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Business Segment Reporting
 3 Months Ended
Mar. 31, 2019
Segment Reporting [Abstract]  
BUSINESS SEGMENT REPORTING
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 months ended March 31, 2019 and 2018:

Table 9.1
Core Earnings by Business Segment
For the Three Months Ended March 31, 2019
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
15,282

 
$
4,442

 
$
(274
)
 
$
18,187

 
$
2,962

 
$
—

 
$
40,599

Less: reconciling adjustments(1)(2)(3)
(2,545
)
 
(478
)
 
3,507

 
(1,814
)
 
(468
)
 
1,798

 
—

Net effective spread
12,737

 
3,964

 
3,233

 
16,373

 
2,494

 
1,798

 
—

Guarantee and commitment fees(2)
4,744

 
224

 
363

 
88

 
—

 
(1,906
)
 
3,513

Other income/(expense)(3)
480

 
—

 
7

 
—

 
22

 
(332
)
 
177

Non-interest income/(loss)
5,224

 
224

 
370

 
88

 
22

 
(2,238
)
 
3,690

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of loan losses
264

 
—

 
—

 
—

 
—

 
—

 
264

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
129

 
—

 
—

 
—

 
—

 
—

 
129

Other non-interest expense
(4,799
)
 
(1,428
)
 
(866
)
 
(2,159
)
 
(3,638
)
 
—

 
(12,890
)
Non-interest expense(4)
(4,670
)
 
(1,428
)
 
(866
)
 
(2,159
)
 
(3,638
)
 
—

 
(12,761
)
Core earnings before income taxes
13,555

 
2,760

 
2,737

 
14,302

 
(1,122
)
 
(440
)
(5) 
31,792

Income tax (expense)/benefit
(2,847
)
 
(580
)
 
(575
)
 
(3,003
)
 
290

 
93

 
(6,622
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
10,708

 
2,180

 
2,162

 
11,299

 
(832
)
 
(347
)
(5) 
25,170

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Segment core earnings/(losses)
$
10,708

 
$
2,180

 
$
2,162

 
$
11,299

 
$
(4,128
)
 
$
(347
)
(5) 
$
21,874

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,698,250

 
$
2,191,896

 
$
1,443,393

 
$
8,502,084

 
$
2,962,154

 
$
—

 
$
19,797,777

Total on- and off-balance sheet program assets at principal balance
$
7,215,585

 
$
2,484,779

 
$
2,074,714

 
$
8,731,835

 
$
—

 
$
—

 
$
20,506,913

(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 on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(5) 
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 March 31, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
14,941

 
$
5,070

 
$
2,537

 
$
17,832

 
$
2,849

 
$
—

 
$
43,229

Less: reconciling adjustments(1)(2)(3)
(2,401
)
 
(670
)
 
413

 
(3,008
)
 
(462
)
 
6,128

 
—

Net effective spread
12,540

 
4,400

 
2,950

 
14,824

 
2,387

 
6,128

 
—

Guarantee and commitment fees(2)
4,378

 
166

 
449

 
90

 
—

 
(1,584
)
 
3,499

Other income/(expense)(3)
557

 
5

 
5

 
—

 
(139
)
 
(3,688
)
 
(3,260
)
Non-interest income/(loss)
4,935

 
171

 
454

 
90

 
(139
)
 
(5,272
)
 
239

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of loan losses
431

 
—

 
—

 
—

 
—

 
—

 
431

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(21
)
 
—

 
—

 
—

 
—

 
—

 
(21
)
Other non-interest expense
(4,520
)
 
(1,193
)
 
(673
)
 
(1,846
)
 
(3,389
)
 
—

 
(11,621
)
Non-interest expense(4)
(4,541
)
 
(1,193
)
 
(673
)
 
(1,846
)
 
(3,389
)
 
—

 
(11,642
)
Core earnings before income taxes
13,365

 
3,378

 
2,731

 
13,068

 
(1,141
)
 
856

(5) 
32,257

Income tax (expense)/benefit
(2,807
)
 
(709
)
 
(574
)
 
(2,744
)
 
575

 
(179
)
 
(6,438
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
10,558

 
2,669

 
2,157

 
10,324

 
(566
)
 
677

(5) 
25,819

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,295
)
 
—

 
(3,295
)
Segment core earnings/(losses)
$
10,558

 
$
2,669

 
$
2,157

 
$
10,324

 
$
(3,861
)
 
$
677

(5) 
$
22,524

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,306,960

 
$
2,195,714

 
$
1,043,335

 
$
8,066,231

 
$
2,784,996

 
$
—

 
$
18,397,236

Total on- and off-balance sheet program assets at principal balance
$
6,932,002

 
$
2,391,739

 
$
1,729,797

 
$
8,325,905

 
$
—

 
$
—

 
$
19,379,443

(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 on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.
(4) 
Includes directly attributable costs and an allocation of indirectly attributable costs based on employee headcount.
(5) 
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.