AGM

• Overall Financial Performance

  • FarmerMac delivered record Q2 2026 results, with total outstanding business volume reaching a new high of $37.2 billion, a $2.4 billion net increase from the prior quarter.
  • Total revenue hit $125 million, core earnings reached $59 million ($5.40 per diluted share), and return on equity hit 18.9%, one of the strongest in company history.
  • The operating efficiency ratio came in at 28%, below the company's long-term 30% target.
  • Net effective spread reached a record $117.4 million, up 25% year-over-year and 15% sequentially, hitting 126 basis points; excluding a one-time $7.4 million interest recovery, net effective spread was 118 basis points, in line with prior periods.
  • Core capital increased $141 million to $1.9 billion after a successful $100 million Series I preferred stock issuance, with a tier one capital ratio of 13.2%, within the company's 12-14% target range.

• Strategic & Operational Updates

  • Launched the new FarmerMac Loan Exchange (FLEX), a unified digital platform for all farm and ranch loan purchase products that improves process efficiency, documentation management, and scalability, serving as a foundational base for future product innovation.
  • The company provided over $4 billion in new liquidity to U.S. agriculture and rural infrastructure in Q2, and $7.5 billion in total liquidity in H1 2026, exceeding the 2022 H1 record by more than 50%.
  • The company is developing a new credit risk transfer program expected to launch in 2026, which will leverage third-party capital to improve capital efficiency, expand balance sheet capacity, and support sustainable long-term growth.

• Credit Quality

  • Provision for credit loss was $7 million in the quarter, with $3.6 million driven by portfolio growth and $3 million from collateral value deterioration on two farm and ranch loans that entered foreclosure.
  • Allowance for credit losses increased $7.2 million sequentially to $47.4 million, equal to 19.7% of total non-accrual assets, up from 15.4% at the end of Q1. 90-day delinquencies fell 15 basis points sequentially to 37 basis points, and total substandard assets as a share of the total portfolio improved to 1.71% from 1.87% in Q1.

• Full-year 2026 operating efficiency ratio is expected to land in the 27% to 29% range, remaining below the 30% long-term target.
• Full-year 2026 compensation expense is projected to be 20-22% higher than 2025, with growth expected to moderate in H2 2026 after a one-time $4 million performance incentive true-up in Q2.
• Net effective spreads across all business segments (corporate ag, broadband, renewable energy, farm and ranch) are expected to remain within recent historical trailing 12-month ranges, with only minor potential compression in farm and ranch from lumpy growth in the wholesale Advantage product.
• Management expects to generate positive operating leverage going forward, with expanding operating leverage in H2 2026 as expense growth moderates after Q2's elevated level.
• Farm and ranch wholesale finance is expected to deliver incremental net growth in H2 2026 due to minimal scheduled maturities and strong relative value compared to alternative funding options.
• Renewable energy segment growth is expected to continue through 2027, driven by large unmet demand for new power generation capacity that more than offsets natural portfolio runoff; beyond 2027, growth is expected to become more market-driven rather than policy-driven.
• Corporate agribusiness finance is expected to see continued modest growth, with management remaining disciplined on pursuing opportunities that meet underwriting standards.

1. Agricultural Finance: Outstanding business volume grew $1.8 billion sequentially to an unstated total, with $1.1 billion of this growth coming from the farm and ranch advantage wholesale finance securities portfolio. Net growth in farm and ranch loan purchases totaled $867 million in H1 2026, nearly double the year-ago H1 level. This segment contributed the majority of the quarter's overall $2.4 billion net outstanding volume growth.
2. Corporate Agribusiness Finance: Outstanding business volume grew modestly to $2.1 billion at quarter end. Deal flow remained muted in 2026 due to lower M&A activity amid market volatility, trade tensions, and inflation. This segment accounted for a small share of overall quarterly growth.
3. Infrastructure Finance: Total outstanding business volume increased $573 million sequentially to $13.1 billion at quarter end, with all sub-segments contributing growth:
   • Power & Utilities: Net growth of $291 million, driven by loan purchase activity including a $197 million single-customer loan pool acquisition.
   • Renewable Energy: Grew $120 million to $3 billion at quarter end, after accounting for elevated scheduled maturities and repayments. The segment recorded $565 million in loan purchases and commitments during the quarter, with a current deal pipeline approaching $1 billion.
   • Broadband Infrastructure: Posted net growth of $162 million to end at $1.9 billion. 70% of new quarterly volume was data center-related (driven by AI, cloud, and enterprise digitization growth), bringing total data center-related outstanding volume to ~$1 billion, equal to 50% of this sub-segment's total.

• Macroeconomic uncertainty stemming from interest rate volatility, shifting trade policy, regulatory changes, and global geopolitical tensions that impact commodity markets, energy and fertilizer input costs, and overall market conditions.
• Ongoing stress in some sectors of the agricultural economy from elevated input costs and market volatility, which could lead to additional credit deterioration and increased provision expenses.
• Rapid growth in data center exposure within the broadband infrastructure segment creates potential market concentration risk, though management has responded by enhancing portfolio diversification requirements and prioritizing investment-grade hyperscaler tenants.
• The renewable energy industry is adjusting to the phase-out of federal tax credit incentives and ongoing supply chain disruptions, which could impact project development and demand.
• Widening credit spreads in the broader market could impact bank balance sheet capacity, though management notes this dynamic may actually increase demand for FarmerMac's liquidity products due to its relatively lower funding cost sensitivity.
• Market capacity for new credit risk transfer transactions for agricultural and infrastructure assets is untested at scale, which could limit long-term growth of this capital tool if investor appetite is lower than expected.

Q: Do data center assets in the broadband segment have higher spreads than other broadband assets, and was the quarter's corporate ag spread increase solely due to the one-time interest recovery? / A: Data center spreads are broadly in line with other assets in the broadband segment; management prioritizes consistent risk-adjusted returns across all sub-sectors, with no significant spread volatility between different parts of the portfolio. For corporate ag finance, the net effective spread increase in the quarter was almost entirely driven by the one-time $7.4 million interest recovery from a resolved non-accrual loan; excluding this item, spreads were flat quarter-over-quarter.

Q: Will the new credit risk transfer program improve return on equity, and will it be structured similarly to Fannie/Freddie risk sharing programs? / A: Credit risk transfer is expected to be a more efficient, flexible, and lower-cost source of capital than traditional equity issuance, so it will directly boost return on equity over time. The program will evolve beyond FarmerMac's existing senior-subordinate securitization structure to include additional tools like synthetic securitization, aligned with structures used by other government-sponsored enterprises.

Q: What are the core drivers of the recent rapid acceleration in farm and ranch loan volume growth? / A: Growth has three core drivers: 1) Some agricultural borrowers facing stress tap equity in their land to access liquidity for working capital through the secondary market; 2) Lenders need to balance balance sheet growth amid high-cost deposits and capital constraints, so they increasingly use the secondary market to manage capital and liquidity; 3) FarmerMac's product and platform improvements have made accessing liquidity faster and more efficient, increasing borrower and lender demand. Additionally, wider market credit spreads benefit FarmerMac because its funding costs are less sensitive to spread movements than bank funding costs, making its products relatively more attractive.

Q: Can securitization/credit risk transfer volume grow materially over the next two years, and can infrastructure loans be included in these transactions? / A: Yes, management expects credit risk transfer volume to be meaningfully higher two years from now. Early transactions will prioritize farm and ranch loans, where the market already has comfort with FarmerMac's underwriting and historical credit performance. Infrastructure risk transfer transactions will be evaluated over the longer term, and are not a near-term priority for the new program.