First Quarte r S tockholders Report
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Unaudited)
The following discussion summarizes the financial position and results of operations of High Plains Farm Credit, ACA for the three months ended March 31, 2026, with comparisons to prior periods. The accompanying financial statements were prepared under the oversight of our Audit Committee. You should read these comments along with the accompanying financial statements and footnotes and the 2025 Annual Report to Shareholders.
High Plains Farm Credit’s annual and quarterly reports to stockholders are available on the Association’s website, HighPlainsFarmCredit.com or can be obtained free of charge by contacting the Association’s headquarters at (620) 285-6978. Annual reports are available 75 days after year-end and quarterly reports are available 40 days after each calendar quarter-end. The financial condition and results of operations of CoBank, ACB (CoBank), materially affect the risk associated with stockholder investments in High Plains Farm Credit, ACA. Stockholders of High Plains Farm Credit, ACA may obtain copies of CoBank’s financial statements free of charge by visiting CoBank’s website, CoBank.com, or by contacting the Larned headquarters office located at 605 Main, Larned, KS 67550-0067 or by phone at (620) 285-6978.
CURRENT MARKET CONDITIONS
The U.S. Drought Monitor indicated increasing drought conditions across the Association’s territory throughout the first quarter of 2026, culminating in drought classification across the entire region by quarter end. While early quarter precipitation provided some short-term relief, progressively drier conditions limited soil moisture recharge and slowed pasture growth as the quarter progressed. These developing conditions began to increase stress on forage resources and raised concerns for crop and livestock operations entering the spring growing season.
Grain markets remained under pressure during the quarter, reflecting continued volatility in global grain and feed demand, along with uncertainty surrounding trade policy and geopolitical tensions. Despite these headwinds, the fed cattle market continued to perform well. Tight supplies and resilient consumer demand supported cash prices near record levels. Hay movement remained limited, as many producers were unwilling to sell below production costs, resulting in light overall sales activity during the quarter.
The agricultural real estate market was relatively subdued during the first quarter, although some producers continued to seek expansion opportunities. Demand remained solid for high quality dry cropland and pastureland, with limited inventory supporting firm values in select areas. Local producers accounted for the majority of purchases, while recreational and CRP related activity also contributed to sales activity.
The U.S. economy showed a mix of resilience, slowing momentum, and rising uncertainty for the first quarter of 2026. While growth expectations have improved, a combination of increasing tariffs, the cooling labor market, and geopolitical pressures have contributed to a complicated economic environment. Real GDP is projected to grow at a rate of 2.6% for 2026 largely due to continued upward trends in personal consumption expenditures, business investments, and modest government spending. The unemployment rate remained relatively steady at 4.3% in the first quarter of 2026 and is expected to slightly increase through the current year. The Federal Reserve funds target range remains at 3.50% - 3.75% with Fed officials anticipating one rate cut this year as they try to mitigate the effects of tariffs, global conflicts, and continued inflation that have weakened the economy. In 2026, net farm income is forecasted to decline slightly in comparison to 2025. Farm production expenses are expected to increase by 1.0% in comparison to 2025 with spending on feed, livestock and poultry, and labor being the three largest increases in spending in 2026.
LOAN PORTFOLIO
Loans outstanding at March 31, 2026, totaled $2.14 billion, an increase of $18.0 million, or 0.9%, from loans of $2.12 billion at December 31, 2025. The increase was a combination of increased loan demand from existing and new borrowers, as well as loan participation purchase opportunities to diversify our portfolio. Credit quality remains strong and stable at 97.5%.
Advanced conditional payments totaled $30.7 million at March 31, 2026, a decrease of $5.2 million, or 14.4% from $35.9 million at December 31, 2025. Advanced conditional payment accounts are generally impacted by seasonal conditions. Typically, stockholders apply excess cash to these accounts to be utilized within their operation later in the year.
RESULTS OF OPERATIONS
High Plains Farm Credit, ACA posted solid financial results for the three-month period ending March 31, 2026. Net income for the three months ended March 31, 2026, was $12.4 million, an increase of $369 thousand, or 3.1%, from
the same period ended one year ago. This was mainly due to increases in net interest income and noninterest income, partially offset by an increase in provision for credit losses. Additional details are provided below.
For the three months ended March 31, 2026, net interest income was $16.7 million, an increase of $1.8 million, or 11.8%, compared with the three months ended March 31, 2025. Net interest income increased primarily as a result of loan volume growth.
The provision for credit losses for the three months ended March 31, 2026, was $4.0 million, compared to the provision for credit losses of $397 thousand for the same period ended one year ago. The provision for credit losses increased primarily as a result of changes in the overall risk profile of the portfolio.
Noninterest income increased $1.9 million, or 39.1%, during the first three months of 2026, compared with the first three months of 2025, primarily due to the collection of prior year fee income in the first quarter of 2026 ($892 thousand) and an increase of $732 thousand in refund from the Farm Credit System Insurance Corporation (FCSIC), compared with the same period ended on year ago. These refunds represent our portion of excess funds above the secure base amount in the FCSIC Allocated Insurance Reserve Accounts.
Mineral income of $160 thousand was recognized during the first three months of 2026, which is distributed quarterly by CoBank. The increase for the three months ended March 31, 2026, compared with the first three months of 2025, is primarily due to additional income from 39 new wells that were completed in the past year.
During the first three months of 2026, noninterest expense decreased $362 thousand to $6.9 million, primarily due to a decrease in other noninterest expense ($728 thousand), partially offset by increases in data processing services ($131 thousand) and salaries and benefits ($129 thousand). The decrease in other noninterest expense is primarily due to a loss on the sale of the former Hays branch office in 2025 with no comparable loss incurred in 2026. The increase in data processing services is primarily due to an increase in charges from our service provider. Salaries and benefits increased primarily as a result of additional employees and merit increases. For the three months ended March 31, 2025, $1.1 million was reclassified from purchased services to data processing services to conform to the current period’s presentation as a result of changes in our service provider’s pricing model.
CAPITAL RESOURCES
Our shareholders’ equity at March 31, 2026, was $404.6 million, an increase from $391.8 million at December 31, 2025. This increase is due to net income and net stock issuances, partially offset by preferred stock dividends declared.
The undersigned certify they have reviewed this report, this report has been prepared in accordance with all applicable statutory or regulatory requirements, and the information contained herein is true, accurate, and complete to the best of his or her knowledge and belief.
___//signature on file//__________________
Tim Benoit
___//signature on file//__________________
Melvin E. Kitts
Chairperson of the Board Chairperson of the Audit Committee May 8, 2026 May 8, 2026
___//signature on file//__________________
Kevin D. Swayne
___//signature on file//__________________
John T. Booze President & Chief Executive Officer Chief Financial Officer May 8, 2026 May 8, 2026
Consolidated Statement of Condition
(Dollars in Thousands)
Commitments and Contingencies
The accompanying notes are an integral part of
Consolidated Statement of Comprehensive Income
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated Statement of Changes in Shareholders' Equity
(Dollars in Thousands)
The accompanying notes are an integral part of these consolidated financial statements.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
A description of the organization and operations of High Plains Farm Credit, ACA (the Association), the significant accounting policies followed, and the financial condition and results of operations as of and for the year ended December 31, 2025, are contained in the 2025 Annual Report to Shareholders. These unaudited first quarter 2026 financial statements should be read in conjunction with the 2025 Annual Report to Shareholders.
The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information. Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under U.S. GAAP and the rules of the Farm Credit Administration (FCA). This report should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2025, as contained in the 2025 Annual Report to Shareholders.
In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for a fair statement of results for the interim periods, have been made. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2026. Descriptions of the significant accounting policies are included in the 2025 Annual Report to Shareholders. In the opinion of management, these policies and the presentation of the interim financial condition and results of operations conform with GAAP and prevailing practices within the banking industry.
Certain amounts in the prior period’s financial statements have been reclassified from purchased services to data processing services to conform to the current period’s financial statement presentation as a result of changes in the service provider’s pricing model.
Recently Issued or Adopted Accounting Pronouncements
Financial Instruments – Credit Losses (Topic 326): Purchased Loans
In November 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-08 Financial Instruments - Credit Losses (Topic 326) - Purchased Loans. The amendment simplifies accounting for purchased loans by expanding the "gross-up" method to "purchased seasoned loans" (PSLs). This eliminates the Day 1 credit loss expense for most acquired loans, improves comparability, and reduces earnings volatility by creating a more consistent accounting approach similar to that used for previously purchased credit-deteriorated (PCD) loans. The standard is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those years. Early adoption is permitted. The Association is currently evaluating the potential impact of adoption on the Association's financial condition, results of operations, and cash flows.
Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendment introduces several key changes: (1) eliminates the stage-based rules for capitalization, (2) replaces these rules with a principlesbased framework where capitalization occurs when management has authorized and committed to funding, and it is probable that the project will be completed and the software used as intended, (3) clarifies website developments costs and (4) modifies the disclosure requirements for capitalized software costs. The standard is effective for annual periods starting after December 15, 2027, with early adoption permitted as of the beginning of any annual reporting period. The Association is currently assessing the potential impact of this amendment on its disclosures.
Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05 Financial Instruments – Credit Losses – Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The practical expedient allows all entities when developing reasonable and supportable forecasts as part of estimating expected credit losses to assume that current conditions as of the balance sheet date do not
change for the remaining life of the asset. The accounting policy election allows an entity to consider collection activity after the balance sheet date when estimating expected credit losses. The amendments were effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods under a prospective approach. The adoption of this guidance did not have a material impact on the Association’s financial condition, results of operations, or cash flows.
NOTE 2 - LOANS AND ALLOWANCE FOR CREDIT LOSSES
A summary of loans by type follows:
March 31, 2026
December 31, 2025
The Association purchases and sells participation interests with other parties to diversify risk, manage loan volume, and comply with Farm Credit Administration regulations. The following table presents information regarding the balances of participations purchased and sold at March 31, 2026:
We have participation relationships with associations across the Farm Credit System. High Plains Farm Credit serves as the lead lender or facilitating agent for these participations in loans to eligible borrowers. High Plains Farm Credit is the administrator for the Farm Credit Capital Group (FCCG) which assists other Associations in expanding participation activity. Of the total purchased and sold volume noted in the table above, FCCG accounts for $3.11 billion of total purchased volume and $2.53 billion of total sold volume.
Credit Quality
Credit risk arises from the potential inability of an obligor to meet its payment obligation and exists in our outstanding loans, letters of credit, and unfunded loan commitments. The Association manages credit risk associated with retail lending activities through an analysis of the credit risk profile of an individual borrower using its own set of underwriting standards and lending policies, approved by its board of directors, which provides direction to its loan officers. The retail credit risk management process begins with an analysis of the borrower’s credit history, repayment capacity, financial position, and collateral, which includes an analysis of credit scores for smaller loans. Repayment capacity focuses on the borrower’s ability to repay the loan based on cash flows from operations or other sources of income, including off-farm income. Real estate mortgage loans must be secured by first liens on the real estate (collateral). As required by Farm Credit Administration regulations, each institution that makes loans on a secured basis must have collateral evaluation policies and procedures. Real estate mortgage loans may be made only in amounts up to 85% of the original appraised value of the property taken as security or up to 97% of the appraised value if guaranteed by a state, federal, or other governmental agency. The actual loan to appraised value when loans are made is generally lower than the statutory maximum percentage. Loans other than real estate mortgage may be made
unsecured basis.
borrower default and a separate scale addressing loss given default over a period of time. Probability of default rating is management's assumption of the probability that a borrower will experience a default within 12 months from the date of the determination of the risk rating. A default is considered to have occurred if the lender believes the borrower will not be able to pay its obligation in full or the borrower is past due more than 90 days. The loss given default is management's assumption of the anticipated principal loss on a specific loan assuming default occurs during the remaining life of the loan. This credit risk rating process incorporates objective and subjective criteria to identify inherent strengths, weaknesses, and risks in a particular relationship. The Association reviews, at least on an annual basis or when a credit action is taken, the probability of default category.
Each of the probability of default categories carries a distinct percentage of default probability. The probability of default rate between one and nine of the acceptable categories is very narrow and would reflect almost no default to a minimal default percentage. The probability of default rate grows more rapidly as a loan moves from acceptable to other assets especially mentioned and grows significantly as a loan moves to a substandard (viable) level. A substandard (nonviable) rating indicates that the probability of default is almost certain. These categories are defined as follows:
Acceptable – assets are expected to be fully collectible and represent the highest quality.
Other assets especially mentioned (OAEM) – assets are currently collectible but exhibit some potential weakness.
Substandard – assets exhibit some serious weakness in repayment capacity, equity, and/or collateral pledged on the loan.
Doubtful – assets exhibit similar weaknesses to substandard assets; however, doubtful assets have additional weaknesses in existing factors, conditions, and values that make collection in full highly questionable.
Loss – assets are considered uncollectible.
The following table shows loans under the Farm Credit Administration Uniform Loan Classification System as a percentage of total loans by loan type as of:
Accrued interest receivable of $29.3 million on loans at March 31, 2026, and $31.8 million at December 31, 2025, is excluded from the amortized cost of loans and reported separately in the Consolidated Statement of Condition. The Association did not write off any accrued interest during the first three months of 2026 or during the first three months of 2025.
Nonperforming assets consist of nonaccrual loans, accruing loans 90 days or more past due, and other property owned. The following table shows these nonperforming assets and related credit quality statistics as follows:
(dollars in thousands)
Accruing loans 90 days past due
Total accruing loans 90 days past due Total nonperforming assets
The Association had no other property owned for the periods presented. The following tables provide the amortized cost for nonaccrual loans with and without a related allowance for loan losses, as well as interest income recognized on nonaccrual loans during the periods presented:
March 31, 2026
The following tables provide an aging analysis of past due loans at amortized cost.
Loan Modifications to Borrowers Experiencing Financial Difficulty
The following tables show the amortized cost basis at the end of the respective reporting periods for loan modifications granted to borrowers experiencing financial difficulty, disaggregated by loan type and type of modification granted. These balances exclude loans that were modified during the period but were paid off or sold prior to period end.
(dollars in thousands) % of Portfolio Segment March 31, 2025 For the Three Months Ended Payment Deferral
Accrued interest receivable related to loan modifications granted to borrowers experiencing financial difficulty was $64 thousand as of the three months ended March 31, 2026 and the association did not have any accrued interest related to loan modifications during the three months ended March 31, 2025.
The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the periods presented:
Production and Intermediate-Term
Combination – Term Extension and Payment Deferral For the Three Months Ended March 31, 2026
Added a weighted average of 61.1 months to the life of loans and deferred payments by a weighted average of 7.0 months
None of the loans to borrowers experiencing financial difficulty that received a payment modification during the three months ended March 31, 2026 or March 31, 2025 experienced a subsequent default.
The following tables set forth an aging analysis of loans to borrowers experiencing financial difficulty that were modified during the periods presented:
(dollars in thousands) During the Past Twelve Months Ended March 31, 2026
(dollars in thousands)
Payment Status of Modified Loans
During the Past Twelve Months Ended March 31, 2025
Current
30-89 Days 90 Days or More Past Due Past Due
Additional commitments to lend to borrowers experiencing financial difficulty whose loans have been modified during the three months ended March 31, 2026 were $948 thousand and during the year ended December 31, 2025 were $10.4 million. The Association evaluates the commitments extended to borrowers experiencing financial difficulty and can restrict future draws as needed.
The Association had no loans held for sale at March 31, 2026 and December 31, 2025.
Allowance for Credit Losses
The allowance for credit losses (ACL) represents the estimated current expected credit losses over the remaining contractual life of the loans measured at amortized cost and certain off-balance sheet credit exposures. The ACL takes into consideration relevant information about past events, current conditions, and reasonable and supportable macroeconomic forecasts of future conditions. The contractual term excludes expected extensions, renewals, and modifications. The Association uses a single economic scenario over a reasonable and supportable forecast period of 12 months. After the forecast period, the Association explicitly reverts to long run historical loss experience beyond the 12 months to inform the estimate of losses for the remaining contractual life of the loan portfolio. The economic forecasts are updated on a quarterly basis and incorporate macroeconomic variables such as agricultural commodity prices, unemployment rates, Gross Domestic Product (GDP) annual growth rates, government spending to GDP, real consumer spending, United States exports, inflation, and Fed Funds rates.
The credit risk rating methodology is a key component of the Association’s allowance for credit losses evaluation and is generally incorporated into the Association’s loan underwriting standards and internal lending limits. In addition, borrower and commodity concentration lending and leasing limits have been established by the Association to manage credit exposure. The regulatory limit to a single borrower or lessee is 15% of the Association’s lending and leasing limit base but the Association’s board of directors has generally established more restrictive lending limits. This limit applies to Associations with long-term and short- and intermediate-term lending authorities.
A summary of changes in the allowance for loan losses is as follows:
(dollars in thousands)
at December 31, 2025
(dollars in thousands)
Balance at March 31, 2025 Balance at December 31, 2024
The Association maintains a separate reserve for unfunded commitments, which is included in Liabilities on the Association’s Consolidated Statement of Condition. The related provision for the reserve for unfunded commitments is included as part of the provision for credit losses on the Consolidated Statement of Comprehensive Income, along with the provision for loan losses. A summary of changes in the reserve for unfunded commitments follows:
For the Three Months Ended
(dollars in thousands)
(dollars in thousands)
March 31, 2026
For the Three Months Ended
March 31, 2025
Balance at beginning of period 582 $
Provision for reserve for unfunded commitments 46
628 $
NOTE 3 – CAPITAL
A summary of select capital ratios based on a three-month average and minimums set by the Farm Credit Administration follows.
As of As of Capital March 31, December 31,Regulatory Conservation 2026 2025 Minimums Buffer
If capital ratios fall below the regulatory minimum plus buffer amounts, capital distributions (equity redemptions, cash dividend payments, and cash patronage payments) and discretionary senior executive bonuses are restricted or prohibited without prior FCA approval.
There was no significant activity in accumulated other comprehensive income during the three months ended March 31, 2026 or March 31, 2025.
NOTE 4 - FAIR VALUE MEASUREMENTS
Accounting guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability. See Note 2 of the 2025 Annual Report to Shareholders for a more complete description.
Assets measured at fair value on a recurring basis are summarized below:
(dollars in thousands)
Assets held in nonqualified benefits trusts
31, 2026
31, 2025
The Association had no liabilities measured at fair value on a recurring basis at March 31, 2026, or December 31, 2025.
Assets measured at fair value on a non-recurring basis for each of the fair value hierarchy values are summarized below:
(dollars in thousands)
Loans
March 31, 2026
December 31, 2025
The Association had no liabilities measured at fair value on a non-recurring basis at March 31, 2026, or December 31, 2025.
Valuation Techniques
As more fully discussed in Note 2 of the 2025 Annual Report to Shareholders, accounting guidance establishes a fair value hierarchy, which requires an Association to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following presents a brief summary of the valuation techniques used by the Association for assets and liabilities, subject to fair value measurement.
Assets Held in Non-Qualified Benefits Trusts
Assets held in trust funds related to deferred compensation and supplemental retirement plans are classified within Level 1. The trust funds include investments that are actively traded and have quoted net asset values that are observable in the marketplace.
Loans Evaluated for Impairment
For impaired loans measured on a non-recurring basis, the fair value is based upon the underlying collateral since the loans are collateral dependent loans. The fair value measurement process uses independent appraisals and other market-based information, but in many cases, it also requires significant input based on management’s knowledge of and judgment about current market conditions, specific issues relating to the collateral, and other matters. As a result, these fair value measurements fall within Level 3 of the hierarchy. When the value of the collateral, less estimated costs to sell, is less than the principal balance of the loan, a specific reserve is established.
NOTE 5 - SUBSEQUENT EVENTS
The Association has evaluated subsequent events through May 8, 2026, which is the date the financial statements were issued, and no material subsequent events were identified.