Business Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2023

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 six months ended June 30, 2023 and 2022.

Table 10.1

Core Earnings by Business Segment
For the Three Months Ended June 30, 2023
	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	$	35,425	$	7,444	$	5,839	$	1,100	$	28,402	$	467	$	—	$	—		$	78,677
Less: reconciling adjustments(1)(2)(3)	(1,037)		—		(31)		—		4,096		127		—		(3,155)			—
Net effective spread	34,388		7,444		5,808		1,100		32,498		594		—		(3,155)			—
Guarantee and commitment fees	4,221		62		281		17		—		—		—		(1,092)			3,489
Other income/(expense)(3)	342		12		—		—		—		11		44		2,042			2,451
Total revenues	38,951		7,518		6,089		1,117		32,498		605		44		(2,205)			84,617
(Provision for)/release of losses	(5)		(327)		(632)		(110)		—		1		—		—			(1,073)
(Provision for)/release of reserve for losses	(75)		—		6		—		—		—		—		—			(69)
Operating expenses	—		—		—		—		—		—		(24,188)		—			(24,188)
Total non-interest expense	(75)		—		6		—		—		—		(24,188)		—			(24,257)
Core earnings before income taxes	38,871		7,191		5,463		1,007		32,498		606		(24,144)		(2,205)		(4)	59,287
Income tax (expense)/benefit	(8,163)		(1,510)		(1,147)		(211)		(6,825)		(127)		5,444		464			(12,075)
Core earnings before preferred stock dividends	30,708		5,681		4,316		796		25,673		479		(18,700)		(1,741)		(4)	47,212
Preferred stock dividends	—		—		—		—		—		—		(6,791)		—			(6,791)
Segment core earnings/(losses)	$	30,708	$	5,681	$	4,316	$	796	$	25,673	$	479	$	(25,491)	$	(1,741)	(4)	$	40,421
Total Assets	$	14,456,296	$	1,584,841	$	6,169,811	$	314,538	$	—	$	4,959,243	$	174,836	$	—		$	27,659,565
Total on- and off-balance sheet program assets at principal balance	$	18,116,503	$	1,680,756	$	6,611,892	$	327,901	$	—	$	—	$	—	$	—		$	26,737,052

(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 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 June 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	$	33,670	$	6,929	$	3,772	$	468	$	20,357	$	(1,282)	$	—	$	—		$	63,914
Less: reconciling adjustments(1)(2)(3)	(1,080)		—		(39)		—		(1,849)		—		—		2,968			—
Net effective spread	32,590		6,929		3,733		468		18,508		(1,282)		—		2,968			—
Guarantee and commitment fees	4,338		43		308		20		—		—		—		(1,496)			3,213
Other income/(expense)(3)	161		143		—		—		—		—		3		3,992			4,299
Total revenues	37,089		7,115		4,041		488		18,508		(1,282)		3		5,464			71,426
Release of/(provision for) losses	857		(650)		1,172		(8)		—		1		—		—			1,372
Release of reserve for losses	111		—		52		—		—		—		—		—			163
Operating expenses	—		—		—		—		—		—		(20,048)		—			(20,048)
Total non-interest expense	111		—		52		—		—		—		(20,048)		—			(19,885)
Core earnings before income taxes	38,057		6,465		5,265		480		18,508		(1,281)		(20,045)		5,464		(4)	52,913
Income tax (expense)/benefit	(7,991)		(1,357)		(1,105)		(101)		(3,887)		269		4,263		(1,149)			(11,058)
Core earnings before preferred stock dividends	30,066		5,108		4,160		379		14,621		(1,012)		(15,782)		4,315		(4)	41,855
Preferred stock dividends	—		—		—		—		—		—		(6,792)		—			(6,792)
Segment core earnings/(losses)	$	30,066	$	5,108	$	4,160	$	379	$	14,621	$	(1,012)	$	(22,574)	$	4,315	(4)	$	35,063
Total Assets	$	13,686,589	$	1,521,102	$	5,632,551	$	126,513	$	—	$	4,781,990	$	147,076	$	—		$	25,895,821
Total on- and off-balance sheet program assets at principal balance	$	16,591,999	$	1,567,311	$	6,172,063	$	148,018	$	—	$	—	$	—	$	—		$	24,479,391

(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 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 Six Months Ended June 30, 2023
	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	$	68,936	$	14,592	$	11,379	$	1,958	$	60,946	$	(76)	$	—	$	—		$	157,735
Less: reconciling adjustments(1)(2)(3)	(2,083)		—		(64)		—		3,290		127		—		(1,270)			—
Net effective spread	66,853		14,592		11,315		1,958		64,236		51		—		(1,270)			—
Guarantee and commitment fees	8,513		115		562		45		—		—		—		(1,813)			7,422
Other income/(expense)(3)	1,409		12		—		—		—		11		44		2,600			4,076
Total revenues	76,775		14,719		11,877		2,003		64,236		62		44		(483)			169,233
Release of/(provision for) losses	123		(4,628)		2,852		28		—		5		—		—			(1,620)
(Provision for)/release of reserve for losses	(652)		—		380		—		—		—		—		—			(272)
Operating expenses	—		—		—		—		—		—		(47,901)		—			(47,901)
Total non-interest expense	(652)		—		380		—		—		—		(47,901)		—			(48,173)
Core earnings before income taxes	76,246		10,091		15,109		2,031		64,236		67		(47,857)		(483)		(4)	119,440
Income tax (expense)/benefit	(16,012)		(2,119)		(3,173)		(426)		(13,490)		(14)		9,939		102			(25,193)
Core earnings before preferred stock dividends	60,234		7,972		11,936		1,605		50,746		53		(37,918)		(381)		(4)	94,247
Preferred stock dividends	—		—		—		—		—		—		(13,582)		—			(13,582)
Segment core earnings/(losses)	$	60,234	$	7,972	$	11,936	$	1,605	$	50,746	$	53	$	(51,500)	$	(381)	(4)	$	80,665
Total Assets	$	14,456,296	$	1,584,841	$	6,169,811	$	314,538	$	—	$	4,959,243	$	174,836	$	—		$	27,659,565
Total on- and off-balance sheet program assets at principal balance	$	18,116,503	$	1,680,756	$	6,611,892	$	327,901	$	—	$	—	$	—	$	—		$	26,737,052

(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 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 Six Months Ended June 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	$	65,024	$	14,138	$	6,965	$	843	$	43,760	$	(1,278)	$	—	$	—		$	129,452
Less: reconciling adjustments(1)(2)(3)	(2,080)		—		(73)		—		(8,514)		—		—		10,667			—
Net effective spread	62,944		14,138		6,892		843		35,246		(1,278)		—		10,667			—
Guarantee and commitment fees	8,554		62		620		30		—		—		—		(2,358)			6,908
Other income/(expense)(3)	561		257		—		—		—		—		3		21,078			21,899
Total revenues	72,059		14,457		7,512		873		35,246		(1,278)		3		29,387			158,259
Release of/(provision for) losses	347		(1,165)		2,341		(210)		—		3		—		—			1,316
Release of reserve for losses	185		—		88		—		—		—		—		—			273
Operating expenses	—		—		—		—		—		—		(41,436)		—			(41,436)
Total non-interest expense	185		—		88		—		—		—		(41,436)		—			(41,163)
Core earnings before income taxes	72,591		13,292		9,941		663		35,246		(1,275)		(41,433)		29,387		(4)	118,412
Income tax (expense)/benefit	(15,243)		(2,791)		(2,087)		(139)		(7,402)		268		8,461		(6,171)			(25,104)
Core earnings before preferred stock dividends	57,348		10,501		7,854		524		27,844		(1,007)		(32,972)		23,216		(4)	93,308
Preferred stock dividends	—		—		—		—		—		—		(13,583)		—			(13,583)
Segment core earnings/(losses)	$	57,348	$	10,501	$	7,854	$	524	$	27,844	$	(1,007)	$	(46,555)	$	23,216	(4)	$	79,725
Total Assets	$	13,686,589	$	1,521,102	$	5,632,551	$	126,513	$	—	$	4,781,990	$	147,076	$	—		$	25,895,821
Total on- and off-balance sheet program assets at principal balance	$	16,591,999	$	1,567,311	$	6,172,063	$	148,018	$	—	$	—	$	—	$	—		$	24,479,391

(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 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.