Our loan portfolio is segregated into segments by borrower member class, which is based on the utility sector of the borrowers because the key operational, infrastructure, regulatory, environmental, customer and financial risks of each sector are similar in nature. Total loan portfolio member class consists of CFC distribution, CFC power supply, CFC statewide and associate, NCSC electric and NCSC telecom. We offer both long-term and line of credit loans to our borrowers. Under our long-term loan facilities, a borrower may select a fixed interest rate or a variable interest rate at the time of each loan advance. Line of credit loans are generally revolving loan facilities and have a variable interest rate.

Loans to members consist of loans held for investment and loans held for sale. The outstanding amount of loans held for investment is recorded based on the unpaid principal balance, net of discounts, net charge-offs and recoveries, of loans and deferred loan origination costs. The outstanding amount of loans held for sale is recorded based on the lower of cost or fair


	February 28, 2026				May 31, 2025
(Dollars in thousands)	Amount		% of Total		Amount		% of Total
Member class:
CFC:
Distribution	$	30,387,286	78	%	$	29,262,495	79	%
Power supply	6,288,837		16		5,895,500		16
Statewide and associate	273,177		1		251,325		—
Total CFC	36,949,300		95		35,409,320		95
NCSC:
Electric	1,163,391		3		1,078,763		3
Telecom	618,988		2		575,465		2
Total NCSC	1,782,379		5		1,654,228		5
Total loans outstanding(1)	38,731,679		100		37,063,548		100
Deferred loan origination costs—CFC(2)	18,203		—		16,430		—
Loans to members	$	38,749,882	100	%	$	37,079,978	100	%

Loan type:
Long-term loans:
Fixed rate	$	32,145,476	83	%	$	31,388,313	85	%
Variable rate	1,438,929		4		1,122,250		3

Total long-term loans	33,584,405		87		32,510,563		88
Lines of credit	5,147,274		13		4,552,985		12
Total loans outstanding(1)	38,731,679		100		37,063,548		100
Deferred loan origination costs—CFC(2)	18,203		—		16,430		—
Loans to members	$	38,749,882	100	%	$	37,079,978	100	%

We sold CFC and NCSC loans, at par for cash, totaling $460 million and $376 million during YTD FY2026 and YTD FY2025, respectively. We recorded immaterial losses on the sale of these loans attributable to the unamortized deferred loan origination costs associated with the transferred loans. We had loans held for sale totaling $4 million as of February 28, 2026, which were sold at par for cash in March 2026. We had loans held for sale totaling $21 million as of May 31, 2025, which were sold at par for cash during YTD FY2026.

We report accrued interest on loans separately on our consolidated balance sheets as a component of the line item accrued interest receivable rather than as a component of loans to members. Accrued interest on loans totaled $238 million and $237 million as of February 28, 2026 and May 31, 2025, respectively. Accrued interest receivable amounts generally represent three months or less of accrued interest on loans outstanding. Because our policy is to write off past-due accrued interest receivable in a timely manner, we elected not to measure an allowance for credit losses for accrued interest receivable on loans outstanding. We also elected to exclude accrued interest receivable from the credit quality disclosures required under CECL.

Concentrations of credit may exist when a lender has large credit exposures to single borrowers, large credit exposures to borrowers in the same industry sector or engaged in similar activities or large credit exposures to borrowers in a geographic region that would cause the borrowers to be similarly impacted by economic or other conditions in the region. As a tax-exempt, member-owned finance cooperative, CFC’s principal focus is to provide funding to its rural electric utility cooperative members to assist them in acquiring, constructing and operating electric distribution systems, power supply systems and related facilities.

Because we lend primarily to our rural electric utility cooperative members, we have had a loan portfolio subject to single-industry and single-obligor concentration risks since our inception in 1969. Loans outstanding to electric utility organizations of $38,113 million and $36,488 million as of February 28, 2026 and May 31, 2025, respectively, accounted for 98% of total loans outstanding as of each respective date. The remaining loans outstanding in our portfolio were to members, affiliates and associates in the telecommunications industry. Our credit exposure is partially mitigated by long-term loans guaranteed by RUS, which totaled $97 million and $105 million as of February 28, 2026 and May 31, 2025, respectively.

The outstanding loan exposure for our 20 largest borrowers totaled $7,248 million and $7,149 million as of February 28, 2026 and May 31, 2025, respectively, representing 19% of total loans outstanding as of each respective date. Our 20 largest borrowers consisted of 13 distribution systems and seven power supply systems as of February 28, 2026 and 14 distribution systems and six power supply systems as of May 31, 2025. The largest total outstanding exposure to a single borrower or controlled group represented approximately 1% of total loans outstanding as of both February 28, 2026 and May 31, 2025.

We entered into a long-term standby purchase commitment agreement with Farmer Mac during fiscal year 2016. Under this agreement, we may designate certain long-term loans to be covered under the commitment, subject to approval by Farmer Mac, and in the event any such loan later goes into payment default for at least 90 days, upon request by us, Farmer Mac must purchase such loan at par value. We are required to pay Farmer Mac a monthly fee based on the unpaid principal balance of loans covered under the purchase commitment. The aggregate unpaid principal balance of designated and Farmer Mac approved loans was $327 million and $346 million as of February 28, 2026 and May 31, 2025, respectively. Loan exposure to our 20 largest borrowers covered under the Farmer Mac agreement totaled $205 million and $155 million as of February 28, 2026 and May 31, 2025, respectively, which reduced our exposure to the 20 largest borrowers to approximately $7,043 million and $6,994 million of our total loans outstanding as of each respective date. We have had no loan defaults for loans covered under this agreement; therefore, no loans have been put to Farmer Mac for purchase pursuant to the standby purchase agreement as of February 28, 2026.

Although our organizational structure and mission result in single-industry concentration, we serve a geographically diverse group of electric and telecommunications borrowers throughout the U.S. The consolidated number of borrowers with loans outstanding totaled 908 and 899 borrowers as of February 28, 2026 and May 31, 2025, respectively, located in 49 states. Of the 908 and 899 borrowers with loans outstanding, 49 and 50 were electric power supply borrowers as of February 28, 2026 and May 31, 2025, respectively. Electric power supply borrowers generally require significantly more capital than electric distribution and telecommunications borrowers.

Texas, which had 67 and 68 borrowers with loans outstanding as of February 28, 2026 and May 31, 2025, respectively, accounted for the largest number of borrowers with loans outstanding in any one state as of each respective date, as well as the largest concentration of loan exposure in any one state. Loans outstanding to Texas-based borrowers totaled $6,258 million and $6,105 million as of February 28, 2026 and May 31, 2025, respectively, and accounted for approximately 16% of total loans outstanding as of each respective date. Of the loans outstanding to Texas-based borrowers, $111 million and $118 million as of February 28, 2026 and May 31, 2025, respectively, were covered by the Farmer Mac standby repurchase agreement, which reduced our credit risk exposure to Texas-based borrowers to $6,147 million and $5,987 million as of each respective date.

Assessing the overall credit quality of our loan portfolio and measuring our credit risk is an ongoing process that involves tracking payment status, modifications to borrowers experiencing financial difficulty, nonperforming loans, charge-offs, the internal risk ratings of our borrowers and other indicators of credit risk. We monitor and subject each borrower and loan facility in our loan portfolio to an individual risk assessment based on quantitative and qualitative factors. Payment status trends and internal risk ratings are indicators, among others, of the probability of borrower default and overall credit quality of our loan portfolio.

Loans are considered delinquent when contractual principal or interest amounts become past due 30 days or more following the scheduled payment due date. Loans are placed on nonaccrual status when payment of principal or interest is 90 days or more past due or management determines that the full collection of principal and interest is doubtful. The following table presents the payment status, by legal entity and member class, of loans outstanding as of February 28, 2026 and May 31, 2025.


	February 28, 2026
(Dollars in thousands)	Current			30-89 Days Past Due			> 90 Days Past Due			Total Past Due			Total Loans Outstanding			Nonaccrual Loans
Member class:
CFC:
Distribution	$	30,387,286		$	—		$	—		$	—		$	30,387,286		$	—
Power supply	6,288,837			—			—			—			6,288,837			12,887
Statewide and associate	273,177			—			—			—			273,177			—
Total CFC	36,949,300			—			—			—			36,949,300			12,887
NCSC:
Electric	1,163,391			—			—			—			1,163,391			—
Telecom	618,988			—			—			—			618,988			—
Total NCSC	1,782,379			—			—			—			1,782,379			—
Total loans outstanding	$	38,731,679		$	—		$	—		$	—		$	38,731,679		$	12,887

Percentage of total loans	100.00		%	—		%	—		%	—		%	100.00		%	0.03		%


	May 31, 2025
(Dollars in thousands)	Current			30-89 Days Past Due			> 90 Days Past Due			Total Past Due			Total Loans Outstanding			Nonaccrual Loans
Member class:
CFC:
Distribution	$	29,262,495		$	—		$	—		$	—		$	29,262,495		$	—
Power supply	5,895,500			—			—			—			5,895,500			26,099
Statewide and associate	251,325			—			—			—			251,325			—
Total CFC	35,409,320			—			—			—			35,409,320			26,099
NCSC:
Electric	1,078,763			—			—			—			1,078,763			—
Telecom	575,465			—			—			—			575,465			—
Total NCSC	1,654,228			—			—			—			1,654,228			—
Total loans outstanding	$	37,063,548		$	—		$	—		$	—		$	37,063,548		$	26,099

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

We actively monitor problem loans and, from time to time, attempt to work with borrowers to manage such exposures through loan workouts or modifications that better align with the borrower’s current ability to pay. Therefore, as part of our loss mitigation efforts, we may provide modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for exercising remedies. We consider the impact of all loan modifications when estimating the credit quality of our loan portfolio and establishing the allowance for credit losses.

We had a loan to one CFC electric power supply borrower of $13 million and $26 million classified as nonperforming and nonaccrual, which represented 0.03% and 0.07% of total loans outstanding as of February 28, 2026 and May 31, 2025, respectively. The decrease in this outstanding loan balance reflected $13 million payments received during YTD FY2026 and an immaterial charge-off during Q3 FY2026 , as discussed below. Subsequent to the quarter ended February 28, 2026, we received $5 million payments on this loan which reduced its outstanding balance to $8 million.

We recorded a charge-off of $0.3 million related to a CFC electric power supply loan during Q3 FY2026 and YTD FY2026. We had no charge-offs during YTD FY2025. Prior to this charge-off and two CFC electric power supply loan defaults in fiscal years 2021 and 2022, we had not experienced any defaults or charge-offs in our electric utility loan portfolio since fiscal year 2013, or in our telecommunications loan portfolios since fiscal year 2017.

As part of our management of credit risk, we maintain a credit risk rating framework under which we employ a consistent process for assessing the credit quality of our loan portfolio. We evaluate each borrower and loan facility in our loan portfolio and assign internal borrower and loan facility risk ratings based on the consideration of a number of quantitative and qualitative factors. Each risk rating is reassessed annually following the receipt of the borrower’s audited financial statements; however, interim risk-rating adjustments may occur as a result of updated information affecting a borrower’s ability to fulfill its obligations or other significant developments and trends. We categorize loans in our portfolio based on our internally assigned borrower risk ratings, which are intended to assess the general creditworthiness of the borrower and probability of default. Our borrower risk ratings align with the U.S. federal banking regulatory agencies’ credit risk definitions of pass and criticized categories, with the criticized category further segmented among special mention, substandard and doubtful. Pass ratings reflect relatively low probability of default, while criticized ratings have a higher probability of default.

Table 4.3 displays total loans outstanding, by borrower risk rating category and by legal entity and member class, as of February 28, 2026 and May 31, 2025. The borrower risk rating categories presented below correspond to the borrower risk rating categories used in calculating our collective allowance for credit losses. If a parent company provides a guarantee of full repayment of loans of a subsidiary borrower and has a better risk rating, we include the loans outstanding in the borrower risk-rating category of the guarantor parent company rather than the risk rating category of the subsidiary borrower for purposes of calculating the collective allowance.

We present term loans outstanding as of February 28, 2026 and May 31, 2025, by fiscal year of origination for each year during the five-year annual reporting period beginning in fiscal year 2022 and 2021, and in the aggregate for periods prior to fiscal year 2022 and 2021, respectively. The origination period represents the date CFC advances funds to a borrower, rather than the execution date of a loan facility for a borrower. Revolving loans are presented separately. The substantial majority of loans in our portfolio represent fixed-rate advances under secured long-term facilities with terms up to 35 years, and as indicated in Table 4.3 below, term loan advances made to borrowers prior to fiscal year 2022 totaled $19,649 million, representing 51% of our total loans outstanding as of February 28, 2026. In comparison, term loan advances made to borrowers prior to fiscal year 2021 totaled $18,537 million, representing 50% of our total loans outstanding as of May 31, 2025. The average remaining maturity of our long-term loans, which accounted for 87% and 88% of total loans outstanding as of February 28, 2026 and May 31, 2025, respectively, was 19 years, as of each respective date.


	February 28, 2026
	Term Loans by Fiscal Year of Origination
(Dollars in thousands)	YTD FY2026		2025		2024		2023		2022		Prior		Revolving Loans		Total
Pass
CFC:
Distribution	$	1,741,279	$	2,204,296	$	2,430,939	$	2,283,064	$	2,199,096	$	15,815,662	$	3,511,438	$	30,185,774
Power supply	497,378		437,079		486,060		432,577		277,513		3,196,810		948,533		6,275,950
Statewide and associate	—		6,514		35,897		55,175		2,651		22,243		140,653		263,133
Total CFC	2,238,657		2,647,889		2,952,896		2,770,816		2,479,260		19,034,715		4,600,624		36,724,857
NCSC:
Electric	67,180		79,836		117,974		243,939		16,096		345,217		293,149		1,163,391
Telecom	71,975		50,724		115,782		30,586		46,678		226,765		76,478		618,988
Total NCSC	139,155		130,560		233,756		274,525		62,774		571,982		369,627		1,782,379
Total pass	$	2,377,812	$	2,778,449	$	3,186,652	$	3,045,341	$	2,542,034	$	19,606,697	$	4,970,251	$	38,507,236

Special mention
CFC:
Distribution	$	567	$	—	$	358	$	4,080	$	—	$	19,484	$	177,023	$	201,512

Statewide and associate	—		—		—		—		—		10,044		—		10,044
Total CFC	567		—		358		4,080		—		29,528		177,023		211,556

Total special mention	$	567	$	—	$	358	$	4,080	$	—	$	29,528	$	177,023	$	211,556

Substandard





Total substandard	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Doubtful

CFC power supply	$	—	$	—	$	—	$	—	$	—	$	12,887	$	—	$	12,887


Total doubtful	$	—	$	—	$	—	$	—	$	—	$	12,887	$	—	$	12,887

Total criticized loans	$	567	$	—	$	358	$	4,080	$	—	$	42,415	$	177,023	$	224,443
Total loans outstanding	$	2,378,379	$	2,778,449	$	3,187,010	$	3,049,421	$	2,542,034	$	19,649,112	$	5,147,274	$	38,731,679


	May 31, 2025
	Term Loans by Fiscal Year of Origination
(Dollars in thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total
Pass
CFC:
Distribution	$	2,301,736	$	2,471,765	$	2,323,781	$	2,256,706	$	1,541,206	$	15,022,726	$	3,163,495	$	29,081,415
Power supply	442,972		496,642		441,984		296,948		474,074		2,857,029		859,752		5,869,401
Statewide and associate	7,125		36,294		57,101		2,806		1,420		22,257		113,338		240,341
Total CFC	2,751,833		3,004,701		2,822,866		2,556,460		2,016,700		17,902,012		4,136,585		35,191,157
NCSC:
Electric	81,315		122,354		250,610		16,773		4,131		385,564		217,416		1,078,163
Telecom	52,516		129,964		40,642		64,086		49,898		196,307		42,052		575,465
Total NCSC	133,831		252,318		291,252		80,859		54,029		581,871		259,468		1,653,628
Total pass	$	2,885,664	$	3,257,019	$	3,114,118	$	2,637,319	$	2,070,729	$	18,483,883	$	4,396,053	$	36,844,785

Special mention
CFC:
Distribution	$	—	$	361	$	4,126	$	—	$	4,568	$	15,693	$	156,332	$	181,080

Statewide and associate	—		—		—		—		—		10,984		—		10,984
Total CFC	—		361		4,126		—		4,568		26,677		156,332		192,064
NCSC electric	—		—		—		—		—		—		600		600

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

Substandard





Total substandard	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Doubtful

CFC Power supply	$	—	$	—	$	—	$	—	$	—	$	26,099	$	—	$	26,099


Total doubtful	$	—	$	—	$	—	$	—	$	—	$	26,099	$	—	$	26,099

Total criticized loans	$	—	$	361	$	4,126	$	—	$	4,568	$	52,776	$	156,932	$	218,763
Total loans outstanding	$	2,885,664	$	3,257,380	$	3,118,244	$	2,637,319	$	2,075,297	$	18,536,659	$	4,552,985	$	37,063,548

Criticized loans totaled $224 million and $219 million as of February 28, 2026 and May 31, 2025, respectively, and represented approximately 1% of total loans outstanding as of each respective date. The increase of $5 million in criticized loans was primarily driven by a net increase of approximately $18 million in loans outstanding in the special mention category, partially offset by $13 million payments received during YTD FY2026 from a CFC electric power supply borrower in the doubtful category, as discussed below. Each of the borrowers with loans outstanding in the criticized category was current with regard to all principal and interest amounts due to us as of February 28, 2026 and May 31, 2025.

One CFC electric distribution borrower with loans outstanding of $202 million and $181 million as of February 28, 2026 and May 31, 2025, respectively, accounted for the substantial majority of loans in the special mention loan category amount of $212 million and $193 million as of each respective date. This borrower experienced an adverse financial impact from restoration costs incurred to repair damage caused by two successive hurricanes. We expect that the borrower will continue to receive grant funds from the Federal Emergency Management Agency and the state where it is located for the full reimbursement of the hurricane damage-related restoration costs.

We had one loan outstanding classified as doubtful totaling $13 million and $26 million to a CFC electric power supply borrower as of February 28, 2026 and May 31, 2025, respectively, which was also classified as nonperforming and nonaccrual as of each respective date. The decrease in this outstanding loan balance reflected $13 million payments received during YTD FY2026 and an immaterial charge-off during Q3 FY2026, as discussed above. Subsequent to the quarter ended February 28, 2026, we received $5 million payments on this loan which reduced its outstanding balance to $8 million.


(Dollars in thousands)	February 28, 2026		May 31, 2025
Member class:
CFC:
Distribution	$	12,922,422	$	11,948,516
Power supply	5,358,997		5,097,398
Statewide and associate	195,553		215,768
Total CFC	18,476,972		17,261,682
NCSC:
Electric	364,071		520,312
Telecom	372,750		437,015
Total NCSC	736,821		957,327
Total unadvanced commitments	$	19,213,793	$	18,219,009



Loan type:(2)
Long-term loans:
Fixed rate	$	—	$	—
Variable rate	8,231,549		7,471,266

Total long-term loans	8,231,549		7,471,266
Lines of credit	10,982,244		10,747,743
Total unadvanced commitments	$	19,213,793	$	18,219,009

(1)Excludes the portion of any commitment to advance funds under swingline loan facilities in excess of CFC’s total commitment amount in a syndicated credit facility. Other syndicate lenders have an absolute obligation to acquire participations in such swingline loans upon CFC’s election, including during a default by the borrower.


	Available Balance		Notional Maturities of Unadvanced Loan Commitments
(Dollars in thousands)			2026		2027		2028		2029		2030		Thereafter
Line of credit loans	$	10,982,244	$	226,610	$	4,569,140	$	2,069,204	$	1,769,149	$	1,407,901	$	940,240
Long-term loans	8,231,549		91,194		1,233,056		1,095,961		1,993,861		1,900,406		1,917,071
Total	$	19,213,793	$	317,804	$	5,802,196	$	3,165,165	$	3,763,010	$	3,308,307	$	2,857,311

Unadvanced line of credit commitments accounted for 57% of total unadvanced loan commitments as of February 28, 2026. Unadvanced line of credit commitments are typically revolving facilities for periods not to exceed five years and generally serve as supplemental back-up liquidity to our borrowers. Historically, borrowers have not drawn the full commitment amount for line of credit facilities, and we have experienced a very low utilization rate on line of credit loan facilities regardless of whether or not we are obligated to fund the facility when a material adverse change has occurred.

Because we historically have experienced a very low utilization rate on line of credit loan facilities, which account for the majority of our total unadvanced loan commitments, we believe the unadvanced loan commitment total of $19,214 million as of February 28, 2026 is not necessarily representative of our future funding requirements.

The substantial majority of our line of credit commitments and all of our unadvanced long-term loan commitments include material adverse change clauses. Unadvanced loan commitments subject to material adverse change clauses totaled $15,507 million and $14,629 million as of February 28, 2026 and May 31, 2025, respectively. Prior to making an advance on these facilities, we confirm that there has been no material adverse change in the business or condition, financial or otherwise, of the borrower since the time the loan was approved and confirm that the borrower is currently in compliance with loan terms and conditions. In some cases, the borrower’s access to the full amount of the facility is further constrained by the designated purpose, imposition of borrower-specific restrictions or by additional conditions that must be met prior to advancing funds.

Unadvanced loan commitments not subject to material adverse change clauses at the time of each advance consisted of unadvanced committed lines of credit totaling $3,707 million and $3,590 million as of February 28, 2026 and May 31, 2025, respectively. We are required to advance amounts on these committed facilities as long as the borrower is in compliance with the terms and conditions of the facility. The following table summarizes the available balance under unconditional committed lines of credit as of February 28, 2026, and the related maturity amounts in each fiscal year during the five-year period ending May 31, 2030, and thereafter.

We are required to pledge eligible mortgage notes or other collateral in an amount at least equal to the outstanding balance of our secured debt. Table 4.7 displays the borrowing amount under each of our secured borrowing agreements and the corresponding loans outstanding pledged as collateral as of February 28, 2026 and May 31, 2025. See “Note 6—Short-Term Borrowings” and “Note 7—Long-Term Debt” in this Report for information on our secured borrowings and other borrowings.


(Dollars in thousands)	February 28, 2026		May 31, 2025
Collateral trust bonds:
2007 indenture:
Collateral trust bonds outstanding	$	6,665,191	$	7,072,711
Pledged collateral:
Distribution system mortgage notes pledged	7,709,091		8,107,921
RUS-guaranteed loans qualifying as permitted investments pledged	97,401		104,628
Total pledged collateral	7,806,492		8,212,549

1994 indenture:
Collateral trust bonds outstanding	$	5,000	$	10,000
Pledged collateral:
Distribution system mortgage notes pledged	12,885		14,575

Guaranteed Underwriter Program:
Notes payable outstanding	$	5,743,393	$	6,456,852
Pledged collateral:
Distribution and power supply system mortgage notes pledged	7,392,048		7,640,203

Farmer Mac:
Notes payable outstanding	$	3,929,086	$	3,780,461
Pledged collateral:
Distribution and power supply system mortgage notes pledged	4,892,969		4,648,691