SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2023

The following schedule reconciles basic and diluted EPS for the years ended December 31, 2023, 2022 and 2021:

Table 2.1


	For the Years Ended December 31,
	2023					2022					2021
	Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
	(in thousands, except per share amounts)
Basic EPS
Net income attributable to common stockholders	$	172,838	10,829	$	15.97	$	150,979	10,791	$	14.00	$	111,412	10,758	$	10.36
Effect of dilutive securities(1)
SARs and restricted stock units	—		108	(0.16)		—		92	(0.13)		—		88	(0.09)
Diluted EPS	$	172,838	10,937	$	15.81	$	150,979	10,883	$	13.87	$	111,412	10,846	$	10.27

(1)For years ended December 31, 2023, 2022 and 2021, SARs and restricted stock units of 32,683, 32,448, and 39,326 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the years ended December 31, 2023, 2022 and 2021, contingent shares of unvested restricted stock units of 30,648, 18,535, and 18,183 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

Schedule of Accumulated Other Comprehensive Income, Net of Tax

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the years ended December 31, 2023, 2022, and 2021.

Table 2.2



	Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
	(in thousands)
Balance as of January 1, 2021	$	(13,937)	$	22,829	$	(22,815)	(13,923)
Other comprehensive income before reclassifications	9,114		—		11,602		20,716
Amounts reclassified from AOCI	(2,109)		(6,676)		5,845		(2,940)
Net comprehensive income/(loss)	7,005		(6,676)		17,447		17,776
Balance as of December 31, 2021	$	(6,932)	$	16,153	$	(5,368)	$	3,853
Other comprehensive (loss)/income before reclassifications	(108,624)		—		54,688		(53,936)
Amounts reclassified from AOCI	(5)		204		(959)		(760)
Net comprehensive (loss)/income	(108,629)		204		53,729		(54,696)
Balance as of December 31, 2022	$	(115,561)	$	16,357	$	48,361	$	(50,843)
Other comprehensive income/(loss) before reclassifications	47,114		(25,199)		4,973		26,888
Amounts reclassified from AOCI	—		118		(16,308)		(16,190)
Net comprehensive income/(loss)	47,114		(25,081)		(11,335)		10,698
Balance as of December 31, 2023	$	(68,447)	$	(8,724)	$	37,026	$	(40,145)

Schedule of Reclassification out of Accumulated Other Comprehensive Income

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the years ended December 31, 2023, 2022, and 2021:

Table 2.3


	For the Years Ended December 31,
	2023						2022						2021
	Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
	(in thousands)
Other comprehensive income:
Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	$	59,640	$	12,526	$	47,114	$	(137,500)	$	(28,876)	$	(108,624)	$	11,537	$	2,423	$	9,114
Less reclassification adjustments included in:
Net interest income(1)	—		—		—		—		—		—		(2,333)		(490)		(1,843)
Gains on sale of available-for-sale investment securities(2)	—		—		—		—		—		—		(253)		(53)		(200)
Other income(2)	—		—		—		(6)		(1)		(5)		(84)		(18)		(66)
Total	$	59,640	$	12,526	$	47,114	$	(137,506)	$	(28,877)	$	(108,629)	$	8,867	$	1,862	$	7,005
Held-to-maturity securities:
Change in fair value(3)	$	(31,898)	$	(6,699)	$	(25,199)	$	—	$	—	$	—	$	—	$	—	$	—
Less reclassification adjustments included in:
Net interest income(4)	148		30		118		259		55		204		(8,451)		(1,775)		(6,676)
Total	$	(31,750)	$	(6,669)	$	(25,081)	$	259	$	55	$	204	$	(8,451)	$	(1,775)	$	(6,676)
Cash flow hedges
Unrealized gains on cash flow hedges	$	6,295	$	1,322	$	4,973	$	69,225	$	14,537	$	54,688	$	14,685	$	3,083	$	11,602
Less reclassification adjustments included in:
Net interest income(5)	(20,643)		(4,335)		(16,308)		(1,213)		(254)		(959)		7,399		1,554		5,845
Total	$	(14,348)	$	(3,013)	$	(11,335)	$	68,012	$	14,283	$	53,729	$	22,084	$	4,637	$	17,447
Other comprehensive income/(loss)	$	13,542	$	2,844	$	10,698	$	(69,235)	$	(14,539)	$	(54,696)	$	22,500	$	4,724	$	17,776

(1)Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

(2)Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

(3)Represents the accumulated unrealized loss on the AgVantage Securities transferred from available-for-sale to held-to-maturity.

(4)Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

(5)Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

Schedule of Consolidation of Variable Interest Entities

The following tables present, by segment, details about the consolidation of VIEs:

Table 2.4


	Consolidation of Variable Interest Entities
	As of December 31, 2023
	Agricultural Finance		Treasury		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,432,261	$	—	$	1,432,261
Debt securities of consolidated trusts held by third parties (1)(2)	1,351,069		—		1,351,069
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value	46,343		—		46,343
Maximum exposure to loss (3)	45,952		—		45,952
Investment securities:
Carrying value (4)	—		3,676,555		3,676,555
Maximum exposure to loss (3) (4)	—		3,862,006		3,862,006
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	452,602		—		452,602

(1)Includes borrower remittances of $6.0 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2023.

(2)Includes $87.1 million in unamortized discount related to structured securitization transactions.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities, and other mission related investments.

(5)The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause.


	Consolidation of Variable Interest Entities
	As of December 31, 2022
	Agricultural Finance		Treasury		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,211,576	$	—	$	1,211,576
Debt securities of consolidated trusts held by third parties (1)(2)	1,181,948		—		1,181,948
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value	28,466		—		28,466
Maximum exposure to loss (3)	31,208		—		31,208
Investment securities:
Carrying value (4)	—		3,138,619		3,138,619
Maximum exposure to loss (3) (4)	—		3,341,427		3,341,427
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	500,953		—		500,953

(1)Includes borrower remittances of $8.1 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2022.

(2)Includes $37.7 million in unamortized discount related to a structured securitization transaction.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities, and other mission related investments.

Schedule of Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance


Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2020-04 and 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	January 1, 2020	During the second quarter 2023, Farmer Mac adopted optional expedients including those relating to qualifying hedging relationships and contract modification relief and, since September 30, 2023, has no further exposure to LIBOR. To date, these elections did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.
ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848	The amendments in this Update deferred the sunset date in Topic 848 from December 31, 2022 to December 31, 2024.	December 21, 2022	Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The Update addresses and amends areas identified by the Financial Accounting Standards Board as part of its post-implementation review of the accounting standard that introduced the current expected credit losses (“CECL”) model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write offs for financing receivables and net investment in leases by year of origination in the vintage disclosures.	January 1, 2023	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2022-01, Fair Value Hedging - Portfolio Layer Method	The Update introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method). It also expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio, and provides that an entity may reclassify HTM debt securities identified within 30 days of the date of adoption to AFS if the entity applies portfolio layer method hedging to those debt securities.	January 1, 2023	Farmer Mac adopted this guidance as of January 1, 2023. Farmer Mac does not currently hedge interest rate risk for single closed portfolios of financial assets, so adoption of this guidance had no effect on Farmer Mac's financial condition, results of operations, cash flows, or disclosures given current strategies.

Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements


Standard	Description	Effect on Consolidated Financial Statements
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	The amendments in this Update require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This Update also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this Update and existing disclosures in Topic 280. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively. Early adoption is permitted.	Farmer Mac is still assessing the effect on our annual consolidated financial statement disclosures, however, adoption will not have a material impact on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The Update provides guidance on improvements to annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. Additionally, public entities must provide a separate disclosure for any reconciling item that meets a quantitative threshold. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The amendments should be applied on a prospective basis. Early adoption is permitted.	Farmer Mac is still assessing the impact of the new accounting standard but does not expect that adoption of the new guidance will have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

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