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Business Segment Reporting
 9 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]
BUSINESS SEGMENT REPORTING

The following tables present core earnings for Farmer Mac's operating segments and a reconciliation to consolidated net income for the three and nine months ended September 30, 2018 and 2017:

Table 9.1
Core Earnings by Business Segment
For the Three Months Ended September 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
16,425

 
$
5,304

 
$
3,081

 
$
17,600

 
$
2,648

 
$
—

 
$
45,058

Less: reconciling adjustments(1)(2)(3)(4)
(2,538
)
 
(677
)
 
(204
)
 
(1,958
)
 
(604
)
 
5,981

 
—

Net effective spread
13,887

 
4,627

 
2,877

 
15,642

 
2,044

 
5,981

 
—

Guarantee and commitment fees(2)
4,489

 
214

 
376

 
91

 
—

 
(1,680
)
 
3,490

Other income/(expense)(3)
294

 
5

 
15

 
—

 
(245
)
 
880

 
949

Non-interest income/(loss)
4,783

 
219

 
391

 
91

 
(245
)
 
(800
)
 
4,439

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(99
)
 
—

 
—

 
—

 
—

 
—

 
(99
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
102

 
—

 
—

 
—

 
—

 
—

 
102

Other non-interest expense
(4,456
)
 
(1,288
)
 
(732
)
 
(1,844
)
 
(3,432
)
 
—

 
(11,752
)
Non-interest expense(5)
(4,354
)
 
(1,288
)
 
(732
)
 
(1,844
)
 
(3,432
)
 
—

 
(11,650
)
Core earnings before income taxes
14,217

 
3,558

 
2,536

 
13,889

 
(1,633
)
 
5,181

(6) 
37,748

Income tax (expense)/benefit
(2,986
)
 
(747
)
 
(533
)
 
(2,917
)
 
292

 
(1,088
)
 
(7,979
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
11,231

 
2,811

 
2,003

 
10,972

 
(1,341
)
 
4,093

(6) 
29,769

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,295
)
 
—

 
(3,295
)
Segment core earnings/(losses)
$
11,231

 
$
2,811

 
$
2,003

 
$
10,972

 
$
(4,636
)
 
$
4,093

(6) 
$
26,474

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,438,128

 
$
2,212,515

 
$
956,204

 
$
8,103,181

 
$
2,764,006

 
$
—

 
$
18,474,034

Total on- and off-balance sheet program assets at principal balance
$
7,072,018

 
$
2,471,251

 
$
1,632,037

 
$
8,365,280

 
—

 
—

 
$
19,540,586

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(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 September 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
13,609

 
$
5,288

 
$
2,230

 
$
15,431

 
$
3,004

 
$
—

 
$
39,562

Less: reconciling adjustments(1)(2)(3)(4)
(2,306
)
 
(560
)
 
535

 
(976
)
 
(279
)
 
3,586

 
—

Net effective spread
11,303

 
4,728

 
2,765

 
14,455

 
2,725

 
3,586

 
—

Guarantee and commitment fees(2)
4,236

 
130

 
476

 
93

 
—

 
(1,621
)
 
3,314

Other income/(expense)(3)(5)
214

 
9

 
5

 
—

 
78

 
679

 
985

Non-interest income/(loss)
4,450

 
139

 
481

 
93

 
78

 
(942
)
 
4,299

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(270
)
 
—

 
—

 
—

 
—

 
—

 
(270
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(114
)
 
—

 
—

 
—

 
—

 
—

 
(114
)
Other non-interest expense
(4,077
)
 
(1,080
)
 
(608
)
 
(1,670
)
 
(3,067
)
 
—

 
(10,502
)
Non-interest expense(6)
(4,191
)
 
(1,080
)
 
(608
)
 
(1,670
)
 
(3,067
)
 
—

 
(10,616
)
Core earnings before income taxes
11,292

 
3,787

 
2,638

 
12,878

 
(264
)
 
2,644

(7) 
32,975

Income tax (expense)/benefit
(3,952
)
 
(1,325
)
 
(923
)
 
(4,507
)
 
439

 
(925
)
 
(11,193
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
7,340

 
2,462

 
1,715

 
8,371

 
175

 
1,719

(7) 
21,782

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,295
)
 
—

 
(3,295
)
Non-controlling interest
—

 
—

 
—

 
—

 
—

 
—

 
—

Segment core earnings/(losses)
$
7,340

 
$
2,462

 
$
1,715

 
$
8,371

 
$
(3,120
)
 
$
1,719

(7) 
$
18,487

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,128,778

 
$
2,165,749

 
$
1,073,525

 
$
7,612,572

 
$
2,709,614

 
$
—

 
$
17,690,238

Total on- and off-balance sheet program assets at principal balance
$
6,557,030

 
$
2,298,956

 
$
1,886,445

 
$
7,901,842

 
$
—

 
$
—

 
$
18,644,273

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
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.
(6) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(7) 
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 Nine Months Ended September 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
47,255

 
$
15,446

 
$
8,931

 
$
54,237

 
$
6,351

 
$
—

 
$
132,220

Less: reconciling adjustments(1)(2)(3)(4)
(7,481
)
 
(2,021
)
 
(181
)
 
(8,551
)
 
(1,646
)
 
19,880

 
—

Net effective spread
39,774

 
13,425

 
8,750

 
45,686

 
4,705

 
19,880

 
—

Guarantee and commitment fees(2)
13,356

 
570

 
1,227

 
271

 
—

 
(4,954
)
 
10,470

Other income/(expense)(3)
1,193

 
18

 
25

 
—

 
(594
)
 
(54
)
 
588

Non-interest income/(loss)
14,549

 
588

 
1,252

 
271

 
(594
)
 
(5,008
)
 
11,058

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(92
)
 
—

 
—

 
—

 
—

 
—

 
(92
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(77
)
 
—

 
—

 
—

 
—

 
—

 
(77
)
Other non-interest expense
(13,930
)
 
(3,793
)
 
(2,144
)
 
(5,720
)
 
(10,549
)
 
—

 
(36,136
)
Non-interest expense(5)
(14,007
)
 
(3,793
)
 
(2,144
)
 
(5,720
)
 
(10,549
)
 
—

 
(36,213
)
Core earnings before income taxes
40,224

 
10,220

 
7,858

 
40,237

 
(6,438
)
 
14,872

(6) 
106,973

Income tax (expense)/benefit
(8,447
)
 
(2,146
)
 
(1,651
)
 
(8,450
)
 
2,067

 
(3,122
)
 
(21,749
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
31,777

 
8,074

 
6,207

 
31,787

 
(4,371
)
 
11,750

(6) 
85,224

Preferred stock dividends
—

 
—

 
—

 
—

 
(9,886
)
 
—

 
(9,886
)
Segment core earnings/(losses)
$
31,777

 
$
8,074

 
$
6,207

 
$
31,787

 
$
(14,257
)
 
$
11,750

(6) 
$
75,338

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,438,128

 
$
2,212,515

 
$
956,204

 
$
8,103,181

 
$
2,764,006

 
$
—

 
$
18,474,034

Total on- and off-balance sheet program assets at principal balance
$
7,072,018

 
$
2,471,251

 
$
1,632,037

 
$
8,365,280

 
—

 
—

 
$
19,540,586

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(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 Nine Months Ended September 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
39,701

 
$
15,747

 
$
8,181

 
$
44,364

 
$
8,371

 
$
—

 
$
116,364

Less: reconciling adjustments(1)(2)(3)(4)
(6,729
)
 
(1,907
)
 
(179
)
 
(2,827
)
 
(886
)
 
12,528

 
—

Net effective spread
32,972

 
13,840

 
8,002

 
41,537

 
7,485

 
12,528

 
—

Guarantee and commitment fees(2)
12,722

 
303

 
1,455

 
713

 
—

 
(4,563
)
 
10,630

Other income/(expense)(3)(5)
1,402

 
34

 
15

 
—

 
199

 
2,559

 
4,209

Non-interest income/(loss)
14,124

 
337

 
1,470

 
713

 
199

 
(2,004
)
 
14,839

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(1,234
)
 
—

 
—

 
—

 
—

 
—

 
(1,234
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(60
)
 
—

 
—

 
—

 
—

 
—

 
(60
)
Other non-interest expense
(12,588
)
 
(3,333
)
 
(1,838
)
 
(4,813
)
 
(9,923
)
 
—

 
(32,495
)
Non-interest expense(6)
(12,648
)
 
(3,333
)
 
(1,838
)
 
(4,813
)
 
(9,923
)
 
—

 
(32,555
)
Core earnings before income taxes
33,214

 
10,844

 
7,634

 
37,437

 
(2,239
)
 
10,524

(7) 
97,414

Income tax (expense)/benefit
(11,625
)
 
(3,795
)
 
(2,671
)
 
(13,103
)
 
1,775

 
(3,684
)
 
(33,103
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
21,589

 
7,049

 
4,963

 
24,334

 
(464
)
 
6,840

(7) 
64,311

Preferred stock dividends
—

 
—

 
—

 
—

 
(9,886
)
 
—

 
(9,886
)
Non-controlling interest
—

 
—

 
—

 
—

 
165

 
—

 
165

Segment core earnings/(losses)
$
21,589

 
$
7,049

 
$
4,963

 
$
24,334

 
$
(10,185
)
 
$
6,840

(7) 
$
54,590

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,128,778

 
$
2,165,749

 
$
1,073,525

 
$
7,612,572

 
$
2,709,614

 
$
—

 
$
17,690,238

Total on- and off-balance sheet program assets at principal balance
$
6,557,030

 
$
2,298,956

 
$
1,886,445

 
$
7,901,842

 
—

 
—

 
$
18,644,273

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
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.
(6) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(7) 
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.
Schedule of Segment Reporting Information, by Segment [Table Text Block]
Table 9.1
Core Earnings by Business Segment
For the Three Months Ended September 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
16,425

 
$
5,304

 
$
3,081

 
$
17,600

 
$
2,648

 
$
—

 
$
45,058

Less: reconciling adjustments(1)(2)(3)(4)
(2,538
)
 
(677
)
 
(204
)
 
(1,958
)
 
(604
)
 
5,981

 
—

Net effective spread
13,887

 
4,627

 
2,877

 
15,642

 
2,044

 
5,981

 
—

Guarantee and commitment fees(2)
4,489

 
214

 
376

 
91

 
—

 
(1,680
)
 
3,490

Other income/(expense)(3)
294

 
5

 
15

 
—

 
(245
)
 
880

 
949

Non-interest income/(loss)
4,783

 
219

 
391

 
91

 
(245
)
 
(800
)
 
4,439

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(99
)
 
—

 
—

 
—

 
—

 
—

 
(99
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
102

 
—

 
—

 
—

 
—

 
—

 
102

Other non-interest expense
(4,456
)
 
(1,288
)
 
(732
)
 
(1,844
)
 
(3,432
)
 
—

 
(11,752
)
Non-interest expense(5)
(4,354
)
 
(1,288
)
 
(732
)
 
(1,844
)
 
(3,432
)
 
—

 
(11,650
)
Core earnings before income taxes
14,217

 
3,558

 
2,536

 
13,889

 
(1,633
)
 
5,181

(6) 
37,748

Income tax (expense)/benefit
(2,986
)
 
(747
)
 
(533
)
 
(2,917
)
 
292

 
(1,088
)
 
(7,979
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
11,231

 
2,811

 
2,003

 
10,972

 
(1,341
)
 
4,093

(6) 
29,769

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,295
)
 
—

 
(3,295
)
Segment core earnings/(losses)
$
11,231

 
$
2,811

 
$
2,003

 
$
10,972

 
$
(4,636
)
 
$
4,093

(6) 
$
26,474

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,438,128

 
$
2,212,515

 
$
956,204

 
$
8,103,181

 
$
2,764,006

 
$
—

 
$
18,474,034

Total on- and off-balance sheet program assets at principal balance
$
7,072,018

 
$
2,471,251

 
$
1,632,037

 
$
8,365,280

 
—

 
—

 
$
19,540,586

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(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 September 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
13,609

 
$
5,288

 
$
2,230

 
$
15,431

 
$
3,004

 
$
—

 
$
39,562

Less: reconciling adjustments(1)(2)(3)(4)
(2,306
)
 
(560
)
 
535

 
(976
)
 
(279
)
 
3,586

 
—

Net effective spread
11,303

 
4,728

 
2,765

 
14,455

 
2,725

 
3,586

 
—

Guarantee and commitment fees(2)
4,236

 
130

 
476

 
93

 
—

 
(1,621
)
 
3,314

Other income/(expense)(3)(5)
214

 
9

 
5

 
—

 
78

 
679

 
985

Non-interest income/(loss)
4,450

 
139

 
481

 
93

 
78

 
(942
)
 
4,299

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(270
)
 
—

 
—

 
—

 
—

 
—

 
(270
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(114
)
 
—

 
—

 
—

 
—

 
—

 
(114
)
Other non-interest expense
(4,077
)
 
(1,080
)
 
(608
)
 
(1,670
)
 
(3,067
)
 
—

 
(10,502
)
Non-interest expense(6)
(4,191
)
 
(1,080
)
 
(608
)
 
(1,670
)
 
(3,067
)
 
—

 
(10,616
)
Core earnings before income taxes
11,292

 
3,787

 
2,638

 
12,878

 
(264
)
 
2,644

(7) 
32,975

Income tax (expense)/benefit
(3,952
)
 
(1,325
)
 
(923
)
 
(4,507
)
 
439

 
(925
)
 
(11,193
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
7,340

 
2,462

 
1,715

 
8,371

 
175

 
1,719

(7) 
21,782

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,295
)
 
—

 
(3,295
)
Non-controlling interest
—

 
—

 
—

 
—

 
—

 
—

 
—

Segment core earnings/(losses)
$
7,340

 
$
2,462

 
$
1,715

 
$
8,371

 
$
(3,120
)
 
$
1,719

(7) 
$
18,487

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,128,778

 
$
2,165,749

 
$
1,073,525

 
$
7,612,572

 
$
2,709,614

 
$
—

 
$
17,690,238

Total on- and off-balance sheet program assets at principal balance
$
6,557,030

 
$
2,298,956

 
$
1,886,445

 
$
7,901,842

 
$
—

 
$
—

 
$
18,644,273

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
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.
(6) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(7) 
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 Nine Months Ended September 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
47,255

 
$
15,446

 
$
8,931

 
$
54,237

 
$
6,351

 
$
—

 
$
132,220

Less: reconciling adjustments(1)(2)(3)(4)
(7,481
)
 
(2,021
)
 
(181
)
 
(8,551
)
 
(1,646
)
 
19,880

 
—

Net effective spread
39,774

 
13,425

 
8,750

 
45,686

 
4,705

 
19,880

 
—

Guarantee and commitment fees(2)
13,356

 
570

 
1,227

 
271

 
—

 
(4,954
)
 
10,470

Other income/(expense)(3)
1,193

 
18

 
25

 
—

 
(594
)
 
(54
)
 
588

Non-interest income/(loss)
14,549

 
588

 
1,252

 
271

 
(594
)
 
(5,008
)
 
11,058

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(92
)
 
—

 
—

 
—

 
—

 
—

 
(92
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(77
)
 
—

 
—

 
—

 
—

 
—

 
(77
)
Other non-interest expense
(13,930
)
 
(3,793
)
 
(2,144
)
 
(5,720
)
 
(10,549
)
 
—

 
(36,136
)
Non-interest expense(5)
(14,007
)
 
(3,793
)
 
(2,144
)
 
(5,720
)
 
(10,549
)
 
—

 
(36,213
)
Core earnings before income taxes
40,224

 
10,220

 
7,858

 
40,237

 
(6,438
)
 
14,872

(6) 
106,973

Income tax (expense)/benefit
(8,447
)
 
(2,146
)
 
(1,651
)
 
(8,450
)
 
2,067

 
(3,122
)
 
(21,749
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
31,777

 
8,074

 
6,207

 
31,787

 
(4,371
)
 
11,750

(6) 
85,224

Preferred stock dividends
—

 
—

 
—

 
—

 
(9,886
)
 
—

 
(9,886
)
Segment core earnings/(losses)
$
31,777

 
$
8,074

 
$
6,207

 
$
31,787

 
$
(14,257
)
 
$
11,750

(6) 
$
75,338

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,438,128

 
$
2,212,515

 
$
956,204

 
$
8,103,181

 
$
2,764,006

 
$
—

 
$
18,474,034

Total on- and off-balance sheet program assets at principal balance
$
7,072,018

 
$
2,471,251

 
$
1,632,037

 
$
8,365,280

 
—

 
—

 
$
19,540,586

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(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 Nine Months Ended September 30, 2017
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
39,701

 
$
15,747

 
$
8,181

 
$
44,364

 
$
8,371

 
$
—

 
$
116,364

Less: reconciling adjustments(1)(2)(3)(4)
(6,729
)
 
(1,907
)
 
(179
)
 
(2,827
)
 
(886
)
 
12,528

 
—

Net effective spread
32,972

 
13,840

 
8,002

 
41,537

 
7,485

 
12,528

 
—

Guarantee and commitment fees(2)
12,722

 
303

 
1,455

 
713

 
—

 
(4,563
)
 
10,630

Other income/(expense)(3)(5)
1,402

 
34

 
15

 
—

 
199

 
2,559

 
4,209

Non-interest income/(loss)
14,124

 
337

 
1,470

 
713

 
199

 
(2,004
)
 
14,839

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(1,234
)
 
—

 
—

 
—

 
—

 
—

 
(1,234
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(60
)
 
—

 
—

 
—

 
—

 
—

 
(60
)
Other non-interest expense
(12,588
)
 
(3,333
)
 
(1,838
)
 
(4,813
)
 
(9,923
)
 
—

 
(32,495
)
Non-interest expense(6)
(12,648
)
 
(3,333
)
 
(1,838
)
 
(4,813
)
 
(9,923
)
 
—

 
(32,555
)
Core earnings before income taxes
33,214

 
10,844

 
7,634

 
37,437

 
(2,239
)
 
10,524

(7) 
97,414

Income tax (expense)/benefit
(11,625
)
 
(3,795
)
 
(2,671
)
 
(13,103
)
 
1,775

 
(3,684
)
 
(33,103
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
21,589

 
7,049

 
4,963

 
24,334

 
(464
)
 
6,840

(7) 
64,311

Preferred stock dividends
—

 
—

 
—

 
—

 
(9,886
)
 
—

 
(9,886
)
Non-controlling interest
—

 
—

 
—

 
—

 
165

 
—

 
165

Segment core earnings/(losses)
$
21,589

 
$
7,049

 
$
4,963

 
$
24,334

 
$
(10,185
)
 
$
6,840

(7) 
$
54,590

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,128,778

 
$
2,165,749

 
$
1,073,525

 
$
7,612,572

 
$
2,709,614

 
$
—

 
$
17,690,238

Total on- and off-balance sheet program assets at principal balance
$
6,557,030

 
$
2,298,956

 
$
1,886,445

 
$
7,901,842

 
—

 
—

 
$
18,644,273

(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 "Gains/(losses) on financial derivatives and hedging activities" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Effective in fourth quarter 2017, Farmer Mac revised its methodology for calculating net effective spread, a component of core earnings, to also include the net effects of gains/(losses) due to terminations or net settlements on financial derivatives and hedging activities. All prior period information has been recast to reflect the revised methodology. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread."
(5) 
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.
(6) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(7) 
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.