Revision of Prior Period Financial Statements

9 Months Ended

Sep. 30, 2022

Accounting Changes and Error Corrections [Abstract]

Revision of Prior Period Financial Statements

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

Farmer Mac revised certain prior period financial statements to correct an error related to the recognition of accrual of interest for derivative contracts cleared through the swap clearinghouse, the CME. Farmer Mac determined that the error was immaterial to these previous consolidated financial statements, taken as a whole. Although Farmer Mac has concluded these errors are immaterial to the previously issued consolidated financial statements, Farmer Mac has corrected this error by revising the accompanying consolidated financial statements. Farmer Mac will also correct previously reported financial information for such immaterial errors in future filings, as applicable. The following tables summarize the effect of the revision on each financial statement line item:

Revised Consolidated Balance Sheet

	As of December 31, 2021
	As previously Reported		Adjustments		As Revised
	(in thousands)
Assets
Financial Derivatives, at fair value	$	19,139	$	(13,058)	$	6,081
Interest Receivable	177,355		(11,751)		165,604
Deferred Tax Asset, net	15,558		311		15,869
Prepaid Expenses and Other Assets	45,318		16		45,334
Total Assets	$	25,145,491	$	(24,482)	$	25,121,009
Liabilities
Notes Payable	$	22,716,156	$	(2,385)	$	22,713,771
Financial Derivatives, at fair value	34,248		1,306		35,554
Accrued Interest Payable	83,992		(24,989)		59,003
Accounts Payable and Accrued Expenses	79,427		(7,701)		71,726
Total Liabilities	$	23,941,078	$	(33,769)	$	23,907,309
Equity
Retained Earnings	$	579,270	$	9,287	$	588,557
Total Equity	1,204,413		9,287		1,213,700
Total Liabilities and Equity	$	25,145,491	$	(24,482)	$	25,121,009

Revised Consolidated Statements of Operations

	Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021
	As previously Reported		Adjustments		As Revised		As previously Reported		Adjustments		As Revised
	(in thousands)
Interest Income:
Farmer Mac Guaranteed Securities and USDA Securities	$	38,428	$	3,911	$	42,339	$	123,246	$	4,730	$	127,976
Total interest income	104,472		3,911		108,383		318,984		4,730		323,714
Net interest income	55,005		3,911		58,916		163,385		4,730		168,115
Non-interest income/(expense):
(Losses)/gains on financial derivatives	(2,347)		1,459		(888)		(1,120)		3,701		2,581
Non-Interest Income	1,791		1,459		3,250		11,154		3,701		14,855
Income before income taxes	39,323		5,370		44,693		121,155		8,431		129,586
Income tax expense	8,260		1,128		9,388		25,579		1,771		27,350
Net Income	31,063		4,242		35,305		95,576		6,660		102,236
Net Income attributable to common stockholders	24,289		4,242		28,531		77,691		6,660		84,351

Revised Consolidated Statements of Comprehensive Income

	Three Months Ended September 30, 2021							Nine Months Ended September 30, 2021
	As previously Reported			Adjustments		As Revised		As previously Reported		Adjustments		As Revised
	(in thousands)
Net Income	$	31,063		$	4,242	$	35,305	$	95,576	$	6,660	$	102,236
Comprehensive Income	32,536		—	4,242		36,778		127,705		6,660		134,365

Revised Consolidated Statements of Equity

	Retained Earnings						Total Equity
	As previously Reported		Adjustments		As Revised		As previously Reported		Adjustments		As Revised
	(in thousands)
Balance as of December 31, 2021	$	579,270	$	9,287	$	588,557	$	1,204,413	$	9,287	$	1,213,700
Net Income	47,837		3,616		51,453		47,837		3,616		51,453
Balance as of March 31, 2022	$	610,087	$	12,903	$	622,990	$	1,192,844	$	12,903	$	1,205,747
Net Income	45,896		(4,041)		41,855		45,896		(4,041)		41,855
Balance as of June 30, 2022	$	638,935	$	8,862	$	647,797	$	1,212,348	$	8,862	$	1,221,210

	Retained Earnings						Total Equity
	As previously Reported		Adjustments		As Revised		As previously Reported		Adjustments		As Revised
	(in thousands)
Balance as of December 31, 2020	$	509,560	$	5,457	$	515,017	$	992,477	$	5,457	$	997,934
Net Income	33,227		4,842		38,069		33,227		4,842		38,069
Balance as of March 31, 2021	$	528,068	$	10,299	$	538,367	$	1,077,492	$	10,299	$	1,087,791
Net Income	31,286		(2,423)		28,863		31,286		(2,423)		28,863
Balance as of June 30, 2021	$	544,038	$	7,876	$	551,914	$	1,180,215	$	7,876	$	1,188,091
Net Income	31,063		4,242		35,305		31,063		4,242		35,305
Balance as of September 30, 2021	$	558,853	$	12,118	$	570,971	$	1,197,298	$	12,118	$	1,209,416

Revised Consolidated Statements of Cash Flows

	For the Nine Months Ended September 30, 2021
	As previously Reported		Adjustments		As Revised
	(in thousands)
Cash flows from operating activities:
Net income/(loss)	$	95,576	$	6,660	$	102,236
Adjustments to reconcile net income to net cash provided by operating activities:
Net change in fair value of trading securities, hedged assets, and financial derivatives	226,895		(11,126)		215,769
Deferred income taxes	(1,302)		844		(458)
Net change in:
Interest receivable	40,509		(1,479)		39,030
Other assets	2,431		3,163		5,594
Accrued interest payable	(9,475)		(2,939)		(12,414)
Other liabilities	(8,346)		4,877		(3,469)
Net cash provided by operating activities	433,219		—		433,219