What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-06 compared with 2023-11-06 · 237 added, 541 removed, 1232 unchanged (39% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(in thousands)

34 unchanged sentences

Accounts payable and accrued expenses 74,821 76,662

Deferred tax liability, net 3,795 —

Reserve for losses 1,642 1,711

24 unchanged sentences

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended For the Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the Three Months Ended

March 31, 2024 March 31, 2023

(in thousands, except per share amounts)

11 unchanged sentences

Gains on financial derivatives 2,079 399

(Losses)/gains on trading securities ( 2 ) ( 41 ) 14 ( 75 )

Release of/(provision for) reserve for losses

45 167 ( 227 ) 440

Other income 1,249 1,226

16 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended For the Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

For the Three Months Ended

March 31, 2024 March 31, 2023

(in thousands)

1 unchanged sentence

Other comprehensive income/(loss):

Net unrealized gains/(losses) on available-for-sale securities 22,076 ( 41,827 ) 46,068 ( 158,273 )

Net unrealized gains on available-for-sale securities

Net changes in held-to-maturity securities ( 634 ) ( 782 )

Net unrealized gains on cash flow hedges

Net unrealized gains/(losses) on cash flow hedges

6,286 ( 11,292 )

Other comprehensive (loss)/income before tax

Other comprehensive income/(loss) before tax

45,604 ( 11,416 )

Income tax benefit/(expense) related to other comprehensive (loss)/income

Income tax (expense)/benefit related to other comprehensive income/(loss)

( 9,577 ) 2,397

Other comprehensive (loss)/income net of tax

Other comprehensive income/(loss) net of tax

36,027 ( 9,019 )

9 unchanged sentences

Net Income — — — — — — 53,746 53,746

Other comprehensive loss, net of tax — — — — — ( 9,019 ) — ( 9,019 )

Cash dividends:

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

Common stock (cash dividend of $ 1.10 per share)

— — — — — — ( 11,882 ) ( 11,882 )

Issuance of Class C Common Stock — — 19 19 51 — — 70

Stock-based compensation cost — — — — 2,254 — — 2,254

Other stock-based award activity — — — — ( 1,240 ) — — ( 1,240 )

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

Cash dividends:

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

Common stock (cash dividend of $ 1.10 per share)

— — — — — 36,027 — 36,027

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

Net Income — — — — — — 58,137 58,137

Other comprehensive loss, net of tax

— — — — — ( 1,488 ) — ( 1,488 )

Cash dividends:

5 unchanged sentences

Other stock-based award activity — — — — ( 2,890 ) — — ( 2,890 )

Balance as of September 30, 2023 19,980 $ 484,531 10,840 $ 10,840 $ 130,921 $ ( 35,839 ) $ 794,814 $ 1,385,267

Additional Other

Preferred Stock Common Stock Paid-In Comprehensive Retained Total

Shares Amount Shares Amount Capital Income/(Loss) Earnings Equity

(in thousands)

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

Net Income — — — — — — 51,453 51,453

Other comprehensive loss, net of tax — — — — — ( 43,518 ) — ( 43,518 )

Cash dividends:

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

Common stock (cash dividend of $ 0.95 per share)

— — — — — — ( 10,229 ) ( 10,229 )

Issuance of Class C Common Stock — — 22 22 46 — — 68

Stock-based compensation cost — — — — 2,113 — — 2,113

Other stock-based award activity — — — — ( 1,049 ) — — ( 1,049 )

Balance as of March 31, 2024 19,980 $ 484,531 10,869 $ 10,869 $ 133,576 $ ( 4,118 ) $ 855,485 $ 1,480,343

Balance as of December 31, 2022 19,980 $ 484,531 10,801 $ 10,801 $ 128,939 $ ( 50,843 ) $ 698,530 $ 1,271,958

Net Income — — — — — — 47,035 47,035

Other comprehensive loss, net of tax

Cash dividends:

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

Common stock (cash dividend of $ 0.95 per share)

— — — — — ( 9,019 ) — ( 9,019 )

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

Net Income — — — — — — 41,418 41,418

Other comprehensive loss, net of tax — — — — — ( 14,105 ) — ( 14,105 )

Cash dividends:

5 unchanged sentences

Other stock-based award activity — — — — ( 1,240 ) — — ( 1,240 )

Balance as of September 30, 2022 19,980 $ 484,531 10,800 $ 10,800 $ 128,117 $ ( 63,589 ) $ 672,164 $ 1,232,023

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

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

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

September 30, 2023 September 30, 2022

For the Three Months Ended

March 31, 2024 March 31, 2023

(in thousands)

4 unchanged sentences

Amortization of debt premiums, discounts, and issuance costs 11,586 10,217

Net change in fair value of trading securities, hedged assets, and financial derivatives 340,035 665,775

Net change in fair value of trading securities, hedged items, and financial derivatives

123,519 ( 62,398 )

Total provision for/(release of) allowance for losses ( 1,870 ) 750

12 unchanged sentences

Cash flows from investing activities:

Purchases of available-for-sale investment securities ( 1,381,795 ) ( 1,789,932 )

Purchases of equipment and leasehold improvements

Purchases of available-for-sale and held-to-maturity investment securities

( 606,698 ) ( 375,153 )

Purchases of other investment securities ( 83 ) —

1 unchanged sentence

Purchases of loans held for investment ( 690,986 ) ( 554,787 )

Proceeds from repayment of available-for-sale investment securities 1,146,861 1,103,046

Proceeds from repayment of available-for-sale and held-to-maturity investment securities

520,194 505,848

Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities 254,722 247,706

Proceeds from repayment of loans purchased as held for investment 461,071 431,483

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

Proceeds from sale of Farmer Mac Guaranteed Securities — 47,212

Net cash used in investing activities ( 525,473 ) ( 461,315 )

2 unchanged sentences

Proceeds from issuance of medium-term notes 1,774,926 1,383,319

Proceeds from third parties from issuance of debt securities of consolidated trusts 222,188 258,198

Proceeds from issuance of debt securities of consolidated trusts

Payments to redeem discount notes ( 12,695,146 ) ( 10,913,679 )

11 unchanged sentences

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

Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment 3,078 1,781

Capitalized interest — 446

Matured securities receivable ( 77,445 ) —

Charge-off from the allowance for losses — 84

Borrowers' payments not yet received from servicers ( 3,335 ) —

Purchases of securities - traded, not yet settled 16,012 268,370

Transfers of available-for-sale Farmer Mac Guaranteed Securities to held-to-maturity

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

12 unchanged sentences

The December 31, 2023 consolidated balance sheet presented in this report has been derived

from Farmer Mac's audited 2022 consolidated financial statements, as revised.

from Farmer Mac's audited 2023 consolidated financial statements.

Management believes that

8 unchanged sentences

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

updated information for the three and nine months ended September 30, 2023.

updated information for the three months ended March 31, 2024.

Principles of Consolidation

4 unchanged sentences

Consolidation of Variable Interest Entities

As of September 30, 2023

As of March 31, 2024

Agricultural Finance Treasury Total

21 unchanged sentences

(1) Includes borrower remittances of $ 1.1 million.

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

The borrower remittances had not been passed through to third-party investors as of March 31, 2024.

(2) Includes $ 85.1 million in unamortized discount related to structured securitization transactions.

34 unchanged sentences

Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding.

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 and nine months ended September 30, 2023 and 2022:

The following schedule reconciles basic and diluted EPS for the three months ended March 31, 2024 and 2023:

For the Three Months Ended

September 30, 2023 September 30, 2022

Income Weighted-Average Shares $ per

(in thousands, except per share amounts)

Net income attributable to common stockholders $ 51,345 10,839 $ 4.74 $ 34,627 10,799 $ 3.21

Effect of dilutive securities (1)

SARs and restricted stock — 99 ( 0.05 ) — 75 ( 0.03 )

Diluted EPS $ 51,345 10,938 $ 4.69 $ 34,627 10,874 $ 3.18

(1) For the three months ended September 30, 2023 and 2022, SARs and restricted stock of 16,761 and 18,432 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 September 30, 2023 and 2022, contingent shares of unvested restricted stock of 32,469 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 Nine Months Ended

September 30, 2023 September 30, 2022

March 31, 2024 March 31, 2023

Income Weighted-Average Shares $ per

3 unchanged sentences

Effect of dilutive securities (1)

SARs and restricted stock — 99 ( 0.12 ) — 88 ( 0.10 )

SARs and restricted stock units

— 122 ( 0.05 ) — 116 ( 0.04 )

Diluted EPS $ 46,955 10,969 $ 4.28 $ 40,244 10,918 $ 3.69

(1) For the nine months ended September 30, 2023 and 2022, SARs and restricted stock of 37,990 and 37,120 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive.

For the nine months ended September 30, 2023 and 2022, contingent shares of unvested restricted stock of 32,407 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 March 31, 2024 and 2023, SARs and restricted stock units of 49,371 and 62,709 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, 2024 and 2023, contingent shares of unvested restricted stock units of 29,918 and 32,282 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 and nine months ended September 30, 2023 and 2022.

As of September 30, 2023 As of September 30, 2022

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three months ended March 31, 2024 and 2023.

As of March 31, 2024 As of March 31, 2023

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

6 unchanged sentences

Ending Balance $ ( 36,886 ) $ ( 9,224 ) $ 41,992 $ ( 4,118 ) $ ( 115,041 ) $ 15,739 $ 39,440 $ ( 59,862 )

For the Nine 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 36,406 ( 25,199 ) 16,277 27,484 ( 125,027 ) — 55,766 ( 69,261 )

Amounts reclassified from AOCI ( 13 ) ( 577 ) ( 11,890 ) ( 12,480 ) ( 8 ) 173 1,654 1,819

Net comprehensive income/(loss) 36,393 ( 25,776 ) 4,387 15,004 ( 125,035 ) 173 57,420 ( 67,442 )

Ending Balance $ ( 79,168 ) $ ( 9,419 ) $ 52,748 $ ( 35,839 ) $ ( 131,967 ) $ 16,326 $ 52,052 $ ( 63,589 )

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 and nine months ended September 30, 2023 and 2022:

For the Three Months Ended

September 30, 2023 September 30, 2022

March 31, 2024 March 31, 2023

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

2 unchanged sentences

Available-for-sale-securities:

Unrealized holding gains/(losses) on available-for-sale securities $ 22,081 $ 4,638 $ 17,443 $ ( 41,824 ) $ ( 8,783 ) $ ( 33,041 )

Less reclassification adjustments included in:

Net interest income (1)

Other income (2)

( 5 ) ( 1 ) ( 4 ) ( 3 ) ( 1 ) ( 2 )

Total $ 22,076 $ 4,637 $ 17,439 $ ( 41,827 ) $ ( 8,784 ) $ ( 33,043 )

Held-to-maturity securities:

Change in fair value (3)

$ ( 31,898 ) $ ( 6,699 ) $ ( 25,199 ) $ — $ — $ —

Less reclassification adjustments included in:

Net interest income (4)

373 79 294 ( 622 ) ( 130 ) ( 492 )

Total $ ( 31,525 ) $ ( 6,620 ) $ ( 24,905 ) $ ( 622 ) $ ( 130 ) $ ( 492 )

Cash flow hedges

Unrealized gains on cash flow hedges $ 13,135 $ 2,759 $ 10,376 $ 25,668 $ 5,391 $ 20,277

Less reclassification adjustments included in:

Net interest income (5)

( 5,569 ) ( 1,171 ) ( 4,398 ) ( 1,072 ) ( 225 ) ( 847 )

Total $ 7,566 $ 1,588 $ 5,978 $ 24,596 $ 5,166 $ 19,430

Other comprehensive loss

Unrealized holding gains on available-for-sale securities

$ 39,957 $ 8,392 $ 31,565 $ 664 $ 139 $ 525

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

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

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

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

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

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

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

For the Nine Months Ended

September 30, 2023 September 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 $ 46,084 $ 9,678 $ 36,406 $ ( 158,263 ) $ ( 33,236 ) $ ( 125,027 )

Less reclassification adjustments included in:

Net interest income (1)

Other income (1)

2 unchanged sentences

Held-to-maturity securities:

Change in fair value (3)

$ ( 31,898 ) $ ( 6,699 ) $ ( 25,199 ) $ — $ — $ —

Less reclassification adjustments included in:

3 unchanged sentences

Cash flow hedges

Unrealized gains on cash flow hedges $ 20,604 $ 4,327 $ 16,277 $ 70,590 $ 14,824 $ 55,766

Unrealized gains/(losses) on cash flow hedges

$ 11,717 $ 2,461 $ 9,256 $ ( 6,901 ) $ ( 1,449 ) $ ( 5,452 )

Less reclassification adjustments included in:

3 unchanged sentences

Other comprehensive income/(loss) $ 45,604 $ 9,577 $ 36,027 $ ( 11,416 ) $ ( 2,397 ) $ ( 9,019 )

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

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

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

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

4 unchanged sentences

Recently Adopted Accounting Guidance

Standard Description Date of Adoption Effect on Consolidated Financial Statements

ASU 2020-04 and 2021-01 , Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting

The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting.

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

January 1, 2020 During the second quarter 2023, Farmer Mac adopted optional expedients including those relating to qualifying hedging relationships and contract modification relief, and 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):

Deferral of the Sunset Date of Topic 848

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

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

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

Troubled Debt Restructurings and Vintage Disclosures

The Update addresses and amends areas identified by the Financial Accounting Standards Board as part of its post-implementation review of the accounting standard that introduced the current expected credit losses (“CECL”) model.

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

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

Standard Description Date of Adoption

Effect on Consolidated Financial Statements

ASU 2023-02 , Investments - Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method

The amendments in this Update permit an entity to elect to account for their tax equity investments using the proportional amortization method if certain conditions are met, regardless of the tax credit program from which the income tax credits are received.

January 1, 2024 The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.

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

The Update introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method).

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.

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

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

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

Effect on Consolidated Financial Statements

ASU 2023-07 , Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures

The amendments in this Update require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss.

This Update also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss.

Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments should be applied retrospectively.

Early adoption is permitted.

Farmer Mac is still assessing the effect on our annual consolidated financial statement disclosures, however, adoption will not have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

ASU 2023-09 , Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

The Update provides guidance on improvements to annual income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

Additionally, public entities must provide a separate disclosure for any reconciling item that meets a quantitative threshold.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The amendments should be applied on a prospective basis.

Early adoption is permitted.

Farmer Mac is still assessing the impact of the new accounting standard but does not expect that adoption of the new guidance will have a material impact on Farmer Mac's financial position, results of operations, or cash flows.

(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 September 30, 2023 and December 31, 2022:

As of September 30, 2023

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of March 31, 2024 and December 31, 2023:

As of March 31, 2024

Amount Outstanding Unamortized Premium/(Discount) Amortized

16 unchanged sentences

Total held-to-maturity $ 53,756 $ — $ 53,756 $ — $ 1,104 $ — $ 54,860

(1) Amounts presented exclude $ 17.4 million of accrued interest receivable on investment securities as of September 30, 2023.

(1) Amounts presented exclude $ 22.2 million of accrued interest receivable on investment securities as of March 31, 2024.

(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 6.5 % as of September 30, 2023.

(3) The held-to-maturity investment securities had a weighted average yield of 6.7 % as of March 31, 2024.

As of December 31, 2023

8 unchanged sentences

Fixed rate GSE guaranteed mortgage-backed securities 1,727,669 ( 46,788 ) 1,680,881 — 6,558 ( 117,824 ) 1,569,615

Floating rate U.S.

Treasuries 50,000 ( 17 ) 49,983 — — ( 15 ) 49,968

Fixed rate U.S.

9 unchanged sentences

(3) The held-to-maturity investment securities had a weighted average yield of 6.7 % as of December 31, 2023.

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

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

As of September 30, 2023

Farmer Mac did no t sell any securities from its available-for-sale investment portfolio during the three months ended March 31, 2024 and 2023.

As of March 31, 2024 and December 31, 2023, unrealized losses on available-for-sale investment securities were as follows:

As of March 31, 2024

Available-for-Sale Securities

23 unchanged sentences

Fixed rate Government/GSE guaranteed mortgage-backed securities 384,305 ( 4,262 ) 905,759 ( 113,562 )

Floating rate U.S.

Treasuries 49,969 ( 15 ) — —

Fixed rate U.S.

2 unchanged sentences

Number of securities in loss position 91 162

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 September 30, 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 March 31, 2024 and December 31, 2023, 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 September 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.

As of both March 31, 2024 and December 31, 2023, 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 September 30, 2023 that is, on average, approximately 92.7 % 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, 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 September 30, 2023 are set forth below.

Securities in unrealized loss positions for 12 months or longer have a fair value as of March 31, 2024 that is, on average, approximately 94.1 % 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, or 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 March 31, 2024 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 September 30, 2023

As of March 31, 2024

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 September 30, 2023 and December 31, 2022:

As of September 30, 2023

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of March 31, 2024 and December 31, 2023:

As of March 31, 2024

Unpaid Principal Balance Unamortized Premium/(Discount) Amortized

16 unchanged sentences

$ 1,069 $ 57 $ 1,126 $ — $ — $ ( 60 ) $ 1,066

(1) Amounts presented exclude $ 53.3 million, $ 58.9 million, and $ 38,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of September 30, 2023.

(1) Amounts presented exclude $ 57.9 million, $ 59.4 million, and $ 27,610 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of March 31, 2024.

(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 $ 9.5 million of an interest-only security with a notional amount of $ 233.5 million.

(4) The trading USDA securities had a weighted average yield of 5.50 % as of September 30, 2023.

(4) The trading USDA securities had a weighted average yield of 5.58 % as of March 31, 2024.

As of December 31, 2023

23 unchanged sentences

On July 1, 2023, Farmer Mac transferred $ 2.7 billion of AgVantage Securities from available-for-sale to held-to-maturity to reflect Farmer Mac's positive intent and ability to hold these securities until maturity or payoff.

Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment of unrealized losses of $ 31.9 million.

The accumulated unrealized losses were retained in accumulated other comprehensive income in the amount of $ 31.9 million.

Farmer Mac accounts for held-to-maturity securities at amortized cost.

Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment due to unrealized losses of $ 31.9 million.

The accumulated unrealized losses were recorded in accumulated other comprehensive income in the amount of $ 31.9 million.

Both the cost basis adjustment and accumulated unrealized depreciation will be amortized as an adjustment to the yield on the held-to-maturity AgVantage Securities over the remaining term of the transferred securities.

As of September 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 September 30, 2023

As of March 31, 2024 and December 31, 2023, 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, 2024

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

12 unchanged sentences

AgVantage $ 1,133,776 $ ( 15,100 ) $ 3,945,347 $ ( 337,846 )

Farmer Mac Guaranteed Securities — — — —

Total available-for-sale $ 1,133,776 $ ( 15,100 ) $ 3,945,347 $ ( 337,846 )

14 unchanged sentences

AgVantage $ 508,182 $ ( 5,716 ) $ 4,043,431 $ ( 303,695 )

Farmer Mac Guaranteed Securities 7,847 ( 2,775 ) — —

Total available-for-sale $ 508,182 $ ( 5,716 ) $ 4,043,431 $ ( 303,695 )

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to September 30, 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 March 31, 2024 and December 31, 2023, 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 76 and 95 available-for-sale securities as of September 30, 2023 and December 31, 2022, respectively.

There were 59 and 37 held-to-maturity AgVantage securities with an unrealized loss as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023 and December 31, 2022, 64 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

As of September 30, 2023 and December 31, 2022, there were 26 and 4 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three and nine months ended September 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 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 September 30, 2023 are set forth below.

The unrealized losses from AgVantage securities were on 73 and 68 available-for-sale securities as of March 31, 2024 and December 31, 2023, respectively.

There were 63 and 53 held-to-maturity AgVantage securities with an unrealized loss as of March 31, 2024 and December 31, 2023, respectively.

As of March 31, 2024 and December 31, 2023, 60 and 62 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months.

As of March 31, 2024 and December 31, 2023, there were 19 and 22 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three three months ended March 31, 2024 and 2023 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 September 30, 2023

As of March 31, 2024

Available-for-Sale Securities

7 unchanged sentences

(1) Amounts presented exclude $ 57.9 million of accrued interest receivable.

As of September 30, 2023

As of March 31, 2024

Held-to-Maturity Securities

23 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 $ 14.3 million and $ 6.1 million of accrued interest receivable and $ 6.3 million and $ 3.6 million of accrued interest payable on uncleared swaps as of September 30, 2023 and December 31, 2022, respectively.

The table below includes accrued interest on cleared swaps, but excludes $ 17.6 million and $ 16.4 million of accrued interest receivable and $ 6.2 million and $ 6.5 million of accrued interest payable on uncleared swaps as of March 31, 2024 and December 31, 2023, 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 September 30, 2023

As of March 31, 2024

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 September 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 September 30, 2023.

During the three and nine months ended September 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 nine months ended September 30, 2023 and 2022:

For the Three Months Ended September 30, 2023

As of March 31, 2024, Farmer Mac expects to reclassify $ 14.5 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, 2024.

During the three months ended March 31, 2024 and 2023, 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, 2024 and 2023:

For the Three Months Ended March 31, 2024

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

23 unchanged sentences

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 2,079 $ 2,079

For the Three Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

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

7 unchanged sentences

Recognized on hedged items 6,961 41,971 15,208 ( 70,975 ) — ( 6,835 )

Discount amortization recognized on hedged items ( 59 ) — — ( 549 ) — ( 608 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 5,515 $ 35,413 $ 16,694 $ ( 58,491 ) $ — $ ( 869 )

(Losses)/gains on fair value hedging relationships:

Recognized on derivatives $ 49,373 $ 201,864 $ 105,683 $ ( 197,884 ) $ — $ 159,036

Recognized on hedged items ( 52,308 ) ( 204,765 ) ( 100,490 ) 197,902 — ( 159,661 )

(Losses)/gains on fair value hedging relationships

$ ( 2,935 ) $ ( 2,901 ) $ 5,193 $ 18 $ — $ ( 625 )

Expense related to interest settlements on cash flow hedging relationships:

Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 1,072 $ — $ 1,072

Recognized on hedged items — — — ( 4,046 ) — ( 4,046 )

Discount amortization recognized on hedged items — — — ( 15 ) — ( 15 )

Expense recognized on cash flow hedges $ — $ — $ — $ ( 2,989 ) $ — $ ( 2,989 )

Gains on financial derivatives not designated in hedge relationships:

Gains on interest rate swaps $ — $ — $ — $ — $ 5,054 $ 5,054

Interest expense on interest rate swaps — — — — ( 2,613 ) ( 2,613 )

Treasury futures — — — — ( 1,669 ) ( 1,669 )

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 772 $ 772

For the Nine Months Ended September 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 $ 209,429 $ 442,649 $ 388,837 $ ( 795,537 ) $ 4,763 $ 250,141

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

Recognized on derivatives 24,952 104,023 46,625 ( 258,358 ) — ( 82,758 )

Recognized on hedged items 23,865 133,995 47,144 ( 243,053 ) — ( 38,049 )

Premium/discount amortization recognized on hedged items

Income/(expense) related to interest settlements on fair value hedging relationships $ 50,216 $ 238,018 $ 93,769 $ ( 503,548 ) $ — $ ( 121,545 )

(Losses)/gains on fair value hedging relationships:

Recognized on derivatives $ 45,722 $ 117,267 $ 97,346 $ 50,916 $ — $ 311,251

Recognized on hedged items ( 46,485 ) ( 116,591 ) ( 97,827 ) ( 52,144 ) — ( 313,047 )

(Losses)/gains on fair value hedging relationships $ ( 763 ) $ 676 $ ( 481 ) $ ( 1,228 ) $ — $ ( 1,796 )

Expense related to interest settlements on cash flow hedging relationships:

Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 15,051 $ — $ 15,051

Recognized on hedged items — — — ( 23,325 ) — ( 23,325 )

Discount amortization recognized on hedged items — — — ( 41 ) — ( 41 )

Expense recognized on cash flow hedges $ — $ — $ — $ ( 8,315 ) $ — $ ( 8,315 )

Gains on financial derivatives not designated in hedging relationships:

Gains on interest rate swaps $ — $ — $ — $ — $ 5,263 $ 5,263

Interest expense on interest rate swaps — — — — ( 3,999 ) ( 3,999 )

Treasury futures — — — — 3,499 3,499

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 4,763 $ 4,763

For the Nine Months Ended September 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:

268 — — ( 691 ) — ( 423 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 13,778 $ 70,880 $ 28,388 $ ( 149,133 ) $ — $ ( 36,087 )

Recognized on derivatives ( 1,536 ) ( 37,687 ) ( 9,568 ) ( 3,831 ) — ( 52,622 )

Recognized on hedged items 10,433 102,123 41,146 ( 76,862 ) — 76,840

Discount amortization recognized on hedged items ( 816 ) — — ( 1,478 ) — ( 2,294 )

Income/(expense) related to interest settlements on fair value hedging relationships $ 8,081 $ 64,436 $ 31,578 $ ( 82,171 ) $ — $ 21,924

(Losses)/gains on fair value hedging relationships:

Gains/(losses) on fair value hedging relationships:

Recognized on derivatives $ ( 27,153 ) $ ( 93,792 ) $ ( 56,681 ) $ 122,540 $ — $ ( 55,086 )

Recognized on hedged items 27,428 93,295 56,957 ( 122,699 ) — 54,981

(Losses)/gains on fair value hedging relationships

Gains/(losses) on fair value hedging relationships

$ 275 $ ( 497 ) $ 276 $ ( 159 ) $ — $ ( 105 )

9 unchanged sentences

Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 399 $ 399

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 September 30, 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)

September 30, 2023 December 31, 2022 September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023 March 31, 2024 December 31, 2023

(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 September 30, 2023 and December 31, 2022:

September 30, 2023

Gross Amounts Not Offset in the Consolidated Balance Sheet

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, 2024 and December 31, 2023:

March 31, 2024

Gross Amount Recognized Gross Amounts offset in the Consolidated Balance Sheet Net Amount Presented in the Consolidated Balance Sheet (1)

Gross Amounts Not Offset in the Consolidated Balance Sheet

Netting Adjustments Financial instruments pledged Cash Collateral (2)

Net Amount (3)

(in thousands)

6 unchanged sentences

(1) Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 24.1 million of collateral posted related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 15.6 million of collateral posted and $ 0.0 million of collateral received related to counterparties not subject to master netting agreements.

(3) Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount.

As of March 31, 2024, Farmer Mac had additional net exposure of $ 197.9 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position.

December 31, 2023

Gross Amounts Not Offset in the Consolidated Balance Sheet

Gross Amount Recognized Gross Amounts offset in the Consolidated Balance Sheet Net Amount Presented in the Consolidated Balance Sheet (1)

Gross Amounts Not Offset in the Consolidated Balance Sheet

Netting Adjustments Financial instruments pledged Cash Collateral (2)

Net Amount (3)

(in thousands)

6 unchanged sentences

(1) Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 23.7 million of collateral posted related to counterparties not subject to master netting agreements.

(2) Cash collateral excludes $ 15.2 million of collateral posted and $ 2.0 million of collateral received related to counterparties not subject to master netting agreements.

(3) Any over-collateralization at an individual clearing agent and/or counterparty level is not included in the determination of the net amount.

As of December 31, 2023, Farmer Mac had additional net exposure of $ 207.2 million due to instances where Farmer Mac's collateral to a counterparty exceeded the net derivative position.

Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets.

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 September 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 September 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 $ 24.5 billion notional amount of interest rate swaps outstanding as of September 30, 2023, $ 19.5 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 March 31, 2024 or December 31, 2023, 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, 2024 and December 31, 2023, 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 $ 26.1 billion notional amount of interest rate swaps outstanding as of March 31, 2024, $ 20.8 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME").

Of Farmer Mac's $ 25.8 billion notional amount of interest rate swaps outstanding as of December 31, 2023, $ 20.5 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, which was completed as of the end of the second quarter of 2023.

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 September 30, 2023 and December 31, 2022, Farmer Mac had no loans held for sale.

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

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

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

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

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

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

As of March 31, 2024 As of December 31, 2023

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 September 30, 2023 and December 31, 2022:

September 30, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

Allowance for Losses Allowance for Losses

6 unchanged sentences

Total $ 14,288 $ 16,031

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

September 30, 2023 September 30, 2022

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

For the Three Months Ended

March 31, 2024 March 31, 2023

Agricultural Finance loans Rural Infrastructure

7 unchanged sentences

(in thousands)

For the Three Months Ended

Beginning Balance $ 3,936 $ 2,948 $ 6,884 $ 9,147 $ 4,044 $ 2,731 $ 6,775 $ 8,314

(Release of)/provision for losses ( 25 ) ( 3,689 ) ( 3,714 ) 3,580 ( 153 ) 334 181 418

Charge-offs — — — — — — — —

Ending Balance $ 3,910 $ 3,678 $ 7,588 $ 9,026 $ 2,112 $ 2,084 $ 4,196 $ 8,806

For the Nine Months Ended

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

(Release of)/provision for losses ( 134 ) 947 813 712 ( 686 ) 1,524 838 ( 1,793 )

Provision for/(release of) losses

599 ( 379 ) 220 ( 1,963 ) ( 111 ) 4,308 4,197 ( 3,613 )

Charge-offs — — — — — — — —

Ending Balance $ 4,535 $ 2,569 $ 7,104 $ 7,184 $ 3,933 $ 7,039 $ 10,972 $ 4,701

(1) As of September 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 September 30, 2023 and 2022, allowance for losses for Agricultural Finance Corporate AgFinance loans includes $ 0.0 million and $ 1.7 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

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

The $ 3.6 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the quarter ended September 30, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the quarter.

The $ 3.7 million net release from the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended September 30, 2023 was primarily attributable to the full payoff of a single collateral dependent storage and processing loan.

The $ 0.7 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the nine months ended September 30, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the most recent quarter.

The $ 0.8 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the nine months ended September 30, 2023 was primarily attributable to increased loan volume and certain risk rating downgrades.

The net provision to the allowance for Rural Infrastructure Finance loan losses of $ 0.4 million recorded

during third quarter 2022 was primarily attributable to net new loan volume.

The $ 0.2 million net

provision to the allowance for the Agricultural Finance mortgage loan portfolio during third quarter 2022

was primarily attributable to the deterioration of a single agricultural storage and processing loan.

The $ 1.8 million net release from the allowance for the Rural Infrastructure Finance portfolio for the nine

months ended September 30, 2022 was primarily attributable to improvements in forecasts of future

economic conditions, 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 $ 0.8 million net provision to the allowance for the

Agricultural Finance mortgage loan portfolio for the nine months ended September 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 September 30, 2023 and December 31, 2022:

As of September 30, 2023

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

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

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

The $ 2.0 million net release from the allowance for the Rural Infrastructure Finance portfolio during the quarter ended March 31, 2024 was primarily attributable to a single telecommunications loan that completed a restructuring, which resulted in an improved collateral position and a paydown of approximately 15 % of its previously unpaid principal balance.

The $ 0.2 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended March 31, 2024 was primarily attributable to increased loan volume.

Although substandard Agricultural Finance loans increased $ 73.0 million from December 31, 2023, there was not a significant provision for loss associated with that increase because of the net realizable value of those loans.

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

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

on newly available industry data.

The $ 4.2 million net provision to the allowance for the Agricultural

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

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

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

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

As of March 31, 2024

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

8 unchanged sentences

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

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

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

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

(4) Includes $ 45.9 million of nonaccrual loans for which there was no associated allowance.

During the three and nine months ended September 30, 2023, Farmer Mac received $ 0.4 million and $ 1.9 million in interest on nonaccrual loans, respectively.

During the three months ended March 31, 2024, Farmer Mac received $ 0.6 million in interest on nonaccrual loans.

As of December 31, 2023

9 unchanged sentences

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

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

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

2 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 September 30, 2023 and December 31, 2022, by year of origination:

As of September 30, 2023

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

As of March 31, 2024

Year of Origination:

9 unchanged sentences

Total $ 207,272 $ 611,432 $ 1,192,657 $ 1,667,156 $ 1,122,060 $ 1,475,276 $ 381,087 $ 6,656,940

For the Three Months Ended September 30, 2023:

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

For the Nine Months Ended September 30, 2023:

For the Three Months Ended March 31, 2024:

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

2 unchanged sentences

(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 September 30, 2023

As of March 31, 2024

Year of Origination:

9 unchanged sentences

Total $ 34,521 $ 204,717 $ 91,839 $ 272,595 $ 172,484 $ 226,337 $ 256,013 $ 1,258,506

For the Three Months Ended September 30, 2023:

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

For the Nine Months Ended September 30, 2023:

For the Three Months Ended March 31, 2024:

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

2 unchanged sentences

(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 September 30, 2023

As of March 31, 2024

Year of Origination:

9 unchanged sentences

Total $ 192,160 $ 572,095 $ 700,374 $ 189,652 $ 585,661 $ 1,283,649 $ 163,162 $ 3,686,753

For the Three Months Ended September 30, 2023:

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

For the Nine Months Ended September 30, 2023:

For the Three Months Ended March 31, 2024:

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

14 unchanged sentences

Total $ 604,837 $ 1,207,742 $ 1,691,901 $ 1,149,903 $ 357,646 $ 1,148,725 $ 404,957 $ 6,565,711

For the Three Months Ended September 30, 2022:

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

For the Nine Months Ended September 30, 2022:

For the Three Months Ended March 31, 2023:

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

14 unchanged sentences

Total $ 207,279 $ 112,444 $ 277,400 $ 173,980 $ 119,685 $ 112,947 $ 255,988 $ 1,259,723

For the Three Months Ended September 30, 2022:

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

For the Nine Months Ended September 30, 2022:

For the Three Months Ended March 31, 2023:

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

14 unchanged sentences

Total $ 618,946 $ 720,522 $ 187,746 $ 593,841 $ 701,937 $ 611,548 $ 100,223 $ 3,534,763

For the Three Months Ended September 30, 2022:

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

For the Nine Months Ended September 30, 2022:

For the Three Months Ended March 31, 2023:

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

3 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 September 30, 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 March 31, 2024 and December 31, 2023, 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 September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

(in thousands)

1 unchanged sentence

Farmer Mac Guaranteed Securities $ 443,843 $ 452,602

Rural Infrastructure Finance

Farmer Mac Guaranteed Securities 1,098 1,169

Total off-balance sheet Farmer Mac Guaranteed Securities $ 443,843 $ 452,602

1 unchanged sentence

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

For the Nine Months Ended

September 30, 2023 September 30, 2022

For the Three Months Ended

March 31, 2024 March 31, 2023

(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 September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

(dollars in thousands)

2 unchanged sentences

Farmer Mac Guaranteed Securities 21.6 years 21.9 years

AgVantage Securities 1.2 years 2.0 years

Long-Term Standby Purchase Commitments

1 unchanged sentence

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 September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

(dollars in thousands)

5 unchanged sentences

Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities

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

September 30, 2023 December 31, 2022

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

March 31, 2024 December 31, 2023

Reserve for Losses Reserve for Losses

3 unchanged sentences

Total $ 1,642 $ 1,711

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

For the Three Months Ended For the Nine Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

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

(in thousands) (in thousands)

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

For the Three Months Ended

March 31, 2024 March 31, 2023

Reserve for Losses Reserve for Losses

(in thousands)

Agricultural Finance

1 unchanged sentence

(Release of)/provision for losses

( 59 ) ( 139 ) 593 ( 325 )

Ending Balance $ 1,407 $ 1,396

1 unchanged sentence

Beginning Balance $ 240 $ 614

Provision for/(release of) losses

Release of losses

( 5 ) ( 374 )

Ending Balance $ 235 $ 240

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

The allowance for both the Agricultural Finance and Rural Infrastructure Finance LTSPC and Farmer Mac Guaranteed portfolios recorded during the three and nine months ended September 30, 2022 remained relatively constant.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of September 30, 2023 and December 31, 2022:

As of September 30, 2023

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.

As of March 31, 2024

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 September 30, 2023 and December 31, 2022, by year of origination:

As of September 30, 2023

As of March 31, 2024

Year of Origination:

9 unchanged sentences

Total $ 686 $ 167,655 $ 237,965 $ 506,137 $ 525,482 $ 1,459,080 $ 372,366 $ 3,269,371

For the Three Months Ended September 30, 2023:

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

For the Nine Months Ended September 30, 2023:

For the Three Months Ended March 31, 2024:

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

1 unchanged sentence

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

As of September 30, 2023

As of March 31, 2024

Year of Origination:

9 unchanged sentences

Total $ — $ — $ — $ — $ — $ 391,099 $ 222,885 $ 613,984

For the Three Months Ended September 30, 2023:

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

For the Nine Months Ended September 30, 2023:

For the Three Months Ended March 31, 2024:

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

13 unchanged sentences

Total $ 169,429 $ 246,512 $ 517,862 $ 535,398 $ 266,882 $ 1,256,770 $ 404,991 $ 3,397,844

For the Three Months Ended September 30, 2022:

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

For the Nine Months Ended September 30, 2022:

For the Three Months Ended March 31, 2023:

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

13 unchanged sentences

Total $ — $ — $ — $ — $ — $ 419,190 $ 115,823 $ 535,013

For the Three Months Ended September 30, 2022:

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

For the Nine Months Ended September 30, 2022:

For the Three Months Ended March 31, 2023:

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

4 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 September 30, 2023 and December 31, 2022:

September 30, 2023

Outstanding as of September 30

The following tables set forth information related to Farmer Mac's borrowings as of March 31, 2024 and December 31, 2023:

March 31, 2024

Outstanding as of March 31

Average Outstanding During the Quarter

37 unchanged sentences

Total $ 26,336,542

The maximum amount of Farmer Mac's discount notes outstanding at any month end during the nine months ended September 30, 2023 and 2022 was $ 1.5 billion and $ 2.2 billion, respectively.

The maximum amount of Farmer Mac's discount notes outstanding at any month end during each of the three months ended March 31, 2024 and 2023 was $ 1.9 billion and $ 0.9 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 September 30, 2023:

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

The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2024 as of March 31, 2024:

Debt Callable in 2024 as of March 31, 2024, by Maturity

Amount Weighted-Average Rate

6 unchanged sentences

Total $ 5,696,888 2.71 %

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of September 30, 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 March 31, 2024, 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 $ 26,814,918 3.35 %

During the nine months ended September 30, 2023 and 2022, Farmer Mac called $ 111.0 million and $ 26.0 million of callable medium-term notes, respectively.

During the the three months ended March 31, 2024 and 2023, Farmer Mac called $ 354.5 million and $ 0.0 million of callable medium-term notes, respectively.

Authority to Borrow from the U.S.

7 unchanged sentences

Treasury within a reasonable time.

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

As of March 31, 2024, Farmer Mac had not used this borrowing authority.

Gains on Repurchases of Outstanding Debt

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

During each of the first, second, and third quarters 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.

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.

Shortly after these repurchases were completed, Farmer Mac indefinitely suspended its share repurchase program in an effort to preserve capital and liquidity in view of market volatility and uncertainty caused by the COVID-19 pandemic.

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 that two-year period.

No outstanding debt repurchases were made in the three months ended March 31, 2024 and 2023.

During first quarter 2024, Farmer Mac paid a quarterly dividend of $ 1.40 per share on all classes of its common stock.

For each quarter in 2023, Farmer Mac paid a quarterly dividend of $ 1.10 per share on all

classes of its common stock.

Except for the period from March 16, 2020 to March 10, 2021, Farmer Mac has had a common stock repurchase program in place since third quarter 2015.

On March 10, 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms and extended the expiration date of the program to March 2023.

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 third quarter 2023.

As of September 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.

Farmer Mac has no t repurchased any shares of its Class C non-voting common stock since the repurchase program was reinstated in March 2021.

As of March 31, 2024, 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 September 30, 2023 and December 31, 2022, the minimum capital requirement was greater than the risk-based capital requirement.

As of both March 31, 2024 and December 31, 2023, 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 September 30, 2023, Farmer Mac's minimum capital requirement was $ 840.1 million and its core capital level was $ 1.4 billion, which was $ 581.1 million above the minimum capital requirement as of that date.

As of March 31, 2024, Farmer Mac's minimum capital requirement was $ 872.3 million and its core capital level was $ 1.5 billion, which was $ 612.1 million above the minimum capital requirement as of that date.

As of December 31, 2023, Farmer Mac's minimum capital requirement was $ 862.6 million and its core capital level was $ 1.5 billion, which was $ 589.4 million above the minimum capital requirement as of that date.

2 unchanged sentences

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 September 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 September 30, 2023

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023, 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, 2024

Level 1 Level 2 Level 3 (1)

32 unchanged sentences

Fixed rate GSE guaranteed mortgage-backed securities — 1,569,615 — 1,569,615

Floating rate U.S.

Treasuries 49,968 — — 49,968

Fixed rate U.S.

15 unchanged sentences

(1) Level 3 assets represent 19 % of total assets and 52 % 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 September 30, 2023 or December 31, 2022.

There were no material assets or liabilities measured at fair value on a non-recurring basis as of March 31, 2024 or December 31, 2023.

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 nine months ended September 30, 2023 and 2022, there were no transfers within the fair value hierarchy.

During the three months ended March 31, 2024 and 2023, 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 and nine months ended September 30, 2023 and 2022.

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

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized (losses)/gains included

Unrealized gains

included in Other

Comprehensive

Income Transfers Out (1)

Ending Balance

(in thousands)

Investment Securities:

Available-for-sale:

Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,032 $ — $ — $ 1 $ — $ — $ — $ 19,033

Total available-for-sale 19,032 — — 1 — — — 19,033

Farmer Mac Guaranteed Securities:

Available-for-sale:

7,737,810 100,000 ( 6,875 ) 133 ( 107,917 ) 9,653 ( 2,684,096 ) 5,048,708

Farmer Mac Guaranteed Securities 7,605 — ( 169 ) — — 2,553 — 9,989

Total available-for-sale 7,745,415 100,000 ( 7,044 ) 133 ( 107,917 ) 12,206 ( 2,684,096 ) 5,058,697

USDA Securities:

Trading 1,348 — ( 44 ) — ( 2 ) — — 1,302

Total USDA Securities 1,348 — ( 44 ) — ( 2 ) — — 1,302

Guarantee and commitment obligations:

Guarantee Asset 4,331 — ( 84 ) — 1,716 — — 5,963

Total Guarantee and commitment obligations 4,331 — ( 84 ) — 1,716 — — 5,963

Total Assets at fair value $ 7,770,126 $ 100,000 $ ( 7,172 ) $ 134 $ ( 106,203 ) $ 12,206 $ ( 2,684,096 ) $ 5,084,995

(1) Includes $ 2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

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

There were no liabilities measured at fair value using significant unobservable inputs during the three months ended March 31, 2024 and 2023.

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended March 31, 2024

Beginning Balance Purchases Settlements Allowance for Losses Realized and

3 unchanged sentences

Comprehensive

Income Ending Balance

(in thousands)

Investment Securities:

Available-for-sale:

Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,061 $ — $ — $ 11 $ — $ 171 $ 19,243

Total available-for-sale 19,061 — — 11 — 171 19,243

Farmer Mac Guaranteed Securities:

Available-for-sale:

AgVantage 6,440,396 1,370,000 ( 627,131 ) ( 11 ) ( 204,450 ) ( 13,043 ) 6,965,761

Farmer Mac Guaranteed

Securities 9,816 — ( 468 ) — — ( 1,107 ) 8,241

Total available-for-sale 6,450,212 1,370,000 ( 627,599 ) ( 11 ) ( 204,450 ) ( 14,150 ) 6,974,002

USDA Securities:

Trading 2,275 — ( 383 ) — ( 41 ) — 1,851

Total USDA Securities 2,275 — ( 383 ) — ( 41 ) — 1,851

Guarantee and commitment obligations:

Guarantee Asset 5,636 — ( 229 ) — ( 715 ) — 4,692

Total Guarantee and commitment obligations 5,636 — ( 229 ) — ( 715 ) — 4,692

Total Assets at fair value $ 6,477,184 $ 1,370,000 $ ( 628,211 ) $ — $ ( 205,206 ) $ ( 13,979 ) $ 6,999,788

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

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized (losses)/gains included

in Income Unrealized gains

included in Other

Comprehensive

Income Transfers Out (1)

Ending Balance

16 unchanged sentences

Total Assets at fair value $ 5,558,633 $ 50,000 $ ( 64,391 ) $ 28 $ ( 80,708 ) $ 29,206 $ 5,492,768

(1) Includes $ 2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

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

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

Beginning Balance Purchases Settlements Allowance for Losses Realized and

unrealized losses included

in Income Unrealized losses

unrealized gains included

Unrealized (losses)/gains

included in Other

Comprehensive

Income Ending Balance

Ending Balance

(in thousands)

16 unchanged sentences

Total Assets at fair value $ 7,632,487 $ 687,650 $ ( 142,437 ) $ 36 $ 93,701 $ ( 20,977 ) $ 8,250,460

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 September 30, 2023 and December 31, 2022:

As of September 30, 2023

As of March 31, 2024

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

23 unchanged sentences

Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease.

Prepayment rates are not presented in the table above for AgVantage

securities because they generally have fixed maturity dates when the secured general obligations are due and do not prepay.

The significant unobservable inputs used in the fair value measurements of USDA Securities are the prepayment rate and discount rate commensurate with the risks involved.

Typically, significant increases (decreases) in any of these inputs in isolation may result in materially lower (higher) fair value measurements.

Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase and would likely expect a corresponding decrease in forecasted prepayment rates.

Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease and would likely expect a corresponding increase in forecasted prepayment rates.

CPR are not presented in the table above for AgVantage securities

because they generally have fixed maturity dates when the secured general obligations are due and do not prepay.

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 September 30, 2023 and December 31, 2022:

As of September 30, 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 March 31, 2024 and December 31, 2023:

As of March 31, 2024 As of December 31, 2023

Fair Value Carrying

22 unchanged sentences

These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3.

Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or

receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2.

Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2.

The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3.

10 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 and nine months ended September 30, 2023 and 2022.

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, 2024 and 2023.

Core Earnings by Business Segment

For the Three Months Ended September 30, 2023

For the Three Months Ended March 31, 2024

Agricultural Finance Rural Infrastructure Treasury Corporate

8 unchanged sentences

Guarantee and commitment fees 4,484 87 349 62 — — — ( 1,065 ) 3,917

Other income/(expense) (3)

Other income (3)

995 12 — — — 4 66 2,251 3,328

Total revenues 38,322 8,070 7,581 2,111 32,474 479 66 4,510 93,613

Release of/(provision for) losses

13 3,694 ( 3,504 ) ( 66 ) — ( 1 ) — — 136

Release of/(provision for) reserve for losses

58 — ( 13 ) — — — — — 45

Operating expenses — — — — — — ( 24,034 ) — ( 24,034 )

Total non-interest expense 58 — ( 13 ) — — — ( 24,034 ) — ( 23,989 )

Core earnings before income taxes 38,043 12,022 3,124 1,108 34,415 537 ( 23,794 ) 7,795 (4)

Income tax (expense)/benefit ( 7,989 ) ( 2,525 ) ( 656 ) ( 233 ) ( 7,226 ) ( 113 ) 5,267 ( 1,638 ) ( 15,113 )

Core earnings before preferred stock dividends 30,054 9,497 2,468 875 27,189 424 ( 18,527 ) 6,157 (4)

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

Segment core earnings/(losses) $ 30,054 $ 9,497 $ 2,468 $ 875 $ 27,189 $ 424 $ ( 25,319 ) $ 6,157 (4)

Total Assets $ 14,660,371 $ 1,619,664 $ 6,648,693 $ 320,572 $ — $ 4,866,969 $ 195,112 $ — $ 28,311,381

Total on- and off-balance sheet program assets at principal balance $ 18,461,835 $ 1,741,306 $ 7,118,295 $ 330,575 $ — $ — $ — $ — $ 27,652,011

(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 September 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 $ 34,173 $ 7,600 $ 4,253 $ 705 $ 23,913 $ ( 2,791 ) $ — $ — $ 67,853

reconciling adjustments (1)(2)(3)

( 830 ) — ( 33 ) — ( 1,349 ) — — 2,212 —

Net effective spread 33,343 7,600 4,220 705 22,564 ( 2,791 ) — 2,212 —

Guarantee and commitment fees 3,833 46 309 13 — — — ( 1,558 ) 2,643

Other income/(expense) (3)

(Provision for)/release of losses

( 561 ) 378 3,017 ( 1,034 ) — 1 — — 1,801

Total revenues 37,645 7,650 4,529 718 22,564 ( 2,791 ) — 1,563 71,878

Release of/(provision for) losses 93 ( 333 ) ( 414 ) 26 — 11 — — ( 617 )

Release of reserve for losses

Operating expenses — — — — — — ( 19,379 ) — ( 19,379 )

Total non-interest expense 139 — 28 — — — ( 19,379 ) — ( 19,212 )

Core earnings before income taxes 37,877 7,317 4,143 744 22,564 ( 2,780 ) ( 19,379 ) 1,563 (4)

Income tax (expense)/benefit ( 7,953 ) ( 1,536 ) ( 869 ) ( 156 ) ( 4,739 ) 584 4,366 ( 328 ) ( 10,631 )

Core earnings before preferred stock dividends 29,924 5,781 3,274 588 17,825 ( 2,196 ) ( 15,013 ) 1,235 (4)

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

Segment core earnings/(losses) $ 29,924 $ 5,781 $ 3,274 $ 588 $ 17,825 $ ( 2,196 ) $ ( 21,804 ) $ 1,235 (4)

Total Assets $ 14,113,686 $ 1,558,139 $ 5,779,300 $ 186,832 $ — $ 4,608,868 $ 194,763 $ — $ 26,441,588

Total on- and off-balance sheet program assets at principal balance $ 17,199,347 $ 1,634,786 $ 6,296,263 $ 196,242 $ — $ — $ — $ — $ 25,326,638

(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 Nine Months Ended September 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 $ 102,671 $ 22,842 $ 17,772 $ 3,108 $ 98,588 $ 397 $ — $ — $ 245,378

reconciling adjustments (1)(2)(3)

64 — 5 — — — — — 69

Net effective spread 99,571 22,842 17,677 3,108 98,648 583 — 2,949 —

Guarantee and commitment fees 12,960 193 841 69 — — — ( 1,121 ) 12,942

Other income/(expense) (3)

2,216 12 — — 3 17 284 5,484 8,016

Total revenues 114,747 23,047 18,518 3,177 98,651 600 284 7,312 266,336

Release of/(provision for) losses 136 ( 934 ) ( 652 ) ( 38 ) — 4 — — ( 1,484 )

(Provision for)/release of reserve for losses ( 594 ) — 367 — — — — — ( 227 )

Operating expenses — — — — — — ( 27,237 ) — ( 27,237 )

15 unchanged sentences

Core Earnings by Business Segment

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Agricultural Finance Rural Infrastructure Treasury Corporate

12 unchanged sentences

Release of/(provision for) losses 128 ( 4,301 ) 3,484 138 — 4 — — ( 547 )

Release of reserve for losses 324 — 116 — — — — — 440

(Provision for)/release of reserve for losses ( 577 ) — 374 — — — — — ( 203 )

Operating expenses — — — — — — ( 23,713 ) — ( 23,713 )

15 unchanged sentences

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