10-Q

As filed with the Securities and Exchange Commission on August 10, 2020

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

Commission File Number 001-14951 

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

(Exact name of registrant as specified in its charter)

Federally chartered instrumentality of the United States		52-1578738
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)
1999 K Street, N.W., 4th Floor,
Washington,	DC	20006
(Address of principal executive offices)		(Zip code)

(202)	872-7700
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Exchange on which registered
Class A voting common stock	AGM.A	New York Stock Exchange
Class C non-voting common stock	AGM	New York Stock Exchange
5.875% Non-Cumulative Preferred Stock, Series A	AGM.PRA	New York Stock Exchange
6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C	AGM.PRC	New York Stock Exchange
5.700% Non-Cumulative Preferred Stock, Series D	AGM.PRD	New York Stock Exchange
5.750% Non-Cumulative Preferred Stock, Series E	AGM.PRE	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Class B voting common stock

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes        o                                No          x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes        o                                No           x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes        ☒                              No           ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes        ☒                               No          ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes         ☐                               No           ☒

As of August 3, 2020, the registrant had outstanding 1,030,780 shares of Class A voting common stock, 500,301 shares of Class B voting common stock, and 9,201,754 shares of Class C non-voting common stock.

1

Table of Contents

PART I		4
Item 1.	Financial Statements	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Equity	7
	Consolidated Statements of Cash Flows	9
	Notes to Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	62
	Forward-Looking Statements	62
	Overview	63
	Use of Non-GAAP Measures	69
	Results of Operations	71
	Outlook	88
	Balance Sheet Review	93
	Risk Management	94
	Liquidity and Capital Resources	112
	Regulatory Matters	113
	Other Matters	114
	Supplemental Information	114
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	119
Item 4.	Controls and Procedures	119
PART II		120
Item 1.	Legal Proceedings	120
Item 1A.	Risk Factors	120
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	127
Item 3.	Default Upon Senior Securities	127
Item 4.	Mine Safety Disclosures	127
Item 5.	Other Information	127
Item 6.	Exhibits	128
Signatures		129

3

PART I

Item 1.Financial Statements

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)

	As of
	June 30, 2020		December 31, 2019
	(in thousands)
Assets:
Cash and cash equivalents	$	827,600	$	604,381
Investment securities:
Available-for-sale, at fair value (amortized cost of $3,458,957 and $2,961,430, respectively)	3,467,378		2,959,843
Held-to-maturity, at amortized cost	45,032		45,032
Total Investment Securities	3,512,410		3,004,875
Farmer Mac Guaranteed Securities:
Available-for-sale, at fair value (amortized cost of $7,539,944 and $7,016,971, respectively)	7,898,387		7,143,025
Held-to-maturity, at amortized cost	1,140,718		1,447,451
Total Farmer Mac Guaranteed Securities	9,039,105		8,590,476
USDA Securities:
Trading, at fair value	7,786		8,913
Held-to-maturity, at amortized cost	2,339,923		2,232,160
Total USDA Securities	2,347,709		2,241,073
Loans:
Loans held for investment, at amortized cost	6,469,997		5,390,977
Loans held for investment in consolidated trusts, at amortized cost	1,436,090		1,600,917
Allowance for losses	(14,939)		(10,454)
Total loans, net of allowance	7,891,148		6,981,440
Financial derivatives, at fair value	16,588		10,519
Interest receivable (includes $17,415 and $20,568, respectively, related to consolidated trusts)	175,659		199,195
Guarantee and commitment fees receivable	36,612		38,442
Deferred tax asset, net	38,790		16,510
Prepaid expenses and other assets	47,035		22,463
Total Assets	$	23,932,656	$	21,709,374
Liabilities and Equity:
Liabilities:
Notes payable	21,421,550		19,098,648
Debt securities of consolidated trusts held by third parties	1,476,964		1,616,504
Financial derivatives, at fair value	47,543		27,042
Accrued interest payable (includes $15,007 and $18,018, respectively, related to consolidated trusts)	100,134		106,959
Guarantee and commitment obligation	35,162		36,700
Accounts payable and accrued expenses	24,167		22,081
Reserve for losses	3,020		2,164
Total Liabilities	23,108,540		20,910,098
Commitments and Contingencies (Note 6)
Equity:
Preferred stock:
Series A, par value $25 per share, 2,400,000 shares authorized, issued and outstanding	58,333		58,333
Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding	73,382		73,382
Series D, par value $25 per share, 4,000,000 shares authorized, issued and outstanding	96,659		96,659
Series E, par value $25 per share, 3,180,000 shares authorized, issued and outstanding	77,003		—
Common stock:
Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding	1,031		1,031
Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding	500		500
Class C Non-Voting, $1 par value, no maximum authorization, 9,201,623 shares and 9,180,744 shares outstanding, respectively	9,202		9,181
Additional paid-in capital	120,856		119,304
Accumulated other comprehensive loss, net of tax	(91,497)		(16,161)
Retained earnings	478,647		457,047
Total Equity	824,116		799,276
Total Liabilities and Equity	$	23,932,656	$	21,709,374

The accompanying notes are an integral part of these consolidated financial statements.

4

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(in thousands, except per share amounts)
Interest income:
Investments and cash equivalents	$	10,399	$	20,156	$	28,140	$	38,863
Farmer Mac Guaranteed Securities and USDA Securities	61,792		85,569		133,309		170,980
Loans	55,430		59,403		116,026		110,800
Total interest income	127,621		165,128		277,475		320,643
Total interest expense	79,273		122,074		187,815		236,990
Net interest income	48,348		43,054		89,660		83,653
Provision for losses	(451)		(578)		(3,889)		(314)
Net interest income after provision for losses	47,897		42,476		85,771		83,339
Non-interest income/(expense):
Guarantee and commitment fees	3,140		3,403		6,336		6,916
Gains/(losses) on financial derivatives	6,523		8,913		(2,775)		8,553
(Losses)/gains on trading securities	(21)		61		85		105
Gains on sale of real estate owned	—		—		485		—
Release of reserve for losses	400		158		7		287
Other income	1,229		355		2,045		848
Non-interest income	11,271		12,890		6,183		16,709
Operating expenses:
Compensation and employee benefits	8,087		6,770		18,214		14,376
General and administrative	5,295		4,689		10,658		9,285
Regulatory fees	725		687		1,450		1,375
Real estate owned operating costs, net	—		64		—		64
Operating expenses	14,107		12,210		30,322		25,100
Income before income taxes	45,061		43,156		61,632		74,948
Income tax expense	9,435		9,111		13,176		15,733
Net income attributable to Farmer Mac	35,626		34,045		48,456		59,215
Preferred stock dividends	(3,939)		(3,785)		(7,370)		(7,081)
Loss on retirement of preferred stock	—		(1,956)		—		(1,956)
Net income attributable to common stockholders	$	31,687	$	28,304	$	41,086	$	50,178
Earnings per common share:
Basic earnings per common share	$	2.95	$	2.65	$	3.83	$	4.70
Diluted earnings per common share	$	2.94	$	2.63	$	3.81	$	4.66

The accompanying notes are an integral part of these consolidated financial statements.

5

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
					(in thousands)
Net income	$	35,626	$	34,045	$	48,456	$	59,215
Other comprehensive income before taxes:
Net unrealized gains/(losses) on available-for-sale securities	42,527		(28,588)		(56,789)		(25,347)
Net changes in held-to-maturity securities	(2,496)		(4,601)		(8,184)		(6,863)
Net unrealized losses on cash flow hedges	(2,132)		(9,972)		(30,388)		(15,637)
Other comprehensive gain/(loss) before tax	37,899		(43,161)		(95,361)		(47,847)
Income tax (expense)/benefit related to other comprehensive gain/(loss)	(7,959)		9,064		20,025		10,048
Other comprehensive gain/(loss) net of tax	29,940		(34,097)		(75,336)		(37,799)
Comprehensive income/(loss) attributable to Farmer Mac	$	65,566	$	(52)	$	(26,880)	$	21,416

The accompanying notes are an integral part of these consolidated financial statements.

6

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

									Accumulated
							Additional		Other
	Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
	Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
	(in thousands)
Balance as of December 31, 2019	9,400	$	228,374	10,712	$	10,712	$	119,304	$	(16,161)	$	457,047	$	799,276
Cumulative effect adjustment from adoption of current expected credit loss standard	—	—		—	—		—		—		(2,099)		(2,099)
Balance as of January 1, 2020	9,400	$	228,374	10,712	$	10,712	$	119,304	$	(16,161)	$	454,948	$	797,177
Net income	—	—		—	—		—		—		12,830		12,830
Other comprehensive loss, net of tax	—	—		—	—		—		(105,276)		—		(105,276)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(3,431)		(3,431)
Common stock (cash dividend of $0.80 per share)	—	—		—	—		—		—		(8,571)		(8,571)
Issuance of Class C common stock	—	—		15	15		19		—		—		34
Repurchase of Class C Common Stock	—	—		(4)	(4)		—		—		(231)		(235)
Stock-based compensation cost	—	—		—	—		1,293		—				1,293
Other stock-based award activity	—	—		—	—		(204)		—		—		(204)
Balance as of March 31, 2020	9,400	$	228,374	10,723	$	10,723	$	120,412	$	(121,437)	$	455,545	$	693,617
Net income	—	—		—	—		—		—		35,626		35,626
Other comprehensive income, net of tax	—	—		—	—		—		29,940		—		29,940
Cash dividends:
Preferred stock	—	—		—	—		—		—		(3,939)		(3,939)
Common stock (cash dividend of $0.80 per share)	—	—		—	—		—		—		(8,585)		(8,585)
Issuance of Series E preferred stock	3,180	77,003		—	—		—		—		—		77,003
Issuance of Class C common stock	—	—		10	10		17		—		—		27
Stock-based compensation cost	—	—		—	—		719		—		—		719
Other stock-based award activity	—	—		—	—		(292)		—		—		(292)
Balance as of June 30, 2020	12,580	$	305,377	10,733	$	10,733	$	120,856	$	(91,497)	$	478,647	$	824,116

7

									Accumulated
							Additional		Other
	Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
	Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
	(in thousands)
Balance as of December 31, 2018	8,400	$	204,759	10,669	$	10,669	$	118,822	$	24,956	$	393,351	$	752,557
Net Income	—	—		—	—		—		—		25,170		25,170
Other comprehensive loss, net of tax	—	—		—	—		—		(3,702)		—		(3,702)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(3,296)		(3,296)
Common stock (cash dividend of $0.70 per share)	—	—		—	—		—		—		(7,470)		(7,470)
Issuance of Class C Common Stock	—	—		20	20		3		—		—		23
Stock-based compensation cost	—	—		—	—		724		—		—		724
Other stock-based award activity	—	—		—	—		(708)		—		—		(708)
Balance as of March 31, 2019	8,400	$	204,759	10,689	$	10,689	$	118,841	$	21,254	$	407,755	$	763,298
Net income	—	—		—	—		—		—		34,045		34,045
Other comprehensive loss, net of tax	—	—		—	—		—		(34,097)		—		(34,097)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(3,785)		(3,785)
Common stock (cash dividend of $0.70 per share)	—	—		—	—		—		—		(7,490)		(7,490)
Issuance of Series D Preferred Stock	4,000	96,659					—		—		—		96,659
Redemption of Series B Preferred Stock	(3,000)	(73,044)		—	—		—		—		—		(73,044)
Loss on retirement of preferred stock	—	—		—	—		—		—		(1,956)		(1,956)
Issuance of Class C Common Stock	—	—		11	11		3		—		—		14
Stock-based compensation cost	—	—		—	—		533		—		—		533
Other stock-based award activity	—	—		—	—		(435)		—		—		(435)
Balance as of June 30, 2019	9,400	$	228,374	10,700	$	10,700	$	118,942	$	(12,843)	$	428,569	$	773,742

The accompanying notes are an integral part of these consolidated financial statements.

8

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the Six Months Ended
	June 30, 2020		June 30, 2019
	(in thousands)
Cash flows from operating activities:
Net income	$	48,456	$	59,215
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	1,095		(4,922)
Amortization of debt premiums, discounts, and issuance costs	14,769		24,022
Net change in fair value of trading securities, hedged assets, and financial derivatives	(401,002)		(208,213)
Gain on sale of real estate owned	(485)		—
Total provision for allowance for losses	3,882		27
Excess tax benefits related to stock-based awards	(475)		259
Deferred income taxes	(2,254)		5,874
Stock-based compensation expense	2,012		1,257
Proceeds from repayment of loans purchased as held for sale	35,351		23,239
Net change in:
Interest receivable	24,139		(4,578)
Guarantee and commitment fees receivable	292		120
Other assets	(23,446)		(9,006)
Accrued interest payable	(6,825)		11,386
Other liabilities	(2,453)		651
Net cash used in operating activities	(306,944)		(100,669)
Cash flows from investing activities:
Purchases of available-for-sale investment securities	(1,591,501)		(1,217,901)
Purchases of Farmer Mac Guaranteed Securities and USDA Securities	(1,361,109)		(1,660,280)
Purchases of loans held for investment	(1,502,920)		(1,101,705)
Purchases of defaulted loans	(6,272)		—
Proceeds from repayment of available-for-sale investment securities	1,097,237		500,462
Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities	1,029,718		1,241,156
Proceeds from repayment of loans purchased as held for investment	712,238		330,387
Proceeds from sale of Farmer Mac Guaranteed Securities	28,050		166,351
Proceeds from sale of real estate owned	2,191		—
Net cash used in investing activities	(1,592,368)		(1,741,530)
Cash flows from financing activities:
Proceeds from issuance of discount notes	34,376,593		28,265,587
Proceeds from issuance of medium-term notes	7,791,406		4,467,265
Payments to redeem discount notes	(34,075,014)		(27,730,461)
Payments to redeem medium-term notes	(5,847,765)		(3,106,538)
Payments to third parties on debt securities of consolidated trusts	(175,004)		(80,820)
Proceeds from common stock issuance	36		6
Retirement of Series B preferred stock	—		(75,000)
Proceeds from Series D preferred stock issuance, net of stock issuance costs	—		96,659
Proceeds from Series E preferred stock issuance, net of stock issuance costs	77,003		—
Tax payments related to share-based awards	(471)		(1,112)
Purchases of common stock	(235)		—
Dividends paid on common and preferred stock	(24,018)		(22,041)
Net cash provided by financing activities	2,122,531		1,813,545
Net change in cash and cash equivalents	223,219		(28,654)
Cash and cash equivalents at beginning of period	604,381		425,256
Cash and cash equivalents at end of period	$	827,600	$	396,602
Non-cash activity:
Loans acquired and securitized as Farmer Mac Guaranteed Securities	28,050		166,351
Consolidation of Farmer Mac Guaranteed Securities from off-balance sheet to loans held for investment in consolidated trusts and to debt securities of consolidated trusts held by third parties	28,050		118,004
Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment	7,414		4,721
Maturity of investment security - not yet settled	—		(35,075)
Purchases of securities - traded, not yet settled	4,588		10,000

  The accompanying notes are an integral part of these consolidated financial statements.

9

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation ("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Farmer Mac and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted as permitted by SEC rules and regulations. The December 31, 2019 consolidated balance sheet presented in this report has been derived from Farmer Mac's audited 2019 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2019 consolidated financial statements of Farmer Mac and subsidiaries included in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 25, 2020. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain updated information for the three and six months ended June 30, 2020.

Principles of Consolidation

The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries during the year: (1) Farmer Mac Mortgage Securities Corporation ("FMMSC"), whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Guarantees line of business – primarily the acquisition of USDA Securities. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

10

The following tables present, by line of business, details about the consolidation of VIEs:

Table 1.1

	Consolidation of Variable Interest Entities
	As of June 30, 2020
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,436,090	$	—	$	—	$	1,436,090
Debt securities of consolidated trusts held by third parties (1)	1,476,964		—		—		1,476,964
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,615		—		32,615
Maximum exposure to loss (3)	—		32,537		—		32,537
Investment securities:
Carrying value (4)	—		—		1,651,031		1,651,031
Maximum exposure to loss (3) (4)	—		—		1,648,328		1,648,328
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	90,225		330,309		—		420,534

⁽¹⁾Includes borrower remittances of $40.9 million. The borrower remittances had not been passed through to third party investors as of June 30, 2020.

⁽²⁾Includes $0.1 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

11

	Consolidation of Variable Interest Entities
	As of December 31, 2019
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,600,917	$	—	$	—	$	1,600,917
Debt securities of consolidated trusts held by third parties (1)	1,616,504		—		—		1,616,504
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,041		—		32,041
Maximum exposure to loss (3)	—		31,887		—		31,887
Investment securities:
Carrying value (4)	—		—		1,117,203		1,117,203
Maximum exposure to loss (3) (4)	—		—		1,120,765		1,120,765
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	107,322		389,216		—		496,538

⁽¹⁾Includes borrower remittances of $15.6 million. The borrower remittances had not been passed through to third party investors as of December 31, 2019.

⁽²⁾Includes $0.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

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(a)Earnings Per Common Share

Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding.  Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock awards.  The following schedule reconciles basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:

Table 1.2

	For the Three Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	31,687	10,730	$	2.95	$	28,304	10,698	$	2.65
Effect of dilutive securities(1)
SARs and restricted stock	—		46	(0.01)		—		72	(0.02)
Diluted EPS	$	31,687	10,776	$	2.94	$	28,304	10,770	$	2.63

⁽¹⁾For the three months ended June 30, 2020 and 2019, SARs and restricted stock of 83,297 and 62,660, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

	For the Six Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	41,086	10,721	$	3.83	$	50,178	10,684	$	4.70
Effect of dilutive securities(1)
SARs and restricted stock	—		58	(0.02)		—		90	(0.04)
Diluted EPS	$	41,086	10,779	$	3.81	$	50,178	10,774	$	4.66

⁽¹⁾For the six months ended June 30, 2020 and 2019, SARs and restricted stock of 85,223 and 59,818, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the six months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

(b)Comprehensive Income

Comprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

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The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and six months ended June 30, 2020 and 2019:

Table 1.3

	As of June 30, 2020								As of June 30, 2019
	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	(121,858)	$	28,351	$	(27,930)	$	(121,437)	$	(22,800)	$	41,656	$	2,398	$	21,254
Other comprehensive income/(loss) before reclassifications	34,374		—		(2,920)		31,454		(21,711)		—		(7,512)		(29,223)
Amounts reclassified from AOCI	(777)		(1,972)		1,235		(1,514)		(873)		(3,635)		(366)		(4,874)
Net comprehensive income/(loss)	33,597		(1,972)		(1,685)		29,940		(22,584)		(3,635)		(7,878)		(34,097)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)
For the Six Months Ended:
Beginning Balance	$	(43,397)	$	32,845	$	(5,609)	$	(16,161)	$	(25,360)	$	43,443	$	6,873	$	24,956
Other comprehensive loss before reclassifications	(43,310)		—		(25,588)		(68,898)		(18,393)		—		(11,608)		(30,001)
Amounts reclassified from AOCI	(1,554)		(6,466)		1,582		(6,438)		(1,631)		(5,422)		(745)		(7,798)
Net comprehensive loss	(44,864)		(6,466)		(24,006)		(75,336)		(20,024)		(5,422)		(12,353)		(37,799)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)

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The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the three and six months ended June 30, 2020 and 2019:

Table 1.4

	For the Three Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	$	43,512	$	9,138	$	34,374	$	(27,482)	$	(5,771)	$	(21,711)
Less reclassification adjustments included in:
Net interest income(1)	(971)		(204)		(767)		(956)		(201)		(755)
Other income(2)	(14)		(4)		(10)		(150)		(32)		(118)
Total	$	42,527	$	8,930	$	33,597	$	(28,588)	$	(6,004)	$	(22,584)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(2,496)		(524)		(1,972)		(4,601)		(966)		(3,635)
Total	$	(2,496)	$	(524)	$	(1,972)	$	(4,601)	$	(966)	$	(3,635)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(3,695)	$	(775)	$	(2,920)	$	(9,510)	$	(1,998)	$	(7,512)
Less reclassification adjustments included in:
Net interest income(4)	1,563		328		1,235		(462)		(96)		(366)
Total	$	(2,132)	$	(447)	$	(1,685)	$	(9,972)	$	(2,094)	$	(7,878)
Other comprehensive income/(loss)	$	37,899	$	7,959	$	29,940	$	(43,161)	$	(9,064)	$	(34,097)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

15

	For the Six Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding losses on available-for-sale securities	$	(54,822)	$	(11,512)	$	(43,310)	$	(23,282)	$	(4,889)	$	(18,393)
Less reclassification adjustments included in:
Net interest income(1)	(1,940)		(407)		(1,533)		(1,909)		(401)		(1,508)
Other income(2)	(27)		(6)		(21)		(156)		(33)		(123)
Total	$	(56,789)	$	(11,925)	$	(44,864)	$	(25,347)	$	(5,323)	$	(20,024)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(8,184)		(1,718)		(6,466)		(6,863)		(1,441)		(5,422)
Total	$	(8,184)	$	(1,718)	$	(6,466)	$	(6,863)	$	(1,441)	$	(5,422)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(32,390)	$	(6,802)	$	(25,588)	$	(14,695)	$	(3,087)	$	(11,608)
Less reclassification adjustments included in:
Net interest income(4)	2,002		420		1,582		(942)		(197)		(745)
Total	$	(30,388)	$	(6,382)	$	(24,006)	$	(15,637)	$	(3,284)	$	(12,353)
Other comprehensive loss	$	(95,361)	$	(20,025)	$	(75,336)	$	(47,847)	$	(10,048)	$	(37,799)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

(c)Allowance for Losses and Reserve for Losses

On January 1, 2020, Farmer Mac adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, ("CECL"). Under CECL, Farmer Mac's allowance for credit losses represents the difference between the carrying amount of the related financial instruments and the present value of their expected cash flows discounted at their effective interest rates, as of the respective balance sheet date. Under CECL, Farmer Mac's reserve for credit losses represents the difference between the outstanding amount of off-balance sheet credit exposures and the present value of their expected cash flows discounted at their effective interest rates.

Farmer Mac maintains an allowance for credit losses to cover current expected credit losses as of the balance sheet date for on-balance sheet investment securities, loans held for investment, and Farmer Mac Guaranteed Securities (collectively referred to as "allowance for losses"). Additionally, Farmer Mac maintains a reserve for credit losses to cover current expected credit losses as of the balance sheet date for off-balance sheet loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities (collectively referred to as "reserve for losses"). Both the allowance for losses and reserve for losses are based on historical information and reasonable and supportable forecasts.  

16

Farmer Mac has never experienced a credit loss in its Rural Utilities line of business. Upon the adoption of CECL, Farmer Mac is now required to measure its expected credit losses for the expected life of all financial instruments, including its Rural Utilities loans. To estimate expected credit losses on these loans, Farmer Mac relies upon industry historical credit loss data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities industry.

The allowance for losses increases through periodic provisions for loan losses that are charged against net interest income and the reserve for losses increases through provisions for losses that are charged to non-interest expense. Both the allowance for losses and reserve for losses are decreased by charge-offs for realized losses, net of recoveries.  Releases from the allowance for losses or reserve for losses occur when the estimate of expected credit losses as of the end of a period is less than the estimate at the beginning of the period.

The total allowance for losses consists of the allowance for losses and the reserve for losses.

Charge-offs

Farmer Mac records a charge-off against the allowance for losses principally when a loss has been confirmed through the receipt of assets, generally the underlying collateral, in full satisfaction of the loan. The loss equals the excess of the recorded investment in the loan over the fair value of the collateral less estimated selling costs.

Estimation Methodology

Farmer Mac bases its methodology for determining its current estimate of expected losses on a statistical model, which incorporates credit loss history and reasonable and supportable forecasts. Farmer Mac's estimation methodology is comprised of the following key components:

•An economic model for each portfolio, including Farm & Ranch, Rural Utilities, and Institutional Credit;

•A migration matrix for each portfolio that reasonably predicts the movement of each financial asset among various risk categories over the course of each asset's expected life. The migration matrix forms the basis for our estimate of the probability of default of each financial asset;

•A loss-given-default ("LGD") model that reasonably predicts the amount of loss that Farmer Mac would incur upon the default of each financial asset;

•An economic factor forecast that updates the migration matrix model and the LGD model with current assumptions for the economic indicators that Farmer Mac has determined are most correlated with or relevant to the performance of each portfolio of assets; including Gross Domestic Product ("GDP"), credit spreads, unemployment rates, land values, and commodity prices; and

•A discounted cash flow analysis, which relies upon each of the above model outputs, plus the contractual terms of each financial asset, and the effective interest rate of each financial asset.

Management evaluates these assumptions by considering many relevant factors, including:

•economic conditions;

•geographic and agricultural commodity/product concentrations in the portfolio;

•the credit profile of the portfolio, including risk ratings and financial metrics;

•delinquency trends of the portfolio;

•historical charge-off and recovery activities of the portfolio; and

17

•other factors to capture current portfolio trends and characteristics that differ from historical experience.

Management believes that its methodology produces a reasonable estimate of expected credit losses, as of the balance sheet date, for the expected life of all of its financial assets.

Allowance for Loss on Available-for-Sale (AFS) Securities

To measure current expected credit losses on impaired AFS securities, Farmer Mac first considers those impaired securities that: 1) Farmer Mac does not intend to sell, and 2) it is not more likely than not that Farmer Mac will be required to sell before recovering its amortized cost basis. In assessing whether a credit loss exists, Farmer Mac compares the present value, discounted at the security's effective interest rate, of cash flows expected to be collected from an impaired AFS debt security to its amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis of the impaired security, a credit loss exists and Farmer Mac records an allowance for loss for that credit loss. However, the amount of that allowance is limited by the amount that the security’s fair value is less than its amortized cost basis. Accrued interest receivable is recorded separately on the Consolidated Balance Sheet, and the allowance for credit losses excludes uncollectible accrued interest receivable.

Collateral Dependent Assets ("CDAs")

CDAs are loans, loans underlying LTSPCs, or off-balance sheet credit exposures in which the borrower is either in foreclosure or is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral by Farmer Mac. Farmer Mac estimates the current expected credit loss on CDAs based upon the appraised value of the collateral, the costs to sell it, and any applicable credit protection such as a guarantee.

COVID-19 Payment Deferments

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law on March 27, 2020. Section 4013 of the CARES Act titled “Temporary Relief from Troubled Debt Restructurings” provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (“TDRs”) for a limited period of time to account for the effects of the novel coronavirus disease 2019 ("COVID-19"). On April 10, 2020, Farmer Mac’s prudential regulator, the Office of Secondary Market Oversight (OSMO) within the Farm Credit Administration (FCA), issued guidance to Farmer Mac on loan servicing and reporting TDRs for lines of business affected by the COVID-19 outbreak. This guidance was consistent with the guidance provided by other financial regulatory agencies and the Financial Accounting Standards Board that short-term modifications made on a good faith basis in response to the COVID-19 national emergency are not TDRs when the borrower was not past due on loan payments before the March 13, 2020 presidential proclamation declaring the COVID-19 outbreak a national emergency.

During second quarter 2020, Farmer Mac implemented the guidance from FCA by granting up to 6-month payment deferments to borrowers who have been economically impacted by COVID-19. Farmer Mac deems loans under a COVID-19 payment deferment not to be past due and continues to accrue interest on those loans. Furthermore, Farmer Mac does not consider a payment deferment on any such loan to be a troubled debt restructuring. For the purpose of estimating expected credit losses on Farm & Ranch loans held for investment, Farmer Mac does consider payment deferments along with other available credit and economic information that pertains to that portfolio.

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(d)New Accounting Standards

Recently Adopted Accounting Guidance

Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This Update required entities to measure all expected credit losses for financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, as well as requiring entities to use forward-looking information to form their credit loss estimates.	January 1, 2020	In first quarter 2020 Farmer Mac adopted the new guidance. The cumulative-effect adjustment to retained earnings as of January 1, 2020 reflected application of the new guidance and did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. For more information on the transition adjustment see Table 1.5 below.
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities	The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. There is no required accounting change for securities held at a discount in this Update.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurements, including the consideration of costs and benefits. Certain disclosure requirements were either removed, modified, or added.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

The following table presents the impact of adopting CECL on January 1, 2020 on our allowance and retained earnings:

Table 1.5

	December 31, 2019		Transition Adjustment		January 1, 2020
	(in thousands)
Allowance:
Farm & Ranch:
Loans	$	10,454	$	(3,909)	$	6,545
Long-term standby purchase commitments and guarantees	2,164		(148)		2,016
Rural Utilities:
Loans	—		5,378		5,378
Long-term standby purchase commitments	—		1,011		1,011
Farmer Mac Guaranteed Securities:
AgVantage	—		315		315
Investment Securities	—		9		9
Total Allowance	$	12,618	$	2,656	$	15,274
Retained Earnings	$	457,047	$	(2,099)	$	454,948

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Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard	Description	Date of Planned Adoption	Effect on Consolidated Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022.	Farmer Mac is currently evaluating the impact of the discontinuation of LIBOR on the consolidated financial statements and the applicability of the optional guidance provided by this Update.

(e)Reclassifications

Certain reclassifications of prior period information were made to conform to the current period presentation.

2.INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's investment securities as of June 30, 2020 and December 31, 2019:

Table 2.1

	As of June 30, 2020
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(38)	$	—	$	(1,379)	$	18,283
Floating rate asset-backed securities	9,818		—		9,818		—		—		(11)		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	2,108,505		29		2,108,534		—		7,409		(3,566)		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	292		—		292		—		30		—		322
Fixed rate U.S. Treasuries	1,314,850		5,763		1,320,613		—		6,043		(67)		1,326,589
Total available-for-sale	3,453,165		5,792		3,458,957		(38)		13,482		(5,023)		3,467,378
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		650		—		45,682
Total investment securities	$	3,498,197	$	5,792	$	3,503,989	$	(38)	$	14,132	$	(5,023)	$	3,513,060

⁽¹⁾Amounts presented exclude $6.6 million of accrued interest receivable on investment securities as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The held-to-maturity investment securities had a weighted average yield of 1.5% as of June 30, 2020.

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	As of December 31, 2019
	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	$	—	$	(788)	$	18,912
Floating rate asset-backed securities	11,092		—		11,092		—		(7)		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	1,633,731		1,174		1,634,905		2,414		(4,736)		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	315		—		315		25		—		340
Fixed rate U.S. Treasuries	1,295,210		208		1,295,418		1,520		(15)		1,296,923
Total available-for-sale	2,960,048		1,382		2,961,430		3,959		(5,546)		2,959,843
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(1)	45,032		—		45,032		953		—		45,985
Total investment securities	$	3,005,080	$	1,382	$	3,006,462	$	4,912	$	(5,546)	$	3,005,828

⁽¹⁾The held-to-maturity investment securities had a weighted average yield of 3.3% as of December 31, 2019.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the three and six months ended June 30, 2020 and 2019.

As of June 30, 2020 and December 31, 2019, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2

	As of June 30, 2020
	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	$	—	$	—	$	18,283	$	(1,379)
Floating rate asset-backed securities	—		—		9,807		(11)
Floating rate Government/GSE guaranteed mortgage-backed securities	565,860		(2,163)		217,525		(1,403)
Fixed rate U.S. Treasuries	226,448		(67)		—		—
Total	$	792,308	$	(2,230)	$	245,615	$	(2,793)
Number of securities in loss position			58				55

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	As of December 31, 2019
	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	$	—	$	—	$	18,912	$	(788)
Floating rate asset-backed securities	2,583		(1)		8,502		(6)
Floating rate Government/GSE guaranteed mortgage-backed securities	841,993		(2,244)		436,621		(2,492)
Fixed rate U.S. Treasuries	35,107		(15)		—		—
Total	$	879,683	$	(2,260)	$	464,035	$	(3,286)
Number of securities in loss position			57				62

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to June 30, 2020 and December 31, 2019, 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 both June 30, 2020 and December 31, 2019, 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 June 30, 2020 that is, on average, approximately 98.9% 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.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2020 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 2.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,235,047	$	1,241,040	1.58%
Due after one year through five years	364,971		364,927		0.99%
Due after five years through ten years	922,322		926,675		0.72%
Due after ten years	936,617		934,736		0.69%
Total	$	3,458,957	$	3,467,378	1.05%

22

3.FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2020 and December 31, 2019:

Table 3.1

	As of June 30, 2020
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,108,720	$	(70)	$	1,108,650	$	(546)	$	30,070	$	—	$	1,138,174
Farmer Mac Guaranteed USDA Securities	32,537		77		32,614		—		1,249		—		33,863
Total Farmer Mac Guaranteed Securities	1,141,257		7		1,141,264		(546)		31,319		—		1,172,037
USDA Securities	2,307,684		32,239		2,339,923		—		85,626		(661)		2,424,888
Total held-to-maturity	$	3,448,941	$	32,246	$	3,481,187	$	(546)	$	116,945	$	(661)	$	3,596,925
Available-for-sale:
AgVantage	$	7,540,043	$	(99)	$	7,539,944	$	(235)	$	405,926	$	(47,248)	$	7,898,387
Trading:
USDA Securities(3)	$	7,276	$	391	$	7,667	$	—	$	122	$	(3)	$	7,786

⁽¹⁾Amounts presented exclude $34.9 million, $35.3 million, and $0.2 million of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The trading USDA securities had a weighted average yield of 5.15% as of June 30, 2020.

	As of December 31, 2019
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,415,584	$	(174)	$	1,415,410	$	15,300	$	(164)	$	1,430,546
Farmer Mac Guaranteed USDA Securities	31,887		154		32,041		839		—		32,880
Total Farmer Mac Guaranteed Securities	1,447,471		(20)		1,447,451		16,139		(164)		1,463,426
USDA Securities	2,190,671		41,489		2,232,160		54,356		(758)		2,285,758
Total held-to-maturity	$	3,638,142	$	41,469	$	3,679,611	$	70,495	$	(922)	$	3,749,184
Available-for-sale:
AgVantage	$	7,017,095	$	(124)	$	7,016,971	$	161,316	$	(35,262)	$	7,143,025
Trading:
USDA Securities(1)	$	8,400	$	479	$	8,879	$	61	$	(27)	$	8,913

⁽¹⁾The trading USDA securities had a weighted average yield of 5.20% as of December 31, 2019.

23

As of June 30, 2020 and December 31, 2019, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2

	As of June 30, 2020
	Held-to-Maturity and 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)
Held-to-maturity:
USDA Securities	$	—	$	—	$	22,235	$	(661)
Total held-to-maturity	$	—	$	—	$	22,235	$	(661)
Available-for-sale:
AgVantage	$	521,979	$	(932)	$	841,123	$	(46,316)

	As of December 31, 2019
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	—	$	—	$	301,836	$	(164)
USDA Securities	—		—		27,089		(758)
Total held-to-maturity	$	—	$	—	$	328,925	$	(922)
Available-for-sale:
AgVantage	$	225,239	$	(2,203)	$	1,394,802	$	(33,059)

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to June 30, 2020 and December 31, 2019, as applicable. The unrealized losses on the held-to-maturity USDA Securities as of both June 30, 2020 and December 31, 2019 reflect their increased cost basis resulting from their transfer to held-to-maturity as of October 1, 2016.

The credit exposure related to Farmer Mac's USDA Guarantees line of business is covered by the full faith and credit guarantee of the United States of America. As of June 30, 2020, Farmer Mac had executed COVID-19 payment deferments on loans with unpaid principal balances of $50.1 million underlying USDA Securities.

The unrealized losses from AgVantage securities were on 13 and 17 available-for-sale securities as of June 30, 2020 and December 31, 2019, respectively. There were 0 and 4 held-to-maturity AgVantage securities with an unrealized loss as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, 6 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

24

During the three and six months ended June 30, 2020 and 2019, Farmer Mac had no sales of Farmer Mac Guaranteed Securities or USDA Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of June 30, 2020 are set forth below. The balances presented are based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,435,445	$	1,438,585	1.34	%
Due after one year through five years	3,434,770		3,557,439		2.34	%
Due after five years through ten years	1,147,366		1,232,206		2.34	%
Due after ten years	1,522,363		1,670,157		2.67	%
Total	$	7,539,944	$	7,898,387	2.22	%

⁽¹⁾Amounts presented exclude $34.9 million of accrued interest receivable.

	As of June 30, 2020
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	445,889	$	451,452	2.94	%
Due after one year through five years	751,402		777,980		3.21	%
Due after five years through ten years	213,460		220,404		3.17	%
Due after ten years	2,070,436		2,147,089		3.39	%
Total	$	3,481,187	$	3,596,925	3.28	%

⁽¹⁾Amounts presented exclude $35.3 million of accrued interest receivable.

4.FINANCIAL DERIVATIVES

Farmer Mac enters into financial derivative transactions to protect against risk from the effects of market price, or interest rate movements, on the value of certain assets, future cash flows, or debt issuance, and not for trading or speculative purposes.  For more information about Farmer Mac's financial derivatives, see Note 6 in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

25

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements as of June 30, 2020 and December 31, 2019:

Table 4.1

	As of June 30, 2020
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	5,584,809	$	8,358	$	(4,694)	2.24%	0.65%		11.71
Receive fixed non-callable	2,305,500		249		(8,087)		0.78%	1.90%		2.35
Receive fixed callable	413,500		5,891		—		0.48%	1.80%		3.53
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	437,000		1,246		(11,964)		2.27%	0.71%		5.82
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	446,721		—		(22,403)		2.78%	0.85%		4.25
Receive fixed non-callable	3,143,951		—		—		0.48%	1.09%		0.82
Receive fixed callable	150,000		138		—		0.73%	1.66%		1.27
Basis swaps	3,610,000		706		(545)		0.49%	0.27%		1.08
Treasury futures	27,500				(9)				139.14
Credit valuation adjustment			—		159
Total financial derivatives	$	16,118,981	$	16,588	$	(47,543)
Collateral (held)/pledged			(1,500)		248,293
Net amount			$	15,088	$	200,750

26

	As of December 31, 2019
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	4,955,686	$	7,163	$	(3,281)	2.47%	1.93%		11.26
Receive fixed non-callable	1,413,200		76		(5,329)		1.88%	2.13%		1.25
Receive fixed callable	524,000		476		(772)		1.52%	1.91%		2.83
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	428,000		1,882		(1,514)		2.36%	2.12%		5.43
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	342,745		7		(14,046)		3.55%	2.00%		5.51
Receive fixed non-callable	3,124,148		49		(1,637)		1.88%	2.06%		1.66
Receive fixed callable	525,000		79		(80)		1.64%	1.68%		0.83
Basis swaps	2,670,000		787		(395)		1.86%	1.76%		0.90
Treasury futures	39,400		—		(51)				128.29
Credit valuation adjustment			—		63
Total financial derivatives	$	14,022,179	$	10,519	$	(27,042)
Collateral (held)/pledged			(2,685)		132,129
Net amount			$	7,834	$	105,087

As of June 30, 2020, Farmer Mac expects to reclassify $5.3 million after tax from accumulated other comprehensive income to earnings over the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after June 30, 2020. During the three and six months ended June 30, 2020 and 2019, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

27

The following table summarizes the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and six months ended June 30, 2020 and 2019:

Table 4.2

	For the Three Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	61,792	$	55,430	$	(79,273)	$	6,523	$	44,472
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(12,257)		(4,535)		5,432		—		(11,360)
Recognized on hedged items	32,102		9,812		(12,721)		—		29,193
Discount amortization recognized on hedged items	—		—		(181)		—		(181)
Income/(expense) related to interest settlements on fair value hedging relationships	$	19,845	$	5,277	$	(7,470)	$	—	$	17,652
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(9,226)	$	(6,616)	$	3,722	$	—	$	(12,120)
Recognized on hedged items	9,050		3,037		(2,348)		—		9,739
(Losses)/gains on fair value hedging relationships	$	(176)	$	(3,579)	$	1,374	$	—	$	(2,381)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(1,563)	$	—	$	(1,563)
Recognized on hedged items	—		—		(1,029)		—		(1,029)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,594)	$	—	$	(2,594)
Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	8,427	$	8,427
Interest expense on interest rate swaps	—		—		—		(1,795)		(1,795)
Treasury futures	—		—		—		(109)		(109)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	6,523	$	6,523

28

	For The Three Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	85,569	$	59,403	$	(122,074)	$	8,913	$	31,811
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	1,167		(202)		(2,572)		—		(1,607)
Recognized on hedged items	30,380		6,323		(11,779)		—		24,924
Discount amortization recognized on hedged items	—		—		(164)		—		(164)
Income/(expense) related to interest settlements on fair value hedging relationships	$	31,547	$	6,121	$	(14,515)	$	—	$	23,153
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(116,405)	$	(33,953)	$	16,146	$	—	$	(134,212)
Recognized on hedged items	114,638		33,795		(15,649)		—		132,784
(Losses)/gains on fair value hedging relationships	$	(1,767)	$	(158)	$	497	$	—	$	(1,428)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	462	$	—	$	462
Recognized on hedged items	—		—		(2,697)		—		(2,697)
Discount amortization recognized on hedged items	—		—		(1)		—		(1)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,236)	$	—	$	(2,236)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	11,152	$	11,152
Interest expense on interest rate swaps	—		—		—		(1,146)		(1,146)
Treasury futures	—		—		—		(1,093)		(1,093)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,913	$	8,913

29

	For the Six Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Losses on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	133,309	$	116,026	$	(187,815)	$	(2,775)	$	58,745
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(18,408)		(6,412)		7,066		—		(17,754)
Recognized on hedged items	63,927		18,489		(26,997)		—		55,419
Discount amortization recognized on hedged items	—		—		(361)		—		(361)
Income/(expense) related to interest settlements on fair value hedging relationships	$	45,519	$	12,077	$	(20,292)	$	—	$	37,304
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(303,159)	$	(152,521)	$	62,656	$	—	$	(393,024)
Recognized on hedged items	299,430		148,445		(62,913)		—		384,962
(Losses)/gains on fair value hedging relationships	$	(3,729)	$	(4,076)	$	(257)	$	—	$	(8,062)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(2,002)	$	—	$	(2,002)
Recognized on hedged items	—		—		(3,152)		—		(3,152)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(5,156)	$	—	$	(5,156)
(Losses)/gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	1,878	$	1,878
Interest expense on interest rate swaps	—		—		—		(2,657)		(2,657)
Treasury futures	—		—		—		(1,996)		(1,996)
(Losses)/gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	(2,775)	$	(2,775)

30

	For The Six Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	170,980	$	110,800	$	(236,990)	$	8,553	$	53,343
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	2,717		(224)		(5,790)		—		(3,297)
Recognized on hedged items	55,198		10,878		(21,811)		—		44,265
Discount amortization recognized on hedged items	—		—		(314)		—		(314)
Income/(expense) related to interest settlements on fair value hedging relationships	$	57,915	$	10,654	$	(27,915)	$	—	$	40,654
Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	(175,392)	$	(54,034)	$	25,123	$	—	$	(204,303)
Recognized on hedged items	173,990		50,031		(23,846)		—		200,175
Gains/(losses) on fair value hedging relationships	$	(1,402)	$	(4,003)	$	1,277	$	—	$	(4,128)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	942	$	—	$	942
Recognized on hedged items	—		—		(5,417)		—		(5,417)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(4,477)	$	—	$	(4,477)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	13,320	$	13,320
Interest expense on interest rate swaps	—		—		—		(3,446)		(3,446)
Treasury futures	—		—		—		(1,321)		(1,321)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,553	$	8,553

31

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of June 30, 2020 and December 31, 2019:

Table 4.3

	Hedged Items in Fair Value Relationship
	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
	(in thousands)
Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	$	4,506,185	$	4,092,611	$	479,632	$	180,215
Loans held for investment, at amortized cost(1)	1,634,784		1,050,335		186,352		37,907
Notes Payable(2)	(2,787,699)		(2,761,052)		(70,433)		(7,433)

⁽¹⁾Includes $0.4 million as of June 30, 2020 in fair value adjustment, currently included in "Prepaid expenses and other assets" related to a hedge of a purchase commitment of a loan.

⁽²⁾Carrying amount represents amortized cost.

The following table shows Farmer Mac's credit exposure to interest rate swap counterparties as of June 30, 2020 and December 31, 2019:

Table 4.4

	June 30, 2020
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swap	$	122,793	$	121,310	$	1,483
Liabilities:
Derivatives
Interest rate swap	$	799,070	$	779,807	$	19,263

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

	December 31, 2019
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swaps	$	56,139	$	53,771	$	2,368
Liabilities:
Derivatives
Interest rate swaps	$	305,584	$	291,326	$	14,258

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

32

As of June 30, 2020, Farmer Mac held $1.5 million of cash and no investment securities as collateral for its derivatives in net asset positions, compared to $2.7 million of cash and no investment securities as collateral for its derivatives in net asset positions as of December 31, 2019.

Farmer Mac posted $17.6 million cash and $230.7 million of investment securities as of June 30, 2020 and posted $0.5 million cash and $131.7 million investment securities as of December 31, 2019.  Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets. Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets.  If Farmer Mac had breached certain provisions of the derivative contracts as of June 30, 2020 and December 31, 2019, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral. As of June 30, 2020 and December 31, 2019, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's $16.1 billion notional amount of interest rate swaps outstanding as of June 30, 2020, $13.3 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME"). Of Farmer Mac's $14.0 billion notional amount of interest rate swaps outstanding as of December 31, 2019, $11.0 billion were cleared through the CME. During the first half of 2020 and throughout 2019, Farmer Mac increased its use of non-cleared basis swaps as it began to prepare for the transition away from the use of LIBOR as a reference rate. For more information about interest rate swaps cleared through a clearinghouse, see Note 6 in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

5.LOANS

Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments. The following table displays the composition of the loan balances as of June 30, 2020 and December 31, 2019:

Table 5.1

	As of June 30, 2020(1)						As of December 31, 2019(2)
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Farm & Ranch	$	4,181,422	$	1,436,090	$	5,617,512	$	3,675,640	$	1,600,917	$	5,276,557
Rural Utilities	2,101,568		—		2,101,568		1,671,293		—		1,671,293
Total unpaid principal balance(3)	6,282,990		1,436,090		7,719,080		5,346,933		1,600,917		6,947,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	187,007		—		187,007		44,044		—		44,044
Total loans	6,469,997		1,436,090		7,906,087		5,390,977		1,600,917		6,991,894
Allowance for losses	(13,758)		(1,181)		(14,939)		(8,853)		(1,601)		(10,454)
Total loans, net of allowance	$	6,456,239	$	1,434,909	$	7,891,148	$	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.

33

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of June 30, 2020 and December 31, 2019:

Table 5.2

	June 30, 2020(1)		December 31, 2019(2)
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Farm & Ranch	$	6,039	$	10,454
Rural Utilities	8,900		—
Total	$	14,939	$	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 and six month period ended June 30, 2020 and 2019:

Table 5.3

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Allowance for Losses		Allowance for Losses		Allowance for Losses		Allowance for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	7,353	$	6,753	$	10,454	$	7,017
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(3,909)		—
Adjusted Beginning Balance	7,353		6,753		6,545		7,017
(Release of)/provision for losses	(920)		578		(112)		314
Charge-offs	(394)		(67)		(394)		(67)
Ending Balance(3)	$	6,039	$	7,264	$	6,039	$	7,264
Rural Utilities:
Beginning Balance	$	7,503	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		5,378		—
Adjusted Beginning Balance	7,503		—		5,378		—
Provision for losses	1,397		—		3,522		—
Charge-offs	—		—		—		—
Ending Balance(4)	$	8,900	$	—	$	8,900	$	—

⁽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 $1.8 million for collateral dependent assets secured by commercial real estate.

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

The cumulative transition adjustment decrease of $3.9 million in the Farm & Ranch portfolio was primarily driven by differences in the way that the two loss models measure the impact of low loan-to-

34

value ratios in that portfolio. Under the previous accounting standard, Farmer Mac's estimated incurred loss model was based on historical weighted-average loss rates from realized losses within commodities and risk ratings. The historical weighted average loss rates were then applied to sub-portfolios, as disaggregated by commodity and risk rating, to calculate the general allowance. Under the CECL accounting standard, Farmer Mac's current expected credit losses are calculated individually based on the expected probability of default and the expected loss-given-default for each loan. The low loan-to-value ratios in the Farm & Ranch portfolio result in low individual losses-given-default. Thus, our expected credit losses as of January 1, 2020 were less than our estimate of incurred losses as of December 31, 2019.

The cumulative transition adjustment increase of $5.4 million in the Rural Utilities portfolio was primarily driven by the change from measuring incurred probable credit losses to measuring expected credit losses over the expected lives of these loans. Farmer Mac has never experienced a credit loss in its Rural Utilities portfolio. Additionally, these loans have strong credit ratings and performance, which supported Farmer Mac's estimate of no incurred credit losses under the previous accounting standard. Upon the adoption of CECL, Farmer Mac is now required to measure its expected credit losses for the entire expected life of all financial instruments, including its Rural Utilities loans. To estimate expected credit losses on these loans, Farmer Mac relies upon industry data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities industry. Under the CECL accounting standard, Farmer Mac's loss allowance model for these loans is primarily impacted by the long-term maturities of the loans and their low probability of prepayment. In addition, the highly-specialized nature of power generation and transmission facilities results in significant losses given default even though the probability of default is low. Thus, the long-term expected lives of these loans combined with high losses given default result in an estimate of expected losses although we have never incurred a credit loss in this portfolio.

The provision to the allowance for loan losses of $0.5 million recorded during second quarter 2020 was primarily due to the impact of net new loan volume in the Rural Utilities portfolio of $311.8 million. The impact of the Rural Utilities portfolio on the net increase to the provision was partially offset by improving economic factors that uniquely impacted the Farm & Ranch portfolio, specifically improvements in commodity prices and expectations for stable farm land values. In addition, there was a $0.4 million charge-off to the allowance related to the acquisition of a new real estate owned property ("REO") during second quarter 2020.

The provision to the allowance for loan losses of $3.4 million recorded during the six months ended June 30, 2020 was primarily due to the impact of net new loan volume in the Rural Utilities portfolio and the impact of economic factor forecasts on the Rural Utilities portfolio, especially expected higher unemployment, as a result of the COVID-19 pandemic and the resulting economic volatility.

The provision for the allowance for loan losses recorded during three and six months ended June 30, 2019 was attributable to an increase in the general allowance due to net volume growth in on-balance sheet Farm & Ranch loans and a slight decrease in the portfolio credit quality.

35

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of June 30, 2020:

Table 5.4

	As of June 30, 2020
	Accruing
	Current(5)		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Farm & Ranch	$	5,476,962	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	5,617,512
Rural Utilities	2,101,568		—		—		—		—		—		2,101,568
Total	$	7,578,530	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	7,719,080

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

⁽³⁾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.

⁽⁴⁾Includes $23.1 million of nonaccrual loans for which there was no associated allowance. During the three and six months ended June 30, 2020, Farmer Mac received $1.3 million and 2.3 million, respectively, in interest on nonaccrual loans.

⁽⁵⁾Includes $82.2 million of unpaid principal balance related to Farm & Ranch loans that Farmer Mac has executed a COVID-19 payment deferment.

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

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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 and six months ended June 30, 2019:

Table 5.7

	June 30, 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	$	98,176	$	39,056	$	28,650	$	7,675	$	—	$	59	$	173,616
Income recognized on impaired loans	379		121		304		55		—		—		859
For the Six Months Ended:
Average recorded investment in impaired loans	$	85,652	$	41,903	$	26,279	$	8,268	$	—	$	66	$	162,168
Income recognized on impaired loans	701		420		417		122		—		—		1,660

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.

37

Table 5.8

	90-Day Delinquencies(1)		Net Credit Losses
	As of		For the Six Months Ended
	December 31, 2019		June 30, 2019
	(in thousands)
Farm & Ranch loans	$	57,719	$	131

⁽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.

Of the $57.7 million of on-balance sheet loans reported as 90-day delinquencies as of December 31, 2019, no loans were subject to "removal-of-account" provisions.

Rural Utilities

As of December 31, 2019, no allowance for losses had been provided for Farmer Mac's Rural Utilities line of business based on the performance of the loans in this line of business and the credit quality of the collateral supporting these loans, as well as Farmer Mac's counterparty risk analysis. As of December 31, 2019, there were no delinquencies or probable losses inherent in Farmer Mac's Rural Utilities loans held or underlying LTSPCs.

38

Credit Quality Indicators

The following tables present credit quality indicators related to Farm & Ranch loans and Rural Utilities loans held as of June 30, 2020, by year of origination:

Table 5.9

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch(1):
Internally Assigned Risk Rating:
Acceptable	$	758,965	$	773,199	$	562,604	$	617,751	$	528,068	$	1,345,384	$	501,625	$	5,087,596
Special mention(2)	76,588		166,829		32,164		9,278		5,477		19,630		10,260		320,226
Substandard(3)	448		6,655		18,326		59,545		53,639		60,478		10,599		209,690
Total	$	836,001	$	946,683	$	613,094	$	686,574	$	587,184	$	1,425,492	$	522,484	$	5,617,512
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394

⁽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.

39

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities(1):
Internally Assigned Risk Rating:
Acceptable	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	658,827	$	7,366	$	2,096,554
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		5,014		—		5,014
Total	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	663,841	$	7,366	$	2,101,568
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽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 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.

40

6.GUARANTEES

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of June 30, 2020 and December 31, 2019, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1

Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
	As of June 30, 2020		As of December 31, 2019
	(in thousands)
Farm & Ranch:
Farmer Mac Guaranteed Securities	$	90,225	$	107,322
USDA Guarantees:
Farmer Mac Guaranteed USDA Securities	330,309		389,216
Institutional Credit:
AgVantage Securities	6,068		7,567
Total off-balance sheet Farmer Mac Guaranteed Securities	$	426,602	$	504,105

Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors.  The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2

	For the Six Months Ended
	June 30, 2020		June 30, 2019
	(in thousands)
Proceeds from new securitizations	$	28,050	$	166,351
Guarantee fees received	894		861

Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets.  The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation	$	1,890	$	2,230
Weighted average remaining maturity:
Farmer Mac Guaranteed Securities	9.6 years		9.8 years
AgVantage Securities	4.5 years		5.0 years

41

Long-Term Standby Purchase Commitments

Farmer Mac has recorded a liability for its obligation to stand ready under the guarantee in the guarantee and commitment obligation on the consolidated balance sheets.  The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation(1)	$	33,273	$	34,470
Maximum principal amount	2,900,166		3,002,349
Weighted-average remaining maturity	15.2 years		15.2 years

⁽¹⁾ Relates to LTSPCs issued or modified on or after January 1, 2003.

42

Reserve for Losses

The following table is a summary, by asset type, of the reserve for losses as of June 30, 2020 and December 31, 2019:

Table 6.5

	June 30, 2020(1)		December 31, 2019(2)
	Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	1,650	$	2,164
Rural Utilities
LTSPCs	1,370		—
Total	$	3,020	$	2,164

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

The following is a summary of the changes in the reserve for losses for the three and six month period ended June 30, 2020 and 2019:

Table 6.6

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	2,020	$	2,038	$	2,164	$	2,167
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(148)		—
Adjusted Beginning Balance	2,020		2,038		2,016		2,167
Release of losses	$	(370)	$	(158)	$	(366)	$	(287)
Charge-offs	—		—		—		—
Ending Balance	$	1,650	$	1,880	$	1,650	$	1,880
Rural Utilities:
Beginning Balance	$	1,400	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		1,011		—
Adjusted Beginning Balance	1,400		—		1,011		—
(Release of)/provision for losses	$	(30)	$	—	$	359	$	—
Charge-offs	—		—		—		—
Ending Balance	$	1,370	$	—	$	1,370	$	—

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

The release from the reserve for losses recorded during the three and six months ended June 30, 2020 was primarily due to the net decreases in LTSPC volume of $58.5 million and $119.3 million, respectively.

43

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 June 30, 2020:

Table 6.7

	As of June 30, 2020
	Current(2)		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	$	2,374,988	$	9,947	$	12,587	$	2,816	$	25,350	$	2,400,338
Rural Utilities:
LTSPCs	$	590,053	$	—	$	—	$	—	$	—	$	590,053

⁽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.

⁽²⁾Includes $109.5 million of unpaid principal balance related to Farm & Ranch LTSPCs for which the lender has notified Farmer Mac of an executed COVID-19 payment deferment.

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

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Net credit losses and 90-day delinquencies as of and for the periods indicated for loans underlying off-balance sheet securities representing interests in pools of eligible Farm & Ranch LTSPCs 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 LTSPCs portfolio and Farmer Mac had not experienced credit losses on any Rural Utilities LTSPCs.

Table 6.9

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Six Months Ended
	December 31, 2019		June 30, 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.

Credit Quality Indicators

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 June 30, 2020, by year of origination:

Table 6.10

	As of June 30, 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	$	71,569	$	206,177	$	177,787	$	251,149	$	222,988	$	1,072,259	$	172,509	$	2,174,438
Special mention(1)	—		10,250		7,835		24,518		16,090		61,674		10,359		130,726
Substandard(2)	286		—		3,982		15,277		11,619		59,342		4,668		95,174
Total	$	71,855	$	216,427	$	189,604	$	290,944	$	250,697	$	1,193,275	$	187,536	$	2,400,338
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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.  

45

⁽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 June 30, 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	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
For the Three Months Ended
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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.

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7.NOTES PAYABLE

Farmer Mac's borrowings consist of discount notes and medium-term notes, both of which are unsecured general obligations of Farmer Mac.  Discount notes generally have original maturities of 1.0 year or less, whereas medium-term notes generally have maturities of 0.5 years to 15.0 years.

The following tables set forth information related to Farmer Mac's borrowings as of June 30, 2020 and December 31, 2019:

Table 7.1

	June 30, 2020
	Outstanding as of June 30				Average Outstanding During the First Six Months
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,507,363	0.44	%	$	2,221,571	1.05	%
Medium-term notes	1,394,857		0.47	%	1,120,213		1.16	%
Current portion of medium-term notes	6,985,303		0.93	%
Total due within one year	$	10,887,523	0.76	%
Due after one year:
Medium-term notes due in:
Two years	$	3,764,817	1.08	%
Three years	1,839,291		1.70	%
Four years	1,204,584		1.78	%
Five years	1,213,467		1.56	%
Thereafter	2,511,868		2.28	%
Total due after one year	10,534,027		1.61	%
Total	$	21,421,550	1.18	%

47

	December 31, 2019
	Outstanding as of December 31				Average Outstanding During the Year
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,194,177	1.72	%	$	1,977,214	2.25	%
Medium-term notes	1,152,770		1.98	%	1,780,517		2.33	%
Current portion of medium-term notes	6,672,135		1.85	%
Total due within one year	$	10,019,082	1.84	%
Due after one year:
Medium-term notes due in:
Two years	$	3,700,835	2.04	%
Three years	1,594,709		2.15	%
Four years	1,205,276		2.27	%
Five years	760,887		2.25	%
Thereafter	1,817,859		2.89	%
Total due after one year	9,079,566		2.28	%
Total	$	19,098,648	2.05	%

During the six months ended June 30, 2020, Farmer Mac increased its use of short-term funding in order to fund the growth of short-term assets in its liquidity portfolio. The maximum amount of Farmer Mac's discount notes outstanding at any month end during the six months ended June 30, 2020 and 2019 was $2.6 billion and $2.1 billion, respectively.

Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date.  The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2020 as of June 30, 2020:

Table 7.2

Debt Callable in 2020 as of June 30, 2020, by Maturity
	Amount		Weighted-Average Rate
	(dollars in thousands)
Maturity:
2021	$	491,862	1.02	%
2022	203,845		1.43	%
2023	37,953		0.82	%
2024	143,832		1.80	%
Thereafter	399,489		2.25	%
Total	$	1,276,981	1.56	%

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of June 30, 2020, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

48

Table 7.3

	Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding
	Amount		Weighted-Average Rate
	(dollars in thousands)
Debt with interest rate resets, or debt maturities in:
2020	$	11,227,000	0.48	%
2021	3,047,823		1.79	%
2022	1,745,399		1.74	%
2023	1,706,568		1.88	%
2024	965,056		1.86	%
Thereafter	2,729,704		2.31	%
Total	$	21,421,550	1.18	%

During the six months ended June 30, 2020 and 2019, Farmer Mac called $1.9 billion and $0.3 billion of callable medium-term notes, respectively. The decrease in market interest rates throughout 2019 and continuing into the first half of 2020 led to an increase in called medium-term notes compared to the prior year.

Authority to Borrow from the U.S. Treasury

Farmer Mac's statutory charter authorizes it, upon satisfying certain conditions, to borrow up to $1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely for the purpose of fulfilling Farmer Mac's guarantee obligations.  Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S. Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the obligations from Farmer Mac.  The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S. Treasury within a reasonable time.  As of June 30, 2020, Farmer Mac had not used this borrowing authority.

Gains on Repurchase of Outstanding Debt

No outstanding debt repurchases were made in the six months ended June 30, 2020 or 2019.

8.EQUITY

Preferred Stock

In May 2020, Farmer Mac issued 3.2 million shares of 5.750% non-cumulative perpetual Series E preferred stock, par value $25.00 per share. Farmer Mac incurred direct costs of $2.5 million related to the issuance of the Series E preferred stock. The dividend rate on the Series E preferred stock will remain at a non-cumulative, fixed rate of 5.750% per year, when, as, and if a dividend is declared by the Board of Directors of Farmer Mac, for so long as the Series E preferred stock remains outstanding. The Series E preferred stock has no maturity date, but Farmer Mac has the option to redeem the preferred stock at any time on any dividend payment date on and after July 17, 2025.

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Common Stock

During first and second quarter 2020, Farmer Mac paid a quarterly dividend of $0.80 per share on all classes of its common stock. For each quarter in 2019, Farmer Mac paid a quarterly dividend of $0.70 per share on all classes of its common stock.

Farmer Mac's board of directors approved a share repurchase program during third quarter 2015 authorizing Farmer Mac to repurchase up to $25.0 million of its outstanding Class C non-voting common stock. The share repurchase program, last modified on March 14, 2019, authorized Farmer Mac to repurchase up to $10.0 million of Farmer Mac's outstanding Class C non-voting common stock. During first quarter 2020, Farmer Mac repurchased approximately 4,000 shares of Class C non-voting common stock at a cost of approximately $0.2 million. Shortly after these repurchases were completed, Farmer Mac indefinitely suspended its share repurchase program in an effort to preserve capital and liquidity in view of market volatility and uncertainty caused by the COVID-19 pandemic. As of June 30, 2020, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $19.8 million under the share repurchase program since 2015. The program expires at the end of March 2021.

Capital Requirements

Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of both June 30, 2020 and December 31, 2019, the minimum capital requirement was greater than the risk-based capital requirement. Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements.

As of June 30, 2020, Farmer Mac's minimum capital requirement was $667.7 million and its core capital level was $915.6 million, which was $247.9 million above the minimum capital requirement as of that date. As of December 31, 2019, Farmer Mac's minimum capital requirement was $618.8 million and its core capital level was $815.4 million, which was $196.6 million above the minimum capital requirement as of that date.

In accordance with the Farm Credit Administration's rule on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac has adopted a policy for maintaining a sufficient level of Tier 1 capital (consisting of retained earnings, paid-in-capital, common stock, and qualifying preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

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9.FAIR VALUE DISCLOSURES

Fair Value Classification and Transfers

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Table 9.1

Assets and Liabilities Measured at Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,283	$	18,283
Floating rate asset-backed securities	—		9,807		—		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,112,377		—		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	—		322		—		322
Fixed rate U.S. Treasuries	1,326,589		—		—		1,326,589
Total Investment Securities	1,326,589		2,122,506		18,283		3,467,378
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,898,387		7,898,387
Total Farmer Mac Guaranteed Securities	—		—		7,898,387		7,898,387
USDA Securities:
Trading	—		—		7,786		7,786
Total USDA Securities	—		—		7,786		7,786
Financial derivatives	—		16,588		—		16,588
Total Assets at fair value	$	1,326,589	$	2,139,094	$	7,924,456	$	11,390,139
Liabilities:
Financial derivatives	$	9	$	47,534	$	—	$	47,543
Total Liabilities at fair value	$	9	$	47,534	$	—	$	47,543

⁽¹⁾ Level 3 assets represent 33% of total assets and 69% of financial instruments measured at fair value.

51

Assets and Liabilities Measured at Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,912	$	18,912
Floating rate asset-backed securities	—		11,085		—		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	—		1,632,583		—		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	—		340		—		340
Fixed rate U.S. Treasuries	1,296,923		—		—		1,296,923
Total available-for-sale	1,296,923		1,644,008		18,912		2,959,843
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,143,025		7,143,025
Total Farmer Mac Guaranteed Securities	—		—		7,143,025		7,143,025
USDA Securities:
Trading	—		—		8,913		8,913
Total USDA Securities	—		—		8,913		8,913
Financial derivatives	—		10,519		—		10,519
Total Assets at fair value	$	1,296,923	$	1,654,527	$	7,170,850	$	10,122,300
Liabilities:
Financial derivatives	$	51	$	26,991	$	—	$	27,042
Total Liabilities at fair value	$	51	$	26,991	$	—	$	27,042

⁽¹⁾ Level 3 assets represent 33% of total assets and 71% of financial instruments measured at fair value.

There were no significant assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2020 or December 31, 2019.

Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period. During the first half of 2020 and 2019, there were no transfers within the fair value hierarchy for fair value measurements of Farmer Mac's investment securities, Farmer Mac Guaranteed Securities, USDA Securities, and financial derivatives.

52

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three and six months ended June 30, 2020 and 2019.

Table 9.2

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	16,721	$	—	$	—	$	—	$	(15)	$	—	$	1,577	$	18,283
Total available-for-sale	16,721		—		—		—		(15)		—		1,577		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
Total available-for-sale	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
USDA Securities:
Trading	8,408		—		—		(602)		—		(20)		—		7,786
Total USDA Securities	8,408		—		—		(602)				(20)		—		7,786
Total Assets at fair value	$	7,612,315	$	351,896	$	—	$	(85,863)	$	(84)	$	9,030	$	37,162	$	7,924,456

53

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	—	$	296	$	19,208
Total available-for-sale	18,912		—		—		—		—		296		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
Total available-for-sale	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
USDA Securities:
Available-for-sale	—		29,419		(29,419)		—		—		—		—
Trading	9,487		—		—		(347)		61		—		9,201
Total USDA Securities	9,487		29,419		(29,419)		(347)		61		—		9,201
Total Assets at fair value	$	6,470,023	$	643,183	$	(29,419)	$	(98,926)	$	114,699	$	(35,483)	$	7,064,077

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for Losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	(38)	$	—	$	(591)	$	18,283
Total available-for-sale	18,912		—		—		—		(38)		—		(591)		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
Total available-for-sale	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
USDA Securities:
Trading	8,913		—		—		(1,213)		—		86		—		7,786
Total USDA Securities	8,913		—		—		(1,213)				86		—		7,786
Total Assets at fair value	$	7,170,850	$	835,476	$	—	$	(313,729)	$	(272)	$	299,515	$	(67,384)	$	7,924,456

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Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,715	$	—	$	—	$	—	$	—	$	493	$	19,208
Total available-for-sale	18,715		—		—		—		—		493		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
Total available-for-sale	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
USDA Securities:
Available-for-sale	—		48,347		(48,347)		—		—		—		—
Trading	9,999		—		—		(903)		105		—		9,201
Total USDA Securities	9,999		48,347		(48,347)		(903)		105		—		9,201
Total Assets at fair value	$	6,003,211	$	1,438,443	$	(48,347)	$	(471,215)	$	174,095	$	(32,110)	$	7,064,077

The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of June 30, 2020 and December 31, 2019:

Table 9.3

	As of June 30, 2020
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,283	Indicative bids	Range of broker quotes	93.0% - 93.0% (93.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,898,387	Discounted cash flow	Discount rate	0.9% - 4.0% (1.2%)
USDA Securities	$	7,786	Discounted cash flow	Discount rate	1.5% - 2.2% (1.6%)
				CPR	14% - 23% (22%)

55

	As of December 31, 2019
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	Indicative bids	Range of broker quotes	96.0% - 96.0% (96.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,143,025	Discounted cash flow	Discount rate	2.3% - 5.5% (2.6%)
USDA Securities	$	8,913	Discounted cash flow	Discount rate	2.3% - 2.6% (2.1%)
				CPR	10% - 21% (19%)

The significant unobservable input used in the fair value measurements of AgVantage Farmer Mac Guaranteed Securities is the discount rate commensurate with the risks involved. Typically, significant increases (decreases) in this input in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease. Prepayment rates are not presented in the table above for AgVantage securities because they generally have fixed maturity dates when the secured general obligations are due and don't prepay.

The significant unobservable inputs used in the fair value measurements of USDA Securities are the prepayment rate and discount rate commensurate with the risks involved. Typically, significant increases (decreases) in any of these inputs in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase and would likely expect a corresponding decrease in forecasted prepayment rates. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease and would likely expect a corresponding increase in forecasted prepayment rates.

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Disclosures on Fair Value of Financial Instruments

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of June 30, 2020 and December 31, 2019:

Table 9.4

	As of June 30, 2020				As of December 31, 2019
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
	(in thousands)
Financial assets:
Cash and cash equivalents	$	827,600	$	827,600	$	604,381	$	604,381
Investment securities	3,513,060		3,512,410		3,005,828		3,004,875
Farmer Mac Guaranteed Securities	9,070,424		9,039,105		8,606,451		8,590,476
USDA Securities	2,432,674		2,347,709		2,294,671		2,241,073
Loans	8,214,871		7,891,148		7,317,091		6,981,440
Financial derivatives	16,588		16,588		10,519		10,519
Guarantee and commitment fees receivable	32,254		36,612		36,732		38,442
Financial liabilities:
Notes payable	21,736,245		21,421,550		19,234,079		19,098,648
Debt securities of consolidated trusts held by third parties	1,499,947		1,476,964		1,663,177		1,616,504
Financial derivatives	47,543		47,543		27,042		27,042
Guarantee and commitment obligations	30,804		35,162		34,990		36,700

The carrying value of cash and cash equivalents is a reasonable estimate of their approximate fair value and is classified as Level 1. The fair value of investments in U.S. Treasuries are valued based on unadjusted quoted prices in active markets and are classified as Level 1. A significant portion of Farmer Mac's investment portfolio is valued using a reputable nationally recognized third-party pricing service. The prices obtained are non-binding and generally representative of recent market trades and are classified as Level 2. Farmer Mac internally models the fair value of its loan portfolio, including loans held for investment and loans held for investment in consolidated trusts, Farmer Mac Guaranteed Securities, and USDA Securities by discounting the projected cash flows of these instruments at projected interest rates. The fair values are based on the present value of expected cash flows using management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves and discount rates commensurate with the risks involved. These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3. Financial derivatives primarily are valued using unadjusted counterparty valuations and are classified as Level 2. The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3. Notes payable are valued by discounting the expected cash flows of these instruments using a yield curve derived from market prices observed for similar agency securities and are also classified as Level 3. Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent, estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model. Different market assumptions and estimation methodologies could significantly affect estimated fair value amounts.

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10.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 six months ended June 30, 2020 and 2019:

Table 10.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	19,310	$	5,403	$	2,322	$	20,084	$	1,229	$	—		$	48,348
Less: reconciling adjustments(1)(2)(3)	(2,577)		(714)		3,194		(1,302)		(480)		1,879			—
Net effective spread	16,733		4,689		5,516		18,782		749		1,879			—
Guarantee and commitment fees(2)	4,394		210		332		7		—		(1,803)			3,140
Other income/(expense)(3)	585		617		5		—		(159)		6,683			7,731
Non-interest income/(loss)	4,979		827		337		7		(159)		4,880			10,871
Provision for loan losses	920		—		(1,397)		41		(15)		—			(451)
Provision for reserve for losses	370		—		30		—		—		—			400
Other non-interest expense	(5,254)		(1,584)		(1,386)		(2,083)		(3,800)		—			(14,107)
Non-interest expense(4)	(4,884)		(1,584)		(1,356)		(2,083)		(3,800)		—			(13,707)
Core earnings before income taxes	17,748		3,932		3,100		16,747		(3,225)		6,759		(5)	45,061
Income tax (expense)/benefit	(3,727)		(826)		(651)		(3,517)		705		(1,419)			(9,435)
Core earnings before preferred stock dividends	14,021		3,106		2,449		13,230		(2,520)		5,340		(5)	35,626
Preferred stock dividends	—		—		—		—		(3,939)		—			(3,939)
Segment core earnings/(losses)	$	14,021	$	3,106	$	2,449	$	13,230	$	(6,459)	$	5,340	(5)	$	31,687
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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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	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⁾ Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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Core Earnings by Business Segment
For the Six Months Ended June 30, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	35,675	$	9,944	$	7,069	$	33,888	$	3,084	$	—		$	89,660
Less: reconciling adjustments(1)(2)(3)	(4,004)		(630)		3,367		2,596		(357)		(972)			—
Net effective spread	31,671		9,314		10,436		36,484		2,727		(972)			—
Guarantee and commitment fees(2)	8,711		445		667		16		—		(3,503)			6,336
Other income/(expense)(3)	1,754		729		12		—		(288)		(2,367)			(160)
Non-interest income/(loss)	10,465		1,174		679		16		(288)		(5,870)			6,176
Provision for loan losses	112		—		(3,522)		(450)		(29)		—			(3,889)
Provision for reserve for losses	366		—		(359)		—		—		—			7
Other non-interest expense	(11,251)		(3,402)		(2,990)		(4,446)		(8,233)		—			(30,322)
Non-interest expense(4)	(10,885)		(3,402)		(3,349)		(4,446)		(8,233)		—			(30,315)
Core earnings before income taxes	31,363		7,086		4,244		31,604		(5,823)		(6,842)		(5)	61,632
Income tax (expense)/benefit	(6,586)		(1,488)		(891)		(6,637)		988		1,438			(13,176)
Core earnings before preferred stock dividends	24,777		5,598		3,353		24,967		(4,835)		(5,404)		(5)	48,456
Preferred stock dividends	—		—		—		—		(7,370)		—			(7,370)
Segment core earnings/(losses)	$	24,777	$	5,598	$	3,353	$	24,967	$	(12,205)	$	(5,404)	(5)	$	41,086
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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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	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⁾ Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations

Financial information included in this report is consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and results of operations should be read together with: (1) the interim unaudited consolidated financial statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 25, 2020.

FORWARD-LOOKING STATEMENTS

In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation unless otherwise stated or unless the context otherwise requires.

Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments.  Forward-looking statements include, without limitation, any statement, including statements about COVID-19 and the impact of the pandemic on Farmer Mac, that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "intends," "outlook," "plans," "potential," "project," "target" and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would."  This report includes forward-looking statements addressing Farmer Mac's:

•prospects for earnings;

•prospects for growth in business volume;

•assessment of the impact of the COVID-19 pandemic on our business, financial results, financial condition, and business plans and strategies;

•trends in net interest income and net effective spread;

•trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for losses;

•trends in expenses;

•trends in investment securities;

•prospects for asset impairments and allowance for losses;

•changes in capital position;

•future dividend payments; and

•other business and financial matters.

Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties.  Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the forward-looking statements, including the factors discussed under "Risk Factors" in Part I, Item 1A of Farmer Mac's Annual Report on Form 10-K for the fiscal period ended December 31, 2019 filed with the

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SEC on February 25, 2020, the factors discussed under "Risk Factors" in Part II, Item 1A of this report, and uncertainties about:

•the duration, spread, and severity of the COVID-19 pandemic;

•the actions taken to address the COVID-19 pandemic, including government actions to mitigate the economic impact of the pandemic, how quickly and to what extent normal economic and operating conditions can resume, the possibility of future disruptions to economic recovery caused by additional outbreaks, regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, and the duration and efficacy of such restrictions;

•the effects of the COVID-19 pandemic on the business operations of agricultural and rural borrowers, the capital markets, and Farmer Mac's business operations;

•the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms;

•legislative or regulatory developments that could affect Farmer Mac, its sources of business, or the agricultural or rural utilities industries;

•fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries;

•the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac;

•the general rate of growth in agricultural mortgage and rural utilities indebtedness;

•the effect of economic conditions and geopolitics on agricultural mortgage or rural utilities lending, borrower repayment capacity, or collateral values, including fluctuations in interest rates, changes in U.S. trade policies, fluctuations in export demand for U.S. agricultural products, and volatility in commodity prices;

•the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes;

•developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac;

•the effect of any changes in Farmer Mac's executive leadership; and

•other factors that could have a negative effect on agricultural mortgage lending or borrower repayment capacity, including the effects of weather and fluctuations in agricultural real estate values.

Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this report.  Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this report is not necessarily indicative of future results.

Overview

The discussion below of Farmer Mac's financial information includes "non-GAAP measures," which are measures of financial performance that are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

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COVID-19 Update

Farmer Mac continues to closely monitor the effect of the COVID-19 pandemic on our financial condition and operations. We have maintained uninterrupted continuity of our operations while operating entirely remotely and our liquidity levels remain well above regulatory requirements, which has enabled us to execute our mission to support rural America during this pandemic. For example:

•we have maintained uninterrupted access to the debt capital markets;

•we provided a total of $1.7 billion in liquidity and lending capacity to lenders serving rural America during the quarter-ended June 30, 2020;

^•we are working with our loan servicers, and other partners, to respond to and facilitate payment deferment requests from borrowers; as of June 30, 2020, we had executed COVID-19 payment deferments for $241.7 million of unpaid principal balance related to Farm & Ranch loans, Farm & Ranch LTSPCs, and USDA Securities to provide relief to borrowers;

•we are maintaining strong liquidity in our investment portfolio, as evidenced by our quarter-end cash position of $0.8 billion; and

•we have built and preserved capital and liquidity by issuing $79.5 million of preferred stock in the second quarter and indefinitely suspending our share repurchase program in the first quarter.

The economic deterioration from the COVID-19 pandemic caused our total allowance for credit losses to remain elevated in the second quarter and continues to be higher than it would have been without the economic effects from the pandemic. On January 1, 2020, we adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Loss (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). Under CECL, our allowances and reserve for credit losses reflect our estimate of expected losses over the lives of our financial instruments based on historical information and reasonable and supportable forecasts. Both the adoption of this new accounting standard and the economic effects from the COVID-19 pandemic combined to increase the amount of our total allowance for losses from December 31, 2019 to June 30, 2020. The economic effects from the COVID-19 pandemic that most affected our estimate of expected credit losses were the effects on credit spreads and expectations for higher unemployment. Of the $3.9 million credit loss provision that we recorded in the first six months of 2020, $1.2 million was attributable to updated economic factors, predominantly related to COVID-19. For more information about the impact of COVID-19 on Farmer Mac's expected credit losses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans & Guarantees."

We have also observed an increase in payment deferment requests from our loan servicers on behalf of borrowers in our loan portfolio, as well as from our AgVantage counterparties for loans collateralizing their obligations. For more information about Farm & Ranch payment deferments, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees." For more information about AgVantage loan collateral payment deferments, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Institutional."

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Net Income and Core Earnings

The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings and core earnings per share are non-GAAP measures that principally differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value fluctuations as well as the effects of specified infrequent or unusual transactions.

Table 1

	For the Three Months Ended
	June 30, 2020		March 31, 2020		June 30, 2019
	(in thousands)
Net income attributable to common stockholders	$	31,687	$	9,399	$	28,304
Core earnings	26,347		20,143		23,642

The $22.3 million sequential increase in net income attributable to common stockholders was primarily due to a $12.5 million after-tax increase in the fair value of financial derivatives not designated as hedging instruments in hedge accounting relationships (undesignated financial derivatives) due to fluctuations in long-term interest rates, a $5.6 million after-tax increase in net interest income, a $3.0 million after-tax decrease in the total provision for credit losses, and a $1.7 million after-tax decrease in operating expenses.

The $3.4 million year-over-year increase in net income attributable to common stockholders was primarily due to a $4.2 million after-tax increase in net interest income, the absence of $2.0 million in deferred issuance costs related to the redemption of Series B Preferred Stock in the prior period, and a $0.7 after-tax increase in other income. These increases were partially offset by a $1.9 million after-tax decrease in the fair value of undesignated financial derivatives due to fluctuations in long-term interest rates and a $1.6 million after-tax increase in operating expenses.

The $6.2 million sequential increase in core earnings was primarily due to a $3.0 million after-tax decrease in the total provision for credit losses, a $1.8 million after-tax increase in net effective spread, and a $1.7 million after-tax decrease in operating expenses.

The $2.7 million year-over-year increase in core earnings was primarily due to a $4.0 million after-tax increase in net effective spread and a $0.3 million after-tax decrease in the total provision for losses. These increases were partially offset by a $1.6 million after-tax increase in operating expenses.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

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Net Interest Income and Net Effective Spread

The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income.

Table 2

	For the Three Months Ended
	June 30, 2020			March 31, 2020			June 30, 2019
	(in thousands)
Net interest income	$	48,348		$	41,312		$	43,054
Net interest yield %	0.87		%	0.78		%	0.87		%
Net effective spread	46,469			44,163			41,355
Net effective spread %	0.89		%	0.89		%	0.91		%

The $7.0 million sequential increase in net interest income was primarily due to a $3.3 million decrease in net fair value losses from derivatives designated in fair value hedge accounting relationships (designated financial derivatives), a $2.3 million increase related to net volume growth across most lines of business, an $0.8 million increase in cash-basis interest income received from past due loans that are on nonaccrual status, and a $0.5 million decrease in funding and liquidity costs. In percentage terms, the increase of 0.09% was primarily attributable to an increase of 0.06% in net fair value changes from designated financial derivatives, an increase of 0.01% related to other income, an increase of 0.1% in funding and liquidity costs, and an increase of 0.01% related to net volume growth.

The $5.3 million year-over-year increase in net interest income was primarily due to net growth across most lines of business, which contributed to a $5.5 million increase in net interest income, and a $0.7 million decrease in funding and liquidity costs. These increases were partially offset by the decrease of $1.0 million in net fair value gains from designated financial derivatives due to fluctuations in long-term interest rates. In percentage terms, net interest income remained at 0.87% in both second quarter 2020 and second quarter 2019.

The $2.3 million sequential increase in net effective spread was primarily due to a $2.3 million increase related to net volume growth across most lines of business. In percentage terms, net effective spread remained at 0.89% in both second quarter 2020 and first quarter 2020.

The $5.1 million year-over-year increase in net effective spread was primarily due to growth in outstanding business volume, which increased net effective spread by approximately $5.5 million. In percentage terms, the decrease of 0.02% was primarily attributable to an increase in funding and liquidity costs of 0.05%, offset by an increase of 0.03% related to net volume growth.

For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 11 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

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Business Volume

Our outstanding business volume was $22.0 billion as of June 30, 2020, a net increase of $502.8 million from March 31, 2020, after taking into account all new business, maturities, and paydowns on existing assets. This net increase was attributable to three lines of business: $306.2 million in Rural Utilities, $206.3 million in Farm & Ranch, and $31.6 million in USDA Guarantees. These increases were partially offset by a net decrease of $41.3 million in Institutional Credit.

Farmer Mac's net business volume growth of $502.8 million in second quarter 2020 was $263.0 million more than the $239.8 million of net growth achieved in second quarter 2019. The increase in second quarter 2020 was primarily attributable to historically low interest rates and pent-up demand that drove strong market demand from borrowers taking advantage of low interest rates on long-term funding. We experienced strong demand from our two main Rural Utilities counterparties as well as widespread robust demand among our network of active Farm & Ranch sellers. We achieved this growth by offering competitive pricing while maintaining our credit underwriting standards and profitable spreads, that improved toward the end of the quarter. We recorded more than half of our net business volume growth for the quarter in June, which will not be fully reflected in core earnings and net effective spread until the third quarter.

For more information about Farmer Mac's business volume, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Business Volume."

Capital

Table 3

	As of
	June 30, 2020		December 31, 2019
	(in thousands)
Core capital	$	915,613	$	815,437
Capital in excess of minimum capital level required	247,916		196,669

The increase in capital in excess of the minimum capital level required was primarily due to the Board-authorized issuance of Series E Preferred Stock and the increase in retained earnings, partially offset by growth in our outstanding business volume.

Current Expected Credit Loss

As noted above, Farmer Mac adopted CECL on January 1, 2020. Under CECL, we estimate and recognize expected credit losses over the lives of our financial assets. We base our estimate of expected losses on historical loss information and reasonable and supportable forecasts. In second quarter 2020, our reasonable and supportable forecasts included the impact of the COVID-19 pandemic on economic factors such as credit spreads and unemployment. Thus, our total provision for credit losses during the three months ended June 30, 2020 was affected by the ongoing economic effects of the COVID-19 pandemic.

As of June 30, 2020, Farmer Mac's allowance for losses on its on-balance sheet loan portfolio was $14.9 million (0.19% of all loans), compared to $14.9 million (0.20% of all loans) as of March 31, 2020 and $10.5 million (0.15% of all loans) as of December 31, 2019. In first quarter 2020, Farmer Mac recorded a transition adjustment of $1.5 million. Farmer Mac also recorded a provision of $2.9 million to

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the allowance for loan losses in first quarter 2020 related to a decline in expected economic factors. In second quarter 2020, Farmer Mac recorded a provision to its allowance for loan losses of $0.5 million, which was mostly offset by a direct charge-off of $0.4 million to the allowance. The charge-off was related to the foreclosure of a single Farm & Ranch loan during the quarter.

As of June 30, 2020, Farmer Mac's reserve for losses on its off-balance sheet LTSPCs and Guaranteed Securities was $3.0 million (0.09% of all off-balance sheet LTSPCs and Guaranteed Securities), compared to $3.4 million (0.10% of all off-balance sheet LTSPCs and Guaranteed Securities) as of March 31, 2020 and $2.2 million (0.06% of all off-balance sheet LTSPCs and Guaranteed Securities) on December 31, 2019. The first quarter increase was comprised of a $0.9 million transition adjustment related to the adoption of CECL on January 1, 2020 and an additional $0.4 million provision to the reserve. The second quarter release from the reserve for losses of $0.4 million was primarily related to repayments and payoffs that occurred in the LTSPC portfolio during the quarter.

Credit Quality

The following table presents Farm & Ranch substandard assets, in dollars and as a percentage of the Farm & Ranch portfolio, for both on- and off-balance sheet assets as of June 30, 2020, March 31, 2020, and December 31, 2019:

Table 4

	Farm & Ranch Line of Business
	On-Balance Sheet				Off-Balance Sheet
	Substandard Assets		% of Portfolio		Substandard Assets		% of Portfolio
	(dollars in thousands)
June 30, 2020	$	209,690	3.7	%	$	95,174	4.0	%
March 31, 2020	211,376		3.9	%	100,964		4.1	%
December 31, 2019	207,078		3.9	%	102,877		4.1	%
Increase/(decrease) from prior quarter-ending	$	(1,686)	(0.2)	%	$	(5,790)	(0.1)	%
Increase/(decrease) from prior year-ending	$	2,612	(0.2)	%	$	(7,703)	(0.1)	%

The decrease of $1.7 million in on-balance sheet substandard assets during second quarter 2020 was primarily driven by repayments during the quarter on loans that were classified as substandard as of the first quarter, partially offset by downgrades during the quarter. The overall portfolio grew by $259.1 million, which caused substandard assets as a percentage of the total on-balance sheet portfolio to decrease. The $5.8 million decrease in substandard assets in our off-balance sheet portfolio during second quarter 2020 was primarily due to a net decrease in business volume in that portfolio, with a slight improvement in credit quality overall during the period. For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 27 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees."

The following table presents Farm & Ranch 90-day delinquencies, in dollars and as a percentage of the Farm & Ranch portfolio, for both on- and off-balance sheet assets as of June 30, 2020 and December 31, 2019:

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Table 5

	Farm & Ranch Line of Business
	On-Balance Sheet				Off-Balance Sheet
	90-Day Delinquencies		% of Portfolio		90-Day Delinquencies		% of Portfolio
	(dollars in thousands)
June 30, 2020	$	65,866	1.17	%	$	2,816	0.12	%
March 31, 2020	75,117		1.40	%	4,605		0.19	%
December 31, 2019	57,719		1.09	%	3,235		0.13	%
Increase/(decrease) from prior quarter-ending	$	(9,251)	(0.23)	%	$	(1,789)	(0.07)	%
Increase/(decrease) from prior year-ending	$	8,147	0.08	%	$	(419)	(0.01)	%

The sequential decrease in 90-day delinquencies is primarily due to the seasonal payment pattern associated with loans that have annual (January 1st) and semi-annual (January 1st and July 1st) payment terms, which account for most of the loans in the Farm & Ranch portfolio. In addition, the sequential decrease was primarily driven by two commodity groups – permanent plantings and crops. Other commodity groups also experienced smaller decreases or remained constant. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of June 30, 2020.

In the Rural Utilities portfolio, one $5.0 million loan was downgraded to substandard and there were no delinquencies as of June 30, 2020.

For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, as well as the effects of the COVID-19 pandemic on loan payment deferments, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees."

Use of Non-GAAP Measures

In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends.

The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.

Core Earnings and Core Earnings Per Share

Core earnings and core earnings per share principally differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value

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fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected.

Core earnings and core earnings per share also differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For example, in prior periods we have excluded from core earnings losses on retirement of preferred stock and the re-measurement of the deferred tax asset. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations."

Net Effective Spread

Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of these assets. Net effective spread differs from net interest income and net interest yield because it excludes: (1) the amortization of premiums and discounts on assets consolidated at fair value that are amortized as adjustments to yield in interest income over the contractual or estimated remaining lives of the underlying assets; (2) interest income and interest expense related to consolidated trusts with beneficial interests owned by third parties, which are presented on Farmer Mac's consolidated balance sheets as "Loans held for investment in consolidated trusts, at amortized cost"; and (3) the fair value changes of financial derivatives and the corresponding assets or liabilities designated in a fair value hedge accounting relationship.

Farmer Mac excludes from net effective spread the premiums and discounts on assets consolidated at fair value because they either do not reflect actual cash premiums paid for the assets at acquisition or are not expected to have an economic effect on Farmer Mac's financial performance if the assets are held to maturity, as is expected. Farmer Mac also excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.

Net effective spread also principally differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual

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amounts due in "Gains/(losses) on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.

Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

For a reconciliation of net interest income and net interest yield to net effective spread, see Table 11 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Results of Operations

Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings:

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Table 6

Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
	For the Three Months Ended
	June 30, 2020		June 30, 2019
	(in thousands, except per share amounts)
Net income attributable to common stockholders	$	31,687	$	28,304
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 14)	8,700		10,485
Losses on hedging activities due to fair value changes	(2,676)		(1,438)
Unrealized (losses)/gains on trading securities	(20)		61
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value	35		(139)
Net effects of terminations or net settlements on financial derivatives	720		(592)
Issuance costs on the retirement of preferred stock	—		(1,956)
Income tax effect related to reconciling items	(1,419)		(1,759)
Sub-total	5,340		4,662
Core earnings	$	26,347	$	23,642
Composition of Core Earnings:
Revenues:
Net effective spread(1)	$	46,469	$	41,355
Guarantee and commitment fees(2)	4,943		5,276
Other(3)	1,048		777
Total revenues	52,460		47,408
Credit related expense (GAAP):
Provision for losses	51		420
REO operating expenses	—		64
Total credit related expense	51		484
Operating expenses (GAAP):
Compensation and employee benefits	8,087		6,770
General and administrative	5,295		4,689
Regulatory fees	725		687
Total operating expenses	14,107		12,146
Net earnings	38,302		34,778
Income tax expense(4)	8,016		7,351
Preferred stock dividends (GAAP)	3,939		3,785
Core earnings	$	26,347	$	23,642
Core earnings per share:
Basic	$	2.46	$	2.21
Diluted	2.45		2.20
Weighted-average shares:
Basic	10,730		10,698
Diluted	10,776		10,770

⁽¹⁾Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 11 for a reconciliation of net interest income to net effective spread.

⁽²⁾Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.

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⁽³⁾Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.

⁽⁴⁾Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.

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Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
	For the Six Months Ended
	June 30, 2020		June 30, 2019
	(in thousands, except per share amounts)
Net income attributable to common stockholders	$	41,086	$	50,178
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 14)	2,216		12,725
Losses on hedging activities due to fair value changes	(8,601)		(4,255)
Unrealized gains on trading securities	86		105
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value	38		(155)
Net effects of terminations or net settlements on financial derivatives	(580)		(482)
Issuance costs on the retirement of preferred stock	—		(1,956)
Income tax effect related to reconciling items	1,437		(1,667)
Sub-total	(5,404)		4,315
Core earnings	$	46,490	$	45,863
Composition of Core Earnings:
Revenues:
Net effective spread(1)	$	90,632	$	80,156
Guarantee and commitment fees(2)	9,839		10,695
Other(3)	1,722		1,286
Total revenues	102,193		92,137
Credit related expense (GAAP):
Provision for losses	3,882		27
REO operating expenses	—		64
Gains on sale of REO	(485)		—
Total credit related expense	3,397		91
Operating expenses (GAAP):
Compensation and employee benefits	18,214		14,376
General and administrative	10,658		9,285
Regulatory fees	1,450		1,375
Total operating expenses	30,322		25,036
Net earnings	68,474		67,010
Income tax expense(4)	14,614		14,066
Preferred stock dividends (GAAP)	7,370		7,081
Core earnings	$	46,490	$	45,863
Core earnings per share:
Basic	$	4.34	$	4.29
Diluted	4.31		4.26
Weighted-average shares:
Basic	10,721		10,684
Diluted	10,779		10,774

⁽¹⁾Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 11 for a reconciliation of net interest income to net effective spread.

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⁽²⁾Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.

⁽³⁾Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.

⁽⁴⁾Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.

Table 7

Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share
	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(in thousands, except per share amounts)
GAAP - Basic EPS	$	2.95	$	2.65	$	3.83	$	4.70
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 14)	0.81		0.98		0.21		1.19
Losses on hedging activities due to fair value changes	(0.25)		(0.13)		(0.80)		(0.39)
Unrealized gains on trading securities	—		0.01		0.01		0.01
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		(0.01)		—		(0.01)
Net effects of terminations or net settlements on financial derivatives	0.06		(0.06)		(0.06)		(0.05)
Issuance costs on the retirement of preferred stock	—		(0.18)		—		(0.18)
Income tax effect related to reconciling items	(0.13)		(0.17)		0.13		(0.16)
Sub-total	0.49		0.44		(0.51)		0.41
Core Earnings - Basic EPS	$	2.46	$	2.21	$	4.34	$	4.29
Shares used in per share calculation (GAAP and Core Earnings)	10,730		10,698		10,721		10,684

Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share
	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(in thousands, except per share amounts)
GAAP - Diluted EPS	$	2.94	$	2.63	$	3.81	$	4.66
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 14)	0.81		0.96		0.21		1.17
Losses on hedging activities due to fair value changes	(0.25)		(0.14)		(0.80)		(0.40)
Unrealized gains on trading securities	—		0.01		0.01		0.01
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		(0.01)		—		(0.01)
Net effects of terminations or net settlements on financial derivatives	0.06		(0.05)		(0.05)		(0.04)
Issuance costs on the retirement of preferred stock	—		(0.18)		—		(0.18)
Income tax effect related to reconciling items	(0.13)		(0.16)		0.13		(0.15)
Sub-total	0.49		0.43		(0.50)		0.40
Core Earnings - Diluted EPS	$	2.45	$	2.20	$	4.31	$	4.26
Shares used in per share calculation (GAAP and Core Earnings)	10,776		10,770		10,779		10,774

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The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are:

1. Losses on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) (Losses)/gains on undesignated financial derivatives due to fair value changes; and (b) Losses on hedging activities due to fair value changes. The table below calculates the non-GAAP reconciling item for losses on hedging activities due to fair value changes:

Table 8

Non-GAAP Reconciling Items for (Losses)/Gains on Hedging Activities due to Fair Value Changes
	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(in thousands)
Losses due to fair value changes (see Table 4.2)	$	(2,381)	$	(1,428)	$	(8,062)	$	(4,128)
Initial cash payment (received) at inception of swap	(295)		(10)		(539)		(127)
Losses on hedging activities due to fair value changes	$	(2,676)	$	(1,438)	$	(8,601)	$	(4,255)

2. Unrealized gains/(losses) on trading securities. The unrealized gains/(losses) on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period.

3. Amortization of premiums/discounts and deferred gains on assets consolidated at fair value. The amount of this non-GAAP reconciling item is the recorded amount of premium, discount, or deferred gain amortization during the reporting period on those assets for which the premium, discount, or deferred gain was based on the application of an accounting principle (e.g., consolidation of variable interest entities) rather than on a cash transaction (e.g., a purchase price premium or discount).

4. The net effects of terminations or net settlements on financial derivatives. These terminations or net settlements relate to:

•Forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities. These contracts are used as a short-term economic hedge of the issuance of debt. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.

•Initial cash payments received by Farmer Mac upon the inception of certain swaps. When there is no direct payment arrangement between a swap dealer counterparty and a debt dealer issuing Farmer Mac's medium-term notes for a particular transaction, Farmer Mac may receive an initial cash payment from the swap dealer at the inception of the swap to offset dollar-for-dollar the amount of the discount on the associated hedged debt. For GAAP purposes, changes in fair value of the swaps are recognized in "Gains on financial derivatives," while the economically offsetting discount on the associated hedged debt is amortized over the term of the debt as an adjustment to its yield. For purposes of core earnings, these initial cash payments are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.

5. The recognition of deferred issuance costs on the retirement of the Series B Preferred Stock in second quarter 2019 has been excluded from core earnings because it is not a frequently occurring transaction, nor

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is it indicative of future operating results. This is consistent with Farmer Mac's previous treatment of deferred issuance costs associated with the retirement of preferred stock.

The following sections provide more detail about specific components of Farmer Mac's results of operations.

Net Interest Income.  The following table provides information about interest-earning assets and funding for the six months ended June 30, 2020 and 2019. The average balance of non-accruing loans is included in the average balance of loans, Farmer Mac Guaranteed Securities, and USDA Securities presented, though the related income is accounted for on a cash basis.  Therefore, as the average balance of non-accruing loans and the income received increases or decreases, the net interest income and yield will fluctuate accordingly.  The average balance of loans in consolidated trusts with beneficial interests owned by third parties is disclosed in the net effect of consolidated trusts and is not included in the average balances of interest-earning assets and interest-bearing liabilities.  The interest income and expense associated with these trusts are shown in the net effect of consolidated trusts. 

Table 9

	For the Six Months Ended
	June 30, 2020						June 30, 2019
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
	(dollars in thousands)
Interest-earning assets:
Cash and investments	$	3,839,155	$	28,140	1.47	%	$	2,894,225	$	38,863	2.69	%
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)	16,464,280		220,035		2.67	%	14,853,973		251,338		3.38	%
Total interest-earning assets	20,303,435		248,175		2.44	%	17,748,198		290,201		3.27	%
Funding:
Notes payable due within one year	3,341,975		18,122		1.08	%	3,667,842		44,848		2.45	%
Notes payable due after one year(2)	16,676,078		143,897		1.73	%	13,421,483		165,479		2.47	%
Total interest-bearing liabilities(3)	20,018,053		162,019		1.62	%	17,089,325		210,327		2.46	%
Net non-interest-bearing funding	285,382		—				658,873		—
Total funding	20,303,435		162,019		1.60	%	17,748,198		210,327		2.37	%
Net interest income/yield prior to consolidation of certain trusts	20,303,435		86,156		0.85	%	17,748,198		79,874		0.90	%
Net effect of consolidated trusts(4)	1,499,758		3,504		0.47	%	1,553,815		3,779		0.49	%
Net interest income/yield	$	21,803,193	$	89,660	0.82	%	$	19,302,013	$	83,653	0.87	%

⁽¹⁾Excludes interest income of $29.3 million and $30.4 million, in the first half of 2020 and 2019, respectively, related to consolidated trusts with beneficial interests owned by third parties.

⁽²⁾Includes current portion of long-term notes.

⁽³⁾Excludes interest expense of $25.8 million and $26.7 million in the first half of 2020 and 2019, respectively, related to consolidated trusts with beneficial interests owned by third parties.

⁽⁴⁾Includes the effect of consolidated trusts with beneficial interests owned by third parties.

The $6.0 million year-over-year increase in net interest income was primarily due to net growth across all lines of business, which contributed $10.0 million towards the increase in net interest income. This increase was partially offset by the decrease of $3.9 million in net fair value changes from fair value hedge accounting relationships as a result of material changes in market interest rates.

In percentage terms, the decrease of 0.05% was primarily attributable to a decrease of 0.04% in net fair value changes from fair value hedge accounting relationships and an increase of 0.04% in funding and liquidity costs. These decreases were partially offset by an increase of 0.03% related to net volume growth.

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The following table sets forth information about changes in the components of Farmer Mac's net interest income prior to consolidation of certain trusts for the periods indicated.  For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by old rate) and changes in rate (change in rate multiplied by old volume).  Combined rate/volume variances, the third element of the calculation, are allocated based on their relative size.  

Table 10

	For the Six Months Ended June 30, 2020 Compared to Same Period in 2019
	Increase/(Decrease) Due to
	Rate		Volume		Total
	(in thousands)
Income from interest-earning assets:
Cash and investments	$	(21,001)	$	10,278	$	(10,723)
Loans, Farmer Mac Guaranteed Securities and USDA Securities	(56,602)		25,299		(31,303)
Total	(77,603)		35,577		(42,026)
Expense from other interest-bearing liabilities	(80,236)		31,928		(48,308)
Change in net interest income prior to consolidation of certain trusts(1)	$	2,633	$	3,649	$	6,282

⁽¹⁾Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties.

The following table presents a reconciliation of net interest income and net interest yield to net effective spread.  Net effective spread is measured by: including (1) expenses related to undesignated financial derivatives, which consists of income or expense related to contractual amounts due on financial derivatives not designated in hedge relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (3) the amortization of premiums and discounts on assets consolidated at fair value, (4) the net effects of consolidated trusts with beneficial interests owned by third parties, and (5) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information about net effective spread.

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Table 11

	For the Three Months Ended								For the Six Months Ended
	June 30, 2020				June 30, 2019				June 30, 2020				June 30, 2019
	Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield
	(dollars in thousands)
Net interest income/yield	$	48,348	0.87	%	$	43,054	0.87	%	$	89,660	0.82	%	$	83,653	0.87	%
Net effects of consolidated trusts	(1,804)		0.02	%	(1,873)		0.03	%	(3,505)		0.03	%	(3,778)		0.03	%
Expense related to undesignated financial derivatives	(2,413)		(0.05)	%	(1,557)		(0.03)	%	(3,603)		(0.04)	%	(4,102)		(0.05)	%
Amortization of premiums/discounts on assets consolidated at fair value	(21)		—	%	289		0.01	%	(10)		—	%	311		—	%
Amortization of losses due to terminations or net settlements on financial derivatives	(22)		—	%	14		—	%	27		—	%	(56)		—	%
Fair value changes on fair value hedge relationships	2,381		0.05	%	1,428		0.03	%	8,063		0.08	%	4,128		0.05	%
Net effective spread	$	46,469	0.89	%	$	41,355	0.91	%	$	90,632	0.89	%	$	80,156	0.90	%

For the three months ended June 30, 2020 compared to the same period in 2019, the $5.1 million increase in net effective spread in dollars was primarily due to growth in outstanding business volume, which increased net effective spread by approximately $5.5 million.

For the first six months of 2020 compared to the same period in 2019, the $10.5 million increase in net effective spread in dollars was primarily due to growth in outstanding business volume, which increased net effective spread by approximately $10.0 million.

See Note 10 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business.

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Provision for and Release of Allowance for Losses and Reserve for Losses. The following table summarizes the components of Farmer Mac's total allowance for losses for the three and six months ended June 30, 2020 and 2019:

Table 12

	As of June 30, 2020						As of June 30, 2019
	Allowance for Losses		Reserve for Losses		Total Allowance for Losses		Allowance for Losses		Reserve for Losses		Total Allowance for Losses
	(in thousands)
For the Three Months Ended:
Beginning balance	$	15,685	$	3,420	$	19,105	$	6,753	$	2,038	$	8,791
Provision for/(release of) losses	467		(400)		67		578		(158)		420
Charge-offs	(394)		—		(394)		(67)		—		(67)
Ending Balance	$	15,758	$	3,020	$	18,778	$	7,264	$	1,880	$	9,144
For the Six Months Ended:
Beginning balance	$	10,454	$	2,164	$	12,618	$	7,017	$	2,167	$	9,184
Cumulative effect adjustment from adoption of current expected credit loss standard	1,793		863		2,656		—		—		—
Adjusted beginning balance	12,247		3,027		15,274		7,017		2,167		9,184
Provision for/(release of) losses	3,905		(7)		3,898		314		(287)		27
Charge-offs	(394)		—		(394)		(67)		—		(67)
Ending balance	$	15,758	$	3,020	$	18,778	$	7,264	$	1,880	$	9,144

The cumulative effect adjustment from the adoption of CECL on January 1, 2020 was $2.7 million and was recorded directly to retained earnings, net of tax. The transition adjustment was the difference between (1) the total allowance for losses on December 31, 2019 that reflected probable incurred losses and (2) the total allowance for losses on January 1, 2020 that reflected expected losses.

The cumulative effect adjustment for credit losses on on-balance sheet assets was $1.8 million and was comprised of an increase of $5.4 million to the allowance for losses on Rural Utilities loans and Farmer Mac Guaranteed Securities and a $3.6 million decrease in the allowance for losses on Farm & Ranch loans and Farmer Mac Guaranteed Securities. Although Farmer Mac has never experienced any credit losses in its portfolio of Rural Utilities loans and Farmer Mac Guaranteed Securities, our estimate of expected losses is based upon reasonable and supportable forecasts over the expected lives of these assets. The reduction in the allowance for losses on Farm & Ranch loans and Farmer Mac Guaranteed Securities reflects the expected recovery rate based on loan-to-value ratios in those portfolios.

The cumulative effect adjustment for credit losses on LTSPCs was $0.9 million and was comprised of an increase of $1.0 million on Rural Utilities LTSPCs and a decrease of $0.1 million on Farm & Ranch LTSPCs.

In second quarter 2020, our forecasts continue to include the effects of the COVID-19 pandemic on economic factors such as land values, gross domestic product, credit spreads, and unemployment. Primarily due to the stabilization of credit spreads in the second quarter, Farmer Mac recorded a lower total provision for losses than in the first quarter. The total provision for loan losses in the second quarter was approximately $0.1 million.

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The provision to Farmer Mac's allowance for losses for on-balance sheet assets was $0.5 million and was comprised of $1.4 million for expected losses on Rural Utilities loans and Farmer Mac Guaranteed Securities and a release of $0.9 million on Farm & Ranch loans and Farmer Mac Guaranteed Securities. Updates to our economic factor forecast in the second quarter had a negative impact on the Rural Utilities portfolio, where the positive impacts of stabilizing credit spreads were more than offset by net business volume growth and continued uncertainty surrounding unemployment expectations for the next 12 months. Conversely, updated second quarter economic factors had a positive impact on our Farm & Ranch portfolio where improving commodity prices and lower expected volatility in land values decreased expected losses for our lowest risk-rated assets. The release from Farmer Mac's reserve for losses on LTSPCs was $0.4 million, was primarily related to Farm & Ranch LTSPCs, and was driven by decreased volume in that portfolio in the second quarter.

Our estimates of expected losses are based on historical information and reasonable and supportable forecasts. Our reasonable and supportable forecasts incorporate economic factor forecasts and are sensitive to changes in those economics factor forecasts. As of June 30, 2020, our estimate of expected credit losses considered the economic volatility from the COVID-19 pandemic. In particular, the stabilization of credit spreads and continued uncertainty in unemployment expectations were the two economic factors that had the most significant impact. These economic factors also had a more significant impact on our estimate of expected losses in Farmer Mac's Rural Utilities portfolio than in the Farm & Ranch portfolio because of stable farm land values and stable credit quality in the Farm & Ranch portfolio during both the first and second quarters. Notwithstanding the impact of improved economic conditions as of the end of the second quarter, growth in net outstanding business volume across three of our portfolios caused Farmer Mac to record a provision for expected credit losses of approximately $0.1 million. However, a charge-off to the allowance of $0.4 million decreased Farmer Mac's total allowance for losses by $0.4 million compared to the end of the first quarter.

See Notes 5 and 6 to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees."

Guarantee and Commitment Fees.  The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the three and six months ended June 30, 2020 and 2019:

Table 13

	For the Three Months Ended						For the Six Months Ended
			Change								Change
	June 30, 2020	June 30, 2019	$		%		June 30, 2020		June 30, 2019		$		%
	(dollars in thousands)
Guarantee and commitment fees	3,140	3,403	$	(263)	(8)	%	$	6,336	$	6,916	$	(580)	(8)	%

In Farmer Mac's presentation of core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. The decrease in guarantee and commitment fees for the three and six months ended June 30, 2020 compared to the same periods in 2019 was primarily due to decreased LTSPC volume. As

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adjusted for the core earnings presentation, guarantee and commitment fees were $4.9 million and $9.8 million for the three and six months ended June 30, 2020, respectively, compared to $5.3 million and $10.7 million for the three and six months ended June 30, 2019, respectively.

For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures."

Gains/(losses) on financial derivatives.  The components of gains and losses on financial derivatives for the three and six months ended June 30, 2020 and 2019 are summarized in the following table:

Table 14

	For the Three Months Ended								For the Six Months Ended
					Change								Change
	June 30, 2020		June 30, 2019		$		%		June 30, 2020		June 30, 2019		$		%
	(dollars in thousands)
Gains due to fair value changes	$	8,700	$	10,485	$	(1,785)	(17)	%	$	2,216	$	12,725	$	(10,509)	(83)	%
Accrual of contractual payments	(2,413)		(1,557)		(856)		55	%	(3,603)		(4,101)		498		(12)	%
Gains/(losses) due to terminations or net settlements	236		(15)		251		(1,673)	%	(1,388)		(71)		(1,317)		1,855	%
Gains/(losses) on financial derivatives	$	6,523	$	8,913	$	(2,390)	(27)	%	$	(2,775)	$	8,553	$	(11,328)	(132)	%

These changes in fair value are primarily the result of fluctuations in long-term interest rates. The accrual of periodic cash settlements for interest paid or received from Farmer Mac's interest rate swaps that are undesignated financial derivatives is shown as expense related to financial derivatives. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "Gains/(losses) due to terminations or net settlements" in the table above. For undesignated swaps, when there is no direct payment arrangement between a swap dealer counterparty and a debt dealer issuing Farmer Mac's medium-term notes for a particular transaction, Farmer Mac may receive an initial cash payment from the swap dealer at the inception of the swap to offset dollar-for-dollar the amount of the discount on the associated hedged debt. Changes in the fair value of these swaps are recognized immediately in "Gains/(losses) on financial derivatives," while the offsetting discount on the hedged debt is amortized over the term of the debt as an adjustment to its yield. The amounts of initial cash payments received by Farmer Mac vary depending on the number of the aforementioned type of swaps it executes during a quarter.

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Other Income. The following table presents other income for the three and six months ended June 30, 2020 and 2019:

Table 15

	For the Three Months Ended								For the Six Months Ended
					Change								Change
	June 30, 2020		June 30, 2019		$		%		June 30, 2020		June 30, 2019		$		%
	(dollars in thousands)
Late fees	$	296	$	154	$	142	92	%	$	887	$	569	$	318	56	%
Other	933		201		732		364	%	1,158		279		879		315	%
Total other income	$	1,229	$	355	$	874	246	%	$	2,045	$	848	$	1,197	141	%

The increase in other fees is primarily due to an increase in the fees received from borrowers to modify their long-term fixed borrowing rate to a new lower rate.

Operating Expenses. The components of operating expenses for the three and six months ended June 30, 2020 and 2019 are summarized in the following table:

Table 16

	For the Three Months Ended								For the Six Months Ended
					Change								Change
	June 30, 2020		June 30, 2019		$		%		June 30, 2020		June 30, 2019		$		%
	(dollars in thousands)
Compensation and employee benefits	8,087		$	6,770	$	1,317	19	%	$	18,214	$	14,376	$	3,838	27	%
General and administrative	5,295		4,689		606		13	%	10,658		9,285		1,373		15	%
Regulatory fees	725		687		38		6	%	1,450		1,375		75		5	%
Total Operating Expenses	$	14,107	$	12,146	$	1,961	16	%	$	30,322	$	25,036	$	5,286	21	%

a.Compensation and Employee Benefits. The increase in compensation and employee benefits expenses for the three months ended June 30, 2020 compared to the same period in 2019 was primarily due to lower than expected bonus payments in the prior year period and increased headcount in the current period. The increase in compensation and employee benefits expenses for the six months ended June 30, 2020 compared to the same period in 2019 was primarily due to an increase in bonus expense in first quarter 2020 due to 2019 financial performance and the severance payments made to an executive who resigned in first quarter 2020.

b.General and Administrative Expenses (G&A). The increase in G&A expenses for the three and six months ended June 30, 2020 compared to the same periods in 2019 was primarily due to increased spending on software licenses and information technology consultants to support growth and strategic initiatives.

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Income Tax Expense. The following table presents income tax expense and the effective income tax rate for the three and six months ended June 30, 2020 and 2019:

Table 17

	For the Three Months Ended										For the Six Months Ended
							Change										Change
	June 30, 2020			June 30, 2019			$		%		June 30, 2020			June 30, 2019			$		%
	(dollars in thousands)
Income tax expense	$	9,435		$	9,111		$	324	4	%	$	13,176		$	15,733		$	(2,557)	(16)	%
Effective tax rate	20.9		%	21.1		%			(0.2)	%	21.4		%	21.0		%			0.4	%

Business Volume.  

The following table sets forth the net growth or decrease under Farmer Mac's lines of business for the three and six months ended June 30, 2020 and 2019:

Table 18

Net New Business Volume – Farmer Mac Loan Purchases, Guarantees, LTSPCs, and AgVantage Securities
	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)
	(in thousands)
Farm & Ranch:
Loans	$	259,130	$	143,361	$	340,956	$	165,936
LTSPCs	(52,874)		(67,594)		(100,055)		(108,556)
USDA Guarantees:
USDA Securities	72,194		14,392		116,538		(25,252)
Farmer Mac Guaranteed USDA Securities	(40,594)		22,223		(58,907)		31,026
Rural Utilities:
Loans	311,843		98,049		430,276		588,307
LTSPCs	(5,632)		(17,092)		(19,226)		(24,752)
Institutional Credit:
AgVantage securities	(41,271)		46,483		214,584		395,501
Total purchases, guarantees, LTSPCs, and AgVantage securities	$	502,796	$	239,822	$	924,166	$	1,022,210

Farmer Mac's net business volume growth of $502.8 million in second quarter 2020 was $263.0 million more than the $239.8 million of net growth achieved in second quarter 2019. The increase in second quarter 2020 was primarily attributable to historically low interest rates that drove strong market demand by borrowers seeking to take advantage of low interest rates on long-term funding.

Our outstanding business volume was $22.0 billion as of June 30, 2020, a net increase of $502.8 million from March 31, 2020, after taking into account all new business, maturities, and repayments on existing assets. This net increase consisted of increases of $306.2 million in Rural Utilities, $206.3 million in Farm & Ranch, and $31.6 million in the USDA Guarantees line of business, partially offset by a decrease of $41.3 million in Institutional Credit.

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The $306.2 million net growth in our Rural Utilities line of business during second quarter 2020 was primarily due to the purchase of $339.4 million in loans from the two main counterparties in that line of business, partially offset by regularly scheduled payments, prepayments, and maturities of loans previously purchased and loans under LTSPCs.

The $206.3 million net increase in our Farm & Ranch line of business was comprised of a $259.1 million net increase in outstanding loan purchase volume, partially offset by a $52.8 million net decrease in loans under LTSPCs. The net growth in second quarter 2020 reflected our ability to retain borrowers in a decreasing interest rate environment by proactively engaging with our customers and adjusting their rates and loan sizes to reflect current market conditions and their specific funding needs. Our net growth of 18.2% in Farm & Ranch loan purchases over the twelve months ended June 30, 2020 is significantly higher than the 3.1% net growth of the overall agricultural mortgage loan market over the twelve months ended March 31, 2020 (based on our analysis of bank and Farm Credit System call report data).

Our USDA Guarantees line of business grew by $31.6 million in second quarter 2020. The second quarter gross volume of $224.0 million was the highest gross volume that we have ever recorded in any quarter. When added to the $147.9 million, it is the most gross business volume in USDA Guarantees that Farmer Mac has recorded in any six-month period. This growth reflected the positive effect of adjustments that we made to our product structure in the second half of 2019 to more effectively meet customer demands in an increasingly competitive environment and in response to increased loan limits mandated by the 2018 Farm Bill described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report.

The $41.3 million net decrease in the Institutional Credit line of business during second quarter 2020 was due primarily to two large counterparties who reduced their amount of outstanding credit in connection with the maturity of one bond and regularly scheduled payments on multiple bonds. We also experienced a slight net increase from smaller fund counterparties.

For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report.

The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated:

Table 19

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020		June 30, 2019		June 30, 2020		June 30, 2019
	(in thousands)
Loans securitized and sold as Farm & Ranch Guaranteed Securities	$	—	$	20,224	$	28,050	$	118,004
Farmer Mac Guaranteed USDA Securities	—		29,419		28,050		48,347
AgVantage securities	430,024		659,447		990,419		1,484,864
Total Farmer Mac Guaranteed Securities Issuances	$	430,024	$	709,090	$	1,046,519	$	1,651,215

Farmer Mac either retains the loans it purchases or securitizes them and retains or sells Farmer Mac Guaranteed Securities backed by those loans.  The weighted-average age of the Farm & Ranch non-delinquent eligible loans purchased and retained (excluding the purchases of defaulted loans) during both

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second quarter 2020 and 2019 was less than one year. Of those loans, 25% and 63% had principal amortization periods longer than the maturity date, resulting in balloon payments at maturity, with a weighted-average remaining term to maturity of 15.0 years for both periods.

During second quarter 2020 and 2019, Farmer Mac securitized some of the Farm & Ranch loans it had purchased and sold the resulting Farmer Mac Guaranteed Securities, as shown below. During the three and six months ended June 30, 2020 and 2019, Farmer Mac realized no gains or losses from the sale of Farmer Mac Guaranteed Securities or USDA Securities. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the consolidated balance sheets. For the three and six months ended June 30, 2020, none of our Farmer Mac Guaranteed Securities were sold to a related party to Farmer Mac, compared to none and $63.1 million of our Farmer Mac Guaranteed Securities were sold to a related party to Farmer Mac (which is related by virtue of its owning more than 10% of Farmer Mac's Class A voting common stock) for the same periods in 2019, respectively.

The following table sets forth information about outstanding volume in each of Farmer Mac's four lines of business as of the dates indicated:

Table 20

Lines of Business - Outstanding Business Volume
	As of June 30, 2020		As of December 31, 2019
	(in thousands)
Farm & Ranch:
Loans	$	4,181,422	$	3,675,640
Loans held in trusts:
Beneficial interests owned by third party investors	1,436,090		1,600,917
LTSPCs	2,310,113		2,393,071
Guaranteed Securities	90,225		107,322
USDA Guarantees:
USDA Securities	2,314,961		2,199,072
Farmer Mac Guaranteed USDA Securities	362,846		421,103
Rural Utilities:
Loans	2,101,568		1,671,293
LTSPCs(1)	590,053		609,278
Institutional Credit
AgVantage Securities	8,654,830		8,440,246
Total	$	22,042,108	$	21,117,942

⁽¹⁾As of both June 30, 2020 and December 31, 2019, includes $20.0 million related to one-year loan purchase commitments on which Farmer Mac receives a nominal unused commitment fee.

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The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of June 30, 2020:

Table 21

Schedule of Principal Amortization as of June 30, 2020
	Loans Held		Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs		USDA Securities and Farmer Mac Guaranteed USDA Securities		Total
	(in thousands)
2020	$	152,425	$	106,391	$	59,137	$	317,953
2021	336,225		281,270		116,557		734,052
2022	330,914		224,825		117,421		673,160
2023	333,244		210,451		121,362		665,057
2024	328,160		176,133		119,630		623,923
Thereafter	6,238,112		1,991,321		2,143,700		10,373,133
Total	$	7,719,080	$	2,990,391	$	2,677,807	$	13,387,278

Of the $22.0 billion outstanding principal balance of volume included in Farmer Mac's four lines of business as of June 30, 2020, $8.7 billion were AgVantage securities included in the Institutional Credit line of business.  Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. The following table summarizes by maturity date the outstanding principal amount of both on- and off-balance sheet AgVantage securities as of June 30, 2020:

Table 22

AgVantage Balances by Year of Maturity
	As of
	June 30, 2020
	(in thousands)
2020	$	1,157,737
2021	1,692,298
2022	1,582,868
2023	964,527
2024	828,108
Thereafter(1)	2,429,292
Total	$	8,654,830

⁽¹⁾Includes various maturities ranging from 2025 to 2044.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.7 years as of June 30, 2020.  

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Outlook  

Farmer Mac continues to provide a stable source of liquidity, capital, and risk management tools as the secondary market that helps meet the financing needs of rural America. The pace of Farmer Mac’s growth will depend on the capital and liquidity needs of the lending institutions in the agricultural and rural financing business as well as the overall health of agriculture and rural borrowers in the sectors we serve.

Farmer Mac foresees opportunities for growth across our lines of business driven by several key factors:

•As agricultural and rural utilities lenders seek to manage equity capital and return on equity capital requirements or seek to reduce exposure due to lending limits or concentration limits, Farmer Mac can provide relief for those institutions through loan and portfolio purchases, participations, guarantees, LTSPCs, or wholesale funding.

•While overall loan growth within the rural utilities industry appears to be moderate in the near term due to generally flat demand for capital, future growth opportunities may increase in Farmer Mac’s Rural Utilities line of business from deepening business relationships with eligible counterparties and exploring new types of loan products. These opportunities may be limited by sector growth, credit quality, and the competitiveness of Farmer Mac’s products.

•As a result of business and product development efforts, and continued interest in the agricultural asset class from institutional investors, Farmer Mac’s customer base and product set continue to expand, which may generate more demand for Farmer Mac’s products from new sources.

•Consolidation within the agricultural finance industry, coupled with Farmer Mac’s relationships with larger regional and national lenders, continue to provide opportunities that could influence Farmer Mac’s loan demand and increase the average transaction size within Farmer Mac’s Farm & Ranch line of business.

•Expansion and refinancing opportunities for agricultural producers resulting from a decrease in interest rates have increased financing requirements for mergers and acquisitions, consolidation, and vertical integration across many sectors of the agricultural industry, which may also generate demand for Farmer Mac’s loan products.

The COVID-19 pandemic and related efforts to contain it continue to create disruptions to the global economy. Government stimulus programs designed to mitigate the economic impacts of the pandemic as well as significant liquidity support by the Federal Reserve to facilitate the functioning of the capital markets has endeavored to reduce volatility to the economy and the sectors we serve. However, the duration, severity, and continued spread of the pandemic and the effectiveness of government efforts taken to contain COVID-19 and mitigate public health and economic effects continue to evolve and remain uncertain. For a further discussion of the uncertainties and risks associated with the COVID-19 pandemic on Farmer Mac and its business, see the factors discussed under "Risk Factors" in Part II, Item 1A of this report,

The pandemic's effect on our growth objectives and outlook will depend on many factors, including:

•How quickly and to what extent affected rural borrowers can recover from the negative economic impact of the pandemic and recession, how quickly normal economic and operating conditions can resume, and whether there are lingering effects to the economy after the COVID-19 pandemic is

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over as a result of the disruption to the global economy, the domestic agricultural economy, and recession.

•Increasing borrowers' payment deferral requests and the duration of approved deferrals, including payments made to holders of Farmer Mac Guaranteed Securities to cover principal and interest shortfalls, could consume some capital which would otherwise have been available for certain planned growth initiatives. For more information about the impact of COVID-19 on Farmer Mac's payment deferral requests received to date, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees."

•Stress on commodity and agriculture exports as a result of global trade disruptions caused by the COVID-19 pandemic and geopolitical trade disputes, which could create downward pressure on commodity prices and further stress borrowers’ liquidity and negatively impact loan growth opportunities.

•The inability of borrowers in the pandemic to close on agricultural or renewable energy loans due to limited access to local or state administrative offices, delays in receiving equipment components, installation inefficiencies caused by social distancing among workers, and difficulties in obtaining inspections and grid interconnection on a timely basis could limit our opportunities to purchase agricultural or renewable energy loans.

•Delays and postponements of planned or potential mergers and acquisitions, consolidations, and vertical integrations as a result of COVID-19 and, consequently, a potential reduction in the need for Farmer Mac’s products and services until the global economy recovers and the flow of transactions returns to pre-pandemic levels.

•Disruptions in the capital markets and the widening of credit spreads could impact Farmer Mac’s funding costs and could result in higher interest rates charged for our products and services, which could adversely affect our competitiveness in the sectors we serve.

•Farmer Mac’s mission is to support rural America during this pandemic, and the disruptions caused by COVID-19 may present some new and expanded opportunities for Farmer Mac to help meet the financing needs of rural America. Rural electric cooperatives financed by Farmer Mac could have an increased demand for temporary liquidity if COVID-19 related state moratoriums protecting consumers against utility providers taking actions due to non-payment of power bills continue for a significant period of time. If borrowers seek to obtain additional financing and liquidity from lenders to maintain operations and production during this time, or to make up for lost productivity due to shutdowns, delays, and social distancing requirements, these short-term funding requirements could create additional growth opportunities for Farmer Mac as other lenders look to manage lending limits and credit concentrations as short-term financing demands arise.

•Financial market volatility, coupled with uncertainty regarding the long-term impacts of the pandemic, is causing some financial institutions to delay or cease capital deployment to many sectors that Farmer Mac serves. While these reductions could reduce our loan purchase opportunities, Farmer Mac could also provide a much-needed source of secondary market liquidity to help stimulate capital deployment during this time of uncertainty.

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Operating Expense. Farmer Mac continues to expand its investments in human capital, technology, and business infrastructure to increase capacity and efficiency as it seeks to accommodate its growth opportunities and achieve its long-term strategic objectives. Accordingly, Farmer Mac expects continued increases in its operating expenses over the next several years corresponding to business and revenue growth. We expect these efforts to continue and increase through 2020 as we innovate and grow our business.

Operations. On March 12, 2020, Farmer Mac activated its business continuity plan and has been operating uninterruptedly since then, with all of its employees working remotely from their homes. Farmer Mac has provided guidance and support to all of its employees to ensure that they have the tools and knowledge needed to effectively work from home, and Farmer Mac’s technology platform and business continuity plan have been functioning as designed in support of all functions of the organization with no material disruption of business. As a secondary market participant in the agricultural and rural utility lending space, Farmer Mac's business model is already based on a remote interface with its customers and vendors. We do not expect Farmer Mac's remote-working environment to have a material effect on our operations either in the near term or for the foreseeable future.

Agricultural Industry. The agricultural industry includes many diverse sectors that respond in different ways to changes in economic conditions. Those individual sectors often are affected differently, sometimes positively and sometimes negatively, by prevailing domestic and global economic factors and regional weather conditions. The interconnectedness between sectors typically results in cycles where one or more segments may be under stress while others are not.

The COVID-19 pandemic continues to impact the agricultural sector, although economic conditions improved somewhat during second quarter 2020. Sudden school and restaurant closures in March and April dramatically altered the supply and demand functions for food. U.S. Census Advance Retail Sales Data indicates that, after dropping 50 percent in April, U.S. consumer spending for food services away from home rebounded to 75 percent of normal. Much of the decline has been picked up in consumer spending at grocery stores, which was up more than 10 percent in June 2020 compared to the prior year. Farm production and food processing take a higher net margin of the food dollar spent at home, so the shift of consumer spending on food at home could offset some of the losses from sales to restaurants and schools. According to data from the U.S. Energy Information Administration, after dropping nearly 50 percent in April, ethanol production rebounded to 89 percent of pre-pandemic levels in June and July as drivers returned to the roads. Ethanol is a primary demand driver for corn. Agricultural commodity prices, although still down significantly in 2020, pared losses in May and June as markets adjusted to the economic shocks. Farm labor and food processing worker health and availability remain a top industry concern as a resurgence of COVID-19 cases could adversely affect the harvest of fresh fruit and produce as well as food processing in the second half of the year.

The decline in revenue during the first half of 2020 has multiple potential offsets to help support producers’ profitability. First, farm expenses fell for many producers during the first half of 2020. Lower energy prices improved the cost of fuel and fertilizer ahead of the planting season. Lower grain prices led to a decrease in animal feed input costs, and lower replacement animal prices improved the cost structure for many protein producers. Second, USDA issued a final $3.7 billion Market Facilitation Program (MFP) cash payment in April and May 2020 to address market losses from trade disruptions. Third, in response to the COVID-19 pandemic, Congress passed a series of measures, including the CARES Act on March 27, 2020, which provided over $2 trillion in economic stimulus to support various aspects of the U.S. economy. The CARES Act contained a $9.5 billion emergency fund for the USDA aimed toward

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providing help to livestock, dairy, and produce providers who sell locally. It also included a $14 billion replenishment of the Commodity Credit Corporation ("CCC"), a line of credit at the U.S. Treasury Department that USDA can use to help crop and livestock producers. In April 2020, the USDA announced that it would provide $19 billion of assistance through the Coronavirus Food Assistance Program ("CFAP"). CFAP used the funding and authorities provided in the CARES Act, the Families First Coronavirus Response Act, and other USDA existing authorites to provide $16 billion in direct payments to distribute to producers and $3 billion in food purchases. As of July 27, 2020, the USDA had distributed $6.6 billion in CFAP payments. Farmers and ranchers were also eligible to participate in the Small Business Administration’s Paycheck Protection Program (PPP). Through July 24, 2020, more than $7.9 billion in PPP loans had been disbursed to businesses involved in agriculture, forestry, fishing, and hunting.

Farmland values have held steady in early 2020 after rising at approximately the rate of inflation for the last two years. Data released in 2019 by the USDA indicates an average decrease in farm real estate values of 0.2% in 2019 in Corn Belt states (Illinois, Indiana, Iowa, Missouri, and Ohio), but an increase of 2.8% in Northern Plains states (Kansas, Nebraska, North Dakota, and South Dakota). In all other regions, farmland value averages are reported to be flat to increasing. The COVID-19 pandemic has slowed public auctions and sales in 2020, but transactions have progressed, and values have been largely level through the first half of the year. While regional averages for farmland values provide a good barometer for the overall movement in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility than state or national averages indicate.

Over the past few decades, the U.S. agricultural industry has become increasingly connected to global trade, and agricultural export demand depends significantly on trading relationships in numerous foreign markets, as well as on foreign exchange rates. A prolonged decline in global economic growth or continued tightening in trade policies and agreements could adversely affect the demand for certain U.S. agricultural exports, which may result in downward pressure on commodity prices. Also, the strength of the U.S. dollar relative to trading-partner currencies has been elevated since 2016 (as measured by the U.S. Dollar Index). A strong U.S. dollar decreases the competitiveness of U.S. agricultural exports by raising U.S. prices relative to other countries’ producers. The value of the U.S. dollar weakened in June and July, providing some relief to export sales. However, the COVID-19 pandemic has the potential to disrupt global demand for U.S. agriculture into 2021 due to lower incomes and reduced economic activity. Many of the primary trading partners and the U.S. maintain good trade relations evidenced by recently-enacted free trade agreements (e.g., Canada, Mexico, and Japan). Relations have become increasingly tense with China, another top U.S. agricultural trading partner. Agricultural export sales to China are up year-to-date in 2020 compared to 2019, but there exists increasing uncertainty surrounding growth expectations for this market.

Farmer Mac has experienced higher 90-day delinquencies and substandard asset ratings in recent quarters. The increase is a function of agricultural cycles trending toward tighter industry profitability levels compared to peaks experienced from 2012 to 2015. To date, the fluctuations in 90-day delinquencies and the increase in substandard assets have not yet translated into rising credit losses. Farmer Mac believes that its portfolio is highly diversified, both geographically and by commodity and that its portfolio has been underwritten to high credit quality standards. Therefore, Farmer Mac believes that its portfolio is well-positioned to endure reasonably foreseeable volatility in commodity prices and farmland values. However, the COVID-19 pandemic and a subsequent economic downturn increases the level of uncertainty inherent in the agricultural credit sector and could alter the trajectory of the current agricultural cycle. A prolonged disruption may result in elevated loan delinquencies, and a higher

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percentage of loans rated substandard as more payments reach 90-days past their July 1 payment due date. Loan deferments approved by Farmer Mac through June 30, 2020 represent 1.1% of our total outstanding business volume, as measured by unpaid principal balance. This amount could fluctuate in future quarters based on loan performance and economic conditions in the coming months, but roughly 80 percent of Farm & Ranch and USDA loans had a payment due on July 1. For more information about the loan balances, loan-to-value ratios, 90-day delinquencies, and substandard asset rate for the Farm & Ranch loans in Farmer Mac’s portfolio as of June 30, 2020, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees."

Under a provision of the Agricultural Improvement Act of 2018, also referred to as the "Farm Bill," Farmer Mac's charter was amended effective June 18, 2020 to expand the acreage exception to the loan amount limitation on Farm & Ranch loans (currently $13.2 million) from 1,000 acres to 2,000 acres, meaning that the statutory loan amount limitation does not apply to Farm & Ranch loans secured by 2,000 acres of agricultural real estate or less. Farmer Mac will continue to evaluate this increase in the acreage limitation to determine the potential benefits to Farmer Mac's customers and the related effects on our business. The Farm Bill also increased the authorized limit for the amount of new guarantees issued by the USDA under the Consolidated Farm and Rural Development Act (which are eligible for Farmer Mac's USDA Guarantees line of business) from $3.026 billion to $7.0 billion for each government fiscal year through September 2023. Also, the limit for the size of individual loans to which these guarantees are applied was increased from $1.399 million to $1.75 million, which thereby increases the authorized amount of the USDA-guaranteed portion for an individual loan. These higher loan limits likely contributed to additional growth in the USDA Guarantees purchased by Farmer Mac during the first half of 2020, and they could result in more increases in new business volume in our USDA Guarantees line of business in the future.

Farmer Mac also continues to monitor state legislation and regulations that could impact U.S. agriculture. For example, groundwater management regulations, including in California, may result in tighter restrictions on groundwater usage that could affect agricultural producers in the future. Farmer Mac will monitor the effects that any changes in legislation or regulation (federal or state) could have on Farmer Mac or its customers.

Rural Utilities Industry.

The rural energy industry has less cyclicality than the agricultural sector, but it does trend with conditions in the general economy. Higher levels of unemployment and adverse credit markets are typically associated with drops in energy demand (i.e., lower commercial, industrial, or residential demand) and increases in industry ratings downgrades. The economic distress caused by the COVID-19 pandemic has led to historic levels of unemployment as well as reduced demand from the commercial and industrial sectors. According to data from the U.S. Energy Information Administration, electricity sales to commercial and industrial consumers dropped 12 percent in April and May 2020 compared to 2019. However, residential sales during the same period were up nearly 7 percent compared to 2019 as residents spent more time at home during state, local, and self-imposed quarantines. Residential power sales are typically significantly more profitable than those for commercial and industrial consumers, thus some of the profitability reduction from the loss of commercial and industrial sales can be offset by the change in sales mix. Sector sales mix varies from utility to utility based on the characteristics of the region served by the utility, so the degree of profitability offset will differ. Some rural electric cooperatives participated in the Paycheck Protection Program (PPP) and received forgivable loans through that program, which are

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another potential source to offset any profitability reduction. The COVID-19 pandemic has also highlighted the greater need for and interest in access to broadband internet in rural areas, and there was more than $300 million in support authorized in the CARES Act to support healthcare industry telecommunications and rural broadband grants. Farmer Mac expects the heightened level of uncertainty surrounding the economic impacts of COVID-19 to continue throughout 2020.

During the first half of 2020, the sudden decrease of interest rates to historic lows drove a significant amount of financing activity on the part of rural electric cooperatives. Prospects for loan growth within the rural utilities industry overall appear to be moderate in the short to medium term as capital expenditures for large generation assets have decreased, although ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure are expected to continue. Farmer Mac's future growth opportunities for lending to the electrical cooperative industry may be affected by the demand for electric power in rural areas, capital expenditures by electric cooperatives driven by regulatory or technological changes, the continuation of a low interest rate environment, and competitive dynamics within the rural utilities cooperative finance industry. The retirement of coal generation assets, growth in renewable energy generation, deployment of energy storage technologies, expansion of broadband service in rural areas, and the deepening of relationships with new and existing counterparties, all may provide new business opportunities for Farmer Mac. To address some of these trends, Farmer Mac has deployed new financing products tailored to the renewable energy sector, which represents a new market opportunity for Farmer Mac. Under this new program, Farmer Mac purchased a participation interest in a solar project financing in late 2019 and additional solar project participation interests from a new counterparty during first quarter 2020. Farmer Mac anticipates further growth in this area during 2020.

Balance Sheet Review

The following table summarizes the balance sheet as of the periods indicated:

Table 23

	As of					Change
	June 30, 2020			December 31, 2019		$			%
	(in thousands)
Assets
Cash and cash equivalents	$	827,600		$	604,381	$	223,219		37	%
Investment securities, net of allowance	3,512,410			3,004,875		507,535			17	%
Farmer Mac Guaranteed Securities, net of allowance	9,039,105			8,590,476		448,629			5	%
USDA Securities	2,347,709			2,241,073		106,636			5	%
Loans, net of allowance	7,891,148			6,981,440		909,708			13	%
Other	314,684			287,129		27,555			10	%
Total assets	$	23,932,656	23,932,656	$	21,709,374	$	2,223,282		10	%
Liabilities
Notes Payable	21,421,550			19,098,648		2,322,902			12	%
Other	1,686,990			1,811,450		(124,460)			(7)	%
Total liabilities	$	23,108,540		$	20,910,098	$	2,198,442	2198442	11	%
Total equity	824,116			799,276		24,840			3	%
Total liabilities and equity	$	23,932,656		$	21,709,374	$	2,223,282		10	%

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Assets. The increase in total assets was primarily attributable to the net growth in our outstanding business volume across all lines of business.

The increase in cash and cash equivalents and investment securities was primarily due to a decision to increase our liquidity investment portfolio due to the COVID-19 pandemic and to support our program asset growth.

Liabilities. The increase in total liabilities was primarily due to an increase in total notes payable to support our program asset growth.

Equity. The increase in total equity was primarily due to the issuance of Series E Preferred Stock and an increase in net income. These increases were partially offset by an increase in other comprehensive losses, net of tax, primarily due to decreases in the fair value of available-for-sale securities and financial derivatives designated in cash flow hedge accounting relationships.

Off-Balance Sheet Arrangements 

Farmer Mac offers approved lenders two credit enhancement alternatives to increase their liquidity or lending capacity while retaining the cash flow benefits of their loans: (1) Farmer Mac Guaranteed Securities, which are available through each of the Farm & Ranch, USDA Guarantees, Rural Utilities, and Institutional Credit lines of business; and (2) LTSPCs, which are available through the Farm & Ranch and Rural Utilities lines of business. For securitization trusts where Farmer Mac is the primary beneficiary, the trust assets and liabilities are included on Farmer Mac's consolidated balance sheet. For securitization trusts where Farmer Mac is not the primary beneficiary and in the event of de-consolidation, both of these alternatives create off-balance sheet obligations for Farmer Mac. See Note 6 to the consolidated financial statements for more information about consolidation and Farmer Mac's off-balance sheet business activities.

Risk Management

Credit Risk – Loans and Guarantees.  

COVID-19

Farmer Mac continues to monitor the effects of the COVID-19 pandemic on Farmer Mac's credit risk related to Farmer Mac's borrower exposures. Since first quarter 2020, Farmer Mac has seen an increase in payment deferment requests from its network of loan servicers on behalf of borrowers in Farmer Mac's Farm & Ranch loan portfolio, although deferment requests have been below our expectations. Our early expectations for payment deferment requests were based on forecasts provided by other GSEs and other Farm Credit System institutions. To address the requests that we have received, Farmer Mac has established criteria for approval of payment deferments for borrowers impacted by the COVID-19 pandemic and have communicated these criteria to key counterparties. Farmer Mac will monitor the criteria as the impact of the pandemic continues to unfold and determine if any changes should be made. Most of the payment deferments Farmer Mac has approved and executed for loans it has purchased or securitized in its Farm & Ranch portfolio have been for up to six months, with the deferred principal and interest payments capitalized into the unpaid principal balance of the loan. The unpaid principal balance is then re-amortized over the remaining term of the loan. Approved and executed payment deferments for loans in LTSPCs have varied from three-month payment deferments for principal and interest to deferred

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interest-only payments for up to twelve months, depending on the applicable LTSPC lender's deferment policy. As of June 30, 2020, we have executed payment deferments in the Farm & Ranch and USDA Securities portfolios related to an aggregate of $241.7 million of unpaid principal balances, which represents 1.10% of our total outstanding business volume. The period of time covered by the payment deferments is typically in the range of three to six months. At the end of each payment deferment, the principal and interest related to the approved deferments will be re-capitalized into the outstanding unpaid principal balance and re-amortized over the remaining life of the loan.

In addition, FCA has issued regulatory guidance encouraging Farmer Mac to work with its lending and servicing partners in approving and executing servicing actions for borrowers impacted by COVID-19. The table below presents a summary of COVID-19 payment deferments through June 30, 2020 in the Farm & Ranch line of business. Farmer Mac has not received any payment deferment requests in the Rural Utilities line of business. For more information about FCA's regulatory guidance related to the COVID-19 pandemic, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Regulatory Matters."

Table 24

Farm & Ranch COVID-19 Deferments Summary
	As of June 30, 2020(1)
	Unpaid Principal Balance
	Requested, but not yet Approved				Approved, but not yet Executed		Not Approved		Approved and Executed
Farm & Ranch:	(in thousands)
On-balance sheet:
Loans held for investment	$	2,547			$	32,292	$	—	$	44,434
Loans held in consolidated trusts	4,927				5,249		—		37,734
On-balance sheet total	$	7,474			$	37,541	$	—	$	82,168
Off-balance sheet:
LTSPCs	2,716				49,696		—		109,475
Farm & Ranch Total	$	10,190	$	—	$	87,237	$	—	$	191,643
USDA:
USDA Securities	$	14,310			$	10,378	$	3,387	$	48,005
Farmer Mac Guaranteed USDA Securities	864				1,015		385		2,087
USDA Total	$	15,174			$	11,393	$	3,772	$	50,092
Farm & Ranch and USDA Total Deferments	$	25,364			$	98,630	$	3,772	$	241,735

⁽¹⁾ Loans under a COVID-19 deferment are not considered to be past due.

Farm & Ranch

Farmer Mac's direct credit exposure to Farm & Ranch loans held and loans underlying Farm & Ranch Guaranteed Securities and LTSPCs as of June 30, 2020 was $8.0 billion across 48 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Farm & Ranch loans, see "Business—Farmer Mac's Lines of Business—Farm & Ranch—Underwriting and Collateral Valuation (Appraisal) Standards" in Farmer Mac’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

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Farmer Mac has indirect credit exposure to the Farm & Ranch loans that secure AgVantage securities included in the Institutional Credit line of business. As of June 30, 2020, Farmer Mac had not experienced any credit losses on any AgVantage securities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Institutional" for more information about Farmer Mac's credit risk on AgVantage securities.

Farmer Mac considers a loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards.  As of June 30, 2020 and December 31, 2019, the average unpaid principal balances for loans outstanding in the Farm & Ranch line of business was $702,000 and $683,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for Farm & Ranch loans purchased during second quarter 2020 was 41%, compared to 53% for loans purchased during second quarter 2019. The weighted-average original loan-to-value ratio for all Farm & Ranch loans held and all loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs was 51% as of both June 30, 2020 and December 31, 2019. The weighted-average original loan-to-value ratio for all 90-day delinquencies was 51% and 53% as of June 30, 2020 and December 31, 2019, respectively.

The weighted-average current loan-to-value ratio (the loan to-value ratio based on original appraised value and current outstanding loan amount adjusted to reflect amortization) for Farm & Ranch loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs was 45% as of both June 30, 2020 and December 31, 2019.

For more information about the credit quality of Farmer Mac's Farm & Ranch portfolio and the associated allowance for losses please refer to Note 5 to the consolidated financial statements. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses."

Farmer Mac's 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. As of June 30, 2020, Farmer Mac's 90-day delinquencies were $68.7 million (0.86% of the Farm & Ranch portfolio), compared to $79.7 million (1.02% of the Farm & Ranch portfolio) as of March 31, 2020 and $61.0 million (0.78% of the Farm & Ranch portfolio) as of December 31, 2019. Those 90-day delinquencies were comprised of 54 delinquent loans as of June 30, 2020, compared to 72 delinquent loans as of March 31, 2020 and 57 delinquent loans as of December 31, 2019. The sequential decrease in 90-day delinquencies is primarily due to the seasonal payment pattern associated with loans that have annual (January 1st) and semi-annual (January 1st and July 1st) payment terms, which account for most of the loans in the Farm & Ranch portfolio. Farmer Mac's 90-day delinquencies have historically fluctuated from quarter to quarter, both in dollars and as a percentage of the outstanding Farm & Ranch portfolio, with higher levels generally observed at the end of the first and third quarters and lower levels generally observed at the end of the second and fourth quarters of each year as a result of the annual (January 1st) and semi-annual (January 1st and July 1st) payment terms of most Farm & Ranch loans. In addition, the sequential decrease was driven by two commodity groups – permanent plantings and crops. The other commodity groups either

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experienced decreases or remained constant. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of June 30, 2020. Loans under COVID-19 deferment are not considered past due and are not included in our delinquent loan statistics. Farmer Mac believes that it remains adequately collateralized on its delinquent loans.

Our 90-day delinquency rate as of June 30, 2020 approximated Farmer Mac's historical average. In the near-term, our delinquency rate is expected to exceed our historical average (which it did in third quarter 2017) due to the expected impact of the COVID-19 pandemic on the agricultural economy. Farmer Mac's average 90-day delinquency rate as a percentage of its Farm & Ranch portfolio over the last 15 years is approximately 1%. The highest 90-day delinquency rate observed during that period occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's then-held ethanol loan portfolio that Farmer Mac no longer holds.

The following table presents historical information about Farmer Mac's 90-day delinquencies in the Farm & Ranch line of business compared to the unpaid principal balance of all Farm & Ranch loans held and loans underlying off-balance sheet Farm & Ranch Guaranteed Securities and LTSPCs:

Table 25

	Farm & Ranch Line of Business		90-Day Delinquencies		Percentage
	(dollars in thousands)
As of:
June 30, 2020	$	8,017,850	$	68,682	0.86	%
March 31, 2020	7,811,594		79,722		1.02	%
December 31, 2019	7,776,950		60,954		0.78	%
September 30, 2019	7,393,728		59,691		0.81	%
June 30, 2019	7,291,352		28,045		0.38	%
March 31, 2019	7,215,585		52,366		0.73	%
December 31, 2018	7,233,971		26,881		0.37	%
September 30, 2018	7,072,018		37,545		0.53	%
June 30, 2018	7,045,397		43,076		0.61	%

Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.31% of total outstanding business volume as of June 30, 2020, compared to 0.29% as of December 31, 2019 and 0.14% as of June 30, 2019. The following table presents outstanding Farm & Ranch loans held and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities and 90-day delinquencies as of June 30, 2020 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure:

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Table 26

Farm & Ranch 90-Day Delinquencies as of June 30, 2020
	Distribution of Farm & Ranch Line of Business		Farm & Ranch Line of Business		90-Day Delinquencies(1)		Percentage
	(dollars in thousands)
By year of origination:
2010 and prior	8	%	$	670,088	$	2,425	0.36	%
2011	2	%	150,148		—		—	%
2012	5	%	370,422		966		0.26	%
2013	7	%	577,515		1,961		0.34	%
2014	6	%	462,788		4,185		0.90	%
2015	8	%	633,114		6,688		1.06	%
2016	12	%	964,303		27,263		2.83	%
2017	13	%	1,062,965		22,877		2.15	%
2018	11	%	920,834		2,317		0.25	%
2019	16	%	1,249,509		—		—	%
2020	12	%	956,164		—		—	%
Total	100	%	$	8,017,850	$	68,682	0.86	%
By geographic region(2):
Northwest	12	%	$	982,409	$	12,194	1.24	%
Southwest	33	%	2,652,211		10,055		0.38	%
Mid-North	30	%	2,395,304		23,036		0.96	%
Mid-South	13	%	1,019,365		15,525		1.52	%
Northeast	4	%	354,724		3,936		1.11	%
Southeast	8	%	613,837		3,936		0.64	%
Total	100	%	$	8,017,850	$	68,682	0.86	%
By commodity/collateral type:
Crops	51	%	$	4,107,839	$	30,667	0.75	%
Permanent plantings	23	%	1,827,060		9,050		0.50	%
Livestock	19	%	1,486,061		15,699		1.06	%
Part-time farm	6	%	502,738		401		0.08	%
Ag. Storage and Processing	1	%	86,979		12,865		14.79	%
Other	—		7,173		—		—	%
Total	100	%	$	8,017,850	$	68,682	0.86	%
By original loan-to-value ratio:
0.00% to 40.00%	18	%	$	1,413,947	$	2,017	0.14	%
40.01% to 50.00%	26	%	2,066,788		35,338		1.71	%
50.01% to 60.00%	34	%	2,757,099		28,409		1.03	%
60.01% to 70.00%	18	%	1,449,386		2,808		0.19	%
70.01% to 80.00%(3)	4	%	313,883		—		—	%
80.01% to 90.00%(3)	—	%	16,747		110		0.66	%
Total	100	%	$	8,017,850	$	68,682	0.86	%
By size of borrower exposure(4):
Less than $1,000,000	31	%	$	2,448,289	$	10,433	0.43	%
$1,000,000 to $4,999,999	36	%	2,907,722		32,982		1.13	%
$5,000,000 to $9,999,999	14	%	1,149,996		6,272		0.55	%
$10,000,000 to $24,999,999	11	%	838,074		18,995		2.27	%
$25,000,000 and greater	8	%	673,769		—		—	%
Total	100	%	$	8,017,850	$	68,682	0.86	%

⁽¹⁾Includes loans held and 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.

⁽²⁾Geographic regions:  Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

⁽³⁾Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance.

⁽⁴⁾Includes aggregated loans to single borrowers or borrower-related entities.

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Another indicator that Farmer Mac considers in analyzing the credit quality of its Farm & Ranch portfolio is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding Farm & Ranch portfolio. Assets categorized as "substandard" 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 June 30, 2020, Farmer Mac's substandard assets were $304.9 million (3.8% of the Farm & Ranch portfolio), compared to $312.3 million (4.0% of the Farm & Ranch portfolio) as of March 31, 2020 and $310.0 million (4.0% of the Farm & Ranch portfolio) as of December 31, 2019. Those substandard assets were comprised of 368 loans as of June 30, 2020, 355 loans as of March 31, 2020, and 353 loans as of December 31, 2019.

The decrease of $7.4 million in substandard assets during second quarter 2020 was primarily driven by repayments during the quarter on loans that had been classified as substandard as of the first quarter, partially offset by credit downgrades during the quarter. Substandard assets decreased as a percentage of the total on- and off-balance sheet portfolio not only because of repayments but also because the overall portfolio grew by $206.3 million. The percentage of substandard assets within the portfolio closely approximates the historical average.

Farmer Mac's average substandard assets as a percentage of its Farm & Ranch portfolio over the last 15 years is approximately 4%. Due to the COVID-19 pandemic, we believe that the substandard rate may rise above that historical average in the short-term. The full extent of the impact of the COVID-19 pandemic remains to be seen, and we will continue to monitor its impact on our substandard asset rate. The highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's then-held ethanol portfolio that Farmer Mac no longer holds. If Farmer Mac's substandard asset rate increases from current levels, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses will also increase.

Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its portfolio, which Farmer Mac believes is adequately collateralized.

The following table presents the current loan-to-value ratios for the Farm & Ranch portfolio, as disaggregated by internally assigned risk ratings:

Table 27

Farm & Ranch current loan-to-value ratio by internally assigned risk rating as of June 30, 2020
	Acceptable		Special Mention		Substandard		Total
	(in thousands)
Current loan-to-value ratio(1):
0.00% to 40.00%	$	2,512,711	$	98,178	$	96,330	$	2,707,219
40.01% to 50.00%	1,989,690		129,814		83,954		2,203,458
50.01% to 60.00%	1,633,872		102,664		73,391		1,809,927
60.01% to 70.00%	890,407		80,917		29,662		1,000,986
70.01% to 80.00%	217,471		35,690		6,787		259,948
80.01% and greater	17,883		3,689		14,740		36,312
Total	$	7,262,034	$	450,952	$	304,864	$	8,017,850

⁽¹⁾The current loan-to-value ratio is based on original appraised value (or most recently obtained appraisal, if available) and current outstanding loan amount adjusted to reflect loan amortization.

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The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Farm & Ranch loans purchased and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities as of June 30, 2020 by year of origination, geographic region, and commodity/collateral type.  The purpose of this information is to present information about realized losses relative to original Farm & Ranch purchases, guarantees, and commitments.

Table 28

Farm & Ranch Credit Losses Relative to Cumulative
Original Loans, Guarantees, and LTSPCs as of June 30, 2020
	Cumulative Original Loans, Guarantees and LTSPCs		Cumulative Net Credit Losses/(Recoveries)		Cumulative Loss Rate
	(dollars in thousands)
By year of origination:
2010 and prior	$	15,329,678	$	30,103	0.20	%
2011	780,402		3,661		0.47	%
2012	1,159,716		—		—	%
2013	1,450,157		—		—	%
2014	1,026,726		—		—	%
2015	1,183,420		(516)		(0.04)	%
2016	1,478,669		—		—	%
2017	1,553,646		—		—	%
2018	1,267,020		—		—	%
2019	1,461,128		—		—	%
2020	1,007,172				—	%
Total	$	27,697,734	$	33,248	0.12	%
By geographic region(1):
Northwest	$	3,611,959	$	11,191	0.31	%
Southwest	9,774,321		8,520		0.09	%
Mid-North	6,962,016		12,855		0.18	%
Mid-South	3,366,198		(613)		(0.02)	%
Northeast	1,562,479		323		0.02	%
Southeast	2,420,761		972		0.04	%
Total	$	27,697,734	$	33,248	0.12	%
By commodity/collateral type:
Crops	$	12,739,384	$	2,887	0.02	%
Permanent plantings	6,172,827		9,762		0.16	%
Livestock	6,299,930		3,836		0.06	%
Part-time farm	1,589,997		1,090		0.07	%
Ag. Storage and Processing	740,551		15,673		2.12	%
Other	155,045		—		—	%
Total	$	27,697,734	$	33,248	0.12	%

⁽¹⁾Geographic regions:  Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

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Analysis of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. The following tables present concentrations of Farm & Ranch loans held and loans underlying LTSPCs and off-balance sheet Farm & Ranch Guaranteed Securities by commodity type within geographic region and cumulative credit losses by origination year and commodity type:

Table 29

	As of June 30, 2020
	Farm & Ranch Concentrations by Commodity Type within Geographic Region
	Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing			Other			Total
	(dollars in thousands)
By geographic region(1):
Northwest	$	454,289		$	168,634		$	274,876		$	79,462		$	5,089		$	59		$	982,409
	5.7		%	2.1		%	3.4		%	1.0		%	0.1		%	—		%	12.3		%
Southwest	614,432			1,367,620			519,738			98,387			47,541			4,493			2,652,211
	7.7		%	17.1		%	6.5		%	1.2		%	0.6		%	0.1		%	33.2		%
Mid-North	2,027,533			11,542			210,861			124,673			18,522			2,173			2,395,304
	25.3		%	0.1		%	2.6		%	1.6		%	0.2		%	—		%	29.8		%
Mid-South	622,465			44,791			286,076			58,831			7,179			23			1,019,365
	7.7		%	0.6		%	3.6		%	0.7		%	0.1		%	—		%	12.7		%
Northeast	154,876			59,872			64,852			71,520			3,604			—			354,724
	1.9		%	0.7		%	0.8		%	0.9		%	—		%	—		%	4.3		%
Southeast	234,244			174,601			129,658			69,865			5,044			425			613,837
	2.9		%	2.2		%	1.6		%	0.9		%	0.1		%	—		%	7.7		%
Total	$	4,107,839		$	1,827,060		$	1,486,061		$	502,738		$	86,979		$	7,173		$	8,017,850
	51.2		%	22.8		%	18.5		%	6.3		%	1.1		%	0.1		%	100.0		%

⁽¹⁾Geographic regions:  Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

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Table 30

	As of June 30, 2020
	Farm & Ranch Cumulative Credit Losses by Origination Year and Commodity Type
	Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Total
	(in thousands)
By year of origination:
2010 and prior	$	3,427	$	9,762	$	3,836	$	1,066	$	12,012	$	30,103
2011	—		—		—		—		3,661		3,661
2012	—		—		—		—		—		—
2013	—		—		—		—		—		—
2014	—		—		—		—		—		—
2015	(540)		—		—		24		—		(516)
2016	—		—		—		—		—		—
2017	—		—		—		—		—		—
2018	—		—		—		—		—		—
2019	—		—		—		—		—		—
2020	—		—		—		—		—		—
Total	$	2,887	$	9,762	$	3,836	$	1,090	$	15,673	$	33,248

Rural Utilities

Farmer Mac's direct credit exposure to Rural Utilities loans held and loans underlying LTSPCs as of June 30, 2020 was $2.7 billion across 43 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Rural Utilities loans, see "Business—Farmer Mac's Lines of Business—Rural Utilities—Underwriting" in Farmer Mac’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020. As of June 30, 2020, there were no delinquencies in Farmer Mac's portfolio of Rural Utilities loans.

Farmer Mac has indirect credit exposure to Rural Utilities loans that secure AgVantage securities included in the Institutional Credit line of business. As of June 30, 2020, Farmer Mac had not experienced any credit losses on any AgVantage securities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Institutional" for more information about Farmer Mac's credit risk on AgVantage securities.

Farmer Mac has never experienced a credit loss in its Rural Utilities line of business. Upon the adoption of the current expected credit loss accounting standard ("CECL") on January 1, 2020, we are now required to forecast and disclose our expected credit losses for the expected life of our Rural Utilities portfolio assets. To do this, Farmer Mac relies upon industry data purchased from ratings agencies as well as publicly available information as disclosed in the securities filings of other major lenders who serve this industry. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses."

Farmer Mac evaluates credit risk for these assets by reviewing a variety of borrower credit risk characteristics. These characteristics can include (but is not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment.

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The following table presents Farmer Mac’s portfolio of generation and transmission ("G&T") and distribution cooperative borrowers, as well as renewable energy loans, disaggregated by internally assigned risk ratings.

Table 31

	Rural Utilities portfolio by internally assigned risk rating as of June 30, 2020
	Acceptable		Special Mention		Substandard		Total
	(in thousands)
Distribution Cooperative	$	2,098,958	$	—	$	5,014	$	2,103,972
G&T Cooperative	568,087		—		—		568,087
Renewable Energy	19,562		—		—		19,562
Rural Utilities Total	$	2,686,607	$	—	$	5,014	$	2,691,621

For more information about the credit quality of Farmer Mac's Rural Utilities portfolio and the associated allowance for losses please refer to Notes 5 and 6 of the consolidated financial statements.

Other Considerations Regarding Credit Risk Related to Loans and Guarantees

The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States.  Therefore, Farmer Mac believes that we have little or no credit risk exposure in the USDA Guarantees line of business because of the USDA guarantee.  As of June 30, 2020, Farmer Mac had not experienced any credit losses on any securities under the USDA Guarantees line of business and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Guaranteed Securities. As of June 30, 2020, Farmer Mac had executed COVID-19 payment deferments on loans with unpaid principal balances of $50.1 million underlying USDA Securities.

Farmer Mac requires most approved lenders to make representations and warranties about the conformity of eligible agricultural mortgage and Rural Utilities loans to Farmer Mac's standards, the accuracy of loan data provided to Farmer Mac, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has the ability to require a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's decision to purchase the loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred by the seller to Farmer Mac. During the previous three years ended June 30, 2020, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan. In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the agricultural real estate mortgage loans (other than rural housing and part-time farm mortgage loans) and Rural Utilities loans on which it has direct credit exposure. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria without exception. For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Farm & Ranch—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Farm & Ranch—Underwriting and Collateral Valuation (Appraisal) Standards," "Business—Farmer Mac's Lines of Business—Rural Utilities—Loan Eligibility," and "Business—Farmer Mac's Lines of Business—Rural Utilities—Underwriting" in Farmer Mac’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 25, 2020.

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Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements. Servicers are responsible to Farmer Mac for serious errors in the servicing of those loans. If a servicer materially breaches the terms of its servicing agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. During the previous three years ended June 30, 2020, Farmer Mac had not exercised any remedies or taken any formal action against any servicers. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Farm & Ranch—Servicing" and "Business—Farmer Mac's Lines of Business—Rural Utilities—Servicing" in Farmer Mac’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

Credit Risk – Institutional.  Farmer Mac is exposed to credit risk arising from its business relationships with other institutions, which include:

•issuers of AgVantage securities;

•approved lenders and servicers; and

•interest rate swap counterparties.

Farmer Mac approves AgVantage counterparties and manages institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's standards for creditworthiness for the particular counterparty type and transaction.  The required collateralization level is established when the AgVantage facility is entered into with the counterparty and does not change during the life of the AgVantage securities issued under the facility without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral any loan that becomes more than 30 days delinquent in the payment of principal or interest and to substitute an eligible loan that is current in payment to maintain the minimum required collateralization level.  Since the onset of the COVID-19 pandemic, Farmer Mac has approved and expects to continue to approve payment deferments on loans collateralizing AgVantage securities, allowing the AgVantage counterparty to keep these loans in its collateral pool without replacing them. The criteria currently in place for approving payment deferments for these loans is similar to the criteria Farmer Mac has established for loans in its Farm & Ranch portfolio that are affected by the COVID-19 pandemic.

In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. For Farm Equity AgVantage counterparties and smaller financial funds or entities, Farmer Mac also requires that the counterparty generally (1) maintain a higher collateralization level through lower loan-to-value ratio thresholds than required for traditional AgVantage securities and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Institutional Credit" in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Farm & Ranch line of business totaled $5.6 billion as of June 30, 2020 and $5.5 billion as of December 31, 2019. The unpaid principal balance of on-balance sheet AgVantage securities secured by

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loans eligible for the Rural Utilities line of business totaled $3.1 billion as of June 30, 2020 and $2.9 billion as of December 31, 2019. The unpaid principal balance of outstanding off-balance sheet AgVantage securities totaled $6.1 million as of June 30, 2020 and $7.6 million as of December 31, 2019. A $0.3 billion off-balance sheet AgVantage revolving line of credit facility was terminated during fourth quarter 2019.

The following table provides information about the issuers of AgVantage securities, as well as the required collateralization levels for those transactions as of June 30, 2020 and December 31, 2019:

Table 32

	As of June 30, 2020				As of December 31, 2019
Counterparty	Balance		Credit Rating	Required Collateralization	Balance		Credit Rating	Required Collateralization
	(dollars in thousands)
AgVantage:
CFC	$	3,062,635	A	100%	$	2,949,500	A	100%
MetLife	2,550,000		AA-	103%	2,550,000		AA-	103%
Rabo AgriFinance	2,275,000		None	110%	2,225,000		None	110%
Other(1)	494,190		None	106% to 125%	436,041		None	106% to 125%
Farm Equity AgVantage(2)	273,005		None	110%	279,705		None	110%
Total outstanding	$	8,654,830			$	8,440,246

⁽¹⁾Consists of AgVantage securities issued by 6 and 5 different issuers as of June 30, 2020 and December 31, 2019, respectively.

⁽²⁾Consists of AgVantage securities issued by 5 different issuers as of both June 30, 2020 and December 31, 2019.

Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness.  Farmer Mac monitors the financial condition of those institutions by evaluating financial statements and bank credit rating agency reports.  For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Farm & Ranch—Approved Lenders" and "Business—Farmer Mac's Lines of Business—Rural Utilities—Approved Lenders" in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, as filed with the SEC on February 25, 2020.

Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that varies based on the market value of its swap portfolio with each counterparty. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 4 to the consolidated financial statements.

Credit Risk – Other Investments. As of June 30, 2020, Farmer Mac had $0.8 billion of cash and cash equivalents and $3.5 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's internal policies as well as the liquidity and investment regulations for Farmer Mac, which were issued by FCA and which establish criteria for investments that

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are eligible for Farmer Mac's investment portfolio, including limitations on asset class, dollar amount, issuer concentration, and credit quality. In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's investment policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets.

Farmer Mac's liquidity and investment regulations and internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held.

Farmer Mac's liquidity and investment regulations and internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. Farmer Mac's liquidity and investment regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor of securities to 10% of Farmer Mac's regulatory capital ($93.4 million as of June 30, 2020). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($46.7 million as of June 30, 2020). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE.

Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework.

Interest Rate Risk.  Farmer Mac is subject to interest rate risk on all assets retained on its balance sheet because of timing differences in the cash flows of the assets and related liabilities.  This risk is primarily related to loans, loan participation interests, Farmer Mac Guaranteed Securities, and USDA Securities due to the ability of borrowers to prepay their loans before the scheduled maturities.  Cash flow mismatches in a changing interest rate environment can reduce the earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac could see a drop in income if assets repay more slowly than expected in a rising interest rate environment and the associated debt must be replaced by higher-cost debt.

Interest Rate Risk Management

The goal of interest rate risk management at Farmer Mac is to create and maintain a portfolio that generates stable earnings and value across a variety of interest rate environments. Recognizing that interest rate sensitivity may change with the passage of time and as interest rates change, Farmer Mac assesses this exposure regularly and, if necessary, adjusts its portfolio of assets and liabilities.

Farmer Mac's objective is to ensure exposure to interest rate risk is within appropriate limits, as approved by Farmer Mac's board of directors. Farmer Mac's management-level Asset and Liability Committee

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("ALCO") is tasked with oversight and approval of strategies to ensure interest rate risk remains within the board-established limits.

Farmer Mac's primary strategy for managing interest rate risk is to fund asset purchases with liabilities that have similar duration and convexity characteristics so that they will perform in a similar fashion as interest rates change. As part of the liability issuance strategy, Farmer Mac seeks to issue a blend of liabilities across a variety of maturities to help better align the liability cashflows with the asset cashflows. Along with the liability issuance strategy, Farmer Mac uses interest rate derivatives to minimize its economic exposure to cashflow mismatches.

Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its liability issuance strategy. Callable debt is issued to minimize prepayment risk associated with assets held on balance sheet. By using a blend of liabilities that includes callable debt, the interest rate sensitivities of the liabilities tend to increase or decrease as interest rates change in a manner similar to changes in the interest rate sensitivities of the assets. Farmer Mac uses financial derivatives, primarily interest rate swaps, as another tool to better match the durations of Farmer Mac's assets and liabilities, thereby reducing overall interest rate sensitivity.

Taking into consideration the prepayment provisions and the default probabilities associated with its loan assets, Farmer Mac uses prepayment models when projecting and valuing cash flows associated with these assets.  Because borrowers' behaviors in various interest rate environments may change over time, Farmer Mac periodically evaluates the effectiveness of these models compared to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts.

Changes in interest rates may affect loan prepayment rates which may, in turn, affect durations and values of the loans. Declining interest rates generally increase prepayment rates, which shortens the duration of these assets, while rising interest rates tend to slow loan prepayments, thereby extending the duration of the loans.

Farmer Mac is subject to interest rate risk on loans that Farmer Mac has committed to acquire but has not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement).  When Farmer Mac commits to purchase these loans, it is exposed to interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of those loans. Farmer Mac manages the interest rate risk related to these loans by using futures contracts involving U.S. Treasury securities and other financial derivatives.  Farmer Mac uses U.S. Treasury futures contracts as a hedge against the level of interest rates.

Farmer Mac's $0.8 billion of cash and cash equivalents mature within three months and are funded with discount notes having similar maturities. As of June 30, 2020, $3.4 billion of the $3.5 billion of investment securities (96%) were floating rate securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Those securities are funded with effectively floating rate debt that closely matches the rate adjustment dates of the associated investments.

Interest Rate Risk Metrics

Farmer Mac regularly stress tests its portfolio for interest rate risk and uses a variety of metrics to quantify and manage its interest rate risk. These metrics include sensitivity to interest rate movements of market value of equity ("MVE") and projected net effective spread ("NES") as well as duration gap analysis.

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MVE represents management's estimate of the present value of all future cash flows from on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. MVE sensitivity analysis is used to measure the degree to which the market values of Farmer Mac's assets and liabilities change for a given change in interest rates. Because this analysis evaluates the effect of interest rate movements on the value of all future cash flows, this measure provides an evaluation of Farmer Mac's long-term interest rate risk.

Farmer Mac's NES simulation represents the difference between projected income from interest-earning assets and interest expense produced by the related funding, including associated derivatives. Farmer Mac's NES may be affected by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of assets and liabilities. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest rates as well as the composition of Farmer Mac's portfolio. The NES forecast represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, NES sensitivity statistics provide a short-term view of Farmer Mac's interest rate sensitivity.

Duration is a measure of a financial instrument's sensitivity to small changes in interest rates. Duration gap is the difference between the estimated durations of Farmer Mac's assets and liabilities. Because duration is a measure of market value sensitivity, duration gap summarizes the extent to which estimated market value sensitivities for assets and liabilities are matched. Duration gap provides a relatively concise measure of the interest rate risk inherent in Farmer Mac's outstanding portfolio.

A positive duration gap denotes that the duration of Farmer Mac's assets is greater than the duration of its liabilities. A positive duration gap indicates that the market value of Farmer Mac's assets is more sensitive to small interest rate movements than is the market value of its liabilities. Conversely, a negative duration gap indicates that Farmer Mac's assets are less sensitive to small interest rate movements than are its liabilities.

Each of the metrics is produced using asset/liability models and is derived based on management's best estimates of factors such as projected interest rates, interest rate volatility, and prepayment speeds. Accordingly, these metrics should be understood as estimates rather than as precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's portfolio or changes in strategies undertaken to mitigate unfavorable sensitivities to interest rate changes.

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The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of June 30, 2020 and December 31, 2019 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:

Table 33

	Percentage Change in MVE from Base Case
Interest Rate Scenario(1)	As of June 30, 2020		As of December 31, 2019
+100 basis points	7.0	%	2.7	%
-100 basis points	(0.5)	%	(8.4)	%

	Percentage Change in NES from Base Case
Interest Rate Scenario(1)	As of June 30, 2020		As of December 31, 2019
+100 basis points	4.0	%	0.8	%
-100 basis points	(0.3)	%	0.1	%

⁽¹⁾The Down 100 basis points shock scenario was replaced with a proportional shock relative to 50% of the 3-month Treasury bill rate, with the approval of the Financial Risk Committee of the Board of Directors.

As of June 30, 2020, Farmer Mac's effective duration gap was negative 3.1 months, compared to negative 2.5 months as of December 31, 2019. Interest rates decreased significantly during the first half of 2020. This rate movement reduced the duration of Farmer Mac's assets relative to its liabilities, thereby widening Farmer Mac's duration gap.

Financial Derivatives Transactions

The economic effects of financial derivatives are included in Farmer Mac's MVE, NES, and duration gap analyses.  Farmer Mac enters into the following financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of assets, future cash flows, credit exposure, and debt issuance, not for trading or speculative purposes:

•"pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties;

•"receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties; and

•"basis swaps," in which Farmer Mac pays variable rates of interest based on one index to, and receives variable rates of interest based on another index from, counterparties.

As of June 30, 2020, Farmer Mac had $16.1 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to thirty years, of which $6.5 billion were pay-fixed interest rate swaps, $6.0 billion were receive-fixed interest rate swaps, and $3.6 billion were basis swaps.

Farmer Mac enters into interest rate swap contracts to more closely match the cash flow and duration characteristics of its assets with those of its liabilities. Interest rate swaps paired with the issuance of short-term debt can create effectively fixed rate funding that provides a similar duration match with the corresponding assets being funded.  Farmer Mac evaluates the overall cost of using the swap market as a funding alternative and uses interest rate swaps to manage interest rate risks across the balance sheet.

Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available for sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark

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interest rate (e.g., LIBOR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt.

As discussed in Note 4 to the consolidated financial statements, all financial derivatives are recorded on the balance sheet at fair value as derivative assets or as derivative liabilities. Changes in the fair values of financial derivatives are reported in "Gains/(losses) on financial derivatives" in the consolidated statements of operations. For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations. Interest accruals on derivatives designated in fair value hedge accounting relationships are also recorded in "Net interest income" in the consolidated statements of operations. For financial derivatives designated in cash flow hedge accounting relationships, the unrealized gain or loss on the derivative is recorded in other comprehensive income. Because the hedging instrument is an interest rate swap and the hedged forecasted transactions are future interest payments on variable rate debt, amounts recorded in accumulated other comprehensive income are reclassified to "Total interest expense" in conjunction with the recognition of interest expense on the debt. All of Farmer Mac's financial derivatives transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of June 30, 2020 and December 31, 2019, Farmer Mac had no uncollateralized net exposures.

Re-funding and repricing risk

In addition to being exposed to the risk of asset and liability cash flow mismatches, Farmer Mac is exposed to the risk related to changes in its cost of funds relative to floating rate market indexes (such as LIBOR) on many of the floating rate assets it holds. This exposure is referred to as "re-funding and repricing risk." Re-funding and repricing risk arises from the potential changes in funding costs when Farmer Mac funds floating rate, or synthetic floating rate, assets with floating rate liabilities with shorter maturities. Changes in Farmer Mac's funding costs relative to the benchmark rate to which the assets are indexed can cause changes to net interest income from funding those assets.

Farmer Mac is subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. In addition, many of Farmer Mac's floating rate assets have the ability to prepay before the contractual maturity date. Farmer Mac is also subject to re-funding and repricing risk on some of its fixed rate assets as a result of its use of pay-fixed receive-floating interest rate swaps that effectively convert the required funding needed from fixed rate to floating rate. These fixed rate assets are then effectively synthetically floating rate assets that require floating rate funding.

Farmer Mac can meet floating rate funding needs in several ways, including:

•issuing short-term discount notes with maturities that match the reset period of the assets;

•issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded;

•issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or

•issuing non-maturity matched, fixed-rate discount notes or medium-term notes swapped to match the interest rate reset dates of the assets as an alternative source of effectively floating rate funding.

To meet floating rate funding needs, Farmer Mac frequently uses shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with an interest rate swap because these options generally

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provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's overall liability issuance and liquidity management strategies.

However, if the funding cost of Farmer Mac’s discount notes or medium-term notes were to deteriorate relative to LIBOR (or some other market index to which the assets are being funded) during the time between when these floating rate assets were first funded and when Farmer Mac refinanced the associated debt, Farmer Mac would be exposed to a commensurate reduction in its net effective spread on the associated assets. Conversely, if the funding cost on Farmer Mac’s discount notes or medium-term notes were to improve relative to LIBOR during that time, Farmer Mac would benefit from a commensurate increase in its net effective spread on those assets.

Farmer Mac's liability issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's risk tolerance. ALCO regularly reviews Farmer Mac's liability issuance strategy to ensure that re-funding and repricing risk is appropriately managed.

As of June 30, 2020, Farmer Mac held $7.0 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indexes, primarily one-month and three-month LIBOR. As of the same date, Farmer Mac also had $6.5 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest.

Throughout the first half of 2020, Farmer Mac's funding relative to LIBOR remained stable with spreads comparable to historical averages. Farmer Mac regularly adjusts its funding strategies to mitigate the effects of spread variability from time to time and seeks to maintain an effective funding cost in the context of its overall liability management and liquidity management strategies.

Discontinuation of LIBOR

As described in "Risk Factors—Market Risk" in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020, Farmer Mac faces risks associated with the reform, replacement, or discontinuation of the LIBOR benchmark interest rate and the transition to an alternative benchmark interest rate. We are currently evaluating the potential effect on our business of the replacement of the LIBOR benchmark interest rate, including the possibility of replacement benchmark interest rates. As of June 30, 2020, Farmer Mac held $5.8 billion of floating rate assets in its lines of business and its investment portfolio, had issued $5.2 billion of floating rate debt, and had entered into $15.9 billion notional amount of interest rate swaps, each of which reset based on LIBOR. In addition, our Non-Cumulative Series C Preferred Stock currently pays a fixed rate of interest until July 17, 2024. It becomes redeemable at our option on July 18, 2024 and thereafter pays interest at a floating rate equal to three-month LIBOR plus 3.260%. The market transition away from LIBOR and towards an alternative benchmark interest rate that may be developed is expected to be complicated and may require the development of term and credit adjustments to accommodate for differences between the benchmark interest rates. The transition may also result in different financial performance for previously booked transactions, require different hedging strategies, or require renegotiation of previously booked transactions. As of June 30, 2020, we have issued $1.0 billion in medium-term notes based on the Secured Overnight Financing Rate (SOFR), a potential alternative benchmark interest rate.

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Liquidity and Capital Resources

Farmer Mac's primary sources of funds to meet its liquidity and funding needs are the proceeds of its debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and maturities of AgVantage securities. Farmer Mac regularly accesses the capital markets for funding, and Farmer Mac has maintained access to the capital markets at favorable rates through first quarter 2020. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the public capital markets. As of June 30, 2020, Farmer Mac had outstanding discount notes of $2.5 billion, medium-term notes that mature within one year of $8.4 billion, and medium-term notes that mature after one year of $10.5 billion.

Assuming continued access to the capital markets, Farmer Mac believes it has sufficient liquidity and capital resources to support its operations for the next 12 months and for the foreseeable future. Farmer Mac also has a contingency funding plan to manage unanticipated disruptions in its access to the capital markets. That plan involves borrowing through repurchase agreement arrangements and the sale of liquid assets. Farmer Mac must maintain a minimum of 90 days of liquidity under its liquidity and investment regulations. Under the methodology for calculating available days of liquidity prescribed by those regulations, Farmer Mac maintained an average of 212 days of liquidity during second quarter 2020 and had 212 days of liquidity as of June 30, 2020. ALCO regularly reviews Farmer Mac's liquidity position and ensures the required minimums are maintained.

Farmer Mac maintains cash, cash equivalents (including U.S. Treasury securities and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs.  Farmer Mac's current policies authorize liquidity investments in:

•obligations of or fully guaranteed by the United States or a U.S. government agency;

•obligations of or fully guaranteed by GSEs;

•municipal securities;

•international and multilateral development bank obligations;

•money market instruments;

•diversified investment funds;

•asset-backed securities;

•corporate debt securities; and

•mortgage-backed securities.

The following table presents these assets as of June 30, 2020 and December 31, 2019:

Table 34

	As of June 30, 2020		As of December 31, 2019
	(in thousands)
Cash and cash equivalents	$	827,600	$	604,381
Investment securities:
Guaranteed by U.S. Government and its agencies	1,816,385		1,842,640
Guaranteed by GSEs	1,677,742		1,143,323
Asset-backed securities	18,321		18,912
Total	$	4,340,048	$	3,609,256

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The increase in the investment portfolio since December 31, 2019 was to provide a greater level of liquidity in response to the COVID-19 pandemic, to prepare for the possibility of future volatility in the debt capital markets, and to support program asset growth as the overall funding needs for the balance sheet increased.

Capital Requirements. Farmer Mac is subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of June 30, 2020, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level I" (the highest compliance level).

In accordance with FCA's rule on capital planning, Farmer Mac's board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of June 30, 2020 and December 31, 2019, Farmer Mac's Tier 1 capital ratio was 13.4% and 12.9%, respectively. The increase in our Tier 1 capital ratio was due to the fact that capital growth, which reflects the issuance of the Series E Preferred Stock, outpaced the growth in risk-weighted assets during second quarter 2020. As of June 30, 2020, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition.

For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—Capital Standards" in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020. See Note 8 to the consolidated financial statements for more information about Farmer Mac's capital position.

Regulatory Matters

In response to the economic effects of the COVID-19 pandemic, FCA has issued regulatory guidance to encourage Farmer Mac to work with its lending and servicing partners in approving servicing actions for borrowers impacted by COVID-19, including working with other Farm Credit System institutions on approvals for loans to which statutory borrower rights are attached (primarily in LTSPCs). FCA also provided guidance about under what circumstances loans with approved servicing actions due exclusively to the economic effects of the COVID-19 pandemic should not be classified as nonaccrual or troubled debt restructurings.

Also, In response to the COVID-19 pandemic and the related economic effects, Congress passed a series of stimulus measures, including the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"), which contained a $9.5 billion emergency fund for the USDA aimed toward providing help to livestock, dairy, and produce providers who sell locally. It also included a $14 billion replenishment of the CCC, a line of credit at the U.S. Treasury Department that USDA can use to help crop and livestock producers. On April 17, 2020, USDA announced that it would provide $19 billion of assistance through the Coronavirus Food Assistance Program ("CFAP"). CFAP used the funding and authorities provided in the CARES Act, the Families First Coronavirus Response Act, and other USDA existing authorities to provide $16 billion in direct support to farmers and ranchers based on actual losses from disruptions to prices and market supply chains and for projected impacts to marketing costs resulting from lost demand and short-term oversupply for the 2020 marketing year caused by the coronavirus. As part of the CFAP,

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USDA also announced that it would purchase $3 billion in fresh produce, dairy, and meat. These purchases are aimed at propping up commodity prices while providing commodities to food banks, community and faith based organizations, and other non-profits serving Americans in need. Through the end of July, more than $14.5 billion in economic support has been delivered to farm businesses under the CARES Act through a combination of direct payments and loans. In addition to legislation and stimulus in response to COVID-19, Farmer Mac continues to monitor the establishment and evolution of legislation and regulations that could affect farmers, ranchers, rural lenders, and rural America in general.

Under a provision of the Agricultural Improvement Act of 2018, known as the "Farm Bill," Farmer Mac's charter was amended effective June 18, 2020 to expand the acreage exception to the loan amount limitation on Farm & Ranch loans (currently $13.2 million) from 1,000 acres to 2,000 acres, meaning that the statutory loan amount limitation does not apply to Farm & Ranch loans secured by 2,000 acres of agricultural real estate or less. Farmer Mac will continue to evaluate this increase in the acreage limitation to determine the potential benefits to Farmer Mac's customers and the related effects on our business.

Other Matters

The expected effects of recently issued accounting pronouncements on the consolidated financial statements are presented in Note 1(d) to the consolidated financial statements.

Supplemental Information

The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume:

Table 35

New Business Volume
	Farm & Ranch				USDA Guarantees		Rural Utilities				Institutional Credit
	Loans		LTSPCs		USDA Securities		Loans		LTSPCs		AgVantage		Total
	(in thousands)
For the quarter ended:
June 30, 2020	$	609,284	$	85,390	$	224,016	$	339,366	$	19,500	$	430,024	$	1,707,580
March 31, 2020	401,853		73,674		147,906		152,668		—		560,395		1,336,496
December 31, 2019	602,750		65,614		143,565		102,900		—		371,075		1,285,904
September 30, 2019	309,805		125,022		113,664		117,279		—		402,611		1,068,381
June 30, 2019	248,152		57,321		118,335		105,000		—		659,447		1,188,255
March 31, 2019	203,156		91,215		57,223		546,198		—		825,417		1,723,209
December 31, 2018	285,008		80,840		90,297		3,000		—		585,814		1,044,959
September 30, 2018	192,628		64,100		116,339		—		—		1,085,953		1,459,020
June 30, 2018	224,101		126,066		129,960		—		—		825,203		1,305,330
For the year ended:
December 31, 2019	$	1,363,863	$	339,172	$	432,787	$	871,377	—		$	2,258,550	$	5,265,749
December 31, 2018	960,848		430,071		460,121		11,645		—		3,310,307		5,172,992

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Table 36

Repayments of Assets by Line of Business
	Farm & Ranch						USDA Guarantees		Rural Utilities				Institutional Credit
	Loans		Guaranteed Securities		LTSPCs		USDA Securities		Loans		LTSPCs		AgVantage		Total
	(in thousands)
For the quarter ended:
Scheduled	$	101,264	$	3,043	$	39,010	$	37,879	$	23,589	$	25,132	$	471,295	$	701,212
Unscheduled	248,890		4,034		92,177		154,536		3,935		—		—		503,572
June 30, 2020	$	350,154	$	7,077	$	131,187	$	192,415	$	27,524	$	25,132	$	471,295	$	1,204,784
Scheduled	$	128,768	$	6,132	$	50,393	$	43,069	$	34,235	$	13,593	$	304,540	$	580,730
Unscheduled	191,260		3,888		60,442		78,806		—		—		—		334,396
March 31, 2020	$	320,028	$	10,020	$	110,835	$	121,875	$	34,235	$	13,593	$	304,540	$	915,126
Scheduled	$	57,488	$	4,737	$	39,878	$	25,142	$	10,317	$	10,551	$	656,095	$	804,208
Unscheduled	105,671		3,247		74,121		66,011		34,063		—		13,000		296,113
December 31, 2019	$	163,159	$	7,984	$	113,999	$	91,153	$	44,380	$	10,551	$	669,095	$	1,100,321
Scheduled	$	97,421	$	3,095	$	22,713	$	27,853	$	31,656	$	8,692	$	441,575	$	633,005
Unscheduled	129,676		2,663		76,883		39,442		—		—		1,088		249,752
September 30, 2019	$	227,097	$	5,758	$	99,596	$	67,295	$	31,656	$	8,692	$	442,663	$	882,757
Scheduled	$	39,879	$	3,758	$	58,779	$	38,676	$	6,951	$	17,092	$	612,964	$	778,099
Unscheduled	64,912		3,399		58,979		43,044		—		—		—		170,334
June 30, 2019	$	104,791	$	7,157	$	117,758	$	81,720	$	6,951	$	17,092	$	612,964	$	948,433
Scheduled	$	112,973	$	5,843	$	74,054	$	41,266	$	31,492	$	7,660	$	470,812	$	744,100
Unscheduled	67,608		1,798		50,482		46,798		24,448		—		5,587		196,721
March 31, 2019	$	180,581	$	7,641	$	124,536	$	88,064	$	55,940	$	7,660	$	476,399	$	940,821
Scheduled	$	36,006	$	8,331	$	35,682	$	24,793	$	6,321	$	16,062	$	568,277	$	695,472
Unscheduled	56,299		9,257		33,319		21,135		20,538		—		—		140,548
December 31, 2018	$	92,305	$	17,588	$	69,001	$	45,928	$	26,859	$	16,062	$	568,277	$	836,020
Scheduled	$	73,476	$	5,677	$	21,742	$	28,135	$	25,640	$	8,286	$	1,102,798	$	1,265,754
Unscheduled	77,492		4,562		47,159		35,068		3,476		—		9,760		177,517
September 30, 2018	$	150,968	$	10,239	$	68,901	$	63,203	$	29,116	$	8,286	$	1,112,558	$	1,443,271
Scheduled	$	33,075	$	8,391	$	31,067	$	36,983	$	353	$	8,699	$	759,223	$	877,791
Unscheduled	86,426		8,273		69,539		66,601		51,306		—		—		282,145
June 30, 2018	$	119,501	$	16,664	$	100,606	$	103,584	$	51,659	$	8,699	$	759,223	$	1,159,936
For the year ended:
Scheduled	$	307,761	$	17,433	$	195,424	$	132,937	$	80,416	$	43,995	$	2,181,446	$	2,959,412
Unscheduled	367,867		11,107		260,465		195,295		58,511		—		19,675		912,920
December 31, 2019	$	675,628	$	28,540	$	455,889	$	328,232	$	138,927	$	43,995	$	2,201,121	$	3,872,332
Scheduled	$	253,290	$	36,484	$	158,548	$	130,722	$	58,821	$	33,047	$	2,822,608	$	3,493,520
Unscheduled	293,719		27,021		231,221		165,993		90,272		120,022		9,760		938,008
December 31, 2018	$	547,009	$	63,505	$	389,769	$	296,715	$	149,093	$	153,069	$	2,832,368	$	4,431,528

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Table 37

Lines of Business - Outstanding Business Volume
	Farm & Ranch						USDA Guarantees		Rural Utilities				Institutional Credit
	Loans		Guaranteed Securities		LTSPCs		USDA Securities		Loans		LTSPCs		AgVantage		Total
	(in thousands)
As of:
June 30, 2020	$	5,617,512	$	90,225	$	2,310,113	$	2,677,807	$	2,101,568	$	590,053	$	8,654,830	$	22,042,108
March 31, 2020	5,358,382		97,302		2,355,910		2,646,206		1,789,726		595,685		8,696,101		21,539,312
December 31, 2019	5,276,557		107,322		2,393,071		2,620,175		1,671,293		609,278		8,440,246		21,117,942
September 30, 2019	4,836,966		115,306		2,441,456		2,567,763		1,612,773		619,829		8,738,266		20,932,359
June 30, 2019	4,754,258		121,064		2,416,030		2,521,394		1,527,150		628,521		8,778,318		20,746,735
March 31, 2019	4,610,897		128,221		2,476,467		2,484,779		1,429,101		645,613		8,731,835		20,506,913
December 31, 2018	4,588,322		135,862		2,509,787		2,515,620		938,843		653,273		8,382,817		19,724,524
September 30, 2018	4,420,619		287,594		2,363,805		2,471,251		962,702		669,335		8,365,280		19,540,586
June 30, 2018	4,378,958		297,833		2,368,606		2,418,115		991,819		677,621		8,391,885		19,524,837

Table 38

On-Balance Sheet Outstanding Business Volume
	Fixed Rate		5- to 10-Year ARMs & Resets		1-Month to 3-Year ARMs		Total Held in Portfolio
	(in thousands)
As of:
June 30, 2020	$	10,793,629	$	2,845,266	$	5,076,445	18,715,340
March 31, 2020	10,296,598		2,818,869		4,996,478		18,111,945
December 31, 2019	10,045,712		2,863,199		4,702,577		17,611,488
September 30, 2019	9,642,802		2,850,000		4,549,689		17,042,491
June 30, 2019	9,446,117		2,825,151		4,601,917		16,873,185
March 31, 2019	9,206,082		2,720,639		4,643,506		16,570,227
December 31, 2018	8,325,347		2,717,505		4,705,169		15,748,021
September 30, 2018	7,945,007		2,629,612		4,986,987		15,561,606
June 30, 2018	7,551,149		2,594,399		5,398,021		15,543,569

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The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:

Table 39

	Net Effective Spread by Line of Business
	Farm & Ranch				USDA Guarantees				Rural Utilities				Institutional Credit				Corporate				Net Effective Spread
	Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield
	(dollars in thousands)
For the quarter ended:
June 30, 2020(1)	$	16,733	1.71	%	$	4,689	0.81	%	$	5,516	1.15	%	$	18,782	0.86	%	$	749	0.08	%	$	46,469	0.89	%
March 31, 2020	14,938		1.64	%	4,625		0.81	%	4,920		1.14	%	17,702		0.84	%	1,978		0.21	%	44,163		0.89	%
December 31, 2019	16,374		1.90	%	4,363		0.78	%	4,871		1.17	%	18,008		0.85	%	2,375		0.27	%	45,991		0.95	%
September 30, 2019	13,181		1.66	%	4,314		0.79	%	4,502		1.16	%	17,807		0.84	%	2,657		0.30	%	42,461		0.90	%
June 30, 2019(1)	13,335		1.72	%	4,097		0.76	%	3,996		1.10	%	17,371		0.82	%	2,556		0.34	%	41,355		0.91	%
March 31, 2019	12,737		1.70	%	3,964		0.74	%	3,233		1.12	%	16,373		0.79	%	2,494		0.35	%	38,801		0.89	%
December 31, 2018	13,288		1.79	%	4,630		0.85	%	2,833		1.19	%	15,751		0.80	%	2,353		0.36	%	38,855		0.93	%
September 30, 2018	13,887		1.91	%	4,627		0.86	%	2,877		1.18	%	15,642		0.78	%	2,044		0.30	%	39,077		0.93	%
June 30, 2018	13,347		1.86	%	4,398		0.83	%	2,923		1.15	%	15,220		0.76	%	274		0.04	%	36,162		0.86	%

⁽¹⁾See Note 10 to the consolidated financial statements for a reconciliation of GAAP net interest income by line of business to net effective spread by line of business for the three months ended June 30, 2020 and 2019.

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The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders:

Table 40

	Core Earnings by Quarter End
	June 2020		March 2020		December 2019		September 2019		June 2019		March 2019		December 2018		September 2018		June 2018
	(in thousands)
Revenues:
Net effective spread	$	46,469	$	44,163	$	45,991	$	42,461	$	41,355	$	38,801	$	38,855	$	39,077	$	36,162
Guarantee and commitment fees	4,943		4,896		5,432		5,208		5,276		5,419		5,309		5,170		5,171
Other	1,048		674		100		389		777		509		(129)		110		111
Total revenues	52,460		49,733		51,523		48,058		47,408		44,729		44,035		44,357		41,444
Credit related expense/(income):
Provision for/(release of) losses	51		3,831		2,851		623		420		(393)		166		(3)		582
REO operating expenses	—		—		—		—		64		—		—		—		—
(Gains)/losses on sale of REO	—		(485)		—		—		—		—		—		41		(34)
Total credit related expense/(income)	51		3,346		2,851		623		484		(393)		166		38		548
Operating expenses:
Compensation and employee benefits	8,087		10,127		6,732		7,654		6,770		7,606		7,167		6,777		6,936
General and administrative	5,295		5,363		5,773		5,253		4,689		4,596		5,829		4,350		5,202
Regulatory fees	725		725		725		688		687		688		687		625		625
Total operating expenses	14,107		16,215		13,230		13,595		12,146		12,890		13,683		11,752		12,763
Net earnings	38,302		30,172		35,442		33,840		34,778		32,232		30,186		32,567		28,133
Income tax expense	8,016		6,598		7,526		7,018		7,351		6,715		6,431		6,891		5,477
Preferred stock dividends	3,939		3,431		3,432		3,427		3,785		3,296		3,296		3,295		3,296
Core earnings	$	26,347	$	20,143	$	24,484	$	23,395	$	23,642	$	22,221	$	20,459	$	22,381	$	19,360
Reconciling items:
Gains/(losses) on undesignated financial derivatives due to fair value changes	8,700		(6,484)		4,469		(7,117)		10,485		2,240		(96)		3,625		6,709
(Losses)/gains on hedging activities due to fair value changes	(2,676)		(5,925)		(220)		(4,535)		(1,438)		(2,817)		(853)		1,051		1,687
Unrealized (losses)/gains on trading assets	(20)		106		172		49		61		44		57		(3)		11
Amortization of premiums/discounts and deferred gains on assets consolidated at fair value	35		3		40		(7)		(139)		(16)		67		(38)		196
Net effects of terminations or net settlements on financial derivatives	720		(1,300)		1,339		232		(592)		110		(312)		546		232
Issuance costs on the retirement of preferred stock	—		—		—		—		(1,956)		—		—		—		—
Income tax effect related to reconciling items	(1,419)		2,856		(1,218)		2,389		(1,759)		92		238		(1,088)		(1,855)
Net income attributable to common stockholders	$	31,687	$	9,399	$	29,066	$	14,406	$	28,304	$	21,874	$	19,560	$	26,474	$	26,340

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Item 3.Quantitative and Qualitative Disclosures About Market Risk

Farmer Mac is exposed to market risk from changes in interest rates.  Farmer Mac manages this market risk by entering into various financial transactions, including financial derivatives, and by monitoring and measuring its exposure to changes in interest rates.  See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" for more information about Farmer Mac's exposure to interest rate risk and its strategies to manage that risk.  For information about Farmer Mac's use of financial derivatives and related accounting policies, see Note 4 to the consolidated financial statements.

Item 4.Controls and Procedures

Management's Evaluation of Disclosure Controls and Procedures. Farmer Mac maintains disclosure controls and procedures designed to ensure that information required to be disclosed in its periodic filings under the Securities Exchange Act of 1934 (“Exchange Act”), including this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to Farmer Mac's management on a timely basis to allow decisions about required disclosure. Management, including Farmer Mac's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of Farmer Mac's disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2020.

Farmer Mac carried out the evaluation of the effectiveness of its disclosure controls and procedures, required by paragraph (b) of Exchange Act Rules 13a-15 and 15d-15, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Farmer Mac's disclosure controls and procedures were effective as of June 30, 2020.

Changes in Internal Control Over Financial Reporting. There were no changes in Farmer Mac's internal control over financial reporting during the three months ended June 30, 2020 that have materially affected, or are reasonably likely to materially affect, Farmer Mac's internal control over financial reporting.

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PART II

Item 1.Legal Proceedings

None.

Item 1A.Risk Factors

The risk factors in this section update and supplement the risk factors described in "Risk Factors" in Part I, Item 1A of Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 ("2019 Form 10-K"), as filed with the SEC on February 25, 2020, and as updated by Farmer Mac's Current Report on Form 8-K filed with the SEC on April 6, 2020 and Farmer Mac's Quarterly Report on Form 10-Q, as filed with the SEC on May 11, 2020. The primary risks to our business and how we seek to manage those risks are also described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management," in the 2019 Form 10-K and in this report. The risks we face could materially affect our business, operations, operating results, financial condition, liquidity, capital levels, or future results and could cause our actual results to differ materially from our past results or the results contemplated by any forward-looking statements we make.

Farmer Mac’s efforts to manage and mitigate these risk factors may be unsuccessful, and the effectiveness of these efforts and the extent to which the COVID-19 pandemic affects Farmer Mac’s business, results of operations, and financial condition will depend on factors beyond its control, including: the duration, severity, and spread of the pandemic; third-party and government actions taken to contain COVID-19 or treat its impact and mitigate public health and economic effects; the nature and extent of the deferments approved for borrowers negatively affected by COVID-19; the conduct of agricultural producer borrowers in response to the COVID-19 pandemic and how quickly and to what extent affected borrowers can recover from the negative economic impact of the pandemic; and how quickly and to what extent normal economic and operating conditions can resume, including whether any future COVID-19 outbreaks interrupt economic recovery. Even after the COVID-19 pandemic is over, Farmer Mac may continue to experience material adverse effects to its business as a result of the disruption in the global economy, the domestic agricultural economy, and any resulting recession. Because there have been no comparable recent global pandemics that resulted in similar global macroeconomic impact, Farmer Mac does not yet know the full extent of the effects on its business, operations, or the global economy as a whole, but they could materially and adversely affect Farmer Mac’s business, operations, operating results, financial condition, liquidity, or capital levels as discussed in more detail below.

The effects of the COVID-19 pandemic are uncertain and could have a material adverse effect on Farmer Mac's business, operations, operating results, financial condition, liquidity, or capital levels.

The COVID-19 pandemic is creating extensive disruptions to the global economy and to the lives of individuals throughout the world. Governments, businesses, and the public are taking unprecedented actions to contain the spread of COVID-19 and to mitigate its effects, including quarantines, social distancing, travel bans and restrictions, shelter in place orders, closures of businesses and schools, fiscal stimulus, and legislation designed to deliver monetary aid and other relief. The scope, duration, and full effects of COVID-19 remain uncertain, but it is clear that the pandemic and related efforts to contain it have disrupted global economic activity, altered and affected the functioning of financial markets, increased economic and market uncertainty, and disrupted trade and supply chains, and may continue to do so for the foreseeable future. Although Farmer Mac has not observed a material effect on its business from the effects of the COVID-19 pandemic, if these effects continue for a protracted period or result in

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sustained economic stress or prolonged recession, many of the risks identified in Farmer Mac’s 2019 Form 10-K could be exacerbated and could manifest in a number of ways related to credit, collateral, customer demand, funding, operations, interest rate risk, and human capital, possibly with materially greater material adverse effect than Farmer Mac currently anticipates.

The effects of the COVID-19 pandemic may negatively affect counterparties’ profitability and ability to repay their loans and other obligations in Farmer Mac’s portfolio, which could have a material adverse effect on Farmer Mac’s financial condition, results of operations, liquidity, or capital levels.

Farmer Mac assumes the ultimate credit risk of borrower defaults on its agricultural mortgage and rural utilities loan assets, including AgVantage securities, and Farmer Mac's earnings depend significantly on their performance. Farmer Mac recognizes that the COVID-19 pandemic may continue to create significant stress for agricultural and rural borrowers because of disruptions to employees, markets, transportation, and other factors important to their operations. If the effects of COVID-19 result in widespread and sustained repayment shortfalls on loans in Farmer Mac's portfolio or defaults by AgVantage counterparties, Farmer Mac could incur significant credit losses, particularly if conditions cause land and asset values to deteriorate and the available collateral is insufficient to cover Farmer Mac's exposure, which likely would have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

Concentrated exposure to a particular borrower or AgVantage counterparty may exacerbate the credit risk Farmer Mac faces from the effects of the COVID-19 pandemic, which could materially and adversely affect its business, operating results, or financial condition.

Farmer Mac may be subject to credit risk due to concentrated exposure to a particular borrower. Farmer Mac’s Farm & Ranch portfolio consists of loans varying in size and by borrower, including large exposures ($25 million or more) to individual borrowers. The default of any one of these borrowers due to the effects of the COVID-19 pandemic could negatively affect Farmer Mac's financial condition. Farmer Mac also has concentrated exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by eligible loans held by the issuing institution. Although AgVantage securities are collateralized by eligible loans in a principal amount equal to or greater than the principal amount of the securities outstanding, Farmer Mac could suffer losses if the counterparty defaults and the market value of the loan collateral has declined, whether due to the negative effects of the COVID-19 pandemic or otherwise. If an AgVantage counterparty experiences stress in its loan collateral portfolio due to increased borrower defaults, whether from the effects of the COVID-19 pandemic or otherwise, it may also increase the likelihood of the AgVantage counterparty defaulting. Taking possession of the loan collateral upon a default by the AgVantage counterparty could also result in higher current expected credit losses for Farmer Mac's loans held on balance sheet, as well as increased capital requirements, particularly if those loans are experiencing default or stress due to COVID-19. Most of Farmer Mac's AgVantage exposure is concentrated in a small number of issuers. As of June 30, 2020, $7.9 billion of the $8.7 billion of AgVantage securities outstanding had been issued by three counterparties. A default by any of these counterparties could have a significant adverse effect on Farmer Mac's business, operating results, or financial condition.

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Disruptions in the food supply chain due to the COVID-19 pandemic could have a negative effect on borrowers' profitability and repayment capacity, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

The COVID-19 pandemic has caused and may continue to cause restrictions and closures of businesses, including agricultural producers, as employers and government authorities respond to the public health crisis. Not only could these restrictions and closures affect the profitability of the businesses experiencing them, but disruptions in the supply chain related to the pandemic may also put downward pressure on the demand for agricultural commodities and products and negatively affect the profitability of those producers. Borrowers who have loans in Farmer Mac's portfolio and who are experiencing negative effects on their profitability from restrictions or closures or from supply chain disruptions may also experience challenges in their ability to repay those loans. These effects may be exacerbated the longer these conditions continue. Widespread and prolonged restrictions, closures, and supply chain disruptions due to the COVID-19 pandemic that negatively affect agricultural producers could lead to significant delinquencies and defaults in Farmer Mac's loan portfolio, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

A large number of loan payment deferments resulting from the COVID-19 pandemic could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

As the negative economic conditions triggered by the COVID-19 pandemic continue, Farmer Mac has observed an increase in payment deferment requests from loan servicers on behalf of borrowers to help them avoid default on their loans, and we expect those requests to continue to increase. For more information on Farmer Mac's Farm & Ranch payment deferments, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans & Guarantees." Farmer Mac funds these loans through its issuance of debt in the capital markets. If Farmer Mac approves a significant volume of deferment requests for loans held in its portfolio, it will receive diminished or no income on these loans for a period of time while still having required debt payments, which could materially and adversely affect Farmer Mac's financial condition, results of operations, liquidity, or capital levels. Deferment requests may also come from borrowers whose loans collateralize securities on which Farmer Mac has guaranteed timely payment of principal and interest. If Farmer Mac approves a significant volume of deferment requests for loans collateralizing these guaranteed securities, Farmer Mac will be required to make guarantee payments to the holders of many of these securities, or may elect to repurchase the loans from the pools collateralizing these securities, either of which could materially and adversely affect Farmer Mac's financial condition, results of operations, liquidity, or capital levels. In response to the COVID-19 pandemic, Oregon enacted House Bill 4204 (effective June 30, 2020) establishing temporary prohibitions on foreclosure, events of default, late payment penalties, and loan deferrals. Other states could follow suit. If several states or the federal government enact similar legislation and Farmer Mac was required to forgive, forbear, or defer all or part of borrowers' loan payments under the new legislation, Farmer Mac's volume of payment deferments could significantly increase, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.

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The effects of the COVID-19 pandemic may affect the demand for Farmer Mac’s secondary market, the price or marketability of Farmer Mac’s products, and Farmer Mac’s ability to offer its products and services, which could materially and adversely affect Farmer Mac's business, operating results, financial condition, or capital levels.

The success of Farmer Mac's business may be affected by a variety of external factors that may affect the price or marketability of Farmer Mac's products and services, including disruptions in the capital markets, changes in interest rates that may increase Farmer Mac's funding costs, and reduced demand for Farmer Mac’s products due to economic conditions. The increase in Farmer Mac's business volume in second quarter 2020 was primarily attributable to historically low interest rates and pent-up demand that drove strong market demand from borrowers taking advantage of low interest rates on long-term funding. Farmer Mac experienced strong demand from our two main Rural Utilities counterparties as well as widespread robust demand among our network of active Farm & Ranch sellers. Changes in interest rates and the continued effects of COVID-19 on economic activity could negatively affect the demand for or profitability of Farmer Mac’s products and services by farmers, ranchers, rural utilities, and their lenders, which could materially and adversely affect Farmer Mac’s business, operating results, financial condition, or capital levels.

Disruptions in the equity and debt capital markets from the COVID-19 pandemic could have a material adverse effect on Farmer Mac's business, operating results, financial condition, liquidity, capital levels, or its ability to offer competitive products.

Farmer Mac's ability to operate its business, meet its obligations, generate asset volume growth, and fulfill its statutory mission depends on Farmer Mac's capacity to remain adequately capitalized through the issuance of equity and debt securities at favorable rates and terms in the U.S. financial markets. Farmer Mac's potential for growth and future net income depends in part on Farmer Mac's ability to access equity markets to raise efficient capital. The issuance of debt securities is Farmer Mac's primary source for repaying or refinancing existing debt, and one of the primary sources of Farmer Mac's revenue is the net interest income earned from the difference, or "spread," between the return received on assets held and the related borrowing costs. Farmer Mac’s daily access to the debt capital markets continued to be strong through the date of this report. If the recent disruptions and volatility in the U.S. financial markets related to the COVID-19 pandemic continues or intensifies in a way that prevents Farmer Mac from accessing those markets to issue equity or debt securities at favorable rates and terms, Farmer Mac's business, operating results, or financial condition could be adversely affected.

The COVID-19 pandemic has exposed Farmer Mac to increased cybersecurity risk and operational risk, which could adversely affect Farmer Mac’s business, results of operations, or financial condition.

Farmer Mac relies on business processes that largely depend on people, technology, and the use of complex systems and models to manage its business, including access to information systems and models as well as information, applications, payment systems, and other services provided by third parties. In response to the challenges presented by the COVID-19 pandemic, Farmer Mac has modified its business practices to focus on protecting its employees and the public while continuing to fulfill its critical mission and maintaining its regular business operations in support of the farmers, ranchers, and rural utilities of America. On March 12, 2020, Farmer Mac activated its Business Continuity Plan (“BCP”) and has been operating uninterrupted since then with all of its employees working remotely from their homes. Farmer Mac has provided guidance and support to its employees to ensure that they have the tools and knowledge needed to effectively work from home, and Farmer Mac’s technology platform and BCP have been functioning as designed in support of all functions of the organization. Nonetheless, because the

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technology in employees’ homes may not be as robust as in Farmer Mac’s offices and could cause the networks, information systems, applications, and other tools available to employees to be more limited or less reliable than Farmer Mac’s in-office technology, the continuation of these work-from-home measures introduces additional operational risk. These risks include but are not limited to greater cybersecurity risks, strain on the local technology networks for remote operations, and potential impairment of the ability to perform critical functions, all of which could adversely affect Farmer Mac’s business, results of operations, and financial condition. Farmer Mac regularly monitors attempts by third parties to gain unauthorized access to its network and information systems through cyber-attacks. Despite the increased cybersecurity risks presented by a workforce that is operating entirely remotely, Farmer Mac is not aware of any cyber-attacks or other privacy or data security incidents through the date of this report that negatively affected the confidentiality, integrity, or availability of Farmer Mac’s information resources.

Operational disruptions or challenges due to the COVID-19 pandemic faced by third parties upon whom Farmer Mac relies in its own business operations could have a material adverse impact on its results of operations or financial condition.

Farmer Mac relies on many third parties, including vendors that supply essential services and local and federal government agencies, offices, and courthouses, in the performance of its business operations. In light of measures undertaken as a result of the COVID-19 pandemic, many of these entities have limited and may continue to limit the access and availability of their services. For example, Farmer Mac has observed delays in loan closings related to reductions in available staff in recording offices or the closing of courthouses to walk-in traffic in some rural counties, which is slowing the established process and turnaround times for title work and mortgage and UCC filings in those counties. Reduced personnel at or closures of USDA field offices as a result of the COVID-19 pandemic could negatively affect growth in Farmer Mac’s USDA Guarantees line of business because that business depends on obtaining a valid assignment of guarantee signed by an authorized USDA official. Farmer Mac continues to closely monitor the third parties who provide the information and services required to operate its business and their ability to continue to operate effectively in the face of the nationwide challenges posed by COVID-19. These entities include loan servicers; providers of financial information, systems, and analytical tools; providers of electronic payment and settlement systems; and providers of information technology infrastructure and business continuity services. Farmer Mac had not identified any significant disruptions with these third parties that had materially affected Farmer Mac’s business operations as of the date of this report. If some of the identified limitations in the availability of some services continue for a prolonged period or if additional limitations or potential disruptions in the ability to provide services materialize (which may be caused by a third party’s own financial or operational difficulties), it may inhibit or otherwise negatively affect the normal operations and processes for Farmer Mac’s business, which could have a material adverse impact on its results of operations or financial condition.

The effects of the COVID-19 pandemic on interest rates could materially and adversely affect Farmer Mac’s net income, operating results, or financial condition.

Farmer Mac is exposed to interest rate risk that could materially and adversely affect its business, operating results, or financial condition and changes in interest rates relative to Farmer Mac’s management of interest rate risk through derivatives may cause volatility in financial results and capital levels and may adversely affect Farmer Mac’s net income, liquidity position, or operating results. Farmer Mac’s financing activities, hedging activities, net effective spread, and profitability could be negatively affected by volatility in interest rates caused by uncertainties stemming from COVID-19, as evidenced by the recent actions of the Federal Reserve to significantly lower the target range for the federal funds rate based on concerns about the disruption to economic activity. Farmer Mac's primary strategy for managing

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interest rate risk is to fund asset purchases with liabilities that have similar duration and convexity characteristics so that they will perform similarly as interest rates change. However, a prolonged period of extremely volatile and unstable market conditions would likely increase Farmer Mac’s hedging and funding costs while negatively affecting market risk mitigation strategies. In that scenario, Farmer Mac may adjust its funding strategy for long-term fixed rate assets. Alternative funding strategies could result in greater exposure to re-funding risk and higher income volatility from changes in interest rates and movements in re-funding terms and spreads to benchmark indices such as LIBOR, which could have a material adverse effect on Farmer Mac's net income, operating results, or financial condition.

Significant disruption in the continuity of Farmer Mac's employees or executive leaders from the COVID-19 pandemic may materially and adversely affect Farmer Mac's business performance, operations, or financial condition.

Farmer Mac relies on its employees' breadth and depth of knowledge of Farmer Mac and the industries in which it operates to run its business operations successfully. A significant percentage of Farmer Mac’s employees and executive leaders live and work in the geographic region of its main office in Washington, D.C, with about 25% of the total workforce distributed in other geographic locations in the United States. This concentration of Farmer Mac's personnel, technology, and facilities increases Farmer Mac's risk of business disruptions if the negative impacts of the COVID-19 pandemic affect the Washington, D.C. metropolitan area disproportionately compared to other regions of the country. If Farmer Mac experiences widespread cases of COVID-19 among its employees, it would place more pressure on the remaining employees to perform all functions across the organization, could require Farmer Mac to divert or expend more resources to cover key personnel functions, and could impair the company’s ability to conduct business. A significant disruption in the continuity of Farmer Mac's employees or executive leaders caused by the COVID-19 pandemic could materially and adversely affect Farmer Mac's business performance, operations, or financial condition.

Disruption in the operations of Farmer Mac’s service providers caused by the COVID-19 pandemic or from government or third-party responses to the COVID-19 pandemic could materially and adversely affect Farmer Mac’s business, operating results, or financial condition.

Farmer Mac relies on many third-party service providers to conduct its business, including loan servicers, information systems providers, software-as-a-service (SaaS) providers, cloud computing service providers, consultants on key technology initiatives, and other service providers. Although Farmer Mac has continued to operate effectively through a fully remote workforce, disruptions in the operations of Farmer Mac’s third-party service providers caused by COVID-19-related illnesses or government or third-party actions taken to mitigate the public health effects of the COVID-19 pandemic, including stay-at-home orders, could impact Farmer Mac’s operations, which could materially and adversely affect Farmer Mac’s business, operating results, or financial condition.

The trading price for Farmer Mac's Class C non-voting common stock may be volatile due to market influences, trading volume, the effects of equity awards for Farmer Mac's officers, directors, and employees, or sales of significant amounts of the stock by large holders.

The trading price of Farmer Mac's Class C non-voting common stock ("Class C stock") has at times experienced substantial price volatility and may continue to be volatile. For example, from January 2020 to July 2020, the closing price of the Class C stock ranged from $43.02 per share to $83.55 per share. The trading price may fluctuate in response to various factors, including short sales, hedging, the presence or absence of a share repurchase program, stock market influences in general that are unrelated to Farmer

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Mac's operating performance (including COVID-19), or sales of significant amounts of the stock by large holders. Farmer Mac typically grants equity awards each year that are based on the Class C stock, including grants that vest over time or upon the achievement of specified performance goals. Sales of stock acquired upon vesting or the exercise of equity awards by Farmer Mac's officers, directors, or employees, whether under an established trading plan or otherwise, could adversely affect the trading price of the Class C stock.

As to the potential effect of sales of significant amounts of the Class C stock by large holders, Farmer Mac is aware of a regulatory action that could result in significant sales by Zions Bancorporation, National Association (“Zions”), which held 803,820 shares of Class C stock (approximately 8.7% of the outstanding shares) as of June 30, 2020. In a letter granting conditional approval of a proposed merger involving Zions, the applicable federal regulator found that, although Zions had requested to maintain its ownership in Farmer Mac’s Class C stock after the merger, the continued ownership of Class C stock (held by Zions' holding company before the merger) would not be a permissible investment for the surviving national bank entity of the merger based on then-current precedent. Under the terms of the conditional approval letter, Zions was to divest its ownership of the Class C stock by September 30, 2020, however Zions has indicated in its Quarterly Report filed on Form 10-Q on May 6, 2020, that the regulator has granted approval for Zions to extend the original sale deadline from September 30, 2020 to a date which will enable an orderly sale of its Farmer Mac Class C stock. Even though the regulator has made the determination to allow Zions to sell the Class C stock over an extended period, Zions is still required to sell all or a significant amount of its remaining Class C stock, and those sales could adversely affect the trading price of Farmer Mac’s Class C stock. The merger condition related to Zions’ ownership of Class C stock does not apply to Zions’ ownership of 322,100 shares of Farmer Mac’s Class A voting common stock (approximately 31.25% of the outstanding shares of that stock as of June 30, 2020).

All of these factors may be exacerbated during periods of low trading volume for Farmer Mac's Class C stock, which has averaged approximately 50,000 shares daily during 2020, and may have a prolonged negative effect on its trading price or increase price volatility.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)Farmer Mac is a federally chartered instrumentality of the United States whose debt and equity securities are exempt from registration under Section 3(a)(2) of the Securities Act of 1933. During second quarter 2020, the following transactions occurred related to Farmer Mac's equity securities that were not registered under the Securities Act of 1933 and were not otherwise reported on a Current Report on Form 8-K:

Class C Non-Voting Common Stock. Under Farmer Mac's policy that permits directors of Farmer Mac to elect to receive shares of Class C non-voting common stock in lieu of their cash retainers, Farmer Mac issued an aggregate of 317 shares of its Class C non-voting common stock in April 2020 to the three directors who elected to receive stock in lieu of their cash retainers. Farmer Mac calculated the number of shares issued to the directors based on a price of $55.63 per share, which was the closing price of the Class C non-voting common stock on March 31, 2020 (the last trading day of the previous quarter) as reported by the New York Stock Exchange.

On April 1, 2020, Farmer Mac granted an aggregate of 19,825 shares of time-vested restricted stock units under its Amended and Restated 2008 Omnibus Incentive Plan at a grant price of $52.25 per share to 34 employees as incentive compensation. All of these shares of restricted stock units granted to each

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employee will "cliff" vest on April 15, 2023 if the employee remains employed by Farmer Mac on that date.

(b)Not applicable.

(c)None.

Item 3.Defaults Upon Senior Securities

(a) None.

(b) None.

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

(a) None.

(b) None.

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Item 6.Exhibits

**	3.1	—	Title VIII of the Farm Credit Act of 1971, as most recently amended on June 18, 2020.
*	3.2	—	Amended and Restated By-Laws of the Registrant (Previously filed as Exhibit 3.1 to Form 8-K filed May 12, 2020).
*	4.1	—	Specimen Certificate for Farmer Mac Class A Voting Common Stock (Previously filed as Exhibit 4.1 to Form 10-Q filed May 15, 2003).
*	4.2	—	Specimen Certificate for Farmer Mac Class B Voting Common Stock (Previously filed as Exhibit 4.2 to Form 10-Q filed May 15, 2003).
*	4.3	—	Specimen Certificate for Farmer Mac Class C Non-Voting Common Stock (Previously filed as Exhibit 4.3 to Form 10-Q filed May 15, 2003).
*	4.4	—	Specimen Certificate for 5.875% Non-Cumulative Preferred Stock, Series A (Previously filed as Exhibit 4.4.1 to Form 10-Q filed May 9, 2013).
*	4.4.1	—	Certificate of Designation of Terms and Conditions of 5.875% Non-Cumulative Preferred Stock, Series A (Previously filed as Exhibit 4.1 to Form 8-A filed January 17, 2013).
*	4.5	—	Specimen Certificate for 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.6 to Form 10-Q filed August 11, 2014).
*	4.5.1	—	Certificate of Designation of Terms and Conditions of 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.1 to Form 8-A filed June 20, 2014).
*	4.6	—	Specimen Certificate for 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.7 to Form 10-Q filed August 1, 2019).
*	4.6.1	—	Certificate of Designation of Terms and Conditions of 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.1 to Form 8-A filed May 13, 2019).
**	4.7	—	Specimen Certificate for 5.750% Non-Cumulative Preferred Stock, Series E .
*	4.7.1	—	Certificate of Designation of Terms and Conditions of 5.750% Non-Cumulative Preferred Stock, Series E (Previously filed as Exhibit 4.1 to Form 8-A filed May 20, 2020).
**	4.8	—	Description of the Registrant's securities that are registered under Section 12 of the Securities Exchange Act of 1934.
*	10.1	—	Form of Performance-Based Restricted Stock Award Agreement for grants made to non-directors on or after March 3, 2020 (Previously filed as Exhibit 10.1 to Form 8-K filed March 10, 2020).
*	21	—	List of the Registrant's subsidiaries (Previously filed as Exhibit 21 to Form 10-K filed March 8, 2018).
**	31.1	—	Certification of Registrant's principal executive officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	31.2	—	Certification of Registrant's principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	32	—	Certification of Registrant's principal executive officer and principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**	101.INS	—	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
**	101.SCH	—	Inline XBRL Taxonomy Extension Schema
**	101.CAL	—	Inline XBRL Taxonomy Extension Calculation
**	101.DEF	—	Inline XBRL Taxonomy Extension Definition
**	101.LAB	—	Inline XBRL Taxonomy Extension Label
**	101.PRE	—	Inline XBRL Taxonomy Extension Presentation
**	104	—	Cover Page Inline Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document included as Exhibit 101

*	Incorporated by reference to the indicated prior filing.
**	Filed with this report.
#	Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
†	Management contract or compensatory plan.

128

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION

/s/ Bradford T. Nordholm		August 10, 2020
By:	Bradford T. Nordholm	Date
	President and Chief Executive Officer
	(Principal Executive Officer)

/s/ Aparna Ramesh		August 10, 2020
By:	Aparna Ramesh	Date
	Executive Vice President - Chief Financial Officer and Treasurer
	(Principal Financial Officer)

129

EX-3.1

EXHIBIT 3.1

Title VIII of the Farm Credit Act of 1971, as amended

12 U.S.C. 2279 aa et seq.

As of August 18, 2020

AGRICULTURAL MORTGAGE SECONDARY MARKET

Subtitle A — Establishment and Activities of Federal Agricultural Mortgage Corporation

12 U.S.C. 2279aa SEC. 8.0. DEFINITIONS.

For purposes of this title:

(1) AGRICULTURAL REAL ESTATE. — The term "agricultural real estate" means —

(A) a parcel or parcels of land, or a building or structure affixed to the parcel or parcels, that —

(i) is used for the production of one or more agricultural commodities or products: and

(ii) consists of a minimum acreage or is used in producing minimum annual receipts, as determined by the Corporation; or

(B)  principal residence that is a single family, moderate‑priced residential dwelling located in a rural area, excluding —

(i) any community having a population in excess of 2,500 inhabitants; and

(ii) any dwelling,excluding the land to which the dwelling is affixed, with a value exceeding $100,000 (as adjusted for inflation).

(2) BOARD. — The term "Board" means the board of directors established under section 8.2.

(3) CERTIFIED FACILITY. — The term "certified facility" means —

(A) an agricultural mortgage marketing facility that is certified under section 8.5; or

(B) the Corporation and any affiliate thereof.

(4) CORPORATION. — The term "Corporation" means the Federal Agricultural Mortgage Corporation established in section 8.1.

(5) GUARANTEE. — The term "guarantee" means the guarantee of timely payment of the principal and interest on securities representing interests in, or obligations backed by, pools of qualified loans, in accordance with this title.

(6) ORIGINATOR. — The term "originator" means any Farm Credit System institution, bank, insurance company, business and industrial development company, savings and loan association, association of agricultural producers, agricultural cooperative, commercial finance company, trust company, credit union, or other entity that originates and services agricultural mortgage loans.

(7) QUALIFIED LOAN. — The term "qualified loan" means an obligation —

(A)  (i) that is secured by a fee‑simple or leasehold mortgage with status as a first lien on agricultural real estate located in the United States that is not subject to any legal or equitable claims deriving from a preceding fee‑simple or leasehold mortgage;

(ii) of —

(I)  a citizen or national of the United States or an alien lawfully admitted for permanent residence in the United States; or

(II)  a private corporation or partnership whose members, stockholders, or partners holding a majority interest in the corporation or partnership are individuals described in subclause (I); and

(iii) of a person, corporation, or partnership that has training or farming experience that, under criteria established by the Corporation, is sufficient to ensure a reasonable likelihood that the loan will be repaid according to its terms;

(B)  that is the portion of a loan guaranteed by the Secretary of Agriculture pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.), except that —

(i)  subsections (b) and (c) of section 8.6, and sections 8.8 and 8.9, shall not apply to the portion of a loan guaranteed by the Secretary or to an obligation, pool, or security representing an interest in or obligation backed by a pool of obligations relating to the portion of a loan guaranteed by the Secretary; and

(ii)  the portion of a loan guaranteed by the Secretary shall be considered to meet all standards for qualified loans for all purposes under this Act; or

(C)  that is a loan, or an interest in a loan, for an electric or telephone facility by a cooperative lender to a borrower that has received, or is eligible to receive, a loan under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.).

(8) STATE. — The term "State" has the meaning given such term in section 5.51.

12 U.S.C. 2279aa-1 SEC. 8.1. FEDERAL AGRICULTURAL MORTGAGE CORPORATION. —

(a) ESTABLISHMENT. —

(1)  IN GENERAL. — There is hereby established a corporation to be known as the Federal Agricultural Mortgage Corporation, which shall be a federally chartered instrumentality of the United States.

(2)  INSTITUTION WITHIN FARM CREDIT SYSTEM. — The Corporation shall be an institution of the Farm Credit System.

(3)  LIABILITY. —

(A)  CORPORATION. — The Corporation shall not be liable for any debt or obligation of any other institution of the Farm Credit System.

(B)  SYSTEM INSTITUTIONS. — The Farm Credit System and System institutions (other than the Corporation) shall not be liable for any debt or obligation of the Corporation.

(b)  DUTIES. — The Corporation shall —

(1)  in consultation with originators, develop uniform underwriting, security appraisal, and repayment standards for qualified loans;

         (2) determine the eligibility of agricultural mortgage marketing facilities to contract with the Corporation for the provision of guarantees for specific mortgage pools;

(3) provide guarantees for the timely repayment of principal and interest on securities representing interests in, or obligations backed by, pools of qualified loans;and

(4) purchase qualified loans and issue securities representing interests in, or obligations backed by, the qualified loans, guaranteed for the timely repayment of principal and interest.

12 U.S.C. 2279aa-2 SEC. 8.2. BOARD OF DIRECTORS. —

(a)  IN GENERAL. —

(1)  ESTABLISHMENT. — The Corporation shall be under the management of the board of directors.

(2)  COMPOSITION. — The Board shall consist of 15 members, of which —

(A)  5 members shall be elected by holders of common stock that are insurance companies, banks, or other financial institutions or entities:

(B)  5 members shall be elected by holders of common stock that are Farm Credit System institutions; and

(C)  5 members shall be appointed by the President, by and with the advice and consent of the Senate —

(i)   which members shall not be, or have been, officers or directors of any financial institutions or entities;

(ii)   which members shall be representatives of the general public;

(iii)   of which members not more than 3 shall be members of the same political party; and

(iv)   of which members at least 2 shall be experienced in farming or ranching.

(3)  VACANCY. —

(A)  ELECTED MEMBERS. — Subject to paragraph (5), a vacancy among the members elected to the Board in the manner described in subparagraph (A) or (B) of paragraph (2) shall be filled by the Board from among persons eligible for election to the position for which the vacancy exists.

(B)  APPOINTED MEMBERS. — A vacancy among the members appointed to the Board under paragraph (2)(C) shall be filled in the manner in which the original appointment was made.

(4)  CONTINUATION OF MEMBERSHIP. — If —

(A)  any member of the Board who was appointed or elected to the Board from among persons who are representatives of banks, other financial institutions or entities, insurance companies, or Farm Credit System institutions ceases to be such a representative; or

(B)  any member who was appointed from persons who are not or have not been directors or officers of any financial institution or entity becomes a director or an officer of any financial institution or entity;

        such member may continue as a member for not longer than the 45-day period beginning on the date such member ceases to be such a representative, officer, or employee or becomes such a director or officer, as the case may be.

(5)  TERMS. —

(A)  APPOINTED MEMBERS. — The members appointed by the President shall serve at the pleasure of the President.

(B)   ELECTED MEMBERS. — The members elected under subparagraphs (A) and (B) of subsection (b)(2) of this section shall each be elected annually for a term ending on the date of the next annual meeting of the common stockholders of the Corporation and shall serve until their successors are elected and qualified. Any seat on the Board that becomes vacant after the annual election of the directors shall be filled by the members of the Board from the same category of directors, but only for the unexpired portion of the term.

(C)  VACANCY APPOINTMENT. — Any member appointed to fill a vacancy occurring before the expiration of the term for which the predecessor of the member was appointed shall be appointed only for the remainder of such term.

(D)  SERVICE AFTER EXPIRATION OF TERM. — A member may serve after the expiration of the term of the member until the successor of the member has taken office.

(6)  QUORUM. — 8 members of the Board shall constitute a quorum.

(7)  NO ADDITIONAL PAY FOR FEDERAL OFFICERS OR EMPLOYEES. — Members of the Board who are full-time officers or employees of the United States shall receive no additional pay by reason of service on the Board.

(8)   CHAIRPERSON. — The President shall designate 1 of the members of the Board who are appointed by the President as the chairperson of the Board.

(9)  MEETINGS. — The Board shall meet at the call of the chairperson or a majority of its members.

(b)  OFFICERS AND STAFF. — The Board may appoint, employ, fix the pay of, and provide other allowances and benefits for such officers and employees of the Corporation as the Board determines to be appropriate.

12 U.S.C. 2279aa-3 SEC. 8.3. POWERS AND DUTIES OF CORPORATION AND BOARD. —

(a) GUARANTEES. — After the Board has been duly constituted, subject to the other provisions of this title and other commitments and requirements established pursuant to law, the Corporation may provide guarantees on terms and conditions determined by the Corporation of securities issued on the security of, or in participation in, pooled interests in qualified loans.

(b) DUTIES OF THE BOARD. —

(1)  IN GENERAL. The Board shall —

(A)  determine the general policies that shall govern the operations of the Corporation;

(B)  select, appoint, and determine the compensation of qualified persons to fill such offices as may be provided for in the bylaws of the Corporation; and

(C)  assign to such persons such executive functions, powers, and duties as may be prescribed by the bylaws of the Corporation or by the Board.

(2)  EXECUTIVE OFFICERS AND FUNCTIONS. — The persons elected or appointed under paragraph (1)(B) shall be the executive officers of the Corporation and shall discharge the executive functions, powers, and duties of the Corporation.

(c) POWERS OF THE CORPORATION. — The Corporation shall be a body corporate and shall have the following powers:

(1) To operate under the direction of its Board.

(2) To issue stock in the manner provided in section 8.4.

(3) To adopt, alter, and use a corporate seal which shall be judicially noted.

(4) To provide for a president, 1 or more vice presidents, secretary, treasurer, and such other officers, employees, and agents as may be necessary, define their duties and compensation levels, all without regard to Title 5, United States Code, and require surety bonds or make other provisions against losses occasioned by acts of such persons.

(5) To provide guarantees in the manner provided under section 8.6.

(6) To have succession until dissolved by a law enacted by the Congress.

(7) To prescribe bylaws, through the Board, not inconsistent with law, that shall provide for —

(A)  the classes of the stock of the Corporation; and

(B)  the manner in which —

(i)   the stock shall be issued, transferred, and retired;

(ii)    the officers, employees, and agents of the Corporation are selected;

(iii)   the property of the Corporation is acquired, held, and transferred;

(iv)   the commitments and other financial assistance of the Corporation are made;

(v)    the general business of the Corporation is conducted; and

(vi)   the privileges granted by law to the Corporation are exercised and enjoyed;

(8) To prescribe such standards as may be necessary to carry out this title.

(9) To enter into contracts and make payments with respect to the contracts.

(10) To sue and be sued in its corporate capacity and to complain and defend in any action brought by or against the Corporation in any State or Federal court of competent jurisdiction.

(11) To make and perform contracts, agreements, and commitments with persons and entities both inside and outside of the Farm Credit System.

(12) To acquire, hold, lease, mortgage or dispose of, at public or private sale, real and personal property, purchase or sell any securities or obligations, and otherwise exercise all the usual incidents of ownership of property necessary and convenient to the business of the Corporation.

(13) To purchase, hold, sell, or assign a qualified loan, to issue a guaranteed security, representing an interest in, or an obligation backed by, the qualified loan, and to perform all the functions and responsibilities of an agricultural mortgage marketing facility operating as a certified facility under this title.

(14) To establish, acquire, and maintain affiliates (as such term is defined in section 8.11(e)) under applicable State laws to carry out any activities that otherwise would be performed directly by the Corporation under this title.

(15) To exercise such other incidental powers as are necessary to carry out the powers, duties, and functions of the Corporation in accordance with this title.

(d)  FEDERAL RESERVE BANKS AS DEPOSITORIES AND FISCAL AGENTS. — The Federal Reserve banks shall act as depositories for, andas fiscal agents or custodians of, the Corporation.

         (e) ACCESS TO BOOK-ENTRY SYSTEM. — The Corporation shall have access to the book-entry system of the Federal Reserve System.

12 U.S.C. 2279aa-4 SEC. 8.4. STOCK ISSUANCE —

(a) VOTING COMMON STOCK. —

(1)  ISSUE. —

        (A) IN GENERAL. — The Corporation shall issue voting common stock having such par value as may be fixed by the Board from time to time.

        (B) NUMBER OF VOTES. — Each share of voting common stock shall be entitled to one vote with rights of cumulative voting at all elections of directors.

        (C) OFFERS. —

         (i) IN GENERAL. — The Board shall offer the voting common stock to banks, other financial institutions, insurance companies, and System institutions under such terms and conditions as the Board may adopt.

         (ii) REQUIREMENTS. — The voting common stock shall be fairly and broadly offered to ensure that—

(I)  no institution or institutions acquire a disproportionate share of the total quantity of the voting common stock outstanding of a class of stock; and

(II)  capital contributions and issuances of voting common stock for the contributions are fairly distributed between entities eligible to hold class A stock and class B stock.

        (D) CLASSES OF STOCK. —

         (i) IN GENERAL. — The stock shall be divided into two classes with the same par value per share.

         (ii) CLASS A STOCK. — Class A stock may be held only by entities that are not Farm Credit System institutions and that are entitled to vote for directors specified in section 8.2(a)(2)(A), including national banking associations (which shall be allowed to purchase and hold such stock).

         (iii) CLASS B STOCK. — Class B stock may be held only by Farm Credit System institutions that are entitled to vote for directors specified in section 8.2(a)(2)(B).

(2)  LIMITATION ON ISSUE. — After the date the Board first meets with a quorum of its members present, voting common stock of the Corporation may be issued only to originators and certified facilities.

(3)  AUTHORITY OF BOARD TO ESTABLISH TERMS AND PROCEDURES. — The Board shall adopt such terms, conditions, and procedures with regard to the issue of stock under this section as may be necessary, including the establishment of a maximum amount limitation on the number of shares of voting common stock that may be outstanding at any time.

(4)  TRANSFERABILITY. — Subject to such limitations as the Board may impose, any share of any class of voting common stock issued under this section shall be transferable among the institutions or entities to which shares of such class of common stock may be offered under paragraph (1), except that, as to the Corporation, such shares shall be transferable only on the books of the Corporation.

(5)  MAXIMUM NUMBER OF SHARES. — No stockholder, other than a holder of class B stock, may own, directly or indirectly, more than 33 percent of the outstanding shares of such class of the voting common stock of the Corporation.

(b) REQUIRED CAPITAL CONTRIBUTIONS.—

(1) IN GENERAL — The Corporation may require each originator and each certified facility to make, or commit to make, such nonrefundable capital contributions to the Corporation as are reasonable and necessary to meet the administrative expenses of the Corporation.

(2) STOCK ISSUED AS CONSIDERATION FOR CONTRIBUTION. — The Corporation, from time to time, shall issue to each originator or certified facility voting common stock evidencing any capital contributions made pursuant to this subsection.

(c) DIVIDENDS. —

(1) IN GENERAL. — Such dividends as may be declared by the Board, in the discretion of the Board, shall be paid by the Corporation to the holders of the voting common stock of the Corporation pro rata based on the total number of shares of both classes of stock outstanding.

(2) RESERVES REQUIREMENT. — No dividend may be declared or paid by the Board under this section unless the Board determines that adequate provision has been made for the reserve required under section 8.10(c)(1).

(3) DIVIDENDS PROHIBITED WHILE OBLIGATIONS ARE OUTSTANDING. — No dividend may be declared or paid by the Board under this section while any obligation issued by the Corporation to the Secretary of the Treasury under section 8.13 remains outstanding.

(d) NONVOTING COMMON STOCK. — The Corporation is authorized to issue nonvoting common stock having such par value as may be fixed by the Board from time to time. Such nonvoting common stock shall be freely transferable, except that, as to the Corporation, such stock shall be transferable only on the books of the Corporation. Such dividends as may be declared by the Board, in the discretion of the Board, may be paid by the Corporation to the holders of the nonvoting common stock of the Corporation, subject to paragraphs (2) and (3) of subsection (c) of this section.

(e)  PREFERRED STOCK. —

(1)  AUTHORITY OF BOARD. — The Corporation is authorized to issue nonvoting preferred stock having such par value as may be fixed by the Board from time to time. Such preferred stock issued shall be freely transferable, except that, as to the Corporation, such stock shall be transferred only on the books of the Corporation.

(2)  RIGHTS OF PREFERRED STOCK. — Subject to paragraphs (2) and (3) of subsection (c) of this section, the holders of the preferred stock shall be entitled to such rate of cumulative dividends, and such holders shall be subject to such redemption or other conversion provisions, as may be provided for at the time of issuance. No dividends shall be payable on any share of common stock at any time when any dividend is due on any share of preferred stock and has not been paid.

(3)  PREFERENCE OF TERMINATION OF BUSINESS. — In the event of any liquidation, dissolution, or winding up of the business of the Corporation, the holders of the preferred shares of stock shall be

paid in full at the par value thereof, plus all accrued dividends, before the holders of the common shares receive any payment.

12 U.S.C. 2279aa-5 SEC. 8.5. CERTIFICATION OF AGRICULTURAL MORTGAGE MARKETING      FACILITIES. —

(a)  ELIGIBILITY STANDARDS. —

(1)  ESTABLISHMENT REQUIRED. — Within 120 days after the date on which the Board first meets with a quorum present, the Corporation shall issue standards for the certification of agricultural mortgage marketing facilities (other than the Corporation), including eligibility standards in accordance with paragraph (2).

(2)  MINIMUM REQUIREMENTS. — To be eligible to be certified under the standards referred to in paragraph (1), an agricultural mortgage marketing facility (other than the Corporation) shall —

(A)  be an institution of the Farm Credit System or a corporation, association, or trust organized under the laws of the United States or of any State;

(B)  meet or exceed capital standards established by the Board;

(C)  have as one of the purposes of the facility, the sale or resale of securities representing interests in, or obligations backed by, pools of qualified loans that have been provided guarantees by the Corporation;

(D)  demonstrate managerial ability with respect to agricultural mortgage loan underwriting, servicing, and marketing that is acceptable to the Corporation;

(E)  adopt appropriate agricultural mortgage loan underwriting, appraisal, and servicing standards and procedures that meet or exceed the standards established by the Board;

(F)  for purposes of enabling the Corporation to examine the facility, agree to allow officers or employees of the Corporation to have access to all books, accounts, financial records, reports, files, and all other papers, things, or property, of any type whatsoever, belonging to or used by the Corporation that are necessary to facilitate an examination of the operations of the facility in connection with securities, and the pools of qualified loans that back securities, for which the Corporation has provided guarantees; and

(G)  adopt appropriate minimum standards and procedures relating to loan administration and disclosure to borrowers concerning the terms and rights applicable to loans for which guarantee is provided, in conformity with uniform standards established by the Corporation.

(3)  NONDISCRIMINATION REQUIREMENT. — The standard established under this subsection shall not discriminate between or against Farm Credit System and non-Farm Credit System applicants.

(b)  CERTIFICATION BY CORPORATION.  — Within 60 days after receiving an application for certification under this section, the Corporation shall certify the facility if the facility meets the standards established by the Corporation under subsection (a)(1) of this section.

(c)  MAXIMUM TIME PERIOD FOR CERTIFICATION. — Any certification by the Corporation of an agricultural mortgage marketing facility shall be effective for a period determined by the Corporation of not to exceed 5 years.

(d)  REVOCATION. —

(1)  IN GENERAL. — After notice and an opportunity for a hearing, the Corporation may revoke the certification of an agricultural mortgage marketing facility if the Corporation determines that the facility no longer meets the standards referred to in subsection (a) of this section.

(2)  EFFECT OF REVOCATION. — Revocation of a certification shall not affect any pool guarantee that has been issued by the Corporation.

(e)  AFFILIATION OF FCS INSTITUTIONS WITH FACILITY. —

(1)  ESTABLISHMENT OF AFFILIATE AUTHORIZED. — Notwithstanding any other provision of this Act, any Farm Credit System institution acting for such institution alone or in conjunction with one or more other such institutions, may establish and operate as an affiliate, an agricultural mortgage marketing facility if, within a reasonable time after such establishment, such facility obtains and thereafter retains certification under subsection (b) of this section as a certified facility.

(2)  EXCLUSIVE AGENCY AGREEMENT AUTHORIZED. — Any number of Farm Credit System institutions (other than the Corporation) may enter into an agreement with any certified facility (including an affiliate established under paragraph (1)) to sell the qualified loans of such institutions exclusively to or through the facility.

12 U.S.C. 2279aa-6 SEC. 8.6. GUARANTEE OF QUALIFIED LOANS. —

(a)  GUARANTEE AUTHORIZED FOR CERTIFIED FACILITIES. —

(1)  IN GENERAL. — Subject to the requirements of this section and on such other terms and conditions as the Corporation shall consider appropriate, the Corporation—

(A)shall guarantee the timely payment of principal and interest on the securities issued by a certified facility that represents interests solely in, or obligations fully backed by, any pool consisting solely of qualified loans which meet the applicable standards established under section 8.8 and which are held by such facility; and

(B) may issue a security, guaranteed as to the timely payment of principal and interest, that represents an interest solely in, or an obligation fully backed by, a pool consisting of qualified loans that —

(i)   meet the applicable standards established under section 8.8; and

(ii)  have been purchased and held by the Corporation.

(2)  INABILITY OF FACILITY TO PAY. — If the facility is unable to make any payment of principal or interest on any security for which a guarantee has been provided by the Corporation under paragraph (1) of this section the Corporation shall make such payment as and when due in cash and on such payment shall be subrogated fully to the rights satisfied by such payment.

(3)  POWER OF CORPORATION. — Notwithstanding any other provision of law, the Corporation is empowered, in connection with any guarantee under this subsection, whether before or after any default, to provide by contract with the facility for the extinguishment, on default by the facility, of any redemption, equitable, legal, or other right, title, or interest of the facility in any mortgage or mortgages constituting the pool against which the guaranteed securities are issued. With respect to any issue of guaranteed securities, in the event of default and pursuant otherwise to the terms of the contract, the mortgages that constitute such pool shall become the absolute

property of the Corporation subject only to the unsatisfied rights of the holder of the securities based on and backed by such pool.

(b)  OTHER RESPONSIBILITIES OF AND LIMITATIONS ON CERTIFIED FACILITIES. — As a condition for providing any guarantees under this section for securities issued by a certified facility that represent interests in, or obligations backed by, any pool of qualified loans, the Corporation shall require such facility to agree to comply with the following requirements:

(1)  LOAN DEFAULT RESOLUTION. — The facility shall act in accordance with the standards of a prudent institutional lender to resolve loan defaults.

(2)  SUBROGATION OF UNITED STATES AND CORPORATION TO INTERESTS OF FACILITY. — The proceeds of any collateral, judgments, settlements or guarantees received by the facility with respect to any loan in such pool, shall be applied, after payment of costs of collection —

(A)  first, to reduce the amount of any principal outstanding on any obligation of the Corporation that was purchased by the Secretary of the Treasury under section 8.13 to the extent the proceeds of such obligation were used to make guarantees in connection with such securities: and

(B)  second, to reimburse the Corporation for any such guarantee payments.

(3)  LOAN SERVICING. — The originator of any loan in such pool shall be permitted to retain the right to service the loan.

(4)  MINORITY PARTICIPATION IN PUBLIC OFFERINGS. — The facility shall take such steps as may be necessary to ensure that minority owned or controlled investment banking firms, underwriters, and bond counsels throughout the United States have an opportunity to participate to a significant degree in any public offering of securities.

(5)  NO DISCRIMINATION AGAINST STATES WITH BORROWERS RIGHTS. — The facility may not refuse to purchase qualified loans originating in States that have established borrowers rights laws either by statute or under the constitution of such States, except that the facility may require discounts or charge fees reasonably related to costs and expenses arising from such statutes or constitutional provisions.

(c)  ADDITIONAL AUTHORITY OF THE BOARD. — To ensure the liquidity of securities for which guarantees have been provided under this section, the Board shall adopt appropriate standards regarding —

(1)  the characteristics of any pool of qualified loans serving as collateral for such securities; and

(2)  transfer requirements.

           (d) PURCHASE OF GUARANTEED SECURITIES. —

(1)  PURCHASE AUTHORITY. — The Corporation (and affiliates) may purchase, hold, and sell any securities guaranteed under this section by the Corporation that represent interests in, or obligations backed by, pools of qualified loans. Securities issued under this section shall have maturities and bear rates of interest as determined by the Corporation.

(2) ISSUANCE OF DEBT OBLIGATIONS. — The Corporation (and affiliates) may issue debt obligations solely for the purpose of obtaining amounts for the purchase of any securities under paragraph (1), for the purchase of qualified loans (as defined in section 8.0), and for maintaining reasonable amounts for business operations (including adequate liquidity) relating to activities under this subsection.

(3) TERMS AND LIMITATIONS. —

(A)  TERMS. — The obligations issued under this subsection shall have maturities and bear rates of interest as determined by the Corporation, and may be redeemable at the option of the Corporation before maturity in the manner stipulated in the obligations.

(B)  REQUIREMENT. — Each obligation shall clearly indicate that the obligation is not an obligation of, and is not guaranteed as to principal and interest by, the Farm Credit Administration, the United States, or any other agency or instrumentality of the United States (other than the Corporation).

(C) AUTHORITY. — The Corporation may not issue obligations pursuant to paragraph (2) under this subsection while any obligation issued by the Corporation under section 8.13(a) remains outstanding.

12 U.S.C. 2279aa-7 SEC. 8.7. [REPEALED]

12 U.S.C. 2279aa-8 SEC. 8.8. STANDARDS FOR QUALIFIED LOANS. —

(a)  STANDARDS. —

(1)  IN GENERAL. — The Corporation shall establish underwriting, security appraisal, and repayment standards for qualified loans taking into account the nature, risk profile, and other differences between different categories of qualified loans.

(2)  SUPERVISION, EXAMINATION, AND REPORT OF CONDITION. — The standards shall be subject to the authorities of the Farm Credit Administration under section 8.11.

(3)  MORTGAGE LOANS. — In establishing standards for qualified loans, the Corporation shall confine corporate operations, so far as practicable, to mortgage loans that are deemed by the Board to be of such quality so as to meet, substantially and generally, the purchase standards imposed by private institutional mortgage investors.

(b)  MINIMUM CRITERIA. — To further the purpose of this title to provide a new source of long‑term fixed rate financing to assist farmers and ranchers to purchase agricultural real estate, the standards established by the Board pursuant to subsection (a) with respect to loans secured by agricultural real estate of this section shall, at a minimum —

(1)  provide that no agricultural mortgage loan with a loan‑to‑value ratio in excess of 80 percent may be treated as a qualified loan;

(2)  require each borrower to demonstrate sufficient cash-flow to adequately service the agricultural mortgage loan;

(3)  contain sufficient documentation standards;

(4)  contain adequate standards to protect the integrity of the appraisal process with respect to any agricultural mortgage loans;

(5)  contain adequate standards to ensure that the farmer or rancher is or will be actively engaged in agricultural production, and require the borrower to certify to the originator that the borrower intends to continue agricultural production on the farm or ranch involved;

(6)  minimize speculation in agricultural real estate for nonagricultural purposes; and

(7)  in establishing the value of agricultural real estate, consider the purpose for which the real estate is taxed.

(c)  LOAN AMOUNT LIMITATION. —

(1)  IN GENERAL. — A loan secured by agricultural real estate may not be treated as a qualified loan if the principal amount of such loan exceeds $2,500,000, adjusted for inflation, except as provided in paragraph (2).

(2)  ACREAGE EXCEPTION. — Paragraph (1) shall not apply with respect to any agricultural mortgage loan described in such paragraph if such loan is secured by agricultural real estate that, in the aggregate, comprises not more than 2,000 acres.

(d)  NONDISCRIMINATION REQUIREMENT. — The standards established under subsection (a) shall not discriminate against small originators or small agricultural mortgage loans that are at least $50,000. The Board shall promote and encourage the inclusion of qualified loans for small farms and family farmers in the agricultural mortgage secondary market.

12 U.S.C. 2279aa-9 SEC. 8.9. EXEMPTION FROM RESTRUCTURING AND BORROWERS RIGHTS      PROVISIONS FOR POOLED LOANS. —

(a) RESTRUCTURING. — Notwithstanding any other provision of law, sections 4.14, 4.14A, 4.14B, and 4.14D and 4.36 shall not apply to any loan included in a pool of qualified loans backing securities or obligations for which the Corporation provides guarantee. The loan servicing standards established by the Corporation shall be patterned after similar standards adopted by other federally sponsored secondary market facilities.

(b) BORROWERS RIGHTS. — At the time of application for a loan, originators that are Farm Credit System institutions shall give written notice to each applicant of the terms and conditions of the loan, setting forth separately terms and conditions for pooled loans and loans that are not pooled. This notice shall include a statement, if applicable, that the loan may be pooled and that, if pooled, sections 4.14, 4.14A, 4.14B, and 4.14D and 4.36 shall not apply. This notice also shall inform the applicant that he or she has the right not to have the loan pooled. Within 3 days from the time of commitment, an applicant has the right to refuse to allow the loan to be pooled, thereby retaining rights under sections 4.14, 4.14A, 4.14B, and 4.14D and 4.36, if applicable.

12 U.S.C. 2279aa-10 SEC. 8.10. FUNDING FOR GUARANTEE; RESERVES OF CORPORATION. —

(a) GUARANTEE. — The Corporation shall provide guarantees for securities representing interests in, or obligations backed by, pools of qualified loans through commitments issued by the Corporation providing for guarantees.

(b) GUARANTEE FEES. —

(1)  INITIAL FEE. — At the time a guarantee is issued by the Corporation, the Corporation shall assess the certified facility a fee of not more than 1/2 of 1 percent of the initial principal amount of each pool of qualified loans.

(2)  ANNUAL FEES. — Beginning in the second year after the date the guarantee is issued under paragraph (1), the Corporation may, at the end of each year, assess the certified facility an annual fee of not more than 1/2 of 1 percent of the principal amount of the loans then constituting the pool.

(3)  DETERMINATION OF AMOUNT. — The Corporation shall establish such fees on the amount of risk incurred by the Corporation in providing the guarantees with respect to which such fee is assessed, as determined by the Corporation. Fees assessed under paragraphs (1) and (2) shall be established on an actuarially sound basis.

Amended by Pub. L 104-316 Title I, §106 (f) (4) ANNUAL REVIEW BY GAO. — The Comptroller General of the United States may review, and submit to the Congress a report regarding, the

actuarial soundness and reasonableness of the fees established by the Corporation under this subsection. —

(c) CORPORATION RESERVE AGAINST GUARANTEES LOSSES REQUIRED. —

(1)  IN GENERAL. — So much of the fees assessed under this section as the Board determines to be necessary shall be set aside by the Corporation in a segregated account as a reserve against losses arising out of the guarantee activities of the Corporation.

(2)  EXHAUSTION OF RESERVE REQUIRED. — The Corporation may not issue obligations to the Secretary of the Treasury under section 8.13 in order to meet the obligations of the Corporation with respect to any guarantees provided under this title until the reserve established under paragraph (1) has been exhausted.

(d) FEES TO COVER ADMINISTRATIVE COSTS AUTHORIZED. — The Corporation may impose charges or fees in reasonable amounts in connection with the administration of its activities under this title to recover its costs for performing such administration.

12 U.S.C. 2279aa-11 SEC. 8.11. SUPERVISION, EXAMINATION, AND REPORT OF CONDITION. —

(a) REGULATION. —

(1) AUTHORITY. — Notwithstanding any other provision of this Act, the Farm Credit Administration shall have the authority to provide, acting through the Office of Secondary Market Oversight —

(A)  for the examination of the Corporation and its affiliates; and

(B)  for the general supervision of the safe and sound performance of the powers, functions, and duties vested in the Corporation and its affiliates by this title, including through the use of the authorities granted to the Farm Credit Administration under —

(i)   part C of title V; and

(ii)  beginning 6 months after the date of enactment of this section, section 5.17(a)(9).

(2)  CONSIDERATIONS. — In exercising its authority pursuant to this section, the Farm Credit Administration shall consider —

(A)  the purposes for which the Corporation was created;

(B)  the practices appropriate to the conduct of secondary markets in agricultural loans; and

(C)  the reduced levels of risk associated with appropriately structured secondary market transactions.

            (3) OFFICE OF SECONDARY MARKET OVERSIGHT. —

(A)  Not later than 180 days after the date of enactment of this paragraph, the Farm Credit Administration Board shall establish within the Farm Credit Administration the Office of Secondary Market Oversight.

(B)  The Farm Credit Administration Board shall carry out the authority set forth in this section through the Office of Secondary Market Oversight.

(C)  The Office of Secondary Market Oversight shall be managed by a full-time Director who shall be selected by and report to the Farm Credit Administration Board.

(b)  EXAMINATIONS AND AUDITS. —

(1)  IN GENERAL. — The financial transactions of the Corporation shall be examined by examiners of the Farm Credit Administration in accordance with the principles and procedures applicable to commercial corporate transactions under such rules and regulations as may be prescribed by the Administration.

(2)  FREQUENCY. — The examinations shall occur at such times as the Farm Credit Administration Board may determine, but in no event less than once each year.

(3)  ACCESS. — The examiners shall —

(A)  have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the Corporation and necessary to facilitate the audit; and

(B)  be afforded full access for verifying transactions with certified facilities and other entities with whom the Corporation conducts transactions.

(c)  ANNUAL REPORT OF CONDITION. — The Corporation shall make and publish an annual report of condition as prescribed by the Farm Credit Administration. Each report shall contain financial statements prepared in accordance with generally accepted accounting principles and contain such additional information as the Farm Credit Administration may by regulation prescribe. The financial statements of the Corporation shall be audited by an independent public accountant.

(d)  FCA ASSESSMENTS TO COVER COSTS. — The Farm Credit Administration shall assess the Corporation for the cost to the Administration of any regulatory activities conducted under this section, including the cost of any examination.

(e)  DEFINITION OF AFFILIATE. — As used in this title, the term "affiliate" shall mean an entity effectively controlled or owned by the Corporation, except that such term shall not include an originator (as defined in section 8.0).

(f)  The Farm Credit Administration Board shall ensure that —

(1)  the Office of Secondary Market Oversight has access to a sufficient number of qualified and trained employees to adequately supervise the secondary market activities of the Corporation; and

(2)  the supervision of the powers, functions, and duties of the Corporation is performed, to the extent practicable, by personnel who are not responsible for the supervision of the banks and associations of the Farm Credit System.

12 U.S.C. 2279aa-12 SEC. 8.12. SECURITIES IN CREDIT ENHANCED POOLS. —

(a)  FEDERAL LAWS. —

(1)  APPLICABILITY OF CERTAIN FEDERAL SECURITIES LAWS. — For purposes of section 3(a)(2) of the Securities Act of 1933, no security representing an interest in, or obligations backed by, a pool of qualified loans for which guarantees have been provided by the Corporation shall be deemed to be a security issued or guaranteed by a person controlled or supervised by, or acting as an instrumentality of, the Government of the United States. No such security shall be deemed to be a "government security" for purposes of the Securities Exchange Act of 1934 or for purposes of the Investment Company Act of 1940.

(2)  NO FULL FAITH AND CREDIT OF THE UNITED STATES. — Each security for which credit enhancement has been provided by the Corporation shall clearly indicate that the security is not an obligation of, and is not guaranteed as to principal or interest by, the Farm Credit Administration, the United States, or any other agency or instrumentality of the United States (other than the Corporation).

(b)  STATE SECURITIES LAWS. —

(1)  GENERAL EXEMPTION. — Any security or obligation that has been provided a guarantee by the Corporation shall be exempt from any law of any State with respect to or requiring registration or qualification of securities or real estate to the same extent as any obligation issued by, or guaranteed as to principal and interest by, the United States or any agency or instrumentality of the United States.

(2)  STATE OVERRIDE. — The provisions of paragraph (1) shall not be applicable to any State that, during the 8‑year period beginning on the date of the enactment of this title, enacts a law that —

(A)  specifically refers to this subsection; and

(B)  expressly provides that paragraph (1) shall not apply to the State.

(c)  AUTHORIZED INVESTMENTS. —

(1)  IN GENERAL. — Securities representing an interest in, or obligations backed by, pools of qualified loans with respect to which the Corporation has provided a guarantee shall be authorized investments of any person, trust, corporation, partnership, association, business trust, or business entity created pursuant to or existing under the laws of the United States or any State to the same extent that the person, trust, corporation, partnership, association, business trust, or business entity is authorized under any applicable law to purchase, hold, or invest in obligations issued by or guaranteed as to principal and interest by the United States or any agency or instrumentality of the United States. Such securities or obligations may be accepted as security for all fiduciary, trust, and public funds, the investment or deposits of which shall be under the authority and control of the United States or any State or any officers of either.

(2)  STATE LIMITATIONS ON PURCHASE, HOLDING, OR INVESTMENT. — If State law limits the purchase, holding, or investment in obligations issued by the United States by the person, trust, corporation, partnership, association, business trust, or business entity, securities or obligations of a certified facility issued on which the Corporation has provided a guarantee shall be considered to be obligations issued by the United States for purposes of the limitation.

(3)  NONAPPLICABILITY OF PROVISIONS. —

(A)  SUBSEQUENT STATE LAW. — Paragraphs (1) and (2) shall not apply with respect to a particular person, trust, corporation, partnership, association, business trust, or business entity, or class thereof, in any State that, prior to the expiration of the 8‑year period beginning on the date of the enactment of this title, enacts a law that specifically refers to this section and either prohibits or provides

for a more limited authority to purchase, hold, or invest in the securities by any person, trust, corporation, partnership, association, business trust, or business entity, or class thereof, than is provided in paragraphs (1) and (2).

(B)  EFFECT OF SUBSEQUENT STATE LAW. — The enactment by any State of a law of the type described in subparagraph (A) shall not affect the validity of any contractual commitment to purchase, hold, or invest that was made prior to the effective date of the law and shall not require the sale or other disposition of any securities acquired prior to the effective date of the law.

(d) STATE USURY LAWS SUPERSEDED. — A provision of the Constitution or law of any State shall not apply to an agricultural loan made by an originator or a certified facility in accordance with this title for sale to the Corporation or to a certified facility for inclusion in a pool for which the Corporation has provided, or has committed to provide, a guarantee, if the loan, not later than 180 days after the date the loan was made, is sold to the Corporation or included in a pool for which the Corporation has provided a guarantee, if the provision —

  (1) limits the rate or amount of interest, discount points, finance charges, or other charges that may be charged, taken, received, or reserved by an agricultural lender or a certified facility; or

         (2)  limits or prohibits a prepayment penalty (either fixed or declining), yield maintenance, or make-whole payment that may be charged, taken, or received by an agricultural lender or a certified facility in connection with the full or partial payment of the principal amount due on a loan by a borrower in advance of the scheduled date for the payment under the terms of the loan, otherwise known as a prepayment of the loan principal.

12 U.S.C. 2279aa13 SEC. 8.13. AUTHORITY TO ISSUE OBLIGATIONS TO COVER GUARANTEE LOSSES OF CORPORATION. —

(a)  SALE OF OBLIGATIONS TO TREASURY. —

(1)  IN GENERAL. — Subject to the limitations contained in section 8.10(c) and the requirement of paragraph (2), the Corporation may issue obligations to the Secretary of the Treasury the proceeds of which may be used by the Corporation solely for the purpose of fulfilling the obligations of the Corporation under any guarantee provided by the Corporation under this title.

(2)  CERTIFICATION. — The Secretary of the Treasury may purchase obligations of the Corporation under paragraph (1) only if the Corporation certifies to the Secretary that

           (A)  the requirements of section 8.10(c) have been fulfilled; and

           (B) the proceeds of the sale of such obligations are needed to fulfill the obligations of the Corporation under any guarantee provided by the Corporation under this title.

(b) EXPEDITIOUS TRANSACTION REQUIRED. — Not later than 10 business days after receipt by the Secretary of the Treasury of any certification by the Corporation under subsection (a)(2) of this section, the Secretary of the Treasury shall purchase obligations issued by the Corporation in an amount determined by the Corporation to be sufficient to meet the guarantee liabilities of the Corporation.

(c) LIMITATION ON AMOUNT OF OUTSTANDING OBLIGATIONS. — The aggregate amount of obligations issued by the Corporation under subsection (a)(1) of this section which may be held by the Secretary of the Treasury at any time (as determined by the Secretary) shall not exceed $1,500,000,000.

(d) TERMS OF OBLIGATION. —

(1) INTEREST. — Each obligation purchased by the Secretary of the Treasury shall bear interest at a rate determined by the Secretary, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of such obligation.

(2)  REDEMPTION. — The Secretary of the Treasury shall require that such obligations be repurchased by the Corporation within a reasonable time.

(e)   COORDINATION WITH TITLE 31, UNITED STATES CODE. —

(1)  AUTHORITY TO USE PROCEEDS FROM SALE OF TREASURY SECURITIES. — For the purpose of purchasing obligations of the Corporation, the Secretary of the Treasury may use as a public debt transaction the proceeds from the sale by the Secretary of any securities issued under chapter 31, of title 31, United States Code, and the purposes for which securities may be issued under such chapter are extended to include such purchases.

(2)  TREATMENT OF TRANSACTIONS. — All purchases and sales by the Secretary of the Treasury of obligations issued by the Corporation under this section shall be treated as public debt transactions of the United States.

        (f) AUTHORIZATION OF APPROPRIATIONS. — There is authorized to be appropriated to the Secretary of the Treasury $1,500,000,000, without fiscal year limitation, to carry out the purposes of this title.

12 U.S.C. 2279aa-14 SEC. 8.14. FEDERAL JURISDICTION. —

Notwithstanding section 1349 of Title 28, United States Code, or any other provision of law:

(1)  The Corporation shall be considered an agency under sections 1345 and 1442 of such title.

(2)  All civil actions to which the Corporation is a party shall be deemed to arise under the laws of the United States and, to the extent applicable, shall be deemed to be governed by Federal common law. The district courts of the United States shall have original jurisdiction of all such actions, without regard to amount of value.

(3)  Any civil or other action, case, or controversy in a court of a State or any court, other than a district court of the United States, to which the Corporation is a party may at any time before trial be removed by the Corporation, without the giving of any bond or security —

(A)  to the District Court of the United States for the district and division embracing the place where the same is pending; or

(B)  if there is no such district court, to the District Court of the United States for the district in which the principal office of the Corporation is located, by following any procedure for removal for causes in effect at the time of such removal.

(4)  No attachment or execution shall be issued against the Corporation or any of the property of the Corporation before final judgment in any Federal, State, or other court.

         Subtitle B — Regulation of Financial Safety and Soundness of Federal Agricultural Mortgage Corporation

12 U.S.C. 2279bb SEC. 8.31. DEFINITIONS.

For purposes of this subtitle:

(1) COMPENSATION. — The term 'compensation' means any payment of money or the provision of any other thing of current or potential value in connection with employment.

(2) CORE CAPITAL. — The term 'core capital' means, with respect to the Corporation, the sum of the following (as determined in accordance with generally accepted accounting principles):

(A) The par value of outstanding common stock.

(B) The par value of outstanding preferred stock.

(C) Paid-in capital.

(D) Retained earnings.

(3) DIRECTOR. — The term 'Director' means the Director of the Office of Secondary Market Oversight of the Farm Credit Administration, selected under section 8.11(a)(3).

(4) OFFICE. — The term 'Office' means the Office of Secondary Market Oversight of the Farm Credit Administration, established in section 8.11(a).

(5) REGULATORY CAPITAL. — The term 'regulatory capital' means, with respect to the Corporation, the core capital of the Corporation plus an allowance for losses and guarantee claims, as determined in accordance with generally accepted accounting principles.

(6) STATE. — The term 'State' means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.

12 U.S.C. 2279bb -1 SEC. 8.32. RISK-BASED CAPITAL LEVELS.

(a)  RISK-BASED CAPITAL TEST. — The Director of the Office of Secondary Market Oversight shall, by regulation, establish a risk-based capital test under this section for the Corporation. When applied to the Corporation, the risk-based capital test shall determine the amount of regulatory capital for the Corporation that is sufficient for the Corporation to maintain positive capital during a 10-year period in which both of the following circumstances occur.

(1)  CREDIT RISK. —

(A)  IN GENERAL. — With respect to securities representing an interest in, or obligations backed by, a pool of qualified loans owned or guaranteed by the Corporation and other obligations of the Corporation, losses on the underlying qualified loans occur throughout the United States at a rate of default and severity (based on any measurements of default reasonably related to prevailing industry practice in determining capital adequacy) reasonably related to the rate and severity that occurred in contiguous areas of the United States containing an aggregate of not less than 5 percent of the total population of the United States that, for a period of not less than 2 years (as established by the Director), experienced the highest rates of default and severity of agricultural mortgage losses, in comparison with such rates of default and severity of agricultural mortgage losses in other such areas for any period of such duration, as determined by the Director.

(B)  RURAL UTILITY LOANS. — With respect to securities representing an interest in, or obligation backed by, a pool of qualified loans described in section 8.0(7)(C) owned or guaranteed by the Corporation, losses occur at a rate of default and severity

reasonably related to risks in electric and telephone facility loans (as applicable), as determined by the Director.

(2)  INTEREST RATE RISK. — Interest rates on Treasury obligations of varying terms increase or decrease over the first 12 months of such 10-year period by not more than the lesser of (A) 50 percent (with respect to the average interest rates on such obligations during the 12-month period preceding the 10-year period), or (B) 600 basis points, and remain at such level for the remainder of the period. This paragraph may not be construed to require the Director to determine interest rate risk under this paragraph based on the interest rates for various long-term and short-term obligations all increasing or all decreasing concurrently.

(b)  CONSIDERATIONS. —

(1)  ESTABLISHMENT OF TEST. — In establishing the risk-based capital test under subsection (a) —

(A)  the Director shall take into account appropriate distinctions based on various types of agricultural mortgage products, varying terms of Treasury obligations, and any other factors the Director considers appropriate;

(B)  the Director shall conform loan data used in determining credit risk to the minimum geographic and commodity diversification standards applicable to pools of qualified loans eligible for guarantee;

(C)  the Director maytake into account retained subordinated participating interests under section 8.6(b)(2)(as in effect before the date of the enactment of the Farm Credit System Reform Act of 1996);

(D)  the Director may take into account other methods or tests to determine credit risk developed by the Corporation before the date of the enactment of this section; and

(E)  the Director shall consider any other information submitted by the Corporation in writing during the 180-day period beginning on the date of the enactment of such Act.

(2)  REVISING TEST. — Upon the expiration of the8-year period beginning on the date of the enactment of this section, the Director shall examine the risk-based capital test under subsection (a) and may revise the test. In making examinations and revisions under this paragraph, the Director shall take into account that, before the date of the enactment of this section, the Corporation has not issued guarantees for pools of qualified loans. To the extent that the revision of the risk-based capital test causes a change in the classification of the corporation within the enforcement levels established under section 8.35, the Director shall waive the applicability of any additional enforcement actions available because of such change for a reasonable period of time, to permit the Corporation to increase the amount of regulatory capital of the Corporation accordingly.

(c)  RISK-BASED CAPITAL LEVEL. — For purposes of this subtitle, the risk-based capital level for the Corporation shall be equal to the sum of the following amounts:

(1)  CREDIT AND INTEREST RATE RISK. — The amount of regulatory capital determined by applying the risk-based capital test under subsection (a) to the Corporation, adjusted to account for foreign exchange risk.

(2)  MANAGEMENT AND OPERATIONS RISK. — To provide for management and operations risk, 30 percent of the amount of regulatory capital determined by applying the risk-based capital test under subsection (a) to the Corporation.

(d)  SPECIFIED CONTENTS. —

(1) In General. — The regulations establishingthe risk-based capital test under this section shall—

(A) be issued by the Director for public comment in the form of a notice of proposed rulemaking, to be first published after the expiration of the period referred to in subsection (a); and

(B) containspecific requirements, definitions, methods, variables, and parameters used under the risk-based capital test and in implementing the test (such as loan loss severity, float income, loan-to-value ratios, taxes, yield curve slopes, default experience, prepayment rates, and performance of pools of qualified loans).

(2) SPECIFICITY. — The regulations referred to in paragraph (1) shallbe sufficiently specific to permit an individual other than the Director to apply the test in the same manner as the Director.

(e)  AVAILABILITY OF MODEL. — The Director shall make copies of the statistical model or models used to implement the risk-based capital test under this section available for public acquisition and may charge a reasonable fee for such copies.

12 U.S.C. 2279bb –2 SEC. 8.33. MINIMUM CAPITAL LEVEL.

(a) IN GENERAL. — Except as provided in subsection (b), for purposes of this subtitle, the minimum capital level for the Corporation shall be an amount of core capital equal to the sum of —

(1)  2.75 percent of the aggregate on-balance sheet assets of the Corporation, as determined in accordance with generally accepted accounting principles; and

(2)  0.75 percent of the aggregate off-balance sheet obligations of the Corporation, which, for the purposes of this subtitle, shall include —

(A)  the unpaid principal balance of outstanding securities that are guaranteed by the Corporation and backed by pools of qualified loans;

(B) instruments that are issued or guaranteed by the Corporation and are substantially equivalent to instruments described in subparagraph (A); and

(C) other off-balance sheet obligations of the Corporation.

(b) TRANSITION PERIOD. —

(1) IN GENERAL.— For purposes of this subtitle, the minimum capital level for the Corporation —

(A) prior to January 1, 1997, shall be the amount of core capital equal to the sum of—

(i)  0.45 percent of the aggregate off-balance sheet obligations of the Corporation;

(ii) 0.45 percent of designated on-balance sheet assets of the Corporation, as determined under paragraph (2); and

(iii) 2.50 percent of on-balance sheet assets of the Corporation other than assets designated under paragraph (2);

(B) during the 1-year period ending December 31, 1997, shall be the amount of core capital equal to the sum of —

(i) 0.55 percent of aggregate off-balance sheet obligations of the Corporation;

(ii)  1.20 percent of designated on-balance sheet assets of the Corporation, as determined under paragraph (2); and

(iii)  2.55 percent of on-balance sheet assets of the Corporation other than assets designated under paragraph (2);

(C) during the 1-year period ending December 31, 1998, shall be the amount of core capital equal to —

(i)  if the Corporation’s core capital is not less than $25,000,000 on January 1, 1998, the sum of —

(I)  0.65 percent of aggregate off-balance sheet obligations of the Corporation;

(II)  1.95 percent of designated on-balance sheet assets of the Corporation, as determined under paragraph (2); and

(III)  2.65 percent of on-balance sheet assets of the Corporation other than assets designated under paragraph (2); or

(ii)  if the Corporation’s core capital is less than $25,000,000 on January 1, 1998, the amount determined under subsection (a); and

(D)  on and after January 1, 1999, shall be the amount determined under subsection (a). 

(2) DESIGNATED ON-BALANCE SHEET ASSETS.— For purposes of this subsection, the designated on-balance sheet assets of the Corporation shall be —

(A) the aggregate on-balance sheet assets of the Corporation acquired under section 8.6(d); and

(B) the aggregate amount of qualified loans purchased and held by the Corporation under section 8.3(c)(13).

12 U.S.C. 2279bb –3   SEC. 8.34. CRITICAL CAPITAL LEVEL.

For purposes of this subtitle, the critical capital level for the Corporation shall be an amount of core capital equal to 50 percent of the total minimum capital amount determined under section 8.33.

12 U.S.C. 2279bb-4 SEC. 8.35. ENFORCEMENT LEVELS.

(a)  IN GENERAL. — The Director shall classify the Corporation, for purposes of this subtitle, according to the following enforcement levels:

(1)  LEVEL I. — The Corporation shall be classified as within level I if the Corporation —

(A)  maintains an amount of regulatory capital that is equal to or exceeds the risk-based capital level established under section 8.32; and

(B)  equals or exceeds the minimum capital level established under section 8.33.

(2)  LEVEL II. — The Corporation shall be classified as within level II if —

(A)  the Corporation —

(i)  maintains an amount of regulatory capital that is less than the risk-based capital level; and

(ii)  equals or exceeds the minimum capital level; or

(B)  the Corporation is otherwise classified as within level II under subsection (b) of this section.

(3)  LEVEL III. — The Corporation shall be classified as within level III if —

(A)  the Corporation —

(i)  does not equal or exceed the minimum capital level; and

(ii)  equals or exceeds the critical capital level established under section 8.34; or

(B)  the Corporation is otherwise classified as within level III under subsection (b) of this section.

(4)  LEVEL IV. — The Corporation shall be classified as within level IV if the Corporation —

(A)  does not equal or exceed the critical capital level; or

(B)  is otherwise classified as within level IV under subsection (b) of this section.

(b)  DISCRETIONARY CLASSIFICATION. — If at any time the Director determines in writing (and provides written notification to the Corporation and the Farm Credit Administration) that the Corporation is taking any action not approved by the Director that could result in a rapid depletion of core capital or that the value of the property subject to mortgages securitized by the Corporation or property underlying securities guaranteed by the Corporation, has decreased significantly, the Director may classify the Corporation —

(1)  as within level II, if the Corporation is otherwise within level I;

(2)  as within level III, if the Corporation is otherwise within level II; or

(3)  as within level IV, if the Corporation is otherwise within level III.

(c)  QUARTERLY DETERMINATION. — The Director shall determine the classification of the Corporation for purposes of this subtitle on not less than a quarterly basis (and as appropriate under subsection (b)). The first such determination shall be made for the quarter ending March 31, 1992.

(d)  NOTICE. — Upon determining under subsection (b) or (c) that the Corporation is within level II or III, the Director shall provide written notice to the Congress and to the Corporation —

(1)  that the Corporation is within such level;

(2)  that the Corporation is subject to the provisions of section 8.36 or 8.37, as applicable; and

(3)  stating the reasons for the classification of the Corporation within such level.

12 U.S.C. 2279bb –5  SEC. 8.36. MANDATORY ACTIONS APPLICABLE TO LEVEL II.

(a) CAPITAL RESTORATION PLAN. — If the Corporation is classified as within level II, the Corporation shall, within the time period determined by the Director, submit to the Director a capital restoration plan and, after approval, carry out the plan.

(b) RESTRICTION OF DIVIDENDS. — If the Corporation is classified as within level II, the Corporation may not make any payment of dividends that would result in the Corporation being reclassified as within level III or IV.

(c) RECLASSIFICATION FROM LEVEL II TO LEVEL III. — The Director shall immediately reclassify the Corporation as within level III (and the Corporation shall be subject to the provisions of section 8.37), if —

(1)  the Corporation is within level II; and

(2)  (A) the Corporation does not submit a capital restoration plan that is approved by the Director; or

          (B) the Director determines that the Corporation has failed to make, in good faith, reasonable efforts necessary to comply with such a capital restoration plan and fulfill the schedule for the plan approved by the Director.

        (d) EFFECTIVE DATE. — This section shall take effect upon the expiration of the 30-month period beginning on the date of the enactment of this section.

12 U.S.C. 2279bb –6  SEC. 8.37. SUPERVISORY ACTIONS APPLICABLE TO LEVEL III.

(a) MANDATORY SUPERVISORY ACTIONS. —

(1)  CAPITAL RESTORATION PLAN. — If the Corporation is classified as within level III, the Corporation shall, within the time period determined by the Director, submit to the Director a capital restoration plan and, after approval, carry out the plan.

(2)  RESTRICTIONS ON DIVIDENDS. —

(A)  PRIOR APPROVAL. — If the Corporation is classified as within level III, the Corporation —

(i)  may not make any payment of dividends that would result in the Corporation being reclassified as within level IV; and

(ii)  may make any other payment of dividends only if the Director approves the payment before the payment.

(B)  STANDARD FOR APPROVAL. — If the Corporation is classified as within level III, the Director may approve a payment of dividends by the Corporation only if the Director determines that the payment (i) will enhance the ability of the Corporation to meet the risk-based capital level and the minimum capital level promptly, (ii) will contribute to the long-term safety and soundness of the Corporation, or (iii) is otherwise in the public interest.

(3)  RECLASSIFICATION FROM LEVEL III TO LEVEL IV. — The Director shall immediately reclassify the Corporation as within level IV if —

(A)  the Corporation is classified as within level III; and

(B)  (i) the Corporation does not submit a capital restoration plan that is approved by the Director; or

           (ii) the Director determines that the Corporation has failed to make, in good faith, reasonable efforts necessary to

comply with such a capital restoration plan and fulfill the schedule for the plan approved by the Director.

(b) DISCRETIONARY SUPERVISORY ACTIONS. — In addition to any other actions taken by the Director (including actions under subsection (a)), the Director may, at any time, take any of the following actions if the Corporation is classified as within level III;

(1) LIMITATION ON INCREASE IN OBLIGATIONS. — Limit any increase in, or order the reduction of, any obligations of the Corporation, including off-balance sheet obligations.

(2) LIMITATION ON GROWTH. — Limit or prohibit the growth of the assets of the Corporation or require contraction of the assets of the Corporation.

(3) PROHIBITION ON DIVIDENDS. — Prohibit the Corporation from making any payment of dividends.

(4)  ACQUISITION OF NEW CAPITAL. — Require the Corporation to acquire new capital in any form and in any amount sufficient to provide for the reclassification of the Corporation as within level II.

(5)  RESTRICTION OF ACTIVITIES. — Require the Corporation to terminate, reduce, or modify any activity that the Director determines creates excessive risk to the Corporation.

(6)  CONSERVATORSHIP. — Appoint a conservator for the Corporation consistent with this Act.

(c) EFFECTIVE DATE. — This section shall take effect on January 1, 1992.

12 U.S.C. 2279bb –7  SEC. 8.38 [REPEALED]

        12 U.S.C. 2279cc SEC. 8.41. CONSERVATORSHIP; LIQUIDATION; RECEIVERSHIP.

(a) VOLUNTARY LIQUIDATION.— The Corporation may voluntarily liquidate only with the consent of, and in accordance with a plan of liquidation approved by, the Farm Credit Administration Board.

(b) INVOLUNTARY LIQUIDATION.—

(1) IN GENERAL.— The Farm Credit Administration Board may appoint a conservator or receiver for the Corporation under the circumstances specified in section 4.12(b).

(2) APPLICATION.— In applying section 4.12(b) to the Corporation under paragraph (1)—

(A) the Corporation shall also be considered insolvent if the Corporation is unable to pay its debts as they fall due in the ordinary course of business;

(B) a conservator may also be appointed for the Corporation if the authority of the Corporation to purchase qualified loans for issue or guarantee loan-backed securities is suspended; and

(C) a receiver may also be appointed for the Corporation if—

(i)(I)  the authority of the Corporation to purchase qualified loans or issue or guarantee loan-backed securities is suspended; or

        (II)  the Corporation is classified under section 8.35 as within level III or IV and the alternative actions available under subtitle B are not satisfactory; and

(ii)  the Farm Credit Administration determines that the appointment of a conservator would not be appropriate.

(3) NO EFFECT ON SUPERVISORY ACTIONS.— The grounds for appointment of a conservator for the Corporation under this subsection shall be in addition to those in section 8.37.

(c) APPOINTMENT OF A CONSERVATOR OR RECEIVER.—

        (1) QUALIFICATIONS.— Notwithstanding section 4.12(b), if a conservator or receiver is appointed for the Corporation, the conservator or receiver shall be—

(A) The Farm Credit Administration or any other governmental entity or employee, including the Farm Credit System Insurance Corporation; or

         (B) Any person that—

(i)  has no claim against, or financial interest in, the Corporation or other basis for a conflict of interest as the conservator or receiver; and

(ii) has the financial and management expertise necessary to direct the operations and affairs of the Corporation and, if necessary, to liquidate the Corporation.

         (2) COMPENSATION.—

        (A) IN GENERAL.— A conservator or receiver for Corporation and professional personnel (other than a Federal employee) employed to represent or assist the conservator or receiver may be compensated for activities conducted as, or for, a conservator or receiver.

        (B) LIMIT ON COMPENSATION.— Compensation may not be provided in amounts greater than the compensation paid to employees of the Federal Government for similar services, except that the Farm Credit Administration may provide compensation at higher rates that are not in excess of rates prevailing in the private sector if the Farm Credit Administration determines that compensation at higher rates is necessary in order to recruit and retain competent personnel.

        (C) CONTRACTUAL ARRANGEMENTS.— The conservator or receiver may contract with any governmental entity, including the Farm Credit System Insurance Corporation, to make personnel, services, and facilities of the entity available to the conservator or receiver on such terms and compensation arrangements as shall be mutually agreed, and each entity may provide the same to the conservator or receiver.

(3) EXPENSES.— A valid claim for expenses of the conservatorship or receivership (including compensation under paragraph (2)) and a valid claim with respect to a loan made under subsection (f) shall—

         (A) be paid by the conservator or receiver from funds  of the Corporation before any other valid claim against the  Corporation; and

         (B)  may be secured by a lien, on such property of the  Corporation as the conservator or receiver may determine, that  shall have priority over any other liens.

(4) LIABILITY.— If the conservator or receiver for the Corporation is not a Federal entity, or an officer or employee for the Federal Government, the conservator or receiver shall not be personally liable for damages in tort or otherwise for an act or omission performed pursuant to and in the course of the conservatorship or receivership, unless the act or omission

constitutes gross negligence or any form of intentional tortuous conduct or criminal conduct.

(5) INDEMNIFICATION.— The Farm Credit Administration may allow indemnification of the conservator or receiver from the asset of the conservatorship or receivership on such terms as the Farm Credit Administration considers appropriate.

(d) JUDICIAL REVIEW OF APPOINTMENT.—

        (1) IN GENERAL.— Notwithstanding subsection (i)(1), not later than 30 days after a conservator or receiver is appointed under subsection (b), the Corporation may bring an action in the United States District court for the District of Columbia for an order requiring the Farm Credit Administration Board to remove the conservator or receiver. The court shall, on the merits,  dismiss the action or direct the Farm Credit Administration Board to remove the conservator or receiver.

        (2) STAY OF OTHER ACTIONS.— On the commencement of an action under paragraph (1), any court having jurisdiction of any other action or enforcement proceeding authorized under this Act to which the Corporation is party shall stay the action or proceeding during the pendency of the action for removal of the conservator or receiver.

(e) GENERAL POWERS OF CONSERVATOR OR RECEIVER.— The conservator or receiver for the Corporation shall have such powers to conduct the conservatorship or receivership as shall be provided pursuant to regulations adopted by the Farm Credit Administration Board. Such powers shall be comparable to the powers available to a conservator or receiver appointed pursuant section 4.12(b).

(f) BORROWINGS FOR WORKING CAPITAL.—

        (1) IN GENERAL.— If the conservator or receiver of the Corporation determines that it is likely that there will be insufficient funds to pay the ongoing administrative expenses of the conservatorship or receivership or that there will be insufficient liquidity to fund maturing obligations of the conservatorship or receivership, the conservator or receiver may borrow funds in such amounts, from such sources, and at such rates of interest as the conservator or receiver considers necessary or appropriate to meet the administrative expenses or liquidity needs of the conservatorship or receivership.

        (2) WORKING CAPITAL FROM FARM CREDIT BANKS.— A Farm Credit bank may loan funds to the conservator or receiver for a loan authorized under paragraph (1) or, in the event of receivership, a Farm Credit bank may purchase assets of the Corporation.

(g) AGREEMENTS AGAINST INTERESTS OF CONSERVATOR OR RECEIVER.— No agreement that tends to diminish or defeat the right, title, or interest of the conservator or receiver for the Corporation in any asset acquired by the conservator or receiver as conservator or receiver for the Corporation shall be valid against the conservator or receiver unless the agreement—

        (1) is in writing;

        (2) is executed by the Corporation and any person claiming an adverse interest under the agreement, including the obligor, contemporaneously with the acquisition of the asset by the Corporation;

        (3) is approved by the Board or an appropriate committee of the Board, which approval shall be reflected in the minutes of the Board or committee; and

        (4) has been, continuously, from the time of the agreement's execution, an official record of the Corporation.

(h) REPORT TO THE CONGRESS.— On a determination by the receiver for the Corporation that there are insufficient assets of the receivership to pay all valid claims against the receivership, the receiver shall submit to the Secretary of the Treasury, the Committee on Agriculture of the House of Representatives, and the Committee on

Agriculture, Nutrition, and Forestry of the Senate a report on the financial condition of the receivership.

(i) TERMINATION OF AUTHORITIES.—

        (1) CORPORATION.— The charter of the Corporation shall be canceled and the authority provided to the Corporation by this title shall terminate, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver.

        (2) OVERSIGHT.— The Office of Secondary Market Oversight established under section 8.11 shall be abolished, and section 8.11(a) and subtitle B shall have no force or effect, on such date as the Farm Credit Administration Board determines is appropriate following the placement of the Corporation in receivership, but not later than the conclusion of the receivership and discharge of the receiver.

EX-4.7

Exhibit 4.7

Established under the Laws of the United States Pursuant to an Act of Congress

FEDERAL AGRICULTURAL

MORTGAGE CORPORATION

Series E Certificate No.	No. of Series E Shares 3,000,000
1	CUSIP No.: 313148850

5.750% Non-Cumulative Preferred Stock, Series E

         THIS CERTIFIES THAT Cede & Co. is the registered holder of 3,000,000 fully paid and non-assessable shares, par value $25.00 per share, of 5.750% Non-Cumulative Preferred Stock, Series E of the Federal Agricultural Mortgage Corporation (hereinafter and on the reverse hereof referred to as the “Corporation”) transferable on the books and records of the Continental Stock Transfer & Trust Company (the “Transfer Agent”) in accordance with the applicable procedures of the Transfer Agent and the Depository Trust Company, a New York corporation (“DTC”).

         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by its duly authorized officers this 20th day of May, 2020.

____SPECIMEN__________________	___SPECIMEN_______________________
President and Chief Executive Officer	Executive Vice President – General Counsel and Secretary

        THE PREFERRED STOCK IS NOT A DEBT OR OBLIGATION OF, AND IS NOT GUARANTEED BY, THE UNITED STATES, THE FARM CREDIT ADMINISTRATION, THE FARM CREDIT SYSTEM OR ANY FEDERAL AGENCY OR INSTRUMENTALITY OR ANY INDIVIDUAL INSTITUTION OF THE FARM CREDIT SYSTEM OTHER THAN THE FEDERAL AGRICULTURAL MORTGAGE CORPORATION.

THE INFORMATION CONTAINED IN THIS CERTIFICATE IS A SUMMARY OF CERTAIN PROVISIONS OF TITLE VIII OF THE FARM CREDIT ACT OF 1971, AS AMENDED (THE “ACT”), WHICH SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE THERETO.

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND ARE BEING ISSUED PURSUANT TO THE EXEMPTION AFFORDED BY SECTION 3(a)(2) OF THE SECURITIES ACT. THEREFORE, THE SECURITIES ARE NOT RESTRICTED SECURITIES AND ARE FREELY TRANSFERABLE.

THE HOLDER OF THE SECURITIES EVIDENCED BY THIS CERTIFICATE IS ENTITLED TO CERTAIN RIGHTS AND SUBJECT TO CERTAIN OBLIGATIONS, INCLUDING PROVISIONS RELATING TO REDEMPTION, LIQUIDATION PREFERENCES AND DIVIDEND RATE, AS SET FORTH IN THE CERTIFICATE OF DESIGNATION OF TERMS AND CONDITIONS OF 5.750% NON-CUMULATIVE

PREFERRED STOCK, SERIES E. THE SECURITIES EVIDENCED BY THIS CERTIFICATE SHALL NOT HAVE ANY PREEMPTIVE RIGHTS TO PURCHASE UNISSUED OR TREASURY SHARES OF THE CORPORATION.

THIS CERTIFICATE AND SHARES REPRESENTED HEREBY ARE ISSUED AND SHALL BE SUBJECT TO THE PROVISIONS OF THE ACT, AND THE BYLAWS, RULES AND REGULATIONS OF THE CORPORATION, AND ALL AMENDMENTS THERETO, TO ALL OF WHICH THE HOLDER HEREOF BY ACCEPTANCE OF THIS CERTIFICATE ASSENTS.

THE CORPORATION IS AUTHORIZED TO ISSUE MORE THAN ONE CLASS OF STOCK, INCLUDING ADDITIONAL PREFERRED STOCK DESIGNATED AS 5.750% NON-CUMULATIVE PREFERRED STOCK, SERIES E. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES, AND RELATIVE, PARTICIPATING, OPTIONAL, OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE CORPORATION OR THE TRANSFER AGENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

REVERSE OF SECURITY

1. Designation, Par Value, Number of Shares, and Seniority

The class of preferred stock of Farmer Mac created hereby (the “Preferred Stock”) shall be designated “5.750% Non-Cumulative Preferred Stock, Series E,” shall have a par value of $25.00 per share and a liquidation preference of $25.00 per share and shall consist of 3,000,000 shares. The Board of Directors, or a duly authorized committee thereof, shall be permitted to increase the authorized number of such shares at any time and from time to time. The Preferred Stock shall rank senior to the Class A Voting Common Stock, Class B Voting Common Stock, and Class C Non-Voting Common Stock of Farmer Mac (collectively, the “Common Stock”), and on parity with the outstanding 5.875% Non-Cumulative Preferred Stock, Series A, the outstanding 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C and the outstanding 5.700% Non-Cumulative Preferred Stock, Series D of Farmer Mac (collectively, the “Outstanding Parity Preferred Stock”), in each case to the extent provided in this Certificate.

2. Dividends

(a) Subject to paragraphs (2) and (3) of Section 8.4(c) of the Farm Credit Act of 1971, as amended (12 U.S.C. §§ 2279aa-4(c)), holders of outstanding shares of the Preferred Stock shall be entitled to receive, ratably, when, as, and if declared by the Board of Directors, in its sole discretion, out of funds legally available for dividend payments, on a non-cumulative basis, quarterly cash dividends at the annual rate of 5.750% of the liquidation preference of the Preferred Stock, or $1.4375per share per year of Preferred Stock. Dividends on the Preferred Stock shall be payable when, as, and if declared by the Board of Directors, on January 17, April 17, July 17 and October 17 of each year (each, a “Dividend Payment Date”), beginning on July 17, 2020. If a Dividend Payment Date is not a “Business Day,” the related dividend (if declared) shall be paid on the next Business Day with the same force and effect as though paid on the Dividend Payment Date, without any increase to account for the period from such Dividend Payment Date through the date of actual payment. For these purposes, “Business Day” means a day other than (i) a Saturday or Sunday, (ii) a day on which New York City banks are closed, or (iii) a day on which the offices of Farmer Mac are closed. The “Dividend Period” relating to a Dividend Payment Date shall be the period from, but not including, the preceding Dividend Payment Date (or from, but not including, May 20, 2020 in the case of the first Dividend Payment Date) (regardless of whether or not a dividend was declared and paid for such previous Dividend Period) through and including the related Dividend Payment Date. If declared, the dividend payable in respect of a Dividend Period shall be $0.359375 per share, or such lesser amount as the Board of Directors may determine; provided, however, that the dividend, when, as, and if declared by the Board of Directors, for the first Dividend Period shall be $0.2276 per share, or such lesser amount as the Board of Directors may determine. The amount of dividends payable for any period shorter than a full quarterly Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends shall be paid to holders of record of outstanding shares of the Preferred Stock as they appear in the books and records of Farmer Mac on the record date fixed by the Board of Directors, not to be earlier than 45 days nor later than 10 days preceding the applicable Dividend Payment Date. Notwithstanding any other

provision hereof to the contrary, dividends on the Preferred Stock shall not be declared, paid, or set aside for payment to the extent such act would cause Farmer Mac to fail to comply with laws or regulations applicable thereto, including any applicable capital adequacy requirements.

(b) No dividends shall be declared or paid or set apart for payment on the Common Stock or any other class or series of stock ranking junior to the Preferred Stock unless full dividends have been declared and paid for the then-current Dividend Period or set apart or ordered by our Board of Directors to be set apart for payment on the outstanding Preferred Stock in respect of the then-current Dividend Period. The foregoing dividend preference shall not in any way create any claim or right in favor of the holders of the Preferred Stock in the event that Farmer Mac shall not have declared or paid or set apart or the Board of Directors shall not have ordered to be set apart dividends on the Preferred Stock in respect of any prior Dividend Period. In the event that Farmer Mac shall not declare any one or more dividends or any part thereof on the Preferred Stock, the holders of the Preferred Stock shall not have any claim in respect of such non-payment.

(c) Full dividends will not be declared or paid or set apart for payment on any outstanding class or series of stock issued by Farmer Mac of equal priority as to dividends as the Preferred Stock, including the Outstanding Parity Preferred Stock, unless dividends on the Preferred Stock for the then-current Dividend Period are declared and paid or set apart for payment in full. The Board of Directors may, in its discretion, choose to declare and pay less than a full dividend on the Preferred Stock. In the event that the Board of Directors declares less than a full dividend on the Preferred Stock and/or any other outstanding class or series of stock of equal priority as to dividends, including the Outstanding Parity Preferred Stock, the Board of Directors shall declare dividends on the Preferred Stock and such other outstanding stock, as applicable, on a proportional basis such that the amount of such dividends declared per share shall bear to each other the same ratio that full dividends per share for the then-current Dividend Period on the Preferred Stock and full dividends per share on any such other outstanding stock of equal priority as to dividends, bear to each other; provided, that, solely for purposes of calculating the ratio set forth in the foregoing sentence, the amount of full dividends per share for the then-current Dividend Period on the Preferred Stock and/or the full dividends per share on any such other outstanding stock of equal priority, as applicable, shall be increased by the amount per share of dividends that have been declared but not paid in respect of such stock, if any.

(d) Notwithstanding any other provision of this Certificate, the Board of Directors, in its sole discretion, may choose to pay dividends on the Preferred Stock without the payment of any dividends on the Common Stock or any other outstanding class or series of stock ranking junior to the Preferred Stock with respect to the payment of dividends.

(e) No dividend shall be declared or paid or set apart for payment on any shares of the Preferred Stock if at the same time any arrears or default exists in the payment of dividends on the Preferred Stock or on any outstanding class or series of stock of Farmer Mac ranking senior to or (except as provided herein) on parity with the Preferred Stock with respect to the payment of dividends, including the Outstanding Parity Preferred Stock. If and whenever dividends, having been declared, shall not have been paid in full, as aforesaid, on shares of the Preferred

Stock and on the shares of any other class or series of stock of Farmer Mac ranking on parity with the Preferred Stock with respect to the payment of dividends, all such dividends that have been declared on shares of the Preferred Stock and on the shares of any such other class or series shall be paid pro rata, so that the respective amounts of dividends paid per share on the Preferred Stock and on such other class or series shall in all cases bear to each other the same ratio that the respective amounts of dividends declared but unpaid per share on the shares of the Preferred Stock and on the shares of such other class or series bear to each other.

(f) Holders of shares of the Preferred Stock shall not be entitled to any dividends, whether payable in cash or in property, other than as herein provided and shall not be entitled to interest, or any sum in lieu of interest, on or in respect of any dividend payment.

(g) If Farmer Mac defaults on the payment of the equivalent of six quarters of declared dividends (regardless of whether such quarters are consecutive quarters), then the holders of the Preferred Stock will have the right to elect two observers to the Board of Directors.

3. Optional Redemption

(a) The Preferred Stock shall not be redeemable before July 17, 2025. On that date and on any Dividend Payment Date thereafter, subject to the notice provisions set forth in Section 3(b) below and to any further limitations that may be imposed by law, Farmer Mac may redeem the Preferred Stock, in whole or in part, out of funds legally available therefor, at the redemption price of $25.00 per share plus an amount, determined in accordance with Section 2 above, equal to the amount of any declared and unpaid dividends through and including the date of redemption. If less than all of the outstanding shares of the Preferred Stock are to be redeemed, Farmer Mac shall select shares to be redeemed from the outstanding shares not previously called for redemption by lot or pro rata (as nearly as possible).

(b) In the event Farmer Mac shall redeem any or all of the Preferred Stock, Farmer Mac shall give notice of such redemption by first class mail, postage prepaid, mailed neither less than 30 nor more than 60 days prior to the redemption date, to each holder of record of the shares of the Preferred Stock being redeemed, at such holder’s address as the same appears in the books and records of Farmer Mac; provided, that, if the Preferred Stock is held in book-entry form through DTC, Farmer Mac may give such notice in any manner permitted by DTC. Each such notice shall state the number of shares to be redeemed, the redemption price, the redemption date, and the procedures a holder must follow to submit its shares of Preferred Stock for redemption. Failure to duly give notice, or any defect in the notice, to any holder of the Preferred Stock shall not affect the validity of the proceedings for the redemption of shares of any other holder of the Preferred Stock being redeemed.

(c) If any redemption date is not a Business Day, payment of the redemption price may be made on the next Business Day with the same force and effect as if made on the redemption date, and no interest, additional dividends or other sums will accrue on the amount payable from the redemption date to the next Business Day.

(d) Notice having been mailed as aforesaid, from and after the redemption date specified therein and upon payment of the consideration set forth in Section 3(a) above, said shares of the Preferred Stock shall no longer be deemed to be outstanding, and all rights of the holders thereof as holders of the Preferred Stock shall cease, with respect to shares so redeemed.

(e) Any shares of the Preferred Stock so redeemed shall, after such redemption, no longer have the status of issued or outstanding shares.

(f) The Preferred Stock shall not be subject to any mandatory redemption, sinking fund, or other similar provisions. In addition, holders of the Preferred Stock shall have no right to require redemption of any shares of the Preferred Stock.

4. No Voting Rights

Except as set forth in Section 9, the shares of the Preferred Stock shall not have any voting powers, either general or special, or have any consent rights.

5. No Conversion or Exchange Rights

The holders of shares of the Preferred Stock shall not have any right to convert such shares into or exchange such shares for any other class or series of stock or obligations of Farmer Mac.

6. No Preemptive Rights

No holder of the Preferred Stock shall, as such holder, be entitled as a matter of right to subscribe for or purchase, or have any preemptive right with respect to, any new or additional issue of other shares, rights, options, or other securities of any class of Farmer Mac whatsoever, whether now or hereafter authorized and whether issued for cash or other consideration or by way of dividend.

7. Liquidation Rights and Preference

(a) Except as otherwise set forth herein, upon the voluntary or involuntary dissolution, liquidation, or winding up of Farmer Mac, after payment of or provision for the liabilities of Farmer Mac and the expenses of such dissolution, liquidation, or winding up, the holders of the outstanding shares of the Preferred Stock shall be entitled to receive out of the assets of Farmer Mac available for distribution to stockholders, before any payment or distribution shall be made on the Common Stock or any other class or series of stock of Farmer Mac ranking junior to the Preferred Stock upon liquidation, the amount of $25.00 per share plus an amount, determined in accordance with Section 2 above, equal to the amount of any declared and unpaid dividends through and including the date of payment in respect of such dissolution, liquidation, or winding up. The holders of the outstanding shares of any class or series of stock of Farmer Mac ranking on parity with the Preferred Stock upon liquidation, including the Outstanding Parity Preferred Stock, shall be entitled to receive out of the assets of Farmer Mac available for distribution to stockholders, before any such payment or distribution shall be made on the Common Stock or

any other class or series of stock of Farmer Mac ranking junior to the Preferred Stock and to such parity stock upon dissolution, liquidation, or winding up, any corresponding preferential amount to which the holders of such parity stock may, by the terms thereof, be entitled; provided, however, that if the assets of Farmer Mac available for distribution to stockholders shall be insufficient for the payment in full of the aggregate amount to which the holders of the outstanding shares of the Preferred Stock and the holders of the outstanding shares of such parity stock shall be entitled to receive upon such dissolution, liquidation, or winding up of Farmer Mac as aforesaid, then, subject to paragraph (b) of this Section 7, all of the assets of Farmer Mac available for distribution to stockholders shall be distributed to the holders of outstanding shares of the Preferred Stock and to the holders of outstanding shares of such parity stock pro rata, so that the amounts so distributed to holders of the Preferred Stock and to holders of such classes or series of such parity stock, respectively, shall bear to each other the same ratio that the respective distributive amounts to which they are so entitled bear to each other. After the payment of the aforesaid amounts to which they are entitled, the holders of outstanding shares of the Preferred Stock and the holders of outstanding shares of any such parity stock shall not be entitled to any further participation in any distribution of assets of Farmer Mac. Solely for purposes of Section 8.4(e)(3) of the Farm Credit Act of 1971, as amended, the Preferred Stock shall be deemed to have a par value of $25.00 per share.

(b) Notwithstanding the foregoing, upon the dissolution, liquidation, or winding up of Farmer Mac, the holders of shares of the Preferred Stock then outstanding shall not be entitled to be paid any amounts to which such holders are entitled pursuant to paragraph (a) of this Section 7 unless and until the holders of any classes or series of stock of Farmer Mac ranking senior to the Preferred Stock upon liquidation shall have been paid all amounts to which such classes or series are entitled pursuant to their respective terms.

(c) Neither the sale, lease, or exchange of all or substantially all of the property or business of Farmer Mac, nor the merger, consolidation, or combination of Farmer Mac into or with any other corporation or entity, shall be deemed to be a dissolution, liquidation, or winding up for the purpose of this Section 7.

8. Additional Preferred Stock and Additional Classes or Series of Stock

The Board of Directors shall have the right at any time in the future to authorize, create, and issue, by resolution or resolutions, additional Preferred Stock or one or more additional classes or series of stock of Farmer Mac, and to determine and fix the distinguishing characteristics and the relative rights, preferences, privileges and other terms of the shares thereof. Any such class or series of stock may rank senior to, on parity with, or junior to the Preferred Stock as to dividends, upon liquidation, or otherwise.

9. Amendments

Farmer Mac, by or under the authority of the Board of Directors, may amend, alter, supplement, or repeal any provision of this Certificate pursuant to the following terms and conditions:

(a) Without the consent of the holders of the Preferred Stock, Farmer Mac may amend, alter, supplement, or repeal any provision of this Certificate to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Certificate, provided that such action shall not materially and adversely affect the powers, preferences, rights, privileges, qualifications, limitations, restrictions, terms, or conditions of the Preferred Stock.

(b) The consent of the holders of at least two-thirds of all of the shares of the Preferred Stock at the time outstanding, given in person or by proxy, either in writing or by a vote at a meeting called for the purpose at which the holders of shares of the Preferred Stock shall vote together as a class, shall be necessary for authorizing, effecting, or validating the amendment, alteration, supplementation, or repeal of the provisions of this Certificate if such amendment, alteration, supplementation, or repeal would materially and adversely affect the powers, preferences, rights, privileges, qualifications, limitations, restrictions, terms, or conditions of the Preferred Stock. Notwithstanding the foregoing sentence, the 5.750% annual dividend rate, the redemption price, or the liquidation preference of the Preferred Stock shall not be reduced without the unanimous consent of the holders of all shares of the Preferred Stock. Any increase in the amount of authorized or issued Preferred Stock, or the creation and issuance of any other class or series of stock of Farmer Mac, or the issuance of additional shares of any existing class or series of stock of Farmer Mac, whether ranking senior to, on parity with, or junior to the Preferred Stock as to dividends, liquidation rights, or otherwise, shall be deemed not to constitute such an amendment, alteration, supplementation, or repeal.

(c) Holders of the Preferred Stock shall be entitled to one vote per share on matters on which their consent is required pursuant to subparagraph (b) of this Section 9. Consents shall be effective when duly executed and delivered to Farmer Mac in accordance with the applicable procedures of DTC. In connection with any meeting of such holders, the Board of Directors shall fix a record date, neither earlier than 60 days nor later than 10 days prior to the date of such meeting, and holders of record of shares of the Preferred Stock on such record date shall be entitled to notice of and to vote at any such meeting and any adjournment. The Board of Directors, or such person or persons as it may designate, may establish reasonable rules and procedures as to the solicitation of the consent of holders of the Preferred Stock at any such meeting or otherwise, which rules and procedures shall conform to the requirements of any national securities exchange on which the Preferred Stock may be listed at such time.

10. Priority

Any stock of any class or series of Farmer Mac shall be deemed to rank:

(a) senior to the shares of the Preferred Stock, either as to dividends or upon liquidation, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation, or winding up of Farmer Mac, as the case may be, in preference or priority to the holders of shares of the Preferred Stock;

(b) on parity with shares of the Preferred Stock, either as to dividends or upon liquidation, whether or not the dividend rates or amounts, dividend payment dates, or redemption or liquidation prices per share, if any, be different from those of the Preferred Stock, if the holders of such class or series shall be entitled to the receipt of dividends or of amounts distributable upon dissolution, liquidation, or winding up of Farmer Mac, as the case may be, in proportion to their respective dividend rates or amounts or liquidation prices, without preference or priority, one over the other, as between the holders of such class or series and the holders of shares of the Preferred Stock; and

(c) junior to shares of the Preferred Stock, either as to dividends or upon liquidation, if such class or series shall be Common Stock, or if the holders of shares of the Preferred Stock shall be entitled to receipt of dividends or of amounts distributable upon dissolution, liquidation, or winding up of Farmer Mac, as the case may be, in preference or priority to the holders of shares of such class or series.

11. Notices

Any notice, demand, or other communication that by any provision of this Certificate is required or permitted to be given or served to or upon Farmer Mac shall be given or served in writing addressed (unless and until another address shall be published by Farmer Mac) to the Federal Agricultural Mortgage Corporation, 1999 K Street, N.W., 4th Floor, Washington, D.C. 20006, Attention: Executive Vice President—General Counsel and Secretary. Such notice, demand, or other communication to or upon Farmer Mac shall be deemed to have been sufficiently given or made only upon actual receipt of a writing by Farmer Mac. Any notice, demand, or other communication that by any provision of this Certificate is required or permitted to be given or served by Farmer Mac hereunder may be given or served by being deposited first class, postage prepaid, in the United States mail addressed (1) to the holder as such holder’s name and address may appear at such time in the books and records of Farmer Mac or (2) if to a person or entity other than a holder of record of the Preferred Stock, to such person or entity at such address as appears to Farmer Mac to be appropriate at such time; provided that if the Preferred Stock is held in book-entry form through DTC, Farmer Mac may give such notice in any manner permitted by DTC. Such notice, demand, or other communication shall be deemed to have been sufficiently given or made, for all purposes, upon mailing.

12. Miscellaneous

(a) Farmer Mac and any agent of Farmer Mac may deem and treat the holder of a share or shares of Preferred Stock, as shown in Farmer Mac’s books and records, as the absolute owner of such share or shares of Preferred Stock for the purpose of receiving payment of dividends in respect of such share or shares of Preferred Stock and for all other purposes whatsoever, and neither Farmer Mac nor any agent of Farmer Mac shall be affected by any notice to the contrary. All payments made to or upon the order of any such person shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge liabilities for moneys payable by Farmer Mac on or with respect to any such share or shares of Preferred Stock.

(b) The shares of the Preferred Stock, when duly issued, shall be fully paid and non-assessable.

(c) Farmer Mac may at its option issue shares of Preferred Stock without certificates.

(d) For purposes of this Certificate, the term “Farmer Mac” means the Federal Agricultural Mortgage Corporation and any successor thereto by operation of law or by reason of a merger, consolidation, or combination.

(e) This Certificate and the respective rights and obligations of Farmer Mac and the holders of the Preferred Stock with respect to such Preferred Stock shall be construed in accordance with and governed by the laws of the United States, provided that the law of the District of Columbia shall serve as the federal rule of decision in all instances except where such law is inconsistent with Farmer Mac’s enabling legislation, its public purposes or any provision of this Certificate.

(f) RECEIPT AND ACCEPTANCE OF A SHARE OR SHARES OF THE PREFERRED STOCK BY OR ON BEHALF OF A HOLDER SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE HOLDER (AND ALL OTHERS HAVING BENEFICIAL OWNERSHIP OF SUCH SHARE OR SHARES) OF ALL OF THE TERMS AND PROVISIONS OF THIS CERTIFICATE. NO SIGNATURE OR OTHER FURTHER MANIFESTATION OF ASSENT TO THE TERMS AND PROVISIONS OF THIS CERTIFICATE SHALL BE NECESSARY FOR ITS OPERATION OR EFFECT AS BETWEEN FARMER MAC AND THE HOLDER (AND ALL SUCH OTHERS).

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned does hereby sell, assign and transfer ____________ Shares evidenced by the within Certificate unto:

        (Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

, and does hereby irrevocably constitute and irrevocably appoints:

agent to transfer the said Shares on the books of the Transfer Agent, with full power of substitution in the premises.

Dated: __________________

Signature: _______________________

Signature Guarantee*: _________________________

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Transfer Agent).

EX-4.8

Exhibit 4.8

Description of Registrant’s Securities

Class A voting common stock

–Farmer Mac’s Class A voting common stock has a par value of $1.

–Farmer Mac’s statutory charter restricts ownership of Farmer Mac's Class A voting common stock to banks, insurance companies, and other financial institutions or similar entities that are not institutions of the Farm Credit System. Shares of Class A voting common stock may only be transferred to other banks, insurance companies, and other financial institutions or similar entities that are not institutions of the Farm Credit System.

–The charter also provides that five members of Farmer Mac's 15-member board of directors (the “Board”) are elected by a plurality of the votes of the Class A stockholders each year. Each share of Class A voting common stock shall be entitled to one vote for each of the five seats eligible to be elected by holders of Class A voting common stock, with rights of cumulative voting at all elections of directors.

–The charter limits the amount of Class A voting common stock that any one holder may own to no more than 33% of the outstanding shares of Class A voting common stock.

–Except for voting rights with respect to Farmer Mac’s Board and transfer rights (in each case, as described above), there are no other provisions in Farmer Mac’s charter or bylaws permitting a change of control of Farmer Mac absent action on the part of Congress (or the Farm Credit Administration, in the event of a conservatorship).

–Dividends as may be declared by the Board, in the discretion of the Board, shall be paid by Farmer Mac to holders of the Class A voting common stock pro rata based on at minimum the total number of shares of both the Class A voting common stock and the Class B voting common stock outstanding. Declaration and payment of dividends are subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter;

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter; and

–all dividends due on preferred stock have been paid.

–The Class A voting common stock does not contain any conversion terms, sinking fund provisions, redemption provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

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Exhibit 4.8

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares (including Class A voting common stock) receive any payment. Shares of Class A voting common stock have equal liquidation preference to all other classes of Farmer Mac’s common stock and would receive pro rata distribution of any funds remaining after full liquidation of outstanding preferred stock.

–The rights of holders may be modified otherwise than by a vote of a majority or more of the shares outstanding, voting as a class, under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Class A voting common stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Class A voting common stock.

–The rights of holders of Class A voting common stock are materially limited or qualified by the rights of holders of Farmer Mac’s outstanding series of preferred stock in dividend payment and liquidation preference (in each case as described above). The rights of holders of Class A voting common stock are otherwise not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

Class B voting common stock

–Farmer Mac’s Class B voting common stock has a par value of $1.

–Farmer Mac’s statutory charter restricts ownership of Farmer Mac's Class B voting common stock to institutions of the Farm Credit System. Shares of Class B voting common stock may only be transferred to other institutions of the Farm Credit System.

–The charter also provides that five members of Farmer Mac's 15-member board of directors (the “Board”) are elected by a plurality of the votes of the Class B stockholders each year. Each share of Class B voting common stock shall be entitled to one vote for each of the five seats eligible to be elected by holders of Class B voting common stock, with rights of cumulative voting at all elections of directors.

–

–The charter does not prescribe a limit for the amount of Class B voting common stock that any one holder may own.

–Except for voting rights with respect to Farmer Mac’s Board and transfer rights (in each case, as described above), there are no other provisions in Farmer Mac’s charter or bylaws permitting a change of control of Farmer Mac absent action on the part of Congress (or the Farm Credit Administration, in the event of a conservatorship).

2

Exhibit 4.8

–Dividends as may be declared by the Board, in the discretion of the Board, shall be paid by Farmer Mac to holders of the Class B voting common stock pro rata based on at minimum the total number of shares of both the Class A voting common stock and the Class B voting common stock outstanding. Declaration and payment of dividends are subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter;

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter; and

–all dividends due on preferred stock have been paid.

–The Class B voting common stock does not contain any conversion terms, sinking fund provisions, redemption provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares (including Class B voting common stock) receive any payment. Shares of Class B voting common stock have equal liquidation preference to all other classes of Farmer Mac’s common stock and would receive pro rata distribution of any funds remaining after full liquidation of outstanding preferred stock.

–The rights of holders may be modified otherwise than by a vote of a majority or more of the shares outstanding, voting as a class, under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Class B voting common stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Class B voting common stock.

–The rights of holders of Class B voting common stock are materially limited or qualified by the rights of holders of Farmer Mac’s outstanding series of preferred stock in dividend payment and liquidation preference (in each case as described above). The rights of holders of Class B voting common stock are otherwise not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

Class C non-voting common stock

–Farmer Mac’s Class C non-voting common stock has a par value of $1.

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Exhibit 4.8

–The charter does not impose any ownership restrictions on Farmer Mac's Class C non-voting common stock, and shares of this class are freely transferable.  Holders of the Class C non-voting common stock do not vote on the election of directors or any other matter, including any right to a change of control of Farmer Mac.  

–Dividends as may be declared by the Board, in the discretion of the Board, shall be paid by Farmer Mac to holders of the Class C non-voting common stock, subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter;

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter; and

–all dividends due on preferred stock have been paid.

–The Class C non-voting common stock does not contain any conversion terms, sinking fund provisions, redemption provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares (including Class C non-voting common stock) receive any payment. Shares of Class C non-voting common stock have equal liquidation preference to all other classes of Farmer Mac’s common stock and would receive pro rata distribution of any funds remaining after full liquidation of outstanding preferred stock.

–The rights of holders may be modified under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Class C non-voting common stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Class C non-voting common stock.

–The rights of holders of Class C non-voting common stock are materially limited or qualified by the rights of holders of Farmer Mac’s outstanding series of preferred stock in dividend payment and liquidation preference (in each case as described above). The rights of holders of Class C non-voting common stock are otherwise not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

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Exhibit 4.8

5.875% Non-Cumulative Preferred Stock, Series A

–Farmer Mac’s 5.875% Non-Cumulative Preferred Stock, Series A (the “Series A Preferred Stock”) has a par value of $25, an initial liquidation preference of $25 per share, and an annualized (non-cumulative) dividend rate of 5.875%. Each series of outstanding preferred stock (including the Series A Preferred Stock) ranks senior to Farmer Mac’s outstanding classes of common stock.

–The charter does not impose any ownership restrictions on Farmer Mac's Series A Preferred Stock, and shares of this stock are freely transferable.  Holders of the Series A Preferred Stock do not vote on the election of directors or any other matter, including any right to a change of control of Farmer Mac.  

–Dividends as may be declared by the Board, in the discretion of the Board, are paid quarterly to holders of the Series A Preferred Stock. Dividends on the Series A Preferred Stock are non-cumulative, so if the Board has not declared a dividend before the dividend payment date for any dividend period, the dividend will not be paid or accumulate, and Farmer Mac will not be obligated to pay dividends for that dividend period, whether or not dividends on the Series A Preferred Stock are declared for any future dividend period. Farmer Mac may pay dividends on the Series A Preferred Stock without paying dividends on any class or series of stock Farmer Mac may issue in the future that ranks junior to the Series A Preferred Stock. Dividends on the Series A Preferred Stock are also subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter; and

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter.

–The Series A Preferred Stock does not contain any conversion terms, sinking fund provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series A Preferred Stock on and any time after January 17, 2018, at a price equal to the then-applicable liquidation preference. If Farmer Mac chooses to redeem the Series A Preferred Stock, Farmer Mac will provide notice of the redemption between 30 and 60 days prior to the redemption date, by mail or in any manner permitted by the Depository Trust Company, which holds the shares of Series A Preferred Stock in book-entry form. There are no restrictions on redemption if there is any arrearage in the payment of dividends.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par

5

Exhibit 4.8

value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares receive any payment. The shares of Series A Preferred Stock have equal liquidation preference to all other classes of Farmer Mac’s preferred stock. If assets available for distribution to Farmer Mac’s stockholders are insufficient to pay in full the aggregate amount of the par value for all shares of all series of Farmer Mac’s preferred stock (including the Series A Preferred Stock), the assets will be distributed to the holders of shares of the Series A Preferred Stock on a pro rata basis with all other shares of Farmer Mac’s outstanding preferred stock.

–The rights of holders may be modified under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Series A Preferred Stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Series A Preferred Stock.

–The rights of holders of Series A Preferred Stock are not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C

–Farmer Mac’s 6.000% Fixed-to-Floating Non-Cumulative Preferred Stock, Series C (the “Series C Preferred Stock”) has a par value of $25, an initial liquidation preference of $25 per share, and an annualized (non-cumulative) dividend rate of 5.875% from the date of issuance to and including the quarterly payment date on July 17, 2024 and thereafter a floating rate equal to three-month LIBOR plus 3.260%. Each series of outstanding preferred stock (including the Series C Preferred Stock) ranks senior to Farmer Mac’s outstanding classes of common stock.

–The charter does not impose any ownership restrictions on Farmer Mac's Series C Preferred Stock, and shares of this stock are freely transferable.  Holders of the Series C Preferred Stock do not vote on the election of directors or any other matter, including any right to a change of control of Farmer Mac.  

–Dividends as may be declared by the Board, in the discretion of the Board, are paid quarterly to holders of the Series C Preferred Stock. Dividends on the Series C Preferred Stock are non-cumulative, so if the Board has not declared a dividend before the dividend payment date for any dividend period, the dividend will not be paid or accumulate, and Farmer Mac will not be obligated to pay dividends for that dividend period, whether or not dividends on the Series C Preferred Stock are declared for any future dividend period. Farmer Mac may pay dividends on the Series C Preferred Stock without paying dividends on any class or series of stock Farmer Mac may issue in the future that ranks junior to the Series C Preferred Stock. Dividends on the Series C Preferred Stock are also subject to:

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Exhibit 4.8

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter; and

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter.

–The Series C Preferred Stock does not contain any conversion terms, sinking fund provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series C Preferred Stock on and any time after July 18, 2024, at a price equal to the then-applicable liquidation preference. If Farmer Mac chooses to redeem the Series C Preferred Stock, Farmer Mac will provide notice of the redemption between 30 and 60 days prior to the redemption date, by mail or in any manner permitted by the Depository Trust Company, which holds the shares of Series C Preferred Stock in book-entry form. There are no restrictions on redemption if there is any arrearage in the payment of dividends.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares receive any payment. The shares of Series C Preferred Stock have equal liquidation preference to all other classes of Farmer Mac’s preferred stock. If assets available for distribution to Farmer Mac’s stockholders are insufficient to pay in full the aggregate amount of the par value for all shares of all series of Farmer Mac’s preferred stock (including the Series C Preferred Stock), the assets will be distributed to the holders of shares of the Series C Preferred Stock on a pro rata basis with all other shares of Farmer Mac’s outstanding preferred stock.

–The rights of holders may be modified under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Series C Preferred Stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Series C Preferred Stock.

–The rights of holders of Series C Preferred Stock are not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

5.700% Non-Cumulative Preferred Stock, Series D

–Farmer Mac’s 5.700% Non-Cumulative Preferred Stock, Series D (the “Series D Preferred Stock”) has a par value of $25, an initial liquidation preference of $25 per share, and an

7

Exhibit 4.8

annualized (non-cumulative) dividend rate of 5.700%. Each series of outstanding preferred stock (including the Series D Preferred Stock) ranks senior to Farmer Mac’s outstanding classes of common stock.

–The charter does not impose any ownership restrictions on Farmer Mac's Series D Preferred Stock, and shares of this stock are freely transferable.  Holders of the Series D Preferred Stock do not vote on the election of directors or any other matter, including any right to a change of control of Farmer Mac.  

–Dividends as may be declared by the Board, in the discretion of the Board, are paid quarterly to holders of the Series D Preferred Stock. Dividends on the Series D Preferred Stock are non-cumulative, so if the Board has not declared a dividend before the dividend payment date for any dividend period, the dividend will not be paid or accumulate, and Farmer Mac will not be obligated to pay dividends for that dividend period, whether or not dividends on the Series D Preferred Stock are declared for any future dividend period. Farmer Mac may pay dividends on the Series D Preferred Stock without paying dividends on any class or series of stock Farmer Mac may issue in the future that ranks junior to the Series D Preferred Stock. Dividends on the Series D Preferred Stock are also subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter; and

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter.

–The Series D Preferred Stock does not contain any conversion terms, sinking fund provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series D Preferred Stock on any scheduled dividend payment date on or after July 17, 2024, at a price equal to the then-applicable liquidation preference. If Farmer Mac chooses to redeem the Series D Preferred Stock, Farmer Mac will provide notice of the redemption between 30 and 60 days prior to the redemption date, by mail or in any manner permitted by the Depository Trust Company, which holds the shares of Series D Preferred Stock in book-entry form. There are no restrictions on redemption if there is any arrearage in the payment of dividends.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares receive any payment. The shares of Series D Preferred Stock have equal liquidation preference to all other classes of Farmer Mac’s preferred stock. If assets available for distribution to Farmer Mac’s stockholders are insufficient to pay in full the

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Exhibit 4.8

aggregate amount of the par value for all shares of all series of Farmer Mac’s preferred stock (including the Series D Preferred Stock), the assets will be distributed to the holders of shares of the Series D Preferred Stock on a pro rata basis with all other shares of Farmer Mac’s outstanding preferred stock.

–The rights of holders may be modified under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Series D Preferred Stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Series D Preferred Stock.

–The rights of holders of Series D Preferred Stock are not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

5.750% Non-Cumulative Preferred Stock, Series E

–Farmer Mac’s 5.750% Non-Cumulative Preferred Stock, Series E (the “Series E Preferred Stock”) has a par value of $25, an initial liquidation preference of $25 per share, and an annualized (non-cumulative) dividend rate of 5.750%. Each series of outstanding preferred stock (including the Series E Preferred Stock) ranks senior to Farmer Mac’s outstanding classes of common stock.

–The charter does not impose any ownership restrictions on Farmer Mac's Series E Preferred Stock, and shares of this stock are freely transferable.  Holders of the Series E Preferred Stock do not vote on the election of directors or any other matter, including any right to a change of control of Farmer Mac.  

–Dividends as may be declared by the Board, in the discretion of the Board, are paid quarterly to holders of the Series E Preferred Stock. Dividends on the Series E Preferred Stock are non-cumulative, so if the Board has not declared a dividend before the dividend payment date for any dividend period, the dividend will not be paid or accumulate, and Farmer Mac will not be obligated to pay dividends for that dividend period, whether or not dividends on the Series E Preferred Stock are declared for any future dividend period. Farmer Mac may pay dividends on the Series E Preferred Stock without paying dividends on any class or series of stock Farmer Mac may issue in the future that ranks junior to the Series E Preferred Stock. Dividends on the Series E Preferred Stock are also subject to:

–the Board’s determination that adequate provision has been made for Farmer Mac’s reserve against guarantee losses prescribed by section 8.10(c)(1) of its charter; and

–there being no outstanding obligations of Farmer Mac to the U.S. Treasury Department under section 8.13 of Farmer Mac’s charter.

9

Exhibit 4.8

–The Series E Preferred Stock does not contain any conversion terms, sinking fund provisions, or preemption rights, and the holders of these shares do not face liability to further calls or assessment by Farmer Mac for any reason. There are no provisions discriminating against any existing or prospective holder as a result of such holder owning a substantial amount of shares or other securities of Farmer Mac.

–Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series E Preferred Stock on any scheduled dividend payment date on or after July 17, 2025, at a price equal to the then-applicable liquidation preference. If Farmer Mac chooses to redeem the Series E Preferred Stock, Farmer Mac will provide notice of the redemption between 30 and 60 days prior to the redemption date, by mail or in any manner permitted by the Depository Trust Company, which holds the shares of Series E Preferred Stock in book-entry form. There are no restrictions on redemption if there is any arrearage in the payment of dividends.

–In the event of any liquidation, dissolution, or winding up of the business of Farmer Mac, the holders of all series of Farmer Mac’s preferred stock shall be paid in full at the par value of that preferred stock, plus all accrued dividends, before the holders of any class of common shares receive any payment. The shares of Series E Preferred Stock have equal liquidation preference to all other classes of Farmer Mac’s preferred stock. If assets available for distribution to Farmer Mac’s stockholders are insufficient to pay in full the aggregate amount of the par value for all shares of all series of Farmer Mac’s preferred stock (including the Series E Preferred Stock), the assets will be distributed to the holders of shares of the Series E Preferred Stock on a pro rata basis with all other shares of Farmer Mac’s outstanding preferred stock.

–The rights of holders may be modified under the following circumstances:

–Congress may modify Farmer Mac’s charter at any time and in any manner, which could affect the rights of any of Farmer Mac’s securityholders, including holders of Series E Preferred Stock; and

–Farmer Mac’s charter prescribes that the Board may adopt and amend bylaws not inconsistent with Farmer Mac’s charter or other laws or regulations, which may have the effect of modifying the rights of holders of Series E Preferred Stock.

The rights of holders of Series E Preferred Stock are not materially limited or qualified by the rights of any other holders of Farmer Mac’s outstanding securities.

10

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Bradford T. Nordholm, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of the Federal Agricultural Mortgage Corporation for the fiscal quarter ended June 30, 2020;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 10, 2020

/s/ Bradford T. Nordholm

Bradford T. Nordholm

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Aparna Ramesh, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of the Federal Agricultural Mortgage Corporation for the fiscal quarter ended June 30, 2020;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 10, 2020

/s/ Aparna Ramesh

Aparna Ramesh

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of the Federal Agricultural Mortgage Corporation (the “Corporation”) for the quarterly period ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Bradford T. Nordholm, Chief Executive Officer of the Corporation, and Aparna Ramesh, Chief Financial Officer of the Corporation, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to their knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

/s/ Bradford T. Nordholm
Bradford T. Nordholm
Chief Executive Officer
/s/ Aparna Ramesh
Aparna Ramesh
Chief Financial Officer
Date:	August 10, 2020

XML

COVER PAGE - shares	6 Months Ended
	Jun. 30, 2020	Aug. 03, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Entity File Number	001-14951
Entity Registrant Name	FEDERAL AGRICULTURAL MORTGAGE CORPORATION
Entity Incorporation, State or Country Code	X1
Entity Tax Identification Number	52-1578738
Entity Address, Address Line One	1999 K Street, N.W., 4th Floor,
Entity Address, City or Town	Washington,
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20006
City Area Code	(202)
Local Phone Number	872-7700
Title of 12(g) Security	Class B voting common stock
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Central Index Key	0000845877
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Class A voting common stock
Entity Information [Line Items]
Title of 12(b) Security	Class A voting common stock
Trading Symbol	AGM.A
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		1,030,780
Class C non-voting common stock
Entity Information [Line Items]
Title of 12(b) Security	Class C non-voting common stock
Trading Symbol	AGM
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding		9,201,754
5.875% Non-Cumulative Preferred Stock, Series A
Entity Information [Line Items]
Title of 12(b) Security	5.875% Non-Cumulative Preferred Stock, Series A
Trading Symbol	AGM.PRA
Security Exchange Name	NYSE
6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
Entity Information [Line Items]
Title of 12(b) Security	6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
Trading Symbol	AGM.PRC
Security Exchange Name	NYSE
5.700% Non-Cumulative Preferred Stock, Series D
Entity Information [Line Items]
Title of 12(b) Security	5.700% Non-Cumulative Preferred Stock, Series D
Trading Symbol	AGM.PRD
Security Exchange Name	NYSE
Series E Preferred Stock
Entity Information [Line Items]
Title of 12(b) Security	5.750% Non-Cumulative Preferred Stock, Series E
Trading Symbol	AGM.PRE
Security Exchange Name	NYSE
Common Class B, Voting
Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		500,301

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets:
Cash and cash equivalents	$ 827,600	$ 604,381
Loans:
Loans held for investment, at amortized cost	6,469,997	5,390,977
Loans held for investment in consolidated trusts, at amortized cost	1,436,090	1,600,917
Allowance for losses	(14,939)	(10,454)
Total loans, net of allowance	7,891,148	6,981,440
Financial derivatives, at fair value	16,588	10,519
Interest receivable (includes $17,415 and $20,568, respectively, related to consolidated trusts)	175,659	199,195
Guarantee and commitment fees receivable	36,612	38,442
Deferred tax asset, net	38,790	16,510
Prepaid expenses and other assets	47,035	22,463
Total Assets	23,932,656	21,709,374
Liabilities:
Notes payable	21,421,550	19,098,648
Debt securities of consolidated trusts held by third parties	1,476,964	1,616,504
Financial derivatives, at fair value	47,543	27,042
Accrued interest payable (includes $15,007 and $18,018, respectively, related to consolidated trusts)	100,134	106,959
Guarantee and commitment obligation	35,162	36,700
Accounts payable and accrued expenses	24,167	22,081
Reserve for losses	3,020	2,164
Total Liabilities	23,108,540	20,910,098
Commitments and Contingencies
Common stock:
Additional paid-in capital	120,856	119,304
Accumulated other comprehensive loss, net of tax	(91,497)	(16,161)
Retained earnings	478,647	457,047
Total Equity	824,116	799,276
Total Liabilities and Equity	23,932,656	21,709,374
5.875% Non-Cumulative Preferred Stock, Series A
Preferred stock:
Preferred stock	58,333	58,333
6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
Preferred stock:
Preferred stock	73,382	73,382
5.700% Non-Cumulative Preferred Stock, Series D
Preferred stock:
Preferred stock	96,659	96,659
Series E Preferred Stock
Preferred stock:
Preferred stock	77,003	0
Class A voting common stock
Common stock:
Common Stock	1,031	1,031
Common Class B, Voting
Common stock:
Common Stock	500	500
Class C non-voting common stock
Common stock:
Common Stock	9,202	9,181
Debt Securities
Assets:
Available-for-sale, at fair value	3,467,378	2,959,843
Held-to-maturity, at amortized cost	45,032	45,032
Total Securities	3,512,410	3,004,875
Farmer Mac Guaranteed Securities:
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
Held-to-maturity, at amortized cost	1,140,718	1,447,451
Total Securities	9,039,105	8,590,476
USDA Securities:
Assets:
Held-to-maturity, at amortized cost	2,339,923	2,232,160
Trading, at fair value	7,786	8,913
Total Securities	$ 2,347,709	$ 2,241,073

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Interest receivable - consolidated trusts amount	$ 175,659	$ 199,195
Accrued interest payable - consolidated trusts amount	100,134	106,959
Available-for-Sale Securities
Amortized cost of available-for-sale investment securities	3,458,957	2,961,430
Farmer Mac Guaranteed Securities:
Amortized cost of available-for-sale investment securities	7,539,944	7,016,971
Variable Interest Entity, Primary Beneficiary
Interest receivable - consolidated trusts amount	17,415	20,568
Accrued interest payable - consolidated trusts amount	$ 15,007	$ 18,018
5.875% Non-Cumulative Preferred Stock, Series A
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	2,400,000	2,400,000
Preferred stock, shares issued (in shares)	2,400,000	2,400,000
Preferred stock, shares outstanding (in shares)	2,400,000	2,400,000
6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	3,000,000	3,000,000
Preferred stock, shares outstanding (in shares)	3,000,000	3,000,000
5.700% Non-Cumulative Preferred Stock, Series D
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	4,000,000	4,000,000
Preferred stock, shares issued (in shares)	4,000,000	4,000,000
Preferred stock, shares outstanding (in shares)	4,000,000	4,000,000
Series E Preferred Stock
Preferred stock, par value (in dollars per share)	$ 25	$ 25
Preferred stock, shares authorized (in shares)	3,180,000	3,180,000
Preferred stock, shares issued (in shares)	3,180,000	3,180,000
Preferred stock, shares outstanding (in shares)	3,180,000	3,180,000
Class A voting common stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares outstanding (in shares)	1,030,780	1,030,780
Common Class B, Voting
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares outstanding (in shares)	500,301	500,301
Class C non-voting common stock
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares outstanding (in shares)	9,201,623	9,180,744

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Interest income:
Investments and cash equivalents	$ 10,399	$ 20,156	$ 28,140	$ 38,863
Farmer Mac Guaranteed Securities and USDA Securities	61,792	85,569	133,309	170,980
Loans	55,430	59,403	116,026	110,800
Total interest income	127,621	165,128	277,475	320,643
Total interest expense	79,273	122,074	187,815	236,990
Net interest income	48,348	43,054	89,660	83,653
Provision for losses	(451)	(578)	(3,889)	(314)
Net interest income after provision for losses	47,897	42,476	85,771	83,339
Non-interest income/(expense):
Guarantee and commitment fees	3,140	3,403	6,336	6,916
Gains/(losses) on financial derivatives	6,523	8,913	(2,775)	8,553
(Losses)/gains on trading securities	(21)	61	85	105
Gains on sale of real estate owned	0	0	485	0
Release of reserve for losses	400	158	7	287
Other income	1,229	355	2,045	848
Non-interest income	11,271	12,890	6,183	16,709
Operating expenses:
Compensation and employee benefits	8,087	6,770	18,214	14,376
General and administrative	5,295	4,689	10,658	9,285
Regulatory fees	725	687	1,450	1,375
Real estate owned operating costs, net	0	64	0	64
Operating expenses	14,107	12,210	30,322	25,100
Income before income taxes	45,061	43,156	61,632	74,948
Income tax expense	9,435	9,111	13,176	15,733
Net income attributable to Farmer Mac	35,626	34,045	48,456	59,215
Preferred stock dividends	(3,939)	(3,785)	(7,370)	(7,081)
Loss on retirement of preferred stock	0	(1,956)	0	(1,956)
Net income attributable to common stockholders	$ 31,687	$ 28,304	$ 41,086	$ 50,178
Earnings per common share:
Basic earnings per common share (in dollars per share)	$ 2.95	$ 2.65	$ 3.83	$ 4.70
Diluted earnings per common share (in dollars per share)	$ 2.94	$ 2.63	$ 3.81	$ 4.66

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income	$ 35,626	$ 34,045	$ 48,456	$ 59,215
Other comprehensive income before taxes:
Net unrealized gains/(losses) on available-for-sale securities	42,527	(28,588)	(56,789)	(25,347)
Net changes in held-to-maturity securities	(2,496)	(4,601)	(8,184)	(6,863)
Net unrealized losses on cash flow hedges	(2,132)	(9,972)	(30,388)	(15,637)
Other comprehensive gain/(loss) before tax	37,899	(43,161)	(95,361)	(47,847)
Income tax (expense)/benefit related to other comprehensive gain/(loss)	(7,959)	9,064	20,025	10,048
Other comprehensive gain/(loss) net of tax	29,940	(34,097)	(75,336)	(37,799)
Comprehensive income/(loss) attributable to Farmer Mac	$ 65,566	$ (52)	$ (26,880)	$ 21,416

XML

CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Class C non-voting common stock	Series E Preferred Stock	5.700% Non-Cumulative Preferred Stock, Series D	Series B Preferred Stock	Preferred Stock	Preferred Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Preferred Stock Series E Preferred Stock	Preferred Stock 5.700% Non-Cumulative Preferred Stock, Series D	Preferred Stock Series B Preferred Stock	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock Class C non-voting common stock	Additional Paid-in Capital	Additional Paid-in Capital Cumulative Effect, Period of Adoption, Adjusted Balance	Additional Paid-in Capital Class C non-voting common stock	Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss) Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings Class C non-voting common stock
Beginning balance ( in shares) at Dec. 31, 2018								8,400					10,669
Beginning balance at Dec. 31, 2018	$ 752,557							$ 204,759					$ 10,669			$ 118,822			$ 24,956		$ 393,351
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	25,170																				25,170
Other comprehensive loss, net of tax	(3,702)																		(3,702)
Cash dividends, preferred stock	(3,296)																				(3,296)
Cash dividends, common stock	(7,470)																				(7,470)
Issuance of stock (in shares)															20
Issuance of stock				$ 23											$ 20			$ 3
Stock-based compensation cost	724															724
Other stock-based award activity	(708)															(708)
Ending balance (in shares) at Mar. 31, 2019								8,400					10,689
Ending balance at Mar. 31, 2019	763,298							$ 204,759					$ 10,689			118,841			21,254		407,755
Beginning balance ( in shares) at Dec. 31, 2018								8,400					10,669
Beginning balance at Dec. 31, 2018	752,557							$ 204,759					$ 10,669			118,822			24,956		393,351
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	59,215
Other comprehensive loss, net of tax	(37,799)
Loss on retirement of preferred stock	(1,956)
Ending balance (in shares) at Jun. 30, 2019								9,400					10,700
Ending balance at Jun. 30, 2019	773,742							$ 228,374					$ 10,700			118,942			(12,843)		428,569
Beginning balance ( in shares) at Dec. 31, 2018								8,400					10,669
Beginning balance at Dec. 31, 2018	752,557							$ 204,759					$ 10,669			118,822			24,956		393,351
Ending balance (in shares) at Dec. 31, 2019								9,400	9,400				10,712	10,712
Ending balance at Dec. 31, 2019	799,276	$ (2,099)	$ 797,177					$ 228,374	$ 228,374				$ 10,712	$ 10,712		119,304	$ 119,304		(16,161)	$ (16,161)	457,047	$ (2,099)	$ 454,948
Beginning balance ( in shares) at Mar. 31, 2019								8,400					10,689
Beginning balance at Mar. 31, 2019	763,298							$ 204,759					$ 10,689			118,841			21,254		407,755
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	34,045																				34,045
Other comprehensive loss, net of tax	(34,097)																		(34,097)
Cash dividends, preferred stock	(3,785)																				(3,785)
Cash dividends, common stock	(7,490)																				(7,490)
Issuance of stock (in shares)											4,000				11
Issuance of stock				14		$ 96,659					$ 96,659				$ 11			3
Redemption of stock (in shares)												(3,000)
Redemption of stock							$ (73,044)					$ (73,044)
Loss on retirement of preferred stock	(1,956)																				(1,956)
Stock-based compensation cost	533															533
Other stock-based award activity	(435)															(435)
Ending balance (in shares) at Jun. 30, 2019								9,400					10,700
Ending balance at Jun. 30, 2019	773,742							$ 228,374					$ 10,700			118,942			(12,843)		428,569
Beginning balance ( in shares) at Dec. 31, 2019								9,400	9,400				10,712	10,712
Beginning balance at Dec. 31, 2019	799,276	(2,099)	797,177					$ 228,374	$ 228,374				$ 10,712	$ 10,712		119,304	119,304		(16,161)	(16,161)	457,047	(2,099)	454,948
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	12,830																				12,830
Other comprehensive loss, net of tax	(105,276)																		(105,276)
Cash dividends, preferred stock	(3,431)																				(3,431)
Cash dividends, common stock	(8,571)																				(8,571)
Issuance of stock (in shares)															15
Issuance of stock				34											$ 15			19
Repurchase of Class C Common Stock (in shares)															(4)
Repurchase of Class C Common Stock				(235)											$ (4)									$ (231)
Stock-based compensation cost	1,293															1,293
Other stock-based award activity	(204)															(204)
Ending balance (in shares) at Mar. 31, 2020								9,400					10,723
Ending balance at Mar. 31, 2020	693,617							$ 228,374					$ 10,723			120,412			(121,437)		455,545
Beginning balance ( in shares) at Dec. 31, 2019								9,400	9,400				10,712	10,712
Beginning balance at Dec. 31, 2019	799,276	$ (2,099)	$ 797,177					$ 228,374	$ 228,374				$ 10,712	$ 10,712		119,304	$ 119,304		(16,161)	$ (16,161)	457,047	$ (2,099)	$ 454,948
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	48,456
Other comprehensive loss, net of tax	(75,336)
Loss on retirement of preferred stock	0
Ending balance (in shares) at Jun. 30, 2020								12,580					10,733
Ending balance at Jun. 30, 2020	$ 824,116							$ 305,377					$ 10,733			120,856			(91,497)		478,647
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Beginning balance ( in shares) at Mar. 31, 2020								9,400					10,723
Beginning balance at Mar. 31, 2020	$ 693,617							$ 228,374					$ 10,723			120,412			(121,437)		455,545
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	35,626																				35,626
Other comprehensive loss, net of tax	29,940																		29,940
Cash dividends, preferred stock	(3,939)																				(3,939)
Cash dividends, common stock	(8,585)																				(8,585)
Issuance of stock (in shares)										3,180					10
Issuance of stock				$ 27	$ 77,003					$ 77,003					$ 10			$ 17
Loss on retirement of preferred stock	0
Stock-based compensation cost	719
Other stock-based award activity	(292)															(292)
Ending balance (in shares) at Jun. 30, 2020								12,580					10,733
Ending balance at Jun. 30, 2020	$ 824,116							$ 305,377					$ 10,733			$ 120,856			$ (91,497)		$ 478,647

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CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Common stock dividends per common share (in dollars per share)	$ 0.80	$ 0.80	$ 0.70	$ 0.70

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ 48,456	$ 59,215
Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	1,095	(4,922)
Amortization of debt premiums, discounts, and issuance costs	14,769	24,022
Net change in fair value of trading securities, hedged assets, and financial derivatives	(401,002)	(208,213)
Gain on sale of real estate owned	(485)	0
Total provision for allowance for losses	3,882	27
Excess tax benefits related to stock-based awards	(475)	259
Deferred income taxes	(2,254)	5,874
Stock-based compensation expense	2,012	1,257
Proceeds from repayment of loans purchased as held for sale	35,351	23,239
Net change in:
Interest receivable	24,139	(4,578)
Guarantee and commitment fees receivable	292	120
Other assets	(23,446)	(9,006)
Accrued interest payable	(6,825)	11,386
Other liabilities	(2,453)	651
Net cash used in operating activities	(306,944)	(100,669)
Cash flows from investing activities:
Purchases of loans held for investment	(1,502,920)	(1,101,705)
Purchases of defaulted loans	(6,272)	0
Proceeds from repayment of loans purchased as held for investment	712,238	330,387
Proceeds from sale of Farmer Mac Guaranteed Securities	28,050	166,351
Proceeds from sale of real estate owned	2,191	0
Net cash used in investing activities	(1,592,368)	(1,741,530)
Cash flows from financing activities:
Payments to third parties on debt securities of consolidated trusts	(175,004)	(80,820)
Proceeds from common stock issuance	36	6
Retirement of Series B preferred stock	0	(75,000)
Tax payments related to share-based awards	(471)	(1,112)
Purchases of common stock	(235)	0
Dividends paid on common and preferred stock	(24,018)	(22,041)
Net cash provided by financing activities	2,122,531	1,813,545
Net change in cash and cash equivalents	223,219	(28,654)
Cash and cash equivalents at beginning of period	604,381	425,256
Cash and cash equivalents at end of period	827,600	396,602
Non-cash activity:
Loans acquired and securitized as Farmer Mac Guaranteed Securities	28,050	166,351
Consolidation of Farmer Mac Guaranteed Securities from off-balance sheet to loans held for investment in consolidated trusts and to debt securities of consolidated trusts held by third parties	28,050	118,004
Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment	7,414	4,721
Maturity of investment security - not yet settled	0	(35,075)
Purchases of securities - traded, not yet settled	4,588	10,000
5.700% Non-Cumulative Preferred Stock, Series D
Cash flows from financing activities:
Proceeds from preferred stock issuance, net of stock issuance costs	0	96,659
Series E Preferred Stock
Cash flows from financing activities:
Proceeds from preferred stock issuance, net of stock issuance costs	77,003	0
Medium-term Notes
Cash flows from financing activities:
Proceeds from issuance of discount notes and medium-term notes	7,791,406	4,467,265
Payments to redeem notes	(5,847,765)	(3,106,538)
Notes Payable to Banks
Cash flows from financing activities:
Proceeds from issuance of discount notes and medium-term notes	34,376,593	28,265,587
Payments to redeem notes	(34,075,014)	(27,730,461)
Debt Securities
Cash flows from investing activities:
Purchases of securities	(1,591,501)	(1,217,901)
Proceeds from repayment of securities	1,097,237	500,462
Farmer Mac Guaranteed Securities and USDA Securities
Cash flows from investing activities:
Purchases of securities	(1,361,109)	(1,660,280)
Proceeds from repayment of securities	$ 1,029,718	$ 1,241,156

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation ("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Farmer Mac and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted as permitted by SEC rules and regulations. The December 31, 2019 consolidated balance sheet presented in this report has been derived from Farmer Mac's audited 2019 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2019 consolidated financial statements of Farmer Mac and subsidiaries included in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 25, 2020. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain updated information for the three and six months ended June 30, 2020.

Principles of Consolidation

The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries during the year: (1) Farmer Mac Mortgage Securities Corporation ("FMMSC"), whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Guarantees line of business – primarily the acquisition of USDA Securities. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

The following tables present, by line of business, details about the consolidation of VIEs:

Table 1.1

	Consolidation of Variable Interest Entities
	As of June 30, 2020
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,436,090	$	—	$	—	$	1,436,090
Debt securities of consolidated trusts held by third parties (1)	1,476,964		—		—		1,476,964
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,615		—		32,615
Maximum exposure to loss (3)	—		32,537		—		32,537
Investment securities:
Carrying value (4)	—		—		1,651,031		1,651,031
Maximum exposure to loss (3) (4)	—		—		1,648,328		1,648,328
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	90,225		330,309		—		420,534

⁽¹⁾Includes borrower remittances of $40.9 million. The borrower remittances had not been passed through to third party investors as of June 30, 2020.

⁽²⁾Includes $0.1 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

	Consolidation of Variable Interest Entities
	As of December 31, 2019
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,600,917	$	—	$	—	$	1,600,917
Debt securities of consolidated trusts held by third parties (1)	1,616,504		—		—		1,616,504
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,041		—		32,041
Maximum exposure to loss (3)	—		31,887		—		31,887
Investment securities:
Carrying value (4)	—		—		1,117,203		1,117,203
Maximum exposure to loss (3) (4)	—		—		1,120,765		1,120,765
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	107,322		389,216		—		496,538

⁽¹⁾Includes borrower remittances of $15.6 million. The borrower remittances had not been passed through to third party investors as of December 31, 2019.

⁽²⁾Includes $0.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

Earnings Per Common Share

Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding.  Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock awards.  The following schedule reconciles basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:

Table 1.2

	For the Three Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	31,687	10,730	$	2.95	$	28,304	10,698	$	2.65
Effect of dilutive securities(1)
SARs and restricted stock	—		46	(0.01)		—		72	(0.02)
Diluted EPS	$	31,687	10,776	$	2.94	$	28,304	10,770	$	2.63

⁽¹⁾For the three months ended June 30, 2020 and 2019, SARs and restricted stock of 83,297 and 62,660, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

	For the Six Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	41,086	10,721	$	3.83	$	50,178	10,684	$	4.70
Effect of dilutive securities(1)
SARs and restricted stock	—		58	(0.02)		—		90	(0.04)
Diluted EPS	$	41,086	10,779	$	3.81	$	50,178	10,774	$	4.66

⁽¹⁾For the six months ended June 30, 2020 and 2019, SARs and restricted stock of 85,223 and 59,818, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the six months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

Comprehensive IncomeComprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and six months ended June 30, 2020 and 2019:

Table 1.3

	As of June 30, 2020								As of June 30, 2019
	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	(121,858)	$	28,351	$	(27,930)	$	(121,437)	$	(22,800)	$	41,656	$	2,398	$	21,254
Other comprehensive income/(loss) before reclassifications	34,374		—		(2,920)		31,454		(21,711)		—		(7,512)		(29,223)
Amounts reclassified from AOCI	(777)		(1,972)		1,235		(1,514)		(873)		(3,635)		(366)		(4,874)
Net comprehensive income/(loss)	33,597		(1,972)		(1,685)		29,940		(22,584)		(3,635)		(7,878)		(34,097)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)
For the Six Months Ended:
Beginning Balance	$	(43,397)	$	32,845	$	(5,609)	$	(16,161)	$	(25,360)	$	43,443	$	6,873	$	24,956
Other comprehensive loss before reclassifications	(43,310)		—		(25,588)		(68,898)		(18,393)		—		(11,608)		(30,001)
Amounts reclassified from AOCI	(1,554)		(6,466)		1,582		(6,438)		(1,631)		(5,422)		(745)		(7,798)
Net comprehensive loss	(44,864)		(6,466)		(24,006)		(75,336)		(20,024)		(5,422)		(12,353)		(37,799)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the three and six months ended June 30, 2020 and 2019:

Table 1.4

	For the Three Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	$	43,512	$	9,138	$	34,374	$	(27,482)	$	(5,771)	$	(21,711)
Less reclassification adjustments included in:
Net interest income(1)	(971)		(204)		(767)		(956)		(201)		(755)
Other income(2)	(14)		(4)		(10)		(150)		(32)		(118)
Total	$	42,527	$	8,930	$	33,597	$	(28,588)	$	(6,004)	$	(22,584)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(2,496)		(524)		(1,972)		(4,601)		(966)		(3,635)
Total	$	(2,496)	$	(524)	$	(1,972)	$	(4,601)	$	(966)	$	(3,635)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(3,695)	$	(775)	$	(2,920)	$	(9,510)	$	(1,998)	$	(7,512)
Less reclassification adjustments included in:
Net interest income(4)	1,563		328		1,235		(462)		(96)		(366)
Total	$	(2,132)	$	(447)	$	(1,685)	$	(9,972)	$	(2,094)	$	(7,878)
Other comprehensive income/(loss)	$	37,899	$	7,959	$	29,940	$	(43,161)	$	(9,064)	$	(34,097)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

	For the Six Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding losses on available-for-sale securities	$	(54,822)	$	(11,512)	$	(43,310)	$	(23,282)	$	(4,889)	$	(18,393)
Less reclassification adjustments included in:
Net interest income(1)	(1,940)		(407)		(1,533)		(1,909)		(401)		(1,508)
Other income(2)	(27)		(6)		(21)		(156)		(33)		(123)
Total	$	(56,789)	$	(11,925)	$	(44,864)	$	(25,347)	$	(5,323)	$	(20,024)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(8,184)		(1,718)		(6,466)		(6,863)		(1,441)		(5,422)
Total	$	(8,184)	$	(1,718)	$	(6,466)	$	(6,863)	$	(1,441)	$	(5,422)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(32,390)	$	(6,802)	$	(25,588)	$	(14,695)	$	(3,087)	$	(11,608)
Less reclassification adjustments included in:
Net interest income(4)	2,002		420		1,582		(942)		(197)		(745)
Total	$	(30,388)	$	(6,382)	$	(24,006)	$	(15,637)	$	(3,284)	$	(12,353)
Other comprehensive loss	$	(95,361)	$	(20,025)	$	(75,336)	$	(47,847)	$	(10,048)	$	(37,799)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

Allowance for Losses and Reserve for Losses

On January 1, 2020, Farmer Mac adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, ("CECL"). Under CECL, Farmer Mac's allowance for credit losses represents the difference between the carrying amount of the related financial instruments and the present value of their expected cash flows discounted at their effective interest rates, as of the respective balance sheet date. Under CECL, Farmer Mac's reserve for credit losses represents the difference between the outstanding amount of off-balance sheet credit exposures and the present value of their expected cash flows discounted at their effective interest rates.

Farmer Mac maintains an allowance for credit losses to cover current expected credit losses as of the balance sheet date for on-balance sheet investment securities, loans held for investment, and Farmer Mac Guaranteed Securities (collectively referred to as "allowance for losses"). Additionally, Farmer Mac maintains a reserve for credit losses to cover current expected credit losses as of the balance sheet date for off-balance sheet loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities (collectively referred to as "reserve for losses"). Both the allowance for losses and reserve for losses are based on historical information and reasonable and supportable forecasts.  

Farmer Mac has never experienced a credit loss in its Rural Utilities line of business. Upon the adoption of CECL, Farmer Mac is now required to measure its expected credit losses for the expected life of all financial instruments, including its Rural Utilities loans. To estimate expected credit losses on these loans, Farmer Mac relies upon industry historical credit loss data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities industry.

The allowance for losses increases through periodic provisions for loan losses that are charged against net interest income and the reserve for losses increases through provisions for losses that are charged to non-interest expense. Both the allowance for losses and reserve for losses are decreased by charge-offs for realized losses, net of recoveries.  Releases from the allowance for losses or reserve for losses occur when the estimate of expected credit losses as of the end of a period is less than the estimate at the beginning of the period.

The total allowance for losses consists of the allowance for losses and the reserve for losses.

Charge-offs

Farmer Mac records a charge-off against the allowance for losses principally when a loss has been confirmed through the receipt of assets, generally the underlying collateral, in full satisfaction of the loan. The loss equals the excess of the recorded investment in the loan over the fair value of the collateral less estimated selling costs.

Estimation Methodology

Farmer Mac bases its methodology for determining its current estimate of expected losses on a statistical model, which incorporates credit loss history and reasonable and supportable forecasts. Farmer Mac's estimation methodology is comprised of the following key components:

•An economic model for each portfolio, including Farm & Ranch, Rural Utilities, and Institutional Credit;

•A migration matrix for each portfolio that reasonably predicts the movement of each financial asset among various risk categories over the course of each asset's expected life. The migration matrix forms the basis for our estimate of the probability of default of each financial asset;

•A loss-given-default ("LGD") model that reasonably predicts the amount of loss that Farmer Mac would incur upon the default of each financial asset;

•An economic factor forecast that updates the migration matrix model and the LGD model with current assumptions for the economic indicators that Farmer Mac has determined are most correlated with or relevant to the performance of each portfolio of assets; including Gross Domestic Product ("GDP"), credit spreads, unemployment rates, land values, and commodity prices; and

•A discounted cash flow analysis, which relies upon each of the above model outputs, plus the contractual terms of each financial asset, and the effective interest rate of each financial asset.

Management evaluates these assumptions by considering many relevant factors, including:

•economic conditions;

•geographic and agricultural commodity/product concentrations in the portfolio;

•the credit profile of the portfolio, including risk ratings and financial metrics;

•delinquency trends of the portfolio;

•historical charge-off and recovery activities of the portfolio; and

•other factors to capture current portfolio trends and characteristics that differ from historical experience.

Management believes that its methodology produces a reasonable estimate of expected credit losses, as of the balance sheet date, for the expected life of all of its financial assets.

Allowance for Loss on Available-for-Sale (AFS) Securities

To measure current expected credit losses on impaired AFS securities, Farmer Mac first considers those impaired securities that: 1) Farmer Mac does not intend to sell, and 2) it is not more likely than not that Farmer Mac will be required to sell before recovering its amortized cost basis. In assessing whether a credit loss exists, Farmer Mac compares the present value, discounted at the security's effective interest rate, of cash flows expected to be collected from an impaired AFS debt security to its amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis of the impaired security, a credit loss exists and Farmer Mac records an allowance for loss for that credit loss. However, the amount of that allowance is limited by the amount that the security’s fair value is less than its amortized cost basis. Accrued interest receivable is recorded separately on the Consolidated Balance Sheet, and the allowance for credit losses excludes uncollectible accrued interest receivable.

Collateral Dependent Assets ("CDAs")

CDAs are loans, loans underlying LTSPCs, or off-balance sheet credit exposures in which the borrower is either in foreclosure or is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral by Farmer Mac. Farmer Mac estimates the current expected credit loss on CDAs based upon the appraised value of the collateral, the costs to sell it, and any applicable credit protection such as a guarantee.

COVID-19 Payment Deferments

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law on March 27, 2020. Section 4013 of the CARES Act titled “Temporary Relief from Troubled Debt Restructurings” provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (“TDRs”) for a limited period of time to account for the effects of the novel coronavirus disease 2019 ("COVID-19"). On April 10, 2020, Farmer Mac’s prudential regulator, the Office of Secondary Market Oversight (OSMO) within the Farm Credit Administration (FCA), issued guidance to Farmer Mac on loan servicing and reporting TDRs for lines of business affected by the COVID-19 outbreak. This guidance was consistent with the guidance provided by other financial regulatory agencies and the Financial Accounting Standards Board that short-term modifications made on a good faith basis in response to the COVID-19 national emergency are not TDRs when the borrower was not past due on loan payments before the March 13, 2020 presidential proclamation declaring the COVID-19 outbreak a national emergency.

During second quarter 2020, Farmer Mac implemented the guidance from FCA by granting up to 6-month payment deferments to borrowers who have been economically impacted by COVID-19. Farmer Mac deems loans under a COVID-19 payment deferment not to be past due and continues to accrue interest on those loans. Furthermore, Farmer Mac does not consider a payment deferment on any such loan to be a troubled debt restructuring. For the purpose of estimating expected credit losses on Farm & Ranch loans held for investment, Farmer Mac does consider payment deferments along with other available credit and economic information that pertains to that portfolio.

New Accounting Standards

Recently Adopted Accounting Guidance

Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This Update required entities to measure all expected credit losses for financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, as well as requiring entities to use forward-looking information to form their credit loss estimates.	January 1, 2020	In first quarter 2020 Farmer Mac adopted the new guidance. The cumulative-effect adjustment to retained earnings as of January 1, 2020 reflected application of the new guidance and did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. For more information on the transition adjustment see Table 1.5 below.
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities	The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. There is no required accounting change for securities held at a discount in this Update.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurements, including the consideration of costs and benefits. Certain disclosure requirements were either removed, modified, or added.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

The following table presents the impact of adopting CECL on January 1, 2020 on our allowance and retained earnings:

Table 1.5

	December 31, 2019		Transition Adjustment		January 1, 2020
	(in thousands)
Allowance:
Farm & Ranch:
Loans	$	10,454	$	(3,909)	$	6,545
Long-term standby purchase commitments and guarantees	2,164		(148)		2,016
Rural Utilities:
Loans	—		5,378		5,378
Long-term standby purchase commitments	—		1,011		1,011
Farmer Mac Guaranteed Securities:
AgVantage	—		315		315
Investment Securities	—		9		9
Total Allowance	$	12,618	$	2,656	$	15,274
Retained Earnings	$	457,047	$	(2,099)	$	454,948

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard	Description	Date of Planned Adoption	Effect on Consolidated Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022.	Farmer Mac is currently evaluating the impact of the discontinuation of LIBOR on the consolidated financial statements and the applicability of the optional guidance provided by this Update.

ReclassificationsCertain reclassifications of prior period information were made to conform to the current period presentation.

XML

Investment Securities

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's investment securities as of June 30, 2020 and December 31, 2019:

Table 2.1

	As of June 30, 2020
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(38)	$	—	$	(1,379)	$	18,283
Floating rate asset-backed securities	9,818		—		9,818		—		—		(11)		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	2,108,505		29		2,108,534		—		7,409		(3,566)		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	292		—		292		—		30		—		322
Fixed rate U.S. Treasuries	1,314,850		5,763		1,320,613		—		6,043		(67)		1,326,589
Total available-for-sale	3,453,165		5,792		3,458,957		(38)		13,482		(5,023)		3,467,378
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		650		—		45,682
Total investment securities	$	3,498,197	$	5,792	$	3,503,989	$	(38)	$	14,132	$	(5,023)	$	3,513,060

⁽¹⁾Amounts presented exclude $6.6 million of accrued interest receivable on investment securities as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The held-to-maturity investment securities had a weighted average yield of 1.5% as of June 30, 2020.

	As of December 31, 2019
	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	$	—	$	(788)	$	18,912
Floating rate asset-backed securities	11,092		—		11,092		—		(7)		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	1,633,731		1,174		1,634,905		2,414		(4,736)		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	315		—		315		25		—		340
Fixed rate U.S. Treasuries	1,295,210		208		1,295,418		1,520		(15)		1,296,923
Total available-for-sale	2,960,048		1,382		2,961,430		3,959		(5,546)		2,959,843
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(1)	45,032		—		45,032		953		—		45,985
Total investment securities	$	3,005,080	$	1,382	$	3,006,462	$	4,912	$	(5,546)	$	3,005,828

⁽¹⁾The held-to-maturity investment securities had a weighted average yield of 3.3% as of December 31, 2019.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the three and six months ended June 30, 2020 and 2019.

As of June 30, 2020 and December 31, 2019, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2

	As of June 30, 2020
	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	$	—	$	—	$	18,283	$	(1,379)
Floating rate asset-backed securities	—		—		9,807		(11)
Floating rate Government/GSE guaranteed mortgage-backed securities	565,860		(2,163)		217,525		(1,403)
Fixed rate U.S. Treasuries	226,448		(67)		—		—
Total	$	792,308	$	(2,230)	$	245,615	$	(2,793)
Number of securities in loss position			58				55

	As of December 31, 2019
	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	$	—	$	—	$	18,912	$	(788)
Floating rate asset-backed securities	2,583		(1)		8,502		(6)
Floating rate Government/GSE guaranteed mortgage-backed securities	841,993		(2,244)		436,621		(2,492)
Fixed rate U.S. Treasuries	35,107		(15)		—		—
Total	$	879,683	$	(2,260)	$	464,035	$	(3,286)
Number of securities in loss position			57				62

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to June 30, 2020 and December 31, 2019, 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 both June 30, 2020 and December 31, 2019, 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 June 30, 2020 that is, on average, approximately 98.9% 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.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2020 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 2.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,235,047	$	1,241,040	1.58%
Due after one year through five years	364,971		364,927		0.99%
Due after five years through ten years	922,322		926,675		0.72%
Due after ten years	936,617		934,736		0.69%
Total	$	3,458,957	$	3,467,378	1.05%

FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2020 and December 31, 2019:

Table 3.1

	As of June 30, 2020
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,108,720	$	(70)	$	1,108,650	$	(546)	$	30,070	$	—	$	1,138,174
Farmer Mac Guaranteed USDA Securities	32,537		77		32,614		—		1,249		—		33,863
Total Farmer Mac Guaranteed Securities	1,141,257		7		1,141,264		(546)		31,319		—		1,172,037
USDA Securities	2,307,684		32,239		2,339,923		—		85,626		(661)		2,424,888
Total held-to-maturity	$	3,448,941	$	32,246	$	3,481,187	$	(546)	$	116,945	$	(661)	$	3,596,925
Available-for-sale:
AgVantage	$	7,540,043	$	(99)	$	7,539,944	$	(235)	$	405,926	$	(47,248)	$	7,898,387
Trading:
USDA Securities(3)	$	7,276	$	391	$	7,667	$	—	$	122	$	(3)	$	7,786

⁽¹⁾Amounts presented exclude $34.9 million, $35.3 million, and $0.2 million of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The trading USDA securities had a weighted average yield of 5.15% as of June 30, 2020.

	As of December 31, 2019
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,415,584	$	(174)	$	1,415,410	$	15,300	$	(164)	$	1,430,546
Farmer Mac Guaranteed USDA Securities	31,887		154		32,041		839		—		32,880
Total Farmer Mac Guaranteed Securities	1,447,471		(20)		1,447,451		16,139		(164)		1,463,426
USDA Securities	2,190,671		41,489		2,232,160		54,356		(758)		2,285,758
Total held-to-maturity	$	3,638,142	$	41,469	$	3,679,611	$	70,495	$	(922)	$	3,749,184
Available-for-sale:
AgVantage	$	7,017,095	$	(124)	$	7,016,971	$	161,316	$	(35,262)	$	7,143,025
Trading:
USDA Securities(1)	$	8,400	$	479	$	8,879	$	61	$	(27)	$	8,913

⁽¹⁾The trading USDA securities had a weighted average yield of 5.20% as of December 31, 2019.

As of June 30, 2020 and December 31, 2019, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2

	As of June 30, 2020
	Held-to-Maturity and 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)
Held-to-maturity:
USDA Securities	$	—	$	—	$	22,235	$	(661)
Total held-to-maturity	$	—	$	—	$	22,235	$	(661)
Available-for-sale:
AgVantage	$	521,979	$	(932)	$	841,123	$	(46,316)

	As of December 31, 2019
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	—	$	—	$	301,836	$	(164)
USDA Securities	—		—		27,089		(758)
Total held-to-maturity	$	—	$	—	$	328,925	$	(922)
Available-for-sale:
AgVantage	$	225,239	$	(2,203)	$	1,394,802	$	(33,059)

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to June 30, 2020 and December 31, 2019, as applicable. The unrealized losses on the held-to-maturity USDA Securities as of both June 30, 2020 and December 31, 2019 reflect their increased cost basis resulting from their transfer to held-to-maturity as of October 1, 2016.

The credit exposure related to Farmer Mac's USDA Guarantees line of business is covered by the full faith and credit guarantee of the United States of America. As of June 30, 2020, Farmer Mac had executed COVID-19 payment deferments on loans with unpaid principal balances of $50.1 million underlying USDA Securities.

The unrealized losses from AgVantage securities were on 13 and 17 available-for-sale securities as of June 30, 2020 and December 31, 2019, respectively. There were 0 and 4 held-to-maturity AgVantage securities with an unrealized loss as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, 6 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

During the three and six months ended June 30, 2020 and 2019, Farmer Mac had no sales of Farmer Mac Guaranteed Securities or USDA Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of June 30, 2020 are set forth below. The balances presented are based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,435,445	$	1,438,585	1.34	%
Due after one year through five years	3,434,770		3,557,439		2.34	%
Due after five years through ten years	1,147,366		1,232,206		2.34	%
Due after ten years	1,522,363		1,670,157		2.67	%
Total	$	7,539,944	$	7,898,387	2.22	%

⁽¹⁾Amounts presented exclude $34.9 million of accrued interest receivable.

	As of June 30, 2020
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	445,889	$	451,452	2.94	%
Due after one year through five years	751,402		777,980		3.21	%
Due after five years through ten years	213,460		220,404		3.17	%
Due after ten years	2,070,436		2,147,089		3.39	%
Total	$	3,481,187	$	3,596,925	3.28	%

⁽¹⁾Amounts presented exclude $35.3 million of accrued interest receivable.

XML

Farmer Mac Guaranteed Securities and USDA Securities

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

FARMER MAC GUARANTEED SECURITES AND USDA SECURITIES

INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's investment securities as of June 30, 2020 and December 31, 2019:

Table 2.1

	As of June 30, 2020
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(38)	$	—	$	(1,379)	$	18,283
Floating rate asset-backed securities	9,818		—		9,818		—		—		(11)		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	2,108,505		29		2,108,534		—		7,409		(3,566)		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	292		—		292		—		30		—		322
Fixed rate U.S. Treasuries	1,314,850		5,763		1,320,613		—		6,043		(67)		1,326,589
Total available-for-sale	3,453,165		5,792		3,458,957		(38)		13,482		(5,023)		3,467,378
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		650		—		45,682
Total investment securities	$	3,498,197	$	5,792	$	3,503,989	$	(38)	$	14,132	$	(5,023)	$	3,513,060

⁽¹⁾Amounts presented exclude $6.6 million of accrued interest receivable on investment securities as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The held-to-maturity investment securities had a weighted average yield of 1.5% as of June 30, 2020.

	As of December 31, 2019
	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	$	—	$	(788)	$	18,912
Floating rate asset-backed securities	11,092		—		11,092		—		(7)		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	1,633,731		1,174		1,634,905		2,414		(4,736)		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	315		—		315		25		—		340
Fixed rate U.S. Treasuries	1,295,210		208		1,295,418		1,520		(15)		1,296,923
Total available-for-sale	2,960,048		1,382		2,961,430		3,959		(5,546)		2,959,843
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(1)	45,032		—		45,032		953		—		45,985
Total investment securities	$	3,005,080	$	1,382	$	3,006,462	$	4,912	$	(5,546)	$	3,005,828

⁽¹⁾The held-to-maturity investment securities had a weighted average yield of 3.3% as of December 31, 2019.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the three and six months ended June 30, 2020 and 2019.

As of June 30, 2020 and December 31, 2019, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2

	As of June 30, 2020
	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	$	—	$	—	$	18,283	$	(1,379)
Floating rate asset-backed securities	—		—		9,807		(11)
Floating rate Government/GSE guaranteed mortgage-backed securities	565,860		(2,163)		217,525		(1,403)
Fixed rate U.S. Treasuries	226,448		(67)		—		—
Total	$	792,308	$	(2,230)	$	245,615	$	(2,793)
Number of securities in loss position			58				55

	As of December 31, 2019
	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	$	—	$	—	$	18,912	$	(788)
Floating rate asset-backed securities	2,583		(1)		8,502		(6)
Floating rate Government/GSE guaranteed mortgage-backed securities	841,993		(2,244)		436,621		(2,492)
Fixed rate U.S. Treasuries	35,107		(15)		—		—
Total	$	879,683	$	(2,260)	$	464,035	$	(3,286)
Number of securities in loss position			57				62

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to June 30, 2020 and December 31, 2019, 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 both June 30, 2020 and December 31, 2019, 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 June 30, 2020 that is, on average, approximately 98.9% 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.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2020 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 2.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,235,047	$	1,241,040	1.58%
Due after one year through five years	364,971		364,927		0.99%
Due after five years through ten years	922,322		926,675		0.72%
Due after ten years	936,617		934,736		0.69%
Total	$	3,458,957	$	3,467,378	1.05%

FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2020 and December 31, 2019:

Table 3.1

	As of June 30, 2020
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,108,720	$	(70)	$	1,108,650	$	(546)	$	30,070	$	—	$	1,138,174
Farmer Mac Guaranteed USDA Securities	32,537		77		32,614		—		1,249		—		33,863
Total Farmer Mac Guaranteed Securities	1,141,257		7		1,141,264		(546)		31,319		—		1,172,037
USDA Securities	2,307,684		32,239		2,339,923		—		85,626		(661)		2,424,888
Total held-to-maturity	$	3,448,941	$	32,246	$	3,481,187	$	(546)	$	116,945	$	(661)	$	3,596,925
Available-for-sale:
AgVantage	$	7,540,043	$	(99)	$	7,539,944	$	(235)	$	405,926	$	(47,248)	$	7,898,387
Trading:
USDA Securities(3)	$	7,276	$	391	$	7,667	$	—	$	122	$	(3)	$	7,786

⁽¹⁾Amounts presented exclude $34.9 million, $35.3 million, and $0.2 million of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The trading USDA securities had a weighted average yield of 5.15% as of June 30, 2020.

	As of December 31, 2019
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,415,584	$	(174)	$	1,415,410	$	15,300	$	(164)	$	1,430,546
Farmer Mac Guaranteed USDA Securities	31,887		154		32,041		839		—		32,880
Total Farmer Mac Guaranteed Securities	1,447,471		(20)		1,447,451		16,139		(164)		1,463,426
USDA Securities	2,190,671		41,489		2,232,160		54,356		(758)		2,285,758
Total held-to-maturity	$	3,638,142	$	41,469	$	3,679,611	$	70,495	$	(922)	$	3,749,184
Available-for-sale:
AgVantage	$	7,017,095	$	(124)	$	7,016,971	$	161,316	$	(35,262)	$	7,143,025
Trading:
USDA Securities(1)	$	8,400	$	479	$	8,879	$	61	$	(27)	$	8,913

⁽¹⁾The trading USDA securities had a weighted average yield of 5.20% as of December 31, 2019.

As of June 30, 2020 and December 31, 2019, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2

	As of June 30, 2020
	Held-to-Maturity and 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)
Held-to-maturity:
USDA Securities	$	—	$	—	$	22,235	$	(661)
Total held-to-maturity	$	—	$	—	$	22,235	$	(661)
Available-for-sale:
AgVantage	$	521,979	$	(932)	$	841,123	$	(46,316)

	As of December 31, 2019
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	—	$	—	$	301,836	$	(164)
USDA Securities	—		—		27,089		(758)
Total held-to-maturity	$	—	$	—	$	328,925	$	(922)
Available-for-sale:
AgVantage	$	225,239	$	(2,203)	$	1,394,802	$	(33,059)

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to June 30, 2020 and December 31, 2019, as applicable. The unrealized losses on the held-to-maturity USDA Securities as of both June 30, 2020 and December 31, 2019 reflect their increased cost basis resulting from their transfer to held-to-maturity as of October 1, 2016.

The credit exposure related to Farmer Mac's USDA Guarantees line of business is covered by the full faith and credit guarantee of the United States of America. As of June 30, 2020, Farmer Mac had executed COVID-19 payment deferments on loans with unpaid principal balances of $50.1 million underlying USDA Securities.

The unrealized losses from AgVantage securities were on 13 and 17 available-for-sale securities as of June 30, 2020 and December 31, 2019, respectively. There were 0 and 4 held-to-maturity AgVantage securities with an unrealized loss as of June 30, 2020 and December 31, 2019, respectively. As of June 30, 2020 and December 31, 2019, 6 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

During the three and six months ended June 30, 2020 and 2019, Farmer Mac had no sales of Farmer Mac Guaranteed Securities or USDA Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of June 30, 2020 are set forth below. The balances presented are based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,435,445	$	1,438,585	1.34	%
Due after one year through five years	3,434,770		3,557,439		2.34	%
Due after five years through ten years	1,147,366		1,232,206		2.34	%
Due after ten years	1,522,363		1,670,157		2.67	%
Total	$	7,539,944	$	7,898,387	2.22	%

⁽¹⁾Amounts presented exclude $34.9 million of accrued interest receivable.

	As of June 30, 2020
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	445,889	$	451,452	2.94	%
Due after one year through five years	751,402		777,980		3.21	%
Due after five years through ten years	213,460		220,404		3.17	%
Due after ten years	2,070,436		2,147,089		3.39	%
Total	$	3,481,187	$	3,596,925	3.28	%

⁽¹⁾Amounts presented exclude $35.3 million of accrued interest receivable.

XML

Financial Derivatives

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

FINANCIAL DERIVATIVES

FINANCIAL DERIVATIVESFarmer Mac enters into financial derivative transactions to protect against risk from the effects of market price, or interest rate movements, on the value of certain assets, future cash flows, or debt issuance, and not for trading or speculative purposes.  For more information about Farmer Mac's financial derivatives, see Note 6 in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements as of June 30, 2020 and December 31, 2019:

Table 4.1

	As of June 30, 2020
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	5,584,809	$	8,358	$	(4,694)	2.24%	0.65%		11.71
Receive fixed non-callable	2,305,500		249		(8,087)		0.78%	1.90%		2.35
Receive fixed callable	413,500		5,891		—		0.48%	1.80%		3.53
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	437,000		1,246		(11,964)		2.27%	0.71%		5.82
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	446,721		—		(22,403)		2.78%	0.85%		4.25
Receive fixed non-callable	3,143,951		—		—		0.48%	1.09%		0.82
Receive fixed callable	150,000		138		—		0.73%	1.66%		1.27
Basis swaps	3,610,000		706		(545)		0.49%	0.27%		1.08
Treasury futures	27,500				(9)				139.14
Credit valuation adjustment			—		159
Total financial derivatives	$	16,118,981	$	16,588	$	(47,543)
Collateral (held)/pledged			(1,500)		248,293
Net amount			$	15,088	$	200,750

	As of December 31, 2019
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	4,955,686	$	7,163	$	(3,281)	2.47%	1.93%		11.26
Receive fixed non-callable	1,413,200		76		(5,329)		1.88%	2.13%		1.25
Receive fixed callable	524,000		476		(772)		1.52%	1.91%		2.83
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	428,000		1,882		(1,514)		2.36%	2.12%		5.43
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	342,745		7		(14,046)		3.55%	2.00%		5.51
Receive fixed non-callable	3,124,148		49		(1,637)		1.88%	2.06%		1.66
Receive fixed callable	525,000		79		(80)		1.64%	1.68%		0.83
Basis swaps	2,670,000		787		(395)		1.86%	1.76%		0.90
Treasury futures	39,400		—		(51)				128.29
Credit valuation adjustment			—		63
Total financial derivatives	$	14,022,179	$	10,519	$	(27,042)
Collateral (held)/pledged			(2,685)		132,129
Net amount			$	7,834	$	105,087

As of June 30, 2020, Farmer Mac expects to reclassify $5.3 million after tax from accumulated other comprehensive income to earnings over the next twelve months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after June 30, 2020. During the three and six months ended June 30, 2020 and 2019, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

The following table summarizes the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and six months ended June 30, 2020 and 2019:

Table 4.2

	For the Three Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	61,792	$	55,430	$	(79,273)	$	6,523	$	44,472
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(12,257)		(4,535)		5,432		—		(11,360)
Recognized on hedged items	32,102		9,812		(12,721)		—		29,193
Discount amortization recognized on hedged items	—		—		(181)		—		(181)
Income/(expense) related to interest settlements on fair value hedging relationships	$	19,845	$	5,277	$	(7,470)	$	—	$	17,652
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(9,226)	$	(6,616)	$	3,722	$	—	$	(12,120)
Recognized on hedged items	9,050		3,037		(2,348)		—		9,739
(Losses)/gains on fair value hedging relationships	$	(176)	$	(3,579)	$	1,374	$	—	$	(2,381)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(1,563)	$	—	$	(1,563)
Recognized on hedged items	—		—		(1,029)		—		(1,029)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,594)	$	—	$	(2,594)
Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	8,427	$	8,427
Interest expense on interest rate swaps	—		—		—		(1,795)		(1,795)
Treasury futures	—		—		—		(109)		(109)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	6,523	$	6,523

	For The Three Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	85,569	$	59,403	$	(122,074)	$	8,913	$	31,811
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	1,167		(202)		(2,572)		—		(1,607)
Recognized on hedged items	30,380		6,323		(11,779)		—		24,924
Discount amortization recognized on hedged items	—		—		(164)		—		(164)
Income/(expense) related to interest settlements on fair value hedging relationships	$	31,547	$	6,121	$	(14,515)	$	—	$	23,153
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(116,405)	$	(33,953)	$	16,146	$	—	$	(134,212)
Recognized on hedged items	114,638		33,795		(15,649)		—		132,784
(Losses)/gains on fair value hedging relationships	$	(1,767)	$	(158)	$	497	$	—	$	(1,428)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	462	$	—	$	462
Recognized on hedged items	—		—		(2,697)		—		(2,697)
Discount amortization recognized on hedged items	—		—		(1)		—		(1)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,236)	$	—	$	(2,236)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	11,152	$	11,152
Interest expense on interest rate swaps	—		—		—		(1,146)		(1,146)
Treasury futures	—		—		—		(1,093)		(1,093)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,913	$	8,913

	For the Six Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Losses on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	133,309	$	116,026	$	(187,815)	$	(2,775)	$	58,745
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(18,408)		(6,412)		7,066		—		(17,754)
Recognized on hedged items	63,927		18,489		(26,997)		—		55,419
Discount amortization recognized on hedged items	—		—		(361)		—		(361)
Income/(expense) related to interest settlements on fair value hedging relationships	$	45,519	$	12,077	$	(20,292)	$	—	$	37,304
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(303,159)	$	(152,521)	$	62,656	$	—	$	(393,024)
Recognized on hedged items	299,430		148,445		(62,913)		—		384,962
(Losses)/gains on fair value hedging relationships	$	(3,729)	$	(4,076)	$	(257)	$	—	$	(8,062)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(2,002)	$	—	$	(2,002)
Recognized on hedged items	—		—		(3,152)		—		(3,152)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(5,156)	$	—	$	(5,156)
(Losses)/gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	1,878	$	1,878
Interest expense on interest rate swaps	—		—		—		(2,657)		(2,657)
Treasury futures	—		—		—		(1,996)		(1,996)
(Losses)/gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	(2,775)	$	(2,775)

	For The Six Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	170,980	$	110,800	$	(236,990)	$	8,553	$	53,343
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	2,717		(224)		(5,790)		—		(3,297)
Recognized on hedged items	55,198		10,878		(21,811)		—		44,265
Discount amortization recognized on hedged items	—		—		(314)		—		(314)
Income/(expense) related to interest settlements on fair value hedging relationships	$	57,915	$	10,654	$	(27,915)	$	—	$	40,654
Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	(175,392)	$	(54,034)	$	25,123	$	—	$	(204,303)
Recognized on hedged items	173,990		50,031		(23,846)		—		200,175
Gains/(losses) on fair value hedging relationships	$	(1,402)	$	(4,003)	$	1,277	$	—	$	(4,128)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	942	$	—	$	942
Recognized on hedged items	—		—		(5,417)		—		(5,417)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(4,477)	$	—	$	(4,477)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	13,320	$	13,320
Interest expense on interest rate swaps	—		—		—		(3,446)		(3,446)
Treasury futures	—		—		—		(1,321)		(1,321)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,553	$	8,553

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of June 30, 2020 and December 31, 2019:

Table 4.3

	Hedged Items in Fair Value Relationship
	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
	(in thousands)
Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	$	4,506,185	$	4,092,611	$	479,632	$	180,215
Loans held for investment, at amortized cost(1)	1,634,784		1,050,335		186,352		37,907
Notes Payable(2)	(2,787,699)		(2,761,052)		(70,433)		(7,433)

⁽¹⁾Includes $0.4 million as of June 30, 2020 in fair value adjustment, currently included in "Prepaid expenses and other assets" related to a hedge of a purchase commitment of a loan.

⁽²⁾Carrying amount represents amortized cost.

The following table shows Farmer Mac's credit exposure to interest rate swap counterparties as of June 30, 2020 and December 31, 2019:

Table 4.4

	June 30, 2020
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swap	$	122,793	$	121,310	$	1,483
Liabilities:
Derivatives
Interest rate swap	$	799,070	$	779,807	$	19,263

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

	December 31, 2019
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swaps	$	56,139	$	53,771	$	2,368
Liabilities:
Derivatives
Interest rate swaps	$	305,584	$	291,326	$	14,258

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

As of June 30, 2020, Farmer Mac held $1.5 million of cash and no investment securities as collateral for its derivatives in net asset positions, compared to $2.7 million of cash and no investment securities as collateral for its derivatives in net asset positions as of December 31, 2019.

Farmer Mac posted $17.6 million cash and $230.7 million of investment securities as of June 30, 2020 and posted $0.5 million cash and $131.7 million investment securities as of December 31, 2019.  Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets. Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets.  If Farmer Mac had breached certain provisions of the derivative contracts as of June 30, 2020 and December 31, 2019, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral. As of June 30, 2020 and December 31, 2019, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's $16.1 billion notional amount of interest rate swaps outstanding as of June 30, 2020, $13.3 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME"). Of Farmer Mac's $14.0 billion notional amount of interest rate swaps outstanding as of December 31, 2019, $11.0 billion were cleared through the CME. During the first half of 2020 and throughout 2019, Farmer Mac increased its use of non-cleared basis swaps as it began to prepare for the transition away from the use of LIBOR as a reference rate. For more information about interest rate swaps cleared through a clearinghouse, see Note 6 in Farmer Mac's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on February 25, 2020.

XML

Loans

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

LOANS

LOANS

Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments. The following table displays the composition of the loan balances as of June 30, 2020 and December 31, 2019:

Table 5.1

	As of June 30, 2020(1)						As of December 31, 2019(2)
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Farm & Ranch	$	4,181,422	$	1,436,090	$	5,617,512	$	3,675,640	$	1,600,917	$	5,276,557
Rural Utilities	2,101,568		—		2,101,568		1,671,293		—		1,671,293
Total unpaid principal balance(3)	6,282,990		1,436,090		7,719,080		5,346,933		1,600,917		6,947,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	187,007		—		187,007		44,044		—		44,044
Total loans	6,469,997		1,436,090		7,906,087		5,390,977		1,600,917		6,991,894
Allowance for losses	(13,758)		(1,181)		(14,939)		(8,853)		(1,601)		(10,454)
Total loans, net of allowance	$	6,456,239	$	1,434,909	$	7,891,148	$	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.

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of June 30, 2020 and December 31, 2019:

Table 5.2

	June 30, 2020(1)		December 31, 2019(2)
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Farm & Ranch	$	6,039	$	10,454
Rural Utilities	8,900		—
Total	$	14,939	$	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 and six month period ended June 30, 2020 and 2019:

Table 5.3

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Allowance for Losses		Allowance for Losses		Allowance for Losses		Allowance for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	7,353	$	6,753	$	10,454	$	7,017
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(3,909)		—
Adjusted Beginning Balance	7,353		6,753		6,545		7,017
(Release of)/provision for losses	(920)		578		(112)		314
Charge-offs	(394)		(67)		(394)		(67)
Ending Balance(3)	$	6,039	$	7,264	$	6,039	$	7,264
Rural Utilities:
Beginning Balance	$	7,503	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		5,378		—
Adjusted Beginning Balance	7,503		—		5,378		—
Provision for losses	1,397		—		3,522		—
Charge-offs	—		—		—		—
Ending Balance(4)	$	8,900	$	—	$	8,900	$	—

⁽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 $1.8 million for collateral dependent assets secured by commercial real estate.

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

The cumulative transition adjustment decrease of $3.9 million in the Farm & Ranch portfolio was primarily driven by differences in the way that the two loss models measure the impact of low loan-to-

value ratios in that portfolio. Under the previous accounting standard, Farmer Mac's estimated incurred loss model was based on historical weighted-average loss rates from realized losses within commodities and risk ratings. The historical weighted average loss rates were then applied to sub-portfolios, as disaggregated by commodity and risk rating, to calculate the general allowance. Under the CECL accounting standard, Farmer Mac's current expected credit losses are calculated individually based on the expected probability of default and the expected loss-given-default for each loan. The low loan-to-value ratios in the Farm & Ranch portfolio result in low individual losses-given-default. Thus, our expected credit losses as of January 1, 2020 were less than our estimate of incurred losses as of December 31, 2019.

The cumulative transition adjustment increase of $5.4 million in the Rural Utilities portfolio was primarily driven by the change from measuring incurred probable credit losses to measuring expected credit losses over the expected lives of these loans. Farmer Mac has never experienced a credit loss in its Rural Utilities portfolio. Additionally, these loans have strong credit ratings and performance, which supported Farmer Mac's estimate of no incurred credit losses under the previous accounting standard. Upon the adoption of CECL, Farmer Mac is now required to measure its expected credit losses for the entire expected life of all financial instruments, including its Rural Utilities loans. To estimate expected credit losses on these loans, Farmer Mac relies upon industry data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities industry. Under the CECL accounting standard, Farmer Mac's loss allowance model for these loans is primarily impacted by the long-term maturities of the loans and their low probability of prepayment. In addition, the highly-specialized nature of power generation and transmission facilities results in significant losses given default even though the probability of default is low. Thus, the long-term expected lives of these loans combined with high losses given default result in an estimate of expected losses although we have never incurred a credit loss in this portfolio.

The provision to the allowance for loan losses of $0.5 million recorded during second quarter 2020 was primarily due to the impact of net new loan volume in the Rural Utilities portfolio of $311.8 million. The impact of the Rural Utilities portfolio on the net increase to the provision was partially offset by improving economic factors that uniquely impacted the Farm & Ranch portfolio, specifically improvements in commodity prices and expectations for stable farm land values. In addition, there was a $0.4 million charge-off to the allowance related to the acquisition of a new real estate owned property ("REO") during second quarter 2020.

The provision to the allowance for loan losses of $3.4 million recorded during the six months ended June 30, 2020 was primarily due to the impact of net new loan volume in the Rural Utilities portfolio and the impact of economic factor forecasts on the Rural Utilities portfolio, especially expected higher unemployment, as a result of the COVID-19 pandemic and the resulting economic volatility.

The provision for the allowance for loan losses recorded during three and six months ended June 30, 2019 was attributable to an increase in the general allowance due to net volume growth in on-balance sheet Farm & Ranch loans and a slight decrease in the portfolio credit quality.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of June 30, 2020:

Table 5.4

	As of June 30, 2020
	Accruing
	Current(5)		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Farm & Ranch	$	5,476,962	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	5,617,512
Rural Utilities	2,101,568		—		—		—		—		—		2,101,568
Total	$	7,578,530	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	7,719,080

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

⁽³⁾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.

⁽⁴⁾Includes $23.1 million of nonaccrual loans for which there was no associated allowance. During the three and six months ended June 30, 2020, Farmer Mac received $1.3 million and 2.3 million, respectively, in interest on nonaccrual loans.

⁽⁵⁾Includes $82.2 million of unpaid principal balance related to Farm & Ranch loans that Farmer Mac has executed a COVID-19 payment deferment.

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 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 and six months ended June 30, 2019:

Table 5.7

	June 30, 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	$	98,176	$	39,056	$	28,650	$	7,675	$	—	$	59	$	173,616
Income recognized on impaired loans	379		121		304		55		—		—		859
For the Six Months Ended:
Average recorded investment in impaired loans	$	85,652	$	41,903	$	26,279	$	8,268	$	—	$	66	$	162,168
Income recognized on impaired loans	701		420		417		122		—		—		1,660

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
	As of		For the Six Months Ended
	December 31, 2019		June 30, 2019
	(in thousands)
Farm & Ranch loans	$	57,719	$	131

⁽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.

Of the $57.7 million of on-balance sheet loans reported as 90-day delinquencies as of December 31, 2019, no loans were subject to "removal-of-account" provisions.

Rural Utilities

As of December 31, 2019, no allowance for losses had been provided for Farmer Mac's Rural Utilities line of business based on the performance of the loans in this line of business and the credit quality of the collateral supporting these loans, as well as Farmer Mac's counterparty risk analysis. As of December 31, 2019, there were no delinquencies or probable losses inherent in Farmer Mac's Rural Utilities loans held or underlying LTSPCs.

Credit Quality Indicators

The following tables present credit quality indicators related to Farm & Ranch loans and Rural Utilities loans held as of June 30, 2020, by year of origination:

Table 5.9

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch(1):
Internally Assigned Risk Rating:
Acceptable	$	758,965	$	773,199	$	562,604	$	617,751	$	528,068	$	1,345,384	$	501,625	$	5,087,596
Special mention(2)	76,588		166,829		32,164		9,278		5,477		19,630		10,260		320,226
Substandard(3)	448		6,655		18,326		59,545		53,639		60,478		10,599		209,690
Total	$	836,001	$	946,683	$	613,094	$	686,574	$	587,184	$	1,425,492	$	522,484	$	5,617,512
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394

⁽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.

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities(1):
Internally Assigned Risk Rating:
Acceptable	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	658,827	$	7,366	$	2,096,554
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		5,014		—		5,014
Total	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	663,841	$	7,366	$	2,101,568
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽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 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.

XML

Guarantees

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

GUARANTEES

GUARANTEES

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of June 30, 2020 and December 31, 2019, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1

Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
	As of June 30, 2020		As of December 31, 2019
	(in thousands)
Farm & Ranch:
Farmer Mac Guaranteed Securities	$	90,225	$	107,322
USDA Guarantees:
Farmer Mac Guaranteed USDA Securities	330,309		389,216
Institutional Credit:
AgVantage Securities	6,068		7,567
Total off-balance sheet Farmer Mac Guaranteed Securities	$	426,602	$	504,105

Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors.  The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2

	For the Six Months Ended
	June 30, 2020		June 30, 2019
	(in thousands)
Proceeds from new securitizations	$	28,050	$	166,351
Guarantee fees received	894		861

Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets.  The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation	$	1,890	$	2,230
Weighted average remaining maturity:
Farmer Mac Guaranteed Securities	9.6 years		9.8 years
AgVantage Securities	4.5 years		5.0 years

Long-Term Standby Purchase Commitments

Farmer Mac has recorded a liability for its obligation to stand ready under the guarantee in the guarantee and commitment obligation on the consolidated balance sheets.  The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation(1)	$	33,273	$	34,470
Maximum principal amount	2,900,166		3,002,349
Weighted-average remaining maturity	15.2 years		15.2 years

⁽¹⁾ Relates to LTSPCs issued or modified on or after January 1, 2003.

Reserve for Losses

The following table is a summary, by asset type, of the reserve for losses as of June 30, 2020 and December 31, 2019:

Table 6.5

	June 30, 2020(1)		December 31, 2019(2)
	Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	1,650	$	2,164
Rural Utilities
LTSPCs	1,370		—
Total	$	3,020	$	2,164

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

The following is a summary of the changes in the reserve for losses for the three and six month period ended June 30, 2020 and 2019:

Table 6.6

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	2,020	$	2,038	$	2,164	$	2,167
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(148)		—
Adjusted Beginning Balance	2,020		2,038		2,016		2,167
Release of losses	$	(370)	$	(158)	$	(366)	$	(287)
Charge-offs	—		—		—		—
Ending Balance	$	1,650	$	1,880	$	1,650	$	1,880
Rural Utilities:
Beginning Balance	$	1,400	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		1,011		—
Adjusted Beginning Balance	1,400		—		1,011		—
(Release of)/provision for losses	$	(30)	$	—	$	359	$	—
Charge-offs	—		—		—		—
Ending Balance	$	1,370	$	—	$	1,370	$	—

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

The release from the reserve for losses recorded during the three and six months ended June 30, 2020 was primarily due to the net decreases in LTSPC volume of $58.5 million and $119.3 million, respectively.

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 June 30, 2020:

Table 6.7

	As of June 30, 2020
	Current(2)		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	$	2,374,988	$	9,947	$	12,587	$	2,816	$	25,350	$	2,400,338
Rural Utilities:
LTSPCs	$	590,053	$	—	$	—	$	—	$	—	$	590,053

⁽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.

⁽²⁾Includes $109.5 million of unpaid principal balance related to Farm & Ranch LTSPCs for which the lender has notified Farmer Mac of an executed COVID-19 payment deferment.

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

Net credit losses and 90-day delinquencies as of and for the periods indicated for loans underlying off-balance sheet securities representing interests in pools of eligible Farm & Ranch LTSPCs 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 LTSPCs portfolio and Farmer Mac had not experienced credit losses on any Rural Utilities LTSPCs.

Table 6.9

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Six Months Ended
	December 31, 2019		June 30, 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.

Credit Quality Indicators

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 June 30, 2020, by year of origination:

Table 6.10

	As of June 30, 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	$	71,569	$	206,177	$	177,787	$	251,149	$	222,988	$	1,072,259	$	172,509	$	2,174,438
Special mention(1)	—		10,250		7,835		24,518		16,090		61,674		10,359		130,726
Substandard(2)	286		—		3,982		15,277		11,619		59,342		4,668		95,174
Total	$	71,855	$	216,427	$	189,604	$	290,944	$	250,697	$	1,193,275	$	187,536	$	2,400,338
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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 June 30, 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	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
For the Three Months Ended
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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.

XML

Notes Payable

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTES PAYABLE

Farmer Mac's borrowings consist of discount notes and medium-term notes, both of which are unsecured general obligations of Farmer Mac.  Discount notes generally have original maturities of 1.0 year or less, whereas medium-term notes generally have maturities of 0.5 years to 15.0 years.

The following tables set forth information related to Farmer Mac's borrowings as of June 30, 2020 and December 31, 2019:

Table 7.1

	June 30, 2020
	Outstanding as of June 30				Average Outstanding During the First Six Months
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,507,363	0.44	%	$	2,221,571	1.05	%
Medium-term notes	1,394,857		0.47	%	1,120,213		1.16	%
Current portion of medium-term notes	6,985,303		0.93	%
Total due within one year	$	10,887,523	0.76	%
Due after one year:
Medium-term notes due in:
Two years	$	3,764,817	1.08	%
Three years	1,839,291		1.70	%
Four years	1,204,584		1.78	%
Five years	1,213,467		1.56	%
Thereafter	2,511,868		2.28	%
Total due after one year	10,534,027		1.61	%
Total	$	21,421,550	1.18	%

	December 31, 2019
	Outstanding as of December 31				Average Outstanding During the Year
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,194,177	1.72	%	$	1,977,214	2.25	%
Medium-term notes	1,152,770		1.98	%	1,780,517		2.33	%
Current portion of medium-term notes	6,672,135		1.85	%
Total due within one year	$	10,019,082	1.84	%
Due after one year:
Medium-term notes due in:
Two years	$	3,700,835	2.04	%
Three years	1,594,709		2.15	%
Four years	1,205,276		2.27	%
Five years	760,887		2.25	%
Thereafter	1,817,859		2.89	%
Total due after one year	9,079,566		2.28	%
Total	$	19,098,648	2.05	%

During the six months ended June 30, 2020, Farmer Mac increased its use of short-term funding in order to fund the growth of short-term assets in its liquidity portfolio. The maximum amount of Farmer Mac's discount notes outstanding at any month end during the six months ended June 30, 2020 and 2019 was $2.6 billion and $2.1 billion, respectively.

Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date.  The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2020 as of June 30, 2020:

Table 7.2

Debt Callable in 2020 as of June 30, 2020, by Maturity
	Amount		Weighted-Average Rate
	(dollars in thousands)
Maturity:
2021	$	491,862	1.02	%
2022	203,845		1.43	%
2023	37,953		0.82	%
2024	143,832		1.80	%
Thereafter	399,489		2.25	%
Total	$	1,276,981	1.56	%

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of June 30, 2020, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

Table 7.3

	Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding
	Amount		Weighted-Average Rate
	(dollars in thousands)
Debt with interest rate resets, or debt maturities in:
2020	$	11,227,000	0.48	%
2021	3,047,823		1.79	%
2022	1,745,399		1.74	%
2023	1,706,568		1.88	%
2024	965,056		1.86	%
Thereafter	2,729,704		2.31	%
Total	$	21,421,550	1.18	%

During the six months ended June 30, 2020 and 2019, Farmer Mac called $1.9 billion and $0.3 billion of callable medium-term notes, respectively. The decrease in market interest rates throughout 2019 and continuing into the first half of 2020 led to an increase in called medium-term notes compared to the prior year.

Authority to Borrow from the U.S. Treasury

Farmer Mac's statutory charter authorizes it, upon satisfying certain conditions, to borrow up to $1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely for the purpose of fulfilling Farmer Mac's guarantee obligations.  Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S. Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the obligations from Farmer Mac.  The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S. Treasury within a reasonable time.  As of June 30, 2020, Farmer Mac had not used this borrowing authority.

Gains on Repurchase of Outstanding Debt

No outstanding debt repurchases were made in the six months ended June 30, 2020 or 2019.

XML

Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

EQUITY

EQUITY

Preferred Stock

In May 2020, Farmer Mac issued 3.2 million shares of 5.750% non-cumulative perpetual Series E preferred stock, par value $25.00 per share. Farmer Mac incurred direct costs of $2.5 million related to the issuance of the Series E preferred stock. The dividend rate on the Series E preferred stock will remain at a non-cumulative, fixed rate of 5.750% per year, when, as, and if a dividend is declared by the Board of Directors of Farmer Mac, for so long as the Series E preferred stock remains outstanding. The Series E preferred stock has no maturity date, but Farmer Mac has the option to redeem the preferred stock at any time on any dividend payment date on and after July 17, 2025.

Common Stock

During first and second quarter 2020, Farmer Mac paid a quarterly dividend of $0.80 per share on all classes of its common stock. For each quarter in 2019, Farmer Mac paid a quarterly dividend of $0.70 per share on all classes of its common stock.

Farmer Mac's board of directors approved a share repurchase program during third quarter 2015 authorizing Farmer Mac to repurchase up to $25.0 million of its outstanding Class C non-voting common stock. The share repurchase program, last modified on March 14, 2019, authorized Farmer Mac to repurchase up to $10.0 million of Farmer Mac's outstanding Class C non-voting common stock. During first quarter 2020, Farmer Mac repurchased approximately 4,000 shares of Class C non-voting common stock at a cost of approximately $0.2 million. Shortly after these repurchases were completed, Farmer Mac indefinitely suspended its share repurchase program in an effort to preserve capital and liquidity in view of market volatility and uncertainty caused by the COVID-19 pandemic. As of June 30, 2020, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $19.8 million under the share repurchase program since 2015. The program expires at the end of March 2021.

Capital Requirements

Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of both June 30, 2020 and December 31, 2019, the minimum capital requirement was greater than the risk-based capital requirement. Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements.

As of June 30, 2020, Farmer Mac's minimum capital requirement was $667.7 million and its core capital level was $915.6 million, which was $247.9 million above the minimum capital requirement as of that date. As of December 31, 2019, Farmer Mac's minimum capital requirement was $618.8 million and its core capital level was $815.4 million, which was $196.6 million above the minimum capital requirement as of that date.

In accordance with the Farm Credit Administration's rule on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac has adopted a policy for maintaining a sufficient level of Tier 1 capital (consisting of retained earnings, paid-in-capital, common stock, and qualifying preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

XML

Fair Value Disclosures

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

FAIR VALUE DISCLOSURES

Fair Value Classification and Transfers

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Table 9.1

Assets and Liabilities Measured at Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,283	$	18,283
Floating rate asset-backed securities	—		9,807		—		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,112,377		—		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	—		322		—		322
Fixed rate U.S. Treasuries	1,326,589		—		—		1,326,589
Total Investment Securities	1,326,589		2,122,506		18,283		3,467,378
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,898,387		7,898,387
Total Farmer Mac Guaranteed Securities	—		—		7,898,387		7,898,387
USDA Securities:
Trading	—		—		7,786		7,786
Total USDA Securities	—		—		7,786		7,786
Financial derivatives	—		16,588		—		16,588
Total Assets at fair value	$	1,326,589	$	2,139,094	$	7,924,456	$	11,390,139
Liabilities:
Financial derivatives	$	9	$	47,534	$	—	$	47,543
Total Liabilities at fair value	$	9	$	47,534	$	—	$	47,543

⁽¹⁾ Level 3 assets represent 33% of total assets and 69% of financial instruments measured at fair value.

Assets and Liabilities Measured at Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,912	$	18,912
Floating rate asset-backed securities	—		11,085		—		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	—		1,632,583		—		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	—		340		—		340
Fixed rate U.S. Treasuries	1,296,923		—		—		1,296,923
Total available-for-sale	1,296,923		1,644,008		18,912		2,959,843
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,143,025		7,143,025
Total Farmer Mac Guaranteed Securities	—		—		7,143,025		7,143,025
USDA Securities:
Trading	—		—		8,913		8,913
Total USDA Securities	—		—		8,913		8,913
Financial derivatives	—		10,519		—		10,519
Total Assets at fair value	$	1,296,923	$	1,654,527	$	7,170,850	$	10,122,300
Liabilities:
Financial derivatives	$	51	$	26,991	$	—	$	27,042
Total Liabilities at fair value	$	51	$	26,991	$	—	$	27,042

⁽¹⁾ Level 3 assets represent 33% of total assets and 71% of financial instruments measured at fair value.

There were no significant assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2020 or December 31, 2019.

Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period. During the first half of 2020 and 2019, there were no transfers within the fair value hierarchy for fair value measurements of Farmer Mac's investment securities, Farmer Mac Guaranteed Securities, USDA Securities, and financial derivatives.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three and six months ended June 30, 2020 and 2019.

Table 9.2

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	16,721	$	—	$	—	$	—	$	(15)	$	—	$	1,577	$	18,283
Total available-for-sale	16,721		—		—		—		(15)		—		1,577		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
Total available-for-sale	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
USDA Securities:
Trading	8,408		—		—		(602)		—		(20)		—		7,786
Total USDA Securities	8,408		—		—		(602)				(20)		—		7,786
Total Assets at fair value	$	7,612,315	$	351,896	$	—	$	(85,863)	$	(84)	$	9,030	$	37,162	$	7,924,456

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	—	$	296	$	19,208
Total available-for-sale	18,912		—		—		—		—		296		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
Total available-for-sale	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
USDA Securities:
Available-for-sale	—		29,419		(29,419)		—		—		—		—
Trading	9,487		—		—		(347)		61		—		9,201
Total USDA Securities	9,487		29,419		(29,419)		(347)		61		—		9,201
Total Assets at fair value	$	6,470,023	$	643,183	$	(29,419)	$	(98,926)	$	114,699	$	(35,483)	$	7,064,077

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for Losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	(38)	$	—	$	(591)	$	18,283
Total available-for-sale	18,912		—		—		—		(38)		—		(591)		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
Total available-for-sale	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
USDA Securities:
Trading	8,913		—		—		(1,213)		—		86		—		7,786
Total USDA Securities	8,913		—		—		(1,213)				86		—		7,786
Total Assets at fair value	$	7,170,850	$	835,476	$	—	$	(313,729)	$	(272)	$	299,515	$	(67,384)	$	7,924,456

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,715	$	—	$	—	$	—	$	—	$	493	$	19,208
Total available-for-sale	18,715		—		—		—		—		493		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
Total available-for-sale	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
USDA Securities:
Available-for-sale	—		48,347		(48,347)		—		—		—		—
Trading	9,999		—		—		(903)		105		—		9,201
Total USDA Securities	9,999		48,347		(48,347)		(903)		105		—		9,201
Total Assets at fair value	$	6,003,211	$	1,438,443	$	(48,347)	$	(471,215)	$	174,095	$	(32,110)	$	7,064,077

The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of June 30, 2020 and December 31, 2019:

Table 9.3

	As of June 30, 2020
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,283	Indicative bids	Range of broker quotes	93.0% - 93.0% (93.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,898,387	Discounted cash flow	Discount rate	0.9% - 4.0% (1.2%)
USDA Securities	$	7,786	Discounted cash flow	Discount rate	1.5% - 2.2% (1.6%)
				CPR	14% - 23% (22%)

	As of December 31, 2019
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	Indicative bids	Range of broker quotes	96.0% - 96.0% (96.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,143,025	Discounted cash flow	Discount rate	2.3% - 5.5% (2.6%)
USDA Securities	$	8,913	Discounted cash flow	Discount rate	2.3% - 2.6% (2.1%)
				CPR	10% - 21% (19%)

The significant unobservable input used in the fair value measurements of AgVantage Farmer Mac Guaranteed Securities is the discount rate commensurate with the risks involved. Typically, significant increases (decreases) in this input in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease. Prepayment rates are not presented in the table above for AgVantage securities because they generally have fixed maturity dates when the secured general obligations are due and don't prepay.

The significant unobservable inputs used in the fair value measurements of USDA Securities are the prepayment rate and discount rate commensurate with the risks involved. Typically, significant increases (decreases) in any of these inputs in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase and would likely expect a corresponding decrease in forecasted prepayment rates. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease and would likely expect a corresponding increase in forecasted prepayment rates.

Disclosures on Fair Value of Financial Instruments

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of June 30, 2020 and December 31, 2019:

Table 9.4

	As of June 30, 2020				As of December 31, 2019
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
	(in thousands)
Financial assets:
Cash and cash equivalents	$	827,600	$	827,600	$	604,381	$	604,381
Investment securities	3,513,060		3,512,410		3,005,828		3,004,875
Farmer Mac Guaranteed Securities	9,070,424		9,039,105		8,606,451		8,590,476
USDA Securities	2,432,674		2,347,709		2,294,671		2,241,073
Loans	8,214,871		7,891,148		7,317,091		6,981,440
Financial derivatives	16,588		16,588		10,519		10,519
Guarantee and commitment fees receivable	32,254		36,612		36,732		38,442
Financial liabilities:
Notes payable	21,736,245		21,421,550		19,234,079		19,098,648
Debt securities of consolidated trusts held by third parties	1,499,947		1,476,964		1,663,177		1,616,504
Financial derivatives	47,543		47,543		27,042		27,042
Guarantee and commitment obligations	30,804		35,162		34,990		36,700

The carrying value of cash and cash equivalents is a reasonable estimate of their approximate fair value and is classified as Level 1. The fair value of investments in U.S. Treasuries are valued based on unadjusted quoted prices in active markets and are classified as Level 1. A significant portion of Farmer Mac's investment portfolio is valued using a reputable nationally recognized third-party pricing service. The prices obtained are non-binding and generally representative of recent market trades and are classified as Level 2. Farmer Mac internally models the fair value of its loan portfolio, including loans held for investment and loans held for investment in consolidated trusts, Farmer Mac Guaranteed Securities, and USDA Securities by discounting the projected cash flows of these instruments at projected interest rates. The fair values are based on the present value of expected cash flows using management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves and discount rates commensurate with the risks involved. These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3. Financial derivatives primarily are valued using unadjusted counterparty valuations and are classified as Level 2. The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3. Notes payable are valued by discounting the expected cash flows of these instruments using a yield curve derived from market prices observed for similar agency securities and are also classified as Level 3. Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent, estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model. Different market assumptions and estimation methodologies could significantly affect estimated fair value amounts.

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Business Segment Reporting

6 Months Ended

Jun. 30, 2020

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 and six months ended June 30, 2020 and 2019:

Table 10.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	19,310	$	5,403	$	2,322	$	20,084	$	1,229	$	—		$	48,348
Less: reconciling adjustments(1)(2)(3)	(2,577)		(714)		3,194		(1,302)		(480)		1,879			—
Net effective spread	16,733		4,689		5,516		18,782		749		1,879			—
Guarantee and commitment fees(2)	4,394		210		332		7		—		(1,803)			3,140
Other income/(expense)(3)	585		617		5		—		(159)		6,683			7,731
Non-interest income/(loss)	4,979		827		337		7		(159)		4,880			10,871
Provision for loan losses	920		—		(1,397)		41		(15)		—			(451)
Provision for reserve for losses	370		—		30		—		—		—			400
Other non-interest expense	(5,254)		(1,584)		(1,386)		(2,083)		(3,800)		—			(14,107)
Non-interest expense(4)	(4,884)		(1,584)		(1,356)		(2,083)		(3,800)		—			(13,707)
Core earnings before income taxes	17,748		3,932		3,100		16,747		(3,225)		6,759		(5)	45,061
Income tax (expense)/benefit	(3,727)		(826)		(651)		(3,517)		705		(1,419)			(9,435)
Core earnings before preferred stock dividends	14,021		3,106		2,449		13,230		(2,520)		5,340		(5)	35,626
Preferred stock dividends	—		—		—		—		(3,939)		—			(3,939)
Segment core earnings/(losses)	$	14,021	$	3,106	$	2,449	$	13,230	$	(6,459)	$	5,340	(5)	$	31,687
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 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, 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	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⁾ Includes 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 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, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	35,675	$	9,944	$	7,069	$	33,888	$	3,084	$	—		$	89,660
Less: reconciling adjustments(1)(2)(3)	(4,004)		(630)		3,367		2,596		(357)		(972)			—
Net effective spread	31,671		9,314		10,436		36,484		2,727		(972)			—
Guarantee and commitment fees(2)	8,711		445		667		16		—		(3,503)			6,336
Other income/(expense)(3)	1,754		729		12		—		(288)		(2,367)			(160)
Non-interest income/(loss)	10,465		1,174		679		16		(288)		(5,870)			6,176
Provision for loan losses	112		—		(3,522)		(450)		(29)		—			(3,889)
Provision for reserve for losses	366		—		(359)		—		—		—			7
Other non-interest expense	(11,251)		(3,402)		(2,990)		(4,446)		(8,233)		—			(30,322)
Non-interest expense(4)	(10,885)		(3,402)		(3,349)		(4,446)		(8,233)		—			(30,315)
Core earnings before income taxes	31,363		7,086		4,244		31,604		(5,823)		(6,842)		(5)	61,632
Income tax (expense)/benefit	(6,586)		(1,488)		(891)		(6,637)		988		1,438			(13,176)
Core earnings before preferred stock dividends	24,777		5,598		3,353		24,967		(4,835)		(5,404)		(5)	48,456
Preferred stock dividends	—		—		—		—		(7,370)		—			(7,370)
Segment core earnings/(losses)	$	24,777	$	5,598	$	3,353	$	24,967	$	(12,205)	$	(5,404)	(5)	$	41,086
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 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	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⁾ Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries during the year: (1) Farmer Mac Mortgage Securities Corporation ("FMMSC"), whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Guarantees line of business – primarily the acquisition of USDA Securities. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

Earnings Per Common Share

Earnings Per Common ShareBasic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding.  Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock awards.

Comprehensive Income

Comprehensive IncomeComprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

Allowance for Expected Credit Losses and Reserve for Credit Losses

On January 1, 2020, Farmer Mac adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, ("CECL"). Under CECL, Farmer Mac's allowance for credit losses represents the difference between the carrying amount of the related financial instruments and the present value of their expected cash flows discounted at their effective interest rates, as of the respective balance sheet date. Under CECL, Farmer Mac's reserve for credit losses represents the difference between the outstanding amount of off-balance sheet credit exposures and the present value of their expected cash flows discounted at their effective interest rates.

Farmer Mac maintains an allowance for credit losses to cover current expected credit losses as of the balance sheet date for on-balance sheet investment securities, loans held for investment, and Farmer Mac Guaranteed Securities (collectively referred to as "allowance for losses"). Additionally, Farmer Mac maintains a reserve for credit losses to cover current expected credit losses as of the balance sheet date for off-balance sheet loans underlying LTSPCs and off-balance sheet Farmer Mac Guaranteed Securities (collectively referred to as "reserve for losses"). Both the allowance for losses and reserve for losses are based on historical information and reasonable and supportable forecasts.  

Farmer Mac has never experienced a credit loss in its Rural Utilities line of business. Upon the adoption of CECL, Farmer Mac is now required to measure its expected credit losses for the expected life of all financial instruments, including its Rural Utilities loans. To estimate expected credit losses on these loans, Farmer Mac relies upon industry historical credit loss data from ratings agencies and publicly available information as disclosed in the securities filings of other major lenders who serve the utilities industry.

The allowance for losses increases through periodic provisions for loan losses that are charged against net interest income and the reserve for losses increases through provisions for losses that are charged to non-interest expense. Both the allowance for losses and reserve for losses are decreased by charge-offs for realized losses, net of recoveries.  Releases from the allowance for losses or reserve for losses occur when the estimate of expected credit losses as of the end of a period is less than the estimate at the beginning of the period.

The total allowance for losses consists of the allowance for losses and the reserve for losses.

Charge-offs

Farmer Mac records a charge-off against the allowance for losses principally when a loss has been confirmed through the receipt of assets, generally the underlying collateral, in full satisfaction of the loan. The loss equals the excess of the recorded investment in the loan over the fair value of the collateral less estimated selling costs.

Estimation Methodology

Farmer Mac bases its methodology for determining its current estimate of expected losses on a statistical model, which incorporates credit loss history and reasonable and supportable forecasts. Farmer Mac's estimation methodology is comprised of the following key components:

•An economic model for each portfolio, including Farm & Ranch, Rural Utilities, and Institutional Credit;

•A migration matrix for each portfolio that reasonably predicts the movement of each financial asset among various risk categories over the course of each asset's expected life. The migration matrix forms the basis for our estimate of the probability of default of each financial asset;

•A loss-given-default ("LGD") model that reasonably predicts the amount of loss that Farmer Mac would incur upon the default of each financial asset;

•An economic factor forecast that updates the migration matrix model and the LGD model with current assumptions for the economic indicators that Farmer Mac has determined are most correlated with or relevant to the performance of each portfolio of assets; including Gross Domestic Product ("GDP"), credit spreads, unemployment rates, land values, and commodity prices; and

•A discounted cash flow analysis, which relies upon each of the above model outputs, plus the contractual terms of each financial asset, and the effective interest rate of each financial asset.

Management evaluates these assumptions by considering many relevant factors, including:

•economic conditions;

•geographic and agricultural commodity/product concentrations in the portfolio;

•the credit profile of the portfolio, including risk ratings and financial metrics;

•delinquency trends of the portfolio;

•historical charge-off and recovery activities of the portfolio; and

•other factors to capture current portfolio trends and characteristics that differ from historical experience.

Management believes that its methodology produces a reasonable estimate of expected credit losses, as of the balance sheet date, for the expected life of all of its financial assets.

Allowance for Loss on Available-for-Sale (AFS) Securities

To measure current expected credit losses on impaired AFS securities, Farmer Mac first considers those impaired securities that: 1) Farmer Mac does not intend to sell, and 2) it is not more likely than not that Farmer Mac will be required to sell before recovering its amortized cost basis. In assessing whether a credit loss exists, Farmer Mac compares the present value, discounted at the security's effective interest rate, of cash flows expected to be collected from an impaired AFS debt security to its amortized cost basis. If the present value of cash flows expected to be collected is less than the amortized cost basis of the impaired security, a credit loss exists and Farmer Mac records an allowance for loss for that credit loss. However, the amount of that allowance is limited by the amount that the security’s fair value is less than its amortized cost basis. Accrued interest receivable is recorded separately on the Consolidated Balance Sheet, and the allowance for credit losses excludes uncollectible accrued interest receivable.

Collateral Dependent Assets ("CDAs")

CDAs are loans, loans underlying LTSPCs, or off-balance sheet credit exposures in which the borrower is either in foreclosure or is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral by Farmer Mac. Farmer Mac estimates the current expected credit loss on CDAs based upon the appraised value of the collateral, the costs to sell it, and any applicable credit protection such as a guarantee.

COVID-19 Payment Deferments

The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was signed into law on March 27, 2020. Section 4013 of the CARES Act titled “Temporary Relief from Troubled Debt Restructurings” provides financial institutions the option to temporarily suspend certain requirements under U.S. GAAP related to troubled debt restructurings (“TDRs”) for a limited period of time to account for the effects of the novel coronavirus disease 2019 ("COVID-19"). On April 10, 2020, Farmer Mac’s prudential regulator, the Office of Secondary Market Oversight (OSMO) within the Farm Credit Administration (FCA), issued guidance to Farmer Mac on loan servicing and reporting TDRs for lines of business affected by the COVID-19 outbreak. This guidance was consistent with the guidance provided by other financial regulatory agencies and the Financial Accounting Standards Board that short-term modifications made on a good faith basis in response to the COVID-19 national emergency are not TDRs when the borrower was not past due on loan payments before the March 13, 2020 presidential proclamation declaring the COVID-19 outbreak a national emergency.

During second quarter 2020, Farmer Mac implemented the guidance from FCA by granting up to 6-month payment deferments to borrowers who have been economically impacted by COVID-19. Farmer Mac deems loans under a COVID-19 payment deferment not to be past due and continues to accrue interest on those loans. Furthermore, Farmer Mac does not consider a payment deferment on any such loan to be a troubled debt restructuring. For the purpose of estimating expected credit losses on Farm & Ranch loans held for investment, Farmer Mac does consider payment deferments along with other available credit and economic information that pertains to that portfolio.

New Accounting Standards

New Accounting Standards

Recently Adopted Accounting Guidance

Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This Update required entities to measure all expected credit losses for financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, as well as requiring entities to use forward-looking information to form their credit loss estimates.	January 1, 2020	In first quarter 2020 Farmer Mac adopted the new guidance. The cumulative-effect adjustment to retained earnings as of January 1, 2020 reflected application of the new guidance and did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. For more information on the transition adjustment see Table 1.5 below.
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities	The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. There is no required accounting change for securities held at a discount in this Update.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurements, including the consideration of costs and benefits. Certain disclosure requirements were either removed, modified, or added.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

The following table presents the impact of adopting CECL on January 1, 2020 on our allowance and retained earnings:

Table 1.5

	December 31, 2019		Transition Adjustment		January 1, 2020
	(in thousands)
Allowance:
Farm & Ranch:
Loans	$	10,454	$	(3,909)	$	6,545
Long-term standby purchase commitments and guarantees	2,164		(148)		2,016
Rural Utilities:
Loans	—		5,378		5,378
Long-term standby purchase commitments	—		1,011		1,011
Farmer Mac Guaranteed Securities:
AgVantage	—		315		315
Investment Securities	—		9		9
Total Allowance	$	12,618	$	2,656	$	15,274
Retained Earnings	$	457,047	$	(2,099)	$	454,948

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard	Description	Date of Planned Adoption	Effect on Consolidated Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022.	Farmer Mac is currently evaluating the impact of the discontinuation of LIBOR on the consolidated financial statements and the applicability of the optional guidance provided by this Update.

Reclassifications

ReclassificationsCertain reclassifications of prior period information were made to conform to the current period presentation.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Schedule of Consolidation of Variable Interest Entities

The following tables present, by line of business, details about the consolidation of VIEs:

Table 1.1

	Consolidation of Variable Interest Entities
	As of June 30, 2020
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,436,090	$	—	$	—	$	1,436,090
Debt securities of consolidated trusts held by third parties (1)	1,476,964		—		—		1,476,964
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,615		—		32,615
Maximum exposure to loss (3)	—		32,537		—		32,537
Investment securities:
Carrying value (4)	—		—		1,651,031		1,651,031
Maximum exposure to loss (3) (4)	—		—		1,648,328		1,648,328
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	90,225		330,309		—		420,534

⁽¹⁾Includes borrower remittances of $40.9 million. The borrower remittances had not been passed through to third party investors as of June 30, 2020.

⁽²⁾Includes $0.1 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

	Consolidation of Variable Interest Entities
	As of December 31, 2019
	Farm & Ranch		USDA Guarantees		Corporate		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,600,917	$	—	$	—	$	1,600,917
Debt securities of consolidated trusts held by third parties (1)	1,616,504		—		—		1,616,504
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value (2)	—		32,041		—		32,041
Maximum exposure to loss (3)	—		31,887		—		31,887
Investment securities:
Carrying value (4)	—		—		1,117,203		1,117,203
Maximum exposure to loss (3) (4)	—		—		1,120,765		1,120,765
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	107,322		389,216		—		496,538

⁽¹⁾Includes borrower remittances of $15.6 million. The borrower remittances had not been passed through to third party investors as of December 31, 2019.

⁽²⁾Includes $0.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business.

⁽³⁾Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

⁽⁴⁾Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities.

⁽⁵⁾The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.

Basic and Diluted EPS

The following schedule reconciles basic and diluted EPS for the three and six months ended June 30, 2020 and 2019:

Table 1.2

	For the Three Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	31,687	10,730	$	2.95	$	28,304	10,698	$	2.65
Effect of dilutive securities(1)
SARs and restricted stock	—		46	(0.01)		—		72	(0.02)
Diluted EPS	$	31,687	10,776	$	2.94	$	28,304	10,770	$	2.63

⁽¹⁾For the three months ended June 30, 2020 and 2019, SARs and restricted stock of 83,297 and 62,660, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

	For the Six Months Ended
	June 30, 2020					June 30, 2019
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	41,086	10,721	$	3.83	$	50,178	10,684	$	4.70
Effect of dilutive securities(1)
SARs and restricted stock	—		58	(0.02)		—		90	(0.04)
Diluted EPS	$	41,086	10,779	$	3.81	$	50,178	10,774	$	4.66

⁽¹⁾For the six months ended June 30, 2020 and 2019, SARs and restricted stock of 85,223 and 59,818, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the six months ended June 30, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

Schedule of Accumulated Other Comprehensive Income, Net of Tax

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and six months ended June 30, 2020 and 2019:

Table 1.3

	As of June 30, 2020								As of June 30, 2019
	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)
For the Three Months Ended:
Beginning Balance	$	(121,858)	$	28,351	$	(27,930)	$	(121,437)	$	(22,800)	$	41,656	$	2,398	$	21,254
Other comprehensive income/(loss) before reclassifications	34,374		—		(2,920)		31,454		(21,711)		—		(7,512)		(29,223)
Amounts reclassified from AOCI	(777)		(1,972)		1,235		(1,514)		(873)		(3,635)		(366)		(4,874)
Net comprehensive income/(loss)	33,597		(1,972)		(1,685)		29,940		(22,584)		(3,635)		(7,878)		(34,097)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)
For the Six Months Ended:
Beginning Balance	$	(43,397)	$	32,845	$	(5,609)	$	(16,161)	$	(25,360)	$	43,443	$	6,873	$	24,956
Other comprehensive loss before reclassifications	(43,310)		—		(25,588)		(68,898)		(18,393)		—		(11,608)		(30,001)
Amounts reclassified from AOCI	(1,554)		(6,466)		1,582		(6,438)		(1,631)		(5,422)		(745)		(7,798)
Net comprehensive loss	(44,864)		(6,466)		(24,006)		(75,336)		(20,024)		(5,422)		(12,353)		(37,799)
Ending Balance	$	(88,261)	$	26,379	$	(29,615)	$	(91,497)	$	(45,384)	$	38,021	$	(5,480)	$	(12,843)

Schedule of Reclassification out of Accumulated Other Comprehensive Income

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the three and six months ended June 30, 2020 and 2019:

Table 1.4

	For the Three Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	$	43,512	$	9,138	$	34,374	$	(27,482)	$	(5,771)	$	(21,711)
Less reclassification adjustments included in:
Net interest income(1)	(971)		(204)		(767)		(956)		(201)		(755)
Other income(2)	(14)		(4)		(10)		(150)		(32)		(118)
Total	$	42,527	$	8,930	$	33,597	$	(28,588)	$	(6,004)	$	(22,584)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(2,496)		(524)		(1,972)		(4,601)		(966)		(3,635)
Total	$	(2,496)	$	(524)	$	(1,972)	$	(4,601)	$	(966)	$	(3,635)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(3,695)	$	(775)	$	(2,920)	$	(9,510)	$	(1,998)	$	(7,512)
Less reclassification adjustments included in:
Net interest income(4)	1,563		328		1,235		(462)		(96)		(366)
Total	$	(2,132)	$	(447)	$	(1,685)	$	(9,972)	$	(2,094)	$	(7,878)
Other comprehensive income/(loss)	$	37,899	$	7,959	$	29,940	$	(43,161)	$	(9,064)	$	(34,097)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

	For the Six Months Ended
	June 30, 2020						June 30, 2019
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding losses on available-for-sale securities	$	(54,822)	$	(11,512)	$	(43,310)	$	(23,282)	$	(4,889)	$	(18,393)
Less reclassification adjustments included in:
Net interest income(1)	(1,940)		(407)		(1,533)		(1,909)		(401)		(1,508)
Other income(2)	(27)		(6)		(21)		(156)		(33)		(123)
Total	$	(56,789)	$	(11,925)	$	(44,864)	$	(25,347)	$	(5,323)	$	(20,024)
Held-to-maturity securities:
Less reclassification adjustments included in:
Net interest income(3)	(8,184)		(1,718)		(6,466)		(6,863)		(1,441)		(5,422)
Total	$	(8,184)	$	(1,718)	$	(6,466)	$	(6,863)	$	(1,441)	$	(5,422)
Cash flow hedges
Unrealized losses on cash flow hedges	$	(32,390)	$	(6,802)	$	(25,588)	$	(14,695)	$	(3,087)	$	(11,608)
Less reclassification adjustments included in:
Net interest income(4)	2,002		420		1,582		(942)		(197)		(745)
Total	$	(30,388)	$	(6,382)	$	(24,006)	$	(15,637)	$	(3,284)	$	(12,353)
Other comprehensive loss	$	(95,361)	$	(20,025)	$	(75,336)	$	(47,847)	$	(10,048)	$	(37,799)

⁽¹⁾Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

⁽²⁾Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

⁽³⁾Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

⁽⁴⁾Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

Recently Adopted Accounting Guidance and Recently Issued Accounting Guidance, Note Yet Adopted Within Out Consolidated Financial Statements

Recently Adopted Accounting Guidance

Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments	This Update required entities to measure all expected credit losses for financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, as well as requiring entities to use forward-looking information to form their credit loss estimates.	January 1, 2020	In first quarter 2020 Farmer Mac adopted the new guidance. The cumulative-effect adjustment to retained earnings as of January 1, 2020 reflected application of the new guidance and did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. For more information on the transition adjustment see Table 1.5 below.
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities	The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. There is no required accounting change for securities held at a discount in this Update.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement	The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurements, including the consideration of costs and benefits. Certain disclosure requirements were either removed, modified, or added.	January 1, 2020	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

The following table presents the impact of adopting CECL on January 1, 2020 on our allowance and retained earnings:

Table 1.5

	December 31, 2019		Transition Adjustment		January 1, 2020
	(in thousands)
Allowance:
Farm & Ranch:
Loans	$	10,454	$	(3,909)	$	6,545
Long-term standby purchase commitments and guarantees	2,164		(148)		2,016
Rural Utilities:
Loans	—		5,378		5,378
Long-term standby purchase commitments	—		1,011		1,011
Farmer Mac Guaranteed Securities:
AgVantage	—		315		315
Investment Securities	—		9		9
Total Allowance	$	12,618	$	2,656	$	15,274
Retained Earnings	$	457,047	$	(2,099)	$	454,948

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements

Standard	Description	Date of Planned Adoption	Effect on Consolidated Financial Statements
ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022.	Farmer Mac is currently evaluating the impact of the discontinuation of LIBOR on the consolidated financial statements and the applicability of the optional guidance provided by this Update.

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Investment Securities (Tables)

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of Farmer Mac Investment Securities

The following tables set forth information about Farmer Mac's investment securities as of June 30, 2020 and December 31, 2019:

Table 2.1

	As of June 30, 2020
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(38)	$	—	$	(1,379)	$	18,283
Floating rate asset-backed securities	9,818		—		9,818		—		—		(11)		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	2,108,505		29		2,108,534		—		7,409		(3,566)		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	292		—		292		—		30		—		322
Fixed rate U.S. Treasuries	1,314,850		5,763		1,320,613		—		6,043		(67)		1,326,589
Total available-for-sale	3,453,165		5,792		3,458,957		(38)		13,482		(5,023)		3,467,378
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		650		—		45,682
Total investment securities	$	3,498,197	$	5,792	$	3,503,989	$	(38)	$	14,132	$	(5,023)	$	3,513,060

⁽¹⁾Amounts presented exclude $6.6 million of accrued interest receivable on investment securities as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The held-to-maturity investment securities had a weighted average yield of 1.5% as of June 30, 2020.

	As of December 31, 2019
	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	$	—	$	(788)	$	18,912
Floating rate asset-backed securities	11,092		—		11,092		—		(7)		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	1,633,731		1,174		1,634,905		2,414		(4,736)		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	315		—		315		25		—		340
Fixed rate U.S. Treasuries	1,295,210		208		1,295,418		1,520		(15)		1,296,923
Total available-for-sale	2,960,048		1,382		2,961,430		3,959		(5,546)		2,959,843
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(1)	45,032		—		45,032		953		—		45,985
Total investment securities	$	3,005,080	$	1,382	$	3,006,462	$	4,912	$	(5,546)	$	3,005,828

⁽¹⁾The held-to-maturity investment securities had a weighted average yield of 3.3% as of December 31, 2019.

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2020 and December 31, 2019:

Table 3.1

	As of June 30, 2020
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,108,720	$	(70)	$	1,108,650	$	(546)	$	30,070	$	—	$	1,138,174
Farmer Mac Guaranteed USDA Securities	32,537		77		32,614		—		1,249		—		33,863
Total Farmer Mac Guaranteed Securities	1,141,257		7		1,141,264		(546)		31,319		—		1,172,037
USDA Securities	2,307,684		32,239		2,339,923		—		85,626		(661)		2,424,888
Total held-to-maturity	$	3,448,941	$	32,246	$	3,481,187	$	(546)	$	116,945	$	(661)	$	3,596,925
Available-for-sale:
AgVantage	$	7,540,043	$	(99)	$	7,539,944	$	(235)	$	405,926	$	(47,248)	$	7,898,387
Trading:
USDA Securities(3)	$	7,276	$	391	$	7,667	$	—	$	122	$	(3)	$	7,786

⁽¹⁾Amounts presented exclude $34.9 million, $35.3 million, and $0.2 million of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The trading USDA securities had a weighted average yield of 5.15% as of June 30, 2020.

	As of December 31, 2019
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,415,584	$	(174)	$	1,415,410	$	15,300	$	(164)	$	1,430,546
Farmer Mac Guaranteed USDA Securities	31,887		154		32,041		839		—		32,880
Total Farmer Mac Guaranteed Securities	1,447,471		(20)		1,447,451		16,139		(164)		1,463,426
USDA Securities	2,190,671		41,489		2,232,160		54,356		(758)		2,285,758
Total held-to-maturity	$	3,638,142	$	41,469	$	3,679,611	$	70,495	$	(922)	$	3,749,184
Available-for-sale:
AgVantage	$	7,017,095	$	(124)	$	7,016,971	$	161,316	$	(35,262)	$	7,143,025
Trading:
USDA Securities(1)	$	8,400	$	479	$	8,879	$	61	$	(27)	$	8,913

⁽¹⁾The trading USDA securities had a weighted average yield of 5.20% as of December 31, 2019.

Schedule of Unrealized Losses on Available-for-Sale Investment Securities

As of June 30, 2020 and December 31, 2019, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2

	As of June 30, 2020
	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	$	—	$	—	$	18,283	$	(1,379)
Floating rate asset-backed securities	—		—		9,807		(11)
Floating rate Government/GSE guaranteed mortgage-backed securities	565,860		(2,163)		217,525		(1,403)
Fixed rate U.S. Treasuries	226,448		(67)		—		—
Total	$	792,308	$	(2,230)	$	245,615	$	(2,793)
Number of securities in loss position			58				55

	As of December 31, 2019
	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	$	—	$	—	$	18,912	$	(788)
Floating rate asset-backed securities	2,583		(1)		8,502		(6)
Floating rate Government/GSE guaranteed mortgage-backed securities	841,993		(2,244)		436,621		(2,492)
Fixed rate U.S. Treasuries	35,107		(15)		—		—
Total	$	879,683	$	(2,260)	$	464,035	$	(3,286)
Number of securities in loss position			57				62

As of June 30, 2020 and December 31, 2019, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2

	As of June 30, 2020
	Held-to-Maturity and 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)
Held-to-maturity:
USDA Securities	$	—	$	—	$	22,235	$	(661)
Total held-to-maturity	$	—	$	—	$	22,235	$	(661)
Available-for-sale:
AgVantage	$	521,979	$	(932)	$	841,123	$	(46,316)

	As of December 31, 2019
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	—	$	—	$	301,836	$	(164)
USDA Securities	—		—		27,089		(758)
Total held-to-maturity	$	—	$	—	$	328,925	$	(922)
Available-for-sale:
AgVantage	$	225,239	$	(2,203)	$	1,394,802	$	(33,059)

Schedule of Available-for-Sale Securities Maturities

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2020 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 2.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,235,047	$	1,241,040	1.58%
Due after one year through five years	364,971		364,927		0.99%
Due after five years through ten years	922,322		926,675		0.72%
Due after ten years	936,617		934,736		0.69%
Total	$	3,458,957	$	3,467,378	1.05%

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of June 30, 2020 are set forth below. The balances presented are based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,435,445	$	1,438,585	1.34	%
Due after one year through five years	3,434,770		3,557,439		2.34	%
Due after five years through ten years	1,147,366		1,232,206		2.34	%
Due after ten years	1,522,363		1,670,157		2.67	%
Total	$	7,539,944	$	7,898,387	2.22	%

⁽¹⁾Amounts presented exclude $34.9 million of accrued interest receivable.

	As of June 30, 2020
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	445,889	$	451,452	2.94	%
Due after one year through five years	751,402		777,980		3.21	%
Due after five years through ten years	213,460		220,404		3.17	%
Due after ten years	2,070,436		2,147,089		3.39	%
Total	$	3,481,187	$	3,596,925	3.28	%

⁽¹⁾Amounts presented exclude $35.3 million of accrued interest receivable.

XML

Farmer Mac Guaranteed Securities and USDA Securities (Tables)

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Schedule of Farmer Mac Guaranteed Securities and USDA Securities

The following tables set forth information about Farmer Mac's investment securities as of June 30, 2020 and December 31, 2019:

Table 2.1

	As of June 30, 2020
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		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	$	(38)	$	—	$	(1,379)	$	18,283
Floating rate asset-backed securities	9,818		—		9,818		—		—		(11)		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	2,108,505		29		2,108,534		—		7,409		(3,566)		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	292		—		292		—		30		—		322
Fixed rate U.S. Treasuries	1,314,850		5,763		1,320,613		—		6,043		(67)		1,326,589
Total available-for-sale	3,453,165		5,792		3,458,957		(38)		13,482		(5,023)		3,467,378
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		650		—		45,682
Total investment securities	$	3,498,197	$	5,792	$	3,503,989	$	(38)	$	14,132	$	(5,023)	$	3,513,060

⁽¹⁾Amounts presented exclude $6.6 million of accrued interest receivable on investment securities as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The held-to-maturity investment securities had a weighted average yield of 1.5% as of June 30, 2020.

	As of December 31, 2019
	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	$	—	$	(788)	$	18,912
Floating rate asset-backed securities	11,092		—		11,092		—		(7)		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	1,633,731		1,174		1,634,905		2,414		(4,736)		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	315		—		315		25		—		340
Fixed rate U.S. Treasuries	1,295,210		208		1,295,418		1,520		(15)		1,296,923
Total available-for-sale	2,960,048		1,382		2,961,430		3,959		(5,546)		2,959,843
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(1)	45,032		—		45,032		953		—		45,985
Total investment securities	$	3,005,080	$	1,382	$	3,006,462	$	4,912	$	(5,546)	$	3,005,828

⁽¹⁾The held-to-maturity investment securities had a weighted average yield of 3.3% as of December 31, 2019.

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2020 and December 31, 2019:

Table 3.1

	As of June 30, 2020
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,108,720	$	(70)	$	1,108,650	$	(546)	$	30,070	$	—	$	1,138,174
Farmer Mac Guaranteed USDA Securities	32,537		77		32,614		—		1,249		—		33,863
Total Farmer Mac Guaranteed Securities	1,141,257		7		1,141,264		(546)		31,319		—		1,172,037
USDA Securities	2,307,684		32,239		2,339,923		—		85,626		(661)		2,424,888
Total held-to-maturity	$	3,448,941	$	32,246	$	3,481,187	$	(546)	$	116,945	$	(661)	$	3,596,925
Available-for-sale:
AgVantage	$	7,540,043	$	(99)	$	7,539,944	$	(235)	$	405,926	$	(47,248)	$	7,898,387
Trading:
USDA Securities(3)	$	7,276	$	391	$	7,667	$	—	$	122	$	(3)	$	7,786

⁽¹⁾Amounts presented exclude $34.9 million, $35.3 million, and $0.2 million of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2020.

⁽²⁾Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

⁽³⁾The trading USDA securities had a weighted average yield of 5.15% as of June 30, 2020.

	As of December 31, 2019
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,415,584	$	(174)	$	1,415,410	$	15,300	$	(164)	$	1,430,546
Farmer Mac Guaranteed USDA Securities	31,887		154		32,041		839		—		32,880
Total Farmer Mac Guaranteed Securities	1,447,471		(20)		1,447,451		16,139		(164)		1,463,426
USDA Securities	2,190,671		41,489		2,232,160		54,356		(758)		2,285,758
Total held-to-maturity	$	3,638,142	$	41,469	$	3,679,611	$	70,495	$	(922)	$	3,749,184
Available-for-sale:
AgVantage	$	7,017,095	$	(124)	$	7,016,971	$	161,316	$	(35,262)	$	7,143,025
Trading:
USDA Securities(1)	$	8,400	$	479	$	8,879	$	61	$	(27)	$	8,913

⁽¹⁾The trading USDA securities had a weighted average yield of 5.20% as of December 31, 2019.

Schedule of Unrealized Losses on Available-for-Sale Investment Securities

As of June 30, 2020 and December 31, 2019, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2

	As of June 30, 2020
	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	$	—	$	—	$	18,283	$	(1,379)
Floating rate asset-backed securities	—		—		9,807		(11)
Floating rate Government/GSE guaranteed mortgage-backed securities	565,860		(2,163)		217,525		(1,403)
Fixed rate U.S. Treasuries	226,448		(67)		—		—
Total	$	792,308	$	(2,230)	$	245,615	$	(2,793)
Number of securities in loss position			58				55

	As of December 31, 2019
	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	$	—	$	—	$	18,912	$	(788)
Floating rate asset-backed securities	2,583		(1)		8,502		(6)
Floating rate Government/GSE guaranteed mortgage-backed securities	841,993		(2,244)		436,621		(2,492)
Fixed rate U.S. Treasuries	35,107		(15)		—		—
Total	$	879,683	$	(2,260)	$	464,035	$	(3,286)
Number of securities in loss position			57				62

As of June 30, 2020 and December 31, 2019, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2

	As of June 30, 2020
	Held-to-Maturity and 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)
Held-to-maturity:
USDA Securities	$	—	$	—	$	22,235	$	(661)
Total held-to-maturity	$	—	$	—	$	22,235	$	(661)
Available-for-sale:
AgVantage	$	521,979	$	(932)	$	841,123	$	(46,316)

	As of December 31, 2019
	Held-to-Maturity and 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)
Held-to-maturity:
AgVantage	$	—	$	—	$	301,836	$	(164)
USDA Securities	—		—		27,089		(758)
Total held-to-maturity	$	—	$	—	$	328,925	$	(922)
Available-for-sale:
AgVantage	$	225,239	$	(2,203)	$	1,394,802	$	(33,059)

Schedule of Available-for-Sale and Held-to-Maturity Securities Maturities

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2020 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 2.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,235,047	$	1,241,040	1.58%
Due after one year through five years	364,971		364,927		0.99%
Due after five years through ten years	922,322		926,675		0.72%
Due after ten years	936,617		934,736		0.69%
Total	$	3,458,957	$	3,467,378	1.05%

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of June 30, 2020 are set forth below. The balances presented are based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3

	As of June 30, 2020
	Available-for-Sale Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	1,435,445	$	1,438,585	1.34	%
Due after one year through five years	3,434,770		3,557,439		2.34	%
Due after five years through ten years	1,147,366		1,232,206		2.34	%
Due after ten years	1,522,363		1,670,157		2.67	%
Total	$	7,539,944	$	7,898,387	2.22	%

⁽¹⁾Amounts presented exclude $34.9 million of accrued interest receivable.

	As of June 30, 2020
	Held-to-Maturity Securities
	Amortized Cost(1)		Fair Value		Weighted- Average Yield
	(dollars in thousands)
Due within one year	$	445,889	$	451,452	2.94	%
Due after one year through five years	751,402		777,980		3.21	%
Due after five years through ten years	213,460		220,404		3.17	%
Due after ten years	2,070,436		2,147,089		3.39	%
Total	$	3,481,187	$	3,596,925	3.28	%

⁽¹⁾Amounts presented exclude $35.3 million of accrued interest receivable.

XML

Financial Derivatives (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements as of June 30, 2020 and December 31, 2019:

Table 4.1

	As of June 30, 2020
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	5,584,809	$	8,358	$	(4,694)	2.24%	0.65%		11.71
Receive fixed non-callable	2,305,500		249		(8,087)		0.78%	1.90%		2.35
Receive fixed callable	413,500		5,891		—		0.48%	1.80%		3.53
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	437,000		1,246		(11,964)		2.27%	0.71%		5.82
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	446,721		—		(22,403)		2.78%	0.85%		4.25
Receive fixed non-callable	3,143,951		—		—		0.48%	1.09%		0.82
Receive fixed callable	150,000		138		—		0.73%	1.66%		1.27
Basis swaps	3,610,000		706		(545)		0.49%	0.27%		1.08
Treasury futures	27,500				(9)				139.14
Credit valuation adjustment			—		159
Total financial derivatives	$	16,118,981	$	16,588	$	(47,543)
Collateral (held)/pledged			(1,500)		248,293
Net amount			$	15,088	$	200,750

	As of December 31, 2019
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Pay fixed non-callable	$	4,955,686	$	7,163	$	(3,281)	2.47%	1.93%		11.26
Receive fixed non-callable	1,413,200		76		(5,329)		1.88%	2.13%		1.25
Receive fixed callable	524,000		476		(772)		1.52%	1.91%		2.83
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	428,000		1,882		(1,514)		2.36%	2.12%		5.43
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	342,745		7		(14,046)		3.55%	2.00%		5.51
Receive fixed non-callable	3,124,148		49		(1,637)		1.88%	2.06%		1.66
Receive fixed callable	525,000		79		(80)		1.64%	1.68%		0.83
Basis swaps	2,670,000		787		(395)		1.86%	1.76%		0.90
Treasury futures	39,400		—		(51)				128.29
Credit valuation adjustment			—		63
Total financial derivatives	$	14,022,179	$	10,519	$	(27,042)
Collateral (held)/pledged			(2,685)		132,129
Net amount			$	7,834	$	105,087

Schedule of Net Income/(Expense) Recognized

The following table summarizes the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and six months ended June 30, 2020 and 2019:

Table 4.2

	For the Three Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	61,792	$	55,430	$	(79,273)	$	6,523	$	44,472
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(12,257)		(4,535)		5,432		—		(11,360)
Recognized on hedged items	32,102		9,812		(12,721)		—		29,193
Discount amortization recognized on hedged items	—		—		(181)		—		(181)
Income/(expense) related to interest settlements on fair value hedging relationships	$	19,845	$	5,277	$	(7,470)	$	—	$	17,652
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(9,226)	$	(6,616)	$	3,722	$	—	$	(12,120)
Recognized on hedged items	9,050		3,037		(2,348)		—		9,739
(Losses)/gains on fair value hedging relationships	$	(176)	$	(3,579)	$	1,374	$	—	$	(2,381)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(1,563)	$	—	$	(1,563)
Recognized on hedged items	—		—		(1,029)		—		(1,029)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,594)	$	—	$	(2,594)
Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	8,427	$	8,427
Interest expense on interest rate swaps	—		—		—		(1,795)		(1,795)
Treasury futures	—		—		—		(109)		(109)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	6,523	$	6,523

	For The Three Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	85,569	$	59,403	$	(122,074)	$	8,913	$	31,811
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	1,167		(202)		(2,572)		—		(1,607)
Recognized on hedged items	30,380		6,323		(11,779)		—		24,924
Discount amortization recognized on hedged items	—		—		(164)		—		(164)
Income/(expense) related to interest settlements on fair value hedging relationships	$	31,547	$	6,121	$	(14,515)	$	—	$	23,153
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(116,405)	$	(33,953)	$	16,146	$	—	$	(134,212)
Recognized on hedged items	114,638		33,795		(15,649)		—		132,784
(Losses)/gains on fair value hedging relationships	$	(1,767)	$	(158)	$	497	$	—	$	(1,428)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	462	$	—	$	462
Recognized on hedged items	—		—		(2,697)		—		(2,697)
Discount amortization recognized on hedged items	—		—		(1)		—		(1)
Expense recognized on cash flow hedges	$	—	$	—	$	(2,236)	$	—	$	(2,236)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	11,152	$	11,152
Interest expense on interest rate swaps	—		—		—		(1,146)		(1,146)
Treasury futures	—		—		—		(1,093)		(1,093)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,913	$	8,913

	For the Six Months Ended June 30, 2020
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Losses on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations	$	133,309	$	116,026	$	(187,815)	$	(2,775)	$	58,745
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(18,408)		(6,412)		7,066		—		(17,754)
Recognized on hedged items	63,927		18,489		(26,997)		—		55,419
Discount amortization recognized on hedged items	—		—		(361)		—		(361)
Income/(expense) related to interest settlements on fair value hedging relationships	$	45,519	$	12,077	$	(20,292)	$	—	$	37,304
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	(303,159)	$	(152,521)	$	62,656	$	—	$	(393,024)
Recognized on hedged items	299,430		148,445		(62,913)		—		384,962
(Losses)/gains on fair value hedging relationships	$	(3,729)	$	(4,076)	$	(257)	$	—	$	(8,062)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	(2,002)	$	—	$	(2,002)
Recognized on hedged items	—		—		(3,152)		—		(3,152)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(5,156)	$	—	$	(5,156)
(Losses)/gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	1,878	$	1,878
Interest expense on interest rate swaps	—		—		—		(2,657)		(2,657)
Treasury futures	—		—		—		(1,996)		(1,996)
(Losses)/gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	(2,775)	$	(2,775)

	For The Six Months Ended June 30, 2019
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income						Non-Interest Income		Total
	Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
	(in thousands)
Total amounts presented in the consolidated statement of operations:	$	170,980	$	110,800	$	(236,990)	$	8,553	$	53,343
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	2,717		(224)		(5,790)		—		(3,297)
Recognized on hedged items	55,198		10,878		(21,811)		—		44,265
Discount amortization recognized on hedged items	—		—		(314)		—		(314)
Income/(expense) related to interest settlements on fair value hedging relationships	$	57,915	$	10,654	$	(27,915)	$	—	$	40,654
Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	$	(175,392)	$	(54,034)	$	25,123	$	—	$	(204,303)
Recognized on hedged items	173,990		50,031		(23,846)		—		200,175
Gains/(losses) on fair value hedging relationships	$	(1,402)	$	(4,003)	$	1,277	$	—	$	(4,128)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	942	$	—	$	942
Recognized on hedged items	—		—		(5,417)		—		(5,417)
Discount amortization recognized on hedged items	—		—		(2)		—		(2)
Expense recognized on cash flow hedges	$	—	$	—	$	(4,477)	$	—	$	(4,477)
Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	13,320	$	13,320
Interest expense on interest rate swaps	—		—		—		(3,446)		(3,446)
Treasury futures	—		—		—		(1,321)		(1,321)
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	8,553	$	8,553

Schedule of Hedged Items in Fair Value Hedging Relationships

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of June 30, 2020 and December 31, 2019:

Table 4.3

	Hedged Items in Fair Value Relationship
	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
	(in thousands)
Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	$	4,506,185	$	4,092,611	$	479,632	$	180,215
Loans held for investment, at amortized cost(1)	1,634,784		1,050,335		186,352		37,907
Notes Payable(2)	(2,787,699)		(2,761,052)		(70,433)		(7,433)

⁽¹⁾Includes $0.4 million as of June 30, 2020 in fair value adjustment, currently included in "Prepaid expenses and other assets" related to a hedge of a purchase commitment of a loan.

⁽²⁾Carrying amount represents amortized cost.

Schedule of Credit Exposure to Interest Rate Swap Counterparties

The following table shows Farmer Mac's credit exposure to interest rate swap counterparties as of June 30, 2020 and December 31, 2019:

Table 4.4

	June 30, 2020
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swap	$	122,793	$	121,310	$	1,483
Liabilities:
Derivatives
Interest rate swap	$	799,070	$	779,807	$	19,263

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

	December 31, 2019
	Gross Amount Recognized(1)		Counterparty Netting		Net Amount Presented in the Consolidated Balance Sheet
	(in thousands)
Assets:
Derivatives
Interest rate swaps	$	56,139	$	53,771	$	2,368
Liabilities:
Derivatives
Interest rate swaps	$	305,584	$	291,326	$	14,258

⁽¹⁾Gross amount excludes netting arrangements and any adjustment for nonperformance risk, but includes accrued interest.

XML

Loans (Tables)

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Schedule of Composition of Loan Balances

The following table displays the composition of the loan balances as of June 30, 2020 and December 31, 2019:

Table 5.1

	As of June 30, 2020(1)						As of December 31, 2019(2)
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Farm & Ranch	$	4,181,422	$	1,436,090	$	5,617,512	$	3,675,640	$	1,600,917	$	5,276,557
Rural Utilities	2,101,568		—		2,101,568		1,671,293		—		1,671,293
Total unpaid principal balance(3)	6,282,990		1,436,090		7,719,080		5,346,933		1,600,917		6,947,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	187,007		—		187,007		44,044		—		44,044
Total loans	6,469,997		1,436,090		7,906,087		5,390,977		1,600,917		6,991,894
Allowance for losses	(13,758)		(1,181)		(14,939)		(8,853)		(1,601)		(10,454)
Total loans, net of allowance	$	6,456,239	$	1,434,909	$	7,891,148	$	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 June 30, 2020 and December 31, 2019:

Table 5.2

	June 30, 2020(1)		December 31, 2019(2)
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Farm & Ranch	$	6,039	$	10,454
Rural Utilities	8,900		—
Total	$	14,939	$	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 and six month period ended June 30, 2020 and 2019:

Table 5.3

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Allowance for Losses		Allowance for Losses		Allowance for Losses		Allowance for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	7,353	$	6,753	$	10,454	$	7,017
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(3,909)		—
Adjusted Beginning Balance	7,353		6,753		6,545		7,017
(Release of)/provision for losses	(920)		578		(112)		314
Charge-offs	(394)		(67)		(394)		(67)
Ending Balance(3)	$	6,039	$	7,264	$	6,039	$	7,264
Rural Utilities:
Beginning Balance	$	7,503	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		5,378		—
Adjusted Beginning Balance	7,503		—		5,378		—
Provision for losses	1,397		—		3,522		—
Charge-offs	—		—		—		—
Ending Balance(4)	$	8,900	$	—	$	8,900	$	—

⁽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 $1.8 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 June 30, 2020:

Table 5.4

	As of June 30, 2020
	Accruing
	Current(5)		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Farm & Ranch	$	5,476,962	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	5,617,512
Rural Utilities	2,101,568		—		—		—		—		—		2,101,568
Total	$	7,578,530	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	7,719,080

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

⁽³⁾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.

⁽⁴⁾Includes $23.1 million of nonaccrual loans for which there was no associated allowance. During the three and six months ended June 30, 2020, Farmer Mac received $1.3 million and 2.3 million, respectively, in interest on nonaccrual loans.

⁽⁵⁾Includes $82.2 million of unpaid principal balance related to Farm & Ranch loans that Farmer Mac has executed a COVID-19 payment deferment.

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
	As of		For the Six Months Ended
	December 31, 2019		June 30, 2019
	(in thousands)
Farm & Ranch loans	$	57,719	$	131

⁽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 June 30, 2020:

Table 6.7

	As of June 30, 2020
	Current(2)		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	$	2,374,988	$	9,947	$	12,587	$	2,816	$	25,350	$	2,400,338
Rural Utilities:
LTSPCs	$	590,053	$	—	$	—	$	—	$	—	$	590,053

⁽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.

⁽²⁾Includes $109.5 million of unpaid principal balance related to Farm & Ranch LTSPCs for which the lender has notified Farmer Mac of an executed COVID-19 payment deferment.

Table 6.9

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Six Months Ended
	December 31, 2019		June 30, 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 and six months ended June 30, 2019:

Table 5.7

	June 30, 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	$	98,176	$	39,056	$	28,650	$	7,675	$	—	$	59	$	173,616
Income recognized on impaired loans	379		121		304		55		—		—		859
For the Six Months Ended:
Average recorded investment in impaired loans	$	85,652	$	41,903	$	26,279	$	8,268	$	—	$	66	$	162,168
Income recognized on impaired loans	701		420		417		122		—		—		1,660

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 June 30, 2020, by year of origination:

Table 5.9

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch(1):
Internally Assigned Risk Rating:
Acceptable	$	758,965	$	773,199	$	562,604	$	617,751	$	528,068	$	1,345,384	$	501,625	$	5,087,596
Special mention(2)	76,588		166,829		32,164		9,278		5,477		19,630		10,260		320,226
Substandard(3)	448		6,655		18,326		59,545		53,639		60,478		10,599		209,690
Total	$	836,001	$	946,683	$	613,094	$	686,574	$	587,184	$	1,425,492	$	522,484	$	5,617,512
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394

⁽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.

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities(1):
Internally Assigned Risk Rating:
Acceptable	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	658,827	$	7,366	$	2,096,554
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		5,014		—		5,014
Total	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	663,841	$	7,366	$	2,101,568
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽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 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 June 30, 2020, by year of origination:

Table 6.10

	As of June 30, 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	$	71,569	$	206,177	$	177,787	$	251,149	$	222,988	$	1,072,259	$	172,509	$	2,174,438
Special mention(1)	—		10,250		7,835		24,518		16,090		61,674		10,359		130,726
Substandard(2)	286		—		3,982		15,277		11,619		59,342		4,668		95,174
Total	$	71,855	$	216,427	$	189,604	$	290,944	$	250,697	$	1,193,275	$	187,536	$	2,400,338
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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 June 30, 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	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
For the Three Months Ended
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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.

XML

Guarantees (Tables)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Guarantor Obligations

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of June 30, 2020 and December 31, 2019, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1

Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
	As of June 30, 2020		As of December 31, 2019
	(in thousands)
Farm & Ranch:
Farmer Mac Guaranteed Securities	$	90,225	$	107,322
USDA Guarantees:
Farmer Mac Guaranteed USDA Securities	330,309		389,216
Institutional Credit:
AgVantage Securities	6,068		7,567
Total off-balance sheet Farmer Mac Guaranteed Securities	$	426,602	$	504,105

The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation	$	1,890	$	2,230
Weighted average remaining maturity:
Farmer Mac Guaranteed Securities	9.6 years		9.8 years
AgVantage Securities	4.5 years		5.0 years

Schedule of Cash Flows Related To Transfer of Securitizations

The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2

	For the Six Months Ended
	June 30, 2020		June 30, 2019
	(in thousands)
Proceeds from new securitizations	$	28,050	$	166,351
Guarantee fees received	894		861

Schedule of Long-Term Standby Purchase Commitments

The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4

	As of June 30, 2020		As of December 31, 2019
	(dollars in thousands)
Guarantee and commitment obligation(1)	$	33,273	$	34,470
Maximum principal amount	2,900,166		3,002,349
Weighted-average remaining maturity	15.2 years		15.2 years

⁽¹⁾ Relates to LTSPCs issued or modified on or after January 1, 2003.

Schedule of Reserve for Losses

The following table is a summary, by asset type, of the reserve for losses as of June 30, 2020 and December 31, 2019:

Table 6.5

	June 30, 2020(1)		December 31, 2019(2)
	Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	1,650	$	2,164
Rural Utilities
LTSPCs	1,370		—
Total	$	3,020	$	2,164

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

The following is a summary of the changes in the reserve for losses for the three and six month period ended June 30, 2020 and 2019:

Table 6.6

	For the Three Months Ended				For the Six Months Ended
	June 30, 2020(1)		June 30, 2019(2)		June 30, 2020(1)		June 30, 2019(2)
	Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	2,020	$	2,038	$	2,164	$	2,167
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		(148)		—
Adjusted Beginning Balance	2,020		2,038		2,016		2,167
Release of losses	$	(370)	$	(158)	$	(366)	$	(287)
Charge-offs	—		—		—		—
Ending Balance	$	1,650	$	1,880	$	1,650	$	1,880
Rural Utilities:
Beginning Balance	$	1,400	$	—	$	—	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		1,011		—
Adjusted Beginning Balance	1,400		—		1,011		—
(Release of)/provision for losses	$	(30)	$	—	$	359	$	—
Charge-offs	—		—		—		—
Ending Balance	$	1,370	$	—	$	1,370	$	—

⁽¹⁾Reserve 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 a reserve for losses to cover estimated probable incurred losses on loans underlying LTSPCs and off-balance sheet Farm & Ranch Farmer Mac Guaranteed Securities.

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 June 30, 2020:

Table 5.4

	As of June 30, 2020
	Accruing
	Current(5)		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Farm & Ranch	$	5,476,962	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	5,617,512
Rural Utilities	2,101,568		—		—		—		—		—		2,101,568
Total	$	7,578,530	$	7,892	$	—	$	15,528	$	23,420	$	117,130	$	7,719,080

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

⁽³⁾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.

⁽⁴⁾Includes $23.1 million of nonaccrual loans for which there was no associated allowance. During the three and six months ended June 30, 2020, Farmer Mac received $1.3 million and 2.3 million, respectively, in interest on nonaccrual loans.

⁽⁵⁾Includes $82.2 million of unpaid principal balance related to Farm & Ranch loans that Farmer Mac has executed a COVID-19 payment deferment.

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
	As of		For the Six Months Ended
	December 31, 2019		June 30, 2019
	(in thousands)
Farm & Ranch loans	$	57,719	$	131

⁽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 June 30, 2020:

Table 6.7

	As of June 30, 2020
	Current(2)		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	$	2,374,988	$	9,947	$	12,587	$	2,816	$	25,350	$	2,400,338
Rural Utilities:
LTSPCs	$	590,053	$	—	$	—	$	—	$	—	$	590,053

⁽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.

⁽²⁾Includes $109.5 million of unpaid principal balance related to Farm & Ranch LTSPCs for which the lender has notified Farmer Mac of an executed COVID-19 payment deferment.

Table 6.9

	90-Day Delinquencies(1)		Net Credit Losses/(Recoveries)
	As of		For the Six Months Ended
	December 31, 2019		June 30, 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 Financing Receivable Credit Quality Indicators

The following tables present credit quality indicators related to Farm & Ranch loans and Rural Utilities loans held as of June 30, 2020, by year of origination:

Table 5.9

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch(1):
Internally Assigned Risk Rating:
Acceptable	$	758,965	$	773,199	$	562,604	$	617,751	$	528,068	$	1,345,384	$	501,625	$	5,087,596
Special mention(2)	76,588		166,829		32,164		9,278		5,477		19,630		10,260		320,226
Substandard(3)	448		6,655		18,326		59,545		53,639		60,478		10,599		209,690
Total	$	836,001	$	946,683	$	613,094	$	686,574	$	587,184	$	1,425,492	$	522,484	$	5,617,512
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	394	$	—	$	394

⁽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.

	As of June 30, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities(1):
Internally Assigned Risk Rating:
Acceptable	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	658,827	$	7,366	$	2,096,554
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		5,014		—		5,014
Total	$	470,419	$	827,336	$	8,337	$	92,440	$	31,829	$	663,841	$	7,366	$	2,101,568
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

⁽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 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 June 30, 2020, by year of origination:

Table 6.10

	As of June 30, 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	$	71,569	$	206,177	$	177,787	$	251,149	$	222,988	$	1,072,259	$	172,509	$	2,174,438
Special mention(1)	—		10,250		7,835		24,518		16,090		61,674		10,359		130,726
Substandard(2)	286		—		3,982		15,277		11,619		59,342		4,668		95,174
Total	$	71,855	$	216,427	$	189,604	$	290,944	$	250,697	$	1,193,275	$	187,536	$	2,400,338
For the Three Months Ended:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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 June 30, 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	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	577,920	$	12,133	$	590,053
For the Three Months Ended
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Six Months Ended:
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.

XML

Notes Payable (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Debt

The following tables set forth information related to Farmer Mac's borrowings as of June 30, 2020 and December 31, 2019:

Table 7.1

	June 30, 2020
	Outstanding as of June 30				Average Outstanding During the First Six Months
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,507,363	0.44	%	$	2,221,571	1.05	%
Medium-term notes	1,394,857		0.47	%	1,120,213		1.16	%
Current portion of medium-term notes	6,985,303		0.93	%
Total due within one year	$	10,887,523	0.76	%
Due after one year:
Medium-term notes due in:
Two years	$	3,764,817	1.08	%
Three years	1,839,291		1.70	%
Four years	1,204,584		1.78	%
Five years	1,213,467		1.56	%
Thereafter	2,511,868		2.28	%
Total due after one year	10,534,027		1.61	%
Total	$	21,421,550	1.18	%

	December 31, 2019
	Outstanding as of December 31				Average Outstanding During the Year
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	2,194,177	1.72	%	$	1,977,214	2.25	%
Medium-term notes	1,152,770		1.98	%	1,780,517		2.33	%
Current portion of medium-term notes	6,672,135		1.85	%
Total due within one year	$	10,019,082	1.84	%
Due after one year:
Medium-term notes due in:
Two years	$	3,700,835	2.04	%
Three years	1,594,709		2.15	%
Four years	1,205,276		2.27	%
Five years	760,887		2.25	%
Thereafter	1,817,859		2.89	%
Total due after one year	9,079,566		2.28	%
Total	$	19,098,648	2.05	%

The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2020 as of June 30, 2020:

Table 7.2

Debt Callable in 2020 as of June 30, 2020, by Maturity
	Amount		Weighted-Average Rate
	(dollars in thousands)
Maturity:
2021	$	491,862	1.02	%
2022	203,845		1.43	%
2023	37,953		0.82	%
2024	143,832		1.80	%
Thereafter	399,489		2.25	%
Total	$	1,276,981	1.56	%

Schedule of Long-Term Debt Instruments

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of June 30, 2020, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

Table 7.3

	Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding
	Amount		Weighted-Average Rate
	(dollars in thousands)
Debt with interest rate resets, or debt maturities in:
2020	$	11,227,000	0.48	%
2021	3,047,823		1.79	%
2022	1,745,399		1.74	%
2023	1,706,568		1.88	%
2024	965,056		1.86	%
Thereafter	2,729,704		2.31	%
Total	$	21,421,550	1.18	%

XML

Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements, Recurring and Nonrecurring

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Table 9.1

Assets and Liabilities Measured at Fair Value as of June 30, 2020
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,283	$	18,283
Floating rate asset-backed securities	—		9,807		—		9,807
Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,112,377		—		2,112,377
Fixed rate GSE guaranteed mortgage-backed securities	—		322		—		322
Fixed rate U.S. Treasuries	1,326,589		—		—		1,326,589
Total Investment Securities	1,326,589		2,122,506		18,283		3,467,378
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,898,387		7,898,387
Total Farmer Mac Guaranteed Securities	—		—		7,898,387		7,898,387
USDA Securities:
Trading	—		—		7,786		7,786
Total USDA Securities	—		—		7,786		7,786
Financial derivatives	—		16,588		—		16,588
Total Assets at fair value	$	1,326,589	$	2,139,094	$	7,924,456	$	11,390,139
Liabilities:
Financial derivatives	$	9	$	47,534	$	—	$	47,543
Total Liabilities at fair value	$	9	$	47,534	$	—	$	47,543

⁽¹⁾ Level 3 assets represent 33% of total assets and 69% of financial instruments measured at fair value.

Assets and Liabilities Measured at Fair Value as of December 31, 2019
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	18,912	$	18,912
Floating rate asset-backed securities	—		11,085		—		11,085
Floating rate Government/GSE guaranteed mortgage-backed securities	—		1,632,583		—		1,632,583
Fixed rate GSE guaranteed mortgage-backed securities	—		340		—		340
Fixed rate U.S. Treasuries	1,296,923		—		—		1,296,923
Total available-for-sale	1,296,923		1,644,008		18,912		2,959,843
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,143,025		7,143,025
Total Farmer Mac Guaranteed Securities	—		—		7,143,025		7,143,025
USDA Securities:
Trading	—		—		8,913		8,913
Total USDA Securities	—		—		8,913		8,913
Financial derivatives	—		10,519		—		10,519
Total Assets at fair value	$	1,296,923	$	1,654,527	$	7,170,850	$	10,122,300
Liabilities:
Financial derivatives	$	51	$	26,991	$	—	$	27,042
Total Liabilities at fair value	$	51	$	26,991	$	—	$	27,042

⁽¹⁾ Level 3 assets represent 33% of total assets and 71% of financial instruments measured at fair value.

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three and six months ended June 30, 2020 and 2019.

Table 9.2

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	16,721	$	—	$	—	$	—	$	(15)	$	—	$	1,577	$	18,283
Total available-for-sale	16,721		—		—		—		(15)		—		1,577		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
Total available-for-sale	7,587,186		351,896		—		(85,261)		(69)		9,050		35,585		7,898,387
USDA Securities:
Trading	8,408		—		—		(602)		—		(20)		—		7,786
Total USDA Securities	8,408		—		—		(602)				(20)		—		7,786
Total Assets at fair value	$	7,612,315	$	351,896	$	—	$	(85,863)	$	(84)	$	9,030	$	37,162	$	7,924,456

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	—	$	296	$	19,208
Total available-for-sale	18,912		—		—		—		—		296		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
Total available-for-sale	6,441,624		613,764		—		(98,579)		114,638		(35,779)		7,035,668
USDA Securities:
Available-for-sale	—		29,419		(29,419)		—		—		—		—
Trading	9,487		—		—		(347)		61		—		9,201
Total USDA Securities	9,487		29,419		(29,419)		(347)		61		—		9,201
Total Assets at fair value	$	6,470,023	$	643,183	$	(29,419)	$	(98,926)	$	114,699	$	(35,483)	$	7,064,077

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2020
	Beginning Balance		Purchases		Sales		Settlements		Allowance for Losses		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	$	—	$	—	$	—	$	(38)	$	—	$	(591)	$	18,283
Total available-for-sale	18,912		—		—		—		(38)		—		(591)		18,283
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
Total available-for-sale	7,143,025		835,476		—		(312,516)		(234)		299,429		(66,793)		7,898,387
USDA Securities:
Trading	8,913		—		—		(1,213)		—		86		—		7,786
Total USDA Securities	8,913		—		—		(1,213)				86		—		7,786
Total Assets at fair value	$	7,170,850	$	835,476	$	—	$	(313,729)	$	(272)	$	299,515	$	(67,384)	$	7,924,456

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2019
	Beginning Balance		Purchases		Sales		Settlements		Realized and unrealized gains/(losses) included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,715	$	—	$	—	$	—	$	—	$	493	$	19,208
Total available-for-sale	18,715		—		—		—		—		493		19,208
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
Total available-for-sale	5,974,497		1,390,096		—		(470,312)		173,990		(32,603)		7,035,668
USDA Securities:
Available-for-sale	—		48,347		(48,347)		—		—		—		—
Trading	9,999		—		—		(903)		105		—		9,201
Total USDA Securities	9,999		48,347		(48,347)		(903)		105		—		9,201
Total Assets at fair value	$	6,003,211	$	1,438,443	$	(48,347)	$	(471,215)	$	174,095	$	(32,110)	$	7,064,077

Fair Value Inputs, Assets and Liabilities, Quantitative Information

The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of June 30, 2020 and December 31, 2019:

Table 9.3

	As of June 30, 2020
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,283	Indicative bids	Range of broker quotes	93.0% - 93.0% (93.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,898,387	Discounted cash flow	Discount rate	0.9% - 4.0% (1.2%)
USDA Securities	$	7,786	Discounted cash flow	Discount rate	1.5% - 2.2% (1.6%)
				CPR	14% - 23% (22%)

	As of December 31, 2019
Financial Instruments	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted-Average)
	(in thousands)
Assets:
Investment securities:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	18,912	Indicative bids	Range of broker quotes	96.0% - 96.0% (96.0%)
Farmer Mac Guaranteed Securities:
AgVantage	$	7,143,025	Discounted cash flow	Discount rate	2.3% - 5.5% (2.6%)
USDA Securities	$	8,913	Discounted cash flow	Discount rate	2.3% - 2.6% (2.1%)
				CPR	10% - 21% (19%)

Fair Value, by Balance Sheet Grouping

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of June 30, 2020 and December 31, 2019:

Table 9.4

	As of June 30, 2020				As of December 31, 2019
	Fair Value		Carrying Amount		Fair Value		Carrying Amount
	(in thousands)
Financial assets:
Cash and cash equivalents	$	827,600	$	827,600	$	604,381	$	604,381
Investment securities	3,513,060		3,512,410		3,005,828		3,004,875
Farmer Mac Guaranteed Securities	9,070,424		9,039,105		8,606,451		8,590,476
USDA Securities	2,432,674		2,347,709		2,294,671		2,241,073
Loans	8,214,871		7,891,148		7,317,091		6,981,440
Financial derivatives	16,588		16,588		10,519		10,519
Guarantee and commitment fees receivable	32,254		36,612		36,732		38,442
Financial liabilities:
Notes payable	21,736,245		21,421,550		19,234,079		19,098,648
Debt securities of consolidated trusts held by third parties	1,499,947		1,476,964		1,663,177		1,616,504
Financial derivatives	47,543		47,543		27,042		27,042
Guarantee and commitment obligations	30,804		35,162		34,990		36,700

XML

Business Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2020

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, 2020 and 2019:

Table 10.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	19,310	$	5,403	$	2,322	$	20,084	$	1,229	$	—		$	48,348
Less: reconciling adjustments(1)(2)(3)	(2,577)		(714)		3,194		(1,302)		(480)		1,879			—
Net effective spread	16,733		4,689		5,516		18,782		749		1,879			—
Guarantee and commitment fees(2)	4,394		210		332		7		—		(1,803)			3,140
Other income/(expense)(3)	585		617		5		—		(159)		6,683			7,731
Non-interest income/(loss)	4,979		827		337		7		(159)		4,880			10,871
Provision for loan losses	920		—		(1,397)		41		(15)		—			(451)
Provision for reserve for losses	370		—		30		—		—		—			400
Other non-interest expense	(5,254)		(1,584)		(1,386)		(2,083)		(3,800)		—			(14,107)
Non-interest expense(4)	(4,884)		(1,584)		(1,356)		(2,083)		(3,800)		—			(13,707)
Core earnings before income taxes	17,748		3,932		3,100		16,747		(3,225)		6,759		(5)	45,061
Income tax (expense)/benefit	(3,727)		(826)		(651)		(3,517)		705		(1,419)			(9,435)
Core earnings before preferred stock dividends	14,021		3,106		2,449		13,230		(2,520)		5,340		(5)	35,626
Preferred stock dividends	—		—		—		—		(3,939)		—			(3,939)
Segment core earnings/(losses)	$	14,021	$	3,106	$	2,449	$	13,230	$	(6,459)	$	5,340	(5)	$	31,687
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 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, 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	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⁾ Includes 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 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, 2020
	Farm & Ranch		USDA Guarantees		Rural  Utilities		Institutional Credit		Corporate		Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	35,675	$	9,944	$	7,069	$	33,888	$	3,084	$	—		$	89,660
Less: reconciling adjustments(1)(2)(3)	(4,004)		(630)		3,367		2,596		(357)		(972)			—
Net effective spread	31,671		9,314		10,436		36,484		2,727		(972)			—
Guarantee and commitment fees(2)	8,711		445		667		16		—		(3,503)			6,336
Other income/(expense)(3)	1,754		729		12		—		(288)		(2,367)			(160)
Non-interest income/(loss)	10,465		1,174		679		16		(288)		(5,870)			6,176
Provision for loan losses	112		—		(3,522)		(450)		(29)		—			(3,889)
Provision for reserve for losses	366		—		(359)		—		—		—			7
Other non-interest expense	(11,251)		(3,402)		(2,990)		(4,446)		(8,233)		—			(30,322)
Non-interest expense(4)	(10,885)		(3,402)		(3,349)		(4,446)		(8,233)		—			(30,315)
Core earnings before income taxes	31,363		7,086		4,244		31,604		(5,823)		(6,842)		(5)	61,632
Income tax (expense)/benefit	(6,586)		(1,488)		(891)		(6,637)		988		1,438			(13,176)
Core earnings before preferred stock dividends	24,777		5,598		3,353		24,967		(4,835)		(5,404)		(5)	48,456
Preferred stock dividends	—		—		—		—		(7,370)		—			(7,370)
Segment core earnings/(losses)	$	24,777	$	5,598	$	3,353	$	24,967	$	(12,205)	$	(5,404)	(5)	$	41,086
Total assets at carrying value	$	5,746,556	$	2,408,713	$	2,281,490	$	9,049,393	$	4,446,504	$	—		$	23,932,656
Total on- and off-balance sheet program assets at principal balance	$	8,017,850	$	2,677,807	$	2,691,621	$	8,654,830	$	—	$	—		$	22,042,108

⁽¹⁾Includes 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 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	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⁾ Includes 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 reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

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Summary of Significant Accounting Policies - Narrative (Details)	Jun. 30, 2020 subsidiary
Accounting Policies [Abstract]
Number of subsidiaries	2

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Summary of Significant Accounting Policies - Consolidation of Variable Interest Entities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	$ 6,469,997	$ 5,390,977
Notes payable	21,421,550	19,098,648
Farm & Ranch
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	5,617,512
Borrower remittances	40,900	15,600
USDA Guarantees
Variable Interest Entity [Line Items]
Unamortized premiums and discounts	100	(200)
On-Balance Sheet:
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost		5,276,557
On-Balance Sheet: | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	1,436,090	1,600,917
Notes payable	1,476,964	1,616,504
On-Balance Sheet: | Farm & Ranch
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost		5,276,557
Off-Balance Sheet:
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost		2,500,393
Off-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Maximum exposure to loss	420,534	496,538
Farmer Mac Guaranteed Securities
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	7,898,387	7,143,025
Farmer Mac Guaranteed Securities | On-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	32,615	32,041
Maximum exposure to loss	32,537	31,887
Debt Securities
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	3,467,378	2,959,843
Unamortized premiums and discounts	(5,792)	(1,382)
Debt Securities | On-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	1,651,031	1,117,203
Maximum exposure to loss	1,648,328	1,120,765
Operating Segments | On-Balance Sheet: | Farm & Ranch | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	1,436,090	1,600,917
Notes payable	1,476,964	1,616,504
Operating Segments | On-Balance Sheet: | USDA Guarantees | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	0	0
Notes payable	0	0
Operating Segments | Off-Balance Sheet: | Farm & Ranch | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Maximum exposure to loss	90,225	107,322
Operating Segments | Off-Balance Sheet: | USDA Guarantees | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Maximum exposure to loss	330,309	389,216
Operating Segments | Farmer Mac Guaranteed Securities | On-Balance Sheet: | Farm & Ranch | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	0	0
Maximum exposure to loss	0	0
Operating Segments | Farmer Mac Guaranteed Securities | On-Balance Sheet: | USDA Guarantees | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	32,615	32,041
Maximum exposure to loss	32,537	31,887
Operating Segments | Debt Securities | On-Balance Sheet: | Farm & Ranch | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	0	0
Maximum exposure to loss	0	0
Operating Segments | Debt Securities | On-Balance Sheet: | USDA Guarantees | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	0	0
Maximum exposure to loss	0	0
Corporate | On-Balance Sheet: | Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Loans held for investment, at amortized cost	0	0
Notes payable	0	0
Corporate | Off-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Maximum exposure to loss	0	0
Corporate | Farmer Mac Guaranteed Securities | On-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	0	0
Maximum exposure to loss	0	0
Corporate | Debt Securities | On-Balance Sheet: | Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Available-for-sale, at fair value	1,651,031	1,117,203
Maximum exposure to loss	$ 1,648,328	$ 1,120,765

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Summary of Significant Accounting Policies - Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Basic EPS
Net income attributable to common stockholders	$ 31,687	$ 28,304	$ 41,086	$ 50,178
Weighted-Average Shares (in shares)	10,730,000	10,698,000	10,721,000	10,684,000
Dollars per share (in dollars per share)	$ 2.95	$ 2.65	$ 3.83	$ 4.70
Effect of dilutive securities
SARs and restricted stock (in shares)	46,000	72,000	58,000	90,000
SARs and restricted stock (in dollars per share)	$ (0.01)	$ (0.02)	$ (0.02)	$ (0.04)
Net income, Diluted EPS	$ 31,687	$ 28,304	$ 41,086	$ 50,178
Weighted-Average Shares, Diluted EPS (in shares)	10,776,000	10,770,000	10,779,000	10,774,000
Diluted EPS (in dollars per share)	$ 2.94	$ 2.63	$ 3.81	$ 4.66
Stock Appreciation Rights and Restricted Stock
Effect of dilutive securities
Antidilutive securities excluded from earnings per share (in shares)	83,297	62,660	85,223	59,818
Performance Shares
Effect of dilutive securities
Antidilutive securities excluded from earnings per share (in shares)	12,680	12,284	12,680	12,284

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Summary of Significant Accounting Policies - Schedule of Accumulated Other Comprehensive Income, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 693,617	$ 799,276	$ 763,298	$ 752,557	$ 799,276	$ 752,557
Other comprehensive income/(loss) before reclassifications	31,454		(29,223)		(68,898)	(30,001)
Amounts reclassified from AOCI	(1,514)		(4,874)		(6,438)	(7,798)
Other comprehensive gain/(loss) net of tax	29,940	(105,276)	(34,097)	(3,702)	(75,336)	(37,799)
Ending balance	824,116	693,617	773,742	763,298	824,116	773,742
Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Available-for-Sale Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(121,858)	(43,397)	(22,800)	(25,360)	(43,397)	(25,360)
Other comprehensive income/(loss) before reclassifications	34,374		(21,711)		(43,310)	(18,393)
Amounts reclassified from AOCI	(777)		(873)		(1,554)	(1,631)
Other comprehensive gain/(loss) net of tax	33,597		(22,584)		(44,864)	(20,024)
Ending balance	(88,261)	(121,858)	(45,384)	(22,800)	(88,261)	(45,384)
Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Held-to-Maturity Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	28,351	32,845	41,656	43,443	32,845	43,443
Other comprehensive income/(loss) before reclassifications	0		0		0	0
Amounts reclassified from AOCI	(1,972)		(3,635)		(6,466)	(5,422)
Other comprehensive gain/(loss) net of tax	(1,972)		(3,635)		(6,466)	(5,422)
Ending balance	26,379	28,351	38,021	41,656	26,379	38,021
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(27,930)	(5,609)	2,398	6,873	(5,609)	6,873
Other comprehensive income/(loss) before reclassifications	(2,920)		(7,512)		(25,588)	(11,608)
Amounts reclassified from AOCI	1,235		(366)		1,582	(745)
Other comprehensive gain/(loss) net of tax	(1,685)		(7,878)		(24,006)	(12,353)
Ending balance	(29,615)	(27,930)	(5,480)	2,398	(29,615)	(5,480)
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(121,437)	(16,161)	21,254	24,956	(16,161)	24,956
Other comprehensive gain/(loss) net of tax	29,940	(105,276)	(34,097)	(3,702)
Ending balance	$ (91,497)	$ (121,437)	$ (12,843)	$ 21,254	$ (91,497)	$ (12,843)

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Summary of Significant Accounting Policies - Schedule of Reclassification out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Before Tax
Unrealized holding (losses)/gains on available-for-sale-securities, before tax	$ 43,512		$ (27,482)		$ (54,822)	$ (23,282)
Other comprehensive gain/(loss) before tax	37,899		(43,161)		(95,361)	(47,847)
Provision (Benefit)
Unrealized holding (losses)/gains on available-for-sale securities, provision (benefit)	9,138		(5,771)		(11,512)	(4,889)
Other comprehensive (loss)/income provision (benefit)	7,959		(9,064)		(20,025)	(10,048)
After Tax
Unrealized holding (losses)/gains on available-for-sale securities, after tax	34,374		(21,711)		(43,310)	(18,393)
Reclassification adjustments, after tax	(1,514)		(4,874)		(6,438)	(7,798)
Other comprehensive income before reclassifications	31,454		(29,223)		(68,898)	(30,001)
Other comprehensive gain/(loss) net of tax	29,940	$ (105,276)	(34,097)	$ (3,702)	(75,336)	(37,799)
Cash Flow Hedges
Before Tax
Unrealized (losses)/gains on cash flow hedges, before tax	(3,695)		(9,510)		(32,390)	(14,695)
Other comprehensive gain/(loss) before tax	(2,132)		(9,972)		(30,388)	(15,637)
Provision (Benefit)
Unrealized (losses)/gains on cash flow hedges, provision (benefit)	(775)		(1,998)		(6,802)	(3,087)
Other comprehensive (loss)/income provision (benefit)	(447)		(2,094)		(6,382)	(3,284)
After Tax
Reclassification adjustments, after tax	1,235		(366)		1,582	(745)
Other comprehensive income before reclassifications	(2,920)		(7,512)		(25,588)	(11,608)
Other comprehensive gain/(loss) net of tax	(1,685)		(7,878)		(24,006)	(12,353)
Available-for-Sale Securities | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest
Before Tax
Other comprehensive gain/(loss) before tax	42,527		(28,588)		(56,789)	(25,347)
Provision (Benefit)
Other comprehensive (loss)/income provision (benefit)	8,930		(6,004)		(11,925)	(5,323)
After Tax
Reclassification adjustments, after tax	(777)		(873)		(1,554)	(1,631)
Other comprehensive income before reclassifications	34,374		(21,711)		(43,310)	(18,393)
Other comprehensive gain/(loss) net of tax	33,597		(22,584)		(44,864)	(20,024)
Held-to-Maturity Securities | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest
Before Tax
Other comprehensive gain/(loss) before tax	(2,496)		(4,601)		(8,184)	(6,863)
Provision (Benefit)
Other comprehensive (loss)/income provision (benefit)	(524)		(966)		(1,718)	(1,441)
After Tax
Reclassification adjustments, after tax	(1,972)		(3,635)		(6,466)	(5,422)
Other comprehensive income before reclassifications	0		0		0	0
Other comprehensive gain/(loss) net of tax	(1,972)		(3,635)		(6,466)	(5,422)
Net Interest Income | Available-for-Sale Securities | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income
Before Tax
Reclassification adjustments, before tax	(971)		(956)		(1,940)	(1,909)
Provision (Benefit)
Reclassification adjustments, provision (benefit)	(204)		(201)		(407)	(401)
After Tax
Reclassification adjustments, after tax	(767)		(755)		(1,533)	(1,508)
Net Interest Income | Held-to-Maturity Securities | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income
Before Tax
Reclassification adjustments, before tax	(2,496)		(4,601)		(8,184)	(6,863)
Provision (Benefit)
Reclassification adjustments, provision (benefit)	(524)		(966)		(1,718)	(1,441)
After Tax
Reclassification adjustments, after tax	(1,972)		(3,635)		(6,466)	(5,422)
Other Income | Available-for-Sale Securities | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | Reclassification out of Accumulated Other Comprehensive Income
Before Tax
Reclassification adjustments, before tax	(14)		(150)		(27)	(156)
Provision (Benefit)
Reclassification adjustments, provision (benefit)	(4)		(32)		(6)	(33)
After Tax
Reclassification adjustments, after tax	(10)		(118)		(21)	(123)
Interest Expense | Cash Flow Hedges | Reclassification out of Accumulated Other Comprehensive Income
Before Tax
Reclassification adjustments, before tax	1,563		(462)		2,002	(942)
Provision (Benefit)
Reclassification adjustments, provision (benefit)	328		(96)		420	(197)
After Tax
Reclassification adjustments, after tax	$ 1,235		$ (366)		$ 1,582	$ (745)

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Summary of Significant Accounting Policies - CECL Adoption (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Mar. 31, 2020	Jan. 01, 2020	Jun. 30, 2019	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Total Allowance		$ 12,618
Long-term standby purchase commitments and guarantees	$ 3,020	2,164
Securities borrowed, allowance for credit loss		0
Retained earnings	824,116	799,276	$ 693,617		$ 773,742	$ 763,298		$ 752,557
Allowance for losses	14,939	10,454
Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Securities borrowed, allowance for credit loss				$ 9
Retained earnings		(2,099)
Allowance for losses				2,656
Cumulative Effect, Period of Adoption, Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Securities borrowed, allowance for credit loss				9
Retained earnings		797,177
Allowance for losses				15,274
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings	478,647	457,047	455,545		428,569	407,755		393,351
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings		(2,099)		(2,099)
Retained Earnings | Cumulative Effect, Period of Adoption, Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Retained earnings		$ 454,948		454,948
Farm & Ranch
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member
Total Allowance		$ 10,454
Long-term standby purchase commitments and guarantees	1,650	2,164	2,020	2,016	1,880	2,038	$ 2,167	2,167
Allowance for losses	6,039	10,454	7,353
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term standby purchase commitments and guarantees			0	(148)		0	0
Allowance for losses		(3,909)	0	(3,909)
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term standby purchase commitments and guarantees				2,016
Allowance for losses		$ 6,545	7,353	6,545
Rural  Utilities
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member
Total Allowance		$ 0
Long-term standby purchase commitments and guarantees	1,370	0	1,400	1,011	$ 0	0	0	$ 0
Allowance for losses	$ 8,900	0	7,503
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term standby purchase commitments and guarantees			0	1,011		$ 0	$ 0
Allowance for losses		5,378	0	5,378
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Long-term standby purchase commitments and guarantees				1,011
Allowance for losses		5,378	$ 7,503	5,378
Institutional Credit
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Allowance		$ 0
Institutional Credit | Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for losses				315
Institutional Credit | Cumulative Effect, Period of Adoption, Adjusted Balance
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for losses				$ 315

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Investment Securities - Schedule of Investment Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Held-to-maturity:
Allowance for losses	$ (546)
Debt Securities
Available-for-sale:
Amount Outstanding	3,453,165	$ 2,960,048
Unamortized Premium/(Discount)	5,792	1,382
Amortized cost of available-for-sale investment securities	3,458,957	2,961,430
Allowance for losses	(38)
Unrealized Gains	13,482	3,959
Unrealized Losses	(5,023)	(5,546)
Fair Value	3,467,378	2,959,843
Held-to-maturity:
Unamortized Premium/(Discount)	5,792	1,382
Total investment securities
Amount Outstanding	3,498,197	3,005,080
Unamortized Premium/(Discount)	5,792	1,382
Amortized Cost	3,503,989	3,006,462
Allowance for losses	(38)
Unrealized Gains	14,132	4,912
Unrealized Losses	(5,023)	(5,546)
Fair Value	3,513,060	3,005,828
Accrued interest excluded	6,600
Available-for-Sale Securities | Debt Securities
Available-for-sale:
Unamortized Premium/(Discount)	5,792	1,382
Held-to-maturity:
Unamortized Premium/(Discount)	5,792	1,382
Total investment securities
Unamortized Premium/(Discount)	5,792	1,382
Floating Interest Rate | Floating rate auction-rate certificates backed by Government guaranteed student loans
Available-for-sale:
Amount Outstanding	19,700	19,700
Amortized cost of available-for-sale investment securities	19,700	19,700
Allowance for losses	(38)
Unrealized Gains	0	0
Unrealized Losses	(1,379)	(788)
Fair Value	18,283	18,912
Floating Interest Rate | Floating rate asset-backed securities
Available-for-sale:
Amount Outstanding	9,818	11,092
Amortized cost of available-for-sale investment securities	9,818	11,092
Allowance for losses	0
Unrealized Gains	0	0
Unrealized Losses	(11)	(7)
Fair Value	9,807	11,085
Floating Interest Rate | Government/GSE Guaranteed Mortgage Backed Securities
Available-for-sale:
Amount Outstanding	2,108,505	1,633,731
Amortized cost of available-for-sale investment securities	2,108,534	1,634,905
Allowance for losses	0
Unrealized Gains	7,409	2,414
Unrealized Losses	(3,566)	(4,736)
Fair Value	2,112,377	1,632,583
Floating Interest Rate | Available-for-Sale Securities | Floating rate auction-rate certificates backed by Government guaranteed student loans
Available-for-sale:
Unamortized Premium/(Discount)	0	0
Held-to-maturity:
Unamortized Premium/(Discount)	0	0
Total investment securities
Unamortized Premium/(Discount)	0	0
Floating Interest Rate | Available-for-Sale Securities | Floating rate asset-backed securities
Available-for-sale:
Unamortized Premium/(Discount)	0	0
Held-to-maturity:
Unamortized Premium/(Discount)	0	0
Total investment securities
Unamortized Premium/(Discount)	0	0
Floating Interest Rate | Available-for-Sale Securities | Government/GSE Guaranteed Mortgage Backed Securities
Available-for-sale:
Unamortized Premium/(Discount)	29	1,174
Held-to-maturity:
Unamortized Premium/(Discount)	29	1,174
Total investment securities
Unamortized Premium/(Discount)	29	1,174
Fixed Interest Rate | Government/GSE Guaranteed Mortgage Backed Securities
Available-for-sale:
Amount Outstanding	292	315
Amortized cost of available-for-sale investment securities	292	315
Allowance for losses	0
Unrealized Gains	30	25
Unrealized Losses	0	0
Fair Value	322	340
Held-to-maturity:
Amount Outstanding	45,032	45,032
Amortized Cost	45,032	45,032
Allowance for losses	0
Unrealized Gains	650	953
Unrealized Losses	0	0
Fair Value	$ 45,682	$ 45,985
Total investment securities
Held-to-maturity investment securities weighted average yield	1.50%	3.30%
Fixed Interest Rate | Fixed rate U.S. Treasuries
Available-for-sale:
Amount Outstanding	$ 1,314,850	$ 1,295,210
Amortized cost of available-for-sale investment securities	1,320,613	1,295,418
Allowance for losses	0
Unrealized Gains	6,043	1,520
Unrealized Losses	(67)	(15)
Fair Value	1,326,589	1,296,923
Fixed Interest Rate | Available-for-Sale Securities | Government/GSE Guaranteed Mortgage Backed Securities
Available-for-sale:
Unamortized Premium/(Discount)	0	0
Held-to-maturity:
Unamortized Premium/(Discount)	0	0
Total investment securities
Unamortized Premium/(Discount)	0	0
Fixed Interest Rate | Available-for-Sale Securities | Fixed rate U.S. Treasuries
Available-for-sale:
Unamortized Premium/(Discount)	5,763	208
Held-to-maturity:
Unamortized Premium/(Discount)	5,763	208
Total investment securities
Unamortized Premium/(Discount)	5,763	208
Fixed Interest Rate | Held-to-Maturity Securities | Government/GSE Guaranteed Mortgage Backed Securities
Available-for-sale:
Unamortized Premium/(Discount)	0	0
Held-to-maturity:
Unamortized Premium/(Discount)	0	0
Total investment securities
Unamortized Premium/(Discount)	$ 0	$ 0

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Investment Securities - Narrative (Details)	Jun. 30, 2020
Debt Securities
Debt Securities, Available-for-sale [Line Items]
Average percent of amortized cost for securities in unrealized loss positions for more than 12 months	98.90%

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Investment Securities - Unrealized Loss Position (Details) $ in Thousands	Jun. 30, 2020 USD ($) security	Dec. 31, 2019 USD ($) security
Unrealized loss position for less than 12 months
Fair Value	$ 792,308	$ 879,683
Unrealized Loss	(2,230)	(2,260)
Unrealized loss position for more than 12 months
Fair Value	245,615	464,035
Unrealized Loss	$ (2,793)	$ (3,286)
Debt Securities
Unrealized loss position for less than 12 months
Number of securities in loss position | security	58	57
Unrealized loss position for more than 12 months
Number of securities in loss position | security	55	62
Floating Interest Rate | Floating rate auction-rate certificates backed by Government guaranteed student loans
Unrealized loss position for less than 12 months
Fair Value	$ 0	$ 0
Unrealized Loss	0	0
Unrealized loss position for more than 12 months
Fair Value	18,283	18,912
Unrealized Loss	(1,379)	(788)
Floating Interest Rate | Floating rate asset-backed securities
Unrealized loss position for less than 12 months
Fair Value	0	2,583
Unrealized Loss	0	(1)
Unrealized loss position for more than 12 months
Fair Value	9,807	8,502
Unrealized Loss	(11)	(6)
Floating Interest Rate | Government/GSE Guaranteed Mortgage Backed Securities
Unrealized loss position for less than 12 months
Fair Value	565,860	841,993
Unrealized Loss	(2,163)	(2,244)
Unrealized loss position for more than 12 months
Fair Value	217,525	436,621
Unrealized Loss	(1,403)	(2,492)
Fixed Interest Rate | Fixed rate U.S. Treasuries
Unrealized loss position for less than 12 months
Fair Value	226,448	35,107
Unrealized Loss	(67)	(15)
Unrealized loss position for more than 12 months
Fair Value	0	0
Unrealized Loss	$ 0	$ 0

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Investment Securities - Debt Maturities (Details) - Debt Securities - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Amortized Cost
Due within one year	$ 1,235,047
Due after one year through five years	364,971
Due after five years through ten years	922,322
Due after ten years	936,617
Amortized Cost	3,458,957	$ 2,961,430
Fair Value
Due within one year	1,241,040
Due after one year through five years	364,927
Due after five years through ten years	926,675
Due after ten years	934,736
Total	$ 3,467,378	$ 2,959,843
Weighted- Average Yield
Due within one year	1.58%
Due after one year through five years	0.99%
Due after five years through ten years	0.72%
Due after ten years	0.69%
Total	1.05%

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Farmer Mac Guaranteed Securities and USDA Securities - Farmer Mac Guaranteed Securities and USDA Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Held-to-maturity:
Allowance for losses	$ (546)
Farmer Mac Guaranteed Securities and USDA Securities
Held-to-maturity:
Unpaid Principal Balance	3,448,941	$ 3,638,142
Amortized Cost	3,481,187	3,679,611
Unrealized Gains	116,945	70,495
Unrealized Losses	(661)	(922)
Fair Value	3,596,925
Fair Value	3,596,925	3,749,184
Farmer Mac Guaranteed Securities
Held-to-maturity:
Unpaid Principal Balance	1,141,257	1,447,471
Amortized Cost	1,141,264	1,447,451
Allowance for losses	(546)
Unrealized Gains	31,319	16,139
Unrealized Losses	0	(164)
Fair Value	1,172,037
Fair Value		1,463,426
Available-for-sale:
Amortized Cost	7,539,944
Fair Value	7,898,387
USDA Securities:
Trading:
Fair Value	7,786	8,913
Held-to-Maturity Securities | Farmer Mac Guaranteed Securities and USDA Securities
Held-to-maturity:
Unamortized Premium/(Discount)	32,246	41,469
Available-for-sale:
Unamortized Premium/(Discount)	32,246	41,469
Trading:
Unamortized Premium/(Discount)	32,246	41,469
Held-to-Maturity Securities | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unamortized Premium/(Discount)	7	(20)
Available-for-sale:
Unamortized Premium/(Discount)	7	(20)
Trading:
Unamortized Premium/(Discount)	7	(20)
Institutional Credit
Trading:
Available-for-sale, accrued interest excluded	34,900
Held-to-maturity, accrued interest excluded	35,300
Trading securities, accrued interest excluded	200
Institutional Credit | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unpaid Principal Balance	1,108,720	1,415,584
Amortized Cost	1,108,650	1,415,410
Allowance for losses	(546)
Unrealized Gains	30,070	15,300
Unrealized Losses	0	(164)
Fair Value	1,138,174
Fair Value		1,430,546
Available-for-sale:
Unpaid Principal Balance	7,540,043	7,017,095
Amortized Cost	7,539,944	7,016,971
Allowance for losses	(235)
Unrealized Gains	405,926	161,316
Unrealized Losses	(47,248)	(35,262)
Fair Value	7,898,387	7,143,025
Institutional Credit | Held-to-Maturity Securities | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unamortized Premium/(Discount)	(70)	(174)
Available-for-sale:
Unamortized Premium/(Discount)	(70)	(174)
Trading:
Unamortized Premium/(Discount)	(70)	(174)
Institutional Credit | Available-for-Sale Securities | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unamortized Premium/(Discount)	(99)	(124)
Available-for-sale:
Unamortized Premium/(Discount)	(99)	(124)
Trading:
Unamortized Premium/(Discount)	(99)	(124)
USDA Guarantees
Held-to-maturity:
Unamortized Premium/(Discount)	(100)	200
Available-for-sale:
Unamortized Premium/(Discount)	(100)	200
Trading:
Unamortized Premium/(Discount)	(100)	200
USDA Guarantees | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unpaid Principal Balance	32,537	31,887
Amortized Cost	32,614	32,041
Allowance for losses	0
Unrealized Gains	1,249	839
Unrealized Losses	0	0
Fair Value	33,863
Fair Value		32,880
USDA Guarantees | USDA Securities:
Held-to-maturity:
Unpaid Principal Balance	2,307,684	2,190,671
Amortized Cost	2,339,923	2,232,160
Allowance for losses	0
Unrealized Gains	85,626	54,356
Unrealized Losses	(661)	(758)
Fair Value	2,424,888
Fair Value		2,285,758
Trading:
Unpaid Principal Balance	7,276	8,400
Amortized Cost	7,667	8,879
Allowance for losses	0
Unrealized Gains	122	61
Unrealized Losses	(3)	(27)
Fair Value	$ 7,786	$ 8,913
Trading securities, weighted-average yield	5.15%	5.20%
USDA Guarantees | Held-to-Maturity Securities | Farmer Mac Guaranteed Securities
Held-to-maturity:
Unamortized Premium/(Discount)	$ 77	$ 154
Available-for-sale:
Unamortized Premium/(Discount)	77	154
Trading:
Unamortized Premium/(Discount)	77	154
USDA Guarantees | Held-to-Maturity Securities | USDA Securities:
Held-to-maturity:
Unamortized Premium/(Discount)	32,239	41,489
Available-for-sale:
Unamortized Premium/(Discount)	32,239	41,489
Trading:
Unamortized Premium/(Discount)	32,239	41,489
USDA Guarantees | Trading Securities | USDA Securities:
Held-to-maturity:
Unamortized Premium/(Discount)	391	479
Available-for-sale:
Unamortized Premium/(Discount)	391	479
Trading:
Unamortized Premium/(Discount)	$ 391	$ 479

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Farmer Mac Guaranteed Securities and USDA Securities - Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Unrealized loss position for less than 12 months
Fair Value	$ 792,308	$ 879,683
Unrealized Loss	(2,230)	(2,260)
Unrealized loss position for more than 12 months
Fair Value	245,615	464,035
Unrealized Loss	(2,793)	(3,286)
Farmer Mac Guaranteed Securities and USDA Securities
Unrealized loss position for less than 12 months
Fair Value	0	0
Unrealized Loss	0	0
Unrealized loss position for more than 12 months
Fair Value	22,235	328,925
Unrealized Loss	(661)	(922)
Institutional Credit | Farmer Mac Guaranteed Securities
Unrealized loss position for less than 12 months
Fair Value		0
Unrealized Loss		0
Unrealized loss position for more than 12 months
Fair Value		301,836
Unrealized Loss		(164)
Unrealized loss position for less than 12 months
Fair Value	521,979	225,239
Unrealized Loss	(932)	(2,203)
Unrealized loss position for more than 12 months
Fair Value	841,123	1,394,802
Unrealized Loss	(46,316)	(33,059)
USDA Guarantees | USDA Securities:
Unrealized loss position for less than 12 months
Fair Value	0	0
Unrealized Loss	0	0
Unrealized loss position for more than 12 months
Fair Value	22,235	27,089
Unrealized Loss	$ (661)	$ (758)

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Farmer Mac Guaranteed Securities and USDA Securities - Narrative (Details) $ in Millions	Jun. 30, 2020 security	Dec. 31, 2019 USD ($) security
Institutional Credit | Farmer Mac Guaranteed Securities
Debt Securities, Available-for-sale [Line Items]
Available-for-sale, securities in unrealized loss positions	13	17
Held-to-maturity, securities in unrealized loss positions	0	4
Number of securities in loss position	6	13
USDA Guarantees | USDA Securities: | Payment Deferral, CARES Act | Loans Insured or Guaranteed by US Government Authorities, CARES Act
Debt Securities, Available-for-sale [Line Items]
Unpaid principal balances | $		$ 50.1

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Farmer Mac Guaranteed Securities and USDA Securities - Schedule of Available-for-sale Securities (Details) - Farmer Mac Guaranteed Securities $ in Thousands	Jun. 30, 2020 USD ($)
Amortized Cost
Due within one year	$ 1,435,445
Due after one year through five years	3,434,770
Due after five years through ten years	1,147,366
Due after ten years	1,522,363
Amortized Cost	7,539,944
Fair Value
Due within one year	1,438,585
Due after one year through five years	3,557,439
Due after five years through ten years	1,232,206
Due after ten years	1,670,157
Total	$ 7,898,387
Weighted- Average Yield
Due within one year	1.34%
Due after one year through five years	2.34%
Due after five years through ten years	2.34%
Due after ten years	2.67%
Total	2.22%

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Farmer Mac Guaranteed Securities and USDA Securities - Schedule of Held-to-maturity Securities (Details) - Farmer Mac Guaranteed Securities and USDA Securities - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Amortized Cost
Due within one year	$ 445,889
Due after one year through five years	751,402
Due after five years through ten years	213,460
Due after ten years	2,070,436
Amortized Cost	3,481,187	$ 3,679,611
Fair Value
Due within one year	451,452
Due after one year through five years	777,980
Due after five years through ten years	220,404
Due after ten years	2,147,089
Total	$ 3,596,925	$ 3,749,184
Weighted- Average Yield
Due within one year	2.94%
Due after one year through five years	3.21%
Due after five years through ten years	3.17%
Due after ten years	3.39%
Total	3.28%

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Financial Derivatives - Schedule of Derivative Instruments in Statement of Financial Position (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Notional Disclosures [Abstract]
Notional Amount	$ 16,118,981	$ 14,022,179
Fair Value
Asset	16,588	10,519
Collateral (held)/pledged	(1,500)	(2,685)
Net amount	15,088	7,834
(Liability)	(47,543)	(27,042)
Collateral (held)/pledged	248,293	132,129
Net amount	200,750	105,087
Designated as Hedging Instrument | Fair value hedges: | Pay fixed non-callable
Notional Disclosures [Abstract]
Notional Amount	5,584,809	4,955,686
Fair Value
Asset	8,358	7,163
(Liability)	$ (4,694)	$ (3,281)
Weighted- Average Pay Rate	2.24%	2.47%
Weighted- Average Receive Rate	0.65%	1.93%
Weighted- Average Remaining Term (in years)	11 years 8 months 15 days	11 years 3 months 3 days
Designated as Hedging Instrument | Fair value hedges: | Receive fixed non-callable
Notional Disclosures [Abstract]
Notional Amount	$ 2,305,500	$ 1,413,200
Fair Value
Asset	249	76
(Liability)	$ (8,087)	$ (5,329)
Weighted- Average Pay Rate	0.78%	1.88%
Weighted- Average Receive Rate	1.90%	2.13%
Weighted- Average Remaining Term (in years)	2 years 4 months 6 days	1 year 3 months
Designated as Hedging Instrument | Fair value hedges: | Receive fixed callable
Notional Disclosures [Abstract]
Notional Amount	$ 413,500	$ 524,000
Fair Value
Asset	5,891	476
(Liability)	$ 0	$ (772)
Weighted- Average Pay Rate	0.48%	1.52%
Weighted- Average Receive Rate	1.80%	1.91%
Weighted- Average Remaining Term (in years)	3 years 6 months 10 days	2 years 9 months 29 days
Designated as Hedging Instrument | Cash flow hedges: | Pay fixed non-callable
Notional Disclosures [Abstract]
Notional Amount	$ 437,000	$ 428,000
Fair Value
Asset	1,246	1,882
(Liability)	$ (11,964)	$ (1,514)
Weighted- Average Pay Rate	2.27%	2.36%
Weighted- Average Receive Rate	0.71%	2.12%
Weighted- Average Remaining Term (in years)	5 years 9 months 25 days	5 years 5 months 4 days
Not Designated as Hedging Instrument
Fair Value
Credit valuation adjustment	$ 0	$ 0
Credit valuation adjustment	159	63
Not Designated as Hedging Instrument | Pay fixed non-callable
Notional Disclosures [Abstract]
Notional Amount	446,721	342,745
Fair Value
Asset	0	7
(Liability)	$ (22,403)	$ (14,046)
Weighted- Average Pay Rate	2.78%	3.55%
Weighted- Average Receive Rate	0.85%	2.00%
Weighted- Average Remaining Term (in years)	4 years 3 months	5 years 6 months 3 days
Not Designated as Hedging Instrument | Receive fixed non-callable
Notional Disclosures [Abstract]
Notional Amount	$ 3,143,951	$ 3,124,148
Fair Value
Asset	0	49
(Liability)	$ 0	$ (1,637)
Weighted- Average Pay Rate	0.48%	1.88%
Weighted- Average Receive Rate	1.09%	2.06%
Weighted- Average Remaining Term (in years)	9 months 25 days	1 year 7 months 28 days
Not Designated as Hedging Instrument | Receive fixed callable
Notional Disclosures [Abstract]
Notional Amount	$ 150,000	$ 525,000
Fair Value
Asset	138	79
(Liability)	$ 0	$ (80)
Weighted- Average Pay Rate	0.73%	1.64%
Weighted- Average Receive Rate	1.66%	1.68%
Weighted- Average Remaining Term (in years)	1 year 3 months 7 days	9 months 29 days
Not Designated as Hedging Instrument | Basis swaps
Notional Disclosures [Abstract]
Notional Amount	$ 3,610,000	$ 2,670,000
Fair Value
Asset	706	787
(Liability)	$ (545)	$ (395)
Weighted- Average Pay Rate	0.49%	1.86%
Weighted- Average Receive Rate	0.27%	1.76%
Weighted- Average Remaining Term (in years)	1 year 29 days	10 months 24 days
Not Designated as Hedging Instrument | Treasury futures
Notional Disclosures [Abstract]
Notional Amount	$ 27,500	$ 39,400
Fair Value
Asset		0
(Liability)	$ (9)	$ (51)
Weighted- Average Forward Price (in dollars per share)	$ 139.14	$ 128.29

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Financial Derivatives - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Derivative [Line Items]
Gain expected to be reclassified from AOCI to earnings over next 12 months	$ 5,300,000		$ 5,300,000
Gain (loss) from interest rate swaps designated as cash flow hedges reclassified to earnings	0	$ 0	0	$ 0
Investments held as collateral	0		0		$ 0
Cash posted as collateral	248,293,000		248,293,000		132,129,000
Financial derivatives in net payable position	0		0		0
Notional amount	16,118,981,000		16,118,981,000		14,022,179,000
Cash
Derivative [Line Items]
Cash held as collateral	1,500,000		1,500,000		2,700,000
Cash posted as collateral	17,600,000		17,600,000		500,000
Available-for-Sale Securities
Derivative [Line Items]
Cash posted as collateral	230,700,000		230,700,000		131,700,000
Exchange Cleared
Derivative [Line Items]
Notional amount	13,300,000,000		13,300,000,000		11,000,000,000.0
Interest Rate Swap
Derivative [Line Items]
Notional amount	$ 16,100,000,000		$ 16,100,000,000		$ 14,000,000,000.0

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Financial Derivatives - Schedule of Net Income/(Expense) Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Interest Income Farmer Mac Guaranteed Securities and USDA Securities	$ 61,792	$ 85,569	$ 133,309	$ 170,980
Interest Income Loans	55,430	59,403	116,026	110,800
Total Interest Expense	(79,273)	(122,074)	(187,815)	(236,990)
Gains/(losses) on financial derivatives	6,523	8,913	(2,775)	8,553
Total	44,472	31,811	58,745	53,343
Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	9,739	132,784	384,962	200,175
(Losses)/gains on fair value hedging relationships	(2,381)	(1,428)	(8,062)	(4,128)
Cash flow hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Discount amortization recognized on hedged items	(2)	(1)	(2)	(2)
Interest settlements reclassified from AOCI into net income on derivatives	(1,563)	462	(2,002)	942
Recognized on hedged items	(1,029)	(2,697)	(3,152)	(5,417)
Expense recognized on cash flow hedges	(2,594)	(2,236)	(5,156)	(4,477)
Designated as Hedging Instrument | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	29,193	24,924	55,419	44,265
Discount amortization recognized on hedged items	(181)	(164)	(361)	(314)
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	6,523	8,913	(2,775)	8,553
Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	9,050	114,638	299,430	173,990
(Losses)/gains on fair value hedging relationships	(176)	(1,767)	(3,729)	(1,402)
Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Cash flow hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Discount amortization recognized on hedged items	0	0	0	0
Interest settlements reclassified from AOCI into net income on derivatives	0	0	0	0
Recognized on hedged items	0	0	0	0
Expense recognized on cash flow hedges	0	0	0	0
Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Designated as Hedging Instrument | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	32,102	30,380	63,927	55,198
Discount amortization recognized on hedged items	0	0	0	0
Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Interest Income Loans | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	3,037	33,795	148,445	50,031
(Losses)/gains on fair value hedging relationships	(3,579)	(158)	(4,076)	(4,003)
Interest Income Loans | Cash flow hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Discount amortization recognized on hedged items	0	0	0	0
Interest settlements reclassified from AOCI into net income on derivatives	0	0	0	0
Recognized on hedged items	0	0	0	0
Expense recognized on cash flow hedges	0	0	0	0
Interest Income Loans | Designated as Hedging Instrument | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	9,812	6,323	18,489	10,878
Discount amortization recognized on hedged items	0	0	0	0
Interest Income Loans | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Total Interest Expense | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	(2,348)	(15,649)	(62,913)	(23,846)
(Losses)/gains on fair value hedging relationships	1,374	497	(257)	1,277
Total Interest Expense | Cash flow hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Discount amortization recognized on hedged items	(2)	(1)	(2)	(2)
Interest settlements reclassified from AOCI into net income on derivatives	(1,563)	462	(2,002)	942
Recognized on hedged items	(1,029)	(2,697)	(3,152)	(5,417)
Expense recognized on cash flow hedges	(2,594)	(2,236)	(5,156)	(4,477)
Total Interest Expense | Designated as Hedging Instrument | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	(12,721)	(11,779)	(26,997)	(21,811)
Discount amortization recognized on hedged items	(181)	(164)	(361)	(314)
Total Interest Expense | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Gains on financial derivatives | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	0	0	0	0
(Losses)/gains on fair value hedging relationships	0	0	0	0
Gains on financial derivatives | Cash flow hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Discount amortization recognized on hedged items	0	0	0	0
Interest settlements reclassified from AOCI into net income on derivatives	0	0	0	0
Recognized on hedged items	0	0	0	0
Expense recognized on cash flow hedges	0	0	0	0
Gains on financial derivatives | Designated as Hedging Instrument | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on hedged items	0	0	0	0
Discount amortization recognized on hedged items	0	0	0	0
Gains on financial derivatives | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	6,523	8,913	(2,775)	8,553
Interest Rate Swap | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on derivatives	(11,360)	(1,607)	(17,754)	(3,297)
Income/(expense) related to interest settlements on fair value hedging relationships	17,652	23,153	37,304	40,654
Recognized on derivatives	(12,120)	(134,212)	(393,024)	(204,303)
Interest Rate Swap | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Total Interest Expense	(1,795)	(1,146)	(2,657)	(3,446)
Gains/(losses) on financial derivatives	8,427	11,152	1,878	13,320
Interest Rate Swap | Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on derivatives	(12,257)	1,167	(18,408)	2,717
Income/(expense) related to interest settlements on fair value hedging relationships	19,845	31,547	45,519	57,915
Recognized on derivatives	(9,226)	(116,405)	(303,159)	(175,392)
Interest Rate Swap | Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Total Interest Expense	0	0	0	0
Gains/(losses) on financial derivatives	0	0	0	0
Interest Rate Swap | Interest Income Loans | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on derivatives	(4,535)	(202)	(6,412)	(224)
Income/(expense) related to interest settlements on fair value hedging relationships	5,277	6,121	12,077	10,654
Recognized on derivatives	(6,616)	(33,953)	(152,521)	(54,034)
Interest Rate Swap | Interest Income Loans | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Total Interest Expense	0	0	0	0
Gains/(losses) on financial derivatives	0	0	0	0
Interest Rate Swap | Total Interest Expense | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on derivatives	5,432	(2,572)	7,066	(5,790)
Income/(expense) related to interest settlements on fair value hedging relationships	(7,470)	(14,515)	(20,292)	(27,915)
Recognized on derivatives	3,722	16,146	62,656	25,123
Interest Rate Swap | Total Interest Expense | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Total Interest Expense	0	0	0	0
Gains/(losses) on financial derivatives	0	0	0	0
Interest Rate Swap | Gains on financial derivatives | Fair value hedges:
Derivative Instruments, Gain (Loss) [Line Items]
Recognized on derivatives	0	0	0	0
Income/(expense) related to interest settlements on fair value hedging relationships	0	0	0	0
Recognized on derivatives	0	0	0	0
Interest Rate Swap | Gains on financial derivatives | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Total Interest Expense	(1,795)	(1,146)	(2,657)	(3,446)
Gains/(losses) on financial derivatives	8,427	11,152	1,878	13,320
Treasury futures | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	(109)	(1,093)	(1,996)	(1,321)
Treasury futures | Interest Income Farmer Mac Guaranteed Securities and USDA Securities | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Treasury futures | Interest Income Loans | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Treasury futures | Total Interest Expense | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	0	0	0	0
Treasury futures | Gains on financial derivatives | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains/(losses) on financial derivatives	$ (109)	$ (1,093)	$ (1,996)	$ (1,321)

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Financial Derivatives - Hedged Items in Fair Value Hedging Relationships (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Loans
HedgedItemsinFairValueHedgingRelationship [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	$ 1,634,784	$ 1,050,335
Hedged Asset	186,352	37,907
Long-term Debt
HedgedItemsinFairValueHedgingRelationship [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	(2,787,699)	(2,761,052)
Hedged Liability	(70,433)	(7,433)
Prepaid Expenses and Other Assets
HedgedItemsinFairValueHedgingRelationship [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	400
Farmer Mac Guaranteed Securities
HedgedItemsinFairValueHedgingRelationship [Line Items]
Carrying Amount of Hedged Assets/(Liabilities)	4,506,185	4,092,611
Hedged Asset	$ 479,632	$ 180,215

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Financial Derivatives - Schedule of Credit Exposure to Interest Rate Swap Counterparties (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative [Line Items]
Liabilities derivatives interest rate swaps	$ 47,543	$ 27,042
Gross Amount Recognized | Including Accrued Interest
Derivative [Line Items]
Assets derivatives interest rate swaps	122,793	56,139
Liabilities derivatives interest rate swaps	799,070	305,584
Counterparty Netting | Including Accrued Interest
Derivative [Line Items]
Assets derivatives interest rate swaps	121,310	53,771
Liabilities derivatives interest rate swaps	779,807	291,326
Net Amount Presented in the Consolidated Balance Sheet | Including Accrued Interest
Derivative [Line Items]
Assets derivatives interest rate swaps	1,483	2,368
Liabilities derivatives interest rate swaps	$ 19,263	$ 14,258

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Loans - Schedule of Composition of Loan Balances (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	$ 7,719,080
Total	6,469,997	$ 5,390,977
Total loans, net of allowance	7,891,148	6,981,440
Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	7,719,080	6,947,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	187,007	44,044
Total	7,906,087	6,991,894
Allowance for losses	(14,939)	(10,454)
Total loans, net of allowance	7,891,148	6,981,440
Farm & Ranch
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	5,617,512
Total	5,617,512
Allowance for losses			$ (7,264)	$ (6,753)	$ (7,017)
Farm & Ranch | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	5,617,512	5,276,557
Rural  Utilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	2,101,568
Total	2,101,568
Allowance for losses			$ 0	$ 0	$ 0
Rural  Utilities | Real Estate Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	2,101,568	1,671,293
Unsecuritized
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	6,282,990	5,346,933
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	187,007	44,044
Total	6,469,997	5,390,977
Allowance for losses	(13,758)	(8,853)
Total loans, net of allowance	6,456,239	5,382,124
Unsecuritized | Farm & Ranch
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	4,181,422	3,675,640
Unsecuritized | Rural  Utilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	2,101,568	1,671,293
In Consolidated Trusts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	1,436,090	1,600,917
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	0	0
Total	1,436,090	1,600,917
Allowance for losses	(1,181)	(1,601)
Total loans, net of allowance	1,434,909	1,599,316
In Consolidated Trusts | Farm & Ranch
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	1,436,090	1,600,917
In Consolidated Trusts | Rural  Utilities
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unpaid principal balance	$ 0	$ 0

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Loans - Allowance for Losses (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses	$ 14,939	$ 14,939			$ 10,454
Provision to allowance for loan losses	500
Real estate owned, amount of loss at acquisition	400
Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses				$ 2,656
Farm & Ranch
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses	6,039	6,039	$ 7,353		10,454
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses			0	(3,909)	(3,909)
Rural  Utilities
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses	8,900	8,900	7,503		0
Provision to allowance for loan losses		$ 3,400
Increase (decrease) in loan volume	$ 311,800
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for losses			$ 0	$ 5,378	$ 5,378

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Loans - Changes in the Allowance for Losses (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			$ 10,454,000
(Release of)/provision for losses	$ 451,000	$ 578,000	3,889,000	$ 314,000
Provision for/(release of) losses			3,882,000	27,000
Ending balance	14,939,000		$ 14,939,000		$ 10,454,000
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member
Farm & Ranch
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	7,353,000		$ 10,454,000
Beginning balance		6,753,000		7,017,000	7,017,000
(Release of)/provision for losses	(920,000)		(112,000)
Provision for/(release of) losses		578,000		314,000
Charge-offs	(394,000)	(67,000)	(394,000)	(67,000)
Ending balance	6,039,000		6,039,000		$ 10,454,000
Ending balance		7,264,000		7,264,000
Accounting Standards Update [Extensible List]					us-gaap:AccountingStandardsUpdate201613Member
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	0		(3,909,000)
Beginning balance		0		0	$ 0
Ending balance					(3,909,000)
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	7,353,000		6,545,000
Beginning balance		6,753,000		7,017,000	7,017,000
Ending balance					6,545,000
Farm & Ranch | Commercial Real Estate
Financing Receivable, Allowance for Credit Losses [Roll Forward]
(Release of)/provision for losses			1,800,000
Rural  Utilities
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	7,503,000		0
Beginning balance		0		0	0
(Release of)/provision for losses	1,397,000		3,522,000
Provision for/(release of) losses		0		0
Charge-offs	0	0	0	0
Ending balance	8,900,000		8,900,000		$ 0
Ending balance		0		0
Accounting Standards Update [Extensible List]					us-gaap:AccountingStandardsUpdate201613Member
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	0		5,378,000
Beginning balance		0		0	$ 0
Ending balance					5,378,000
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjusted Balance
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 7,503,000		5,378,000
Beginning balance		$ 0		$ 0	0
Ending balance					$ 5,378,000
Rural  Utilities | Collateral Pledged
Financing Receivable, Allowance for Credit Losses [Roll Forward]
(Release of)/provision for losses			$ 0

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Loans - Unpaid Principal Balances by Delinquency Status (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, not past due	$ 7,578,530	$ 7,578,530
Financing receivables, past due	23,420	23,420
Nonaccrual loans	117,130	117,130	$ 87,781
Total Loans	7,719,080	7,719,080
Nonaccrual loans with no associated allowance	23,100	23,100
Interest received on nonaccrual loans	1,300	2,300
Farm & Ranch
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, not past due	5,476,962	5,476,962
Financing receivables, past due	23,420	23,420
Nonaccrual loans	117,130	117,130
Total Loans	5,617,512	5,617,512
Rural  Utilities
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivable, not past due	2,101,568	2,101,568
Financing receivables, past due	0	0
Nonaccrual loans	0	0
Total Loans	2,101,568	2,101,568
30-59 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	7,892	7,892
30-59 Days | Farm & Ranch
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	7,892	7,892
30-59 Days | Rural  Utilities
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	0	0
60-89 Days
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	0	0
60-89 Days | Farm & Ranch
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	0	0
60-89 Days | Rural  Utilities
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	0	0
90 Days and Greater
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	15,528	15,528
90 Days and Greater | Farm & Ranch
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	15,528	15,528
90 Days and Greater | Farm & Ranch | Payment Deferral, CARES Act
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	82,200	82,200
90 Days and Greater | Rural  Utilities
Financing Receivable, Recorded Investment, Past Due [Line Items]
Financing receivables, past due	$ 0	$ 0

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Loans - Schedule of Allowance for Losses by Impairment Method and Commodity (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Ending Balance:
Total	$ 6,469,997	$ 5,390,977
Allowance for Losses:
Total	$ 14,939	10,454
On-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		5,069,480
Individually evaluated for impairment:		207,077
Total		5,276,557
Allowance for Losses:
Collectively evaluated for impairment:		4,256
Individually evaluated for impairment:		6,198
Total		10,454
On-Balance Sheet: | Crops
Ending Balance:
Collectively evaluated for impairment:		2,664,362
Individually evaluated for impairment:		108,815
Total		2,773,177
Allowance for Losses:
Collectively evaluated for impairment:		1,880
Individually evaluated for impairment:		2,628
Total		4,508
On-Balance Sheet: | Permanent Plantings
Ending Balance:
Collectively evaluated for impairment:		1,161,900
Individually evaluated for impairment:		51,256
Total		1,213,156
Allowance for Losses:
Collectively evaluated for impairment:		1,362
Individually evaluated for impairment:		1,008
Total		2,370
On-Balance Sheet: | Livestock
Ending Balance:
Collectively evaluated for impairment:		871,341
Individually evaluated for impairment:		39,962
Total		911,303
Allowance for Losses:
Collectively evaluated for impairment:		714
Individually evaluated for impairment:		2,447
Total		3,161
On-Balance Sheet: | Part-time Farm
Ending Balance:
Collectively evaluated for impairment:		356,920
Individually evaluated for impairment:		7,044
Total		363,964
Allowance for Losses:
Collectively evaluated for impairment:		249
Individually evaluated for impairment:		115
Total		364
On-Balance Sheet: | Ag. Storage and Processing
Ending Balance:
Collectively evaluated for impairment:		10,360
Individually evaluated for impairment:		0
Total		10,360
Allowance for Losses:
Collectively evaluated for impairment:		47
Individually evaluated for impairment:		0
Total		47
On-Balance Sheet: | Other
Ending Balance:
Collectively evaluated for impairment:		4,597
Individually evaluated for impairment:		0
Total		4,597
Allowance for Losses:
Collectively evaluated for impairment:		4
Individually evaluated for impairment:		0
Total		$ 4

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Loans - Schedule of Impaired Financing Receivables (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				$ 52,191
Impaired loans, with no specific allowance, unpaid principal balance				52,014
Impaired loan, with a specific allowance, recorded investment				174,385
Impaired loans, with a specific allowance, unpaid principal balance				173,844
Impaired loans, associated allowance				6,541
Recorded investment				226,576
Unpaid principal balance				225,858
Recorded investment of loans on nonaccrual status			$ 117,130	87,781
Average recorded investment in impaired loans	$ 173,616	$ 162,168
Income recognized on impaired loans	859	1,660
Less than 90 days past due
Financing Receivable, Impaired [Line Items]
Recorded investment of loans on nonaccrual status				30,100
Crops
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				30,846
Impaired loans, with no specific allowance, unpaid principal balance				30,741
Impaired loan, with a specific allowance, recorded investment				84,044
Impaired loans, with a specific allowance, unpaid principal balance				83,772
Impaired loans, associated allowance				2,725
Recorded investment				114,890
Unpaid principal balance				114,513
Recorded investment of loans on nonaccrual status				34,037
Average recorded investment in impaired loans	98,176	85,652
Income recognized on impaired loans	379	701
Permanent Plantings
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				16,696
Impaired loans, with no specific allowance, unpaid principal balance				16,638
Impaired loan, with a specific allowance, recorded investment				36,852
Impaired loans, with a specific allowance, unpaid principal balance				36,732
Impaired loans, associated allowance				1,051
Recorded investment				53,548
Unpaid principal balance				53,370
Recorded investment of loans on nonaccrual status				22,849
Average recorded investment in impaired loans	39,056	41,903
Income recognized on impaired loans	121	420
Livestock
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				3,195
Impaired loans, with no specific allowance, unpaid principal balance				3,185
Impaired loan, with a specific allowance, recorded investment				47,113
Impaired loans, with a specific allowance, unpaid principal balance				46,984
Impaired loans, associated allowance				2,636
Recorded investment				50,308
Unpaid principal balance				50,169
Recorded investment of loans on nonaccrual status				28,441
Average recorded investment in impaired loans	28,650	26,279
Income recognized on impaired loans	304	417
Part-time Farm
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				1,398
Impaired loans, with no specific allowance, unpaid principal balance				1,394
Impaired loan, with a specific allowance, recorded investment				6,376
Impaired loans, with a specific allowance, unpaid principal balance				6,356
Impaired loans, associated allowance				129
Recorded investment				7,774
Unpaid principal balance				7,750
Recorded investment of loans on nonaccrual status				2,454
Average recorded investment in impaired loans	7,675	8,268
Income recognized on impaired loans	55	122
Ag. Storage and Processing
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				0
Impaired loans, with no specific allowance, unpaid principal balance				0
Impaired loan, with a specific allowance, recorded investment				0
Impaired loans, with a specific allowance, unpaid principal balance				0
Impaired loans, associated allowance				0
Recorded investment				0
Unpaid principal balance				0
Recorded investment of loans on nonaccrual status				0
Average recorded investment in impaired loans	0	0
Income recognized on impaired loans	0	0
Other
Financing Receivable, Impaired [Line Items]
Impaired loans, with no specific allowance, recorded investment				56
Impaired loans, with no specific allowance, unpaid principal balance				56
Impaired loan, with a specific allowance, recorded investment				0
Impaired loans, with a specific allowance, unpaid principal balance				0
Impaired loans, associated allowance				0
Recorded investment				56
Unpaid principal balance				56
Recorded investment of loans on nonaccrual status				0
Average recorded investment in impaired loans	59	66
Income recognized on impaired loans	$ 0	$ 0
Collateral Dependent Not Individually Analyzed
Financing Receivable, Impaired [Line Items]
Impaired loans, associated allowance				3,000
Recorded investment				$ 159,100
Impaired loans, impairment analysis performed percent				70.00%

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Loans - Schedule of Past Due Financing Receivables (Details) - USD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Financing Receivable, Recorded Investment, Past Due [Line Items]
90-Days Delinquencies		$ 23,420,000
Loans subject to removal-of-account provisions			$ 0
On-Balance Sheet:
Financing Receivable, Recorded Investment, Past Due [Line Items]
90-Days Delinquencies			$ 57,719,000
Net Credit Losses	$ 131,000

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Loans - Schedule of Financing Receivables Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
2020
Current period recoveries	$ 0		$ 0
2019
Current period recoveries	0		0
2017
Current period recoveries	0		0
2016
Current period recoveries	0		0
Prior
Current period recoveries	0		0
Revolving Loans - Amortized Cost Basis
Current period recoveries	0		0
Total
Total	6,469,997		6,469,997		$ 5,390,977
90-Days Delinquencies	23,420		23,420
Farm & Ranch
2020
Total	836,001		836,001
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2019
Total	946,683		946,683
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2018
Total	613,094		613,094
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2017
Total	686,574		686,574
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2016
Total	587,184		587,184
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Prior
Total	1,425,492		1,425,492
Current period charge-offs	394		394
Current period recoveries	0		0
Current period net charge-offs	394		394
Revolving Loans - Amortized Cost Basis
Total	522,484		522,484
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Total
Total	5,617,512		5,617,512
Current period charge-offs	394		394
Current period recoveries	0		0
Current period net charge-offs	394	$ 67	394	$ 67
90-Days Delinquencies	23,420		23,420
Rural  Utilities
2020
Total	470,419		470,419
Current period charge-offs	0		0
Current period net charge-offs	0		0
2019
Total	827,336		827,336
Current period charge-offs	0		0
Current period net charge-offs	0		0
2018
Total	8,337		8,337
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2017
Total	92,440		92,440
Current period charge-offs	0		0
Current period net charge-offs	0		0
2016
Total	31,829		31,829
Current period charge-offs	0		0
Current period net charge-offs	0		0
Prior
Total	663,841		663,841
Current period charge-offs	0		0
Current period net charge-offs	0		0
Revolving Loans - Amortized Cost Basis
Total	7,366		7,366
Current period charge-offs	0		0
Current period net charge-offs	0		0
Total
Total	2,101,568		2,101,568
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0	$ 0	0	$ 0
90-Days Delinquencies	0		0
Acceptable | Farm & Ranch
2020
Total	758,965		758,965
2019
Total	773,199		773,199
2018
Total	562,604		562,604
2017
Total	617,751		617,751
2016
Total	528,068		528,068
Prior
Total	1,345,384		1,345,384
Revolving Loans - Amortized Cost Basis
Total	501,625		501,625
Total
Total	5,087,596		5,087,596
Acceptable | Rural  Utilities
2020
Total	470,419		470,419
2019
Total	827,336		827,336
2018
Total	8,337		8,337
2017
Total	92,440		92,440
2016
Total	31,829		31,829
Prior
Total	658,827		658,827
Revolving Loans - Amortized Cost Basis
Total	7,366		7,366
Total
Total	2,096,554		2,096,554
Special mention(1) | Farm & Ranch
2020
Total	76,588		76,588
2019
Total	166,829		166,829
2018
Total	32,164		32,164
2017
Total	9,278		9,278
2016
Total	5,477		5,477
Prior
Total	19,630		19,630
Revolving Loans - Amortized Cost Basis
Total	10,260		10,260
Total
Total	320,226		320,226
Special mention(1) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	0		0
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Total	0		0
Substandard(2) | Farm & Ranch
2020
Total	448		448
2019
Total	6,655		6,655
2018
Total	18,326		18,326
2017
Total	59,545		59,545
2016
Total	53,639		53,639
Prior
Total	60,478		60,478
Revolving Loans - Amortized Cost Basis
Total	10,599		10,599
Total
Total	209,690		209,690
Substandard(2) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	5,014		5,014
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Total	$ 5,014		$ 5,014
On-Balance Sheet:
Total
Total					5,276,557
90-Days Delinquencies					57,719
On-Balance Sheet: | Farm & Ranch
Total
Total					5,276,557
90-Days Delinquencies					57,719
On-Balance Sheet: | Acceptable | Farm & Ranch
Total
Total					4,790,636
On-Balance Sheet: | Special mention(1) | Farm & Ranch
Total
Total					278,843
On-Balance Sheet: | Substandard(2) | Farm & Ranch
Total
Total					207,078
On-Balance Sheet: | Crops
Total
Total					2,773,177
On-Balance Sheet: | Crops | Farm & Ranch
Total
Total					2,773,177
90-Days Delinquencies					21,167
On-Balance Sheet: | Crops | Acceptable | Farm & Ranch
Total
Total					2,556,956
On-Balance Sheet: | Crops | Special mention(1) | Farm & Ranch
Total
Total					107,406
On-Balance Sheet: | Crops | Substandard(2) | Farm & Ranch
Total
Total					108,815
On-Balance Sheet: | Permanent Plantings
Total
Total					1,213,156
On-Balance Sheet: | Permanent Plantings | Farm & Ranch
Total
Total					1,213,156
90-Days Delinquencies					15,828
On-Balance Sheet: | Permanent Plantings | Acceptable | Farm & Ranch
Total
Total					1,050,160
On-Balance Sheet: | Permanent Plantings | Special mention(1) | Farm & Ranch
Total
Total					111,739
On-Balance Sheet: | Permanent Plantings | Substandard(2) | Farm & Ranch
Total
Total					51,257
On-Balance Sheet: | Livestock
Total
Total					911,303
On-Balance Sheet: | Livestock | Farm & Ranch
Total
Total					911,303
90-Days Delinquencies					19,354
On-Balance Sheet: | Livestock | Acceptable | Farm & Ranch
Total
Total					825,234
On-Balance Sheet: | Livestock | Special mention(1) | Farm & Ranch
Total
Total					46,107
On-Balance Sheet: | Livestock | Substandard(2) | Farm & Ranch
Total
Total					39,962
On-Balance Sheet: | Part-time Farm
Total
Total					363,964
On-Balance Sheet: | Part-time Farm | Farm & Ranch
Total
Total					363,964
90-Days Delinquencies					1,370
On-Balance Sheet: | Part-time Farm | Acceptable | Farm & Ranch
Total
Total					343,329
On-Balance Sheet: | Part-time Farm | Special mention(1) | Farm & Ranch
Total
Total					13,591
On-Balance Sheet: | Part-time Farm | Substandard(2) | Farm & Ranch
Total
Total					7,044
On-Balance Sheet: | Ag. Storage and Processing
Total
Total					10,360
On-Balance Sheet: | Ag. Storage and Processing | Farm & Ranch
Total
Total					10,360
90-Days Delinquencies					0
On-Balance Sheet: | Ag. Storage and Processing | Acceptable | Farm & Ranch
Total
Total					10,360
On-Balance Sheet: | Ag. Storage and Processing | Special mention(1) | Farm & Ranch
Total
Total					0
On-Balance Sheet: | Ag. Storage and Processing | Substandard(2) | Farm & Ranch
Total
Total					0
On-Balance Sheet: | Other
Total
Total					4,597
On-Balance Sheet: | Other | Farm & Ranch
Total
Total					4,597
90-Days Delinquencies					0
On-Balance Sheet: | Other | Acceptable | Farm & Ranch
Total
Total					4,597
On-Balance Sheet: | Other | Special mention(1) | Farm & Ranch
Total
Total					0
On-Balance Sheet: | Other | Substandard(2) | Farm & Ranch
Total
Total					$ 0

XML

Guarantees - Off-Balance Sheet Guaranteed Securities (Details) - Variable Interest Entity, Not Primary Beneficiary - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Guarantor Obligations [Line Items]
Total off-balance sheet Farmer Mac Guaranteed Securities	$ 426,602	$ 504,105
Farm & Ranch
Guarantor Obligations [Line Items]
Total off-balance sheet Farmer Mac Guaranteed Securities	90,225	107,322
USDA Guarantees
Guarantor Obligations [Line Items]
Total off-balance sheet Farmer Mac Guaranteed Securities	330,309	389,216
Institutional Credit
Guarantor Obligations [Line Items]
Total off-balance sheet Farmer Mac Guaranteed Securities	$ 6,068	$ 7,567

XML

Guarantees - Significant Cash Flows Received From and Paid to Trusts (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Proceeds from sale of Farmer Mac Guaranteed Securities	$ 28,050	$ 166,351
Guarantee fees received	$ 894	$ 861

XML

Guarantees - Schedule of Underlying Off-Balance Sheet Guaranteed Securities (Details) - Farmer Mac Guaranteed Securities - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Guarantor Obligations [Line Items]
Guarantee and commitment obligation	$ 1,890	$ 2,230
Weighted-average remaining maturity	9 years 7 months 6 days	9 years 9 months 18 days
Institutional Credit
Guarantor Obligations [Line Items]
Weighted-average remaining maturity	4 years 6 months	5 years

XML

Guarantees - Schedule of Long-Term Standby Purchase Commitments (Details) - LTSPCs - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Guarantor Obligations [Line Items]
Maximum principal amount	$ 2,900,166	$ 3,002,349
Weighted-average remaining maturity	15 years 2 months 12 days	15 years 2 months 12 days
Guarantee obligations issued after January 1, 2003
Guarantor Obligations [Line Items]
Guarantee and commitment obligation	$ 33,273	$ 34,470

XML

Guarantees - Reserve For Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Mar. 31, 2020	Jan. 01, 2020	Dec. 31, 2019	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018
Guarantor Obligations [Line Items]
Reserve for losses	$ 3,020		$ 3,020				$ 2,164
Release of losses	(400)	$ (158)	(7)	$ (287)
Farm & Ranch
Guarantor Obligations [Line Items]
Reserve for losses	1,650	1,880	1,650	1,880	$ 2,020	$ 2,016	2,164	$ 2,038	$ 2,167	$ 2,167
Release of losses	(370)	(158)	(366)	(287)
Charge-offs	394		394
Rural  Utilities
Guarantor Obligations [Line Items]
Reserve for losses	1,370	0	1,370	0	$ 1,400	$ 1,011	0	$ 0	$ 0	$ 0
Release of losses	(30)	$ 0	359	$ 0
Charge-offs	0		0
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch
Guarantor Obligations [Line Items]
Reserve for losses	1,650		1,650				2,164
Charge-offs	0		0
LTSPCs | Rural  Utilities
Guarantor Obligations [Line Items]
Reserve for losses	$ 1,370		$ 1,370				$ 0

XML

Guarantees - Changes in Reserve for Losses (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			$ 2,164
Release of losses	$ (400)	$ (158)	(7)	$ (287)
Ending balance	3,020		3,020
LTSPCs
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Increase (decrease) in loan volume	(58,500)		(119,300)
Farm & Ranch
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	2,020	2,038	2,164	2,167
Release of losses	(370)	(158)	(366)	(287)
Charge-offs	0	0	0	0
Ending balance	1,650	1,880	1,650	1,880
Farm & Ranch | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	0	0
Rural  Utilities
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	1,400	0	0	0
Release of losses	(30)	0	359	0
Charge-offs	0	0	0	0
Ending balance	1,370	0	1,370	$ 0
Increase (decrease) in loan volume	311,800
Rural  Utilities | LTSPCs
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance			0
Ending balance	1,370		$ 1,370
Rural  Utilities | Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Allowance for Credit Losses [Roll Forward]
Beginning balance	$ 0	$ 0

XML

Guarantees - Unpaid Principal Balances by Delinquency Status (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Guarantor Obligations [Line Items]
Financing receivable, not past due	$ 7,578,530
Financing receivables, past due	23,420
Loans held for investment, at amortized cost	6,469,997	$ 5,390,977
30-59 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	7,892
60-89 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
90 Days and Greater
Guarantor Obligations [Line Items]
Financing receivables, past due	15,528
Rural  Utilities
Guarantor Obligations [Line Items]
Financing receivable, not past due	2,101,568
Financing receivables, past due	0
Loans held for investment, at amortized cost	2,101,568
Rural  Utilities | 30-59 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
Rural  Utilities | 60-89 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
Rural  Utilities | 90 Days and Greater
Guarantor Obligations [Line Items]
Financing receivables, past due	0
Farm & Ranch
Guarantor Obligations [Line Items]
Financing receivable, not past due	5,476,962
Financing receivables, past due	23,420
Loans held for investment, at amortized cost	5,617,512
Farm & Ranch | 30-59 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	7,892
Farm & Ranch | 60-89 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
Farm & Ranch | 90 Days and Greater
Guarantor Obligations [Line Items]
Financing receivables, past due	15,528
Farm & Ranch | 90 Days and Greater | Payment Deferral, CARES Act
Guarantor Obligations [Line Items]
Financing receivables, past due	82,200
LTSPCs | Rural  Utilities
Guarantor Obligations [Line Items]
Financing receivable, not past due	590,053
Financing receivables, past due	0
Loans held for investment, at amortized cost	590,053
LTSPCs | Rural  Utilities | 30-59 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
LTSPCs | Rural  Utilities | 60-89 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	0
LTSPCs | Rural  Utilities | 90 Days and Greater
Guarantor Obligations [Line Items]
Financing receivables, past due	0
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch
Guarantor Obligations [Line Items]
Financing receivable, not past due	2,374,988
Financing receivables, past due	25,350
Loans held for investment, at amortized cost	2,400,338
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch | Payment Deferral, CARES Act
Guarantor Obligations [Line Items]
Financing receivable, not past due	109,500
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch | 30-59 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	9,947
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch | 60-89 Days
Guarantor Obligations [Line Items]
Financing receivables, past due	12,587
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch | 90 Days and Greater
Guarantor Obligations [Line Items]
Financing receivables, past due	$ 2,816

XML

Guarantees - Schedule of Allowance for Losses by Impairment Method and Commodity (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Ending Balance:
Total	$ 6,469,997	$ 5,390,977
Allowance for Losses:
Total	$ 14,939	10,454
Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		2,481,612
Individually evaluated for impairment:		18,781
Total		2,500,393
Allowance for Losses:
Collectively evaluated for impairment:		1,821
Individually evaluated for impairment:		343
Total		2,164
Crops | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		1,151,983
Individually evaluated for impairment:		5,698
Total		1,157,681
Allowance for Losses:
Collectively evaluated for impairment:		599
Individually evaluated for impairment:		97
Total		696
Permanent Plantings | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		511,991
Individually evaluated for impairment:		2,114
Total		514,105
Allowance for Losses:
Collectively evaluated for impairment:		96
Individually evaluated for impairment:		43
Total		139
Livestock | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		581,377
Individually evaluated for impairment:		10,207
Total		591,584
Allowance for Losses:
Collectively evaluated for impairment:		308
Individually evaluated for impairment:		189
Total		497
Part-time Farm | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		167,395
Individually evaluated for impairment:		706
Total		168,101
Allowance for Losses:
Collectively evaluated for impairment:		50
Individually evaluated for impairment:		14
Total		64
Ag. Storage and Processing | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		66,106
Individually evaluated for impairment:		0
Total		66,106
Allowance for Losses:
Collectively evaluated for impairment:		767
Individually evaluated for impairment:		0
Total		767
Other | Off-Balance Sheet:
Ending Balance:
Collectively evaluated for impairment:		2,760
Individually evaluated for impairment:		56
Total		2,816
Allowance for Losses:
Collectively evaluated for impairment:		1
Individually evaluated for impairment:		0
Total		$ 1

XML

Guarantees - Schedule of Past Due Financing Receivables (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
Guarantor Obligations [Line Items]
90-Days Delinquencies		$ 23,420
Off-Balance Sheet:
Guarantor Obligations [Line Items]
90-Days Delinquencies			$ 3,235
Net credit losses (recoveries)	$ 0

XML

Guarantees - Credit Quality Indicators (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
2020
Current period recoveries	$ 0		$ 0
2019
Current period recoveries	0		0
2017
Current period recoveries	0		0
2016
Current period recoveries	0		0
Prior
Current period recoveries	0		0
Revolving Loans - Amortized Cost Basis
Current period recoveries	0		0
Total
Loans held for investment, at amortized cost	6,469,997		6,469,997		$ 5,390,977
Loans held for investment, at amortized cost	6,469,997		6,469,997		5,390,977
Financing receivables, past due	23,420		23,420
Off-Balance Sheet:
Total
Loans held for investment, at amortized cost					2,500,393
Loans held for investment, at amortized cost					2,500,393
Financing receivables, past due					3,235
Off-Balance Sheet: | Crops
Total
Loans held for investment, at amortized cost					1,157,681
Loans held for investment, at amortized cost					1,157,681
Financing receivables, past due					1,493
Off-Balance Sheet: | Permanent Plantings
Total
Loans held for investment, at amortized cost					514,105
Loans held for investment, at amortized cost					514,105
Financing receivables, past due					196
Off-Balance Sheet: | Livestock
Total
Loans held for investment, at amortized cost					591,584
Loans held for investment, at amortized cost					591,584
Financing receivables, past due					1,066
Off-Balance Sheet: | Part-time Farm
Total
Loans held for investment, at amortized cost					168,101
Loans held for investment, at amortized cost					168,101
Financing receivables, past due					480
Off-Balance Sheet: | Ag. Storage and Processing
Total
Loans held for investment, at amortized cost					66,106
Loans held for investment, at amortized cost					66,106
Financing receivables, past due					0
Off-Balance Sheet: | Other
Total
Loans held for investment, at amortized cost					2,816
Loans held for investment, at amortized cost					2,816
Financing receivables, past due					0
Rural  Utilities
2020
Total	470,419		470,419
Current period charge-offs	0		0
Current period net charge-offs	0		0
2019
Total	827,336		827,336
Current period charge-offs	0		0
Current period net charge-offs	0		0
2018
Total	8,337		8,337
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2017
Total	92,440		92,440
Current period charge-offs	0		0
Current period net charge-offs	0		0
2016
Total	31,829		31,829
Current period charge-offs	0		0
Current period net charge-offs	0		0
Prior
Total	663,841		663,841
Current period charge-offs	0		0
Current period net charge-offs	0		0
Revolving Loans - Amortized Cost Basis
Total	7,366		7,366
Current period charge-offs	0		0
Current period net charge-offs	0		0
Total
Loans held for investment, at amortized cost	2,101,568		2,101,568
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0	$ 0	0	$ 0
Loans held for investment, at amortized cost	2,101,568		2,101,568
Financing receivables, past due	0		0
Farm & Ranch
2020
Total	836,001		836,001
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2019
Total	946,683		946,683
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2018
Total	613,094		613,094
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2017
Total	686,574		686,574
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2016
Total	587,184		587,184
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Prior
Total	1,425,492		1,425,492
Current period charge-offs	394		394
Current period recoveries	0		0
Current period net charge-offs	394		394
Revolving Loans - Amortized Cost Basis
Total	522,484		522,484
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Total
Loans held for investment, at amortized cost	5,617,512		5,617,512
Current period charge-offs	394		394
Current period recoveries	0		0
Current period net charge-offs	394	$ 67	394	$ 67
Loans held for investment, at amortized cost	5,617,512		5,617,512
Financing receivables, past due	23,420		23,420
Acceptable | Off-Balance Sheet:
Total
Loans held for investment, at amortized cost					2,269,005
Loans held for investment, at amortized cost					2,269,005
Acceptable | Off-Balance Sheet: | Crops
Total
Loans held for investment, at amortized cost					1,033,002
Loans held for investment, at amortized cost					1,033,002
Acceptable | Off-Balance Sheet: | Permanent Plantings
Total
Loans held for investment, at amortized cost					484,601
Loans held for investment, at amortized cost					484,601
Acceptable | Off-Balance Sheet: | Livestock
Total
Loans held for investment, at amortized cost					521,341
Loans held for investment, at amortized cost					521,341
Acceptable | Off-Balance Sheet: | Part-time Farm
Total
Loans held for investment, at amortized cost					161,361
Loans held for investment, at amortized cost					161,361
Acceptable | Off-Balance Sheet: | Ag. Storage and Processing
Total
Loans held for investment, at amortized cost					66,106
Loans held for investment, at amortized cost					66,106
Acceptable | Off-Balance Sheet: | Other
Total
Loans held for investment, at amortized cost					2,594
Loans held for investment, at amortized cost					2,594
Acceptable | Rural  Utilities
2020
Total	470,419		470,419
2019
Total	827,336		827,336
2018
Total	8,337		8,337
2017
Total	92,440		92,440
2016
Total	31,829		31,829
Prior
Total	658,827		658,827
Revolving Loans - Amortized Cost Basis
Total	7,366		7,366
Total
Loans held for investment, at amortized cost	2,096,554		2,096,554
Loans held for investment, at amortized cost	2,096,554		2,096,554
Acceptable | Farm & Ranch
2020
Total	758,965		758,965
2019
Total	773,199		773,199
2018
Total	562,604		562,604
2017
Total	617,751		617,751
2016
Total	528,068		528,068
Prior
Total	1,345,384		1,345,384
Revolving Loans - Amortized Cost Basis
Total	501,625		501,625
Total
Loans held for investment, at amortized cost	5,087,596		5,087,596
Loans held for investment, at amortized cost	5,087,596		5,087,596
Special mention(1) | Off-Balance Sheet:
Total
Loans held for investment, at amortized cost					128,511
Loans held for investment, at amortized cost					128,511
Special mention(1) | Off-Balance Sheet: | Crops
Total
Loans held for investment, at amortized cost					68,372
Loans held for investment, at amortized cost					68,372
Special mention(1) | Off-Balance Sheet: | Permanent Plantings
Total
Loans held for investment, at amortized cost					22,909
Loans held for investment, at amortized cost					22,909
Special mention(1) | Off-Balance Sheet: | Livestock
Total
Loans held for investment, at amortized cost					35,618
Loans held for investment, at amortized cost					35,618
Special mention(1) | Off-Balance Sheet: | Part-time Farm
Total
Loans held for investment, at amortized cost					1,612
Loans held for investment, at amortized cost					1,612
Special mention(1) | Off-Balance Sheet: | Ag. Storage and Processing
Total
Loans held for investment, at amortized cost					0
Loans held for investment, at amortized cost					0
Special mention(1) | Off-Balance Sheet: | Other
Total
Loans held for investment, at amortized cost					0
Loans held for investment, at amortized cost					0
Special mention(1) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	0		0
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Loans held for investment, at amortized cost	0		0
Loans held for investment, at amortized cost	0		0
Special mention(1) | Farm & Ranch
2020
Total	76,588		76,588
2019
Total	166,829		166,829
2018
Total	32,164		32,164
2017
Total	9,278		9,278
2016
Total	5,477		5,477
Prior
Total	19,630		19,630
Revolving Loans - Amortized Cost Basis
Total	10,260		10,260
Total
Loans held for investment, at amortized cost	320,226		320,226
Loans held for investment, at amortized cost	320,226		320,226
Substandard(2) | Off-Balance Sheet:
Total
Loans held for investment, at amortized cost					102,877
Loans held for investment, at amortized cost					102,877
Substandard(2) | Off-Balance Sheet: | Crops
Total
Loans held for investment, at amortized cost					56,307
Loans held for investment, at amortized cost					56,307
Substandard(2) | Off-Balance Sheet: | Permanent Plantings
Total
Loans held for investment, at amortized cost					6,595
Loans held for investment, at amortized cost					6,595
Substandard(2) | Off-Balance Sheet: | Livestock
Total
Loans held for investment, at amortized cost					34,625
Loans held for investment, at amortized cost					34,625
Substandard(2) | Off-Balance Sheet: | Part-time Farm
Total
Loans held for investment, at amortized cost					5,128
Loans held for investment, at amortized cost					5,128
Substandard(2) | Off-Balance Sheet: | Ag. Storage and Processing
Total
Loans held for investment, at amortized cost					0
Loans held for investment, at amortized cost					0
Substandard(2) | Off-Balance Sheet: | Other
Total
Loans held for investment, at amortized cost					222
Loans held for investment, at amortized cost					$ 222
Substandard(2) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	5,014		5,014
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Loans held for investment, at amortized cost	5,014		5,014
Loans held for investment, at amortized cost	5,014		5,014
Substandard(2) | Farm & Ranch
2020
Total	448		448
2019
Total	6,655		6,655
2018
Total	18,326		18,326
2017
Total	59,545		59,545
2016
Total	53,639		53,639
Prior
Total	60,478		60,478
Revolving Loans - Amortized Cost Basis
Total	10,599		10,599
Total
Loans held for investment, at amortized cost	209,690		209,690
Loans held for investment, at amortized cost	209,690		209,690
LTSPCs | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	577,920		577,920
Revolving Loans - Amortized Cost Basis
Total	12,133		12,133
Total
Loans held for investment, at amortized cost	590,053		590,053
Loans held for investment, at amortized cost	590,053		590,053
Financing receivables, past due	0		0
LTSPCs | Acceptable | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	577,920		577,920
Revolving Loans - Amortized Cost Basis
Total	12,133		12,133
Total
Loans held for investment, at amortized cost	590,053		590,053
Loans held for investment, at amortized cost	590,053		590,053
LTSPCs | Special mention(1) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	0		0
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Loans held for investment, at amortized cost	0		0
Loans held for investment, at amortized cost	0		0
LTSPCs | Substandard(2) | Rural  Utilities
2020
Total	0		0
2019
Total	0		0
2018
Total	0		0
2017
Total	0		0
2016
Total	0		0
Prior
Total	0		0
Revolving Loans - Amortized Cost Basis
Total	0		0
Total
Loans held for investment, at amortized cost	0		0
Loans held for investment, at amortized cost	0		0
LTSPCs and Farmer Mac Guaranteed Securities | Farm & Ranch
2020
Total	71,855		71,855
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2019
Total	216,427		216,427
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2018
Total	189,604		189,604
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2017
Total	290,944		290,944
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
2016
Total	250,697		250,697
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Prior
Total	1,193,275		1,193,275
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Revolving Loans - Amortized Cost Basis
Total	187,536		187,536
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Total
Loans held for investment, at amortized cost	2,400,338		2,400,338
Current period charge-offs	0		0
Current period recoveries	0		0
Current period net charge-offs	0		0
Loans held for investment, at amortized cost	2,400,338		2,400,338
Financing receivables, past due	25,350		25,350
LTSPCs and Farmer Mac Guaranteed Securities | Acceptable | Farm & Ranch
2020
Total	71,569		71,569
2019
Total	206,177		206,177
2018
Total	177,787		177,787
2017
Total	251,149		251,149
2016
Total	222,988		222,988
Prior
Total	1,072,259		1,072,259
Revolving Loans - Amortized Cost Basis
Total	172,509		172,509
Total
Loans held for investment, at amortized cost	2,174,438		2,174,438
Loans held for investment, at amortized cost	2,174,438		2,174,438
LTSPCs and Farmer Mac Guaranteed Securities | Special mention(1) | Farm & Ranch
2020
Total	0		0
2019
Total	10,250		10,250
2018
Total	7,835		7,835
2017
Total	24,518		24,518
2016
Total	16,090		16,090
Prior
Total	61,674		61,674
Revolving Loans - Amortized Cost Basis
Total	10,359		10,359
Total
Loans held for investment, at amortized cost	130,726		130,726
Loans held for investment, at amortized cost	130,726		130,726
LTSPCs and Farmer Mac Guaranteed Securities | Substandard(2) | Farm & Ranch
2020
Total	286		286
2019
Total	0		0
2018
Total	3,982		3,982
2017
Total	15,277		15,277
2016
Total	11,619		11,619
Prior
Total	59,342		59,342
Revolving Loans - Amortized Cost Basis
Total	4,668		4,668
Total
Loans held for investment, at amortized cost	95,174		95,174
Loans held for investment, at amortized cost	$ 95,174		$ 95,174

XML

Notes Payable (Details) - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Debt Instrument [Line Items]
Medium term notes called during the period	$ 1,900,000,000	$ 300,000,000
Maximum borrowing capacity from U.S. Treasury	1,500,000,000
Outstanding debt repurchases	$ 0	0
Discount Notes
Debt Instrument [Line Items]
Maturities of notes	1 year
Medium-term Notes | Minimum
Debt Instrument [Line Items]
Maturities of notes	6 months
Medium-term Notes | Maximum
Debt Instrument [Line Items]
Maturities of notes	15 years
Notes Payable to Banks
Debt Instrument [Line Items]
Maximum amount of discount notes outstanding at any month end	$ 2,600,000,000	$ 2,100,000,000

XML

Notes Payable - Borrowings (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Due within one year:
Current portion of medium-term notes	$ 10,887,523	$ 10,019,082
Weighted - average rate (as a percent)	0.76%	1.84%
Medium-term notes due in:
Two years	$ 3,764,817	$ 3,700,835
Three years	1,839,291	1,594,709
Four years	1,204,584	1,205,276
Five years	1,213,467	760,887
Thereafter	2,511,868	1,817,859
Total due after one year	10,534,027	9,079,566
Total	$ 21,421,550	$ 19,098,648
Weighted - Average Rate (as a percent)	1.61%	2.28%
Total Weighted - Average Rate (as a percent)	1.18%	2.05%
2021
Medium-term notes due in:
Weighted - Average Rate (as a percent)	1.08%	2.04%
2022
Medium-term notes due in:
Weighted - Average Rate (as a percent)	1.70%	2.15%
2023
Medium-term notes due in:
Weighted - Average Rate (as a percent)	1.78%	2.27%
2024
Medium-term notes due in:
Weighted - Average Rate (as a percent)	1.56%	2.25%
Thereafter
Medium-term notes due in:
Weighted - Average Rate (as a percent)	2.28%	2.89%
Notes Payable to Banks
Due within one year:
Current portion of medium-term notes	$ 2,507,363	$ 2,194,177
Weighted - average rate (as a percent)	0.44%	1.72%
Short-term debt, average outstanding during the quarter	$ 2,221,571	$ 1,977,214
Weighted - average rate, average outstanding during the quarter (as a percent)	1.05%	2.25%
Medium-term Notes
Due within one year:
Current portion of medium-term notes	$ 1,394,857	$ 1,152,770
Weighted - average rate (as a percent)	0.47%	1.98%
Short-term debt, average outstanding during the quarter	$ 1,120,213	$ 1,780,517
Weighted - average rate, average outstanding during the quarter (as a percent)	1.16%	2.33%
Long-term Debt
Due within one year:
Current portion of medium-term notes	$ 6,985,303	$ 6,672,135
Weighted - average rate (as a percent)	0.93%	1.85%

XML

Notes Payable - Callable Medium-Term Notes (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
2022	$ 3,764,817	$ 3,700,835
2023	1,839,291	1,594,709
2024	1,204,584	1,205,276
Total	$ 21,421,550	$ 19,098,648
Weighted - Average Rate (as a percent)	1.61%	2.28%
Call Option
Debt Instrument [Line Items]
2021	$ 491,862
2022	203,845
2023	37,953
2024	143,832
Thereafter	399,489
Total	$ 1,276,981
Weighted - Average Rate (as a percent)	1.56%
Call Option | 2021
Debt Instrument [Line Items]
Weighted - Average Rate (as a percent)	1.02%
Call Option | 2022
Debt Instrument [Line Items]
Weighted - Average Rate (as a percent)	1.43%
Call Option | 2023
Debt Instrument [Line Items]
Weighted - Average Rate (as a percent)	0.82%
Call Option | 2024
Debt Instrument [Line Items]
Weighted - Average Rate (as a percent)	1.80%
Call Option | Thereafter
Debt Instrument [Line Items]
Weighted - Average Rate (as a percent)	2.25%

XML

Notes Payable - Earliest Interest Reset Date of Borrowing Outstanding (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
2022	$ 3,764,817	$ 3,700,835
2023	1,839,291	1,594,709
2024	1,204,584	1,205,276
Total	$ 21,421,550	$ 19,098,648
Short-term debt, weighted average rate (as a percent)	0.76%	1.84%
Weighted - Average Rate (as a percent)	1.61%	2.28%
Total Weighted - Average Rate (as a percent)	1.18%	2.05%
2020
Debt Instrument [Line Items]
Short-term debt	$ 11,227,000
Short-term debt, weighted average rate (as a percent)	0.48%
2021
Debt Instrument [Line Items]
2021	$ 3,047,823
Weighted - Average Rate (as a percent)	1.79%
2022
Debt Instrument [Line Items]
2022	$ 1,745,399
Weighted - Average Rate (as a percent)	1.74%
2023
Debt Instrument [Line Items]
2023	$ 1,706,568
Weighted - Average Rate (as a percent)	1.88%
2024
Debt Instrument [Line Items]
2024	$ 965,056
Weighted - Average Rate (as a percent)	1.86%
Thereafter
Debt Instrument [Line Items]
Long-Term Debt, Maturity, after Year Four	$ 2,729,704
Weighted - Average Rate (as a percent)	2.31%

XML

Equity (Details) - USD ($) $ / shares in Units, shares in Thousands	1 Months Ended	3 Months Ended						57 Months Ended
	May 31, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Mar. 14, 2019	Dec. 31, 2015
Class of Stock [Line Items]
Quarterly dividend on all classes of common stock (in dollars per share)		$ 0.80	$ 0.80	$ 0.70	$ 0.70	$ 0.70	$ 0.70
Capital required for capital adequacy		$ 667,700,000		$ 618,800,000				$ 667,700,000
Capital		915,600,000		815,400,000				915,600,000
Excess capital		$ 247,900,000		$ 196,600,000				$ 247,900,000
Series E Preferred Stock
Class of Stock [Line Items]
Number of shares issued (in shares)	3,200
Preferred stock, dividend rate (as a percent)	5.75%
Preferred stock, par value (in dollars per share)	$ 25.00	$ 25		$ 25				$ 25
Payments of stock issuance costs	$ 2,500,000
Class C non-voting common stock
Class of Stock [Line Items]
Stock authorized for repurchase									$ 10,000,000.0	$ 25,000,000.0
Shares repurchased (in shares)			4					673
Shares repurchased			$ 200,000					$ 19,800,000

XML

Fair Value Disclosures - Fair Value Measurements, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Assets:
Financial derivatives	$ 15,088	$ 7,834
Liabilities:
Financial derivatives	200,750	105,087
Debt Securities
Assets:
Available-for-sale, at fair value	3,467,378	2,959,843
Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387
Fair Value, Measurements, Recurring
Assets:
Trading	7,786	8,913
Financial derivatives	16,588	10,519
Total Assets at fair value	11,390,139	10,122,300
Liabilities:
Financial derivatives	47,543	27,042
Total Liabilities at fair value	47,543	27,042
Fair Value, Measurements, Recurring | USDA Securities:
Assets:
Trading	7,786	8,913
Fair Value, Measurements, Recurring | Debt Securities
Assets:
Available-for-sale, at fair value	3,467,378	2,959,843
Fair Value, Measurements, Recurring | Level 1
Assets:
Trading	0	0
Financial derivatives	0	0
Total Assets at fair value	1,326,589	1,296,923
Liabilities:
Financial derivatives	9	51
Total Liabilities at fair value	9	51
Fair Value, Measurements, Recurring | Level 1 | USDA Securities:
Assets:
Trading	0	0
Fair Value, Measurements, Recurring | Level 1 | Debt Securities
Assets:
Available-for-sale, at fair value	1,326,589	1,296,923
Fair Value, Measurements, Recurring | Level 2
Assets:
Trading	0	0
Financial derivatives	16,588	10,519
Total Assets at fair value	2,139,094	1,654,527
Liabilities:
Financial derivatives	47,534	26,991
Total Liabilities at fair value	47,534	26,991
Fair Value, Measurements, Recurring | Level 2 | USDA Securities:
Assets:
Trading	0	0
Fair Value, Measurements, Recurring | Level 2 | Debt Securities
Assets:
Available-for-sale, at fair value	2,122,506	1,644,008
Fair Value, Measurements, Recurring | Level 3
Assets:
Trading	7,786	8,913
Financial derivatives	0	0
Total Assets at fair value	7,924,456	7,170,850
Liabilities:
Financial derivatives	0	0
Total Liabilities at fair value	0	0
Fair Value, Measurements, Recurring | Level 3 | USDA Securities:
Assets:
Trading	7,786	8,913
Fair Value, Measurements, Recurring | Level 3 | Debt Securities
Assets:
Available-for-sale, at fair value	18,283	18,912
Institutional Credit | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
Institutional Credit | Fair Value, Measurements, Recurring | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
Institutional Credit | Fair Value, Measurements, Recurring | Level 1 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	0	0
Institutional Credit | Fair Value, Measurements, Recurring | Level 2 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	0	0
Institutional Credit | Fair Value, Measurements, Recurring | Level 3 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
USDA Guarantees | Fair Value, Measurements, Recurring | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
USDA Guarantees | Fair Value, Measurements, Recurring | Level 1 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	0	0
USDA Guarantees | Fair Value, Measurements, Recurring | Level 2 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	0	0
USDA Guarantees | Fair Value, Measurements, Recurring | Level 3 | Farmer Mac Guaranteed Securities
Assets:
Available-for-sale, at fair value	7,898,387	7,143,025
Floating Interest Rate | Floating rate auction-rate certificates backed by Government guaranteed student loans
Assets:
Available-for-sale, at fair value	18,283	18,912
Floating Interest Rate | Floating rate asset-backed securities
Assets:
Available-for-sale, at fair value	9,807	11,085
Floating Interest Rate | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	2,112,377	1,632,583
Floating Interest Rate | Fair Value, Measurements, Recurring | Floating rate auction-rate certificates backed by Government guaranteed student loans
Assets:
Available-for-sale, at fair value	18,283	18,912
Floating Interest Rate | Fair Value, Measurements, Recurring | Floating rate asset-backed securities
Assets:
Available-for-sale, at fair value	9,807	11,085
Floating Interest Rate | Fair Value, Measurements, Recurring | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	2,112,377	1,632,583
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 1 | Floating rate auction-rate certificates backed by Government guaranteed student loans
Assets:
Available-for-sale, at fair value	0	0
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 1 | Floating rate asset-backed securities
Assets:
Available-for-sale, at fair value	0	0
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 1 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	0	0
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 2 | Floating rate auction-rate certificates backed by Government guaranteed student loans
Assets:
Available-for-sale, at fair value	0	0
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 2 | Floating rate asset-backed securities
Assets:
Available-for-sale, at fair value	9,807	11,085
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 2 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	2,112,377	1,632,583
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 3 | Floating rate auction-rate certificates backed by Government guaranteed student loans
Assets:
Available-for-sale, at fair value	18,283	18,912
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 3 | Floating rate asset-backed securities
Assets:
Available-for-sale, at fair value	0	0
Floating Interest Rate | Fair Value, Measurements, Recurring | Level 3 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	0	0
Fixed Interest Rate | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	322	340
Fixed Interest Rate | Fixed rate U.S. Treasuries
Assets:
Available-for-sale, at fair value	1,326,589	1,296,923
Fixed Interest Rate | Fair Value, Measurements, Recurring | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	322	340
Fixed Interest Rate | Fair Value, Measurements, Recurring | Fixed rate U.S. Treasuries
Assets:
Available-for-sale, at fair value	1,326,589	1,296,923
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 1 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	0	0
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 1 | Fixed rate U.S. Treasuries
Assets:
Available-for-sale, at fair value	1,326,589	1,296,923
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 2 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	322	340
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 2 | Fixed rate U.S. Treasuries
Assets:
Available-for-sale, at fair value	0	0
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 3 | Government/GSE Guaranteed Mortgage Backed Securities
Assets:
Available-for-sale, at fair value	0	0
Fixed Interest Rate | Fair Value, Measurements, Recurring | Level 3 | Fixed rate U.S. Treasuries
Assets:
Available-for-sale, at fair value	$ 0	$ 0

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Fair Value Disclosures - Narrative (Details) - Level 3	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Percent of level three fair value assets and liabilities	33.00%	33.00%
Financial instruments level three percent	69.00%	71.00%

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Fair Value Disclosures - Unobservable Input Reconciliation (Details) - Level 3 - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 7,612,315	$ 6,470,023	$ 7,170,850	$ 6,003,211
Purchases	351,896	643,183	835,476	1,438,443
Sales	0	(29,419)	0	(48,347)
Settlements	(85,863)	(98,926)	(313,729)	(471,215)
Allowance for losses	(84)		(272)
Realized and unrealized gains/(losses) included in Income	9,030	114,699	299,515	174,095
Unrealized gains/(losses) included in Other Comprehensive Income	37,162	(35,483)	(67,384)	(32,110)
Ending Balance	7,924,456	7,064,077	7,924,456	7,064,077
Available-for-Sale Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	16,721	18,912	18,912	18,715
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Allowance for losses	(15)		(38)
Realized and unrealized gains/(losses) included in Income	0	0	0	0
Unrealized gains/(losses) included in Other Comprehensive Income	1,577	296	(591)	493
Ending Balance	18,283	19,208	18,283	19,208
Available-for-Sale Securities | Farmer Mac Guaranteed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	7,587,186	6,441,624	7,143,025	5,974,497
Purchases	351,896	613,764	835,476	1,390,096
Sales	0	0	0	0
Settlements	(85,261)	(98,579)	(312,516)	(470,312)
Allowance for losses	(69)		(234)
Realized and unrealized gains/(losses) included in Income	9,050	114,638	299,429	173,990
Unrealized gains/(losses) included in Other Comprehensive Income	35,585	(35,779)	(66,793)	(32,603)
Ending Balance	7,898,387	7,035,668	7,898,387	7,035,668
USDA Securities:
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance			8,913
Ending Balance	7,786		7,786
Institutional Credit | Available-for-Sale Securities | Farmer Mac Guaranteed Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	7,587,186	6,441,624	7,143,025	5,974,497
Purchases	351,896	613,764	835,476	1,390,096
Sales	0	0	0	0
Settlements	(85,261)	(98,579)	(312,516)	(470,312)
Allowance for losses	(69)		(234)
Realized and unrealized gains/(losses) included in Income	9,050	114,638	299,429	173,990
Unrealized gains/(losses) included in Other Comprehensive Income	35,585	(35,779)	(66,793)	(32,603)
Ending Balance	7,898,387	7,035,668	7,898,387	7,035,668
USDA Guarantees | Available-for-Sale Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance		0		0
Purchases		29,419		48,347
Sales		(29,419)		(48,347)
Settlements		0		0
Realized and unrealized gains/(losses) included in Income		0		0
Unrealized gains/(losses) included in Other Comprehensive Income		0		0
Ending Balance		0		0
USDA Guarantees | Trading
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	8,408	9,487	8,913	9,999
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	(602)	(347)	(1,213)	(903)
Allowance for losses	0		0
Realized and unrealized gains/(losses) included in Income	(20)	61	86	105
Unrealized gains/(losses) included in Other Comprehensive Income	0	0	0	0
Ending Balance	7,786	9,201	7,786	9,201
USDA Guarantees | USDA Securities:
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	8,408	9,487	8,913	9,999
Purchases	0	29,419	0	48,347
Sales	0	(29,419)	0	(48,347)
Settlements	(602)	(347)	(1,213)	(903)
Allowance for losses
Realized and unrealized gains/(losses) included in Income	(20)	61	86	105
Unrealized gains/(losses) included in Other Comprehensive Income	0	0	0	0
Ending Balance	7,786	9,201	7,786	9,201
Floating Interest Rate | Available-for-Sale Securities | Floating rate auction-rate certificates backed by Government guaranteed student loans
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	16,721	18,912	18,912	18,715
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Allowance for losses	(15)		(38)
Realized and unrealized gains/(losses) included in Income	0	0	0	0
Unrealized gains/(losses) included in Other Comprehensive Income	1,577	296	(591)	493
Ending Balance	$ 18,283	$ 19,208	$ 18,283	$ 19,208

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Fair Value Disclosures - Quantitative Information (Details) - Fair Value, Measurements, Recurring - Level 3 $ in Thousands	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 7,924,456	$ 7,612,315	$ 7,170,850	$ 7,064,077	$ 6,470,023	$ 6,003,211
Floating rate auction-rate certificates backed by Government guaranteed student loans | Floating Interest Rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	18,283		18,912
USDA Securities:
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	7,786		8,913
Institutional Credit | Farmer Mac Guaranteed Securities
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	7,898,387		7,143,025
USDA Guarantees | USDA Securities:
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Fair Value	$ 7,786	$ 8,408	$ 8,913	$ 9,201	$ 9,487	$ 9,999
Measurement Input, Range of Broker Quotes | Minimum | Floating rate auction-rate certificates backed by Government guaranteed student loans | Valuation, Market Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.930		0.960
Measurement Input, Range of Broker Quotes | Maximum | Floating rate auction-rate certificates backed by Government guaranteed student loans | Valuation, Market Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.930		0.960
Measurement Input, Range of Broker Quotes | Weighted Average | Floating rate auction-rate certificates backed by Government guaranteed student loans | Valuation, Market Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.930		0.960
Measurement Input, Discount Rate | Minimum | Institutional Credit | Farmer Mac Guaranteed Securities | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.009		0.023
Measurement Input, Discount Rate | Minimum | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.015		0.023
Measurement Input, Discount Rate | Maximum | Institutional Credit | Farmer Mac Guaranteed Securities | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.040		0.055
Measurement Input, Discount Rate | Maximum | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.022		0.026
Measurement Input, Discount Rate | Weighted Average | Institutional Credit | Farmer Mac Guaranteed Securities | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Investment securities, measurement input	0.012		0.026
Measurement Input, Discount Rate | Weighted Average | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.016		0.021
Measurement Input, Constant Prepayment Rate | Minimum | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.14		0.10
Measurement Input, Constant Prepayment Rate | Maximum | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.23		0.21
Measurement Input, Constant Prepayment Rate | Weighted Average | USDA Guarantees | USDA Securities: | Valuation, Cost Approach
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
USDA securities, measurement input	0.22		0.19

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Fair Value Disclosures - Summary of Carrying Value and Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Financial derivatives	$ 15,088	$ 7,834
Guarantee and commitment fees receivable	36,612	38,442
Financial derivatives	200,750	105,087
Guarantee and commitment obligation	35,162	36,700
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	827,600	604,381
Loans	8,214,871	7,317,091
Financial derivatives	16,588	10,519
Guarantee and commitment fees receivable	32,254	36,732
Notes payable	21,736,245	19,234,079
Debt securities of consolidated trusts held by third parties	1,499,947	1,663,177
Financial derivatives	47,543	27,042
Guarantee and commitment obligation	30,804	34,990
Fair Value | Debt Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	3,513,060	3,005,828
Fair Value | Farmer Mac Guaranteed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	9,070,424	8,606,451
Fair Value | USDA Securities:
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	2,432,674	2,294,671
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	827,600	604,381
Loans	7,891,148	6,981,440
Financial derivatives	16,588	10,519
Guarantee and commitment fees receivable	36,612	38,442
Notes payable	21,421,550	19,098,648
Debt securities of consolidated trusts held by third parties	1,476,964	1,616,504
Financial derivatives	47,543	27,042
Guarantee and commitment obligation	35,162	36,700
Carrying Amount | Debt Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	3,512,410	3,004,875
Carrying Amount | Farmer Mac Guaranteed Securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	9,039,105	8,590,476
Carrying Amount | USDA Securities:
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	$ 2,347,709	$ 2,241,073

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Business Segment Reporting - Core Earnings - Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	$ 48,348	$ 43,054	$ 89,660	$ 83,653
Less: reconciling adjustments	0	0	0	0
Net effective spread	0	0	0	0
Guarantee and commitment fees	3,140	3,403	6,336	6,916
Other income/(expense)	7,731	9,329	(160)	9,506
Non-interest income/(loss)	10,871	12,732	6,176	16,422
Provision for losses	(451)	(578)	(3,889)	(314)
Provision for reserve for losses	400	158	7	287
Other non-interest expense	(14,107)	(12,210)	(30,322)	(25,100)
Non-interest expense	(13,707)	(12,052)	(30,315)	(24,813)
Core earnings before income taxes	45,061	43,156	61,632	74,948
Income tax (expense)/benefit	(9,435)	(9,111)	(13,176)	(15,733)
Core earnings before preferred stock dividends	35,626	34,045	48,456	59,215
Preferred stock dividends	(3,939)	(3,785)	(7,370)	(7,081)
Loss on retirement of preferred stock	0	(1,956)	0	(1,956)
Segment core earnings/(losses)	31,687	28,304	41,086	50,178
Total assets at carrying value	23,932,656	20,738,160	23,932,656	20,738,160	$ 21,709,374
Total on- and off-balance sheet program assets at principal balance	22,042,108	20,746,735	22,042,108	20,746,735
Corporate
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	1,229	2,824	3,084	5,786
Less: reconciling adjustments	(480)	(268)	(357)	(736)
Net effective spread	749	2,556	2,727	5,050
Guarantee and commitment fees	0	0	0	0
Other income/(expense)	(159)	582	(288)	604
Non-interest income/(loss)	(159)	582	(288)	604
Provision for losses	(15)	0	(29)	0
Provision for reserve for losses	0	0	0	0
Other non-interest expense	(3,800)	(3,428)	(8,233)	(7,066)
Non-interest expense	(3,800)	(3,428)	(8,233)	(7,066)
Core earnings before income taxes	(3,225)	(290)	(5,823)	(1,412)
Income tax (expense)/benefit	705	13	988	303
Core earnings before preferred stock dividends	(2,520)	(277)	(4,835)	(1,109)
Preferred stock dividends	(3,939)	(3,785)	(7,370)	(7,081)
Loss on retirement of preferred stock		0		0
Segment core earnings/(losses)	(6,459)	(4,062)	(12,205)	(8,190)
Total assets at carrying value	4,446,504	3,452,842	4,446,504	3,452,842
Total on- and off-balance sheet program assets at principal balance	0	0	0	0
Reconciling Adjustments
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	0	0	0	0
Less: reconciling adjustments	1,879	1,699	(972)	3,497
Net effective spread	1,879	1,699	(972)	3,497
Guarantee and commitment fees	(1,803)	(1,873)	(3,503)	(3,779)
Other income/(expense)	6,683	8,552	(2,367)	8,220
Non-interest income/(loss)	4,880	6,679	(5,870)	4,441
Provision for losses	0	0	0	0
Provision for reserve for losses	0	0	0	0
Other non-interest expense	0	0	0	0
Non-interest expense	0	0	0	0
Core earnings before income taxes	6,759	8,378	(6,842)	7,938
Income tax (expense)/benefit	(1,419)	(1,760)	1,438	(1,667)
Core earnings before preferred stock dividends	5,340	6,618	(5,404)	6,271
Preferred stock dividends	0	0	0	0
Loss on retirement of preferred stock		(1,956)		(1,956)
Segment core earnings/(losses)	5,340	4,662	(5,404)	4,315
Total assets at carrying value	0	0	0	0
Total on- and off-balance sheet program assets at principal balance	0	0	0	0
Farm & Ranch
Segment Reporting Information, Profit (Loss) [Abstract]
Provision for losses	920		112
Provision for reserve for losses	370	158	366	287
Farm & Ranch | Operating Segments
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	19,310	15,797	35,675	31,079
Less: reconciling adjustments	(2,577)	(2,462)	(4,004)	(5,007)
Net effective spread	16,733	13,335	31,671	26,072
Guarantee and commitment fees	4,394	4,594	8,711	9,338
Other income/(expense)	585	188	1,754	668
Non-interest income/(loss)	4,979	4,782	10,465	10,006
Provision for losses	920	(578)	112	(314)
Provision for reserve for losses	370	158	366	287
Other non-interest expense	(5,254)	(4,587)	(11,251)	(9,386)
Non-interest expense	(4,884)	(4,429)	(10,885)	(9,099)
Core earnings before income taxes	17,748	13,110	31,363	26,665
Income tax (expense)/benefit	(3,727)	(2,753)	(6,586)	(5,600)
Core earnings before preferred stock dividends	14,021	10,357	24,777	21,065
Preferred stock dividends	0	0	0	0
Loss on retirement of preferred stock		0		0
Segment core earnings/(losses)	14,021	10,357	24,777	21,065
Total assets at carrying value	5,746,556	4,872,766	5,746,556	4,872,766
Total on- and off-balance sheet program assets at principal balance	8,017,850	7,291,352	8,017,850	7,291,352
USDA Guarantees | Operating Segments
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	5,403	4,112	9,944	8,554
Less: reconciling adjustments	(714)	(15)	(630)	(493)
Net effective spread	4,689	4,097	9,314	8,061
Guarantee and commitment fees	210	238	445	462
Other income/(expense)	617	0	729	0
Non-interest income/(loss)	827	238	1,174	462
Provision for losses	0	0	0	0
Provision for reserve for losses	0	0	0	0
Other non-interest expense	(1,584)	(1,345)	(3,402)	(2,773)
Non-interest expense	(1,584)	(1,345)	(3,402)	(2,773)
Core earnings before income taxes	3,932	2,990	7,086	5,750
Income tax (expense)/benefit	(826)	(628)	(1,488)	(1,208)
Core earnings before preferred stock dividends	3,106	2,362	5,598	4,542
Preferred stock dividends	0	0	0	0
Loss on retirement of preferred stock		0		0
Segment core earnings/(losses)	3,106	2,362	5,598	4,542
Total assets at carrying value	2,408,713	2,198,514	2,408,713	2,198,514
Total on- and off-balance sheet program assets at principal balance	2,677,807	2,521,394	2,677,807	2,521,394
Rural  Utilities
Segment Reporting Information, Profit (Loss) [Abstract]
Provision for losses	(1,397)		(3,522)
Provision for reserve for losses	30	0	(359)	0
Rural  Utilities | Operating Segments
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	2,322	3,936	7,069	3,662
Less: reconciling adjustments	3,194	60	3,367	3,567
Net effective spread	5,516	3,996	10,436	7,229
Guarantee and commitment fees	332	358	667	721
Other income/(expense)	5	7	12	14
Non-interest income/(loss)	337	365	679	735
Provision for losses	(1,397)	0	(3,522)	0
Provision for reserve for losses	30	0	(359)	0
Other non-interest expense	(1,386)	(816)	(2,990)	(1,682)
Non-interest expense	(1,356)	(816)	(3,349)	(1,682)
Core earnings before income taxes	3,100	3,545	4,244	6,282
Income tax (expense)/benefit	(651)	(744)	(891)	(1,319)
Core earnings before preferred stock dividends	2,449	2,801	3,353	4,963
Preferred stock dividends	0	0	0	0
Loss on retirement of preferred stock		0		0
Segment core earnings/(losses)	2,449	2,801	3,353	4,963
Total assets at carrying value	2,281,490	1,580,979	2,281,490	1,580,979
Total on- and off-balance sheet program assets at principal balance	2,691,621	2,155,671	2,691,621	2,155,671
Institutional Credit | Operating Segments
Segment Reporting Information, Profit (Loss) [Abstract]
Net interest income	20,084	16,385	33,888	34,572
Less: reconciling adjustments	(1,302)	986	2,596	(828)
Net effective spread	18,782	17,371	36,484	33,744
Guarantee and commitment fees	7	86	16	174
Other income/(expense)	0	0	0	0
Non-interest income/(loss)	7	86	16	174
Provision for losses	41	0	(450)	0
Provision for reserve for losses	0	0	0	0
Other non-interest expense	(2,083)	(2,034)	(4,446)	(4,193)
Non-interest expense	(2,083)	(2,034)	(4,446)	(4,193)
Core earnings before income taxes	16,747	15,423	31,604	29,725
Income tax (expense)/benefit	(3,517)	(3,239)	(6,637)	(6,242)
Core earnings before preferred stock dividends	13,230	12,184	24,967	23,483
Preferred stock dividends	0	0	0	0
Loss on retirement of preferred stock		0		0
Segment core earnings/(losses)	13,230	12,184	24,967	23,483
Total assets at carrying value	9,049,393	8,633,059	9,049,393	8,633,059
Total on- and off-balance sheet program assets at principal balance	$ 8,654,830	$ 8,778,318	$ 8,654,830	$ 8,778,318