NATIONAL RURAL UTILITIES COOPERATIVE FINANCE CORP DC

For the period ended Aug 31, 2024. Filed Oct 11, 2024.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Aug 31, 2024 · Filed Oct 11, 2024

NRUC$19.91+0.6%Stored close · as of Nov 6, 2026

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 31, 2024

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number:1-7102

NATIONAL RURAL UTILITIES

COOPERATIVE FINANCE CORPORATION

(Exact name of registrant as specified in its charter)

District of Columbia	52-0891669
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

(Address of principal executive offices) (Zip Code)
20701 Cooperative Way,	Dulles,	Virginia,	20166

Registrant’s telephone number, including area code: (703) 467-1800

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
7.35% Collateral Trust Bonds, due 2026	NRUC 26	New York Stock Exchange
5.50% Subordinated Notes, due 2064	NRUC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer¨ Accelerated filer¨ Non-accelerated filer x Smaller reporting company¨ Emerging growth company¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ Nox

The Registrant is a tax-exempt cooperative and therefore doesnot issue capital stock.

TABLE OF CONTENTS

Page
PART I—FINANCIAL INFORMATION	1
Item 1.	Financial Statements	43
	Consolidated Statements of Operations (Unaudited)	44
	Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	45
	Consolidated Balance Sheets (Unaudited)	46
	Consolidated Statements of Changes in Equity (Unaudited)	47
	Consolidated Statements of Cash Flows (Unaudited)	48
	Notes to Consolidated Financial Statements (Unaudited)	49
	Note 1 — Summary of Significant Accounting Policies	49
	Note 2 — Interest Income and Interest Expense	51
	Note 3 — Investment Securities	51
	Note 4 — Loans	53
	Note 5 — Allowance for Credit Losses	64
	Note 6 — Short-Term Borrowings	66
	Note 7 — Long-Term Debt	68
	Note 8 — Subordinated Deferrable Debt	70
	Note 9 — Derivative Instruments and Hedging Activities	70
	Note 10 — Equity	73
	Note 11 — Guarantees	74
	Note 12 — Fair Value Measurement	76
	Note 13 — Variable Interest Entities	78
	Note 14 — Business Segments	80
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)	1
	Forward-Looking Statements	1
	Introduction	1
	Executive Summary	3
	Consolidated Results of Operations	7
	Consolidated Balance Sheet Analysis	14
	Enterprise Risk Management	19
	Credit Risk	20
	Liquidity Risk	26
	Market Risk	36
	Critical Accounting Estimates	38
	Recent Accounting Changes and Other Developments	39
	Non-GAAP Financial Measures and Reconciliations	39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	83
Item 4.	Controls and Procedures	83
PART II—OTHER INFORMATION	83
Item 1.	Legal Proceedings	83
Item 1A.	Risk Factors	83
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 3.	Defaults Upon Senior Securities	83
Item 4.	Mine Safety Disclosures	83
Item 5.	Other Information	84
Item 6.	Exhibits	84
SIGNATURES	85

CROSS REFERENCE INDEX OF MD&A TABLES

Table	Description	Page
1	Net Income (Loss) and TIER	3
2	Adjusted Net Income and Adjusted TIER	4
3	Average Balances, Interest Income/Interest Expense and Average Yield/Cost	8
4	Rate/Volume Analysis of Changes in Interest Income/Interest Expense	10
5	Non-Interest Income (Loss)	12
6	Derivative Gains (Losses)	13
7	Comparative Swap Curves	13
8	Non-Interest Expense	14
9	Debt—Total Debt Outstanding	16
10	Debt—Member Investments	17
11	Equity	18
12	Loans—Loan Portfolio Security Profile	21
13	Loans—Loan Exposure to 20 Largest Borrowers	22
14	Allowance for Credit Losses by Borrower Member Class and Evaluation Methodology	24
15	Available Liquidity	27
16	Liquidity Coverage Ratios	28
17	Committed Bank Revolving Line of Credit Agreements	30
18	Short-Term Borrowings—Funding Sources	31
19	Long-Term and Subordinated Debt—Issuances and Repayments	32
20	Long-Term and Subordinated Debt—Scheduled Principal Maturities and Amortization	32
21	Collateral Pledged	33
22	Loans—Unencumbered Loans	33
23	Projected Long-Term Sources and Uses of Funds	35
24	Credit Ratings	35
25	Interest Rate Sensitivity Analysis	37
26	Adjusted Net Income	39
27	TIER and Adjusted TIER	40
28	Adjusted Liabilities and Equity	41
29	Debt-to-Equity Ratio and Adjusted Debt-to-Equity Ratio	41
30	Members’ Equity	42

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