Business Segments (Tables)

3 Months Ended

Aug. 31, 2023

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 months ended August 31, 2023 and 2022, assets attributable to each segment as of August 31, 2023 and August 31, 2022 and a reconciliation of total segment amounts to our consolidated total amounts.

Table 14.1: Business Segment Information


	Three Months Ended August 31, 2023
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	378,630	$	19,032	$	397,662	$	—	$	(16,706)	$	380,956
Interest expense	(316,273)		(16,714)		(332,987)		—		16,706		(316,281)
Derivative cash settlements interest income	27,837		32		27,869		(27,869)		—		—
Interest expense	(288,436)		(16,682)		(305,118)		(27,869)		16,706		(316,281)
Net interest income	90,194		2,350		92,544		(27,869)		—		64,675
Provision for credit losses	(800)		(902)		(1,702)		—		902		(800)
Net interest income after provision for credit losses	89,394		1,448		90,842		(27,869)		902		63,875
Non-interest income:
Fee and other income	6,327		1,666		7,993		—		(3,456)		4,537
Derivative gains:
Derivative cash settlements interest income	—		—		—		27,869		—		27,869
Derivative forward value gains	—		—		—		162,018		—		162,018
Derivative gains	—		—		—		189,887		—		189,887
Investment securities gains	2,933		—		2,933		—		—		2,933
Total non-interest income	9,260		1,666		10,926		189,887		(3,456)		197,357
Non-interest expense:
General and administrative expenses	(30,936)		(2,763)		(33,699)		—		2,196		(31,503)
Losses on early extinguishment of debt	(939)		—		(939)		—		—		(939)
Other non-interest expense	(177)		(359)		(536)		—		358		(178)
Total non-interest expense	(32,052)		(3,122)		(35,174)		—		2,554		(32,620)
Income (loss) before income taxes	66,602		(8)		66,594		162,018		—		228,612
Income tax provision	—		(328)		(328)		—		—		(328)
Net income (loss)	$	66,602	$	(336)	$	66,266	$	162,018	$	—	$	228,284

	August 31, 2023
	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Assets:
Total loans outstanding	$	33,063,285	$	1,462,423	$	34,525,708	$	—	$	(1,442,215)	$	33,083,493
Deferred loan origination costs	13,153		—		13,153		—		—		13,153
Loans to members	33,076,438		1,462,423		34,538,861		—		(1,442,215)		33,096,646
Less: Allowance for credit losses	(54,926)		(4,572)		(59,498)		—		4,572		(54,926)
Loans to members, net	33,021,512		1,457,851		34,479,363		—		(1,437,643)		33,041,720
Other assets	1,644,426		76,321		1,720,747		—		(68,304)		1,652,443
Total assets	$	34,665,938	$	1,534,172	$	36,200,110	$	—	$	(1,505,947)	$	34,694,163


	Three Months Ended August 31, 2022
(Dollars in thousands)	CFC		NCSC and RTFC		Segments Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Results of operations:
Interest income	$	304,984	$	11,936	$	316,920	$	—	$	(9,942)	$	306,978
Interest expense	(209,468)		(9,942)		(219,410)		—		9,942		(209,468)
Derivative cash settlements interest expense	(10,528)		(257)		(10,785)		10,785		—		—
Interest expense	(219,996)		(10,199)		(230,195)		10,785		9,942		(209,468)
Net interest income	84,988		1,737		86,725		10,785		—		97,510
Provision for credit losses	(3,496)		(247)		(3,743)		—		247		(3,496)
Net interest income after provision for credit losses	81,492		1,490		82,982		10,785		247		94,014
Non-interest income:
Fee and other income	5,793		919		6,712		—		(2,656)		4,056
Derivative gains:
Derivative cash settlements interest expense	—		—		—		(10,785)		—		(10,785)
Derivative forward value gains	—		—		—		104,372		—		104,372
Derivative gains	—		—		—		93,587		—		93,587
Investment securities losses	(3,679)		—		(3,679)		—		—		(3,679)
Total non-interest income	2,114		919		3,033		93,587		(2,656)		93,964
Non-interest expense:
General and administrative expenses	(25,012)		(2,535)		(27,547)		—		2,028		(25,519)

Other non-interest expense	(322)		(381)		(703)		—		381		(322)
Total non-interest expense	(25,334)		(2,916)		(28,250)		—		2,409		(25,841)
Income (loss) before income taxes	58,272		(507)		57,765		104,372		—		162,137
Income tax provision	—		(263)		(263)		—		—		(263)
Net income (loss)	$	58,272	$	(770)	$	57,502	$	104,372	$	—	$	161,874

	August 31, 2022
	CFC		NCSC and RTFC		Segment Total		Reclasses and Adjustments(1)		Intersegment Eliminations(2)		Consolidated Total
Assets:
Total loans outstanding	$	30,656,301	$	1,197,504	$	31,853,805	$	—	$	(1,178,809)	$	30,674,996
Deferred loan origination costs	12,335		—		12,335		—		—		12,335
Loans to members	30,668,636		1,197,504		31,866,140		—		(1,178,809)		30,687,331
Less: Allowance for credit losses	(71,056)		(2,982)		(74,038)		—		2,982		(71,056)
Loans to members, net	30,597,580		1,194,522		31,792,102		—		(1,175,827)		30,616,275
Other assets	1,456,295		97,694		1,553,989		—		(87,970)		1,466,019
Total assets	$	32,053,875	$	1,292,216	$	33,346,091	$	—	$	(1,263,797)	$	32,082,294

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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.