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Business Segment Reporting - Business Segment Reporting (Tables)
 6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
The following tables present core earnings for Farmer Mac's operating segments and a reconciliation to consolidated net income for the three and six months ended June 30, 2017 and 2016:

Table 9.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
13,338

 
$
5,176

 
$
3,003

 
$
15,431

 
$
2,783

 
$
—

 
$
39,731

Less: reconciling adjustments(1)(2)(3)
(2,007
)
 
(495
)
 
(267
)
 
(1,036
)
 
(316
)
 
4,121

 
—

Net effective spread
11,331

 
4,681

 
2,736

 
14,395

 
2,467

 
4,121

 
—

Guarantee and commitment fees(2)
4,191

 
99

 
487

 
165

 
—

 
(1,470
)
 
3,472

Other income/(expense)(3)(4)
994

 
11

 
5

 
—

 
(450
)
 
(288
)
 
272

Non-interest income/(loss)
5,185

 
110

 
492

 
165

 
(450
)
 
(1,758
)
 
3,744

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(327
)
 
—

 
—

 
—

 
—

 
—

 
(327
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(139
)
 
—

 
—

 
—

 
—

 
—

 
(139
)
Other non-interest expense
(4,446
)
 
(1,166
)
 
(643
)
 
(1,622
)
 
(3,374
)
 
—

 
(11,251
)
Non-interest expense(5)
(4,585
)
 
(1,166
)
 
(643
)
 
(1,622
)
 
(3,374
)
 
—

 
(11,390
)
Core earnings before income taxes
11,604

 
3,625

 
2,585

 
12,938

 
(1,357
)
 
2,363

(6) 
31,758

Income tax (expense)/benefit
(4,061
)
 
(1,269
)
 
(905
)
 
(4,528
)
 
466

 
(827
)
 
(11,124
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
7,543

 
2,356

 
1,680

 
8,410

 
(891
)
 
1,536

(6) 
20,634

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Non-controlling interest
—

 
—

 
—

 
—

 
150

 
—

 
150

Segment core earnings/(losses)
$
7,543

 
$
2,356

 
$
1,680

 
$
8,410

 
$
(4,037
)
 
$
1,536

(6) 
$
17,488

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
3,958,344

 
$
2,141,569

 
$
1,038,383

 
$
7,425,774

 
$
2,703,315

 
$
—

 
$
17,267,385

Total on- and off-balance sheet program assets at principal balance
$
6,426,518

 
$
2,237,013

 
$
1,883,909

 
$
7,711,418

 


 
—

 
$
18,258,858

(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. In 2016 and prior periods, fair value adjustments on financial derivatives included variation margin payment amounts because those amounts were considered to be collateral of the related exposure and were accounted for as unrealized gains or losses. However, effective first quarter 2017, CME implemented a change in its rules related to the exchange of variation margin, whereby variation margin payments are considered to be a partial settlement of the respective derivatives contracts rather than as pledged collateral, and accounted for as realized gains and losses. See Note 4 for more information about this rule change. Farmer Mac believes that even though these variation margin amounts are now accounted for as realized gains or losses on financial derivatives and hedging activities as a result of the CME rule change, their economic character will remain the same as they were before the change. The exchange of variation margin, whether considered a partial settlement of or the pledge of collateral under a derivatives contract, is not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP because the related financial instruments are expected to be held to maturity. Therefore, beginning in 2017, this reconciling adjustment includes realized gains and losses on financial derivatives centrally cleared through CME resulting from the exchange of variation margin. As a result, core earnings subsequent to 2016 will be presented on a consistent basis with core earnings in 2016 and prior periods.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.
(6) 
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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 reserve 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
6,076

 
2,298

 
1,368

 
7,363

 
(788
)
 
(1,031
)
(6) 
15,286

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Non-controlling interest
—

 
—

 
—

 
—

 
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 staffing.
(6) 
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.




Core Earnings by Business Segment
For the Six Months Ended June 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
26,092

 
$
10,459

 
$
5,951

 
$
28,933

 
$
5,367

 
$
—

 
$
76,802

Less: reconciling adjustments(1)(2)(3)
(4,077
)
 
(1,075
)
 
(576
)
 
(1,957
)
 
(641
)
 
8,326

 
—

Net effective spread
22,015

 
9,384

 
5,375

 
26,976

 
4,726

 
8,326

 
—

Guarantee and commitment fees(2)
8,486

 
173

 
979

 
620

 
—

 
(2,942
)
 
7,316

Other income/(expense)(3)(4)
1,188

 
25

 
10

 
—

 
393

 
1,608

 
3,224

Non-interest income/(loss)
9,674

 
198

 
989

 
620

 
393

 
(1,334
)
 
10,540

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(964
)
 
—

 
—

 
—

 
—

 
—

 
(964
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
54

 
—

 
—

 
—

 
—

 
—

 
54

Other non-interest expense
(8,511
)
 
(2,253
)
 
(1,230
)
 
(3,143
)
 
(6,856
)
 
—

 
(21,993
)
Non-interest expense(5)
(8,457
)
 
(2,253
)
 
(1,230
)
 
(3,143
)
 
(6,856
)
 
—

 
(21,939
)
Core earnings before income taxes
22,268

 
7,329

 
5,134

 
24,453

 
(1,737
)
 
6,992

(6) 
64,439

Income tax (expense)/benefit
(7,793
)
 
(2,565
)
 
(1,797
)
 
(8,558
)
 
1,251

 
(2,448
)
 
(21,910
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
14,475

 
4,764

 
3,337

 
15,895

 
(486
)
 
4,544

(6) 
42,529

Preferred stock dividends
—

 
—

 
—

 
—

 
(6,591
)
 
—

 
(6,591
)
Non-controlling interest
—

 
—

 
—

 
—

 
165

 
—

 
165

Segment core earnings/(losses)
$
14,475

 
$
4,764

 
$
3,337

 
$
15,895

 
$
(6,912
)
 
$
4,544

(6) 
$
36,103

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
3,958,344

 
$
2,141,569

 
$
1,038,383

 
$
7,425,774

 
$
2,703,315

 
$
—

 
$
17,267,385

Total on- and off-balance sheet program assets at principal balance
$
6,426,518

 
$
2,237,013

 
$
1,883,909

 
$
7,711,418

 
 
 
—

 
$
18,258,858

(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. In 2016 and prior periods, fair value adjustments on financial derivatives included variation margin payment amounts because those amounts were considered to be collateral of the related exposure and were accounted for as unrealized gains or losses. However, effective first quarter 2017, CME implemented a change in its rules related to the exchange of variation margin, whereby variation margin payments are considered to be a partial settlement of the respective derivatives contracts rather than as pledged collateral, and accounted for as realized gains and losses. See Note 4 for more information about this rule change. Farmer Mac believes that even though these variation margin amounts are now accounted for as realized gains or losses on financial derivatives and hedging activities as a result of the CME rule change, their economic character will remain the same as they were before the change. The exchange of variation margin, whether considered a partial settlement of or the pledge of collateral under a derivatives contract, is not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP because the related financial instruments are expected to be held to maturity. Therefore, beginning in 2017, this reconciling adjustment includes realized gains and losses on financial derivatives centrally cleared through CME resulting from the exchange of variation margin. As a result, core earnings subsequent to 2016 will be presented on a consistent basis with core earnings in 2016 and prior periods.
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on staffing.
(6) 
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.










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 reserve 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
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
—

 
—

 
—

 
—

 
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 staffing.
(6) 
Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends and attribution of income to non-controlling interest reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.