GUARANTEES AND COMMITMENTS

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

GUARANTEES AND COMMITMENTS

GUARANTEES AND COMMITMENTS

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1

Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
	As of September 30, 2024		As of December 31, 2023
	(in thousands)
Agricultural Finance
Farmer Mac Guaranteed Securities	$	430,628	$	452,602
Total off-balance sheet Farmer Mac Guaranteed Securities	$	430,628	$	452,602

Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors. 

The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2

	For the Nine Months Ended
	September 30, 2024		September 30, 2023
	(in thousands)
Proceeds from new securitizations	$	343,654	$	222,188
Guarantee fees received	1,173		1,280

    

Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets. The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3

	As of September 30, 2024		As of December 31, 2023
	(dollars in thousands)
Guarantee and commitment obligation	$	5,644	$	5,969
Weighted average remaining maturity:
Farmer Mac Guaranteed Securities	21.4 years		21.9 years

Long-Term Standby Purchase Commitments

Farmer Mac has recorded a liability for its obligation to stand ready under the commitment in the guarantee and commitment obligation on the consolidated balance sheets. The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4

	As of September 30, 2024		As of December 31, 2023
	(dollars in thousands)
Guarantee and commitment obligation(1)	$	38,295	$	41,594
Maximum principal amount	3,568,824		3,680,333
Weighted-average remaining maturity	14.4 years		14.5 years

(1) Relates to LTSPCs issued or modified on or after January 1, 2003.

Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities

The following table is a summary, by asset type, of the reserve for losses as of September 30, 2024 and December 31, 2023:

Table 6.5

	September 30, 2024		December 31, 2023
	Reserve for Losses		Reserve for Losses
	(in thousands)
Agricultural Finance	$	1,317	$	1,471
Rural Infrastructure Finance	207		240
Total	$	1,524	$	1,711

The following is a summary of the changes in the reserve for losses for the three and nine month periods ended September 30, 2024 and 2023:

Table 6.6

	For the Three Months Ended				For the Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
	(in thousands)
Agricultural Finance
Beginning Balance	$	1,443	$	1,471	$	1,471	$	819
(Release of)/provision for losses	(126)		(59)		(154)		593
Ending Balance	$	1,317	$	1,412	$	1,317	$	1,412
Rural Infrastructure Finance
Beginning Balance	$	251	$	234	$	240	$	614
(Release of)/provision for losses	(44)		14		(33)		(366)
Ending Balance	$	207	$	248	$	207	$	248

The release from the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during the nine months ended September 30, 2024 was primarily due to a decrease in LTSPC volume. The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the nine months ended September 30, 2024 was primarily due to a decrease in LTSPC volume.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023:

Table 6.7

	As of September 30, 2024
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Agricultural Finance:	$	3,182,727	$	2,090	$	6,232	$	6,358	$	14,680	$	3,197,407
Rural Infrastructure Finance:	611,163		—		—		—		—		611,163
Total	$	3,793,890	$	2,090	$	6,232	$	6,358	$	14,680	$	3,808,570

(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs 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.

	As of December 31, 2023
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Agricultural Finance:	$	3,390,918	$	2,776	$	2,366	$	1,784	$	6,926	$	3,397,844
Rural Infrastructure Finance:	535,013		—		—		—		—		535,013
Total	$	3,925,931	$	2,776	$	2,366	$	1,784	$	6,926	$	3,932,857

(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs 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.

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of September 30, 2024 and December 31, 2023, by year of origination:

Table 6.8

	As of September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Agricultural Finance:
Internally Assigned Risk Rating:
Acceptable	$	12,104	$	127,022	$	219,900	$	478,659	$	516,045	$	1,297,238	$	411,223	$	3,062,191
Special mention(1)	—		5,963		12,941		14,561		6,926		46,864		12,134		99,389
Substandard(2)	—		—		1,246		1,182		6,346		25,839		1,214		35,827
Total	$	12,104	$	132,985	$	234,087	$	494,402	$	529,317	$	1,369,941	$	424,571	$	3,197,407
For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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 September 30, 2024
	Year of Origination:
	2024		2023		2022		2021		2020		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	363,689	$	247,474	$	611,163
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	363,689	$	247,474	$	611,163
For the Three Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Nine Months Ended September 30, 2024:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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:
Internally Assigned Risk Rating:
Acceptable	$	169,429	$	246,441	$	515,396	$	534,395	$	264,815	$	1,185,811	$	391,335	$	3,307,622
Special mention(1)	—		71		2,466		872		531		44,631		8,565		57,136
Substandard(2)	—		—		—		131		1,536		26,328		5,091		33,086
Total	$	169,429	$	246,512	$	517,862	$	535,398	$	266,882	$	1,256,770	$	404,991	$	3,397,844
For the Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Nine Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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:
Internally Assigned Risk Rating:
Acceptable	$	—	$	—	$	—	$	—	$	—	$	419,190	$	115,823	$	535,013
Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	—	$	419,190	$	115,823	$	535,013
For the Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
For the Nine Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

(2)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.