AGM 10-K & 10-Q changes, risk factors and insider trading

Farmer Mac'sOur 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'sour business, operating results, and financial condition or how much any factor, or combination of factors, may affect Farmer Mac'sour actual results and financial condition. If any of the following risks materialize, Farmer Mac'sour business, financial condition, or results of operations could be materially and adversely affected. FarmerWe Mac undertakesundertake no obligation to update or revise this risk factor discussion, unless required by applicable law.

Economic stress caused by disruptive global events, such as geopolitical instability, and natural or human-caused disasters, may materially and adversely affect Farmer Mac'sour 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’sour 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’sour borrowers and their ability to remain profitable and make payments on their loans.

FarmerUnless Macwe assumeshave transferred the credit risk to a third party, we assume the ultimate credit risk of borrower defaults on itsour agricultural mortgage and infrastructure loan assets, and Farmer Mac'sour 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'sour portfolio could result in losses, particularly if the value of the available collateral does not cover Farmer Mac'sour exposure, and could materially and adversely affect Farmer Mac’sour 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’sour business, operating results, or financial condition.

In addition to the general risks posed by adverse weather conditions, Farmer Mac’sour exposure to credit risk and the market value of loan collateral is potentially subject to risks associated with farmers and ranchers facing increasing, as(in wellboth asfrequency increasingly-severe,and severity), weather incidents. The U.S. experienced 2723 separate billion-dollar weather disasters in 2024,2025, surpassed only by the 27 billion-dollar weather disasters in 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’sour business, operating results, or financial condition.

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

Potential shiftsChanges 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'sour 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 utilitiesinfrastructure 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 itsour 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'sour financial condition, results of operations, liquidity, or capital levels.

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

Farmer Mac'sOur credit risk may increase due to a decline in the collateral values securing the loans in Farmer Mac'sour 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 Farmerwe Mac foreclosesforeclose on a loan secured by property that is specialized or highly improved, Farmerwe Mac hashave 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 Macus to recoup itsour investment. Farmer Mac'sOur 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. FarmerWe Mac hashave 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'sthe 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'sour financial condition, results of operations, liquidity, or capital levels.

Concentrations in Farmer Mac'sour loan or investment portfolios, or to one or more borrowers or counterparties, may increase Farmer Mac'sour exposure to credit risk, which could materially and adversely affect itsour business, operating results, and financial condition.

Farmer Mac'sOur exposure to credit risk may increase due to concentrations in itsour 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 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’sour financial condition if sufficient diversity in these areas does not successfully mitigate concentration risk.

Farmer Mac'sOur exposure to credit risk may also increase due to concentrated exposure to a particular borrower or counterparty. Farmer Mac’sOur 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'sour financial condition. Farmer MacWe also hashave concentrated exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by eligibleEligible loansLoans held by the issuing institution. Although AgVantage securities are collateralized by eligibleEligible loansLoans in a principal amount equal to or greater than the principal amount of the securities outstanding, Farmer Macwe 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'sour 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'sOur exposure to credit risk may also increase due to concentrated exposure to one or more investment types or counterparties in the investment portfolio Farmerwe Mac maintainsmaintain 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 MacWe regularly reviewsreview concentration limits to ensure that itsour investments are appropriately diversified and comply with policies approved by Farmer Mac'sour board of directors and with applicable FCA regulations, but Farmerwe Mac isare still exposed to credit risk from issuers of the investment securities itwe holds,hold, particularly to issuers to whom Farmer Macwe may have a higher concentration of exposure relative to the rest of Farmer Mac'sour investment portfolio. For example, as of December 31, 2024,2025, Farmer Macwe held at fair value $4.3$4.9 billion of investment securities guaranteed by GSEs. A default by multiple issuers of investment securities heldwe by Farmer Machold or by a single issuer of investment securities in which Farmerwe Mac isare more heavily concentrated could have an adverse effect on Farmer Mac'sour business, operating results, and financial condition.

Farmer MacOur Guaranteed Securities and LTSPCs expose Farmer Macus to significant contingent liabilities, and Farmer Mac'sour ability to fulfill itsour obligations under itsour guarantees and LTSPCs may be limited.

Farmer Mac'sOur guarantee and purchase commitment obligations to third parties, including LTSPCs and securities guaranteedthat bywe Farmer Mac,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, 2024,2025, Farmer Macwe had $4.5$5.4 billion of contingent liabilities related to LTSPCs and securities issued to third parties andthat guaranteedwe by Farmer Mac,guarantee, which represents Farmer Mac'sour exposure if all loans underlying these LTSPCs and guarantees defaulted and Farmer Macwe 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, 2024,2025, Farmer Macwe 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 itsour obligations, including itsour guarantee and LTSPC obligations. Although Farmerwe Mac believesbelieve that itwe remainsremain well-collateralized on the assets underlying itsour 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'sour total contingent liabilities for these obligations could exceed the amount itwe may have available for payment of Farmer Mac'sour obligations, including claims on Farmer Mac's contingent obligations. See "Management's Discussion and AnalysisMD&A—Risk Management—Credit Risk – Loans and Guarantees" for more information on Farmer Mac'sour management of credit risk.

FarmerWe Mac isare exposed to counterparty risk on both itsour cleared and non-cleared swaps transactions that could materially and adversely affect itsour business, operating results, and financial condition.

FarmerWe Mac usesuse interest rate swap contracts and hedging arrangements to manage itsour interest rate risk. FarmerWe Mac clearsclear a significant portion of itsour interest rate swaps through a swap clearinghouse and usesuse the services of a futures commission merchant to post and receive mark-to-market margin amounts. Farmer MacWe also transactstransact non-cleared (bilateral) derivative contracts directly with swap counterparties and postspost and receivesreceive collateral to secure the market value of those contracts. A failure of any of these counterparties could cause intra-day disruption for Farmer Mac'sour swap operations if the failure were to prompt a termination of all or part of Farmer Mac'sour swap positions or if Farmer Macwe 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'sour position before Farmerwe Mac hadhave time to reposition itsour swaps. These events could have a negative effect on Farmer Mac'sour operations and liquidity and could expose Farmer Macus to more interest rate risk, which could materially and adversely affect itsour business, operating results, and financial condition. As of December 31, 2024,2025, the aggregate notional balance of Farmer Mac'sour cleared swaps was $19.1$19.4 billion, and the aggregate notional balance of Farmer Mac'sour non-cleared swaps was $5.7$6.0 billion.

Farmer Mac'sOur 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'sour secondary market, the price or marketability of Farmer Mac'sour products, or Farmer Mac'sour ability to offer itsour products and services.

Farmer Mac'sOur 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'sour products and services or Farmer Mac'sour ability to offer itsour products and services, including, but not limited to:

•competitive pressures in Farmer Mac'sour loan purchase and guarantee activities or in the issuance of itsour debt securities;

•changes in interest rates that may increase Farmer Mac'sour funding costs;

•market or customer perception of Farmer Mac'sour reputation;

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

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

Farmer Mac'sOur ability to operate itsour business, meet itsour obligations, generate asset volume growth, and fulfill itsour statutory mission depends on Farmer Mac'sour 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 Farmer Mac'sour primary source for repaying or refinancing existing debt and to fund contingent liabilities, as needed. Farmer Mac'sOur ability to access the debt and equity markets to raise capital, fund itsour assets, repay debt, and earn net interest income depends on market perception of Farmer Mac. If Farmerwe Mac wereare unable to access the U.S. financial markets to issue equity or debt securities at favorable rates and terms, Farmer Mac'sour business, operating results, liquidity, or financial condition could be adversely affected.

The loss of business from key business counterparties or customers, including AgVantage counterparties, could weaken Farmer Mac'sour business and decrease itsour revenues and profits.

Farmer Mac'sOur business and ability to generate revenues and profits largely depends on itsour ability to purchase eligibleEligible loansLoans or place eligibleEligible loansLoans under guarantees or LTSPCs and to purchase or guarantee AgVantage securities. FarmerWe Mac conductsconduct a significant portion of itsour business with a few business counterparties. This concentration of business could potentially result in increased variability in Farmer Mac'sour business as existing assets pay down or mature and the status and needs of Farmer Mac'sour customers evolve. In 2024,2025, ten institutions generated approximately 65%55% of loan purchase volume in the Agricultural Finance line of business. Between December 31, 20232024 and December 31, 2024,2025, the outstanding balance of Farmer Mac'sour 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 20252026 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'sour Infrastructure Finance line of business. Farmer Mac'sOur ability to maintain the current relationships with itsour business counterparties or customers and the business generated by those business counterparties or customers is significant to Farmer Mac'sour business. As a result, the loss of business from any one of Farmer Mac'sour key business counterparties could decrease Farmer Mac'sour revenues and profitability. Farmer MacWe 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'sour secondary market, which could adversely affect Farmer Mac'sour business and decrease itsour revenues and profits.

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

FarmerWe Mac isare exposed to operational risk due to the complex nature of itsour business operations and the processes and systems used to undertake itsour business activities and comply with regulatory requirements. Operational risk includes the risk of loss to Farmer Mac resulting from:

•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'sour information systems or security measures (including of itsour third parties), or the unauthorized access and/or acquisition of data;

FarmerWe Mac reliesrely on business processes that largely depend on people, technology, and the use of complex systems and models to manage itsour business, process a high volume of daily transactions, and generate the records on which Farmer Mac'sour financial statements are based. Inadequacies or failures in Farmer Mac'sour 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'sour business and customers; extortion; financial and economic loss or costs; errors in itsour financial statements; impairment of itsour liquidity; harm to itsour employees, customers, or vendors; liability or service interruptions to itsour 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'sour interactions with, and reliance on, third parties.parties Farmerand Mac'swe are aware of cybersecurity incidents involving third parties in the past. Our business relies on itsour ability to process, evaluate, and interpret significant amounts of information, much of which third parties provide or process. Yet Farmer Mac'sour ability to implement safeguards preventing disruption or unauthorized access to third-party systems or infrastructure is more limited than for itsour 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 Farmerwe Mac interactsinteract or upon whom itwe reliesrely fail to operate properly, are subject to unauthorized access or improper use, or are disrupted, then Farmer Macwe may be impacted in the same manner as itwe would be due to inadequacies or failures in Farmer Mac'sour own internal processes, personnel, systems, cybersecurity program, or infrastructure.

Farmer Mac’sOur internal loan servicing function and reliance on third-party servicers exposes Farmer Macus to operational risks that could adversely affect itsour business, operating results, or financial condition.

Effective and reliable loan servicing is essential for Farmer Macus to successfully operate itsour business. StartingWe in 2021, Farmer Mac expanded its internal loan servicing function through two strategic acquisitions that included the loan servicing rights forservice a sizeablesizable portion of Farmer Mac’sour 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 hasWe 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 continuescontinue to rely on experienced third-party servicers to service the portion of Farmer Mac’sour Agricultural Finance mortgage loan portfolio that we do not servicedservice directly by Farmer Mac.directly. Although Farmerwe Mac hashave established servicing standards and requirements to which these third-party servicers are required by contract to adhere and on which they must report to Farmerus, Mac,we Farmer Mac doesdo 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 employedwe by Farmer Macemploy or any of itsour third-party servicers could expose Farmer Macus to operational risk that could adversely affect Farmer Mac’sour business, operating results, or financial condition.

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

To conduct and manage itsour business operations, Farmerwe Mac reliesrely 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 itsour 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 theour planning, control, coordination, operations, and decision-making processes within Farmer Mac.processes. Risks to Farmer Mac'sour information systems and data as a result of cybersecurity attacks has increased as the importance and complexity of Farmer Mac’sour technology and information systems has increased, and as new technologies are developed that are used by itsus, our customers, Farmer Mac, and itsour service providers to support itsour business and operations. Like many other financial institutions, Farmer Macwe and itsour 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 Macwe and itsour third-party service providers face and the methods used to gain unauthorized access to or disrupt their information systems and data are evolving. FarmerWe Mac isare not always able to prevent or recognize attacks, itsour existing cybersecurity defenses may not be sufficient to detect attacks in a timely manner or to fully investigate an attack, and itwe may be unable to implement effective preventive measures or proactively address these threats until after a cybersecurity incident has been discovered. FarmerWe Macrequire 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 itsour service providers' handling of cybersecurity incidents, including their recognition and prevention practices. Any of our employees or agents of Farmer Mac’s (or itsour 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’sOur current information security program with cybersecurity procedures, policies, training, practices, and controls, may not be sufficient to prevent unauthorized access to itsour 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 Macus and/or itsour customers); extortion; financial and economic loss or costs; errors in itsour financial statements; impairment of its liquidity; harm to employees, customers, or vendors; liability or service interruptions to itsour 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 Macwe 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 MacWe also could be subject to litigation and government enforcement actions as a result of any failure in itsour procedures, policies, practices, and controls. Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of Farmer Mac'sour insurance coverage, which could adversely affect Farmer Mac'sour financial condition and results of operations. The amount and scope of insurance Farmerwe Mac maintainsmaintain 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.

Failure by Farmer Mac'sour 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'sour business, operating results, or financial condition.

FarmerWe Mac reliesrely 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’sour business and operations. FarmerWe Mac dependsdepend 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 Farmerwe Mac isare subject to numerous cyber-attacks from a variety of actors, so too are these third parties. FarmerWe Mac requiresrequire 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 Farmerwe Mac doesdo business or obtainsobtain services are beyond itsour control. FarmerWe Macalso ismay 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 itsour third party service providers in the past. Although Farmerwe Mac hashave not experienced a material loss of data or disruption of itsour 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'sour operations in the same manner as incidents on itsour own systems.

FarmerWe Mac reliesrely upon a variety of third-party applications, services, and tools that arewe 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 itsour 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 marketbusiness 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'sour 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'sour own systems; significant disruption to itsour business operations; fraud (on Farmer Macus and/or itsour 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'sour management of risk associated with its loan assets and investment securities based on model assumptions and output is not effective, itsour business, operating results, financial condition, or capital levels could be materially adversely affected.

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

FarmerWe Mac isare exposed to interest rate risk that could materially and adversely affect itsour operating results or financial condition.

FarmerWe Mac isare subject to interest rate risk due to the timing differences in the cash flows of the assets itwe holdshold and the liabilities issued to fund those assets. Farmer Mac'sOur 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'sour earnings if assets repay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments, particularly if Farmer Mac'sour 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'sour earnings could be adversely affected. In addition, rapid changes in interest rates could have a negative effect on Farmer Mac'sour 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'sour ability to manage interest rate risk, which could have a material adverse effect on Farmer Mac'sour operating results or financial condition. See "Management's Discussion and AnalysisMD&A—Risk Management—Interest Rate Risk" for more information on Farmer Mac'sour management of interest rate risk.

FarmerWe Mac isare also subject to repricing risk, which is the risk that Farmer Mac'sour 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 Farmerwe Mac issuesissue 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 Farmer Mac'sour funding cost relative to the benchmark index, including SOFR, may compress spread income on the assets Farmerwe Mac holdshold and seeksseek to re-fund with the higher cost funding. Widespread compression within a short timeframe could adversely affect Farmer Mac'sour operating results or financial condition.

Changes in interest rates relative to Farmer Mac'sour management of interest rate risk through derivatives may cause volatility in financial results and capital levels and may adversely affect Farmer Mac'sour net income, liquidity position, or operating results.

FarmerWe Mac entersenter into financial derivatives transactions to hedge interest rate risks inherent in itsour business and carrieswe itscarry our financial derivatives at fair value in itsour consolidated financial statements. Although Farmer Mac'sour financial derivatives provide economic hedges of interest rate risk, changes in the fair valuesvalue of financial derivatives 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 Farmer Mac'sour derivatives change based on the position Farmerwe Mac holdshold relative to the specific characteristics of the derivative. Farmer Mac'sOur core capital available to meet itsour statutory minimum capital requirement can be affected by changes in the fair valuesvalue of financial derivatives, as noted above. Adverse changes in the fair valuesvalue of Farmer Mac'sour 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 20242025 and 2023,2024, Farmer Macwe recorded losses of $1.9 million and gains of $3.3 million and $5.1 million, respectively, from changes in the fair valuesvalue of itsour financial derivatives as a result of movements in interest rates during those years. Farmer MacWe recorded gains of $11.5$6.8 million and losses of $5.4$11.5 million in 20242025 and 2023,2024, respectively, related to ineffectiveness in hedge accounting relationships.

Changes in interest rates have required, and in the future may require, Farmerthat Mac towe post cash or investment securities to collateralize itsour 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'sour derivatives, Farmer Macwe would be required to post cash, cash equivalents, or investment securities, possibly within a short period of time, to satisfy itsour obligations under itsour derivatives contracts. As of December 31, 2024,2025, Farmer Macwe posted $46.9$2.1 million of cash and $213.4$250.6 million of investment securities as collateral for itsour derivatives in net liability positions. If Farmerwe Mac isare required to fully collateralize a significant portion of itsour derivatives in an adverse interest rate environment, it could have a material adverse effect on Farmer Mac'sour liquidity position or operating results.

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

Farmer Mac'sOur accounting policies and methods are fundamental to how itwe recordsrecord and reportsreport itsour financial condition and results of operations. Some of these policies and methods require management to make estimates and assumptions in preparing Farmer Mac'sour consolidated financial statements. Incorrect estimates and assumptions by management in connection with preparing Farmer Mac'sour 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, 2024,2025, Farmer Mac'sour assets and liabilities recorded at fair value included financial instruments valued at $5.5$6.7 billion whose fair valuesvalue management estimated in the absence of readily observable fair valuesvalue (in other words, level 3). These financial instruments measured with significant unobservable inputs represented 17.7%19.1% of total assets and 47.8%49.4% of financial instruments measured at fair value as of December 31, 2024.2025. See "Management's Discussion and AnalysisMD&A—Critical Accounting Estimates" for more information about fair value measurement. If managementwe makesmake incorrect assumptions or estimates that result in understating or overstating reported financial results, it could materially and adversely affect Farmer Mac'sour business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels.

Changes in the value or composition of Farmer Mac'sour investment securities could adversely affect Farmer Mac'sour business, operating results, financial condition, liquidity or capital levels.

Deterioration in financial or credit market conditions could reduce the fair value of Farmer Mac'sour investment securities, particularly those securities that are less liquid and more subject to market variability. SomeCertain securities ownedwe by Farmer Mac, including auction-rate certificates,own do not have well-established secondary trading markets, making it more difficult to estimate current fair values for those securities. This requires Farmer Macus to rely on market observations and internal models to estimate the fair values of itsour investment securities and to determine whether credit losses exist. However, available market data may not reflect the actual sale conditions Farmer Macwe may face when selling itsour investment securities, particularly in adverse financial market conditions. Internal models require Farmer Macus to exercise judgment about estimates and assumptions used in the models. If Farmerwe Mac usesuse unreliable market data or incorrect estimates or assumptions in itsour internal models to estimate the fair value of itsour investment securities, those estimates could adversely affect results of operations during the reporting period. AndIf ifwe Farmer Mac decidesdecide to sell securities in itsour 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 forour fair value.value estimates. Failure to accurately estimate the fair value of Farmer Mac'sour investment securities reasonably accurately could adversely affect Farmer Mac'sour business, operating results, financial condition, liquidity or capital levels.

The objective of thisThis section of the report is to provide aprovides discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac'sour 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 itsour 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 Farmer Mac'sour consolidated financial statements and the related notes to the consolidated financial statements for theeach fiscal year ended December 31, 2025, 2024, 2023, and 2022.2023. 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.

FarmerWe Mac isare driven by itsour mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to ourthe 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 MacWe also serves as a criticalprovide investment toolopportunities forto a number of entities –entities, such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions – by offering investment opportunitiesunions, that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During 2024,2025, Farmer Macwe:

•providedexceeded $7.0$30 billion in liquidityoutstanding andbusiness lending capacity to lenders serving rural Americavolume;

•maintained strong liquidity in our investment portfolioportfolio, with a monthly average of 301 days of liquidity during 2025, well above the regulatory requirementsrequirement of a minimum of 90 days of liquidity; and

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

The discussion below of Farmer Mac'sour 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 Farmerwe Mac uses,use, see "Management's Discussion and Analysis of Financial Condition and Results of OperationsMD&A—Use of Non-GAAP Measures."

The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings andis core earnings per share area non-GAAP measuresmeasure that differdiffers 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.

The $21.9 million year-over-year increase of $2.1 million in net income attributable to common stockholders for 2023 compared to 20222025 was dueprimarily attributable to a $44.7$36.9 million after-tax increase in net interest income and a $2.9 million after-tax increase in guarantee fees. These factors were("NII"), partially offset by a $15.6$21.3 million after-tax decreaseincrease in the fairprovision valuefor ofcredit undesignated financial derivativeslosses and a $12.1$14.4 million after-tax increase in operating expenses.

The $0.5$11.3 million year-over-year increase in core earnings for 2025 was primarily attributable to a $9.9$43.5 million after-tax increase in net effective spread,spread a $2.6 million federal income tax benefit from the purchase of renewable energy investment tax credits, a $2.0 million decrease in preferred stock dividends,("NES") and a $1.1$3.5 million after-tax increase in guarantee and commitment fees. These factorsimpacts were partially offset by ana $8.2$21.3 million after-tax increase in the provision for credit losses and a $6.6$14.4 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 OperationsMD&A—Results of Operations." For more information about theour non-GAAP measures Farmer Mac uses,measures, see "Management's Discussion and Analysis of Financial Condition and Results of OperationsMD&A—Use of Non-GAAP Measures."

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

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, 20232024 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.

The following table presents 90-day delinquency rates for our Agricultural Finance on-mortgage loans and off-balanceInfrastructure sheetFinance substandard assets,loans, in dollars and as a percentage of thetotal respectiveoutstanding portfoliobusiness volume as of December 31, 20242025 and 20232024:

The objective of this section of the report is to provide a discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's financial condition and results of operations for the three monthsquarter ended MarchJune 31,30, 2026. Financial information included in this report is consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with: (1) the interim unaudited consolidated financial statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as filed with the SEC on February 19, 2026 (the "2025 Annual Report").

Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations ('MD&A')" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "aims," "anticipates," "believes," "continues," "designed," "estimates," "expects," "forecasts," "likely," "intends," "often," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing our:

We are driven by our mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our secondary market provides liquidity to 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 & 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. We also provide investment opportunities through our debt issuances to entities, such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions, that may diversify their investment portfolios and provide possibilities to earn a competitive return on their investment dollars.

During firstsecond quarter 2026, we:

•maintained strong liquidity in our investment portfolio, averaging 301282 days of liquidity during 2026, well above the regulatory requirement of a minimum of 90 days of liquidity; and

TheNet $5.8income attributable to common stockholders and core earnings each increased $7.0 million year-over-yearfrom the prior quarter. The increase in net income attributable to common stockholders was primarily driven by a $16.7 million increase in net interest income ("NII"), while the increase in core earnings for the first quarter of 2026 was primarily attributabledriven toby a $12.0$15.4 million increase in net effective spread ("NES") and a $1.2 million increase in guarantee and commitment fees.. These impactsincreases were partially offset by a $2.6$2.8 million increase in operating expenses, a $2.7 million increase in the provision for credit losseslosses, and a $3.9$2.6 million increase in operatingincome expenses.tax expense during the second quarter of 2026.

The year-over-year increase of $10.5$21.3 million in NII and $12.0$23.5 million in NES were both primarily driven by anthe $11.5effects million increase related toof net volume growth, primarilyled inby Infrastructure Finance andthe Farm & Ranch.Ranch and Renewable Energy portfolios, and the impact of the $7.4 million collection of default interest recognized in second quarter 2026.

Our outstanding business volume was $34.8$37.2 billion as of MarchJune 31,30, 2026, a net increase of $1.5$2.4 billion from DecemberMarch 31, 20252026 after taking into account all new business, maturities, sales, and paydowns on existing assets. The net increase was due to new volume during the quarter totaling $3.4$4.0 billion, partially offset by scheduled maturities and repayments of $1.9$1.6 billion. The net new volume includes increases of $0.8$1.8 billion in the Agricultural Finance and $0.7$0.6 billion in the Infrastructure Finance lines of business. For more information about our business volume, see MD&A—Results of Operations—Business Volume.

Our allowance for losses increased $2.1$9.4 million from December 31, 2025 to MarchJune 31,30, 2026, primarily due to $4.3an $11.4 million in net provision expense offset by a $2.2$2.0 million charge-off.in Thesecharge-offs, changesnet areof recoveries during the six months ended June 30, 2026. The increase in our allowance for losses was primarily attributedattributable to new volume growth across all of our segments and portfolio credit migration.

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

The following table presents Agricultural Finance mortgage loans and Infrastructure Finance loans classified as substandard, in dollars and as a percentage of the respective portfolio as of MarchJune 31,30, 2026 and December 31, 2025:

Total substandard assets increased $81.5$65.5 million from December 31, 2025 to MarchJune 31,30, 2026, with the amount of substandard assets as a percentage of the portfolio increasing from 3.52%3.5% at December 31, 2025 to 4.12%3.9% at MarchJune 31,30, 2026 for Agricultural Finance loans and decreasing from 0.96%1.0% at December 31, 2025 to 0.69%0.6% at MarchJune 31,30, 2026 for Infrastructure Finance. The increase in substandard assets for Agricultural Finance loans was primarily driven by credit downgrades in crops and agricultural storage and processing while the decrease in substandard assets for Infrastructure Finance was related to a credit upgrade in the renewableRenewable energyEnergy segment.

The following table presents 90-day delinquency rates for our Agricultural Finance mortgage loans and Infrastructure Finance loans, in dollars and as a percentage of total outstanding business volume as of MarchJune 31,30, 2026 and December 31, 2025:

Across all of our lines of business, 90-day delinquency rates increaseddecreased modestly in firstsecond quarter 2026 as compared to Q4fourth 2025,quarter but continue to remain at low levels.2025.

•Interest income and interest expense associated with single-class consolidated trusts with beneficial interests owned by third parties and for which we guaranteesguarantee 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.

(3)Includes NII of $0.9$1.0 million and $1.0 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees.

Net Interest Income. The following tables provide information about interest-earning assets and funding, composition of changes in NII due to rate and volume, and a reconciliation of NII to NES for the three and six months ended MarchJune 31,30, 2026 and 2025. See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information about the differences between NII and NES. Our interest-earning assets include:

The $31.7 million and $35.6 million year-over-year increase in NII and NES, respectively, for the six months ended June 30, 2026 compared to the same period in the prior year, were largely driven by net new business volume in Renewable Energy and Farm & Ranch, in addition to the impact of collecting $7.4 million of default interest recognized in second quarter 2026 See Note 9—Business Segments to the consolidated financial statements for more information about NII and NES from our business segments. See MD&A—Supplemental Information for quarterly NES by line of business.

Provision for Allowance for Losses. The following table summarizes the components of our total allowance for losses for the three monthand periodsix months ended MarchJune 31,30, 2026 and 2025:

During the second quarter 2026, we recorded a $7.0 million net provision to the allowance, which is attributable to new volume growth and portfolio credit migration. For additional information, see Note 4—Loans to the consolidated financial statements and MD&A—Risk Management—Credit Risk—Loans and Guarantees.

Gains/(losses) on financial derivatives. The components of gains and losses on financial derivatives for the three and six months ended MarchJune 31,30, 2026 and 2025 are summarized in the following table:

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 "Gains(Losses)/(losses)gains due to terminations or net settlements" in the table above. See Note 3—Financial Derivatives to the consolidated financial statements for more information about our financial derivatives.

Operating Expenses. The following table summarizes components of operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025:

The year-over-year increase in compensation and employee benefits expenses for the three and six months ended MarchJune 31,30, 2026 was largelydriven due toby increased headcountheadcount, and increasedhigher bonus accruals associated with strong financial performanceperformance, comparedand tothe targetstiming inof 2025.compensation expense recognition within 2026.

The year-over-year increase in general and administrative expenses for the three and six months ended MarchJune 31,30, 2026 was primarily attributable to transactionalhigher legalconsulting fees.and licensing costs.

Income Tax Expense. The following table presents income tax expense and the effective income tax rate for the three and six months ended MarchJune 31,30, 2026 and 2025:

The year-over-year decreaseincrease in income tax expense and the effective tax rate for the three and six months ended MarchJune 31,30, 2026 was primarily attributable to increased taxable income in 2026. The changes in our effective tax rate are impacted by the volume of purchases of renewable energy investment tax credits. During the firstthree quarterand ofsix months ended June 30, 2026, we purchased $45.0$21.4 million and $66.4 million, respectively, of tax credits at prices ranging from approximately $0.91 to $0.93 per $1.00 of credit, resulting in a benefit of $4.2$2.0 million.million Weand did$6.3 notmillion, purchaserespectively. anyDuring both the three and six months ended June 30, 2025, we purchased $35.6 million in renewable energy investment tax credits duringat prices of approximately $0.91 per $1.00 of credit. All of the firstrenewable quarterenergy investment tax credits purchased are with projects that have been placed into service. As a result of these purchases, we recognized a tax benefit of $3.2 million for both the three and six months ended June 30, 2025.

The following table presents the net growth or decrease in our lines of business for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our outstanding business volume was $34.8$37.2 billion as of MarchJune 31,30, 2026, a net increase of $1.5$2.4 billion from DecemberMarch 31, 2025.2026.

The increase in outstanding business volume during the firstsecond quarter of 2026, was attributable to a $0.8$1.8 billion increase in the Agricultural Finance portfolio and a $0.7$0.6 billion increase in outstanding business volume in the Infrastructure Finance portfolio.

The increase in the Agricultural Finance portfolio during the firstsecond quarter of 2026 primarily consisted of a $0.7$1.7 billion increase in Farm & Ranch, largely due to net growth in AgVantage Securities and Loans and AgVantageother Securities.securities. Volume in AgVantage securitiesSecurities across both Farm & Ranch and Corporate AgFinance increased by $0.4$1.2 billion reflecting $0.9$1.5 billion in purchases, partially offset by $0.5$0.4 billion in repayment activity.

The $0.6 billion increase in the Infrastructure Finance portfolio consistedwas comprised of a $0.1$0.3 billion increase in Power & Utilities, a $0.2 billion increase in Broadband Infrastructure, and a $0.4$0.1 billion increase in Renewable Energy. The Renewable Energy segment experienced strong growthincrease in Power & Utilities was largely attributable to the first quarterpurchase of 2026a with$197.3 Loansmillion andpool unfundedof commitments combining to add $0.8 billionloans in newthat volume,portfolio partiallyin offsetJune by scheduled maturity and repayment activity of $0.4 billion.2026.

The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securitiesSecurities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of MarchJune 31,30, 2026:

Of the $34.8$37.2 billion outstanding business volume as of MarchJune 31,30, 2026, $8.8$9.9 billion were AgVantage securitiesSecurities included in the Agricultural Finance and Infrastructure Finance lines of business. Unlike business volume from our other products, most AgVantage securitiesSecurities 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 securitiesSecurities 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 securitiesSecurities to continue to fluctuate. The following table summarizes by maturity date the outstanding principal amount of AgVantage securitiesSecurities as of MarchJune 31,30, 2026:

The weighted-average remaining maturity of the outstanding AgVantage securitiesSecurities shown in the table above was 5.65.7 years as of MarchJune 31,30, 2026.

We play a vital role in serving rural America by offeringproviding secondary market liquidity, capital, and risk management tools asthat aexpand secondary marketaccess to help increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our growth trajectory is closely tied to the capital and liquidity needs of the lending institutions that serve agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors.

Several factors continue to influence our business volume growth dynamics. Because the Farm & Ranch portfolio contains a significant share of legacy low‑rate loans, refinance incentives remain muted, keeping prepayment rates at or below historical norms. Also, a tightening agricultural economy is creating the need for more liquidity and working capital for borrowers managing through this agricultural cycle. The net effect of these forces contributed to strong Farm & Ranch loan purchase portfolio growth during firstsecond quarter of 2026 and we anticipate this growth to persist throughout the rest of 2026. Opportunities for future business volume growth include our potential role in alleviating liquidity, capital, and return-on-equity challenges faced by lenders. In 2026, there has been an increase in Farm & Ranch business volume from capital-constrained lending institutions, highlighting the value our secondary market services bring to the industry. We experienced an increase in wholesale finance volume during firstsecond quarter of 2026, driven by financings drawn from numerous AgVantage facilities, including a large issuance from a facility put in place in late 2025.2025 with a new counterparty. Future wholesale finance growth will likely be influenced by market interest rates and credit spreads, overall economic conditions and loan growth opportunities, and the relative value of our product versus the broader market. Continued strong interest in data centers, broadband expansion, and constructing and completing renewable energy projects before the sunset of tax credits, along with the overall need for energy generation and transmission capacity for rural America, provided significant opportunities for Infrastructure Finance during firstsecond quarter of 2026. We expect these opportunities to persist for the remainder of the year.