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INCOME TAXES | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Farmer Mac is subject to federal corporate income taxes but is exempt from state and local corporate income taxes. The components of the federal corporate income tax expense for the years ended December 31, 2023, 2022, and 2021 were as follows: Table 10.1
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (in thousands)
Current income tax expense | $ | 46,712 |  |  | $ | 35,609 |  |  | $ | 38,645 |
Deferred income tax expense | 6,386 |  |  | 11,926 |  |  | (2,273) |
Income tax expense | $ | 53,098 |  |  | $ | 47,535 |  |  | $ | 36,372 |
A reconciliation of income tax at the statutory federal corporate income tax rate to the income tax expense for the years ended December 31, 2023, 2022, and 2021 is as follows: Table 10.2
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (dollars in thousands)
Tax expense at statutory rate | $ | 53,151 |  |  | $ | 47,393 |  |  | $ | 36,217 |
Excess tax benefits related to stock-based awards | (924) |  |  | (401) |  |  | (300) |
Other | 871 |  |  | 543 |  |  | 455 |
Income tax expense | $ | 53,098 |  |  | $ | 47,535 |  |  | $ | 36,372 |
Statutory tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
The components of the deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows: Table 10.3
| As of December 31,
| 2023 |  | 2022
| (in thousands)
Deferred tax assets: |  |  |
Basis difference related to hedge items | $ | 84,922 |  |  | $ | 53,360 |
Unrealized losses on available-for-sale securities | 20,514 |  |  | 26,371 |
Allowance for losses | 3,842 |  |  | 3,603 |
Compensation and Benefits | 2,127 |  |  | 1,639 |
Stock-based compensation | 2,481 |  |  | 1,755 |
Capital loss carryforwards | 35 |  |  | 32 |
Valuation allowance | (35) |  |  | (32) |
Other | 2,051 |  |  | 1,444 |
Total deferred tax assets | $ | 115,937 |  |  | $ | 88,172 |
Deferred tax liability: |  |  |
Basis differences related to financial derivatives | $ | 80,887 |  |  | $ | 49,526 |
Unrealized gains on cash flow hedges | 9,843 |  |  | 12,855 |
Basis difference related to structured securitizations | 16,647 |  |  | 7,782 |
Other | 90 |  |  | 5 |
Total deferred tax liability | $ | 107,467 |  |  | $ | 70,168 |
Net deferred tax asset | $ | 8,470 |  |  | $ | 18,004 |
After the evaluation of both positive and negative objective evidence regarding the likelihood that its deferred tax assets will be realized, Farmer Mac established a valuation allowance of $35,000 and $32,000, as of December 31, 2023 and 2022, respectively, which was attributable to capital loss carryforwards on investment securities. Farmer Mac did not establish a valuation allowance for the remainder of its deferred tax assets because it believes it is more likely than not that those deferred tax assets will be realized. As of December 31, 2023, no capital loss carryforwards expired. As of December 31, 2023, the amount of capital loss carryforwards was $0.2 million. These capital loss carryforwards will expire beginning in 2024. As of December 31, 2023 and 2022, Farmer Mac did not identify any uncertain tax positions. Farmer Mac did not have any unrecognized tax benefits for the years ended December 31, 2023, 2022, and 2021. Tax years 2020 through 2023 remain subject to examination.

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