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YoY shift: Lean -
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.16pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.22pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.11pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
incidents+3
loss+1
unauthorized+1
disasters+1
expose+1
Positive rising
profitability+1
successful+1
achieved+1
Risk Factors (Item 1A)
8,057 words
Item 1A. Risk Factors
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 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 our business, operating results, and financial condition or how much any factor, or combination of factors, may affect our actual results and financial condition. If any of the following risks materialize, our business, financial condition, or results of operations could be materially and adversely affected. 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 affect our business, operations, operating results, financial condition, liquidity, or capital levels and may heighten other risk factors in this report.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
deteriorations+3
breach+2
delays+2
weaknesses+2
against+1
Positive rising
strengths+3
strong+2
opportunities+1
improvement+1
improved+1
MD&A (Item 7)
20,225 words
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This section of the report provides discussion and analysis, from management’s perspective, of the material information necessary to assess our financial condition and results of operations for the year ended December 31, 2025. Financial information included in this report is consolidated to include the accounts of Farmer Mac and 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 , 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
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 and utilities, and renewable energy. We are uniquely positioned to facilitate competitive access to financing that fuels growth, , and in America's rural and agricultural communities. We also provide investment 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.
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 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 our borrowers and their ability to remain profitable and make payments on their loans.
Unless we have transferred the credit risk to a third party, we assume the ultimate credit risk of borrower defaults on our agricultural mortgage and infrastructure loan assets, and 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 our portfolio could result in losses, particularly if the value of the available collateral does not cover our exposure, and could materially and adversely affect 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 our business, operating results, or financial condition.
In addition to the general risks posed by adverse weather conditions, 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-
dollar weather disasters in 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. 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. 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 our business, operating results, or financial condition.
Political and other external factors outside of our or borrowers' control may impair borrowers' profitability and ability to repay their loans in our portfolio, which could have a material adverse effect on our financial condition, results of operations, liquidity, or capital levels.
Changes in U.S. trade policies (including tariffs and trade restrictions), tax policies, environmental regulations, and immigration laws 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 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 infrastructure operation, which could then inhibit the related borrower's repayment capacity on one or more loans from that borrower in 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 our financial condition, results of operations, liquidity, or capital levels.
A decline in the value of collateral securing loans in our portfolio or a decline in the value of our borrowers could increase the probability of loss in the event of default, which could have a material adverse effect on our financial condition, results of operations, liquidity, or capital levels.
Our credit risk may increase due to a decline in the collateral values securing the loans in 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 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 the enterprise value of a borrower is less than the outstanding principal balance of the 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 our financial condition, results of operations, liquidity, or capital levels.
Concentrations in our loan or investment portfolios, or to one or more borrowers or counterparties, may increase our exposure to credit risk, which could materially and adversely affect our business, operating results, and financial condition.
Our exposure to credit risk may 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 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 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 our financial condition. We also have concentrated exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by Eligible Loans held by the issuing institution. Although AgVantage securities are collateralized by Eligible Loans in a principal amount equal to or greater than the principal amount of the securities outstanding, we could sufferlosses 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 our loans held on balance sheet, as well as increased capital requirements. As of December 31, 2025, $7.6 billion of the $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.
Our exposure to credit risk may also increase due to concentrated exposure to one or more investment types or counterparties in the investment portfolio 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. We regularly review concentration limits to ensure that our investments are appropriately diversified and comply with policies approved by our board of directors and with applicable FCA regulations, but we are still exposed to credit risk from issuers of the investment securities we hold, particularly to issuers to whom we may have a higher concentration of exposure relative to the rest of our investment portfolio. For example, as of December 31, 2025, we held at fair value $4.9 billion of investment securities guaranteed by GSEs. A default by multiple issuers of investment securities we hold or by a single issuer of investment securities in which we are more heavily concentrated could have an adverse effect on our business, operating results, and financial condition.
Our Guaranteed Securities and LTSPCs expose us to significant contingent liabilities, and our ability to fulfill our obligations under our guarantees and LTSPCs may be limited.
Our guarantee and purchase commitment obligations to third parties, including LTSPCs and securities that we guarantee, are solely our obligations 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, 2025, we had $5.4 billion of contingent liabilities related to LTSPCs and securities issued to third parties that we guarantee, which represents our exposure if all loans underlying these LTSPCs and guarantees defaulted and 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, 2025, we held cash, cash equivalents, and other investment securities with a fair value of $7.8 billion that could be used as a source of funds for payment on our obligations, including our guarantee and LTSPC obligations. Although we believe that we remain well-collateralized on the assets underlying 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, our total contingent liabilities for these obligations could exceed the amount we may have available for payment of our obligations, including claims on contingent obligations. See MD&A—Risk Management—Credit Risk – Loans and Guarantees for more information on our management of credit risk.
We are exposed to counterparty risk on both our cleared and non-cleared swaps transactions that could materially and adversely affect our business, operating results, and financial condition.
We use interest rate swap contracts and hedging arrangements to manage our interest rate risk. We clear a significant portion of our interest rate swaps through a swap clearinghouse and use the services of a futures commission merchant to post and receive mark-to-market margin amounts. We also transact non-cleared (bilateral) derivative contracts directly with swap counterparties and post and receive collateral to secure the market value of those contracts. A failure of any of these counterparties could cause intra-day disruption for our swap operations if the failure were to prompt a termination of all or part of our swap positions or if 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 our position before we have time to reposition our swaps. These events could have a negative effect on our operations and liquidity and could expose us to more interest rate risk, which could materially and adversely affect our business, operating results, and financial condition. As of December 31, 2025, the aggregate notional
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
Our business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the demand for our secondary market, the price or marketability of our products, or our ability to offer our products and services.
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 our products and services or our ability to offer our products and services, including, but not limited to:
• disruptions in the debt or equity capital markets;
• competitive pressures in our loan purchase and guarantee activities or in the issuance of our debt securities;
• changes in interest rates that may increase our funding costs;
• market or customer perception of our reputation;
• legislative or regulatory developments adversely affecting our ability to offer new products, the ability or motivation of lenders to participate in 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 our business, operating results, financial condition, liquidity, and capital levels.
Our ability to operate our business, meet our obligations, generate asset volume growth, and fulfill our statutory mission depends on 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. 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.
The loss of business from key business counterparties or customers, including AgVantage counterparties, could weaken our business and decrease our revenues and profits.
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 could potentially result in increased variability in our business as existing assets pay down or 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
securities decreased by approximately $0.1 billion. As of December 31, 2025, approximately 90.6% of the $8.4 billion outstanding principal amount of AgVantage securities (of which $1.2 billion and $0.9 billion will be maturing in 2026 and 2027, respectively) were issued by three institutions. As of December 31, 2025, transactions with two institutions represented nearly all of the business volume under our Infrastructure Finance line of business. Our ability to maintain the current relationships with our business counterparties or customers and the business generated by those business counterparties or customers is significant to our business. As a result, the loss of business from any one of our key business counterparties could decrease our revenues and profitability. 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 our secondary market, which could adversely affect our business and decrease 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 our operational systems, cybersecurity program, internal controls or processes, or infrastructure, or those of third parties, could have a material adverse effect on our business, operating results, or financial condition.
We are exposed to operational risk due to the complex nature of our business operations and the processes and systems used to undertake our business activities and comply with regulatory requirements. Operational risk includes the risk of loss resulting from:
• inadequate or failed internal processes, systems, cybersecurity program, or infrastructure;
• inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure;
• any cybersecurity incident or compromise of our information systems or security measures (including of 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;
• 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.
We rely on business processes that largely depend on people, technology, and the use of complex systems and models to manage our business, process a high volume of daily transactions, and generate the records on which our financial statements are based. Inadequacies or failures in 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 our business and customers; extortion; financial and economic loss or costs; errors in our financial statements; impairment of our liquidity; harm to our employees, customers, or vendors; liability or service interruptions to 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 our interactions with, and reliance on, third parties and we are aware of cybersecurity incidents involving third parties in the past. Our business relies on our ability to process, evaluate, and interpret significant amounts of information, much of which third parties provide or process. Yet our ability to implement safeguards preventingdisruption or unauthorized access to third-party systems or infrastructure is more limited than for 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 we interact or upon whom we rely fail to operate properly, are subject to unauthorized access or improper use, or are disrupted, then we may be impacted in the same manner as we would be due to inadequacies or failures in our own internal processes, personnel, systems, cybersecurity program, or infrastructure.
Our internal loan servicing function and reliance on third-party servicers exposes us to operational risks that could adversely affect our business, operating results, or financial condition.
Effective and reliable loan servicing is essential for us to successfully operate our business. We service a sizable portion of our Agricultural Finance mortgage loan and USDA Securities portfolios, as well as eligible agricultural mortgage loans that are held by an unrelated third party. We also continue to rely on experienced third-party servicers to service the portion of our Agricultural Finance mortgage loan portfolio that we do not service directly. Although 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 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 we employ or any of our third-party servicers could expose us to operational risk that could adversely affect our business, operating results, or financial condition.
A deficiency, failure, interruption, or breach in our or our service providers' technology and information systems, infrastructure, or cybersecurity program, including the occurrence of a cybersecurity incident, could adversely affect our business, operating results, or financial condition.
To conduct and manage our business operations, 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 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 our planning, control, coordination, operations, and decision-making processes. Risks to our information systems and data as a result of cybersecurity attacks has increased as the importance and complexity of our technology and information systems has increased, and as new technologies are developed that are used by us, our customers, and our service providers to support our business and operations. Like many other financial institutions, we and our third-party service providers, vendors, and suppliers face regular attacks by threat actors attempting to gainunauthorized access to, or disrupt, information systems and access or acquire 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 we and our third-party service providers face and the methods used to gainunauthorized access to or disrupt information systems and data are evolving. We are not always able to prevent or recognize attacks, our existing cybersecurity defenses may not be sufficient to detect attacks in a timely manner or to fully investigate an attack, and we may be unable to implement effective preventive measures or proactively address these threats until after a cybersecurity incident has been discovered. 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 our service providers' handling of cybersecurity incidents, including their recognition and prevention practices. Any of our employees or agents (or 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.
Our current information security program with cybersecurity procedures, policies, training, practices, and controls, may not be sufficient to prevent unauthorized access to 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 us and/or our customers); extortion; financial and economic loss or costs; errors in our financial statements; impairment of liquidity; harm to employees, customers, or vendors; liability or service interruptions to 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, 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. We also could be subject to litigation and government enforcement actions as a result of any failure in our procedures, policies, practices, and controls. Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of our insurance coverage, which could adversely affect our financial condition and results of operations. The amount and scope of insurance 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.
Failure by our 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 our business, operating results, or financial condition.
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 our business and operations. 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 we are subject to numerous cyber-attacks from a variety of actors, so too are these third parties. 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 we do business or obtain services are beyond our control. 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 our third party service providers in the past. Although we have not experienced a material loss of data or disruption of 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 our operations in the same manner as incidents on our own systems.
We rely upon a variety of third-party applications, services, and tools that we do not develop, including artificial intelligence systems and cloud-based platforms and related data centers, to host data and support and operate certain aspects of 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 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 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 our own systems; significant disruption to our business operations; fraud (on us and/or our customers); extortion; financial and economic losses or costs; errors in financial statements; impairment of liquidity; harm to employees, customers, or vendors; liability or service interruptions to 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 our management of risk based on model assumptions and output is not effective, our business, operating results, financial condition, or capital levels could be materially adversely affected.
We continually develop and adapt profitability and risk management models to adequately address a wide range of possible market developments. Some of our qualitative tools and metrics for managing risk are based on use of observed historical market behavior. 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 unanticipatedlosses. 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.
Market Risk
We are exposed to interest rate risk that could materially and adversely affect our operating results or financial condition.
We are subject to interest rate risk due to the timing differences in the cash flows of the assets we hold and the liabilities issued to fund those assets. 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 our earnings if assets repay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments, particularly if 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, our earnings could be adversely affected. In addition, rapid changes in interest rates could have a negative effect on our net interest income across quarters. A future period of rapid increase or decline in interest rates may create or exacerbate periods of market volatility that could adversely affect our ability to manage interest rate risk, which could have a material adverse effect on our operating results or financial condition. See MD&A—Risk Management—Interest Rate Risk for more information on our management of interest rate risk.
We are also subject to repricing risk, which is the risk that 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.
Changes in interest rates relative to our management of interest rate risk through derivatives may cause volatility in financial results and capital levels and may adversely affect our net income, liquidity position, or operating results.
We enter into financial derivatives transactions to hedge interest rate risks inherent in 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, changes in the fair value 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 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 2024, we recorded losses of $1.9 million and gains of $3.3 million, respectively, from changes in the fair value of our financial derivatives as a result of movements in interest rates during those years. We recorded gains of
$6.8 million and $11.5 million in 2025 and 2024, respectively, related to ineffectiveness in hedge accounting relationships.
Changes in interest rates have required, and in the future may require, that we post cash or investment securities to collateralize 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 our derivatives, we would be required to post cash, cash equivalents, or investment securities, possibly within a short period of time, to satisfy our obligations under our derivatives contracts. As of December 31, 2025, we posted $2.1 million of cash and $250.6 million of investment securities as collateral for our derivatives in net liability positions. If we are required to fully collateralize a significant portion of our derivatives in an adverse interest rate environment, it could have a material adverse effect on our liquidity position or operating results.
Financial Risk
Incorrect estimates and assumptions by management in preparing financial statements could adversely affect our business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels.
Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies and methods require management to make estimates and assumptions in preparing our consolidated financial statements. Incorrect estimates and assumptions by management in connection with preparing 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.
Changes in the value or composition of our investment securities could adversely affect our business, operating results, financial condition, liquidity or capital levels.
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 of our investment securities, those estimates could adversely affect 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 in the market at the time of sale, which could be significantly less than our
fair value estimates. Failure to estimate the fair value of our investment securities reasonably accurately could adversely affect our business, operating results, financial condition, liquidity or capital levels.
The trading price for our Class C non-voting common stock may be volatile due to market influences, trading volume, the effects of equity awards for our officers, directors, and employees, or sales of significant amounts of the stock by large holders.
The trading price of our Class C non-voting common 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 $155.25 per share to $209.73 per share during 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 our operating performance, or sales of significant amounts of the stock by large holders. We typically 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 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 our Class C non-voting common stock, which averaged 75,460 shares daily during 2025 and may have a prolongednegative effect on the stock's trading price or increase price volatility.
Regulatory and Compliance Risk
We are a GSE that may be materially and adversely affected by legislative or political developments.
We are a GSE with a statutory Charter that may be amended by Congress at any time, and we are also regulated by government agencies, including the FCA and the SEC. Although we are not aware of any pending legislative or regulatory proposals that would materially impact our business or operations, our ability to effectively conduct our business is subject to risks and uncertainties related to political developments that could 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 condition, or capital levels. See Business—Government Regulation of Farmer Mac for more information about the rules and regulations governing our activities.
We and many of our business counterparties are subject to comprehensive government regulation, and changes to those laws and regulations could adversely affect our business, operating results, reputation, or financial condition.
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 actions affecting our statutory Charter or our business activities, including increased regulatory supervision, and any required changes to our business or operations resulting from such actions, could result in financial loss or otherwise reduce our profitability, subject us to more compliance and other costs, limit our product offerings or our ability to pursue business opportunities in which we might otherwise
consider engaging, curtail our current business activities, affect the value of assets that we hold, or otherwise adversely affect our business, results of operations, reputation, or financial condition.
The financial services industry, in which most of our business counterparties and customers operate, is subject to significant legislation 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 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 our business practices or activities. As a result, our business, operating results, reputation, or financial condition could 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 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 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 our business, financial results, and financial condition.
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;
• legislative or regulatory actions that increase our capital requirements; and
• changes in GAAP or regulatory capital framework as set forth by our principal regulatory agency, FCA.
Other Risks
Our ability to attract and retain motivated and qualified employees is critical to the success of our business, and significant or sustained disruption in the continuity of our employees or executive leaders may materially adversely affect our business performance, operations, financial condition, or reputation.
We rely on our employees' breadth and depth of knowledge of our company and related industries to run our business operations successfully. If we cannot retain and attract motivated and qualified employees or do not have adequate human capital to achieve our business objectives, our business performance, operations, financial condition, or reputation could be materially adversely affected. A significant disruption in the continuity of 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 resources to replace personnel. Loss of key leadership personnel could damage the 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 risk management, see "MD&A—Risk Management" in Item 7 of this report.
innovation
prosperity
opportunities
During 2025, we:
• exceeded $30 billion in outstanding business volume;
• provided $10.5 billion in liquidity and lending capacity to lenders serving rural America;
• added $100.0 million in equity through the issuance of 4.0 million shares of 6.500% non-cumulative perpetual Series H preferred stock;
• maintained strong liquidity in our investment portfolio, with a monthly average of 301 days of liquidity during 2025, well above the regulatory requirement of a minimum of 90 days of liquidity; and
• maintained our strong capital position, with capital of $0.7 billion in excess of the minimum regulatory capital requirement, and maintained uninterrupted access to the debt capital markets.
The discussion below of our financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures we use, see MD&A—Use of Non-GAAP 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 is a non-GAAP measure that differs from net income attributable to common stockholders by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions.
Table 1
For the Years Ended December 31,
(in thousands)
Net income attributable to common stockholders
Core earnings
The year-over-year increase of $2.1 million in net income attributable to common stockholders for 2025 was primarily attributable to a $36.9 million increase in net interest income ("NII"), partially offset by a $21.3 million increase in the provision for credit losses and a $14.4 million increase in operating expenses.
The $11.3 million year-over-year increase in core earnings for 2025 was primarily attributable to a $43.5 million increase in net effective spread ("NES") and a $3.5 million increase in guarantee and commitment fees. These impacts were partially offset by a $21.3 million increase in the provision for credit losses and a $14.4 million increase in operating expenses.
For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see MD&A—Results of Operations. For more information about our non-GAAP measures, see MD&A—Use of Non-GAAP Measures.
Net Interest Income and Net Effective Spread
The following table shows our NII and NES in both dollars and percentage yield or spread for the periods presented. We use NES, a non-GAAP measure, as an alternative to NII because management believes it is a useful metric that reflects the economics of the net spread between all the assets we own and all related funding, including any associated derivatives, some of which may not be included in NII.
Table 2
For the Years Ended December 31,
(in thousands)
Net interest income
Net interest yield %
Net effective spread
Net effective spread %
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 an increase in our use of non-interest-bearing funding to support our
volume growth. 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.
See MD&A—Use of Non-GAAP Measures for more information about our use of NES as a financial measure and Table 9 in MD&A—Results of Operations—Net Interest Income for a reconciliation of NII to NES.
Business Volume
Our outstanding business volume was $33.4 billion as of December 31, 2025, a net increase of $3.8 billion from December 31, 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 $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.
Throughout this MD&A, references to “Agricultural Finance Mortgage Loans” include on‑balance sheet agricultural mortgage loans as well as off‑balance sheet exposures, consisting of LTSPCs, unfunded commitments, and Farmer Mac Guaranteed Securities and references to "Infrastructure Finance Loans" include on-balance sheet infrastructure finance loans as well as off-balance sheet LTSPCs and unfunded commitments.
Credit Quality
Our allowance for losses increased $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
As of December 31, 2025
As of December 31, 2024
Substandard Assets
% of Portfolio
Substandard Assets
% of Portfolio
(dollars in thousands)
Agricultural Finance
Infrastructure Finance
Total
Although total substandard assets increased year-over-year by $129.0 million during 2025, the amount of substandard assets as a percentage of the portfolio increased by a proportionately smaller amount across the two lines of business given growth in outstanding business volume.
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:
Table 4
As of December 31, 2025
As of December 31, 2024
90-Day
Delinquencies
% of Total Outstanding Volume
90-Day
Delinquencies
% of Total Outstanding Volume
(dollars in thousands)
Agricultural Finance
Infrastructure Finance
Total
Across all of our lines of business, 90-day delinquency rates remained relatively flat as a percentage of total outstanding business volume.
For more information about our credit metrics, see MD&A—Risk Management—Credit Risk—Loans and Guarantees.
Critical Accounting Estimates
The 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 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 it has had or is likely to have a material impact on our financial condition or results of 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
Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
For the Years Ended December 31,
(in thousands, except per share amounts)
Net income attributable to common stockholders
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 11)
Gains on hedging activities due to fair value changes
Unrealized losses on trading securities
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value (1)
Net effects of terminations or net settlements on financial derivatives
Issuance costs on the retirement of preferred stock
Income tax effect related to reconciling items
Sub-total
Core earnings
Composition of Core Earnings:
Revenues:
Net effective spread (2)
Guarantee and commitment fees (3)
Other (4)
Total revenues
Credit related expense (GAAP):
Provision for losses
Other credit related expense
Total credit related expense
Operating expenses (GAAP):
Compensation and employee benefits
General and administrative
Regulatory fees
Total operating expenses
Net earnings
Income tax expense (5)
Preferred stock dividends (GAAP)
Core earnings
Core EPS:
Basic
Diluted
Weighted-average shares:
Basic
Diluted
(1) Reflects the amortization recorded during the reporting period on those assets for which the premium, discount, or deferred gain was a result of consolidation accounting rather than a cash transaction.
(2) NES is a non-GAAP measure. See MD&A—Use of Non-GAAP Measures—Net Effective Spread for more information and Table 9 for a reconciliation of NII to NES.
(3) Includes NII of $4.1 million and $4.5 million for the years ended December 31, 2025 and 2024, respectively, related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees.
(4) Reflects reconciling adjustments for the reclassification to exclude expenses related to undesignated financial derivatives and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
(5) Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.
Table 6
Reconciliation of GAAP Basic EPS to Core Earnings - Basic EPS
For the Years Ended December 31,
(in thousands, except per share amounts)
GAAP - Basic EPS
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 11)
Gains on hedging activities due to fair value changes
Unrealized losses on trading securities
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
Net effects of terminations or net settlements on financial derivatives
Issuance costs on the retirement of preferred stock
Income tax effect related to reconciling items
Sub-total
Core Earnings - Basic EPS
Shares used in per share calculation (GAAP and Core Earnings)
Reconciliation of GAAP Diluted EPS to Core Earnings - Diluted EPS
For the Years Ended December 31,
(in thousands, except per share amounts)
GAAP - Diluted EPS
Less reconciling items:
(Losses)/gains on undesignated financial derivatives due to fair value changes (see Table 11)
Gains on hedging activities due to fair value changes
Unrealized losses on trading securities
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value
Net effects of terminations or net settlements on financial derivatives
Issuance costs on the retirement of preferred stock
Income tax effect related to reconciling items
Sub-total
Core Earnings - Diluted EPS
Shares used in per share calculation (GAAP and Core Earnings)
The following sections provide more detail about specific components of our results of operations.
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 t he years ended December 31, 2025 and 2024. 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:
• "Liquidity investments", which are defined as cash, cash equivalents (including U.S. Treasury securities, operational deposits, and 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
For the Year Ended
December 31, 2025
December 31, 2024
Average
Balance
Income/
Expense
Average
Rate
Average
Balance
Income/
Expense
Average
Rate
(dollars in thousands)
Interest-earning assets:
Liquidity investments
Program Assets
Total interest-earning assets
Funding:
Total interest-bearing liabilities
Net non-interest-bearing funding
Total funding
Net interest income/yield
Table 8
Increase/(Decrease) Due to
Rate
Volume
Total
(in thousands)
Income from interest-earning assets:
Liquidity Investments
Program Assets
Total
Expense from other interest-bearing liabilities
Change in net interest income
Table 9
For the Years Ended December 31,
Dollars
Yield
Dollars
Yield
(dollars in thousands)
Net interest income
Net effects of single-class consolidated trusts
Expense related to undesignated financial derivatives
Amortization of premiums/discounts on assets consolidated at fair value
Amortization of losses due to terminations or net settlements on financial derivatives
Fair value changes on fair value hedge relationships
Net effective spread
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.
See Note 12—Business Segment Reporting 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 and Release of Allowance for Losses . The following table summarizes the components of our total allowance for losses for the two-year period ended December 31, 2025:
Table 10
Allowance
for
Losses
(in thousands)
Balance as of December 31, 2023
Provision for losses
Charge-offs
Balance as of December 31, 2024
Provision for losses
Recovery
Charge-offs
Balance as of December 31, 2025
Our allowance for loan loss increased $14.3 million from December 31, 2024 to December 31, 2025, primarily due to $32.9 million in provision expense offset by $20.9 million in 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 growth.
For additional information, see Note 7 — Loans to the consolidated financial statements and MD&A—Risk Management—Credit Risk—Loans and Guarantees.
(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
For the Years Ended December 31,
(dollars in thousands)
(Losses)/gains on undesignated financial derivatives due to fair value changes
Accrual of contractual payments
(Losses)/gains due to terminations or net settlements
(Losses)/gains on financial derivatives
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 Note 5—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 years ended December 31, 2025 and 2024:
Table 12
For the Years Ended December 31,
(dollars in thousands)
Compensation and employee benefits
General and administrative
Regulatory fees
Total Operating Expenses
The year-over-year increase in compensation and employee benefits expenses for the year ended December 31, 2025 was largely due to increased head count and increased bonus accruals associated with strong financial performance compared to targets in 2025.
The year-over-year increase in general and administrative expenses for the year ended December 31, 2025 was primarily attributable to an increase in information technology infrastructure costs, transactional legal fees, and hiring expenses.
Income Tax Expense . The following table presents income tax expense and the effective income tax rate for the years ended December 31, 2025 and 2024:
Table 13
For the Years Ended December 31,
(dollars in thousands)
Income tax expense
Effective tax rate
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
Outstanding Business Volume
On or Off
Balance Sheet
As of December 31,
(in thousands)
Agricultural Finance:
Farm & Ranch:
Loans
On-balance sheet
Loans held in consolidated trusts:
Single-class consolidated trusts (1)
On-balance sheet
Structured consolidated trusts (1)
On-balance sheet
IO-FMGS (2)
On-balance sheet
USDA Securities
On-balance sheet
AgVantage Securities (2)
On-balance sheet
LTSPCs and unfunded loan commitments
Off-balance sheet
Other Farmer Mac Guaranteed Securities (3)
Off-balance sheet
Loans serviced for others
Off-balance sheet
Total Farm & Ranch
Corporate AgFinance:
Loans
On-balance sheet
AgVantage Securities (2)
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Corporate AgFinance
Total Agricultural Finance
Infrastructure Finance:
Power & Utilities:
Loans
On-balance sheet
AgVantage Securities (2)
On-balance sheet
LTSPCs and unfunded loan commitments
Off-balance sheet
Total Power & Utilities
Broadband Infrastructure:
Loans
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Broadband Infrastructure
Renewable Energy:
Loans
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Renewable Energy
Total Infrastructure Finance
Total
(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
Net New Business Volume
For the Year Ended
On or Off
Balance Sheet
December 31, 2025
December 31, 2024
Net Growth/(Decrease)
Net Growth/(Decrease)
(in thousands)
Agricultural Finance:
Farm & Ranch:
Loans
On-balance sheet
Loans held in consolidated trusts:
Single-class consolidated trusts (1)
On-balance sheet
Structured consolidated trusts (1)
On-balance sheet
IO-FMGS (2)
On-balance sheet
USDA Securities
On-balance sheet
AgVantage Securities (2)
On-balance sheet
LTSPCs and unfunded loan commitments
Off-balance sheet
Other Farmer Mac Guaranteed Securities (3)
Off-balance sheet
Loans serviced for others
Off-balance sheet
Total Farm & Ranch
Corporate AgFinance:
Loans
On-balance sheet
AgVantage Securities (2)
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Corporate AgFinance
Total Agricultural Finance
Infrastructure Finance:
Power & Utilities:
Loans
On-balance sheet
AgVantage Securities (2)
On-balance sheet
LTSPCs and unfunded loan commitments
Off-balance sheet
Total Power & Utilities
Broadband Infrastructure:
Loans
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Broadband Infrastructure
Renewable Energy:
Loans
On-balance sheet
Unfunded loan commitments
Off-balance sheet
Total Renewable Energy
Total Infrastructure Finance
Total
(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.
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
Schedule of Principal Amortization as of December 31, 2025
Loans
Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs
USDA Securities and Farmer Mac Guaranteed USDA Securities
Total
(in thousands)
Thereafter
Total
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
AgVantage Balances by Year of Maturity
December 31, 2025
(in thousands)
Thereafter (1)
Total
(1) Includes various maturities ranging from 2031 to 2055.
The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 5.7 years as of December 31, 2025.
Related Party Transactions . 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).
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's board of directors and institutions that 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
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 unrelated counterparty.
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, 2025.
Table 18
Name of Institution
Ownership of
Farmer Mac Voting Common Stock
Primary Aspects of Institution's
Business Relationship with Farmer Mac
AgriBank, FCB
201,621 shares of Class B voting common stock
(40.30% of outstanding Class B stock and 13.17% of total voting common stock outstanding)
We did not conduct any business with AgriBank during 2025 or 2024.
CoBank, ACB
163,253 shares of Class B voting common stock
(32.63% of outstanding Class B stock and 10.66% of total voting common stock outstanding)
We purchased $529.2 million and $442.7 million in loans from CoBank in 2025 and 2024, respectively.
In 2025 and 2024, CoBank retained $4.1 million and $4.0 million of servicing fees related to the loan participations sold to Farmer Mac, respectively.
Zions Bancorporation, National Association (Zions)
322,100 shares of Class A voting common stock
(31.25% of outstanding Class A stock and 21.04% of total voting common stock outstanding)
In 2025 and 2024, we purchased $148.1 million and $173.9 million of Agricultural Finance mortgage loans from Zions, respectively. In 2025 and 2024, we purchased none and $0.4 million, of USDA Securities from Zions, respectively.
As of December 31, 2025, we had entered into mandatory purchase commitments with Zions of $4.6 million.
In 2025 and 2024, Zions retained approximately $11.6 million and $11.2 million in servicing fees for its work as a Farmer Mac servicer, respectively.
For more information about related party transactions, see Note 3—Related Party Transactions to the consolidated financial statements.
Outlook
Business Outlook
Products and Portfolio
We play a vital role in serving rural America by offering liquidity, capital, and risk management tools as a secondary market to help increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure. Our growth trajectory is closely tied to the capital and liquidity needs of the lending institutions that serve agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors.
Several factors continue to influence our business volume growth dynamics. Because the Farm & Ranch portfolio contains a significant share of legacy low‑rate loans, refinance incentives remain muted, keeping prepayment rates below historical norms. 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 throughout 2025, and industry 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 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 throughout 2025. We expect these opportunities to persist into future years.
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.
Growing relationships with larger agriculture lenders, industry consolidation, interest rates, and market volatility, as well as financial institutions' focus on capital efficiency and liquidity, are expected to continue to provide increased opportunities for our loan purchase, risk management, and wholesale funding solutions. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and infrastructure industries present further opportunities for our loan purchase products and other financing solutions. Investments supporting consumer and food supply demand may increase financing needs in the food and agriculture supply chain, potentially requiring incremental capital support through the secondary market. Deepening relationships with eligible infrastructure counterparties are expected to continue to create opportunities to support fiber and broadband-related transactions, including significant market activity and investments in wholesale data centers and renewable energy projects.
Operations
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. These investments are designed to enhance capacity and efficiency in support of market growth opportunities and long-term strategic objectives. By investing in infrastructure and business platforms, we aim to scale more efficiently in tandem with future portfolio and earnings growth. These initiatives are expected to improve product delivery, business operations, and scalability to better position us to capitalize on future market growth opportunities.
Another focus of our planned infrastructure investments is a continued effort to expand our servicing capabilities and to enhance the efficiency of processes associated with loan onboarding and servicing. We expect to continue to leverage technology enhancements and servicing standardization efforts to drive scalability and consistency. We plan to implement technology enhancements 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.
Agricultural Finance Industry Outlook
Farm Incomes
The farm profitability outlook remains varied for 2026. Total net cash farm income rebounded slightly in 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 bifurcation across agricultural sectors. Namely, crop producers face headwinds from tepid commodity prices and elevated input costs that have compressed margins, while livestock producers are expected to benefit again in 2026 from robust consumer and export demand and falling feed costs. Shifts in the outlook for trade could have a meaningful impact on commodity prices and farm incomes. The current USDA forecast shows U.S. agricultural exports dropping modestly in 2026.
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 arise in the coming quarters.
Land Values
Farmland value growth rates continued to moderate in 2025 following successive years of strong appreciation. Land value survey data from the USDA shows a 4.3% increase in average farm real estate values from June 2024 to June 2025. Annual farm real estate value gains were highest in the Southern Plains (5.9%) and the Lake states (5.7%) and still strong but slowing in the Northern Plains (4.9%), the Southeast (4.7%), and the Corn Belt (4.0%).
Farmland transaction data, like the USDA survey results, show weaker farmland sales prices in 2025. The Farmer Mac Farmland Price Index Powered by AcreValue ® decreased 6% in third quarter 2025 relative to the same period in 2024. Basing this index on actual farmland transactions can lead to greatervolatility, as many economic factors affecting land markets are highly localized and some markets may experience greatervolatility 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, the farm and food sectors in 2026 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions. Water availability is a perennial concern for many agricultural producers. Drought conditions increased modestly in intensity and prevalence in fourth quarter 2025, largely across several southern and southeastern states. At the same time, drought conditions improved across several western states, including California.
The ongoing implementation of groundwater management regulation, especially in California, continues to influence land values in many regions of the 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 exceptionaldrought (primarily in California), our 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 during the past few years, but economic factors continue to evolve into 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 2026 and 2027 could provide support for raw materials such as corn and soybeans, but markets for these fuels are nascent and could evolve or erode rapidly in the coming quarters. Trade policy uncertainty, labor availability, changes to consumer demand due to health policy and pharmaceuticals, and a high risk of global economic stress could pose challenges for these sectors into 2026. Still, consumer spending held steady throughout 2024 and 2025, providing stable conditions for value-added food, feed, fiber, and biofuel consumption. Consumer demand, particularly for animal protein products, 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 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 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, 2023, and 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 or above historical levels based on the replacement and modernization of existing and new infrastructure, as well as increasing demand for electricity across the spectrum of residential, commercial, and industrial customers.
Renewable Energy
Investment in renewable energy generation and deployment of energy storage technologies in the last five years deepened our relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable energy net generation grew by 38% in the last five years, compared to a non-renewable electricity net generation increase of 4%. The volatile cost of fossil fuel-based inputs, combined with policy initiatives and the falling costs of renewable power generation, influenced this change in generation capacity. In response to this expansion, we have hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represents a 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 and investment in more fiber network capacity. In addition to capital projects spurred by government-backed support programs, we could see an increase in financing opportunities for other telecommunications providers in rural areas. For example, fiber line expansion, wireless broadband deployment, industry consolidation and efficiency through mergers and acquisitions, and data processing center buildouts are all increasingly important to rural economic opportunity, and the food and agriculture industries require constant connectivity. However, some types of "leapfrog" technology advances in the broadband infrastructure sector, such as low orbit satellite communication systems, could put pressure on the profitability of the providers of older digital technologies.
Changes in tax policy, trade, and immigration laws, as well as energy cost and availability, could result in significant challenges and opportunities to infrastructure borrowers. These changes could lead to delays in completing current projects and slow future investments in renewable energy and battery storage projects as well as the deployment of fiber and broadband infrastructure in rural areas. 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.
Balance Sheet Review
The following table summarizes our balance sheet as of the periods indicated:
Table 19
Change
December 31, 2025
December 31, 2024
(in thousands)
Assets
Cash and cash equivalents
Investment securities
Loans, net of allowance
Loans held in trusts
Other
Total assets
Liabilities
Notes Payable
Debt securities of consolidated trusts held by third parties
Other
Total liabilities
Total equity
Total liabilities and equity
Assets . The increase in total assets was primarily attributable to new loan 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. 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 addition to an increase in 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
Our direct credit exposure to Agricultural Finance mortgage loans as of December 31, 2025 was $14.0 billion across 48 states. 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, we have implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity.
Product Type
Underwriting
Collateral
Farm & Ranch
Typically required to meet specific underwriting criteria or demonstrate compensating strengths in one or more other underwriting criteria.
First lien mortgage
Corporate AgFinance
Typically relies upon the value of the borrower as a going concern, which is estimated using one or more valuation techniques (e.g., discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques), and therefore depends on the ability of the borrower entity to generate recurring positive cash flow ("enterprise value").
Generally secured by all business assets, including first lien mortgages and common stock of the borrower.
Corporate AgFinance loans 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 evaluating the borrower's suppliers, customers, market share, and competition. Any underlying weaknesses are assessed and analyzed in conjunction with any compensating strengths. Corporate AgFinance loans typically require ongoing monitoring of reporting requirements and financial and non-financial covenants. We rely on internal underwriters with the expertise to analyze large, complex farming operations and agribusiness loans, along with collateral valuation contractors, and legal counsel to perform the necessary diligence to assess the overall credit risk and loan structures of these transactions. We have developed
business operating processes and skill sets to source, underwrite, close, and service Corporate AgFinance loans. Those processes and skill sets are different than those required for Farm & Ranch loans and, accordingly, have a higher operating expense profile than for Farm & Ranch loans.
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.
The following table disaggregates the Agricultural Finance mortgage loans by portfolio segment and by internally assigned risk ratings.
Table 20
As of December 31, 2025
Agricultural Finance mortgage loans by internally assigned risk rating
Acceptable
Special Mention
Substandard
Total
(in thousands)
Farm & Ranch
Corporate AgFinance
Agricultural Finance Total
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.
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.
Our 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. As of 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 0.88% of the portfolio as of December 31, 2024. 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.
Our 90-day delin 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 portfolio over the last 15 years. We continue to monitor delinquency rates for trends that may result from more than expected cyclical trends such as changes in the general economy or unforeseen events like adverse weather or regulatory changes in water management.
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:
Table 21
Agricultural Finance Mortgage Loans
90-Day
Delinquencies
Percentage
(dollars in thousands)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
For Farm & Ranch loans, we consider a loan's original LTV ratio as one of many factors in evaluating lossseverity. 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.
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 by commodity type within geographic region and cumulative credit losses by origination year and commodity type:
Table 22
As of December 31, 2025
Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region
Agricultural Finance Mortgage Loans Cumulative Credit Losses by Origination Year and Commodity Type
Crops
Permanent
Plantings
Livestock
Part-time
Farm
Ag. Storage and
Processing
Total
(in thousands)
By year of origination:
2015 and prior
Total
For more information about the credit quality of our Agricultural Finance mortgage loans and the associated allowance for losses 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 Release of Allowance for Loan Losses.
Infrastructure Finance - Direct Credit Exposure
Our direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of December 31, 2025 was $7.9 billion across 45 states. 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 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 line of business are detailed below:
Product Type
Underwriting
Collateral
Power & Utilities
Review of lenders' credit submissions and analysis of borrowers' audited financial statements and financial and operating reports to confirm that loans meet our underwriting standards.
Customary for lender or lender group to take security interest in all of the borrower's assets for which we verify that lien accommodation will result in shared first lien or first lien in our favor. When debt indentures are used, we determine if available collateral is adequate to support the loan program and our investment. We may also purchase unsecured loans that meet our underwriting standards for unsecured loans (primarily electric generation and transmission loans)
Broadband Infrastructure
Typically relies upon enterprise value. We have implemented methodologies and parameters to help assess credit risk and established specific underwriting criteria for Broadband Infrastructure loans based on the sector, borrower construct, and transaction complexity.
Generally secured by all business assets, including first lien mortgages and common stock of the borrower. On occasion, we purchased unsecured debt of the highest quality borrowers.
Renewable Energy
Typically financed on a non-recourse or limited recourse basis and underwritten on a projection basis with significant reliance placed on assumptions used in each project’s analysis. Credit risk is assessed based on specified methodologies and parameters and specific underwriting criteria based on the project and transaction construct and complexity. Each prospective loan is thoroughly analyzed and quantitative assessments are performed that typically focus on projected debt service requirements, term and amortization review, interest rate sensitivity, and collateral analysis. We also perform qualitative assessments typically focused on the project sponsor's credentials and experience, off-take (cash flow) considerations, and concentration and other market considerations. We typically review the project contracts and agreements for each loan.
Typically secured by a first lien on the borrower's project assets, an assignment of the project contracts and agreements, a land or leasehold interest, and in certain cases, a pledge of the equity interests in the borrower entity. Our enforcement rights in any collateral may be subject to tax equity interests in the borrower's renewable energy project.
Broadband Infrastructure loans tend to be larger operations focused on providing communication and data services to rural areas, including fiber, cable/broadband, tower, wireless, local exchange carrier, and data centers. 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 reporting requirements and financial and non-financial covenants. We rely on the experience of internal underwriters with the expertise to analyze the loans and engage legal counsel to perform the necessary diligence to assess the overall credit risk and loan structures of these transactions.
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.
We do not directly service loans held in our portfolio for the Infrastructure Finance line of business. Typically, these loans are serviced by the lender or other organization which has experience in servicing loans to 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
As of December 31, 2025
Infrastructure Finance loans by internally assigned risk rating
Acceptable
Special Mention
Substandard
Total
(in thousands)
Power & Utilities
Renewable Energy
Broadband Infrastructure
Infrastructure Finance Total
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, we believe there is little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business. As of December 31, 2025, we had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and do not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, we do not provide an allowance for losses on the USDA portfolio. The lender on each USDA-guaranteed loan is required by regulation to retain the unguaranteed portion of 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.
We require many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to our standards, the accuracy of provided loan data, and other requirements related to the loans. Sellers who make these representations and warranties are responsible for breaches of those representations and warranties. In the event of a breach of a representation or warranty material to our decision to purchase 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 cure, replace, or repurchase the loan. During the previous three years ended December 31, 2025, there have been no breaches of representations and warranties by sellers requiring a selle r to cure, replace, or repurchase a loan. For more information about Farmer Mac's loan eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility."
We service a sizable portion of our Agricultural Finance mortgage loan and USDA Securities portfolios, as well as a smaller portfolio of eligible agricultural mortgage loans that are held by 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 . We are exposed to credit risk arising from our business relationships with other institutions, which include:
• issuers of AgVantage securities;
• approved lenders and servicers; and
• interest rate swap counterparties.
We approve AgVantage counterparties and manage institutional credit risk related to those AgVantage counterparties by requiring them to meet our standards for creditworthiness for the particular counterparty type and transaction. All AgVantage securities must be secured by Eligible Loans or eligible securities in an amount at least equal to the outstanding principal amount of the issuer's AgVantage securities. The required collateralization level is established when the AgVantage facility is entered into with the counterparty and does not change during the life of the AgVantage securities issued under the facility without our consent. Loans pledged under AgVantage securities are serviced by the issuers of the 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 to maintain the minimum required collateralization level.
For AgVantage securities secured by loans eligible for our Agricultural Finance line of business, we require the general obligation to be over-collateralized, either by Eligible Loans or any of the following: cash; securities issued by the U.S. Treasury or guaranteed by an agency or instrumentality of the United States, other highly-rated securities; or other approved instruments. We require collateralized loans to meet the minimum standards set forth in the Charter for Agricultural Finance mortgage loans with a
maximum limit of $75.0 million in cumulative loan exposure to any one borrower or related borrowers on pledged collateral.
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
As of December 31, 2025
As of December 31, 2024
Counterparty
Balance
Required Collateralization
Balance
Required Collateralization
(dollars in thousands)
AgVantage:
CFC
MetLife
Rabo AgriFinance
Other (1)
Total outstanding
(1) Consists of AgVantage securities issued by 9 different issuers as of both December 31, 2025 and December 31, 2024.
We manage institutional credit risk related to lenders and servicers by requiring those institutions to meet our standards for creditworthiness. We monitor the financial condition of those institutions by evaluating financial statements and credit rating agency reports. For more information about lender eligibility requirements, see Business—Farmer Mac's Lines of 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 . The management of the credit risk inherent in these investments is governed by our internal policies as well as the Liquidity and Investment Regulations. In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of our investment policies are designed to minimize exposure to financial market volatility, preserve capital, and support access to the debt markets.
The Liquidity and Investment Regulations and our internal policies require that investments held in 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 severelyadverse 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.
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 5% of our regulatory capital ($87.3 million as of December 31, 2025). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although our current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE.
Although the Liquidity and Investments Regulations 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 set forth asset class limits as part of our overall risk management framework.
Interest Rate Risk . We are subject to interest rate risk on all interest-earning assets on our balance sheet due to timing differences in the cash flows 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 our earnings if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when our funding costs cannot be correspondingly reduced. Alternatively, 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 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, we regularly assess this exposure and, if necessary, adjust our portfolio of interest-earning assets, debt, and financial derivatives.
We seek to maintain exposure to interest rate risk within appropriate limits, as approved by our board of directors. 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.
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 management strategy. We consider the deployment of equity proceeds when assessing balance sheet duration, earnings sensitivity, and value across interest rate environment.
Our primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and convexity characteristics and help mitigate impacts from interest rate changes across the yield curve. As part of this strategy, we seek 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.
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 risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, asset prepayments typically increase, and we may be able to economically extinguish certain callable debt issuances. We also enter into financial derivatives, primarily interest rate swaps, to better match the durations of our assets and liabilities, thereby reducing overall sensitivity to changing interest rates.
We incorporate behavioral models when projecting and valuing cash flows related to our interest-earning assets, taking into consideration the associated prepayment provisions and the default probabilities. We periodically evaluate the effectiveness of these models compared to actual prepayment experience because borrowers' behavior may change over time depending on the interest rate environment. We adjust and refine our models as necessary to improve the precision of future prepayment forecasts.
Interest rate changes may affect the timing of prepayments which may, in turn, impact duration and asset value. Declining interest rates generally result in increased prepayments, which shortens asset duration while rising interest rates generally result in lower prepayments, thereby extending asset duration.
We are subject to interest rate risk on loans and 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 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 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 and other financial derivatives.
Interest Rate Risk Metrics
We regularly evaluate and conduct interest rate shock simulations on our portfolio of financial assets, debt, and financial derivatives and examine a variety of metrics to quantify and manage our exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted NES as well as a duration gap analysis.
MVE represents our estimate of the present value of all future cash flows from 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 our market value as a going concern 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 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 associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest 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.
Duration is a measure of a financial instrument's fair value sensitivity to changes in interest rates. Duration gap is calculated using the net estimated durations of our interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and financial derivatives. Duration gap provides a relatively concise measure of the interest rate risk inherent in our outstanding portfolio.
A positive duration gap denotes that the duration of our interest-earning assets is greater than the duration of our debt and financial derivatives. A positive duration gap indicates that with small changes in interest rate movements the fair value change of our interest-earning assets is more sensitive than the fair value change of our debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate 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 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.
Each of the interest rate risk metrics is quantified using asset/liability models and derived based on our best estimates of 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 extent there are material changes to our financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes.
The following schedule summarizes our MVE and NES sensitivity analysis as of December 31, 2025 and 2024 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:
Table 26
Percentage Change in MVE from Base Case
Interest Rate Scenario
As of December 31, 2025
As of December 31, 2024
+100 basis points
-100 basis points
Percentage Change in NES from Base Case
Interest Rate Scenario
As of December 31, 2025
As of December 31, 2024
+100 basis points
-100 basis points
As of December 31, 2025, we reported a positiveeffective 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.
Financial Derivatives Transactions
The economic effects of financial derivatives are included in our MVE, NES, and duration gap analyses. We typically 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 we pay fixed rates of interest to, and receive floating rates of interest from, counterparties;
• "receive-fixed" interest rate swaps, in which we receive fixed rates of interest from, and pay floating rates of interest to, counterparties;
• "basis swaps," in which we pay floating rates of interest based on one index to, and 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, 2025, we had $25.5 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to approximately thirty years, of which $11.3 billion were pay-fixed interest rate swaps, $13.8 billion were receive-fixed interest rate swaps, and $0.4 billion were basis swaps.
We enter into interest rate swaps to more closely match the cash flow and duration characteristics of our interest-earning assets with those of our debt. For example, we enter into pay-fixed interest rate swaps and issue floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. 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.
Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as AFS or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate 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 mark-to-market value of the portfolio of interest rate swaps.
Re-funding and repricing risk
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 we issue floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that, on average, may have longer maturities. Changes in our funding costs relative to the asset's benchmark market index rate can cause changes to NII when debt matures and is reissued at then-current interest rates to continue funding those assets.
We are subject to re-funding and repricing risk on certain fixed rate assets due to pay-fixed, receive-floating interest rate swaps, effectively converting these assets to floating rate which then require floating rate funding.
We can meet floating rate funding needs in several ways, including:
• issuing 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, we frequently 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, 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 our overall debt issuance and liquidity management strategies. However, if the funding cost of 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 we refinanced the associated debt, we would be exposed to a commensurate reduction of NES. Conversely, if the funding cost on our discount notes or medium-term notes decreased relative to the benchmark market index during that time, we would benefit from a commensurate increase to NES.
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 our risk tolerance. We regularly adjust our funding strategies to mitigate the effects of interest rate variability and seek to maintain an effective mixture of funding structures in the context of our overall liability and liquidity management strategies.
As of December 31, 2025, we held $8.5 billion of floating rate assets in our lines of business and our investment portfolio that reset based on floating rate market indices, such as SOFR. As of December 31, 2025, we had $11.3 billion of pay-fixed interest rate swaps outstanding.
Liquidity and Capital Resources
We primarily use the proceeds of our debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and repayments of AgVantage and investment securities to meet our liquidity and funding needs. We regularly access the debt capital markets for funding, and we maintained steady access to the debt capital markets throughout 2025. We fund our purchases of Eligible Loan assets, USDA Securities, Farmer Mac Guaranteed Securities and investment assets and finance our operations primarily by issuing debt obligations of various maturities in the debt capital markets. As of December 31, 2025, we had outstanding discount notes of $2.6 billion, medium-term notes that mature within one year of $8.7 billion, and medium-term notes that mature after one year of $19.5 billion.
Assuming continued access to the debt capital markets, we believe we have sufficient liquidity and capital resources to support our operations for the next 12 months and for the foreseeable future. We have a contingency funding plan to manage unanticipateddisruptions in our access to the debt capital markets, which requires us to maintain a minimum of 90 days of liquidity under the Liquidity and Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, we maintained a monthly average of 301 days of liquidity throughout 2025 and had 277 days of liquidity as of December 31, 2025.
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. Our liquidity investments must comply with policies adopted by 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:
Table 27
As of December 31, 2025
As of December 31, 2024
(in thousands)
Cash and cash equivalents
Investment securities:
Guaranteed by U.S. Government and its agencies
Guaranteed by GSEs
Asset-backed securities
Total
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.
Capital Requirements . We are subject to the following statutory capital requirements – minimum, critical, and risk-based. We must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of December 31, 2025, we were in compliance with our statutory capital requirements and were classified within "level 1" (the highest compliance level).
Capital
Table 28
December 31, 2025
December 31, 2024
(in thousands)
Core capital
Capital in excess of minimum capital level required
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 our known, fixed, and determinable discount and medium-term note obligations by payment date as of December 31, 2025. Payment amounts represent amounts due to investors (including return of discount and interest on debt) and do not include unamortized premiums or discounts or other similar carrying value adjustments.
Table 29
One Year
or Less
One to
Three Years
Three to
Five Years
Over Five
Years
Total
(in thousands)
Discount notes (1)
Medium-term notes (1)
Interest payments on fixed rate medium-term notes (2)
Interest payments on floating rate medium-term notes (3)
(1) Future events, including additional issuance and refinancing of notes, could cause actual payments to differ significantly from these amounts. For more information about discount notes and medium-term notes, see Note 6—Notes Payable to the consolidated financial statements.
(2) Interest payments on callable medium-term notes are calculated based on maturity. Future calls could cause actual interest payments to differ significantly from the amounts presented.
(3) Calculated using the effective interest rates as of December 31, 2025. As a result, these amounts do not reflect the effects of changes in the interest rates effective on future interest rate reset dates.
We enter into financial derivatives contracts under which we receive cash from or we are required to pay cash to 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 our credit risk and that of 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, 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. See Note 2(f)—Summary of Significant Accounting Policies—Financial Derivatives and Note 5—Financial Derivatives to the consolidated financial statements for more information.
Contingent Liabilities and Off-Balance Sheet Arrangements . In conducting our loan purchase activities, we enter into mandatory delivery commitments to purchase agricultural mortgage loans and USDA Securities. In conducting our LTSPC activities, we commit, subject to the applicable LTSPC agreement, to a future purchase of one or more loans from identified pools of Eligible Loans that meet our standards at inception of the transaction and when we assumed the credit risk on the loans. The following table presents these commitments:
Table 30
As of December 31,
(in thousands)
LTSPCs and purchase commitments
Mandatory commitments to purchase loans and USDA Securities
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 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 10—Guarantees and Commitments to the consolidated financial statements for more information.
Other Matters
None.
Supplemental Information
The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume:
Table 31
New Business Volume
Agricultural Finance
Infrastructure Finance
Farm &
Ranch
Corporate AgFinance
Power & Utilities
Broadband Infrastructure
Renewable Energy
Total
(in thousands)
For the quarter ended:
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
For the year ended:
December 31, 2025
December 31, 2024
Table 32
Repayments of Assets
Agricultural Finance
Infrastructure Finance
Farm &
Ranch
Corporate AgFinance
Power & Utilities
Broadband Infrastructure
Renewable Energy
Total
(in thousands)
For the quarter ended:
Scheduled
Unscheduled
December 31, 2025
Scheduled
Unscheduled
September 30, 2025
Scheduled
Unscheduled
June 30, 2025
Scheduled
Unscheduled
March 31, 2025
Scheduled
Unscheduled
December 31, 2024
Scheduled
Unscheduled
September 30, 2024
Scheduled
Unscheduled
June 30, 2024
Scheduled
Unscheduled
March 31, 2024
Scheduled
Unscheduled
December 31, 2023
For the year ended:
Scheduled
Unscheduled
December 31, 2025
Scheduled
Unscheduled
December 31, 2024
Table 33
Outstanding Business Volume
Agricultural Finance
Infrastructure Finance
Farm &
Ranch
Corporate AgFinance
Power & Utilities
Broadband Infrastructure
Renewable Energy
Total
(in thousands)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
Table 34
On-Balance Sheet Outstanding Business Volume
Fixed Rate
5- to 10-Year ARMs & Resets
1-Month to 3-Year ARMs
Total Held in Portfolio
(in thousands)
December 31, 2025
September 30, 2025
June 30, 2025
March 31, 2025
December 31, 2024
September 30, 2024
June 30, 2024
March 31, 2024
December 31, 2023
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
Agricultural Finance Mortgage Loans 90-Day Delinquencies as of December 31, 2025
Distribution of Agricultural Loans
Agricultural Loans
90-Day Delinquencies (1)
Percentage
(dollars in thousands)
By year of origination:
2015 and prior
Total
By geographic region (2) :
Northwest
Southwest
Mid-North
Mid-South
Northeast
Southeast
Total
By commodity/collateral type:
Crops
Permanent plantings
Livestock
Part-time farm
Ag. Storage and Processing
Other
Total
By original LTV ratio:
Less than 40.00%
Greater than 100%
Enterprise Value (3)
Total
By size of borrower exposure (4) :
Less than $1,000,000
$25,000,000 and greater
Total
(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.
(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
Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative
Original Loans, Guarantees, and LTSPCs as of December 31, 2025
