December 9, 2009

Dear Members:

A year ago all of us were taken aback with the unprecedented upheaval in the financial sector.
The economic turmoil was big news on Wall Street and Main Streets in cities and towns across
the U.S. A little more than a year after the financial upheaval, on a national basis, your
cooperative Farm Credit institution continues to be a financially strong lending organization,
providing credit and related services to agriculture and rural America. I’m pleased to say that
your cooperative, AgCarolina Financial, is a sound, stable, and profitable organization.

With over 3,000 members, our net worth has increased to $150.6 million, a 5.3% increase from
September 30, 2008 to September 30, 2009. Through the end of September, we’ve also generated
$10.1 million in net earnings. We are on target to pay a patronage refund to our members for the
22nd consecutive year. Our September 30, 2009 financial statements are available at our website
and have been published in our third quarter 2009 Leader magazine.

While we have remained financially strong and profitable, there has nonetheless been some
deterioration in the quality of our loan portfolio. Actual losses on loans and provisions for
potential loan losses have resulted in reduced earnings from the level of the prior year. The
continued weak general economy has adversely impacted some customers. Stress in some sectors
of the ag economy has also contributed to the weakening of the loan portfolio.

Throughout the past year, we have continued to have access to a competitive source of credit to
meet the needs of our members in 34 counties of eastern North Carolina. As we work through the
challenges and changing market conditions that continue to face us, I want to reiterate that
AgCarolina Financial is committed to supporting agriculture and rural communities in North
Carolina. Throughout our 90 years as a farmer-owned financial cooperative, we have been here
to help you plan for meeting the challenges of our day, both in lean times and in times of plenty.

If you or members of your family have questions about your loans, your financial situation, or
your financial cooperative, please contact me or your Financial Services Officer.

On behalf of the employees of AgCarolina Financial, we wish for each of you a joyous holiday
season.

Sincerely,

Eugene R. Charville
President & CEO