Business Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the three and nine months ended September 30, 2022 and 2021. The amounts for the three and nine months ended September 30, 2021 have been revised to conform to the current year's segment alignment.

Table 10.1

Core Earnings by Business Segment
For the Three Months Ended September 30, 2022
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural  Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	34,173	$	7,600	$	4,253	$	705	$	23,913	$	(2,791)	$	—	$	—		$	67,853
Less: reconciling adjustments(1)(2)(3)	(830)		—		(33)		—		(1,349)		—		—		2,212			—
Net effective spread	33,343		7,600		4,220		705		22,564		(2,791)		—		2,212			—
Guarantee and commitment fees	3,833		46		309		13		—		—		—		(1,558)			2,643
Other income/(expense)(3)	469		4		—		—		—		—		—		909			1,382
Total revenues	37,645		7,650		4,529		718		22,564		(2,791)		—		1,563			71,878
Release of/(provision for) losses	93		(333)		(414)		26		—		11		—		—			(617)
Release of reserve for losses	139		—		28		—		—		—		—		—			167
Operating expenses	—		—		—		—		—		—		(19,379)		—			(19,379)
Total non-interest expense	139		—		28		—		—		—		(19,379)		—			(19,212)
Core earnings before income taxes	37,877		7,317		4,143		744		22,564		(2,780)		(19,379)		1,563		(4)	52,049
Income tax (expense)/benefit	(7,953)		(1,536)		(869)		(156)		(4,739)		584		4,366		(328)			(10,631)
Core earnings before preferred stock dividends	29,924		5,781		3,274		588		17,825		(2,196)		(15,013)		1,235		(4)	41,418
Preferred stock dividends	—		—		—		—		—		—		(6,791)		—			(6,791)
Segment core earnings/(losses)	$	29,924	$	5,781	$	3,274	$	588	$	17,825	$	(2,196)	$	(21,804)	$	1,235	(4)	$	34,627
Total Assets	$	14,113,686	$	1,558,139	$	5,779,300	$	186,832	$	—	$	4,608,868	$	194,763	$	—		26,441,588
Total on- and off-balance sheet program assets at principal balance	$	17,199,347	$	1,634,786	$	6,296,263	$	196,242	$	—	$	—	$	—	$	—		25,326,638

(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)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 September 30, 2021
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural  Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	30,063	$	7,162	$	2,101	$	237	$	19,195	$	158	$	—	$	—		$	58,916
Less: reconciling adjustments(1)(2)(3)	(1,148)		—		(34)		—		(1,809)		—		—		2,991			—
Net effective spread	28,915		7,162		2,067		237		17,386		158		—		2,991			—
Guarantee and commitment fees	3,988		9		325		—		—		—		—		(1,167)			3,155
Other income/(expense)(3)	557		—		2		—		—		—		128		(703)			(16)
Total revenues	33,460		7,171		2,394		237		17,386		158		128		1,121			62,055
Release of/(provision for) losses	(261)		(191)		45		35		—		6		—		—			(366)
Provision for reserve for losses	91		—		20		—		—		—		—		—			111
Operating expenses	—		—		—		—		—		—		(17,107)		—			(17,107)
Total non-interest expense	91		—		20		—		—		—		(17,107)		—			(16,996)
Core earnings before income taxes	33,290		6,980		2,459		272		17,386		164		(16,979)		1,121		(4)	44,693
Income tax (expense)/benefit	(6,991)		(1,466)		(516)		(57)		(3,651)		(35)		3,564		(236)			(9,388)
Core earnings before preferred stock dividends	26,299		5,514		1,943		215		13,735		129		(13,415)		885		(4)	35,305
Preferred stock dividends	—		—		—		—		—		—		(6,774)		—			(6,774)
Loss on retirement of preferred stock	—		—		—		—		—		—		—		—			—
Segment core earnings/(losses)	$	26,299	$	5,514	$	1,943	$	215	$	13,735	$	129	$	(20,189)	$	885	(4)	$	28,531
Total Assets	$	12,845,105	$	1,347,182	$	5,511,782	$	88,738	$	—	$	4,919,431	$	32,130	$	—		$	24,744,368
Total on- and off-balance sheet program assets at principal balance	$	15,565,589	$	1,379,816	$	6,080,691	$	92,695	$	—	$	—	$	—	$	—		$	23,118,791

(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)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 Nine Months Ended September 30, 2022
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural  Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	99,197	$	21,738	$	11,218	$	1,548	$	67,673	$	(4,069)	$	—	$	—		$	197,305
Less: reconciling adjustments(1)(2)(3)	(2,910)		—		(106)		—		(9,863)		—		—		12,879			—
Net effective spread	96,287		21,738		11,112		1,548		57,810		(4,069)		—		12,879			—
Guarantee and commitment fees	12,387		108		929		43		—		—		—		(3,916)			9,551
Other income/(expense)(3)	1,030		261		—		—		—		—		3		21,987			23,281
Total revenues	109,704		22,107		12,041		1,591		57,810		(4,069)		3		30,950			230,137
Release of/(provision for) losses	440		(1,498)		1,927		(184)		—		14		—		—			699
Release of reserve for losses	324		—		116		—		—		—		—		—			440
Operating expenses	—		—		—		—		—		—		(60,815)		—			(60,815)
Total non-interest expense	324		—		116		—		—		—		(60,815)		—			(60,375)
Core earnings before income taxes	110,468		20,609		14,084		1,407		57,810		(4,055)		(60,812)		30,950		(4)	170,461
Income tax (expense)/benefit	(23,196)		(4,327)		(2,956)		(295)		(12,141)		852		12,827		(6,499)			(35,735)
Core earnings before preferred stock dividends	87,272		16,282		11,128		1,112		45,669		(3,203)		(47,985)		24,451		(4)	134,726
Preferred stock dividends	—		—		—		—		—		—		(20,374)		—			(20,374)
Segment core earnings/(losses)	$	87,272	$	16,282	$	11,128	$	1,112	$	45,669	$	(3,203)	$	(68,359)	$	24,451	(4)	$	114,352
Total Assets	$	14,113,686	$	1,558,139	$	5,779,300	$	186,832	$	—	$	4,608,868	$	194,763	$	—		26,441,588
Total on- and off-balance sheet program assets at principal balance	$	17,199,347	$	1,634,786	$	6,296,263	$	196,242	$	—	$	—	$	—	$	—		25,326,638

(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)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 Nine Months Ended September 30, 2021
	Agricultural Finance				Rural Infrastructure				Treasury				Corporate
	Farm & Ranch		Corporate AgFinance		Rural  Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments			Consolidated Net Income
	(in thousands)
Net interest income	$	88,186	$	20,760	$	5,648	$	863	$	52,260	$	398	$	—	$	—		$	168,115
Less: reconciling adjustments(1)(2)(3)	(3,647)		—		(102)		—		1,969		—		—		1,780			—
Net effective spread	84,539		20,760		5,546		863		54,229		398		—		1,780			—
Guarantee and commitment fees	11,906		18		958		14		—		—		—		(3,714)			9,182
Other income/(expense)(3)	1,560		—		4		—		—		—		(125)		2,957			4,396
Total revenues	98,005		20,778		6,508		877		54,229		398		(125)		1,023			181,693
Release of/(provision for) losses	322		(157)		(490)		(177)		—		(16)		—		—			(518)
Provision for reserve for losses	996		—		281		—		—		—		—		—			1,277
Operating expenses	—		—		—		—		—		—		(52,866)		—			(52,866)
Total non-interest expense	996		—		281		—		—		—		(52,866)		—			(51,589)
Core earnings before income taxes	99,323		20,621		6,299		700		54,229		382		(52,991)		1,023		(4)	129,586
Income tax (expense)/benefit	(20,857)		(4,330)		(1,322)		(147)		(11,388)		(80)		10,989		(215)			(27,350)
Core earnings before preferred stock dividends	78,466		16,291		4,977		553		42,841		302		(42,002)		808		(4)	102,236
Preferred stock dividends	—		—		—		—		—		—		(17,885)		—			(17,885)
Segment core earnings/(losses)	$	78,466	$	16,291	$	4,977	$	553	$	42,841	$	302	$	(59,887)	$	808	(4)	$	84,351
Total Assets	$	12,845,105	$	1,347,182	$	5,511,782	$	88,738	$	—	$	4,919,431	$	32,130	$	—		$	24,744,368
Total on- and off-balance sheet program assets at principal balance	$	15,565,589	$	1,379,816	$	6,080,691	$	92,695	$	—	$	—	$	—	$	—		$	23,118,791

(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)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.