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Equity
 3 Months Ended
Aug. 31, 2026
Stockholders' Equity Note [Abstract]  
EQUITY
NOTE 10—EQUITY

Total equity increased $73 million to $3,385 million as of August 31, 2026, compared with May 31, 2026. The increase was attributable to our reported net income of $135 million for Q1 FY2027, partially offset by the CFC Board of Directors’ authorized patronage capital retirement of $62 million in July 2026, as discussed below.

Allocation of Net Earnings and Retirement of Patronage Capital

The amount of patronage capital allocated each year by CFC’s Board of Directors is based on adjusted net income, which excludes the impact of derivative forward value gains (losses). See “MD&A—Non-GAAP Financial Measures and Reconciliations” in this Report for information on adjusted net income. In May 2026, the CFC Board of Directors authorized the allocation of $1 million of net earnings for fiscal year 2026 to the cooperative educational fund. In July 2026, the CFC Board of Directors authorized the allocation of net earnings for fiscal year 2026 as follows: $72 million to members in the form of patronage capital and $172 million to the members’ capital reserve.

In July 2026, the CFC Board of Directors also authorized the retirement of allocated net earnings totaling $62 million, of which $36 million represented 50% of the patronage capital allocation for fiscal year 2026 and $26 million represented the portion of the allocation from net earnings for fiscal year 2001 that had been held for 25 years pursuant to the CFC Board of Directors’ policy. The authorized patronage capital retirement amount of $62 million was returned to members in cash in September 2026. The remaining portion of the patronage capital allocation for fiscal year 2026 will be retained by CFC for 25 years pursuant to the guidelines adopted by the CFC Board of Directors in June 2009.

See “Note 11—Equity” in our 2026 Form 10-K for additional information on our policy for allocation and retirement of patronage capital.

Accumulated Other Comprehensive Income (Loss)

The following table presents, by component, changes in AOCI for the periods presented and the balance of each component as of the end of each respective period.
Table 10.1: Changes in Accumulated Other Comprehensive Income (Loss)

Q1 FY2027Q1 FY2026
(Dollars in thousands)
Unrealized Gains on Derivative Hedges(1)
Unrealized Losses on Defined Benefit Plans(2)
Total
Unrealized Gains on Derivative Hedges(1)
Unrealized Losses on Defined Benefit Plans(2)
Total
Beginning balance$2,465 $(4,834)$(2,369)$2,935 $(5,171)$(2,236)
Changes in unrealized gains167 — 167 — — — 
Realized (gains) losses reclassified to earnings(118)115 (3)(118)119 1 
Ending balance$2,514 $(4,719)$(2,205)$2,817 $(5,052)$(2,235)
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(1) Derivative gains reclassified to earnings were included in the interest expense line item in our consolidated statements of operations.
(2) Reclassified to earnings as a component of the other non-interest expense line item presented in our consolidated statements of operations.

We expect to reclassify realized net gains of $1 million attributable to derivative cash flow hedges from AOCI into earnings over the next 12 months.