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Loans | 6 Months Ended
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Jun. 30, 2022
Receivables [Abstract] |
Loans | LOANS Farmer Mac classifies loans as either held for investment or held for sale. Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled basis. As of both June 30, 2022 and December 31, 2021, Farmer Mac had no loans held for sale, respectively. Farmer Mac did not record any lower of cost or fair value adjustments during the three and six months ended June 30, 2022 and 2021. The following table includes loans held for investment and displays the composition of the loan balances as of June 30, 2022 and December 31, 2021: Table 5.1
| As of June 30, 2022 |  | As of December 31, 2021
| Unsecuritized |  | In Consolidated Trusts |  | Total |  | Unsecuritized |  | In Consolidated Trusts |  | Total
| (in thousands)
Agricultural Finance mortgage loans | $ | 6,363,921 |  |  | $ | 834,941 |  |  | $ | 7,198,862 |  |  | $ | 5,898,370 |  |  | $ | 948,623 |  |  | $ | 6,846,993 |
Rural Infrastructure Finance loans | 2,757,993 |  |  | — |  |  | 2,757,993 |  |  | 2,389,136 |  |  | — |  |  | 2,389,136 |
Total unpaid principal balance(1) | 9,121,914 |  |  | 834,941 |  |  | 9,956,855 |  |  | 8,287,506 |  |  | 948,623 |  |  | 9,236,129 |
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments | (210,439) |  |  | — |  |  | (210,439) |  |  | 26,590 |  |  | — |  |  | 26,590 |
Total loans | 8,911,475 |  |  | 834,941 |  |  | 9,746,416 |  |  | 8,314,096 |  |  | 948,623 |  |  | 9,262,719 |
Allowance for losses | (12,046) |  |  | (357) |  |  | (12,403) |  |  | (13,477) |  |  | (564) |  |  | (14,041) |
Total loans, net of allowance | $ | 8,899,429 |  |  | $ | 834,584 |  |  | $ | 9,734,013 |  |  | $ | 8,300,619 |  |  | $ | 948,059 |  |  | $ | 9,248,678 |
(1)Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business. Allowance for Losses The following table is a summary, by asset type, of the allowance for losses as of June 30, 2022 and December 31, 2021: Table 5.2
| June 30, 2022 |  | December 31, 2021
| Allowance for Losses |  | Allowance for Losses
| (in thousands)
Loans: |  |  |
Agricultural Finance mortgage loans | $ | 4,015 |  |  | $ | 3,442 |
Rural Infrastructure Finance loans | 8,388 |  |  | 10,599 |
Total | $ | 12,403 |  |  | $ | 14,041 |
The following is a summary of the changes in the allowance for losses for the three and six month period ended June 30, 2022 and 2021: Table 5.3
| For the Three Months Ended |  | For the Six Months Ended
| June 30, 2022 |  | June 30, 2021 |  | June 30, 2022 |  | June 30, 2021
| Allowance for Losses |  | Allowance for Losses |  | Allowance for Losses |  | Allowance for Losses
| (in thousands)
Agricultural Finance mortgage loans |  |  |  |  |  |  |
Beginning Balance | $ | 3,948 |  |  | $ | 3,718 |  |  | $ | 3,442 |  |  | $ | 3,745 |
Provision for/(release of) losses | 67 |  |  | (626) |  |  | 657 |  |  | (653) |
Charge-offs | — |  |  | — |  |  | (84) |  |  | — |
Ending Balance(1) | $ | 4,015 |  |  | $ | 3,092 |  |  | $ | 4,015 |  |  | $ | 3,092 |
Rural Infrastructure Finance loans |  |  |  |  |  |  |
Beginning Balance | $ | 9,622 |  |  | $ | 11,089 |  |  | $ | 10,599 |  |  | $ | 10,087 |
(Release of)/provision for losses | (1,234) |  |  | (181) |  |  | (2,211) |  |  | 821 |
Charge-offs | — |  |  | — |  |  | — |  |  | — |
Ending Balance(2) | $ | 8,388 |  |  | $ | 10,908 |  |  | $ | 8,388 |  |  | $ | 10,908 |
(1)As of June 30, 2022 and 2021, allowance for losses for Agricultural Finance mortgage loans includes $1.2 million and $1.8 million allowance for collateral dependent assets secured by agricultural real estate, respectively. (2)As of both June 30, 2022 and 2021, allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets. The net release from the allowance for Rural Infrastructure Finance loan losses of $1.2 million recorded during second quarter 2022 was primarily attributable to updated credit loss model forecast assumptions and improvements in risk ratings. The $0.1 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during second quarter 2022 was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan. The $2.2 million net release from the allowance for the Rural Infrastructure Finance portfolio for the six months ended June 30, 2022 was primarily attributable to the updated credit loss model forecast assumptions mentioned above and a first quarter risk rating upgrade on a single loan. The risk rating upgrade on that loan reflected that borrower's successful securitization of its large payable that arose during the arctic freeze that struck Texas in February 2021. The $0.7 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio for the six months ended June 30, 2022 was primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan. The release from the allowance for Rural Infrastructure Finance loan losses of $0.2 million recorded during second quarter 2021 was primarily attributable to the impact of improving economic factor forecasts, specifically expectations for unemployment. The $0.6 million release from the allowance for the Agricultural Finance mortgage loan portfolio during second quarter 2021 was primarily attributable to improving economic factor forecasts, particularly agricultural commodity prices. The small net provision recorded to the allowance for the six months ended June 30, 2021, was primarily a result of the impact of the Texas Arctic Freeze on the Rural Infrastructure Finance portfolio, partially offset by improving economic factor forecasts. The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of June 30, 2022 and December 31, 2021: Table 5.4
| As of June 30, 2022
| Accruing |  |  |  |
| Current |  | 30-59 Days |  | 60-89 Days |  | 90 Days and Greater(2) |  | Total Past Due |  | Nonaccrual loans(3)(4) |  | Total Loans
| (in thousands)
Loans(1): |  |  |  |  |  |  |  |  |  |  |  |  |
Agricultural Finance mortgage loans | $ | 7,076,993 |  |  | $ | 9,546 |  |  | $ | 265 |  |  | $ | 3,480 |  |  | $ | 13,291 |  |  | $ | 108,578 |  |  | $ | 7,198,862 |
Rural Infrastructure Finance loans | 2,757,993 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,757,993 |
Total | $ | 9,834,986 |  |  | $ | 9,546 |  |  | $ | 265 |  |  | $ | 3,480 |  |  | $ | 13,291 |  |  | $ | 108,578 |  |  | $ | 9,956,855 |
(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. (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 $19.6 million of nonaccrual loans for which there was no associated allowance. During the three and six months ended June 30, 2022, Farmer Mac received $2.0 million and $3.8 million in interest on nonaccrual loans, respectively.
| As of December 31, 2021
| Accruing |  |  |  |
| Current |  | 30-59 Days |  | 60-89 Days |  | 90 Days and Greater(2) |  | Total Past Due |  | Nonaccrual loans(3)(4) |  | Total Loans
| (in thousands)
Loans(1): |  |  |  |  |  |  |  |  |  |  |  |  |
Agricultural Finance mortgage loans | $ | 6,715,070 |  |  | $ | 4,548 |  |  | $ | 568 |  |  | $ | — |  |  | $ | 5,116 |  |  | $ | 126,807 |  |  | $ | 6,846,993 |
Rural Infrastructure Finance loans | 2,389,136 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,389,136 |
Total | $ | 9,104,206 |  |  | $ | 4,548 |  |  | $ | 568 |  |  | $ | — |  |  | $ | 5,116 |  |  | $ | 126,807 |  |  | $ | 9,236,129 |
(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. (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 $31.0 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2021, Farmer Mac received $5.0 million in interest on nonaccrual loans. Credit Quality Indicators The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of June 30, 2022 and December 31, 2021, by year of origination: Table 5.5
| As of June 30, 2022
| Year of Origination: |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Agricultural Finance mortgage loans (1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 806,441 |  |  | $ | 2,069,734 |  |  | $ | 1,452,337 |  |  | $ | 477,525 |  |  | $ | 300,187 |  |  | $ | 1,100,135 |  |  | $ | 537,395 |  |  | $ | 6,743,754 |
Special mention(2) | 17,989 |  |  | 104,734 |  |  | 40,616 |  |  | 50,915 |  |  | 34,897 |  |  | 25,188 |  |  | 11,459 |  |  | 285,798 |
Substandard(3) | — |  |  | 5,984 |  |  | 19,716 |  |  | 24,622 |  |  | 20,108 |  |  | 81,136 |  |  | 17,744 |  |  | 169,310 |
Total | $ | 824,430 |  |  | $ | 2,180,452 |  |  | $ | 1,512,669 |  |  | $ | 553,062 |  |  | $ | 355,192 |  |  | $ | 1,206,459 |  |  | $ | 566,598 |  |  | $ | 7,198,862 |
For the Three Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Agricultural Finance net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Six Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (84) |  |  | $ | — |  |  | $ | (84) |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Agricultural Finance net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (84) |  |  | $ | — |  |  | $ | (84) |
(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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 June 30, 2022
| Year of Origination: |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Rural Infrastructure Finance loans(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 415,701 |  |  | $ | 206,967 |  |  | $ | 638,579 |  |  | $ | 757,248 |  |  | $ | 3,792 |  |  | $ | 693,200 |  |  | $ | 42,506 |  |  | $ | 2,757,993 |
Special mention(2) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard(3) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 415,701 |  |  | $ | 206,967 |  |  | $ | 638,579 |  |  | $ | 757,248 |  |  | $ | 3,792 |  |  | $ | 693,200 |  |  | $ | 42,506 |  |  | $ | 2,757,993 |
For the Three Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Rural Infrastructure net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Six Months Ended June 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Rural Infrastructure net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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 December 31, 2021
| Year of Origination: |  |  |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Agricultural Finance mortgage loans (1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 2,138,060 |  |  | $ | 1,541,509 |  |  | $ | 540,139 |  |  | $ | 324,917 |  |  | $ | 303,852 |  |  | $ | 1,004,709 |  |  | $ | 545,370 |  |  | $ | 6,398,556 |
Special mention(2) | 84,795 |  |  | 50,057 |  |  | 51,200 |  |  | 48,078 |  |  | 9,132 |  |  | 14,646 |  |  | 4,771 |  |  | 262,679 |
Substandard(3) | 1,654 |  |  | 4,997 |  |  | 26,237 |  |  | 27,109 |  |  | 38,703 |  |  | 75,780 |  |  | 11,278 |  |  | 185,758 |
Total | $ | 2,224,509 |  |  | $ | 1,596,563 |  |  | $ | 617,576 |  |  | $ | 400,104 |  |  | $ | 351,687 |  |  | $ | 1,095,135 |  |  | $ | 561,419 |  |  | $ | 6,846,993 |
For the Three Months Ended June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Agricultural Finance net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Six Months Ended June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Agricultural Finance net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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 December 31, 2021
| Year of Origination: |  |  |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Rural Infrastructure Finance loans(1): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 242,570 |  |  | $ | 612,366 |  |  | $ | 774,941 |  |  | $ | 8,100 |  |  | $ | 86,878 |  |  | $ | 628,903 |  |  | $ | 12,578 |  |  | $ | 2,366,336 |
Special mention(2) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard(3) | — |  |  | 22,800 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22,800 |
Total | $ | 242,570 |  |  | $ | 635,166 |  |  | $ | 774,941 |  |  | $ | 8,100 |  |  | $ | 86,878 |  |  | $ | 628,903 |  |  | $ | 12,578 |  |  | $ | 2,389,136 |
For the Three Months Ended June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Rural Infrastructure net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Six Months Ended June 30, 2021: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Current period recoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Current period Rural Infrastructure net charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans. (2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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.

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