2020 ANNUAL REPORT AGFIRST FARM CREDIT BANK IN SIGHT LEON T. AMERSON ELLIS W. TAYLOR CHIEF EXECUTIVE OFFICER CHAIRMAN OF THE BOARD AgFirst started 2020 with a clear vision of what we wanted to accomplish and a roadmap for making it happen. While plans can be derailed by even minor disruptions, 2020 brought IN SIGHT unprecedented challenges and uncertainty. Despite those MESSAGE FROM THE CHIEF EXECUTIVE conditions, AgFirst employees remained undeterred, keeping OFFICER & THE CHAIRMAN OF THE BOARD our collective goals in sight and on track. Our success this year speaks to the insight and vision of our organization across multiple disciplines and at all levels. Like most companies in 2020, AgFirst had to react quickly to evolving pandemic conditions in the early spring. The majority of our workforce had to abruptly adjust to working remotely, and we had to navigate rapidly changing economic impacts. Through it all, we pulled together to deliver uncompromised service and fnished the year in a position of strength. We accomplished this through incisive leadership, prescient planning, a committed workforce and consistent collaboration with our partners. FINANCIALS During a tumultuous year that challenged so many, it was borrowers, such as those authorized by the Coronavirus Aid, AgFirst’s vision that helped our District meet and exceed Relief and Economic Security (CARES) Act – including the fnancial goals in 2020. Small Business Administration’s Paycheck Protection Program (PPP) and the USDA’s Coronavirus Food Assistance Program The pandemic’s impact on the interest rate environment and (CFAP) – also contributed to relatively stable asset quality AgFirst’s interest rate risk management strategies enabled the in 2020. Bank to refnance $43 billion of debt during the year to improve the Bank’s net interest margin by 44 basis points for 2020. The As a result of the stable credit quality and improved net interest increase in net interest margin was the primary driver for the margin, the Bank returned record patronage of $394 million Bank’s net income of $417.7 million, which was 54% higher during 2020. Associations pay for the funding, technology than 2019. and services provided by AgFirst primarily through the interest rates associated with their borrowings from AgFirst. The Despite the turbulence of 2020, our credit quality remained patronage refunds efectively reduced the Associations’ average stable due to commodity and geographic diversity in the loan interest rate and costs of common technology and services by portfolio and having a signifcant number of member-borrowers 193 basis points, resulting in an after-patronage cost of only 73 who entered the pandemic with strong balance sheets. Certain basis points. government support programs made available to member- 2020 AGFIRST FARM CREDIT BANK ANNUAL REPORT THE POWER OF PLANNING THROUGH THE LENS OF COLLABORATION While no one could have predicted how the year would unfold, AgFirst views our role in accomplishing the mission of serving AgFirst maintained its commitment to serving Association rural America and agriculture through a lens of collaboration. partners thanks to the foresight of strong business continuity From partnering with Associations on business solutions to planning. providing services that enable our partners to operate more efectively and efciently as a group, we have long seen A series of business-as-usual years can lead to a sense of collaboration as a vital element of our success. complacency, and because of that, we regularly practice and refne our response to potential disruptive scenarios. Our Never has collaboration been more important than it was in switch to remote work this spring was abrupt, but because of our 2020. As we learned to navigate the year’s challenges, our diligent planning, the transition was smooth. Protocol worked as committees and workgroups continued important conversations planned, enabling us to maintain normal daily operations and albeit virtually – with a dedication to meeting milestones and keep our strategic initiatives in sharp focus. an eye toward the future. The events of 2020 underscored the importance of consistent In a year that was disruptive enough to drive some operations business continuity planning. However, we would not have been apart, the AgFirst District instead came together to work as a as successful or efective without a dedicated and committed team for the rural residents, farmers and agricultural businesses workforce. Even amid rapidly changing and sometimes difcult that rely on us. Time and again, our teams worked hard to see conditions, our employees ably met each challenge, ensuring we the possibilities of the future over the obstacles of the present. could continue to meet the needs of our Association partners. This challenging year served to reinforce the importance of establishing a strong vision for our District and working together to achieve it. Perhaps more importantly, it was a year Ellis W. Taylor that demonstrated an adaptability that allowed us to live out our Chairman of the Board vision even during trying circumstances. As we work toward recovery in 2021, we must now – more than ever – continue to nurture a strong culture of collaboration Leon T. Amerson and planning for the future. As we navigate the ever-changing Chief Executive Ofcer landscape, it is this commitment that will enable us to remain successful. March 11, 2021 2020 AGFIRST FARM CREDIT BANK ANNUAL REPORT AGFIRST FARM CREDIT BANK & ASSOCIATIONS YANKEE FARM AgFirst is a member of the Farm Credit System, the largest agricultural lending CREDIT organization in the United States. As one of the four Banks in the Farm Credit System, we provide funding to 19 afliated Associations and provide services to 20 Associations in 18 states and Puerto Rico. Our Associations, in turn, provide fnancing to more than 90,000 farmers, ranchers, rural homeowners and agribusinesses. AGCREDIT AGCHOICE FARM CREDIT MIDATLANTIC FARM CREDIT MIDATLANTIC FARM CREDIT CENTRAL KENTUCKY AG CREDIT FARM CREDIT OF THE VIRGINIAS MIDATLANTIC RIVER VALLEY COLONIAL FARM CREDIT AGCREDIT FARM FARM CREDIT CREDIT OF THE VIRGINIAS COLONIAL FARM CREDIT CAROLINA AGCAROLINA FARM CREDIT FARM CREDIT RIVER VALLEY AGCREDIT CAPE FEAR AGSOUTH FARM FARM CREDIT CREDIT ARBORONE FARM CREDIT AGSOUTH FARM FIRST SOUTH CREDIT FARM CREDIT FIRST SOUTH FARM CREDIT AGGEORGIA FARM CREDIT AGSOUTH AGFIRST FARM FARM CREDIT CREDIT BANK AgFirst provides: Funding and Services FIRST SOUTH FARM CREDIT Services FARM CREDIT OF FLORIDA SOUTHWEST GEORGIA FARM CREDIT FARM CREDIT OF NORTHWEST FLORIDA FARM CREDIT OF CENTRAL FLORIDA PUERTO RICO FARM CREDIT FARM CREDIT OF FLORIDA BOARD OF DIRECTORS GARY L. BALDOSSER JACK W. BENTLEY JR. JENNY R. BLACK SHERRY E. BOWDEN WILLIAM J. FRANKLIN JR. AGCREDIT AGGEORGIA FARM CREDIT FARM CREDIT OF OUTSIDE DIRECTOR FARM CREDIT OF CENTRAL FLORIDA THE VIRGINIAS BONNIE V. HANCOCK WILLIAM K. JACKSON J. ALVIN LYONS S. ALAN MARSH FRED R. MOORE JR. OUTSIDE DIRECTOR AGCHOICE FARM CREDIT CENTRAL KENTUCKY FIRST SOUTH FARM CREDIT MIDATLANTIC FARM CREDIT AGCREDIT MICHAEL W. PATRICK THOMAS E. PORTER JR. WILLIAM T. ROBINSON MICHAEL T. STONE ELLIS W. TAYLOR FIRST SOUTH FARM CREDIT CAROLINA FARM CREDIT AGSOUTH FARM CREDIT CAPE FEAR FARM CREDIT AGCAROLINA FARM CREDIT 2020 AGFIRST FARM CREDIT BANK ANNUAL REPORT AGFIRST FARM CREDIT BANK 2020 ANNUAL REPORT AgFirst Farm Credit Bank AgFirst Farm Credit Bank 2020 ANNUAL REPORT Contents Report of Management........................................................................................................................................................................... 2 Five-Year Summary of Selected Financial Data.................................................................................................................................... 3 Management’s Discussion & Analysis of Financial Condition & Results of Operations..................................................................... 4-29 Additional Disclosure Required by Farm Credit Administration Regulations...................................................................................... 30-36 Additional Required Regulatory Capital Disclosures............................................................................................................................ 37-44 Report on Internal Control Over Financial Reporting........................................................................................................................... 45 Report of the Audit Committee.............................................................................................................................................................. 46 Report of Independent Registered Public Accounting Firm.................................................................................................................. 47-49 Financial Statements.............................................................................................................................................................................. 50-53 Notes to the Financial Statements.......................................................................................................................................................... 54-86 Glossary of Certain Acronyms............................................................................................................................................................... 87 Management Leon T. Amerson............................................................................................