What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-07 compared with 2023-05-09 · 473 added, 187 removed, 1314 unchanged (33% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(in thousands)

60 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

March 31, 2023 March 31, 2022

For the Three Months Ended For the Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands, except per share amounts)

6 unchanged sentences

Net interest income 78,677 63,914 157,735 129,452

Provision for losses ( 547 ) ( 56 )

Net interest income after provision for losses 78,511 65,482

(Provision for)/release of losses ( 1,073 ) 1,372 ( 1,620 ) 1,316

Net interest income after (provision for)/release of losses 77,604 65,286 156,115 130,768

Non-interest income/(expense):

1 unchanged sentence

Gains on financial derivatives 1,693 3,791 2,092 20,779

Gains/(losses) on trading securities 25 ( 63 )

(Losses)/gains on trading securities ( 9 ) 29 16 ( 34 )

(Provision for)/release of reserve for losses ( 69 ) 163 ( 272 ) 273

17 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended

March 31, 2023 March 31, 2022

For the Three Months Ended For the Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(in thousands

Net income $ 47,212 $ 41,855 $ 94,247 $ 93,308

Other comprehensive (loss)/income:

Other comprehensive income/(loss):

Net unrealized gains/(losses) on available-for-sale securities 23,334 ( 30,179 ) 23,992 ( 116,446 )

Net changes in held-to-maturity securities ( 321 ) 865 ( 1,103 ) 842

Net unrealized (losses)/gains on cash flow hedges ( 11,292 ) 31,204

Other comprehensive loss before tax ( 11,416 ) ( 55,086 )

Income tax benefit related to other comprehensive loss 2,397 11,568

Other comprehensive loss net of tax ( 9,019 ) ( 43,518 )

Net unrealized gains/(losses) on cash flow hedges 9,279 16,884 ( 2,013 ) 48,088

Other comprehensive income/(loss) before tax 32,292 ( 12,430 ) 20,876 ( 67,516 )

Income tax (expense)/benefit related to other comprehensive income/(loss) ( 6,781 ) 2,611 ( 4,384 ) 14,179

Other comprehensive income/(loss) net of tax 25,511 ( 9,819 ) 16,492 ( 53,337 )

Comprehensive income $ 72,723 $ 32,036 $ 110,739 $ 39,971

17 unchanged sentences

Balance as of March 31, 2023 19,980 $ 484,531 10,820 $ 10,820 $ 130,004 $ ( 59,862 ) $ 726,892 $ 1,292,385

Net Income — — — — — — 47,212 47,212

Other comprehensive income, net of tax — — — — — 25,511 — 25,511

Cash dividends:

Preferred stock — — — — — — ( 6,791 ) ( 6,791 )

Common stock (cash dividend of $ 1.10 per share)

— — — — — — ( 11,921 ) ( 11,921 )

Issuance of Class C Common Stock — — 16 16 54 — — 70

Stock-based compensation cost — — — — 1,223 — — 1,223

Other stock-based award activity — — — — ( 1,134 ) — — ( 1,134 )

Balance as of June 30, 2023 19,980 $ 484,531 10,836 $ 10,836 $ 130,147 $ ( 34,351 ) $ 755,392 $ 1,346,555

Balance as of December 31, 2021 19,980 $ 484,531 10,766 $ 10,766 $ 125,993 $ 3,853 $ 588,557 $ 1,213,700

9 unchanged sentences

Balance as of March 31, 2022 19,980 $ 484,531 10,788 $ 10,788 $ 127,103 $ ( 39,665 ) $ 622,990 $ 1,205,747

Net Income — — — — — — 41,855 41,855

Other comprehensive loss, net of tax — — — — — ( 9,819 ) — ( 9,819 )

Cash dividends:

Preferred stock — — — — — — ( 6,792 ) ( 6,792 )

Common stock (cash dividend of $ 0.95 per share)

— — — — — — ( 10,256 ) ( 10,256 )

Issuance of Class C Common Stock — — 9 9 46 — — 55

Stock-based compensation cost — — — — 862 — — 862

Other stock-based award activity — — — — ( 442 ) — — ( 442 )

Balance as of June 30, 2022 19,980 $ 484,531 10,797 $ 10,797 $ 127,569 $ ( 49,484 ) $ 647,797 $ 1,221,210

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

March 31, 2023 March 31, 2022

For the Six Months Ended

June 30, 2023 June 30, 2022

(in thousands)

17 unchanged sentences

Other liabilities ( 7,371 ) 3,522

Net cash provided by/(used in) operating activities 60,561 269,305

Net cash provided by operating activities 179,663 526,010

Cash flows from investing activities:

6 unchanged sentences

Proceeds from repayment of loans purchased as held for investment 662,458 726,196

Proceeds from sale of loans previously classified as held for investment — 9,000

Proceeds from sale of Farmer Mac Guaranteed Securities — 25,928

17 unchanged sentences

Loans held for investment transferred to consolidated trusts 281,027 —

Reclassification of loans held for investment to loans held for sale — 9,000

Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment 1,863 569

Capitalized interest — 443

Matured securities receivable ( 97,500 ) —

(Recovery)/charge-off from the allowance for losses — 84

Loan payoff not yet received ( 4,537 ) —

Charge-off from the allowance for losses — 84

Borrowers' payments not yet received from servicers ( 22,468 ) —

Purchases of securities - traded, not yet settled 20,262 —

24 unchanged sentences

Presented below are Farmer Mac's significant accounting policies that contain

updated information for the three months ended March 31, 2023.

updated information for the three and six months ended June 30, 2023.

Farmer Mac has revised its prior period financial information to correct an error that was not material to those previous consolidated financial statements, taken as a whole.

6 unchanged sentences

Consolidation of Variable Interest Entities

As of March 31, 2023

As of June 30, 2023

Agricultural Finance Treasury Total

21 unchanged sentences

(1) Includes borrower remittances of $ 0.9 million.

The borrower remittances had not been passed through to third-party investors as of March 31, 2023.

The borrower remittances had not been passed through to third-party investors as of June 30, 2023.

(2) Includes $ 91.2 million in unamortized discount related to structured securitization transactions.

35 unchanged sentences

Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock awards.

The following schedule reconciles basic and diluted EPS for the three months ended March 31, 2023 and 2022:

The following schedule reconciles basic and diluted EPS for the three and six months ended June 30, 2023 and 2022:

For the Three Months Ended

March 31, 2023 March 31, 2022

June 30, 2023 June 30, 2022

Income Weighted-Average Shares $ per

5 unchanged sentences

Diluted EPS $ 40,421 10,916 $ 3.70 $ 35,063 10,864 $ 3.23

(1) For the three months ended March 31, 2023 and 2022, SARs and restricted stock of 62,709 and 50,005 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

For the three months ended March 31, 2023 and 2022, contingent shares of unvested restricted stock of 32,282 and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

(1) For the three months ended June 30, 2023 and 2022, SARs and restricted stock of 34,500 and 42,922 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

For the three months ended June 30, 2023 and 2022, contingent shares of unvested restricted stock of 32,282 and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

For the Six Months Ended

June 30, 2023 June 30, 2022

Income Weighted-Average Shares $ per

(in thousands, except per share amounts)

Net income attributable to common stockholders $ 80,665 10,817 $ 7.46 $ 79,725 10,782 $ 7.40

Effect of dilutive securities (1)

SARs and restricted stock — 100 ( 0.07 ) — 94 ( 0.07 )

Diluted EPS $ 80,665 10,917 $ 7.39 $ 79,725 10,876 $ 7.33

(1) For the six months ended June 30, 2023 and 2022, SARs and restricted stock of 48,605 and 46,464 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

For the six months ended June 30, 2023 and 2022, contingent shares of unvested restricted stock of 32,282 and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

(b) Comprehensive Income

Comprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

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

As of March 31, 2023 As of March 31, 2022

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and six months ended June 30, 2023 and 2022.

As of June 30, 2023 As of June 30, 2022

Available-for-Sale Securities Held-to-Maturity Securities Cash Flow Hedges Total Available-for-Sale Securities Held-to-Maturity Securities Cash Flow Hedges Total

2 unchanged sentences

Beginning Balance $ ( 115,041 ) $ 15,739 $ 39,440 $ ( 59,862 ) $ ( 75,083 ) $ 16,134 $ 19,284 $ ( 39,665 )

Other comprehensive (loss)/income before reclassifications 525 — ( 5,452 ) ( 4,927 ) ( 68,148 ) — 23,062 ( 45,086 )

Other comprehensive income/(loss) before reclassifications 18,438 — 11,352 29,790 ( 23,839 ) — 12,426 ( 11,413 )

Amounts reclassified from AOCI ( 4 ) ( 253 ) ( 4,022 ) ( 4,279 ) ( 2 ) 684 912 1,594

Net comprehensive (loss)/income 520 ( 618 ) ( 8,921 ) ( 9,019 ) ( 68,151 ) ( 19 ) 24,652 ( 43,518 )

Net comprehensive income/(loss) 18,434 ( 253 ) 7,330 25,511 ( 23,841 ) 684 13,338 ( 9,819 )

Ending Balance $ ( 96,607 ) $ 15,486 $ 46,770 $ ( 34,351 ) $ ( 98,924 ) $ 16,818 $ 32,622 $ ( 49,484 )

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

For the Six Months Ended:

Beginning Balance $ ( 115,561 ) $ 16,357 $ 48,361 $ ( 50,843 ) $ ( 6,932 ) $ 16,153 $ ( 5,368 ) $ 3,853

Other comprehensive income/(loss) before reclassifications 18,963 — 5,900 24,863 ( 91,986 ) — 35,489 ( 56,497 )

Amounts reclassified from AOCI ( 9 ) ( 871 ) ( 7,491 ) ( 8,371 ) ( 6 ) 665 2,501 3,160

Net comprehensive income/(loss) 18,954 ( 871 ) ( 1,591 ) 16,492 ( 91,992 ) 665 37,990 ( 53,337 )

Ending Balance $ ( 96,607 ) $ 15,486 $ 46,770 $ ( 34,351 ) $ ( 98,924 ) $ 16,818 $ 32,622 $ ( 49,484 )

For the Three Months Ended

March 31, 2023 March 31, 2022

June 30, 2023 June 30, 2022

Before Tax Provision (Benefit) After Tax Before Tax Provision (Benefit) After Tax

14 unchanged sentences

Cash flow hedges

Unrealized (losses)/gains on cash flow hedges $ ( 6,901 ) $ ( 1,449 ) $ ( 5,452 ) $ 29,193 $ 6,131 $ 23,062

Unrealized gains on cash flow hedges $ 14,370 $ 3,018 $ 11,352 $ 15,729 $ 3,303 $ 12,426

Less reclassification adjustments included in:

2 unchanged sentences

Total $ 9,279 $ 1,949 $ 7,330 $ 16,884 $ 3,546 $ 13,338

Other comprehensive loss $ ( 11,416 ) $ ( 2,397 ) $ ( 9,019 ) $ ( 55,086 ) $ ( 11,568 ) $ ( 43,518 )

Other comprehensive income/(loss) $ 32,292 $ 6,781 $ 25,511 $ ( 12,430 ) $ ( 2,611 ) $ ( 9,819 )

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

4 unchanged sentences

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

For the Six Months Ended

June 30, 2023 June 30, 2022

Before Tax Provision (Benefit) After Tax Before Tax Provision (Benefit) After Tax

(in thousands)

Other comprehensive income:

Available-for-sale-securities:

Unrealized holding gains/(losses) on available-for-sale securities $ 24,003 $ 5,040 $ 18,963 $ ( 116,439 ) $ ( 24,453 ) $ ( 91,986 )

Less reclassification adjustments included in:

Net interest income (1)

Other income (2)

( 11 ) ( 2 ) ( 9 ) ( 7 ) ( 1 ) ( 6 )

Total $ 23,992 $ 5,038 $ 18,954 $ ( 116,446 ) $ ( 24,454 ) $ ( 91,992 )

Held-to-maturity securities:

Less reclassification adjustments included in:

Net interest income (3)

( 1,103 ) ( 232 ) ( 871 ) 842 177 665

Total $ ( 1,103 ) $ ( 232 ) $ ( 871 ) $ 842 $ 177 $ 665

Cash flow hedges

Unrealized gains on cash flow hedges $ 7,469 $ 1,569 $ 5,900 $ 44,922 $ 9,433 $ 35,489

Less reclassification adjustments included in:

Net interest income (4)

( 9,482 ) ( 1,991 ) ( 7,491 ) 3,166 665 2,501

Total $ ( 2,013 ) $ ( 422 ) $ ( 1,591 ) $ 48,088 $ 10,098 $ 37,990

Other comprehensive income/(loss) $ 20,876 $ 4,384 $ 16,492 $ ( 67,516 ) $ ( 14,179 ) $ ( 53,337 )

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

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

(3) Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity.

The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value.

These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

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

5 unchanged sentences

They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

January 1, 2020 Farmer Mac adopted optional expedients specific to discounting transition on a retrospective basis, and as a result of this election, the discounting transition did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

Farmer Mac expects to adopt additional optional expedients, including contract modification relief, and does not expect this to have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

January 1, 2020 During the period, Farmer Mac adopted optional expedients including those relating to qualifying hedging relationships and contract modification relief, and as of June 30, 2023, has no further variable-rate exposure to LIBOR.

To date, these elections did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.

ASU 2022-06 , Reference Rate Reform (Topic 848):

1 unchanged sentence

The amendments in this Update deferred the sunset date in Topic 848 from December 31, 2022 to December 31, 2024.

December 21, 2022 Farmer Mac continues to evaluate the impact of ASC 848.

December 21, 2022 Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.

ASU 2022-02 , Financial Instruments-Credit Losses (Topic 326):

2 unchanged sentences

The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty.

In addition, the amendments require disclosure of current-period gross writeoffs for financing receivables and net investment in leases by year of origination in the vintage disclosures.

In addition, the amendments require disclosure of current-period gross write offs for financing receivables and net investment in leases by year of origination in the vintage disclosures.

January 1, 2023 The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

Recently Issued Accounting Guidance

Standard Description Effect on Consolidated Financial Statements

ASU 2022-01 , Fair Value Hedging - Portfolio Layer Method

1 unchanged sentence

Additionally, it expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio, and provides that an entity may reclassify HTM debt securities identified within 30 days of the date of adoption to AFS if the entity applies portfolio layer method hedging to those debt securities.

Farmer Mac is continuing to evaluate the use of the portfolio layer method in its hedging programs, although future use of the standard is dependent on its asset-liability management strategies in the context of the then current interest rate outlook.

Farmer Mac does not believe adoption of the standard will have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

January 1, 2023 Farmer Mac adopted this guidance as of January 1, 2023.

Farmer Mac does not currently hedge interest rate risk for portfolios of financial assets, so adoption of this guidance had no effect on Farmer Mac's financial condition, results of operations, cash flows, or disclosures given current strategies.

(d) Reclassifications

2 unchanged sentences

INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of June 30, 2023 and December 31, 2022:

As of June 30, 2023

Amount Outstanding Unamortized Premium/(Discount) Amortized

7 unchanged sentences

Fixed rate GSE guaranteed mortgage-backed securities 1,540,857 ( 45,223 ) 1,495,634 — 1,565 ( 136,415 ) 1,360,784

Floating rate U.S.

Treasuries 50,000 ( 30 ) 49,970 — 28 — 49,998

Fixed rate U.S.

5 unchanged sentences

Total held-to-maturity $ 45,032 $ — $ 45,032 $ — $ 237 $ — $ 45,269

(1) Amounts presented exclude $ 12.4 million of accrued interest receivable on investment securities as of March 31, 2023.

(1) Amounts presented exclude $ 12.2 million of accrued interest receivable on investment securities as of June 30, 2023.

(2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses.

Amount excludes unrealized losses relating to non-credit factors.

(3) The held-to-maturity investment securities had a weighted average yield of 5.8 % as of March 31, 2023.

(3) The held-to-maturity investment securities had a weighted average yield of 6.3 % as of June 30, 2023.

As of December 31, 2022

19 unchanged sentences

(3) The held-to-maturity investment securities had a weighted average yield of 4.5 % as of December 31, 2022.

Farmer Mac did no t sell any securities from its available-for-sale investment portfolio during the three months March 31, 2023 and 2022.

As of March 31, 2023 and December 31, 2022, unrealized losses on available-for-sale investment securities were as follows:

As of March 31, 2023

Farmer Mac did no t sell any securities from its available-for-sale investment portfolio during the three and six months ended June 30, 2023 and 2022.

As of June 30, 2023 and December 31, 2022, unrealized losses on available-for-sale investment securities were as follows:

As of June 30, 2023

Available-for-Sale Securities

27 unchanged sentences

Number of securities in loss position 174 51

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to March 31, 2023 and December 31, 2022, as applicable.

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to June 30, 2023 and December 31, 2022, as applicable.

The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities.

As of both March 31, 2023 and December 31, 2022, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S.

government or had credit ratings of at least "AA+."

Securities in unrealized loss positions for 12 months or longer have a fair value as of March 31, 2023 that is, on average, approximately 93.7 % of their amortized cost basis.

Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity or changes in credit spreads.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of March 31, 2023 are set forth below.

As of both June 30, 2023 and December 31, 2022, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S.

government, a U.S.

government sponsored enterprise, or had credit ratings of at least "AA+."

Securities in unrealized loss positions for 12 months or longer have a fair value as of June 30, 2023 that is, on average, approximately 94.3 % of their amortized cost basis.

Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity, changes in credit spread, and changes in levels of interest rates.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of June 30, 2023 are set forth below.

Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

As of March 31, 2023

As of June 30, 2023

Available-for-Sale Securities

7 unchanged sentences

FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of June 30, 2023 and December 31, 2022:

As of June 30, 2023

Unpaid Principal Balance Unamortized Premium/(Discount) Amortized

16 unchanged sentences

$ 1,350 $ 64 $ 1,414 $ — $ — $ ( 66 ) $ 1,348

(1) Amounts presented exclude $ 63.6 million, $ 36.9 million, and $ 27,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of March 31, 2023.

(1) Amounts presented exclude $ 56.8 million, $ 33.6 million, and $ 33,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of June 30, 2023.

(2) Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses.

1 unchanged sentence

(3) Fair value includes $ 7.6 million of an interest-only security with a notional amount of $ 243.2 million.

(4) The trading USDA securities had a weighted average yield of 5.52 % as of March 31, 2023.

(4) The trading USDA securities had a weighted average yield of 5.51 % as of June 30, 2023.

As of December 31, 2022

22 unchanged sentences

(4) The trading USDA securities had a weighted average yield of 4.84 % as of December 31, 2022.

As of March 31, 2023 and December 31, 2022, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

As of March 31, 2023

As of June 30, 2023 and December 31, 2022, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

As of June 30, 2023

Held-to-Maturity and Available-for-Sale Securities

31 unchanged sentences

Total available-for-sale $ 4,649,943 $ ( 270,661 ) $ 1,548,551 $ ( 143,123 )

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to March 31, 2023 and December 31, 2022, as applicable.

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to June 30, 2023 and December 31, 2022, as applicable.

The credit exposure related to Farmer Mac's USDA Securities in the Agricultural Finance line of business is covered by the full faith and credit guarantee of the United States of America.

The unrealized losses from AgVantage securities were on 94 and 95 available-for-sale securities as of March 31, 2023 and December 31, 2022, respectively.

There were 33 and 37 held-to-maturity AgVantage securities with an unrealized loss as of March 31, 2023 and December 31, 2022, respectively.

As of March 31, 2023 and December 31, 2022, 28 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

As of March 31, 2023 and December 31, 2022, there were 16 and 4 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three months ended March 31, 2023 and 2022 Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of March 31, 2023 are set forth below.

The unrealized losses from AgVantage securities were on 106 and 95 available-for-sale securities as of June 30, 2023 and December 31, 2022, respectively.

There were 32 and 37 held-to-maturity AgVantage securities with an unrealized loss as of June 30, 2023 and December 31, 2022, respectively.

As of June 30, 2023 and December 31, 2022, 57 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

As of June 30, 2023 and December 31, 2022, there were 22 and 4 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three and six months ended June 30, 2023 and 2022 Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

The balances presented are based on their contractual maturities, although the actual maturities may differ due to prepayments of the underlying assets.

As of March 31, 2023

As of June 30, 2023

Available-for-Sale Securities

7 unchanged sentences

(1) Amounts presented exclude $ 56.8 million of accrued interest receivable.

As of March 31, 2023

As of June 30, 2023

Held-to-Maturity Securities

11 unchanged sentences

fixed rate assets, classified as available-for-sale, to protect against fair value changes in the assets related

to changes in a benchmark interest rate (e.g., LIBOR or SOFR).

to changes in a benchmark interest rate (e.g., SOFR).

Certain other financial derivatives are

15 unchanged sentences

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements.

The table below includes accrued interest on cleared swaps, but excludes $ 8.2 million and $ 6.1 million of accrued interest receivable and $ 4.5 million and $ 3.6 million of accrued interest payable on uncleared swaps as of March 31, 2023 and December 31, 2022, respectively.

The table below includes accrued interest on cleared swaps, but excludes $ 9.4 million and $ 6.1 million of accrued interest receivable and $ 5.4 million and $ 3.6 million of accrued interest payable on uncleared swaps as of June 30, 2023 and December 31, 2022, respectively.

The aforementioned accrued interest on uncleared swaps is included within Accrued Interest Receivable and Accrued Interest Payable on the consolidated balance sheets.

As of March 31, 2023

As of June 30, 2023

Fair Value Weighted-

49 unchanged sentences

(1) Amounts represent the application of the netting requirements that allow Farmer Mac to settle positive and negative positions, including accrued interest, held or placed with the same clearing agent.

As of March 31, 2023, Farmer Mac expects to reclassify $ 13.7 million after-tax from accumulated other comprehensive income to earnings over the next twelve months related to cash flow hedges.

This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after March 31, 2023.

During the three months ended March 31, 2023 and 2022, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

The following tables summarize the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023

As of June 30, 2023, Farmer Mac expects to reclassify $ 16.6 million after-tax from accumulated other comprehensive income to earnings over the next twelve months related to cash flow hedges.

This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after June 30, 2023.

During the three and six months ended June 30, 2023 and 2022, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

The following tables summarize the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and six months ended June 30, 2023 and 2022:

For the Three Months Ended June 30, 2023

Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives

8 unchanged sentences

Income/(expense) related to interest settlements on fair value hedging relationships $ 16,858 $ 80,721 $ 31,602 $ ( 169,493 ) $ — $ ( 40,312 )

(Losses)/gains on fair value hedging relationships:

Recognized on derivatives $ 30,824 $ 100,862 $ 46,762 $ ( 81,098 ) $ — $ 97,350

Recognized on hedged items ( 31,969 ) ( 101,921 ) ( 49,381 ) 81,020 — ( 102,251 )

(Losses)/gains on fair value hedging relationships $ ( 1,145 ) $ ( 1,059 ) $ ( 2,619 ) $ ( 78 ) $ — $ ( 4,901 )

Expense related to interest settlements on cash flow hedging relationships:

Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 5,091 $ — $ 5,091

Recognized on hedged items — — — ( 7,848 ) — ( 7,848 )

Discount amortization recognized on hedged items — — — ( 14 ) — ( 14 )

Expense recognized on cash flow hedges $ — $ — $ — $ ( 2,771 ) $ — $ ( 2,771 )

Gains on financial derivatives not designated in hedging relationships:

Gains on interest rate swaps $ — $ — $ — $ — $ 2,458 $ 2,458

Interest expense on interest rate swaps — — — — ( 1,568 ) ( 1,568 )

Treasury futures — — — — 803 803

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 1,693 $ 1,693

For the Three Months Ended June 30, 2022

Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives

Net Interest Income Non-Interest Income Total

Interest Income Investments and Cash Equivalents Interest Income Farmer Mac Guaranteed Securities and USDA Securities Interest Income Loans Total Interest Expense Gains on financial derivatives

(in thousands)

Total amounts presented in the consolidated statement of operations:

$ 11,200 $ 51,616 $ 76,632 $ ( 75,534 ) $ 3,791 $ 67,705

Income/(expense) related to interest settlements on fair value hedging relationships:

Recognized on derivatives ( 1,008 ) ( 15,693 ) ( 4,459 ) 4,648 — ( 16,512 )

Recognized on hedged items 3,219 34,431 13,669 ( 23,443 ) — 27,876

Discount amortization recognized on hedged items ( 343 ) — — ( 484 ) — ( 827 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 1,868 $ 18,738 $ 9,210 $ ( 19,279 ) $ — $ 10,537

Gains/(losses) on fair value hedging relationships:

7 unchanged sentences

Expense recognized on cash flow hedges $ — $ — $ — $ ( 2,991 ) $ — $ ( 2,991 )

Gains on financial derivatives not designated in hedge relationships:

Gains on interest rate swaps $ — $ — $ — $ — $ 4,284 $ 4,284

Interest expense on interest rate swaps — — — — ( 1,955 ) ( 1,955 )

Treasury futures — — — — 1,462 1,462

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 3,791 $ 3,791

For the Six Months Ended June 30, 2023

Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives

Net Interest Income Non-Interest Income Total

Interest Income Investments and Cash Equivalents Interest Income Farmer Mac Guaranteed Securities and USDA Securities Interest Income Loans Total Interest Expense Gains on financial derivatives

(in thousands)

Total amounts presented in the consolidated statement of operations $ 129,482 $ 281,298 $ 248,324 $ ( 501,369 ) $ 2,092 $ 159,827

Income/(expense) related to interest settlements on fair value hedging relationships:

Recognized on derivatives 15,001 63,909 28,933 ( 165,695 ) — ( 57,852 )

Recognized on hedged items 14,859 87,693 31,056 ( 151,527 ) — ( 17,919 )

Premium/discount amortization recognized on hedged items 776 — — ( 1,404 ) — ( 628 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 30,636 $ 151,602 $ 59,989 $ ( 318,626 ) $ — $ ( 76,399 )

(Losses)/gains on fair value hedging relationships:

Recognized on derivatives $ 3,671 $ 7,070 $ ( 9,919 ) $ 41,441 $ — $ 42,263

Recognized on hedged items ( 4,541 ) ( 8,625 ) 7,576 ( 41,679 ) — ( 47,269 )

(Losses)/gains on fair value hedging relationships $ ( 870 ) $ ( 1,555 ) $ ( 2,343 ) $ ( 238 ) $ — $ ( 5,006 )

Expense related to interest settlements on cash flow hedging relationships:

Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 9,482 $ — $ 9,482

Recognized on hedged items — — — ( 15,038 ) — ( 15,038 )

Discount amortization recognized on hedged items — — — ( 27 ) — ( 27 )

Expense recognized on cash flow hedges $ — $ — $ — $ ( 5,583 ) $ — $ ( 5,583 )

Gains on financial derivatives not designated in hedging relationships:

3 unchanged sentences

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 2,092 $ 2,092

For the Three Months Ended March 31, 2022

For the Six Months Ended June 30, 2022

Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives

23 unchanged sentences

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 20,779 $ 20,779

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of March 31, 2023 and December 31, 2022:

Hedged Items in Fair Value Relationship

Carrying Amount of Hedged Assets/(Liabilities) Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)

March 31, 2023 December 31, 2022 March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022 June 30, 2023 December 31, 2022

(in thousands)

5 unchanged sentences

(1) Carrying amount represents amortized cost.

The following tables present the fair value of financial assets and liabilities, based on the terms of Farmer Mac's master netting arrangements as of March 31, 2023 and December 31, 2022:

March 31, 2023

The following tables present the fair value of financial assets and liabilities, based on the terms of Farmer Mac's master netting arrangements as of June 30, 2023 and December 31, 2022:

June 30, 2023

Gross Amounts Not Offset in the Consolidated Balance Sheet

25 unchanged sentences

Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets.

If Farmer Mac had breached certain provisions of the derivative contracts as of March 31, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral.

As of March 31, 2023 and December 31, 2022, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's $ 25.0 billion notional amount of interest rate swaps outstanding as of March 31, 2023, $ 20.3 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME").

If Farmer Mac had breached certain provisions of the derivative contracts as of June 30, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral.

As of June 30, 2023 and December 31, 2022, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's $ 25.3 billion notional amount of interest rate swaps outstanding as of June 30, 2023, $ 20.2 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME").

Of Farmer Mac's $ 23.9 billion notional amount of interest rate swaps outstanding as of December 31, 2022, $ 19.5 billion were cleared through the CME.

During 2023 and throughout 2022, Farmer Mac continued the use of non-cleared basis swaps to prepare for the transition away from the use of LIBOR as a reference rate.

During 2023 and throughout 2022, Farmer Mac continued the use of non-cleared basis swaps to prepare for the transition away from the use of LIBOR as a reference rate, which was completed as of the end of the quarter.

Farmer Mac classifies loans as either held for investment or held for sale.

1 unchanged sentence

Loans held for sale are reported at the lower of cost or fair value determined on a pooled

As of both March 31, 2023 and December 31, 2022, Farmer Mac had no loans held for sale.

As of both June 30, 2023 and December 31, 2022, Farmer Mac had no loans held for sale.

Under the Agricultural Finance line of business, Farmer Mac has two segments – Farm & Ranch and Corporate AgFinance.

The segments are characterized by similarities in risk attributes and the manner in which Farmer Mac monitors and assesses credit risk.

The following table includes loans held for investment and displays the composition of the loan balances as of March 31, 2023 and December 31, 2022:

As of March 31, 2023 As of December 31, 2022

The following table includes loans held for investment and displays the composition of the loan balances as of June 30, 2023 and December 31, 2022:

As of June 30, 2023 As of December 31, 2022

Unsecuritized In Consolidated Trusts Total Unsecuritized In Consolidated Trusts Total

13 unchanged sentences

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

The following table is a summary, by asset type, of the allowance for losses as of June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

Allowance for Losses Allowance for Losses

6 unchanged sentences

Total $ 16,748 $ 15,089

The following is a summary of the changes in the allowance for losses for the three months ended March 31, 2023 and 2022:

For the Three Months Ended

March 31, 2023 March 31, 2022

The following is a summary of the changes in the allowance for losses for the three and six months ended June 30, 2023 and 2022:

June 30, 2023 June 30, 2022

Agricultural Finance loans Rural Infrastructure

7 unchanged sentences

(in thousands)

For the Three Months Ended

Beginning Balance $ 3,933 $ 7,039 $ 10,972 $ 4,701 $ 2,875 $ 1,073 $ 3,948 $ 9,622

2 unchanged sentences

Ending Balance $ 3,935 $ 7,367 $ 11,302 $ 5,446 $ 2,265 $ 1,750 $ 4,015 $ 8,388

(1) As of March 31, 2023 and 2022, allowance for losses for Agricultural Finance Farm & Ranch loans includes $ 1.1 million and no allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2) As of March 31, 2023 and 2022, allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 4.6 million and no allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3) As of both March 31, 2023 and 2022, allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $ 3.6 million net release from the allowance for the Rural Infrastructure Finance portfolio during the quarter ended March 31, 2023 was primarily attributable to an updated estimate of expected losses based on newly available industry data.

The $ 4.2 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended March 31, 2023 was primarily attributable to declining valuation of a single agricultural storage and processing loan, due to its ongoing bankruptcy proceedings and an updated estimate of expected losses based on additional availability of industry data.

The net release from the allowance for Rural Infrastructure Finance loan losses of $ 1.0 million recorded during first quarter 2022 was primarily attributable to a risk rating upgrade on a single loan related to the borrower's successful securitization of a large payable incurred as a result of the arctic freeze that struck Texas in February 2021, and was partially offset by new loan volume.

The $ 0.6 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during first quarter 2022 was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

For the Six Months Ended

Beginning Balance $ 4,044 $ 2,731 $ 6,775 $ 8,314 $ 2,882 $ 560 $ 3,442 $ 10,599

(Release of)/provision for losses ( 109 ) 4,636 4,527 ( 2,868 ) ( 533 ) 1,190 657 ( 2,211 )

Charge-offs — — — — ( 84 ) — ( 84 ) —

Ending Balance $ 3,935 $ 7,367 $ 11,302 $ 5,446 $ 2,265 $ 1,750 $ 4,015 $ 8,388

(1) As of June 30, 2023 and 2022, allowance for losses for Agricultural Finance Farm & Ranch loans includes $ 1.1 million and no allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2) As of June 30, 2023 and 2022, allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 4.6 million and $ 1.2 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3) As of both June 30, 2023 and 2022, allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The $ 0.7 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the quarter ended June 30, 2023 was primarily attributable to increased telecommunications loan volume.

The $ 0.3 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended June 30, 2023 was primarily attributable to increased storage and processing loan volume.

The $ 2.9 million net release from the allowance for the Rural Infrastructure Finance portfolio during the six months ended June 30, 2023 was primarily attributable to an updated estimate of expected losses based on newly available loss-given-default industry data.

The $ 4.5 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the six months ended June 30, 2023 was primarily attributable to declining valuation of a single agricultural storage and processing loan, due to its ongoing bankruptcy proceedings, and an updated estimate of expected losses based on additional availability of loss-given-default industry data.

See Note 12 ("Subsequent Event") to the consolidated financial statements for more information about this loan based on events that occurred after June 30, 2023.

The net release from the allowance for Rural Infrastructure Finance loan losses of $ 1.2 million recorded

during second quarter 2022 was primarily attributable to updated credit loss model forecast assumptions

and improvements in risk ratings.

The $ 0.1 million net provision to the allowance for the Agricultural

Finance mortgage loan portfolio during second quarter 2022 was primarily attributable to a risk rating

downgrade on a single agricultural storage and processing loan.

The $ 2.2 million net release from the allowance for the Rural Infrastructure Finance portfolio for the six

months ended June 30, 2022 was primarily attributable to the updated credit loss model forecast

assumptions mentioned above and a first quarter risk rating upgrade on a single loan.

The risk rating

upgrade on that loan reflected that borrower's successful securitization of its large payable that arose

during the arctic freeze that struck Texas in February 2021.

The $ 0.7 million net provision to the

allowance for the Agricultural Finance mortgage loan portfolio for the six months ended June 30, 2022

was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of June 30, 2023 and December 31, 2022:

As of June 30, 2023

Current 30-59 Days 60-89 Days 90 Days and Greater (2)

11 unchanged sentences

(4) Includes $ 24.1 million of nonaccrual loans for which there was no associated allowance.

During the three months ended March 31, 2023, Farmer Mac received $ 0.5 million in interest on nonaccrual loans.

During the three and six months ended June 30, 2023, Farmer Mac received $ 1.0 million and $ 1.5 million in interest on nonaccrual loans, respectively.

As of December 31, 2022

14 unchanged sentences

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of March 31, 2023 and December 31, 2022, by year of origination:

As of March 31, 2023

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of June 30, 2023 and December 31, 2022, by year of origination:

As of June 30, 2023

Year of Origination:

9 unchanged sentences

Total $ 265,010 $ 1,232,135 $ 1,729,441 $ 1,187,703 $ 383,892 $ 1,214,238 $ 388,033 $ 6,400,452

For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

1 unchanged sentence

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

As of March 31, 2023

As of June 30, 2023

Year of Origination:

9 unchanged sentences

Total $ 98,171 $ 113,819 $ 284,134 $ 176,675 $ 127,585 $ 119,137 $ 268,382 $ 1,187,903

For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

1 unchanged sentence

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

As of March 31, 2023

As of June 30, 2023

Year of Origination:

9 unchanged sentences

Total $ 383,710 $ 732,146 $ 183,029 $ 610,440 $ 720,113 $ 632,462 $ 44,867 $ 3,306,767

For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

13 unchanged sentences

Total $ 1,252,022 $ 1,781,621 $ 1,236,079 $ 395,895 $ 265,661 $ 1,032,986 $ 398,062 $ 6,362,326

For the Three Months Ended March 31, 2022:

For the Three Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ ( 84 ) $ — $ ( 84 )

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

13 unchanged sentences

Total $ 145,263 $ 299,729 $ 226,158 $ 128,928 $ 76,454 $ 44,827 $ 244,894 $ 1,166,253

For the Three Months Ended March 31, 2022:

For the Three Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

13 unchanged sentences

Total $ 741,021 $ 220,420 $ 629,223 $ 739,270 $ 7,932 $ 649,830 $ 33,570 $ 3,021,266

For the Three Months Ended March 31, 2022:

For the Three Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

2 unchanged sentences

GUARANTEES AND COMMITMENTS

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of March 31, 2023 and December 31, 2022, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of June 30, 2023 and December 31, 2022, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities

As of March 31, 2023 As of December 31, 2022

As of June 30, 2023 As of December 31, 2022

(in thousands)

6 unchanged sentences

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

For the Three Months Ended

March 31, 2023 March 31, 2022

For the Six Months Ended

June 30, 2023 June 30, 2022

(in thousands)

3 unchanged sentences

The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

As of March 31, 2023 As of December 31, 2022

As of June 30, 2023 As of December 31, 2022

(dollars in thousands)

6 unchanged sentences

The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

As of March 31, 2023 As of December 31, 2022

As of June 30, 2023 As of December 31, 2022

(dollars in thousands)

4 unchanged sentences

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

Reserve for Losses

The following table is a summary, by asset type, of the reserve for losses as of March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities

The following table is a summary, by asset type, of the reserve for losses as of June 30, 2023 and December 31, 2022:

June 30, 2023 December 31, 2022

Reserve for Losses Reserve for Losses

3 unchanged sentences

Total $ 1,705 $ 1,433

The following is a summary of the changes in the reserve for losses for the three month period ended March 31, 2023 and 2022:

For the Three Months Ended

March 31, 2023 March 31, 2022

Reserve for Losses Reserve for Losses

(in thousands)

The following is a summary of the changes in the reserve for losses for the three and six month periods ended June 30, 2023 and 2022:

For the Three Months Ended For the Six Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Reserve for Losses Reserve for Losses Reserve for Losses Reserve for Losses

(in thousands) (in thousands)

Agricultural Finance

6 unchanged sentences

Ending Balance $ 234 $ 795 $ 234 $ 795

The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during first quarter 2023 was primarily due to an updated estimate of expected losses based on additional available industry data.

The provision to the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during first quarter 2023 was primarily due to an updated estimate of expected losses based on additional available industry data.

The provision for the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during the six months ended June 30, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data.

The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the six months ended June 30, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data.

The release from the reserve for losses in both the Agricultural Finance and Rural Infrastructure Finance

LTSPC portfolios and Farmer Mac Guaranteed portfolios recorded during the three months ended March 31, 2022

was primarily due to decreased net volume in those portfolios.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

LTSPC and Farmer Mac Guaranteed portfolios recorded during the three and six months ended June 30, 2022 was primarily due to improvements in risk ratings in those portfolios.

As of June 30, 2023

Current 30-59 Days 60-89 Days 90 Days and Greater (1)

18 unchanged sentences

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of March 31, 2023 and December 31, 2022, by year of origination:

As of March 31, 2023

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of June 30, 2023 and December 31, 2022, by year of origination:

As of June 30, 2023

Year of Origination:

9 unchanged sentences

Total $ 88,205 $ 225,185 $ 490,132 $ 532,981 $ 251,647 $ 1,310,220 $ 339,475 $ 3,237,845

For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

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

As of March 31, 2023

As of June 30, 2023

Year of Origination:

9 unchanged sentences

Total $ — $ — $ — $ — $ — $ 433,896 $ 56,518 $ 490,414

For the Three Months Ended March 31, 2023:

For the Three Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2023:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

12 unchanged sentences

Total $ 202,998 $ 497,588 $ 537,752 $ 254,293 $ 212,165 $ 1,183,111 $ 303,085 $ 3,190,992

For the Three Months Ended March 31, 2022:

For the Three Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

12 unchanged sentences

Total $ — $ — $ — $ — $ — $ 470,659 $ 52,533 $ 523,192

For the Three Months Ended March 31, 2022:

For the Three Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

For the Six Months Ended June 30, 2022:

Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

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

3 unchanged sentences

Discount notes generally have original maturities of 1 year or less, whereas medium-term notes generally have maturities of 0.5 years to 25.0 years.

The following tables set forth information related to Farmer Mac's borrowings as of March 31, 2023 and December 31, 2022:

March 31, 2023

Outstanding as of March 31

The following tables set forth information related to Farmer Mac's borrowings as of June 30, 2023 and December 31, 2022:

June 30, 2023

Outstanding as of June 30

Average Outstanding During the Quarter

37 unchanged sentences

Total $ 24,469,113

The maximum amount of Farmer Mac's discount notes outstanding at any month end during each of the three months ended March 31, 2023 and 2022 was $ 0.9 billion and $ 2.2 billion, respectively.

The maximum amount of Farmer Mac's discount notes outstanding at any month end during the six months ended June 30, 2023 and 2022 was $ 1.0 billion and $ 2.2 billion, respectively.

Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date.

The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2023 as of March 31, 2023:

Debt Callable in 2023 as of March 31, 2023, by Maturity

The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2023 as of June 30, 2023:

Debt Callable in 2023 as of June 30, 2023, by Maturity

Amount Weighted-Average Rate

6 unchanged sentences

Total $ 5,343,221 2.31 %

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of March 31, 2023, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of June 30, 2023, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding

9 unchanged sentences

Total principal net of discounts $ 24,999,411 2.68 %

During the three months ended March 31, 2023 and 2022, Farmer Mac called none and $ 26.0 million of callable medium-term notes, respectively.

During the six months ended June 30, 2023 and 2022, Farmer Mac called none and $ 26.0 million of callable medium-term notes, respectively.

Authority to Borrow from the U.S.

4 unchanged sentences

Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S.

Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the

obligations from Farmer Mac.

The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S.

Treasury within a reasonable time.

As of March 31, 2023, Farmer Mac had not used this borrowing authority.

As of June 30, 2023, Farmer Mac had not used this borrowing authority.

Gains on Repurchases of Outstanding Debt

No outstanding debt repurchases were made in the three months ended March 31, 2023 and 2022.

During first quarter 2023, Farmer Mac paid a quarterly dividend of $ 1.10 per share on all classes of its common stock.

For each quarter in 2022, Farmer Mac paid a quarterly dividend of $ 0.95 per share on all

classes of its common stock.

No outstanding debt repurchases were made in the six months ended June 30, 2023 and 2022.

During first and second quarter 2023, Farmer Mac paid a quarterly dividend of $ 1.10 per share on all classes of its common stock.

For each quarter in 2022, Farmer Mac paid a quarterly dividend of $ 0.95 per share on all classes of its common stock.

Farmer Mac's board of directors approved a share repurchase program during third quarter 2015 authorizing Farmer Mac to repurchase up to $ 25.0 million of its outstanding Class C non-voting common stock.

The share repurchase program, last modified on March 14, 2019, authorized Farmer Mac to repurchase up to $ 10.0 million of Farmer Mac's outstanding Class C non-voting common stock.

The share repurchase program, last modified on March 14, 2019, authorized Farmer Mac to

repurchase up to $ 10.0 million of Farmer Mac's outstanding Class C non-voting common stock.

During first quarter 2020, Farmer Mac repurchased approximately 4,000 shares of Class C non-voting common stock at a cost of approximately $ 0.2 million.

1 unchanged sentence

In March 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms (with a remaining authorization of up to $ 9.8 million in stock repurchases) and extended the expiration date of the program to March 2023.

Farmer Mac did no t repurchase any shares of its Class C non-voting common stock during first quarter 2023.

As of March 31, 2023, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $ 19.8 million under the share repurchase program since 2015.

Farmer Mac did no t repurchase any shares of its Class C non-voting common stock during that two-year period.

In February 2023, Farmer Mac's board of directors renewed the share repurchase program on its previous terms (with a remaining authorization of up to $ 9.8 million in stock repurchases) and extended the expiration date of the program to February 2025.

Farmer Mac did no t repurchase any shares of its Class C non-voting common stock during second quarter 2023.

As of June 30, 2023, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $ 19.8 million under the share repurchase program since 2015.

Capital Requirements

Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement.

As of both March 31, 2023 and December 31, 2022, the minimum capital requirement was greater than the risk-based capital requirement.

As of both June 30, 2023 and December 31, 2022, the minimum capital requirement was greater than the risk-based capital requirement.

Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements.

As of March 31, 2023, Farmer Mac's minimum capital requirement was $ 817.9 million and its core capital level was $ 1.4 billion, which was $ 534.4 million above the minimum capital requirement as of that date.

As of June 30, 2023, Farmer Mac's minimum capital requirement was $ 814.7 million and its core capital level was $ 1.4 billion, which was $ 566.2 million above the minimum capital requirement as of that date.

As of December 31, 2022, Farmer Mac's minimum capital requirement was $ 805.9 million and its core capital level was $ 1.3 billion, which was $ 516.9 million above the minimum capital requirement as of that date.

preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

In accordance with a rule of the Farm Credit Administration ("FCA") on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac 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) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

FAIR VALUE DISCLOSURES

Fair Value Classification and Transfers

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of March 31, 2023 and December 31, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Assets and Liabilities Measured at Fair Value as of March 31, 2023

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Assets and Liabilities Measured at Fair Value as of June 30, 2023

Level 1 Level 2 Level 3 (1)

5 unchanged sentences

Fixed rate GSE guaranteed mortgage-backed securities — 1,360,784 — 1,360,784

Floating rate U.S.

Treasuries 49,998 — — 49,998

Fixed rate U.S.

40 unchanged sentences

(1) Level 3 assets represent 28 % of total assets and 62 % of financial instruments measured at fair value.

There were no material assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2023 or December 31, 2022.

There were no material assets or liabilities measured at fair value on a non-recurring basis as of June 30, 2023 or December 31, 2022.

Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period.

During the three months ended March 31, 2023 and 2022, there were no transfers within the fair value hierarchy.

During the six months ended June 30, 2023 and 2022, there were no transfers within the fair value hierarchy.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value.

Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period.

There were no liabilities measured at fair value using significant unobservable inputs during the three months ended March 31, 2023 and 2022.

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2023

There were no liabilities measured at fair value using significant unobservable inputs during the three and six months ended June 30, 2023 and 2022.

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2023

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized gains included

in Income Unrealized (losses)/gains

unrealized losses included

in Income Unrealized gains

included in Other

18 unchanged sentences

Total Assets at fair value $ 8,250,460 $ 852,000 $ ( 1,258,093 ) $ 9 $ ( 101,929 ) $ 27,679 $ 7,770,126

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2022

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2022

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized (losses)/gains included

in Income Unrealized gains/(losses)

included in Other

Comprehensive

Income Ending Balance

(in thousands)

Investment Securities:

Available-for-sale:

Floating rate auction-rate certificates backed by Government guaranteed student loans $ 18,961 $ — $ — $ 1 $ — $ 99 $ 19,061

Total available-for-sale 18,961 — — 1 — 99 19,061

Farmer Mac Guaranteed Securities:

Available-for-sale:

AgVantage 6,589,224 520,000 ( 513,342 ) 84 ( 149,205 ) ( 6,365 ) 6,440,396

Farmer Mac Guaranteed

Securities 11,022 — ( 358 ) — — ( 848 ) 9,816

Total available-for-sale 6,600,246 520,000 ( 513,700 ) 84 ( 149,205 ) ( 7,213 ) 6,450,212

USDA Securities:

Trading 3,386 — ( 1,140 ) — 29 — 2,275

Total USDA Securities 3,386 — ( 1,140 ) — 29 — 2,275

Guarantee and commitment obligations:

Guarantee Asset 6,138 — ( 188 ) — ( 314 ) — 5,636

Total Guarantee and commitment obligations 6,138 — ( 188 ) — ( 314 ) — 5,636

Total Assets at fair value $ 6,628,731 $ 520,000 $ ( 515,028 ) $ 85 $ ( 149,490 ) $ ( 7,114 ) $ 6,477,184

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2023

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized (losses)/gains included

in Income Unrealized gains

included in Other

Comprehensive

Income Ending Balance

(in thousands)

Investment Securities:

Available-for-sale:

Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,027 $ — $ — $ 5 $ — $ — $ 19,032

Total available-for-sale 19,027 — — 5 — — 19,032

Farmer Mac Guaranteed Securities:

Available-for-sale:

AgVantage 7,599,379 1,539,650 ( 1,398,799 ) 40 ( 8,530 ) 6,070 7,737,810

Farmer Mac Guaranteed Securities 7,847 — ( 874 ) — — 632 7,605

Total available-for-sale 7,607,226 1,539,650 ( 1,399,673 ) 40 ( 8,530 ) 6,702 7,745,415

USDA Securities:

Trading 1,767 — ( 435 ) — 16 — 1,348

Total USDA Securities 1,767 — ( 435 ) — 16 — 1,348

Guarantee and commitment obligations:

Guarantee Asset 4,467 — ( 422 ) — 286 — 4,331

Total Guarantee and commitment obligations 4,467 — ( 422 ) — 286 — 4,331

Total Assets at fair value $ 7,632,487 $ 1,539,650 $ ( 1,400,530 ) $ 45 $ ( 8,228 ) $ 6,702 $ 7,770,126

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2022

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized losses included

in Income Unrealized losses

20 unchanged sentences

Total Assets at fair value $ 6,358,451 $ 1,352,750 $ ( 811,898 ) $ ( 331 ) $ ( 359,984 ) $ ( 61,804 ) $ 6,477,184

The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of March 31, 2023 and December 31, 2022:

As of March 31, 2023

As of June 30, 2023

Financial Instruments Fair Value Valuation Technique Unobservable Input Range (Weighted-Average)

30 unchanged sentences

Disclosures on Fair Value of Financial Instruments

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of March 31, 2023 and December 31, 2022:

As of March 31, 2023 As of December 31, 2022

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of June 30, 2023 and December 31, 2022:

As of June 30, 2023 As of December 31, 2022

Fair Value Carrying

36 unchanged sentences

These differences would be due to various factors, including the exclusion of unrealized gains and losses related to fair value changes of trading assets and financial derivatives, as well as the allocation of certain expenses such as operating expenses, dividends and interest expense related to the issuance of capital and the issuance of indebtedness managed at the corporate level.

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the three months ended March 31, 2023 and 2022.

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the three and six months ended June 30, 2023 and 2022.

Core Earnings by Business Segment

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Agricultural Finance Rural Infrastructure Treasury Corporate

11 unchanged sentences

Total revenues 38,951 7,518 6,089 1,117 32,498 605 44 ( 2,205 ) 84,617

(Provision for)/release of losses ( 5 ) ( 327 ) ( 632 ) ( 110 ) — 1 — — ( 1,073 )

(Provision for)/release of reserve for losses ( 75 ) — 6 — — — — — ( 69 )

Operating expenses — — — — — — ( 24,188 ) — ( 24,188 )

Total non-interest expense ( 75 ) — 6 — — — ( 24,188 ) — ( 24,257 )

Core earnings before income taxes 38,871 7,191 5,463 1,007 32,498 606 ( 24,144 ) ( 2,205 ) (4)

Income tax (expense)/benefit ( 8,163 ) ( 1,510 ) ( 1,147 ) ( 211 ) ( 6,825 ) ( 127 ) 5,444 464 ( 12,075 )

Core earnings before preferred stock dividends 30,708 5,681 4,316 796 25,673 479 ( 18,700 ) ( 1,741 ) (4)

Preferred stock dividends — — — — — — ( 6,791 ) — ( 6,791 )

Segment core earnings/(losses) $ 30,708 $ 5,681 $ 4,316 $ 796 $ 25,673 $ 479 $ ( 25,491 ) $ ( 1,741 ) (4)

Total Assets $ 14,456,296 $ 1,584,841 $ 6,169,811 $ 314,538 $ — $ 4,959,243 $ 174,836 $ — $ 27,659,565

Total on- and off-balance sheet program assets at principal balance $ 18,116,503 $ 1,680,756 $ 6,611,892 $ 327,901 $ — $ — $ — $ — $ 26,737,052

(1) Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

(2) Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.

(3) Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

(4) Net adjustments to reconcile to the corresponding income measures:

core earnings before income taxes reconciled to income before income taxes;

core earnings before preferred stock dividends reconciled to net income;

and segment core earnings reconciled to net income attributable to common stockholders.

Core Earnings by Business Segment

For the Three Months Ended June 30, 2022

Agricultural Finance Rural Infrastructure Treasury Corporate

Farm & Ranch Corporate AgFinance Rural

Renewable Energy Funding Investments Reconciling

Adjustments Consolidated Net Income

(in thousands)

Net interest income $ 33,670 $ 6,929 $ 3,772 $ 468 $ 20,357 $ ( 1,282 ) $ — $ — $ 63,914

reconciling adjustments (1)(2)(3)

( 1,080 ) — ( 39 ) — ( 1,849 ) — — 2,968 —

Net effective spread 32,590 6,929 3,733 468 18,508 ( 1,282 ) — 2,968 —

Guarantee and commitment fees 4,338 43 308 20 — — — ( 1,496 ) 3,213

Other income/(expense) (3)

161 143 — — — — 3 3,992 4,299

Total revenues 37,089 7,115 4,041 488 18,508 ( 1,282 ) 3 5,464 71,426

Release of/(provision for) losses 857 ( 650 ) 1,172 ( 8 ) — 1 — — 1,372

Release of reserve for losses 111 — 52 — — — — — 163

Operating expenses — — — — — — ( 20,048 ) — ( 20,048 )

Total non-interest expense 111 — 52 — — — ( 20,048 ) — ( 19,885 )

Core earnings before income taxes 38,057 6,465 5,265 480 18,508 ( 1,281 ) ( 20,045 ) 5,464 (4)

Income tax (expense)/benefit ( 7,991 ) ( 1,357 ) ( 1,105 ) ( 101 ) ( 3,887 ) 269 4,263 ( 1,149 ) ( 11,058 )

Core earnings before preferred stock dividends 30,066 5,108 4,160 379 14,621 ( 1,012 ) ( 15,782 ) 4,315 (4)

Preferred stock dividends — — — — — — ( 6,792 ) — ( 6,792 )

Segment core earnings/(losses) $ 30,066 $ 5,108 $ 4,160 $ 379 $ 14,621 $ ( 1,012 ) $ ( 22,574 ) $ 4,315 (4)

Total Assets $ 13,686,589 $ 1,521,102 $ 5,632,551 $ 126,513 $ — $ 4,781,990 $ 147,076 $ — $ 25,895,821

Total on- and off-balance sheet program assets at principal balance $ 16,591,999 $ 1,567,311 $ 6,172,063 $ 148,018 $ — $ — $ — $ — $ 24,479,391

(1) Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

(4) Net adjustments to reconcile to the corresponding income measures:

core earnings before income taxes reconciled to income before income taxes;

core earnings before preferred stock dividends reconciled to net income;

and segment core earnings reconciled to net income attributable to common stockholders.

Core Earnings by Business Segment

For the Six Months Ended June 30, 2023

Agricultural Finance Rural Infrastructure Treasury Corporate

Farm & Ranch Corporate AgFinance Rural

Renewable Energy Funding Investments Reconciling

Adjustments Consolidated Net Income

(in thousands)

Net interest income $ 68,936 $ 14,592 $ 11,379 $ 1,958 $ 60,946 $ ( 76 ) $ — $ — $ 157,735

reconciling adjustments (1)(2)(3)

( 2,083 ) — ( 64 ) — 3,290 127 — ( 1,270 ) —

Net effective spread 66,853 14,592 11,315 1,958 64,236 51 — ( 1,270 ) —

Guarantee and commitment fees 8,513 115 562 45 — — — ( 1,813 ) 7,422

Other income/(expense) (3)

1,409 12 — — — 11 44 2,600 4,076

Total revenues 76,775 14,719 11,877 2,003 64,236 62 44 ( 483 ) 169,233

Release of/(provision for) losses 123 ( 4,628 ) 2,852 28 — 5 — — ( 1,620 )

(Provision for)/release of reserve for losses ( 652 ) — 380 — — — — — ( 272 )

16 unchanged sentences

Core Earnings by Business Segment

For the Three Months Ended March 31, 2022

For the Six Months Ended June 30, 2022

Agricultural Finance Rural Infrastructure Treasury Corporate

11 unchanged sentences

Total revenues 72,059 14,457 7,512 873 35,246 ( 1,278 ) 3 29,387 158,259

(Provision for)/release of losses ( 510 ) ( 515 ) 1,169 ( 202 ) — 2 — — ( 56 )

Release of/(provision for) losses 347 ( 1,165 ) 2,341 ( 210 ) — 3 — — 1,316

Release of reserve for losses 185 — 88 — — — — — 273

23 unchanged sentences

Revised Consolidated Statements of Operations

Three Months Ended March 31, 2022

As previously Reported Adjustments As Revised

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

As previously Reported Adjustments As Revised As previously Reported Adjustments As Revised

(in thousands)

11 unchanged sentences

Revised Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2022

As previously Reported Adjustments As Revised

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

As previously Reported Adjustments As Revised As previously Reported Adjustments As Revised

(in thousands)

8 unchanged sentences

Balance as of March 31, 2022 $ 610,087 $ 12,903 $ 622,990 $ 1,192,844 $ 12,903 $ 1,205,747

Net Income 45,896 ( 4,041 ) 41,855 45,896 ( 4,041 ) 41,855

Balance as of June 30, 2022 $ 638,935 $ 8,862 $ 647,797 $ 1,212,348 $ 8,862 $ 1,221,210

Revised Consolidated Statements of Cash Flows

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

As previously Reported Adjustments As Revised

11 unchanged sentences

Net cash provided by operating activities 526,010 — 526,010

SUBSEQUENT EVENT

As described above in Note 5, Farmer Mac had a single agricultural storage and processing loan that was subject to bankruptcy proceedings during second quarter 2023.

On July 31, 2023, an entity purchased the assets and assumed the liabilities of the borrower on this loan, which ended the bankruptcy proceedings.

Farmer Mac received proceeds from this bankruptcy sale in an amount that closely approximated the loan's amortized cost.

Farmer Mac will release the entire allowance for loan loss attributable to this loan during third quarter 2023, which was approximately $ 4.6 million as of June 30, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements