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Loans (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Composition of Loan Balances

The following table includes loans held for investment and loans held for sale and displays the composition of the loan balances as of September 30, 2021 and December 31, 2020:Table 5.1


	As of September 30, 2021						As of December 31, 2020
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Farm & Ranch	$	5,800,376	$	977,373	$	6,777,749	$	4,889,393	$	1,287,045	$	6,176,438
Rural Utilities	2,243,172		—		2,243,172		2,260,412		—		2,260,412
Total unpaid principal balance(1)	8,043,548		977,373		9,020,921		7,149,805		1,287,045		8,436,850
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	16,288		—		16,288		112,128		—		112,128
Total loans	8,059,836		977,373		9,037,209		7,261,933		1,287,045		8,548,978
Allowance for losses	(13,621)		(673)		(14,294)		(12,943)		(889)		(13,832)
Total loans, net of allowance	$	8,046,215	$	976,700	$	9,022,915	$	7,248,990	$	1,286,156	$	8,535,146

(1)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 September 30, 2021 and December 31, 2020:

Table 5.2


	September 30, 2021		December 31, 2020
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Farm & Ranch	$	3,506	$	3,745
Rural Utilities	10,788		10,087
Total	$	14,294	$	13,832

The following is a summary of the changes in the allowance for losses for the three and nine month period ended September 30, 2021 and 2020:

Table 5.3


	For the Three Months Ended				For the Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
	Allowance for Losses		Allowance for Losses		Allowance for Losses		Allowance for Losses
	(in thousands)
Farm & Ranch:
Beginning Balance	$	3,092	$	6,039	$	3,745	$	10,454
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		—		(3,909)
Adjusted Beginning Balance	3,092		6,039		3,745		6,545
Provision for/(release of) losses	414		(300)		(239)		(412)
Charge-offs	—		—		—		(394)
Ending Balance(1)	$	3,506	$	5,739	$	3,506	$	5,739

Rural Utilities:
Beginning Balance	$	10,908	$	8,900	$	10,087	$	—
Cumulative effect adjustment from adoption of current expected credit loss standard	—		—		—		5,378
Adjusted Beginning Balance	10,908		8,900		10,087		5,378
(Release of)/provision for losses	(120)		1,182		701		4,704

Charge-offs	—		—		—		—
Ending Balance(2)	$	10,788	$	10,082	$	10,788	$	10,082

(1)As of September 30, 2021 and 2020, allowance for losses for Farm & Ranch includes no allowance and $1.8 million, respectively, for collateral dependent assets secured by agricultural real estate.

(2)As of both September 30, 2021 and 2020, allowance for losses for Rural Utilities 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 September 30, 2021 and December 31, 2020:

Table 5.4


	As of September 30, 2021
	Accruing
	Current		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	$	6,633,343	$	2,345	$	482	$	3,655	$	6,482	$	137,924	$	6,777,749
Rural Utilities	2,243,172		—		—		—		—		—		2,243,172
Total	$	8,876,515	$	2,345	$	482	$	3,655	$	6,482	$	137,924	$	9,020,921

(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 $44.8 million of nonaccrual loans for which there was no associated allowance. During the three and nine months ended September 30, 2021, Farmer Mac received $1.4 million and $4.4 million, respectively, in interest on nonaccrual loans.


	As of December 31, 2020
	Accruing
	Current		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	$	6,055,154	$	4,582	$	632	$	1,072	$	6,286	$	114,998	$	6,176,438
Rural Utilities	2,260,412		—		—		—		—		—		2,260,412
Total	$	8,315,566	$	4,582	$	632	$	1,072	$	6,286	$	114,998	$	8,436,850

(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.

(4)Includes $44.2 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2020, Farmer Mac received $4.4 million in interest on nonaccrual loans.

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 September 30, 2021 and December 31, 2020:

Table 6.7


	As of September 30, 2021
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Farm and Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	2,659,372	$	6,026	$	45	$	2,167	$	8,238	$	2,667,610
Rural Utilities:
LTSPCs	$	574,255	$	—	$	—	$	—	$	—	$	574,255

(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.


	As of December 31, 2020
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Farm and Ranch:
LTSPCs and Farmer Mac Guaranteed Securities	$	2,389,777	$	2,189	$	1,344	$	11,433	$	14,966	$	2,404,743
Rural Utilities:
LTSPCs	$	556,425	$	—	$	—	$	—	$	—	$	556,425

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 September 30, 2021 and December 31, 2020, by year of origination:

Table 5.5


	As of September 30, 2021
	Year of Origination:
	2021		2020		2019		2018		2017		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch(1):
Internally Assigned Risk Rating:
Acceptable	$	1,570,766	$	1,798,703	$	660,485	$	382,027	$	318,043	$	1,054,024	$	531,063	$	6,315,111
Special mention(2)	83,224		88,848		36,050		13,828		6,962		18,998		10,531		258,441
Substandard(3)	607		5,305		26,892		27,730		50,478		81,240		11,945		204,197
Total	$	1,654,597	$	1,892,856	$	723,427	$	423,585	$	375,483	$	1,154,262	$	553,539	$	6,777,749

For the Three Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch 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.


	As of September 30, 2021
	Year of Origination:
	2021		2020		2019		2018		2017		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities(1):
Internally Assigned Risk Rating:
Acceptable	$	60,793	$	619,772	$	784,153	$	8,100	$	89,263	$	628,903	$	28,988	$	2,219,972
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		23,200		—		—		—		—		—		23,200
Total	$	60,793	$	642,972	$	784,153	$	8,100	$	89,263	$	628,903	$	28,988	$	2,243,172

For the Three Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch 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.


	As of December 31, 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	$	1,947,618	$	774,315	$	484,345	$	500,768	$	465,277	$	1,068,693	$	535,742	$	5,776,758
Special mention(2)	70,171		79,744		18,317		8,530		13,111		21,328		7,656		218,857
Substandard(3)	3,400		5,821		21,879		52,709		37,173		50,582		9,259		180,823
Total	$	2,021,189	$	859,880	$	524,541	$	562,007	$	515,561	$	1,140,603	$	552,657	$	6,176,438

For the Three Months Ended September 30, 2020:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2020:
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 December 31, 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	$	667,489	$	809,921	$	8,260	$	89,842	$	31,275	$	641,145	$	12,480	$	2,260,412
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	667,489	$	809,921	$	8,260	$	89,842	$	31,275	$	641,145	$	12,480	$	2,260,412

For the Three Months Ended September 30, 2020:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2020:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch 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 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 September 30, 2021 and December 31, 2020, by year of origination:

Table 6.8


	As of September 30, 2021
	Year of Origination:
	2021		2020		2019		2018		2017		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch LTSPCs and Farmer Mac Guaranteed Securities:
Internally Assigned Risk Rating:
Acceptable	$	306,664	$	309,938	$	206,652	$	189,643	$	225,421	$	1,054,049	$	228,509	$	2,520,876
Special mention(1)	—		3,915		—		1,382		3,190		58,112		6,058		72,657
Substandard(2)	—		220		730		10,496		12,942		45,900		3,789		74,077
Total	$	306,664	$	314,073	$	207,382	$	201,521	$	241,553	$	1,158,061	$	238,356	$	2,667,610

For the Three Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2021:
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 September 30, 2021
	Year of Origination:
	2021		2020		20	2019		2018		2017		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities LTSPCs:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—		$	—	$	—	$	—	$	511,743	$	62,512	$	574,255
Special mention(1)	—		—			—		—		—		—		—		—
Substandard(2)	—		—			—		—		—		—		—		—
Total	$	—	$	—		$	—	$	—	$	—	$	511,743	$	62,512	$	574,255

For the Three Months Ended September 30, 2021:
Current period charge-offs	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—			—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2021:
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 December 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Farm & Ranch LTSPCs and Farmer Mac Guaranteed Securities:
Internally Assigned Risk Rating:
Acceptable	$	178,213	$	213,620	$	183,948	$	237,042	$	207,296	$	969,860	$	211,620	$	2,201,599
Special mention(1)	3,920		1,742		1,502		5,603		19,644		50,004		10,058		92,473
Substandard(2)	264		10,250		12,611		14,578		7,841		60,602		4,525		110,671
Total	$	182,397	$	225,612	$	198,061	$	257,223	$	234,781	$	1,080,466	$	226,203	$	2,404,743

For the Three Months Ended September 30, 2020:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Farm & Ranch net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2020:
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 December 31, 2020
	Year of Origination:
	2020		2019		2018		2017		2016		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Utilities LTSPCs:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	549,405	$	7,020	$	556,425
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	549,405	$	7,020	$	556,425

For the Three Months Ended September 30, 2020:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Current period recoveries	—		—		—		—		—		—		—		—
Current period Rural Utilities net charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2020:
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.