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Business Segment Reporting (Tables)
 6 Months Ended
Jun. 30, 2019
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment

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, 2019 and 2018:

Table 9.1
Core Earnings by Business Segment
For the Three Months Ended June 30, 2019
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
15,797

 
$
4,112

 
$
3,936

 
$
16,385

 
$
2,824

 
$
—

 
$
43,054

Less: reconciling adjustments(1)(2)(3)
(2,462
)
 
(15
)
 
60

 
986

 
(268
)
 
1,699

 
—

Net effective spread
13,335

 
4,097

 
3,996

 
17,371

 
2,556

 
1,699

 
—

Guarantee and commitment fees(2)
4,594

 
238

 
358

 
86

 
—

 
(1,873
)
 
3,403

Other income/(expense)(3)
188

 
—

 
7

 
—

 
582

 
8,552

 
9,329

Non-interest income/(loss)
4,782

 
238

 
365

 
86

 
582

 
6,679

 
12,732

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(578
)
 
—

 
—

 
—

 
—

 
—

 
(578
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
158

 
—

 
—

 
—

 
—

 
—

 
158

Other non-interest expense
(4,587
)
 
(1,345
)
 
(816
)
 
(2,034
)
 
(3,428
)
 
—

 
(12,210
)
Non-interest expense(4)
(4,429
)
 
(1,345
)
 
(816
)
 
(2,034
)
 
(3,428
)
 
—

 
(12,052
)
Core earnings before income taxes
13,110

 
2,990

 
3,545

 
15,423

 
(290
)
 
8,378

(5) 
43,156

Income tax (expense)/benefit
(2,753
)
 
(628
)
 
(744
)
 
(3,239
)
 
13

 
(1,760
)
 
(9,111
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
10,357

 
2,362

 
2,801

 
12,184

 
(277
)
 
6,618

(5) 
34,045

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,785
)
 
—

 
(3,785
)
Loss on retirement of preferred stock
—

 
—

 
—

 
—

 
—

 
(1,956
)
 
(1,956
)
Segment core earnings/(losses)
$
10,357

 
$
2,362

 
$
2,801

 
$
12,184

 
$
(4,062
)
 
$
4,662

(5) 
$
28,304

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,872,766

 
$
2,198,514

 
$
1,580,979

 
$
8,633,059

 
$
3,452,842

 
$
—

 
$
20,738,160

Total on- and off-balance sheet program assets at principal balance
$
7,291,352

 
$
2,521,394

 
$
2,155,671

 
$
8,778,318

 
$
—

 
$
—

 
$
20,746,735

(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" 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 June 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
15,889

 
$
5,072

 
$
3,313

 
$
18,805

 
$
854

 
$
—

 
$
43,933

Less: reconciling adjustments(1)(2)(3)
(2,542
)
 
(674
)
 
(390
)
 
(3,585
)
 
(580
)
 
7,771

 
—

Net effective spread
13,347

 
4,398

 
2,923

 
15,220

 
274

 
7,771

 
—

Guarantee and commitment fees(2)
4,488

 
190

 
402

 
91

 
—

 
(1,690
)
 
3,481

Other income/(expense)(3)
341

 
8

 
5

 
—

 
(209
)
 
2,754

 
2,899

Non-interest income/(loss)
4,829

 
198

 
407

 
91

 
(209
)
 
1,064

 
6,380

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(424
)
 
—

 
—

 
—

 
—

 
—

 
(424
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(158
)
 
—

 
—

 
—

 
—

 
—

 
(158
)
Other non-interest expense
(4,954
)
 
(1,312
)
 
(739
)
 
(2,030
)
 
(3,728
)
 
—

 
(12,763
)
Non-interest expense(4)
(5,112
)
 
(1,312
)
 
(739
)
 
(2,030
)
 
(3,728
)
 
—

 
(12,921
)
Core earnings before income taxes
12,640

 
3,284

 
2,591

 
13,281

 
(3,663
)
 
8,835

(5) 
36,968

Income tax (expense)/benefit
(2,654
)
 
(690
)
 
(544
)
 
(2,789
)
 
1,200

 
(1,855
)
 
(7,332
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
9,986

 
2,594

 
2,047

 
10,492

 
(2,463
)
 
6,980

(5) 
29,636

Preferred stock dividends
—

 
—

 
—

 
—

 
(3,296
)
 
—

 
(3,296
)
Segment core earnings/(losses)
$
9,986

 
$
2,594

 
$
2,047

 
$
10,492

 
$
(5,759
)
 
$
6,980

(5) 
$
26,340

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,428,172

 
$
2,177,345

 
$
995,068

 
$
8,144,763

 
$
2,881,423

 
$
—

 
$
18,626,771

Total on- and off-balance sheet program assets at principal balance
$
7,045,397

 
$
2,418,115

 
$
1,669,440

 
$
8,391,885

 
$
—

 
$
—

 
$
19,524,837

(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" 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 Six Months Ended June 30, 2019
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
31,079

 
$
8,554

 
$
3,662

 
$
34,572

 
$
5,786

 
$
—

 
$
83,653

Less: reconciling adjustments(1)(2)(3)
(5,007
)
 
(493
)
 
3,567

 
(828
)
 
(736
)
 
3,497

 
—

Net effective spread
26,072

 
8,061

 
7,229

 
33,744

 
5,050

 
3,497

 
—

Guarantee and commitment fees(2)
9,338

 
462

 
721

 
174

 
—

 
(3,779
)
 
6,916

Other income/(expense)(3)
668

 
—

 
14

 
—

 
604

 
8,220

 
9,506

Non-interest income/(loss)
10,006

 
462

 
735

 
174

 
604

 
4,441

 
16,422

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for loan losses
(314
)
 
—

 
—

 
—

 
—

 
—

 
(314
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of reserve for losses
287

 
—

 
—

 
—

 
—

 
—

 
287

Other non-interest expense
(9,386
)
 
(2,773
)
 
(1,682
)
 
(4,193
)
 
(7,066
)
 
—

 
(25,100
)
Non-interest expense(4)
(9,099
)
 
(2,773
)
 
(1,682
)
 
(4,193
)
 
(7,066
)
 
—

 
(24,813
)
Core earnings before income taxes
26,665

 
5,750

 
6,282

 
29,725

 
(1,412
)
 
7,938

(5) 
74,948

Income tax (expense)/benefit
(5,600
)
 
(1,208
)
 
(1,319
)
 
(6,242
)
 
303

 
(1,667
)
 
(15,733
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
21,065

 
4,542

 
4,963

 
23,483

 
(1,109
)
 
6,271

(5) 
59,215

Preferred stock dividends
—

 
—

 
—

 
—

 
(7,081
)
 
—

 
(7,081
)
Loss on retirement of preferred stock
—

 
—

 
—

 
—

 
—

 
(1,956
)
 
(1,956
)
Segment core earnings/(losses)
$
21,065

 
$
4,542

 
$
4,963

 
$
23,483

 
$
(8,190
)
 
$
4,315

(5) 
$
50,178

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,872,766

 
$
2,198,514

 
$
1,580,979

 
$
8,633,059

 
$
3,452,842

 
$
—

 
$
20,738,160

Total on- and off-balance sheet program assets at principal balance
$
7,291,352

 
$
2,521,394

 
$
2,155,671

 
$
8,778,318

 
$
—

 
$
—

 
$
20,746,735


(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" 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 Six Months Ended June 30, 2018
 
Farm & Ranch
 
USDA Guarantees
 
Rural 
Utilities
 
Institutional Credit
 
Corporate
 
Reconciling
Adjustments
 
Consolidated Net Income
 
(in thousands)
Net interest income
$
30,830

 
$
10,142

 
$
5,850

 
$
36,637

 
$
3,703

 
$
—

 
$
87,162

Less: reconciling adjustments(1)(2)(3)
(4,943
)
 
(1,344
)
 
23

 
(6,593
)
 
(1,042
)
 
13,899

 
—

Net effective spread
25,887

 
8,798

 
5,873

 
30,044

 
2,661

 
13,899

 
—

Guarantee and commitment fees(2)
8,867

 
356

 
851

 
180

 
—

 
(3,274
)
 
6,980

Other income/(expense)(3)
899

 
13

 
10

 
—

 
(349
)
 
(934
)
 
(361
)
Non-interest income/(loss)
9,766

 
369

 
861

 
180

 
(349
)
 
(4,208
)
 
6,619

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Release of loan losses
7

 
—

 
—

 
—

 
—

 
—

 
7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for reserve for losses
(179
)
 
—

 
—

 
—

 
—

 
—

 
(179
)
Other non-interest expense
(9,474
)
 
(2,505
)
 
(1,412
)
 
(3,876
)
 
(7,117
)
 
—

 
(24,384
)
Non-interest expense(4)
(9,653
)
 
(2,505
)
 
(1,412
)
 
(3,876
)
 
(7,117
)
 
—

 
(24,563
)
Core earnings before income taxes
26,007

 
6,662

 
5,322

 
26,348

 
(4,805
)
 
9,691

(5) 
69,225

Income tax (expense)/benefit
(5,461
)
 
(1,399
)
 
(1,118
)
 
(5,533
)
 
1,775

 
(2,034
)
 
(13,770
)
Core earnings before preferred stock dividends and attribution of income to non-controlling interest
20,546

 
5,263

 
4,204

 
20,815

 
(3,030
)
 
7,657

(5) 
55,455

Preferred stock dividends
—

 
—

 
—

 
—

 
(6,591
)
 
—

 
(6,591
)
Segment core earnings/(losses)
$
20,546

 
$
5,263

 
$
4,204

 
$
20,815

 
$
(9,621
)
 
$
7,657

(5) 
$
48,864

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets at carrying value
$
4,428,172

 
$
2,177,345

 
$
995,068

 
$
8,144,763

 
$
2,881,423

 
$
—

 
$
18,626,771

Total on- and off-balance sheet program assets at principal balance
$
7,045,397

 
$
2,418,115

 
$
1,669,440

 
$
8,391,885

 
$
—

 
$
—

 
$
19,524,837

(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" 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.