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Business Segment Reporting
 6 Months Ended
Jun. 30, 2016
Segment Reporting [Abstract]  
Business Segment Reporting Disclosure
The following tables present core earnings for Farmer Mac's reportable operating segments and a reconciliation to consolidated net income for the three and six months ended June 30, 2016 and 2015:

Table 9.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2016
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
11,606

 
$
4,938

 
$
2,855

 
$
12,109

 
$
2,850

 
$
—

 
$
34,358

Less: reconciling adjustments(1)(2)(3)
(1,731
)
 
(350
)
 
(293
)
 
(702
)
 
(256
)
 
3,332

 
—

Net effective spread
9,875

 
4,588

 
2,562

 
11,407

 
2,594

 
3,332

 
—

Guarantee and commitment fees(2)
3,965

 
14

 
373

 
458

 
—

 
(1,155
)
 
3,655

Other income/(expense)(3)(4)
78

 
25

 
—

 
—

 
(228
)
 
(3,764
)
 
(3,889
)
Non-interest income/(loss)
4,043

 
39

 
373

 
458

 
(228
)
 
(4,919
)
 
(234
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(364
)
 
—

 
—

 
—

 
—

 
—

 
(364
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for losses
(94
)
 
—

 
—

 
—

 
—

 
—

 
(94
)
Other non-interest expense
(4,112
)
 
(1,092
)
 
(830
)
 
(538
)
 
(3,408
)
 
—

 
(9,980
)
Non-interest expense(5)
(4,206
)
 
(1,092
)
 
(830
)
 
(538
)
 
(3,408
)
 
—

 
(10,074
)
Core earnings before income taxes
9,348

 
3,535

 
2,105

 
11,327

 
(1,042
)
 
(1,587
)
(6) 
23,686

Income tax (expense)/benefit
(3,272
)
 
(1,237
)
 
(737
)
 
(3,964
)
 
254

 
556

 
(8,400
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest - preferred stock dividends
6,076

 
2,298

 
1,368

 
7,363

 
(788
)
 
(1,031
)
(6) 
15,286

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Non-controlling interest - preferred stock dividends
—

 
—

 
—

 
—

 
16

 
—

 
16

Segment core earnings/(losses)
$
6,076

 
$
2,298

 
$
1,368

 
$
7,363

 
$
(4,068
)
 
$
(1,031
)
(6) 
$
12,006

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
3,311,270

 
$
2,046,516

 
$
1,023,630

 
$
6,071,924

 
$
4,369,850

 
$
—

 
$
16,823,190

Total on- and off-balance sheet program assets at principal balance
$
5,830,533

 
$
1,960,358

 
$
1,934,473

 
$
7,391,172

 


 
—

 
$
17,116,536

(1) 
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
(2) 
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.
(3) 
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
(6) 
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest; and segment core earnings to corresponding income measures: income before income taxes, net income, and net income attributable to common stockholders, respectively.
Core Earnings by Business Segment
For the Three Months Ended June 30, 2015
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
10,757

 
$
4,643

 
$
3,153

 
$
11,312

 
$
1,999

 
$
—

 
$
31,864

Less: reconciling adjustments(1)(2)(3)
(1,076
)
 
(177
)
 
(315
)
 
(452
)
 
(57
)
 
2,077

 
—

Net effective spread
9,681

 
4,466

 
2,838

 
10,860

 
1,942

 
2,077

 
—

Guarantee and commitment fees(2)
3,693

 
8

 
—

 
384

 
—

 
(697
)
 
3,388

Other income/(expense)(3)(4)
160

 
28

 
—

 
—

 
(212
)
 
14,843

 
14,819

Non-interest income/(loss)
3,853

 
36

 
—

 
384

 
(212
)
 
14,146

 
18,207

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(110
)
 
—

 
—

 
—

 
—

 
—

 
(110
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for losses
(1,146
)
 
—

 
—

 
—

 
—

 
—

 
(1,146
)
Other non-interest expense
(4,304
)
 
(1,025
)
 
(860
)
 
(532
)
 
(2,986
)
 
—

 
(9,707
)
Non-interest expense(5)
(5,450
)
 
(1,025
)
 
(860
)
 
(532
)
 
(2,986
)
 
—

 
(10,853
)
Core earnings before income taxes
7,974

 
3,477

 
1,978

 
10,712

 
(1,256
)
 
16,223

(6) 
39,108

Income tax (expense)/benefit
(2,791
)
 
(1,216
)
 
(691
)
 
(3,749
)
 
356

 
(5,678
)
 
(13,769
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest - preferred stock dividends
5,183

 
2,261

 
1,287

 
6,963

 
(900
)
 
10,545

(6) 
25,339

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Non-controlling interest - preferred stock dividends
—

 
—

 
—

 
—

 
119

 
—

 
119

Segment core earnings/(losses)
$
5,183

 
$
2,261

 
$
1,287

 
$
6,963

 
$
(4,077
)
 
$
10,545

(6) 
$
22,162

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
2,780,018

 
$
1,913,390

 
$
962,702

 
$
5,874,088

 
$
3,614,399

 
$
—

 
$
15,144,597

Total on- and off-balance sheet program assets at principal balance
$
5,485,570

 
$
1,862,430

 
$
954,188

 
$
6,827,939

 
 
 
—

 
$
15,130,127

(1) 
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
(2) 
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.
(3) 
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
(6) 
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest; and segment core earnings to corresponding income measures: income before income taxes, net income, and net income attributable to common stockholders, respectively.

Core Earnings by Business Segment
For the Six Months Ended June 30, 2016
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
22,733

 
$
9,990

 
$
5,719

 
$
23,858

 
$
5,698

 
$
—

 
$
67,998

Less: reconciling adjustments(1)(2)(3)
(3,397
)
 
(1,094
)
 
(619
)
 
(1,361
)
 
(552
)
 
7,023

 
—

Net effective spread
19,336

 
8,896

 
5,100

 
22,497

 
5,146

 
7,023

 
—

Guarantee and commitment fees(2)
7,874

 
21

 
668

 
916

 
—

 
(2,198
)
 
7,281

Other income/(expense)(3)(4)
175

 
83

 
—

 
—

 
(900
)
 
(9,579
)
 
(10,221
)
Non-interest income/(loss)
8,049

 
104

 
668

 
916

 
(900
)
 
(11,777
)
 
(2,940
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(413
)
 
—

 
—

 
—

 
—

 
—

 
(413
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for losses
(108
)
 
—

 
—

 
—

 
—

 
—

 
(108
)
Other non-interest expense
(8,273
)
 
(2,185
)
 
(1,661
)
 
(1,077
)
 
(6,736
)
 
—

 
(19,932
)
Non-interest expense(5)
(8,381
)
 
(2,185
)
 
(1,661
)
 
(1,077
)
 
(6,736
)
 
—

 
(20,040
)
Core earnings before income taxes
18,591

 
6,815

 
4,107

 
22,336

 
(2,490
)
 
(4,754
)
(6) 
44,605

Income tax (expense)/benefit
(6,508
)
 
(2,385
)
 
(1,438
)
 
(7,816
)
 
747

 
1,665

 
(15,735
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest - preferred stock dividends
12,083

 
4,430

 
2,669

 
14,520

 
(1,743
)
 
(3,089
)
(6) 
28,870

Preferred stock dividends
—

 
—

 
—

 
—

 
(6,591
)
 
—

 
(6,591
)
Non-controlling interest - preferred stock dividends
—

 
—

 
—

 
—

 
44

 
—

 
44

Segment core earnings/(losses)
$
12,083

 
$
4,430

 
$
2,669

 
$
14,520

 
$
(8,290
)
 
$
(3,089
)
(6) 
$
22,323

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
3,311,270

 
$
2,046,516

 
$
1,023,630

 
$
6,071,924

 
$
4,369,850

 
$
—

 
$
16,823,190

Total on- and off-balance sheet program assets at principal balance
$
5,830,533

 
$
1,960,358

 
$
1,934,473

 
$
7,391,172

 
 
 
—

 
$
17,116,536

(1) 
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
(2) 
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.
(3) 
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
(6) 
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest; and segment core earnings to corresponding income measures: income before income taxes, net income, and net income attributable to common stockholders, respectively.

Core Earnings by Business Segment
For the Six Months Ended June 30, 2015
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
21,988

 
$
8,987

 
$
5,611

 
$
22,304

 
$
3,763

 
$
—

 
$
62,653

Less: reconciling adjustments(1)(2)(3)
(2,193
)
 
(296
)
 
31

 
(1,019
)
 
(132
)
 
3,609

 
—

Net effective spread
19,795

 
8,691

 
5,642

 
21,285

 
3,631

 
3,609

 
 
Guarantee and commitment fees(2)
7,326

 
2

 
—

 
769

 
—

 
(1,332
)
 
6,765

Other income/(expense)(3)(4)
247

 
87

 
—

 
—

 
(764
)
 
12,347

 
11,917

Non-interest income/(loss)
7,573

 
89

 
—

 
769

 
(764
)
 
11,015

 
18,682

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(186
)
 
—

 
—

 
—

 
—

 
—

 
(186
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for losses
(374
)
 
—

 
—

 
—

 
—

 
—

 
(374
)
Other non-interest expense
(8,630
)
 
(1,410
)
 
(1,726
)
 
(1,067
)
 
(5,989
)
 
—

 
(18,822
)
Non-interest expense(5)
(9,004
)
 
(1,410
)
 
(1,726
)
 
(1,067
)
 
(5,989
)
 
—

 
(19,196
)
Core earnings before income taxes
18,178

 
7,370

 
3,916

 
20,987

 
(3,122
)
 
14,624

(6) 
61,953

Income tax (expense)/benefit
(6,362
)
 
(2,579
)
 
(1,369
)
 
(7,345
)
 
2,872

 
(3,217
)
 
(18,000
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest - preferred stock dividends
11,816

 
4,791

 
2,547

 
13,642

 
(250
)
 
11,407

(6) 
43,953

Preferred stock dividends
—

 
—

 
—

 
—

 
(6,591
)
 
—

 
(6,591
)
Non-controlling interest - preferred stock dividends
—

 
—

 
—

 
—

 
(5,235
)
 
—

 
(5,235
)
Loss on retirement of preferred stock
—

 
—

 
—

 
—

 
—

 
(8,147
)
 
(8,147
)
Segment core earnings/(losses)
$
11,816

 
$
4,791

 
$
2,547

 
$
13,642

 
$
(12,076
)
 
$
3,260

(6) 
$
23,980

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
2,780,018

 
$
1,913,390

 
$
962,702

 
$
5,874,088

 
$
3,614,399

 
$
—

 
$
15,144,597

Total on- and off-balance sheet program assets at principal balance
$
5,485,570

 
$
1,862,430

 
$
954,188

 
$
6,827,939

 
 
 
—

 
$
15,130,127

(1) 
Excludes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.
(2) 
Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect the net interest income Farmer Mac earns is effectively a guarantee fee.
(3) 
Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "(Losses)/gains on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes reconciling adjustments for fair value adjustments on financial derivatives and trading assets. Also includes a reconciling adjustment related to the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on headcount.
(6) 
Net adjustments to reconcile core earnings before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest; and segment core earnings to corresponding income measures: income before income taxes, net income, and net income attributable to common stockholders, respectively.