FEDERAL AGRICULTURAL MORTGAGE CORP (AGM)

Risk Factors

Farmer Mac's Our business activities, financial performance, and results of operations are, by their nature, subject to risks and uncertainties, including those related to the agricultural industry, infrastructure industries, access to the capital markets, the political and regulatory environment, the level of prevailing interest rates, and overall market conditions. The following risk factors should be considered along with "Management's Discussion and Analysis of Financial Condition and Results of Operations" MD&A in Item 7 of this report, including the risks and uncertainties described in the "Forward-Looking Statements" section. Because new risk factors likely will emerge from time to time, management can neither predict all potential risk factors nor assess the effects of those factors on Farmer Mac's our business, operating results, and financial condition or how much any factor, or combination of factors, may affect Farmer Mac's our actual results and financial condition. If any of the following risks materialize, Farmer Mac's our business, financial condition, or results of operations could be materially and adversely affected. Farmer Mac undertakes We undertake no obligation to update or revise this risk factor discussion, unless required by applicable law.

Credit and Counterparty Risk

Economic stress caused by disruptive global events, such as geopolitical instability, and natural or human-caused disasters, may materially and adversely affect Farmer Mac's our business, operations, operating results, financial condition, liquidity, or capital levels and may heighten other risk factors in this report.

In a tightly-linked global economy, recent or continuing disruptive global events have contributed and may continue to contribute to economic stress on America’s agricultural producers and infrastructure by disrupting or transforming markets, systems, or resources that America’s farmers, ranchers, and rural service providers rely on to remain profitable. This includes supply chain disruptions that prevent producers from accessing critical resources or that inhibit exports, inflationary effects that put downward pressure on demand for agricultural products or that may increase production expenses, and higher interest rates that may increase the risk that Farmer Mac’s our borrowers may default on their loans. Depending on the severity and frequency of these types of disruptive events, as well as the capability of governments and global markets to effectively mitigate the resulting negative effects, a prolonged period of economic stress, including a broader economic downturn or recession, could ensue from these events, which could increase stress on Farmer Mac’s our borrowers and their ability to remain profitable and make payments on their loans.

Farmer Mac assumes Unless we have transferred the credit risk to a third party, we assume the ultimate credit risk of borrower defaults on its our agricultural mortgage and infrastructure loan assets, and Farmer Mac's our earnings, which come from net interest income, guarantee fees, and commitment fees on those assets, depend significantly on their performance. Widespread and sustained repayment shortfalls on loans in Farmer Mac's our portfolio could result in losses, particularly if the value of the available collateral does not cover Farmer Mac's our exposure, and could materially and adversely affect Farmer Mac’s our business, operations, operating results, financial condition, liquidity, or capital levels. The occurrence of these disruptive events and resulting negative economic effects may also heighten other risk factors described in this report.

Weather-related events or other natural or environmental disasters could have a material adverse effect on Farmer Mac’s our business, operating results, or financial condition.

In addition to the general risks posed by adverse weather conditions, Farmer Mac’s our exposure to credit risk and the market value of loan collateral is potentially subject to risks associated with farmers and ranchers facing increasing, (in both frequency and severity), weather incidents. The U.S. experienced 23 separate billion-

facing increasing, as well as increasingly-severe, dollar weather incidents. The U.S. experienced disasters in 2025, surpassed only by the 27 separate billion-dollar weather disasters in 2024, surpassed only by 2024 and the 28 billion-dollar weather disasters in 2023, both of which significantly exceeded the previous high set in 2020 (which had 22 billion-dollar weather disasters) as the highest level in the more than 40 years tracked by the National Oceanic and Atmospheric Administration ("NOAA"). Administration. Many climatologists predict increases in average temperatures, more extreme temperatures, and increases in volatile weather over time. These physical changes may prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of borrowers, such as increasing costs, reducing the value of assets, and increasing operating expenses. At the end of 2024, approximately 70% of the United States is classified as experiencing some level of drought or dryness according to the National Drought Mitigation Center, USDA, and NOAA. The effects of severe weather events could make some agricultural properties less suitable for farming or for other alternative uses. Extended periods of drought and dryness can reduce agricultural productivity, cause lasting damage to permanent crops like fruit and tree nuts, and result in producers leaving some fields fallow due to lack of water. These and other effects of severe weather could have an adverse impact on farming operations and the value of loan collateral, which could have a material adverse effect on Farmer Mac’s our business, operating results, or financial condition.

Political and other external factors outside of Farmer Mac's our or borrowers' control may impair borrowers' profitability and ability to repay their loans in Farmer Mac's our portfolio, which could have a material adverse effect on Farmer Mac's our financial condition, results of operations, liquidity, or capital levels.

Potential shifts Changes in U.S. trade policies, policies (including tariffs and trade restrictions), tax policies, environmental regulations, and immigration laws with the change in U.S. political leadership could result in significant impacts on agricultural producers and the broader agricultural sector, as well as the infrastructure sector. These changes could lead to both favorable and unfavorable conditions, influencing trade dynamics, the strength of the U.S. dollar, labor costs and availability, and regulatory frameworks. Infrastructure borrowers (particularly those involved in renewable energy projects) may experience delays in completing current projects or future investments in renewable energy and battery storage projects as well as deployment of fiber and broadband infrastructure in rural areas. The agricultural and infrastructure sectors may experience varying degrees of disruption and adaptation in response to political developments and these evolving policies, and these changes could increase the uncertainty and volatility of profitability in the agriculture and infrastructure sectors in the near-term.

Other external factors beyond Farmer Mac's our or borrowers' control could impair borrowers' profitability, such as volatility in demand for agricultural products or electricity in rural areas; variability in borrowers' input costs; increased competition among producers due to oversupply or available alternatives; and adverse changes in interest rates and land values. Any of these factors could put downward pressure on the value and profitability of a farming, agribusiness, or rural utilities infrastructure operation, which could then inhibit the related borrower's repayment capacity on one or more loans that Farmer Mac may have from that borrower in its our portfolio. A significant number of defaults, or a single default from a large borrower exposure, stemming from one or more of these factors could have a material adverse effect on Farmer Mac's our financial condition, results of operations, liquidity, or capital levels.

A decline in the value of collateral securing loans in Farmer Mac's our portfolio or a decline in the value of Farmer Mac's our borrowers could increase the probability of loss in the event of default, which could have a material adverse effect on Farmer Mac's our financial condition, results of operations, liquidity, or capital levels.

Farmer Mac's Our credit risk may increase due to a decline in the collateral values securing the loans in Farmer Mac's our portfolio. Specialized or highly improved collateral, such as storage and processing facilities, permanent plantings, rural utilities, broadband, and renewable energy facilities, increase the risk of undercollateralization in a default scenario because producers requiring specialized or highly improved collateral are generally less able to adapt their operations or switch functional production when faced with adverse conditions. Highly improved properties also face higher risk of loss in a default scenario, as the pool of potential purchasers in a sale or foreclosure action may be smaller for a highly improved property than for a property that is adaptable to multiple uses. If a borrower defaults and Farmer Mac forecloses on a loan secured by property that is specialized or highly improved, Farmer Mac has experienced, and may in the future experience, losses if the value of the property has dropped significantly since origination or if there is a limited pool of potential purchasers willing to purchase the property at the price necessary for Farmer Mac to recoup its investment. Farmer Mac's credit risk may also increase due to a decline in the enterprise value of borrowers whose loans have been underwritten based on the estimated value of the borrower as a going concern. External market factors outside of the borrower's control may cause stress in the related industry, such as decrease in market demand, disruptions in supply chain, geopolitical or regulatory action, or increased market competition. A borrower's management decisions, such as poorly executed acquisitions or growth strategies or inability to adapt to changing market conditions, may also adversely affect that borrower's ability to repay its loan. In these scenarios, the borrower may experience downward pressure on cash flows and liquidity, which not only may contribute to an increased risk of default, but also could decrease the borrower's enterprise value. Farmer Mac has incurred, and may in the future incur, losses if the value of the collateral securing a loan or the enterprise value of a borrower is less than the outstanding principal balance of Farmer Mac's loan at the time of foreclosure or sale, liquidation, or other disposition of the business. If losses caused by declines in collateral value or borrower enterprise value occur across a large number of loans, or across loans with large principal balances in the aggregate, this could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

Concentrations able to adapt their operations or switch functional production when faced with adverse conditions. Highly improved properties also face higher risk of loss in Farmer Mac's a default scenario, as the pool of potential purchasers in a sale or foreclosure action may be smaller for a highly improved property than for a property that is adaptable to multiple uses. If a borrower defaults and we foreclose on a loan secured by property that is specialized or highly improved, we have experienced, and may in the future experience, losses if the value of the property has dropped significantly since origination or if there is a limited pool of potential purchasers willing to purchase the property at the price necessary for us to recoup our investment. Our credit risk may also increase due to a decline in the enterprise value of borrowers whose loans have been underwritten based on the estimated value of the borrower as a going concern. External market factors outside of the borrower's control may cause stress in the related industry, such as decrease in market demand, disruptions in supply chain, geopolitical or regulatory action, or increased market competition. A borrower's management decisions, such as poorly executed acquisitions or growth strategies or inability to adapt to changing market conditions, may also adversely affect that borrower's ability to repay its loan. In these scenarios, the borrower may experience downward pressure on cash flows and liquidity, which not only may contribute to an increased risk of default, but also could decrease the borrower's enterprise value. We have incurred, and may in the future incur, losses if the value of the collateral securing a loan or investment portfolios, the enterprise value of a borrower is less than the outstanding principal balance of the loan at the time of foreclosure or to one sale, liquidation, or more borrowers other disposition of the business. If losses caused by declines in collateral value or counterparties, may increase Farmer Mac's exposure to credit risk, which borrower enterprise value occur across a large number of loans, or across loans with large principal balances in the aggregate, this could materially and adversely affect its business, operating results, and have a material adverse effect on our financial condition. condition, results of operations, liquidity, or capital levels.

Farmer Mac's Concentrations in our loan or investment portfolios, or to one or more borrowers or counterparties, may increase our exposure to credit risk may increase due to concentrations in its loan portfolio, risk, which can include concentrated exposure to particular commodities, geographic regions, or collateral types, as well as concentrations in processing could materially and manufacturing segments of agricultural supply chains or in rural utilities or renewable energy industries. Widespread weakening in the adversely affect our business, operating results, and financial condition of borrowers within a particular geographic region that produce particular commodities or rely on particular collateral, that engage in processes or production that depend on a fluid supply chain, or that produce or provide a specialized infrastructure service or product could negatively affect Farmer Mac’s financial condition if sufficient diversity in these areas does not successfully mitigate concentration risk. condition.

Farmer Mac's Our exposure to credit risk may also increase due to concentrations in our loan portfolio, which can include concentrated exposure to particular commodities, geographic regions, or collateral types, as well as concentrations in processing and manufacturing segments of agricultural supply chains or in rural utilities or renewable energy industries. Widespread weakening in the financial condition of borrowers within a particular borrower geographic region that produce particular commodities or counterparty. Farmer Mac’s portfolio consists of loans varying rely on particular collateral, that engage in size and by borrower, including large exposures ($25 million processes or more) to individual borrowers. The default of any one of production that depend on a fluid supply chain, or that produce or provide a specialized infrastructure service or product could negatively affect our financial condition if sufficient diversity in these areas does not successfully mitigate concentration risk.

Our exposure to credit risk may also increase due to concentrated exposure to a particular borrower or counterparty. Our portfolio consists of loans varying in size and by borrower, including large exposures ($25 million or more) to individual borrowers. The default of any one of these borrowers could negatively affect Farmer Mac's our financial condition. Farmer Mac We also has have concentrated exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by eligible loans Eligible Loans held by the issuing institution. Although AgVantage securities are collateralized by eligible loans Eligible Loans in a principal amount equal to or greater than the principal amount of the securities outstanding, Farmer Mac we could suffer losses if the market value of the loan collateral declines and the counterparty defaults. Taking possession of the loan collateral upon a default by the AgVantage counterparty could also result in higher current expected credit losses for Farmer Mac's our loans held on balance sheet, as well as increased capital requirements. As of December 31, 2024, 2025, $7.6 billion of the $8.5 $8.4 billion of AgVantage securities outstanding had been issued by three counterparties. A default by any of these counterparties could have a significant adverse effect on Farmer Mac's business, operating results, and financial condition.

Farmer Mac's Our exposure to credit risk may also increase due to concentrated exposure to one or more investment types or counterparties in the investment portfolio Farmer Mac maintains we maintain for liquidity. This investment portfolio consists primarily of cash and cash equivalents, U.S. Treasury securities, investment securities guaranteed by U.S. Government agencies and GSEs, and asset-backed securities backed primarily by U.S. Government-guaranteed loans. Farmer Mac We regularly reviews review concentration limits to ensure that its our investments are appropriately diversified and comply with policies approved by Farmer Mac's our board of directors and with applicable FCA regulations, but Farmer Mac is we are still exposed to credit risk from issuers of the investment securities it holds, we hold, particularly to issuers to whom Farmer Mac we may have a higher concentration of exposure relative to the rest of Farmer Mac's our investment portfolio. For example, as of December 31, 2024, Farmer Mac 2025, we held at fair value $4.3 $4.9 billion of investment securities guaranteed by GSEs. A default by multiple issuers of investment securities held by Farmer Mac we hold or by a single issuer of investment securities in which Farmer Mac is we are more heavily concentrated could have an adverse effect on Farmer Mac's our business, operating results, and financial condition.

Farmer Mac Our Guaranteed Securities and LTSPCs expose Farmer Mac us to significant contingent liabilities, and Farmer Mac's our ability to fulfill its our obligations under its our guarantees and LTSPCs may be limited.

Farmer Mac's Our guarantee and purchase commitment obligations to third parties, including LTSPCs and securities guaranteed by Farmer Mac, that we guarantee, are solely our obligations of Farmer Mac only and are not backed by the full faith and credit of the United States, FCA, or any other agency or instrumentality of the United States other than Farmer Mac. As of December 31, 2024, Farmer Mac 2025, we had $4.5 $5.4 billion of contingent liabilities related to LTSPCs and securities issued to third parties and guaranteed by Farmer Mac, that we guarantee, which represents Farmer Mac's our exposure if all loans underlying these LTSPCs and guarantees defaulted and Farmer Mac we recovered no value from the related collateral. If this were to occur, the funds available for payment on these guarantees and LTSPCs could be substantially less than the aggregate amount of the corresponding liabilities. As of December 31, 2024, Farmer Mac 2025, we held cash, cash equivalents, and other investment securities with a fair value of $7.0 $7.8 billion that could be used as a source of funds for payment on its our obligations, including its our guarantee and LTSPC obligations. Although Farmer Mac believes we believe that it remains we remain well-collateralized on the assets underlying its our guarantee and LTSPC obligations to third parties and that the estimated probable losses for these obligations remain low relative to the amount available for payment of claims on these obligations, Farmer Mac's our total contingent liabilities for these obligations could exceed the amount it we may have available for payment of Farmer Mac's our obligations, including claims on Farmer Mac's contingent obligations. See "Management's Discussion and Analysis—Risk MD&A—Risk Management—Credit Risk – Loans and Guarantees" Guarantees for more information on Farmer Mac's our management of credit risk.

Farmer Mac is We are exposed to counterparty risk on both its our cleared and non-cleared swaps transactions that could materially and adversely affect its our business, operating results, and financial condition.

Farmer Mac uses We use interest rate swap contracts and hedging arrangements to manage its our interest rate risk. Farmer Mac clears We clear a significant portion of its our interest rate swaps through a swap clearinghouse and uses use the services of a futures commission merchant to post and receive mark-to-market margin amounts. Farmer Mac We also transacts transact non-cleared (bilateral) derivative contracts directly with swap counterparties and posts post and receives receive collateral to secure the market value of those contracts. A failure of any of these counterparties could cause intra-day disruption for Farmer Mac's our swap operations if the failure were to prompt a termination of all or part of Farmer Mac's our swap positions or if Farmer Mac we were unable to quickly access margin or collateral amounts. These conditions could be exacerbated in volatile market conditions, in which the market could move against Farmer Mac's our position before Farmer Mac had we have time to reposition its our swaps. These events could have a negative effect on Farmer Mac's our operations and liquidity and could expose Farmer Mac us to more interest rate risk, which could materially and adversely affect its our business, operating results, and financial condition. As of December 31, 2024, 2025, the aggregate notional balance of Farmer Mac's cleared swaps was $19.1 billion, and the aggregate notional balance of Farmer Mac's non-cleared swaps was $5.7 billion.

balance of our cleared swaps was $19.4 billion, and the aggregate notional balance of our non-cleared swaps was $6.0 billion.

Strategic and Business Risk

Farmer Mac's Our business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the demand for Farmer Mac's our secondary market, the price or marketability of Farmer Mac's our products, or Farmer Mac's our ability to offer its our products and services.

Farmer Mac's Our business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the price or marketability of Farmer Mac's our products and services or Farmer Mac's our ability to offer its our products and services, including, but not limited to:

•

disruptions in the debt or equity capital markets;

•

competitive pressures in Farmer Mac's our loan purchase and guarantee activities or in the issuance of its our debt securities;

•

changes in interest rates that may increase Farmer Mac's our funding costs;

•

market or customer perception of Farmer Mac's our reputation;

•

legislative or regulatory developments adversely affecting Farmer Mac's our ability to offer new products, the ability or motivation of lenders to participate in Farmer Mac's our lines of business, or the cost of related corporate activities;

•

reduced demand for agricultural real estate loans or infrastructure loans due to regional, domestic, or global economic conditions; and

•

expanded funding alternatives available to agricultural and infrastructure borrowers.

An inability to access the equity and debt capital markets could have a material adverse effect on Farmer Mac's our business, operating results, financial condition, liquidity, and capital levels.

Farmer Mac's Our ability to operate its our business, meet its our obligations, generate asset volume growth, and fulfill its our statutory mission depends on Farmer Mac's our continued access to the U.S. financial markets at favorable rates and terms to remain adequately capitalized through the issuance of equity and with adequate access to liquidity through the issuance of debt securities. The issuance of debt securities is our primary source for repaying or refinancing existing debt and to fund contingent liabilities, as needed. Our ability to access the debt and equity markets to raise capital, fund our assets, repay debt, and earn net interest income depends on market perception of Farmer Mac's Mac. If we are unable to access the U.S. financial markets to issue equity or debt securities at favorable rates and terms, our business, operating results, liquidity, or financial condition could be adversely affected.

primary source for repaying The loss of business from key business counterparties or refinancing existing debt customers, including AgVantage counterparties, could weaken our business and to fund contingent liabilities, as needed. Farmer Mac's ability to access the debt decrease our revenues and equity markets to raise capital, fund its assets, repay debt, and earn net interest income depends on market perception of Farmer Mac. If Farmer Mac were unable to access the U.S. financial markets to issue equity or debt securities at favorable rates and terms, Farmer Mac's business, operating results, liquidity, or financial condition could be adversely affected. profits.

The loss Our business and ability to generate revenues and profits largely depends on our ability to purchase Eligible Loans or place Eligible Loans under guarantees or LTSPCs and to purchase or guarantee AgVantage securities. We conduct a significant portion of our business with a few business counterparties. This concentration of business from key could potentially result in increased variability in our business counterparties as existing assets pay down or customers, including mature and the status and needs of our customers evolve. In 2025, ten institutions generated approximately 55% of loan purchase volume in the Agricultural Finance line of business. Between December 31, 2024 and December 31, 2025, the outstanding balance of our AgVantage counterparties, could weaken Farmer Mac's business and decrease its revenues and profits.

Farmer Mac's business and ability to generate revenues and profits largely depends on its ability to purchase eligible loans or place eligible loans under guarantees or LTSPCs and to purchase or guarantee AgVantage securities. Farmer Mac conducts a significant portion of its business with a few business counterparties. This concentration of business could potentially result in increased variability in Farmer Mac's business as existing assets pay down or mature and the status and needs of Farmer Mac's customers evolve. In 2024, ten institutions generated approximately 65% of loan purchase volume in the Agricultural Finance line of business. Between December 31, 2023 and December 31, 2024, the outstanding balance of Farmer Mac's AgVantage securities decreased by approximately $1.5 $0.1 billion. As of December 31, 2024, 2025, approximately 89.1% 90.6% of the $8.5 $8.4 billion outstanding principal amount of AgVantage securities (of which $1.6 $1.2 billion and $1.2 $0.9 billion will be maturing in 2025 2026 and 2026, 2027, respectively) were issued by three institutions. As of December 31, 2024, 2025, transactions with two institutions represented nearly all of the business volume under Farmer Mac's our Infrastructure Finance line of business. Farmer Mac's Our ability to maintain the current relationships with its our business counterparties or customers and the business generated by those business counterparties or customers is significant to Farmer Mac's our business. As a result, the loss of business from any one of Farmer Mac's our key business counterparties could decrease Farmer Mac's our revenues and profitability. Farmer Mac We may be unable to replace the loss of business of a key business counterparty or customer with alternate sources of business due to limitations on the types of assets eligible for Farmer Mac's our secondary market, which could adversely affect Farmer Mac's our business and decrease its our revenues and profits.

Our efforts to expand product offerings and services to our customers expose us to business, operational and other risks that could materially and adversely affect our business, operating results, or financial condition.

As the needs of our customer base and rural America evolve, we seek to respond by offering new products and services to meet these needs. We invest significant time and resources in developing and marketing new products and services. Initial timetables for the introduction and development of new products or services may not be achieved, and profitability targets may not prove feasible. External factors, such as compliance with laws and regulations, competitive alternatives, and shifting consumer preferences, may also impact the successful implementation of a new product or service. Further, as we expand our product offerings and services, we are exposed to operational risk in implementing these new products and services. New products and services may require new operational processes, which often require new internal controls to manage new risks that these new processes present. If these controls are insufficient or ineffective to manage the risks inherent in these new processes, or if there is human error in executing these new controls either due to their novelty or otherwise, we could face financial loss, reputational damage, or regulatory enforcement, which could materially and adversely affect our business, operating results, or financial condition.

Operational Risk

The inadequacy or failure of Farmer Mac's our operational systems, cybersecurity program, internal controls or processes, or infrastructure, or those of third parties, could have a material adverse effect on Farmer Mac's our business, operating results, or financial condition.

Farmer Mac is We are exposed to operational risk due to the complex nature of its our business operations and the processes and systems used to undertake its our business activities and comply with regulatory requirements. Operational risk includes the risk of loss to Farmer Mac resulting from:

•

inadequate or failed internal processes, systems, cybersecurity program, or infrastructure;

•

Farmer Mac's inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure;

•

any cybersecurity incident or compromise of Farmer Mac's our information systems or security measures (including of its our third parties), or the unauthorized access and/or acquisition of data;

•

failed execution of system implementations and upgrades;

•

human error, malfeasance, or other misconduct;

•

undetected or unknown errors, defects, or vulnerabilities in third party software or cybersecurity incidents related to third party software;

incidents related to third party software;

•

inadequate or failed internal controls or processes to detect or prevent fraud or other violations of law or regulations; or

•

external events, including a disruption involving physical site access, catastrophic events, natural disasters, terrorist activities, or disease pandemics.

Farmer Mac relies We rely on business processes that largely depend on people, technology, and the use of complex systems and models to manage its our business, process a high volume of daily transactions, and generate the records on which Farmer Mac's our financial statements are based. Inadequacies or failures in Farmer Mac's our internal processes, personnel, systems, cybersecurity program, or infrastructure could lead to a significant disruption to business operations; unauthorized access to, or acquisition, destruction, alteration, release, theft, or loss of, confidential, proprietary, or personal data; fraud on Farmer Mac's our business and customers; extortion; financial and economic loss or costs; errors in its our financial statements; impairment of its our liquidity; harm to its our employees, customers, or vendors; liability or service interruptions to its our customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; or reputational damage.

The potential for operational risk exposure also exists as a result of Farmer Mac's our interactions with, and reliance on, third parties. Farmer Mac's parties and we are aware of cybersecurity incidents involving third parties in the past. Our business relies on its our ability to process, evaluate, and interpret significant amounts of information, much of which third parties provide or process. Yet Farmer Mac's our ability to implement safeguards preventing disruption or unauthorized access to third-party systems or infrastructure is more limited than for its our own systems or infrastructure. Although we have not experienced a material loss due to a breach of third party systems, unauthorized access to a third party service provider's information technology assets or data may significantly impact our operations in the same manner as incidents on our own systems. If the financial, accounting, data processing, backup, information technology, or other operating systems and infrastructure of third parties with whom Farmer Mac interacts we interact or upon whom it relies we rely fail to operate properly, are subject to unauthorized access or improper use, or are disrupted, then Farmer Mac we may be impacted in the same manner as it we would be due to inadequacies or failures in Farmer Mac's our own internal processes, personnel, systems, cybersecurity program, or infrastructure.

Farmer Mac’s Our internal loan servicing function and reliance on third-party servicers exposes Farmer Mac us to operational risks that could adversely affect its our business, operating results, or financial condition.

Effective and reliable loan servicing is essential for Farmer Mac us to successfully operate its our business. Starting in 2021, Farmer Mac expanded its internal loan servicing function through two strategic acquisitions that included the loan servicing rights for We service a sizeable sizable portion of Farmer Mac’s our Agricultural Finance mortgage loan and USDA Securities portfolios, as well as servicing rights for eligible agricultural mortgage loans that are held by an unrelated third party. Farmer Mac has We also acquired experienced servicing personnel and an operational servicing platform during that time. This expansion of servicing responsibilities and personnel has required Farmer Mac to implement processes and controls for a business function that Farmer Mac has previously not operated and still has limited experience executing and managing. Farmer Mac also continues continue to rely on experienced third-party servicers to service the portion of Farmer Mac’s our Agricultural Finance mortgage loan portfolio that we do not serviced directly by Farmer Mac. service directly. Although Farmer Mac has we have established servicing standards and requirements to which these third-party servicers are required by contract to adhere and on which they must report to Farmer Mac, Farmer Mac does us, we do not manage the processes and controls of these third-party servicers. The ineffective implementation, operation, or oversight of one or more of the servicing processes or controls employed by Farmer Mac we employ or any of its our third-party servicers could expose Farmer Mac us to operational risk that could adversely affect Farmer Mac’s our business, operating results, or financial condition.

A deficiency, failure, interruption, or breach in Farmer Mac's our or its our service providers' technology and information systems, infrastructure, or cybersecurity program, including the occurrence of a cybersecurity incident, could adversely affect Farmer Mac's our business, operating results, or financial condition.

To conduct and manage its our business operations, Farmer Mac relies we rely heavily on technology and information systems, including from third parties, for the secure collection, processing, transmission, and storage of confidential, proprietary, and personal information in its our information systems (and those of third parties). These technology and information systems encompass an integrated set of hardware, software, infrastructure, and personnel organized to facilitate the our planning, control, coordination, operations, and decision-making processes within Farmer Mac. processes. Risks to Farmer Mac's our information systems and data as a result of cybersecurity attacks has increased as the importance and complexity of Farmer Mac’s our technology and information systems has increased, and as new technologies are developed that are used by its us, our customers, Farmer Mac, and its our service providers to support its our business and operations. Like many other financial institutions, Farmer Mac we and its our third-party service providers, vendors, and suppliers face regular attacks by threat actors attempting to gain unauthorized access to, or disrupt, its information systems and access or acquire its data, including from organized criminal groups, hackers, nation states, activists, insiders, and others. These threats come from a variety of different sources, including cyber-attacks, computer viruses, malware, exploits of system and network vulnerabilities, human error, phishing, ransomware, and distributed denial of service attacks. The threats Farmer Mac we and its our third-party service providers face and the methods used to gain unauthorized access to or disrupt their information systems and data are evolving. Farmer Mac is We are not always able to prevent or recognize attacks, its our existing cybersecurity defenses may not be sufficient to detect attacks in a timely manner or to fully investigate an attack, and it we may be unable to implement effective preventive measures or proactively address these threats until after a cybersecurity incident has been discovered. Farmer Mac We require third parties who collect, process, or store confidential, proprietary, or personal data to adhere to security policies, processes, and controls. We also may have limited or no control over its our service providers' handling of cybersecurity incidents, including their recognition and prevention practices. Any of our employees or agents of Farmer Mac’s (or its our third-party customers or vendors) who have authorized access to confidential, proprietary, or personal information could also intentionally, inadvertently, or erroneously disseminate the information to unauthorized third parties.

Farmer Mac’s Our current information security program with cybersecurity procedures, policies, training, practices, and controls, may not be sufficient to prevent unauthorized access to its our information technology assets or data, which could lead to a significant disruption to business operations; unauthorized access to or acquisition, destruction, alteration, release, theft, or loss of confidential, proprietary, or personal data; fraud (on Farmer Mac us and/or its our customers); extortion; financial and economic loss or costs; errors in its our financial statements; impairment of its liquidity; harm to employees, customers, or vendors; liability or service interruptions to its our customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; or reputational damage. Even when an attempted cybersecurity attack or other security breach is successfully avoided or thwarted, Farmer Mac we may need to expend substantial resources in doing so, may be required to take actions that could adversely affect customer satisfaction or behavior, or may be exposed to reputational damage. Farmer Mac We also could be subject to litigation and government enforcement actions as a result of any failure in its our procedures, policies, practices, and controls. Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of Farmer Mac's our insurance coverage, which could adversely affect Farmer Mac's our financial condition and results of operations. The amount and scope of insurance Farmer Mac maintains we maintain may not cover all expenses related to those claims. Also, the risk of unauthorized access to confidential, proprietary, or personal information through information system breaches or inadvertent dissemination may be heightened in a remote-working environment, which is currently more prevalent at Farmer Mac.

prevalent at Farmer Mac. Failure by our third-party loan servicers, third-party applications, information systems providers (including artificial intelligence systems), and other service providers to protect confidential

Failure by Farmer Mac's third-party loan servicers, third-party applications, information systems providers (including artificial intelligence systems), and other service providers to protect confidential information from unauthorized access and dissemination could have a negative effect on Farmer Mac's our business, operating results, or financial condition.

Farmer Mac relies We rely on third parties, including loan servicers, information systems providers, software-as-a-service (SaaS) providers, cloud computing service providers, law firms, and other service providers, to perform various functions that support Farmer Mac’s our business and operations. Farmer Mac depends We depend on these third parties to collect, process, transmit, and store a variety of confidential, proprietary, or personal information, including sensitive financial information and customer information. Just as Farmer Mac is we are subject to numerous cyber-attacks from a variety of actors, so too are these third parties. Farmer Mac requires We require third parties who collect, process, or store confidential, proprietary, or personal data to adhere to security policies, processes, and controls. However, the control systems, cybersecurity program, infrastructure, and personnel associated with third parties with which Farmer Mac does we do business or obtains obtain services are beyond its our control. Farmer Mac is We also may have limited or no control over third parties handling of cybersecurity incidents, including their recognition and prevention practices. We are aware of cybersecurity incidents involving its our third party service providers in the past. Although Farmer Mac has we have not experienced a material loss of data or disruption of its our operations due to a breach of third party systems, unauthorized access to a third party service provider's information technology assets or data may significantly impact Farmer Mac's our operations in the same manner as incidents on its our own systems.

Farmer Mac relies We rely upon a variety of third-party applications, services, and tools that are we do not developed by Farmer Mac, develop, including artificial intelligence systems and cloud-based platforms and related data centers, to host data and support and operate certain aspects of its our services and business operations. The effective adoption, integration, and leveraging of existing and emerging technologies, including artificial intelligence and machine learning systems into our operations, presents operational and market business risks, including system failures, inaccuracies with artificial intelligence outputs, and the investment of time and resources to develop and implement successful artificial intelligence solutions in a rapidly changing competitive market.

The unauthorized access to, acquisition, misuse, mishandling, unavailability, or destruction of Farmer Mac's our data or confidential information stored by these third parties or on their applications and systems, including artificial intelligence systems, or unauthorized access to or disruption of these third party applications, services, or tools could result in: unauthorized access to Farmer Mac's our own systems; significant disruption to its our business operations; fraud (on Farmer Mac us and/or its our customers); extortion; financial and economic losses or costs; errors in financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; reputational damage; or litigation and government enforcement actions.

If Farmer Mac's our management of risk associated with its loan assets and investment securities based on model assumptions and output is not effective, its our business, operating results, financial condition, or capital levels could be materially adversely affected.

Farmer Mac We continually develops develop and adapts adapt profitability and risk management models to adequately address a wide range of possible market developments. Some of Farmer Mac's our qualitative tools and metrics for managing risk are based on its use of observed historical market behavior. Farmer Mac applies We apply statistical and other tools to these observations to quantify our risks. These tools and metrics may fail to predict future or unanticipated risks or may not be effective in mitigating our risk exposure in all economic market environments or against all types of risk, which could expose us to material unanticipated losses. Our inability to effectively identify and manage the risks inherent in our business could have a material adverse effect on our business, operating results, financial condition, or capital levels.

statistical and other tools to these observations to quantify its risks. These tools and metrics may fail to predict future or unanticipated risks or may not be effective in mitigating its risk exposure in all economic market environments or against all types of risk, which could expose Farmer Mac to material unanticipated losses. The inability of Farmer Mac to effectively identify and manage the risks inherent in its business could have a material adverse effect on its business, operating results, financial condition, or capital levels.

Farmer Mac's efforts to expand product offerings and services to its customers exposes Farmer Mac to operational risk that could materially and adversely affect its business, operating results, or financial condition.

As the needs of Farmer Mac's customer base and rural America evolve, Farmer Mac seeks to respond by offering new products and services to meet these needs. As Farmer Mac expands its product offerings and services, it is exposed to operational risk in implementing these new products and services. New products and services may require new operational processes, which often require new internal controls to manage new risks that these new processes present. If these controls are insufficient or ineffective to manage the risks inherent in these new processes, or if there is human error in executing these new controls either due to their novelty or otherwise, Farmer Mac could face financial loss, reputational damage, or regulatory enforcement, which could materially and adversely affect Farmer Mac's business, operating results, or financial condition.

Market Risk

Farmer Mac is We are exposed to interest rate risk that could materially and adversely affect its our operating results or financial condition.

Farmer Mac is We are subject to interest rate risk due to the timing differences in the cash flows of the assets it holds we hold and the liabilities issued to fund those assets. Farmer Mac's Our primary strategy for managing interest rate risk is to fund asset purchases with debt together with financial derivatives that have similar duration and convexity characteristics to help mitigate impacts from interest rate changes across the yield curve. However, the ability of borrowers to prepay their loans before the scheduled maturities increases the likelihood of asset and liability cash flow mismatches. In a changing interest rate environment, these cash flow mismatches affect Farmer Mac's our earnings if assets repay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments, particularly if Farmer Mac's our related funding costs cannot be correspondingly repaid. Conversely, if assets repay more slowly than anticipated and the associated debt issued to fund the assets must be reissued at a higher interest rate, Farmer Mac's our earnings could be adversely affected. In addition, rapid changes in interest rates could have a negative effect on Farmer Mac's our net interest income across quarters. Although Farmer Mac has benefited from higher nominal interest rates in its investment portfolio, if those nominal interest rates decline, Farmer Mac may earn less interest income on its investments in future periods. A future period of rapid increase or decline in interest rates may create or exacerbate periods of market volatility that could adversely affect Farmer Mac's our ability to manage interest rate risk, which could have a material adverse effect on Farmer Mac's our operating results or financial condition. See "Management's Discussion and Analysis—Risk MD&A—Risk Management—Interest Rate Risk" Risk for more information on Farmer Mac's our management of interest rate risk.

Farmer Mac is We are also subject to repricing risk, which is the risk that Farmer Mac's our funding cost relative to a benchmark index (for example, the Secured Overnight Financing Rate known as "SOFR") will increase from the time the initial funding was issued and the time the liabilities are re-funded. This repricing risk arises from a funding strategy whereby we issue floating rate debt across a variety of maturities to fund floating or synthetically floating rate assets that on average may have longer maturities. A significant increase in the difference between our funding cost relative to the benchmark index, including SOFR, may compress spread income on the assets we hold and seek to re-fund with the higher cost funding. Widespread compression within a short timeframe could adversely affect our operating results or financial condition.

arises from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating or synthetically floating rate assets that on average may have longer maturities. A significant increase Changes in the difference between Farmer Mac's funding cost interest rates relative to the benchmark index, including SOFR, our management of interest rate risk through derivatives may compress spread income on the assets Farmer Mac holds cause volatility in financial results and seeks to re-fund with the higher cost funding. Widespread compression within a short timeframe could capital levels and may adversely affect Farmer Mac's our net income, liquidity position, or operating results or financial condition. results.

Changes We enter into financial derivatives transactions to hedge interest rate risks inherent in interest rates relative to Farmer Mac's management our business and we carry our financial derivatives at fair value in our consolidated financial statements. Although our financial derivatives provide economic hedges of interest rate risk through risk, changes in the fair value of financial derivatives may can cause volatility in net income and in capital, particularly if those financial derivatives are not designated in hedge accounting relationships or if there is any ineffectiveness in a hedge accounting relationship. As interest rates increase or decrease, the fair values of our derivatives change based on the position we hold relative to the specific characteristics of the derivative. Our core capital available to meet our statutory minimum capital requirement can be affected by changes in the fair value of financial derivatives, as noted above. Adverse changes in the fair value of our financial derivatives that are not designated in hedge accounting relationships and any hedge ineffectiveness that results in a loss would reduce the amount of core capital available to meet this requirement. In 2025 and capital levels and may adversely affect Farmer Mac's net income, liquidity position, or operating results. 2024, we recorded losses of $1.9 million

Farmer Mac enters into financial derivatives transactions to hedge interest rate risks inherent in its business and carries its financial derivatives at fair value in its consolidated financial statements. Although Farmer Mac's financial derivatives provide economic hedges gains of interest rate risk, $3.3 million, respectively, from changes in the fair values value of our financial derivatives can cause volatility as a result of movements in net income and in capital, particularly if those financial derivatives are not designated in hedge accounting relationships or if there is any ineffectiveness in a hedge accounting relationship. As interest rates increase or decrease, the fair values of Farmer Mac's derivatives change based on the position Farmer Mac holds relative to the specific characteristics of the derivative. Farmer Mac's core capital available to meet its statutory minimum capital requirement can be affected by changes in the fair values of financial derivatives, as noted above. Adverse changes in the fair values of Farmer Mac's financial derivatives that are not designated in hedge accounting relationships and any hedge ineffectiveness that results in a loss would reduce the amount of core capital available to meet this requirement. In 2024 and 2023, Farmer Mac during those years. We recorded gains of $3.3 million

$6.8 million and $5.1 million, respectively, from changes in the fair values of its financial derivatives as a result of movements in interest rates during those years. Farmer Mac recorded gains of $11.5 million in 2025 and losses of $5.4 million in 2024 and 2023, 2024, respectively, related to ineffectiveness in hedge accounting relationships.

Changes in interest rates have required, and in the future may require, Farmer Mac to that we post cash or investment securities to collateralize its our derivative exposures due to corresponding changes in the fair market values of these derivatives. If changes in interest rates were to result in a significant decrease in the fair value of Farmer Mac's our derivatives, Farmer Mac we would be required to post cash, cash equivalents, or investment securities, possibly within a short period of time, to satisfy its our obligations under its our derivatives contracts. As of December 31, 2024, Farmer Mac 2025, we posted $46.9 $2.1 million of cash and $213.4 $250.6 million of investment securities as collateral for its our derivatives in net liability positions. If Farmer Mac is we are required to fully collateralize a significant portion of its our derivatives in an adverse interest rate environment, it could have a material adverse effect on Farmer Mac's our liquidity position or operating results.

Financial Risk

Incorrect estimates and assumptions by management in preparing financial statements could adversely affect Farmer Mac's our business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels.

Farmer Mac's Our accounting policies and methods are fundamental to how it records we record and reports its report our financial condition and results of operations. Some of these policies and methods require management to make estimates and assumptions in preparing Farmer Mac's our consolidated financial statements. Incorrect estimates and assumptions by management in connection with preparing Farmer Mac's our consolidated financial statements could adversely affect the reported amounts of assets and liabilities and the reported amounts of income and expenses. For example, as of December 31, 2025, our assets and liabilities recorded at fair value included financial instruments valued at $6.7 billion whose fair value management estimated in the absence of readily observable fair value (in other words, level 3). These financial instruments measured with significant unobservable inputs represented 19.1% of total assets and 49.4% of financial instruments measured at fair value as of December 31, 2025. See MD&A—Critical Accounting Estimates for more information about fair value measurement. If we make incorrect assumptions or estimates that result in understating or overstating reported financial results, it could materially and adversely affect our business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels.

amounts of income and expenses. For example, as of December 31, 2024, Farmer Mac's assets and liabilities recorded at fair value included financial instruments valued at $5.5 billion whose fair values management estimated Changes in the absence value or composition of readily observable fair values (in other words, level 3). These financial instruments measured with significant unobservable inputs represented 17.7% of total assets and 47.8% of financial instruments measured at fair value as of December 31, 2024. See "Management's Discussion and Analysis—Critical Accounting Estimates" for more information about fair value measurement. If management makes incorrect assumptions or estimates that result in understating or overstating reported financial results, it our investment securities could materially and adversely affect Farmer Mac's our business, operating results, reported assets and liabilities, financial condition, reputation, liquidity or capital levels.

Changes Deterioration in financial or credit market conditions could reduce the fair value of our investment securities, particularly those securities that are less liquid and more subject to market variability. Certain securities we own do not have well-established secondary trading markets, making it more difficult to estimate current fair values for those securities. This requires us to rely on market observations and internal models to estimate the fair values of our investment securities and to determine whether credit losses exist. However, available market data may not reflect the actual sale conditions we may face when selling our investment securities, particularly in adverse financial market conditions. Internal models require us to exercise judgment about estimates and assumptions used in the models. If we use unreliable market data or incorrect estimates or assumptions in our internal models to estimate the fair value or composition of Farmer Mac's our investment securities securities, those estimates could adversely affect Farmer Mac's business, operating results, financial condition, results of operations during the reporting period. If we decide to sell securities in our investment portfolio, the price ultimately realized will depend on the demand and liquidity or capital levels. in the market at the time of sale, which could be significantly less than our

Deterioration in financial or credit market conditions could reduce the fair value of Farmer Mac's investment securities, particularly those securities that are less liquid and more subject to market variability. Some securities owned by Farmer Mac, including auction-rate certificates, do not have well-established secondary trading markets, making it more difficult to estimate current fair values for those securities. This requires Farmer Mac to rely on market observations and internal models to estimate the fair values of its investment securities and to determine whether credit losses exist. However, available market data may not reflect the actual sale conditions Farmer Mac may face when selling its investment securities, particularly in adverse financial market conditions. Internal models require Farmer Mac to exercise judgment about estimates and assumptions used in the models. If Farmer Mac uses unreliable market data or incorrect estimates or assumptions in its internal models estimates. Failure to estimate the fair value of its our investment securities, those estimates securities reasonably accurately could adversely affect results of operations during the reporting period. And if Farmer Mac decides to sell securities in its investment portfolio, the price ultimately realized will depend on the demand and liquidity in the market at the time of sale, which could be significantly less than Farmer Mac's estimates for fair value. Failure to accurately estimate the fair value of Farmer Mac's investment securities could adversely affect Farmer Mac's our business, operating results, financial condition, liquidity or capital levels.

The trading price for Farmer Mac's our Class C non-voting common stock may be volatile due to market influences, trading volume, the effects of equity awards for Farmer Mac's our officers, directors, and employees, or sales of significant amounts of the stock by large holders.

The trading price of Farmer Mac's our Class C non-voting common stock ("Class C stock") has at times experienced substantial price volatility and may remain volatile. For example, the trading price of the Class C non-voting common stock ranged from $169.46 $155.25 per share to $216.45 $209.73 per share during 2024. 2025. The trading price may fluctuate in response to various factors, including short sales, hedging, the presence or absence of a share repurchase program, stock market influences in general that are unrelated to Farmer Mac's our operating performance, or sales of significant amounts of the stock by large holders. Farmer Mac We typically grants grant equity awards each year that are based on the Class C non-voting common stock, including grants that vest over time or upon the achievement of specified performance goals. Sales of stock acquired upon vesting or the exercise of equity awards by Farmer Mac's our officers, directors, or employees, whether under an established trading plan or otherwise, could adversely affect the trading price of the Class C non-voting common stock. All of these factors may be exacerbated during periods of low trading volume for Farmer Mac's our Class C non-voting common stock, which averaged 52,650 75,460 shares daily during 2024 2025 and may have a prolonged negative effect on its the stock's trading price or increase price volatility.

Regulatory and Compliance Risk

Farmer Mac We are a GSE that may be materially and many of its business counterparties are subject to comprehensive government regulation, and changes to those laws and regulations could adversely affect Farmer Mac's business, operating results, reputation, affected by legislative or financial condition. political developments.

Farmer Mac was established under We are a GSE with a statutory charter Charter that the U.S. may be amended by Congress may amend at any time time, and is we are also regulated by various government agencies, including the FCA and the SEC. Future Although we are not aware of any pending legislative or regulatory actions affecting Farmer Mac's statutory charter or its business activities, including increased regulatory supervision, and any required changes to Farmer Mac's proposals that would materially impact our business or operations resulting from such actions, operations, our ability to effectively conduct our business is subject to risks and uncertainties related to political developments that could result in affect us or GSEs generally. For example, five members of our board of directors serve at the pleasure of the President of the United States. Also, the organization and operation of the FCA could be affected by efforts to consolidate or otherwise reorganize federal financial regulatory agencies. We cannot predict whether or when legislative or regulatory initiatives may commence that, if successful, could negatively affect our status as a GSE or how we operate, and which could have a material and adverse effect on our business, operating results, financial loss for condition, or capital levels. See Business—Government Regulation of Farmer Mac or otherwise reduce its profitability, impose for more compliance information about the rules and other costs on Farmer Mac, limit the products offered by Farmer Mac or its ability to pursue business opportunities in which it might otherwise consider engaging, curtail business activities in which it is currently engaged, affect the value of assets that Farmer Mac holds, or otherwise adversely affect Farmer Mac's business, results of operations, reputation, or financial condition. regulations governing our activities.

The financial services industry, in which most We and many of Farmer Mac's our business counterparties and customers operate, is are subject to significant legislation comprehensive government regulation, and regulations. To the extent that current or future legislation, regulations, or supervisory activities affect the activities of banks, insurance companies, other rural lenders, derivatives counterparties, clearinghouses, securities dealers, or other regulated entities that constitute a large portion of Farmer Mac's business counterparties or customers, Farmer Mac could experience loss of business or business opportunities, increased compliance costs, disadvantageous business terms in its dealings with counterparties, and unfavorable changes to its business practices or activities. As a result, Farmer Mac's those laws and regulations could adversely affect our business, operating results, reputation, or financial condition could be adversely affected. condition.

The legal We were established under a statutory Charter that the U.S. Congress may amend at any time and we are regulated by various government agencies, including the FCA and the SEC. Future legislative or regulatory environment related to data privacy actions affecting our statutory Charter or our business activities, including increased regulatory supervision, and cybersecurity is constantly changing. Privacy and cybersecurity are currently areas of considerable legislative and regulatory attention, with new or modified laws, regulations, rules, and standards being frequently adopted and potentially subject to divergent interpretation or application in different jurisdictions in a manner that may create inconsistent or conflicting requirements for businesses. The uncertainty and compliance risks created by these legislative and regulatory developments are compounded by the rapid pace of technology development, such as artificial intelligence and advances in data science, that affect the use or security of data, including personal information. Privacy and cybersecurity laws and regulations often impose strict requirements on the collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information. These laws and regulations may increase Farmer Mac’s compliance costs and require any required changes to its our business and operations. An actual or perceived failure by Farmer Mac, lenders, servicers, vendors, service providers, counterparties, or other third parties to comply with privacy, data protection, and information security laws, regulations, standards, policies, and contractual obligations operations resulting from such actions, could result in legal liabilities, fines, regulatory action, financial loss or otherwise reduce our profitability, subject us to more compliance and reputational harm that have a material adverse impact on Farmer Mac’s business, financial results, and financial condition. other costs, limit our product offerings or our ability to pursue business opportunities in which we might otherwise

Farmer Mac's capital requirements may change, and failure to meet those requirements could result in supervisory measures or consider engaging, curtail our current business activities, affect the inability value of Farmer Mac to declare dividends, assets that we hold, or otherwise materially and adversely affect Farmer Mac's our business, operating results, results of operations, reputation, or financial condition.

Farmer Mac The financial services industry, in which most of our business counterparties and customers operate, is required by statute subject to significant legislation and regulation regulations. To the extent that current or future legislation, regulations, or supervisory activities affect the activities of banks, insurance companies, other rural lenders, derivatives counterparties, clearinghouses, securities dealers, or other regulated entities that constitute a large portion of our business counterparties or customers, we could experience loss of business or business opportunities, increased compliance costs, disadvantageous business terms in our dealings with counterparties, and unfavorable changes to maintain certain capital levels. Any inability by Farmer Mac to meet these capital requirements our business practices or activities. As a result, our business, operating results, reputation, or financial condition could result in supervisory measures by FCA, be adversely affected.

The legal and regulatory environment related to data privacy and cybersecurity is constantly changing. Privacy and cybersecurity are currently areas of considerable legislative and regulatory attention, with new or modified laws, regulations, rules, and standards being frequently adopted and potentially subject to divergent interpretation or application in different jurisdictions in a manner that may create inconsistent or conflicting requirements for businesses. The uncertainty and compliance risks created by these legislative and regulatory developments are compounded by the rapid pace of technology development, such as artificial intelligence and advances in data science, that affect Farmer Mac's ability the use or security of data, including personal information. Privacy and cybersecurity laws and regulations often impose strict requirements on the collection, storage, handling, use, disclosure, transfer, security, and other processing of personal information. These laws and regulations may increase our compliance costs and require changes to declare dividends our business and operations. An actual or perceived failure by us, lenders, servicers, vendors, service providers, counterparties, or other third parties to comply with privacy, data protection, and information security laws, regulations, standards, policies, and contractual obligations could result in legal liabilities, fines, regulatory action, and reputational harm that have a material adverse impact on its common our business, financial results, and preferred stock, or otherwise materially and adversely affect Farmer Mac's business, operating results, or financial condition. As required by an FCA regulation on capital planning, Farmer Mac has adopted a policy to maintain a sufficient level of Tier 1 capital and to restrict paying Tier 1-eligible dividends if Tier 1 capital falls below specified thresholds. For more information about Farmer Mac's capital requirements, including the Tier 1 capital requirement, see "Business—Government Regulation of Farmer Mac—Regulation—Capital Standards." Factors that could adversely affect the adequacy of Farmer Mac's capital levels in the future, and which may be beyond Farmer Mac's control, include:

Our capital requirements may change, and failure to meet those requirements could result in supervisory measures or our inability to declare dividends, or otherwise materially and adversely affect our business, operating results, or financial condition.

We are required by statute and regulation to maintain certain capital levels. Any inability to meet these capital requirements could result in supervisory measures by FCA, adversely affect our ability to declare dividends on our common and preferred stock, or otherwise materially and adversely affect our business, operating results, or financial condition. As required by an FCA regulation on capital planning, we have adopted a policy to maintain a sufficient level of Tier 1 capital and to restrict paying Tier 1-eligible dividends if Tier 1 capital falls below specified thresholds. For more information about our capital requirements, including the Tier 1 capital requirement, see "Business—Government Regulation of Farmer Mac—Regulation—Capital Standards." Factors that could adversely affect the adequacy of our capital levels in the future, and which may be beyond our control, include:

•

credit losses;

•

adverse changes in interest rates or credit spreads;

•

the need to legislative or regulatory actions that increase the level of the allowance for losses on loans; our capital requirements; and

•

legislative changes in GAAP or regulatory actions that increase Farmer Mac's capital requirements; and framework as set forth by our principal regulatory agency, FCA.

•

changes in GAAP.

Other Risks

Farmer Mac Our ability to attract and retain motivated and qualified employees is a GSE that critical to the success of our business, and significant or sustained disruption in the continuity of our employees or executive leaders may be materially and adversely affected by legislative affect our business performance, operations, financial condition, or political developments. reputation.

Farmer Mac is a GSE with a statutory charter that may be amended by Congress at any time, We rely on our employees' breadth and is also regulated by government agencies, including the FCA depth of knowledge of our company and the SEC. Although Farmer Mac is related industries to run our business operations successfully. If we cannot retain and attract motivated and qualified employees or do not aware of any pending legislative or regulatory proposals that would materially impact its have adequate human capital to achieve our business or objectives, our business performance, operations, Farmer Mac's ability to effectively conduct its business is subject to risks and uncertainties related to political developments that could affect Farmer Mac or GSEs generally. These political risks and uncertainties generally are heightened under a newly-elected Congress and Presidential administration. For example, five members of Farmer Mac's board of directors serve at the pleasure of the President of the United States. Also, the organization and operation of Farmer Mac's federal safety and soundness regulator, the Farm Credit Administration, could be affected by efforts to consolidate or otherwise reorganize federal financial regulatory agencies. Farmer Mac cannot predict whether or when legislative or regulatory initiatives may commence that, if successful, could negatively affect the status of Farmer Mac as a GSE or how Farmer Mac operates, and which could have a material and adverse effect on Farmer Mac's business, operating results, financial condition, or capital levels. See "Business—Government Regulation reputation could be materially adversely affected. A significant disruption in the continuity of Farmer Mac" for our employees or any significant executive leadership change could also result in a loss of productivity and affect our ability to successfully execute business strategies by creating uncertainty or instability or requiring us to divert or expend more information about resources to replace personnel. Loss of key leadership personnel could damage the rules and regulations governing Farmer Mac's activities. public or market perception of our company or result in the departure of other executives or key employees. Any of these factors could materially adversely affect our business performance, operations, financial condition, or reputation.

Any of the risks described in this section could materially and adversely affect our business, operating results, financial condition, reputation, capital levels, and future earnings. For more information about Farmer Mac's ability to attract and retain motivated and qualified employees is critical to the success risk management, see "MD&A—Risk Management" in Item 7 of its business, and significant or sustained disruption in the continuity of Farmer Mac's employees or executive leaders may materially adversely affect Farmer Mac's business performance, operations, financial condition, or reputation. this report.

Farmer Mac relies on its employees' breadth and depth of knowledge of Farmer Mac and related industries to run its business operations successfully. If Farmer Mac cannot continue to retain and attract motivated and qualified employees or does not have adequate human capital to achieve its business objectives, Farmer Mac's business performance, operations, financial condition, or reputation could be materially adversely affected. A significant disruption in the continuity of Farmer Mac's employees or any significant executive leadership change could also result in a loss of productivity and affect Farmer Mac's ability to successfully execute business strategies by creating uncertainty or instability or requiring Farmer Mac to

divert or expend more resources to replace personnel. Loss of key leadership personnel could also damage the public or market perception of Farmer Mac or result in the departure of other executives or key employees. Any of these factors could materially adversely affect Farmer Mac's business performance, operations, financial condition, or reputation.

Any of the risks described in this section could materially and adversely affect Farmer Mac's business, operating results, financial condition, reputation, capital levels, and future earnings. For more information about Farmer Mac's risk management, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management" in Item 7 of this report.

Management's Discussion and Analysis of Financial Condition and Results of Operations

The objective of this This section of the report is to provide a provides discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's our financial condition and results of operations for the year ended December 31, 2024. 2025. Financial information included in this report is consolidated to include the accounts of Farmer Mac and its our two subsidiaries – Farmer Mac Mortgage Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with our consolidated financial statements and the related notes to the consolidated financial statements for each fiscal year ended December 31, 2025

Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with Farmer Mac's consolidated financial statements and the related notes to the consolidated financial statements for the fiscal year ended December 31, 2024, 2023, and 2022. ,

2024, and 2023. We have omitted a discussion of the earliest of the three fiscal years presented because that information was previously included in our Form 10‑K for the year ended December 31, 2024 and is not necessary for an understanding of our financial condition, changes in financial condition, or results of operations for 2025. The prior discussion is available in Item 7 of that filing.

Overview

Farmer Mac is We are driven by its our mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to our the nation's agricultural and rural infrastructure businesses, supporting a vibrant and strong rural America. We offer a wide range of solutions to help meet financial institutions’ growth, liquidity, risk management, and capital relief needs across diverse markets, including agriculture, agribusiness, broadband infrastructure, power and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, innovation, and prosperity in America's rural and agricultural communities. Farmer Mac We also serves as a critical provide investment tool for a number of entities – opportunities to entities, such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions – by offering investment opportunities unions, that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During 2024, Farmer Mac: 2025, we:

•

provided $7.0 exceeded $30 billion in liquidity and lending capacity to lenders serving rural America; outstanding business volume;

•

issued over $0.6 provided $10.5 billion in FARM securitization certificates; liquidity and lending capacity to lenders serving rural America;

•

maintained strong liquidity added $100.0 million in our investment portfolio well above regulatory requirements; equity through the issuance of 4.0 million shares of 6.500% non-cumulative perpetual Series H preferred stock;

•

maintained strong liquidity in our strong capital position, investment portfolio, with a monthly average of 301 days of liquidity during 2025, well above the regulatory requirements, requirement of a minimum of 90 days of liquidity; and uninterrupted access to the debt capital markets; and

•

redeemed all $75.0 million maintained our strong capital position, with capital of our Series C Preferred Stock. $0.7 billion in excess of the minimum regulatory capital requirement, and maintained uninterrupted access to the debt capital markets.

The discussion below of Farmer Mac's our financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures Farmer Mac uses, we use, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use MD&A—Use of Non-GAAP Measures." Measures.

Net Income and Core Earnings

The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings and core earnings per share are is a non-GAAP measures measure that differ differs from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions.

Table 1

The $7.6 million year-over-year increase of $2.1 million in net income attributable to common stockholders for 2025 was primarily attributable to a $20.8 $36.9 million after-tax increase in net interest income, a $2.6 million federal income tax benefit from the purchase of renewable energy investment tax credits, and a $2.0 million decrease in preferred stock dividends. These factors were ("NII"), partially offset by an $8.2 a $21.3 million after-tax increase in the provision for credit losses, losses and a $6.6 $14.4 million after-tax increase in operating expenses, and the $1.6 million loss on retirement of the Series C Preferred Stock related to deferred issuance costs. expenses.

The $21.9 $11.3 million year-over-year increase in net income core earnings for 2025 was primarily attributable to common stockholders for 2023 compared to 2022 was due to a $44.7 $43.5 million after-tax increase in net interest income effective spread ("NES") and a $2.9 $3.5 million after-tax increase in guarantee and commitment fees. These factors impacts were partially offset by a $15.6 $21.3 million after-tax decrease increase in the fair value of undesignated financial derivatives provision for credit losses and a $12.1 $14.4 million after-tax increase in operating expenses.

The $0.5 million year-over-year increase in core earnings was primarily For more information about net income attributable to a $9.9 million after-tax increase in net effective spread, a $2.6 million federal income tax benefit from common stockholders, the purchase composition of renewable energy investment tax credits, a $2.0 million decrease in preferred stock dividends, core earnings, and a $1.1 million after-tax increase in guarantee and commitment fees. These factors were partially offset by an $8.2 million after-tax increase in the provision for credit losses and a $6.6 million after-tax increase in operating expenses. reconciliation of net income attributable to common stockholders to core earnings, see MD&A—Results of Operations. For more information about our non-GAAP measures, see MD&A—Use of Non-GAAP Measures.

The $46.8 million year-over-year increase in core earnings for 2023 compared to 2022 was due to a $56.4 million after-tax increase in net effective spread, partially offset by a $12.1 million after-tax increase in operating expenses.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Net Interest Income and Net Effective Spread

The following table shows our net interest income NII and net effective spread NES in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, We use NES, a non-GAAP measure, as an alternative to net interest income NII because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac we own and all related funding, including any associated derivatives, some of which may not be included in net interest income. NII.

Table 2

The $26.3 million year-over-year increase of $36.9 million in NII and $43.5 million in NES for 2025 were primarily attributable to the same drivers, which include a $34.3 million increase related to net interest income was primarily new business volume and a $7.0 million increase due to an increase in our use of $20.2 million from the shift in the composition of new business volume toward higher yielding loans and a $16.9 million increase in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). That increased yield was partially offset by a $6.6 million decrease in cash-basis interest income and a $4.6 million increase in non-interest-bearing funding costs. In percentage terms, the year-over-year increase was 0.01%. to support our

volume growth. The $56.6 million year-over-year increase in net interest income for 2023 compared to 2022 NII was primarily due to a $48.9 million decrease in funding costs and a $19.9 million increase related to net new business volume. The decrease in funding costs was primarily due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess long-term capital that we raised when interest rates were at historical lows and is held in our investment portfolio. The factors that contributed to the increase in net interest income were partially further offset by an $11.2 a $4.8 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). In percentage terms, the 0.11% increase was primarily attributable to a decrease of 0.16% in funding costs and a decrease of 0.04% in net fair value changes from designated financial derivatives. derivatives, the impact of which is excluded from NES.

The $12.6 million year-over-year increase See MD&A—Use of Non-GAAP Measures for more information about our use of NES as a financial measure and Table 9 in net effective spread was primarily due MD&A—Results of Operations—Net Interest Income for a reconciliation of NII to a $20.2 million increase from a shift in the composition of new business volume towards higher-yielding loans. This factor was partially offset by a $6.6 million decrease in cash-basis interest income and a $1.3 million increase in funding costs. In percentage terms, the year-over-year decrease of 0.03% was primarily attributable to an increase of 0.04% related to the increases in funding costs and a decrease of 0.02% in cash-basis interest income, which were partially offset by an increase of 0.03% on the shift in the composition of new business volume towards higher-yielding loans. NES.

The $71.5 million year-over-year increase in net effective spread for 2023 compared to 2022 was primarily due to a $54.6 million decrease in funding costs, due to the same factors mentioned above that decreased our funding costs, and a $20.6 million increase related to net new business volume. In percentage terms, the year-over-year increase of 0.16% was primarily attributable to a decrease in funding costs.

For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Business Volume

Our outstanding business volume was $29.5 $33.4 billion as of December 31, 2024, 2025, a net increase of $1.1 $3.8 billion

from December 31, 2023 2024 after taking into account all new business, maturities, sales, and paydowns on existing assets. The net increase was primarily attributable to a net increase of $1.1 $2.8 billion in the Infrastructure Finance line of business. For more information about our business volume, see MD&A—Results of Operations—Business Volume.

For more information about Throughout this MD&A, references to “Agricultural Finance Mortgage Loans” include on‑balance sheet agricultural mortgage loans as well as off‑balance sheet exposures, consisting of LTSPCs, unfunded commitments, and Farmer Mac's business volume, see "Management's Discussion Mac Guaranteed Securities and Analysis of Financial Condition references to "Infrastructure Finance Loans" include on-balance sheet infrastructure finance loans as well as off-balance sheet LTSPCs and Results of Operations—Results of Operations—Business Volume." unfunded commitments.

Capital Credit Quality

Our allowance for losses increased $14.3 million from December 31, 2024 to December 31, 2025, primarily due to $32.9 million in net provision expense offset by $20.9 million

in charge-offs. The $32.9 million in net provision expense is primarily comprised of $19.6 million attributable to certain individually significant credit deteriorations in our Corporate AgFinance and Broadband Infrastructure segments and $9.6 million attributable to new loan volume, particularly in the Infrastructure Finance line of business. The individually significant credit deteriorations that contributed to the provision expense are concentrated in segments that also generate higher yields, which are designed to compensate for the increased credit risk inherent in these segments. These higher-yielding segments have contributed to the growth that we have seen in both NII and NES. During the fourth quarter, we determined that portions of these individually significant exposures in Corporate AgFinance and Broadband Infrastructure were uncollectible and charged off those portions. Those charge-offs comprised the majority of the total charge-offs during the year. The remaining net provision expense recorded during 2025 was primarily related to volume growth. For more information about our provision, see MD&A—Results of Operations. For more details on credit risk management and credit quality indicators, see MD&A—Risk Management—Credit Risk—Loans and Guarantees.

The following table presents Agricultural Finance mortgage loans and Infrastructure Finance loans classified as substandard, in dollars and as a percentage of the respective portfolio as of December 31, 2025 and 2024:

Table 3

The decrease in capital in excess Although total substandard assets increased year-over-year by $129.0 million during 2025, the amount of substandard assets as a percentage of the minimum capital level required was primarily due to portfolio increased by a proportionately smaller amount across the redemption two lines of the Series C Preferred Stock, partially offset by an increase business given growth in retained earnings. outstanding business volume.

Credit Quality The following table presents 90-day delinquency rates for our Agricultural Finance mortgage loans and Infrastructure Finance loans, in dollars and as a percentage of total outstanding business volume as of December 31, 2025 and 2024:

The following table presents Agricultural Finance on- and off-balance sheet substandard assets, in dollars and as a percentage of the respective portfolio as of December 31, 2024 and 2023:

Table 4

The increase Across all of $214.1 million in on-balance sheet substandard assets during 2024 was primarily driven by credit downgrades in permanent plantings, crops, livestock, part-time farms, and agricultural storage and processing. our lines of business, 90-day delinquency rates remained relatively flat as a percentage of total outstanding business volume.

There were two substandard assets with a cumulative outstanding balance of $42.5 million in the Infrastructure Finance portfolio as of December 31, 2024. There was one substandard asset with an outstanding balance of $29.4 million in the Infrastructure Finance portfolio as of December 31, 2023. For more information about our credit metrics, see MD&A—Risk Management—Credit Risk—Loans and Guarantees.

For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 25 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." Critical Accounting Estimates

The following table presents 90-day delinquencies preparation of our consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the on- periods presented. We consider an accounting estimate made in accordance with GAAP to be critical when it involves a significant level of estimation uncertainty and off-balance sheet Agricultural Finance portfolios in dollars and as it has had or is likely to have a percentage material impact on our financial condition or results of the respective balance sheet category as of December 31, 2024 and 2023: operations.

We consider the estimation of the fair value of AgVantage securities ("AgVantage") to be a critical accounting estimate in the preparation of our consolidated financial statements.We consider the fair value of AgVantage securities that are classified as available-for-sale ("AFS") to be a critical estimate due to the significance of the periodic measurement of mark-to-market adjustments relative to our total assets,

comprehensive income, and equity. We consider the fair value of AgVantage securities that are classified as held-to-maturity ("HTM") to be a critical estimate because of their impact on our fair value disclosures in Note 4—Investment Securities and Note 11—Fair Value Disclosures to the consolidated financial statements. We also consider the fair value of AgVantage to be a critical accounting estimate because we apply a discount rate in calculating the net present value of future expected cash flows that is both significant to the estimate of their fair value and unobservable in the market. We rely upon this significant unobservable input to estimate the fair value of AgVantage because there are no observable transactions in these securities in the market.

Our AgVantage AFS fair value was $6.7 billion and $5.5 billion

as of December 31, 2025 and 2024, respectively. The fair value of AgVantage AFS had accumulated net unrealized losses in the amount of $186.2 million and $321.2 million as of December 31, 2025 and 2024, respectively. See Note 4—Investment Securities to the consolidated financial statements for more information.

Our AgVantage HTM amortized cost was $1.5 billion and $2.7 billion as of December 31, 2025 and 2024, respectively. The fair value of AgVantage HTM had net unrealized gain in the amount of $12.7 million and a net unrealized loss of $15.6 million as of December 31, 2025 and 2024, respectively. See Note 4—Investment Securities to the consolidated financial statements for more information.

We apply discount rates that are commensurate with the risks involved to estimate the fair value measurement of both AgVantage AFS and HTM. As of December 31, 2025, we applied discount rates that ranged from 4.3% to 4.9% (with a weighted average of 4.5%) for AgVantage AFS and 4.3% to 5.4% (with a weighted average of 4.7%) for AgVantage HTM. As of December 31, 2024, we applied discount rates that ranged from 5.0% to 5.5% (with a weighted average of 5.1%) for AgVantage AFS and 5.0% to 6.8% (with a weighted average of 5.3%) for AgVantage HTM.

Use of different discount rates than those we select may result in materially different estimates of fair value for AgVantage AFS and HTM. We select the discount rate for each AgVantage AFS and HTM security by analyzing credit default swap levels and the long-term credit outlook of our major counterparties and estimating an appropriate credit spread relative to U.S. Treasury yields. The periodic measurement of fair value and underlying discount rate methodology is subject to our internal controls and review by management. As of December 31, 2025, a 0.50% increase in the discount rates used to determine the fair value of AgVantage AFS and HTM would decrease the reported carrying value by approximately 1.8% and 1.9%, respectively. See Note 11—Fair Value Disclosures to the consolidated financial statements for more information.

For a description of our accounting policy for fair value measurements, see Note 2(m)

—Summary of Significant Accounting Policies—Fair Value Measurements

to the consolidated financial statements.

Use of Non-GAAP Measures

We use "non-GAAP measures" in our analysis of financial information. Non-GAAP measures represent measures of financial performance that are not presented in accordance with GAAP. Specifically, we use the following non-GAAP measures: 1) "core earnings," 2) "core earnings per common share," and 3) "net effective spread," in both dollars and percentage yield. In our view, these non-GAAP measures are useful alternative measures in understanding our economic performance, transaction economics, and business trends.

Our non-GAAP financial measures may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Our disclosure of non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.

Core Earnings and Core Earnings Per Common Share

The main difference between core earnings and core earnings per common share ("Core EPS"), which are non-GAAP measures, and net income attributable to common stockholders and earnings per common share ("EPS"), which are GAAP measures, is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on our financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Additionally, these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of our core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and Core EPS, which is consistent with our historical treatment of any losses on the retirement of preferred stock. For a reconciliation of our net income attributable to common stockholders to core earnings and of EPS to Core EPS, see MD&A—Results of Operations.

Net Effective Spread

We use NES to measure the net spread earned between interest-earning assets and the related net funding costs, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

NES excludes the following:

•

Interest income and interest expense associated with single-class consolidated trusts with beneficial interests owned by third parties

and for which we guarantees all classes of securities issued

("single-class consolidated trusts") and reclassifies that activity to guarantee and commitment fees in determining our core earnings. This reclassification reflects our view that the net interest income earned on single-class consolidated trusts is effectively a guarantee fee.

•

Fair value changes of financial derivatives and corresponding financial assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on our financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.

•

The amortization of premiums and discounts on assets consolidated at fair value.

NES includes the following:

•

Income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). For undesignated financial derivatives, we record the income or expense related to the accrual of the contractual amounts due in "(Losses)/gains on financial derivatives" on the Consolidated Statements of Operations.

•

The net effects of terminations or net settlements on undesignated financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that we receive upon the inception

of certain swaps. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the Consolidated Statements of Operations in the period in which they occur. For NES, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.

For a reconciliation of NII to NES, see Table 9 in MD&A—Results of Operations—Net Interest Income.

Results of Operations

Reconciliations of net income attributable to common stockholders and EPS to core earnings and Core EPS are presented in the following tables along with information about the composition of core earnings:

Table 5

On-balance sheet Agricultural Finance assets 90 or more days delinquent increased in permanent plantings, crops, livestock, and part-time farms. Off-balance sheet Agricultural Finance assets 90 days or more delinquent increased in permanent plantings and crops. The top ten borrower exposures over 90 days delinquent in either the on- or off-balance sheet Agricultural Finance portfolio represented over half of the aggregate 90-day delinquencies as of December 31, 2024. (1)

As Reflects the amortization recorded during the reporting period on those assets for which the premium, discount, or deferred gain was a result of both December 31, 2024 and 2023, there were no 90-day delinquencies in Farmer Mac's portfolio of Infrastructure Finance loan purchases and loans underlying LTSPCs. consolidation accounting rather than a cash transaction.

For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." (2)

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

The preparation of Farmer Mac's consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the periods presented. Farmer Mac considers an accounting estimate made in accordance with GAAP to be critical when it involves a significant level of estimation uncertainty and it has had or is likely to have a material impact on our financial condition or results of operations. (3)

The accounting estimate that Farmer Mac considers Includes NII of $4.1 million and $4.5 million for the years ended December 31, 2025 and 2024, respectively, related to be critical in the preparation of its consolidated financial statements is the estimation of the fair value of AgVantage Securities (AgVantage). Farmer Mac considers the fair value of AgVantage Securities that are classified as held-to-maturity (AgVantage HTM) trusts owned by third parties reclassified from net interest income to be a critical estimate because of their impact on the company's fair value disclosures in Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities guarantee and USDA Securities and Note 13 to the consolidated financial statements – Fair Value Disclosures. Farmer Mac considers the fair value of AgVantage Securities that are classified as available-for-sale (AgVantage AFS) to be a critical estimate due to the significance of the periodic measurement of mark-to-market adjustments relative to the company's total assets, comprehensive income, and equity. Farmer Mac also considers the fair value of AgVantage to be a critical accounting estimate because Farmer Mac applies a discount rate in calculating commitment fees.

the net present value of future expected cash flows that is both significant to the estimate of their fair value and unobservable in the market. Farmer Mac relies upon this significant unobservable input to estimate the fair value of AgVantage because there are no observable transactions in these securities in the market. (4)

Farmer Mac's AgVantage HTM amortized cost was $2.7 billion Reflects reconciling adjustments for the reclassification to exclude expenses related to undesignated financial derivatives and $4.2 billion as of December 31, 2024 terminations or net settlements on financial derivatives, and 2023, respectively. The reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of AgVantage HTM had net unrealized losses in deferred gains over the amount estimated lives of $15.6 million and $34.8 million as of December 31, 2024 and 2023, respectively. See Note 5 to the consolidated financial statements – certain Farmer Mac Guaranteed Securities and USDA Securities for more information. Securities.

Farmer Mac's AgVantage AFS fair value was $5.5 billion as of both December 31, 2024 and 2023. The fair value of AgVantage AFS had accumulated net unrealized losses in the amount of $321.2 million and $293.0 million as of December 31, 2024 and 2023, respectively. See Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities for more information. (5)

Farmer Mac applies discount rates that are commensurate with Includes the risks involved tax impact of non-GAAP reconciling items between net income attributable to estimate the fair value measurement of both AgVantage AFS common stockholders and HTM. As of December 31, 2024, Farmer Mac applied discount rates that ranged from 5.0% to 5.5% (with a weighted average of 5.1%) for AgVantage AFS and 5.0% to 6.8% (with a weighted average of 5.3%) for AgVantage HTM. As of December 31, 2023, Farmer Mac applied discount rates that ranged from 4.7% to 5.4% (with a weighted average of 5.0%) for AgVantage AFS and 4.8% to 8.6% (with a weighted average of 5.5%) for AgVantage HTM. core earnings.

Use of different discount rates than those selected by Farmer Mac may result in materially different estimates of fair value for AgVantage AFS and HTM. Farmer Mac selects the discount rate for each AgVantage AFS and HTM security by analyzing credit default swap levels and the long-term credit outlook of Farmer Mac's major counterparties and estimating an appropriate credit spread relative to U.S. Treasury yields. The periodic measurement of fair value and underlying discount rate methodology is subject to Farmer Mac’s internal controls and review by management. As of December 31, 2024, a 0.50% increase in the discount rates used to determine the fair value of AgVantage AFS and HTM would decrease the overall GAAP carrying value by approximately 1.8% and 1.3%, respectively. See Note 13 to the consolidated financial statements – Fair Value Disclosures for more information.

For a description of Farmer Mac’s accounting policy for fair value measurements, see Note 2(n) to the consolidated financial statements – Significant Accounting Policies, Fair Value Measurements.

Use of Non-GAAP Measures

In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends.

The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a

substitute for, or as more important than, the related financial information prepared in accordance with GAAP.

Core Earnings and Core Earnings Per Share

The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in third quarter 2024, we excluded the loss on the retirement of the Series C Preferred Stock from core earnings and core earnings per share, which is consistent with Farmer Mac's historical treatment of any losses on the retirement of preferred stock. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

Net Effective Spread

Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of those assets. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain.

Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.

Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "Gains on financial derivatives" on the consolidated statements of operations. However, the accrual

of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.

Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

For a reconciliation of net interest income and net interest yield to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Results of Operations

Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings:

Table 6

(1) The following sections provide more detail about specific components of our results of operations.

Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 10 for a reconciliation of net interest income to net effective spread. Interest Income

(2) . The following tables provide information about interest-earning assets and funding, composition of changes in NII due to rate and volume, and a reconciliation of NII to NES for t

Includes interest income he years ended December 31, 2025 and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. 2024.

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

Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading Our interest-earning assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. include:

(4) •

Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders "Liquidity investments", which are defined as cash, cash equivalents (including U.S. Treasury securities, operational deposits, and core earnings. other short-te

rm money market instruments), and other investment securities (including securities guaranteed by the U.S. Government and its agencies or by GSEs and asset backed securities) that can be drawn upon for liquidity needs. For additional details regarding our liquidity investments, see

MD&A

—Liquidity and Capital Resources.

•

"Program Assets" are those assets that fulfill our mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure, and include Eligible Loans, Farmer Mac Guaranteed Securities and USDA Securities.

Table 7

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

1. Gains on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) Gains on undesignated financial derivatives due to fair value changes; and (b) Gains/(losses) on hedging activities due to fair value changes.

2. Unrealized (losses)/gains on trading securities. The unrealized (losses)/gains on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period.

3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value. The amount of this non-GAAP reconciling item is the recorded amount of premium, discount, or deferred gain amortization during the reporting period on those assets for which the premium, discount, or deferred gain was based on the application of an accounting principle (e.g., consolidation of variable interest entities) rather than on a cash transaction (e.g., a purchase price premium or discount).

4. The net effects of terminations or net settlements on financial derivatives. These terminations or net settlements relate to:

•

Forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities. These contracts are used as a short-term economic hedge of the issuance of debt. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.

5. The recognition of deferred issuance costs on the retirement of the Series C Preferred Stock in July 2024 has been excluded from core earnings because they are not frequently occurring transactions, nor are they indicative of future operating results. This is consistent with Farmer Mac's previous treatment of deferred issuance costs associated with the retirement of preferred stock.

The following sections provide more detail about specific components of Farmer Mac's results of operations.

Net Interest Income

. The following table provides information about interest-earning assets and funding for the years ended December 31, 2024, 2023, and 2022. The average balance of non-accruing loans is included in the average balance of loans, Farmer Mac Guaranteed Securities, and USDA Securities presented, though the related income is accounted for on a cash basis. Therefore, as the average balance of non-accruing loans and the income received increases or decreases, the net interest income and yield will fluctuate accordingly. The average balance of loans in consolidated trusts with beneficial interests owned by third parties (single-class) and for which Farmer Mac guarantees all classes of securities issued is disclosed in the net effect of consolidated trusts and is not included in the average balances of interest-earning assets and interest-bearing liabilities. The interest income and expense associated with these trusts are shown in the net effect of consolidated trusts.

Table 8

(1)

Excludes interest income of $38.4 million, $34.2 million, and $31.7 million in 2024, 2023, and 2022 respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(2)

Includes current portion of long-term notes.

(3)

Excludes interest expense of $33.9 million, $30.0 million, and $27.4 million in 2024, 2023, and 2022 respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class).

(4)

Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class).

The $26.3 million year-over-year increase in net interest income was primarily due to an increase of $20.2 million from the shift in the composition of new business volume toward higher yielding loans and a $16.9 million increase in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). That increased yield was partially offset by a $6.6 million decrease in cash-basis interest income and a $4.6 million increase in funding costs. In percentage terms, the year-over-year increase was 0.01%.

For 2023 compared to 2022, the $56.6 million year-over-year increase in net interest income was primarily due to a $48.9 million decrease in funding costs and a $19.9 million increase related to net new business volume. The decrease in funding costs was due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess long-term capital that we raised when interest rates were at historical lows and is held in our investment portfolio. The factors that contributed to an increase in net interest income were partially offset by an $11.2 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). In percentage terms, the 0.11% increase was primarily attributable to a decrease of 0.16% in funding costs and a decrease of 0.04% in net fair value changes from designated financial derivatives.

The following table sets forth information about changes in the components of Farmer Mac's net interest income prior to consolidation of certain trusts for the periods indicated. For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by prior rate), and changes in rate (change in rate multiplied by old volume), and then allocated based on the relative size of rate and volume changes from the prior period.

Table 9

(1) The year-over-year increase of $36.9 million in NII and $43.5 million in NES for 2025 were primarily attributable to the same drivers, which include a $34.3 million increase related to net new business volume and a $7.0 million increase due to a net increase of $182.3 million in non-interest-bearing funding primarily attributable to strong growth in retained earnings during 2025. The year-over-year increase in NII was further offset by a $4.8 million decrease in the fair value of designated financial derivatives, the impact of which is excluded from NES. The increase in yield attributable to net new business volume was comprised of $23.9 million due to growth in the Infrastructure Finance loans and $16.8 million due to growth in the Agricultural Finance loans, partially offset by a decrease of $6.4 million due to a net decrease in AgVantage securities.

Excludes See Note 12—Business Segment Reporting to the effect consolidated financial statements for more information about NII and NES from our business segments. See MD&A—Supplemental Information for quarterly NES by line of debt in consolidated trusts with beneficial interests owned by third parties (single-class). business.

The following table presents a reconciliation Provision for and Release of net interest income and net interest yield to net effective spread. Net effective spread is measured by: including (1) expenses related to undesignated financial derivatives, which consists of income or expense related to contractual amounts due on financial derivatives not designated in hedge relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (1) the amortization of premiums and discounts on assets consolidated at fair value, (2) the net effects of consolidated trusts with beneficial interests owned by third parties (single-class), and (3) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" Allowance for more information about net effective spread. Losses

. The following table summarizes the components of our total allowance for losses for the two-year period ended December 31, 2025:

Table 10

The $12.6 Our allowance for loan loss increased $14.3 million year-over-year increase in net effective spread was from December 31, 2024 to December 31, 2025, primarily due to a $20.2 $32.9 million increase from a shift in the composition of new business volume towards higher-yielding loans. This factor was partially provision expense offset by a $6.6 $20.9 million decrease in cash-basis interest income and a $1.3 million increase in funding costs. In percentage terms, the year-over-year decrease of 0.03% was primarily attributable to an increase of 0.04% related to the increases in funding costs and a decrease of 0.02% in

cash-basis interest income, which were partially offset by an increase of 0.03% on the shift in the composition of new business charge-offs. The provision expense is attributable to some individually significant credit deteriorations in our Corporate AgFinance and Broadband Infrastructure portfolios and year-over-year volume towards higher-yielding loans. growth.

For 2023 compared to 2022, the $71.5 million year-over-year increase in net effective spread was primarily due to a $54.6 million decrease in funding costs, due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess capital that is held in our short-term investment portfolio, and a $20.6 million increase related to net new business volume. In percentage terms, the year-over-year increase of 0.16% was primarily attributable to a decrease in funding costs. additional information, see Note 7

See Note 14 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business. —

Provision for Loans to the consolidated financial statements and Release of Allowance for Losses MD&A—Risk Management—Credit Risk—Loans and Reserve for Losses Guarantees.

. The following table summarizes the components of Farmer Mac's total allowance for losses for the three-year period ended December 31, 2024: (Losses)/gains on financial derivatives

.

The components of gains and losses on financial derivatives for the years ended December 31, 2025 and 2024 are summarized in the following table:

Table 11

These changes in fair value are primarily the result of fluctuations in interest rates. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "(Losses)/gains due to terminations or net settlements" in the table above. See Notes 8 and 12 Note 5—Financial Derivatives to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." for more information about our financial derivatives.

During 2024, we recorded a $11.5 million net provision to the total allowance for losses primarily as a result of one permanent planting borrower relationship, risk rating downgrades in Agricultural Finance, and new loan volume in Infrastructure Finance. Operating Expenses

Guarantee . The following table summarizes components of operating expenses for the years ended December 31, 2025 and Commitment Fees 2024:

. The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the years ended December 31, 2024, 2023, and 2022:

Table 12

Guarantee The year-over-year increase in compensation and commitment fee income decreased employee benefits expenses for the year ended December 31, 2024 compared to 2023, which 2025 was largely due to a decrease in the fair value of our retained beneficial interest in our off-balance sheet securitization. As adjusted for the non-GAAP core earnings presentation, guarantee and commitment fees were $20.3 million increased head

for the year ended December 31, 2024, count and increased bonus accruals associated with strong financial performance compared to $18.9 million and $18.1 million for the years ended December 31, 2023 and 2022, respectively. targets in 2025.

In Farmer Mac's presentation of non-GAAP core earnings, guarantee The year-over-year increase in general and commitment fees include interest income administrative expenses for the year ended December 31, 2025 was primarily attributable to an increase in information technology infrastructure costs, transactional legal fees, and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities. Farmer Mac has also excluded changes in the fair values of guarantee assets from the presentation of core earnings because management does not expect these fluctuations to have a cumulative net impact on Farmer Mac's financial condition, results of operations, or cash flows if Farmer Mac fulfills its guarantee obligation throughout the term of the guaranteed securities, as is expected. hiring expenses.

For more information about net income attributable to common stockholders, the composition of non-GAAP core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Gains on financial derivatives

.

The components of gains and losses on financial derivatives for the years ended December 31, 2024, 2023, and 2022 are summarized in the following table:

Table 13

These changes in fair value are primarily the result of fluctuations in long-term interest rates. The accrual of periodic cash settlements for interest paid or received from Farmer Mac's interest rate swaps that are undesignated financial derivatives is shown as income or expense related to financial derivatives. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash

payments received upon the inception of certain undesignated swaps are included in "Gains due to terminations or net settlements" in the table above. See Note 6 to the consolidated financial statements for more information about Farmer Mac's financial derivatives.

Operating Expenses

. The components of operating expenses for the years ended December 31, 2024, 2023, and 2022 are summarized in the following table:

Table 14

Compensation and Employee Benefits

. The increase in compensation and employee benefits expenses for the year ended December 31, 2024 compared to 2023 was largely due to increased headcount and increased stock compensation expense. The increase in compensation and employee benefits expenses for the year ended December 31, 2023 compared to 2022 was largely due to increased headcount.

General and Administrative Expenses (G&A)

. The increase in G&A expenses for the year ended December 31, 2024 compared to 2023 was primarily due to an increase in licensing fees and information technology infrastructure costs from the deployment of our modernized treasury and cash management systems in fourth quarter 2024. We also saw an increase in transactional legal fees as we continue to grow our Broadband Infrastructure and Renewable Energy portfolios.

Income Tax Expense

.

The following table presents income tax expense and the effective income tax rate for the years ended December 31, 2024, 2023, 2025 and 2022: 2024:

Table 13

The year-over-year decrease in income tax expense and the effective tax rate for the year ended December 31, 2025 is primarily attributable to increased purchases of renewable energy investment tax credits, which totaled $61.5 million during 2025 compared to $29.2 million in 2024. The purchases of the 2025 tax credits were at prices that range from approximately $0.91 to $0.94 per $1.00 of credit, resulting in a benefit of $4.8 million, whereas the 2024 purchases, were priced at $0.91 per $1.00 of credit, resulting in a $2.6 million benefit.

Business Volume

. The following table presents our outstanding volume in each line of business as of the dates indicated:

Table 14

(1)

The securities issued by these trusts are referred to as Farmer Mac Guaranteed Securities.

(2)

These categories are referred to as Farmer Mac Guaranteed Securities.

(3)

Other categories of Farmer Mac Guaranteed Securities that were sold by us to third parties.

The following table presents the net growth or decrease in our lines of business for the years ended December 31, 2025 and 2024:

Table 15

The decrease in Farmer Mac's effective tax rate in 2024 is primarily attributable to renewable energy investment tax credits that Farmer Mac purchased during 2024. (1)

Business Volume The securities issued by these trusts are referred to as Farmer Mac Guaranteed Securities.

. (2)

The following table sets forth the net growth or decrease in These categories are referred to as Farmer Mac's lines of business for the years ended December 31, 2024 and 2023: Mac Guaranteed Securities.

(3)

Other categories of Farmer Mac Guaranteed Securities that were sold by us to third parties.

Our outstanding business volume was $33.4 billion as of December 31, 2025, a net increase of $3.8 billion

from December 31, 2024 which was primarily attributable to increases in the Infrastructure Finance portfolio after taking into account all new business, maturities, sales, and paydowns on existing assets.

The increase in outstanding business volume during 2025 was attributable to a $2.8 billion increase in outstanding business volume in the Infrastructure Finance portfolio and a $1.0 billion increase in the Agricultural Finance portfolio.

The increase in the Infrastructure Finance portfolio consisted of a $1.1 billion increase in Power & Utilities, a $0.7 billion increase in Broadband Infrastructure, and a $1.0 billion increase in Renewable Energy. These increases in volume were primarily driven by $4.7 billion in new purchases, partially offset by $1.9 billion in scheduled maturities and repayments during the year.

The increase in the Agricultural Finance portfolio during 2025 primarily consisted of a $1.0 billion

increase in Farm & Ranch, resulting from net growth of $1.6 billion in loans, loans held in consolidated trusts and LTSPCs and unfunded loan commitments, which was partially offset by a net decrease in Farm & Ranch AgVantage Securities of $0.5 billion. Total Corporate AgFinance volume remained relatively flat when comparing December 31, 2025 to December 31, 2024, as net growth in loans was substantially offset by maturities of AgVantage securities that counterparties did not re-issue.

The level and composition of our outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from period to period. This relationship in turn depends on a variety of external and internal factors. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in our lines of business, see MD&A—Outlook in this report.

The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of December 31, 2025:

Table 16

Of the $33.4 billion outstanding business volume as of December 31, 2025, $8.4 billion were AgVantage securities included in the Agricultural Finance and Infrastructure Finance lines of business. Unlike

business volume from our other products, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. Changes in periodic AgVantage securities volume are primarily driven by the larger transaction size typical for that product, scheduled maturity amounts for a particular period, the liquidity needs of our AgVantage counterparties, and changes in the pricing and availability of wholesale funding from other sources. Based on these factors, we expect business volumes in AgVantage securities to continue to fluctuate. The following table summarizes by maturity date the outstanding principal amount of AgVantage securities as of December 31, 2025:

Table 17

(1)

Categories of Farmer Mac Guaranteed Securities. Includes various maturities ranging from 2031 to 2055.

(2) The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 5.7 years as of December 31, 2025.

An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. Related Party Transactions

(3) . As provided by our statutory Charter, only banks, insurance companies, and other financial institutions or similar entities may hold our Class A voting common stock, and only institutions of the FCS may hold our Class B voting common stock. Our Charter also provides that holders of Class A voting common stock elect five members of our 15-member board of directors and that holders of Class B voting common stock elect five members of the board of directors. The ownership of our two classes of voting common stock is currently concentrated in a small number of institutions. Approximately 48% of the Class A voting common stock is held by three financial institutions, with 31% held by one institution. Approximately 97% of the Class B voting common stock is held by five FCS institutions (two of which are related to each other through a parent-subsidiary relationship).

Other categories Unlike some other GSEs, specifically other FCS institutions and the Federal Home Loan Banks, we are not structured as a cooperative owned exclusively by member institutions and established to provide services exclusively to its members. As a stockholder-owned, publicly-traded corporation, we seek to fulfill our mission of serving the financing needs of rural America in a way that is consistent with providing a return on the investment of our stockholders, including those who do not directly participate in our secondary market activities. We generally require most financial institutions that participate in our Agricultural Finance line of business to own a requisite amount of common stock, based on the size and type of institution. As a result of this requirement, coupled with the ability of holders of Class A and Class B voting common stock to elect two-thirds of our board of directors, we regularly conduct business with institutions affiliated with members of Farmer Mac Guaranteed Securities Mac's board of directors and institutions that were sold by Farmer Mac to third parties. own large amounts of our voting common stock. We have adopted a Code of Business Conduct and Ethics and other related corporate policies that govern any conflicts of interest that may arise in these transactions, and our

Farmer Mac's outstanding business volume was $29.5 billion as policy is to require that any transactions with related parties be conducted in the ordinary course of December 31, 2024, a net increase of $1.1 billion business, with terms and conditions comparable to those available to any other unrelated counterparty.

from The following table summarizes our material relationships with related parties. These related parties consist of all holders of more than ten percent of our total voting common stock outstanding as of December 31, 2023 after taking into account all new business, maturities, sales, and paydowns on existing assets. 2025.

The $0.2 billion net decrease in Farm & Ranch during 2024 resulted from $3.4 billion of scheduled maturities and repayments, partially offset by $3.2 billion of new purchases, commitments, and guarantees. Included in the $3.2 billion is the purchase of $1.5 billion of Farm & Ranch loans. Scheduled loan maturities and repayments in the aggregate amount of $0.6 billion partially offset those purchases. Those purchases include $179.2 million related to Farmer Mac's purchase of two pools of loans from a single agricultural lender. During 2024, Farmer Mac also securitized $0.7 billion loans in on-balance sheet securitizations, which transferred them from loans held for investment to loans held in securitized trusts.

During 2024, a total of $2.0 billion in Farm & Ranch AgVantage Securities matured or were repaid while Farmer Mac purchased $0.9 billion. This activity primarily reflected slower loan growth resulting in less liquidity needs from Farmer Mac's AgVantage counterparties than in previous years.

The $0.2 billion net increase in Corporate AgFinance during 2024 primarily resulted from $1.2 billion of new purchases and unfunded loan commitments, which was partially offset by $1.0 billion of scheduled maturities, repayments, sales, and paydowns on revolving commitments.

The $0.2 billion net decrease in Power & Utilities during 2024 resulted from $0.9 billion of scheduled maturities and repayments, partially offset by $0.7 million of new purchases, unfunded loan commitments, and guarantees.

The $0.3 billion net increase in Broadband Infrastructure during 2024 resulted from new purchases of $0.5 billion in loans and unfunded commitments, partially offset by $0.2 billion in scheduled maturities and repayments.

The $0.9 billion net increase in Renewable Energy during 2024 primarily resulted from $1.5 billion in loan purchases and unfunded commitments, partially offset by $0.5 billion in repayments. The net increase in Renewable Energy loan purchases and unfunded commitments primarily reflects the continued strong demand for renewable power generation and storage.

Farmer Mac's outstanding business volume was $28.5 billion as of December 31, 2023, a net increase of $2.5 billion from December 31, 2022 after taking into account all new business, maturities, and paydowns on existing assets.

The $1.1 billion net increase in Farm & Ranch during 2023 resulted from $5.0 billion of new purchases, commitments, and guarantees, partially offset by $3.9 billion of scheduled maturities and repayments. Included in the $5.0 billion of new volume is newly purchased servicing rights on $0.6 billion of loans (i.e., loans serviced for others). Loans serviced for others earn servicing fee income rather than interest income and are a component of outstanding business volume because they are assets under our management.

Farmer Mac also purchased a total of $2.7 billion in Farm & Ranch AgVantage Securities during 2023, which primarily reflected the refinancing of maturing securities. The $2.7 billion in gross purchases was partially offset by $2.5 billion in scheduled maturities.

The $0.1 billion net increase in Corporate AgFinance during 2023 resulted from $0.9 billion of new purchases and unfunded loan commitments, which was partially offset by $0.8 billion of scheduled maturities, repayments, and paydowns on revolving commitments. Farmer Mac purchased a total of $578.1 million in loans, including draws on revolving commitments, which was partially offset by $484.6 million in scheduled maturities, repayments, and paydowns on revolving commitments. The increase in loan purchases was primarily due to Farmer Mac's continued focus to support loans to larger and more complex agribusinesses focused on food and fiber processing and other food supply chain production.

The $0.9 billion net increase in Power & Utilities during 2023 resulted from $1.8 billion of new purchases, unfunded loan commitments, and guarantees, which was partially offset by $0.8 billion of scheduled maturities and repayments. Farmer Mac purchased a total of $1.5 billion in AgVantage Securities and $297.6 million in electric distribution and generation and transmission loans. The $297.6 million in loan purchases was partially offset by $173.4 million in scheduled maturities and repayments. The net increase in loan purchases primarily reflected borrowers' normal-course capital expenditures related to maintaining and upgrading utility infrastructure.

The $0.2 billion net increase in Broadband Infrastructure during 2023 resulted from $0.3 billion of new purchases and unfunded loan commitments, which was partially offset by $0.1 in repayments.

The $0.3 billion net increase in Renewable Energy during 2023 primarily reflects $273.5 million in loan purchases, partially offset by $52.7 million in repayments.

The level and composition of Farmer Mac’s outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from year to year. This relationship in turn depends on a variety of factors both internal and external to Farmer Mac. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report.

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

Table 17

Farmer Mac either retains the loans it purchases or securitizes them and retains or sells Farmer Mac Guaranteed Securities backed by those securitized loans. During 2024, Farmer Mac executed two structured securitization transactions, whereby it sold and securitized agricultural mortgage loans resulting in $624.1 million of Farmer Mac Guaranteed Securities. In this transaction, Farmer Mac transferred

selected loans to a depositor which then deposited the loans into a trust, at which time the loans became assets of the trust. Farmer Mac concluded that it was the primary beneficiary of the trust because Farmer Mac retained significant interest and has power over the activities most significant to the economic performance of the Variable Interest Entity in its role as Master Servicer. Therefore, Farmer Mac consolidates the assets and liabilities of the trust for this structured securitization. Farmer Mac does not consider the assets held by the related securitization trust to be available to satisfy the claims of the creditors of Farmer Mac and/or the depositor.

During 2024, 2023, and 2022, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the consolidated balance sheets.

During 2024, 2023, and 2022, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed USDA Securities or AgVantage Securities.

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

Table 18

(1) For more information about related party transactions, see Note 3—Related Party Transactions to the consolidated financial statements.

A type of Farmer Mac Guaranteed Security.

(2)

An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.

(3)

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

The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of December 31, 2024:

Table 19

Of Farmer Mac's $29.5 billion outstanding principal balance of business volume as of December 31, 2024, $8.5 billion were AgVantage securities included in the Agricultural Finance and Infrastructure Finance lines of business. Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. Changes in quarterly AgVantage securities volume are primarily driven by the generally larger transaction sizes for that product, scheduled maturity amounts for a particular quarter, the liquidity needs of Farmer Mac’s AgVantage counterparties, and changes in the pricing and availability of wholesale funding. Based on these factors, Farmer Mac expects its business volumes in AgVantage securities to continue to be volatile. The following table summarizes by maturity date the outstanding principal amount of both on- and off-balance sheet AgVantage securities as of December 31, 2024:

Table 20

(1)

Includes various maturities ranging from 2030 to 2044.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.7 years as of December 31, 2024.

Related Party Transactions

. As provided by Farmer Mac's statutory charter, only banks, insurance companies, and other financial institutions or similar entities may hold Farmer Mac's Class A voting common stock, and only institutions of the FCS may hold Farmer Mac's Class B voting common stock. Farmer Mac's charter also provides that holders of Class A voting common stock elect five members of Farmer Mac's 15-member board of directors and that holders of Class B voting common stock elect five members of the board of directors. The ownership of Farmer Mac's two classes of voting common stock is currently concentrated in a small number of institutions. Approximately 47% of the Class A voting common stock is held by three financial institutions, with 31% held by one institution. Approximately 97% of the Class B voting common stock is held by five FCS institutions (two of which are related to each other through a parent-subsidiary relationship).

Unlike some other GSEs, specifically other FCS institutions and the Federal Home Loan Banks, Farmer Mac is not structured as a cooperative owned exclusively by member institutions and established to provide services exclusively to its members. Farmer Mac, as a stockholder-owned, publicly-traded corporation, seeks to fulfill its mission of serving the financing needs of rural America in a way that is consistent with providing a return on the investment of its stockholders, including those who do not directly participate in the secondary market provided by Farmer Mac. Farmer Mac generally requires most financial institutions that participate in Farmer Mac's Agricultural Finance line of business to own a requisite amount of common stock, based on the size and type of institution. As a result of this requirement, coupled with the ability of holders of Class A and Class B voting common stock to elect two-thirds of Farmer Mac's board of directors, Farmer Mac regularly conducts business with "related parties," including institutions affiliated with members of Farmer Mac's board of directors and institutions that own large amounts of Farmer Mac's voting common stock. Farmer Mac has adopted a Code of Business Conduct and Ethics and other related corporate policies that govern any conflicts of interest that may arise in these transactions, and Farmer Mac's policy is to require that any transactions with related parties be conducted in the ordinary course of business, with terms and conditions comparable to those available to any other counterparty not related to Farmer Mac.

The following table summarizes the material relationships between Farmer Mac and certain related parties. The related parties listed in the table below consist of (1) all holders of at least five percent of a class of Farmer Mac voting common stock as of December 31, 2024 and (2) other institutions that are considered "related parties" through an affiliation with a Farmer Mac director and that have conducted business with Farmer Mac during the two years ended December 31, 2024. The table below does not specify any relationships based on the ownership of Farmer Mac's non-voting common stock or any series of preferred stock.

Table 21

As discussed in more detail in Note 2(o) to the consolidated financial statements, Farmer Mac’s consolidated financial statements include the accounts of variable interest entities ("VIEs") in which Farmer Mac determines itself to be the primary beneficiary, including securitization trusts where Farmer Mac shares the power to make decisions about default mitigation with a related party. If that related party status changes, consolidation or deconsolidation of securitization trusts may occur. For more information about related party transactions, see Note 3 to the consolidated financial statements.

Outlook

Business Outlook

Products and Portfolio

Farmer Mac serves We play a vital role in serving rural America by offering liquidity, capital, and risk management tools as a secondary market to help increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. The Our growth trajectory of Farmer Mac is closely tied to the capital and liquidity needs of the lending institutions serving that serve agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors. Even with continued high market interest rates and global and economic volatility, Farmer Mac's outstanding business volume and net effective spread increased 3.7% and 3.8% in 2024 versus 2023, respectively. The increase in business volume and net effective spread primarily reflects the diversification of Farmer Mac’s business model and the resiliency of the agriculture and infrastructure sectors.

Several factors continue to influence our business volume growth dynamics. The persistently elevated market interest rates have had a direct effect on Farmer Mac’s Because the Farm & Ranch product interest rates, and there generally exists an inverse correlation between Farm & Ranch new loan purchase volumes and changes in Farm & Ranch product interest rates, with higher product interest portfolio contains a significant share of legacy low‑rate loans, refinance incentives remain muted, keeping prepayment rates slowing portfolio loan prepayments. below historical norms. Also, a tightening agricultural economy is creating the need for additional more liquidity and working capital needs for borrowers managing through this agricultural cycle. The net effect of these forces contributed to positive strong Farm & Ranch loan purchase portfolio growth in 2024. Future changes in monetary policy, sustained elevated product interest rates, and the financial health of borrowers are anticipated to influence the demand for Agricultural Finance mortgage loans and the pace of repayments. Farmer Mac experienced a decrease in wholesale finance volume during 2024, driven by slower market loan growth and a tightening of market credit spreads that resulted in less liquidity and diversification needs from our counterparties. Any future growth will likely be influenced by market interest rates and credit spreads, overall economic conditions and loan growth opportunities, and the relative value of Farmer Mac’s products versus the broader market. Corporate AgFinance loan purchases and unfunded commitments increased 14.4% in 2024 versus 2023. The Infrastructure Finance segments showed significant business volume growth in 2024, increasing over $1 billion, or 13.3%, to $9.0 billion in 2024 versus 2023. Business volume in Infrastructure Finance was strong across most products and segments in 2024, primarily driven by increased financing activity for renewable energy projects and broadband infrastructure in response to continued strong demand for renewable power generation and storage and data center investments.

Opportunities for profitable future purchase portfolio growth include Farmer Mac's potential role in alleviating liquidity, capital, and return-on-equity capital challenges faced by agricultural and infrastructure lenders. The suite of Farmer Mac's offerings encompasses loan and loan portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, and securitizations. In 2024, Farmer Mac purchased from a single agricultural lender two pools of Farm & Ranch loans with an aggregate outstanding principal balance of $179.2 million. Ongoing business and product development efforts continue to attract institutional investors and nontraditional lenders, resulting in the diversification of Farmer Mac's customer base and product set, potentially generating increased product demand from new sources. Farmer Mac’s expanded loan servicing capabilities enhance our loan portfolio purchase value proposition, adding new product offerings to an increasingly diverse customer base.

Growing relationships with larger agriculture lenders, financial throughout 2025, and industry consolidation, conditions look to maintain these trends into 2026. We experienced an increase in wholesale finance volume during fourth quarter 2025, driven by financings drawn from an AgVantage facility put in place earlier in the year. Future wholesale finance growth will likely be influenced by market interest rates and market volatility, as well as financial institutions' focus on capital efficiency credit spreads, overall economic conditions and liquidity continue to provide increased loan growth opportunities, and the relative value of our product versus the broader market. Continued strong interest in data centers, broadband expansion, and constructing and completing renewable energy projects before the sunset of tax credits, along with the overall need for energy generation and transmission capacity for rural America, provided significant opportunities for Farmer Mac, influencing the demand for loan purchases, risk management solutions, and wholesale funding. Any such growth may lead to an increase in the average transaction size within Farmer Mac’s lines of business. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and infrastructure industries present further opportunities for Farmer Mac’s loan purchase products and other financing solutions. And investments supporting consumer and food supply demand may increase financing needs in the food and agriculture supply chain, potentially requiring incremental capital support through the secondary market. Deepening relationships with eligible infrastructure counterparties are expected to continue to create Infrastructure Finance throughout 2025. We expect these opportunities to support fiber and broadband-related transactions, including significant market activity and investments in wholesale data centers, as well as renewable energy projects. Changes associated with governmental policies, including but not limited to fiscal, monetary, tax, and regulatory policies implemented by the new federal executive administration, have the potential to impact the primary business sectors served by Farmer Mac, which could affect business volume growth and opportunities. persist into future years.

Funding Opportunities for profitable future business volume growth include our potential role in alleviating liquidity, capital, and return-on-equity challenges faced by agricultural and infrastructure lenders. Our suite of offerings includes loan and loan portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, and risk-transfer financial securities. Ongoing business and product development efforts continue to attract private lenders, institutional investors, and non-traditional originators, resulting in the diversification of our customer base and product set, which could potentially generate increased product demand from new sources. Our expanded loan servicing capabilities enhance our loan portfolio purchase value proposition, adding new product offerings to an increasingly diverse customer base.

Unlike depository institutions, Farmer Mac's funding sources do not rely Growing relationships with larger agriculture lenders, industry consolidation, interest rates, and market volatility, as well as financial institutions' focus on deposits, allowing us capital efficiency and liquidity, are expected to navigate beyond short-term liquidity disruptions and continue to potentially take advantage of provide increased opportunities for our loan purchase, risk management, and wholesale funding solutions. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in a competitive lending environment. This is because the agricultural and infrastructure industries present further opportunities for our debt has a contractual term loan purchase products and other financing solutions. Investments supporting consumer and food supply demand may increase financing needs in the food and agriculture supply chain, potentially requiring incremental capital support through the secondary market. Deepening relationships with eligible infrastructure counterparties are expected to maturity and because we have the ability to redeem our callable debt before its original maturity date when market conditions are beneficial to Farmer Mac. In contrast, depository institutions largely rely on demand deposit accounts in which the depositors hold the right to withdraw at any time. During the second half of 2024, we began to see some benefit from calling fixed-rate debt and may continue to see this benefit subject create opportunities to support fiber and broadband-related transactions, including significant market conditions. activity and investments in wholesale data centers and renewable energy projects.

Farmer Mac's business may benefit from natural business hedges that help mitigate vulnerability to effects from interest rate volatility. When interest rates rise, prepayments tend to decline, but interest earned on excess cash and capital could increase. Conversely, when interest rates decline, loan purchase volume often increases, but prepayments tend to rise as well. Although these natural business dynamics may not be perfect offsets, they tend to provide some counterbalance to mitigate volatility from changes in short-term interest rates.

Operations

Farmer Mac anticipates We anticipate ongoing increases in operating expenses over the next several years, aligned with our planned expansion of investments in technology, business infrastructure, and human capital, technology, and business infrastructure. capital. These investments are designed to enhance capacity and efficiency in support of market growth opportunities and long-term strategic objectives. By investing in infrastructure and funding business platforms, Farmer Mac aims we aim to scale more efficiently in tandem with future portfolio and earnings growth. These initiatives are expected to improve product delivery delivery, business operations, and funding efficiency, potentially generating more benefits for scalability to better position us to capitalize on future growth. market growth opportunities.

Another focus of our planned infrastructure investments is a continued effort to expand our servicing capabilities and to enhance the efficiency of processes associated with loan onboarding and servicing. Farmer Mac expects We expect to continue to leverage technology enhancements and servicing standardization efforts to drive scalability and consistency. Technology We plan to implement technology enhancements are planned for 2025 and process re-engineering over the next several years to continue to incorporate all of our loan portfolios onto our servicing platform and to provide flexibility in accessing loan portfolio information, increase standardization of data and processing, and streamline operational workflows.

incorporate all Farmer Mac loan portfolios onto our servicing platform and to provide flexibility in accessing loan portfolio information, as well as streamlining operational workflows.

Agricultural Finance Industry Outlook

Farm Incomes

Overall The farm profitability has compressed in the last two years. According to the USDA, outlook remains varied for 2026. Total net cash farm income peaked at $210.1 billion rebounded slightly in 2022, 2025, rising 8% relative to 2024 according to the USDA. In 2026, the USDA’s initial forecast shows farm incomes rising another 3% relative to 2025. However, that expected overall improvement obscures a record bifurcation across agricultural sectors. Namely, crop producers face headwinds from tepid commodity prices and elevated input costs that have compressed margins, while livestock producers are expected to benefit again in 2026 from robust consumer and export demand and falling feed costs. Shifts in the outlook for both nominal trade could have a meaningful impact on commodity prices and inflation-adjusted farm profits. The primary driver of profitability in 2022 was higher cash revenues, in contrast to 2019 and 2020, when elevated government support payments supported farm incomes. The current USDA currently estimates that annual net cash farm income decreased 25% forecast shows U.S. agricultural exports dropping modestly in 2023 but rebounded 2% higher in 2024. Looking ahead to 2025, the USDA forecasts an additional 22% increase in net cash farm income, fueled by a $33 billion increase in government support payments from the American Relief Act enacted in 2024. If realized, 2025 net cash farm income would reach the third-highest inflation-adjusted level in history. Ad-hoc and supplemental government support payments are not guaranteed annually, but can help offset poor market conditions for producers. 2026.

Commodity Lower prices for several agricultural commodities could have multiple competing effects on loan performance and agricultural credit demand. Constraints on cash flow and additional market volatility could cause loan delinquencies to rise above historical averages, most likely in commodities experiencing negative market conditions such as some grains and permanent crops. Cash flow constraints and heightened uncertainty can also increase demand for debt capital to reorganize balance sheets and replace lost incomes. We believe that our portfolio and market strategy is sufficiently diversified by borrower, industry, and region to maintain robust portfolio performance through the current cycle to be positioned to support any expansion of the farm mortgage market that may see increased volatility arise in 2025 due to a rebound in global supply levels. Annual grain crop prices, which had faced pressure for much of 2024, stabilized in fourth quarter 2024, and even increased modestly for some crops. Prices were also modestly higher for tree nuts in fourth quarter 2024. Tree nut producers have reduced new plantings in recent years, which, combined with robust exports this marketing year, has provided moderate support for prices. Tree nut prices, including almonds and walnuts, had faced similar pressure in recent years from rising production. However, production was relatively stable in 2024, helping limit and even partially alleviate the buildup in inventories. Within the livestock and animal protein sector, producers benefited from lower feed costs in 2024, particularly the cattle sector. Broadly speaking, farm expenses could also abate somewhat into 2025, with lower expected feed, fertilizer, interest, and fuel costs partially offset by higher expected livestock, labor, and rental rates. Demand for corn and soybean by-products could see a boost in 2025 as renewable diesel and sustainable aviation fuel markets continue to mature. coming quarters.

The change in U.S. political leadership may introduce both opportunities and challenges for the agricultural sector. Shifts in trade policies, environmental regulations, and immigration laws could result in significant impacts on agricultural producers and the sector as a whole. These changes could lead to both favorable and unfavorable conditions, influencing trade dynamics, the strength of the U.S. dollar, labor costs and availability, and regulatory frameworks. The agricultural sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near-term.

Lower prices for several agricultural commodities could have multiple competing effects on loan performance and agricultural credit demand. Constraints on cash flow can cause loan delinquency rates to rise back to and surpass historical averages. This reversion is most likely in commodities experiencing negative market conditions like some grain and permanent crops. Simultaneously, cash flow constraints can increase demand for debt capital to reorganize balance sheets and replace lost incomes. Farmer Mac believes that its portfolio and market strategy is sufficiently diversified by borrower, industry, and region to maintain robust portfolio performance through the current cycle to be positioned to support any expansion of the farm mortgage market that may arise in the coming quarters.

Land Values

Record-setting farm incomes Farmland value growth rates continued to moderate in 2021 and 2022, combined with historically low interest rates in 2020 and 2021, drove a rapid rise in land values and a decrease in farm delinquencies and bankruptcies. Momentum for farmland values persisted throughout 2023 due to high levels 2025 following successive years of farm liquidity and a constrained supply of farmland for sale. Land values slowed in some markets in 2024 due to higher interest rates and lower profitability for some agricultural sectors. strong appreciation. Land value survey data from the USDA shows a 5% 4.3% increase in average farm real estate values from June 2023 2024 to June 2024. 2025. Annual farm real estate value gains were highest in the Southeast (9.4%) Southern Plains (5.9%) and the Southern Plains (7.5%) Lake states (5.7%) and still strong but slowing in the Lake states (4.3%), Northern Plains (4.9%), the Southeast (4.7%), and the Corn Belt (3.7%), and the Southeast (2.4%). (4.0%).

Farmland value growth rates moderated in transaction data, like the second half of 2024 in the face of continued higher market interest rates and stagnating price for some commodities. The Federal Reserve Bank of Chicago AgLetter reported no change in USDA survey results, show weaker farmland values in the Seventh District (primarily Iowa, Indiana, Illinois, and Wisconsin) between October 2023 and October 2024. This was down from a 5% increase over the previous 12-month period. Data from the Federal Reserve Bank of Kansas City showed that land values continued to grow in the Tenth District (primarily Kansas, Missouri, Nebraska, and Oklahoma), increasing 5.5% from third quarter 2023 to third quarter 2024. However, the growth rate in both regions has trended consistently lower in the last several years, and growth rates in land values could continue to moderate sales prices in 2025. Lower prices for some commodities and an elevated interest rate environment represent headwinds to farmland values, particularly in states like California. A relatively low supply of available farmland in many regions and persistent demand for the asset class across a wide variety of investors could help maintain balance in the farmland transaction markets. The Farmer Mac Farmland Price Index Powered by AcreValue

While regional averages for farmland values generally provide a good barometer for the overall changes in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate. Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors. ®

decreased 6% in third quarter 2025 relative to the same period in 2024. Basing this index on actual farmland transactions can lead to greater volatility, as many economic factors affecting land markets are highly localized and some markets may experience greater volatility in farmland values than state or national averages indicate. Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors.

Markets and Weather

Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector. Some of the external market conditions that have affected, and could continue to adversely affect affect, the farm and food sectors into 2025 in 2026 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions. The U.S. Water availability is a perennial concern for many agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms producers. Drought conditions increased modestly in intensity and food. The USDA projects that U.S. agriculture exports will drop to $170.0 billion prevalence in fourth quarter 2025, 3% lower than 2024 largely across several southern and down 13% relative to peak levels in 2022. Through November 2024, agricultural export values were roughly even in 2024 compared to 2023. One challenge for U.S. exports has been southeastern states. At the value of the U.S. dollar relative to competing exporters of agricultural goods. The USDA projects this headwind to continue in 2025. Slower global growth could also be a headwind for consumer-oriented products like animal proteins, dairy, fruits, and nuts. Ukrainian corn and wheat export shipments continue to rebound and have approached pre-2022 levels in recent months. Looking ahead, economic and geopolitical uncertainties could lead to higher volatility for the U.S. dollar during 2025. same time, drought conditions improved across several western states, including California.

Severe weather conditions continue The ongoing implementation of groundwater management regulation, especially in California, continues to shape agricultural sectors. In 2024, influence land values in many regions of the U.S. experienced 27 separate billion-dollar weather disasters, as tracked state. We work closely with water consultants and collateral valuation professionals to identify properties influenced by changing water availability. For loans in areas that commonly experience exceptional drought (primarily in California), our underwriting standards include an assessment of anticipated long-term water availability for the National Oceanic related property and Atmospheric Administration. Many of those events affected agriculture, including midwestern storms, flooding, western wildfires, excessive heat, how water availability impacts the collateral value and drought. Through December 31, 2024, Farmer Mac's portfolio had the borrower's liquidity position to mitigate that risk.

not experienced any material performance degradation as a result of these events. Federal crop insurance provides a strong mitigator against this risk, but farmers and ranchers face increasingly severe weather incidents and production volatility.

Drought conditions increased modestly in intensity and prevalence in fourth quarter 2024 after a sizable improvement in conditions in 2023 for large portions of the West Coast. Drought conditions intensified in several western states in the second half of 2024. Nearly one-third of California was classified as in severe drought to start 2025, up from 0% at the beginning of 2024. Farmer Mac had minimal exposure to the areas affected by the southern California wildfires in early 2025. As of January 21, 2025, 17% of the continental U.S. was classified as being in moderate to exceptional drought according to data from the National Center for Environmental Information, which is slightly higher than the same period of 2024. At the end of 2024, approximately 70% of the United States is classified as experiencing some level of drought or dryness according to the National Drought Mitigation Center, USDA, and NOAA. .

For loans in areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting standards include an assessment of anticipated long-term water availability for the related property and how water availability impacts the collateral value and the borrower's liquidity position to mitigate that risk.

Agricultural Processing and Food Supply Chain

The production of food, feed, fiber, and biofuels has generally been economically viable in during the past few years, but some economic factors continued continue to evolve into 2025. Rising consumer inflation boosted the profitability of the food processing and supply chains in 2021 and 2022. Moderating consumer prices in 2023 and 2024 increased the volume of consumer spending but also limited the profit expansion of food and fiber businesses. 2026. Biofuels have gained demand due to low-carbon regulations in several states and incremental tax benefits for the production of renewable diesel and sustainable aviation fuel. A large number of planned biofuel projects and new facilities for 2025 2026 and 2027 could provide support for raw materials such as corn and soybeans, but markets for these fuels are nascent and could evolve or erode rapidly in the coming quarters. A strong U.S. dollar, trade issues, Trade policy uncertainty, labor availability, changes to consumer demand due to health policy and pharmaceuticals, and a high risk of global economic stress could pose challenges for these sectors in 2025 and into 2026. Nonetheless, Still, consumer spending held steady throughout 2024, 2024 and 2025, providing stable conditions for value-added food, feed, fiber, and biofuel consumption. Consumer demand, particularly for animal protein products, are expected to provide a good tailwind for many food processors and agribusinesses in 2026. Credit demand in these sectors could grow in the next few quarters if interest rate policy maintains course, course or loosens, inflation rises again, mergers and acquisitions activity increases, or economic and trade policy uncertainty clears up.

Infrastructure Finance Industry Outlook

Power & Utilities

Economic conditions affecting rural power and electricity markets typically follow those in the general economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers advanced in 2024, with an annual increase in sales of 1.1% and an increase in revenue of 3.5%, respectively, in the last 12 months through November 2024 compared to November 2023. This increase was the result of higher residential and commercial electricity sales combined with slightly higher average prices paid for electricity relative to 2023. Higher energy input prices, such as natural gas and coal, became a headwind in 2022. After two years of increased prices and heightened volatility, oil and natural gas prices moderated throughout much of 2023 and 2024. Continued geopolitical uncertainty in the Middle East and Eastern Europe could increase energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices as

the sale of electricity to customers advanced in 2025, with an annual increase in sales of 2.2% and an increase in revenue of 7.6%, respectively, in the last 12 months through November 2025 compared to November 2024. This increase was the result of higher residential and commercial electricity sales combined with a sizable increase in average prices paid for electricity relative to 2024. Electricity demand was consistently strong in 2025, and power producers are continuing to invest in more capacity to meet the rising demand from consumers and data centers. Continued geopolitical uncertainty in the Middle East and Eastern Europe could increase energy price volatility, but power producers are generally able to pass higher input costs through to retail electricity prices, as evidenced by higher retail electricity prices in 2022 2022, 2023, and parts of 2023. Through December 31, 2024, Farmer Mac had not observed material degradation in the financial performance of its Power & Utilities loans, and that portfolio has never had a serious delinquency or default since its inception. 2025. Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure. These growth opportunities may be affected by the demand for electric power in rural areas, increased power demand from regional data centers, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry. Generally, these investments are expected to continue at, at or above, above historical levels based on the replacement and modernization of existing and new infrastructure. infrastructure, as well as increasing demand for electricity across the spectrum of residential, commercial, and industrial customers.

Renewable Energy

Growth Investment in renewable energy generation and deployment of energy storage technologies has in the potential to continue to deepen Farmer Mac's last five years deepened our relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable electricity capacity is expected to grow energy net generation grew by 167% 38% in the next ten last five years, compared to total electric capacity growth a non-renewable electricity net generation increase of 43%. 4%. The rising volatile cost of fossil fuel-based inputs inputs, combined with policy initiatives and the falling costs of renewable power generation, influenced this change in generation may hasten this increase in capacity along with recently enacted legislation, such as the Inflation Reduction Act of 2022 that incentivizes domestic production in clean energy technologies such as solar and wind. Because of these policy tailwinds, analysis from Bloomberg New Energy Finance (BNEF) estimates that investors will put $3.2 trillion into renewable projects between 2021 and 2050. If realized, growth in renewable energy capacity has the potential to broaden Farmer Mac's customer base focused on financing renewable energy projects and companies. capacity. In response to this expected growth, Farmer Mac has expansion, we have hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represents a new and growing rapidly developing market opportunity for Farmer Mac.

Recent changes to tax policy may alter the trajectory and velocity of investments in U.S. renewable energy. H.R. 1, commonly referred to as the "One Big Beautiful Bill Act" signed into law on July 4, 2025, phases out tax credits that have been routinely used to support renewable power project investments. As these tax credits phase out, new power projects are still likely to be financed, but the marginal costs of electricity generation may be higher without subsidies. Increased political and policy uncertainty and higher cost structures could decrease the overall renewable power investment market growth velocity over the next five years.

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

As of December 31, 2025, we have calculated approximately $80 million of remaining capacity to use renewable energy tax credits to apply against our 2025 federal corporate income tax liability and to carry back to the prior three years. Through December 31, 2025, we have purchased approximately $91.0 million in renewable energy investment tax credits at prices that range from approximately $0.91 to $0.94 per $1.00 of credit. All of the tax credits we have purchased are on projects that have been placed in service. We are focused on purchasing renewable energy tax credits for projects in rural areas or associated with agriculture, such as renewable gas generation from dairy waste. Under H.R. 1's phase-outs of future renewable energy investment tax credits, projects eligible for renewable energy investment tax

credits generally must be placed in service by December 31, 2027 unless construction begins by July 4, 2026.

Broadband Infrastructure

Rural telecommunication and data connectivity has proven to be of vital economic importance in the last decade, as more households and agricultural enterprises require more data and connectivity to thrive. The expected continued rapid growth in digital technologies, including the ongoing interest and investment in artificial intelligence, advancements in cloud computing, and wireless network densification, will require significantly more computing and storage capabilities as well as and investment in additional more fiber network capacity. These industry tailwinds are creating additional investments in rural telecommunications infrastructure by cooperative and non-cooperative providers, which is aided by access to many federally funded programs, such as USDA's Broadband Equity Access and Deployment Program (BEAD), the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF), the USDA’s ReConnect program, and the USDA’s Telecommunications Infrastructure Loan and Loan Guarantee program. In addition to capital projects spurred by these government-backed support programs, Farmer Mac we could see an increase in financing opportunities for other telecommunications providers in rural areas, with areas. For example, fiber line expansion, wireless broadband deployment, industry consolidation and efficiency through mergers and acquisitions, and data processing center buildouts are all increasingly important to rural economic opportunity opportunity, and the constant connectivity required by the food and agriculture industries. industries require constant connectivity. However, some types of "leapfrog" technology advances in the broadband infrastructure sector, such as low orbit satellite communication systems, could put pressure on the profitability of the providers of older digital technologies.

The recent change in U.S. political leadership may introduce both opportunities and challenges for the infrastructure sector. Potential changes Changes in tax policy policy, trade, and immigration laws, as well as trade energy cost and immigration laws availability, could result in significant impacts challenges and opportunities to infrastructure borrowers, especially for renewable energy projects. borrowers. These changes could lead to delays in completing current projects and slow future investments in renewable energy and battery storage projects as well as the deployment of fiber and broadband infrastructure in rural areas. Any lack of availability or increased costs of components or technology that results from tariffs or trade restrictions also could lead to delays in completion or slow future investments in infrastructure projects. The infrastructure sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near-term. The potential for disruption in these sectors due to policy changes may be somewhat mitigated by the historically strong market demand for connectivity, the ongoing diversification of infrastructure providers, and continued strong investments in data centers and fiber infrastructure. New data center infrastructure requires significant demand for power, so delays in grid hookups or electricity capacity could delay some capital or infrastructure deployment.

battery storage projects as well as the deployment of fiber and broadband infrastructure in rural areas. The infrastructure sector may experience varying degrees of disruption and adaptation in response to these evolving policies, and these changes could increase the volatility of sector profitability in the near-term. The potential for disruption in these sectors due to policy changes may be somewhat mitigated by the historically strong market demand for electrification, the ongoing diversification of power generating assets from electricity producers, and continued strong investments in data centers and fiber infrastructure.

Legislative and Regulatory Outlook

Farmer Mac continues to closely monitor potential legislative and regulatory changes that could significantly impact the organization or its stakeholders, including:

•

The 2024 elections have resulted in single-party control over both the executive and legislative branches of government. Some recent executive branch actions have the potential to influence Farmer Mac's regulatory environment:

◦

President Trump has designated Jeffery Hall, who had already been serving on the board of the Farm Credit Administration (FCA), as the board chairman and CEO of FCA, the safety and soundness regulator of Farmer Mac. Chairman Hall will oversee FCA’s regulatory agenda while serving in that role. Any new rules proposed by FCA would not be subject to President Trump's "regulatory freeze" executive order issued on January 20, 2025 because that freeze does not apply to rules approved by a department or agency head appointed or designated by President Trump. FCA's latest regulatory projects plan published in Fall 2024 includes a review of Farmer Mac's regulatory capital framework, with a notice of proposed rulemaking targeted for May 2025. This timeline may change, and Farmer Mac's management team will continue to monitor and engage with this regulatory process as it develops.

◦

President Trump has designated Mark Uyeda as the Acting Chairman of the Securities and Exchange Commission (SEC). Similar to any new rules proposed by FCA, any new rules proposed by the SEC would not be subject to President Trump's "regulatory freeze" executive order issued on January 20, 2025 because the Acting Chairman was designated by President Trump.

•

Two of the three members of the FCA board, including Chairman Hall, are currently serving in a "holdover status," meaning that their terms have expired. These board members will continue to serve until the President nominates and the Senate confirms their replacements.

•

FCA's final rule on cyber risk management became effective on January 1, 2025. Farmer Mac does not expect this new rule to have a significant effect on its business practices or operations, as most of the rule's requirements had already been implemented by Farmer Mac before the rule's effective date.

•

Congress is expected to consider a number of significant issues during 2025, including the expiring provisions of the Tax Cuts and Jobs Act of 2017, the debt ceiling, annual spending bills, and the reauthorization or extension of the farm bill. The farm bill, an omnibus legislative bill supporting farmers' profitability, rural community vitality, and infrastructure modernization, is typically updated by Congress every five years. However, the 2018 farm bill has been extended twice for

one year each to allow Congress more time to develop new policies included in farm bill reauthorization. The current one-year extension of the 2018 farm bill will expire on September 30, 2025. If Congress does not pass a new farm bill or extend the 2018 farm bill by December 31, 2025, federal agricultural policy will revert to 1930s-era policy, which provides no price support for many key commodities.

•

Farmer Mac continues to work with stakeholders and Congress on changes to its charter in the farm bill reauthorization to better support lenders serving rural areas. Any changes would require Congressional approval and the President's signature.

•

Farmer Mac will continue to monitor Congress’s consideration of tax policy in 2025. Several provisions of the Tax Cuts and Jobs Act of 2017 are scheduled to expire in 2025. Congress is likely to address the expiration of these policies and possibly address other tax policies that may directly affect Farmer Mac, such as the corporate tax rate and potential exemptions for income generated from loans secured by agricultural real estate.

Balance Sheet Review

The following table summarizes Farmer Mac's our balance sheet as of the periods indicated:

Table 22 19

Assets

. The increase in total assets was primarily attributable to new loan volume, including those held in consolidated trusts, volume and a larger investment portfolio.

Liabilities

. The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of loan volume, including those held in consolidated trusts. volume.

During 2025, we executed two structured securitization transactions backed by Farm & Ranch loans for which $613.6 million of Farmer Mac Guaranteed Securities were issued.

During 2025 and 2024, there were no realized gains or losses from the issuance of Farmer Mac Guaranteed Securities. We consolidate trusts and present the assets of the trust in "Loans held for investment in consolidated trusts, at amortized cost" and the liabilities of the trust in "Debt securities of consolidated trusts held by third parties" on the Consolidated Balance Sheets.

Equity

. The increase in total equity was primarily due to an increase of $96.8 million related to the issuance of 4.0 million shares of 6.500% non-cumulative perpetual Series H preferred stock in retained earnings and addition to an increase in accumulated other comprehensive income, which was partially offset by the redemption of the Series C Preferred Stock. retained earnings.

Risk Management

Credit Risk – Loans and Guarantees

.

We are exposed to both direct and indirect credit risk. We have direct credit exposure to our Agricultural Finance mortgage loans, Infrastructure Finance loans, and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs. We have indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure Finance loans that secure AgVantage securities because, in the event of a default on an AgVantage security, we have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest.

Agricultural Finance - Direct Credit Exposure

Farmer Mac's Our direct credit exposure to Agricultural Finance mortgage loans as of December 31, 2024 2025 was $12.4 $14.0 billion across 48 states. Farmer Mac applies We apply credit underwriting standards and methodologies to help assess exposures to loan purchases, which may include collateral valuation, financial metrics, and other appropriate borrower financial and credit information. We rely on the combined expertise of experienced internal agricultural credit underwriters and loan servicers, along with external agricultural loan servicing and collateral valuation contractors, to perform the necessary underwriting, servicing, and collateral valuation functions on Agricultural Finance mortgage loans. For Corporate AgFinance loans, which are often larger loan exposures (generally loan sizes more than $10 million) to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has we have implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity. For more information about Farmer Mac's underwriting and collateral valuation standards for Agricultural Finance mortgage loans, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch" and "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance."

Farmer Mac's 90-day delinquency measure includes Corporate AgFinance loans 90 days or more past due, often have a different credit risk profile than Farm & Ranch loans, therefore, we have implemented methodologies and parameters to help assess credit risk and have established specific underwriting criteria for these portfolio loans based on the sector, borrower construct, and transaction complexity. We thoroughly analyze each prospective Corporate AgFinance loan, including assessing the borrower's leverage, cash flows, liquidity, revenue and margin trends, as well as loans in foreclosure evaluating the borrower's suppliers, customers, market share, and non-performing loans where the borrower is in bankruptcy. For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of December 31, 2024, were $108.9 million (0.88% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to $34.7 million (0.31% of the Agricultural Finance mortgage loan portfolio) as of December 31, 2023. Those 90-day delinquencies consisted of 62 delinquent loans as of December 31, 2024, compared to 23 delinquent loans as of December 31, 2023. The increase in the number of 90-day delinquencies was primarily driven by increased delinquencies in permanent plantings and crops and was concentrated in the Southwest region. The increase in loans 90 days or more delinquent as of December 31, 2024 compared to December 31, 2023 reflects the continued decrease in U.S. farm income driven by weak agricultural commodity prices and elevated input costs. $37.6 million of the increase in 90-day delinquent loans was related to a single permanent planting borrower relationship. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of December 31, 2024. Farmer Mac believes that it remains adequately collateralized on its delinquent loans. competition.

Farmer Mac's 90-day delinquency rate as Any underlying weaknesses are assessed and analyzed in conjunction with any compensating strengths. Corporate AgFinance loans typically require ongoing monitoring of December 31, 2024 was slightly below Farmer Mac's historical average. In reporting requirements and financial and non-financial covenants. We rely on internal underwriters with the near-term, our delinquency rate may exceed our historical average due expertise to analyze large, complex farming operations and agribusiness loans, along with collateral valuation contractors, and legal counsel to perform the current agricultural cycle or changes in necessary diligence to assess the general economy or unforeseen overall credit risk and idiosyncratic events like adverse weather events. Farmer Mac's average 90-day delinquency rate as a percentage loan structures of its Agricultural Finance mortgage loan portfolio over the last 15 years is approximately 1%. The highest 90-day delinquency rate observed during that period occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's ethanol loan portfolio. these transactions. We have developed

The following table presents historical information about Farmer Mac's 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared business operating processes and skill sets to the unpaid principal balance of all Agricultural Finance mortgage source, underwrite, close, and service Corporate AgFinance loans. Those processes and skill sets are different than those required for Farm & Ranch loans to which Farmer Mac has direct credit exposure: and, accordingly, have a higher operating expense profile than for Farm & Ranch loans.

Table 23 When analyzing the credit quality of our Agricultural Finance mortgage loans, we also consider the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" have a well-defined weakness or weaknesses, and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.37% of total outstanding business volume as of December 31, 2024, compared to 0.12% as of December 31, 2023 The following table disaggregates the Agricultural Finance mortgage loans by portfolio segment and 0.17% as of December 31, 2022. by internally assigned risk ratings.

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of December 31, 2024 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure: Table 20

Table 24 Agricultural Finance mortgage loans classified as substandard increased $95.9 million to $494.2 million, or 3.5% of the portfolio, as of December 31, 2025 from $398.3 million, or 3.2% of the portfolio, as of December 31, 2024. Substandard assets are primarily concentrated within permanent planting commodity types. Credit performance within the crops and livestock commodities remains near historical averages with a divergence in sector economics causing an improvement in livestock sector performance and a slight degradation in grain and oilseed sector performance. Strong government support program payments have helped to mitigate degradation in the grain and oilseed loan portfolio performance.

(1) The percentage of Agricultural Finance mortgage loans substandard assets within the portfolio of 3.5% as of December 31, 2025 is in line with the 15-year historical average of approximately 3.3% and is less than the highest observed substandard asset rate during that period of approximately 5.3%. If the rate of substandard assets increases from current levels on a sustained basis, our provision to the allowance for loan losses and the reserve for losses would also likely increase.

Includes Our 90-day delinquency measure includes loans held and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days or more past due, as well as loans in foreclosure, foreclosure and non-performing loans where the borrower is in bankruptcy. As of December 31, 2025, 90-day delinquencies on Agricultural Finance mortgage loans with direct credit exposure were $132.6 million, 0.94% of the portfolio, up slightly from $108.9 million, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan. 0.88% of the portfolio as of December 31, 2024.

(2) The top ten borrower exposures over 90 days delinquent represent approximately half of the 90-day delinquencies as of December 31, 2025. We believe that we remain adequately collateralized on our delinquent loans.

Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). Our 90-day delin

(3) quency rate of 0.94% as of December 31, 2025 was above our historical average of approximately 0.72%, which is based on the average 90-day delinquency rate as a percentage of the Agricultural Finance mortgage loan

Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater portfolio over the last 15 years. We continue to monitor delinquency rates for trends that may result from more than 80% are required to have private mortgage insurance. expected cyclical trends such as changes in the general economy or unforeseen events like adverse weather or regulatory changes in water management.

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

"Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques. Table 21

(5) For Farm & Ranch loans, we consider a loan's original LTV ratio as one of many factors in evaluating loss severity. LTV depends on the market value of a property, as determined in accordance with our collateral valuation standards. As of December 31, 2025 and 2024, the average unpaid principal balances for Farm & Ranch loans outstanding and to which we have direct credit exposure was $836,000 and $817,000, respectively. We calculate the "original LTV" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original LTV ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original LTV ratio for Farm & Ranch mortgage loans purchased during 2025 was 51%, compared to 49% for loans purchased during 2024. The weighted-average original LTV ratio for exposure related to on- and off-balance sheet Farm & Ranch mortgage loans was 52% as of both December 31, 2025 and 2024. The weighted-average original LTV ratio for 90-day delinquencies for Farm & Ranch loans was 54% and 53% as of December 31, 2025 and 2024, respectively.

Includes aggregated Analysis of portfolio performance indicates that commodity type is the primary determinant of our exposure to loss on a given loan. Although some credit losses are inherent to the business of agricultural lending, we believe that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of our Agricultural Finance portfolio, which we believe is adequately collateralized. The following tables present concentrations of Agricultural Finance mortgage loans to single borrowers or borrower-related entities. by commodity type within geographic region and cumulative credit losses by origination year and commodity type:

Another indicator that Farmer Mac considers in analyzing the credit quality of its Agricultural Finance mortgage loans is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" have a well-defined weakness or weaknesses, and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of December 31, 2024, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $398.3 million (3.2% of the portfolio), compared to $186.0 million (1.7% of the portfolio) as of December 31, 2023. Those substandard assets comprised 336 loans as of December 31, 2024 and 206 loans as of December 31, 2023. Table 22

The increase of $212.3 million in Agricultural Finance substandard assets during 2024 was primarily attributable to credit risk rating downgrades in permanent plantings and crops. Most of the increase in substandard permanent planting loans were in the Corporate AgFinance segment of the portfolio. Credit performance within the crops and livestock commodities have begun to revert toward historical averages after those commodities were supported by higher commodity prices and federal government support payments in previous years. Overall, Agricultural Finance substandard assets increased as a percentage of our on- and off-balance sheet Agricultural Finance portfolios during 2024.

The percentage of Agricultural Finance substandard assets within the portfolio as of December 31, 2024 was below the historical average. Farmer Mac's average Agricultural Finance substandard assets as a percentage of its Agricultural Finance mortgage loans over the last 15 years is approximately 4%. The highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's ethanol portfolio. If Farmer Mac's substandard asset rate increases from current levels on a sustained basis, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses would also increase.

Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its Agricultural Finance portfolio, which Farmer Mac believes is adequately collateralized.

Within Agricultural Finance, Farmer Mac considers a Farm & Ranch loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards. As of December 31, 2024 and 2023, the average unpaid principal balances for Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $817,000 and $804,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans purchased during 2024 was 49%, compared to 51% for loans purchased during 2023. The weighted-average original loan-to-value ratio for Farm & Ranch mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 52% as of both December 31, 2024 and 2023. The weighted-average original loan-to-value ratio for all 90-day delinquencies was 53% and 56% as of December 31, 2024 and 2023, respectively.

The weighted-average current loan-to-value ratio (the loan to-value ratio based on original appraised value and current outstanding loan amount adjusted to reflect amortization) for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 46% and 47% as of December 31, 2024 and 2023, respectively.

The following table presents the current loan-to-value ratios for the Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, as disaggregated by internally assigned risk ratings:

Table 25

(1)

The current loan-to-value ratio is based on original appraised value (or most recently obtained valuation, if available) and current outstanding loan amount adjusted to reflect loan amortization.

(2)

"Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow. Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques.

The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of December 31, 2024 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized credit losses relative to original Farm & Ranch purchases, guarantees, and commitments.

Table 26

(1)

Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

Included in realized losses in the table above is a charge-off in the amount of approximately $0.5 million related to a single $14.5 million agricultural storage and processing borrower exposure in 2024. Also during 2024, Farmer Mac sold $7.0 million of the holding to reduce the overall exposure to this borrower. That sale resulted in a realized loss in the amount of approximately $1.1 million, before tax. As of December 31, 2024, Farmer Mac had transferred the remaining holding in the amount of approximately $7.1 million from loans held for investment to loans held for sale and recognized an unrealized loss in the amount of approximately $1.0 million, before tax. Thus, in 2024 Farmer Mac incurred an aggregate economic loss on this single agricultural storage and processing exposure in the amount of approximately $2.5 million. Table 23

Analysis For more information about the credit quality of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. The following tables present concentrations of our Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit the associated allowance for losses by origination year please refer to Note 7—Loans to the consolidated financial statements. Activity affecting the allowance for loan losses is discussed in MD&A—Results of Operations—Provision for and commodity type: Release of Allowance for Loan Losses.

Table 27

(1)

Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

Table 28

For more information about the credit quality of Farmer Mac's Agricultural Finance mortgage loans and the associated allowance for losses please refer to Note 8 and Note 12 to the consolidated financial statements. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses."

Infrastructure Finance - Direct Credit Exposure

Farmer Mac's Our direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of December 31, 2024 2025 was $5.5 $7.9 billion across 45 states. For more information about Farmer Mac's Our Charter does not specify minimum underwriting criteria for eligible Infrastructure Finance loans. To manage our credit risk, to mitigate the risk of loss from borrower defaults, and collateral valuation to provide guidance for the management, administration, and conduct of underwriting to participants in the Infrastructure Finance line of business, we have adopted credit underwriting standards that vary by loan product and by loan type. These standards are based on industry practices for similar Power & Utilities, Broadband Infrastructure, or Renewable Energy loans and are designed to assess the risk we assume on the loan and creditworthiness of the borrower. Underwriting standards for loans within each segment of the Infrastructure Finance loans, see "Business—Farmer Mac's Lines line of Business—Infrastructure Finance—Underwriting and Collateral Standards." As of December 31, 2024, there was one Broadband Infrastructure borrower and one Renewable Energy borrower classified as substandard. The total exposure on those two borrowers was $42.5 million. As of December 31, 2023, there was one Broadband Infrastructure borrower classified as substandard, with an unpaid principal balance of $29.4 million. business are detailed below:

Farmer Mac evaluates credit risk of Broadband Infrastructure Finance assets by reviewing a variety of borrower credit risk characteristics. These characteristics can include (but are not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, loans tend to be larger operations focused on providing communication and the regulatory environment. data services to rural areas, including fiber, cable/broadband, tower, wireless, local exchange carrier, and data centers.

The following table disaggregates Farmer Mac’s portfolio Due to the larger loan sizes and different credit risk profiles, we thoroughly analyze each prospective Broadband Infrastructure loan, including assessing the borrower's leverage, cash flows, liquidity, revenue, and margin trends, as well as evaluating the borrower's capital expenditures, customer/subscriber growth, market share, and competition. Any underlying weaknesses are assessed and analyzed in conjunction with any compensating strengths. These loans also typically require ongoing monitoring of Infrastructure Finance reporting requirements and financial and non-financial covenants. We rely on the experience of internal underwriters with the expertise to analyze the loans by portfolio segment and by internally assigned engage legal counsel to perform the necessary diligence to assess the overall credit risk ratings. and loan structures of these transactions.

Table 29 We have developed business operating processes and skill sets to source, underwrite and close Broadband Infrastructure and Renewable Energy loans. Those processes and skill sets are different than those required for Power & Utility loans and, accordingly, have a higher operating expense profile than for Power & Utility loans.

For more information about We do not directly service loans held in our portfolio for the credit quality of Farmer Mac's Infrastructure Finance portfolio and line of business. Typically, these loans are serviced by the associated allowance for losses please refer lender or other organization which has experience in servicing loans to Notes 8 and 12 of the consolidated financial statements. borrowers in these segments.

As of December 31, 2025, there were no delinquencies in our Infrastructure F

inance line of business. Substandard assets within the Infrastructure Finance portfolio increased to $75.5 million as of December 31, 2025 compared to $42.5 million as of

December 31, 2024, however, the amount of substandard assets as a percentage of the total outstanding balance has remained relatively flat

.

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

Table 24

For more information about the credit quality of our Infrastructure Finance line of business and the associated allowance for losses please refer to Notes 7—Loans to the consolidated financial statements.

Other Considerations Regarding Credit Risk Related to Loans and Guarantees

The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States. Therefore, Farmer Mac believes that we have believe there is little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business because of the USDA guarantee. business. As of December 31, 2024, Farmer Mac 2025, we had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does do not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does we do not provide an allowance for losses on its portfolio the USDA portfolio. The lender on each USDA-guaranteed loan is required by regulation to retain the unguaranteed portion of USDA Securities. the loan, to service the entire underlying guaranteed loan, and to remain mortgagee and/or secured party of record, as applicable. The USDA-guaranteed portion and the unguaranteed portion of the loan are to be secured by the same collateral with equal lien priority. The USDA-guaranteed portion of a loan cannot be paid later than, or in any way be subordinated to, the related unguaranteed portion.

Farmer Mac requires We require many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to Farmer Mac's our standards, the accuracy of provided loan data provided to Farmer Mac, data, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has In the ability to require event of a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's our decision to purchase the a loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred to us by the seller, we can require a seller to Farmer Mac. cure, replace, or repurchase the loan. During the previous three years ended December 31, 2024, 2025, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan. In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Infrastructure Finance loans on which it has direct credit exposure. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria. For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Underwriting and Collateral Standards." selle

Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with r to cure, replace, or repurchase a loan. For more information about Farmer Mac's requirements. Servicers are responsible to Farmer Mac for material errors in the servicing loan eligibility requirements, see "Business—Farmer Mac's Lines of those loans. If a servicer materially breaches the terms of its servicing Business—Agricultural Finance—Loan Eligibility."

agreement with Farmer Mac, such We service a sizable portion of our Agricultural Finance mortgage loan and USDA Securities portfolios, as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for well as a particular loan or the entire smaller portfolio serviced of eligible agricultural mortgage loans that are held by the servicer. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. In September 2024, Farmer Mac notified a field servicer of a breach of its servicing duties and the termination of the servicing relationship for two large borrower relationships effective October 1, 2024. That was Farmer Mac's only exercise of remedies or taking of formal action against any servicers during the previous three years ended December 31, 2024. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Servicing" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Lenders and Loan Servicing." an unrelated third

party. We also continue to contract with other institutions to undertake most of the servicing responsibilities for the remaining portion of our Agricultural Finance mortgage loans in accordance with our specified servicing requirements or accepted servicing standards established by the servicing institution. When the originating lender does not retain servicing for Farm & Ranch loans, they often retain "field servicing" in which they maintain certain responsibilities related to direct borrower contact. Field servicers may enter into contracts with our servicers that specify their field servicing responsibilities. We do not directly service loans held i

n our portfolio for the Infrastructure Finance line of business. Typically, these loans are serviced by the lender or other approved servicers in accordance with contractual requirements and in consideration for servicing fees.

In the event of a breach of the terms of its servicing agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without our consent, or insolvency or bankruptcy, the servicer is responsible for any corresponding damages. In most cases, we have the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer. We may also proceed against the servicer in arbitration or exercise any remedies available to us under law. In September 2024, we notified a field servicer of a breach of its servicing duties and the termination of the servicing relationship for two large borrower relationships effective October 1, 2024. In April 2025, we terminated the entire seller/servicer relationship with that field servicer and assumed field servicing duties on all loans we acquired from that entity. We did not incur any credit losses as a result of this breach and these actions against this single field servicer were the only formal remedies taken against any servicers during the previous three years ended December 31, 2025.

Credit Risk – Counterparty Risk

. Farmer Mac is We are exposed to credit risk arising from its our business relationships with other institutions, which include:

•

issuers of AgVantage securities;

•

approved lenders and servicers; and

•

interest rate swap counterparties.

Farmer Mac approves We approve AgVantage counterparties and manages manage institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's our standards for creditworthiness for the particular counterparty type and transaction. The required collateralization level is established when All AgVantage securities must be secured by Eligible Loans or eligible securities in an amount at least equal to the AgVantage facility is entered into with the counterparty and does not change during the life outstanding principal amount of the issuer's AgVantage securities issued under the facility without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute eligible loans that are current in payment or pay down the AgVantage securities to maintain the minimum required collateralization level. securities.

In The required collateralization level is established when the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure loans that secure AgVantage securities. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, Farmer Mac also typically requires that facility is entered into with the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower loan-to-value ratio thresholds and (2) comply with specified financial covenants for does not change during the life of the related AgVantage security to avoid default. As of December 31, 2024, Farmer Mac had not experienced any credit losses on any AgVantage securities over issued under the life facility without our consent. Loans pledged under AgVantage securities are serviced by the issuers of the program. For a more detailed description securities (or their affiliated servicing institutions) in accordance with these institutions' servicing procedures. We review these servicing procedures before purchasing AgVantage securities from the issuer. In AgVantage transactions, the issuer is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute Eligible Loans that are current in payment or pay down the AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Other Products – Infrastructure Finance—AgVantage Securities." securities to maintain the minimum required collateralization level.

The unpaid principal balance of outstanding on-balance sheet For AgVantage securities secured by loans eligible for the our Agricultural Finance line of business totaled $5.0 billion as business, we require the general obligation to be over-collateralized, either by Eligible Loans or any of December 31, 2024 and $6.1 billion as the following: cash; securities issued by the U.S. Treasury or guaranteed by an agency or instrumentality of December 31, 2023. The unpaid principal balance of on-balance sheet AgVantage securities secured by the United States, other highly-rated securities; or other approved instruments. We require collateralized loans eligible to meet the minimum standards set forth in the Charter for the Infrastructure Agricultural Finance line of business totaled $3.5 billion as of December 31, 2024 and $3.9 billion as of December 31, 2023. mortgage loans with a

The following table provides information about the issuers maximum limit of AgVantage securities and the required collateralization levels for those transactions as of December 31, 2024 and 2023: $75.0 million in cumulative loan exposure to any one borrower or related borrowers on pledged collateral.

Table 30 AgVantage securities in our Infrastructure Finance line of business are

issued by lenders organized as cooperatives and secured by pools of Power & Utilities loans.

We require

the

issuing counterparty to have an investment grade credit rating from a NRSRO or to demonstrate comparable creditwort

hiness. Although we have only indirect credit exposure on the Power & Utilities loans pledged to secure AgVantage securities, we apply the same underwriting standards as those used for direct credit exposure to Power & Utilities borrowers. Our Charter does not prescribe a maximum loan size or a total borrower exposure for an eligible Power & Utilities loan, but our current limit for AgVantage transactions is $75.0 million for cumulative loan exposure to any one borrower or related borrowers.

In the event of a default on an AgVantage security, we have recourse to the pledged collateral and rights to the ongoing borrower payments of principal and interest. As a result, we have indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure loans that secure AgVantage securities. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, we also typically require that the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower LTV ratio thresholds and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. As of December 31, 2025, we have had no credit losses on AgVantage securities over the life of the program.

The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of December 31, 2025 and 2024:

Table 25

(1)

Consists of AgVantage securities issued by 9 and 8 different issuers as of both December 31, 2024 2025 and 2023, respectively. December 31, 2024.

Farmer Mac manages We manage institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's our standards for creditworthiness. Farmer Mac monitors We monitor the financial condition of those institutions by evaluating financial statements and credit rating agency reports. For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Lenders and Loan Servicing."

Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each For more information about lender eligibility requirements, see Business—Farmer Mac's Lines of its swap agreements that vary based on the market value of its swap portfolio with each counterparty. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 6 to the consolidated financial statements. Business—Agricultural Finance—Lenders.

We manage institutional credit risk related to interest rate swap counterparties through collateralization provisions contained in each of our swap agreements that vary based on the market value of our swap portfolio with each counterparty. For cleared swap transactions and non-cleared swap transactions entered into after March 1, 2017, we and our interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold. We enter into interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Our use of cleared derivatives has increased over time which reduces our exposure to individual counterparties with the central

clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in MD&A—Risk Management—Interest Rate Risk and Note 5—Financial Derivatives to the consolidated financial statements.

Credit Risk

–

Other Investments

. As of December 31, 2024, Farmer Mac had $1.0 billion of cash and cash equivalents and $6.0 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's our internal policies as well as FCA regulations, which can be found at 12 C.F.R. §§ 652.1-652.45 ("Liquidity the Liquidity and Investment Regulations"). Regulations. In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's our investment policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets.

The Liquidity and Investment Regulations and Farmer Mac's our internal policies require that investments held in Farmer Mac's our investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held.

commitments The Liquidity and Investment Regulations and our internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. While the Liquidity and Investment Regulations limit our total credit exposure to any single entity, issuer, or obligor of securities to 10% of our regulatory capital ($174.5 million as of December 31, 2025), our current policy limit is being relied upon 5% of our regulatory capital ($87.3 million as of December 31, 2025). These exposure limits do not apply to meet the standard set forth in subparagraph (1) is located outside obligations of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) agencies or GSEs, although our current policy restricts investing more than 100% of regulatory capital in the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held. senior non-convertible debt securities of any one GSE.

The Although the Liquidity and Investment Investments Regulations and Farmer Mac's do not establish limits on the maximum amount, expressed as a percentage of our investment portfolio, that can be invested in each eligible asset class, our internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. The Liquidity and Investment Regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor set forth asset class limits as part of securities to 10% of Farmer Mac's regulatory capital ($152.6 million as of December 31, 2024). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($76.3 million as of December 31, 2024). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE. our overall risk management framework.

Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework.

Interest Rate Risk

. Farmer Mac is We are subject to interest rate risk on all interest-earning assets on its our balance sheet because of due to timing differences in the cash flows due related to maturity, paydown, or repricing of the assets and debt together with financial derivatives. Cash flow mismatches due to changing interest rates can reduce the our earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's our funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac we could realize a decline in income if assets repay more slowly than originally forecasted and the associated maturing debt must be replaced by debt issuances at higher interest rates. Changes in interest rates may also affect the returns generated on assets funded with equity capital, as equity proceeds are deployed alongside debt funding to support interest-earning assets and liquidity.

Interest Rate Risk Management

The goal of our interest rate risk management at Farmer Mac is to manage the balance sheet in a manner that generates stable earnings and value across a variety of interest rate environments. Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac we regularly assesses assess this exposure and, if necessary, adjusts its adjust our portfolio of interest-earning assets, debt, and financial derivatives.

Farmer Mac seeks We seek to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's our board of directors. Farmer Mac's Our management-level Asset and Liability Committee ("ALCO") provides oversight, establishes guidelines, and approves strategies to maintain interest rate risk within the board-established limits.

Farmer Mac's primary strategy for managing Equity capital is positioned to support asset growth, regulatory capital requirements, and liquidity and is allocated in a manner that complements our overall funding and interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration management strategy. We consider the deployment of equity proceeds when assessing balance sheet duration, earnings sensitivity, and convexity characteristics and help mitigate impacts from value across interest rate changes across the yield curve. As part of this strategy, Farmer Mac seeks to issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows. environment.

Farmer Mac issues discount notes Our primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and both callable convexity characteristics and non-callable medium-term notes help mitigate impacts from interest rate changes across the yield curve. As part of this strategy, we seek to issue debt securities across a spectrum variety of maturities to execute its debt issuance strategy. Portions of Farmer Mac's callable debt is issued to mitigate prepayment risk associated that, together with certain interest-earning assets held on balance sheet. In general, as interest rates decline, asset prepayments typically increase, and Farmer Mac may be able to economically extinguish certain callable debt issuances. In addition, Farmer Mac enters into financial derivatives, primarily interest rate swaps, to better match closely align the durations of Farmer Mac's assets forecasted debt and liabilities, thereby reducing overall sensitivity to changing interest rates. financial derivative cash flows with forecasted asset cash flows.

Taking into consideration the We issue discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute our debt issuance strategy. A portion of our callable debt is issued to mitigate prepayment provisions and the default probabilities risk associated with its portfolio of certain interest-earning assets, Farmer Mac incorporates behavioral models when projecting assets held on balance sheet. In general, as interest rates decline, asset prepayments typically increase, and valuing cash flows associated with these assets. In recognition that borrowers' behaviors in various we may be able to economically extinguish certain callable debt issuances. We also enter into financial derivatives, primarily interest rate environments may change over time, Farmer Mac periodically evaluates swaps, to better match the effectiveness durations of these models compared our assets and liabilities, thereby reducing overall sensitivity to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts. changing interest rates.

Changes in interest rates may affect We incorporate behavioral models when projecting and valuing cash flows related to our interest-earning assets, taking into consideration the timing of asset prepayments which may, in turn, impact durations associated prepayment provisions and values of the assets. Declining interest rates generally result in increased prepayments, which shortens default probabilities. We periodically evaluate the duration effectiveness of these assets, while rising models compared to actual prepayment experience because borrowers' behavior may change over time depending on the interest rates generally result in lower prepayments, thereby extending rate environment. We adjust and refine our models as necessary to improve the duration precision of the assets. future prepayment forecasts.

Farmer Mac is subject to Interest rate changes may affect the timing of prepayments which may, in turn, impact duration and asset value. Declining interest rate risk on loans and securities it has committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When Farmer Mac commits to purchase these assets, it is exposed to rates generally result in increased prepayments, which shortens asset duration while rising interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of these loans. Farmer Mac manages the interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. rates generally result in lower prepayments, thereby extending asset duration.

Farmer Mac's $1.0 billion of cash We are subject to interest rate risk on loans and cash equivalents held as of December 31, 2024 mature within three months. As of December 31, 2024, $2.7 billion of securities we have committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When we commit to purchase these assets, we are exposed to interest rate risk between the $6.0 billion of investment time we commit to purchase the loan and the time we issue debt to fund the loan purchase. We manage interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. Treasury securities (46%) were floating and other financial derivatives. Similarly, when we commit to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Farmer Mac's floating rate investment securities are primarily funded with floating rate debt. The fixed rate investment securities are generally funded in a manner consistent with Farmer Mac's overall funding strategy that approximates a duration and convexity match. other financial derivatives.

Interest Rate Risk Metrics

Farmer Mac We regularly evaluates evaluate and conducts conduct interest rate shock simulations on its our portfolio of financial assets, debt, and financial derivatives and examines examine a variety of metrics to quantify and manage its our exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted net effective spread ("NES") NES as well as a duration gap analysis.

MVE represents management's our estimate of the present value of all future cash flows from its our current portfolio of on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. However, MVE is not indicative of the our market value of Farmer Mac as a going concern because as these market values are theoretical and do not reflect future business activities. The MVE sensitivity analysis measures the degree to which the market values of our assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates.

Our NES simulation represents the difference between projected income over the next twelve months from the current portfolio of interest-earning assets and interest expense produced by the related funding, including associated financial derivatives. The MVE sensitivity analysis measures NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of funded assets and debt together with the degree to which associated financial derivatives. The direction and magnitude of any such effect depends on the market values direction and magnitude of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given the change in interest rates. rates across the yield curve as well as the composition of our portfolio. The NES simulation represents an estimate of NES that our current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of our NES sensitivity to interest rate shocks.

Farmer Mac's NES simulation represents Duration is a measure of a financial instrument's fair value sensitivity to changes in interest rates. Duration gap is calculated using the difference between projected income over the next twelve months from the current portfolio net estimated durations of our interest-earning assets assets, debt, and interest expense produced by the related funding, including associated financial derivatives. Farmer Mac's NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and re-pricing characteristics of funded assets and debt together with the associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude Duration gap provides a relatively concise measure of the change in interest rates across the yield curve as well as the composition of Farmer Mac's portfolio. The NES simulation represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of Farmer Mac's NES income sensitivity to interest rate shocks. risk inherent in our outstanding portfolio.

Duration A positive duration gap denotes that the duration of our interest-earning assets is a measure greater than the duration of a our debt and financial instrument's fair value sensitivity to derivatives. A positive duration gap indicates that with small changes in interest rates. Duration gap is calculated using rate movements the net estimated durations of Farmer Mac's interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for change of our interest-earning assets, assets is more sensitive than the fair value change of our debt and financial derivatives. Duration Conversely, a negative duration gap provides a relatively concise measure of the indicates that with small changes in interest rate risk inherent movements the fair value change of our interest-earning assets are less sensitive than the fair value change of our debt and financial derivatives. A duration gap of zero indicates that with small changes in Farmer Mac's outstanding portfolio. interest rate movements the fair value change of our interest-earning assets is effectively offset by the fair value change of our debt and financial derivatives.

A positive duration gap denotes that Each of the duration interest rate risk metrics is quantified using asset/liability models and derived based on our best estimates of Farmer Mac's interest-earning assets is greater factors such as implied forward interest rates across the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the duration of its debt and extent there are material changes to our financial derivatives. A positive duration gap indicates that with small asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate movements the fair value change of Farmer Mac's interest-earning assets is more sensitive than the fair value change of its debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets are less sensitive than the fair value change of its debt and financial derivatives. A duration gap of zero indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is effectively offset by the fair value change of its debt and financial derivatives. changes.

Each The following schedule summarizes our MVE and NES sensitivity analysis as of the interest rate risk metrics is quantified using asset/liability models December 31, 2025 and derived based on management's best estimates of factors such as implied forward interest rates across 2024 to an immediate and instantaneous uniform or "parallel" shift in the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes. curve:

The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of December 31, 2024 and 2023 to an immediate and instantaneous uniform or "parallel" shift in the yield curve: Table 26

Table 31 As of December 31, 2025, we reported a positive effective duration gap of 3.7 months, reflecting no material change from the effective duration gap reported as of December 31, 2024. Since the end of 2024, the yield curve has steepened, with the yields on the 2‑year and 10‑year U.S. Treasury Notes falling by approximately 77 and 40 basis points, respectively. The change in interest rates resulted in correspondingly similar changes in the duration profiles of our funded assets, liabilities, and financial derivatives.

As of December 31, 2024, Farmer Mac maintained a positive effective duration gap of 3.7 months, up from the 3.4 months reported as of December 31, 2023. Since the end of 2023, the yield curve has steepened, with the yield on 2-year U.S. Treasury Notes decreasing by approximately 1 basis point and the yield on 10-year U.S. Treasury Notes increasing by about 69 basis points.. This shift in rates contributed to an extension in the duration of Farmer Mac's funded assets relative to its liabilities and financial derivatives.

Financial Derivatives Transactions

The economic effects of financial derivatives are included in Farmer Mac's our MVE, NES, and duration gap analyses. Farmer Mac We typically enters enter into the following types of financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of interest-earning assets, future cash flows, and debt issuance, and not for trading or speculative purposes:

•

"pay-fixed" interest rate swaps, in which Farmer Mac pays we pay fixed rates of interest to, and receives receive floating rates of interest from, counterparties;

•

"receive-fixed" interest rate swaps, in which Farmer Mac receives we receive fixed rates of interest from, and pays pay floating rates of interest to, counterparties;

•

"basis swaps," in which Farmer Mac pays we pay floating rates of interest based on one index to, and receives receive floating rates of interest based on a different index from, counterparties; and

•

exchange-traded futures contracts involving U.S. Treasury securities.

As of December 31, 2024, Farmer Mac 2025, we had $24.9 $25.5 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $10.4 $11.3 billion were pay-fixed interest rate swaps, $13.9 $13.8 billion were receive-fixed interest rate swaps, and $0.7 $0.4 billion were basis swaps.

Farmer Mac enters We enter into interest rate swaps to more closely match the cash flow and duration characteristics of its our interest-earning assets with those of its our debt. For example, Farmer Mac transacts we enter into pay-fixed interest rate swaps and issues issue floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. Farmer Mac evaluates We evaluate the overall cost of using interest rate swaps in conjunction with debt issuance as a funding alternative to duration-matched debt and enters into interest rate swaps to manage interest rate risks across the balance sheet.

alternative Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as AFS or liabilities to duration-matched debt and enters into protect against fair value changes in the assets or liabilities related to a benchmark interest rate swaps (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to manage mitigate the volatility of future interest rate risks across payments on floating rate debt. All of our interest rate swap transactions are conducted under standard collateralized agreements that limit our potential credit exposure to any counterparty. As of both December 31, 2025 and 2024, we had no uncollateralized net exposures based on the balance sheet. mark-to-market value of the portfolio of interest rate swaps.

Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available-for-sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt.

As discussed in Note 6 to the consolidated financial statements, all financial derivatives are recorded on the balance sheet at fair value as derivative assets or as derivative liabilities. Changes in the fair values of undesignated financial derivatives are reported in "Gains on financial derivatives" in the consolidated statements of operations. For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations. Interest accruals on derivatives designated in fair value hedge accounting relationships are also recorded in "Net interest income" in the consolidated statements of operations. For financial derivatives designated in cash flow hedge accounting relationships, the unrealized gain or loss on the derivative is recorded in other comprehensive income. Because the hedging instrument is an interest rate swap and the hedged forecasted transactions are future interest payments on floating rate debt, amounts recorded in accumulated other comprehensive income are reclassified to "Total interest expense" in conjunction with the recognition of interest expense on the debt. All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both December 31, 2024 and 2023, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.

Re-funding and repricing risk

Farmer Mac is We are subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. Re-funding and repricing risk arises from potential changes in funding costs resulting from a funding strategy whereby Farmer Mac issues we issue floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that that, on average average, may have longer maturities. Changes in Farmer Mac's our funding costs relative to the asset's benchmark market index rate to which the assets are indexed can cause changes to net interest income NII when debt matures and is reissued at then current then-current interest rates to continue funding those assets.

Farmer Mac is We are subject to re-funding and repricing risk on a portion of its certain fixed rate assets as a result of its use of pay-fixed due to pay-fixed, receive-floating interest rate swaps that swaps, effectively convert the required funding needed from fixed rate converting these assets to floating rate. These fixed rate assets are which then effectively floating rate assets that require floating rate funding.

Farmer Mac We can meet floating rate funding needs in several ways, including:

•

issuing short-term fixed rate discount notes with maturities that match the reset period of the assets;

•

issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded;

•

issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or

•

issuing non-maturity matched, fixed rate discount notes or medium-term notes swapped to floating rate to match the interest rate reset dates of the assets.

To meet certain floating rate funding needs, Farmer Mac we frequently issues issue shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with a received-fixed interest rate swap because these funding alternatives generally provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks we seek to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's our overall debt issuance and liquidity management strategies. However, if the funding cost of Farmer Mac’s our discount notes or medium-term notes increased relative to the benchmark market index of the associated assets during the time between when these floating rate assets were first funded and when Farmer Mac we refinanced the associated debt, Farmer Mac we would be exposed to a commensurate reduction of net effective spread. NES. Conversely, if the funding cost on Farmer Mac’s our discount notes or medium-term notes decreased relative to the benchmark market index during that time, Farmer Mac we would benefit from a commensurate increase to net effective spread. NES.

Farmer Mac's Our debt issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's our risk tolerance. Farmer Mac We regularly adjusts its adjust our funding strategies to mitigate the effects of interest rate variability and seeks seek to maintain an effective mixture of funding structures in the context of its our overall liability and liquidity management strategies.

As of December 31, 2024, Farmer Mac 2025, we held $7.4 $8.5 billion of floating rate assets in its our lines of business and its our investment portfolio that reset based on floating rate market indices, such as the Secured Overnight Financing Rate ("SOFR"). SOFR. As of the same date, Farmer Mac also December 31, 2025, we had $10.4 $11.3 billion of pay-fixed interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily SOFR. outstanding.

Liquidity and Capital Resources

Farmer Mac's primary sources of funds to meet its liquidity and funding needs are We primarily use the proceeds of its our debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and repayments of AgVantage and investment securities. Farmer Mac securities to meet our liquidity and funding needs. We regularly accesses access the debt capital markets for funding, and Farmer Mac we maintained steady access to the debt capital markets throughout 2024. Farmer Mac funds its 2025. We fund our purchases of eligible loan Eligible Loan assets, USDA Securities, Farmer Mac Guaranteed Securities, Securities and investment assets and finances its finance our operations primarily by issuing debt obligations of various maturities in the debt capital markets. As of December 31, 2024, Farmer Mac 2025, we had outstanding discount notes of $2.2 $2.6 billion, medium-term notes that mature within one year of $8.3 $8.7 billion, and medium-term notes that mature after one year of $17.1 $19.5 billion.

Assuming continued access to the debt capital markets, Farmer Mac believes it has we believe we have sufficient liquidity and capital resources to support its our operations for the next 12 months and for the foreseeable future. Farmer Mac has We have a contingency funding plan to manage unanticipated disruptions in its our access to the debt capital markets. Farmer Mac must markets, which requires us to maintain a minimum of 90 days of liquidity under the Liquidity and Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac we maintained a monthly average of 301 days of liquidity throughout 2024 2025 and had 264 277 days of liquidity as of December 31, 2024. 2025.

Farmer Mac maintains We maintain cash, cash equivalents (including U.S. Treasury securities, operational deposits, and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs. Farmer Mac's Our liquidity investments must comply with policies adopted by Farmer Mac's our board of directors and with FCA's Liquidity and Investment Regulations, which establish limitations on asset class, dollar amount, issuer concentration, and credit quality. The following table presents these assets as of December 31, 2025 and 2024:

The following table presents these assets as of December 31, 2024 and 2023: Table 27

Table 32 The objectives of the investment portfolio as of December 31, 2025 and 2024 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity and to support program asset growth.

The objectives of the investment portfolio as of December 31, 2024 and 2023 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity and to support program asset growth.

Capital Requirements

. Farmer Mac is We are subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac We must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of December 31, 2024, Farmer Mac was 2025, we were in compliance with its our statutory capital requirements and was were classified as within "level 1" (the highest compliance level).

In accordance with the FCA's rule on capital planning, Farmer Mac's board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of December 31, 2024 and 2023, Farmer Mac's Tier 1 capital ratio was 14.2% and 15.4%, respectively. As of December 31, 2024, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with the FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition. Capital

For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and the FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—Capital Standards." See Note 9 to the consolidated financial statements for more information about Farmer Mac's capital position. Table 28

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

In accordance with the FCA's rule on capital planning, our board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of December 31, 2025 and 2024, our Tier 1 capital ratio was 13.3% and 14.2%, respectively. As of December 31, 2025, we were in compliance with the capital adequacy policy. We do not expect ongoing compliance with FCA's rule on capital planning, including our policy on Tier 1 capital, to materially affect our operations or financial condition.

For more information about our capital requirements, our capital adequacy policy, and the FCA's rule on capital plannin

g, see Business—Government Regulation of Farmer Mac—Capital Standards. See Note 8

—Equity

to the consolidated financial statements for more information about our capital position.

Discount and Medium-term Notes

. The following table presents the amount and timing of Farmer Mac's our known, fixed, and determinable discount and medium-term note obligations by payment date as of December 31, 2024. The payment 2025. Payment amounts represent those amounts due to the investor investors (including return of discount and interest on debt) and do not include unamortized premiums or discounts or other similar carrying value adjustments.

Table 33 29

(1)

Future events, including additional issuance of discount notes and medium-term notes and refinancing of those notes, could cause actual payments to differ significantly from these amounts. For more information about discount notes and medium-term notes, see Note 7 6—Notes Payable to the consolidated financial statements.

(2)

Interest payments on callable medium-term notes are calculated based on maturity. Future calls of these notes could cause actual interest payments to differ significantly from the amounts presented.

(3)

Calculated using the effective interest rates as of December 31, 2024. 2025. As a result, these amounts do not reflect the effects of changes in the interest rates effective on future interest rate reset dates.

Farmer Mac enters We enter into financial derivatives contracts under which it either receives we receive cash from counterparties, or is we are required to pay cash to them, counterparties, depending on changes in interest rates. Financial derivatives are carried on the consolidated balance sheets at fair value, representing the net present value of expected future cash payments or receipts based on market interest rates as of the balance sheet date adjusted for the consideration of our credit risk and that of Farmer Mac and its our counterparties. The fair values of the contracts change daily as market interest rates change. Because the financial derivative liabilities recorded on the consolidated balance sheet as of December 31, 2024 2025 do not represent the amounts that may ultimately be paid under the financial derivative contracts, those liabilities are not included in the table presented above. More information about financial derivatives is included in See Note 2(f) 2(f)—Summary of Significant Accounting Policies—Financial Derivatives and Note 6 5—Financial Derivatives to the consolidated financial statements. statements for more information.

Contingent Liabilities and Off-Balance Sheet Arrangements

. In conducting its our loan purchase activities, Farmer Mac enters we enter into mandatory delivery commitments to purchase agricultural mortgage loans and USDA Securities. In conducting its our LTSPC activities, Farmer Mac commits, we commit, subject to the applicable LTSPC agreement, to a future purchase of one or more loans from identified pools of eligible loans Eligible Loans that met Farmer Mac's meet our standards at inception of the transaction and when the applicable transaction was entered into and Farmer Mac we assumed the credit risk on the loans. The following table presents these significant commitments:

Table 34 30

For Our off-balance sheet arrangements primarily include unconsolidated structured securitization trusts, LTSPCs, and unfunded purchase commitments. The outstanding balance of these off-balance sheet arrangements as of December 31, 2025 and 2024, totaled $5.4 billion and $4.5 billion, respectively. See MD&A—Results of Operations—Business Volume for more information about Farmer Mac's commitments to purchase loans, see details on outstanding balances by product type. See MD&A—Risk Management—Credit Risk – Loans and Guarantees and Notes 2(l)—Summary of Significant Accounting Policies—Guarantees and Note 12 10—Guarantees and Commitments to the consolidated financial statements. statements for more information.

Off-Balance Sheet Arrangements

Farmer Mac offers approved lenders two credit enhancement alternatives to increase their liquidity or lending capacity while retaining the cash flow benefits of their loans: (1) certain categories of Farmer Mac Guaranteed Securities; and (2) LTSPCs. Both products are available through each of the Agricultural Finance and Infrastructure Finance lines of business. For securitization trusts where Farmer Mac is the primary beneficiary, the trust assets and liabilities are included on Farmer Mac's consolidated balance

sheet. For securitization trusts where Farmer Mac is not the primary beneficiary and in the event of deconsolidation, both of these alternatives create off-balance sheet obligations for Farmer Mac. See Note 12 to the consolidated financial statements for more information about consolidation and Farmer Mac's off-balance sheet business activities.

As of December 31, 2024 and 2023, outstanding off-balance sheet LTSPCs and Farmer Mac Guaranteed Securities totaled $4.5 billion and $4.1 billion, respectively. The following table presents the balance of outstanding LTSPCs, off-balance sheet Farmer Mac Guaranteed Securities, and unfunded loan commitments as of December 31, 2024 and 2023:

Table 35

See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees" and Notes 2(c), 2(e), 5 and 12 to the consolidated financial statements for more information about Farmer Mac Guaranteed Securities and Notes 2(m) and 12 to the consolidated financial statements for more information about LTSPCs.

Other Matters

None.

Supplemental Information

The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume:

Table 31

Table 32

Table 33

Table 34

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of December 31, 2025 by year of origination, geographic region, commodity/collateral type, original LTV ratio, and range in the size of borrower exposure:

Table 35

(1)

Includes loans held and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(2)

Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

(3)

"Enterprise Value" loans are generally secured by all business assets and common stock (in addition to first lien mortgages) of the borrower and the value of the borrowing entity depends on its ability to generate recurring positive cash flow.

(4)

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

The following table presents our cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of December 31, 2025 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized credit losses relative to original Agricultural Finance purchases, guarantees, and commitments.

Table 36

(1)

Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

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

Table 37

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

Table 38

Table 39

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

Table 40

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

Table 41