
4.	INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's investment securities as of December 31, 2018 and 2017:

Table 4.1



	As of December 31, 2018
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—		$	19,700	$	—	$	(985	)	$	18,715
Floating rate asset-backed securities	28,940		(136		)	28,804		2		(128		)	28,678
Floating rate Government/GSE guaranteed mortgage-backed securities	1,379,472		1,528			1,381,000		721		(4,267		)	1,377,454
Fixed rate GSE guaranteed mortgage-backed securities⁽¹⁾	384		1			385		18		—			403
Fixed rate U.S. Treasuries	797,913		(4,882		)	793,031		119		(548		)	792,602
Total available-for-sale	2,226,409		(3,489		)	2,222,920		860		(5,928		)	2,217,852
Held-to-maturity:
Fixed rate Government/GSE guaranteed mortgage-backed securities	45,032		—			45,032		562		—			45,594
Total investment securities	$	2,271,441	$	(3,489	)	$	2,267,952	$	1,422	$	(5,928	)	$	2,263,446


⁽¹⁾	During second quarter 2018, the remaining premium of an interest-only security was fully amortized because the issuer called the security upon full prepayment of the underlying mortgage loan that collateralized the security.



	As of December 31, 2017
	Amount Outstanding		Unamortized Premium/(Discount)			Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—		$	19,700	$	—	$	(886	)	$	18,814
Floating rate asset-backed securities	34,462		(154		)	34,308		22		(120		)	34,210
Floating rate Government/GSE guaranteed mortgage-backed securities	1,289,123		2,217			1,291,340		2,215		(3,368		)	1,290,187
Fixed rate GSE guaranteed mortgage-backed securities⁽¹⁾	451		2,138			2,589		2,230		—			4,819
Fixed rate senior agency debt	100,000		—			100,000		—		(49		)	99,951
Fixed rate U.S. Treasuries	770,852		(1,836		)	769,016		—		(1,592		)	767,424
Total available-for-sale	2,214,588		2,365			2,216,953		4,467		(6,015		)	2,215,405
Held-to-maturity:
Fixed rate Government/GSE guaranteed mortgage-backed securities	45,032		—			45,032		532		—			45,564
Total investment securities	$	2,259,620	$	2,365		$	2,261,985	$	4,999	$	(6,015	)	$	2,260,969


⁽¹⁾	Fair value includes $4.3 million of an interest-only security with a notional amount of $143.7 million.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the year ended December 31, 2018. During the year ended December 31, 2017, Farmer Mac received proceeds of $10.2 million from the sale of securities from its available-for-sale portfolio, resulting in gross realized gains of $0.1 million. During the year ended December 31, 2016, Farmer Mac received proceeds of $186.8 million from the sale of securities from its available-for-sale investment portfolio, resulting in gross realized gains of $0.1 million and gross realized losses of $0.1 million.

As of December 31, 2018 and 2017, unrealized losses on available-for-sale investment securities were as follows:

Table 4.2



	As of December 31, 2018
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(dollars in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	18,715	$	(985	)
Floating rate asset-backed securities	6,456		(38		)	19,058		(90		)
Floating rate Government/GSE guaranteed mortgage-backed securities	927,416		(2,907		)	196,416		(1,360		)
Fixed rate U.S. Treasuries	499,581		(336		)	81,597		(212		)
Total	$	1,433,453	$	(3,281	)	$	315,786	$	(2,647	)

Number of securities in loss position			72					48



	As of December 31, 2017
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months					Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss
	(in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—		$	18,814	$	(886	)
Floating rate asset-backed securities	—		—			23,145		(120		)
Floating rate Government/GSE guaranteed mortgage-backed securities	292,522		(2,337		)	221,641		(1,031		)
Fixed rate U.S. Treasuries	742,442		(1,572		)	24,983		(20		)
Fixed rate senior agency debt	—		—			99,951		(49		)
Total	$	1,034,964	$	(3,909	)	$	388,534	$	(2,106	)

Number of securities in loss position			40					51

The unrealized losses presented above are principally due to a general widening of market spreads and an increase in the levels of interest rates from the dates of acquisition to December 31, 2018 and 2017, as applicable. The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities. As of December 31, 2018 and 2017, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government or had credit ratings of at least "AA+."

Securities in unrealized loss positions for 12 months or longer have a fair value as of December 31, 2018 that is, on average, approximately 99.2% of their amortized cost basis. Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity or changes in credit spreads. Accordingly, Farmer Mac has concluded that none of the unrealized losses on these available-for-sale investment securities are other-than-temporary impairment as of December 31, 2018 and 2017.

As of December 31, 2018, Farmer Mac owned $45.0 million of held-to-maturity investment securities at amortized cost with a fair value of $45.6 million and a weighted average yield of 3.5%. As of December 31, 2017, Farmer Mac owned $45.0 million of held-to-maturity investment securities at amortized cost with a fair value of $45.6 million and a weighted average yield of 2.5%. Farmer Mac did not own any trading investment securities as of December 31, 2018 and 2017.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of December 31, 2018 are set forth below. Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 4.3



	As of December 31, 2018
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	767,989	$	767,536	1.29%
Due after one year through five years	217,450		217,443		2.76%
Due after five years through ten years	646,531		644,361		2.72%
Due after ten years	590,950		588,512		2.92%
Total	$	2,222,920	$	2,217,852	2.28%