AGM filing — read by section

Item 2. Management’s Discussion and Analysis

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 
 
 The objective of this section of the report is to provide a discussion and analysis, from management’s 
 perspective, of the material information necessary to assess Farmer Mac's financial condition and results 
 of operations for the quarter ended March 31, 2023. Financial information included in this report is 
 consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage 
 Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and 
 results of operations should be read together with: (1) the interim unaudited consolidated financial 
 statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report 
 on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on February 24, 2023 
 (the "2022 Annual Report"). 
 
 FORWARD-LOOKING STATEMENTS 
 
 In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation unless otherwise stated or unless the context otherwise requires. 
 
 Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "intends," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing Farmer Mac's: 
 
 • prospects for earnings; 
 • prospects for growth in business volume; 
 • trends in net interest income and net effective spread; 
 • trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for losses; 
 • assessment of economic and market trends; 
 • trends in expenses; 
 • trends in investment securities; 
 • prospects for asset impairments and allowance for losses; 
 • changes in capital position; 
 • future dividend payments; and 
 • other business and financial matters. 
 
 Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the 
 
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 forward-looking statements, including the factors discussed under "Risk Factors" in Part I, Item 1A of Farmer Mac's 2022 Annual Report, as well as uncertainties about: 
 
 • the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms; 
 • legislative or regulatory developments that could affect Farmer Mac, its sources of business, or agricultural or rural infrastructure industries; 
 • fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries; 
 • the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac; 
 • the general rate of growth in agricultural mortgage and rural infrastructure indebtedness; 
 • the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or rural infrastructure lending, borrower repayment capacity, or collateral values, including rapid inflation, fluctuations in interest rates, changes in U.S. trade policies, fluctuations in export demand for U.S. agricultural products and foreign currency exchange rates, supply chain disruptions, increases in input costs, labor availability, volatility from the recent commercial banking failures, and volatility in commodity prices; 
 • the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes; 
 • developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac; 
 • the effects of the Federal Reserve’s efforts to achieve monetary policy normalization and slow inflation; and 
 • other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, climate change, or fluctuations in agricultural real estate values. 
 
 Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this report. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this report is not necessarily indicative of future results. 
 
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 Overview 
 
 Farmer Mac is a mission-focused, purpose-driven company determined to drive economic opportunity and prosperity by increasing the accessibility of financing for American agriculture and rural infrastructure. As the nation’s secondary market for agricultural and rural infrastructure loans, we help strengthen and connect rural America by providing a broad array of financial solutions to lenders that support flexible low-cost financing to farmers, ranchers, agribusinesses, renewable energy projects, rural utilities, and other related rural businesses and enterprises. Farmer Mac also serves as a critical investment tool for entities such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions. Farmer Mac offers those entities a variety of investment opportunities that may diversify their investment portfolios and provide the opportunity to earn a competitive return on their investment dollars. 
 
 During first quarter 2023: 
 
 • we maintained strong liquidity in our investment portfolio well above regulatory requirements; 
 • we maintained our strong capital position and uninterrupted access to the debt capital markets, which historically have not been subject to the same short-term disruptions and liquidity concerns experienced by institutions that rely primarily on deposits to fund their assets; 
 • we provided $1.7 billion in liquidity and lending capacity to lenders serving rural America; and 
 • we closed our third structured securitization transaction involving approximately $300 million of agricultural mortgage loans. 
 
 Farmer Mac’s performance during first quarter 2023, described in more detail below, reflects the success of our continued focus on pursuing new channels and innovative ways to further our mission to increase the accessibility of financing for American agriculture and rural infrastructure. Despite ongoing macroeconomic concerns and potential headwinds such as volatile macroeconomic conditions, inflation, failures and liquidity concerns in the banking industry, rising interest rates, and war in Ukraine, Farmer Mac continued to deliver solid financial results. These financial results for first quarter 2023 reflected a variety of factors, including: (1) the resilience of the farm economy, as producers have benefited from healthy farm incomes and liquidity from relatively high commodity prices resulting from heightened demand, with revenues rising faster than the costs of inputs; (2) an increase in Farmer Mac's outstanding business volume at higher spreads while credit quality improved; (3) Farmer Mac's disciplined approach to interest rate risk management that helps to protect earnings from the effects of interest rate volatility and is accretive to Farmer Mac during periods of rising interest rates; and (4) Farmer Mac's effective funding strategies that resulted in advantageous funding, which have also benefited from the rising interest rate environment in the current period. The discussion below of Farmer Mac's financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." 
 
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 Net Income and Core Earnings 
 
 The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings and core earnings per share are non-GAAP measures that differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions. 
 
 Table 1 
 For the Three Months Ended 
 March 31, 2023 December 31, 2022 March 31, 2022 
 (in thousands) 
 Net income attributable to common stockholders $ 40,244 $ 36,627 $ 44,662 
 Core earnings 38,884 34,413 25,761 

 The $3.6 million sequential increase in net income attributable to common stockholders was due to a $4.3 million after-tax increase in net interest income and a $0.9 million after-tax decrease in our provision for credit losses. These factors were partially offset by a $2.1 million after-tax increase in operating expenses. 
 
 The $4.4 million year-over-year decrease in net income attributable to common stockholders was due to a $13.1 million after-tax decrease in the fair value of undesignated financial derivatives and a $1.8 million after-tax increase in operating expenses. These factors were partially offset by a $10.7 million after-tax increase in net interest income. 
 
 The $4.5 million sequential increase in core earnings was due to a $4.8 million after-tax increase in net effective spread and a $0.9 million after-tax decrease in our provision for credit losses. These factors were partially offset by a $2.1 million after-tax increase in operating expenses. 
 
 The $13.1 million year-over-year increase in core earnings was due to a $15.3 million after-tax increase in net effective spread. This factor was partially offset by a $1.8 million after-tax increase in operating expenses. 
 
 For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." 
 
 Net Interest Income and Net Effective Spread 
 
 The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income. 
 
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 Table 2 
 For the Three Months Ended 
 March 31, 2023 December 31, 2022 March 31, 2022 
 (in thousands) 
 Net interest income $ 79,058 $ 73,635 $ 65,538 
 Net interest yield % 1.14 % 1.08 % 1.06 % 
 Net effective spread $ 77,173 $ 71,103 $ 57,839 
 Net effective spread % 1.15 % 1.07 % 0.97 % 

 The $5.4 million sequential increase in net interest income was primarily attributable to a $6.6 million decrease in funding costs, due to advantageous funding execution and increasing spreads on interest-earning assets on our short-term investments; partially offset by a $0.7 million decrease in cash-basis interest income. In percentage terms, the sequential 0.06% increase was primarily attributable to a decrease of 0.09% in funding costs, partially offset by a decrease of 0.01% related to cash-basis interest income. 
 
 The $13.5 million year-over-year increase in net interest income was primarily due to a $11.4 million decrease in funding costs primarily due to advantageous funding execution and a $6.8 million increase related to net new business volume. These factors were partially offset by a $2.5 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives) and a $1.9 million decrease in cash-basis interest income. In percentage terms, the 0.08% increase was primarily attributable to a decrease of 0.16% in funding costs, partially offset by a decrease of 0.04% in net fair value changes from designated financial derivatives, and a decrease of 0.03% in cash-basis interest income. 
 
 The $6.1 million sequential increase in net effective spread in dollars was primarily due to a decrease of $7.4 million in non-GAAP funding costs, due to advantageous funding execution and increased spreads on interest-earning assets on our short-term investments; partially offset by a $0.7 million decrease in cash-basis interest income. In percentage terms, the sequential increase of 0.08% was primarily attributable to a decrease of 0.09% in non-GAAP funding costs and a decrease of 0.01% in cash-basis interest income. 
 
 The $19.3 million year-over-year increase in net effective spread in dollars was primarily due to a $14.9 million decrease in non-GAAP funding costs, due to advantageous funding execution and increased spreads on interest-earning assets on our short-term investments, and a $6.7 million increase related to net new business volume. These factors were partially offset by a $1.9 million decrease in cash-basis interest income. In percentage terms, the year-over-year increase of 0.18% was primarily attributable to a decrease in non-GAAP funding costs. 
 
 For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income." 
 
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 Business Volume 
 
 Our outstanding business volume was $26.5 billion as of March 31, 2023, a net increase of $0.6 billion from December 31, 2022 after taking into account all new business, maturities, sales, and paydowns on existing assets. The net increase was primarily attributable to a net increase of $0.6 billion in the Rural Infrastructure Finance line of business. 
 
 For more information about Farmer Mac's business volume, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Business Volume." 
 
 Capital 
 
 Table 3 
 As of 
 March 31, 2023 December 31, 2022 
 (in thousands) 
 Core capital $ 1,352,247 $ 1,322,801 
 Capital in excess of minimum capital level required 534,380 516,882 

 The increase in capital in excess of the minimum capital level required was primarily due to an increase in retained earnings. 
 
 Credit Quality 
 
 The following table presents Agricultural Finance on- and off-balance sheet substandard assets, in dollars and as a percentage of the respective portfolio as of March 31, 2023 and December 31, 2022: 
 
 Table 4 
 
 On-Balance Sheet Off-Balance Sheet 
 Substandard Assets % of Portfolio Substandard Assets % of Portfolio 
 (dollars in thousands) 
 March 31, 2023 $ 173,256 2.3 % $ 31,816 1.0 % 
 
 December 31, 2022 169,667 2.3 % 39,733 1.2 % 
 
 Increase/(decrease) from prior year-ending $ 3,589 — % $ (7,917) (0.2) % 

 The increase of $3.6 million in on-balance sheet substandard assets during first quarter was primarily driven by credit downgrades in crops and was partially offset by credit upgrades in permanent plantings. The $7.9 million decrease in substandard assets in our off-balance sheet portfolios during first quarter was primarily due to credit upgrades in livestock. 
 There were no substandard assets in the Rural Infrastructure Finance portfolio as of both March 31, 2023 and December 31, 2022. 
 For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 25 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 
 
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 The following table presents 90-day delinquencies for the on- and off-balance sheet Agricultural Finance portfolios, in dollars and as a percentage of the respective balance sheet category as of March 31, 2023 and December 31, 2022: 
 
 Table 5 
 
 On-Balance Sheet Off-Balance Sheet 
 90-Day
Delinquencies % of Portfolio 90-Day
Delinquencies % of Portfolio 
 (dollars in thousands) 
 March 31, 2023 $ 65,601 0.88 % $ 5,045 0.16 % 
 
 December 31, 2022 39,681 0.53 % 3,817 0.12 % 
 
 Increase/(decrease) from prior year-ending $ 25,920 0.35 % $ 1,228 0.04 % 

 On-balance sheet Agricultural Finance assets 90 or more days delinquent increased in permanent plantings, crops, and livestock, and was partially offset by decreases in agricultural storage and processing. Off-balance sheet Agricultural Finance assets 90 days or more delinquent increased in permanent plantings, livestock, and part-time farms. The top ten borrower exposures over 90 days delinquent in either the on- or off-balance sheet Agricultural Finance portfolio represented over half of the aggregate 90-day delinquencies as of March 31, 2023. 
 
 As of both March 31, 2023 and December 31, 2022, there were no 90-day delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loan purchases and loans underlying LTSPCs. 
 
 For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 
 
 Use of Non-GAAP Measures 
 
 In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends. 
 
 The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP. 
 
 Core Earnings and Core Earnings Per Share 
 
 The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that 
 
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 those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." 
 
 Net Effective Spread 
 
 Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of these assets. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain. 
 
 Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity. 
 
 Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "Gains on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread. 
 
 Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of 
 
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 its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship. 
 
 For a reconciliation of net interest income and net interest yield to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income." 
 
 Results of Operations 
 
 Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings: 
 
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 Table 6 
 Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 (in thousands, except per share amounts) 
 Net income attributable to common stockholders $ 40,244 $ 44,662 
 Less reconciling items: 
 Gains on undesignated financial derivatives due to fair value changes (see Table 13) 916 2,612 
 (Losses)/gains on hedging activities due to fair value changes (105) 5,687 
 Unrealized gains on trading securities 359 94 
 Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 29 20 
 Net effects of terminations or net settlements on financial derivatives 523 15,512 
 
 Income tax effect related to reconciling items (362) (5,024) 
 Sub-total 1,360 18,901 
 Core earnings $ 38,884 $ 25,761 
 
 Composition of Core Earnings: 
 Revenues: 
 Net effective spread (1) 
 $ 77,173 $ 57,839 
 Guarantee and commitment fees (2) 
 4,654 4,557 
 
 Other (3) 
 1,067 514 
 Total revenues 82,894 62,910 
 
 Credit related expense (GAAP): 
 Provision for/(release of) losses 750 (54) 
 
 Total credit related expense 750 (54) 
 
 Operating expenses (GAAP): 
 Compensation and employee benefits 15,351 13,298 
 General and administrative 7,527 7,278 
 Regulatory fees 835 812 
 Total operating expenses 23,713 21,388 
 
 Net earnings 58,431 41,576 
 Income tax expense (4) 
 12,756 9,024 
 
 Preferred stock dividends (GAAP) 6,791 6,791 
 Core earnings $ 38,884 $ 25,761 
 
 Core earnings per share: 
 Basic $ 3.60 $ 2.39 
 Diluted $ 3.56 $ 2.37 
 Weighted-average shares: 
 Basic 10,802 10,767 
 Diluted 10,918 10,887 

 (1) Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 10 for a reconciliation of net interest income to net effective spread. 
 (2) Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities. 
 (3) Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities. 
 (4) Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings. 
 
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 Table 7 
 Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 (in thousands, except per share amounts) 
 GAAP - Basic EPS $ 3.73 $ 4.15 
 Less reconciling items: 
 Gains on undesignated financial derivatives due to fair value changes (see Table 13) 0.09 0.24 
 (Losses)/gains on hedging activities due to fair value changes (0.01) 0.53 
 Unrealized gains on trading securities 0.03 0.01 
 Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — 
 Net effects of terminations or net settlements on financial derivatives 0.05 1.44 
 
 Income tax effect related to reconciling items (0.03) (0.46) 
 Sub-total 0.13 1.76 
 Core Earnings - Basic EPS $ 3.60 $ 2.39 
 
 Shares used in per share calculation (GAAP and Core Earnings) 10,802 10,767 

 Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 (in thousands, except per share amounts) 
 GAAP - Diluted EPS $ 3.69 $ 4.10 
 Less reconciling items: 
 Gains on undesignated financial derivatives due to fair value changes (see Table 13) 0.09 0.24 
 (Losses)/gains on hedging activities due to fair value changes (0.01) 0.52 
 Unrealized gains on trading securities 0.03 0.01 
 Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — — 
 Net effects of terminations or net settlements on financial derivatives 0.05 1.42 
 
 Income tax effect related to reconciling items (0.03) (0.46) 
 Sub-total 0.13 1.73 
 Core Earnings - Diluted EPS $ 3.56 $ 2.37 
 
 Shares used in per share calculation (GAAP and Core Earnings) 10,918 10,887 

 The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are: 
 
 1. Gains/(losses) on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) Gains on undesignated financial derivatives due to fair value changes; and (b) (Losses)/gains on hedging activities due to fair value changes. 
 
 2. Unrealized gains on trading securities. The unrealized (losses)/gains on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period. 
 
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 3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value. The amount of this non-GAAP reconciling item is the recorded amount of premium, discount, or deferred gain amortization during the reporting period on those assets for which the premium, discount, or deferred gain was based on the application of an accounting principle (e.g., consolidation of variable interest entities) rather than on a cash transaction (e.g., a purchase price premium or discount). 
 4. The net effects of terminations or net settlements on financial derivatives. These terminations or net settlements relate to: 
 • Forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities. These contracts are used as a short-term economic hedge of the issuance of debt. For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years. 
 The following sections provide more detail about specific components of Farmer Mac's results of operations. 
 
 Net Interest Income . The following table provides information about interest-earning assets and funding for the quarters ended March 31, 2023 and 2022. The average balance of non-accruing loans is included in the average balance of loans, Farmer Mac Guaranteed Securities, and USDA Securities presented, though the related income is accounted for on a cash basis. Therefore, as the average balance of non-accruing loans and the income received increases or decreases, the net interest income and yield will fluctuate accordingly. The average balance of loans in consolidated trusts with beneficial interests owned by third parties is disclosed in the net effect of consolidated trusts and is not included in the average balances of interest-earning assets and interest-bearing liabilities. The interest income and expense associated with these trusts are shown in the net effect of consolidated trusts. 
 
 Table 8 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 Average
Balance Income/
Expense Average
Rate Average
Balance Income/
Expense Average
Rate 
 (dollars in thousands) 
 Interest-earning assets: 
 Cash and investments $ 5,671,148 $ 59,703 4.21 % $ 4,949,656 $ 5,716 0.46 % 
 Loans, Farmer Mac Guaranteed Securities and USDA Securities (1) 
 21,282,336 247,047 4.64 % 18,930,349 102,110 2.16 % 
 Total interest-earning assets 26,953,484 306,750 4.55 % 23,880,005 107,826 1.81 % 
 Funding: 
 Notes payable due within one year 3,557,746 36,032 4.05 % 2,849,575 1,148 0.16 % 
 Notes payable due after one year (2) 
 21,872,564 192,715 3.52 % 20,065,027 42,158 0.84 % 
 Total interest-bearing liabilities (3) 
 25,430,310 228,747 3.60 % 22,914,602 43,306 0.76 % 
 Net non-interest-bearing funding 1,523,174 — 965,403 — 
 Total funding 26,953,484 228,747 3.39 % 23,880,005 43,306 0.73 % 
 Net interest income/yield prior to consolidation of certain trusts 26,953,484 78,003 1.16 % 23,880,005 64,520 1.08 % 
 Net effect of consolidated trusts (4) 
 895,671 1,055 0.47 % 881,756 1,018 0.46 % 
 Net interest income/yield $ 27,849,155 $ 79,058 1.14 % $ 24,761,761 $ 65,538 1.06 % 

 (1) Excludes interest income of $8.5 million and $8.1 million in first quarter 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties. 
 (2) Includes current portion of long-term notes. 
 (3) Excludes interest expense of $7.5 million and $7.0 million in first quarter 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties. 
 
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 (4) Includes the effect of consolidated trusts with beneficial interests owned by third parties. 
 
 The $13.5 million year-over-year increase in net interest income was primarily due to a $11.4 million decrease in funding costs and a $6.8 million increase related to net new business volume. The decrease in funding costs was primarily attributable to advantageous funding execution. These factors were partially offset by a $2.5 million decrease in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives) and a $1.9 million decrease in cash-basis interest income. In percentage terms, the 0.08% increase was primarily attributable to a decrease of 0.16% in funding costs, partially offset by a decrease of 0.04% in net fair value changes from designated financial derivatives, and a decrease of 0.03% in cash-basis interest income. 
 
 The following table sets forth information about changes in the components of Farmer Mac's net interest income prior to consolidation of certain trusts for the periods indicated. For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by old rate), and changes in rate (change in rate multiplied by old volume), and then allocated based on the relative size of rate and volume changes from the prior period. 
 
 Table 9 
 For the Three Months Ended March 31, 2023
Compared to Same Period in 2022 
 Increase/(Decrease) Due to 
 Rate Volume Total 
 (in thousands) 
 Income from interest-earning assets: 
 Cash and investments $ 53,035 $ 953 $ 53,988 
 Loans, Farmer Mac Guaranteed Securities and USDA Securities 130,828 14,108 144,936 
 Total 183,863 15,061 198,924 
 Expense from other interest-bearing liabilities 180,179 5,263 185,442 
 Change in net interest income prior to consolidation of certain trusts (1) 
 $ 3,684 $ 9,798 $ 13,482 

 (1) Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties. 
 
 The following table presents a reconciliation of net interest income and net interest yield to net effective spread. Net effective spread is measured by: including (1) expenses related to undesignated financial derivatives, which consists of income or expense related to contractual amounts due on financial derivatives not designated in hedge relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (3) the amortization of premiums and discounts on assets consolidated at fair value, (4) the net effects of consolidated trusts with beneficial interests owned by third parties, and (5) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information about net effective spread. 
 
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 Table 10 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 Dollars Yield Dollars Yield 
 (dollars in thousands) 
 Net interest income/yield $ 79,058 1.14 % $ 65,538 1.06 % 
 Net effects of consolidated trusts (1,055) 0.02 % (1,018) 0.02 % 
 Expense related to undesignated financial derivatives (1,626) (0.02) % (994) (0.02) % 
 Amortization of premiums/discounts on assets consolidated at fair value (23) — % (16) — % 
 Amortization of losses due to terminations or net settlements on financial derivatives 714 0.01 % 356 0.01 % 
 Fair value changes on fair value hedge relationships 105 — % (6,027) (0.10) % 
 Net effective spread $ 77,173 1.15 % $ 57,839 0.97 % 

 The $19.3 million year-over-year increase in net effective spread in dollars was primarily due to a $14.9 million decrease in non-GAAP funding costs, due to advantageous funding execution; and a $6.7 million increase related to net new business volume. These factors were partially offset by a $1.9 million decrease in cash-basis interest income. In percentage terms, the year-over-year increase of 0.18% was primarily attributable to a decrease in non-GAAP funding costs. 
 
 See Note 10 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business. 
 
 Provision for and Release of Allowance for Losses and Reserve for Losses . The following table summarizes the components of Farmer Mac's total allowance for losses for the three month period ended March 31, 2023 and 2022: 
 
 Table 11 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 Allowance
for
Losses Reserve
for Losses Total
Allowance
for Losses Allowance
for
Losses Reserve
for Losses Total
Allowance
for Losses 
 (in thousands) 
 
 Beginning Balance $ 15,731 $ 1,433 $ 17,164 $ 14,492 $ 1,950 $ 16,442 
 Provision for/(release of) losses 547 203 750 56 (110) (54) 
 Charge-offs — — — (84) — (84) 
 Ending Balance $ 16,278 $ 1,636 $ 17,914 $ 14,464 $ 1,840 $ 16,304 

 See Notes 5 and 6 to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 
 
 During first quarter 2023, we recorded a $0.8 million provision to the allowance for losses primarily as a result of one agricultural storage and processing loan whose financial position continued to deteriorate related to the borrower's ongoing bankruptcy. 
 
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 Guarantee and Commitment Fees . The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the three months ended March 31, 2023 and 2022: 
 
 Table 12 
 For the Three Months Ended 
 Change 
 March 31, 2023 March 31, 2022 $ % 
 (dollars in thousands) 
 Contractual guarantee and commitment fees $ 3,705 $ 3,502 $ 203 6 % 
 Guarantee obligation amortization 1,768 2,195 (427) (19) % 
 Guarantee asset fair value changes (1,540) (2,002) 462 23 % 
 Guarantee and commitment fee income $ 3,933 $ 3,695 $ 238 6 % 

 Guarantee and commitment fees increased for the quarter ended March 31, 2023 compared to 2022, which was due to increases in the average outstanding balance of LTSPCs during the period. As adjusted for the core earnings presentation, guarantee and commitment fees were $4.7 million for the quarter ended March 31, 2023, compared to $4.6 million for first quarter 2022. 
 
 In Farmer Mac's presentation of core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities. Additionally, Farmer Mac has excluded guarantee asset fair value changes, because these fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations if Farmer Mac fulfills its guarantee obligation throughout the term of the guaranteed securities, as is expected. 
 
 For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." 
 
 Gains on financial derivatives . The components of gains and losses on financial derivatives for the three months ended March 31, 2023 and 2022 are summarized in the following table: 
 
 Table 13 
 For the Three Months Ended 
 Change 
 March 31, 2023 March 31, 2022 $ % 
 (dollars in thousands) 
 Gains due to fair value changes $ 916 $ 2,612 $ (1,696) (65) % 
 Accrual of contractual payments (1,626) (994) (632) 64 % 
 Gains due to terminations or net settlements 1,109 15,370 (14,261) (93) % 
 Gains on financial derivatives $ 399 $ 16,988 $ (16,589) (98) % 

 65 

 These changes in fair value are primarily the result of fluctuations in long-term interest rates. The accrual of periodic cash settlements for interest paid or received from Farmer Mac's interest rate swaps that are undesignated financial derivatives is shown as expense related to financial derivatives. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "Gains/(losses) due to terminations or net settlements" in the table above. 
 
 Operating Expenses . The components of operating expenses for the three months ended March 31, 2023 and 2022 are summarized in the following table: 
 
 Table 14 
 
 For the Three Months Ended 
 Change 
 March 31, 2023 March 31, 2022 $ % 
 (dollars in thousands) 
 Compensation and employee benefits $ 15,351 $ 13,298 $ 2,053 15 % 
 General and administrative 7,527 7,278 249 3 % 
 Regulatory fees 835 812 23 3 % 
 Total Operating Expenses $ 23,713 $ 21,388 $ 2,325 11 % 

 Compensation and Employee Benefits . The increase in compensation and employee benefits expenses for first quarter 2023 compared to 2022 was due to increased short-term incentive compensation paid in first quarter 2023 resulting from Farmer Mac's performance during 2022 and increased headcount. 
 
 General and Administrative Expenses (G&A) . The increase in G&A expenses for first quarter 2023 compared to 2022 was primarily due to increased spending on software licenses and information technology and other consultants to support growth and strategic initiatives. Specifically, Farmer Mac has begun a multi-year effort to replace its platform for securities trades and to implement a treasury management system. 
 
 Income Tax Expense . The following table presents income tax expense and the effective income tax rate for the three months ended March 31, 2023 and 2022: 
 
 Table 15 
 For the Three Months Ended 
 Change 
 March 31, 2023 March 31, 2022 $ % 
 (dollars in thousands) 
 Income tax expense $ 13,118 $ 14,046 $ (928) (7) % 
 Effective tax rate 21.8 % 21.4 % 0.4 % 

 66 

 Business Volume . 
 
 The following table sets forth the net growth or decrease in Farmer Mac's lines of business for the three months ended March 31, 2023 and 2022: 
 
 Table 16 
 Net New Business Volume 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 On or Off 
Balance Sheet Net Growth/(Decrease) Net Growth/(Decrease) 
 (in thousands) 
 Agricultural Finance: 
 Farm & Ranch: 
 Loans On-balance sheet $ (313,028) $ 160,496 
 Loans held in consolidated trusts: 
 Beneficial interests owned by third-party investors (Pass-Through) (1) 
 On-balance sheet (19,661) (60,423) 
 Beneficial interests owned by third-party investors (Structured) (1) 
 On-balance sheet 276,442 — 
 IO-FMGS (2) 
 On-balance sheet (433) (378) 
 USDA Securities On-balance sheet (50,607) (4,999) 
 AgVantage Securities (1) 
 On-balance sheet 70,000 430,000 
 LTSPCs and unfunded commitments Off-balance sheet 7,762 (8,824) 
 Other Farmer Mac Guaranteed Securities (3) 
 Off-balance sheet (12,858) (33,874) 
 Loans serviced for others Off-balance sheet (448) (1,042) 
 Total Farm & Ranch $ (42,831) $ 480,956 
 Corporate AgFinance: 
 Loans On-balance sheet $ 6,611 $ (14,837) 
 AgVantage Securities (1) 
 On-balance sheet (21,915) 7,798 
 Unfunded commitments Off-balance sheet 11,779 9,965 
 Total Corporate AgFinance $ (3,525) $ 2,926 
 Total Agricultural Finance $ (46,356) $ 483,882 
 Rural Infrastructure Finance: 
 Rural Utilities: 
 Loans On-balance sheet $ 89,922 $ 157,232 
 AgVantage Securities (1) 
 On-balance sheet 471,229 (23,381) 
 LTSPCs and unfunded commitments Off-balance sheet (31,011) (22,632) 
 Other Farmer Mac Guaranteed Securities (3) 
 Off-balance sheet (71) — 
 Total Rural Utilities $ 530,069 $ 111,219 
 Renewable Energy: 
 Loans On-balance sheet $ 66,916 $ 5,483 
 Unfunded commitments Off-balance sheet 11,407 28,363 
 Total Renewable Energy $ 78,323 $ 33,846 
 Total Rural Infrastructure Finance $ 608,392 $ 145,065 
 Total $ 562,036 $ 628,947 

 (1) Categories of Farmer Mac Guaranteed Securities. 
 (2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. 
 (3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties. 
 
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 Farmer Mac's outstanding business volume was $26.5 billion as of March 31, 2023, a net increase of $0.6 billion from December 31, 2022 after taking into account all new business, maturities, sales, and paydowns on existing assets. 
 
 The modest decrease in Farm & Ranch during first quarter 2023 resulted from $0.8 billion of new purchases, commitments, and guarantees, offset by $0.8 billion of scheduled maturities and repayments. 
 
 Farmer Mac purchased a total of $0.2 billion in loans, which was primarily driven by improved borrower economics while also navigating a substantially higher interest rate environment. 
 
 Farmer Mac also purchased a total of $0.2 billion in Farm & Ranch AgVantage Securities during first quarter 2023, which primarily reflected the refinancing of maturing securities as well as financial counterparties seeking to add longer-term AgVantage securities to manage their asset-liability maturity profile given recent increases in credit spreads and interest rates. The $0.2 billion in gross purchases was partially offset by $0.1 billion in scheduled maturities. 
 
 The modest decrease in Corporate AgFinance during first quarter 2023 resulted from $0.2 billion of new purchases and commitments, which was offset by $0.2 billion of scheduled maturities, repayments, and sales. Farmer Mac purchased a total of $145.1 million in loans, which was partially offset by $138.5 million in scheduled maturities and repayments. The increase in loan purchases was primarily due to Farmer Mac's continued focus to support loans to larger and more complex agribusinesses focused on food and fiber processing and other food supply chain production. 
 
 The $0.5 billion net increase in Rural Utilities during first quarter 2023 resulted from $0.7 billion of new purchases, commitments, and guarantees, which was partially offset by $0.2 billion of scheduled maturities and repayments. Farmer Mac purchased a total of $500.0 million in AgVantage Securities, $92.8 million in telecommunications loans, and $90.4 million in electric distribution and generation and transmission loans. The $183.2 million in loan purchases was partially offset by $93.3 million in scheduled maturities and repayments. The net increase in loan purchases primarily reflected borrowers' normal-course capital expenditures related to maintaining and upgrading utility infrastructure as well as investments in broadband infrastructure, and Farmer Mac's continued focus to support telecommunications investment in rural America. 
 
 The $78.3 million net increase in Renewable Energy during first quarter 2023 primarily reflects $89.7 million in loan purchases and unfunded commitments, partially offset by $11.4 million in repayments. 
 
 Farmer Mac's outstanding business volume was $24.2 billion as of March 31, 2022, a net increase of $0.6 billion from December 31, 2021 after taking into account all new business, scheduled maturities, and paydowns on existing assets. 
 
 The $0.5 billion net increase in Farm & Ranch during first quarter 2022 resulted from $2.5 billion of new 
 purchases, commitments, and guarantees, partially offset by $2.0 billion of scheduled maturities and 
 repayments. Farmer Mac purchased a total of $416.2 million in loans, which was primarily driven by farm 
 real estate acquisitions due to improved borrower economics as well as a competitive, while also navigating an increasing interest rate environment resulting in demand for intermediate and long-term financing solutions. The $416.2 million in gross Farm & Ranch loan purchases was partially offset by $255.7 million in scheduled maturities and repayments. 
 
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 Farmer Mac also purchased a total of $1.8 billion in Farm & Ranch AgVantage Securities during first 
 quarter 2022, which primarily reflected the refinancing of maturing securities as well as financial 
 counterparties seeking to add longer term AgVantage securities to manage their asset-liability maturity 
 profile given recent increases in credit spreads and interest rates. The $1.8 billion in gross purchases was 
 partially offset by $1.3 billion in scheduled maturities. Approximately $1.1 billion of the total $1.8 billion 
 in gross purchases reflected purchases that refinanced maturing AgVantage securities and were issued at 
 short-term tenors, which may create volatility in AgVantage volumes throughout the year. However, 
 Farmer Mac does not anticipate a material impact to its net effective spread given the low spread related to 
 these securities due to the short maturities and the credit strength of the counterparties. 
 
 The $2.9 million net increase in Corporate AgFinance during first quarter 2022 resulted from 
 $103.4 million of new loan and AgVantage security purchases, which was offset by $100.4 million of 
 scheduled maturities and repayments. Farmer Mac purchased a total of $61.7 million in loans, which was 
 offset by $76.5 million in scheduled maturities and repayments. This net decrease in loans was primarily 
 due to scheduled amortization and prepayments due to strong land values and agricultural incomes. 
 
 The $111.2 million net increase in Rural Utilities during first quarter 2022 resulted from $378.0 million of 
 new purchases, commitments, and guarantees, which was partially offset by $266.7 million of scheduled 
 maturities and repayments. Farmer Mac purchased a total of $208.0 million in Rural Utilities loans, which 
 was fueled by a competitive but increasing interest rate environment resulting in demand for long-term 
 financing solutions for planned maintenance and capital expenditures. The $208.0 million in loan 
 purchases was partially offset by $50.7 million in scheduled maturities and repayments. 
 
 The $33.8 million net increase in Renewable Energy during first quarter 2022 primarily reflects a 
 $35.0 million commitment to a large solar project being constructed in the southeast United States, 
 consisting of $6.6 million of funded loan purchases (which was partially offset by $1.2 million of other 
 loan repayments) and $28.4 million in unfunded loan commitments expected to be drawn throughout 
 2022. 
 
 The level and composition of Farmer Mac’s outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from year to year. This relationship in turn depends on a variety of factors both internal and external to Farmer Mac. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report. 
 
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 The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated: 
 
 Table 17 
 For the Three Months Ended 
 March 31, 2023 March 31, 2022 
 (dollars in thousands) 
 AgVantage securities $ 695,200 $ 1,941,360 
 Structured securitization transactions (not consolidated) — — 
 Loans securitized and held in consolidated trusts with beneficial interests owned by third parties 285,201 25,928 
 
 Total Farmer Mac Guaranteed Securities Issuances $ 980,401 $ 1,967,288 

 Farmer Mac either retains the loans it purchases or securitizes them and retains or sells Farmer Mac Guaranteed Securities backed by those securitized loans. During the first quarter of 2023, Farmer Mac executed its third structured securitization transaction, whereby it sold and securitized agricultural mortgage loans resulting in $281.0 million of Farmer Mac Guaranteed Securities. In this transaction, Farmer Mac transferred selected loans to a depositor which then deposited the loans into a trust, at which time the loans became assets of the trust. Farmer Mac concluded that it was the primary beneficiary of the trust because Farmer Mac controls the trust in its role as Master Servicer. Therefore, Farmer Mac consolidates the assets and liabilities of the trust for this structured securitization. Farmer Mac does not consider the assets held by the related securitization trust to be available to satisfy the claims of the creditors of Farmer Mac and/or the depositor. 
 
 During the three months ended March 31, 2023 and 2022, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the consolidated balance sheets. 
 
 During the three months ended March 31, 2023 and 2022, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed USDA Securities or AgVantage Securities. 
 
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 The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated: 
 
 Table 18 
 Outstanding Business Volume 
 
 On or Off 
Balance Sheet As of March 31, 2023 As of December 31, 2022 
 (in thousands) 
 Agricultural Finance: 
 Farm & Ranch: 
 Loans On-balance sheet $ 4,837,722 $ 5,150,750 
 Loans held in consolidated trusts: 
 Beneficial interests owned by third-party investors (Pass-Through) (1) 
 On-balance sheet 895,257 914,918 
 Beneficial interests owned by third-party investors (Structured) (1) 
 On-balance sheet 573,100 296,658 
 IO-FMGS (2) 
 On-balance sheet 10,189 10,622 
 USDA Securities On-balance sheet 2,356,695 2,407,302 
 AgVantage Securities (1) 
 On-balance sheet 5,675,000 5,605,000 
 LTSPCs and unfunded commitments Off-balance sheet 2,830,071 2,822,309 
 Other Farmer Mac Guaranteed Securities (3) 
 Off-balance sheet 488,095 500,953 
 Loans serviced for others Off-balance sheet 19,832 20,280 
 Total Farm & Ranch $ 17,685,961 $ 17,728,792 
 Corporate AgFinance: 
 Loans On-balance sheet $ 1,172,864 $ 1,166,253 
 AgVantage Securities (1) 
 On-balance sheet 337,685 359,600 
 Unfunded commitments Off-balance sheet 89,433 77,654 
 Total Corporate AgFinance $ 1,599,982 $ 1,603,507 
 Total Agricultural Finance $ 19,285,943 $ 19,332,299 
 Rural Infrastructure Finance: 
 Rural Utilities: 
 Loans On-balance sheet $ 2,891,618 $ 2,801,696 
 AgVantage Securities (1) 
 On-balance sheet 3,515,385 3,044,156 
 LTSPCs and unfunded commitments Off-balance sheet 481,581 512,592 
 Other Farmer Mac Guaranteed Securities (3) 
 Off-balance sheet 1,098 1,169 
 Total Rural Utilities $ 6,889,682 $ 6,359,613 
 Renewable Energy: 
 Loans On-balance sheet $ 286,486 $ 219,570 
 Unfunded commitments Off-balance sheet 22,007 10,600 
 Total Renewable Energy $ 308,493 $ 230,170 
 Total Rural Infrastructure Finance $ 7,198,175 $ 6,589,783 
 Total $ 26,484,118 $ 25,922,082 

 (1) A Farmer Mac Guaranteed Security. 
 (2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization. 
 (3) Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties. 
 
 71 

 The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of March 31, 2023: 
 
 Table 19 
 Schedule of Principal Amortization as of March 31, 2023 
 
 Loans Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs USDA Securities and Farmer Mac Guaranteed USDA Securities Total 
 (in thousands) 
 2023 $ 360,417 $ 231,241 $ 81,253 $ 672,911 
 2024 492,280 254,837 110,933 858,050 
 2025 544,674 234,989 112,279 891,942 
 2026 541,522 259,898 116,253 917,673 
 2027 594,736 246,058 117,758 958,552 
 Thereafter 8,123,418 2,478,041 2,024,342 12,625,801 
 Total $ 10,657,047 $ 3,705,064 $ 2,562,818 $ 16,924,929 

 Of Farmer Mac's $26.5 billion outstanding principal balance of business volume as of March 31, 2023, $9.5 billion were AgVantage securities included in the Agricultural Finance and Rural Infrastructure Finance lines of business. Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. The following table summarizes by maturity date the outstanding principal amount of both on- and off-balance sheet AgVantage securities as of March 31, 2023: 
 
 Table 20 
 AgVantage Balances by Year of Maturity 
 As of 
 March 31, 2023 
 (in thousands) 
 2023 $ 2,526,674 
 2024 1,322,699 
 2025 916,625 
 2026 1,013,360 
 2027 999,698 
 Thereafter (1) 
 2,750,112 
 Total $ 9,529,168 

 (1) Includes various maturities ranging from 2028 to 2049. 
 
 The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was 4.4 years as of March 31, 2023. 
 
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 Outlook 
 
 Farmer Mac continues to provide a stable source of liquidity, capital, and risk management tools as a secondary market that helps meet the financing needs of rural America. The pace and trajectory of Farmer Mac's growth will depend on the capital and liquidity needs of the lending institutions serving agriculture and rural infrastructure businesses and the overall financial health of borrowers in the sectors we serve. Market interest rates have increased significantly since the lows experienced in 2021, and interest rates on Farmer Mac products during the first quarter 2023 were higher than Farmer Mac's 15-year historical averages. New loan origination volumes tend to correlate inversely with changes in interest rates. However, prepayment rates also generally correlate inversely with changes in interest rates, with higher interest rates typically slowing the pace of portfolio loan repayments. Future changes to monetary policy and the overall level, pace, and duration of elevated interest rates could continue to impact the pace and timing of the Agricultural Finance mortgage loan purchase demand and repayments. 
 
 Despite a higher interest rate environment, Farmer Mac foresees opportunities for profitable growth across our lines of business driven by several key factors: 
 
 • As agricultural and rural infrastructure lenders seek to manage liquidity, equity capital, and return on equity capital requirements or reduce exposure due to lending or concentration limits, Farmer Mac can provide relief for those institutions through loan and portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, or securitizations. 
 
 • As a result of business and product development efforts and continued interest in the agricultural asset class from institutional investors and nontraditional agricultural real estate lenders, Farmer Mac's customer base and product set continue to expand and diversify, which may generate more demand for Farmer Mac's products from new sources. 
 
 • Economic disruptions could positively affect Farmer Mac's funding costs relative to the market, as historically, major economic events have tended to tilt investors toward high-quality fixed income investments. Furthermore, Farmer Mac's funding strategies are not depository in nature, allowing Farmer Mac to fund beyond short-term disruptions and avoid many potential liquidity concerns. Funding advantages could provide Farmer Mac with more opportunities in a competitive lending environment. 
 
 • Farmer Mac's growing relationships with larger regional and national lenders, as well as consolidation within the agricultural lending industry, continue to provide opportunities that could influence Farmer Mac's loan demand and increase the average transaction size within Farmer Mac's lines of business. 
 
 • Future growth opportunities in Farmer Mac's Rural Infrastructure Finance line of business may evolve by deepening business relationships with eligible counterparties, financing broadband-related capital expenditures and rural telecommunications facilities, growing opportunities for renewable energy project finance, and exploring new types of loan products. 
 
 • Expansion and acquisition opportunities for agricultural producers resulting from high agricultural incomes and rising input costs have increased financing requirements for mergers and acquisitions, consolidation, and vertical integration across many sectors of the agricultural industry, which may also generate demand for Farmer Mac's loan products. 
 
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 • Investments necessary to support consumer demand could increase the need for financing within the food and agriculture supply chain, which may increase the need for incremental capital support from the secondary market. 
 
 The higher interest rate environment stressed bank liquidity in first quarter 2023, causing the first commercial bank failures since 2020 and the largest bank failure since 2009. The recently failed banks were not substantial agricultural mortgage originators or Farmer Mac customers. Additionally, Farmer Mac is not a depository institution with volatility in investor withdrawals, which we believe insulates our portfolio from the same kinds of liquidity concerns recently facing various commercial banks. Finally, Farmer Mac offers a range of interest rates, tenors, and rate resetting options for loan products, allowing flexibility for originators and borrowers in all interest rate environments. 
 
 The U.S. economy continued to exhibit signs of slowing in first quarter 2023. While consumer spending has retreated modestly from the highs experienced in 2022, the significantly higher interest rate environment continues to create uncertainty for the economic outlook for the U.S. economy in 2023. And while labor markets continue to remain somewhat resilient, slower consumer spending, declines in residential housing investment, continued political debates on the U.S. debt ceiling, and tightening credit conditions following bank industry stress indicate that the probability of a U.S. or global recession is increasing. Farmer Mac believes that its portfolio is sufficiently balanced to withstand the market volatility that arises with an economic recession, as the agricultural, food, and infrastructure industries tend not to be directly correlated with the general economy. Farmer Mac believes these sectors are generally well positioned to withstand an economic downturn due to ample consumer demand and government support. 
 
 We believe that the current debt ceiling debate, while creating general market volatility, is not likely to have a material negative effect on Farmer Mac's ability to continue to access the capital debt market and issue debt. We understand that investors generally view GSE debt, such as Farmer Mac's, as a safe alternative and Farmer Mac is seeing continued strong demand at all parts on the yield curve. 
 
 Operating Expense . Farmer Mac continues to expand its investments in human capital, technology, and business infrastructure to increase capacity and efficiency as it seeks to accommodate its growth opportunities and achieve its long-term strategic objectives. Farmer Mac expects continued increases in its operating expenses over the next several years, but the growth rate in employee headcount may slow in the coming quarters. We will continue making investments in our infrastructure and funding platforms to support these strategies and scale with our growth. 
 
 Agricultural Industry . The agricultural economy experienced generally favorable conditions in first quarter 2023, with level commodity prices and easing input price inflation. In response to Russia's invasion of Ukraine in early 2022, grain commodity prices rose rapidly during first half of 2022 and continued to be elevated during much of the second half of 2022. Higher commodity prices for grains and many animal proteins substantially increased gross cash receipts for the 2022 marketing year. Farm expense price levels fell again in first quarter 2023, driven by moderating feed, energy, and fertilizer prices. However, several farm expense categories such as interest, labor, and other inputs remain elevated and could experience additional upward pressure throughout 2023. Major commodity prices could remain elevated in 2023 as a result of the global supply shortages in food and energy, as well as a weakening U.S. dollar. Any such price stability would help support farm incomes in 2023. 
 
 74 

 Overall farm income reached new highs in 2022 following a very profitable year in 2021. Net cash farm income increased by more than 28% in 2021 to $149.5 billion. The USDA estimates that net cash farm income climbed another 27% to $189.9 billion in 2022, a new all-time high. For both years, the primary driver of increased profitability was higher cash revenues and not government support payments like in 2019 and 2020. The USDA estimates production expenses rose by 19% in 2022, a level experienced in the 1970s and again in the 2012-2014 agricultural economy expansion. Looking forward, the USDA expects net cash farm income to fall by 21% to $150.6 billion in 2023 due to moderating commodity prices and rising farm expenses. However, the 2023 farm income projections are 20% higher than the 10-year average, demonstrating the continued strength in the farm economy. 
 
 The increase in farm profitability combined with low interest rates in 2020 and 2021 drove a rapid rise in land values and a decrease in farm delinquencies and bankruptcies that extended into 2023. Land value survey data from the USDA show a 12.4% increase in average farm real estate values from June 2021 to June 2022. Annual farm real estate value gains were highest in the Northern Plains (19.8%) and the Corn Belt (14.9%) but also strong in the Lake states (13.7%), the Southern Plains (11.3%), and the Pacific (9.7%). The Federal Reserve Bank of Chicago AgLetter reported a 12% gain in farmland values in the Seventh District (primarily Iowa, Indiana, Illinois, and Wisconsin) between January 2022 and January 2023. Data from the Federal Reserve Bank of Kansas City show a similar rise in land values in the Tenth District (primarily Kansas, Missouri, Nebraska, and Oklahoma) during that same period. Farmland value growth rates moderated in fourth quarter 2022 in the face of rapidly rising interest rates. Growth rates in land values could remain low in 2023 due to compressing farm profitability and an elevated interest rate environment. While regional averages for farmland values provide a good barometer for the overall movement in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate. 
 
 Economic conditions are likely to bring mixed effects to credit demand during 2023. Strong asset appreciation could signal additional demand and capacity for farm debt as financial decision-makers look to lock in long-term economics for their appreciating farm and agribusiness assets. Farm profitability generally increases asset values and demand for the asset class for multiple years, which also contributes to increasing credit demand. However, the elevated interest rate environment could adversely impact mortgage portfolio growth, potentially lowering new sales and originations but also potentially slowing portfolio prepayments. Finally, a changing yield curve coupled with widening market credit spreads could increase opportunities for corporate and institutional lending, as Farmer Mac's programs become more attractive at higher costs of capital. Combined, these factors are expected to be generally supportive of continued net portfolio growth for Farmer Mac in 2023. 
 
 Positive economic conditions in the agricultural economy improved Farmer Mac's agricultural portfolio performance in 2022, and they could continue to positively influence loan delinquencies and losses throughout 2023. Farmer Mac's 90-day delinquency levels increased slightly in first quarter 2023 relative to fourth quarter 2022. The overall delinquency rate increased from 0.41% of the Agricultural Finance line of business as of December 31, 2022 to 0.66% of the Agricultural Finance line of business as of March 31, 2023. The first quarter 2023 percentage is higher than the 0.57% delinquency rate as of March 31, 2022. The increase in the seriously delinquent rate is explained by a small number of larger exposures experiencing idiosyncratic business disruptions. The top five exposures of seriously delinquent loans as of first quarter 2023 represent nearly two-thirds of all 90-day delinquent loans. However, rising input costs, market volatility, and the potential for continued economic and weather-related stress increase the level of uncertainty inherent in the agricultural credit sector, which could negatively affect the trajectory of the current agricultural cycle. Farmer Mac believes that its portfolio continues to be highly diversified, both 
 
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 geographically and by commodity and that its portfolio has been underwritten to high credit quality standards. Therefore, Farmer Mac believes that its portfolio is well-positioned to endure reasonably foreseeable volatility from cyclical and external factors. For more information about the loan balances, loan-to-value ratios, 90-day delinquencies, and substandard asset rate for the Agricultural Finance mortgage loans in Farmer Mac's portfolio as of March 31, 2023, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees." 
 
 Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector. External market conditions that could adversely impact the farm and food sectors in 2023 include foreign trade and trade policy, supply chain disruptions, and environmental conditions. The U.S. agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms and food. The USDA's estimate for fiscal year 2023 is a small decrease in export value over 2022, but through February 2023, agricultural export values were up approximately 3% in 2023 compared to 2022. The value of the U.S. dollar relative to other major currencies fell 1% in first quarter 2023, which may help support farm, food, fiber, and fuel exports through the first half of 2023. Slower global growth could be a headwind for consumer-oriented products like animal proteins, dairy, fruits, and nuts, and Ukrainian corn and wheat production may eventually stabilize. Because Farmer Mac has significant exposure to crop commodities like corn, soybeans, hay, wheat, and cotton, a sustained rally in agricultural commodities is likely to continue to benefit Farmer Mac's overall portfolio credit quality more than degradation from downward pressure on livestock and consumer product profitability. 
 
 Severe weather conditions and long-term environmental change continue to shape agricultural sectors. The U.S. experienced 18 separate billion-dollar weather disasters in 2022, as tracked by the National Oceanic and Atmospheric Administration. Many of those events affected agriculture, including midwestern storms, western wildfires, and drought. Federal crop insurance provides a strong mitigator against this risk, but farmers and ranchers face increasingly-severe weather incidents. Long and persistent drought conditions affected agricultural production regions in the western and midwestern parts of the United States in 2021 and 2022, but there has been a sizable improvement in conditions in fourth quarter 2022 and the first quarter 2023, particularly in California. Roughly 6% of the continental U.S. remained in exceptional or extreme drought as of April 18, 2023, according to data from the National Drought Mitigation Center. While this represents the lowest level of widespread drought since 2020, the current drought cycle is the longest in nearly 20 years. For loans in areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting process includes an assessment of anticipated long-term water availability for the related property and how that impacts the collateral value and borrower's cash flow position to mitigate that risk. Flooding can also disrupt agricultural production, although the impacts are generally more temporary than those from extended drought. Copious winter precipitation in California has resulted in field flooding, particularly in the Tulare Lake bed. Farmer Mac has limited portfolio exposure in affected areas, but California flooding could remain a disruptor for western agricultural production in the coming quarters of 2023. 
 
 Rural Infrastructure Industry . Economic conditions affecting the rural infrastructure industry typically follow those in the general economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers increased by 1.4% and 14.9%, respectively, in the last 12 months through February 2023 compared to February 2022. This increase was driven by a sharp increase in sales to the commercial, industrial, and transportation sectors and an increase in the retail price of electricity. Higher energy input prices such as natural gas and coal became a headwind in 2022. 
 
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 Natural gas prices rose consistently in 2021 and 2022 because of reduced supply and additional demand for U.S. liquified natural gas from European countries. Coal prices also rapidly increased in 2022, driven by higher natural gas prices and additional overseas demand to offset limited Russian coal exports. Despite higher input costs, power producers are generally able to pass cost increases through higher retail electricity prices, which has contributed to the increase in electricity costs impacting retail customers throughout 2022. Oil and natural gas prices were volatile during much of 2022 but moderated in fourth quarter 2022 and early 2023. Through March 31, 2023, Farmer Mac had not observed material degradation in the financial performance of its rural infrastructure portfolio, and that portfolio has never experienced a serious delinquency or default since inception. 
 
 Prospects for loan growth within the rural infrastructure industry overall appear to be moderate in the near term, as ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure continue at typical levels. Farmer Mac's future growth opportunities for financing the electric cooperative industry may be affected by the demand for electric power in rural areas, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry. Cooperatives and service providers have access to numerous federally funded programs, such as the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF), the USDA’s ReConnect, and the USDA’s Telecommunications Infrastructure Loan and Loan Guarantee program. In addition to capital projects spurred by these programs, Farmer Mac could see an increase in financing opportunities for other telecommunications providers in rural areas, with wireless broadband increasingly important to economic opportunity and precision agriculture. 
 
 The growth in renewable energy generation and deployment of energy storage technologies may help deepen Farmer Mac's relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable electricity capacity is expected to grow by 48% in the next five years, compared to total electric capacity growth of 10%. The rising cost of fossil fuel-based inputs combined with the falling costs of renewable power generation may hasten this increase in capacity along with recently enacted legislature, such as the Inflation Reduction Act of 2022 that incentivizes domestic production in clean energy technologies such as solar and wind. Any such growth in renewable energy capacity may broaden Farmer Mac's customer base with cooperative lenders focused on lending to renewable energy customers. In response to this expected growth, Farmer Mac has deployed new financing products tailored to the renewable energy sector, which represents a new market opportunity for Farmer Mac. Under this initiative, Farmer Mac's total outstanding loans and loan commitments of renewable energy financing transactions was $308.5 million as of March 31, 2023. 
 
 Legislative and Regulatory Outlook . Farmer Mac continues to monitor potential legislative and regulatory changes that could affect Farmer Mac or its stakeholders, including: 
 
 • The current farm bill expires on September 30, 2023. Covering a variety of programs impacting farm profitability, agricultural credit, and rural infrastructure, it is a critical piece of legislation for rural America and the agricultural sector which includes Farmer Mac customers. Congress has started an extensive process to review programs that are included in the farm bill in preparation for reauthorization. Farmer Mac is seeking enhancement to its charter in this farm bill reauthorization to enhance its partnerships and services in support of farmers, ranchers, agribusinesses, and rural infrastructure. Farmer Mac will continue to work with Congress to enhance its charter and monitor changes to farm bill programs that may impact farm sector profitability. 
 
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 • On January 13, 2023, the FCA board approved an advanced notice of proposed rulemaking to review Farmer Mac's regulatory capital framework. The notice sought public comment on Farmer Mac's regulatory capital requirements in the context of its business activities. The comment period was originally scheduled to close March 27, 2023 but was later extended to April 26, 2023. Farmer Mac and ten other organizations submitted comment letters before the extended deadline. In the FCA's proposed spring regulatory agenda, the agency is targeting a proposed rulemaking on Farmer Mac's regulatory capital framework for May 2024. This timeline may change, and Farmer Mac's management team will continue to monitor the FCA's process for this potential rulemaking. 
 
 • On September 29, 2022, the U.S. Senate confirmed Vincent Logan to be a member of the FCA board. Mr. Logan was subsequently appointed to be the Chairman and CEO of the FCA by President Biden on October 21, 2022. The remaining two members of the board are currently serving in holdover status because their terms have expired. These board members will continue to serve in their roles until replacements are nominated by the President and confirmed by the U.S. Senate. In addition to changes at the board level, the director of the Office of Secondary Market Oversight (OSMO), the office at FCA responsible for the examination, regulation, and supervision of the activities of Farmer Mac to ensure its safety and soundness, retired in December 2022. FCA has designated an acting director while the agency works to appoint a full-time director. 
 
 Balance Sheet Review 
 
 The following table summarizes Farmer Mac's balance sheet as of the periods indicated: 
 
 Table 21 
 As of Change 
 March 31, 2023 December 31, 2022 $ % 
 (in thousands) 
 Assets 
 Cash and cash equivalents $ 864,594 $ 861,002 $ 3,592 — % 
 Investment securities 4,696,168 4,628,268 67,900 1 % 
 Farmer Mac Guaranteed Securities 9,219,420 8,628,380 591,040 7 % 
 USDA Securities 2,360,333 2,411,601 (51,268) (2) % 
 Loans, net of allowance 8,900,485 8,994,350 (93,865) (1) % 
 Loans held in trusts 1,467,855 1,211,116 256,739 21 % 
 Other 431,092 598,393 (167,301) (28) % 
 Total assets $ 27,939,947 $ 27,333,110 $ 606,837 2 % 
 Liabilities 
 Notes Payable $ 24,837,391 $ 24,469,113 $ 368,278 2 % 
 Debt securities of consolidated trusts held by third parties 1,374,332 1,181,948 192,384 16 % 
 Other 435,839 410,091 25,748 6 % 
 Total liabilities $ 26,647,562 $ 26,061,152 $ 586,410 2 % 
 Total equity 1,292,385 1,271,958 20,427 2 % 
 Total liabilities and equity $ 27,939,947 $ 27,333,110 $ 606,837 2 % 

 Assets . The increase in total assets was primarily attributable to new loan volume, including those held in consolidated trusts, new Farmer Mac Guaranteed Securities, and a larger investment portfolio. 
 
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 Liabilities . The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of loan volume, including those held in consolidated trusts. 
 
 Equity . The increase in total equity was primarily due to an increase in retained earnings, partially offset by a decrease in accumulated other comprehensive income. 
 
 Risk Management 
 
 Credit Risk – Loans and Guarantees . 
 Agricultural Finance - Direct Credit Exposure 
 
 Farmer Mac's direct credit exposure to Agricultural Finance mortgage loans as of March 31, 2023 was $10.7 billion across 48 states. Farmer Mac applies credit underwriting standards and methodologies to help assess exposures to loan purchases, which may include collateral valuation, financial metrics, and other appropriate borrower financial and credit information. For Corporate AgFinance loans, which are often larger loan exposures to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity. For more information about Farmer Mac's underwriting and collateral valuation standards for Agricultural Finance mortgage loans, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch" and "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance" in Farmer Mac's 2022 Annual Report. 
 
 Farmer Mac's 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of March 31, 2023, were $70.6 million (0.66% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to $43.5 million (0.41% of the Agricultural Finance mortgage loan portfolio) as of December 31, 2022. Those 90-day delinquencies were comprised of 51 delinquent loans as of March 31, 2023, compared to 37 delinquent loans as of December 31, 2022. The increase in 90-day delinquencies was primarily driven by increased delinquencies in permanent plantings and crops and was partially offset by decreased delinquencies in agricultural storage and processing. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of March 31, 2023. Farmer Mac believes that it remains adequately collateralized on its delinquent loans. 
 
 Farmer Mac's 90-day delinquency rate as of March 31, 2023 was below Farmer Mac's historical average. In the near-term, our delinquency rate may exceed our historical average due to the impact of adverse weather events on the agricultural economy. Farmer Mac's average 90-day delinquency rate as a percentage of its Agricultural Finance mortgage loan portfolio over the last 15 years is approximately 1%. The highest 90-day delinquency rate observed during that period occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's ethanol loan portfolio. 
 
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 The following table presents historical information about Farmer Mac's 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure: 
 
 Table 22 
 Agricultural Finance Mortgage Loans 90-Day
Delinquencies Percentage 
 (dollars in thousands) 
 As of: 
 March 31, 2023 $ 10,680,419 $ 70,646 0.66 % 
 December 31, 2022 10,719,571 43,498 0.41 % 
 September 30, 2022 10,508,549 44,232 0.42 % 
 June 30, 2022 10,128,083 20,623 0.20 % 
 March 31, 2022 9,879,978 55,847 0.57 % 
 December 31, 2021 9,811,749 47,307 0.48 % 
 September 30, 2021 9,445,359 54,792 0.58 % 
 June 30, 2021 9,056,152 63,076 0.70 % 
 March 31, 2021 8,629,352 72,346 0.84 % 

 Across all of Farmer Mac's lines of business, 90-day delinquencies represented 0.27% of total outstanding business volume as of March 31, 2023, compared to 0.17% as of December 31, 2022 and 0.23% as of March 31, 2022. 
 
 The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of March 31, 2023 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure: 
 
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 Table 23 
 Agricultural Finance Mortgage Loans 90-Day Delinquencies as of March 31, 2023 
 
 Distribution of Agricultural Loans Agricultural Loans 90-Day Delinquencies (1) 
 Percentage 
 (dollars in thousands) 
 By year of origination: 
 2013 and prior 7 % $ 819,171 $ 3,472 0.42 % 
 2014 2 % 210,277 1,001 0.48 % 
 2015 3 % 339,986 10,901 3.21 % 
 2016 5 % 543,184 4,519 0.83 % 
 2017 5 % 531,403 6,503 1.22 % 
 2018 6 % 609,455 2,707 0.44 % 
 2019 8 % 849,808 16,858 1.98 % 
 2020 19 % 2,011,754 5,972 0.30 % 
 2021 25 % 2,659,563 931 0.04 % 
 2022 17 % 1,793,221 5,961 0.33 % 
 2023 3 % 312,597 11,821 0.33 % 
 Total 100 % $ 10,680,419 $ 70,646 0.66 % 
 By geographic region (2) : 
 
 Northwest 13 % $ 1,374,647 $ 2,286 0.17 % 
 Southwest 30 % 3,236,371 21,332 0.66 % 
 Mid-North 27 % 2,845,425 5,830 0.20 % 
 Mid-South 17 % 1,835,733 11,469 0.62 % 
 Northeast 4 % 434,604 1,545 0.36 % 
 Southeast 9 % 953,639 28,184 2.96 % 
 Total 100 % $ 10,680,419 $ 70,646 0.66 % 
 By commodity/collateral type: 
 Crops 50 % $ 5,343,256 $ 21,247 0.40 % 
 Permanent plantings 22 % 2,351,228 26,674 1.13 % 
 Livestock 18 % 1,942,909 6,429 0.33 % 
 Part-time farm 5 % 480,524 3,041 0.63 % 
 Ag. Storage and Processing 5 % 545,263 13,255 2.43 % 
 Other — % 17,239 — — % 
 Total 100 % $ 10,680,419 $ 70,646 0.66 % 
 By original loan-to-value ratio: 
 0.00% to 40.00% 20 % $ 2,090,711 $ 16,975 0.81 % 
 40.01% to 50.00% 23 % 2,429,301 15,828 0.65 % 
 50.01% to 60.00% 36 % 3,803,256 12,860 0.34 % 
 60.01% to 70.00% 19 % 2,080,937 24,532 1.18 % 
 70.01% to 80.00% (3) 
 2 % 250,351 451 0.18 % 
 80.01% to 90.00% (3) 
 — % 25,863 — — % 
 Total 100 % $ 10,680,419 $ 70,646 0.66 % 
 By size of borrower exposure (4) : 
 
 Less than $1,000,000 26 % $ 2,770,722 $ 8,192 0.30 % 
 $1,000,000 to $4,999,999 37 % 3,986,078 26,681 0.67 % 
 $5,000,000 to $9,999,999 15 % 1,656,963 — — % 
 $10,000,000 to $24,999,999 13 % 1,337,406 35,773 2.67 % 
 $25,000,000 and greater 9 % 929,250 — — % 
 Total 100 % $ 10,680,419 $ 70,646 0.66 % 

 (1) Includes loans held and 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. 
 (2) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). 
 (3) Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance. 
 (4) Includes aggregated loans to single borrowers or borrower-related entities. 
 
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 Another indicator that Farmer Mac considers in analyzing the credit quality of its Agricultural Finance mortgage loans is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" 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, 2023, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $205.1 million (1.9% of the portfolio), compared to $209.4 million (2.0% of the portfolio) as of December 31, 2022. Those substandard assets comprised 241 loans as of March 31, 2023 and 243 loans as of December 31, 2022. 
 
 The decrease of $4.3 million in substandard assets during first quarter 2023 was primarily driven by credit upgrades in our off-balance sheet portfolios. Substandard assets decreased as a percentage of our off-balance sheet portfolio and remained flat as a percentage of our on-balance sheet portfolio. 
 
 The percentage of substandard assets within the portfolio as of March 31, 2023 was below the historical average. Farmer Mac's average substandard assets as a percentage of its Agricultural Finance mortgage loans over the last 15 years is approximately 4%. The highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's ethanol portfolio. If Farmer Mac's substandard asset rate increases from current levels, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses will also increase. 
 
 Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its portfolio, which Farmer Mac believes is adequately collateralized. 
 
 Farmer Mac considers a loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards. As of March 31, 2023 and December 31, 2022, the average unpaid principal balances for Agricultural Finance mortgage loans outstanding and to which Farmer Mac has direct credit exposure was $796,000 and $806,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for Agricultural Finance mortgage loans purchased during first quarter 2023 was 44%, compared to 46% for loans purchased during first quarter 2022. The weighted-average original loan-to-value ratio for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 50% and 51% as of March 31, 2023 and December 31, 2022, respectively. The weighted-average original loan-to-value ratio for all 90-day delinquencies was 47% and 46% as of March 31, 2023 and December 31, 2022, respectively. 
 
 The weighted-average current loan-to-value ratio (the loan to-value ratio based on original appraised value and current outstanding loan amount adjusted to reflect amortization) for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 45% and 46% as of March 31, 2023 and December 31, 2022, respectively. 
 
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 The following table presents the current loan-to-value ratios for the Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, as disaggregated by internally assigned risk ratings: 
 
 Table 24 
 Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of March 31, 2023 
 
 Acceptable Special Mention Substandard Total 
 (in thousands) 
 Current loan-to-value ratio (1) : 
 
 0.00% to 40.00% $ 3,235,944 $ 54,460 $ 68,977 $ 3,359,381 
 40.01% to 50.00% 2,646,626 95,201 55,480 2,797,307 
 50.01% to 60.00% 2,808,964 95,155 39,080 2,943,199 
 60.01% to 70.00% 1,212,885 98,301 21,150 1,332,336 
 70.01% to 80.00% 186,235 13,276 16,415 215,926 
 80.01% and greater 27,649 651 3,970 32,270 
 Total $ 10,118,303 $ 357,044 $ 205,072 $ 10,680,419 

 (1) The current loan-to-value ratio is based on original appraised value (or most recently obtained valuation, if available) and current outstanding loan amount adjusted to reflect loan amortization. 
 
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 The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of March 31, 2023 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized losses relative to original Farm & Ranch purchases, guarantees, and commitments. 
 
 Table 25 
 Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative 
 Original Loans, Guarantees, and LTSPCs as of March 31, 2023 
 
 Cumulative Original Loans, Guarantees and LTSPCs Cumulative Net Credit Losses/(Recoveries) Cumulative Loss Rate 
 (dollars in thousands) 
 By year of origination: 
 2013 and prior $ 18,734,932 $ 33,785 0.18 % 
 2014 1,088,631 — — % 
 2015 1,249,141 (516) (0.04) % 
 2016 1,590,216 903 0.06 % 
 2017 1,690,606 4,311 0.25 % 
 2018 1,389,000 — — % 
 2019 1,599,060 — — % 
 2020 2,905,165 — — % 
 2021 3,282,649 — — % 
 2022 1,970,695 — — % 
 2023 322,353 — % 
 Total $ 35,822,448 $ 38,483 0.11 % 
 By geographic region (1) : 
 
 Northwest $ 4,602,960 $ 12,094 0.26 % 
 Southwest 12,051,103 8,542 0.07 % 
 Mid-North 8,961,223 17,165 0.19 % 
 Mid-South 5,082,841 (613) (0.01) % 
 Northeast 1,855,518 323 0.02 % 
 Southeast 3,268,803 972 0.03 % 
 Total $ 35,822,448 $ 38,483 0.11 % 
 By commodity/collateral type: 
 Crops $ 16,564,150 $ 3,790 0.02 % 
 Permanent plantings 7,792,137 9,783 0.13 % 
 Livestock 7,851,668 3,836 0.05 % 
 Part-time farm 1,901,315 1,090 0.06 % 
 Ag. Storage and Processing 1,544,587 19,984 1.29 % 
 Other 168,591 — — % 
 Total $ 35,822,448 $ 38,483 0.11 % 

 (1) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). 
 
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 Analysis of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. The following tables present concentrations of Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit losses by origination year and commodity type: 
 
 Table 26 
 As of March 31, 2023 
 Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region 
 Crops Permanent
Plantings Livestock Part-time
Farm Ag. Storage and
Processing Other Total 
 (dollars in thousands) 
 By geographic region (1) : 
 
 Northwest $ 714,060 $ 223,361 $ 292,864 $ 111,727 $ 32,612 $ 23 $ 1,374,647 
 6.7 % 2.1 % 2.7 % 1.0 % 0.3 % — % 12.8 % 
 Southwest 697,278 1,754,034 546,386 107,857 115,357 15,459 3,236,371 
 6.5 % 16.4 % 5.1 % 1.0 % 1.1 % 0.1 % 30.2 % 
 Mid-North 2,364,622 10,302 251,248 86,220 131,487 1,546 2,845,425 
 22.1 % 0.1 % 2.4 % 0.8 % 1.2 % — % 26.6 % 
 Mid-South 1,060,297 78,596 563,555 62,770 70,498 16 1,835,732 
 9.9 % 0.7 % 5.3 % 0.6 % 0.7 % — % 17.2 % 
 Northeast 187,978 44,408 68,789 50,311 83,118 — 434,604 
 1.8 % 0.4 % 0.6 % 0.5 % 0.8 % — % 4.1 % 
 Southeast 319,021 240,527 220,067 61,639 112,191 195 953,640 
 3.0 % 2.3 % 2.1 % 0.6 % 1.1 % — % 9.1 % 
 Total $5,343,256 $2,351,228 $1,942,909 $480,524 $545,263 $17,239 $10,680,419 
 50.0 % 22.0 % 18.2 % 4.5 % 5.2 % 0.1 % 100.0 % 

 (1) Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN). 
 
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 Table 27 
 As of March 31, 2023 
 Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type 
 Crops Permanent
Plantings Livestock Part-time
Farm Ag. Storage and
Processing Total 
 (in thousands) 
 By year of origination: 
 2013 and prior $ 3,427 $ 9,783 $ 3,836 $ 1,066 $ 15,673 $ 33,785 
 2014 — — — — — — 
 2015 (540) — — 24 — (516) 
 2016 903 — — — — 903 
 2017 — — — — 4,311 4,311 
 2018 — — — — — — 
 2019 — — — — — — 
 2020 — — — — — — 
 2021 — — — — — — 
 2022 — — — — — — 
 2023 — — — — — — 
 Total $ 3,790 $ 9,783 $ 3,836 $ 1,090 $ 19,984 $ 38,483 

 For more information about the credit quality of Farmer Mac's Agricultural Finance mortgage loans and the associated allowance for losses please refer to Note 5 and Note 6 to the consolidated financial statements. Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses." 
 
 Rural Infrastructure Finance - Direct Credit Exposure 
 
 Farmer Mac's direct credit exposure to Rural Infrastructure Finance loans held and loans underlying LTSPCs as of March 31, 2023 was $3.7 billion across 45 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Rural Infrastructure Finance loans, see "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac's 2022 Annual Report. As of March 31, 2023, there were no delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loans. 
 
 Farmer Mac evaluates credit risk for these assets by reviewing a variety of borrower credit risk characteristics. These characteristics can include (but is not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment. 
 
 The following table presents Farmer Mac’s portfolio of generation and transmission ("G&T") and distribution cooperative borrowers, as well as renewable energy loans, disaggregated by internally assigned risk ratings. 
 
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 Table 28 
 Rural Infrastructure Finance portfolio by internally assigned risk rating as of March 31, 2023 
 
 Acceptable Special Mention Substandard Total 
 (in thousands) 
 Distribution Cooperative $ 2,339,582 $ — $ — $ 2,339,582 
 G&T Cooperative 677,515 — — 677,515 
 Renewable Energy 308,493 — — 308,493 
 Telecommunications 356,102 — — 356,102 
 Rural Infrastructure Total $ 3,681,692 $ — $ — $ 3,681,692 

 For more information about the credit quality of Farmer Mac's Rural Infrastructure Finance portfolio and the associated allowance for losses please refer to Notes 5 and 6 of the consolidated financial statements. 
 
 Other Considerations Regarding Credit Risk Related to Loans and Guarantees 
 
 The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States. Therefore, Farmer Mac believes that we have little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business because of the USDA guarantee. As of March 31, 2023, Farmer Mac had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Securities. 
 
 Farmer Mac requires many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to Farmer Mac's standards, the accuracy of loan data provided to Farmer Mac, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has the ability to require a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's decision to purchase the loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred by the seller to Farmer Mac. During the previous three years ended March 31, 2023, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan. In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Rural Infrastructure Finance loans on which it has direct credit exposure. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria. For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac’s 2022 Annual Report. 
 
 Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements. Servicers are responsible to Farmer Mac for material errors in the servicing of those loans. If a servicer materially breaches the terms of its servicing agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without 
 
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 Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. During the previous three years ended March 31, 2023, Farmer Mac had not exercised any remedies or taken any formal action against any servicers. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Servicing" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac’s 2022 Annual Report. 
 
 Credit Risk – Counterparty Risk . Farmer Mac is exposed to credit risk arising from its business relationships with other institutions, which include: 
 
 • issuers of AgVantage securities; 
 • approved lenders and servicers; and 
 • interest rate swap counterparties. 
 
 Farmer Mac approves AgVantage counterparties and manages institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's standards for creditworthiness for the particular counterparty type and transaction. The required collateralization level is established when the AgVantage facility is entered into with the counterparty and does not change during the life of the AgVantage securities issued under the facility without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute eligible loans that are current in payment or pay down the AgVantage securities to maintain the minimum required collateralization level. 
 
 In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Rural Infrastructure loans that secure AgVantage securities. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, Farmer Mac also typically requires that the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower loan-to-value ratio thresholds and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. As of March 31, 2023, Farmer Mac had not experienced any credit losses on any AgVantage securities. For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Other Products – Rural Infrastructure Finance—AgVantage Securities" in Farmer Mac’s 2022 Annual Report. 
 
 The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $6.0 billion as of both March 31, 2023 and December 31, 2022. The unpaid principal balance of on-balance sheet AgVantage securities secured by loans eligible for the Rural Infrastructure Finance line of business totaled $3.5 billion as of March 31, 2023 and $3.0 billion as of December 31, 2022. The unpaid principal balance of outstanding off-balance sheet AgVantage securities totaled $1.1 million as of March 31, 2023 and $1.2 million as of December 31, 2022. 
 
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 The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of March 31, 2023 and December 31, 2022: 
 
 Table 29 
 As of March 31, 2023 As of December 31, 2022 
 Counterparty Balance Required Collateralization Balance Required Collateralization 
 (dollars in thousands) 
 AgVantage: 
 CFC $ 3,516,483 100% $ 3,045,325 100% 
 MetLife 2,050,000 103% 2,050,000 103% 
 Rabo AgriFinance 2,925,000 105% 2,855,000 105% 
 Other (1) 
 1,037,685 100% to 125% 1,059,600 100% to 125% 
 Total outstanding $ 9,529,168 $ 9,009,925 

 (1) Consists of AgVantage securities issued by 10 and 12 different issuers as of March 31, 2023 and 2022, respectively. 
 
 Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness. Farmer Mac monitors the financial condition of those institutions by evaluating financial statements and credit rating agency reports. For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac’s 2022 Annual Report. 
 
 Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that vary based on the market value of its swap portfolio with each counterparty. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 4 to the consolidated financial statements. 
 
 Credit Risk – Other Investments . As of March 31, 2023, Farmer Mac had $0.9 billion of cash and cash equivalents and $4.7 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's internal policies as well as regulations issued by the FCA found at 12 C.F.R. §§ 652.1-652.45 ("Liquidity and Investment Regulations"). In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's investment policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets. 
 
 The Liquidity and Investment Regulations and Farmer Mac's internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and 
 
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 generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held. 
 
 The Liquidity and Investment Regulations and Farmer Mac's internal policies also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. The Liquidity and Investment Regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor of securities to 10% of Farmer Mac's regulatory capital ($137.0 million as of March 31, 2023). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($68.5 million as of March 31, 2023). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE. 
 
 Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework. 
 
 Interest Rate Risk . Farmer Mac is subject to interest rate risk on all interest-earning assets on its balance sheet because of timing differences in the cash flows due to maturity, paydown, or repricing of the assets and debt together with financial derivatives. Cash flow mismatches due to changing interest rates can reduce the earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac could realize a decline in income if assets repay more slowly than originally forecasted and the associated maturing debt must be replaced by debt issuances at higher interest rates. 
 
 Interest Rate Risk Management 
 
 The goal of interest rate risk management at Farmer Mac is to manage the balance sheet in a manner that generates stable earnings and value across a variety of interest rate environments. Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac regularly assesses this exposure and, if necessary, adjusts its portfolio of interest-earning assets, debt, and financial derivatives. 
 
 Farmer Mac's objective is to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's board of directors. Farmer Mac's management-level Asset and Liability Committee ("ALCO") provides oversight, establishes guidelines, and approves strategies to maintain interest rate risk within the board-established limits. 
 
 Farmer Mac's primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and convexity characteristics and help mitigate impacts from interest rate changes across the yield curve. As part of this strategy, Farmer Mac seeks to issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows. 
 
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 Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its debt issuance strategy. Portions of Farmer Mac's callable debt is issued to mitigate prepayment risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, prepayments typically increase, and Farmer Mac is able to economically extinguish certain callable debt issuances. In addition, Farmer Mac enters into financial derivatives, primarily interest rate swaps, to better match the durations of Farmer Mac's assets and liabilities, thereby reducing overall sensitivity to changing interest rates. 
 
 Taking into consideration the prepayment provisions and the default probabilities associated with its portfolio of interest-earning assets, Farmer Mac incorporates behavioral models when projecting and valuing cash flows associated with these assets. In recognition that borrowers' behaviors in various interest rate environments may change over time, Farmer Mac periodically evaluates the effectiveness of these models compared to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts. 
 
 Changes in interest rates may affect the timing of asset prepayments which may, in turn, impact durations and values of the assets. Declining interest rates generally result in increased prepayments, which shortens the duration of these assets, while rising interest rates generally result in lower prepayments, thereby extending the duration of the assets. 
 
 Farmer Mac is subject to interest rate risk on loans and securities it has committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When Farmer Mac commits to purchase these assets, it is exposed to interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of these loans. Farmer Mac manages the interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. 
 
 Farmer Mac's $0.9 billion of cash and cash equivalents held as of March 31, 2023 mature within three months. As of March 31, 2023, $3.2 billion of the $4.7 billion of investment securities (69%) were floating rate securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Farmer Mac's floating rate investment securities are funded with floating rate debt. The fixed rate investment securities are generally funded in a manner consistent with Farmer Mac's overall funding strategy that approximates a duration and convexity match. 
 
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 Interest Rate Risk Metrics 
 
 Farmer Mac regularly evaluates and conducts interest rate shock simulations on its portfolio of financial assets, debt, and financial derivatives and examines a variety of metrics to quantify and manage its exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted net effective spread ("NES") as well as a duration gap analysis. 
 
 MVE represents management's estimate of the present value of all future cash flows from its current portfolio of on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. The MVE sensitivity analysis measures the degree to which the market values of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates. 
 
 Farmer Mac's NES simulation represents the difference between projected income over the next twelve months from the current portfolio of interest-earning assets and interest expense produced by the related funding, including associated financial derivatives. Farmer Mac's NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of funded assets and debt together with the associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest rates across the yield curve as well as the composition of Farmer Mac's portfolio. The NES simulation represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of Farmer Mac's NES income sensitivity to interest rate shocks. 
 
 Duration is a measure of a financial instrument's fair value sensitivity to small changes in interest rates. Duration gap is calculated using the net estimated durations of Farmer Mac's interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and financial derivatives. Duration gap provides a relatively concise measure of the interest rate risk inherent in Farmer Mac's outstanding portfolio. 
 
 A positive duration gap denotes that the duration of Farmer Mac's interest-earning assets is greater than the duration of its debt and financial derivatives. A positive duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is more sensitive than the fair value change of its debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets are less sensitive than the fair value change of its debt and financial derivatives. A duration gap of zero indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is effectively offset by the fair value change of its debt and financial derivatives. 
 
 Each of the interest rate risk metrics is quantified using asset/liability models and derived based on management's best estimates of factors such as implied forward interest rates across the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes. 
 
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 The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of March 31, 2023 and December 31, 2022 to an immediate and instantaneous uniform or "parallel" shift in the yield curve: 
 
 Table 30 
 Percentage Change in MVE from Base Case 
 Interest Rate Scenario As of March 31, 2023 As of December 31, 2022 
 +100 basis points (3.2) % (3.7) % 
 -100 basis points 2.5 % 2.7 % 

 Percentage Change in NES from Base Case 
 Interest Rate Scenario As of March 31, 2023 As of December 31, 2022 
 +100 basis points 0.2 % 0.4 % 
 -100 basis points (0.4) % (0.6) % 

 As of March 31, 2023, Farmer Mac's duration gap was positive 3.1 months, compared to positive 3.6 months as of December 31, 2022. Interest rates within the yield curve flattened during 2023 with the 2-year and 10-year U.S. Treasury Note yield-to-maturity increasing by approximately 40 basis points and 41 basis points, respectively, versus year-end 2022. This rate movement contributed to shortening the duration of Farmer Mac's funded assets compared to its debt and financial derivatives, thereby narrowing Farmer Mac's duration gap. 
 
 Financial Derivatives Transactions 
 
 The economic effects of financial derivatives are included in Farmer Mac's MVE, NES, and duration gap analyses. Farmer Mac typically enters into the following types of financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of interest-earning assets, future cash flows, and debt issuance, and not for trading or speculative purposes: 
 
 • "pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties; 
 • "receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties; 
 • "basis swaps," in which Farmer Mac pays floating rates of interest based on one index to, and receives floating rates of interest based on a different index from, counterparties; and 
 • exchange-traded futures contracts involving U.S. Treasury securities. 
 
 As of March 31, 2023, Farmer Mac had $25.0 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to just over thirty years, of which $9.1 billion were pay-fixed interest rate swaps, $14.1 billion were receive-fixed interest rate swaps, and $1.8 billion were basis swaps. 
 
 Farmer Mac enters into interest rate swaps to more closely match the cash flow and duration characteristics of its interest-earning assets with those of its debt. For example, Farmer Mac transacts pay-fixed interest rate swaps and issues floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. Farmer Mac evaluates the overall cost of using interest rate swaps in conjunction with debt issuance as a funding alternative to duration-matched debt and enters into interest rate swaps to manage interest rate risks across the balance sheet. 
 
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 Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available for sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g., LIBOR or SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt. 
 
 As discussed in Note 4 to the consolidated financial statements, all financial derivatives are recorded on the balance sheet at fair value as derivative assets or as derivative liabilities. Changes in the fair values of undesignated financial derivatives are reported in "Gains on financial derivatives" in the consolidated statements of operations. For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations. Interest accruals on derivatives designated in fair value hedge accounting relationships are also recorded in "Net interest income" in the consolidated statements of operations. For financial derivatives designated in cash flow hedge accounting relationships, the unrealized gain or loss on the derivative is recorded in other comprehensive income. Because the hedging instrument is an interest rate swap and the hedged forecasted transactions are future interest payments on floating rate debt, amounts recorded in accumulated other comprehensive income are reclassified to "Total interest expense" in conjunction with the recognition of interest expense on the debt. All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both March 31, 2023 and December 31, 2022, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps 
 
 Re-funding and repricing risk 
 
 Farmer Mac is subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. Re-funding and repricing risk arises from potential changes in funding costs resulting from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that on average may have longer maturities. Changes in Farmer Mac's funding costs relative to the benchmark market index rate to which the assets are indexed can cause changes to net interest income when debt matures and is reissued at then current interest rates to continue funding those assets. 
 
 Farmer Mac is subject to re-funding and repricing risk on a portion of its fixed rate assets as a result of its use of pay-fixed receive-floating interest rate swaps that effectively convert the required funding needed from fixed rate to floating rate. These fixed rate assets are then effectively floating rate assets that require floating rate funding. 
 
 Farmer Mac can meet floating rate funding needs in several ways, including: 
 
 • issuing short-term fixed rate discount notes with maturities that match the reset period of the assets; 
 • issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded; 
 • issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or 
 • issuing non-maturity matched, fixed rate discount notes or medium-term notes swapped to floating rate to match the interest rate reset dates of the assets. 
 
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 To meet certain floating rate funding needs, Farmer Mac frequently issues shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with a received-fixed interest rate swap because these funding alternatives generally provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's overall debt issuance and liquidity management strategies. 
 
 However, if the funding cost of Farmer Mac’s discount notes or medium-term notes increased relative to the benchmark market index of the associated assets during the time between when these floating rate assets were first funded and when Farmer Mac refinanced the associated debt, Farmer Mac would be exposed to a commensurate reduction of net effective spread. Conversely, if the funding cost on Farmer Mac’s discount notes or medium-term notes decreased relative to the benchmark market index during that time, Farmer Mac would benefit from a commensurate increase to net effective spread. 
 
 Farmer Mac's debt issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's risk tolerance. Farmer Mac regularly adjusts its funding strategies to mitigate the effects of interest rate variability and seeks to maintain an effective mixture of funding structures in the context of its overall liability and liquidity management strategies. 
 
 As of March 31, 2023, Farmer Mac held $7.6 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indices, such as LIBOR or SOFR. As of the same date, Farmer Mac also had $9.1 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily LIBOR or SOFR. 
 
 Discontinuation of LIBOR 
 
 As described in "Risk Factors—Market Risk" in Part I, Item 1A of the 2022 Annual Report, Farmer Mac faces risks associated with the reform, replacement, or discontinuation of the LIBOR benchmark interest rate and the transition to an alternative benchmark interest rate. Farmer Mac continues to evaluate the potential effect on our business of replacement benchmark interest rates expected to replace LIBOR, including SOFR, which is the replacement benchmark rate recommended by the Alternative Reference Rates Committee and designated by the Adjustable Interest Rate (LIBOR) Act and implementing regulations. 
 
 As of March 31, 2023, Farmer Mac held $2.6 billion of floating rate assets in its lines of business and its investment portfolio, had issued $0.2 billion of floating rate debt, and had entered into $9.8 billion notional amount of interest rate swaps, each of which reset based on LIBOR. In addition, our Non-Cumulative Series C Preferred Stock currently pays a fixed rate of interest until July 17, 2024. It becomes redeemable at our option on July 18, 2024 and thereafter pays interest at a floating rate equal to three-month LIBOR plus 3.260%. 
 
 The market transition away from LIBOR and towards alternative benchmark interest rate indices may be complicated and is expected to require term and credit adjustments to accommodate for differences between the benchmark interest rate indices. The transition may also result in different financial performance for existing transactions, may require different hedging strategies, or may require 
 
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 renegotiation of existing transactions. As of March 31, 2023, we had $1.2 billion outstanding in medium-term notes based on SOFR, a potential alternative benchmark interest rate index. 
 
 Liquidity and Capital Resources 
 
 Farmer Mac's primary sources of funds to meet its liquidity and funding needs are the proceeds of its debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and maturities of AgVantage and investment securities. Farmer Mac regularly accesses the debt capital markets for funding, and Farmer Mac has maintained steady access to the debt capital markets throughout 2023. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the debt capital markets. As of March 31, 2023, Farmer Mac had outstanding discount notes of $0.9 billion, medium-term notes that mature within one year of $7.6 billion, and medium-term notes that mature after one year of $16.8 billion. 
 
 Assuming continued access to the debt capital markets, Farmer Mac believes it has sufficient liquidity and capital resources to support its operations for the next 12 months and for the foreseeable future. Farmer Mac has a contingency funding plan to manage unanticipated disruptions in its access to the debt capital markets. Farmer Mac must maintain a minimum of 90 days of liquidity under the Liquidity and Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac maintained a monthly average of 295 days of liquidity throughout first quarter 2023 and had 286 days of liquidity as of March 31, 2023. 
 
 Farmer Mac maintains cash, cash equivalents (including U.S. Treasury securities, operational deposits, and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs. Farmer Mac's current policies authorize liquidity investments in: 
 
 • obligations of or fully guaranteed by the United States or a U.S. government agency; 
 • obligations of or fully guaranteed by GSEs; 
 • municipal securities; 
 • international and multilateral development bank obligations; 
 • money market instruments; 
 • diversified investment funds; 
 • asset-backed securities; 
 • corporate debt securities; and 
 • mortgage-backed securities. 
 
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 The following table presents these assets as of March 31, 2023 and December 31, 2022: 
 
 Table 31 
 
 As of March 31, 2023 As of December 31, 2022 
 (in thousands) 
 Cash and cash equivalents $ 864,594 $ 861,002 
 Investment securities: 
 Guaranteed by U.S. Government and its agencies 1,285,145 1,444,650 
 Guaranteed by GSEs 3,388,320 3,160,919 
 Asset-backed securities 19,031 19,027 
 Total $ 5,557,090 $ 5,485,598 

 The objectives of the investment portfolio as of March 31, 2023 and December 31, 2022 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity, to prepare for the possibility of future volatility in the debt capital markets, and to support program asset growth. 
 
 Capital Requirements . Farmer Mac is subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of March 31, 2023, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level). 
 
 In accordance with the FCA's rule on capital planning, Farmer Mac's board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of March 31, 2023 and 2022, Farmer Mac's Tier 1 capital ratio was 15.7% and 14.9%, respectively. As of March 31, 2023, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with the FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition. 
 
 For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and the FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—Capital Standards" in Farmer Mac's 2022 Annual Report. See Note 8 to the consolidated financial statements for more information about Farmer Mac's capital position. 
 
 Other Matters 
 
 None. 
 
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 Supplemental Information 
 
 The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume: 
 
 Table 32 
 New Business Volume 
 Agricultural Finance Rural Infrastructure Finance 
 Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total 
 (in thousands) 
 For the quarter ended: 
 March 31, 2023 $ 750,040 $ 203,211 $ 683,232 $ 89,747 $ 1,726,230 
 December 31, 2022 1,114,255 165,395 140,222 43,737 1,463,609 
 September 30, 2022 1,927,209 169,932 547,117 61,653 2,705,911 
 June 30, 2022 1,418,397 107,916 326,899 35,307 1,888,519 
 March 31, 2022 2,452,539 103,353 377,965 41,636 2,975,493 
 December 31, 2021 2,075,540 411,838 631,338 12,594 3,131,310 
 September 30, 2021 1,791,662 122,043 609,745 4,152 2,527,602 
 June 30, 2021 925,950 159,958 410,666 3,441 1,500,015 
 March 31, 2021 1,087,897 186,393 171,546 23,484 1,469,320 
 
 For the year ended: 
 December 31, 2022 $ 6,912,400 $ 546,596 $ 1,392,203 $ 182,333 $ 9,033,532 
 December 31, 2021 5,881,049 880,232 1,823,295 43,671 8,628,247 

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 Table 33 
 Repayments of Assets 
 Agricultural Finance Rural Infrastructure Finance 
 Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total 
 (in thousands) 
 For the quarter ended: 
 Scheduled $ 279,676 $ 78,482 $ 95,809 $ 11,424 $ 465,391 
 Unscheduled 231,288 128,254 57,354 — 416,896 
 March 31, 2023 $ 510,964 $ 206,736 $ 153,163 $ 11,424 $ 882,287 
 
 Scheduled $ 447,976 $ 64,308 $ 75,671 $ 9,809 $ 597,764 
 Unscheduled 136,245 132,366 1,201 — 269,812 
 December 31, 2022 $ 584,221 $ 196,674 $ 76,872 $ 9,809 $ 867,576 
 
 Scheduled $ 724,580 $ 38,018 $ 422,917 $ 13,429 $ 1,198,944 
 Unscheduled 296,763 64,439 — — 361,202 
 September 30, 2022 $ 1,021,343 $ 102,457 $ 422,917 $ 13,429 $ 1,560,146 
 
 Scheduled $ 1,114,779 $ 42,162 $ 159,491 $ 7,898 $ 1,324,330 
 Unscheduled 286,303 30,203 1,791 — 318,297 
 June 30, 2022 $ 1,401,082 $ 72,365 $ 161,282 $ 7,898 $ 1,642,627 
 
 Scheduled $ 1,535,369 $ 39,480 $ 266,349 $ 7,790 $ 1,848,988 
 Unscheduled 434,794 60,947 397 — 496,138 
 March 31, 2022 $ 1,970,163 $ 100,427 $ 266,746 $ 7,790 $ 2,345,126 
 
 Scheduled $ 928,663 $ 205,778 $ 816,802 $ 18,526 $ 1,969,769 
 Unscheduled 318,024 48,042 — — 366,066 
 December 31, 2021 $ 1,246,687 $ 253,820 $ 816,802 $ 18,526 $ 2,335,835 
 
 Scheduled $ 725,713 $ 406,285 $ 95,443 $ 4,043 $ 1,231,484 
 Unscheduled 374,287 — 201 — 374,488 
 September 30, 2021 $ 1,100,000 $ 406,285 $ 95,644 $ 4,043 $ 1,605,972 
 
 Scheduled $ 380,684 $ 139,774 $ 225,257 $ 4,704 $ 750,419 
 Unscheduled 409,393 3,921 1,652 — 414,966 
 June 30, 2021 $ 790,077 $ 143,695 $ 226,909 $ 4,704 $ 1,165,385 
 
 Scheduled $ 721,090 $ 120,621 $ 100,482 $ 2,671 $ 944,864 
 Unscheduled 501,651 82,090 2,279 — 586,020 
 March 31, 2021 $ 1,222,741 $ 202,711 $ 102,761 $ 2,671 $ 1,530,884 
 
 For the year ended: 
 Scheduled $ 3,822,704 $ 183,968 $ 924,428 $ 38,926 $ 4,970,026 
 Unscheduled 1,154,105 287,955 3,389 — 1,445,449 
 December 31, 2022 $ 4,976,809 $ 471,923 $ 927,817 $ 38,926 $ 6,415,475 
 
 Scheduled $ 2,756,150 $ 872,458 $ 1,237,984 $ 29,944 $ 4,896,536 
 Unscheduled 1,603,355 134,053 4,132 — 1,741,540 
 December 31, 2021 $ 4,359,505 $ 1,006,511 $ 1,242,116 $ 29,944 $ 6,638,076 

 99 

 Table 34 
 Outstanding Business Volume 
 Agricultural Finance Rural Infrastructure Finance 
 Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total 
 (in thousands) 
 As of: 
 March 31, 2023 $ 17,685,961 $ 1,599,982 $ 6,889,682 $ 308,493 $ 26,484,118 
 December 31, 2022 17,728,792 1,603,507 6,359,613 230,170 25,922,082 
 September 30, 2022 17,199,347 1,634,786 6,296,263 196,242 25,326,638 
 June 30, 2022 16,591,999 1,567,311 6,172,063 148,018 24,479,391 
 March 31, 2022 16,575,595 1,540,760 6,006,446 120,609 24,243,410 
 December 31, 2021 16,094,639 1,537,834 5,895,227 86,763 23,614,463 
 September 30, 2021 15,565,589 1,379,816 6,080,691 92,695 23,118,791 
 June 30, 2021 14,873,926 1,664,059 5,566,591 92,585 22,197,161 
 March 31, 2021 14,738,052 1,647,796 5,382,835 93,848 21,862,531 

 Table 35 
 On-Balance Sheet Outstanding Business Volume 
 Fixed Rate 5- to 10-Year ARMs & Resets 1-Month to 3-Year ARMs Total Held in Portfolio 
 (in thousands) 
 As of: 
 March 31, 2023 $ 13,607,740 $ 3,020,229 $ 5,924,032 $ 22,552,001 
 December 31, 2022 13,693,810 3,031,288 5,251,427 21,976,525 
 September 30, 2022 13,810,162 2,960,596 4,644,958 21,415,716 
 June 30, 2022 13,798,771 2,939,467 3,993,956 20,732,194 
 March 31, 2022 14,174,611 2,858,521 3,443,816 20,476,948 
 December 31, 2021 13,228,675 2,896,014 3,695,269 19,819,958 
 September 30, 2021 12,921,572 2,872,499 3,818,550 19,612,621 
 June 30, 2021 11,800,429 2,878,637 4,254,625 18,933,691 
 March 31, 2021 11,454,321 2,824,551 4,410,661 18,689,533 

 100 

 The following table presents the quarterly net effective spread (a non-GAAP measure) by segment: 
 
 Table 36 
 Net Effective Spread (1) 
 
 Agricultural Finance Rural Infrastructure Finance Treasury 
 Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Funding Investments Net Effective Spread 
 Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield 
 (dollars in thousands) 
 For the quarter ended: 
 March 31, 2023 (2) 
 $ 32,465 0.97 % $ 7,148 1.94 % $ 5,507 0.36 % $ 858 1.53 % $ 31,738 0.47 % $ (543) (0.04) % $ 77,173 1.15 % 
 December 31, 2022 32,770 0.98 % 7,471 1.94 % 4,960 0.34 % 935 1.76 % 27,656 0.42 % (2,689) (0.19) % 71,103 1.07 % 
 September 30, 2022 33,343 1.04 % 7,600 1.99 % 4,220 0.30 % 705 1.97 % 22,564 0.36 % (2,791) (0.21) % 65,641 1.03 % 
 June 30, 2022 32,590 1.05 % 6,929 1.87 % 3,733 0.27 % 468 1.78 % 18,508 0.30 % (1,282) (0.10) % 60,946 0.99 % 
 March 31, 2022 (2) 
 30,354 1.02 % 7,209 1.96 % 3,159 0.23 % 375 1.69 % 16,738 0.28 % 4 — % 57,839 0.97 % 
 December 31, 2021 28,998 0.99 % 6,321 1.84 % 2,521 0.19 % 356 1.53 % 15,979 0.28 % 158 0.01 % 54,333 0.94 % 
 September 30, 2021 28,914 1.06 % 7,163 1.80 % 2,067 0.16 % 236 1.09 % 17,386 0.31 % 159 0.01 % 55,925 0.99 % 
 June 30, 2021 29,163 1.06 % 6,676 1.65 % 1,759 0.14 % 378 1.80 % 18,449 0.33 % 126 0.01 % 56,551 1.01 % 
 March 31, 2021 26,461 0.98 % 6,921 1.67 % 1,720 0.14 % 249 1.28 % 18,394 0.33 % 114 0.01 % 53,859 0.97 % 

 (1) Farmer Mac excludes the Corporate segment in the presentation above because the segment does not have any interest-earning assets. 
 (2) See Note 10 to the consolidated financial statements for a reconciliation of GAAP net interest income by segment to net effective spread by segment for the three months ended March 31, 2023 and 2022. 
 
 101 

 The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders: 
 
 Table 37 
 Core Earnings by Quarter End 
 March 2023 December 2022 September 2022 June 
2022 March 2022 December 2021 September 2021 June 2021 March 2021 
 (in thousands) 
 Revenues: 
 Net effective spread $ 77,173 $ 71,103 $ 65,641 $ 60,946 $ 57,839 $ 54,333 $ 55,925 $ 56,551 $ 53,859 
 Guarantee and commitment fees 4,654 4,677 4,201 4,709 4,557 4,637 4,322 4,334 4,240 
 Gains on sale of mortgage loans — — — — — 6,539 — — — 
 Other 1,067 390 473 307 514 241 687 301 451 
 Total revenues 82,894 76,170 70,315 65,962 62,910 65,750 60,934 61,186 58,550 
 
 Credit related expense/(income): 
 Provision for/(release of) losses 750 1,945 450 (1,535) (54) (1,428) 255 (983) (31) 
 REO operating expenses — 819 — — — — — — — 
 Losses on sale of REO — — — — — — — — — 
 Total credit related expense/(income) 750 2,764 450 (1,535) (54) (1,428) 255 (983) (31) 
 
 Operating expenses: 
 Compensation and employee benefits 15,351 12,105 11,648 11,715 13,298 11,246 10,027 9,779 11,795 
 General and administrative 7,527 8,055 6,919 7,520 7,278 8,492 6,330 6,349 6,336 
 Regulatory fees 835 832 812 813 812 812 750 750 750 
 Total operating expenses 23,713 20,992 19,379 20,048 21,388 20,550 17,107 16,878 18,881 
 
 Net earnings 58,431 52,414 50,486 47,449 41,576 46,628 43,572 45,291 39,700 
 Income tax expense 12,756 11,210 10,303 9,909 9,024 9,809 9,152 9,463 8,520 
 Preferred stock dividends 6,791 6,791 6,791 6,792 6,791 6,792 6,774 5,842 5,269 
 Core earnings $ 38,884 $ 34,413 $ 33,392 $ 30,748 $ 25,761 $ 30,027 $ 27,646 $ 29,986 $ 25,911 
 
 Reconciling items: 
 Gains/(losses) on undesignated financial derivatives due to fair value changes $ 916 $ 1,596 $ 6,441 $ 2,846 $ 2,612 $ (1,242) $ (405) $ (3,020) $ 3,236 
 (Losses)/gains on hedging activities due to fair value changes (105) (148) (624) 428 5,687 (2,079) 1,818 (5,866) 4,317 
 Unrealized gains/(losses) on trading assets 359 31 (757) (285) 94 (76) 36 (61) (14) 
 Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 29 57 24 (62) 20 71 23 20 16 
 Net effects of terminations or net settlements on financial derivatives 523 1,268 (3,522) 2,536 15,512 (429) (351) 109 1,165 
 
 Income tax effect related to reconciling items (362) (590) (327) (1,148) (5,024) 789 (236) 1,852 (1,831) 
 Net income attributable to common stockholders $ 40,244 $ 36,627 $ 34,627 $ 35,063 $ 44,662 $ 27,061 $ 28,531 $ 23,020 $ 32,800
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
FEDERAL AGRICULTURAL MORTGAGE CORP 10-Q

Item 2. Management’s Discussion and Analysis
