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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended
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Mar. 31, 2025
Accounting Policies [Abstract] |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation ("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a fair statement of the financial position and the results of operations and cash flows of Farmer Mac and subsidiaries for the interim periods presented. Certain information and footnote disclosures normally included in the annual consolidated financial statements have been omitted as permitted by SEC rules and regulations. The December 31, 2024 consolidated balance sheet presented in this report has been derived from Farmer Mac's audited 2024 consolidated financial statements. Management believes that the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the 2024 consolidated financial statements of Farmer Mac and subsidiaries included in Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 21, 2025. Results for interim periods are not necessarily indicative of those that may be expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain updated information for the three months ended March 31, 2025. Principles of Consolidation The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries: (1) Farmer Mac Mortgage Securities Corporation, whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Securities included in the Agricultural Finance line of business. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary. Table 1.1
| Consolidation of Variable Interest Entities
| As of March 31, 2025
| Agricultural Finance |  | Treasury |  | Total
| (in thousands)
On-Balance Sheet: |  |  |  |  |
Consolidated VIEs: |  |  |  |  |
Loans held for investment in consolidated trusts, at amortized cost | $ | 2,005,680 |  |  | $ | — |  |  | $ | 2,005,680 |
Debt securities of consolidated trusts held by third parties (1)(2) | 1,894,920 |  |  | — |  |  | 1,894,920 |
Unconsolidated VIEs: |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |
Carrying value | 58,580 |  |  | — |  |  | 58,580 |
Maximum exposure to loss (3) | 58,219 |  |  | — |  |  | 58,219 |
Investment securities: |  |  |  |  |
Carrying value (4) | — |  |  | 4,476,698 |  |  | 4,476,698 |
Maximum exposure to loss (3)(4) | — |  |  | 4,730,044 |  |  | 4,730,044 |
Off-Balance Sheet: |  |  |  |  |
Unconsolidated VIEs: |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |
Maximum exposure to loss (3)(5) | 414,291 |  |  | — |  |  | 414,291 |
(1)Includes borrower remittances of $0.2 million. The borrower remittances had not been passed through to third-party investors as of March 31, 2025. (2)Includes $110.5 million in unamortized discount related to structured securitization transactions. (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, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments. (5)The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause.
| Consolidation of Variable Interest Entities
| As of December 31, 2024
| Agricultural Finance |  | Treasury |  | Total
| (in thousands)
On-Balance Sheet: |  |  |  |  |
Consolidated VIEs: |  |  |  |  |
Loans held for investment in consolidated trusts, at amortized cost | $ | 2,038,283 |  |  | $ | — |  |  | $ | 2,038,283 |
Debt securities of consolidated trusts held by third parties (1)(2) | 1,929,628 |  |  | — |  |  | 1,929,628 |
Unconsolidated VIEs: |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |
Carrying value | 59,317 |  |  | — |  |  | 59,317 |
Maximum exposure to loss (3) | 58,985 |  |  | — |  |  | 58,985 |
Investment securities: |  |  |  |  |
Carrying value (4) | — |  |  | 4,212,258 |  |  | 4,212,258 |
Maximum exposure to loss (3)(4) | — |  |  | 4,547,397 |  |  | 4,547,397 |
Off-Balance Sheet: |  |  |  |  |
Unconsolidated VIEs: |  |  |  |  |
Farmer Mac Guaranteed Securities: |  |  |  |  |
Maximum exposure to loss (3)(5) | 426,310 |  |  | — |  |  | 426,310 |
(1)Includes borrower remittances of $4.7 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2024. (2)Includes $113.2 million in unamortized discount related to a structured securitization transaction. (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, government-sponsored enterprise ("GSE") guaranteed mortgage-backed securities, and other mission related investments. (5)The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause. Earnings Per Common Share 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 unit awards. The following schedule reconciles basic and diluted EPS for the three months ended March 31, 2025 and 2024: Table 1.2
| For the Three Months Ended
| March 31, 2025 |  | March 31, 2024 |  |
| 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 | $ | 43,985 |  |  | 10,896 |  |  | $ | 4.04 |  |  | $ | 46,955 |  |  | 10,847 |  |  | $ | 4.33 |  |  |  |  |  |  |
Effect of dilutive securities(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
SARs and restricted stock units | — |  |  | 87 |  |  | (0.03) |  |  | — |  |  | 122 |  |  | (0.05) |  |  |  |  |  |  |
Diluted EPS | $ | 43,985 |  |  | 10,983 |  |  | $ | 4.01 |  |  | $ | 46,955 |  |  | 10,969 |  |  | $ | 4.28 |  |  |  |  |  |  |
(1)For the three months ended March 31, 2025 and 2024, SARs and restricted stock units of 58,539 and 49,371, 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, 2025 and 2024, contingent shares of unvested restricted stock units of 29,507 and 29,918, 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. 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 months ended March 31, 2025 and 2024. Table 1.3
| As of March 31, 2025 |  | As of March 31, 2024
| 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 | $ | (37,575) |  |  | $ | (9,226) |  |  | $ | 34,654 |  |  | $ | (12,147) |  |  | $ | (68,447) |  |  | $ | (8,724) |  |  | $ | 37,026 |  |  | $ | (40,145) |
Other comprehensive income/(loss) before reclassifications | 17,194 |  |  | — |  |  | (3,591) |  |  | 13,603 |  |  | 31,565 |  |  | — |  |  | 9,256 |  |  | 40,821 |
Amounts reclassified from AOCI | (3) |  |  | (239) |  |  | (3,022) |  |  | (3,264) |  |  | (4) |  |  | (500) |  |  | (4,290) |  |  | (4,794) |
Net comprehensive income/(loss) | 17,191 |  |  | (239) |  |  | (6,613) |  |  | 10,339 |  |  | 31,561 |  |  | (500) |  |  | 4,966 |  |  | 36,027 |
Ending Balance | $ | (20,384) |  |  | $ | (9,465) |  |  | $ | 28,041 |  |  | $ | (1,808) |  |  | $ | (36,886) |  |  | $ | (9,224) |  |  | $ | 41,992 |  |  | $ | (4,118) |
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, 2025 and 2024: Table 1.4
| For the Three Months Ended
| March 31, 2025 |  | March 31, 2024 |  |
| Before Tax |  | Provision (Benefit) |  | After Tax |  | Before Tax |  | Provision (Benefit) |  | After Tax |  |  |  |  |  |
| (in thousands)
Other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Available-for-sale-securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized holding gains on available-for-sale securities | $ | 21,766 |  |  | $ | 4,572 |  |  | $ | 17,194 |  |  | $ | 39,957 |  |  | $ | 8,392 |  |  | $ | 31,565 |  |  |  |  |  |  |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other income(1) | (4) |  |  | (1) |  |  | (3) |  |  | (5) |  |  | (1) |  |  | (4) |  |  |  |  |  |  |
Total | $ | 21,762 |  |  | $ | 4,571 |  |  | $ | 17,191 |  |  | $ | 39,952 |  |  | $ | 8,391 |  |  | $ | 31,561 |  |  |  |  |  |  |
Held-to-maturity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income(2) | (303) |  |  | (64) |  |  | (239) |  |  | (634) |  |  | (134) |  |  | (500) |  |  |  |  |  |  |
Total | $ | (303) |  |  | $ | (64) |  |  | $ | (239) |  |  | $ | (634) |  |  | $ | (134) |  |  | $ | (500) |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized (losses)/gains on cash flow hedges | $ | (4,546) |  |  | $ | (955) |  |  | $ | (3,591) |  |  | $ | 11,717 |  |  | $ | 2,461 |  |  | $ | 9,256 |  |  |  |  |  |  |
Less reclassification adjustments included in: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net interest income(3) | (3,825) |  |  | (803) |  |  | (3,022) |  |  | (5,431) |  |  | (1,141) |  |  | (4,290) |  |  |  |  |  |  |
Total | $ | (8,371) |  |  | $ | (1,758) |  |  | $ | (6,613) |  |  | $ | 6,286 |  |  | $ | 1,320 |  |  | $ | 4,966 |  |  |  |  |  |  |
Other comprehensive income | $ | 13,088 |  |  | $ | 2,749 |  |  | $ | 10,339 |  |  | $ | 45,604 |  |  | $ | 9,577 |  |  | $ | 36,027 |  |  |  |  |  |  |
(1)Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities. (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. 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. (3)Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI. New Accounting Standards Recently Issued Accounting Guidance, Not Yet Adopted Within Our Consolidated Financial Statements
Standard | Description | Effect on Consolidated Financial Statements
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.
ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses | In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption 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.

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