Fair value, also referred to as an exit price, is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. The fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The levels, in priority order based on the extent to which observable inputs are available to measure fair value, are Level 1, Level 2 and Level 3. The accounting guidance for fair value measurements requires that we maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value.

The following table presents the carrying value and estimated fair value of all of our financial instruments, including those carried at amortized cost, as of August 31, 2026 and May 31, 2026. The table also displays the classification level within the fair value hierarchy based on the degree of observability of the inputs used in the valuation technique for estimating fair value.


	August 31, 2026				Fair Value Measurement Level
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	202,542	$	202,542	$	202,542	$	—	$	—
Restricted cash	8,650		8,650		8,650		—		—

Equity securities, at fair value	12,551		12,551		12,551		—		—
Debt securities trading, at fair value	27,667		27,667		—		27,667		—

Deferred compensation investments	9,194		9,194		9,194		—		—
Loans to members, net	38,303,496		35,295,268		—		—		35,295,268
Accrued interest receivable	185,937		185,937		—		185,937		—
Derivative assets	637,736		637,736		—		637,736		—
Total financial assets	$	39,387,773	$	36,379,545	$	232,937	$	851,340	$	35,295,268

Liabilities:
Short-term borrowings	$	4,789,088	$	4,790,295	$	—	$	4,790,295	$	—
Long-term debt	28,461,438		27,521,795		—		18,997,141		8,524,654
Accrued interest payable	306,740		306,740		—		306,740		—
Guarantee liability	15,939		17,290		—		—		17,290
Derivative liabilities	32,448		32,448		—		32,448		—
Deferred compensation liability	9,194		9,194		9,194		—		—
Subordinated deferrable debt	1,310,162		1,254,821		210,050		1,044,771		—
Members’ subordinated certificates	1,127,347		1,127,347		—		—		1,127,347
Total financial liabilities	$	36,052,356	$	35,059,930	$	219,244	$	25,171,395	$	9,669,291


	May 31, 2026				Fair Value Measurement Level
(Dollars in thousands)	Carrying Value		Fair Value		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	248,819	$	248,819	$	248,819	$	—	$	—
Restricted cash	8,599		8,599		8,599		—		—

Equity securities, at fair value	11,021		11,021		11,021		—		—
Debt securities trading, at fair value	31,144		31,144		—		31,144		—

Deferred compensation investments	9,011		9,011		9,011		—		—
Loans to members, net	38,392,181		35,853,501		—		—		35,853,501
Accrued interest receivable	264,952		264,952		—		264,952		—
Derivative assets	554,116		554,116		—		554,116		—
Total financial assets	$	39,519,843	$	36,981,163	$	277,450	$	850,212	$	35,853,501

Liabilities:
Short-term borrowings	$	5,159,771	$	5,161,495	$	—	$	5,161,495	$	—
Long-term debt	28,345,934		27,715,985		—		18,993,254		8,722,731
Accrued interest payable	308,506		308,506		—		308,506		—
Guarantee liability	16,847		18,236		—		—		18,236
Derivative liabilities	31,414		31,414		—		31,414		—
Deferred compensation liability	9,011		9,011		9,011		—		—
Subordinated deferrable debt	1,310,282		1,317,026		236,320		1,080,706		—
Members’ subordinated certificates	1,128,240		1,128,240		—		—		1,128,240
Total financial liabilities	$	36,310,005	$	35,689,913	$	245,331	$	25,575,375	$	9,869,207

For additional information regarding fair value measurements, the fair value hierarchy and a description of the methodologies we use to estimate fair value, see “Note 14—Fair Value Measurement” to the Consolidated Financial Statements in our 2026 Form 10-K.

We monitor the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy and transfer between Level 1, Level 2, and Level 3 accordingly. Observable market data include but are not limited to quoted prices and market transactions. Changes in economic conditions or market liquidity generally will drive changes in availability of observable market data. Changes in availability of observable market data, which also may result in changes in the valuation technique used, are generally the cause of transfers between levels. We did not have any transfers into or out of Level 3 of the fair value hierarchy during Q1 FY2027 or Q1 FY2026.

The following table presents the carrying value and fair value of financial instruments reported in our consolidated financial statements at fair value on a recurring basis as of August 31, 2026 and May 31, 2026, and the classification of the valuation technique within the fair value hierarchy. We did not have any assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs during Q1 FY2027 or Q1 FY2026.


	August 31, 2026						May 31, 2026
(Dollars in thousands)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Equity securities, at fair value	$	12,551	$	—	$	12,551	$	11,021	$	—	$	11,021
Debt securities trading, at fair value	—		27,667		27,667		—		31,144		31,144
Deferred compensation investments	9,194		—		9,194		9,011		—		9,011
Derivative assets	—		637,736		637,736		—		554,116		554,116

Liabilities:
Derivative liabilities	$	—	$	32,448	$	32,448	$	—	$	31,414	$	31,414
Deferred compensation liability	9,194		—		9,194		9,011		—		9,011

We may be required, from time to time, to measure certain assets and liabilities at fair value on a nonrecurring basis on our consolidated balance sheets. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as in the application of the lower of cost or fair value accounting or when we evaluate assets for impairment. We did not have any assets or liabilities measured at fair value on a nonrecurring basis during Q1 FY2027 or Q1 FY2026.