Allowance for Credit Losses - (Tables)

9 Months Ended

Feb. 28, 2022

Schedule of Allowance for Credit Losses on Financing Receivables

The following tables summarize, by legal entity and member class, changes in the allowance for credit losses for our loan portfolio for the three and nine months ended February 28, 2022 and 2021.

Table 5.1: Changes in Allowance for Credit Losses


	Three Months Ended February 28, 2022
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Balance as of November 30, 2021	$	16,032	$	65,467	$	1,424	$	82,923	$	1,594	$	1,618	$	86,135


Provision (benefit) for credit losses	353		(12,989)		(111)		(12,747)		135		(137)		(12,749)

Balance as of February 28, 2022	$	16,385	$	52,478	$	1,313	$	70,176	$	1,729	$	1,481	$	73,386


	Three Months Ended February 28, 2021
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Balance as of November 30, 2020	$	13,215	$	39,781	$	1,413	$	54,409	$	1,341	$	3,239	$	58,989


Provision for credit losses	2,022		27,381		32		29,435		316		3,272		33,023


Balance as of February 28, 2021	$	15,237	$	67,162	$	1,445	$	83,844	$	1,657	$	6,511	$	92,012


	Nine Months Ended February 28, 2022
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Balance as of May 31, 2021	$	13,426	$	64,646	$	1,391	$	79,463	$	1,374	$	4,695	$	85,532


Provision (benefit) for credit losses	2,959		(12,168)		(78)		(9,287)		355		(3,214)		(12,146)

Balance as of February 28, 2022	$	16,385	$	52,478	$	1,313	$	70,176	$	1,729	$	1,481	$	73,386


	Nine Months Ended February 28, 2021
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Balance as of May 31, 2020	$	8,002	$	38,027	$	1,409	$	47,438	$	806	$	4,881	$	53,125
Cumulative-effect adjustment from adoption of CECL accounting standard	3,586		2,034		25		5,645		(15)		(1,730)		3,900
Balance as of June 1, 2020	11,588		40,061		1,434		53,083		791		3,151		57,025
Provision for credit losses	3,649		27,101		11		30,761		866		3,360		34,987


Balance as of February 28, 2021	$	15,237	$	67,162	$	1,445	$	83,844	$	1,657	$	6,511	$	92,012

Schedule of Allowance for Credit Losses and Recorded Investment in Financing Receivables

The following tables present, by legal entity and member class, the components of our allowance for credit losses as of February 28, 2022 and May 31, 2021.

Table 5.2: Allowance for Credit Losses Components


	February 28, 2022
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Allowance components:
Collective allowance	$	16,385	$	12,219	$	1,313	$	29,917	$	1,729	$	1,226	$	32,872
Asset-specific allowance	—		40,259		—		40,259		—		255		40,514
Total allowance for credit losses	$	16,385	$	52,478	$	1,313	$	70,176	$	1,729	$	1,481	$	73,386

Loans outstanding:(1)
Collectively evaluated loans	$	23,220,659	$	4,784,819	$	102,652	$	28,108,130	$	730,147	$	453,523	$	29,291,800
Individually evaluated loans	5,092		207,254		—		212,346		—		4,217		216,563
Total loans outstanding	$	23,225,751	$	4,992,073	$	102,652	$	28,320,476	$	730,147	$	457,740	$	29,508,363


Allowance ratios:
Collective allowance coverage ratio(2)	0.07%	0.26%	1.28%	0.11%	0.24%	0.27%	0.11%
Asset-specific allowance coverage ratio(3)	—	19.42	—	18.96	—	6.05	18.71
Total allowance coverage ratio(4)	0.07	1.05	1.28	0.25	0.24	0.32	0.25


	May 31, 2021
(Dollars in thousands)	CFC Distribution		CFC Power Supply		CFC Statewide & Associate		CFC Total		NCSC		RTFC		Total
Allowance components:
Collective allowance	$	13,426	$	25,104	$	1,391	$	39,921	$	1,374	$	1,147	$	42,442
Asset-specific allowance(5)	—		39,542		—		39,542		—		3,548		43,090
Total allowance for credit losses	$	13,426	$	64,646	$	1,391	$	79,463	$	1,374	$	4,695	$	85,532

Loans outstanding:(1)
Collectively evaluated loans	$	22,022,044	$	4,926,000	$	106,121	$	27,054,165	$	706,868	$	406,606	$	28,167,639
Individually evaluated loans	5,379		228,312		—		233,691		—		13,777		247,468
Total loans outstanding	$	22,027,423	$	5,154,312	$	106,121	$	27,287,856	$	706,868	$	420,383	$	28,415,107


Allowance ratios:
Collective allowance coverage ratio(2)	0.06%	0.51%	1.31%	0.15%	0.19%	0.28%	0.15%
Asset-specific allowance coverage ratio(3)	—	17.32	—	16.92	—	25.75	17.41
Total allowance coverage ratio(4)	0.06	1.25	1.31	0.29	0.19	1.12	0.30

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(1)Represents the unpaid principal amount of loans as of the end of each period. Excludes unamortized deferred loan origination costs of $12 million as of both February 28, 2022 and May 31, 2021.

(2)Calculated based on the collective allowance component at period end divided by collectively evaluated loans outstanding at period end.

(3)Calculated based on the asset-specific allowance component at period end divided by individually evaluated loans outstanding at period end.

(4)Calculated based on the total allowance for credit losses at period end divided by total loans outstanding at period end.