FEDERAL AGRICULTURAL MORTGAGE CORPORATION
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(Exact name of registrant as specified in its charter)
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Federally chartered instrumentality
of the United States
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52-1578738
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer identification number)
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1999 K Street, N.W., 4th Floor,
Washington, D.C.
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20006
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(Address of principal executive offices)
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(Zip code)
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(202) 872-7700
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(Registrant's telephone number, including area code)
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Item 1.
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Financial Statements
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As of
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||||||
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March 31, 2017
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December 31, 2016
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||||
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(in thousands)
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||||||
Assets:
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Cash and cash equivalents
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$
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313,641
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$
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265,229
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Investment securities:
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Available-for-sale, at fair value
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2,479,244
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2,515,851
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Farmer Mac Guaranteed Securities:
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Available-for-sale, at fair value
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5,243,046
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4,853,685
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Held-to-maturity, at amortized cost
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1,074,686
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1,149,231
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Total Farmer Mac Guaranteed Securities
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6,317,732
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6,002,916
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USDA Securities:
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Trading, at fair value
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18,602
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20,388
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Held-to-maturity, at amortized cost
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2,025,822
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2,009,225
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Total USDA Securities
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2,044,424
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2,029,613
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Loans:
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Loans held for investment, at amortized cost
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3,432,091
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3,379,884
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Loans held for investment in consolidated trusts, at amortized cost
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1,208,950
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1,132,966
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Allowance for loan losses
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(5,811
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)
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(5,415
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)
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Total loans, net of allowance
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4,635,230
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4,507,435
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Real estate owned, at lower of cost or fair value
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5,456
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1,528
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Financial derivatives, at fair value
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2,674
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23,182
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Interest receivable (includes $8,163 and $12,584, respectively, related to consolidated trusts)
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85,522
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122,782
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Guarantee and commitment fees receivable
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38,748
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38,871
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Deferred tax asset, net
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5,085
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12,291
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Prepaid expenses and other assets
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4,001
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86,322
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Total Assets
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$
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15,931,757
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$
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15,606,020
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Liabilities and Equity:
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Liabilities:
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Notes payable:
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Due within one year
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$
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7,616,431
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$
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8,440,123
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Due after one year
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6,300,750
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5,222,977
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Total notes payable
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13,917,181
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13,663,100
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Debt securities of consolidated trusts held by third parties
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1,212,792
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1,142,704
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Financial derivatives, at fair value
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32,054
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58,152
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Accrued interest payable (includes $6,771 and $10,881, respectively, related to consolidated trusts)
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46,845
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49,700
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Guarantee and commitment obligation
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36,802
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37,282
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Accounts payable and accrued expenses
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18,234
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9,415
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Reserve for losses
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1,827
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2,020
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Total Liabilities
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15,265,735
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14,962,373
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Commitments and Contingencies (Note 6)
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Equity:
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Preferred stock:
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Series A, par value $25 per share, 2,400,000 shares authorized, issued and outstanding
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58,333
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58,333
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Series B, par value $25 per share, 3,000,000 shares authorized, issued and outstanding
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73,044
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73,044
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Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding
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73,382
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73,382
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Common stock:
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Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding
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1,031
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1,031
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Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding
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500
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500
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Class C Non-Voting, $1 par value, no maximum authorization, 9,065,194 shares and 9,007,481 shares outstanding, respectively
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9,065
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9,008
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Additional paid-in capital
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118,386
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118,655
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Accumulated other comprehensive income, net of tax
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41,544
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33,758
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Retained earnings
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290,530
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275,714
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Total Stockholders' Equity
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665,815
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643,425
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Non-controlling interest
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207
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222
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Total Equity
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666,022
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643,647
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Total Liabilities and Equity
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$
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15,931,757
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$
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15,606,020
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For the Three Months Ended
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March 31, 2017
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March 31, 2016
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(in thousands, except per share amounts)
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||||||
Interest income:
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Investments and cash equivalents
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$
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7,243
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$
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6,681
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Farmer Mac Guaranteed Securities and USDA Securities
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42,522
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35,510
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Loans
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36,852
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31,700
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Total interest income
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86,617
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73,891
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Total interest expense
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49,546
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40,251
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Net interest income
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37,071
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33,640
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Provision for loan losses
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(637
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)
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(49
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)
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Net interest income after provision for loan losses
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36,434
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33,591
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Non-interest income/(loss):
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Guarantee and commitment fees
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3,844
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3,626
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Gains/(losses) on financial derivatives and hedging activities
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2,486
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(6,782
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)
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(Losses)/gains on trading securities
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(82
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)
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358
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Losses on sale of available-for-sale investment securities
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—
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(9
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)
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Losses on sale of real estate owned
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(5
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)
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—
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Other income
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553
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101
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Non-interest income/(loss)
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6,796
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(2,706
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)
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Non-interest expense:
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Compensation and employee benefits
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6,317
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5,774
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General and administrative
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3,800
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3,526
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Regulatory fees
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625
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613
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Real estate owned operating costs, net
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—
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39
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(Release of)/provision for reserve for losses
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(193
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)
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14
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Non-interest expense
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10,549
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9,966
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Income before income taxes
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32,681
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20,919
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Income tax expense
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10,786
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7,335
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Net income
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21,895
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13,584
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Less: Net loss attributable to non-controlling interest
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15
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28
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Net income attributable to Farmer Mac
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21,910
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13,612
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Preferred stock dividends
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(3,295
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)
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(3,295
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)
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Net income attributable to common stockholders
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$
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18,615
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$
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10,317
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Earnings per common share and dividends:
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Basic earnings per common share
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$
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1.76
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$
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0.99
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Diluted earnings per common share
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$
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1.73
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$
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0.94
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Common stock dividends per common share
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$
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0.36
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$
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0.26
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For the Three Months Ended
|
||||||
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March 31, 2017
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March 31, 2016
|
||||
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(in thousands)
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||||||
Net income
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$
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21,895
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$
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13,584
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Other comprehensive income/(loss) before taxes:
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Net unrealized gains/(losses) on available-for-sale securities
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14,838
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(6,377
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)
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Net changes in held-to-maturity securities
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(3,487
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)
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(1,011
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)
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Net unrealized gains/(losses) on cash flow hedges
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629
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(4,763
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)
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Other comprehensive income/(loss) before tax
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11,980
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(12,151
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)
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Income tax (expense)/benefit related to other comprehensive income
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(4,194
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)
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4,253
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Other comprehensive income/(loss), net of tax
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7,786
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(7,898
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)
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Comprehensive income
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29,681
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5,686
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Less: comprehensive loss attributable to non-controlling interest
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15
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28
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Comprehensive income attributable to Farmer Mac
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$
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29,696
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$
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5,714
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Accumulated
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||||||||||||||||
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Additional
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Other
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||||||||||||||||
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Preferred Stock
|
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Common Stock
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Paid-In
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Comprehensive
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Retained
|
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Non-controlling
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Total
|
||||||||||||||||||||
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Shares
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Amount
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Shares
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Amount
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Capital
|
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Income/(Loss)
|
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Earnings
|
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Interest
|
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Equity
|
||||||||||||||||
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(in thousands)
|
||||||||||||||||||||||||||||||||
Balance as of December 31, 2015
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8,400
|
|
|
$
|
204,759
|
|
|
10,687
|
|
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$
|
10,687
|
|
|
$
|
117,862
|
|
|
$
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(11,019
|
)
|
|
$
|
231,228
|
|
|
$
|
203
|
|
|
$
|
553,720
|
|
Net income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
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||||||||||||||||
Attributable to Farmer Mac
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
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—
|
|
|
—
|
|
|
13,612
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|
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—
|
|
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13,612
|
|
|||||||
Attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
|
—
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|
|
—
|
|
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(28
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)
|
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(28
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)
|
|||||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,898
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)
|
|
—
|
|
|
—
|
|
|
(7,898
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)
|
|||||||
Cash dividends:
|
|
|
|
|
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|
|
|
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|
|
|
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||||||||||||||||
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,295
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)
|
|
—
|
|
|
(3,295
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)
|
|||||||
Common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,702
|
)
|
|
—
|
|
|
(2,702
|
)
|
|||||||
Issuance of Class C Common Stock
|
—
|
|
|
—
|
|
|
71
|
|
|
71
|
|
|
98
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
169
|
|
|||||||
Repurchase of Class C Common Stock
|
—
|
|
|
—
|
|
|
(307
|
)
|
|
(307
|
)
|
|
—
|
|
|
—
|
|
|
(8,781
|
)
|
|
—
|
|
|
(9,088
|
)
|
|||||||
Stock-based compensation cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,027
|
|
|||||||
Other stock-based award activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,553
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,553
|
)
|
|||||||
Investment in subsidiary - non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
52
|
|
|||||||
Balance as of March 31, 2016
|
8,400
|
|
|
$
|
204,759
|
|
|
10,451
|
|
|
$
|
10,451
|
|
|
$
|
117,434
|
|
|
$
|
(18,917
|
)
|
|
$
|
230,062
|
|
|
$
|
227
|
|
|
$
|
544,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance as of December 31, 2016
|
8,400
|
|
|
$
|
204,759
|
|
|
10,539
|
|
|
$
|
10,539
|
|
|
$
|
118,655
|
|
|
$
|
33,758
|
|
|
$
|
275,714
|
|
|
$
|
222
|
|
|
$
|
643,647
|
|
Net income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Attributable to Farmer Mac
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,910
|
|
|
|
|
21,910
|
|
||||||||
Attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
|||||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,786
|
|
|
—
|
|
|
—
|
|
|
7,786
|
|
|||||||
Cash dividends:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,295
|
)
|
|
—
|
|
|
(3,295
|
)
|
|||||||
Common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,799
|
)
|
|
—
|
|
|
(3,799
|
)
|
|||||||
Issuance of Class C Common Stock
|
—
|
|
|
—
|
|
|
57
|
|
|
57
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|||||||
Stock-based compensation cost
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
981
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
981
|
|
|||||||
Other stock-based award activity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,394
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,394
|
)
|
|||||||
Investment in subsidiary - non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Balance as of March 31, 2017
|
8,400
|
|
|
$
|
204,759
|
|
|
10,596
|
|
|
$
|
10,596
|
|
|
$
|
118,386
|
|
|
$
|
41,544
|
|
|
$
|
290,530
|
|
|
$
|
207
|
|
|
$
|
666,022
|
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
21,895
|
|
|
$
|
13,584
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities
|
181
|
|
|
501
|
|
||
Amortization of debt premiums, discounts and issuance costs
|
5,656
|
|
|
7,643
|
|
||
Net change in fair value of trading securities, hedged assets, and financial derivatives
|
525
|
|
|
2,631
|
|
||
Losses on sale of available-for-sale investment securities
|
—
|
|
|
9
|
|
||
Losses on sale of real estate owned
|
5
|
|
|
—
|
|
||
Total provision for losses
|
444
|
|
|
63
|
|
||
Excess tax benefits related to stock-based awards
|
679
|
|
|
—
|
|
||
Deferred income taxes
|
1,419
|
|
|
(1,483
|
)
|
||
Stock-based compensation expense
|
981
|
|
|
1,027
|
|
||
Proceeds from repayment of trading investment securities
|
—
|
|
|
205
|
|
||
Proceeds from repayment of loans purchased as held for sale
|
25,928
|
|
|
28,794
|
|
||
Net change in:
|
|
|
|
||||
Interest receivable
|
37,292
|
|
|
37,633
|
|
||
Guarantee and commitment fees receivable
|
(357
|
)
|
|
800
|
|
||
Other assets
|
2,236
|
|
|
(31,021
|
)
|
||
Accrued interest payable
|
(2,855
|
)
|
|
(9,469
|
)
|
||
Other liabilities
|
8,605
|
|
|
2,495
|
|
||
Net cash provided by operating activities
|
102,634
|
|
|
53,412
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of available-for-sale investment securities
|
(66,561
|
)
|
|
(341,099
|
)
|
||
Purchases of Farmer Mac Guaranteed Securities and USDA Securities
|
(692,245
|
)
|
|
(1,026,187
|
)
|
||
Purchases of loans held for investment
|
(341,702
|
)
|
|
(208,215
|
)
|
||
Purchases of defaulted loans
|
(311
|
)
|
|
(1,415
|
)
|
||
Proceeds from repayment of available-for-sale investment securities
|
183,749
|
|
|
455,315
|
|
||
Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities
|
338,063
|
|
|
676,858
|
|
||
Proceeds from repayment of loans purchased as held for investment
|
182,790
|
|
|
132,652
|
|
||
Proceeds from sale of available-for-sale investment securities
|
—
|
|
|
186,769
|
|
||
Proceeds from sale of Farmer Mac Guaranteed Securities
|
149,607
|
|
|
139,561
|
|
||
Payments from sale of real estate owned
|
697
|
|
|
—
|
|
||
Net cash (used)/provided by investing activities
|
(245,913
|
)
|
|
14,239
|
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuance of discount notes
|
13,618,574
|
|
|
23,089,113
|
|
||
Proceeds from issuance of medium-term notes
|
2,251,535
|
|
|
1,207,092
|
|
||
Payments to redeem discount notes
|
(14,766,905
|
)
|
|
(22,873,972
|
)
|
||
Payments to redeem medium-term notes
|
(856,300
|
)
|
|
(921,000
|
)
|
||
Excess tax benefits related to stock-based awards
|
—
|
|
|
234
|
|
||
Payments to third parties on debt securities of consolidated trusts
|
(46,926
|
)
|
|
(33,010
|
)
|
||
Proceeds from common stock issuance
|
148
|
|
|
101
|
|
||
Tax payments related to share-based awards
|
(1,341
|
)
|
|
(1,499
|
)
|
||
Common stock repurchased
|
—
|
|
|
(9,286
|
)
|
||
Investment in subsidiary - non-controlling interest
|
—
|
|
|
52
|
|
||
Dividends paid on common and preferred stock
|
(7,094
|
)
|
|
(5,997
|
)
|
||
Net cash provided by financing activities
|
191,691
|
|
|
451,828
|
|
||
Net increase in cash and cash equivalents
|
48,412
|
|
|
519,479
|
|
||
Cash and cash equivalents at beginning of period
|
265,229
|
|
|
1,210,084
|
|
||
Cash and cash equivalents at end of period
|
$
|
313,641
|
|
|
$
|
1,729,563
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
Consolidation of Variable Interest Entities
|
||||||||||||||||||||||
|
As of March 31, 2017
|
||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
Corporate
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
On-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for investment in consolidated trusts, at amortized cost
|
$
|
1,208,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,208,950
|
|
Debt securities of consolidated trusts held by third parties
(1)
|
1,212,792
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,212,792
|
|
||||||
Unconsolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carrying value
(2)
|
—
|
|
|
41,130
|
|
|
—
|
|
|
30,054
|
|
|
—
|
|
|
71,184
|
|
||||||
Maximum exposure to loss
(3)
|
—
|
|
|
40,734
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
70,734
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carrying value
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
809,988
|
|
|
809,988
|
|
||||||
Maximum exposure to loss
(3) (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
808,155
|
|
|
808,155
|
|
||||||
Off-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unconsolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Maximum exposure to loss
(3) (5)
|
387,272
|
|
|
135,334
|
|
|
—
|
|
|
970,000
|
|
|
—
|
|
|
1,492,606
|
|
(1)
|
Includes borrower remittances of
$3.8 million
. The borrower remittances had not been passed through to third party investors as of
March 31, 2017
.
|
(2)
|
Includes
$0.4 million
of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. Includes fair value adjustments related to the Institutional Credit line of business of
$0.1 million
.
|
(3)
|
Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.
|
(4)
|
Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.
|
(5)
|
The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.
|
|
Consolidation of Variable Interest Entities
|
||||||||||||||||||||||
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
Corporate
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
On-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Consolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loans held for investment in consolidated trusts, at amortized cost
|
$
|
1,132,966
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,132,966
|
|
Debt securities of consolidated trusts held by third parties
(1)
|
1,142,704
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,142,704
|
|
||||||
Unconsolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carrying value
(2)
|
—
|
|
|
36,042
|
|
|
—
|
|
|
30,347
|
|
|
—
|
|
|
66,389
|
|
||||||
Maximum exposure to loss
(3)
|
—
|
|
|
35,599
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
65,599
|
|
||||||
Investment securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Carrying value
(4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
827,874
|
|
|
827,874
|
|
||||||
Maximum exposure to loss
(3) (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
825,909
|
|
|
825,909
|
|
||||||
Off-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unconsolidated VIEs:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Maximum exposure to loss
(3) (5)
|
415,441
|
|
|
103,976
|
|
|
—
|
|
|
970,000
|
|
|
—
|
|
|
1,489,417
|
|
(1)
|
Includes borrower remittances of
$9.7 million
, which have not been passed through to third party investors as of December 31, 2016.
|
(2)
|
Includes
$0.4 million
of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. Includes fair value adjustments related to the Institutional Credit line of business of
$0.3 million
.
|
(3)
|
Farmer Mac uses unpaid principal balance and the outstanding face amount of investment securities to represent maximum exposure to loss.
|
(4)
|
Includes auction-rate certificates, asset-backed securities, and GSE-guaranteed mortgage-backed securities.
|
(5)
|
The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.
|
(a)
|
Statements of Cash Flows
|
|
For the Three Months Ended
|
||||
|
March 31, 2017
|
|
March 31, 2016
|
||
|
(in thousands)
|
||||
Non-cash activity:
|
|
|
|
||
Real estate owned acquired through loan liquidation
|
4,630
|
|
|
—
|
|
Loans acquired and securitized as Farmer Mac Guaranteed Securities
|
149,607
|
|
|
139,561
|
|
Consolidation of Farm & Ranch Guaranteed Securities from off-balance sheet to loans held for investment in consolidated trusts and to debt securities of consolidated trusts held by third parties
|
117,018
|
|
|
135,913
|
|
(b)
|
Earnings Per Common Share
|
|
For the Three Months Ended
|
||||||||||||||||||||
|
March 31, 2017
(1)
|
|
March 31, 2016
|
||||||||||||||||||
|
Net
Income |
|
Weighted-Average Shares
|
|
$ per
Share |
|
Net
Income |
|
Weighted-Average Shares
|
|
$ per
Share |
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||
Basic EPS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to common stockholders
|
$
|
18,615
|
|
|
10,551
|
|
|
$
|
1.76
|
|
|
$
|
10,317
|
|
|
10,465
|
|
|
$
|
0.99
|
|
Effect of dilutive securities
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock options, SARs and restricted stock
|
—
|
|
|
231
|
|
|
(0.03
|
)
|
|
—
|
|
|
538
|
|
|
(0.05
|
)
|
||||
Diluted EPS
|
$
|
18,615
|
|
|
10,782
|
|
|
$
|
1.73
|
|
|
$
|
10,317
|
|
|
11,003
|
|
|
$
|
0.94
|
|
(1)
|
For the effect of the adoption of the new Accounting Standard Update 2016-09 "
Improvements to Employee Share-Based Payment Accounting
" on Basic and Diluted EPS, see Note 1(d) "New Accounting Standards."
|
(2)
|
For the three months ended
March 31, 2017
and 2016, stock options and SARs of
50,757
and
201,401
, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended
March 31, 2017
and 2016, contingent shares of non-vested restricted stock of
32,892
, and
37,284
, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.
|
(c)
|
Comprehensive Income
|
|
For the Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||||||||||
|
Available-for-Sale Securities
|
|
Held-to-Maturity Securities
|
|
Cash Flow Hedges
|
|
Total
|
|
Available-for-Sale Securities
|
|
Held-to-Maturity Securities
|
|
Cash Flow Hedges
|
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Beginning Balance
|
$
|
(14,387
|
)
|
|
$
|
45,752
|
|
|
$
|
2,393
|
|
|
$
|
33,758
|
|
|
$
|
(10,035
|
)
|
|
$
|
(476
|
)
|
|
$
|
(508
|
)
|
|
$
|
(11,019
|
)
|
Other Comprehensive Income Before Reclassifications
|
12,223
|
|
|
—
|
|
|
76
|
|
|
12,299
|
|
|
(1,769
|
)
|
|
—
|
|
|
(3,395
|
)
|
|
(5,164
|
)
|
||||||||
Amounts reclassified from AOCI
|
(2,578
|
)
|
|
(2,267
|
)
|
|
332
|
|
|
(4,513
|
)
|
|
(2,376
|
)
|
|
(657
|
)
|
|
299
|
|
|
(2,734
|
)
|
||||||||
Net Comprehensive Income
|
9,645
|
|
|
(2,267
|
)
|
|
408
|
|
|
7,786
|
|
|
(4,145
|
)
|
|
(657
|
)
|
|
(3,096
|
)
|
|
(7,898
|
)
|
||||||||
Ending Balance
|
$
|
(4,742
|
)
|
|
$
|
43,485
|
|
|
$
|
2,801
|
|
|
$
|
41,544
|
|
|
$
|
(14,180
|
)
|
|
$
|
(1,133
|
)
|
|
$
|
(3,604
|
)
|
|
$
|
(18,917
|
)
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||
|
Before Tax
|
|
Provision (Benefit)
|
|
After Tax
|
|
Before Tax
|
|
Provision (Benefit)
|
|
After Tax
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale-securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized holding gains/(losses) on available-for-sale-securities
|
$
|
18,804
|
|
|
$
|
6,581
|
|
|
$
|
12,223
|
|
|
$
|
(2,722
|
)
|
|
$
|
(953
|
)
|
|
$
|
(1,769
|
)
|
Less reclassification adjustments included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gains/(losses) on financial derivatives and hedging activities
(1)
|
(3,959
|
)
|
|
(1,386
|
)
|
|
(2,573
|
)
|
|
(3,923
|
)
|
|
(1,373
|
)
|
|
(2,550
|
)
|
||||||
Losses on sale of available-for-sale investment securities
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
3
|
|
|
6
|
|
||||||
Other income
(3)
|
(7
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
259
|
|
|
91
|
|
|
168
|
|
||||||
Total
|
$
|
14,838
|
|
|
$
|
5,193
|
|
|
$
|
9,645
|
|
|
$
|
(6,377
|
)
|
|
$
|
(2,232
|
)
|
|
$
|
(4,145
|
)
|
Held-to-maturity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Less reclassification adjustments included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
(4)
|
$
|
(3,487
|
)
|
|
$
|
(1,220
|
)
|
|
$
|
(2,267
|
)
|
|
$
|
(1,011
|
)
|
|
$
|
(354
|
)
|
|
$
|
(657
|
)
|
Total
|
$
|
(3,487
|
)
|
|
$
|
(1,220
|
)
|
|
$
|
(2,267
|
)
|
|
$
|
(1,011
|
)
|
|
$
|
(354
|
)
|
|
$
|
(657
|
)
|
Cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains/(losses) on cash flow hedges
|
$
|
117
|
|
|
$
|
41
|
|
|
$
|
76
|
|
|
$
|
(5,222
|
)
|
|
$
|
(1,827
|
)
|
|
$
|
(3,395
|
)
|
Less reclassification adjustments included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
(5)
|
512
|
|
|
180
|
|
|
332
|
|
|
459
|
|
|
160
|
|
|
299
|
|
||||||
Total
|
$
|
629
|
|
|
$
|
221
|
|
|
$
|
408
|
|
|
$
|
(4,763
|
)
|
|
$
|
(1,667
|
)
|
|
$
|
(3,096
|
)
|
Other comprehensive income/(loss)
|
$
|
11,980
|
|
|
$
|
4,194
|
|
|
$
|
7,786
|
|
|
$
|
(12,151
|
)
|
|
$
|
(4,253
|
)
|
|
$
|
(7,898
|
)
|
(1)
|
Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.
|
(2)
|
Represents unrealized losses on sales of available-for-sale investment securities.
|
(3)
|
Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.
|
(4)
|
Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.
|
(5)
|
Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.
|
•
|
Consolidated Statements of Operations
- The ASU requires the recognition of all net tax benefits related to share-based compensation awards in the income tax provision. Previously, these amounts were recognized in additional paid-in capital. Net tax benefits related to share-based compensation awards of
$0.7 million
were recognized as a reduction to income tax expense in the three months ended
March 31, 2017
in the consolidated statement of operations. Net tax benefits result from the excess of the tax deduction over the compensation expense recognized under GAAP for share-based compensation awards. That excess arises because the tax deduction is based upon the value of share-based awards upon their exercise (or vesting, in the case of restricted stock units), whereas the compensation expense under GAAP is based upon the value of the share-based awards upon their grant date.
|
•
|
Consolidated Statements of Cash Flows
- The ASU requires excess tax benefits from share-based employee awards to be reported within operating activities. Previously, these cash flows were reported within financing activities. Farmer Mac has applied this guidance prospectively, resulting in an increase in net cash provided by operating activities and a corresponding decrease in net cash provided by financing activities of
$0.7 million
for the three months ended
March 31, 2017
.
|
(e)
|
Reclassifications
|
2.
|
INVESTMENT SECURITIES
|
|
As of March 31, 2017
|
||||||||||||||||||||||
|
Amount Outstanding
|
|
Unamortized Premium/(Discount)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
(1,576
|
)
|
|
$
|
18,124
|
|
Floating rate asset-backed securities
|
40,825
|
|
|
(189
|
)
|
|
40,636
|
|
|
—
|
|
|
(266
|
)
|
|
40,370
|
|
||||||
Floating rate corporate debt securities
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
60
|
|
|
—
|
|
|
10,060
|
|
||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
1,342,378
|
|
|
2,637
|
|
|
1,345,015
|
|
|
2,494
|
|
|
(2,819
|
)
|
|
1,344,690
|
|
||||||
Fixed rate GSE guaranteed mortgage-backed securities
(1)
|
514
|
|
|
2,469
|
|
|
2,983
|
|
|
2,394
|
|
|
—
|
|
|
5,377
|
|
||||||
Floating rate GSE subordinated debt
|
70,000
|
|
|
—
|
|
|
70,000
|
|
|
—
|
|
|
(2,424
|
)
|
|
67,576
|
|
||||||
Fixed rate senior agency debt
|
187,295
|
|
|
53
|
|
|
187,348
|
|
|
—
|
|
|
(283
|
)
|
|
187,065
|
|
||||||
Fixed rate U.S. Treasuries
|
806,493
|
|
|
233
|
|
|
806,726
|
|
|
7
|
|
|
(751
|
)
|
|
805,982
|
|
||||||
Total available-for-sale
|
2,477,205
|
|
|
5,203
|
|
|
2,482,408
|
|
|
4,955
|
|
|
(8,119
|
)
|
|
2,479,244
|
|
||||||
Total investment securities
|
$
|
2,477,205
|
|
|
$
|
5,203
|
|
|
$
|
2,482,408
|
|
|
$
|
4,955
|
|
|
$
|
(8,119
|
)
|
|
$
|
2,479,244
|
|
(1)
|
Fair value includes
$4.8 million
of an interest-only security with a notional amount of
$145.5 million
.
|
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Amount Outstanding
|
|
Unamortized Premium/(Discount)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
19,700
|
|
|
$
|
—
|
|
|
$
|
(1,970
|
)
|
|
$
|
17,730
|
|
Floating rate asset-backed securities
|
44,442
|
|
|
(202
|
)
|
|
44,240
|
|
|
1
|
|
|
(390
|
)
|
|
43,851
|
|
||||||
Floating rate corporate debt securities
|
10,000
|
|
|
—
|
|
|
10,000
|
|
|
41
|
|
|
—
|
|
|
10,041
|
|
||||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
1,359,700
|
|
|
2,827
|
|
|
1,362,527
|
|
|
1,768
|
|
|
(3,266
|
)
|
|
1,361,029
|
|
||||||
Fixed rate GSE guaranteed mortgage-backed securities
(1)
|
538
|
|
|
2,582
|
|
|
3,120
|
|
|
4,505
|
|
|
—
|
|
|
7,625
|
|
||||||
Floating rate GSE subordinated debt
|
70,000
|
|
|
—
|
|
|
70,000
|
|
|
—
|
|
|
(3,047
|
)
|
|
66,953
|
|
||||||
Fixed rate senior agency debt
|
187,295
|
|
|
106
|
|
|
187,401
|
|
|
—
|
|
|
(268
|
)
|
|
187,133
|
|
||||||
Fixed rate U.S. Treasuries
|
821,619
|
|
|
359
|
|
|
821,978
|
|
|
47
|
|
|
(536
|
)
|
|
821,489
|
|
||||||
Total available-for-sale
|
2,513,294
|
|
|
5,672
|
|
|
2,518,966
|
|
|
6,362
|
|
|
(9,477
|
)
|
|
2,515,851
|
|
||||||
Total investment securities
|
$
|
2,513,294
|
|
|
$
|
5,672
|
|
|
$
|
2,518,966
|
|
|
$
|
6,362
|
|
|
$
|
(9,477
|
)
|
|
$
|
2,515,851
|
|
(1)
|
Fair value includes
$7.0 million
of an interest-only security with a notional amount of
$146.1 million
.
|
|
As of March 31, 2017
|
||||||||||||||
|
Available-for-Sale Securities
|
||||||||||||||
|
Unrealized loss position for
less than 12 months |
|
Unrealized loss position for
more than 12 months |
||||||||||||
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
||||||||
|
(in thousands)
|
||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,124
|
|
|
$
|
(1,576
|
)
|
Floating rate asset-backed securities
|
—
|
|
|
—
|
|
|
35,514
|
|
|
(266
|
)
|
||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
241,188
|
|
|
(608
|
)
|
|
409,002
|
|
|
(2,211
|
)
|
||||
Floating rate GSE subordinated debt
|
—
|
|
|
—
|
|
|
67,576
|
|
|
(2,424
|
)
|
||||
Fixed rate U.S. Treasuries
|
776,996
|
|
|
(751
|
)
|
|
—
|
|
|
—
|
|
||||
Fixed rate senior agency debt
|
187,066
|
|
|
(283
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
1,205,250
|
|
|
$
|
(1,642
|
)
|
|
$
|
530,216
|
|
|
$
|
(6,477
|
)
|
|
As of December 31, 2016
|
||||||||||||||
|
Available-for-Sale Securities
|
||||||||||||||
|
Unrealized loss position for
less than 12 months |
|
Unrealized loss position for
more than 12 months |
||||||||||||
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
||||||||
|
(in thousands)
|
||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,730
|
|
|
$
|
(1,970
|
)
|
Floating rate asset-backed securities
|
4,654
|
|
|
(10
|
)
|
|
38,077
|
|
|
(380
|
)
|
||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
384,586
|
|
|
(1,030
|
)
|
|
442,041
|
|
|
(2,236
|
)
|
||||
Floating rate GSE subordinated debt
|
—
|
|
|
—
|
|
|
66,953
|
|
|
(3,047
|
)
|
||||
Fixed rate U.S. Treasuries
|
732,371
|
|
|
(536
|
)
|
|
—
|
|
|
—
|
|
||||
Fixed rate senior agency debt
|
187,133
|
|
|
(268
|
)
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
1,308,744
|
|
|
$
|
(1,844
|
)
|
|
$
|
564,801
|
|
|
$
|
(7,633
|
)
|
|
As of March 31, 2017
|
||||||||
|
Available-for-Sale Securities
|
||||||||
|
Amortized
Cost |
|
Fair Value
|
|
Weighted-
Average Yield |
||||
|
(dollars in thousands)
|
||||||||
Due within one year
|
$
|
988,363
|
|
|
$
|
987,343
|
|
|
0.77%
|
Due after one year through five years
|
227,113
|
|
|
227,471
|
|
|
1.42%
|
||
Due after five years through ten years
|
437,367
|
|
|
438,280
|
|
|
1.54%
|
||
Due after ten years
|
829,565
|
|
|
826,150
|
|
|
1.42%
|
||
Total
|
$
|
2,482,408
|
|
|
$
|
2,479,244
|
|
|
1.18%
|
3.
|
FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES
|
|
As of March 31, 2017
|
||||||||||||||||||||||
|
Unpaid Principal Balance
|
|
Unamortized Premium/(Discount)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AgVantage
|
$
|
1,035,587
|
|
|
$
|
(2,031
|
)
|
|
$
|
1,033,556
|
|
|
$
|
6,290
|
|
|
$
|
(3,115
|
)
|
|
$
|
1,036,731
|
|
Farmer Mac Guaranteed USDA Securities
|
40,734
|
|
|
396
|
|
|
41,130
|
|
|
293
|
|
|
(5
|
)
|
|
41,418
|
|
||||||
Total Farmer Mac Guaranteed Securities
|
1,076,321
|
|
|
(1,635
|
)
|
|
1,074,686
|
|
|
6,583
|
|
|
(3,120
|
)
|
|
1,078,149
|
|
||||||
USDA Securities
|
1,955,868
|
|
|
69,954
|
|
|
2,025,822
|
|
|
1
|
|
|
(66,210
|
)
|
|
1,959,613
|
|
||||||
Total held-to-maturity
|
$
|
3,032,189
|
|
|
$
|
68,319
|
|
|
$
|
3,100,508
|
|
|
$
|
6,584
|
|
|
$
|
(69,330
|
)
|
|
$
|
3,037,762
|
|
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AgVantage
|
$
|
5,266,782
|
|
|
$
|
(258
|
)
|
|
$
|
5,266,524
|
|
|
$
|
33,450
|
|
|
$
|
(56,928
|
)
|
|
$
|
5,243,046
|
|
Trading:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
USDA Securities
|
$
|
17,760
|
|
|
$
|
1,274
|
|
|
$
|
19,034
|
|
|
$
|
56
|
|
|
$
|
(488
|
)
|
|
$
|
18,602
|
|
|
As of December 31, 2016
|
||||||||||||||||||||||
|
Unpaid Principal Balance
|
|
Unamortized Premium/(Discount)
|
|
Amortized
Cost |
|
Unrealized
Gains |
|
Unrealized
Losses |
|
Fair Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AgVantage
|
$
|
1,115,465
|
|
|
$
|
(2,276
|
)
|
|
$
|
1,113,189
|
|
|
$
|
7,187
|
|
|
$
|
(3,175
|
)
|
|
$
|
1,117,201
|
|
Farmer Mac Guaranteed USDA Securities
|
35,599
|
|
|
443
|
|
|
36,042
|
|
|
5
|
|
|
(239
|
)
|
|
35,808
|
|
||||||
Total Farmer Mac Guaranteed Securities
|
1,151,064
|
|
|
(1,833
|
)
|
|
1,149,231
|
|
|
7,192
|
|
|
(3,414
|
)
|
|
1,153,009
|
|
||||||
USDA Securities
|
1,935,440
|
|
|
73,785
|
|
|
2,009,225
|
|
|
—
|
|
|
(95,590
|
)
|
|
1,913,635
|
|
||||||
Total held-to-maturity
|
$
|
3,086,504
|
|
|
$
|
71,952
|
|
|
$
|
3,158,456
|
|
|
$
|
7,192
|
|
|
$
|
(99,004
|
)
|
|
$
|
3,066,644
|
|
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
AgVantage
|
$
|
4,889,007
|
|
|
$
|
(103
|
)
|
|
$
|
4,888,904
|
|
|
$
|
28,715
|
|
|
$
|
(63,934
|
)
|
|
$
|
4,853,685
|
|
Trading:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
USDA Securities
|
$
|
19,360
|
|
|
$
|
1,377
|
|
|
$
|
20,737
|
|
|
$
|
41
|
|
|
$
|
(390
|
)
|
|
$
|
20,388
|
|
|
As of March 31, 2017
|
||||||||||||||
|
Held-to-Maturity and Available-for-Sale Securities
|
||||||||||||||
|
Unrealized loss position for
less than 12 months |
|
Unrealized loss position for
more than 12 months |
||||||||||||
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
||||||||
|
(in thousands)
|
||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
||||||||
AgVantage
|
$
|
358,636
|
|
|
$
|
(3,115
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Farmer Mac Guaranteed USDA Securities
|
279
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
||||
USDA Securities
|
1,865,182
|
|
|
(66,194
|
)
|
|
93,978
|
|
|
(16
|
)
|
||||
Total held-to-maturity
|
$
|
2,224,097
|
|
|
$
|
(69,314
|
)
|
|
$
|
93,978
|
|
|
$
|
(16
|
)
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
AgVantage
|
$
|
1,149,984
|
|
|
$
|
(26,036
|
)
|
|
$
|
1,020,572
|
|
|
$
|
(30,892
|
)
|
|
As of December 31, 2016
|
||||||||||||||
|
Available-for-Sale Securities
|
||||||||||||||
|
Unrealized loss position for
less than 12 months |
|
Unrealized loss position for
more than 12 months |
||||||||||||
|
Fair Value
|
|
Unrealized
Loss |
|
Fair Value
|
|
Unrealized
Loss |
||||||||
|
(in thousands)
|
||||||||||||||
Held-to-maturity:
|
|
|
|
|
|
|
|
||||||||
AgVantage
|
$
|
358,575
|
|
|
$
|
(3,175
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Farmer Mac Guaranteed USDA Securities
|
30,575
|
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
||||
USDA Securities
|
1,816,366
|
|
|
(95,582
|
)
|
|
97,270
|
|
|
(8
|
)
|
||||
Total held-to-maturity
|
$
|
2,205,516
|
|
|
$
|
(98,996
|
)
|
|
$
|
97,270
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
AgVantage
|
$
|
982,538
|
|
|
$
|
(18,482
|
)
|
|
$
|
1,131,930
|
|
|
$
|
(45,452
|
)
|
|
As of March 31, 2017
|
|||||||||
|
Available-for-Sale Securities
|
|||||||||
|
Amortized
Cost |
|
Fair Value
|
|
Weighted-
Average Yield |
|||||
|
(dollars in thousands)
|
|||||||||
Due within one year
|
$
|
541,181
|
|
|
$
|
542,582
|
|
|
1.65
|
%
|
Due after one year through five years
|
2,852,298
|
|
|
2,866,585
|
|
|
1.95
|
%
|
||
Due after five years through ten years
|
838,374
|
|
|
839,129
|
|
|
2.61
|
%
|
||
Due after ten years
|
1,034,671
|
|
|
994,750
|
|
|
1.66
|
%
|
||
Total
|
$
|
5,266,524
|
|
|
$
|
5,243,046
|
|
|
1.97
|
%
|
|
As of March 31, 2017
|
|||||||||
|
Held-to-Maturity Securities
|
|||||||||
|
Amortized
Cost |
|
Fair Value
|
|
Weighted-
Average Yield |
|||||
|
(dollars in thousands)
|
|||||||||
Due within one year
|
$
|
275,696
|
|
|
$
|
276,572
|
|
|
2.21
|
%
|
Due after one year through five years
|
829,335
|
|
|
829,694
|
|
|
2.16
|
%
|
||
Due after five years through ten years
|
179,240
|
|
|
174,029
|
|
|
2.97
|
%
|
||
Due after ten years
|
1,816,237
|
|
|
1,757,467
|
|
|
3.29
|
%
|
||
Total
|
$
|
3,100,508
|
|
|
$
|
3,037,762
|
|
|
2.86
|
%
|
4.
|
FINANCIAL DERIVATIVES
|
|
As of March 31, 2017
|
|||||||||||||||||||
|
|
|
Fair Value
|
|
Weighted-
Average Pay Rate |
|
Weighted-
Average Receive Rate |
|
Weighted-
Average Forward Price |
|
Weighted-
Average Remaining Life (in years) |
|||||||||
|
Notional Amount
|
|
Asset
|
|
(Liability)
|
|
|
|
|
|||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
$
|
1,808,581
|
|
|
$
|
1,292
|
|
|
$
|
(9,133
|
)
|
|
1.77%
|
|
1.04%
|
|
|
|
4.75
|
|
Receive fixed non-callable
|
860,200
|
|
|
11
|
|
|
(1,815
|
)
|
|
0.98%
|
|
1.39%
|
|
|
|
3.27
|
||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
221,000
|
|
|
843
|
|
|
(290
|
)
|
|
2.28%
|
|
1.34%
|
|
|
|
7.13
|
||||
No hedge designation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
433,406
|
|
|
400
|
|
|
(20,912
|
)
|
|
4.06%
|
|
1.04%
|
|
|
|
5.69
|
||||
Receive fixed non-callable
|
4,262,401
|
|
|
69
|
|
|
—
|
|
|
0.82%
|
|
0.87%
|
|
|
|
0.79
|
||||
Receive fixed callable
|
30,000
|
|
|
—
|
|
|
(10
|
)
|
|
0.97%
|
|
0.58%
|
|
|
|
0.08
|
||||
Basis swaps
|
865,000
|
|
|
51
|
|
|
(15
|
)
|
|
0.93%
|
|
0.99%
|
|
|
|
0.93
|
||||
Treasury futures
|
12,800
|
|
|
8
|
|
|
—
|
|
|
|
|
|
|
124.62
|
|
|
|
|||
Credit valuation adjustment
|
|
|
—
|
|
|
121
|
|
|
|
|
|
|
|
|
|
|||||
Total financial derivatives
|
$
|
8,493,388
|
|
|
$
|
2,674
|
|
|
$
|
(32,054
|
)
|
|
|
|
|
|
|
|
|
|
Collateral pledged
|
|
|
—
|
|
|
25,075
|
|
|
|
|
|
|
|
|
|
|||||
Net amount
|
|
|
$
|
2,674
|
|
|
$
|
(6,979
|
)
|
|
|
|
|
|
|
|
|
|
As of December 31, 2016
|
|||||||||||||||||||
|
|
|
Fair Value
|
|
Weighted-
Average Pay Rate |
|
Weighted-
Average Receive Rate |
|
Weighted-
Average Forward Price |
|
Weighted-
Average Remaining Life (in years) |
|||||||||
|
Notional Amount
|
|
Asset
|
|
(Liability)
|
|
|
|
|
|||||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Fair value hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
$
|
1,642,609
|
|
|
$
|
18,508
|
|
|
$
|
(18,909
|
)
|
|
1.73%
|
|
0.90%
|
|
|
|
4.70
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
207,000
|
|
|
3,706
|
|
|
(955
|
)
|
|
2.18%
|
|
1.11%
|
|
|
|
7.28
|
||||
No hedge designation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Pay fixed non-callable
|
435,827
|
|
|
339
|
|
|
(32,951
|
)
|
|
4.06%
|
|
0.89%
|
|
|
|
5.90
|
||||
Receive fixed non-callable
|
4,991,821
|
|
|
607
|
|
|
(5,064
|
)
|
|
0.74%
|
|
0.75%
|
|
|
|
0.60
|
||||
Receive fixed callable
|
30,000
|
|
|
—
|
|
|
(33
|
)
|
|
0.82%
|
|
0.58%
|
|
|
|
0.33
|
||||
Basis swaps
|
765,000
|
|
|
36
|
|
|
(243
|
)
|
|
0.78%
|
|
0.78%
|
|
|
|
0.87
|
||||
Treasury futures
|
28,000
|
|
|
—
|
|
|
(155
|
)
|
|
|
|
|
|
123.73
|
|
|
|
|||
Credit valuation adjustment
|
|
|
(14
|
)
|
|
158
|
|
|
|
|
|
|
|
|
|
|||||
Total financial derivatives
|
$
|
8,100,257
|
|
|
$
|
23,182
|
|
|
$
|
(58,152
|
)
|
|
|
|
|
|
|
|
|
|
Collateral pledged
|
|
|
—
|
|
|
25,643
|
|
|
|
|
|
|
|
|
|
|||||
Net amount
|
|
|
$
|
23,182
|
|
|
$
|
(32,509
|
)
|
|
|
|
|
|
|
|
|
|
Gains/(losses) on financial derivatives and hedging activities
|
||||||
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Fair value hedges:
|
|
|
|
||||
Interest rate swaps
(1)
|
$
|
1,526
|
|
|
$
|
(26,898
|
)
|
Hedged items
|
(5,404
|
)
|
|
29,787
|
|
||
Gains on fair value hedges
|
(3,878
|
)
|
|
2,889
|
|
||
Cash flow hedges:
|
|
|
|
||||
Loss recognized (ineffective portion)
|
(29
|
)
|
|
(149
|
)
|
||
Losses on cash flow hedges
|
(29
|
)
|
|
(149
|
)
|
||
No hedge designation:
|
|
|
|
||||
Interest rate swaps
|
6,684
|
|
|
(8,142
|
)
|
||
Agency forwards
|
(399
|
)
|
|
(877
|
)
|
||
Treasury futures
|
108
|
|
|
(503
|
)
|
||
Gains/(losses) on financial derivatives not designated in hedging relationships
|
6,393
|
|
|
(9,522
|
)
|
||
Gains/(losses) on financial derivatives and hedging activities
|
$
|
2,486
|
|
|
$
|
(6,782
|
)
|
(1)
|
Included in the assessment of hedge effectiveness as of
March 31, 2017
, but excluded from the amounts in the table, were gains of
$3.6 million
for the three months ended
March 31, 2017
, attributable to the fair value of the swaps at the inception of the hedging relationship. Accordingly, the amounts recognized as hedge ineffectiveness for three months ended
March 31, 2017
were losses of
$0.3 million
. The comparable amounts as of
March 31, 2016
were losses of $
1.5 million
for the three months ended
March 31, 2016
, attributable to the fair value of the swaps at the inception of the hedging relationship and, accordingly, gains of
$1.4 million
for the three months ended
March 31, 2016
, attributable to hedge ineffectiveness.
|
5.
|
LOANS AND ALLOWANCE FOR LOSSES
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||||||||||
|
Unsecuritized
|
|
In Consolidated Trusts
|
|
Total
|
|
Unsecuritized
|
|
In Consolidated Trusts
|
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Farm & Ranch
|
$
|
2,434,436
|
|
|
$
|
1,208,950
|
|
|
$
|
3,643,386
|
|
|
$
|
2,381,488
|
|
|
$
|
1,132,966
|
|
|
$
|
3,514,454
|
|
Rural Utilities
|
999,130
|
|
|
—
|
|
|
999,130
|
|
|
999,512
|
|
|
—
|
|
|
999,512
|
|
||||||
Total unpaid principal balance
(1)
|
3,433,566
|
|
|
1,208,950
|
|
|
4,642,516
|
|
|
3,381,000
|
|
|
1,132,966
|
|
|
4,513,966
|
|
||||||
Unamortized premiums, discounts and other cost basis adjustments
|
(1,475
|
)
|
|
—
|
|
|
(1,475
|
)
|
|
(1,116
|
)
|
|
—
|
|
|
(1,116
|
)
|
||||||
Total loans
|
3,432,091
|
|
|
1,208,950
|
|
|
4,641,041
|
|
|
3,379,884
|
|
|
1,132,966
|
|
|
4,512,850
|
|
||||||
Allowance for loan losses
|
(4,710
|
)
|
|
(1,101
|
)
|
|
(5,811
|
)
|
|
(4,437
|
)
|
|
(978
|
)
|
|
(5,415
|
)
|
||||||
Total loans, net of allowance
|
$
|
3,427,381
|
|
|
$
|
1,207,849
|
|
|
$
|
4,635,230
|
|
|
$
|
3,375,447
|
|
|
$
|
1,131,988
|
|
|
$
|
4,507,435
|
|
(1)
|
Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business.
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||
|
Allowance
for Loan Losses |
|
Reserve
for Losses |
|
Total
Allowance for Losses |
|
Allowance
for Loan Losses |
|
Reserve
for Losses |
|
Total
Allowance for Losses |
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Beginning Balance
|
$
|
5,415
|
|
|
$
|
2,020
|
|
|
$
|
7,435
|
|
|
$
|
4,480
|
|
|
$
|
2,083
|
|
|
$
|
6,563
|
|
Provision for/(release of) losses
|
637
|
|
|
(193
|
)
|
|
444
|
|
|
49
|
|
|
14
|
|
|
63
|
|
||||||
Charge-offs
|
(241
|
)
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ending Balance
|
$
|
5,811
|
|
|
$
|
1,827
|
|
|
$
|
7,638
|
|
|
$
|
4,529
|
|
|
$
|
2,097
|
|
|
$
|
6,626
|
|
|
March 31, 2017
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning Balance
|
$
|
3,365
|
|
|
$
|
1,723
|
|
|
$
|
1,375
|
|
|
$
|
405
|
|
|
$
|
533
|
|
|
$
|
34
|
|
|
$
|
7,435
|
|
Provision for/(release of) losses
|
425
|
|
|
147
|
|
|
17
|
|
|
(81
|
)
|
|
(61
|
)
|
|
(3
|
)
|
|
444
|
|
|||||||
Charge-offs
|
(228
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(241
|
)
|
|||||||
Ending Balance
|
$
|
3,562
|
|
|
$
|
1,870
|
|
|
$
|
1,379
|
|
|
$
|
324
|
|
|
$
|
472
|
|
|
$
|
31
|
|
|
$
|
7,638
|
|
|
March 31, 2016
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Beginning Balance
|
$
|
2,791
|
|
|
$
|
931
|
|
|
$
|
1,781
|
|
|
$
|
408
|
|
|
$
|
649
|
|
|
$
|
3
|
|
|
$
|
6,563
|
|
Provision for/(release of) losses
|
101
|
|
|
6
|
|
|
(18
|
)
|
|
36
|
|
|
(62
|
)
|
|
—
|
|
|
63
|
|
|||||||
Ending Balance
|
$
|
2,892
|
|
|
$
|
937
|
|
|
$
|
1,763
|
|
|
$
|
444
|
|
|
$
|
587
|
|
|
$
|
3
|
|
|
$
|
6,626
|
|
|
As of March 31, 2017
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Ending Balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,144,328
|
|
|
$
|
594,950
|
|
|
$
|
573,922
|
|
|
$
|
208,401
|
|
|
$
|
13,640
|
|
|
$
|
8,901
|
|
|
$
|
3,544,142
|
|
Off-balance sheet
|
1,253,209
|
|
|
428,436
|
|
|
712,498
|
|
|
142,997
|
|
|
37,841
|
|
|
4,381
|
|
|
2,579,362
|
|
|||||||
Total
|
$
|
3,397,537
|
|
|
$
|
1,023,386
|
|
|
$
|
1,286,420
|
|
|
$
|
351,398
|
|
|
$
|
51,481
|
|
|
$
|
13,282
|
|
|
$
|
6,123,504
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
53,568
|
|
|
$
|
30,980
|
|
|
$
|
7,396
|
|
|
$
|
7,300
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
99,244
|
|
Off-balance sheet
|
10,078
|
|
|
2,268
|
|
|
4,666
|
|
|
707
|
|
|
—
|
|
|
—
|
|
|
17,719
|
|
|||||||
Total
|
$
|
63,646
|
|
|
$
|
33,248
|
|
|
$
|
12,062
|
|
|
$
|
8,007
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,963
|
|
Total Farm & Ranch loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,197,896
|
|
|
$
|
625,930
|
|
|
$
|
581,318
|
|
|
$
|
215,701
|
|
|
$
|
13,640
|
|
|
$
|
8,901
|
|
|
$
|
3,643,386
|
|
Off-balance sheet
|
1,263,287
|
|
|
430,704
|
|
|
717,164
|
|
|
143,704
|
|
|
37,841
|
|
|
4,381
|
|
|
2,597,081
|
|
|||||||
Total
|
$
|
3,461,183
|
|
|
$
|
1,056,634
|
|
|
$
|
1,298,482
|
|
|
$
|
359,405
|
|
|
$
|
51,481
|
|
|
$
|
13,282
|
|
|
$
|
6,240,467
|
|
Allowance for Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
1,876
|
|
|
$
|
667
|
|
|
$
|
765
|
|
|
$
|
155
|
|
|
$
|
21
|
|
|
$
|
26
|
|
|
$
|
3,510
|
|
Off-balance sheet
|
446
|
|
|
260
|
|
|
217
|
|
|
33
|
|
|
451
|
|
|
5
|
|
|
1,412
|
|
|||||||
Total
|
$
|
2,322
|
|
|
$
|
927
|
|
|
$
|
982
|
|
|
$
|
188
|
|
|
$
|
472
|
|
|
$
|
31
|
|
|
$
|
4,922
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
962
|
|
|
$
|
936
|
|
|
$
|
275
|
|
|
$
|
128
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,301
|
|
Off-balance sheet
|
278
|
|
|
7
|
|
|
122
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
415
|
|
|||||||
Total
|
$
|
1,240
|
|
|
$
|
943
|
|
|
$
|
397
|
|
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,716
|
|
Total Farm & Ranch loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,838
|
|
|
$
|
1,603
|
|
|
$
|
1,040
|
|
|
$
|
283
|
|
|
$
|
21
|
|
|
$
|
26
|
|
|
$
|
5,811
|
|
Off-balance sheet
|
724
|
|
|
267
|
|
|
339
|
|
|
41
|
|
|
451
|
|
|
5
|
|
|
1,827
|
|
|||||||
Total
|
$
|
3,562
|
|
|
$
|
1,870
|
|
|
$
|
1,379
|
|
|
$
|
324
|
|
|
$
|
472
|
|
|
$
|
31
|
|
|
$
|
7,638
|
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Ending Balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,115,450
|
|
|
$
|
569,360
|
|
|
$
|
537,859
|
|
|
$
|
183,660
|
|
|
$
|
11,545
|
|
|
$
|
8,894
|
|
|
$
|
3,426,768
|
|
Off-balance sheet
|
1,241,851
|
|
|
437,575
|
|
|
752,473
|
|
|
131,889
|
|
|
36,506
|
|
|
4,503
|
|
|
2,604,797
|
|
|||||||
Total
|
$
|
3,357,301
|
|
|
$
|
1,006,935
|
|
|
$
|
1,290,332
|
|
|
$
|
315,549
|
|
|
$
|
48,051
|
|
|
$
|
13,397
|
|
|
$
|
6,031,565
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
41,648
|
|
|
$
|
27,770
|
|
|
$
|
10,658
|
|
|
$
|
7,610
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
87,686
|
|
Off-balance sheet
|
11,549
|
|
|
2,735
|
|
|
4,854
|
|
|
915
|
|
|
—
|
|
|
—
|
|
|
20,053
|
|
|||||||
Total
|
$
|
53,197
|
|
|
$
|
30,505
|
|
|
$
|
15,512
|
|
|
$
|
8,525
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107,739
|
|
Total Farm & Ranch loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,157,098
|
|
|
$
|
597,130
|
|
|
$
|
548,517
|
|
|
$
|
191,270
|
|
|
$
|
11,545
|
|
|
$
|
8,894
|
|
|
$
|
3,514,454
|
|
Off-balance sheet
|
1,253,400
|
|
|
440,310
|
|
|
757,327
|
|
|
132,804
|
|
|
36,506
|
|
|
4,503
|
|
|
2,624,850
|
|
|||||||
Total
|
$
|
3,410,498
|
|
|
$
|
1,037,440
|
|
|
$
|
1,305,844
|
|
|
$
|
324,074
|
|
|
$
|
48,051
|
|
|
$
|
13,397
|
|
|
$
|
6,139,304
|
|
Allowance for Losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Collectively evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,000
|
|
|
$
|
652
|
|
|
$
|
735
|
|
|
$
|
193
|
|
|
$
|
22
|
|
|
$
|
28
|
|
|
$
|
3,630
|
|
Off-balance sheet
|
420
|
|
|
281
|
|
|
241
|
|
|
54
|
|
|
511
|
|
|
6
|
|
|
1,513
|
|
|||||||
Total
|
$
|
2,420
|
|
|
$
|
933
|
|
|
$
|
976
|
|
|
$
|
247
|
|
|
$
|
533
|
|
|
$
|
34
|
|
|
$
|
5,143
|
|
Individually evaluated for impairment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
613
|
|
|
$
|
770
|
|
|
$
|
270
|
|
|
$
|
132
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,785
|
|
Off-balance sheet
|
332
|
|
|
20
|
|
|
129
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|
507
|
|
|||||||
Total
|
$
|
945
|
|
|
$
|
790
|
|
|
$
|
399
|
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,292
|
|
Total Farm & Ranch loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet
|
$
|
2,613
|
|
|
$
|
1,422
|
|
|
$
|
1,005
|
|
|
$
|
325
|
|
|
$
|
22
|
|
|
$
|
28
|
|
|
$
|
5,415
|
|
Off-balance sheet
|
752
|
|
|
301
|
|
|
370
|
|
|
80
|
|
|
511
|
|
|
6
|
|
|
2,020
|
|
|||||||
Total
|
$
|
3,365
|
|
|
$
|
1,723
|
|
|
$
|
1,375
|
|
|
$
|
405
|
|
|
$
|
533
|
|
|
$
|
34
|
|
|
$
|
7,435
|
|
|
As of March 31, 2017
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Impaired Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
With no specific allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Recorded investment
|
$
|
7,603
|
|
|
$
|
3,665
|
|
|
$
|
791
|
|
|
$
|
1,965
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,024
|
|
Unpaid principal balance
|
7,619
|
|
|
3,669
|
|
|
791
|
|
|
1,970
|
|
|
—
|
|
|
—
|
|
|
14,049
|
|
|||||||
With a specific allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Recorded investment
(1)
|
55,927
|
|
|
29,515
|
|
|
11,149
|
|
|
6,026
|
|
|
—
|
|
|
—
|
|
|
102,617
|
|
|||||||
Unpaid principal balance
|
56,027
|
|
|
29,579
|
|
|
11,271
|
|
|
6,037
|
|
|
—
|
|
|
—
|
|
|
102,914
|
|
|||||||
Associated allowance
|
1,240
|
|
|
943
|
|
|
397
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
2,716
|
|
|||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Recorded investment
|
63,530
|
|
|
33,180
|
|
|
11,940
|
|
|
7,991
|
|
|
—
|
|
|
—
|
|
|
116,641
|
|
|||||||
Unpaid principal balance
|
63,646
|
|
|
33,248
|
|
|
12,062
|
|
|
8,007
|
|
|
—
|
|
|
—
|
|
|
116,963
|
|
|||||||
Associated allowance
|
1,240
|
|
|
943
|
|
|
397
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
2,716
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Recorded investment of loans on nonaccrual status
(2)
|
$
|
17,801
|
|
|
$
|
25,974
|
|
|
$
|
1,941
|
|
|
$
|
4,797
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,513
|
|
(1)
|
Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on
$101.0 million
(
87 percent
) of impaired loans as of
March 31, 2017
, which resulted in a specific allowance of
$2.3 million
.
|
(2)
|
Includes
$1.0 million
of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Impaired Loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
With no specific allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Recorded investment
|
$
|
20,761
|
|
|
$
|
3,683
|
|
|
$
|
1,054
|
|
|
$
|
1,970
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,468
|
|
Unpaid principal balance
|
20,816
|
|
|
3,688
|
|
|
1,055
|
|
|
1,975
|
|
|
—
|
|
|
—
|
|
|
27,534
|
|
|||||||
With a specific allowance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Recorded investment
(1)
|
32,326
|
|
|
26,748
|
|
|
14,322
|
|
|
6,535
|
|
|
—
|
|
|
—
|
|
|
79,931
|
|
|||||||
Unpaid principal balance
|
32,381
|
|
|
26,817
|
|
|
14,457
|
|
|
6,550
|
|
|
—
|
|
|
—
|
|
|
80,205
|
|
|||||||
Associated allowance
|
945
|
|
|
790
|
|
|
399
|
|
|
158
|
|
|
—
|
|
|
—
|
|
|
2,292
|
|
|||||||
Total:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Recorded investment
|
53,087
|
|
|
30,431
|
|
|
15,376
|
|
|
8,505
|
|
|
—
|
|
|
—
|
|
|
107,399
|
|
|||||||
Unpaid principal balance
|
53,197
|
|
|
30,505
|
|
|
15,512
|
|
|
8,525
|
|
|
—
|
|
|
—
|
|
|
107,739
|
|
|||||||
Associated allowance
|
945
|
|
|
790
|
|
|
399
|
|
|
158
|
|
|
—
|
|
|
—
|
|
|
2,292
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Recorded investment of loans on nonaccrual status
(2)
|
$
|
13,405
|
|
|
$
|
10,785
|
|
|
$
|
2,696
|
|
|
$
|
5,256
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,142
|
|
(1)
|
Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on
$76.5 million
(
71 percent
) of impaired loans as of
December 31, 2016
, which resulted in a specific allowance of
$1.6 million
.
|
(2)
|
Includes
$12.4 million
of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.
|
|
March 31, 2017
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average recorded investment in impaired loans
|
$
|
58,309
|
|
|
$
|
31,806
|
|
|
$
|
13,658
|
|
|
$
|
8,248
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
112,021
|
|
Income recognized on impaired loans
|
302
|
|
|
152
|
|
|
177
|
|
|
103
|
|
|
—
|
|
|
—
|
|
|
734
|
|
|
March 31, 2016
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Average recorded investment in impaired loans
|
$
|
23,555
|
|
|
$
|
23,648
|
|
|
$
|
16,318
|
|
|
$
|
8,567
|
|
|
$
|
4,919
|
|
|
$
|
—
|
|
|
$
|
77,007
|
|
Income recognized on impaired loans
|
2
|
|
|
44
|
|
|
15
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
133
|
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Unpaid principal balance at acquisition date:
|
|
|
|
||||
Loans underlying LTSPCs
|
$
|
311
|
|
|
$
|
1,267
|
|
Loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities)
|
—
|
|
|
148
|
|
||
Total unpaid principal balance at acquisition date
|
311
|
|
|
1,415
|
|
||
Contractually required payments receivable
|
311
|
|
|
1,435
|
|
||
Impairment recognized subsequent to acquisition
|
—
|
|
|
—
|
|
||
Recovery/release of allowance for all outstanding acquired defaulted loans
|
14
|
|
|
4
|
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Outstanding balance
|
$
|
14,083
|
|
|
$
|
14,669
|
|
Carrying amount
|
12,765
|
|
|
13,069
|
|
|
90-Day Delinquencies
(1)
|
|
Net Credit Losses
|
||||||||||||
|
As of
|
|
For the Three Months Ended
|
||||||||||||
|
March 31, 2017
|
|
December 31, 2016
|
|
March 31, 2017
|
|
March 31, 2016
|
||||||||
|
(in thousands)
|
||||||||||||||
On-balance sheet assets:
|
|
|
|
|
|
|
|
||||||||
Farm & Ranch:
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
49,534
|
|
|
$
|
19,757
|
|
|
$
|
246
|
|
|
$
|
39
|
|
Total on-balance sheet
|
$
|
49,534
|
|
|
$
|
19,757
|
|
|
$
|
246
|
|
|
$
|
39
|
|
Off-balance sheet assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Farm & Ranch:
|
|
|
|
|
|
|
|
|
|
|
|||||
LTSPCs
|
$
|
1,273
|
|
|
$
|
1,281
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total off-balance sheet
|
$
|
1,273
|
|
|
$
|
1,281
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
50,807
|
|
|
$
|
21,038
|
|
|
$
|
246
|
|
|
$
|
39
|
|
(1)
|
Includes loans and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are
90 days
or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.
|
|
As of March 31, 2017
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Credit risk profile by internally assigned grade
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
2,104,716
|
|
|
$
|
593,926
|
|
|
$
|
542,790
|
|
|
$
|
206,233
|
|
|
$
|
13,640
|
|
|
$
|
8,901
|
|
|
$
|
3,470,206
|
|
Special mention
(2)
|
39,725
|
|
|
1,024
|
|
|
31,132
|
|
|
2,168
|
|
|
—
|
|
|
—
|
|
|
74,049
|
|
|||||||
Substandard
(3)
|
53,455
|
|
|
30,980
|
|
|
7,396
|
|
|
7,300
|
|
|
—
|
|
|
—
|
|
|
99,131
|
|
|||||||
Total on-balance sheet
|
$
|
2,197,896
|
|
|
$
|
625,930
|
|
|
$
|
581,318
|
|
|
$
|
215,701
|
|
|
$
|
13,640
|
|
|
$
|
8,901
|
|
|
$
|
3,643,386
|
|
Off-Balance Sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
1,204,807
|
|
|
$
|
395,331
|
|
|
$
|
687,070
|
|
|
$
|
138,332
|
|
|
$
|
35,950
|
|
|
$
|
3,805
|
|
|
$
|
2,465,295
|
|
Special mention
(2)
|
26,201
|
|
|
16,475
|
|
|
12,702
|
|
|
4,000
|
|
|
—
|
|
|
14
|
|
|
59,392
|
|
|||||||
Substandard
(3)
|
32,279
|
|
|
18,898
|
|
|
17,392
|
|
|
1,372
|
|
|
1,891
|
|
|
562
|
|
|
72,394
|
|
|||||||
Total off-balance sheet
|
$
|
1,263,287
|
|
|
$
|
430,704
|
|
|
$
|
717,164
|
|
|
$
|
143,704
|
|
|
$
|
37,841
|
|
|
$
|
4,381
|
|
|
$
|
2,597,081
|
|
Total Ending Balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
3,309,523
|
|
|
$
|
989,257
|
|
|
$
|
1,229,860
|
|
|
$
|
344,565
|
|
|
$
|
49,590
|
|
|
$
|
12,706
|
|
|
$
|
5,935,501
|
|
Special mention
(2)
|
65,926
|
|
|
17,499
|
|
|
43,834
|
|
|
6,168
|
|
|
—
|
|
|
14
|
|
|
133,441
|
|
|||||||
Substandard
(3)
|
85,734
|
|
|
49,878
|
|
|
24,788
|
|
|
8,672
|
|
|
1,891
|
|
|
562
|
|
|
171,525
|
|
|||||||
Total
|
$
|
3,461,183
|
|
|
$
|
1,056,634
|
|
|
$
|
1,298,482
|
|
|
$
|
359,405
|
|
|
$
|
51,481
|
|
|
$
|
13,282
|
|
|
$
|
6,240,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commodity analysis of past due loans
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
On-balance sheet
|
$
|
23,484
|
|
|
$
|
20,690
|
|
|
$
|
2,612
|
|
|
$
|
2,748
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,534
|
|
Off-balance sheet
|
880
|
|
|
—
|
|
|
—
|
|
|
393
|
|
|
—
|
|
|
—
|
|
|
1,273
|
|
|||||||
90 days or more past due
|
$
|
24,364
|
|
|
$
|
20,690
|
|
|
$
|
2,612
|
|
|
$
|
3,141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,807
|
|
(1)
|
Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.
|
(2)
|
Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.
|
(3)
|
Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
|
|
As of December 31, 2016
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Credit risk profile by internally assigned grade
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
On-balance sheet:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
2,080,227
|
|
|
$
|
568,221
|
|
|
$
|
504,784
|
|
|
$
|
179,288
|
|
|
$
|
11,545
|
|
|
$
|
8,894
|
|
|
$
|
3,352,959
|
|
Special mention
(2)
|
35,223
|
|
|
1,139
|
|
|
33,075
|
|
|
4,372
|
|
|
—
|
|
|
—
|
|
|
73,809
|
|
|||||||
Substandard
(3)
|
41,648
|
|
|
27,770
|
|
|
10,658
|
|
|
7,610
|
|
|
—
|
|
|
—
|
|
|
87,686
|
|
|||||||
Total on-balance sheet
|
$
|
2,157,098
|
|
|
$
|
597,130
|
|
|
$
|
548,517
|
|
|
$
|
191,270
|
|
|
$
|
11,545
|
|
|
$
|
8,894
|
|
|
$
|
3,514,454
|
|
Off-Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
1,201,144
|
|
|
$
|
403,256
|
|
|
$
|
724,056
|
|
|
$
|
125,440
|
|
|
$
|
34,537
|
|
|
$
|
3,916
|
|
|
$
|
2,492,349
|
|
Special mention
(2)
|
20,422
|
|
|
16,881
|
|
|
15,341
|
|
|
2,344
|
|
|
—
|
|
|
6
|
|
|
54,994
|
|
|||||||
Substandard
(3)
|
31,834
|
|
|
20,173
|
|
|
17,930
|
|
|
5,020
|
|
|
1,969
|
|
|
581
|
|
|
77,507
|
|
|||||||
Total off-balance sheet
|
$
|
1,253,400
|
|
|
$
|
440,310
|
|
|
$
|
757,327
|
|
|
$
|
132,804
|
|
|
$
|
36,506
|
|
|
$
|
4,503
|
|
|
$
|
2,624,850
|
|
Total Ending Balance:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Acceptable
|
$
|
3,281,371
|
|
|
$
|
971,477
|
|
|
$
|
1,228,840
|
|
|
$
|
304,728
|
|
|
$
|
46,082
|
|
|
$
|
12,810
|
|
|
$
|
5,845,308
|
|
Special mention
(2)
|
55,645
|
|
|
18,020
|
|
|
48,416
|
|
|
6,716
|
|
|
—
|
|
|
6
|
|
|
128,803
|
|
|||||||
Substandard
(3)
|
73,482
|
|
|
47,943
|
|
|
28,588
|
|
|
12,630
|
|
|
1,969
|
|
|
581
|
|
|
165,193
|
|
|||||||
Total
|
$
|
3,410,498
|
|
|
$
|
1,037,440
|
|
|
$
|
1,305,844
|
|
|
$
|
324,074
|
|
|
$
|
48,051
|
|
|
$
|
13,397
|
|
|
$
|
6,139,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commodity analysis of past due loans
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
On-balance sheet
|
$
|
13,449
|
|
|
$
|
3,245
|
|
|
$
|
669
|
|
|
$
|
2,394
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,757
|
|
Off-balance sheet
|
373
|
|
|
407
|
|
|
38
|
|
|
463
|
|
|
—
|
|
|
—
|
|
|
1,281
|
|
|||||||
90 days or more past due
|
$
|
13,822
|
|
|
$
|
3,652
|
|
|
$
|
707
|
|
|
$
|
2,857
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,038
|
|
(1)
|
Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.
|
(2)
|
Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.
|
(3)
|
Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
|
|
As of
|
||||||
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
By commodity/collateral type:
|
|
|
|
||||
Crops
|
$
|
3,461,183
|
|
|
$
|
3,410,498
|
|
Permanent plantings
|
1,056,634
|
|
|
1,037,440
|
|
||
Livestock
|
1,298,482
|
|
|
1,305,844
|
|
||
Part-time farm
|
359,405
|
|
|
324,074
|
|
||
Ag. Storage and Processing
|
51,481
|
|
|
48,051
|
|
||
Other
|
13,282
|
|
|
13,397
|
|
||
Total
|
$
|
6,240,467
|
|
|
$
|
6,139,304
|
|
By geographic region
(1)
:
|
|
|
|
|
|
||
Northwest
|
$
|
688,304
|
|
|
$
|
657,403
|
|
Southwest
|
1,796,177
|
|
|
1,791,745
|
|
||
Mid-North
|
2,151,503
|
|
|
2,104,867
|
|
||
Mid-South
|
858,319
|
|
|
837,121
|
|
||
Northeast
|
237,968
|
|
|
229,679
|
|
||
Southeast
|
508,196
|
|
|
518,489
|
|
||
Total
|
$
|
6,240,467
|
|
|
$
|
6,139,304
|
|
By original loan-to-value ratio:
|
|
|
|
|
|
||
0.00% to 40.00%
|
$
|
1,783,420
|
|
|
$
|
1,740,792
|
|
40.01% to 50.00%
|
1,431,980
|
|
|
1,401,630
|
|
||
50.01% to 60.00%
|
1,719,971
|
|
|
1,706,099
|
|
||
60.01% to 70.00%
|
1,064,391
|
|
|
1,086,295
|
|
||
70.01% to 80.00%
|
204,639
|
|
|
180,142
|
|
||
80.01% to 90.00%
|
36,066
|
|
|
24,346
|
|
||
Total
|
$
|
6,240,467
|
|
|
$
|
6,139,304
|
|
(1)
|
Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).
|
6.
|
GUARANTEES AND LONG-TERM STANDBY PURCHASE COMMITMENTS
|
Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
|
|||||||
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||
|
(in thousands)
|
||||||
Farm & Ranch:
|
|
|
|
||||
Guaranteed Securities
|
$
|
387,272
|
|
|
$
|
415,441
|
|
USDA Guarantees:
|
|
|
|
|
|
||
Farmer Mac Guaranteed USDA Securities
|
135,334
|
|
|
103,976
|
|
||
Institutional Credit:
|
|
|
|
|
|
||
AgVantage Securities
|
983,214
|
|
|
983,214
|
|
||
Revolving floating rate AgVantage facility
(1)
|
300,000
|
|
|
300,000
|
|
||
Total off-balance sheet Farmer Mac Guaranteed Securities
|
$
|
1,805,820
|
|
|
$
|
1,802,631
|
|
(1)
|
Relates to a revolving floating rate AgVantage facility subject to specified contractual terms. Farmer Mac receives a fixed fee based on the full dollar amount of the facility.
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Proceeds from new securitizations
|
$
|
149,607
|
|
|
$
|
139,561
|
|
Guarantee fees received
|
488
|
|
|
561
|
|
||
Purchases of assets from the trusts
|
—
|
|
|
(1,267
|
)
|
7.
|
EQUITY
|
•
|
Statutory minimum capital requirement – Farmer Mac's statutory minimum capital level is an amount of core capital (stockholders' equity less accumulated other comprehensive income) equal to the sum of
2.75 percent
of Farmer Mac's aggregate on-balance sheet assets, as calculated for regulatory purposes, plus
0.75 percent
of the aggregate off-balance sheet obligations of Farmer Mac, specifically including:
|
◦
|
the unpaid principal balance of outstanding Farmer Mac Guaranteed Securities;
|
◦
|
instruments issued or guaranteed by Farmer Mac that are substantially equivalent to Farmer Mac Guaranteed Securities, including LTSPCs; and
|
◦
|
other off-balance sheet obligations of Farmer Mac.
|
•
|
Statutory critical capital requirement – Farmer Mac's critical capital level is an amount of core capital equal to
50 percent
of the total minimum capital requirement at that time.
|
•
|
Risk-based capital requirement – Farmer Mac's charter directs FCA to establish a risk-based capital stress test for Farmer Mac, using specified stress-test parameters.
|
8.
|
FAIR VALUE DISCLOSURES
|
Assets and Liabilities Measured at Fair Value as of March 31, 2017
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
Recurring:
|
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Investment Securities:
|
|
|
|
|
|
|
|
||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,124
|
|
|
$
|
18,124
|
|
Floating rate asset-backed securities
|
—
|
|
|
40,370
|
|
|
—
|
|
|
40,370
|
|
||||
Floating rate corporate debt securities
|
—
|
|
|
10,060
|
|
|
—
|
|
|
10,060
|
|
||||
Floating rate Government/GSE guaranteed mortgage-backed securities
|
—
|
|
|
1,344,690
|
|
|
—
|
|
|
1,344,690
|
|
||||
Fixed rate GSE guaranteed mortgage-backed securities
|
—
|
|
|
558
|
|
|
4,819
|
|
|
5,377
|
|
||||
Floating rate GSE subordinated debt
|
—
|
|
|
67,576
|
|
|
—
|
|
|
67,576
|
|
||||
Fixed rate senior agency debt
|
—
|
|
|
187,065
|
|
|
—
|
|
|
187,065
|
|
||||
Fixed rate U.S. Treasuries
|
805,982
|
|
|
—
|
|
|
—
|
|
|
805,982
|
|
||||
Total Investment Securities
|
805,982
|
|
|
1,650,319
|
|
|
22,943
|
|
|
2,479,244
|
|
||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
AgVantage
|
—
|
|
|
—
|
|
|
5,243,046
|
|
|
5,243,046
|
|
||||
Total Farmer Mac Guaranteed Securities
|
—
|
|
|
—
|
|
|
5,243,046
|
|
|
5,243,046
|
|
||||
USDA Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Trading
|
—
|
|
|
—
|
|
|
18,602
|
|
|
18,602
|
|
||||
Total USDA Securities
|
—
|
|
|
—
|
|
|
18,602
|
|
|
18,602
|
|
||||
Financial derivatives
|
8
|
|
|
2,666
|
|
|
—
|
|
|
2,674
|
|
||||
Total Assets at fair value
|
$
|
805,990
|
|
|
$
|
1,652,985
|
|
|
$
|
5,284,591
|
|
|
$
|
7,743,566
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial derivatives
|
$
|
—
|
|
|
$
|
32,054
|
|
|
$
|
—
|
|
|
$
|
32,054
|
|
Total Liabilities at fair value
|
$
|
—
|
|
|
$
|
32,054
|
|
|
$
|
—
|
|
|
$
|
32,054
|
|
Non-recurring:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loans held for investment
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,260
|
|
|
$
|
1,260
|
|
REO
|
—
|
|
|
—
|
|
|
4,978
|
|
|
4,978
|
|
||||
Total Non-recurring Assets at fair value
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,238
|
|
|
$
|
6,238
|
|
Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2017
|
|||||||||||||||||||||||||||||||
|
Beginning
Balance |
|
Transfers in
|
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Realized and
Unrealized Gains/(Losses) included in Income |
|
Unrealized
Gains/(Losses) included in Other Comprehe -nsive Income |
|
Ending
Balance |
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
17,730
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
394
|
|
|
$
|
18,124
|
|
|
Fixed rate GSE guaranteed mortgage-backed securities
|
—
|
|
|
7,041
|
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
(2,110
|
)
|
|
4,819
|
|
||||||||
Total available-for-sale
|
17,730
|
|
|
7,041
|
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
(1,716
|
)
|
|
22,943
|
|
||||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
AgVantage
|
4,853,685
|
|
|
—
|
|
|
539,527
|
|
|
—
|
|
|
(161,907
|
)
|
|
(3,215
|
)
|
|
14,956
|
|
|
5,243,046
|
|
||||||||
Total available-for-sale
|
4,853,685
|
|
|
—
|
|
|
539,527
|
|
|
—
|
|
|
(161,907
|
)
|
|
(3,215
|
)
|
|
14,956
|
|
|
5,243,046
|
|
||||||||
USDA Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Available-for-sale
|
—
|
|
|
—
|
|
|
32,589
|
|
|
(32,589
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Trading
(1)
|
20,388
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,704
|
)
|
|
(82
|
)
|
|
—
|
|
|
18,602
|
|
||||||||
Total USDA Securities
|
20,388
|
|
|
—
|
|
|
32,589
|
|
|
(32,589
|
)
|
|
(1,704
|
)
|
|
(82
|
)
|
|
—
|
|
|
18,602
|
|
||||||||
Total Assets at fair value
|
$
|
4,891,803
|
|
|
$
|
7,041
|
|
|
$
|
572,116
|
|
|
$
|
(32,589
|
)
|
|
$
|
(163,723
|
)
|
|
$
|
(3,297
|
)
|
|
$
|
13,240
|
|
|
$
|
5,284,591
|
|
(1)
|
Includes unrealized losses of
$44,000
attributable to assets still held as of
March 31, 2017
that are recorded in "
(Losses)/gains on trading securities
."
|
Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2016
|
|||||||||||||||||||||||||||
|
Beginning
Balance |
|
Purchases
|
|
Sales
|
|
Settlements
|
|
Realized and
Unrealized (Losses)/Gains included in Income |
|
Unrealized
Gains/(Losses) included in Other Comprehen-sive Income |
|
Ending
Balance |
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Recurring:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Investment Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
$
|
44,924
|
|
|
$
|
—
|
|
|
$
|
(26,806
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
(394
|
)
|
|
$
|
17,730
|
|
Total available-for-sale
|
44,924
|
|
|
—
|
|
|
(26,806
|
)
|
|
—
|
|
|
6
|
|
|
(394
|
)
|
|
17,730
|
|
|||||||
Trading:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Floating rate asset-backed securities
(1)
|
491
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
98
|
|
|
—
|
|
|
383
|
|
|||||||
Total trading
|
491
|
|
|
—
|
|
|
—
|
|
|
(206
|
)
|
|
98
|
|
|
—
|
|
|
383
|
|
|||||||
Total Investment Securities
|
45,415
|
|
|
—
|
|
|
(26,806
|
)
|
|
(206
|
)
|
|
104
|
|
|
(394
|
)
|
|
18,113
|
|
|||||||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
AgVantage
|
4,121,244
|
|
|
915,531
|
|
|
—
|
|
|
(512,530
|
)
|
|
24,298
|
|
|
(13,733
|
)
|
|
4,534,810
|
|
|||||||
Farmer Mac Guaranteed USDA Securities
|
31,361
|
|
|
—
|
|
|
—
|
|
|
(498
|
)
|
|
—
|
|
|
(169
|
)
|
|
30,694
|
|
|||||||
Total Farmer Mac Guaranteed Securities
|
4,152,605
|
|
|
915,531
|
|
|
—
|
|
|
(513,028
|
)
|
|
24,298
|
|
|
(13,902
|
)
|
|
4,565,504
|
|
|||||||
USDA Securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Available-for-sale
|
1,888,344
|
|
|
98,974
|
|
|
(3,648
|
)
|
|
(84,193
|
)
|
|
—
|
|
|
8,537
|
|
|
1,908,014
|
|
|||||||
Trading
(2)
|
28,975
|
|
|
—
|
|
|
—
|
|
|
(2,365
|
)
|
|
259
|
|
|
—
|
|
|
26,869
|
|
|||||||
Total USDA Securities
|
1,917,319
|
|
|
98,974
|
|
|
(3,648
|
)
|
|
(86,558
|
)
|
|
259
|
|
|
8,537
|
|
|
1,934,883
|
|
|||||||
Total Assets at fair value
|
$
|
6,115,339
|
|
|
$
|
1,014,505
|
|
|
$
|
(30,454
|
)
|
|
$
|
(599,792
|
)
|
|
$
|
24,661
|
|
|
$
|
(5,759
|
)
|
|
$
|
6,518,500
|
|
(1)
|
Unrealized gains are attributable to assets still held as of
March 31, 2016
and are recorded in "
(Losses)/gains on trading securities
."
|
(2)
|
Includes unrealized gains of
$0.2 million
attributable to assets still held as of
March 31, 2016
that are recorded in "
(Losses)/gains on trading securities
."
|
|
|
As of March 31, 2017
|
||||||||
Financial Instruments
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Weighted-Average)
|
||
|
|
(in thousands)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||
Investment securities:
|
|
|
|
|
|
|
|
|
||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
|
$
|
18,124
|
|
|
Indicative bids
|
|
Range of broker quotes
|
|
92.0% - 92.0% (92.0%)
|
Fixed rate GSE guaranteed mortgage-backed securities
|
|
$
|
4,819
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.4%
|
|
|
|
|
|
|
CPR
|
|
0 %
|
||
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
||
AgVantage
|
|
$
|
5,243,046
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
1.7% - 3.3% (2.0%)
|
|
|
|
|
|
|
|
|
|
||
USDA Securities
|
|
$
|
18,602
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.7% - 5.3% (5.0%)
|
|
|
|
|
|
|
CPR
|
|
9% - 19% (17%)
|
|
|
As of December 31, 2016
|
||||||||
Financial Instruments
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Weighted-Average)
|
||
|
|
(in thousands)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||
Investment securities:
|
|
|
|
|
|
|
|
|
||
Floating rate auction-rate certificates backed by Government guaranteed student loans
|
|
$
|
17,730
|
|
|
Indicative bids
|
|
Range of broker quotes
|
|
90.0% - 90.0% (90.0%)
|
Farmer Mac Guaranteed Securities:
|
|
|
|
|
|
|
|
|
||
AgVantage
|
|
$
|
4,853,685
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
1.5% - 3.3% (1.9%)
|
|
|
|
|
|
|
|
|
|
||
USDA Securities
|
|
$
|
20,388
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
4.0% - 5.3% (5.0%)
|
|
|
|
|
|
|
CPR
|
|
13% - 18% (17%)
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||
|
Fair Value
|
|
Carrying
Amount |
|
Fair Value
|
|
Carrying
Amount |
||||||||
|
(in thousands)
|
||||||||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
313,641
|
|
|
$
|
313,641
|
|
|
$
|
265,229
|
|
|
$
|
265,229
|
|
Investment securities
|
2,479,244
|
|
|
2,479,244
|
|
|
2,515,851
|
|
|
2,515,851
|
|
||||
Farmer Mac Guaranteed Securities
|
6,321,194
|
|
|
6,317,732
|
|
|
6,006,694
|
|
|
6,002,916
|
|
||||
USDA Securities
|
1,978,216
|
|
|
2,044,424
|
|
|
1,934,023
|
|
|
2,029,613
|
|
||||
Loans
|
4,663,885
|
|
|
4,635,230
|
|
|
4,481,019
|
|
|
4,507,435
|
|
||||
Financial derivatives
|
2,674
|
|
|
2,674
|
|
|
23,182
|
|
|
23,182
|
|
||||
Guarantee and commitment fees receivable:
|
|
|
|
|
|
|
|
||||||||
LTSPCs
|
34,137
|
|
|
32,926
|
|
|
34,720
|
|
|
32,656
|
|
||||
Farmer Mac Guaranteed Securities
|
5,791
|
|
|
5,822
|
|
|
6,197
|
|
|
6,215
|
|
||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Notes payable:
|
|
|
|
|
|
|
|
||||||||
Due within one year
|
7,613,484
|
|
|
7,616,431
|
|
|
8,439,515
|
|
|
8,440,123
|
|
||||
Due after one year
|
6,345,661
|
|
|
6,300,750
|
|
|
5,260,497
|
|
|
5,222,977
|
|
||||
Debt securities of consolidated trusts held by third parties
|
1,199,226
|
|
|
1,212,792
|
|
|
1,107,513
|
|
|
1,142,704
|
|
||||
Financial derivatives
|
32,054
|
|
|
32,054
|
|
|
58,152
|
|
|
58,152
|
|
||||
Guarantee and commitment obligations:
|
|
|
|
|
|
|
|
||||||||
LTSPCs
|
33,300
|
|
|
32,089
|
|
|
33,860
|
|
|
31,796
|
|
||||
Farmer Mac Guaranteed Securities
|
4,682
|
|
|
4,713
|
|
|
5,467
|
|
|
5,486
|
|
9.
|
BUSINESS SEGMENT REPORTING
|
Core Earnings by Business Segment
|
|||||||||||||||||||||||||||
For the Three Months Ended March 31, 2017
|
|||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural
Utilities
|
|
Institutional Credit
|
|
Corporate
|
|
Reconciling
Adjustments |
|
Consolidated Net Income
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Net interest income
|
$
|
12,754
|
|
|
$
|
5,283
|
|
|
$
|
2,948
|
|
|
$
|
13,502
|
|
|
$
|
2,584
|
|
|
$
|
—
|
|
|
$
|
37,071
|
|
Less: reconciling adjustments
(1)(2)(3)
|
(2,070
|
)
|
|
(580
|
)
|
|
(309
|
)
|
|
(921
|
)
|
|
(325
|
)
|
|
4,205
|
|
|
—
|
|
|||||||
Net effective spread
|
10,684
|
|
|
4,703
|
|
|
2,639
|
|
|
12,581
|
|
|
2,259
|
|
|
4,205
|
|
|
—
|
|
|||||||
Guarantee and commitment fees
(2)
|
4,295
|
|
|
74
|
|
|
492
|
|
|
455
|
|
|
—
|
|
|
(1,472
|
)
|
|
3,844
|
|
|||||||
Other income/(expense)
(3)(4)
|
194
|
|
|
14
|
|
|
5
|
|
|
—
|
|
|
843
|
|
|
1,896
|
|
|
2,952
|
|
|||||||
Non-interest income/(loss)
|
4,489
|
|
|
88
|
|
|
497
|
|
|
455
|
|
|
843
|
|
|
424
|
|
|
6,796
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Provision for loan losses
|
(637
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(637
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Release of reserve for losses
|
193
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193
|
|
|||||||
Other non-interest expense
|
(4,065
|
)
|
|
(1,087
|
)
|
|
(587
|
)
|
|
(1,521
|
)
|
|
(3,482
|
)
|
|
—
|
|
|
(10,742
|
)
|
|||||||
Non-interest expense
(5)
|
(3,872
|
)
|
|
(1,087
|
)
|
|
(587
|
)
|
|
(1,521
|
)
|
|
(3,482
|
)
|
|
—
|
|
|
(10,549
|
)
|
|||||||
Core earnings before income taxes
|
10,664
|
|
|
3,704
|
|
|
2,549
|
|
|
11,515
|
|
|
(380
|
)
|
|
4,629
|
|
(6)
|
32,681
|
|
|||||||
Income tax (expense)/benefit
|
(3,732
|
)
|
|
(1,296
|
)
|
|
(892
|
)
|
|
(4,030
|
)
|
|
785
|
|
|
(1,621
|
)
|
|
(10,786
|
)
|
|||||||
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
|
6,932
|
|
|
2,408
|
|
|
1,657
|
|
|
7,485
|
|
|
405
|
|
|
3,008
|
|
(6)
|
21,895
|
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,295
|
)
|
|
—
|
|
|
(3,295
|
)
|
|||||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||||
Segment core earnings/(losses)
|
$
|
6,932
|
|
|
$
|
2,408
|
|
|
$
|
1,657
|
|
|
$
|
7,485
|
|
|
$
|
(2,875
|
)
|
|
$
|
3,008
|
|
(6)
|
$
|
18,615
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets at carrying value
|
$
|
3,693,360
|
|
|
$
|
2,109,264
|
|
|
$
|
1,005,187
|
|
|
$
|
6,315,591
|
|
|
$
|
2,808,355
|
|
|
$
|
—
|
|
|
$
|
15,931,757
|
|
Total on- and off-balance sheet program assets at principal balance
|
$
|
6,240,467
|
|
|
$
|
2,149,697
|
|
|
$
|
1,868,794
|
|
|
$
|
7,585,583
|
|
|
|
|
|
—
|
|
|
$
|
17,844,541
|
|
(1)
|
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
|
(2)
|
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.
|
(3)
|
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "
Gains/(losses) on financial derivatives and hedging activities
" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
|
(4)
|
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. In 2016 and prior periods, fair value adjustments on financial derivatives included variation margin payment amounts because those amounts were considered to be collateral of the related exposure and were accounted for as unrealized gains or losses. However, effective first quarter 2017, CME implemented a change in its rules related to the exchange of variation margin, whereby variation margin payments are considered to be a partial settlement of the respective derivatives contracts rather than as pledged collateral, and accounted for as realized gains and losses. See Note 4 for more information about this rule change. Farmer Mac believes that even though these variation margin amounts are now accounted for as realized gains or losses on financial derivatives and hedging activities as a result of the CME rule change, their economic character will remain the same as they were before the change. The exchange of variation margin, whether considered a partial settlement of or the pledge of collateral under a derivatives contract, is not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP because the related financial instruments are expected to be held to maturity. Therefore, beginning in 2017, this reconciling adjustment includes realized gains and losses on financial derivatives centrally cleared through CME resulting from the exchange of variation margin. As a result, core earnings subsequent to 2016 will be presented on a consistent basis with core earnings in 2016 and prior periods.
|
(5)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.
|
(6)
|
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.
|
Core Earnings by Business Segment
|
|||||||||||||||||||||||||||
For the Three Months Ended March 31, 2016
|
|||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural
Utilities |
|
Institutional Credit
|
|
Corporate
|
|
Reconciling
Adjustments
|
|
Consolidated Net Income
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
Net interest income
|
$
|
11,127
|
|
|
$
|
5,052
|
|
|
$
|
2,864
|
|
|
$
|
11,749
|
|
|
$
|
2,848
|
|
|
$
|
—
|
|
|
$
|
33,640
|
|
Less: reconciling adjustments
(1)(2)(3)
|
(1,666
|
)
|
|
(744
|
)
|
|
(326
|
)
|
|
(659
|
)
|
|
(296
|
)
|
|
3,691
|
|
|
—
|
|
|||||||
Net effective spread
|
9,461
|
|
|
4,308
|
|
|
2,538
|
|
|
11,090
|
|
|
2,552
|
|
|
3,691
|
|
|
—
|
|
|||||||
Guarantee and commitment fees
(2)
|
3,909
|
|
|
7
|
|
|
295
|
|
|
458
|
|
|
—
|
|
|
(1,043
|
)
|
|
3,626
|
|
|||||||
Other income/(expense)
(3)(4)
|
97
|
|
|
58
|
|
|
—
|
|
|
—
|
|
|
(672
|
)
|
|
(5,815
|
)
|
|
(6,332
|
)
|
|||||||
Non-interest income/(loss)
|
4,006
|
|
|
65
|
|
|
295
|
|
|
458
|
|
|
(672
|
)
|
|
(6,858
|
)
|
|
(2,706
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Provision for loan losses
|
(49
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Release of reserve for losses
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
|||||||
Other non-interest expense
|
(4,161
|
)
|
|
(1,093
|
)
|
|
(831
|
)
|
|
(539
|
)
|
|
(3,328
|
)
|
|
—
|
|
|
(9,952
|
)
|
|||||||
Non-interest expense
(5)
|
(4,175
|
)
|
|
(1,093
|
)
|
|
(831
|
)
|
|
(539
|
)
|
|
(3,328
|
)
|
|
—
|
|
|
(9,966
|
)
|
|||||||
Core earnings before income taxes
|
9,243
|
|
|
3,280
|
|
|
2,002
|
|
|
11,009
|
|
|
(1,448
|
)
|
|
(3,167
|
)
|
(6)
|
20,919
|
|
|||||||
Income tax (expense)/benefit
|
(3,236
|
)
|
|
(1,148
|
)
|
|
(701
|
)
|
|
(3,852
|
)
|
|
493
|
|
|
1,109
|
|
|
(7,335
|
)
|
|||||||
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
|
6,007
|
|
|
2,132
|
|
|
1,301
|
|
|
7,157
|
|
|
(955
|
)
|
|
(2,058
|
)
|
(6)
|
13,584
|
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,295
|
)
|
|
—
|
|
|
(3,295
|
)
|
|||||||
Non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|||||||
Segment core earnings/(losses)
|
$
|
6,007
|
|
|
$
|
2,132
|
|
|
$
|
1,301
|
|
|
$
|
7,157
|
|
|
$
|
(4,222
|
)
|
|
$
|
(2,058
|
)
|
(6)
|
$
|
10,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total assets at carrying value
|
$
|
3,115,749
|
|
|
$
|
1,987,855
|
|
|
$
|
1,002,691
|
|
|
$
|
5,731,346
|
|
|
$
|
4,318,387
|
|
|
$
|
—
|
|
|
$
|
16,156,028
|
|
Total on- and off-balance sheet program assets at principal balance
|
$
|
5,713,789
|
|
|
$
|
1,929,582
|
|
|
$
|
1,510,575
|
|
|
$
|
7,061,626
|
|
|
|
|
—
|
|
|
$
|
16,215,572
|
|
(1)
|
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
|
(2)
|
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.
|
(3)
|
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "
Gains/(losses) on financial derivatives and hedging activities
" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
|
(4)
|
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
|
(5)
|
Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.
|
(6)
|
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
prospects for earnings;
|
•
|
prospects for growth in business volume;
|
•
|
trends in net interest income and net effective spread;
|
•
|
trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for losses;
|
•
|
trends in expenses;
|
•
|
trends in investment securities;
|
•
|
prospects for asset impairments and allowance for losses;
|
•
|
changes in capital position;
|
•
|
future dividend payments; and
|
•
|
other business and financial matters.
|
•
|
the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms;
|
•
|
legislative or regulatory developments that could affect Farmer Mac, its sources of business, or the agricultural or rural utilities industries;
|
•
|
fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries;
|
•
|
the rate and direction of development of the secondary market for agricultural mortgage and rural utilities loans, including lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac;
|
•
|
the general rate of growth in agricultural mortgage and rural utilities indebtedness;
|
•
|
the effect of economic conditions, including the effects of drought and other weather-related conditions and fluctuations in agricultural real estate values, on agricultural mortgage lending and borrower repayment capacity;
|
•
|
developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac;
|
•
|
changes in the level and direction of interest rates, which could, among other things, affect the value of collateral securing Farmer Mac's agricultural mortgage loan assets;
|
•
|
the degree to which Farmer Mac is exposed to basis risk, which results from fluctuations in Farmer Mac's borrowing costs relative to market indexes such as LIBOR; and
|
•
|
volatility in commodity prices relative to costs of production and/or export demand for U.S. agricultural products.
|
Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
|
|||||||
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands, except per share amounts)
|
||||||
Net income attributable to common stockholders
|
$
|
18,615
|
|
|
$
|
10,317
|
|
Less reconciling items:
|
|
|
|
|
|
||
Gains/(losses) on financial derivatives and hedging activities due to fair value changes
|
4,805
|
|
|
(2,989
|
)
|
||
Unrealized (losses)/gains on trading securities
|
(82
|
)
|
|
358
|
|
||
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
(127
|
)
|
|
(281
|
)
|
||
Net effects of settlements on agency forward contracts
|
32
|
|
|
(255
|
)
|
||
Income tax effect related to reconciling items
|
(1,620
|
)
|
|
1,109
|
|
||
Sub-total
|
3,008
|
|
|
(2,058
|
)
|
||
Core earnings
|
$
|
15,607
|
|
|
$
|
12,375
|
|
|
|
|
|
||||
Composition of Core Earnings:
|
|
|
|
||||
Revenues:
|
|
|
|
||||
Net effective spread
(1)
|
$
|
32,866
|
|
|
$
|
29,949
|
|
Guarantee and commitment fees
(2)
|
5,317
|
|
|
4,669
|
|
||
Other
(3)
|
1,061
|
|
|
(517
|
)
|
||
Total revenues
|
39,244
|
|
|
34,101
|
|
||
|
|
|
|
||||
Credit related expense (GAAP):
|
|
|
|
||||
Provision for losses
|
444
|
|
|
63
|
|
||
REO operating expenses
|
—
|
|
|
39
|
|
||
Losses on sale of REO
|
5
|
|
|
—
|
|
||
Total credit related expense
|
449
|
|
|
102
|
|
||
|
|
|
|
||||
Operating expenses (GAAP):
|
|
|
|
||||
Compensation and employee benefits
|
6,317
|
|
|
5,774
|
|
||
General and administrative
|
3,800
|
|
|
3,526
|
|
||
Regulatory fees
|
625
|
|
|
613
|
|
||
Total operating expenses
|
10,742
|
|
|
9,913
|
|
||
|
|
|
|
||||
Net earnings
|
28,053
|
|
|
24,086
|
|
||
Income tax expense
(4)
|
9,166
|
|
|
8,444
|
|
||
Net loss attributable to non-controlling interest (GAAP)
|
(15
|
)
|
|
(28
|
)
|
||
Preferred stock dividends (GAAP)
|
3,295
|
|
|
3,295
|
|
||
Core earnings
|
$
|
15,607
|
|
|
$
|
12,375
|
|
|
|
|
|
||||
Core earnings per share:
|
|
|
|
||||
Basic
|
$
|
1.48
|
|
|
$
|
1.18
|
|
Diluted
|
1.45
|
|
|
1.12
|
|
||
Weighted-average shares:
|
|
|
|
||||
Basic
|
10,551
|
|
|
10,465
|
|
||
Diluted
|
10,782
|
|
|
11,003
|
|
(1)
|
Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 6 for a reconciliation of net interest income to net effective spread.
|
(2)
|
Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.
|
(3)
|
Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and fair value adjustments on financial derivatives and trading assets and a reconciling adjustment to exclude the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. First quarter 2017 includes $1.0 million of fees received upon the inception of swaps cleared through CME and $0.5 million of hedging losses, compared to $0.1 million of fees received and $0.9 million of hedging losses, respectively, in first quarter 2016.
|
(4)
|
Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings. First quarter 2017 includes $0.7 million of tax benefits upon the vesting of restricted stock and the exercise of SARs under new accounting guidance for stock-based awards that became effective in first quarter 2017.
|
Reconciliation of GAAP Basic Earnings Per Share to Core Earnings Basic Earnings Per Share
|
|||||||
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands, except per share amounts)
|
||||||
GAAP - Basic EPS
|
$
|
1.76
|
|
|
$
|
0.99
|
|
Less reconciling items:
|
|
|
|
||||
Gains/(losses) on financial derivatives and hedging activities due to fair value changes
|
0.45
|
|
|
(0.28
|
)
|
||
Unrealized (losses)/gains on trading securities
|
(0.01
|
)
|
|
0.03
|
|
||
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
(0.01
|
)
|
|
(0.03
|
)
|
||
Net effects of settlements on agency forward contracts
|
—
|
|
|
(0.02
|
)
|
||
Income tax effect related to reconciling items
|
(0.15
|
)
|
|
0.11
|
|
||
Sub-total
|
0.28
|
|
|
(0.19
|
)
|
||
Core Earnings - Basic EPS
|
$
|
1.48
|
|
|
$
|
1.18
|
|
|
|
|
|
||||
Shares used in per share calculation (GAAP and Core Earnings)
|
10,551
|
|
|
10,465
|
|
Non-GAAP Reconciling Item for Gains/(Losses) on Financial Derivatives and Hedging Activities Due to Fair Value Changes
|
|||||||
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Fair value hedges:
|
|
|
|
||||
(Losses)/gains due to fair value changes (see Table 8)
|
$
|
(3,878
|
)
|
|
$
|
2,889
|
|
No hedge designation:
|
|
|
|
||||
Gains/(losses) due to fair value changes (see Table 8)
|
8,683
|
|
|
(5,878
|
)
|
||
Gains/(losses) on financial derivatives and hedging activities due to fair value changes
|
$
|
4,805
|
|
|
$
|
(2,989
|
)
|
|
For the Three Months Ended
|
||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||
|
Average
Balance |
|
Income/
Expense |
|
Average
Rate |
|
Average
Balance |
|
Income/
Expense |
|
Average
Rate |
||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and investments
|
$
|
2,798,774
|
|
|
$
|
7,243
|
|
|
1.04
|
%
|
|
$
|
3,858,756
|
|
|
$
|
6,681
|
|
|
0.69
|
%
|
Loans, Farmer Mac Guaranteed Securities and USDA Securities
(1)
|
11,581,160
|
|
|
69,345
|
|
|
2.40
|
%
|
|
10,676,340
|
|
|
60,522
|
|
|
2.27
|
%
|
||||
Total interest-earning assets
|
14,379,934
|
|
|
76,588
|
|
|
2.13
|
%
|
|
14,535,096
|
|
|
67,203
|
|
|
1.85
|
%
|
||||
Funding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Notes payable due within one year
|
5,806,490
|
|
|
10,499
|
|
|
0.72
|
%
|
|
7,044,292
|
|
|
7,450
|
|
|
0.42
|
%
|
||||
Notes payable due after one year
(2)
|
7,961,194
|
|
|
30,490
|
|
|
1.53
|
%
|
|
7,074,429
|
|
|
27,156
|
|
|
1.54
|
%
|
||||
Total interest-bearing liabilities
(3)
|
13,767,684
|
|
|
40,989
|
|
|
1.19
|
%
|
|
14,118,721
|
|
|
34,606
|
|
|
0.98
|
%
|
||||
Net non-interest-bearing funding
|
612,250
|
|
|
—
|
|
|
|
|
|
416,375
|
|
|
—
|
|
|
|
|
||||
Total funding
|
14,379,934
|
|
|
40,989
|
|
|
1.14
|
%
|
|
14,535,096
|
|
|
34,606
|
|
|
0.95
|
%
|
||||
Net interest income/yield prior to consolidation of certain trusts
|
14,379,934
|
|
|
35,599
|
|
|
0.99
|
%
|
|
14,535,096
|
|
|
32,597
|
|
|
0.90
|
%
|
||||
Net effect of consolidated trusts
(4)
|
1,134,608
|
|
|
1,472
|
|
|
0.52
|
%
|
|
742,832
|
|
|
1,043
|
|
|
0.56
|
%
|
||||
Net interest income/yield
|
$
|
15,514,542
|
|
|
$
|
37,071
|
|
|
0.96
|
%
|
|
$
|
15,277,928
|
|
|
$
|
33,640
|
|
|
0.88
|
%
|
(1)
|
Excludes interest income of
$10.0 million
and
$6.7 million
in first quarter 2017 and 2016, respectively, related to consolidated trusts with beneficial interests owned by third parties.
|
(2)
|
Includes current portion of long-term notes.
|
(3)
|
Excludes interest expense of
$8.5 million
and
$5.6 million
in first quarter 2017 and 2016, respectively, related to consolidated trusts with beneficial interests owned by third parties.
|
(4)
|
Includes the effect of consolidated trusts with beneficial interests owned by third parties.
|
|
For the Three Months Ended March 31, 2017 Compared to Same Period in 2016
|
||||||||||
|
Increase/(Decrease) Due to
|
||||||||||
|
Rate
|
|
Volume
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Income from interest-earning assets:
|
|
|
|
|
|
||||||
Cash and investments
|
$
|
2,721
|
|
|
$
|
(2,159
|
)
|
|
$
|
562
|
|
Loans, Farmer Mac Guaranteed Securities and USDA Securities
|
3,520
|
|
|
5,303
|
|
|
8,823
|
|
|||
Total
|
6,241
|
|
|
3,144
|
|
|
9,385
|
|
|||
Expense from other interest-bearing liabilities
|
7,263
|
|
|
(880
|
)
|
|
6,383
|
|
|||
Change in net interest income prior to consolidation of certain trusts
(1)
|
$
|
(1,022
|
)
|
|
$
|
4,024
|
|
|
$
|
3,002
|
|
(1)
|
Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties.
|
|
For the Three Months Ended
|
||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
||||||
|
(dollars in thousands)
|
||||||||||||
Net interest income/yield
|
$
|
37,071
|
|
|
0.96
|
%
|
|
$
|
33,640
|
|
|
0.88
|
%
|
Net effects of consolidated trusts
|
(1,472
|
)
|
|
0.03
|
%
|
|
(1,043
|
)
|
|
0.02
|
%
|
||
Expense related to undesignated financial derivatives
|
(2,867
|
)
|
|
(0.08
|
)%
|
|
(2,669
|
)
|
|
(0.08
|
)%
|
||
Amortization of premiums/discounts on assets consolidated at fair value
|
134
|
|
|
—
|
%
|
|
21
|
|
|
—
|
%
|
||
Net effective spread
|
$
|
32,866
|
|
|
0.91
|
%
|
|
$
|
29,949
|
|
|
0.82
|
%
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||
|
Allowance
for Loan Losses |
|
Reserve
for Losses |
|
Total
Allowance for Losses |
|
Allowance
for Loan Losses |
|
Reserve
for Losses |
|
Total
Allowance for Losses |
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
For the Three Months Ended:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning Balance
|
$
|
5,415
|
|
|
$
|
2,020
|
|
|
$
|
7,435
|
|
|
$
|
4,480
|
|
|
$
|
2,083
|
|
|
$
|
6,563
|
|
Provision for/(release of) losses
|
637
|
|
|
(193
|
)
|
|
444
|
|
|
49
|
|
|
14
|
|
|
63
|
|
||||||
Charge-offs
|
(241
|
)
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ending Balance
|
$
|
5,811
|
|
|
$
|
1,827
|
|
|
$
|
7,638
|
|
|
$
|
4,529
|
|
|
$
|
2,097
|
|
|
$
|
6,626
|
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Fair value hedges:
|
|
|
|
||||
(Losses)/gains due to fair value changes:
|
|
|
|
||||
Financial derivatives
(1)
|
$
|
1,526
|
|
|
$
|
(26,898
|
)
|
Hedged items
|
(5,404
|
)
|
|
29,787
|
|
||
(Losses)/gains on fair value hedging activities
|
(3,878
|
)
|
|
2,889
|
|
||
Cash flow hedges:
|
|
|
|
||||
Loss recognized (ineffective portion)
|
(29
|
)
|
|
(149
|
)
|
||
Losses on cash flow hedges
|
(29
|
)
|
|
(149
|
)
|
||
No hedge designation:
|
|
|
|
||||
Gains/(losses) due to fair value changes
|
8,683
|
|
|
(5,878
|
)
|
||
Accrual of contractual payments
|
(2,838
|
)
|
|
(2,520
|
)
|
||
Gains/(losses) due to terminations or net settlements
|
548
|
|
|
(1,124
|
)
|
||
Gains/(losses) on financial derivatives not designated in hedging relationships
|
6,393
|
|
|
(9,522
|
)
|
||
Gains/(losses) on financial derivatives and hedging activities
|
$
|
2,486
|
|
|
$
|
(6,782
|
)
|
(1)
|
Included in the assessment of hedge effectiveness as of
March 31, 2017
, but excluded from the amounts in the table, were gains of
$3.6 million
for the three months ended
March 31, 2017
, attributable to the fair value of the swaps at the inception of the hedging relationship. Accordingly, the amounts recognized as hedge ineffectiveness for three months ended
March 31, 2017
were losses of
$0.3 million
. The comparable amounts as of
March 31, 2016
were losses of $
1.5 million
for the three months ended
March 31, 2016
, attributable to the fair value of the swaps at the inception of the hedging relationship and, accordingly, gains of
$1.4 million
for the three months ended
March 31, 2016
, attributable to hedge ineffectiveness.
|
•
|
purchased
$561.4 million
of AgVantage securities;
|
•
|
purchased
$314.1 million
of newly originated Farm & Ranch loans;
|
•
|
added
$113.3 million
of Farm & Ranch loans under LTSPCs;
|
•
|
purchased
$92.6 million
of USDA Securities;
|
•
|
issued
$38.5 million
of Farmer Mac Guaranteed USDA Securities; and
|
•
|
purchased
$27.3 million
of Rural Utilities loans.
|
New Business Volume – Farmer Mac Loan Purchases, Guarantees, LTSPCs, and AgVantage Securities
|
|||||||
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Farm & Ranch:
|
|
|
|
||||
Loans
|
$
|
314,137
|
|
|
$
|
198,548
|
|
LTSPCs
|
113,261
|
|
|
68,017
|
|
||
USDA Guarantees:
|
|
|
|
||||
USDA Securities
|
92,555
|
|
|
95,320
|
|
||
Farmer Mac Guaranteed USDA Securities
|
38,546
|
|
|
3,648
|
|
||
Rural Utilities:
|
|
|
|
||||
Loans
|
27,341
|
|
|
9,691
|
|
||
Institutional Credit:
|
|
|
|
||||
AgVantage Securities
|
561,407
|
|
|
927,219
|
|
||
Total purchases, guarantees, LTSPCs, and AgVantage Securities
|
$
|
1,147,247
|
|
|
$
|
1,302,443
|
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Loans securitized and sold as Farm & Ranch Guaranteed Securities
|
$
|
117,018
|
|
|
$
|
135,913
|
|
Farmer Mac Guaranteed USDA Securities
|
38,546
|
|
|
3,648
|
|
||
AgVantage Securities
|
561,407
|
|
|
927,219
|
|
||
Total Farmer Mac Guaranteed Securities issuances
|
$
|
716,971
|
|
|
$
|
1,066,780
|
|
Lines of Business - Outstanding Business Volume
|
|||||||
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||
|
(in thousands)
|
||||||
On-balance sheet:
|
|
|
|
||||
Farm & Ranch:
|
|
|
|
||||
Loans
|
$
|
2,434,436
|
|
|
$
|
2,381,488
|
|
Loans held in trusts:
|
|
|
|
||||
Beneficial interests owned by third party investors
|
1,208,950
|
|
|
1,132,966
|
|
||
USDA Guarantees:
|
|
|
|
||||
USDA Securities
|
1,973,628
|
|
|
1,954,800
|
|
||
Farmer Mac Guaranteed USDA Securities
|
40,735
|
|
|
35,599
|
|
||
Rural Utilities:
|
|
|
|
||||
Loans
|
999,130
|
|
|
999,512
|
|
||
Institutional Credit
|
|
|
|
||||
AgVantage Securities
|
6,302,369
|
|
|
6,004,472
|
|
||
Total on-balance sheet
|
$
|
12,959,248
|
|
|
$
|
12,508,837
|
|
Off-balance sheet:
|
|
|
|
||||
Farm & Ranch:
|
|
|
|
||||
LTSPCs
|
2,209,809
|
|
|
2,209,409
|
|
||
Guaranteed Securities
|
387,272
|
|
|
415,441
|
|
||
USDA Guarantees:
|
|
|
|
||||
Farmer Mac Guaranteed USDA Securities
|
135,334
|
|
|
103,976
|
|
||
Rural Utilities:
|
|
|
|
||||
LTSPCs
(1)
|
869,664
|
|
|
878,598
|
|
||
Institutional Credit:
|
|
|
|
||||
AgVantage Securities
|
983,214
|
|
|
983,214
|
|
||
AgVantage Revolving Line of Credit Facility
(2)
|
300,000
|
|
|
300,000
|
|
||
Total off-balance sheet
|
$
|
4,885,293
|
|
|
$
|
4,890,638
|
|
Total
|
$
|
17,844,541
|
|
|
$
|
17,399,475
|
|
(1)
|
As of both
March 31, 2017
and December 31 2016, includes $20.0 million related to one-year loan purchase commitments on which Farmer Mac receives a nominal unused commitment fee.
|
(2)
|
During first quarter 2017, $100.0 million of this facility was drawn and subsequently repaid. As of December 31, 2016, this facility had not been utilized. Farmer Mac receives a fixed fee based on the full dollar amount of the facility. If the counterparty draws on the facility, the amounts drawn will be in the form of AgVantage securities, and Farmer Mac will earn interest income on those securities.
|
Schedule of Principal Amortization as of March 31, 2017
|
|||||||||||||||
|
Loans Held
|
|
Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs
|
|
USDA Securities and Farmer Mac Guaranteed USDA Securities
|
|
Total
|
||||||||
|
(in thousands)
|
||||||||||||||
2017
|
$
|
137,049
|
|
|
$
|
202,461
|
|
|
$
|
66,383
|
|
|
$
|
405,893
|
|
2018
|
203,148
|
|
|
689,981
|
|
|
100,753
|
|
|
993,882
|
|
||||
2019
|
187,322
|
|
|
213,978
|
|
|
99,052
|
|
|
500,352
|
|
||||
2020
|
196,340
|
|
|
203,511
|
|
|
99,921
|
|
|
499,772
|
|
||||
2021
|
215,469
|
|
|
215,674
|
|
|
103,811
|
|
|
534,954
|
|
||||
Thereafter
|
3,703,188
|
|
|
1,941,140
|
|
|
1,679,777
|
|
|
7,324,105
|
|
||||
Total
|
$
|
4,642,516
|
|
|
$
|
3,466,745
|
|
|
$
|
2,149,697
|
|
|
$
|
10,258,958
|
|
AgVantage Balances by Year of Maturity
|
|||
|
As of
|
||
|
March 31, 2017
|
||
|
(in thousands)
|
||
2017
(1)
|
$
|
1,434,693
|
|
2018
(2)
|
1,705,234
|
|
|
2019
|
803,911
|
|
|
2020
|
750,082
|
|
|
2021
|
1,020,640
|
|
|
Thereafter
(3)
|
1,871,023
|
|
|
Total
|
$
|
7,585,583
|
|
(1)
|
In April 2017, Farmer Mac purchased and retained $1.0 billion in AgVantage securities from MetLife. MetLife used the proceeds from Farmer Mac's purchase of $1.0 billion in AgVantage securities to refinance an AgVantage security of the same amount that matured in April 2017.
|
(2)
|
Includes the expiration of the $300.0 million revolving floating rate AgVantage facility.
|
(3)
|
Includes various maturities ranging from 2022 to 2047.
|
|
For the Three Months Ended
|
||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||
|
(in thousands)
|
||||||
Defaulted loans purchased underlying Farm & Ranch Guaranteed Securities owned by third party investors
|
$
|
—
|
|
|
$
|
1,267
|
|
Defaulted loans purchased underlying LTSPCs
|
311
|
|
|
148
|
|
||
Total loan purchases
|
$
|
311
|
|
|
$
|
1,415
|
|
•
|
As agricultural and rural utilities lenders face increased equity capital requirements under regulatory frameworks or rating agency requirements, or seek to reduce exposure due to lending limits or concentration limits, Farmer Mac can provide relief for those institutions through loan purchases, guarantees, or LTSPCs.
|
•
|
While lending opportunities in the rural utilities industry remain moderate, growth opportunities within Farmer Mac's Institutional Credit line of business exist because it provides a competitive source of debt funding for the rural utilities cooperative lender that uses Farmer Mac's programs.
|
•
|
As a result of targeted marketing and product development efforts, Farmer Mac's lender network and Institutional Credit customer base continues to expand, which may generate additional demand for Farmer Mac's products from new sources.
|
•
|
loans held;
|
•
|
loans underlying Farmer Mac Guaranteed Securities; and
|
•
|
loans underlying LTSPCs.
|
|
For the Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
||||||||||||||||||||
|
Allowance for Loan Losses
|
|
Reserve for Losses
|
|
Total Allowance for Losses
|
|
Allowance for Loan Losses
|
|
Reserve for Losses
|
|
Total Allowance for Losses
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
Beginning Balance
|
$
|
5,415
|
|
|
$
|
2,020
|
|
|
7,435
|
|
|
$
|
4,480
|
|
|
$
|
2,083
|
|
|
$
|
6,563
|
|
|
Provision for/(release of) losses
|
637
|
|
|
(193
|
)
|
|
444
|
|
|
49
|
|
|
14
|
|
|
63
|
|
||||||
Charge-offs
|
(241
|
)
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Ending Balance
|
$
|
5,811
|
|
|
$
|
1,827
|
|
|
$
|
7,638
|
|
|
$
|
4,529
|
|
|
$
|
2,097
|
|
|
$
|
6,626
|
|
|
Farm & Ranch Line of Business
|
|
90-Day
Delinquencies |
|
Percentage
|
|||||
|
(dollars in thousands)
|
|||||||||
As of:
|
|
|
|
|
|
|||||
March 31, 2017
|
$
|
6,240,467
|
|
|
$
|
50,807
|
|
|
0.81
|
%
|
December 31, 2016
|
6,139,304
|
|
|
21,038
|
|
|
0.34
|
%
|
||
September 30, 2016
|
6,004,728
|
|
|
18,377
|
|
|
0.31
|
%
|
||
June 30, 2016
|
5,830,533
|
|
|
22,093
|
|
|
0.38
|
%
|
||
March 31, 2016
|
5,713,789
|
|
|
34,680
|
|
|
0.61
|
%
|
||
December 31, 2015
|
5,725,299
|
|
|
32,136
|
|
|
0.56
|
%
|
||
September 30, 2015
|
5,504,030
|
|
|
36,669
|
|
|
0.67
|
%
|
||
June 30, 2015
|
5,485,570
|
|
|
31,852
|
|
|
0.58
|
%
|
||
March 31, 2015
|
5,347,248
|
|
|
32,101
|
|
|
0.60
|
%
|
Farm & Ranch 90-Day Delinquencies as of March 31, 2017
|
|||||||||||||
|
Distribution of Farm & Ranch Line of Business
|
|
Farm & Ranch Line of Business
|
|
90-Day Delinquencies
(1)
|
|
Percentage
|
||||||
|
(dollars in thousands)
|
||||||||||||
By year of origination:
|
|
|
|
|
|
|
|
||||||
2007 and prior
|
14
|
%
|
|
$
|
858,635
|
|
|
$
|
9,368
|
|
|
1.09
|
%
|
2008
|
3
|
%
|
|
184,403
|
|
|
707
|
|
|
0.38
|
%
|
||
2009
|
2
|
%
|
|
113,491
|
|
|
2,168
|
|
|
1.91
|
%
|
||
2010
|
3
|
%
|
|
199,729
|
|
|
2,349
|
|
|
1.18
|
%
|
||
2011
|
4
|
%
|
|
267,976
|
|
|
1,333
|
|
|
0.50
|
%
|
||
2012
|
10
|
%
|
|
636,195
|
|
|
3,338
|
|
|
0.52
|
%
|
||
2013
|
15
|
%
|
|
915,587
|
|
|
1,713
|
|
|
0.19
|
%
|
||
2014
|
11
|
%
|
|
688,173
|
|
|
20,017
|
|
(2)
|
2.91
|
%
|
||
2015
|
14
|
%
|
|
867,507
|
|
|
9,814
|
|
(3)
|
1.13
|
%
|
||
2016
|
19
|
%
|
|
1,195,060
|
|
|
—
|
|
|
—
|
%
|
||
2017
|
5
|
%
|
|
313,711
|
|
|
—
|
|
|
—
|
%
|
||
Total
|
100
|
%
|
|
$
|
6,240,467
|
|
|
$
|
50,807
|
|
|
0.81
|
%
|
By geographic region
(4)
:
|
|
|
|
|
|
|
|
|
|
|
|
||
Northwest
|
11
|
%
|
|
$
|
688,304
|
|
|
$
|
4,597
|
|
|
0.67
|
%
|
Southwest
|
29
|
%
|
|
1,796,177
|
|
|
5,506
|
|
|
0.31
|
%
|
||
Mid-North
|
34
|
%
|
|
2,151,503
|
|
|
10,097
|
|
|
0.47
|
%
|
||
Mid-South
|
14
|
%
|
|
858,319
|
|
|
13,124
|
|
|
1.53
|
%
|
||
Northeast
|
4
|
%
|
|
237,968
|
|
|
1,385
|
|
|
0.58
|
%
|
||
Southeast
|
8
|
%
|
|
508,196
|
|
|
16,098
|
|
|
3.17
|
%
|
||
Total
|
100
|
%
|
|
$
|
6,240,467
|
|
|
$
|
50,807
|
|
|
0.81
|
%
|
By commodity/collateral type:
|
|
|
|
|
|
|
|
|
|
|
|||
Crops
|
55
|
%
|
|
$
|
3,461,183
|
|
|
$
|
24,364
|
|
|
0.70
|
%
|
Permanent plantings
|
17
|
%
|
|
1,056,634
|
|
|
20,690
|
|
|
1.96
|
%
|
||
Livestock
|
21
|
%
|
|
1,298,482
|
|
|
2,612
|
|
|
0.20
|
%
|
||
Part-time farm
|
6
|
%
|
|
359,405
|
|
|
3,141
|
|
|
0.87
|
%
|
||
Ag. Storage and Processing
|
1
|
%
|
|
51,481
|
|
|
—
|
|
|
—
|
%
|
||
Other
|
—
|
|
|
13,282
|
|
|
—
|
|
|
—
|
%
|
||
Total
|
100
|
%
|
|
$
|
6,240,467
|
|
|
$
|
50,807
|
|
|
0.81
|
%
|
By original loan-to-value ratio:
|
|
|
|
|
|
|
|
||||||
0.00% to 40.00%
|
29
|
%
|
|
$
|
1,783,420
|
|
|
$
|
25,157
|
|
|
1.41
|
%
|
40.01% to 50.00%
|
23
|
%
|
|
1,431,980
|
|
|
10,904
|
|
|
0.76
|
%
|
||
50.01% to 60.00%
|
27
|
%
|
|
1,719,971
|
|
|
11,792
|
|
|
0.69
|
%
|
||
60.01% to 70.00%
|
17
|
%
|
|
1,064,391
|
|
|
2,632
|
|
|
0.25
|
%
|
||
70.01% to 80.00%
(5)
|
3
|
%
|
|
204,639
|
|
|
206
|
|
|
0.10
|
%
|
||
80.01% to 90.00%
(5)
|
1
|
%
|
|
36,066
|
|
|
116
|
|
|
0.32
|
%
|
||
Total
|
100
|
%
|
|
$
|
6,240,467
|
|
|
$
|
50,807
|
|
|
0.81
|
%
|
(1)
|
Includes loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.
|
(2)
|
Includes $15.4 million of permanent planting loans with one borrower located in the Southeast who became 90-days delinquent during first quarter 2017. The weighted-average original loan-to-value ratio of these two permanent planting loans was between 0.00% and 40.00%.
|
(3)
|
Includes $9.8 million related to two crop loans located in the Mid-South that became 90-days delinquent as a result of a bankruptcy filed by one borrower. The weighted-average original loan-to-value ratio of these two crop loans was between 50.00% and 60.00%.
|
(4)
|
Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).
|
(5)
|
Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance.
|
Farm & Ranch Credit Losses Relative to Cumulative
|
||||||||||
Original Loans, Guarantees, and LTSPCs as of March 31, 2017
|
||||||||||
|
Cumulative Original Loans, Guarantees and LTSPCs
|
|
Cumulative Net Credit Losses/(Recoveries)
|
|
Cumulative Loss Rate
|
|||||
|
(dollars in thousands)
|
|||||||||
By year of origination:
|
|
|
|
|
|
|||||
2007 and prior
|
$
|
13,312,615
|
|
|
$
|
26,032
|
|
|
0.20
|
%
|
2008
|
810,076
|
|
|
3,377
|
|
|
0.42
|
%
|
||
2009
|
543,494
|
|
|
1,508
|
|
|
0.28
|
%
|
||
2010
|
651,514
|
|
|
5
|
|
|
—
|
%
|
||
2011
|
762,161
|
|
|
3,661
|
|
|
0.48
|
%
|
||
2012
|
1,127,622
|
|
|
—
|
|
|
—
|
%
|
||
2013
|
1,391,433
|
|
|
—
|
|
|
—
|
%
|
||
2014
|
928,138
|
|
|
—
|
|
|
—
|
%
|
||
2015
|
1,021,081
|
|
|
228
|
|
|
0.02
|
%
|
||
2016
|
1,289,932
|
|
|
—
|
|
|
—
|
%
|
||
2017
|
311,966
|
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
22,150,032
|
|
|
$
|
34,811
|
|
|
0.16
|
%
|
By geographic region
(1)
:
|
|
|
|
|
|
|
|
|
||
Northwest
|
$
|
2,988,055
|
|
|
$
|
11,198
|
|
|
0.37
|
%
|
Southwest
|
7,584,757
|
|
|
9,121
|
|
|
0.12
|
%
|
||
Mid-North
|
5,681,032
|
|
|
12,830
|
|
|
0.23
|
%
|
||
Mid-South
|
2,650,705
|
|
|
(211
|
)
|
|
(0.01
|
)%
|
||
Northeast
|
1,318,216
|
|
|
169
|
|
|
0.01
|
%
|
||
Southeast
|
1,927,267
|
|
|
1,704
|
|
|
0.09
|
%
|
||
Total
|
$
|
22,150,032
|
|
|
$
|
34,811
|
|
|
0.16
|
%
|
By commodity/collateral type:
|
|
|
|
|
|
|
|
|
||
Crops
|
$
|
10,237,376
|
|
|
$
|
4,610
|
|
|
0.05
|
%
|
Permanent plantings
|
4,456,076
|
|
|
9,332
|
|
|
0.21
|
%
|
||
Livestock
|
5,414,107
|
|
|
3,877
|
|
|
0.07
|
%
|
||
Part-time farm
|
1,239,772
|
|
|
1,319
|
|
|
0.11
|
%
|
||
Ag. Storage and Processing
|
647,896
|
|
|
15,673
|
|
|
2.42
|
%
|
||
Other
|
154,805
|
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
22,150,032
|
|
|
$
|
34,811
|
|
|
0.16
|
%
|
(1)
|
Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).
|
|
As of March 31, 2017
|
||||||||||||||||||||||||||
|
Farm & Ranch Concentrations by Commodity Type within Geographic Region
|
||||||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Other
|
|
Total
|
||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||
By geographic region
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Northwest
|
$
|
335,546
|
|
|
$
|
93,652
|
|
|
$
|
213,070
|
|
|
$
|
45,781
|
|
|
$
|
—
|
|
|
$
|
255
|
|
|
$
|
688,304
|
|
|
5.4
|
%
|
|
1.6
|
%
|
|
3.4
|
%
|
|
0.7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
11.1
|
%
|
|||||||
Southwest
|
506,056
|
|
|
782,582
|
|
|
422,908
|
|
|
62,934
|
|
|
12,830
|
|
|
8,867
|
|
|
1,796,177
|
|
|||||||
|
8.1
|
%
|
|
12.5
|
%
|
|
6.8
|
%
|
|
1.0
|
%
|
|
0.2
|
%
|
|
0.1
|
%
|
|
28.7
|
%
|
|||||||
Mid-North
|
1,839,474
|
|
|
17,371
|
|
|
177,476
|
|
|
93,497
|
|
|
20,117
|
|
|
3,568
|
|
|
2,151,503
|
|
|||||||
|
29.5
|
%
|
|
0.2
|
%
|
|
2.8
|
%
|
|
1.5
|
%
|
|
0.3
|
%
|
|
0.1
|
%
|
|
34.4
|
%
|
|||||||
Mid-South
|
520,315
|
|
|
20,767
|
|
|
269,743
|
|
|
43,034
|
|
|
4,279
|
|
|
181
|
|
|
858,319
|
|
|||||||
|
8.3
|
%
|
|
0.3
|
%
|
|
4.3
|
%
|
|
0.7
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
13.7
|
%
|
|||||||
Northeast
|
106,612
|
|
|
13,912
|
|
|
44,957
|
|
|
66,972
|
|
|
5,442
|
|
|
73
|
|
|
237,968
|
|
|||||||
|
1.7
|
%
|
|
0.3
|
%
|
|
0.7
|
%
|
|
1.1
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
3.9
|
%
|
|||||||
Southeast
|
153,180
|
|
|
128,350
|
|
|
170,328
|
|
|
47,187
|
|
|
8,813
|
|
|
338
|
|
|
508,196
|
|
|||||||
|
2.4
|
%
|
|
2.1
|
%
|
|
2.8
|
%
|
|
0.8
|
%
|
|
0.1
|
%
|
|
—
|
%
|
|
8.2
|
%
|
|||||||
Total
|
$
|
3,461,183
|
|
|
$
|
1,056,634
|
|
|
$
|
1,298,482
|
|
|
$
|
359,405
|
|
|
$
|
51,481
|
|
|
$
|
13,282
|
|
|
$
|
6,240,467
|
|
|
55.4
|
%
|
|
17.0
|
%
|
|
20.8
|
%
|
|
5.8
|
%
|
|
0.8
|
%
|
|
0.2
|
%
|
|
100.0
|
%
|
(1)
|
Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).
|
|
As of March 31, 2017
|
||||||||||||||||||||||
|
Farm & Ranch Cumulative Credit Losses by Origination Year and Commodity Type
|
||||||||||||||||||||||
|
Crops
|
|
Permanent
Plantings |
|
Livestock
|
|
Part-time
Farm |
|
Ag. Storage and
Processing |
|
Total
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
By year of origination:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2007 and Prior
|
$
|
1,658
|
|
|
$
|
9,184
|
|
|
$
|
3,803
|
|
|
$
|
1,189
|
|
|
$
|
10,198
|
|
|
$
|
26,032
|
|
2008
|
2,626
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
621
|
|
|
3,377
|
|
||||||
2009
|
98
|
|
|
148
|
|
|
69
|
|
|
—
|
|
|
1,193
|
|
|
1,508
|
|
||||||
2010
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
||||||
2011
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,661
|
|
|
3,661
|
|
||||||
2012
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2013
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2014
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2015
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
228
|
|
||||||
2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
4,610
|
|
|
$
|
9,332
|
|
|
$
|
3,877
|
|
|
$
|
1,319
|
|
|
$
|
15,673
|
|
|
$
|
34,811
|
|
•
|
issuers of AgVantage securities;
|
•
|
approved lenders and servicers; and
|
•
|
interest rate swap counterparties.
|
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||||||||||||
Counterparty
|
|
Balance
|
|
Credit Rating
|
|
Required Collateralization
|
|
Balance
|
|
Credit Rating
|
|
Required Collateralization
|
||||
|
|
(dollars in thousands)
|
||||||||||||||
AgVantage:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
MetLife
|
|
$
|
2,550,000
|
|
|
AA-
|
|
103%
|
|
$
|
2,550,000
|
|
|
AA-
|
|
103%
|
CFC
(1)
|
|
2,834,679
|
|
|
A
|
|
100%
|
|
2,594,402
|
|
|
A
|
|
100%
|
||
Rabo Agrifinance, Inc.
|
|
1,800,000
|
|
|
None
|
|
106%
|
|
1,800,000
|
|
|
None
|
|
106%
|
||
Other
(2)
|
|
111,821
|
|
|
(3)
|
|
106% to 125%
|
|
86,373
|
|
|
(3)
|
|
106% to 125%
|
||
Farm Equity AgVantage
(4)
|
|
289,083
|
|
|
None
|
|
110%
|
|
256,911
|
|
|
None
|
|
110%
|
||
Total outstanding
|
|
$
|
7,585,583
|
|
|
|
|
|
|
$
|
7,287,686
|
|
|
|
|
|
(1)
|
Includes $300.0 million related to a revolving floating rate AgVantage facility. Farmer Mac receives a fixed fee based on the full dollar amount of the facility. During first quarter 2017, $100.0 million of this facility was drawn and subsequently repaid. As of December 31, 2016, this facility had not been utilized.
|
(2)
|
Consists of AgVantage securities issued by
6
different issuers as of both
March 31, 2017
and December 31, 2016.
|
(3)
|
Consists of AgVantage securities from
6
separate issuers without a credit rating as of both
March 31, 2017
and December 31, 2016.
|
(4)
|
Consists of AgVantage securities from
3
separate issuers as of both
March 31, 2017
and December 31, 2016.
|
•
|
sells Farmer Mac Guaranteed Securities backed by the loans; or
|
•
|
issues debt to retain the loans in its portfolio.
|
•
|
purchasing assets in the ordinary course of business;
|
•
|
refinancing existing liabilities; or
|
•
|
using financial derivatives to alter the characteristics of existing assets or liabilities.
|
|
|
Percentage Change in MVE from Base Case
|
||||
Interest Rate Scenario
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||
+100 basis points
|
|
(2.1
|
)%
|
|
(2.5
|
)%
|
-25 basis points
|
|
(0.3
|
)%
|
|
(0.2
|
)%
|
|
|
Percentage Change in NII from Base Case
|
||||
Interest Rate Scenario
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
||
+100 basis points
|
|
3.7
|
%
|
|
3.0
|
%
|
-25 basis points
|
|
(0.9
|
)%
|
|
(1.3
|
)%
|
•
|
"pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties;
|
•
|
"receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties; and
|
•
|
"basis swaps," in which Farmer Mac pays variable rates of interest based on one index to, and receives variable rates of interest based on another index from, counterparties.
|
•
|
issuing short-term discount notes with maturities that match the reset period of the assets;
|
•
|
issuing floating rate medium-term notes with maturities that match the maturities of the assets;
|
•
|
issuing non-maturity matched, floating rate medium-term notes; or
|
•
|
issuing non-maturity matched, fixed-rate discount notes or medium-term notes swapped to match the interest rate reset dates of the assets as an alternative source of effectively floating rate funding.
|
|
As of March 31, 2017
|
|
As of December 31, 2016
|
|
|||
|
(in thousands)
|
||||||
Cash and cash equivalents
|
$
|
313,641
|
|
|
$
|
265,229
|
|
Investment securities:
|
|
|
|
|
|
||
Guaranteed by U.S. Government and its agencies
|
1,404,554
|
|
|
1,423,850
|
|
||
Guaranteed by GSEs
|
1,027,819
|
|
|
1,044,261
|
|
||
Corporate debt securities
|
10,060
|
|
|
10,041
|
|
||
Asset-backed securities
|
36,811
|
|
|
37,699
|
|
||
Total
|
$
|
2,792,885
|
|
|
$
|
2,781,080
|
|
•
|
$0.3672 per share on its 5.875% Non-Cumulative Preferred Stock, Series A;
|
•
|
$0.4297 per share on its 6.875% Non-Cumulative Preferred Stock, Series B; and
|
•
|
$0.3750 per share on its 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C.
|
New Business Volume
|
|||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
|
||||||||||||||||||
|
Loans
|
|
LTSPCs
|
|
USDA Securities
|
|
Loans
|
|
LTSPCs
|
|
AgVantage
|
|
Total
|
||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
For the quarter ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
March 31, 2017
|
$
|
314,137
|
|
|
$
|
113,261
|
|
|
$
|
131,101
|
|
|
$
|
27,341
|
|
|
$
|
—
|
|
|
$
|
561,407
|
|
|
$
|
1,147,247
|
|
December 31, 2016
|
243,692
|
|
|
117,265
|
|
|
129,343
|
|
|
10,800
|
|
|
20,000
|
|
|
247,154
|
|
|
768,254
|
|
|||||||
September 30, 2016
|
282,690
|
|
|
155,657
|
|
|
119,201
|
|
|
20,000
|
|
|
—
|
|
|
528,234
|
|
|
1,105,782
|
|
|||||||
June 30, 2016
|
241,093
|
|
|
58,156
|
|
|
133,745
|
|
|
10,000
|
|
|
421,404
|
|
|
396,245
|
|
|
1,260,643
|
|
|||||||
March 31, 2016
|
198,548
|
|
|
68,017
|
|
|
98,968
|
|
|
9,691
|
|
|
—
|
|
|
927,219
|
|
|
1,302,443
|
|
|||||||
December 31, 2015
|
245,252
|
|
|
185,919
|
|
|
72,442
|
|
|
46,082
|
|
|
—
|
|
|
14,391
|
|
|
564,086
|
|
|||||||
September 30, 2015
|
175,965
|
|
|
79,621
|
|
|
91,374
|
|
|
53,552
|
|
|
522,262
|
|
|
506,602
|
|
|
1,429,376
|
|
|||||||
June 30, 2015
|
196,927
|
|
|
102,944
|
|
|
123,933
|
|
|
—
|
|
|
—
|
|
|
307,250
|
|
|
731,054
|
|
|||||||
March 31, 2015
|
130,224
|
|
|
59,311
|
|
|
89,186
|
|
|
8,703
|
|
|
—
|
|
|
214,915
|
|
|
502,339
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
For the year ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2016
|
966,023
|
|
|
399,095
|
|
|
481,257
|
|
|
50,491
|
|
|
441,404
|
|
|
2,098,852
|
|
|
4,437,122
|
|
|||||||
December 31, 2015
|
748,368
|
|
|
427,795
|
|
|
376,935
|
|
|
108,337
|
|
|
522,262
|
|
|
1,043,158
|
|
|
3,226,855
|
|
Repayments of Assets by Line of Business
|
|||||||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
|
||||||||||||||||||||||
|
Loans
|
|
Guaranteed Securities
|
|
LTSPCs
|
|
USDA Securities
|
|
Loans
|
|
LTSPCs
|
|
AgVantage
|
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
For the quarter ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
70,394
|
|
|
$
|
16,184
|
|
|
$
|
48,375
|
|
|
$
|
36,322
|
|
|
$
|
26,909
|
|
|
$
|
8,934
|
|
|
$
|
161,451
|
|
|
$
|
368,569
|
|
Unscheduled
|
114,811
|
|
|
11,985
|
|
|
64,486
|
|
|
39,457
|
|
|
814
|
|
|
—
|
|
|
102,059
|
|
|
333,612
|
|
||||||||
March 31, 2017
|
$
|
185,205
|
|
|
$
|
28,169
|
|
|
$
|
112,861
|
|
|
$
|
75,779
|
|
|
$
|
27,723
|
|
|
$
|
8,934
|
|
|
$
|
263,510
|
|
|
$
|
702,181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
20,566
|
|
|
$
|
15,209
|
|
|
$
|
21,546
|
|
|
$
|
21,325
|
|
|
$
|
—
|
|
|
$
|
15,929
|
|
|
$
|
311,739
|
|
|
$
|
406,314
|
|
Unscheduled
|
47,156
|
|
|
10,767
|
|
|
111,137
|
|
|
34,477
|
|
|
4,427
|
|
|
—
|
|
|
2,240
|
|
|
210,204
|
|
||||||||
December 31, 2016
|
$
|
67,722
|
|
|
$
|
25,976
|
|
|
$
|
132,683
|
|
|
$
|
55,802
|
|
|
$
|
4,427
|
|
|
$
|
15,929
|
|
|
$
|
313,979
|
|
|
$
|
616,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
47,221
|
|
|
$
|
7,954
|
|
|
$
|
39,192
|
|
|
$
|
22,626
|
|
|
$
|
26,522
|
|
|
$
|
58,177
|
|
|
$
|
559,895
|
|
|
$
|
761,587
|
|
Unscheduled
|
85,583
|
|
|
17,108
|
|
|
67,094
|
|
|
36,099
|
|
|
2,108
|
|
|
—
|
|
|
5,000
|
|
|
212,992
|
|
||||||||
September 30, 2016
|
$
|
132,804
|
|
|
$
|
25,062
|
|
|
$
|
106,286
|
|
|
$
|
58,725
|
|
|
$
|
28,630
|
|
|
$
|
58,177
|
|
|
$
|
564,895
|
|
|
$
|
974,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
10,769
|
|
|
$
|
9,876
|
|
|
$
|
34,610
|
|
|
$
|
34,434
|
|
|
$
|
82
|
|
|
$
|
7,424
|
|
|
$
|
66,699
|
|
|
$
|
163,894
|
|
Unscheduled
|
64,184
|
|
|
8,947
|
|
|
54,119
|
|
|
68,535
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,785
|
|
||||||||
June 30, 2016
|
$
|
74,953
|
|
|
$
|
18,823
|
|
|
$
|
88,729
|
|
|
$
|
102,969
|
|
|
$
|
82
|
|
|
$
|
7,424
|
|
|
$
|
66,699
|
|
|
$
|
359,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
42,555
|
|
|
$
|
17,866
|
|
|
$
|
42,619
|
|
|
$
|
42,969
|
|
|
$
|
25,966
|
|
|
$
|
4,140
|
|
|
$
|
589,847
|
|
|
$
|
765,962
|
|
Unscheduled
|
91,510
|
|
|
10,883
|
|
|
72,642
|
|
|
44,694
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219,729
|
|
||||||||
March 31, 2016
|
$
|
134,065
|
|
|
$
|
28,749
|
|
|
$
|
115,261
|
|
|
$
|
87,663
|
|
|
$
|
25,966
|
|
|
$
|
4,140
|
|
|
$
|
589,847
|
|
|
$
|
985,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
6,689
|
|
|
$
|
16,884
|
|
|
$
|
26,265
|
|
|
$
|
18,981
|
|
|
$
|
11,234
|
|
|
$
|
4,165
|
|
|
$
|
15,154
|
|
|
$
|
99,372
|
|
Unscheduled
|
59,280
|
|
|
22,534
|
|
|
78,250
|
|
|
33,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
193,873
|
|
||||||||
December 31, 2015
|
$
|
65,969
|
|
|
$
|
39,418
|
|
|
$
|
104,515
|
|
|
$
|
52,790
|
|
|
$
|
11,234
|
|
|
$
|
4,165
|
|
|
$
|
15,154
|
|
|
$
|
293,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
37,524
|
|
|
$
|
11,178
|
|
|
$
|
45,943
|
|
|
$
|
19,785
|
|
|
$
|
25,662
|
|
|
$
|
4,033
|
|
|
$
|
609,524
|
|
|
$
|
753,649
|
|
Unscheduled
|
70,242
|
|
|
11,164
|
|
|
61,075
|
|
|
35,394
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
177,875
|
|
||||||||
September 30, 2015
|
$
|
107,766
|
|
|
$
|
22,342
|
|
|
$
|
107,018
|
|
|
$
|
55,179
|
|
|
$
|
25,662
|
|
|
$
|
4,033
|
|
|
$
|
609,524
|
|
|
$
|
931,524
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
8,687
|
|
|
$
|
11,126
|
|
|
$
|
34,064
|
|
|
$
|
31,064
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
9,245
|
|
|
$
|
94,205
|
|
Unscheduled
|
48,659
|
|
|
11,299
|
|
|
47,714
|
|
|
45,357
|
|
|
13,910
|
|
|
—
|
|
|
—
|
|
|
166,939
|
|
||||||||
June 30, 2015
|
$
|
57,346
|
|
|
$
|
22,425
|
|
|
$
|
81,778
|
|
|
$
|
76,421
|
|
|
$
|
13,929
|
|
|
$
|
—
|
|
|
$
|
9,245
|
|
|
$
|
261,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
39,803
|
|
|
$
|
21,163
|
|
|
$
|
53,747
|
|
|
$
|
33,388
|
|
|
$
|
25,805
|
|
|
$
|
—
|
|
|
$
|
81,922
|
|
|
$
|
255,828
|
|
Unscheduled
|
59,731
|
|
|
16,687
|
|
|
68,330
|
|
|
38,914
|
|
|
390
|
|
|
—
|
|
|
—
|
|
|
184,052
|
|
||||||||
March 31, 2015
|
$
|
99,534
|
|
|
$
|
37,850
|
|
|
$
|
122,077
|
|
|
$
|
72,302
|
|
|
$
|
26,195
|
|
|
$
|
—
|
|
|
$
|
81,922
|
|
|
$
|
439,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
For the year ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
121,111
|
|
|
$
|
50,905
|
|
|
$
|
137,967
|
|
|
$
|
121,354
|
|
|
$
|
52,570
|
|
|
$
|
85,670
|
|
|
$
|
1,528,180
|
|
|
$
|
2,097,757
|
|
Unscheduled
|
288,433
|
|
|
47,705
|
|
|
304,992
|
|
|
183,805
|
|
|
6,535
|
|
|
—
|
|
|
7,240
|
|
|
838,710
|
|
||||||||
December 31, 2016
|
$
|
409,544
|
|
|
$
|
98,610
|
|
|
$
|
442,959
|
|
|
$
|
305,159
|
|
|
$
|
59,105
|
|
|
$
|
85,670
|
|
|
$
|
1,535,420
|
|
|
$
|
2,936,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Scheduled
|
$
|
92,703
|
|
|
$
|
60,351
|
|
|
$
|
160,019
|
|
|
$
|
103,218
|
|
|
$
|
62,720
|
|
|
$
|
8,198
|
|
|
$
|
715,845
|
|
|
$
|
1,203,054
|
|
Unscheduled
|
237,912
|
|
|
61,684
|
|
|
255,369
|
|
|
153,474
|
|
|
14,300
|
|
|
—
|
|
|
—
|
|
|
722,739
|
|
||||||||
December 31, 2015
|
$
|
330,615
|
|
|
$
|
122,035
|
|
|
$
|
415,388
|
|
|
$
|
256,692
|
|
|
$
|
77,020
|
|
|
$
|
8,198
|
|
|
$
|
715,845
|
|
|
$
|
1,925,793
|
|
Lines of Business - Outstanding Business Volume
|
|||||||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
|
||||||||||||||||||||||
|
Loans
|
|
Guaranteed Securities
|
|
LTSPCs
|
|
USDA Securities
|
|
Loans
|
|
LTSPCs
|
|
AgVantage
|
|
Total
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||
As of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
March 31, 2017
|
$
|
3,643,386
|
|
|
$
|
387,272
|
|
|
$
|
2,209,809
|
|
|
$
|
2,149,697
|
|
|
$
|
999,130
|
|
|
$
|
869,664
|
|
|
$
|
7,585,583
|
|
|
$
|
17,844,541
|
|
December 31, 2016
|
3,514,454
|
|
|
415,441
|
|
|
2,209,409
|
|
|
2,094,375
|
|
|
999,512
|
|
|
878,598
|
|
|
7,287,686
|
|
|
17,399,475
|
|
||||||||
September 30, 2016
|
3,338,484
|
|
|
441,417
|
|
|
2,224,827
|
|
|
2,020,834
|
|
|
993,139
|
|
|
874,527
|
|
|
7,354,511
|
|
|
17,247,739
|
|
||||||||
June 30, 2016
|
3,188,598
|
|
|
466,479
|
|
|
2,175,456
|
|
|
1,960,358
|
|
|
1,001,769
|
|
|
932,704
|
|
|
7,391,172
|
|
|
17,116,536
|
|
||||||||
March 31, 2016
|
3,022,458
|
|
|
485,302
|
|
|
2,206,029
|
|
|
1,929,582
|
|
|
991,851
|
|
|
518,724
|
|
|
7,061,626
|
|
|
16,215,572
|
|
||||||||
December 31, 2015
|
2,957,975
|
|
|
514,051
|
|
|
2,253,273
|
|
|
1,918,277
|
|
|
1,008,126
|
|
|
522,864
|
|
|
6,724,254
|
|
|
15,898,820
|
|
||||||||
September 30, 2015
|
2,778,692
|
|
|
553,469
|
|
|
2,171,869
|
|
|
1,898,625
|
|
|
982,078
|
|
|
518,229
|
|
|
6,725,017
|
|
|
15,627,979
|
|
||||||||
June 30, 2015
|
2,710,493
|
|
|
575,811
|
|
|
2,199,266
|
|
|
1,862,430
|
|
|
954,188
|
|
|
—
|
|
|
6,827,939
|
|
|
15,130,127
|
|
||||||||
March 31, 2015
|
2,570,912
|
|
|
598,236
|
|
|
2,178,100
|
|
|
1,814,918
|
|
|
968,117
|
|
|
—
|
|
|
6,529,934
|
|
|
14,660,217
|
|
On-Balance Sheet Outstanding Business Volume
|
|||||||||||||||
|
Fixed Rate
|
|
5- to 10-Year ARMs & Resets
|
|
1-Month to 3-Year ARMs
|
|
Total Held in Portfolio
|
||||||||
|
(in thousands)
|
||||||||||||||
As of:
|
|
|
|
|
|
|
|
||||||||
March 31, 2017
|
$
|
5,373,283
|
|
|
$
|
2,330,819
|
|
|
$
|
5,255,146
|
|
|
$
|
12,959,248
|
|
December 31, 2016
|
5,346,011
|
|
|
2,274,535
|
|
|
4,888,291
|
|
|
12,508,837
|
|
||||
September 30, 2016
|
5,278,332
|
|
|
2,212,946
|
|
|
4,869,765
|
|
|
12,361,043
|
|
||||
June 30, 2016
|
5,201,386
|
|
|
2,157,342
|
|
|
4,867,336
|
|
|
12,226,064
|
|
||||
March 31, 2016
|
4,942,566
|
|
|
2,296,767
|
|
|
4,468,045
|
|
|
11,707,378
|
|
||||
December 31, 2015
|
4,923,163
|
|
|
2,271,960
|
|
|
4,118,366
|
|
|
11,313,489
|
|
||||
September 30, 2015
|
4,889,894
|
|
|
2,147,916
|
|
|
4,049,361
|
|
|
11,087,171
|
|
||||
June 30, 2015
|
5,136,559
|
|
|
2,118,999
|
|
|
4,102,075
|
|
|
11,357,633
|
|
||||
March 31, 2015
|
5,006,542
|
|
|
2,020,600
|
|
|
3,857,363
|
|
|
10,884,505
|
|
|
Net Effective Spread by Line of Business
|
|
|
||||||||||||||||||||||||||||||||||||||
|
Farm & Ranch
|
|
USDA Guarantees
|
|
Rural Utilities
|
|
Institutional Credit
|
|
Corporate
|
|
Net Effective Spread
|
||||||||||||||||||||||||||||||
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
|
Dollars
|
|
Yield
|
||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
For the quarter ended:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
March 31, 2017
(1)
|
$
|
10,684
|
|
|
1.80
|
%
|
|
$
|
4,703
|
|
|
0.91
|
%
|
|
$
|
2,639
|
|
|
1.06
|
%
|
|
$
|
12,581
|
|
|
0.82
|
%
|
|
$
|
2,259
|
|
|
0.32
|
%
|
|
$
|
32,866
|
|
|
0.91
|
%
|
December 31, 2016
|
10,349
|
|
|
1.78
|
%
|
|
5,334
|
|
|
1.08
|
%
|
|
2,623
|
|
|
1.05
|
%
|
|
11,627
|
|
|
0.78
|
%
|
|
1,995
|
|
|
0.26
|
%
|
|
31,928
|
|
|
0.89
|
%
|
||||||
September 30, 2016
|
10,703
|
|
|
1.90
|
%
|
|
5,189
|
|
|
1.07
|
%
|
|
2,643
|
|
|
1.05
|
%
|
|
11,427
|
|
|
0.75
|
%
|
|
2,237
|
|
|
0.24
|
%
|
|
32,199
|
|
|
0.86
|
%
|
||||||
June 30, 2016
|
9,875
|
|
|
1.78
|
%
|
|
4,588
|
|
|
0.96
|
%
|
|
2,562
|
|
|
1.03
|
%
|
|
11,407
|
|
|
0.77
|
%
|
|
2,594
|
|
|
0.29
|
%
|
|
31,026
|
|
|
0.84
|
%
|
||||||
March 31, 2016
(1)
|
9,461
|
|
|
1.71
|
%
|
|
4,308
|
|
|
0.91
|
%
|
|
2,538
|
|
|
1.02
|
%
|
|
11,090
|
|
|
0.80
|
%
|
|
2,552
|
|
|
0.26
|
%
|
|
29,949
|
|
|
0.82
|
%
|
||||||
December 31, 2015
|
9,381
|
|
|
1.72
|
%
|
|
4,518
|
|
|
0.96
|
%
|
|
2,845
|
|
|
1.14
|
%
|
|
10,899
|
|
|
0.80
|
%
|
|
2,306
|
|
|
0.26
|
%
|
|
29,949
|
|
|
0.85
|
%
|
||||||
September 30, 2015
|
9,628
|
|
|
1.80
|
%
|
|
4,630
|
|
|
0.99
|
%
|
|
2,907
|
|
|
1.18
|
%
|
|
11,271
|
|
|
0.81
|
%
|
|
1,951
|
|
|
0.25
|
%
|
|
30,387
|
|
|
0.88
|
%
|
||||||
June 30, 2015
|
9,681
|
|
|
1.82
|
%
|
|
4,466
|
|
|
0.98
|
%
|
|
2,838
|
|
|
1.18
|
%
|
|
10,860
|
|
|
0.78
|
%
|
|
1,942
|
|
|
0.25
|
%
|
|
29,787
|
|
|
0.88
|
%
|
||||||
March 31, 2015
(2)
|
10,114
|
|
|
1.97
|
%
|
|
4,225
|
|
|
0.95
|
%
|
|
2,804
|
|
|
1.15
|
%
|
|
10,425
|
|
|
0.77
|
%
|
|
1,689
|
|
|
0.20
|
%
|
|
29,257
|
|
|
0.86
|
%
|
(1)
|
Net effective spread is a non-GAAP measure. See Note 9 to the consolidated financial statements for a reconciliation of GAAP net interest income by line of business to net effective spread by line of business for the three months ended March 31, 2017 and 2016.
|
(2)
|
Beginning in first quarter 2015, Farmer Mac revised its methodology for interest expense allocation among the Farm & Ranch, USDA Guarantees, and Rural Utilities lines of business. As a result of this revision, a greater percentage of interest expense has been allocated to the longer-term assets included within the USDA Guarantees and Rural Utilities lines of business.
|
Core Earnings by Quarter Ended
|
|||||||||||||||||||||||||||||||||||
|
March 2017
|
|
December 2016
|
|
September 2016
|
|
June 2016
|
|
March 2016
|
|
December 2015
|
|
September 2015
|
|
June 2015
|
|
March 2015
|
||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net effective spread
|
$
|
32,866
|
|
|
$
|
31,928
|
|
|
$
|
32,199
|
|
|
$
|
31,026
|
|
|
$
|
29,949
|
|
|
$
|
29,949
|
|
|
$
|
30,387
|
|
|
$
|
29,787
|
|
|
$
|
29,257
|
|
Guarantee and commitment fees
|
5,317
|
|
|
5,158
|
|
|
4,533
|
|
|
4,810
|
|
|
4,669
|
|
|
4,730
|
|
|
4,328
|
|
|
4,085
|
|
|
4,012
|
|
|||||||||
Other
|
1,061
|
|
|
1,189
|
|
|
(32
|
)
|
|
(125
|
)
|
|
(517
|
)
|
|
(284
|
)
|
|
(93
|
)
|
|
(24
|
)
|
|
(405
|
)
|
|||||||||
Total revenues
|
39,244
|
|
|
38,275
|
|
|
36,700
|
|
|
35,711
|
|
|
34,101
|
|
|
34,395
|
|
|
34,622
|
|
|
33,848
|
|
|
32,864
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Credit related expense/(income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Provision for/(release of) losses
|
444
|
|
|
512
|
|
|
(31
|
)
|
|
458
|
|
|
63
|
|
|
(49
|
)
|
|
(303
|
)
|
|
1,256
|
|
|
(696
|
)
|
|||||||||
REO operating expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
44
|
|
|
48
|
|
|
—
|
|
|
(1
|
)
|
|||||||||
Losses/(gains) on sale of REO
|
5
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||||||
Total credit related expense/(income)
|
449
|
|
|
512
|
|
|
(46
|
)
|
|
458
|
|
|
102
|
|
|
(5
|
)
|
|
(255
|
)
|
|
1,256
|
|
|
(696
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Compensation and employee benefits
|
6,317
|
|
|
5,949
|
|
|
5,438
|
|
|
5,611
|
|
|
5,774
|
|
|
5,385
|
|
|
5,236
|
|
|
5,733
|
|
|
5,693
|
|
|||||||||
General and administrative
|
3,800
|
|
|
4,352
|
|
|
3,474
|
|
|
3,757
|
|
|
3,526
|
|
|
3,238
|
|
|
3,676
|
|
|
3,374
|
|
|
2,823
|
|
|||||||||
Regulatory fees
|
625
|
|
|
625
|
|
|
613
|
|
|
612
|
|
|
613
|
|
|
613
|
|
|
600
|
|
|
600
|
|
|
600
|
|
|||||||||
Total operating expenses
|
10,742
|
|
|
10,926
|
|
|
9,525
|
|
|
9,980
|
|
|
9,913
|
|
|
9,236
|
|
|
9,512
|
|
|
9,707
|
|
|
9,116
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net earnings
|
28,053
|
|
|
26,837
|
|
|
27,221
|
|
|
25,273
|
|
|
24,086
|
|
|
25,164
|
|
|
25,365
|
|
|
22,885
|
|
|
24,444
|
|
|||||||||
Income tax expense
(1)
|
9,166
|
|
|
9,581
|
|
|
9,497
|
|
|
8,956
|
|
|
8,444
|
|
|
8,855
|
|
|
8,924
|
|
|
8,091
|
|
|
6,692
|
|
|||||||||
Net (loss)/income attributable to non-controlling interest
|
(15
|
)
|
|
28
|
|
|
(18
|
)
|
|
(16
|
)
|
|
(28
|
)
|
|
(60
|
)
|
|
(36
|
)
|
|
(119
|
)
|
|
5,354
|
|
|||||||||
Preferred stock dividends
|
3,295
|
|
|
3,296
|
|
|
3,295
|
|
|
3,296
|
|
|
3,295
|
|
|
3,296
|
|
|
3,295
|
|
|
3,296
|
|
|
3,295
|
|
|||||||||
Core earnings
|
$
|
15,607
|
|
|
$
|
13,932
|
|
|
$
|
14,447
|
|
|
$
|
13,037
|
|
|
$
|
12,375
|
|
|
$
|
13,073
|
|
|
$
|
13,182
|
|
|
$
|
11,617
|
|
|
$
|
9,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Reconciling items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Gains/(losses) on financial derivatives and hedging activities due to fair value changes
|
4,805
|
|
|
17,233
|
|
|
1,460
|
|
|
(2,076
|
)
|
|
(2,989
|
)
|
|
2,743
|
|
|
(6,906
|
)
|
|
15,982
|
|
|
(895
|
)
|
|||||||||
Unrealized (losses)/gains on trading assets
|
(82
|
)
|
|
(474
|
)
|
|
1,182
|
|
|
394
|
|
|
358
|
|
|
696
|
|
|
(8
|
)
|
|
170
|
|
|
362
|
|
|||||||||
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value
|
(127
|
)
|
|
(40
|
)
|
|
(157
|
)
|
|
(371
|
)
|
|
(281
|
)
|
|
(263
|
)
|
|
(117
|
)
|
|
(125
|
)
|
|
(814
|
)
|
|||||||||
Net effects of settlements on agency forward contracts
|
32
|
|
|
1,024
|
|
|
464
|
|
|
466
|
|
|
(255
|
)
|
|
(162
|
)
|
|
(390
|
)
|
|
197
|
|
|
(252
|
)
|
|||||||||
Loss on retirement of Farmer Mac II LLC Preferred Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,147
|
)
|
|||||||||
Income tax effect related to reconciling items
|
(1,620
|
)
|
|
(6,210
|
)
|
|
(1,032
|
)
|
|
556
|
|
|
1,109
|
|
|
(1,055
|
)
|
|
2,598
|
|
|
(5,679
|
)
|
|
2,461
|
|
|||||||||
Net income attributable to common stockholders
|
$
|
18,615
|
|
|
$
|
25,465
|
|
|
$
|
16,364
|
|
|
$
|
12,006
|
|
|
$
|
10,317
|
|
|
$
|
15,032
|
|
|
$
|
8,359
|
|
|
$
|
22,162
|
|
|
$
|
1,818
|
|
(1)
|
First quarter 2017 includes $0.7 million of tax benefits upon the vesting of restricted stock and the exercise of SARs associated with new accounting guidance for stock-based awards that became effective in first quarter 2017.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
(b)
|
Not applicable.
|
(c)
|
None.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits and Financial Statement Schedules
|
(a)
|
(1) Financial Statements.
|
*
|
|
3.1
|
|
—
|
|
Title VIII of the Farm Credit Act of 1971, as most recently amended by the Food, Conservation and Energy Act of 2008 (Previously filed as Exhibit to Form 10-Q filed August 12, 2008).
|
*
|
|
3.2
|
|
—
|
|
Amended and Restated By-Laws of the Registrant (Previously filed as Exhibit 3.1 to Form 8-K filed June 9, 2014).
|
*
|
|
4.1
|
|
—
|
|
Specimen Certificate for Farmer Mac Class A Voting Common Stock (Previously filed as Exhibit 4.1 to Form 10-Q filed May 15, 2003).
|
*
|
|
4.2
|
|
—
|
|
Specimen Certificate for Farmer Mac Class B Voting Common Stock (Previously filed as Exhibit 4.2 to Form 10-Q filed May 15, 2003).
|
*
|
|
4.3
|
|
—
|
|
Specimen Certificate for Farmer Mac Class C Non-Voting Common Stock (Previously filed as Exhibit 4.3 to Form 10-Q filed May 15, 2003).
|
*
|
|
4.4
|
|
—
|
|
Specimen Certificate for 5.875% Non-Cumulative Preferred Stock, Series A (Previously filed as Exhibit 4.4.1 to Form 10-Q filed May 9, 2013).
|
*
|
|
4.4.1
|
|
—
|
|
Certificate of Designation of Terms and Conditions of 5.875% Non-Cumulative Preferred Stock, Series A (Previously filed as Exhibit 4.1 to Form 8-A filed January 17, 2013).
|
*
|
|
4.5
|
|
—
|
|
Specimen Certificate for 6.875% Non-Cumulative Preferred Stock, Series B (Previously filed as Exhibit 4.5 to Form 10-Q filed May 12, 2014).
|
*
|
|
4.5.1
|
|
—
|
|
Certificate of Designation of Terms and Conditions of 6.875% Non-Cumulative Preferred Stock, Series B (Previously filed as Exhibit 4.1 to Form 8-A filed March 25, 2014).
|
*
|
|
4.6
|
|
—
|
|
Specimen Certificate for 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.6 to Form 10-Q filed August 11, 2014).
|
*
|
|
4.6.1
|
|
—
|
|
Certificate of Designation of Terms and Conditions of 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.1 to Form 8-A filed June 20, 2014).
|
†**
|
|
10.1
|
|
—
|
|
Amended and Restated 2008 Omnibus Incentive Plan (effective February 28, 2017)
|
†**
|
|
10.2
|
|
—
|
|
Nonqualified Deferred Compensation Plan (effective May 1, 2017)
|
†**
|
|
10.3
|
|
—
|
|
Adoption Agreement of the Nonqualified Deferred Compensation Plan (effective May 1, 2017)
|
**
|
|
31.1
|
|
—
|
|
Certification of Registrant's principal executive officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**
|
|
31.2
|
|
—
|
|
Certification of Registrant's principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
**
|
|
32
|
|
—
|
|
Certification of Registrant's principal executive officer and principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
*
|
Incorporated by reference to the indicated prior filing.
|
**
|
Filed with this report.
|
†
|
Management contract or compensatory plan.
|
/s/ Timothy L. Buzby
|
|
May 10, 2017
|
|
By:
|
Timothy L. Buzby
|
|
Date
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
/s/ R. Dale Lynch
|
|
May 10, 2017
|
|
By:
|
R. Dale Lynch
|
|
Date
|
|
Executive Vice President – Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|