Accounting Policies - Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2015

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

Table 1.1



	Consolidation of Variable Interest Entities
	As of June 30, 2015
	Farm & Ranch		USDA Guarantees		Rural Utilities		Institutional Credit		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	512,559	$	—	$	—	$	—	$	—	$	512,559
Debt securities of consolidated trusts held by third parties⁽¹⁾	516,004		—		—		—		—		516,004
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value⁽²⁾	—		35,008		—		32,065		—		67,073
Maximum exposure to loss⁽³⁾	—		33,822		—		30,000		—		63,822
Investment securities:
Carrying value⁽⁴⁾	—		—		—		—		455,251		455,251
Maximum exposure to loss⁽³⁾⁽⁴⁾	—		—		—		—		458,566		458,566
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss⁽³⁾⁽⁵⁾	575,811		10,888		—		970,000		—		1,556,699


(1)	Includes borrower remittances of $3.4 million. The borrower remittances have not been passed through to third party investors as of June 30, 2015.


(2)	Includes $1.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. Includes fair value adjustments related to the Institutional Credit line of business of $2.1 million.


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


(4)	Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.


(5)	The amount under the Farm & Ranch line of business 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
	As of December 31, 2014
	Farm & Ranch		USDA Guarantees		Rural Utilities		Institutional Credit		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost⁽¹⁾	$	421,355	$	—	$	271,123	$	—	$	—	$	692,478
Debt securities of consolidated trusts held by third parties⁽²⁾	424,214		—		—		—		—		424,214
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value⁽³⁾	—		27,620		—		32,415		—		60,035
Maximum exposure to loss⁽⁴⁾	—		27,832		—		30,000		—		57,832
Investment securities:
Carrying value⁽⁵⁾	—		—		—		—		409,657		409,657
Maximum exposure to loss⁽⁴⁾⁽⁵⁾	—		—		—		—		412,690		412,690
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss⁽⁴⁾⁽⁶⁾	636,086		13,978		—		970,000		—		1,620,064


(1)	Includes unamortized premiums related to the Rural Utilities line of business of $3.7 million.


(2)	Includes borrower remittances of $2.9 million, which have not been passed through to third party investors as of December 31, 2014.


(3)	Includes $0.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. Includes fair value adjustments related to the Institutional Credit line of business of $2.4 million.


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


(5)	Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.


(6)	The amount under the Farm & Ranch line of business 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

The following table sets forth information regarding certain non-cash transactions for the six months ended June 30, 2015 and 2014:

Table 1.2



	For the Six Months Ended
	June 30, 2015		June 30, 2014
	(in thousands)
Non-cash activity:
Loans acquired and securitized as Farmer Mac Guaranteed Securities	$	99,477	$	126,857
Consolidation of Farm & Ranch 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	112,440		129,305
Purchases of securities - traded, not yet settled	236,600		—
Issuance costs on the retirement of Farmer Mac II LLC Preferred Stock	8,147		—
Transfers of available-for-sale Farmer Mac Guaranteed Securities to held-to-maturity	—		1,612,086

Earnings Per Common Share

The following schedule reconciles basic and diluted EPS for the three and six months ended June 30, 2015 and 2014:

Table 1.3



	For the Three Months Ended
	June 30, 2015						June 30, 2014
	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	$	22,162	11,010	$	2.01		$	20,205	10,924	$	1.85
Effect of dilutive securities⁽¹⁾:
Stock options, SARs and restricted stock	—		428	(0.07		)	—		437	(0.07		)
Diluted EPS	$	22,162	11,438	$	1.94		$	20,205	11,361	$	1.78

(1)

For the three months ended June 30, 2015 and 2014, stock options and SARs of 229,693 and 121,468, 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 June 30, 2015 and 2014, contingent shares of non-vested restricted stock of 45,034 and 42,514, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions have not yet been met.



	For the Six Months Ended
	June 30, 2015						June 30, 2014
	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	$	23,980	10,974	$	2.19		$	21,018	10,906	$	1.93
Effect of dilutive securities(1):
Stock options, SARs and restricted stock	—		411	(0.08		)	—		448	(0.08		)
Diluted EPS	$	23,980	11,385	$	2.11		$	21,018	11,354	$	1.85

(1)

For the six months ended June 30, 2015 and 2014, stock options and SARs of 215,547 and 77,226, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the six months ended June 30, 2015 and 2014, contingent shares of non-vested restricted stock of 37,774 and 37,054, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions have not yet been 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.

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