Business Segments - (Tables)

6 Months Ended

Nov. 30, 2021

Schedule of Segment Presentation for the Consolidated Statements of Operations and Consolidated Balance Sheets

The following tables display segment results of operations for the three and six months ended November 30, 2021 and 2020, assets attributable to each segment as of November 30, 2021 and November 30, 2020 and a reconciliation of total segment amounts to our consolidated total amounts.

Table 14.1: Business Segment Information


	Three Months Ended November 30, 2021
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	281,131	$	10,973	$	292,104	$	—	$	(8,952)	$	283,152
Interest expense	(173,596)		(8,952)		(182,548)		—		8,952		(173,596)
Derivative cash settlements interest expense	(25,533)		(419)		(25,952)		25,952		—		—
Interest expense	(199,129)		(9,371)		(208,500)		25,952		8,952		(173,596)
Net interest income	82,002		1,602		83,604		25,952		—		109,556
Benefit for credit losses	3,400		3,063		6,463		—		(3,063)		3,400
Net interest income after benefit for credit losses	85,402		4,665		90,067		25,952		(3,063)		112,956
Non-interest income:
Fee and other income	6,093		(1,812)		4,281		—		550		4,831
Derivative gains:
Derivative cash settlements interest expense	—		—		—		(25,952)		—		(25,952)
Derivative forward value gains	—		—		—		72,038		—		72,038
Derivative gains	—		—		—		46,086		—		46,086
Investment securities losses	(4,344)		—		(4,344)		—		—		(4,344)
Total non-interest income	1,749		(1,812)		(63)		46,086		550		46,573
Non-interest expense:
General and administrative expenses	(22,716)		(1,975)		(24,691)		—		1,596		(23,095)
Losses on early extinguishment of debt	(118)		—		(118)		—		—		(118)
Other non-interest expense	(313)		(917)		(1,230)		—		917		(313)
Total non-interest expense	(23,147)		(2,892)		(26,039)		—		2,513		(23,526)
Income (loss) before income taxes	64,004		(39)		63,965		72,038		—		136,003
Income tax provision	—		(274)		(274)		—		—		(274)
Net income (loss)	$	64,004	$	(313)	$	63,691	$	72,038	$	—	$	135,729


	Three Months Ended November 30, 2020
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	274,473	$	11,008	$	285,481	$	—	$	(8,982)	$	276,499
Interest expense	(174,422)		(8,982)		(183,404)		—		8,982		(174,422)
Derivative cash settlements interest expense	(29,370)		(430)		(29,800)		29,800		—		—
Interest expense	(203,792)		(9,412)		(213,204)		29,800		8,982		(174,422)
Net interest income	70,681		1,596		72,277		29,800		—		102,077
Benefit (provision) for credit losses	(1,638)		41		(1,597)		—		(41)		(1,638)
Net interest income after benefit (provision) for credit losses	69,043		1,637		70,680		29,800		(41)		100,439
Non-interest income:
Fee and other income	7,513		686		8,199		—		(1,867)		6,332
Derivative gains:
Derivative cash settlements interest expense	—		—		—		(29,800)		—		(29,800)
Derivative forward value gains	—		—		—		111,087		—		111,087
Derivative gains	—		—		—		81,287		—		81,287
Investment securities losses	(1,361)		—		(1,361)		—		—		(1,361)
Total non-interest income	6,152		686		6,838		81,287		(1,867)		86,258
Non-interest expense:
General and administrative expenses	(23,750)		(1,978)		(25,728)		—		1,592		(24,136)
Losses on early extinguishment of debt	(1,455)		—		(1,455)		—		—		(1,455)
Other non-interest expense	(323)		(316)		(639)		—		316		(323)
Total non-interest expense	(25,528)		(2,294)		(27,822)		—		1,908		(25,914)
Income before income taxes	49,667		29		49,696		111,087		—		160,783
Income tax provision	—		(262)		(262)		—		—		(262)
Net income (loss)	$	49,667	$	(233)	$	49,434	$	111,087	$	—	$	160,521


	Six Months Ended November 30, 2021
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	562,438	$	21,426	$	583,864	$	—	$	(17,444)	$	566,420
Interest expense	(348,373)		(17,444)		(365,817)		—		17,444		(348,373)
Derivative cash settlements interest expense	(52,678)		(837)		(53,515)		53,515		—		—
Interest expense	(401,051)		(18,281)		(419,332)		53,515		17,444		(348,373)
Net interest income	161,387		3,145		164,532		53,515		—		218,047
Benefit (provision) for credit losses	(603)		2,857		2,254		—		(2,857)		(603)
Net interest income after benefit (provision) for credit losses	160,784		6,002		166,786		53,515		(2,857)		217,444
Non-interest income:
Fee and other income	11,416		(928)		10,488		—		(1,716)		8,772
Derivative losses:
Derivative cash settlements interest expense	—		—		—		(53,515)		—		(53,515)
Derivative forward value losses	—		—		—		(72,562)		—		(72,562)
Derivative losses	—		—		—		(126,077)		—		(126,077)
Investment securities losses	(6,569)		—		(6,569)		—		—		(6,569)
Total non-interest income	4,847		(928)		3,919		(126,077)		(1,716)		(123,874)
Non-interest expense:
General and administrative expenses	(46,370)		(4,126)		(50,496)		—		3,191		(47,305)
Losses on early extinguishment of debt	(118)		—		(118)		—		—		(118)
Other non-interest expense	(569)		(1,382)		(1,951)		—		1,382		(569)
Total non-interest expense	(47,057)		(5,508)		(52,565)		—		4,573		(47,992)
Income (loss) before income taxes	118,574		(434)		118,140		(72,562)		—		45,578
Income tax provision	—		(181)		(181)		—		—		(181)
Net income (loss)	$	118,574	$	(615)	$	117,959	$	(72,562)	$	—	$	45,397

	November 30, 2021
	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Assets:
Total loans outstanding	$	28,911,891	$	1,152,940	$	30,064,831	$	—	$	(1,130,017)	$	28,934,814
Deferred loan origination costs	12,056		—		12,056		—		—		12,056
Loans to members	28,923,947		1,152,940		30,076,887		—		(1,130,017)		28,946,870
Less: Allowance for credit losses	(86,135)		(3,212)		(89,347)		—		3,212		(86,135)
Loans to members, net	28,837,812		1,149,728		29,987,540		—		(1,126,805)		28,860,735
Other assets	1,144,912		99,144		1,244,056		—		(89,212)		1,154,844
Total assets	$	29,982,724	$	1,248,872	$	31,231,596	$	—	$	(1,216,017)	$	30,015,579


	Six Months Ended November 30, 2020
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	552,069	$	22,016	$	574,085	$	—	$	(18,002)	$	556,083
Interest expense	(354,398)		(18,002)		(372,400)		—		18,002		(354,398)
Derivative cash settlements interest expense	(55,933)		(839)		(56,772)		56,772		—		—
Interest expense	(410,331)		(18,841)		(429,172)		56,772		18,002		(354,398)
Net interest income	141,738		3,175		144,913		56,772		—		201,685
Benefit (provision) for credit losses	(1,964)		1,107		(857)		—		(1,107)		(1,964)
Net interest income after benefit (provision) for credit losses	139,774		4,282		144,056		56,772		(1,107)		199,721
Non-interest income:
Fee and other income	12,288		170		12,458		—		(2,610)		9,848
Derivative gains:
Derivative cash settlements interest expense	—		—		—		(56,772)		—		(56,772)
Derivative forward value gains	—		—		—		198,335		—		198,335
Derivative gains	—		—		—		141,563		—		141,563
Investment securities gains	3,298		—		3,298		—		—		3,298
Total non-interest income	15,586		170		15,756		141,563		(2,610)		154,709
Non-interest expense:
General and administrative expenses	(45,950)		(4,035)		(49,985)		—		3,186		(46,799)
Losses on early extinguishment of debt	(1,455)		—		(1,455)		—		—		(1,455)
Other non-interest expense	(655)		(531)		(1,186)		—		531		(655)
Total non-interest expense	(48,060)		(4,566)		(52,626)		—		3,717		(48,909)
Income (loss) before income taxes	107,300		(114)		107,186		198,335		—		305,521
Income tax provision	—		(413)		(413)		—		—		(413)
Net income (loss)	$	107,300	$	(527)	$	106,773	$	198,335	$	—	$	305,108

	November 30, 2020
	CFC		NCSC and RTFC		Segment Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Assets:
Total loans outstanding	$	27,027,010	$	1,136,379	$	28,163,389	$	—	$	(1,112,226)	$	27,051,163
Deferred loan origination costs	11,806		—		11,806		—		—		11,806
Loans to members	27,038,816		1,136,379		28,175,195		—		(1,112,226)		27,062,969
Less: Allowance for credit losses	(58,989)		(4,580)		(63,569)		—		4,580		(58,989)
Loans to members, net	26,979,827		1,131,799		28,111,626		—		(1,107,646)		27,003,980
Other assets	1,161,963		107,272		1,269,235		—		(97,113)		1,172,122
Total assets	$	28,141,790	$	1,239,071	$	29,380,861	$	—	$	(1,204,759)	$	28,176,102

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(1)Consists of (i) the reclassification of net periodic derivative settlement interest expense amounts, which we report as a component of interest expense for business segment reporting purposes but is included in derivatives gains (losses) in our consolidated total results and (ii) derivative forward value gains and losses, which we exclude from our business segment results but is included in derivatives gains (losses) in our consolidated total results.

(2)Consists of intercompany borrowings payable by NCSC and RTFC to CFC and the interest related to those borrowings, management fees paid by NCSC and RTFC to CFC and other intercompany amounts, all of which are eliminated in consolidation.