Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Schedule of Variable Interest Entities [Table Text Blcok]

The following tables present, by line of business, details about the consolidation of VIEs:

Table 1.1



	Consolidation of Variable Interest Entities
	September 30, 2013
	Farm & Ranch		USDA Guarantees		Rural Utilities		Investments		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost (1)	$	176,921	$	—	$	386,934	$	—	$	563,855
Debt securities of consolidated trusts held by third parties (2)	178,076		—		—		—		178,076
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (3)	33,504		25,708		—		—		59,212
Maximum exposure to loss (4)	30,000		24,925		—		—		54,925
Investment securities:
Carrying value	—		—		—		723,901		723,901
Maximum exposure to loss (4)	—		—		—		727,248		727,248
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (4) (5)	1,771,703		21,094		—		—		1,792,797


(1)	Includes unamortized premiums related to Rural Utilities of $32.7 million.


(2)	Includes borrower remittances of $1.2 million, which have not been passed through to third party investors as of September 30, 2013.


(3)	Includes unamortized premiums and discounts and fair value adjustments related to Farm & Ranch and USDA Guarantees of $3.5 million and $0.8 million, respectively.


(4)	Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.


(5)	Of the Farm & Ranch amount, $801.7 million relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.



	Consolidation of Variable Interest Entities
	December 31, 2012
	Farm & Ranch		USDA Guarantees		Rural Utilities		Investments		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost (1)	$	160,436	$	—	$	403,139	$	—	$	563,575
Debt securities of consolidated trusts held by third parties (2)	167,621		—		—		—		167,621
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (3)	31,370		26,681		—		—		58,051
Maximum exposure to loss (4)	30,000		26,238		—		—		56,238
Investment securities:
Carrying value	—		—		—		724,893		724,893
Maximum exposure to loss (4)	—		—		—		737,148		737,148
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (4) (5)	1,881,370		29,658		—		—		1,911,028


(1)	Includes unamortized premiums related to Rural Utilities of $34.3 million.


(2)	Includes borrower remittances of $7.2 million, which have not been passed through to third party investors as of December 31, 2012.


(3)	Includes unamortized premiums and discounts and fair value adjustments related to Farm & Ranch and USDA Guarantees of $1.4 million and $0.4 million, respectively.


(4)	Farmer Mac uses unpaid principal balance and the outstanding face amount of investment securities to represent maximum exposure to loss.


(5)	Of the Farm & Ranch amount, $911.4 million relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

The following table sets forth information regarding certain cash and non-cash transactions for the nine months ended September 30, 2013 and 2012:

Table 1.2



	For the Nine Months Ended
	September 30, 2013		September 30, 2012
	(in thousands)
Cash paid during the period for:
Interest	$	90,052	$	90,588
Income taxes	17,000		16,500
Non-cash activity:
Real estate owned acquired through loan liquidation	1,443		1,130
Loans acquired and securitized as Farmer Mac Guaranteed Securities	64,609		24,008
Purchases of investment securities traded, not yet settled	57,001		—
Consolidation of Farm & Ranch Farmer Mac Guaranteed Securities from off-balance sheet to loans held for investment in consolidated trusts and to debt securities of consolidated trusts held by third parties	64,609		24,008
Deconsolidation of loans held for investment in consolidated trusts and debt securities of consolidated trusts held by third parties - transferred to off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities	—		460,261
Transfers of loans held for sale to loans held for investment	673,991		—

Earnings Per Share [Table Text Block]

The following schedule reconciles basic and diluted EPS for the three and nine months ended September 30, 2013 and 2012:

Table 1.3



	For the Three Months Ended
	September 30, 2013						September 30, 2012
	Net Income		Weighted-Average Shares	$ per Share			Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	15,413	10,843	$	1.42		$	16,381	10,492	$	1.56
Effect of dilutive securities (1):
Stock options, SARs and restricted stock	—		370	(0.05		)	—		504	(0.07		)
Diluted EPS	$	15,413	11,213	$	1.37		$	16,381	10,996	$	1.49

(1)

For the three months ended September 30, 2013 and 2012, stock options and SARs of 36,983 and 296,873, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended September 30, 2013 and 2012, contingent shares of non-vested restricted stock of 44,894 and 106,300, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions were not met.



	For the Nine Months Ended
	September 30, 2013						September 30, 2012
	Net Income		Weighted-Average Shares	$ per Share			Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	59,348	10,799	$	5.50		$	34,293	10,442	$	3.28
Effect of dilutive securities (1):
Stock options, SARs and restricted stock	—		392	(0.20		)	—		532	(0.16		)
Diluted EPS	$	59,348	11,191	$	5.30		$	34,293	10,974	$	3.12

(1)

For the nine months ended September 30, 2013 and 2012, stock options and SARs of 43,640 and 412,009, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the nine months ended September 30, 2013 and 2012, contingent shares of non-vested restricted stock of 38,363 and 97,300, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions were not met.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References

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+ Details