Business Description

26 Non-GAAP Financial Measures 26 Executive Summary 27 Consolidated Results of Operations 33 Consolidated Balance Sheet Analysis 41 Enterprise Risk Management 48 Credit Risk 50 Liquidity Risk 59 Market Risk 70 Operational Risk 73 Critical Accounting Estimates 74 Recent Accounting Changes and Other Developments 76 Non-GAAP Financial Measures and Reconciliations 76 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 80 Item 8. Financial Statements and Supplementary Data 81 Report of Independent Registered Public Accounting Firm 82 Consolidated Statements of Operations 84 Consolidated Statements of Comprehensive Income (Loss) 85 Consolidated Balance Sheets 86 i Page Consolidated Statements of Changes in Equity 87 Consolidated Statements of Cash Flows 88 Notes to Consolidated Financial Statements 90 Note 1 — Summary of Significant Accounting Policies 90 Note 2 — Interest Income and Interest Expense 101 Note 3 — Investment Securities 102 Note 4 — Loans 103 Note 5 — Allowance for Credit Losses 114 Note 6 — Short-Term Borrowings 116 Note 7 — Long-Term Debt 118 Note 8 — Subordinated Deferrable Debt 121 Note 9 — Members’ Subordinated Certificates 122 Note 10 — Derivative Instruments and Hedging Activities 124 Note 11 — Equity 129 Note 12 — Employee Benefits 131 Note 13 — Guarantees 133 Note 14 — Fair Value Measurement 135 Note 15 — Variable Interest Entities 139 Note 16 — Business Segments 141 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 146 Item 9A. Controls and Procedures 146 Item 9B. Other Information 147 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 147 PART III Item 10. Directors, Executive Officers and Corporate Governance 148 Item 11. Executive Compensation 160 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 170 Item 13. Certain Relationships and Related Transactions, and Director Independence 170 Item 14. Principal Accountant Fees and Services 174 PART IV Item 15. Exhibits and Financial Statement Schedules 175 Item 16. Form 10-K Summary 180 SIGNATURES 181 ii Table of Contents CROSS REFERENCE INDEX OF MD&A TABLES Table Description Page 1 Net Income and TIER 27 2 Reconciliation of Net Income 28 3 Adjusted Net Income and Adjusted TIER 29 4 Reconciliation of Adjusted Net Income 29 5 Average Balances, Interest Income/Interest Expense and Average Yield/Cost 34 6 Rate/Volume Analysis of Changes in Interest Income/Interest Expense 36 7 Non-Interest Income (Loss) 38 8 Derivative Gains (Losses) 39 9 Comparative Swap Curves 40 10 Non-Interest Expense 40 11 Loans—Outstanding Amount by Member Class and Loan Type 42 12 Debt—Debt Product Types 43 13 Debt—Total Debt Outstanding and Weighted-Average Interest Rates 45 14 Debt—Member Investments 46 15 Equity 47 16 Loans—Loan Portfolio Security Profile 51 17 Loans—Loan Exposure to 20 Largest Borrowers 52 18 Loans—Loan Geographic Concentration 54 19 Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology 57 20 Available Liquidity 59 21 Liquidity Coverage Ratios 60 22 Committed Bank Revolving Line of Credit Agreements 62 23 Short-Term Borrowings—Outstanding Amount and Weighted-Average Interest Rates 64 24 Short-Term Borrowings—Funding Sources 64 25 Long-Term and Subordinated Debt— Issuances and Repayments 65 26 Collateral Pledged 66 27 Loans—Unencumbered Loans 66 28 Loans—Scheduled Principal Payments 67 29 Contractual Obligations 68 30 Projected Long-Term Sources and Uses of Funds 69 31 Credit Ratings 69 32 Interest Rate Sensitivity Analysis 72 33 Adjusted Net Income 77 34 TIER and Adjusted TIER 77 35 Adjusted Total Debt Outstanding and Equity 79 36 Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio 79 37 Members’ Equity 80 iii Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K for the fiscal year ended May 31, 2026 (“this Report” or “2026 Form 10-K”) contains certain statements that are considered “forward-looking statements” as defined in and within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts or statements of current conditions.…