XML 87 R20.htm IDEA: XBRL DOCUMENT
v3.20.1

Summary of Significant Accounting Policies (Tables) | 3 Months Ended
--- | ---
Mar. 31, 2020
Accounting Policies [Abstract] |
Schedule of Consolidation of Variable Interest Entities | The following tables present, by line of business, details about the consolidation of VIEs: Table 1.1
| Consolidation of Variable Interest Entities |  |  |  |  |  |  |  |  |  |
| As of March 31, 2020 |  |  |  |  |  |  |  |  |  |
| Farm & Ranch |  | USDA Guarantees |  |  |  |  |  | Corporate |  | Total
| (in thousands) |  |  |  |  |  |  |  |  |  |
On-Balance Sheet: |  |  |  |  |  |  |  |  |  |  |
Consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Loans held for investment in consolidated trusts, at amortized cost | $ | 1,540,689 |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 1,540,689 |
Debt securities of consolidated trusts held by third parties (1) | 1,549,527 |  |  | — |  |  |  |  |  |  | — |  |  | 1,549,527 |
Unconsolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |  |  |  |  |  |  |
Carrying value (2) | — |  |  | 33,512 |  |  |  |  |  |  | — |  |  | 33,512 |
Maximum exposure to loss (3) | — |  |  | 33,440 |  |  |  |  |  |  | — |  |  | 33,440 |
Investment securities: |  |  |  |  |  |  |  |  |  |  |
Carrying value (4) | — |  |  | — |  |  |  |  |  |  | 1,291,950 |  |  | 1,291,950 |
Maximum exposure to loss (3) (4) | — |  |  | — |  |  |  |  |  |  | 1,302,410 |  |  | 1,302,410 |
Off-Balance Sheet: |  |  |  |  |  |  |  |  |  |  |
Unconsolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |  |  |  |  |  |  |
Maximum exposure to loss (3) (5) | 97,302 |  |  | 370,903 |  |  |  |  |  |  | — |  |  | 468,205 |
(1)Includes borrower remittances of $8.8 million. The borrower remittances had not been passed through to third party investors as of March 31, 2020. (2)Includes $0.1 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. (3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss. (4)Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities. (5)The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.
| Consolidation of Variable Interest Entities |  |  |  |  |  |  |  |  |  |
| As of December 31, 2019 |  |  |  |  |  |  |  |  |  |
| Farm & Ranch |  | USDA Guarantees |  |  |  |  |  | Corporate |  | Total
| (in thousands) |  |  |  |  |  |  |  |  |  |
On-Balance Sheet: |  |  |  |  |  |  |  |  |  |  |
Consolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Loans held for investment in consolidated trusts, at amortized cost | $ | 1,600,917 |  |  | $ | — |  |  |  |  |  |  | $ | — |  |  | $ | 1,600,917 |
Debt securities of consolidated trusts held by third parties (1) | 1,616,504 |  |  | — |  |  |  |  |  |  | — |  |  | 1,616,504 |
Unconsolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |  |  |  |  |  |  |
Carrying value (2) | — |  |  | 32,041 |  |  |  |  |  |  | — |  |  | 32,041 |
Maximum exposure to loss (3) | — |  |  | 31,887 |  |  |  |  |  |  | — |  |  | 31,887 |
Investment securities: |  |  |  |  |  |  |  |  |  |  |
Carrying value (4) | — |  |  | — |  |  |  |  |  |  | 1,117,203 |  |  | 1,117,203 |
Maximum exposure to loss (3) (4) | — |  |  | — |  |  |  |  |  |  | 1,120,765 |  |  | 1,120,765 |
Off-Balance Sheet: |  |  |  |  |  |  |  |  |  |  |
Unconsolidated VIEs: |  |  |  |  |  |  |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |  |  |  |  |  |  |
Maximum exposure to loss (3) (5) | 107,322 |  |  | 389,216 |  |  |  |  |  |  | — |  |  | 496,538 |
(1)Includes borrower remittances of $15.6 million. The borrower remittances had not been passed through to third party investors as of December 31, 2019. (2)Includes $0.2 million of unamortized premiums and discounts and fair value adjustments related to the USDA Guarantees line of business. (3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss. (4)Includes auction-rate certificates, asset-backed securities, and government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities. (5)The amount under the Farm & Ranch line of business relates to unconsolidated trusts where Farmer Mac determined it was not the primary beneficiary due to shared power with an unrelated party.
Basic and Diluted EPS | The following schedule reconciles basic and diluted EPS for the three months ended March 31, 2020 and 2019: Table 1.2
| For the Three Months Ended |  |  |  |  |  |  |  |  |  |
| March 31, 2020 |  |  |  |  |  | March 31, 2019 |  |  |  |
| Net Income |  | Weighted-Average Shares |  | $ per Share |  | Net Income |  | Weighted-Average Shares |  | $ per Share
| (in thousands, except per share amounts) |  |  |  |  |  |  |  |  |  |
Basic EPS |  |  |  |  |  |  |  |  |  |  |  |
Net income attributable to common stockholders |  | $ | 9,399 |  |  | 10,712 |  |  | $ | 0.88 |  |  | $ | 21,874 |  |  | 10,670 |  |  | $ | 2.05 |
Effect of dilutive securities(1) |  |  |  |  |  |  |  |  |  |  |
SARs and restricted stock |  | — |  |  | 70 |  |  | (0.01) |  |  | — |  |  | 107 |  |  | (0.02) |
Diluted EPS |  | $ | 9,399 |  |  | 10,782 |  |  | $ | 0.87 |  |  | $ | 21,874 |  |  | 10,777 |  |  | $ | 2.03 |
(1)For the three months ended March 31, 2020 and 2019, SARs and restricted stock of 87,148 and 56,976, 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, 2020 and 2019, contingent shares of unvested restricted stock of 12,680 and 12,284, 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.
Schedule of Accumulated Other Comprehensive Income, Net of Tax | The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three months ended March 31, 2020 and 2019: Table 1.3
| As of March 31, 2020 |  |  |  |  |  |  |  | As of March 31, 2019 |  |  |  |  |  |
| Available-for-Sale Securities |  | Held-to-Maturity Securities |  | Cash Flow Hedges |  | Total |  | Available-for-Sale Securities |  | Held-to-Maturity Securities |  | Cash Flow Hedges |  | Total
| (in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |
For the Three Months Ended: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance | $ | (43,397) |  |  | $ | 32,845 |  |  | $ | (5,609) |  |  | $ | (16,161) |  |  | $ | (25,360) |  |  | $ | 43,443 |  |  | $ | 6,873 |  |  | $ | 24,956 |
Other comprehensive (loss)/income before reclassifications | (77,685) |  |  |  | — |  |  |  | (22,668) |  |  | (100,353) |  |  | 3,318 |  |  |  | — |  |  |  | (4,095) |  |  | (777) |
Amounts reclassified from AOCI | (776) |  |  | (4,494) |  |  | 347 |  |  | (4,923) |  |  | (758) |  |  | (1,787) |  |  | (380) |  |  | (2,925) |
Net comprehensive (loss)/income | (78,461) |  |  | (4,494) |  |  | (22,321) |  |  | (105,276) |  |  | 2,560 |  |  | (1,787) |  |  | (4,475) |  |  | (3,702) |
Ending Balance | $ | (121,858) |  |  | $ | 28,351 |  |  | $ | (27,930) |  |  | $ | (121,437) |  |  | $ | (22,800) |  |  | $ | 41,656 |  |  | $ | 2,398 |  |  | $ | 21,254 |
Schedule of Reclassification out of Accumulated Other Comprehensive Income | The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the three months ended March 31, 2020 and 2019: Table 1.4
| For the Three Months Ended |  |  |  |  |  |  |  |  |  |
| March 31, 2020 |  |  |  |  |  | March 31, 2019 |  |  |  |
| Before Tax |  | Provision (Benefit) |  | After Tax |  | Before Tax |  | Provision (Benefit) |  | After Tax
| (in thousands) |  |  |  |  |  |  |  |  |  |
Other comprehensive income: |  |  |  |  |  |  |  |  |  |  |
Available-for-sale-securities: |  |  |  |  |  |  |  |  |  |  |
Unrealized holding (losses)/gains on available-for-sale securities | $ | (98,334) |  |  | $ | (20,649) |  |  | $ | (77,685) |  |  | $ | 4,200 |  |  | $ | 882 |  |  | $ | 3,318 |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |
Net interest income(1) | (969) |  |  | (203) |  |  | (766) |  |  | (953) |  |  | (200) |  |  | (753) |
Other income(2) | (13) |  |  | (3) |  |  | (10) |  |  | (6) |  |  | (1) |  |  | (5) |
Total | $ | (99,316) |  |  | $ | (20,855) |  |  | $ | (78,461) |  |  | $ | 3,241 |  |  | $ | 681 |  |  | $ | 2,560 |
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |  |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |
Net interest income(3) | (5,688) |  |  | (1,194) |  |  | (4,494) |  |  | (2,262) |  |  | (475) |  |  | (1,787) |
Total | $ | (5,688) |  |  | $ | (1,194) |  |  | $ | (4,494) |  |  | $ | (2,262) |  |  | $ | (475) |  |  | $ | (1,787) |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |
Unrealized (losses)/gains on cash flow hedges | $ | (28,695) |  |  | $ | (6,027) |  |  | $ | (22,668) |  |  | $ | (5,184) |  |  | $ | (1,089) |  |  | $ | (4,095) |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |
Net interest income(4) | 439 |  |  | 92 |  |  | 347 |  |  | (481) |  |  | (101) |  |  | (380) |
Total | $ | (28,256) |  |  | $ | (5,935) |  |  | $ | (22,321) |  |  | $ | (5,665) |  |  | $ | (1,190) |  |  | $ | (4,475) |
Other comprehensive (loss)/income | $ | (133,260) |  |  | $ | (27,984) |  |  | $ | (105,276) |  |  | $ | (4,686) |  |  | $ | (984) |  |  | $ | (3,702) |
(1)Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting. (2)Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities. (3)Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income. (4)Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.
Recently Adopted Accounting Guidance and Recently Issued Accounting Guidance, Note Yet Adopted Within Out Consolidated Financial Statements | Recently Adopted Accounting Guidance
Standard | Description | Date of Adoption | Effect on Consolidated Financial Statements
ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments | This Update required entities to measure all expected credit losses for financial assets held at amortized cost at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts, as well as requiring entities to use forward-looking information to form their credit loss estimates. | January 1, 2020 | In first quarter 2020 Farmer Mac adopted the new guidance. The cumulative-effect adjustment to retained earnings as of January 1, 2020 reflected application of the new guidance and did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. For more information on the transition adjustment see Table 1.5 below.
ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities | The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium by requiring the premium to be amortized to the earliest call date. There is no required accounting change for securities held at a discount in this Update. | January 1, 2020 | The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement | The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurements, including the consideration of costs and benefits. Certain disclosure requirements were either removed, modified, or added. | January 1, 2020 | The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
The following table presents the impact of adopting CECL on January 1, 2020 on our allowance and retained earnings: Table 1.5
|  | December 31, 2019 |  | Transition Adjustment |  | January 1, 2020
|  | (in thousands) |  |  |  |
Allowance: |  |  |  |  |  |
Farm & Ranch: |  |  |  |  |  |
Loans |  | $ | 10,454 |  |  | $ | (3,909) |  |  | $ | 6,545 |
Long-term standby purchase commitments and guarantees |  | 2,164 |  |  | (148) |  |  | 2,016 |
Rural Utilities: |  |  |  |  |  |
Loans |  | — |  |  | 5,378 |  |  | 5,378 |
Long-term standby purchase commitments |  | — |  |  | 1,011 |  |  | 1,011 |
Farmer Mac Guaranteed Securities: |  |  |  |  |  |
AgVantage |  | — |  |  | 315 |  |  | 315 |
Investment Securities |  | — |  |  | 9 |  |  | 9 |
Total Allowance |  | $ | 12,618 |  |  | $ | 2,656 |  |  | $ | 15,274 |
Retained Earnings |  | $ | 457,047 |  |  | $ | (2,099) |  |  | $ | 454,948 |
Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements
Standard | Description | Date of Planned Adoption | Effect on Consolidated Financial Statements
ASU 2020-04, 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. | The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. | Farmer Mac is currently evaluating the impact of the discontinuation of LIBOR on the consolidated financial statements and the applicability of the optional guidance provided by this ASU.

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of information about items reclassified out of accumulated other comprehensive income (loss). + References No definition available. + Details
Name: | us-gaap_ReclassificationOutOfAccumulatedOtherComprehensiveIncomeTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of accumulated other comprehensive income (loss). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 220 -SubTopic 10 -Section 45 -Paragraph 14A -URI http://asc.fasb.org/extlink&oid=118930883&loc=SL7669686-108580 + Details
Name: | us-gaap_ScheduleOfAccumulatedOtherComprehensiveIncomeLossTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of an entity's basic and diluted earnings per share calculations, including a reconciliation of numerators and denominators of the basic and diluted per-share computations for income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257 + Details
Name: | us-gaap_ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=116846552&loc=d3e765-108305 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.10-01.(b)(6)) -URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=116846552&loc=d3e725-108305 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794 + Details
Name: | us-gaap_ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 5A -URI http://asc.fasb.org/extlink&oid=118582676&loc=SL6759159-111685 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=118582676&loc=d3e5747-111685 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=118582676&loc=SL6228884-111685 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=118582676&loc=d3e5710-111685 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=118582676&loc=d3e5728-111685 + Details
Name: | us-gaap_ScheduleOfVariableInterestEntitiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration