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LOANS

3 Months Ended

Mar. 31, 2024

Farmer Mac classifies loans as either held for investment or held for sale. Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled

basis. As of both March 31, 2024 and December 31, 2023, Farmer Mac had no loans held for sale.

Under the Agricultural Finance line of business, Farmer Mac has two segments – Farm & Ranch and Corporate AgFinance. The segments are characterized by similarities in risk attributes and the manner in which Farmer Mac monitors and assesses credit risk.

The following table includes loans held for investment and displays the composition of the loan balances as of March 31, 2024 and December 31, 2023:

Table 5.1


	As of March 31, 2024						As of December 31, 2023
	Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
	(in thousands)
Agricultural Finance loans
Farm & Ranch	$	5,247,543	$	1,409,397	$	6,656,940	$	5,133,450	$	1,432,261	$	6,565,711
Corporate AgFinance	1,258,506		—		1,258,506		1,259,723		—		1,259,723
Total Agricultural Finance loans	6,506,049		1,409,397		7,915,446		6,393,173		1,432,261		7,825,434
Rural Infrastructure Finance loans	3,686,753		—		3,686,753		3,534,763		—		3,534,763
Total unpaid principal balance(1)	10,192,802		1,409,397		11,602,199		9,927,936		1,432,261		11,360,197
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	(354,840)		—		(354,840)		(304,817)		—		(304,817)
Total loans	9,837,962		1,409,397		11,247,359		9,623,119		1,432,261		11,055,380
Allowance for losses	(13,836)		(452)		(14,288)		(15,588)		(443)		(16,031)
Total loans, net of allowance	$	9,824,126	$	1,408,945	$	11,233,071	$	9,607,531	$	1,431,818	$	11,039,349

(1)Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business.

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of March 31, 2024 and December 31, 2023:

Table 5.2


	March 31, 2024		December 31, 2023
	Allowance for Losses		Allowance for Losses
	(in thousands)
Loans:
Agricultural Finance loans
Farm & Ranch	$	4,535	$	3,936
Corporate AgFinance	2,569		2,948
Total Agricultural Finance Loans	7,104		6,884
Rural Infrastructure Finance loans	7,184		9,147
Total	$	14,288	$	16,031

The following is a summary of the changes in the allowance for losses for the three months ended March 31, 2024 and 2023:

Table 5.3


	For the Three Months Ended
	March 31, 2024								March 31, 2023
	Agricultural Finance loans						Rural Infrastructure Finance loans(3)		Agricultural Finance loans						Rural Infrastructure Finance loans(3)
	Farm & Ranch(1)		Corporate AgFinance(2)		Total				Farm & Ranch(1)		Corporate AgFinance(2)		Total
	(in thousands)













Beginning Balance	$	3,936	$	2,948	$	6,884	$	9,147	$	4,044	$	2,731	$	6,775	$	8,314
Provision for/(release of) losses	599		(379)		220		(1,963)		(111)		4,308		4,197		(3,613)
Charge-offs	—		—		—		—		—		—		—		—
Ending Balance	$	4,535	$	2,569	$	7,104	$	7,184	$	3,933	$	7,039	$	10,972	$	4,701

(1)As of March 31, 2024 and 2023, the allowance for losses for Agricultural Finance Farm & Ranch loans includes $1.4 million and $1.1 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2)As of March 31, 2024 and 2023, the allowance for losses for Agricultural Finance Corporate AgFinance loans includes $0.0 million and $4.6 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3)As of both March 31, 2024 and 2023, the allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $2.0 million net release from the allowance for the Rural Infrastructure Finance portfolio during the quarter ended March 31, 2024 was primarily attributable to a single telecommunications loan that completed a restructuring, which resulted in an improved collateral position and a paydown of approximately 15% of its previously unpaid principal balance. The $0.2 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended March 31, 2024 was primarily attributable to increased loan volume. Although substandard Agricultural Finance loans increased $73.0 million from December 31, 2023, there was not a significant provision for loss associated with that increase because of the net realizable value of those loans.

The $3.6 million net release from the allowance for the Rural Infrastructure Finance portfolio during the

quarter ended March 31, 2023 was primarily attributable to an updated estimate of expected losses based

on newly available industry data. The $4.2 million net provision to the allowance for the Agricultural

Finance mortgage loan portfolio during the quarter ended March 31, 2023 was primarily attributable to

declining valuation of a single agricultural storage and processing loan, due to its ongoing bankruptcy

proceedings and an updated estimate of expected losses based on additional availability of industry data.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of March 31, 2024 and December 31, 2023:

Table 5.4


	As of March 31, 2024
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Agricultural Finance loans
Farm & Ranch	$	6,538,806	$	13,764	$	3,954	$	15,623	$	33,341	$	84,793	$	6,656,940
Corporate AgFinance	1,247,059		—		—		—		—		11,447		1,258,506
Total Agricultural Finance loans	7,785,865		13,764		3,954		15,623		33,341		96,240		7,915,446
Rural Infrastructure Finance loans	3,686,753		—		—		—		—		—		3,686,753
Total	$	11,472,618	$	13,764	$	3,954	$	15,623	$	33,341	$	96,240	$	11,602,199

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Includes loans in consolidated trusts with beneficial interests owned by third parties (single-class) that are 90 days or more past due.

(3)Includes loans that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(4)Includes $45.9 million of nonaccrual loans for which there was no associated allowance. During the three months ended March 31, 2024, Farmer Mac received $0.6 million in interest on nonaccrual loans.


	As of December 31, 2023
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Agricultural Finance loans
Farm & Ranch	$	6,470,205	$	15,326	$	3,953	$	10,991	$	30,270	$	65,236	$	6,565,711
Corporate AgFinance	1,259,723		—		—		—		—		—		1,259,723
Total Agricultural Finance loans	7,729,928		15,326		3,953		10,991		30,270		65,236		7,825,434
Rural Infrastructure Finance loans	3,534,763		—		—		—		—		—		3,534,763
Total	$	11,264,691	$	15,326	$	3,953	$	10,991	$	30,270	$	65,236	$	11,360,197

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Includes loans in consolidated trusts with beneficial interests owned (single-class) by third parties that are 90 days or more past due.

(4)Includes $25.7 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2023, Farmer Mac received $2.6 million in interest on nonaccrual loans.

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of March 31, 2024 and December 31, 2023, by year of origination:

Table 5.5


	As of March 31, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable	$	190,820	$	509,485	$	1,135,915	$	1,601,660	$	1,082,703	$	1,349,086	$	354,735	$	6,224,404
Special mention(2)	16,452		90,681		29,227		36,893		4,387		31,355		9,093		218,088
Substandard(3)	—		11,266		27,515		28,603		34,970		94,835		17,259		214,448
Total	$	207,272	$	611,432	$	1,192,657	$	1,667,156	$	1,122,060	$	1,475,276	$	381,087	$	6,656,940

For the Three Months Ended March 31, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of March 31, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Corporate AgFinance(1):
Internally Assigned Risk Rating:
Acceptable	$	34,521	$	204,717	$	77,402	$	257,391	$	122,517	$	209,987	$	242,494	$	1,149,029
Special mention(2)	—		—		14,437		15,204		49,967		16,350		2,072		98,030
Substandard(3)	—		—		—		—		—		—		11,447		11,447
Total	$	34,521	$	204,717	$	91,839	$	272,595	$	172,484	$	226,337	$	256,013	$	1,258,506

For the Three Months Ended March 31, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of March 31, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	192,160	$	572,095	$	665,560	$	189,652	$	585,661	$	1,283,649	$	163,162	$	3,651,939
Special mention(2)	—		—		34,814		—		—		—		—		34,814
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	192,160	$	572,095	$	700,374	$	189,652	$	585,661	$	1,283,649	$	163,162	$	3,686,753

For the Three Months Ended March 31, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of December 31, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable	$	530,956	$	1,137,226	$	1,653,780	$	1,120,917	$	323,922	$	1,068,862	$	385,766	$	6,221,429
Special mention(2)	70,524		46,529		27,957		11,591		4,782		21,257		8,777		191,417
Substandard(3)	3,357		23,987		10,164		17,395		28,942		58,606		10,414		152,865
Total	$	604,837	$	1,207,742	$	1,691,901	$	1,149,903	$	357,646	$	1,148,725	$	404,957	$	6,565,711

For the Three Months Ended March 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of December 31, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance - Corporate AgFinance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	207,279	$	97,922	$	261,992	$	123,158	$	99,352	$	112,947	$	254,325	$	1,156,975
Special mention(2)	—		14,522		15,408		50,822		20,333		—		1,663		102,748
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	207,279	$	112,444	$	277,400	$	173,980	$	119,685	$	112,947	$	255,988	$	1,259,723

For the Three Months Ended March 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of December 31, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	618,946	$	681,272	$	187,746	$	593,841	$	701,937	$	611,548	$	100,223	$	3,495,513
Special mention(2)	—		9,850		—		—		—		—		—		9,850
Substandard(3)	—		29,400		—		—		—		—		—		29,400
Total	$	618,946	$	720,522	$	187,746	$	593,841	$	701,937	$	611,548	$	100,223	$	3,534,763

For the Three Months Ended March 31, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.