Interest Income and Interest Expense

9 Months Ended

Feb. 28, 2026

Banking and Thrift, Interest [Abstract]

INTEREST INCOME AND INTEREST EXPENSE

NOTE 2—INTEREST INCOME AND INTEREST EXPENSE

The following table displays the components of interest income, by interest-earning asset type, and interest expense, by debt product type, presented in our consolidated statements of operations.

Table 2.1: Interest Income and Interest Expense

(Dollars in thousands)	Q3 FY2026		Q3 FY2025		YTD FY2026		YTD FY2025
Interest income:
Loans(1)	$	448,236	$	426,216	$	1,338,052	$	1,256,940
Cash and investment securities	1,334		2,644		4,638		9,916
Total interest income	449,570		428,860		1,342,690		1,266,856
Interest expense:(2)(3)
Short-term borrowings	46,188		48,996		142,490		145,643
Long-term debt	294,240		278,359		878,782		822,750
Subordinated debt	29,582		34,563		98,873		104,428
Total interest expense	370,010		361,918		1,120,145		1,072,821
Net interest income	$	79,560	$	66,942	$	222,545	$	194,035

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(1)Includes loan conversion fees, which are generally deferred and recognized in interest income over the period to maturity using the effective interest method, late payment fees, commitment fees and net amortization of deferred loan fees and loan origination costs.

(2)Includes amortization of debt discounts and premiums, and debt issuance costs, which are generally deferred and recognized as interest expense over the period to maturity using the effective interest method. Issuance costs related to dealer commercial paper, however, are recognized in interest expense immediately as incurred.

(3)Includes fees related to funding arrangements, such as up-front fees paid to banks participating in our committed bank revolving line of credit agreements. Based on the nature of the fees, the amount is either recognized immediately as incurred or deferred and recognized in interest expense ratably over the term of the arrangement.

Deferred income reported on our consolidated balance sheets of $31 million and $32 million as of February 28, 2026 and May 31, 2025, respectively, consists primarily of deferred loan conversion fees that totaled $19 million and $21 million as of February 28, 2026 and May 31, 2025, respectively.