Investor Conference Call FY 2019 Fiscal Year Ended May 31, 2019 - PowerPoint PPT Presentation

Investor Conference Call – FY 2019 Fiscal Year Ended May 31, 2019 August 7, 2019 at 11 a.m. ET

Forward-Looking Statements This presentation contains certain statements that are considered forward- looking statements within the Securities Act of 1933, as amended, and the Exchange Act of 1934, as amended. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identified by our use of words such as “intend,” “plan,” “may,” “should,” “will,” “project,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “opportunity” and similar expressions, whether in the negative or affirmative. All statements about future expectations or projections are forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, actual results and performance may differ materially from our forward-looking statements. Factors that could cause future results to vary from our forward-looking statements about our current expectations are included in our annual and quarterly periodic reports filed with the U.S. Securities and Exchange Commission (SEC). Except as required by law, we undertake no obligation to update or publicly release any revisions to forward- looking statements to reflect events, circumstances or changes in expectations after the date on which the statement is made. 2

Financial Performance J. Andrew Don, Chief Financial Officer

Non-GAAP Financial Measures During our discussion, we may review certain non-GAAP adjusted financial measures. Please refer to our annual report on Form 10-K for the fiscal year ended May 31, 2019, as filed with the SEC and posted on the CFC website, for a discussion of why we believe our adjusted measures provide useful information in analyzing CFC’s financial performance and the reconciliation to the most comparable GAAP measures. 4

CFC Market Share CFC Loans Outstanding CFC 100% Borrowers ($ in billions) 238 235 250 $25 224 221 212 $20.2 $19.6 $18.8 200 $20 $17.7 # of 100% Borrowers $16.1 Loans Outstanding $15 150 $10 100 $4.5 $4.6 $4.2 $4.4 $4.4 $5 50 $0 0 5/31/15 5/31/16 5/31/17 5/31/18 5/31/19 5/31/15 5/31/16 5/31/17 5/31/18 5/31/19 G&T Distribution CFC LT Loan Advances by Purpose Electric Cooperatives Total LTD by Lender ($ in billions) 100% 23.61% 24.27% 23.00% 23.00% 87% $60 25% 90% 21.00% 80% $50 20% % of Loan Advance 67% Total Long-Term Debt 70% 54% $40 60% $42.7 50% 48% 15% $40.0 $39.0 $39.3 $39.2 45% 50% 43% 40% $30 $33.9 $34.1 $32.5 40% $31.4 10% $27.8 30% 24% $20 $22.7 $22.1 $22.9 $21.0 20% $19.1 10% 9% 7% 5% 7% 6% $10 10% 3% 0% $- 0% 5/31/15 5/31/16 5/31/17 5/31/18 5/31/19 12/31/14 12/31/15 12/31/16 12/31/17 12/31/18 Capital Expenditures Refinancing All Other Purpose CFC RUS Other CFC Market Share 5

FY19 Financial Results – Balance Sheet Total Assets ($ in Mils) Loans to Members ($ in Mils) $434 MM Increase $738 MM Increase $25,917 $25,179 $27,124 $26,690 $100 $186 $743 $786 $4,579 $4,397 $368 $239 $563 $653 $609 $25,917 $25,179 $20,155 $19,552 FY18 FY19 FY18 FY19 Distribution Power Supply NCSC RTFC Statewide and Associate Loan Origination Cost Loans Investment Other Cash Time Deposits Members’ Equity ($ in Mils) Adjusted Debt to Equity Ratio $129 MM Increase 0.45 Decrease $1,626 6.18 5.73 $1,497 FY18 FY19 FY18 FY19 6

FY19 Financial Results – Income Statement Adjusted TIER Adjusted Net Income ($ in Mils) 0.02 Increase $18 MM Increase 1.19 1.17 $169 $151 FY18 FY19 FY18 FY19 Adjusted Net Interest Income ($ in Mils) Adjusted Net Interest Yield 14 bps Increase $46 MM Increase $256 MM 0.97% $210 MM 0.83% FY18 FY19 FY18 FY19 7

Loan Portfolio Overview CFC’s Electric Cooperative Borrowers/Members: • Provide an essential service to their customers/owners • Experience limited competition • Generally serve exclusive territories with majority number of customers being residential • Demonstrate stable operating and strong financial performance • Are not rate regulated in the majority of states 1% 3% 7% 4% 8% 18% 7% 6% 90% 18% 3% 1% 4% 93% 78% 89% 78% 92% v FY18 FY18 FY18 FY19 FY19 FY19 Distribution NCSC LT Fixed Line of Credit Secured Power Supply RTFC LT Variable Unsecured 8

Consolidated Loans Outstanding by State & Territory at May 31, 2019 (Sorted by Loan Balance) Top 10 States - FY18-19 Loan Growth FY18-FY19 % of FY19 Loan Balance Loan Balance Number of Loan Balance Loan Number of State/Territory State/Territory State/Territory Loan Growth Total Loan ($ in 000s) % Borrowers ($ in 000s) Balance % Borrowers ($ in 000s) Growth Texas $ 3,965,742 15.31% 70 Virginia $ 309,328 1.19% 18 Florida $ 186,707 25.29% Missouri $ 1,442,886 5.57% 47 Utah $ 303,692 1.17% 6 Texas $ 162,818 22.06% Georgia $ 1,431,915 5.53% 47 Wyoming $ 299,237 1.16% 11 Iowa $ 78,490 10.63% Colorado $ 1,413,774 5.46% 24 Nevada $ 251,433 0.97% 8 Missouri $ 76,023 10.30% Kansas $ 1,179,837 4.55% 31 Louisiana $ 249,307 0.96% 10 Ohio $ 65,700 8.90% Florida $ 1,116,999 4.31% 17 Michigan $ 227,543 0.88% 12 North Carolina $ 61,113 8.28% Alaska $ 958,062 3.70% 17 Montana $ 206,570 0.80% 25 Arkansas $ 54,976 7.45% Illinois $ 914,560 3.53% 28 Arizona $ 205,972 0.80% 11 Colorado $ 51,523 6.98% North Dakota $ 845,537 3.26% 17 South Dakota $ 201,672 0.78% 32 Wyoming $ 50,469 6.84% North Carolina $ 818,724 3.16% 28 Tennessee $ 147,198 0.57% 19 South Carolina $ 35,888 4.86% South Carolina $ 805,012 3.11% 24 Idaho $ 126,866 0.49% 12 All Other States $ (85,537) -11.59% Indiana $ 745,255 2.88% 39 Hawaii $ 119,330 0.46% 2 Total Loan Growth $ 738,171 100.00% Oklahoma $ 737,850 2.85% 27 Delaware $ 113,166 0.44% 3 Kentucky $ 737,275 2.85% 24 New Hampshire $ 85,659 0.33% 1 Minnesota $ 691,638 2.67% 53 New Mexico $ 61,976 0.24% 16 Loans Outstanding to 20 Largest Borrowers Arkansas $ 623,074 2.40% 20 Massachusetts $ 60,000 0.23% 1 Amount % of Total Ohio $ 593,164 2.29% 28 Vermont $ 51,533 0.20% 6 Loans Outstanding $5.62 billion 22% Iowa $ 581,683 2.24% 38 California $ 36,413 0.14% 4 (Less Loans covered under Alabama $ 576,307 2.22% 27 New York $ 33,547 0.13% 7 ($360 million) (1%) Farmer Mac Agreement) Pennsylvania $ 507,571 1.96% 17 Nebraska $ 31,289 0.12% 13 Wisconsin $ 487,551 1.88% 23 New Jersey $ 18,295 0.07% 1 Maryland $ 445,519 1.72% 2 West Virginia $ 12,300 0.05% 2 $5.26 billion 21% Net Loans Outstanding Mississippi $ 424,558 1.64% 19 Maine $ 8,843 0.03% 3 Exposure Oregon $ 358,447 1.38% 20 Rhode Island $ 6,141 0.02% 1 Total $ 25,905,664 100.00% 921 Washington $ 335,411 1.30% 10 = Top 10 State - FY18-19 Loan Growth 9

Credit Performance • During CFC’s 50-year history, there have only been 16 defaults, which resulted in six losses in the electric utility portfolio; net write-offs for the electric portfolio totaled $86 million • CFC did not have any delinquent or nonperforming loans since June 1, 2016 • CFC had no charge-offs or loan defaults during FY19 and FY18 Nonperforming Loans Plus Delinquencies/Total Loans Net Charge-Offs/Average Loans Outstanding Outstanding ($ in Thousands) ($ in Thousands) $18,000 0.25% $18,000 0.25% $16,000 $16,000 0.20% 0.20% $14,000 $14,000 $12,000 $12,000 0.15% 0.15% $10,000 $10,000 $8,000 $8,000 0.10% 0.10% $6,000 $6,000 $4,000 $4,000 0.05% 0.05% 0.01% 0.00% $2,000 0.01% $2,000 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $0 0.00% $0 0.00% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Nonperforming Loans - Non-electric loans only Net Charge-Offs - Non-electric loans only 10

Debt Funding Sources Total Debt Outstanding ($ in Mils) Member Investment ($ in Mils) $24,633 MM $25,162 MM $4,407 MM $4,417 MM $221 $221 Famer Mac, 12% Famer Mac, 12% $299 $401 $529 MM $10 MM $505 $528 Members, 18% Members, 18% $626 $644 $630 $631 GUP, 20% GUP, 21% $1,024 $780 $1,202 $1,112 Capital Capital Markets, Markets, 50% 49% FY18 FY19 Member Commercial Paper Member Select Notes Membership Certificates Member Medium-term Notes Loan and Guarantee Certificates Daily Liquidity Fund FY18 FY19 Member Capital Securities GUP, Farmer Mac & Other ($ in Mils) Capital Markets Funding ($ in Mils) $12,449 MM $12,257 MM $8,488 MM $1,065 $945 $7,777 MM $192 MM $742 $986 $711 MM $3,055 $3,003 $2,942 $2,891 $7,639 $5,411 $7,384 $4,856 FY18 FY19 FY18 FY19 Collateral Trust Bonds Non-member Medium-term Notes Guaranteed Underwriter Program (GUP) Farmer Mac Note Payable Other Subordinated Deferrable Debt Non-member Commercial Paper 11