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Guarantees and Commitments | 9 Months Ended
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Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract] |
GUARANTEES AND COMMITMENTS | 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: Table 6.1
Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
| As of September 30, 2023 |  | As of December 31, 2022
| (in thousands)
Agricultural Finance |  |  |
Farmer Mac Guaranteed Securities | $ | 455,681 |  |  | $ | 500,953 |
Rural Infrastructure Finance |  |  |
Farmer Mac Guaranteed Securities | 1,098 |  |  | 1,169 |
Total off-balance sheet Farmer Mac Guaranteed Securities | $ | 456,779 |  |  | $ | 502,122 |
Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors. The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations: Table 6.2
| For the Nine Months Ended
| September 30, 2023 |  | September 30, 2022 |  |
| (in thousands)
Proceeds from new securitizations | $ | 222,188 |  |  | $ | 305,410 |  |  |
Guarantee fees received | 1,280 |  |  | 1,464 |  |  |
Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets. The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities: Table 6.3
| As of September 30, 2023 |  | As of December 31, 2022
| (dollars in thousands)
Guarantee and commitment obligation | $ | 6,053 |  |  | $ | 6,461 |
Weighted average remaining maturity: |  |  |
Farmer Mac Guaranteed Securities | 22.1 years |  | 21.4 years
AgVantage Securities | 1.2 years |  | 2.0 years
Long-Term Standby Purchase Commitments Farmer Mac has recorded a liability for its obligation to stand ready under the commitment in the guarantee and commitment obligation on the consolidated balance sheets. 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: Table 6.4
| As of September 30, 2023 |  | As of December 31, 2022
| (dollars in thousands)
Guarantee and commitment obligation(1) | $ | 41,554 |  |  | $ | 40,121 |
Maximum principal amount | 3,613,934 |  |  | 3,423,155 |
Weighted-average remaining maturity | 14.7 years |  | 15.3 years
(1) Relates to LTSPCs issued or modified on or after January 1, 2003. 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: Table 6.5
| September 30, 2023 |  | December 31, 2022
| Reserve for Losses |  | Reserve for Losses
| (in thousands)
Agricultural Finance | $ | 1,412 |  |  | $ | 819 |
Rural Infrastructure Finance | 248 |  |  | 614 |
Total | $ | 1,660 |  |  | $ | 1,433 |
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: Table 6.6
| 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)
Agricultural Finance |  |  |  |  |  |  |
Beginning Balance | $ | 1,471 |  |  | $ | 882 |  |  | $ | 819 |  |  | $ | 1,068 |
(Release of)/provision for losses | (59) |  |  | (139) |  |  | 593 |  |  | (325) |
Ending Balance | $ | 1,412 |  |  | $ | 743 |  |  | $ | 1,412 |  |  | $ | 743 |
Rural Infrastructure Finance |  |  |  |  |  |  |
Beginning Balance | $ | 234 |  |  | $ | 795 |  |  | $ | 614 |  |  | $ | 882 |
Provision for/(release of) losses | 14 |  |  | (28) |  |  | (366) |  |  | (115) |
Ending Balance | $ | 248 |  |  | $ | 767 |  |  | $ | 248 |  |  | $ | 767 |
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: Table 6.7
| As of September 30, 2023
| Current |  | 30-59 Days |  | 60-89 Days |  | 90 Days and Greater(1) |  | Total Past Due |  | Total Loans
| (in thousands)
Agricultural Finance: | $ | 3,368,620 |  |  | $ | 5,196 |  |  | $ | 3,573 |  |  | $ | 2,840 |  |  | $ | 11,609 |  |  | $ | 3,380,229 |
Rural Infrastructure Finance: | 487,517 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 487,517 |
Total | $ | 3,856,137 |  |  | $ | 5,196 |  |  | $ | 3,573 |  |  | $ | 2,840 |  |  | $ | 11,609 |  |  | $ | 3,867,746 |
(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days of 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.
| As of December 31, 2022
| Current |  | 30-59 Days |  | 60-89 Days |  | 90 Days and Greater(1) |  | Total Past Due |  | Total Loans
| (in thousands)
Agricultural Finance: | $ | 3,174,939 |  |  | $ | 11,614 |  |  | $ | 622 |  |  | $ | 3,817 |  |  | $ | 16,053 |  |  | $ | 3,190,992 |
Rural Infrastructure Finance: | 523,192 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 523,192 |
Total | $ | 3,698,131 |  |  | $ | 11,614 |  |  | $ | 622 |  |  | $ | 3,817 |  |  | $ | 16,053 |  |  | $ | 3,714,184 |
(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days of 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. 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: Table 6.8
| As of September 30, 2023
| Year of Origination: |  |  |  |
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Agricultural Finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 148,802 |  |  | $ | 243,690 |  |  | $ | 513,841 |  |  | $ | 535,172 |  |  | $ | 272,257 |  |  | $ | 1,228,548 |  |  | $ | 362,825 |  |  | $ | 3,305,135 |
Special mention(1) | — |  |  | 2,568 |  |  | 1,294 |  |  | 877 |  |  | — |  |  | 39,657 |  |  | 527 |  |  | 44,923 |
Substandard(2) | — |  |  | — |  |  | — |  |  | 131 |  |  | 1,541 |  |  | 27,236 |  |  | 1,263 |  |  | 30,171 |
Total | $ | 148,802 |  |  | $ | 246,258 |  |  | $ | 515,135 |  |  | $ | 536,180 |  |  | $ | 273,798 |  |  | $ | 1,295,441 |  |  | $ | 364,615 |  |  | $ | 3,380,229 |
For the Three Months Ended September 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Nine Months Ended September 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
| As of September 30, 2023
| Year of Origination: |  |  |  |
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Rural Infrastructure Finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 426,504 |  |  | $ | 61,013 |  |  | $ | 487,517 |
Special mention(1) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard(2) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 426,504 |  |  | $ | 61,013 |  |  | $ | 487,517 |
For the Three Months Ended September 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Nine Months Ended September 30, 2023: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.
| As of December 31, 2022
| Year of Origination: |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Agricultural Finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | 202,998 |  |  | $ | 496,269 |  |  | $ | 535,798 |  |  | $ | 254,293 |  |  | $ | 207,379 |  |  | $ | 1,107,834 |  |  | $ | 296,508 |  |  | $ | 3,101,079 |
Special mention(1) | — |  |  | 1,319 |  |  | 1,778 |  |  | — |  |  | 1,198 |  |  | 42,680 |  |  | 3,205 |  |  | 50,180 |
Substandard(2) | — |  |  | — |  |  | 176 |  |  | — |  |  | 3,588 |  |  | 32,597 |  |  | 3,372 |  |  | 39,733 |
Total | $ | 202,998 |  |  | $ | 497,588 |  |  | $ | 537,752 |  |  | $ | 254,293 |  |  | $ | 212,165 |  |  | $ | 1,183,111 |  |  | $ | 303,085 |  |  | $ | 3,190,992 |
For the Three Months Ended September 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Nine Months Ended September 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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 December 31, 2022
| Year of Origination: |  |  |  |
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Revolving Loans - Amortized Cost Basis |  | Total
| (in thousands)
Rural Infrastructure Finance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Internally Assigned Risk Rating: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acceptable | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 470,659 |  |  | $ | 52,533 |  |  | $ | 523,192 |
Special mention(1) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Substandard(2) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 470,659 |  |  | $ | 52,533 |  |  | $ | 523,192 |
For the Three Months Ended September 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
For the Nine Months Ended September 30, 2022: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period charge-offs | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured. (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.

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