Loans and Commitments (Tables)

9 Months Ended

Feb. 28, 2014

Loans and Commitments

Schedule of Financing Receivable and Unadvanced Commitments

Loans outstanding to members and unadvanced commitments by loan type and by member class are summarized as follows:

	February 28, 2014				May 31, 2013
(Dollars in thousands)	Loans Outstanding		Unadvanced Commitments (1)		Loans Outstanding		Unadvanced Commitments (1)
Total by loan type (2):
Long-term fixed-rate loans	$	18,185,111	$	-	$	17,918,268	$	-
Long-term variable-rate loans		770,883		4,547,813		782,006		4,718,162
Loans guaranteed by RUS		203,173		-		210,815		-
Line of credit loans		1,476,166		8,996,845		1,385,228		8,704,586
Total loans outstanding		20,635,333		13,544,658		20,296,317		13,422,748
Deferred origination costs		9,731		-		9,557		-
Less: Allowance for loan losses		(56,040)		-		(54,325)		-
Net loans outstanding	$	20,589,024	$	13,544,658	$	20,251,549	$	13,422,748
Total by member class (2):
CFC:
Distribution	$	15,186,620	$	9,115,128	$	14,941,192	$	8,948,826
Power supply		4,149,104		3,024,666		4,007,669		3,145,518
Statewide and associate		64,822		128,440		70,956		102,087
CFC total		19,400,546		12,268,234		19,019,817		12,196,431
RTFC		455,492		312,466		503,359		317,344
NCSC		779,295		963,958		773,141		908,973
Total loans outstanding	$	20,635,333	$	13,544,658	$	20,296,317	$	13,422,748

(1) The interest rate on unadvanced commitments is not set until drawn, therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan.

(2) Includes nonperforming and restructured loans.

Nonperforming and restructured loans outstanding and unadvanced commitments to members included in the table above are summarized by loan type and by company below:

	February 28, 2014				May 31, 2013
	Loans		Unadvanced		Loans		Unadvanced
(Dollars in thousands)	Outstanding		Commitments (1)		Outstanding		Commitments (1)
Nonperforming and restructured loans:
Nonperforming loans:
CFC:
Line of credit loans	$	5,000	$	-	$	5,000	$	-
NCSC:
Line of credit loans		450		-		-		-
RTFC:
Long-term fixed-rate loans		2,786		-		3,690		-
Long-term variable-rate loans		2,609		-		6,807		-
Total nonperforming loans	$	10,845	$	-	$	15,497	$	-
Restructured loans:
CFC:
Long-term fixed-rate loans	$	7,584	$	-	$	46,953	$	-
Line of credit loans (2)		-		-		-		5,000
Total restructured loans	$	7,584	$	-	$	46,953	$	5,000

(1) The interest rate on unadvanced commitments is not set until drawn, therefore, the long-term unadvanced loan commitments have been classified in this table as variable-rate unadvanced commitments. However, at the time of the advance, the borrower may select a fixed or a variable rate on the new loan.

(2) The unadvanced commitment is part of the terms outlined in the related restructure agreement. Loans advanced under these commitments would be classified as performing. Principal and interest due under these performing loans would be in addition to scheduled payments due under the restructured loan agreement.

Schedule of Available Balance and Maturities of Committed Lines of Credit

The following table summarizes the available balance at February 28, 2014 under committed lines of credit that are not subject to a material adverse change clause and the related maturities by fiscal year and thereafter as follows:

	Available		Notional Maturities of Committed Lines of Credit
(Dollars in thousands)	Balance		2014		2015		2016		2017		2018		Thereafter
Committed lines of credit	$	2,248,762	$	19,048	$	55,026	$	61,000	$	466,061	$	861,098	$	786,529

Past Due Financing Receivables

The tables below present the payment status, including an aging of delinquent loans, of the recorded investment in loans outstanding by member class at February 28, 2014 and May 31, 2013:

	February 28, 2014
(Dollars in thousands)	Current			30-89 Days Past Due			90 Days or More Past Due (1)			Total Past Due			Total Financing Receivables			Non-accrual Loans
CFC:
Distribution	$	15,186,620		$	-		$	-		$	-		$	15,186,620		$	7,584
Power supply		4,144,104			-			5,000			5,000			4,149,104			5,000
Statewide and associate		64,822			-			-			-			64,822			-
CFC total		19,395,546			-			5,000			5,000			19,400,546			12,584
RTFC		451,913			-			3,579			3,579			455,492			5,395
NCSC		779,295			-			-			-			779,295			450
Total loans outstanding	$	20,626,754		$	-		$	8,579		$	8,579		$	20,635,333		$	18,429
As a % of total loans		99.96	%		0.00	%		0.04	%		0.04	%		100.00	%		0.09	%

(1) All loans 90 days or more past due are on non-accrual status.

	May 31, 2013
(Dollars in thousands)	Current			30-89 Days Past Due			90 Days or More Past Due (1)			Total Past Due			Total Financing Receivables			Non-accrual Loans
CFC:
Distribution	$	14,938,351		$	2,841		$	-		$	2,841		$	14,941,192		$	7,584
Power supply		4,002,669			-			5,000			5,000			4,007,669			5,000
Statewide and associate		70,956			-			-			-			70,956			-
CFC total		19,011,976			2,841			5,000			7,841			19,019,817			12,584
RTFC		495,040			4,163			4,156			8,319			503,359			10,497
NCSC		773,141			-			-			-			773,141			-
Total loans outstanding	$	20,280,157		$	7,004		$	9,156		$	16,160		$	20,296,317		$	23,081
As a % of total loans		99.92	%		0.03	%		0.05	%		0.08	%		100.00	%		0.11	%

(1) All loans 90 days or more past due are on non-accrual status.

Financing Receivable Credit Quality Indicators

The following table presents our loan portfolio by risk rating category and member class at February 28, 2014 and May 31, 2013:

	February 28, 2014						May 31, 2013
(Dollars in thousands)	Pass		Criticized		Total		Pass		Criticized		Total
CFC:
Distribution	$	15,168,785	$	17,835	$	15,186,620	$	14,922,558	$	18,634	$	14,941,192
Power supply		4,144,104		5,000		4,149,104		4,002,669		5,000		4,007,669
Statewide and associate		64,542		280		64,822		70,668		288		70,956
CFC total		19,377,431		23,115		19,400,546		18,995,895		23,922		19,019,817
RTFC		441,757		13,735		455,492		483,058		20,301		503,359
NCSC		776,981		2,314		779,295		770,419		2,722		773,141
Total loans outstanding	$	20,596,169	$	39,164	$	20,635,333	$	20,249,372	$	46,945	$	20,296,317

Schedule of Financing Receivable Secured and Unsecured

The following table summarizes our secured and unsecured loans outstanding by loan type and by company:

	February 28, 2014								May 31, 2013
(Dollars in thousands)	Secured		%		Unsecured		%		Secured		%		Unsecured		%
Total by loan type:
Long-term fixed-rate loans	$	17,128,504	94	%	$	1,056,607	6	%	$	16,871,594	94	%	$	1,046,674	6	%
Long-term variable-rate loans		679,446	88			91,437	12			676,075	86			105,931	14
Loans guaranteed by RUS		203,173	100			-	-			210,815	100			-	-
Line of credit loans		307,820	21			1,168,346	79			294,575	21			1,090,653	79
Total loans outstanding	$	18,318,943	89		$	2,316,390	11		$	18,053,059	89		$	2,243,258	11
Total by company:
CFC	$	17,323,741	89	%	$	2,076,805	11	%	$	17,049,029	90	%	$	1,970,788	10	%
RTFC		436,001	96			19,491	4			482,647	96			20,712	4
NCSC		559,201	72			220,094	28			521,383	67			251,758	33
Total loans outstanding	$	18,318,943	89		$	2,316,390	11		$	18,053,059	89		$	2,243,258	11

Allowance for Credit Losses on Financing Receivables

The tables below summarize the changes in the allowance for loan losses by company for the three and nine months ended February 28, 2014.

	Three Months Ended February 28, 2014
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Balance as of November 30, 2013	$	42,762	$	7,859	$	4,578	$	55,199
Provision for (recovery of) loan losses		1,543		(2,450)		1,694		787
Charge-offs		-		-		-		-
Recoveries of loans previously charged-off		54		-		-		54
Balance as of February 28, 2014	$	44,359	$	5,409	$	6,272	$	56,040

	Three Months Ended February 28, 2013
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Balance as of November 30, 2012	$	133,578	$	8,314	$	6,845	$	148,737
Provision for (recovery of) loan losses		432		(214)		(596)		(378)
Recoveries of loans previously charged-off		52		-		-		52
Balance as of February 28, 2013	$	134,062	$	8,100	$	6,249	$	148,411

	Nine Months Ended February 28, 2014
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Balance as of May 31, 2013	$	41,246	$	9,158	$	3,921	$	54,325
Provision for (recovery of) loan losses		2,953		(2,143)		2,351		3,161
Charge-offs		-		(1,606)		-		(1,606)
Recoveries of loans previously charged-off		160		-		-		160
Balance as of February 28, 2014	$	44,359	$	5,409	$	6,272	$	56,040

	Nine Months Ended February 28, 2013
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Balance as of May 31, 2012	$	126,941	$	8,562	$	7,823	$	143,326
Provision for (recovery of) loan losses		6,963		(462)		(1,574)		4,927
Recoveries of loans previously charged-off		158		-		-		158
Balance as of February 28, 2013	$	134,062	$	8,100	$	6,249	$	148,411

The tables below present the loan loss allowance and the recorded investment in outstanding loans by impairment methodology and by company:

	February 28, 2014
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Ending balance of the allowance:
Collectively evaluated	$	44,359	$	4,950	$	6,217	$	55,526
Individually evaluated		-		459		55		514
Total ending balance of the allowance	$	44,359	$	5,409	$	6,272	$	56,040
Recorded investment in loans:
Collectively evaluated	$	19,387,962	$	450,097	$	778,845	$	20,616,904
Individually evaluated		12,584		5,395		450		18,429
Total recorded investment in loans (1)	$	19,400,546	$	455,492	$	779,295	$	20,635,333
Loans to members, net (1)	$	19,356,187	$	450,083	$	773,023	$	20,579,293

	May 31, 2013
(Dollars in thousands)	CFC		RTFC		NCSC		Total
Ending balance of the allowance:
Collectively evaluated	$	41,246	$	5,731	$	3,921	$	50,898
Individually evaluated		-		3,427		-		3,427
Total ending balance of the allowance	$	41,246	$	9,158	$	3,921	$	54,325
Recorded investment in loans:
Collectively evaluated	$	18,967,864	$	492,862	$	773,141	$	20,233,867
Individually evaluated		51,953		10,497		-		62,450
Total recorded investment in loans (1)	$	19,019,817	$	503,359	$	773,141	$	20,296,317
Loans to members, net (1)	$	18,978,571	$	494,201	$	769,220	$	20,241,992

(1) Excludes deferred origination costs of $10 million at February 28, 2014 and May 31, 2013.

Impaired Financing Receivable with Related Allowance Recorded Investment

Our recorded investment in individually-impaired loans and the related specific valuation allowance is summarized below by member class:

	February 28, 2014				May 31, 2013
(Dollars in thousands)	Recorded Investment		Related Allowance		Recorded Investment		Related Allowance
With no specific allowance recorded:
CFC/Distribution	$	7,584	$	-	$	46,953	$	-
CFC/Power Supply		5,000		-		5,000		-
RTFC		3,580		-		-		-
Total		16,164		-		51,953		-
With a specific allowance recorded:
NCSC		450		55
RTFC		1,815		459		10,497		3,427
Total		2,265		514		10,497		3,427
Total impaired loans	$	18,429	$	514	$	62,450	$	3,427

Impaired Financing Receivable Average Recorded Investment and Interest Income Recognized

The table below represents the average recorded investment in impaired loans and the interest income recognized by member class:

	Three Months Ended February 28,
	2014		2013		2014		2013
(Dollars in thousands)	Average Recorded Investment				Interest Income Recognized
CFC/Distribution	$	7,584	$	70,111	$	-	$	435
CFC/Power Supply		5,000		5,000		-		-
NCSC		454		-		-		-
RTFC		5,527		6,497		-		-
Total impaired loans	$	18,565	$	81,608	$	-	$	435

	Nine Months Ended February 28,
	Average Recorded Investment				Interest Income Recognized
(Dollars in thousands)	2014		2013		2014		2013
CFC/Distribution	$	11,939	$	208,632	$	136	$	13,522
CFC/Power Supply		5,000		5,000		-		-
NCSC		151		-		-		-
RTFC		7,735		6,668		-		-
Total impaired loans	$	24,825	$	220,300	$	136	$	13,522

Schedule of Loans and Leases Receivable Impaired Interest Reduced on Nonaccrual Loans

Foregone interest income as a result of holding loans on non-accrual status:

	Three Months Ended February 28,				Nine Months Ended February 28,
(Dollars in thousands)	2014		2013		2014		2013
Nonperforming loans	$	120	$	355	$	440	$	1,135
Restructured loans		122		-		367		-
Total	$	242	$	355	$	807	$	1,135

Schedule of Financing Receivables Pledged as Collateral Against Debt Instruments

The following table summarizes our loans outstanding as collateral pledged to secure our collateral trust bonds, Clean Renewable Energy Bonds and notes payable to the Federal Agricultural Mortgage Corporation and the amount of the corresponding debt outstanding (see Note 5, Short-Term Debt and Credit Arrangements and Note 6, Long-Term Debt).

(Dollars in thousands)	February 28, 2014		May 31, 2013
Collateral trust bonds:
2007 indenture
Distribution system mortgage notes	$	5,454,096	$	5,674,804
RUS guaranteed loans qualifying as permitted investments		162,509		165,823
Total pledged collateral	$	5,616,605	$	5,840,627
Collateral trust bonds outstanding		5,179,372		4,679,372
1994 indenture
Distribution system mortgage notes	$	1,567,122	$	1,641,858
Collateral trust bonds outstanding		1,310,000		1,465,000
Federal Agricultural Mortgage Corporation:
Distribution and power supply system mortgage notes	$	1,784,959	$	1,795,947
Notes payable outstanding		1,523,032		1,542,474
Clean Renewable Energy Bonds Series 2009A:
Distribution and power supply system mortgage notes	$	21,932	$	23,536
Cash		7,221		7,634
Total pledged collateral	$	29,153	$	31,170
Notes payable outstanding		18,230		19,888

The following table shows the collateral on deposit and the amount of the corresponding debt outstanding:

(Dollars in thousands)	February 28, 2014		May 31, 2013
Federal Financing Bank
Distribution and power supply system mortgage notes on deposit	$	4,387,115	$	3,903,786
Notes payable outstanding		3,999,000		3,674,000