RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

Farmer Mac considers an entity to be a related party if (1) the entity holds at least 5% of a class of Farmer Mac voting common stock or (2) the institution has an affiliation with a Farmer Mac director and conducts material business with Farmer Mac. As provided by Farmer Mac's statutory charter, only banks, insurance companies, and other financial institutions or similar entities may hold Farmer Mac's Class A voting common stock and only institutions of the Farm Credit System may hold Farmer Mac's Class B voting common stock. Farmer Mac's statutory charter also provides that Class A stockholders elect 5 members of Farmer Mac's 15-member board of directors and that Class B stockholders elect 5 members of the board of directors. Farmer Mac generally requires financial institutions to own a requisite amount of common stock, based on the size and type of institution, to participate in the Agricultural Finance line of business. As a result of these requirements, Farmer Mac conducts business with related parties in the normal course of Farmer Mac's business. All related party transactions were conducted with terms and conditions comparable to those available to any other participant in Farmer Mac's lines of business not related to Farmer Mac.

Zions Bancorporation, National Association:

Farmer Mac considers Zions Bancorporation, National Association and its affiliates ("Zions") a related party because Zions owns approximately 31.2% of Farmer Mac's Class A voting common stock. The following transactions occurred between Farmer Mac and Zions during 2023, 2022, and 2021:

Table 3.1

	For the Years Ended December 31,
	2023		2022		2021
	(in thousands)
Unpaid Principal Balance:
Purchases:
Loans	$	160,079	$	274,517	$	214,319
USDA Securities	231		4,171		9,565
Sales of Farmer Mac Guaranteed Securities	—		99,643		—

The purchases of loans from Zions under the Agricultural Finance line of business represented approximately 9.5%, 12.9%, and 8.0% of Agricultural Finance mortgage loan purchases for the years ended December 31, 2023, 2022, and 2021, respectively, and 6.9%, 9.6% and 5.6%, respectively, of total Agricultural Finance mortgage loan business volume (excluding AgVantage and USDA Securities). The purchases of USDA Securities from Zions represented approximately 0.1%, 1.5%, and 2.1% of total purchases of USDA Securities for the years ended December 31, 2023, 2022, and 2021, respectively. Outstanding Agricultural Finance mortgage loans purchased and USDA Securities purchased from Zions represented 3.1% and 3.5%, respectively, of Farmer Mac's outstanding business volume (excluding loans serviced for others) as of December 31, 2023 and 2022.

Zions retained servicing fees of $11.2 million, $10.4 million, and $11.0 million in 2023, 2022, and 2021, respectively, for its work as a Farmer Mac servicer.

National Rural Utilities Cooperative Financial Corporation:

Farmer Mac considers the National Rural Utilities Cooperative Financial Corporation ("CFC") a related party because CFC owns approximately 7.91% of Farmer Mac's Class A voting common stock and because a member of Farmer Mac's board of directors had an affiliation with CFC through June 2021. The following transactions occurred between Farmer Mac and CFC during 2023, 2022, and 2021:

Table 3.2

Farmer Mac Loan Purchases and Guarantees
	For the Years Ended December 31,
	2023		2022		2021
	(in thousands)
Unpaid Principal Balance:
Loans	$	298,254	$	386,998	$	127,117
LTSPCs	—		30,421		—
AgVantage Securities	1,450,000		670,000		1,450,000
Total purchases and guarantees	$	1,748,254	$	1,087,419	$	1,577,117

The transactions with CFC represented 37.1% of Farmer Mac's loan purchase volume under the Rural Infrastructure Finance line of business for 2023, compared to 46.7% of Rural Infrastructure Finance loan purchase volume for 2022 and 36.9% for 2021. These transactions represented 33.8%, 13.4%, and 37.0% of AgVantage securities volume for 2023, 2022, and 2021, respectively, and represented 22.6%, 12.0%, and 18.4% of new business volume for 2023, 2022, and 2021, respectively. Of Farmer Mac's total outstanding business volume (excluding loans serviced for others) as of December 31, 2023 and 2022, Rural Utilities loans, loans under LTSPCs, and AgVantage securities issued by CFC represented 20.4% and 18.7%, respectively.

Farmer Mac had interest receivable of $27.0 million and $18.2 million as of December 31, 2023 and 2022, respectively, and earned interest income of $143.5 million, $79.4 million, and $50.0 million during 2023, 2022, and 2021, respectively, related to its AgVantage transactions with CFC.

As of both December 31, 2023 and 2022, Farmer Mac had $0.1 million of commitment fees receivable from CFC and earned commitment fees of $1.0 million, $1.1 million, and $1.2 million, respectively for 2023, 2022, and 2021.

CFC retained servicing fees of $3.7 million, $3.4 million, and $3.3 million in 2023, 2022, and 2021, respectively, for its work as a Farmer Mac central servicer.

CoBank:

Farmer Mac considers CoBank a related party because CoBank owns approximately 32.6% of Farmer Mac's Class B voting common stock.

Farmer Mac purchased $438.8 million, $376.0 million, and $207.5 million of loans and participations from CoBank, under the Rural Infrastructure Finance and Agricultural Finance lines of business in 2023, 2022, and 2021, respectively. Of Farmer Mac's total outstanding business volume as of December 31, 2023 and 2022, CoBank's loans, participations, and unfunded commitments represented 6.7% and 6.3%, respectively, of total outstanding volume (excluding loans serviced for others).

CoBank retained servicing fees of $3.6 million, $3.5 million, and $3.2 million in 2023, 2022, and 2021, respectively, for its work as a Farmer Mac central servicer.

AgFirst Farm Credit Bank:

Farmer Mac considers AgFirst Farm Credit Bank ("AgFirst") a related party because AgFirst owns approximately 16.8% of Farmer Mac's Class B voting common stock.

AgFirst entered into no Agricultural Finance LTSPC transactions in either 2023 or 2022, and entered into $11.0 million of Agricultural Finance LTSPC transactions in 2021. The aggregate balance of Agricultural Finance LTSPCs outstanding as of December 31, 2023 and 2022 was $447.3 million and $387.1 million, respectively. In 2023, 2022, and 2021, Farmer Mac received $1.4 million, $1.2 million, and $1.2 million, respectively, in commitment fees from AgFirst, and had $0.1 million of commitment fees receivable as of both December 31, 2023 and 2022.

AgFirst owns certain securities backed by rural housing loans. Farmer Mac guarantees the last ten percent of losses (based on the original principal balance at the time of pooling) from each loan in the pool

backing those securities. As of December 31, 2023 and 2022, the outstanding balance of those securities owned by AgFirst was $1.8 million and $2.2 million, respectively. Farmer Mac received guarantee fees of $12,000, $15,000, and $19,000 in 2023, 2022, and 2021, respectively, on those securities.

Farm Credit Bank of Texas:

Farmer Mac considers Farm Credit Bank of Texas a related party because the bank owns approximately 7.7% of Farmer Mac's Class B voting common stock. Farmer Mac received from Farm Credit Bank of Texas commitment fees of $3.4 million, $2.9 million, and $1.9 million in 2023, 2022, and 2021, respectively. The aggregate amount of Agricultural Finance LTSPCs outstanding with Farm Credit Bank of Texas as of December 31, 2023 and 2022 was $923.9 million and $881.6 million, respectively. In each of 2023, 2022, and 2021, Farm Credit Bank of Texas retained $0.1 million in servicing fees for its work as a Farmer Mac central servicer.