Allowance for Losses and Concentration of Credit Risk (Tables)

9 Months Ended

Sep. 30, 2012

Allowance for Losses and Concentrations of Credit Risk [Abstract]

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent

The following is a summary of the changes in the allowance for losses for the three and nine months ended September 30, 2012 and 2011:

	September 30, 2012									September 30, 2011
	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	$	9,361		$	8,779		$	18,140		$	11,053		$	7,443		$	18,496
Provision for/(release of) losses	137			(43		)	94			(349		)	(452		)	(801		)
Charge-offs	(448		)	—			(448		)	(5		)	—			(5		)
Ending Balance	$	9,050		$	8,736		$	17,786		$	10,699		$	6,991		$	17,690
For the Nine Months Ended:
Beginning Balance	$	10,161		$	7,355		$	17,516		$	9,803		$	10,312		$	20,115
(Release of)/provision for losses	(663		)	1,381			718			1,092			(3,321		)	(2,229		)
Charge-offs	(448		)	—			(448		)	(196		)	—			(196		)
Ending Balance	$	9,050		$	8,736		$	17,786		$	10,699		$	6,991		$	17,690

The following tables present the changes in the allowance for losses for the three and nine months ended September 30, 2012 and 2011 by commodity type:

	September 30, 2012
	Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing (including ethanol facilities)		Other			Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	4,281		$	2,522		$	1,471		$	557		$	9,302	$	7		$	18,140
(Release of)/provision for losses	(305		)	176			(129		)	192			161		(1		)	94
Charge-offs	—			(375		)	—			(73		)	—		—			(448		)
Ending Balance	$	3,976		$	2,323		$	1,342		$	676		$	9,463	$	6		$	17,786
For the Nine Months Ended:
Beginning Balance	$	4,133		$	3,099		$	1,697		$	477		$	8,106	$	4		$	17,516
(Release of)/provision for losses	(157		)	(401		)	(355		)	272			1,357		2			718
Charge-offs	—			(375		)	—			(73		)	—		—			(448		)
Ending Balance	$	3,976		$	2,323		$	1,342		$	676		$	9,463	$	6		$	17,786

	September 30, 2011
	Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing (including ethanol facilities)			Other			Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	3,715		$	3,582		$	2,688		$	402		$	8,100		$	9		$	18,496
Provision for/(release of) losses	144			(27		)	(891		)	(28		)	2			(1		)	(801		)
Charge-offs	—			—			—			(5		)	—			—			(5		)
Ending Balance	$	3,859		$	3,555		$	1,797		$	369		$	8,102		$	8		$	17,690
For the Nine Months Ended:
Beginning Balance	$	3,572		$	3,537		$	2,749		$	445		$	9,797		$	15		$	20,115
Provision for/(release of) losses	463			25			(944		)	(71		)	(1,695		)	(7		)	(2,229		)
Charge-offs	(176		)	(7		)	(8		)	(5		)	—			—			(196		)
Ending Balance	$	3,859		$	3,555		$	1,797		$	369		$	8,102		$	8		$	17,690

Allowance for Credit Losses on Financing Receivables

The following tables present the ending balances of loans held and loans underlying LTSPCs and Farmer Mac Guaranteed Securities and the related allowance for losses by impairment method and commodity type as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Ending Balance
Evaluated collectively for impairment	$	1,925,509	$	795,516	$	1,169,443	$	198,175	$	193,769	$	12,041	$	4,294,453
Evaluated individually for impairment	31,786		37,939		17,034		16,391		4,337		1,017		108,504
	$	1,957,295	$	833,455	$	1,186,477	$	214,566	$	198,106	$	13,058	$	4,402,957
Allowance for Losses
Evaluated collectively for impairment	$	1,626	$	643	$	1,131	$	107	$	6,263	$	5	$	9,775
Evaluated individually for impairment	2,350		1,680		211		569		3,200		1		8,011
	$	3,976	$	2,323	$	1,342	$	676	$	9,463	$	6	$	17,786

	As of December 31, 2011
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Ending Balance
Evaluated collectively for impairment	$	1,835,439	$	796,100	$	1,213,227	$	232,607	$	167,850	$	15,914	$	4,261,137
Evaluated individually for impairment	29,520		28,245		10,884		12,513		5,842		1,022		88,026
	$	1,864,959	$	824,345	$	1,224,111	$	245,120	$	173,692	$	16,936	$	4,349,163
Allowance for Losses
Evaluated collectively for impairment	$	1,723	$	775	$	1,290	$	172	$	6,256	$	4	$	10,220
Evaluated individually for impairment	2,410		2,324		407		305		1,850		—		7,296
	$	4,133	$	3,099	$	1,697	$	477	$	8,106	$	4	$	17,516

Impaired Financing Receivables

The following tables present by commodity type the unpaid principal balances, recorded investment and specific allowance for losses related to impaired loans and the recorded investment in loans on nonaccrual status as of September 30, 2012 and December 31, 2011:

	As of September 30, 2012
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including  ethanol facilities)		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	7,863	$	10,060	$	6,007	$	3,377	$	—	$	907	$	28,214
Unpaid principal balance	7,752		10,038		5,686		3,323		—		902		27,701
With a specific allowance:
Recorded investment	24,905		28,302		11,529		13,156		4,498		117		82,507
Unpaid principal balance	24,034		27,901		11,348		13,068		4,337		115		80,803
Associated allowance	2,350		1,680		211		569		3,200		1		8,011
Total:
Recorded investment	32,768		38,362		17,536		16,533		4,498		1,024		110,721
Unpaid principal balance	31,786		37,939		17,034		16,391		4,337		1,017		108,504
Associated allowance	2,350		1,680		211		569		3,200		1		8,011
Recorded investment of loans on nonaccrual status:	$	13,533	$	22,601	$	5,219	$	8,420	$	—	$	—	$	49,773

	As of December 31, 2011
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including  ethanol facilities)		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	6,809	$	10,083	$	3,248	$	3,241	$	—	$	914	$	24,295
Unpaid principal balance	7,446		9,957		4,088		3,298		—		902		25,691
With a specific allowance:
Recorded investment	23,009		18,668		7,036		9,392		5,842		121		64,068
Unpaid principal balance	22,074		18,288		6,796		9,215		5,842		120		62,335
Associated allowance	2,410		2,324		407		305		1,850		—		7,296
Total:
Recorded investment	29,818		28,751		10,284		12,633		5,842		1,035		88,363
Unpaid principal balance	29,520		28,245		10,884		12,513		5,842		1,022		88,026
Associated allowance	2,410		2,324		407		305		1,850		—		7,296
Recorded investment of loans on nonaccrual status:	$	9,214	$	25,710	$	3,483	$	6,931	$	—	$	—	$	45,338

The following table presents by commodity type the average recorded investment and interest income recognized on impaired loans for the three and nine months ended September 30, 2012 and 2011:

	September 30, 2012
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including  ethanol facilities)		Other		Total
	(in thousands)
For the Three Months Ended:
Average recorded investment in impaired loans	$	31,490	$	34,566	$	17,643	$	16,526	$	4,449	$	1,033	$	105,707
Income recognized on impaired loans	72		1,015		94		76		—		—		1,257
For the Nine Months Ended:
Average recorded investment in impaired loans	29,583		34,284		14,973		16,127		4,785		1,035		100,787
Income recognized on impaired loans	213		1,691		210		250		—		—		2,364

	September 30, 2011
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including  ethanol facilities)		Other		Total
	(in thousands)
For the Three Months Ended:
Average recorded investment in impaired loans	$	31,639	$	31,299	$	12,371	$	11,511	$	6,158	$	1,207	$	94,185
Income recognized on impaired loans	120		480		42		63		—		—		705
For the Nine Months Ended:
Average recorded investment in impaired loans	30,546		30,070		13,344		9,753		6,439		771		90,923
Income recognized on impaired loans	432		857		343		125		382		—		2,139

Schedule of Certain Loans Acquired in Transfer Acquired During Period

The following tables present information related to Farmer Mac's acquisition of defaulted loans for the three and nine months ended September 30, 2012 and 2011 and the outstanding balances and carrying amounts of all such loans as of September 30, 2012 and December 31, 2011:

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011
	(in thousands)
Unpaid principal balance at acquisition date:
Loans underlying LTSPCs	$	432	$	—	$	2,962	$	13,974
Loans underlying Farmer Mac Guaranteed Securities	6,742		2,921		8,069		7,292
Total unpaid principal balance at acquisition date	7,174		2,921		11,031		21,266
Contractually required payments receivable	7,373		2,922		11,230		21,314
Impairment recognized subsequent to acquisition	367		42		382		3,812
Recovery/release of allowance for defaulted loans	46		5		979		19

	September 30, 2012		December 31, 2011
	(in thousands)
Outstanding balance	$	40,715	$	35,773
Carrying amount	35,046		29,461

Schedule of Certain Loans Acquired in Transfer Acquired During Period, Delinquencies and Credit Losses

	90-Day Delinquencies (1)						Net Credit Losses
	As of						For the Nine Months Ended
	September 30, 2012		December 31, 2011		September 30, 2011		September 30, 2012		September 30, 2011
	(in thousands)
On-balance sheet assets:
Farmer Mac I:
Loans	$	29,120	$	33,243	$	35,860	$	199	$	334
Total on-balance sheet	$	29,120	$	33,243	$	35,860	$	199	$	334
Off-balance sheet assets:
Farmer Mac I:
LTSPCs	$	11,677	$	7,379	$	8,988	$	—	$	—
Total off-balance sheet	$	11,677	$	7,379	$	8,988	$	—	$	—
Total	$	40,797	$	40,622	$	44,848	$	199	$	334

(1) Includes loans and loans underlying Farmer Mac I Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, restructured after delinquency, and in bankruptcy, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

Financing Receivable Credit Quality Indicators

The following tables present credit quality indicators related to loans held and loans underlying LTSPCs and Farmer Mac I Guaranteed Securities (excluding AgVantage securities) as of September 30, 2012 and December 31, 2011.  

	As of September 30, 2012
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade (1)
Grade:
Acceptable	$	1,881,406	$	764,097	$	1,084,277	$	188,445	$	130,902	$	11,319	$	4,060,446
Other assets especially mentioned ("OAEM") (2)	34,118		16,025		45,158		6,241		44,754		599		146,895
Substandard (2)	41,771		53,333		57,042		19,880		22,450		1,140		195,616
Total	$	1,957,295	$	833,455	$	1,186,477	$	214,566	$	198,106	$	13,058	$	4,402,957
Commodity analysis of past due loans (1)
90 days or more past due	$	13,414	$	11,861	$	4,899	$	6,125	$	4,498	$	—	$	40,797

(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 OAEM category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  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, 2011
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing (including ethanol facilities)		Other		Total
	(in thousands)
Credit risk profile by internally assigned grade (1)
Grade:
Acceptable	$	1,769,768	$	748,558	$	1,097,184	$	215,525	$	96,532	$	15,158	$	3,942,725
Other assets especially mentioned ("OAEM") (2)	60,076		20,442		74,959		7,103		45,673		641		208,894
Substandard (2)	35,115		55,345		51,968		22,492		31,487		1,137		197,544
Total	$	1,864,959	$	824,345	$	1,224,111	$	245,120	$	173,692	$	16,936	$	4,349,163
Commodity analysis of past due loans (1)
90 days or more past due	$	11,605	$	19,227	$	2,475	$	7,315	$	—	$	—	$	40,622

(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 OAEM category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  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.

Schedules of Concentration of Risk, by Risk Factor

The following table sets forth the geographic and commodity/collateral diversification, as well as the range of original loan-to-value ratios, for all loans held and loans underlying Farmer Mac I Guaranteed Securities (excluding AgVantage securities) and LTSPCs as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
	(in thousands)
By commodity/collateral type:
Crops	$	1,957,295	$	1,864,959
Permanent plantings	833,455		824,345
Livestock	1,186,477		1,224,111
Part-time farm	214,566		245,120
Ag. Storage and processing (including ethanol facilities)	198,106		173,692
Other	13,058		16,936
Total	$	4,402,957	$	4,349,163
By geographic region (1):
Northwest	$	785,454	$	761,078
Southwest	1,555,368		1,597,369
Mid-North	897,453		857,659
Mid-South	512,628		484,176
Northeast	273,420		294,854
Southeast	378,634		354,027
Total	$	4,402,957	$	4,349,163
By original loan-to-value ratio:
0.00% to 40.00%	$	1,119,814	$	1,104,617
40.01% to 50.00%	802,204		769,618
50.01% to 60.00%	1,216,706		1,225,939
60.01% to 70.00%	1,097,884		1,062,061
70.01% to 80.00%	126,297		135,985
80.01% to 90.00%	40,052		50,943
Total	$	4,402,957	$	4,349,163

(1) Geographic regions:  Northwest (AK, ID, MT, ND, NE, OR, SD, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, MO, WI); Mid-South (KS, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NC, NH, NJ, NY, OH, PA, RI, TN, VA, VT, WV); Southeast (AL, AR, FL, GA, LA, MS, SC).