Loans (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Schedule of Composition of Loan Balances

The following table displays the composition of the loan balances as of March 31, 2020 and December 31, 2019:

Table 5.1

	As of March 31, 2020(1)						As of December 31, 2019(2)
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Farm & Ranch	$	3,817,693	$	1,540,689	$	5,358,382	$	3,675,640	$	1,600,917	$	5,276,557
Rural Utilities	1,789,726		—		1,789,726		1,671,293		—		1,671,293
Total unpaid principal balance(3)	5,607,419		1,540,689		7,148,108		5,346,933		1,600,917		6,947,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	181,972		—		181,972		44,044		—		44,044
Total loans	5,789,391		1,540,689		7,330,080		5,390,977		1,600,917		6,991,894
Allowance for losses	(13,663)		(1,193)		(14,856)		(8,853)		(1,601)		(10,454)
Total loans, net of allowance	$	5,775,728	$	1,539,496	$	7,315,224	$	5,382,124	$	1,599,316	$	6,981,440

⁽¹⁾Allowance for losses reflects the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020.

⁽²⁾Prior to the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020, Farmer Mac maintained an allowance for losses to cover estimated probable incurred losses on loans held.

(3)Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business.

Schedule Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of March 31, 2020 and December 31, 2019:

Table 5.2

	March 31, 2020(1)		December 31, 2019(2)
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Farm & Ranch	$	7,353	$	10,454
Rural Utilities	7,503		—
Total	$	14,856	$	10,454

⁽¹⁾Allowance for losses reflects the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020.

⁽²⁾Prior to the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020, Farmer Mac maintained an allowance for loan losses to cover estimated probable incurred losses on loans held.

The following is a summary of the changes in the allowance for losses for the three month period ended March 31, 2020 and 2019:

Table 5.3

	For the Three Months Ended
	March 31, 2020(1)		March 31, 2019(2)
	Allowance for Losses		Allowance for Losses
	(in thousands)
Farm & Ranch:
Balance as of December 31,	$	10,454	$	7,017
Cumulative effect adjustment from adoption of current expected credit loss standard	(3,909)		—
Balance as of January 1,	6,545		7,017
Provision for/(release of) losses	$	808	$	(264)
Charge-offs	—		—
Ending Balance(3)	$	7,353	$	6,753
Rural Utilities:
Balance as of December 31,	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	5,378		—
Balance as of January 1,	5,378		—
Provision for/(release of) losses	$	2,125	$	—
Charge-offs	—		—
Ending Balance(4)	$	7,503	$	—

⁽¹⁾Allowance for losses reflects the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020.

⁽²⁾Prior to the adoption of ASU 2016-13, "Financial Instruments - Credit Losses," in first quarter 2020, Farmer Mac maintained an allowance for loan losses to cover estimated probable incurred losses on loans held.

⁽³⁾Allowance for losses includes $2.2 million for collateral dependent assets secured by commercial real estate.

(4)Allowance for losses includes no allowance for collateral dependent assets.

Schedule of Past Due Financing Receivables

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of March 31, 2020:

Table 5.4

	As of March 31, 2020
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Nonaccrual loans(2)(3)		Total Loans
	(in thousands)
Loans:
Farm & Ranch	$	5,206,313	$	4,821	$	3,024	$	22,152	$	29,997	$	122,072	$	5,358,382
Rural Utilities	1,789,726		—		—		—		—		—		1,789,726
Total	$	6,996,039	$	4,821	$	3,024	$	22,152	$	29,997	$	122,072	$	7,148,108

⁽¹⁾Includes loans in consolidated trusts with beneficial interests owned by third parties that are 90 days or more past due.

⁽²⁾Includes loans that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

⁽³⁾Includes $24.0 million of nonaccrual loans for which there was no associated allowance. During the three months ended March 31, 2020, Farmer Mac received $1.0 million in interest on nonaccrual loans.Net credit losses and 90-day delinquencies as of and for the periods indicated for loans held are presented in the table below.  As of December 31, 2019, there were no delinquencies and no probable losses inherent in Farmer Mac's Rural Utilities loan portfolio and Farmer Mac had not experienced credit losses on any Rural Utilities loans.

Table 5.8

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Three Months Ended
	December 31, 2019		March 31, 2019
	(in thousands)
Farm & Ranch loans	$	57,719	$	—

⁽¹⁾Includes loans that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

The following table presents the unpaid principal balances by delinquency status of Farm & Ranch loans underlying LTSPCs. Farm & Ranch Farmer Mac Guaranteed Securities, Rural Utilities loans underlying LTSPCs, and non-performing assets as of March 31, 2020:

Table 6.7

	As of March 31, 2020
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Farm and Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	2,434,531	$	6,183	$	7,893	$	4,605	$	18,681	$	2,453,212
Rural Utilities:
LTSPCs	$	595,685	$	—	$	—	$	—	$	—	$	595,685

⁽¹⁾Includes loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are 90 days of more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

Table 6.9

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Three Months Ended
	December 31, 2019		March 31, 2019
	(in thousands)
Farm & Ranch LTSPCs and Farmer Mac Guaranteed Securities	$	3,235	$	—

⁽¹⁾Includes loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

Schedule of Allowance for Losses by Impairment Method and Commodity

The following tables present the unpaid principal balances of loans held and the related total allowance for losses by impairment method and commodity type as of December 31, 2019:

Table 5.5

	As of December 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment	$	2,664,362	$	1,161,900	$	871,341	$	356,920	$	10,360	$	4,597	$	5,069,480
Individually evaluated for impairment	108,815		51,256		39,962		7,044		—		—		207,077
Total Farm & Ranch loans	$	2,773,177	$	1,213,156	$	911,303	$	363,964	$	10,360	$	4,597	$	5,276,557
Allowance for Losses:
Collectively evaluated for impairment	$	1,880	$	1,362	$	714	$	249	$	47	$	4	$	4,256
Individually evaluated for impairment	2,628		1,008		2,447		115		—		—		6,198
Total Farm & Ranch loans	$	4,508	$	2,370	$	3,161	$	364	$	47	$	4	$	10,454

The following tables present the unpaid principal balances of Farm & Ranch loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and the related reserve for losses by impairment method and commodity type as of December 31, 2019:

Table 6.8

	As of December 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Ending Balance:
Collectively evaluated for impairment:	$	1,151,983	$	511,991	$	581,377	$	167,395	$	66,106	$	2,760	$	2,481,612
Individually evaluated for impairment:	5,698		2,114		10,207		706		—		56		18,781
Total Farm & Ranch	$	1,157,681	$	514,105	$	591,584	$	168,101	$	66,106	$	2,816	$	2,500,393
Allowance for Losses:
Collectively evaluated for impairment:	$	599	$	96	$	308	$	50	$	767	$	1	$	1,821
Individually evaluated for impairment:	97		43		189		14		—		—		343
Total Farm & Ranch	$	696	$	139	$	497	$	64	$	767	$	1	$	2,164

Schedule of Impaired Financing Receivables

The following tables present by commodity type the unpaid principal balances, recorded investment, and specific allowance for losses related to impaired loans and the recorded investment in loans on nonaccrual status as of December 31, 2019:

Table 5.6

	As of December 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Impaired Loans:
With no specific allowance:
Recorded investment	$	30,846	$	16,696	$	3,195	$	1,398	$	—	$	56	$	52,191
Unpaid principal balance	30,741		16,638		3,185		1,394		—		56		52,014
With a specific allowance:
Recorded investment(1)	84,044		36,852		47,113		6,376		—		—		174,385
Unpaid principal balance	83,772		36,732		46,984		6,356		—		—		173,844
Associated allowance	2,725		1,051		2,636		129		—		—		6,541
Total:
Recorded investment	114,890		53,548		50,308		7,774		—		56		226,576
Unpaid principal balance	114,513		53,370		50,169		7,750		—		56		225,858
Associated allowance	2,725		1,051		2,636		129		—		—		6,541
Recorded investment of loans on nonaccrual status(2)	$	34,037	$	22,849	$	28,441	$	2,454	$	—	$	—	$	87,781

⁽¹⁾Impairment analysis was performed in the aggregate in consideration of similar risk characteristics of the assets and historical statistics on $159.1 million (70%) of impaired loans as of December 31, 2019, which resulted in a specific allowance of $3.0 million.

⁽²⁾Includes $30.1 million of loans that are less than 90 days delinquent but which have not met Farmer Mac's performance criteria for returning to accrual status.

The following table presents by commodity type the average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2019:

Table 5.7

	March 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
For the Three Months Ended:
Average recorded investment in impaired loans	$	88,653	$	40,495	$	28,123	$	7,730	$	—	$	65	$	165,066
Income recognized on impaired loans	322		299		113		67		—		—		801

Schedule of Financing Receivable Credit Quality Indicators

The following tables present credit quality indicators related to Farm & Ranch loans and Rural Utilities loans held as of March 31, 2020, by year of origination:

Table 5.9

	As of March 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch:
Internally Assigned Risk Rating:
Acceptable	$	286,971	$	819,220	$	588,761	$	688,649	$	555,678	$	1,452,711	$	468,114	$	4,860,104
Special mention(1)	9,916		159,523		36,786		20,937		32,227		18,283		9,230		286,902
Substandard(2)	—		4,431		16,938		58,407		41,973		78,189		11,438		211,376
Total	$	296,887	$	983,174	$	642,485	$	767,993	$	629,878	$	1,549,183	$	488,782	$	5,358,382
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽¹⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽²⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

	As of March 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities:
Internally Assigned Risk Rating:
Acceptable	$	152,385	$	836,763	$	8,337	$	92,568	$	31,829	$	662,830	$	—	$	1,784,712
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		5,014		—		5,014
Total	$	152,385	$	836,763	$	8,337	$	92,568	$	31,829	$	667,844	$	—	$	1,789,726
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽¹⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽²⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

The following table presents credit quality indicators related to Farm & Ranch loans held as of December 31, 2019:

Table 5.10

	As of December 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Internally Assigned Risk Rating(1)
Acceptable	$	2,556,956	$	1,050,160	$	825,234	$	343,329	$	10,360	$	4,597	$	4,790,636
Special mention(2)	107,406		111,739		46,107		13,591		—		—		278,843
Substandard(3)	108,815		51,257		39,962		7,044		—		—		207,078
Total	$	2,773,177	$	1,213,156	$	911,303	$	363,964	$	10,360	$	4,597	$	5,276,557
Commodity analysis of past due loans(1)	$	21,167	$	15,828	$	19,354	$	1,370	$	—	$	—	$	57,719

⁽¹⁾Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. 

⁽²⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽³⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

The following tables present credit quality indicators related to Farm & Ranch loans underlying LTSPCs, Farm & Ranch Farmer Mac Guaranteed Securities, and Rural Utilities loans underlying LTSPCs as of March 31, 2020, by year of origination:

Table 6.10

	As of March 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch LTSPCs and Farmer Mac Guaranteed Securities:
Internally Assigned Risk Rating:
Acceptable	$	31,243	$	219,342	$	183,228	$	249,022	$	225,466	$	1,132,870	$	173,082	$	2,214,253
Special mention(1)	—		3,600		7,843		29,982		17,482		68,709		10,379		137,995
Substandard(2)	—		—		3,393		16,435		16,282		60,133		4,721		100,964
Total	$	31,243	$	222,942	$	194,464	$	295,439	$	259,230	$	1,261,712	$	188,182	$	2,453,212
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽¹⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽²⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

	As of March 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities LTSPCs:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	595,685	$	—	$	595,685
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	595,685	$	—	$	595,685
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽¹⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽²⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

The following table presents credit quality indicators related to Farm & Ranch loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities as of December 31, 2019:

Table 6.11

	As of December 31, 2019
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Other		Total
	(in thousands)
Internally Assigned Risk Rating(1)
Acceptable	$	1,033,002	$	484,601	$	521,341	$	161,361	$	66,106	$	2,594	$	2,269,005
Special mention(2)	68,372		22,909		35,618		1,612		—		—		128,511
Substandard(3)	56,307		6,595		34,625		5,128		—		222		102,877
Total	$	1,157,681	$	514,105	$	591,584	$	168,101	$	66,106	$	2,816	$	2,500,393
Commodity analysis of past due loans(1)	$	1,493	$	196	$	1,066	$	480	$	—	$	—	$	3,235

⁽¹⁾Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. 

⁽²⁾Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.  

⁽³⁾Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.