collection of all contractual principal and interest is not in doubt.

Interest accrued but not collected at the date a loan is placed on nonaccrual status is reversed against earnings.

Interest income on nonaccrual loans is subsequently recognized only upon the receipt of cash payments.

However, if we believe the ultimate collectability of the loan principal is in doubt, cash received is applied against the principal balance of the loan.

Nonaccrual loans generally are returned to accrual status when principal and interest becomes and remains current for a specified period and repayment of the remaining contractual principal and interest is reasonably assured.

Nonaccrual loans are generally returned to accrual status when the principal and interest have become current;

and when repayment of the remaining contractual principal and interest is reasonably assured.

We charge off loans or a portion of a loan when we determine that the loan is uncollectible.

16 unchanged sentences

unemployment rates or gross domestic product (“GDP”) growth, we have not made adjustments to our historical loss rates for any economic forecast.

We consider the need, however, to adjust our historical loss information for differences in the specific characteristics of our existing loan portfolio based on an evaluation of relative

We consider the need, however, to adjust our historical loss information for differences in the specific characteristics of our existing loan portfolio based on an evaluation of relative qualitative factors, such as differences in the composition of our loan portfolio, our underwriting standards, problem loan trends, the quality of our credit review function, as well as changes in the regulatory environment and other pertinent external factors that may impact the amount of future credit losses.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

qualitative factors, such as differences in the composition of our loan portfolio, our underwriting standards, problem loan trends, the quality of our credit review function, as well as changes in the regulatory environment and other pertinent external factors that may impact the amount of future credit losses.

Collective Allowance

9 unchanged sentences

We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on consideration of a number of quantitative and qualitative factors.

During FY2026 , we enhanced our borrower risk rating methodology to increase the weighting of quantitative factors and to refine the qualitative factors framework, resulting in improved consistency and comparability of borrower credit risk assessments across portfolios, while maintaining alignment with evolving industry practices and internal credit risk assessment objectives.

Each risk rating is reassessed annually following receipt of the borrower’s audited financial statements;

17 unchanged sentences

Asset-Specific Allowance

We generally consider nonperforming loans as well as loans that have been modified to borrowers experiencing financial difficulty for individual evaluation given the risk characteristics of such loans.

Factors we consider in measuring the extent of expected credit loss include the payment status, the collateral value, the borrower’s financial condition, guarantor support, the probability of collecting scheduled principal and interest payments when due, anticipated modifications of payment structure or term for troubled borrowers, and recoveries if they can be reasonably estimated.

We generally consider nonaccrual loans as well as loans that have been modified to borrowers experiencing financial difficulty for individual evaluation given the risk characteristics of such loans.

We generally measure the expected credit loss as the difference between the amortized cost basis in the loan and the present value of the expected future cash flows from the borrower, which is generally discounted at the loan’s effective interest rate, or the fair value of the collateral, if the loan is collateral dependent.

17 unchanged sentences

At the inception date of the head lease agreements, NCSC also entered into sublease agreements (“sublease agreements”) to sublease these vehicles to its members.

Both the head lease and sublease agreements provide customers the option to terminate the lease by buying the vehicle for a terminal rental adjustment clause (“TRAC”) value at the end of the lease term.

In addition, these agreements include a residual value deficiency provision in the event the customer does not purchase the vehicle at the end of the lease.

The head lease and

Both the head lease and sublease agreements provide our members the option to terminate the lease by buying the vehicle for a terminal rental adjustment clause value at the end of the lease term.

In addition, these agreements include a residual value deficiency provision in the event the member does not purchase the vehicle at the end of the lease.

The head lease and sublease have the same lease term ranging from three to 10 years .

We classified the head leases as finance leases and subleases as sales-type leases.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

sublease have the same lease term ranging from three to 10 years .

We classified the head leases as finance leases and subleases as sales-type leases.

Lessee Arrangements

5 unchanged sentences

Variable lease costs for head leases, including property and sales taxes, are recognized as lease expenses when incurred, and are included in the other non-interest expense line item in the consolidated statements of operations.

Total finance lease liability w as $ 7 million and $ 3 million as of May 31, 2025 and 2024, respectively.

Total finance lease liability w as $ 7 million as of both May 31, 2026 and 2025.

Interest expenses and variable lease cost from the finance leases were not mater ial for FY2026, FY2025 and FY2024.

3 unchanged sentences

Variable lease payments, including property and sales tax payments reimbursed by the subleasee, are included in fee and other income in the consolidated statements of operations.

Total net investment in leases was $ 7 million and $ 3 million as of May 31, 2025 and 2024, respectively.

Total net investment in leases was $ 7 million as of both May 31, 2026 and 2025.

Interest income and variable lease payment income from the sales -type leases were not material for FY2026, FY2025 and FY2024.

6 unchanged sentences

Our headquarters facility in Loudoun County, Virginia, which is owned by CFC, is included as a component of building and building equipment.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands) 2026 2025

9 unchanged sentences

Fixed assets, net $ 75,619 $ 81,667

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cloud Computing Arrangements — Implementation Costs

7 unchanged sentences

We recognized amortization exp ense of $ 6 million, $ 5 million and $ 3 million in FY2026, FY2025 and FY2024, respectively, for the capitalized implementation costs for cloud computing service contracts.

Securities Sold Under Repurchase Agreements

We enter into repurchase agreements to sell investment securities.

These transactions are accounted for as collateralized financing transactions and are recorded on our consolidated balance sheets as part of short-term borrowings at the amounts at which the securities were sold.

We had no securities sold under repurchase agreements outstanding as of May 31, 2025 and 2024.

We report debt at cost net of unamortized issuance costs and discounts or premiums.

Issuance costs, discounts and premiums are deferred and amortized into interest expense using the effective interest method or a method approximating the effective interest method over the legal maturity of each bond issue.

Short-term borrowings consist of borrowings with an original

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contractual maturity of one year or less and do not include the current portion of long-term debt.

Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt.

Borrowings with an original contractual maturity of greater than one year are classified as long-term debt.

10 unchanged sentences

If we elect hedge accounting treatment for derivatives, we formally document, designate and assess the effectiveness of t he hedge relationship.

Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) to earnings using the effective interest method over the term of the forecasted transaction.

Changes in the fair value of derivatives designated as qualifying cash flow hedges are recorded as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) into earnings in the same period or periods in which the hedged transaction affects earnings.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We generally do not designate interest rate swaps, which represent the substantial majority of our derivatives, for hedge accounting.

2 unchanged sentences

We typically designate treasury rate locks as cash flow hedges of forecasted debt issuances or repricings.

Changes in the fair value of treasury locks designated as cash flow hedges are recorded as a component of OCI an d reclassified from AOCI into interest expense when the forecasted transaction occurs.

Guarantee Liability

We maintain a guarantee liability that represents our contingent and noncontingent exposure related to guarantees and standby liquidity obligations associated with our members’ debt.

The guarantee liability is included in the other liabilities line item on the consolidated balance sheet, and the provision for guarantee liability is reported in non-interest expense as a separate line item on the consolidated statement of operations.

The contingent portion of the guarantee liability represents management’s estimate of our exposure to losses within the guarantee portfolio.

4 unchanged sentences

The fees are deferred and amortized using the straight-line method into fee and other income over the term of the guarantee.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Valuation Processes

3 unchanged sentences

Fair value estimates were developed at the reporting date and may not necessarily be indicative of amounts that could ultimately be realized in a market transaction at a future date.

With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early-termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity, excluding common stock and preferred stock investments that have no stated maturity and our trading debt securities.

With the exception of redeeming debt under early redemption provisions, terminating derivative instruments under early-termination provisions and allowing borrowers to prepay their loans, we held and intend to hold all financial instruments to maturity, excluding common stock investments that have no stated maturity and our trading debt securities.

Fair Value Hierarchy

8 unchanged sentences

When quoted prices and observable data in active markets are not fully available, management’s judgment is necessary to estimate fair value.

Changes in market conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value.

Changes in market

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

conditions, such as reduced liquidity in the capital markets or changes in secondary market activities, may reduce the availability and reliability of quoted prices or observable data used to determine fair value.

Membership Fees

10 unchanged sentences

When we redeem outstanding debt early, we recognize a gain or loss related to the difference between the amount paid to redeem the debt and the net book value of the extinguished debt as a component of other non-interest expense in the consolidated statements of operations.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

While CFC is exempt under Section 501(c)(4) of the Internal Revenue Code, it is subject to tax on unrelated business taxable income.

NCSC is a taxable cooperative that pays income tax on the full amount of its reportable taxable income and allowable deductions.

The income tax benefit (expense) recorded in the consolidated statement of operations represents the income tax benefit (expense) at the applicable combined federal and state income tax rates resulting from a statutory tax rate.

The income tax benefit (expense) recorded in the consolidated statements of operations represents the income tax benefit (expense) at the applicable combined federal and state income tax rates resulting from a statutory tax rate.

The federal statutory tax rate for FY2026, FY2025 and FY2024 was 21 %.

Substantially all of the income tax expense recorded in our consolidated statements of operations relates to NCSC.

We recorded an immaterial amount of d eferred tax asset as of May 31, 2025 and an immaterial amount of deferred tax liability as of May 31, 2024 from NCSC, primarily from the differences in the accounting and tax treatment for derivatives.

Substantially all of the income tax expense recorded in our consolidated statements of operations rel ates to NCSC.

We recorded an immaterial amount of deferred tax assets as of both May 31, 2026 and 2025.

New Accounting Standards Adopted in Fiscal Year 2026

Segment Reporting—Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which introduced key amendments to enhance disclosures for public entities’ reportable segments.

The amendments require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

The amendments also expand the interim segment disclosure requirements.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and requires r etrospective application to all prior periods presented in the financial statements.

We adopted the guidance effective May 31, 2025 on a ret rospective basis.

See “Note 16—Business Segments” for additional disclosures.

Income Taxes (Topic 740)—Improvements to Income Tax Disclosures

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures .

The ASU requires public business entities to disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a specific quantitative threshold.

There is a further requirement that public business entities will need to disclose a tabular reconciliation, using both percentages and reporting currency amounts.

The guidance also requires entities to disclose, on an annual basis, income taxes paid (net of refunds received), disaggregated by federal, state and foreign jurisdictions, and further disaggregated by individual jurisdiction when quantitative thresholds are met.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 for public business entities, with early adoption permitted.

The ASU should be applied on a prospective basis, while retrospective application is also permitted.

We adopted the guidance effective May 31, 2026 on a prospective basis.

The adoption of the guidance did not have an impact on our financial position, results of operations, or cash flows as the guidance pertains to disclosure only.

We evaluated the disclosure requirements under ASU 2023‑09 for the fiscal year ended May 31, 2026 and prior periods

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Due to the immateriality of total income tax expense and income taxes paid (net of refunds received), a rate reconciliation and disaggregated income taxes paid disclosures have not been presented.

We continue to present total income taxes paid as a single amount in our consolidated statements of cash flows, with the substantial majority attributable to federal income taxes.

New Accounting Standards Issued But Not Yet Adopted

Financial Instruments—Credit Losses (Topic 326):

Purchased Loans

In November 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):

Purchased Loans.

The ASU amends ASC Topic 326 to require entities to apply the gross-up approach to all “purchased seasoned loans.” Purchased seasoned loans are loans (excluding purchased financial assets with credit deterioration, credit card receivables, debt securities and trade receivables) that are (i) acquired in a business combination or (ii) obtained through a transfer that is not a business combination or initially recognized through the consolidation of a VIE, if certain seasoning criteria are met.

A loan is considered seasoned if it is obtained more than 90 days after its origination date and the transferee was not involved in the origination.

ASU 2025-08 is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods, with early adoption permitted.

The ASU must be applied prospectively.

We plan to adopt the guidance on June 1, 2027, and do not expect the adoption to have a material impact on our consolidated financial statements or related disclosures.

Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This ASU updates the accounting guidance for internal-use software by eliminating references to software development project stages, thereby requiring companies to start capitalizing software costs when (i) management has authorized and committed to funding the project, and (ii) it is probable the project will be completed and the software will be used to perform its intended function.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and for interim reporting periods within those annual reporting periods, with early adoption permitted.

The ASU can be applied either (i) prospectively, (ii) through a modified transition approach, or (iii) retrospectively.

We expect to adopt the guidance on June 1, 2028 and are currently evaluating the impact of ASU 2025-06 on our consolidated financial statements and related disclosures.

Income Statement — Expense Disaggregation Disclosures

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40) .

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

The amendments require public entities to disclose, in interim and annual reporting periods, additional information about certain expenses in notes to financial statements, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and other specific expense categories.

6 unchanged sentences

The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the ASC in response to the SEC’s Release No.

33-10532, Disclosure Update and Simplification Initiative , and align the ASC’s requirements with the SEC’s regulations.

For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that

33-10532, Disclosure Update and

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

related disclosure from Regulation S-X or Regulation S-K becomes effective.

Simplification Initiative , and align the ASC’s requirements with the SEC’s regulations.

For entities subject to the SEC’s existing disclosure requirements, the effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective.

However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective.

Early adoption is prohibited.

We are currently in the process of evaluating the impact of the amendments on our consolidated financial statements and related disclosures.

The adoption of the amendments is not expected to have a material impact on our consolidated financial statements or related disclosures.

NOTE 2—INTEREST INCOME AND INTEREST EXPENSE

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Deferred income reported on our consolidated balance sheets of $ 30 million and $ 32 million as of May 31, 2026 and 2025, respectively, consists primarily of deferred loan conversion fees that totaled $ 18 million and $ 21 million as of each respective date.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3—INVESTMENT SECURITIES

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For additional information on our investments in debt securities, see “Note 1—Summary of Significant Accounting Policies.”

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Securities

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(2) Consists primarily of securities backed by auto lease loans, equipment-backed loans, auto loans and credit card loans.

We recognized net unrealized gains of $ 9 million and $ 15 million on our debt securities for FY2025 and FY2024, respectively, and net unrealized losses of $ 3 million for FY2023 .

We sold $ 14 million of debt securities during FY2025 and recorded realized gains on the sale of these securities of less than $ 1 million.

We recognized net unrealized gains of $ 1 million, $ 9 million and $ 15 million on our debt securities for FY2026, FY2025 and FY2024, respectively .

We sold $ 19 million and $ 14 million in principal amount of debt securities during FY2026 and FY2025, respectively, and recorded an immaterial amount of realized gains on the sale of these securities in both periods.

We did not sell any debt securities during FY2024.

We sold $ 36 million of debt securities at fair value and recorded realized gains on the sale of these securities of less than $ 1 million during FY2023.

Equity Securities

The following table presents the composition of our equity security holdings and the fair value as of May 31, 2025 and 2024.

Investments in Equity Securities, at Fair Value

(Dollars in thousands) 2025 2024

Equity securities, at fair value:

Farmer Mac—Series C noncumulative preferred stock

Farmer Mac—Class A common stock 11,252 11,756

Total equity securities, at fair value $ 11,252 $ 36,886

Our equity securities consisted of the Federal Agricultural Mortgage Corporation (“Farmer Mac”) Class A common stock recorded at fair value of $ 11 million as of both May 31, 2026 and 2025.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On July 18, 2024, the Federal Agricultural Mortgage Corporation (“Farmer Mac”) redeemed its Series C noncumulative preferred stock at a redemption price of $ 25.00 per share, plus any declared and unpaid dividends through and including the redemption date.

We recorded an immaterial loss as part of this transaction.

We recognized net unrealized losses on our equity securities of $ 1 million for FY2025, and net unrealized gains of $ 1 million and $ 2 million for FY2024 and FY2023, respectively.

We recognized net unrealized losses on our equity securities of less than $ 1 million and $ 1 million for FY2026 and FY2025, respectively, and net unrealized gains of $ 1 million for FY2024 .

These unrealized amounts are reported as a component of non-interest income in our consolidated statements of operations.

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We recorded immaterial losses on the sale of these loans attributable to the unamortized deferred loan origination costs associated with the transferred loans.

We had loans held for sale totaling $ 21 million and $ 3 million as of May 31, 2025 and 2024, respectively .

We had loans held for sale totaling $ 4 million and $ 21 million as of May 31, 2026 and 2025, respectively, which were sold at par for cash subsequent to the respective year end.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

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Single-Obligor Concentration

The outstanding loan exp osure for our 20 largest borrowers totaled $ 7,149 million and $ 6,851 million as of May 31, 2025 and 2024, respectively, representing 19 % and 20 % of total loans outstanding as of each respective date.

Our 20 largest borrowers consisted o f 14 distribution systems and six power supply systems as of May 31, 2025, compared with 13 distribution systems and seven power supply systems as of May 31, 2024.

The outstanding loan exp osure for our 20 largest borrowers totaled $ 7,374 million and $ 7,149 million as of May 31, 2026 and 2025, respectively, representing 19 % of total loans outstanding as of each respective date.

Our 20 largest borrowers consisted of 12 distribution systems and eight power s upply systems as of May 31, 2026, compared with 14 distribution systems and six power supply systems as of May 31, 2025.

The largest total outstanding exposure to a single borrower or controlled group represented approximately 1 % of total loans outstanding as of both May 31, 2026 and 2025.

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Geographic Concentration

Although our organizational structure and mission result in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S.

The consolidated number of borrowers with loans outstanding totaled 899 , located in 49 states as of May 31, 2025, compared with 885 borrowers, located in 49 states and the District of Columbia as of May 31, 2024.

50 were electric power supply borrowers as of both May 31, 2025 and 2024.

Although our organizational structure and mission result in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the United States.

The consolidated number of borrowers with loans outstanding totaled 903 and 899 borrowers as of May 31, 2026 and 2025, respectively, located in 49 states.

Of the 903 and 899 borrowers with loans outstanding, 50 were electric power supply borrowers as of both May 31, 2026 and 2025.

Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers.

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Credit Quality Indicators

Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, modifications to borrowers experiencing financial difficulty, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk.

Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, modifications to borrowers experiencing financial difficulty, nonaccrual loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk.

We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors.

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Loans are considered delinquent when contractual principal or interest amounts become past due 30 days or more following the scheduled payment due date.

Loans are placed on nonaccrual status when payment of principal or interest is 90 days or more past due or management determines that the full collection of principal and interest is doubtful.

The following table presents the payment status, by legal entity and member class, of loans outstanding as of May 31, 2026 and 2025.

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Percentage of total loans 100.00 % — % — % — % 100.00 % 0.07 %

We had a CFC electric power supply loan outstanding of $ 26 million and $ 49 million on nonaccrual status as of May 31, 2025 and 2024, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficulty

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We consider the impact of all loan modifications when estimating the credit quality of our loan portfolio and establishing the allowance for credit losses.

We had no loan modifications to borrowers experiencing financial difficulty entered during FY2025.

We had one loan modification to an NCSC telecom borrower experiencing financial difficulty during FY2024.

This loan received a term extension and had an amortized cost of $ 3 million, representing 1 % of the NCSC telecom loan portfolio as of May 31, 2024.

The loan has been performing in accordance with the terms of the loan agreement after the modification .

Nonperforming Loans

We had a loan to one CFC electric power supply borrower of $ 26 million and $ 49 million classified as nonperforming, which represented 0.07 % and 0.14 % of total loans outstanding as of May 31, 2025 and 2024, respectively.

The reduction in the nonperforming loan was due to payments received on this loan during FY2025 .

We had no loan modifications to borrowers experiencing financial difficulty entered during FY2026 and FY2025.

Loans on Nonaccrual Status

We had one loan to a CFC electric power supply borrower of $ 8 million and $ 26 million that was on nonaccrual status, which represented 0.02 % and 0.07 % of total loans outstanding as of May 31, 2026 and 2025, respectively.

The decrease in this outstanding loan balance primarily reflected $ 18 million of payments received during FY2026.

Subsequent to FY2026, we received a $ 3 million paymen t on this loan, which reduced its outstanding balance to $ 5 million.

Net Charge-Offs

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We report charge-offs net of amounts recovered on previously charged-off loans.

We had no charge-offs during FY2025 and FY2024.

We recorded $ 1 million in net loan recoveries to previously charged-off loan amounts related to two CFC electric power supply loans during FY2024 .

Prior to the two CFC electric power

We recorded an immaterial charge-off of $ 0.3 million related to a CFC electric power supply loan during FY2026.

We had no charge-offs during FY2025.

Over the past five years, we had three borrower defaults resulting in $ 14 million of charge-offs.

Our electric utility loan portfolio has historically experienced low levels of credit losses, as discussed below.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

supply loan defaults in fiscal years 2021 and 2022, we had no t experienced any defaults or charge-offs in our electric utility and telecommunications loan portfolios since fiscal years 2013 and 2017, respectively.

Borrower Risk Ratings

As part of our management of credit risk, we maintain a credit risk-rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio.

We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on the consideration of a number of quantitative and qualitative factors.

Each risk rating is reassessed annually following the receipt of the borrower’s audited financial statements;

however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends.

We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default.

Our borrower risk ratings align with the U.S.

Additional information regarding our borrower risk rating methodology is provided in “Note 1—Summary of Significant Accounting Policies.” Our borrower risk ratings align with the U.S.

federal banking regulatory agencies’ credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful.

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In comparison, term loan advances made to borrowers prior to fiscal year 2021 totaled $ 18,537 million, representing 50 % of our total loans outstanding as of May 31, 2025.

The average remaining maturity of our long-term loans, which accounted for 88 % and 90 % of total loans outstanding as of May 31, 2025 and 2024, was 19 years, as of each respective date.

The average remaining maturity of our long-term loans, which accounted for 88 % of total loans outstanding as of both May 31, 2026 and 2025, was 19 years, as of each respective date.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

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563 — 357 4,064 — 28,948 165,135 199,067

NCSC electric

— — — — — — 600 600

Total special mention $ 563 $ — $ 357 $ 4,064 $ — $ 28,948 $ 165,135 $ 199,067

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Total CFC — 361 4,126 — 4,568 26,677 156,332 192,064

NCSC telecom — — — — — 3,030 — 3,030

NCSC electric — — — — — — 600 600

Total special mention $ — $ 361 $ 4,126 $ — $ 4,568 $ 26,677 $ 156,932 $ 192,664

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Criticized loans totaled $ 207 million and $ 219 million as of May 31, 2026 and 2025, respectively, and represented approximately 1 % of total loans outstanding as of each respective date.

The decrease of $ 30 million in criticized loans was driven primarily by decreases of loans outstanding in the special mention and doubtful categories, as discussed below.

The $ 12 million decrease in criticized loans was primarily driven by $ 18 million in payments received during FY2026 from a CFC electric power supply borrower in the doubtful category, partially offset by a $ 6 million increase in loans outstanding in the special mention category, as discussed below.

Each of the borrowers with loans outstanding in the criticized category was current with regard to all principal and interest amounts due to us as of May 31, 2026 and 2025.

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We expect that the borrower will continue to receive grant funds from the Federal Emergency Management Agency and the state where it is located for the full reimbursement of the hurricane damage-related restoration costs.

We did not have any loans classified as sub standard as of May 31, 2025 and 2024.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We had one loan outstanding classified as doubtful totaling $ 26 million and $ 49 million to a CFC electric power supply borrower as of May 31, 2025 and 2024, respectively.

The reduction in its loan outstanding was due to payments received on the loan during FY2025 .

We did not have any loans classified as sub standard as of May 31, 2026 and 2025.

We had one loan outstanding classified as doubtful totaling $ 8 million and $ 26 million to a CFC electric power supply borrower as of May 31, 2026 and 2025, respectively, which was also on nonaccrual status as of each respective date.

The reduction in this outstanding loan balance primarily reflected $ 18 million of payments received during FY2026 .

Subsequent to FY2026, we received a $ 3 million payment on this loan which reduced its outstanding balance to $ 5 million.

Unadvanced Loan Commitments

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However, the borrower may select either a fixed or a variable rate when an advance is drawn under a loan commitment.

The following table displays, by loan type, the available balance under unadvanced loan commitments as of May 31, 2025 and the related maturities in each fiscal year during the five-year period ende d May 31, 2030, and thereafter.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table displays, by loan type, the available balance under unadvanced loan commitments as of May 31, 2026 and the related maturities in each fiscal year during the five-year period ende d May 31, 2031, and thereafter.

Unadvanced Loan Commitments

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Provision (benefit) for credit losses ( 1,848 ) ( 8,489 ) ( 130 ) ( 10,467 ) 290 ( 185 ) 105 ( 10,362 )

Charge-offs — ( 306 ) — ( 306 ) — — — ( 306 )

Balance as of May 31, 2026 $ 16,625 $ 6,661 $ 970 $ 24,256 $ 4,108 $ 1,583 $ 5,691 $ 29,947

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Provision (benefit) for credit losses 2,519 ( 10,127 ) ( 89 ) ( 7,697 ) ( 119 ) ( 295 ) ( 414 ) ( 8,111 )

— 1,148 — 1,148 — — — 1,148

Balance as of May 31, 2025 $ 18,473 $ 15,456 $ 1,100 $ 35,029 $ 3,818 $ 1,768 $ 5,586 $ 40,615

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Provision (benefit) for credit losses 1,030 ( 8,871 ) ( 5 ) ( 7,846 ) 1,473 857 2,330 ( 5,516 )

Charge-offs — ( 15,069 ) — ( 15,069 ) — — — ( 15,069 )

Recoveries — 1,148 — 1,148 — — — 1,148

Balance as of May 31, 2024 $ 15,954 $ 25,583 $ 1,189 $ 42,726 $ 3,937 $ 2,063 $ 6,000 $ 48,726

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Our allowance for credit losses and allowance coverage ratio decreased to $ 30 million and 0.08 %, respectively, as of May 31, 2026, from $ 41 million and 0.11 %, respectively, as of May 31, 2025.

The $ 8 million de crease in the allowance for credit loss was attributable to a reduction in the asset-specific allowance due to higher actual than expected payments received on a nonperforming loan during FY2025.

Our collective allowance decreased slightly during FY2025, primarily due to an improved recovery rate on our power supply loan portfolio, partially offset by an increase attributable to loan portfolio growth.

The $ 11 million de crease in the allowance for credit losses was attributable to a $ 9 million reduction in the asset-specific allowance, driven by higher-than-expected payments received on a nonaccrual CFC power supply loan during FY2026, and an approximately $ 2 million decrease in the collective allowance, driven primarily by improved borrower credit quality and a refinement in our borrower risk rating methodology during FY2026, as discussed above in “Note 4—Loans.”

Reserve for Credit Losses—Unadvanced Loan Commitments

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Short-term borrowings consist of borrowings with an original contractual maturity of one year or less and do not include the current portion of long-term debt.

Our short-term borrowings totaled $ 5,091 million and accounted for 15 % of total debt outstanding as of May 31, 2025, compared with $ 4,333 million, or 13 % of total debt outstanding, as of May 31, 2024.

Our short-term borrowings totaled $ 5,160 million and $ 5,091 million as of May 31, 2026 and 2025, respectively, and accounted for 14 % and 15 % of total debt outstanding as of each respective date.

The following table provides information on our short-term borrowings and weighted-average interest rates as of May 31, 2026 and 2025.

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324,190 3.81 451,201 4.62

Farmer Mac notes payable (1)

— — 500,000 5.87

Total short-term borrowings

$ 5,159,771 3.62 $ 5,091,416 4.30

____________________________

(1) Advanced under the revolving note purchase agreement with Farmer Mac dated March 24, 2011.

See “Note 7—Long-Term Debt” in this Report for additional information on this revolving note purchase agreement with Farmer Mac.

We issue commercial paper for periods of one to 270 days.

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Select notes are unsecured obligations that do not require backup bank lines of credit for liquidity purposes.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

notes also require a larger minimum investment than our commercial paper sold to members.

These notes also require a larger minimum investment than our commercial paper sold to members.

Daily liquidity fund notes are unsecured obligations that do not require backup bank lines of credit for liquidity purposes.

Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Committed Bank Revolving Line of Credit Agreements

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$ 50 $ — $ 50 November 28, 2027 7.5 bps

Total 3 -year agreement

1,595 — 1,595

3 -year agreement

1,695 — 1,695 November 28, 2028 7.5 bps

4 -year agreement

1,555 7 1,548 November 28, 2028 10.0 bps

Total 3 -year agreement

1,745 — 1,745

4 -year agreement

1,755 7 1,748 November 28, 2029 10.0 bps

Total $ 3,500 $ 7 $ 3,493

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(1) Facility fee determined by CFC’s senior unsecured credit ratings based on the pricing schedules put in place at the inception of the related agreement.

On December 5, 2024, we amended our three-year and four-year committed bank revolving line of credit agreements to extend the maturity dates to November 28, 2027 and November 28, 2028, respectively, and to increase commitments by $ 250 million (excluding the $ 150 million commitment termination described below) under each of the three-year and four-year revolving credit agreements.

Commitments of $ 150 million that were scheduled to mature on November 28, 2025 were terminated under the three-year revolving credit agreement, and commitments of $ 150 million will continue to expire at the prior maturity date of November 28, 2026 under the four-year revolving credit agreement.

On November 12, 2025, we amended our three-year and four-year committed bank revolving line of credit agreements to (i) extend the maturity dates to November 28, 2028 and November 28, 2029, respectively, (ii) remove the credit spread adjustment in Term Secured Overnight Financing Rate (“ SOFR ”) tenors as described in each agreement and (iii) increase commitments by $ 150 million under the three-year revolving credit agreement and $ 50 million under the four-year revolving credit agreement.

Under the three-year revolving credit agreement, commitments of $ 50 million will continue to expire at the prior maturity date of November 28, 2027.

The total commitment amount under the three-year facility and the four-year facility was $ 1,745 million and $ 1,755 million, respectively, resulting in a combined total commitment amount under the two facilities of $ 3,500 million as of May 31, 2026.

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We were in compliance with all covenants and conditions under the agreements as of May 31, 2026.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7—LONG-TERM DEBT

The following table displays, by debt product type, long-term debt outstanding, the weighted-average interest rates and the maturity date as of May 31, 2026 and 2025.

Long-term debt outstanding totaled $ 27,164 million and accounted for 78 % of total debt outstanding as of May 31, 2025, compared with $ 25,901 million and 79 % of total debt outstanding as of May 31, 2024.

Long-term debt outstanding totaled $ 28,346 million and $ 27,164 million as of May 31, 2026 and 2025, respectively, and accounted for 79 % and 78 % of total debt outstanding as of each respective date.

Long-term debt with fixed and variable interest rates accounted for 90 % and 10 %, respectively, of our total long-term debt outstanding as of May 31, 2026, compared with 94 % and 6 %, respectively, of our total long-term debt outstanding as of May 31, 2025.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Debt—Debt Product Types and Weighted-Average Interest Rates

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$ 6,670,191 3.70 % 2026-2049 $ 7,082,711 3.68 % 2025-2049

Unamortized discount, net ( 155,393 ) ( 166,458 )

Unamortized premium (discount), net ( 140,322 ) ( 155,393 )

Debt issuance costs ( 27,466 ) ( 31,616 )

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Medium-term notes sold through dealers (3)

12,242,476 4.44 2026-2037 9,637,577 4.64 2025-2037

Medium-term notes sold to members 376,726 4.31 2026-2045 419,648 4.61 2025-2037

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(1) Maturity is presented based on calendar year.

(2) Collateral trust bonds represent secured obligations sold to investors in the capital markets, including also those issued in a private placement transaction.

(2) Collateral trust bonds represent secured obligations sold to investors in the capital markets, including those issued through both public offerings and private placement transactions.

(3) Amount includes medium-term notes issued to both institutional and retail investors in the capital markets.

The following table presents the principal amount of long-term debt maturing in each of the five fiscal years subsequent to May 31, 2026 and thereafter.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Term Debt—Maturities and Weighted-Average Interest Rates

9 unchanged sentences

Total $ 28,540,108 3.99

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

___________________________

(1) Amounts presented are based on the face amount of debt outstanding as of May 31, 2025, and therefore do not include debt issuance costs

and unamortized premium or discount.

(1) Amounts presented are based on the face amount of debt outstanding as of May 31, 2026, and therefore do not include debt issuance costs and unamortized premiums or discounts.

Long-term secured debt of $ 15,753 million and $ 17,133 million as of May 31, 2026 and 2025, respectively, represented 56 % and 63 % of total long-term debt outstanding as of each respective date.

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Collateral trust bonds are secured by the pledge of mortgage notes or eligible securities in an amount at least equal to the principal balance of the bonds outstanding.

We issued $ 350 million of 5.00 % fixed-rate collateral trust bonds due August 15, 2034 and repaid $ 505 million in principal amount of collateral trust bonds that matured during FY2025.

In addition, we issued an aggregate amount of $ 300 million in collateral trust bonds at a fixed rate of 5.23 % with a weighted average term of 13.3 years in a private placement transaction during FY2025.

We repaid $ 413 million in principal amount of collateral trust bonds that matured during FY2026.

Guaranteed Underwriter Program Notes Payable

We borrowed $ 300 million and repaid $ 335 million of notes payable outstanding under the Guaranteed Underwriter Program of the USDA (the “Guaranteed Underwriter Program”) during FY2025 .

We repaid $ 1,118 million of notes payable outstanding under the Guaranteed Underwriter Program of the USDA (the “Guaranteed Underwriter Program”) during FY2026 .

We had up to $ 1,800 million available for access under the Guaranteed Underwriter Program as of May 31, 2026.

On December 18, 2024, we closed on a $ 450 million Series V committed loan facility from the U.S.

Treasury Department ’ s Federal Financing Bank (“FFB”) under the Guar anteed Underwriter Program.

On January 29, 2026, we closed on a $ 450 million Series W committed loan facility from the U.S.

Treasury Department ’ s Federal Financing Bank under the Guar anteed Underwriter Program.

Pursuant to this facility, we may borrow any time before July 15, 2030.

3 unchanged sentences

We are required to pledge eligible distribution system or power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under the Guaranteed Underwriter Program.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Farmer Mac Notes Payable

We have a revolving note purchase agreement with Farmer Mac that allows us to borrow, repay and re-borrow funds at any time through maturity, provided the outstanding principal does not exceed the agreement limit.

We have a revolving note purchase agreement with Farmer Mac, under which we can borrow up to $ 6,500 million from Farmer Mac at any time, subject to market conditions, through January 14, 2030, after which the agreement allows for successive one-year renewals of the draw period upon sixty days ’ notice by CFC, subject to approval by Farmer Mac and Farmer Mac Mortgage Securities Corporation.

Pursuant to this revolving note purchase agreement, we can borrow, repay and re-borrow funds at any time through maturity, as market conditions permit, provided the outstanding principal does not exceed the total available under the agreement.

Each borrowing is documented with a pricing agreement setting forth the interest rate, maturity date and other terms.

We may select a fixed or variable rate for each advance.

On January 14, 2025, we amended our revolving note purchase agreement with Farmer Mac to increase the maximum borrowing availability to $ 6,500 million from $ 6,000 million, and extend the draw period from June 30, 2027 to January 14, 2030, with successive one-year renewals upon 60 days’ notice by CFC, subject to approval by Farmer Mac and Farmer Mac Mortgage Securities Corporation.

We borrowed an aggregate principal amount of $ 500 million and repaid $ 83 million in long-term notes under the Farmer Mac note purchase agreement during FY2025.

As of May 31, 2025, $ 3,780 million was outstanding with $ 2,720 million available for borrowing.

We are required to pledge

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

eligible electric distribution system or electric power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under this agreement.

We borrowed an aggregate principal amount of $ 250 million and repaid $ 118 million in long-term notes under the Farmer Mac revolving note purchase agreement during FY2026.

As of May 31, 2026, $ 3,912 million was outstanding with $ 2,588 million avail able for borrowing.

We are required to pledge eligible electric distribution system or electric power supply system loans as collateral in an amount at least equal to the total principal amount of notes outstanding under this agreement.

Unsecured Debt

2 unchanged sentences

Medium-term notes represent unsecured obligations that may be issued through dealers in the capital markets or directly to our members.

During FY2025, w e issued an aggregate principal amount of dealer medium-term notes totaling $ 1,800 million at an average fixed interest rate of 4.65 % with an average term of four years , and an aggregate principal amount of dealer medium-term notes totaling $ 600 million at floating interest rates with an average term of two years .

We repaid $ 1,753 million in principal amount of dealer medium-term notes that matured during FY2025.

During FY2026, w e issued an aggregate principal amount of dealer medium-term notes to institutional investors totaling $ 4,425 million, of which $ 2,800 million was at a weighted average fixed interest rate of 4.14 % with a weighted average term of three years and $ 1,625 million was at floating interest rates with a weighted average term of 16 months.

We also issued an aggregate principal amount of $ 18 million dealer medium-term notes to retail investors during FY2026.

We repaid $ 1,239 million in principal amount of dealer medium-term notes during FY2026 and redeemed $ 600 million of fixed-rate dealer medium-term notes at par plus accrued interest and recognized an immaterial amount of losses on early extinguishment of debt related to unamortized debt issuance costs and discount in our consolidated statements of operations for FY2026 .

Subsequent to FY2026, we issued $ 300 million of dealer medium-term notes at a floating interest rate with a term of 18 months.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8—SUBORDINATED DEFERRABLE DEBT

7 unchanged sentences

Issuances of subordinated notes:

Variable rate issuance 2013

$ 300,000 7.45 % $ 300,000 8.50 % 30 2043 April 30, 2023 (1)

Variable rate issuance 2013 $ — — % $ 300,000 7.45 % 30 2043 April 30, 2023 (1)

5.25 % issuance 2016

7 unchanged sentences

June 15, 2028

Subordinated notes

5.75 % issuance 2026

150,000 5.75 — — 30 2056

January 20, 2031 (3)

5.95 % issuance 2026

450,000 5.95 — — 30 2056

January 21, 2036 (3)

Subordinated notes 72,956 5.74 43,811 5.75 30 2054-2056 Various (4)

Total aggregate principal amount 1,322,956 1,343,811

Unamortized premium

Unamortized premiums

Debt issuance costs

4 unchanged sentences

(2) Maturity is presented based on calendar year.

(3) The subordinated notes may be called, in whole or in part, at par on any day during the period commencing 90 days prior to, and including, the first interest rate reset date and then on each interest payment date thereafter.

The first interest rate reset date is April 20, 2031 for the 5.75 % Notes and April 20, 2036 for the 5.95 % Notes.

(4) The subordinated notes may be called, in whole or in part, at par on or after five years from the date of the issuances.

During FY2026, we redeemed $ 650 million in aggregate principal amount of our subordinated deferrable debt, including $ 300 million of notes due 2043 (the “2043 Notes”) and $ 350 million of notes due 2046 (the “2046 Notes”).

The notes were redeemed at par plus accrued interest.

As a result, we recognized $ 6 million of losses on early extinguishment of debt related to unamortized debt issuance costs for these notes in our consolidated statements of operations for FY2026.

Losses on early extinguishment of debt were included in other non-interest expense in our consolidated statements of operations.

Our 5.50 % subordinated deferrable debt due 2064 pays interest quarterly, may be called at par five years after the issuance and allows us to defer interest payments for one or more consecutive interest periods, not to exceed 40 consecutive quarterly periods.

Our two issuances of 7.125 % subordinated deferrable debt due 2053 pay interest semiannually, may be called at par every five years after the issuances, reset to a new fixed rate every five years based on the five-year U.S.

Treasury rate plus a

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our subordinated deferrable debt due 2043 is based on 3-month Term Secured Overnight Financing Rate (“SOFR”) plus the Alternative Reference Rates Committee (“ARRC”) recommended credit spread adjustment of 26.161 basis points plus 2.91 % as of May 31, 2025.

The interest on the debt is paid quarterly, and the payment of interest can be deferred fo r one or more consecutive interest periods not exceeding five consecutive years.

Our 5.25 % subordinated deferrable debt due 2046 pays interest semiannually, may be called at par 10 years after the issuance, will convert to a variable rate in April 2026 based on 3-month Term SOFR plus the ARRC recommended credit spread adjustment of 26.161 basis points plus 3.63 %, and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding five consecutive years.

Our 5.50 % subordinated deferrable debt due 2064 pays interest quarterly, may be called at par five years after the issuance and allows us to defer the payment of interest for one or more consecutive interest periods not exceeding 40 consecutive quarterly periods.

Treasury rate plus a spread of 3.533 % and allow us to defer the payment of interest for one or more consecutive interest periods not exceeding 20 consecutive semiannual periods.

Subordinated Notes

On November 1, 2024, we entered into an agency agreement with InspereX LLC, Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Clearing Services, LLC, as agents, to launch a program through which we may offer and sell, from time to time, an unlimited aggregate principal amount of our subordinated deferrable interest notes (“subordinated notes”).

On November 1, 2024, we filed a prospectus supplement with the SEC related to these subordinated notes, which are issued under our effective shelf registration statement filed with the SEC in October 2023.

The subordinated notes are unsecured and rank subordinate in right of payment to all of our current and future senior indebtedness.

The subor dinated notes are senior to our members’ subordinated certificates and rank equal in right of payment and upon liquidation to our outstanding subordinated deferrable debt and any other equally ranked subordinated notes we may issue.

The subordinated notes may be called, in whole or in part, at par on or after five years from the date of the issuance and allow us to defer the payment of interest for one or more consecutive interest periods not exceeding 20 consecutive semiannual periods, or 40 consecutive quarterly periods.

During FY2025, w e issued an aggregate principal amount of $ 44 million in subordinated notes that mature in 30 years under this new program.

spread of 3.533 % and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods.

During FY2026 , we issued in a private placement $ 600 million of fixed-to-fixed reset rate subordinated notes due 2056, consisting of two tranches:

$ 150 million notes at a fixed rate of 5.75 % that are noncallable for five years (the “ 5.75 % Notes ”) and $ 450 million notes at a fixed rate of 5.95 % that are noncallable for 10 years (the “ 5.95 % Notes ” .) The interest rate for the 5.75 % Notes will be reset on April 20, 2031 and every five years thereafter based on the five-year U.S.

Treasury Rate plus a spread of 2.000 %, to be reset on each reset date, provided that the interest rate during any reset period will not reset below 5.75 %.

The interest rate for the 5.95 % Notes will be reset on April 20, 2036 and every five years thereafter based on the five-year U.S.

Treasury Rate plus a spread of 1.800 %, to be reset on each reset date, provided that the interest rate during any reset period will not reset below 5.95 %.

Both notes pay interest semiannually and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods.

The notes may be called, in whole or in part, at par on any day during the period commencing 90 days prior to, and including, the first interest rate reset date and then on each interest payment date thereafter.

Under an agency agreement with InspereX LLC, Citigroup Global Markets Inc., RBC Capital Markets, LLC and Wells Fargo Clearing Services, LLC, as agents, we may offer and sell, from time to time, an unlimited aggregate principal amount of our subordinated deferrable interest notes (the “Subordinated Notes” ).

The Subordinated Notes may be called, in whole or in part, at par on or after five years from the date of the issuance and allow us to defer interest payments for one or more consecutive interest periods, not to exceed 20 consecutive semiannual periods or 40 consecutive quarterly periods.

During FY2026, w e issued the Subordinated Notes with an aggregate principal amount of $ 29 million, each with a maturity of 30 years.

To date, we have not exercised our right to defer interest payments on any of our subordinated deferrable debt.

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Loan and Guarantee Subordinated Certificates

Members obtaining long-term loans, certain line of credit loans or guarantees may be required to purchase additional loan or

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

guarantee subordinated certificates with each such loan or guarantee based on the borrower’s debt-to-equity ratio with CFC.

Members obtaining long-term loans, certain line of credit loans or guarantees may be required to purchase additional loan or guarantee subordinated certificates with each such loan or guarantee based on the borrower’s debt-to-equity ratio with CFC.

These certificates are unsecured, subordinated debt and may be interest bearing or non-interest bearing.

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Guarantee subordinated certificates have the same maturity as the related guarantee.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Member Capital Securities

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___________________________

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) The subscribed and unissued subordinated certificates represent subordinated certificates that members are required to purchase.

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The following table presents the amount of members’ subordinated certificates maturing in each of the five fiscal years subsequent to May 31, 2026 and thereafter.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Members’ Subordinated Certificate Maturities and Weighted-Average Interest Rates

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The notional amount is used only as the basis on which interest payments are determined and is not the amount exchanged, nor recorded on our consolidated balance sheets.

The following table shows, by derivative instrument type, the notional amount, the weighted-average rate paid and the weighted-average interest rate received for our interest rate swaps as of May 31, 2025 and 2024.

The following table shows, by derivative instrument type, the notional amount, the weighted-average interest rate paid and the weighted-average interest rate received for our interest rate swaps as of May 31, 2026 and 2025.

For the substantial majority of interest rate swap agreements, SOFR is used as the basis for determining variable interest payment amounts each period.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative Notional Amount and Weighted-Average Rates

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Total interest rate swaps $ 6,544,183 3.03 3.82 $ 7,252,235 3.28 4.32

Forward pay-fixed swaps 21,350 —

Total interest rate swaps $ 6,565,533 $ 7,252,235

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

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The following table presents the notional amount of our interest rate swaps maturing in each of the five fiscal years subsequent to May 31, 2026 and thereafter.

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We terminated the treasury locks upon the pricing of the anticipated debt and recorded a net settlement gain of less than $ 1 million in AOCI during FY2024, which is reclassified into interest expense over the term of the related debt.

During FY2023, we executed two treasury lock agreements with an aggregate notional amount of $ 300 million to hedge interest rate risk on anticipated debt issuances.

We recorded a settlement gain of $ 8 million in AOCI upon the termination of the treasury locks during FY2023.

As the hedged forecasted transaction did not occur in the time period specified in the hedge documentation, we reclassified the $ 8 million gain from AOCI to earnings as a component of derivative gains (losses) in our consolidated statements of operations in FY2024.

We did not have any derivatives designated as accounting hedges as of May 31, 2025 and 2024.

In addition, during FY2024, we reclassified an $ 8 million gain related to prior settled treasury locks from AOCI to earnings as a component of derivative gains (losses) in our consolidated statements of operations, as the hedged forecasted transaction did not occur in the time period specified in the hedge documentation.

We did not execute any treasury lock agreements during FY2026 and did not have any derivatives designated as accounting hedges as of May 31, 2026 and 2025.

Impact of Derivatives on Consolidated Balance Sheets

The following table displays the fair value of the derivative assets and derivative liabilities, by derivatives type, recorded on our consolidated balance sheets and the related outstanding notional amount as of May 31, 2025 and 2024.

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The following table displays the fair value of the derivative assets and derivative liabilities, by derivative type, recorded on our consolidated balance sheets and the related outstanding notional amount as of May 31, 2026 and 2025.

Derivative Assets and Liabilities at Fair Value

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Total derivative liabilities $ 31,414 $ 1,015,409 $ 51,368 $ 1,557,400

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(1) The notional amount as of May 31, 2026 included $ 21 million of forward starting swaps, as shown above in Table 10.1:

Derivative Notional Amount and Weighted-Average Rates, with an effective start date in June 2026.

The fair value of the swap as of May 31, 2026 is included in the above table and in our consolidated financial statements.

All of our master swap agreements include netting provisions that allow for offsetting of all contracts with a given counterparty in the event of default by one of the two parties.

However, we report derivative asset and liability amounts on a gross basis by individual contract.

The following table presents the gross fair value of derivative assets and liabilities reported on our consolidated balance sheets as of May 31, 2025 and 2024, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any.

The following table presents the gross fair value of derivative assets and liabilities

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reported on our consolidated balance sheets as of May 31, 2026 and 2025, and provides information on the impact of netting provisions under our master swap agreements and collateral pledged, if any.

Derivative Gross and Net Amounts

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Impact of Derivatives on Consolidated Statements of Operations

The primary factors affecting the fair value of our derivatives and the derivative gains (losses) recorded in our consolidated statements of operations include changes in interest rates, the shape of the swap curve and the composition of our derivative

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

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We generally record derivative losses when interest rates decline and derivative gains when interest rates rise, as our derivative portfolio consists of a higher proportion of pay-fixed swaps than receive-fixed swaps.

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We classify the derivative cash settlement amounts for the net periodic contractual interest expense on our interest rate swaps as an operating activity in our consolidated statements of cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Derivative Gains (Losses)

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$ 82,166 $ ( 5,851 ) $ 392,037

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(1) During FY2026, in connection with the redemption of the 2043 Notes, we terminated $ 300 million in notional amount of our pay-fixed interest rate swaps hedging the 2043 Notes.

The termination resulted in an immaterial amount of settlement gains recorded in derivative gains (losses) in our consolidated statements of operations.

See “Note 8—Subordinated Deferrable Debt” for details on the redemption of the 2043 Notes.

Credit Risk-Related Contingent Features

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Our credit ratings and outlook remain unchanged as of the date of this Report.

The following table displays the notional amounts of our derivative contracts with rating triggers as of May 31, 2025, and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, or to or below Ba2/BB+ by Moody’s or S&P, respectively.

The following table displays the notional amounts of our derivative contracts with mutual rating triggers as of May 31, 2026, and the payments that would be required if the contracts were terminated as of that date because of a downgrade of our unsecured credit ratings or the counterparty’s unsecured credit ratings below A3/A-, below Baa1/BBB+, to or below Baa2/BBB, or to or below Ba2/BB+ by Moody’s or S&P, respectively.

In calculating the payment amounts that would be required upon termination of the derivative contracts, we assume that amounts for each counterparty would be netted in accordance with the provisions of the master netting agreements with the counterparty.

The net payment amounts are based on the fair value of the underlying derivative instrument, excluding the credit risk valuation adjustment, plus any unpaid accrued interest amounts.

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Derivative Credit Rating Trigger Exposure

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436,761 — 22,332 22,332

Falls below Baa2/BBB 926,275 — 84,222 84,222

Total $ 4,692,652 $ ( 941 ) $ 365,181 $ 364,240

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(2) Rating trigger for CFC falls to or below Baa2/BBB, while rating trigger for counterparty falls to or below Ba2/BB+ by Moody’s or S&P, respectively.

We have interest rate swaps with one counterparty that are subject to a ratings trigger and early termination provision in the event of a downgrade of CFC’s senior unsecured credit ratings below Baa3, BBB- or BBB- by Moody’s, S&P or Fitch, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, we have interest rate swaps with one counterparty that are subject to a ratings trigger and early termination provision in the event of a downgrade of CFC’s senior unsecured credit ratings below Baa3, BBB- or BBB- by Moody’s, S&P or Fitch, respectively.

The outstanding notional amount of these swaps, which is not included in the above table , totaled $ 552 million as of May 31, 2026.

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We had 12 active derivative counterparties with credit ratings ranging from Aa1 to Baa1 by Moody’s as of both May 31, 2026 and 2025, and from AA- to BBB+ by S&P as of both May 31, 2026 and 2025.

Our largest counterparty exposure, based on the outstanding notional amount, accounted for approximately 25 % and 24 % of the total outstanding notional amount of our derivatives as of May 31, 2025 and 2024, respectively.

Our largest counterparty exposure, based on the outstanding notional amount, accounted for approximately 25 % of the total outstanding notional amount of our derivatives as of both May 31, 2026 and 2025.

We believe our exposure to derivative counterparty risk, at any point in time, is equal to the amount of our outstanding derivatives in a net gain position, at the individual counterparty level based on the legally enforceable netting provisions under our master swap agreements, which totaled $ 524 million and $ 506 million as of May 31, 2026 and 2025, respectively, as presented in Table 10.4 above.

NOTE 11—EQUITY

Total equity increased by $ 91 million to $ 3,103 million as of May 31, 2025 compared with May 31, 2024.

The increase was attributable primarily to our reported net income of $ 140 million for FY2025, partially offset by a decrease in equity of $ 47 million from the CFC Board of Directors’ authorized patronage capital retirements during the period, as discussed below.

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NOTE 11—EQUITY

Total equity increased by $ 209 million to $ 3,312 million as of May 31, 2026, compared with $ 3,103 million as of May 31, 2025.

The increase was attributable primarily to our reported net income of $ 263 million for FY2026, partially offset by a decrease in equity of $ 53 million from the CFC Board of Directors’ authorized patronage capital retirements during the period, as discussed below.

(Dollars in thousands) 2026 2025

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(1) Represents derivative forward value gains (losses) for CFC only, as total CFC equity does not include the noncontrolling interests of the consolidated variable interest entities.

The cumulative amounts also include CFC historical foreign currency translation adjustments recorded in net income.

See “Note 16—Business Segments” for the statements of operations for CFC.

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CFC’s bylaws require the allocation to the cooperative educational fund to be at least 0.25 % of its net earnings.

Funds from the coopera tive educational fund are disbursed annually to statewide cooperative organizations to fund the teaching of cooperative principles and for other cooperative education programs.

Funds from the coopera tive

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educational fund are disbursed annually to statewide cooperative organizations to fund the teaching of cooperative principles and for other cooperative education programs.

Currently, CFC has one additional board-approved reserve, the members’ capital reserve.

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The net earnings held in the members’ capital reserve have not been specifically allocated to members, but may be allocated to individual members in the future as patronage capital if authorized by the CFC Board of Directors.

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All remaining net earnings are allocated to CFC’s members in the form of patronage capital.

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MD&A—Non-GAAP Financial Measures” for information on adjusted net income.

In July 2025, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $ 53 million, of which $ 34 million represented 50 % of the patronage capital allocation for FY2025 and $ 19 million represen ted the portion of the allocation from net earnings for fiscal year 2000 that had been held for 25 years pursuant to the CFC Board of Directors’ policy.

In July 2026, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $ 62 million, of which $ 36 million represented 50 % of the patronage capital allocation for FY2026 and $ 26 million represented the portion of the allocation from net earnings for fiscal year 2001 that had been held for 25 years pursuant to the CFC Board of Directors’ policy.

We expect to return the authorized patronage capital retirement amount of $ 62 million to members in cash in the second quarter of fiscal year 2027.

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The remaining portion of the amount allocated for FY2025 will be retained by CFC for 25 years under current guidelines adopted by the CFC Board of Directors in June 2009.

In connection with the RTFC sale transaction, the CFC Board of Directors approved the early retirement of $ 66 million of allocated but unretired CFC patronage capital to RTFC at a discounted amount of $ 41 million, which was paid from CFC to RTFC in December 2023 and the remaining $ 25 million was allocated to the CFC members’ capital reserve during FY2024.

Following the closing of the RTFC sale transaction on December 1, 2023, CFC concluded that it is no longer a primary beneficiary of RTFC, and accordingly, deconsolidated RTFC from its consolidated financial statements.

Future allocations and retirements of net earnings may be made annually as determined by the CFC Board of Directors with due regard for its financial condition.

The CFC Board of Directors has the authority to change the current practice for allocating and retiring net earnings at any time, subject to applicable laws and regulations.

During FY2024, the CFC Board of Directors approved a change in the allocation of net earnings that would allow us to retain additional earnings and help in effectively managing our debt-to-equity ratio.

As a result of this change, we retained a higher percentage of net earnings for FY2024 in the members’ capital reserve, compared with FY2023.

CFC’s total equity includes noncontrolling interest s, which consists of 100 % of the equity of NCSC, as the members of NCSC own or control 100 % of the interest s in NCSC .

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(1) Of the derivative gains reclassified to earnings, a portion is reclassified as a component of the derivative gains (losses) line item and the remainder is reclassified as a component of the interest expense line item in our consolidated statements of operations.

(1) Derivative gains reclassified to earnings for FY2026 were included in the interest expense line item in our consolidated statements of operations.

For FY2025, a portion of the d erivative gains reclassified to earnings was included as a component of the derivative gains (losses) line item and the remainder was reclassified to the interest expense line item in our consolidated statements of operations.

(2) Reclassified to earnings as a component of the other non-interest expense line item presented in our consolidated statements of operations.

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The risks of participating in the multiple-employer plan are different from the risks of single-employer plans due to the following characteristics of the plan:

• Assets contributed to the multiple-employer plan by one participating employer may be used to provide benefits to employees of other participating employers.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

• Assets contributed to the multiple-employer plan by one participating employer may be used to provide benefits to employees of other participating employers.

• If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

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As a result, prior-year plan funding information has been restated to agree to the updated reporting requirements.

Under the market-based reporting of plan assets and liabilities, the plan was more than 90 %, 80 % and 70 % funded as of December 31, 2024, 2023 and 2022, respectively.

We made contributions to the Retirement Security Plan of $ 7 million, $ 6 million and $ 5 million in FY2025, FY2024 and FY2023 , respectively.

Under the market-based reporting of plan assets and liab ilities, the plan was more than 100 % funded as of both December 31, 2025 and 2024 and more than 90 % funded as of December 31, 2023.

We made contributions to the Retirement Security Plan of $ 8 million, $ 7 million and $ 6 million in FY2026, FY2025 a nd FY2024 , respectively.

In each of these years, our contribution represented less than 5 % of total contributions made to the plan by all participating employers.

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There is a risk of forfeiture if participants leave the company prior to becoming fully vested in the EBR Plan.

This plan included nine and seven participants as of May 31, 2025 and 2024, respectively.

This plan included nine participants as of both May 31, 2026 and 2025.

We recognized net periodic pension expense for this plan of approximately $ 1 million in each of FY2026, FY2025 and FY2024 .

The unfunded projected benefit obligation of this plan, which is included on our consolidated balance sheets as a component of other liabilities, was $ 8 million and $ 7 million as of May 31, 2025 and 2024, respectively.

CFC made contributions to the plan of $ 1 million in each of FY2025, FY2024 and FY2023 , for lump-sum settlement payments to fully vested participants of $ 1 million in each respective year.

The unfunded projected benefit obligation of this plan, which is included on our consolidated balance sheets as a component of other liabilities, was $ 8 million as of both May 31, 2026 and 2025.

CFC contributed $ 1 million to the plan in each of FY2026, FY2025 and FY2024 for lump-sum settlement payments to fully vested participants of $ 1 million in each year.

Unrecognized pension costs recorded in accumulated other comprehensive loss were $ 5 million as of both May 31, 2026 and 2025.

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(2) Reflects our maximum potential exposure for letters of credit, which also includes interest due, if any.

(3) Under a hybrid letter of credit facility, we had no commitment available t hat may be used for the issuance of letters of credit as of May 31, 2025 .

We had $ 30 million of commitments that may be used for the issuance of letters of credit as of May 31, 2024.

(3) Includes CFC guarantees to NCSC telecom members totaling $ 37 million and $ 42 million as of May 31, 2026 and 2025, respectively.

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We unconditionally guarantee to the holders or to trustees for the benefit of holders of these bonds the full principal, interest and in most cases, premium, if any, on each bond when due.

Long-term tax-exempt bonds of $ 47 million and $ 48 million as of May 31, 2026 and 2025, respectively, consist of adjustable-rate or variable-rate bonds that may be converted to a fixed rate as specified in the applicable indenture for each bond offering.

We are unable to determine the maximum amount of interest that we may be required to pay related to the

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-term tax-exempt bonds of $ 48 million and $ 74 million as of May 31, 2025 and 2024, respectively, consist of adjustable or variable-rate bonds that may be converted to a fixed rate as specified in the applicable indenture for each bond offering.

We are unable to determine the maximum amount of interest that we may be required to pay related to the remaining adjustable and variable-rate bonds.

remaining adjustable-rate or variable-rate bonds.

Many of these bonds have a call provision that allows us to call the bond in the event of a default, which would limit our exposure to future interest payments on these bonds.

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The maturities for the outstanding letters of credit as of May 31, 2026 extend through calenda r yea r 2044 .

In addition to the outstanding letters of credit listed in the table above, under master letter of credit facilities in place as of May 31, 2025, we may be required to issue up to an additional $ 124 million in letters of credit to third parties for the benefit of our members.

In addition to the outstanding letters of credit listed in the table above, under master letter of credit facilities in place as of May 31, 2026, we may be required to issue up to an ad ditional $ 105 million i n letters of credit to third parties for the benefit of our members.

All of our master letter of credit facilities were subject to material adverse change clauses at the time of issuance as of May 31, 2026.

Prior to issuing a letter of credit, we would confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the master letter of credit facility was approved and confirm that the borrower is currently in compliance with the terms and conditions of the agreement governing the facility.

The maximum potential exposure for other guarantees was $ 184 million as of both May 31, 2025 and 2024, of which $ 25 million was secured as of both May 31, 2025 and 2024 .

The maximum potential exposure for other guarantees was $ 185 million and $ 184 million as of May 31, 2026 and 2025, respectively, of which $ 25 million was secured as of both May 31, 2026 and 2025 .

The maturities for these other guarantees listed in the table above extend through calendar year 2030.

In addition to the guarantees described above, we were also the liquidity provide r for $ 48 million of variable-rate tax-exempt bonds as of May 31, 2025, issued for our member cooperatives.

In addition to the guarantees described above, we were also the liquidity provide r for $ 47 million and $ 48 million of variable-rate tax-exempt bonds as of May 31, 2026 and 2025 , respectively, issued for our member cooperatives.

While the bonds are in variable-rate mode, in return for a fee, we have unconditionally agreed to purchase bonds tendered or put for redemption if the rem arketing agents are unable to sell such bonds to other investors.

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Guarantee Liability

We recorded a total guarantee liability for noncontingent and contingent exposures related to guarantees and liquidity obligations of $ 14 million and $ 16 million as of May 31, 2025 and 2024, respectively.

We recorded a total guarantee liability for noncontingent and contingent exposures related to guarantees and liquidity obligati ons of $ 17 million and $ 14 million as of May 31, 2026 and 2025, respectively.

The noncontingent guarantee liability, which pertains to our obligation to stand ready to perform over the term of our guarantees and liquidity obligations we have entered into or modified and accounts for the substantial majority of our guarantee liability, totaled $ 16 million and $ 13 million as of May 31, 2026 and 2025, respectively.

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Derivative liabilities 31,414 31,414 — 31,414 —

Deferred compensation liability

9,011 9,011 9,011 — —

Subordinated deferrable debt 1,310,282 1,317,026 236,320 1,080,706 —

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Derivative liabilities 51,368 51,368 — 51,368 —

Deferred compensation liability 8,019 8,019 8,019 — —

Subordinated deferrable debt 1,329,485 1,341,974 238,620 1,103,354 —

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The carrying value of our variable-rate loans adjusted for credit risk approximates fair value since variable-rate loans are eligible to be reset at least monthly.

The fair value of loans with different risk characteristics, specifically nonperforming and restructured loans, is estimated using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities.

The fair value of loans with different risk characteristics, specifically nonaccrual and restructured loans, is estimated using collateral valuations or by adjusting cash flows for credit risk and discounting those cash flows using the current rates at which similar loans would be made by us to borrowers for the same remaining maturities.

The fair value of loans held for sale is determined based on the cost, which approximates the fair value, as we sell these loans at par value, concurrently or within a short period of time with the closing of the loan or participation agreement.

See below for information on how we estimate the fair value of certain individually evaluated loans.

Transfers Between Levels

We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2 and Level 3 accordingly.

Observable market data include but

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

are not limited to quoted prices and market transactions.

Transfers Between Levels

Observable market data include but are not limited to quoted prices and market transactions.

Changes in economic conditions or market liquidity generally will drive changes in availability of observable market data.

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Derivative liabilities $ — $ 31,414 $ 31,414 $ — $ 51,368 $ 51,368

Deferred compensation liability

9,011 — 9,011 8,019 — 8,019

Below is a description of the valuation techniques we use to estimate fair value of our financial assets and liabilities recorded at fair value on a recurring basis, the significant inputs used in those techniques, if applicable, and the classification within the fair value hierarchy.

Equity Securities

Our investments in equity securities consist of investments in Farmer Mac Class A common stock and Series C preferred stock.

Our investments in equity securities consist of investments in Farmer Mac Class A common stock.

These securities are reported at fair value in our consolidated balance sheets.

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Methodologies employed, controls relied upon and inputs used by third-party pricing vendors are subject to management review when such services are provided.

This review may consist of, in part, obtaining and evaluating control reports issued and pricing methodology materials distributed.

We review the pricing methodologies provided by the vendors in order to determine if observable market information is being used to determine the fair value versus unobservable inputs.

Investment securities traded in secondary markets are typically valued using unadjusted vendor prices.

This review may consist of, in part, obtaining and evaluating control

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

using significant observable market inputs where available or a combination of multiple valuation techniques for which all significant assumptions are observable in the market.

Deferred Compensation Investments

reports issued and pricing methodology materials distributed.

We review the pricing methodologies provided by the vendors in order to determine if observable market information is being used to determine the fair value versus unobservable inputs.

Investment securities traded in secondary markets are typically valued using unadjusted vendor prices.

These investment securities, which include those measured using unadjusted vendor prices, are generally classified as Level 2 because the valuation typically involves using quoted market prices for similar securities, pricing models, discounted cash flow analyses using significant observable market inputs where available or a combination of multiple valuation techniques for which all significant assumptions are observable in the market.

Deferred Compensation Investments and Liability

CFC offers a nonqualified 457(b) deferred compensation plan to highly compensated employees and board members.

Such amounts deferred by employees are invested by the company.

The deferred compensation investments are presented as other assets in the consolidated balance sheets in the other assets category at fair value.

We calculate fair value based on the daily published and quoted net asset value.

Because quoted market prices are the key input in deriving fair value for this plan, the valuation methodology is classified as Level 1.

The deferred compensation investments are presented as other assets in the consolidated balance sheets at fair value.

A corresponding deferred compensation liability, measured at the same amount as the deferred compensation investments, is included in other liabilities in the consolidated balance sheets.

Fair value is determined based on the daily published and quoted net asset value.

Because quoted market prices are the key input in deriving the fair value, the valuation methodology is classified as Level 1.

Derivative Instruments

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We rely primarily on market-observable inputs for these models, including market interest rates and forward swap yield curves, as well as the contractual terms of the derivative instrument, as of the valuation date.

We include a credit risk valuation adjustment in our valuation of derivatives, which takes into consideration the effect of nonperformance credit risk of the counterparty or our own nonperformance risk and depends on whether the derivative instrument is in a gain, or asset, financial position or in a loss, or liability, financial position.

We corroborate our derivative valuations by comparing the amounts to counterparty valuations and third-party pricing sources.

We analyze and validate pricing variances, if material, among different external pricing sources.

Because observable market data serve as the key inputs in valuing our interest rate swaps, the valuation methodology is classified as Level 2.

We include a credit risk valuation adjustment in our valuation of derivatives, which takes into consideration the e ffect of nonperformance credit risk of the counterparty or our own nonperformance risk and depends on whether the derivative instrument is in a gain, or asset, financial position or in a loss, or liability, financial position.

We corroborate our derivative valuations by comparing the amounts to third-party pricing sources.

Because observable market data serve as the key inputs in valuing our interest rate swaps, the valuation methodology i s classified as Level 2.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as in the application of the lower of cost or fair value accounting or when we evaluate assets for impairment.

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of May 31, 2025 or May 31, 2024.

We did not have any assets or liabilities measured at fair value on a nonrecurring basis during FY2026 and FY2025.

NOTE 15—VARIABLE INTEREST ENTITIES

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Under the terms of the management agreement with NCSC, CFC manages the business operations of NCSC.

CFC also unconditionally guarantees full indemnification for any loan losses of NCSC pursuant to a guarantee agreement with NCSC.

CFC also unconditionally guarantees full payment to NCSC for amounts equal to any loan losses pursuant to a guarantee agreement with NCSC.

CFC earns management and guarantee fees from its agreements with NCSC.

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CFC is not a member of NCSC and does not elect directors to the NCSC board.

If CFC becomes a member of NCSC, it would control the nomination process for one NCSC director.

NCSC members elect directors to the NCSC board based on one vote for each member.

NCSC is a Class C member of CFC.

NCSC creditors have no recourse against CFC in the event of a default by NCSC, unless there is a guarantee agreement under which CFC has guaranteed NCSC debt obligations to a third party.

The following table provides information on incremental consolidated assets and liabilities of VIE included in CFC’s consolidated financial statements, after intercompany eliminations, which include NCSC’s consolidated assets and liabilities as of May 31, 2025 and 2024.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NCSC creditors have no recourse against CFC in the event of a default by NCSC, unless there is a guarantee agreement under which CFC has guaranteed NCSC debt obligations to a third party.

The following table provides information on incremental consolidated assets and liabilities of the VIE included in CFC’s consolidated financial statements, after intercompany eliminations, which include NCSC’s consolidated assets and liabilities as of May 31, 2026 and 2025.

Consolidated Assets and Liabilities of Variable Interest Entities

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NOTE 16—BUSINESS SEGMENTS

The following disclosures reflect the adoption of ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which was adopted retrospectively for our annual consolidated financial statements for the fiscal year ended May 31, 2025.

The adoption of this guidance requires additional reportable segment disclosures, primarily relating to significant segment expenses and the CODM.

Adoption of this guidance did not result in changes to the identification of our reportable business segments.

See “Note 1—Summary of Significant Accounting Policies” for additional information related to our adoption of this new accounting standard.

Our operating segments consist of CFC and NCSC for both FY2025 and FY2024, which also represent our reportable segments.

Our activities were previously conducted through three operating segments:

CFC, NCSC and RTFC for FY2023.

On December 1, 2023, RTFC completed the sale of its business to NCSC, as discussed under “Note 1—Summary of Significant Accounting Policies” in our 2024 Form 10-K.

As we aggregated segment information for NCSC and RTFC into one reportable segment prior to the RTFC sale transaction, the sale of RTFC did not cause a change in the composition of our reportable segments.

A description of each of our segments and the products and services they provide to their respective members and associates is presented below.

Our operating segments consist of CFC and NCSC which also represent our reportable segments .

CFC’s principal purpose is to provide its members with financing to supplement the loan programs of RUS.

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NCSC makes loans to electric cooperatives and their subsidiaries that provide non-electric services in the energy and telecommunication industries as well as to entities that provide substantial benefit to CFC members, including eligible solar energy providers and investor-owned utilities.

NCSC also provides its members and associates with equipment financing for leased assets, institutional debt placement services thought its wholly owned subsidiary Cooperative Securities and credit enhancements in the form of letters of credit.

NCSC also provides its members and associates with equipment financing for leased assets, institutional debt placement services through its wholly owned subsidiary Cooperative Securities and credit enhancements in the form of letters of credit.

Basis of Presentation

We present the results of our business segments on the basis in which management internally evaluates operating performance to establish short- and long-term performance goals, develop budgets and forecasts, identify potential trends, allocate resources and make compensation decisions.

This presentation is aligned with how results are reviewed internally by our Chief Executive Officer (“CEO”), which we determined to be our CODM.

This presentation is aligned with how results are reviewed internally by our Chief Executive Officer (“CEO”), which we determined to be our chief operating decision maker (“CODM”).

The primary measure used regularly by our CODM to evaluate segment financial performance and allocate resources accordingly between segments is the net income adjusted to exclude derivative forward value gains (losses), which represent the effects of fair value fluctuations in our interest rate swaps.

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In addition, CFC manages the business operations of NCSC under a management agreement that automatically renews on an annual basis unless the agreement is terminated by either party.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We report loans, and interest and fees earned on loans, based on the entity that holds the loans.

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However, management excludes the impact of derivative forward value gains (losses) and includes the net periodic derivative cash settlement interest income or expense amounts as a component of interest expense in reporting our segment results of operations, which represents the only difference between the accounting and reporting for our business segment results of operations and our consolidated total results of operations.

NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Segment Results and Reconciliation

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Net interest income 355,511 10,208 365,719 ( 63,953 ) — 301,766

Benefit for credit losses

8,111 414 8,525 — ( 414 ) 8,111

Net interest income after benefit for credit losses

358,828 9,870 368,698 ( 99,219 ) ( 414 ) 269,065

Benefit (provision) for credit losses 10,362 ( 105 ) 10,257 — 105 10,362

Net interest income after benefit (provision) for credit losses 365,873 10,103 375,976 ( 63,953 ) 105 312,128

Non-interest income:

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Derivative cash settlements interest income — — — 63,953 — 63,953

Derivative forward value losses

— — — ( 105,070 ) — ( 105,070 )

Derivative losses

— — — ( 5,851 ) — ( 5,851 )

Derivative forward value gains — — — 18,213 — 18,213

Derivative gains — — — 82,166 — 82,166

Investment securities gains

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( 79,813 ) ( 270 ) ( 80,083 ) — — ( 80,083 )

Consulting (3)

( 14,828 ) ( 249 ) ( 15,077 ) — — ( 15,077 )

Depreciation and amortization (3)

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Interest expense ( 1,442,027 ) ( 78,236 ) ( 1,520,263 ) — 77,984 ( 1,442,279 )

Derivative cash settlements interest income

127,017 149 127,166 ( 127,166 ) — —

Derivative cash settlements interest income (expense) 99,237 ( 18 ) 99,219 ( 99,219 ) — —

Interest expense (3) (4)

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Net interest income 350,717 9,456 360,173 ( 99,219 ) — 260,954

Benefit (provision) for credit losses

5,516 ( 2,330 ) 3,186 — 2,330 5,516

Net interest income after benefit (provision) for credit losses

377,601 7,014 384,615 ( 127,166 ) 2,330 259,779

Benefit for credit losses 8,111 414 8,525 — ( 414 ) 8,111

Net interest income after benefit for credit losses 358,828 9,870 368,698 ( 99,219 ) ( 414 ) 269,065

Non-interest income:

Fee and other income 29,162 3,707 32,869 — ( 9,272 ) 23,597

Derivative gains:

Derivative gains (losses):

Derivative cash settlements interest income

— — — 99,219 — 99,219

Derivative forward value gains — — — 264,871 — 264,871

Derivative gains — — — 392,037 — 392,037

Derivative forward value losses — — — ( 105,070 ) — ( 105,070 )

Derivative losses — — — ( 5,851 ) — ( 5,851 )

Investment securities gains

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( 71,920 ) ( 251 ) ( 72,171 ) — — ( 72,171 )

Consulting (3)

( 9,668 ) ( 168 ) ( 9,836 ) — — ( 9,836 )

Depreciation and amortization (3)

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Income tax provision — ( 188 ) ( 188 ) — — ( 188 )

Net income (loss) (6)

Net income (6)

$ 244,285 $ 799 $ 245,084 $ ( 105,070 ) $ — $ 140,014

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Interest expense ( 1,339,003 ) ( 72,909 ) ( 1,411,912 ) — 72,824 ( 1,339,088 )

Derivative cash settlements interest income (expense)

34,021 ( 444 ) 33,577 ( 33,577 ) — —

Derivative cash settlements interest income 127,017 149 127,166 ( 127,166 ) — —

Interest expense (3) (4)

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Net interest income 372,085 9,344 381,429 ( 127,166 ) — 254,263

Provision for credit losses

( 603 ) ( 935 ) ( 1,538 ) — 935 ( 603 )

Net interest income after provision for credit losses

340,134 7,126 347,260 ( 33,577 ) 935 314,618

Benefit (provision) for credit losses 5,516 ( 2,330 ) 3,186 — 2,330 5,516

Net interest income after benefit (provision) for credit losses 377,601 7,014 384,615 ( 127,166 ) 2,330 259,779

Non-interest income:

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Derivative gains — — — 392,037 — 392,037

Investment securities losses

( 4,974 ) — ( 4,974 ) — — ( 4,974 )

Total non-interest income (expense)

19,906 3,922 23,828 285,844 ( 10,668 ) 299,004

Investment securities gains 10,772 — 10,772 — — 10,772

Total non-interest income 38,629 7,448 46,077 392,037 ( 12,513 ) 425,601

Non-interest expense:

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( 66,382 ) ( 1,019 ) ( 67,401 ) — — ( 67,401 )

Consulting (3)

( 8,201 ) ( 218 ) ( 8,419 ) — — ( 8,419 )

Depreciation and amortization (3)

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Total non-interest expense ( 126,473 ) ( 13,270 ) ( 139,743 ) — 10,183 ( 129,560 )

Income (loss) before income taxes 251,230 ( 1,110 ) 250,120 252,267 — 502,387

Income before income taxes 289,757 1,192 290,949 264,871 — 555,820

Income tax provision — ( 1,504 ) ( 1,504 ) — — ( 1,504 )

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(4) Interest expense presented at the segment level is adjusted to include the effects of derivative cash settlement interest income or expense as provided to the CODM.

(5) Other non-interest expense for each segment includes information technology, member relations, board, and other general and administrative expenses.

(5) Other non-interest expense for each segment includes consulting, information technology, member relations, board, and other general and administrative expenses.

For the NCSC segment, the other non-interest expense also includes the management fee expense paid to CFC pursuant to the management agreement.

Certain reclassifications have been made to the presentation of information in prior periods to conform to the current-period presentation.

(6) Net income (loss) presented at the segment level is adjusted to exclude derivative forward value gains (losses) and is the primary measure used regularly by our CODM to evaluate segment financial performance and allocate resources between segments.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data