CFC Reports $262.7 Million Net Income for Fiscal Year 2026, Up $122.7 Million from Previous Year

National Rural Utilities Cooperative Finance Corporation (CFC) reported a net income of $262.7 million for the fiscal year ended May 31, 2026. This represents a significant increase of $122.7 million compared to the $140.0 million net income reported for the fiscal year ended May 31, 2025. The company's Times Interest Earned Ratio (TIER) improved to 1.18 in fiscal year 2026, up from 1.10 in the prior fiscal year. This improvement in net income and TIER was primarily driven by a $88 million shift to gains on the company's derivative portfolio, largely due to increases in medium- and longer-term swap interest rates.

The company's net interest income also saw a substantial increase, rising by $41 million to $301.8 million in fiscal year 2026. This growth was attributed to a 5% increase in average interest-earning assets, totaling $1.96 billion, and a 7 basis point improvement in net interest yield, reaching 0.79%. The loan portfolio expanded by 4% to $38.4 billion, with long-term loans accounting for the majority of this growth. Additionally, CFC recorded a benefit for credit losses of $10.4 million in fiscal year 2026, an increase from the $8.1 million benefit in fiscal year 2025, primarily due to a reduction in the asset-specific allowance for a nonaccrual loan.

Strategic developments during the fiscal year included the issuance of approximately $4.4 billion in long-term unsecured dealer medium-term notes and $600 million in long-term unsecured subordinated notes. CFC also redeemed $650 million of high-cost subordinated deferrable debt, recognizing $6 million in losses on early extinguishment. The company expanded its committed liquidity by increasing its bank revolving line of credit agreements by $200 million to $3.5 billion and adding a new $450 million committed loan facility with the Federal Financing Bank under the USDA Guaranteed Underwriter Program.

Operationally, CFC's total assets grew by 4% to $39.7 billion as of May 31, 2026, driven by the expansion of its loan portfolio. Total liabilities increased by 3% to $36.4 billion, primarily due to debt issuances to fund loan growth. Total equity saw an increase of $209 million to $3.3 billion, largely due to the reported net income for the fiscal year, partially offset by patronage capital retirements. The company's loan portfolio remained strong, with an immaterial charge-off of $0.3 million during fiscal year 2026. The number of members and associates also saw a slight increase, totaling 1,182 members and 559 associates as of May 31, 2026, compared to 1,176 members and 540 associates in the prior year.

Looking ahead, CFC anticipates continued loan growth and projects an increase in reported net interest income and net interest yield over the next 12 months. However, the company projects a slight decline in adjusted net income and adjusted TIER, primarily due to higher projected operating expenses. CFC continues to monitor macroeconomic conditions, including geopolitical tensions and inflation, and their potential impact on borrowing costs and member operating conditions. The company's outlook is also influenced by trends in the electric cooperative sector, such as increased electricity demand, capital investments, and the ongoing focus on grid reliability and resiliency.