10q10k10q10k.net

What changed in FEDERAL AGRICULTURAL MORTGAGE CORP's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of FEDERAL AGRICULTURAL MORTGAGE CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+547 added−523 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in FEDERAL AGRICULTURAL MORTGAGE CORP's 2024 10-K

547 paragraphs added · 523 removed · 433 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

98 edited+22 added−11 removed145 unchanged
Biggest changeThe following table presents the dividends declared and paid on Series F Preferred Stock during and after 2023: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 22, 2023 $0.3281250 January 18, 2023 April 17, 2023 April 17, 2023 May 3, 2023 $0.3281250 April 18, 2023 July 17, 2023 July 17, 2023 August 9, 2023 $0.3281250 July 18, 2023 October 17, 2023 October 17, 2023 November 8, 2023 $0.3281250 October 18, 2023 January 17, 2024 January 17, 2024 February 21, 2024 $0.3281250 January 18, 2024 April 17, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on April 17, 2024. 27 The following table presents the dividends declared and paid on Series G Preferred Stock during and after 2023: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 22, 2023 $0.3046875 January 18, 2023 April 17, 2023 April 17, 2023 May 3, 2023 $0.3046875 April 18, 2023 July 17, 2023 July 17, 2023 August 9, 2023 $0.3046875 July 18, 2023 October 17, 2023 October 17, 2023 November 8, 2023 $0.3046875 October 18, 2023 January 17, 2024 January 17, 2024 February 21, 2024 $0.3046875 January 18, 2024 April 17, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on April 17, 2024.
Biggest changeThe following table presents the dividends declared and paid on Series F Preferred Stock during and after 2024: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 21, 2024 $0.3281250 January 18, 2024 April 17, 2024 April 17, 2024 May 15, 2024 $0.3281250 April 18, 2024 July 17, 2024 July 17, 2024 August 7, 2024 $0.3281250 July 18, 2024 October 17, 2024 October 17, 2024 November 6, 2024 $0.3281250 October 18, 2024 January 17, 2025 January 17, 2025 February 20, 2025 $0.3281250 January 18, 2025 April 17, 2025 * * The dividend declared on February 20, 2025 is scheduled to be paid on April 17, 2025.
Agricultural Finance Farmer Mac provides a secondary market for eligible loans in Farmer Mac's Agricultural Finance line of business by (1) purchasing and retaining eligible loans and securities, (2) guaranteeing the payment of principal and interest on securities that represent interests in, or obligations secured by, pools of eligible loans, (3) servicing (including as master servicer) eligible loans, and (4) issuing LTSPCs for designated eligible loans.
Farmer Mac provides a secondary market for eligible loans in Farmer Mac's Agricultural Finance line of business by (1) purchasing and retaining eligible loans and securities, (2) guaranteeing the payment of principal and interest on securities that represent interests in, or obligations secured by, pools of eligible loans, (3) servicing (including as master servicer) eligible loans, and (4) issuing LTSPCs for designated eligible loans.
Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement.
Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement.
Most lenders that participate in Farmer Mac's secondary market for Farm & Ranch loans meet prescribed criteria that Farmer Mac establishes for loan-selling counterparties, which typically include the requirement to: • own a requisite amount of Farmer Mac common stock according to a schedule prescribed for the size and type of institution; • have, in the judgment of Farmer Mac, the ability and experience to make or purchase and sell Farm & Ranch loans and service those loans in accordance with Farmer Mac's requirements either through the lender's own staff or through contractors and originators, as well as have appropriate internal controls, policies, and procedures; • maintain a minimum amount of net liquidity or appropriate credit enhancements; and • enter into a Seller/Servicer Agreement, which requires compliance with the terms of Farmer Mac's Seller/Servicer Guide, including providing representations and warranties about the eligibility of the loans and accuracy of loan data provided to Farmer Mac.
Most lenders that participate in Farmer Mac's secondary market for Farm & Ranch loans meet prescribed criteria that Farmer Mac establishes for loan-selling counterparties, which typically include the requirement to: • own a requisite amount of Farmer Mac common stock according to a schedule prescribed for the size and type of institution; • have, in the judgment of Farmer Mac, the ability and experience to make or purchase and sell Farm & Ranch loans and service those loans in accordance with Farmer Mac's requirements either through the lender's own staff or through contractors and originators, as well as have appropriate internal controls, policies, and procedures; • maintain a minimum amount of net liquidity or appropriate credit enhancements; and 12 • enter into a Seller/Servicer Agreement, which requires compliance with the terms of Farmer Mac's Seller/Servicer Guide, including providing representations and warranties about the eligibility of the loans and accuracy of loan data provided to Farmer Mac.
At a lender's request, Farmer Mac purchases loans subject to an LTSPC at: • par if the loans become delinquent for either 90 days or 120 days (depending on the agreement) or are in material non-monetary default, with accrued and unpaid interest on the defaulted loans payable out of any future loan payments or liquidation proceeds; or 14 • fair value or in exchange for cash or Farm & Ranch Guaranteed Securities (if the loans are not delinquent), in accordance with the applicable agreement.
At a lender's request, Farmer Mac purchases loans subject to an LTSPC at: • par if the loans become delinquent for either 90 days or 120 days (depending on the agreement) or are in material non-monetary default, with accrued and unpaid interest on the defaulted loans payable out of any future loan payments or liquidation proceeds; or • fair value or in exchange for cash or Farm & Ranch Guaranteed Securities (if the loans are not delinquent), in accordance with the applicable agreement.
In accordance with this regulation, Farmer Mac's board of directors oversees a policy that requires Farmer Mac to maintain an adequate level of "Tier 1" capital, consisting of retained earnings, paid-in-capital, common stock, qualifying preferred stock, and accumulated other comprehensive income allocable to "non-program" investments that are not included in the Agricultural Finance and Rural Infrastructure Finance lines of business.
In accordance with this regulation, Farmer Mac's board of directors oversees a policy that requires Farmer Mac to maintain an adequate level of "Tier 1" capital, consisting of retained earnings, paid-in-capital, common stock, qualifying preferred stock, and accumulated other comprehensive income allocable to "non-program" investments that are not included in the Agricultural Finance and Infrastructure Finance lines of business.
Underwriting and Collateral Standards - Farm & Ranch Farmer Mac accepts direct credit exposure to borrowers on Agricultural Finance mortgage loans in its Farm & Ranch reportable operating segment (referred to as "Farm & Ranch loans") through its loan 10 purchases, unfunded loan commitments, LTSPCs, and Farmer Mac Guaranteed Securities that represent interests in, or obligations secured by, pools of eligible Farm & Ranch loans but that are not AgVantage securities ("Farm & Ranch Guaranteed Securities").
Underwriting and Collateral Standards - Farm & Ranch Farmer Mac accepts direct credit exposure to borrowers on Agricultural Finance mortgage loans in its Farm & Ranch reportable operating segment (referred to as "Farm & Ranch loans") through its loan purchases, unfunded loan commitments, LTSPCs, and Farmer Mac Guaranteed Securities that represent interests in, or obligations secured by, pools of eligible Farm & Ranch loans but that are not AgVantage securities ("Farm & Ranch Guaranteed Securities").
Farmer Mac (including its 29 subsidiaries) is the only entity regulated by OSMO, which was created as a separate office in recognition of the different role that Farmer Mac plays in providing a secondary market, as compared to the roles of other FCS institutions as primary lenders. The Director of OSMO is selected by and reports to the FCA board.
Farmer Mac (including its subsidiaries) is the only entity regulated by OSMO, which was created as a separate office in recognition of the different role that Farmer Mac plays in providing a secondary market, as compared to the roles of other FCS institutions as primary lenders. The Director of OSMO is selected by and reports to the FCA board.
The required collateralization level is determined based on credit factors related to the issuer and the credit profile of the loans serving as collateral, is established when the AgVantage facility is entered into with the counterparty, and does not change during the life of the AgVantage securities issued under the facility unless mutually agreed by Farmer Mac and the counterparty.
The required collateralization level is determined based on credit factors related to the issuer and the credit profile of the loans serving as collateral, is established when the AgVantage facility is entered into with the counterparty, and does not change during 14 the life of the AgVantage securities issued under the facility unless mutually agreed by Farmer Mac and the counterparty.
Farmer Mac also provides wholesale funding for institutional investors in agricultural assets that qualify as eligible collateral under Farmer Mac's charter. For these potential issuers, Farmer Mac directs its outreach efforts through its business relationships within the agricultural community and through outreach to institutions whose profile may benefit from wholesale funding.
Farmer Mac also provides wholesale funding for institutional investors in agricultural assets that qualify as eligible collateral under Farmer Mac's charter. For these potential issuers, Farmer Mac directs its outreach efforts through its business relationships within the agricultural community and through outreach to institutions whose 7 profile may benefit from wholesale funding.
COMPETITION Farmer Mac is the only federally-chartered corporation established to provide a secondary market for agricultural mortgage loans, rural infrastructure loans, and USDA Securities, but faces competition from other entities that purchase, retain, securitize, or provide financing for the types of assets eligible for Farmer Mac's secondary market activities.
COMPETITION Farmer Mac is the only federally-chartered corporation established to provide a secondary market for agricultural mortgage loans, infrastructure loans, and USDA Securities, but faces competition from other entities that purchase, retain, securitize, or provide financing for the types of assets eligible for Farmer Mac's secondary market activities.
Farmer Mac also continues to contract with other institutions to undertake most of the servicing responsibilities for the remaining portion of its Agricultural Finance mortgage loans in accordance with Farmer Mac's specified servicing requirements or in accordance with the servicing 12 standards established by the servicing institution if the institution's standards are acceptable to Farmer Mac.
Farmer Mac also continues to contract with other institutions to undertake most of the servicing responsibilities for the remaining portion of its Agricultural Finance mortgage loans in accordance with Farmer Mac's specified servicing requirements or in accordance with the servicing standards established by the servicing institution if the institution's standards are acceptable to Farmer Mac.
To manage Farmer Mac's credit risk, to mitigate the risk of loss from borrower defaults, and to provide guidance for the management, administration, and conduct of underwriting to participants in the Rural Infrastructure Finance line of business, Farmer Mac has adopted credit underwriting standards that vary by loan product and by loan type.
To manage Farmer Mac's credit risk, to mitigate the risk of loss from borrower defaults, and to provide guidance for the management, administration, and conduct of underwriting to participants in the Infrastructure Finance line of business, Farmer Mac has adopted credit underwriting standards that vary by loan product and by loan type.
Farmer Mac's Class B voting common stock, which has a limited market and trades infrequently, is not listed or quoted on any exchange or other quotation system, and Farmer Mac is not aware of any publicly available quotations or prices for this class of common stock. 18 • Class C non-voting common stock .
Farmer Mac's Class B voting common stock, which has a limited market and trades infrequently, is not listed or quoted on any exchange or other quotation system, and Farmer Mac is not aware of any publicly available quotations or prices for this class of common stock. • Class C non-voting common stock .
Farmer Mac is compensated for these activities through net interest income on loans and securities held on balance sheet, guarantee fees earned on securities issued to third parties, servicing fees 9 on securitized loans and loans serviced for others, and commitment fees earned on loans in LTSPCs and on unfunded loan commitments.
Farmer Mac is compensated for these activities through net interest income on loans and securities held on balance sheet, guarantee fees earned on securities issued to third parties, servicing fees on securitized loans and loans serviced for others, and commitment fees earned on loans in LTSPCs and on unfunded loan commitments.
For more information about related party transactions, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Related Party Transactions" and Note 3 to the consolidated financial statements. 19 Capital Farmer Mac's charter establishes three capital standards for Farmer Mac – minimum capital, critical capital, and risk-based capital.
For more information about related party transactions, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Related Party Transactions" and Note 3 to the consolidated financial statements. Capital Farmer Mac's charter establishes three capital standards for Farmer Mac – minimum capital, critical capital, and risk-based capital.
No holder of Class A voting common stock may directly or indirectly be a beneficial owner of more than 33% of the outstanding shares of Class A voting common stock. There are no restrictions on the maximum number or percentage of outstanding shares of Class B voting common stock that may be held by an eligible stockholder.
No holder of Class A voting common stock may directly or indirectly be a beneficial owner of more than 33% of the outstanding shares of Class A voting common stock. There are no restrictions on the maximum number or percentage of outstanding shares of Class B voting common stock 25 that may be held by an eligible stockholder.
The charter restricts ownership of Farmer Mac's Class B voting common stock to FCS institutions and also provides that five members of Farmer Mac's 15-member board of directors are elected by a plurality of the votes of the Class B stockholders each year.
The charter restricts ownership of Farmer Mac's Class B voting common stock to FCS institutions and also provides that five members of Farmer Mac's 15- 19 member board of directors are elected by a plurality of the votes of the Class B stockholders each year.
FARMER MAC'S AUTHORITY TO BORROW FROM THE U.S. TREASURY Farmer Mac is authorized to borrow up to $1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely to fulfill Farmer Mac's guarantee obligations. Farmer Mac's charter provides that the U.S.
TREASURY Farmer Mac is authorized to borrow up to $1.5 billion from the U.S. Treasury through the issuance of debt obligations to the U.S. Treasury. Any funds borrowed from the U.S. Treasury may be used solely to fulfill Farmer Mac's guarantee obligations. Farmer Mac's charter provides that the U.S.
Farmer Mac's charter assigns to FCA, acting through OSMO within FCA, the responsibility for the examination of Farmer Mac and the general supervision of the safe and sound performance of the powers, functions, and duties vested in Farmer Mac by its charter. The charter also authorizes FCA, acting through OSMO, to apply its general enforcement powers to Farmer Mac.
Farmer Mac's charter assigns to FCA, acting through OSMO within FCA, the responsibility for the examination of Farmer Mac and the general supervision of the safe and sound performance of the powers, functions, and duties vested in Farmer Mac by its charter. The charter also authorizes FCA, acting 30 through OSMO, to apply its general enforcement powers to Farmer Mac.
Farmer Mac's Liquidity and Investment Regulations require that Farmer Mac maintain at all times a liquidity reserve sufficient to fund at least 32 90 days of the principal portion of maturing obligations and other borrowings. Farmer Mac may also maintain supplemental liquidity to fund obligations and borrowings maturing after 90 days.
Farmer Mac's Liquidity and Investment Regulations require that Farmer Mac maintain at all times a liquidity reserve sufficient to fund at least 90 days of the principal portion of maturing obligations and other borrowings. Farmer Mac may also maintain supplemental liquidity to fund obligations and borrowings maturing after 90 days.
The Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, and Series G Preferred Stock rank equally with each other and will rank equally with any other class or series of stock Farmer Mac may issue in the future of equal priority as to dividends and upon liquidation.
The Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, and Series G Preferred Stock rank equally with each other and will rank equally with any other class or series of stock Farmer Mac may issue in the future of equal priority as to dividends and upon liquidation.
Farmer Mac's guarantee fees typically are collected out of installment payments made on the underlying loans until those loans have been repaid, purchased out of the trust, or otherwise liquidated (generally as a result of default).
Farmer Mac's guarantee fees typically are collected out of 15 installment payments made on the underlying loans until those loans have been repaid, purchased out of the trust, or otherwise liquidated (generally as a result of default).
Treasury rate, and interest rates remain at such level for the remainder of the period. 30 The risk-based capital stress test then adds an additional 30% to the resulting capital requirement for management and operational risk.
Treasury rate, and interest rates remain at such level for the remainder of the period. 31 The risk-based capital stress test then adds an additional 30% to the resulting capital requirement for management and operational risk.
Farmer Mac also requires that any transactions with related parties be conducted in the ordinary course of business, with terms and conditions comparable to those available to any other counterparty not related to Farmer Mac.
Farmer Mac also requires that any transactions with related 20 parties be conducted in the ordinary course of business, with terms and conditions comparable to those available to any other counterparty not related to Farmer Mac.
For information about Farmer Mac's allowance for losses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees" and Note 2(h), Note 8, and Note 12 to the consolidated financial statements. 23 FINANCING Debt Issuance Farmer Mac's charter authorizes Farmer Mac to issue debt obligations to purchase eligible loans and securities, USDA Securities, and to maintain reasonable amounts of liquid investments to maintain an adequate supply of liquidity.
For information about Farmer Mac's allowance for losses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk – Loans and Guarantees" and Note 2(h), Note 8, and Note 12 to the consolidated financial statements. 24 FINANCING Debt Issuance Farmer Mac's charter authorizes Farmer Mac to issue debt obligations to purchase eligible loans and securities, USDA Securities, and to maintain reasonable amounts of liquid investments to maintain an adequate supply of liquidity.
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Requirements" for more information on Farmer Mac's Tier 1 capital ratio. Liquidity Requirements Liquidity Reserve Requirement and Supplemental Liquidity .
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Requirements" for more information on Farmer Mac's Tier 1 capital ratio. 33 Liquidity Requirements Liquidity Reserve Requirement and Supplemental Liquidity .
The Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, and Series G Preferred Stock, (collectively, "Outstanding Preferred Stock") each has a par value of $25.00 per share and an initial liquidation preference of $25.00 per share.
The Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, and Series G Preferred Stock (collectively, "Outstanding Preferred Stock") each has a par value of $25.00 per share and an initial liquidation preference of $25.00 per share.
The Director of OSMO has the discretionary authority to reclassify Farmer Mac to a level that is one level below its then current level (for example, from level I to level II) if the Director determines that Farmer Mac is engaging in any action not approved by the Director that could result in a rapid depletion of core 31 capital or if the value of property subject to mortgages backing securities guaranteed by Farmer Mac has decreased significantly.
The Director of OSMO has the discretionary authority to reclassify Farmer Mac to a level that is one level below its then current level (for example, from level I to level II) if the Director determines that Farmer 32 Mac is engaging in any action not approved by the Director that could result in a rapid depletion of core capital or if the value of property subject to mortgages backing securities guaranteed by Farmer Mac has decreased significantly.
Farmer Mac primarily employs full-time employees to meet its business needs as it grows and evolves while supplementing human capital needs with part-time employees (including interns) and independent contractors and consultants as needed. Farmer Mac has experienced a geographic evolution in its workforce since 2020 and now employs personnel in 27 states across the United States.
Farmer Mac primarily employs full-time employees to meet its business needs as it grows and evolves while supplementing human capital needs with part-time employees (including interns) and independent contractors and consultants as needed. Farmer Mac has experienced a geographic evolution in its workforce since 2020 and now employs personnel in 26 states across the United States.
Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series C Preferred Stock on and any time after July 18, 2024, the Series D Preferred Stock on and after July 17, 2024, the Series E Preferred Stock on and after July 17, 2025, the Series F Preferred Stock on and after October 17, 2025, and the Series G Preferred Stock on and any time after July 17, 2026, all at a price equal to the then-applicable liquidation preference.
Farmer Mac has the right, but not the obligation, to redeem some or all of the issued and outstanding shares of Series D Preferred Stock on and after July 17, 2024, the Series E Preferred Stock on and after July 17, 2025, the Series F Preferred Stock on and after October 17, 2025, and the Series G Preferred Stock on and any time after July 17, 2026, all at a price equal to the then-applicable liquidation preference.
Within those two lines of business are four segments: Corporate AgFinance, Farm & Ranch, Rural Utilities, and Renewable Energy, as shown in the table below: Agricultural Finance Rural Infrastructure Finance Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Interest-earning assets Loans X X X X Loans held in securitization trusts (single-class) 1 X AgVantage Securities 1 X X X Interest-only portions of agricultural mortgage-backed securities ("IO") 1 X USDA Securities X Products and services that earn fee income LTSPCs X X Unfunded loan commitments X X X X Structured securitization transactions 1 X Loan servicing X Other Farmer Mac Guaranteed Securities 1 X 1 These categories comprise "Farmer Mac Guaranteed Securities." The loans (and interests in those loans) eligible for Farmer Mac's secondary market activities in each of Farmer Mac's lines of business include: • For Farmer Mac's Agricultural Finance line of business, mortgage loans secured by first liens on real estate used in agricultural production or processing, including part-time farms and rural housing loans, as well as agricultural and rural development loans guaranteed by the United States Department of Agriculture ("USDA"); and • For Farmer Mac's Rural Infrastructure Finance line of business, loans by lenders organized as cooperatives to finance electrification and telecommunications systems and renewable energy providers or projects in rural areas.
Within those two lines of business are five operating segments: Farm & Ranch, Corporate AgFinance, Power & Utilities, Broadband Infrastructure, and Renewable Energy, as shown in the table below: Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Interest-earning assets Loans X X X X X Loans held in securitization trusts (single-class) 1 X AgVantage Securities 1 X X X Interest-only portions of agricultural mortgage-backed securities ("IO") 1 X USDA Securities X Products and services that earn fee income LTSPCs X X Unfunded loan commitments X X X X X Structured securitization transactions 1 X Loan servicing X Other Farmer Mac Guaranteed Securities 1 X 1 These categories comprise "Farmer Mac Guaranteed Securities." The loans (and interests in those loans) eligible for Farmer Mac's secondary market activities in each of Farmer Mac's lines of business include: • mortgage loans secured by first liens on real estate used in agricultural production or processing, including part-time farms and rural housing loans, as well as agricultural and rural development loans guaranteed by the United States Department of Agriculture ("USDA") in the Agricultural Finance line of business; and • loans by lenders organized as cooperatives to finance electrification and telecommunications systems and renewable energy providers or projects in rural areas in the Infrastructure Finance line of business.
Item 1. Business GENERAL Farmer Mac is a stockholder-owned, federally chartered corporation that combines private capital and public sponsorship to serve a public purpose. Congress has charged Farmer Mac with the mission of providing a secondary market for a variety of loans made to borrowers in rural America.
Item 1. Business GENERAL Farmer Mac is a stockholder-owned, federally chartered corporation that combines private capital and public sponsorship to serve a public purpose. Congress has charged Farmer Mac, in its charter, with the mission of providing a secondary market for a variety of loans made to borrowers in rural America.
From time to time, Farmer Mac issues and guarantees securities backed by USDA Securities that it has purchased and also guarantees securities issued by Farmer Mac II LLC backed by USDA Securities that it has purchased.
From time to time, Farmer Mac issues and guarantees securities backed by USDA Securities that it has purchased and has also guaranteed securities issued by Farmer Mac II LLC backed by USDA Securities that it has purchased.
The United States government does not guarantee payments due on securities guaranteed by Farmer Mac, funds invested in the equity or debt securities of Farmer Mac, any dividend payments on shares of Farmer Mac stock, or the profitability of Farmer Mac. 28 GOVERNMENT REGULATION OF FARMER MAC General Farmer Mac was created by federal statute in 1988 in the aftermath of the collapse of the agricultural credit delivery system.
The United States government does not guarantee payments due on securities guaranteed by Farmer Mac, funds invested in the equity or debt securities of Farmer Mac, any dividend payments on shares of Farmer Mac stock, or the profitability of Farmer Mac. 29 GOVERNMENT REGULATION OF FARMER MAC General Farmer Mac was created by federal statute in 1988 in the aftermath of the collapse of the agricultural credit delivery system.
For a Renewable Energy loan, Farmer Mac has direct credit exposure to the related standalone renewable energy project. These projects are typically financed on a non-recourse or limited recourse basis and underwritten on a projection basis with significant reliance placed on assumptions used in each project’s analysis.
For Renewable Energy loans, Farmer Mac has direct credit exposure to the related standalone renewable energy project. These projects are typically financed on a non-recourse or limited recourse basis and underwritten on a projection basis with significant reliance placed on assumptions used in each project’s analysis.
Guarantees Farmer Mac offers two credit enhancement alternatives to direct loan purchases for Farm & Ranch loans that allow approved lenders the ability to retain the cash flow benefits of their loans and increase their liquidity and lending capacity: (1) LTSPCs and (2) Farm & Ranch Guaranteed Securities.
Purchase Commitments and Guarantees Farmer Mac offers two credit enhancement alternatives to direct loan purchases for Farm & Ranch loans that allow approved lenders the ability to retain the cash flow benefits of their loans and increase their liquidity and lending capacity: (1) LTSPCs and (2) Farm & Ranch Guaranteed Securities.
Farmer Mac's enforcement rights in any collateral securing a Renewable Energy loan may be subject to tax equity interests in the borrower's renewable energy project. Lenders and Loan Servicing Farmer Mac's charter requires loans in Farmer Mac's Rural Infrastructure Finance line of business to involve a lender organized as a cooperative.
Farmer Mac's enforcement rights in any collateral securing a Renewable Energy loan may be subject to tax equity interests in the borrower's renewable energy project. 17 Lenders and Loan Servicing Farmer Mac's charter requires loans in Farmer Mac's Infrastructure Finance line of business to involve a lender organized as a cooperative.
Farmer Mac would be required to repurchase any of its debt obligations held by the U.S. Treasury within a "reasonable time." As of December 31, 2023, Farmer Mac had not used this borrowing authority and does not expect to use this borrowing authority in the future.
Farmer Mac would be required to repurchase any of its debt obligations held by the U.S. Treasury within a "reasonable time." As of December 31, 2024, Farmer Mac had not used this borrowing authority and does not expect to use this borrowing authority in the future.
When debt indentures are used, Farmer Mac determines if available collateral is adequate to support the loan program and Farmer Mac's investment. Farmer Mac also purchases unsecured Rural Utilities loans (primarily electric generation and transmission loans) that meet Farmer Mac's underwriting standards for unsecured Rural Utilities loans.
When debt indentures are used, Farmer Mac determines if available collateral is adequate to support the loan program and Farmer Mac's investment. Farmer Mac also purchases unsecured Power & Utilities loans (primarily electric generation and transmission loans) that meet Farmer Mac's underwriting standards for unsecured Power & Utilities loans.
As of December 31, 2023, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $19.8 million under the share repurchase program since 2015.
As of December 31, 2024, Farmer Mac had repurchased approximately 673,000 shares of Class C non-voting common stock at a cost of approximately $19.8 million under the share repurchase program since 2015.
Farmer Mac seeks to maximize the use of technology to support these business development efforts. 7 FARMER MAC'S LINES OF BUSINESS Farmer Mac engages in a variety of secondary market activities across its two lines of business, Agricultural Finance and Rural Infrastructure Finance.
Farmer Mac seeks to maximize the use of technology to support these business development efforts. FARMER MAC'S LINES OF BUSINESS Farmer Mac engages in a variety of secondary market activities across its two lines of business—Agricultural Finance and Infrastructure Finance.
Farmer Mac's charter directs FCA to classify Farmer Mac within one of four enforcement levels to determine compliance with the capital standards established by Farmer Mac's charter. As of December 31, 2023, Farmer Mac was classified as within level I – the highest compliance level.
Farmer Mac's charter directs FCA to classify Farmer Mac within one of four enforcement levels to determine compliance with the capital standards established by Farmer Mac's charter. As of December 31, 2024, Farmer Mac was classified as within level I – the highest compliance level.
Farmer Mac markets a mix of products to lenders who may be in need of capital, liquidity, portfolio diversification, and/or access to a wide variety of loan products, including those with long-term fixed rates.
Farmer Mac markets a mix of products to lenders who may need capital, liquidity, portfolio diversification, and/or access to a wide variety of loan products, including those with long-term fixed rates.
When Farmer Mac purchases a Rural Utilities loan with a pledge of all assets and a lender also has a lien on all assets, Farmer Mac verifies that a lien accommodation will result in either a shared first lien or a first lien in favor of Farmer Mac.
When Farmer Mac purchases a Power & Utilities loan with a pledge of all assets and a lender also has a lien on all assets, Farmer Mac verifies that a lien accommodation will result in either a shared first lien or a first lien in favor of Farmer Mac.
Although Farmer Mac has only indirect credit exposure on the Rural Utilities loans pledged to secure AgVantage securities, the same underwriting standards that apply to loans made to Rural Utilities borrowers on which Farmer Mac assumes direct credit exposure also apply to loans made to Rural Utilities borrowers that secure the AgVantage securities.
Although Farmer Mac has only indirect credit exposure on the Power & Utilities loans pledged to secure AgVantage securities, the same underwriting standards that apply to loans made to Power & Utilities borrowers on which Farmer Mac assumes direct credit exposure also apply to loans made to Power & Utilities borrowers that secure the AgVantage securities.
Farmer Mac's charter does not prescribe a maximum loan size or a total borrower exposure for an eligible Rural Utilities loan, but Farmer Mac's current limit for AgVantage transactions is $75.0 million for cumulative loan exposure to any one borrower or related borrowers (with the amount of any direct exposure to a borrower not counting towards the $75.0 million limit).
Farmer Mac's charter does not prescribe a maximum loan size or a total borrower exposure for an eligible Power & Utilities loan, but Farmer Mac's current limit for AgVantage transactions is $75.0 million for cumulative loan exposure to any one borrower or related borrowers (with the amount of any direct exposure of Farmer Mac to a borrower not counting towards the $75.0 million limit).
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for more information about Farmer Mac's liquidity and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Other Investments" for more information about Farmer Mac's eligible investments. 33
See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" for more information about Farmer Mac's liquidity and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Other Investments" for more information about Farmer Mac's eligible investments. 34
However, an internal policy approved by Farmer Mac's board of directors limits the cumulative direct credit exposure to any one borrower or group of related borrowers on loans secured by 2,000 acres or less of agricultural real estate to 10% of Farmer Mac's Tier 1 capital ($145.2 million as of December 31, 2023).
However, an internal policy approved by Farmer Mac's board of directors limits the cumulative direct credit exposure to any one borrower or group of related borrowers on loans secured by 2,000 acres or less of agricultural real estate to 10% of Farmer Mac's Tier 1 capital ($150.1 million as of December 31, 2024).
Treasury is required to purchase Farmer Mac's debt obligations up to the authorized limit if Farmer Mac certifies that: • a portion of the guarantee fees assessed by Farmer Mac has been set aside as a reserve against losses arising out of Farmer Mac's guarantee activities in an amount determined by Farmer Mac's board of directors to be necessary and such reserve has been exhausted (that amount was $129.6 million as of December 31, 2023); and • the proceeds of such obligations are needed to fulfill Farmer Mac's guarantee obligations.
Treasury is required to purchase Farmer Mac's debt obligations up to the authorized limit if Farmer Mac certifies that: • a portion of the guarantee fees assessed by Farmer Mac has been set aside as a reserve against losses arising out of Farmer Mac's guarantee activities in an amount determined by Farmer Mac's board of directors to be necessary and such reserve has been exhausted (that amount was $138.7 million as of December 31, 2024); and • the proceeds of such obligations are needed to fulfill Farmer Mac's guarantee obligations.
Upon liquidation, dissolution, or winding up of the business of Farmer Mac, after payment and provision for payment of outstanding debt of Farmer Mac, the holders of shares of Farmer Mac's currently outstanding 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C ("Series C Preferred Stock"), 5.700% Non-Cumulative Preferred Stock, Series D ("Series D Preferred Stock"), 5.750% Non-Cumulative Preferred Stock, Series E ("Series E Preferred Stock"), 5.250% Non-Cumulative Preferred Stock, Series F ("Series F Preferred Stock"), 4.875% Non-Cumulative Preferred Stock, Series G ("Series G Preferred Stock"), and any other preferred stock then outstanding, would be paid at par value out of assets available for distribution, plus all declared and unpaid dividends, before the holders of shares of common stock received any payment.
Upon liquidation, dissolution, or winding up of the business of Farmer Mac, after payment and provision for payment of outstanding debt of Farmer Mac, the holders of shares of Farmer Mac's currently outstanding 5.700% Non-Cumulative Preferred Stock, Series D ("Series D Preferred Stock"), 5.750% Non-Cumulative Preferred Stock, Series E ("Series E Preferred Stock"), 5.250% Non-Cumulative Preferred Stock, Series F ("Series F Preferred Stock"), 4.875% Non-Cumulative Preferred Stock, Series G ("Series G Preferred Stock"), and any other preferred stock then outstanding, would be paid at par value out of assets available for distribution, plus all declared and unpaid dividends, before the holders of shares of common stock received any payment.
Farmer Mac's risk-based capital requirement as of December 31, 2023 was $186.4 million, and Farmer Mac's regulatory capital of $1.5 billion exceeded that amount by approximately $1.3 billion. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Requirements" for a presentation of Farmer Mac's current regulatory capital position. Enforcement Levels .
Farmer Mac's risk-based capital requirement as of December 31, 2024 was $175.1 million, and Farmer Mac's regulatory capital of $1.5 billion exceeded that amount by approximately $1.4 billion. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Requirements" for a presentation of Farmer Mac's current regulatory capital position. Enforcement Levels .
Farmer Mac's philanthropic philosophy centers on supporting agriculture and rural communities and supporting the next generation of farmers and ranchers and financial professionals, including in the communities where Farmer Mac's employees live. Code of Business Conduct and Ethics Farmer Mac's onboarding program includes a mandatory compliance session for every new hire and contract consultant within their first week.
Farmer Mac's philanthropic philosophy centers on supporting agriculture and rural communities and supporting the next generation of farmers and ranchers and financial professionals. Code of Business Conduct and Ethics Farmer Mac's onboarding program includes a mandatory compliance session for every new hire and contract consultant within their first week.
This secondary market is designed to increase the availability of credit at competitive interest rates to America's rural communities and agricultural sectors, as well as to provide borrowers with the benefits of capital markets pricing and product innovation.
This secondary market is designed to increase the accessibility of financing at competitive interest rates to America's rural communities and agricultural sectors, as well as to provide borrowers with the benefits of capital markets pricing and product innovation.
The secondary market provided by Farmer Mac functions as a bridge between the public capital markets and the U.S. agricultural and rural credit markets by attracting additional capital sources for financing rural America and agricultural borrowers.
The secondary market provided by Farmer Mac functions as a bridge between the public capital markets and the U.S. agricultural and rural credit markets to provide vital liquidity by attracting additional capital sources for financing rural America and agricultural borrowers.
Farmer Mac's charter authorizes a maximum loan size (adjusted annually for inflation) for an eligible Agricultural Finance mortgage loan secured by more than 2,000 acres of agricultural real estate. That maximum loan size was $17.0 million as of December 31, 2023.
Farmer Mac's charter authorizes a maximum loan size (adjusted annually for inflation) for an eligible Agricultural Finance mortgage loan secured by more than 2,000 acres of agricultural real estate. That 10 maximum loan size was $17.4 million as of December 31, 2024.
For AgVantage securities that are secured by eligible Agricultural Finance mortgage loans, Farmer Mac requires that the loans meet the minimum standards set forth in the charter for those types of loans with a maximum limit of $75.0 million in cumulative exposure to any one borrower or related borrowers from a single AgVantage issuer.
For AgVantage securities that are secured by eligible Agricultural Finance mortgage loans, Farmer Mac requires that the loans meet the minimum standards set forth in the charter for those types of loans with a maximum limit of $75.0 million in cumulative exposure to any one borrower or related borrowers on the loans pledged as collateral by an AgVantage issuer.
Corporate AgFinance loans tend to be larger and more complex operations than Farm & Ranch loans (generally more than $10 million) and typically are loans made to agribusinesses focused on agriculture production, food and fiber processing, and other supply chain production.
Corporate AgFinance loan borrowers tend to be larger and more complex operations than Farm & Ranch loan borrowers (generally loan sizes more than $10 million) and typically are agribusinesses focused on agriculture production, food and fiber processing, and other supply chain production.
The LEARN Academies were introduced in 2023 and include: • New Hire Academy • Skills Academy • Leadership Academy • Business Academy • Ethics & Compliance Academy • IT and Cybersecurity Academy 21 Each Academy is structured around learning paths aligned to each employee’s professional level, role, and career trajectory.
The LEARN Academies include: • New Hire Academy • Skills Academy • Leadership Academy • Business Academy • Ethics & Compliance Academy • IT and Cybersecurity Academy Each Academy is structured around learning paths aligned to each employee’s professional level, role, and career trajectory.
As of December 31, 2023, the following shares of Farmer Mac preferred stock were outstanding: • 3,000,000 shares of Series C Preferred Stock, all of which were issued in June 2014; • 4,000,000 shares of Series D Preferred Stock, all of which were issued in May 2019; • 3,180,000 shares of Series E Preferred Stock, all of which were issued in May 2020; • 4,800,000 shares of Series F Preferred Stock, all of which were issued in August 2020; and 25 • 5,000,000 shares of Series G Preferred Stock, all of which were issued in May 2021.
As of December 31, 2024, the following shares of Farmer Mac preferred stock were outstanding: • 4,000,000 shares of Series D Preferred Stock, all of which were issued in May 2019; • 3,180,000 shares of Series E Preferred Stock, all of which were issued in May 2020; • 4,800,000 shares of Series F Preferred Stock, all of which were issued in August 2020; and • 5,000,000 shares of Series G Preferred Stock, all of which were issued in May 2021.
Farmer Mac's secondary market activities include: • purchasing eligible loans directly from lenders (including participation interests, syndicated notes, revolving and non-revolving credit facilities, and unfunded commitments to make advances on loans); • guaranteeing and purchasing securities issued by lenders and other financial institutions that are secured by pools of eligible loans (Farmer Mac refers to these securities as "AgVantage," a registered trademark of Farmer Mac); • issuing and guaranteeing securities that represent interests in, or obligations secured by, pools of eligible loans (together with AgVantage, Farmer Mac refers to these securities as "Farmer Mac Guaranteed Securities"); • servicing (including as master servicer) eligible loans, including loans that have been purchased or securitized by Farmer Mac or that would be eligible for purchase by Farmer Mac but are owned by a third party; and • providing long-term standby purchase commitments ("LTSPCs") for eligible loans.
To fulfill Farmer Mac's mission to increase the accessibility of financing to provide vital liquidity for American agriculture and rural infrastructure, its secondary market activities include: • purchasing eligible loans directly from lenders (including participation interests, syndicated notes, revolving and non-revolving credit facilities, and unfunded commitments to make advances on loans); • guaranteeing and purchasing securities issued by lenders and other financial institutions that are secured by pools of eligible loans (Farmer Mac refers to these securities as "AgVantage," a registered trademark of Farmer Mac); • issuing and guaranteeing securities that represent interests in, or obligations secured by, pools of eligible loans (together with AgVantage, Farmer Mac refers to these securities as "Farmer Mac Guaranteed Securities"); • servicing (including as master servicer) eligible loans, including loans that have been purchased or securitized by Farmer Mac or that would be eligible for purchase by Farmer Mac but are owned by a third party; and • providing long-term standby purchase commitments ("LTSPCs") for eligible loans.
Farmer Mac's charter requires Farmer Mac to maintain in its accounts a portion of the guarantee fees it receives from its guarantee activities as a reserve against losses. As of December 31, 2023, this reserve against losses arising from Farmer Mac's guarantee activities was $129.6 million.
Farmer Mac's charter requires Farmer Mac to maintain in its accounts a portion of the guarantee fees it receives from its guarantee activities as a reserve against losses. As of December 31, 2024, this reserve against losses arising from Farmer Mac's guarantee activities was $138.7 million.
Talent Acquisition and Development Farmer Mac is committed to the professional and career development of all employees. "Farmer Mac LEARN" is a program that Farmer Mac launched in 2022 to provide a comprehensive suite of learning and development services to maximize the learning effectiveness in the business.
Talent Acquisition and Development Farmer Mac is committed to the professional and career development of all employees. "Farmer Mac LEARN" is Farmer Mac's strategic learning and development program that is designed to provide a comprehensive suite of learning and development services to maximize the learning effectiveness in the 22 business.
Most of the AgVantage securities in Farmer Mac's Agricultural Finance line of business are securities issued by agricultural lenders that are secured by pools of Farm & Ranch loans.
Typically, Farmer Mac retains AgVantage securities in its portfolio. Most of the AgVantage securities in Farmer Mac's Agricultural Finance line of business are securities issued by agricultural lenders that are secured by pools of Farm & Ranch loans.
As of December 31, 2023, the total outstanding business volume in Farmer Mac's two lines of business (Agricultural Finance and Rural Infrastructure Finance) was $28.5 billion.
As of December 31, 2024, the total outstanding business volume in Farmer Mac's two lines of business (Agricultural Finance and Infrastructure Finance) was $29.5 billion.
The following table presents the dividends declared and paid on Series E Preferred Stock during and after 2023: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 22, 2023 $0.359375 January 18, 2023 April 17, 2023 April 17, 2023 May 3, 2023 $0.359375 April 18, 2023 July 17, 2023 July 17, 2023 August 9, 2023 $0.359375 July 18, 2023 October 17, 2023 October 17, 2023 November 8, 2023 $0.359375 October 18, 2023 January 17, 2024 January 17, 2024 February 21, 2024 $0.359375 January 18, 2024 April 17, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on April 17, 2024.
The following table presents the dividends declared and paid on Series E Preferred Stock during and after 2024: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 21, 2024 $0.359375 January 18, 2024 April 17, 2024 April 17, 2024 May 15, 2024 $0.359375 April 18, 2024 July 17, 2024 July 17, 2024 August 7, 2024 $0.359375 July 18, 2024 October 17, 2024 October 17, 2024 November 6, 2024 $0.359375 October 18, 2024 January 17, 2025 January 17, 2025 February 20, 2025 $0.359375 January 18, 2025 April 17, 2025 * * The dividend declared on February 20, 2025 is scheduled to be paid on April 17, 2025.
Farmer Mac's regular debt issuance supports its access to the capital markets, and Farmer Mac's liquidity investments provide an alternative source of funds should market conditions become unfavorable. As of December 31, 2023, Farmer Mac had $1.7 billion of discount notes and $24.9 billion of medium-term notes outstanding.
Farmer Mac's regular debt issuance supports its access to the capital markets, and Farmer Mac's liquidity investments provide an alternative source of funds should market conditions become unfavorable. As of December 31, 2024, Farmer Mac had $2.2 billion of discount notes and $25.4 billion of medium-term notes outstanding.
For more information on Farmer Mac's capital requirements, see "Business—Government Regulation of Farmer Mac—Capital Standards." 26 The following table presents the dividends declared and paid on Series C Preferred Stock during and after 2023: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 22, 2023 $0.3750 January 18, 2023 April 17, 2023 April 17, 2023 May 3, 2023 $0.3750 April 18, 2023 July 17, 2023 July 17, 2023 August 9, 2023 $0.3750 July 18, 2023 October 17, 2023 October 17, 2023 November 8, 2023 $0.3750 October 18, 2023 January 17, 2024 January 17, 2024 February 21, 2024 $0.3750 January 18, 2024 April 17, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on April 17, 2024.
For more information on Farmer Mac's capital requirements, see "Business—Government Regulation of Farmer Mac—Capital Standards." The following table presents the dividends declared and paid on Series C Preferred Stock during and after 2024: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 21, 2024 $0.3750 January 18, 2024 April 17, 2024 April 17, 2024 May 15, 2024 $0.3750 April 18, 2024 July 17, 2024 July 17, 2024 27 The following table presents the dividends declared and paid on Series D Preferred Stock during and after 2024: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 21, 2024 $0.35625 January 18, 2024 April 17, 2024 April 17, 2024 May 15, 2024 $0.35625 April 18, 2024 July 17, 2024 July 17, 2024 August 7, 2024 $0.35625 July 18, 2024 October 17, 2024 October 17, 2024 November 6, 2024 $0.35625 October 18, 2024 January 17, 2025 January 17, 2025 February 20, 2025 $0.35625 January 18, 2025 April 17, 2025 * * The dividend declared on February 20, 2025 is scheduled to be paid on April 17, 2025.
Rural Infrastructure Finance Farmer Mac's charter authorizes the purchase of, and guarantee of securities backed by, loans for electric (including renewable electric energy) or telecommunications facilities by lenders organized as cooperatives to borrowers that have received or are eligible to receive loans under the Rural Electrification Act of 1936 ("REA").
Infrastructure Finance The Power & Utilities, Broadband Infrastructure, and Renewable Energy segments are within our Infrastructure Finance line of business through the provision in Farmer Mac's charter that authorizes the purchase of, and guarantee of securities backed by, loans for electric (including renewable electric energy) or telecommunications facilities by lenders organized as cooperatives to borrowers that have received or are eligible to receive loans under the Rural Electrification Act of 1936 ("REA").
For a more detailed discussion of Farmer Mac's regulatory and governmental relationships, see "Business—Government Regulation of Farmer Mac." HUMAN CAPITAL As of December 31, 2023, Farmer Mac employed 185 people, with 36 new employees hired during the year resulting in a net increase of 27 employees (17%) compared to year-end 2022.
For a more detailed discussion of Farmer Mac's regulatory and governmental relationships, see "Business—Government Regulation of Farmer Mac." HUMAN CAPITAL As of December 31, 2024, Farmer Mac employed 191 people, with 18 new employees hired during the year resulting in a net increase of 6 employees (3.24%) compared to year-end 2023.
The following table presents the dividends declared on Farmer Mac's common stock during and after 2023: Date Dividend Declared Per Share Amount For Holders Of Record As Of Date Paid February 22, 2023 $1.10 March 16, 2023 March 31, 2023 May 3, 2023 $1.10 June 16, 2023 June 30, 2023 August 9, 2023 $1.10 September 15, 2023 September 29, 2023 November 8, 2023 $1.10 December 15, 2023 December 29, 2023 February 21, 2024 $1.40 March 15, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on March 28, 2024.
The following table presents the dividends declared on Farmer Mac's common stock during and after 2024: Date Dividend Declared Per Share Amount For Holders Of Record As Of Date Paid February 21, 2024 $1.40 March 15, 2024 March 28, 2024 May 15, 2024 $1.40 June 14, 2024 June 28, 2024 August 7, 2024 $1.40 September 16, 2024 September 30, 2024 November 6, 2024 $1.40 December 16, 2024 December 31, 2024 February 20, 2025 $1.50 March 14, 2025 * * The dividend declared on February 20, 2025 is scheduled to be paid on March 31, 2025.
In March 2023, Farmer Mac's board of directors extended the expiration date of the repurchase program to March 2025 on the same terms and with a remaining authorization of up to $9.8 million in stock repurchases.
In February 2023, Farmer Mac's board of directors extended the expiration date of the repurchase program to February 2025 on the same terms and with a remaining authorization of up to $9.8 million in stock repurchases. Farmer Mac's board of directors is expected to extend the expiration date of the program to February 2027 at an upcoming board meeting.
The relative competitiveness of Farmer Mac's loan rates and Farmer Mac's ability to develop business with lending institutions are affected by many factors, including: • the overall supply of capital available to agricultural and rural infrastructure borrowers; • the types and variety of products offered by Farmer Mac's competitors to meet the needs of Farmer Mac's customer base; • changes in the levels of available capital and liquidity of lending institutions; • the existence of alternative sources of funding and credit enhancement for lending institutions; • the rate of growth in the market for eligible loans; and • demand for Farmer Mac's products. 17 Because Farmer Mac's charter limits Farmer Mac's business to secondary-market activities, Farmer Mac's competitive position is affected by the willingness of originators to offer eligible loans for sale in the secondary market or to utilize Farmer Mac for funding syndicated or participated loans.
The relative competitiveness of Farmer Mac's loan rates and Farmer Mac's ability to develop business with lending institutions are affected by many factors, including: 18 • the overall supply of capital available to agricultural and infrastructure borrowers; • the types and variety of products offered by Farmer Mac's competitors to meet the needs of Farmer Mac's customer base; • changes in the levels of available capital and liquidity of lending institutions; • the existence of alternative sources of funding and credit enhancement for lending institutions; • the rate of growth in the market for eligible loans; and • demand for Farmer Mac's products.
Philanthropy Farmer Mac's mission to serve agricultural and rural communities, as well as philanthropic activities undertaken in support of its mission, provide Farmer Mac an advantage in its effort to attract and retain talent.
Farmer Mac experienced a 6.8% turnover rate in 2024 compared to 6.4% in 2023. Philanthropy Farmer Mac's mission to serve agricultural and rural communities, as well as philanthropic activities undertaken in support of its mission, provide Farmer Mac an advantage in its effort to attract and retain talent.
Farmer Mac purchases nearly all of its USDA Securities through Farmer Mac II LLC, a subsidiary of Farmer Mac that operates substantially all of the business related to Farmer Mac's USDA Securities.
Prior to 2024, Farmer Mac purchased nearly all of its USDA Securities through Farmer Mac II LLC, a subsidiary of Farmer Mac that had operated substantially all of the business related to Farmer Mac's USDA Securities since 2010.
This has allowed leadership to leverage the collaborative benefits that cannot be fully replicated remotely while still being flexible with the unique needs of each team and employee.
We introduced "Collaboration Tuesday" to serve as a foundation for these workplace connection opportunities. This has allowed leadership to leverage the collaborative benefits that cannot be fully replicated remotely while still being flexible with the unique needs of each team and employee.
As of December 31, 2023, Farmer Mac's Tier 1 capital ratio was 15.4%.
As of December 31, 2024, Farmer Mac's Tier 1 capital ratio was 14.2%.
The following table presents the dividends declared and paid on Series D Preferred Stock during and after 2023: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 22, 2023 $0.35625 January 18, 2023 April 17, 2023 April 17, 2023 May 3, 2023 $0.35625 April 18, 2023 July 17, 2023 July 17, 2023 August 9, 2023 $0.35625 July 18, 2023 October 17, 2023 October 17, 2023 November 8, 2023 $0.35625 October 18, 2023 January 17, 2024 January 17, 2024 February 21, 2024 $0.35625 January 18, 2024 April 17, 2024 * * The dividend declared on February 21, 2024 is scheduled to be paid on April 17, 2024.
The following table presents the dividends declared and paid on Series G Preferred Stock during and after 2024: Date Dividend Declared Per Share Amount For Period Beginning For Period Ending Date Paid February 21, 2024 $0.3046875 January 18, 2024 April 17, 2024 April 17, 2024 May 15, 2024 $0.3046875 April 18, 2024 July 17, 2024 July 17, 2024 August 7, 2024 $0.3046875 July 18, 2024 October 17, 2024 October 17, 2024 November 6, 2024 $0.3046875 October 18, 2024 January 17, 2025 January 17, 2025 February 20, 2025 $0.3046875 January 18, 2025 April 17, 2025 * * The dividend declared on February 20, 2025 is scheduled to be paid on April 17, 2025. 28 FARMER MAC'S AUTHORITY TO BORROW FROM THE U.S.
The USDA-guaranteed portion and the unguaranteed portion of the loan are to be secured by the same collateral with equal lien priority. The USDA-guaranteed portion of a loan cannot be paid later than, or in any way be subordinated to, the related unguaranteed portion.
The USDA-guaranteed portion and the unguaranteed portion of the loan are to be secured by the same collateral with equal lien priority.
As of December 31, 2023, the following shares of Farmer Mac common stock were outstanding: • 1,030,780 shares of Class A voting common stock; • 500,301 shares of Class B voting common stock; and • 9,310,872 shares of Class C non-voting common stock.
No ownership restrictions apply to Class C non-voting common stock, and those securities are freely transferable. As of December 31, 2024, the following shares of Farmer Mac common stock were outstanding: • 1,030,780 shares of Class A voting common stock; • 500,301 shares of Class B voting common stock; and • 9,360,083 shares of Class C non-voting common stock.

… 51 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+15 added−19 removed86 unchanged
Biggest changeDeterioration in financial or credit market conditions could reduce the fair value of Farmer Mac's investment securities, particularly those securities that are less liquid and more subject to market variability. Some securities owned by Farmer Mac, including auction-rate certificates, do not have well-established secondary trading markets, making it more difficult to estimate current fair values for those securities.
Biggest changeSome securities owned by Farmer Mac, including auction-rate certificates, do not have well-established secondary trading markets, making it more difficult to estimate current fair values for those securities. This requires Farmer Mac to rely on market observations and internal models to estimate the fair values of its investment securities and to determine whether credit losses exist.
In a tightly-linked global economy, recent or continuing disruptive global events have contributed and may continue to contribute to economic stress on America’s agricultural producers and rural infrastructure by disrupting or transforming markets, systems, or resources that America’s farmers, ranchers, and rural service providers rely on to remain profitable.
In a tightly-linked global economy, recent or continuing disruptive global events have contributed and may continue to contribute to economic stress on America’s agricultural producers and infrastructure by disrupting or transforming markets, systems, or resources that America’s farmers, ranchers, and rural service providers rely on to remain profitable.
Strategic/Business Risk Farmer Mac's business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the demand for Farmer Mac's secondary market, the price or marketability of Farmer Mac's products, or Farmer Mac's ability to offer its products and services.
Strategic and Business Risk Farmer Mac's business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the demand for Farmer Mac's secondary market, the price or marketability of Farmer Mac's products, or Farmer Mac's ability to offer its products and services.
Farmer Mac relies heavily on technology and information systems, including from third parties, for the secure collection, processing, transmission, and storage of confidential, proprietary, and personal information in its information systems (and those of third parties) to conduct and manage its business operations.
To conduct and manage its business operations, Farmer Mac relies heavily on technology and information systems, including from third parties, for the secure collection, processing, transmission, and storage of confidential, proprietary, and personal information in its information systems (and those of third parties).
Farmer Mac's business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the price or marketability of Farmer Mac's products and services or Farmer Mac's ability to offer its products and services, including, but not limited to: • disruptions in the debt or equity capital markets; • competitive pressures in Farmer Mac's loan purchase and guarantee activities or in the issuance of its debt securities; • changes in interest rates that may increase Farmer Mac's funding costs; • market or customer perception of Farmer Mac's reputation; • legislative or regulatory developments adversely affecting Farmer Mac's ability to offer new products, the ability or motivation of lenders to participate in Farmer Mac's lines of business, or the cost of related corporate activities; • reduced demand for agricultural real estate loans or rural infrastructure loans due to regional, domestic, or global economic conditions; and • expanded funding alternatives available to agricultural and rural infrastructure borrowers.
Farmer Mac's business, operating results, financial condition, and capital levels may be materially and adversely affected by external factors that may affect the price or marketability of Farmer Mac's products and services or Farmer Mac's ability to offer its products and services, including, but not limited to: • disruptions in the debt or equity capital markets; • competitive pressures in Farmer Mac's loan purchase and guarantee activities or in the issuance of its debt securities; • changes in interest rates that may increase Farmer Mac's funding costs; • market or customer perception of Farmer Mac's reputation; • legislative or regulatory developments adversely affecting Farmer Mac's ability to offer new products, the ability or motivation of lenders to participate in Farmer Mac's lines of business, or the cost of related corporate activities; • reduced demand for agricultural real estate loans or infrastructure loans due to regional, domestic, or global economic conditions; and • expanded funding alternatives available to agricultural and infrastructure borrowers.
Operational risk includes the risk of loss to Farmer Mac resulting from: • inadequate or failed internal processes, systems, cybersecurity program, or infrastructure; • Farmer Mac's inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure; • any cybersecurity incident or compromise of Farmer Mac's information systems or security measures (including of its third parties), or the unauthorized access and/or acquisition of data; • failed execution of system implementations and upgrades; • human error, malfeasance, or other misconduct; • undetected or unknown errors, defects, or vulnerabilities in third party software or cybersecurity incidents related to third party software; • inadequate or failed internal controls or processes to detect or prevent fraud or other violations of law or regulations; or • external events, including a disruption involving physical site access, catastrophic events, natural disasters, terrorist activities, or disease pandemics.
Operational risk includes the risk of loss to Farmer Mac resulting from: • inadequate or failed internal processes, systems, cybersecurity program, or infrastructure; • Farmer Mac's inability to successfully implement enhancements to any of these or migrate to new systems or infrastructure; • any cybersecurity incident or compromise of Farmer Mac's information systems or security measures (including of its third parties), or the unauthorized access and/or acquisition of data; • failed execution of system implementations and upgrades; • human error, malfeasance, or other misconduct; • undetected or unknown errors, defects, or vulnerabilities in third party software or cybersecurity incidents related to third party software; 40 • inadequate or failed internal controls or processes to detect or prevent fraud or other violations of law or regulations; or • external events, including a disruption involving physical site access, catastrophic events, natural disasters, terrorist activities, or disease pandemics.
Inadequacies or failures in Farmer Mac's internal processes, personnel, systems, cybersecurity program, or infrastructure could lead to a significant disruption to business operations; unauthorized access to, or acquisition, destruction, alteration, release, theft, or loss of, confidential, proprietary, or personal data; fraud on Farmer Mac's 40 business and customers; extortion; financial and economic loss or costs; errors in its financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; or reputational damage.
Inadequacies or failures in Farmer Mac's internal processes, personnel, systems, cybersecurity program, or infrastructure could lead to a significant disruption to business operations; unauthorized access to, or acquisition, destruction, alteration, release, theft, or loss of, confidential, proprietary, or personal data; fraud on Farmer Mac's business and customers; extortion; financial and economic loss or costs; errors in its financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; or reputational damage.
Specialized or highly improved collateral, such as storage and processing facilities, permanent plantings, or rural utilities and renewable energy facilities, increase the risk of undercollateralization in a default scenario because producers requiring specialized or highly improved collateral are generally less able to adapt their operations or switch functional production when faced with adverse conditions.
Specialized or highly improved collateral, such as storage and processing facilities, permanent plantings, rural utilities, broadband, and renewable energy facilities, increase the risk of undercollateralization in a default scenario because producers requiring specialized or highly improved collateral are generally less able to adapt their operations or switch functional production when faced with adverse conditions.
Farmer Mac's exposure to credit risk may also increase due to concentrated exposure to a particular borrower or counterparty. Farmer Mac’s portfolio consists of loans varying in size and by borrower, including large exposures ($25 million or more) to individual borrowers. The default of any one of these borrowers could negatively affect Farmer Mac's financial condition.
Farmer Mac's exposure to credit risk may also increase due to concentrated exposure to a particular borrower or counterparty. Farmer Mac’s portfolio consists of loans varying in size and by borrower, including large exposures ($25 million or more) to individual borrowers. The default of any one of these 37 borrowers could negatively affect Farmer Mac's financial condition.
Starting in 2021, Farmer Mac has expanded its internal loan servicing function through two strategic acquisitions that included the loan servicing rights for a sizeable portion of Farmer Mac’s Agricultural Finance mortgage loan and USDA Securities portfolios, as well as servicing rights for eligible agricultural mortgage loans that are held by an unrelated third party.
Starting in 2021, Farmer Mac expanded its internal loan servicing function through two strategic acquisitions that included the loan servicing rights for a sizeable portion of Farmer Mac’s Agricultural Finance mortgage loan and USDA Securities portfolios, as well as servicing rights for eligible agricultural mortgage loans that are held by an unrelated third party.
Although 44 Farmer Mac's financial derivatives provide economic hedges of interest rate risk, changes in the fair values of financial derivatives can cause volatility in net income and in capital, particularly if those financial derivatives are not designated in hedge accounting relationships or if there is any ineffectiveness in a hedge accounting relationship.
Although Farmer Mac's financial derivatives provide economic hedges of interest rate risk, changes in the fair values of financial derivatives can cause volatility in net income and in capital, particularly if those financial derivatives are not designated in hedge accounting relationships or if there is any ineffectiveness in a hedge accounting relationship.
A significant disruption in the continuity of Farmer Mac's employees or any significant executive leadership change could also result in a loss of productivity and affect Farmer Mac's ability to successfully execute business strategies by creating uncertainty or instability or requiring Farmer Mac to divert or expend more resources to replace personnel.
A significant disruption in the continuity of Farmer Mac's employees or any significant executive leadership change could also result in a loss of productivity and affect Farmer Mac's ability to successfully execute business strategies by creating uncertainty or instability or requiring Farmer Mac to 48 divert or expend more resources to replace personnel.
Furthermore, a future period of rapid increase or decline in interest rates may create or exacerbate periods of market volatility that could adversely affect Farmer Mac's ability to manage interest rate risk, which could have a material adverse effect on Farmer Mac's operating results or financial condition.
A future period of rapid increase or decline in interest rates may create or exacerbate periods of market volatility that could adversely affect Farmer Mac's ability to manage interest rate risk, which could have a material adverse effect on Farmer Mac's operating results or financial condition.
Farmer Mac depends on these third parties to collect, process, transmit, and store a variety of confidential, proprietary, or personal information, including sensitive financial information and customer information. Just as Farmer Mac is 42 subject to numerous cyber-attacks from a variety of actors, so too are these third parties.
Farmer Mac depends on these third parties to collect, process, transmit, and store a variety of confidential, proprietary, or personal information, including sensitive financial information and customer information. Just as Farmer Mac is subject to numerous cyber-attacks from a variety of actors, so too are these third parties.
Other external factors outside of Farmer Mac's or borrowers' control may impair borrowers' profitability and ability to repay their loans in Farmer Mac's portfolio, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.
Political and other external factors outside of Farmer Mac's or borrowers' control may impair borrowers' profitability and ability to repay their loans in Farmer Mac's portfolio, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.
Farmer Mac assumes the ultimate credit risk of borrower defaults on its agricultural mortgage and rural infrastructure loan assets, and Farmer Mac's earnings, which come from net interest income, guarantee fees, and commitment fees on those assets, depend significantly on their performance.
Farmer Mac assumes the ultimate credit risk of borrower defaults on its agricultural mortgage and infrastructure loan assets, and Farmer Mac's earnings, which come from net interest income, guarantee fees, and commitment fees on those assets, depend significantly on their performance.
Some of these policies and methods require management to make estimates and assumptions in preparing Farmer Mac's consolidated financial statements. Incorrect estimates and assumptions by management in connection with preparing Farmer Mac's consolidated financial statements could adversely affect the reported amounts of assets and liabilities and the reported amounts of income and expenses.
Some of these policies and methods require management to make estimates and assumptions in preparing Farmer Mac's consolidated financial statements. Incorrect estimates and assumptions by management in connection with preparing Farmer Mac's consolidated financial statements could adversely affect the reported amounts of assets and liabilities and the reported 45 amounts of income and expenses.
As Farmer Mac expands its product offerings and services, it is exposed to operational risk in implementing these new products and services. New products and services may require new operational processes, which often require new internal controls to manage 43 new risks that these new processes present.
As Farmer Mac expands its product offerings and services, it is exposed to operational risk in implementing these new products and services. New products and services may require new operational processes, which often require new internal controls to manage new risks that these new processes present.
This repricing risk arises from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating or synthetically floating rate assets that on average may have longer maturities.
This repricing risk 44 arises from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating or synthetically floating rate assets that on average may have longer maturities.
Some of Farmer Mac's qualitative tools and metrics for managing risk are based on its use of observed historical market behavior. Farmer Mac applies statistical and other tools to these observations to quantify its risks.
Some of Farmer Mac's qualitative tools and metrics for managing risk are based on its use of observed historical market behavior. Farmer Mac applies 43 statistical and other tools to these observations to quantify its risks.
These technology and information systems encompass an integrated set of hardware, software, infrastructure, and personnel organized to facilitate the planning, control, coordination, operations, and 41 decision-making processes within Farmer Mac.
These technology and information systems encompass an integrated set of hardware, software, infrastructure, and personnel organized to facilitate the planning, control, coordination, operations, and decision-making processes within Farmer Mac.
Farmer Mac also has concentrated 36 exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by eligible loans held by the issuing institution.
Farmer Mac also has concentrated exposures to individual business counterparties on AgVantage securities, which are general obligations of institutional counterparties secured by eligible loans held by the issuing institution.
If the financial, accounting, data processing, backup, information technology, or other operating systems and infrastructure of third parties with whom Farmer Mac interacts or upon whom it relies fail to operate properly, are subject to unauthorized access, or are disrupted, then Farmer Mac may be impacted in the same manner as it would be due to inadequacies or failures in Farmer Mac's own internal processes, personnel, systems, cybersecurity program, or infrastructure.
If the financial, accounting, data processing, backup, information technology, or other operating systems and infrastructure of third parties with whom Farmer Mac interacts or upon whom it relies fail to operate properly, are subject to unauthorized access or improper use, or are disrupted, then Farmer Mac may be impacted in the same manner as it would be due to inadequacies or failures in Farmer Mac's own internal processes, personnel, systems, cybersecurity program, or infrastructure.
The unauthorized access to, acquisition, misuse, mishandling, unavailability, or destruction of Farmer Mac's data or confidential information stored by these third parties or on their applications and systems, or unauthorized access to or disruption of these third party applications, services, or tools could result in: unauthorized access to Farmer Mac's own systems; significant disruption to its business operations; fraud (on Farmer Mac and/or its customers); extortion; financial and economic losses or costs; errors in financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; reputational damage; or litigation and government enforcement actions.
The unauthorized access to, acquisition, misuse, mishandling, unavailability, or destruction of Farmer Mac's data or confidential information stored by these third parties or on their applications and systems, including artificial intelligence systems, or unauthorized access to or disruption of these third party applications, services, or tools could result in: unauthorized access to Farmer Mac's own systems; significant disruption to its business operations; fraud (on Farmer Mac and/or its customers); extortion; financial and economic losses or costs; errors in financial statements; impairment of its liquidity; harm to its employees, customers, or vendors; liability or service interruptions to its customers; loss of customers or vendors; violation of data protection laws and other litigation and legal risk; increased regulatory or legislative scrutiny; reputational damage; or litigation and government enforcement actions.
A significant number of defaults, or a single default from a large borrower exposure, stemming from one or more of these factors could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels. 35 A decline in the value of collateral securing loans in Farmer Mac's portfolio or a decline in the value of Farmer Mac's borrowers could increase the probability of loss in the event of default, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.
A significant number of defaults, or a single default from a large borrower exposure, stemming from one or more of these factors could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels. 36 A decline in the value of collateral securing loans in Farmer Mac's portfolio or a decline in the value of Farmer Mac's borrowers could increase the probability of loss in the event of default, which could have a material adverse effect on Farmer Mac's financial condition, results of operations, liquidity, or capital levels.
Item 1A. Risk Factors Farmer Mac's business activities, financial performance, and results of operations are, by their nature, subject to risks and uncertainties, including those related to the agricultural industry, rural infrastructure industries, access to the capital markets, the regulatory environment, the level of prevailing interest rates and overall market conditions.
Item 1A. Risk Factors Farmer Mac's business activities, financial performance, and results of operations are, by their nature, subject to risks and uncertainties, including those related to the agricultural industry, infrastructure industries, access to the capital markets, the political and regulatory environment, the level of prevailing interest rates, and overall market conditions.
This includes supply chain disruptions that prevent producers from accessing critical resources or that inhibit exports, inflationary effects that put downward pressure on demand for agricultural products or that may increase production expenses, and rising interest rates that may increase the risk that Farmer Mac’s borrowers may default on their loans.
This includes supply chain disruptions that prevent producers from accessing critical resources or that inhibit exports, inflationary effects that put downward pressure on demand for agricultural products or that may increase production expenses, and higher interest rates that may increase the risk that Farmer Mac’s borrowers may default on their loans.
The issuance of debt securities is Farmer Mac's 38 primary source for repaying or refinancing existing debt and to fund contingent liabilities, as needed. Farmer Mac's ability to access the debt and equity markets to raise capital, fund its assets, repay debt, and earn net interest income depends on market perception of Farmer Mac.
The issuance of debt securities is Farmer Mac's 39 primary source for repaying or refinancing existing debt and to fund contingent liabilities, as needed. Farmer Mac's ability to access the debt and equity markets to raise capital, fund its assets, repay debt, and earn net interest income depends on market perception of Farmer Mac.
See "Management's Discussion and Analysis—Risk Management—Credit Risk – Loans and Guarantees" for more information on Farmer Mac's management of credit risk. 37 Farmer Mac is exposed to counterparty risk on both its cleared and non-cleared swaps transactions that could materially and adversely affect its business, operating results, and financial condition.
See "Management's Discussion and Analysis—Risk Management—Credit Risk – Loans and Guarantees" for more information on Farmer Mac's management of credit risk. 38 Farmer Mac is exposed to counterparty risk on both its cleared and non-cleared swaps transactions that could materially and adversely affect its business, operating results, and financial condition.
Farmer Mac’s internal loan servicing function and reliance on third-party servicers could expose Farmer Mac to operational risks that could adversely affect its business, operating results, or financial condition. Effective and reliable loan servicing is essential for Farmer Mac to successfully operate its business.
Farmer Mac’s internal loan servicing function and reliance on third-party servicers exposes Farmer Mac to operational risks that could adversely affect its business, operating results, or financial condition. Effective and reliable loan servicing is essential for Farmer Mac to successfully operate its business.
Farmer Mac's credit risk may increase due to decline in the collateral values securing the loans in Farmer Mac's portfolio.
Farmer Mac's credit risk may increase due to a decline in the collateral values securing the loans in Farmer Mac's portfolio.
Concentrations in Farmer Mac's loan or investments portfolios, or to one or more borrowers or counterparties, may increase Farmer Mac's exposure to credit risk, which could materially and adversely affect its business, operating results, and financial condition.
Concentrations in Farmer Mac's loan or investment portfolios, or to one or more borrowers or counterparties, may increase Farmer Mac's exposure to credit risk, which could materially and adversely affect its business, operating results, and financial condition.
The occurrence of these disruptive events and resulting negative economic effects may also heighten other risk factors described in this report. 34 Climate change and the occurrence of weather-related events, or other natural or environmental disasters could have a material adverse effect on Farmer Mac’s business, operating results, or financial condition.
The occurrence of these disruptive events and resulting negative economic effects may also heighten other risk factors described in this report. Weather-related events or other natural or environmental disasters could have a material adverse effect on Farmer Mac’s business, operating results, or financial condition.
As of December 31, 2023, transactions with two institutions represented nearly all of the business volume under Farmer Mac's Rural Infrastructure Finance line of business. Farmer Mac's ability to maintain the current relationships with its business counterparties or customers and the business generated by those business counterparties or customers is significant to Farmer Mac's business.
As of December 31, 2024, transactions with two institutions represented nearly all of the business volume under Farmer Mac's Infrastructure Finance line of business. Farmer Mac's ability to maintain the current relationships with its business counterparties or customers and the business generated by those business counterparties or customers is significant to Farmer Mac's business.
For example, as of December 31, 2023, Farmer Mac's assets and liabilities recorded at fair value included financial instruments valued at $5.6 billion whose fair values management estimated in the absence of readily observable fair values (in other words, level 3).
For example, as of December 31, 2024, Farmer Mac's assets and liabilities recorded at fair value included financial instruments valued at $5.5 billion whose fair values management estimated in the absence of readily observable fair values (in other words, level 3).
Human Capital Risk Farmer Mac's ability to attract and retain motivated and qualified employees is critical to the success of its business, and significant or sustained disruption in the continuity of Farmer Mac's employees or executive leaders may materially adversely affect Farmer Mac's business performance, operations, financial condition, or reputation.
Farmer Mac's ability to attract and retain motivated and qualified employees is critical to the success of its business, and significant or sustained disruption in the continuity of Farmer Mac's employees or executive leaders may materially adversely affect Farmer Mac's business performance, operations, financial condition, or reputation.
Like many other financial institutions, Farmer Mac and its third party service providers face regular attacks by threat actors attempting to gain unauthorized access to, or disrupt, its information systems and access or acquire its data, including from organized criminal groups, hackers, nation states, activists, insiders, and other unauthorized third parties.
Like many other financial institutions, Farmer Mac and its third-party service providers, vendors, and suppliers face regular attacks by threat actors attempting to gain unauthorized access to, or disrupt, its information systems and access or acquire its data, including from organized criminal groups, hackers, nation states, activists, insiders, and others.
As of December 31, 2023, Farmer Mac had $4.1 billion of contingent liabilities related to LTSPCs and securities issued to third parties and guaranteed by Farmer Mac, which represents Farmer Mac's exposure if all loans underlying these LTSPCs and guarantees defaulted and Farmer Mac recovered no value from the related collateral.
As of December 31, 2024, Farmer Mac had $4.5 billion of contingent liabilities related to LTSPCs and securities issued to third parties and guaranteed by Farmer Mac, which represents Farmer Mac's exposure if all loans underlying these LTSPCs and guarantees defaulted and Farmer Mac recovered no value from the related collateral.
This concentration of business could potentially result in increased variability in Farmer Mac's business as existing assets pay down or mature and the status and needs of Farmer Mac's customers evolve. In 2023, ten institutions generated approximately 81% of loan purchase volume in the Agricultural Finance line of business.
This concentration of business could potentially result in increased variability in Farmer Mac's business as existing assets pay down or mature and the status and needs of Farmer Mac's customers evolve. In 2024, ten institutions generated approximately 65% of loan purchase volume in the Agricultural Finance line of business.
All of these factors may be exacerbated during periods of low trading volume for Farmer Mac's Class C stock, which averaged 57,662 shares daily during 2023 and may have a prolonged negative effect on its trading price or increase price volatility. 46 Regulatory and Compliance Risk Farmer Mac and many of its business counterparties are subject to comprehensive government regulation, and unanticipated changes to those laws and regulations could adversely affect Farmer Mac's business, operating results, reputation, or financial condition.
All of these factors may be exacerbated during periods of low trading volume for Farmer Mac's Class C stock, which averaged 52,650 shares daily during 2024 and may have a prolonged negative effect on its trading price or increase price volatility. 46 Regulatory and Compliance Risk Farmer Mac and many of its business counterparties are subject to comprehensive government regulation, and changes to those laws and regulations could adversely affect Farmer Mac's business, operating results, reputation, or financial condition.
Farmer Mac also relies upon a variety of third-party applications, services, and tools that are not developed by Farmer Mac, including cloud-based platforms and related data centers, to host data and support and operate certain aspects of its services and business operations.
Farmer Mac relies upon a variety of third-party applications, services, and tools that are not developed by Farmer Mac, including artificial intelligence systems and cloud-based platforms and related data centers, to host data and support and operate certain aspects of its services and business operations.
Farmer Mac also could be subject to litigation and government enforcement actions as a result of any such failure. Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of Farmer Mac's insurance coverage, which could adversely affect Farmer Mac's financial condition and results of operations.
Farmer Mac also could be subject to litigation and government enforcement actions as a result of any failure in its procedures, policies, practices, and controls. Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of Farmer Mac's insurance coverage, which could adversely affect Farmer Mac's financial condition and results of operations.
These threats come from a variety of different sources, including cyber-attacks, computer viruses, malware, exploits of system and network vulnerabilities, human error, phishing, ransomware, and distributed denial of service attacks. The threats Farmer Mac faces and the methods used to gain unauthorized access to or disrupt its information systems and data, or those of its service providers, are evolving.
These threats come from a variety of different sources, including cyber-attacks, computer viruses, malware, exploits of system and network vulnerabilities, human error, phishing, ransomware, and distributed denial of service attacks. The threats Farmer Mac and its third-party service providers face and the methods used to gain unauthorized access to or disrupt their information systems and data are evolving.
These and other effects of climate change could have an adverse impact on farming operations and the value of loan collateral, which could have a material adverse effect on Farmer Mac’s business, operating results, or financial condition.
These and other effects of severe weather could have an adverse impact on farming operations and the value of loan collateral, which could have a material adverse effect on Farmer Mac’s business, operating results, or financial condition.
Farmer Mac may incur losses if the value of the collateral securing a loan or the enterprise value of a borrower is less than the outstanding principal balance of Farmer Mac's loan at the time of foreclosure or sale, liquidation, or other disposition of the business.
Farmer Mac has incurred, and may in the future incur, losses if the value of the collateral securing a loan or the enterprise value of a borrower is less than the outstanding principal balance of Farmer Mac's loan at the time of foreclosure or sale, liquidation, or other disposition of the business.
Farmer Mac is aware of cybersecurity incidents involving its third party service providers in the past, and although Farmer Mac has not experienced a material loss of data or disruption of its operations due to a breach of third party systems, unauthorized access to a third party service provider's information technology assets or data may significantly impact Farmer Mac's operations in the same manner as incidents on its own systems.
Although Farmer Mac has not experienced a material loss of data or disruption of its operations due to a breach of third party systems, unauthorized access to a third party service provider's information technology assets or data may significantly impact Farmer Mac's operations in the same manner as incidents on its own systems.
For more information about Farmer Mac's capital requirements, including the Tier 1 capital requirement, see "Business—Government Regulation of Farmer Mac—Regulation—Capital Standards." Factors that could adversely affect the adequacy of Farmer Mac's capital levels in the future, and which may be beyond Farmer Mac's control, include: • credit losses; • adverse changes in interest rates or credit spreads; • the need to increase the level of the allowance for losses on loans; • legislative or regulatory actions that increase Farmer Mac's capital requirements; and • changes in GAAP. 47 Political Risk Farmer Mac is a GSE that may be materially and adversely affected by legislative or political developments.
For more information about Farmer Mac's capital requirements, including the Tier 1 capital requirement, see "Business—Government Regulation of Farmer Mac—Regulation—Capital Standards." Factors that could adversely affect the adequacy of Farmer Mac's capital levels in the future, and which may be beyond Farmer Mac's control, include: • credit losses; • adverse changes in interest rates or credit spreads; • the need to increase the level of the allowance for losses on loans; • legislative or regulatory actions that increase Farmer Mac's capital requirements; and • changes in GAAP.
As of December 31, 2023, Farmer Mac held cash, cash equivalents, and other investment securities with a fair value of $5.9 billion that could be used as a source of funds for payment on its obligations, including its guarantee and LTSPC obligations.
As of December 31, 2024, Farmer Mac held cash, cash equivalents, and other investment securities with a fair value of $7.0 billion that could be used as a source of funds for payment on its obligations, including its guarantee and LTSPC obligations.
Internal models require Farmer Mac to exercise judgment about estimates and assumptions used in the models. If Farmer Mac uses unreliable market data or incorrect estimates or assumptions in its internal models to estimate the fair value of its investment securities, those estimates could adversely affect results of operations during the reporting period.
If Farmer Mac uses unreliable market data or incorrect estimates or assumptions in its internal models to estimate the fair value of its investment securities, those estimates could adversely affect results of operations during the reporting period.
For example, as of December 31, 2023, Farmer Mac held at fair value $3.7 billion of investment securities guaranteed by GSEs.
For example, as of December 31, 2024, Farmer Mac held at fair value $4.3 billion of investment securities guaranteed by GSEs.
Farmer Mac is not always able to prevent or recognize attacks, and Farmer Mac's existing cybersecurity defenses may not be sufficient to detect attacks in a timely manner. Also, Farmer Mac may be unable to implement effective preventive measures or proactively address these threats until after a cybersecurity incident has been discovered.
Farmer Mac is not always able to prevent or recognize attacks, its existing cybersecurity defenses may not be sufficient to detect attacks in a timely manner or to fully investigate an attack, and it may be unable to implement effective preventive measures or proactively address these threats until after a cybersecurity incident has been discovered.
Farmer Mac is required by statute and regulation to maintain certain capital levels. Any inability by Farmer Mac to meet these capital requirements could result in supervisory measures by FCA, adversely affect Farmer Mac's ability to declare dividends on its common and preferred stock, or otherwise materially and adversely affect Farmer Mac's business, operating results, or financial condition.
Any inability by Farmer Mac to meet these capital requirements could result in supervisory measures by FCA, adversely 47 affect Farmer Mac's ability to declare dividends on its common and preferred stock, or otherwise materially and adversely affect Farmer Mac's business, operating results, or financial condition.
Taking possession of the loan collateral upon a default by the AgVantage counterparty could also result in higher current expected credit losses for Farmer Mac's loans held on balance sheet, as well as increased capital requirements. As of December 31, 2023, $9.0 billion of the $10.0 billion of AgVantage securities outstanding had been issued by only three counterparties.
Taking possession of the loan collateral upon a default by the AgVantage counterparty could also result in higher current expected credit losses for Farmer Mac's loans held on balance sheet, as well as increased capital requirements. As of December 31, 2024, $7.6 billion of the $8.5 billion of AgVantage securities outstanding had been issued by three counterparties.
In addition to the general risks posed by adverse weather conditions, Farmer Mac’s exposure to credit risk and the market value of loan collateral is potentially subject to risks associated with the long-term effects of climate change, as farmers and ranchers face increasing, as well as increasingly-severe, weather incidents.
In addition to the general risks posed by adverse weather conditions, Farmer Mac’s exposure to credit risk and the market value of loan collateral is potentially subject to risks associated with farmers and ranchers 35 facing increasing, as well as increasingly-severe, weather incidents.
These financial instruments measured with significant unobservable inputs represented 18.8% of total assets and 52.4% of financial instruments measured at fair value as of December 31, 2023. See "Management's Discussion and Analysis—Critical Accounting Estimates" for more information about fair value measurement.
These financial instruments measured with significant unobservable inputs represented 17.7% of total assets and 47.8% of financial instruments measured at fair value as of December 31, 2024. See "Management's Discussion and Analysis—Critical Accounting Estimates" for more information about fair value measurement.
Any of the risks described in this section could materially and adversely affect Farmer Mac's business, operating results, financial condition, reputation, capital levels, and future earnings. For more information about Farmer Mac's risk management, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management" in Item 7 of this Annual Report on Form 10-K.
Any of the risks described in this section could materially and adversely affect Farmer Mac's business, operating results, financial condition, reputation, capital levels, and future earnings. For more information about Farmer Mac's risk management, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management" in Item 7 of this report. Item 1B. Unresolved Staff Comments None.
If management makes incorrect assumptions or estimates that result in understating or overstating reported financial results, it could materially and adversely affect Farmer Mac's business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels. 45 Changes in the value or composition of Farmer Mac's investment securities could adversely affect Farmer Mac's business, operating results, financial condition, liquidity or capital levels.
If management makes incorrect assumptions or estimates that result in understating or overstating reported financial results, it could materially and adversely affect Farmer Mac's business, operating results, reported assets and liabilities, financial condition, reputation, or capital levels.
Failure by Farmer Mac's third-party loan servicers, third-party applications, information systems providers, and other service providers to protect confidential information from unauthorized access and dissemination could result in liability for Farmer Mac or damage Farmer Mac's reputation, which could have a negative effect on Farmer Mac's business, operating results, or financial condition.
Failure by Farmer Mac's third-party loan servicers, third-party applications, information systems providers (including artificial intelligence systems), and other service providers to protect confidential information from unauthorized access and dissemination could have a negative effect on Farmer Mac's business, operating results, or financial condition.
The trading price of Farmer Mac's Class C non-voting common stock ("Class C stock") has at times experienced substantial price volatility and may remain volatile. For example, the trading price of the Class C stock ranged from $113.53 per share to $194.92 per share during 2023.
The trading price of Farmer Mac's Class C non-voting common stock ("Class C stock") has at times experienced substantial price volatility and may remain volatile. For example, the trading price of the Class C stock ranged from $169.46 per share to $216.45 per share during 2024.
Farmer Mac is a GSE with a statutory charter that may be amended by Congress at any time, and is also regulated by government agencies, including the FCA and the SEC.
Other Risks Farmer Mac is a GSE that may be materially and adversely affected by legislative or political developments. Farmer Mac is a GSE with a statutory charter that may be amended by Congress at any time, and is also regulated by government agencies, including the FCA and the SEC.
As the importance and complexity of Farmer Mac’s technology and information systems has increased, and as new technologies are developed that are used by its customers, Farmer Mac, or its service providers to support its business and operations, the risks posed to Farmer Mac’s information systems and data from cybersecurity attacks that threaten the confidentiality, integrity, or availability of Farmer Mac’s information technology assets and resources and its data have increased.
Risks to Farmer Mac's information systems and data as a result of cybersecurity attacks has increased as the importance and complexity of Farmer Mac’s technology and information systems has increased, and as new technologies are developed that are used by its customers, Farmer Mac, and its service providers to support its business and operations.
These physical changes may prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of borrowers, such as increasing costs, reducing the value of assets, and increasing operating expenses.
Many climatologists predict increases in average temperatures, more extreme temperatures, and increases in volatile weather over time. These physical changes may prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of borrowers, such as increasing costs, reducing the value of assets, and increasing operating expenses.
As a result, Farmer Mac's business, operating results, reputation, or financial condition could be adversely affected. Farmer Mac's capital requirements may change, and failure to meet those requirements could result in supervisory measures or the inability of Farmer Mac to declare dividends, or otherwise materially and adversely affect Farmer Mac's business, operating results, or financial condition.
Farmer Mac's capital requirements may change, and failure to meet those requirements could result in supervisory measures or the inability of Farmer Mac to declare dividends, or otherwise materially and adversely affect Farmer Mac's business, operating results, or financial condition. Farmer Mac is required by statute and regulation to maintain certain capital levels.
As of December 31, 2023, the aggregate notional balance of Farmer Mac's cleared swaps was $20.5 billion, and the aggregate notional balance of Farmer Mac's non-cleared swaps was $5.2 billion.
As of December 31, 2024, the aggregate notional balance of Farmer Mac's cleared swaps was $19.1 billion, and the aggregate notional balance of Farmer Mac's non-cleared swaps was $5.7 billion.
Finally, the risk of unauthorized access to confidential, proprietary, or personal information through information system breaches or inadvertent dissemination may be heightened in a remote-working environment, which is currently more prevalent at Farmer Mac.
The amount and scope of insurance Farmer Mac maintains may not cover all expenses related to those claims. Also, the risk of unauthorized access to confidential, proprietary, or personal information through information system breaches or inadvertent dissemination may be heightened in a remote-working environment, which is currently more 42 prevalent at Farmer Mac.
As of December 31, 2023, approximately 90.1% of the $10.0 billion outstanding principal amount of AgVantage securities (of which $2.4 billion and $1.2 billion will be maturing in 2024 and 2025, respectively) were issued by three institutions.
Between December 31, 2023 and December 31, 2024, the outstanding balance of Farmer Mac's AgVantage securities decreased by approximately $1.5 billion. As of December 31, 2024, approximately 89.1% of the $8.5 billion outstanding principal amount of AgVantage securities (of which $1.6 billion and $1.2 billion will be maturing in 2025 and 2026, respectively) were issued by three institutions.
As of December 31, 2023, Farmer Mac posted $84.6 million of cash and $207.2 million of investment securities as collateral for its derivatives in net liability positions.
As of December 31, 2024, Farmer Mac posted $46.9 million of cash and $213.4 million of investment securities as collateral for its derivatives in net liability positions.
In 2023 and 2022, Farmer Mac recorded a gain of $5.1 million and a gain of $13.5 million, respectively, from changes in the fair values of its financial derivatives as a result of movements in interest rates during those years.
In 2024 and 2023, Farmer Mac recorded gains of $3.3 million and $5.1 million, respectively, from changes in the fair values of its financial derivatives as a result of movements in interest rates during those years. Farmer Mac recorded gains of $11.5 million and losses of $5.4 million in 2024 and 2023, respectively, related to ineffectiveness in hedge accounting relationships.
The ineffective implementation, operation, or oversight of one or more of the servicing processes or controls employed by Farmer Mac or any of its third-party servicers could expose Farmer Mac to operational risk that could adversely affect Farmer Mac’s business, operating results, or financial condition.
The ineffective implementation, operation, or oversight of one or more of the servicing processes or controls employed by Farmer Mac or any of its third-party servicers could expose Farmer Mac to operational risk that could adversely affect Farmer Mac’s business, operating results, or financial condition. 41 A deficiency, failure, interruption, or breach in Farmer Mac's or its service providers' technology and information systems, infrastructure, or cybersecurity program, including the occurrence of a cybersecurity incident, could adversely affect Farmer Mac's business, operating results, or financial condition.
Moreover, any employees or agents of Farmer Mac’s (or its third-party customers or vendors) who have authorized access to confidential, proprietary, or personal information could also intentionally, inadvertently, or erroneously disseminate the information to unauthorized third parties.
Farmer Mac also may have limited or no control over its service providers' handling of cybersecurity incidents, including their recognition and prevention practices. Any employees or agents of Farmer Mac’s (or its third-party customers or vendors) who have authorized access to confidential, proprietary, or personal information could also intentionally, inadvertently, or erroneously disseminate the information to unauthorized third parties.
Other external factors beyond Farmer Mac's or borrowers' control could impair borrowers' profitability, such as volatility in demand for agricultural products or electricity in rural areas; variability in borrowers' input costs; protracted regional, domestic, or global economic stress (whether due to disruptive global events or otherwise); legislative or regulatory actions affecting rural borrowers; U.S. trade policy affecting the demand for agricultural exports or the price of imports required for borrowers' operations; increased competition among producers due to oversupply or available alternatives; and adverse changes in interest rates and land values.
Other external factors beyond Farmer Mac's or borrowers' control could impair borrowers' profitability, such as volatility in demand for agricultural products or electricity in rural areas; variability in borrowers' input costs; increased competition among producers due to oversupply or available alternatives; and adverse changes in interest rates and land values.
This requires Farmer Mac to rely on market observations and internal models to estimate the fair values of its investment securities and to determine whether credit losses exist. However, available market data may not reflect the actual sale conditions Farmer Mac may face when selling its investment securities, particularly in adverse financial market conditions.
However, available market data may not reflect the actual sale conditions Farmer Mac may face when selling its investment securities, particularly in adverse financial market conditions. Internal models require Farmer Mac to exercise judgment about estimates and assumptions used in the models.
The U.S. experienced 28 separate billion-dollar weather disasters in 2023, surpassing 2020 (which had 22 billion-dollar weather disasters) as the highest level in the 40 years tracked by the National Oceanic and Atmospheric Administration. Many climatologists predict increases in average temperatures, more extreme temperatures, and increases in volatile weather over time.
The U.S. experienced 27 separate billion-dollar weather disasters in 2024, surpassed only by the 28 billion-dollar weather disasters in 2023, both of which significantly exceeded the previous high set in 2020 (which had 22 billion-dollar weather disasters) as the highest level in the more than 40 years tracked by the National Oceanic and Atmospheric Administration ("NOAA").
For example, since 2022, the Federal Reserve has rapidly increased the target range for the federal funds rate by 5.25% in an effort to combat rising inflation. Although Farmer Mac benefited from higher nominal interest rates in its investment portfolio, if those nominal interest rates decline, Farmer Mac may earn less interest income on its investments in future periods.
Although Farmer Mac has benefited from higher nominal interest rates in its investment portfolio, if those nominal interest rates decline, Farmer Mac may earn less interest income on its investments in future periods.
Approximately 14% of the continental U.S. was classified as being in severe to exceptional drought as of January 2, 2024, according to data from the National Center for Environmental Information. The effects of climate change could make some agricultural properties less suitable for farming or for other alternative uses.
At the end of 2024, approximately 70% of the United States is classified as experiencing some level of drought or dryness according to the National Drought Mitigation Center, USDA, and NOAA. The effects of severe weather events could make some agricultural properties less suitable for farming or for other alternative uses.
Removed
For example, the conflict between Russia and Ukraine, conflict in the Middle East, and severe weather conditions and natural disasters have all contributed to recent or current economic stress on producers and service providers in rural America.
Added
Potential shifts in U.S. trade policies, tax policies, environmental regulations, and immigration laws with the change in U.S. political leadership could result in significant impacts on agricultural producers and the broader agricultural sector, as well as the infrastructure sector.
Removed
For example, long and persistent heat and drought conditions affected agricultural production regions in the western and midwestern parts of the United States in 2021 and 2022. There was a sizable improvement in conditions in 2023 for large portions of the West Coast, especially California, but drought conditions have intensified in other areas of the country.
Added
These changes could lead to both favorable and unfavorable conditions, influencing trade dynamics, the strength of the U.S. dollar, labor costs and availability, and regulatory frameworks.
Removed
Farmer Mac's efforts to balance fulfilling its mission with providing a return to its stockholders may result in business transactions that involve lower returns or higher risk, which could adversely affect its business, operating results, or financial condition.

… 29 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+0 added−6 removed7 unchanged
Biggest changeThe cybersecurity subcommittee typically meets on a monthly basis with the CISO and other members of Farmer Mac's management team to discuss the performance and effectiveness of Farmer Mac's cyber program and to receive updates on cybersecurity risks, any cybersecurity incidents, and major cybersecurity initiatives. 50 The materials provided to Farmer Mac’s cybersecurity subcommittee and discussed in the meetings include: • updates on Farmer Mac’s data security posture; • results from third-party assessments and testing; • progress towards predetermined risk-mitigation-related goals; • Farmer Mac’s incident response plan; and • information about cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to those risks or incidents.
Biggest changeThe cybersecurity subcommittee typically meets on a monthly basis with the CISO and other members of Farmer Mac's management team to discuss the performance and effectiveness of Farmer Mac's cyber program and to receive updates on cybersecurity risks, any cybersecurity incidents, and major cybersecurity initiatives.
At least once a year, the full board of directors meets with Farmer Mac’s Chief Information Security Officer (“CISO”) to discuss Farmer Mac’s programs and policies related to cybersecurity and risk initiatives and considers them closely both from a risk management perspective and as part of Farmer Mac’s business strategy.
At least once a year, the full board of directors meets with Farmer Mac’s Chief Information Security Officer (“CISO”) to discuss and approve Farmer Mac’s programs and policies related to cybersecurity and risk initiatives and considers them closely both from a risk management perspective and as part of Farmer Mac’s business strategy.
That program includes processes to triage, assess severity for, escalate, contain, investigate, and remediate any cybersecurity incident, as well as to comply with any applicable legal obligations and to mitigate brand and reputational damage. Farmer Mac also conducts regular tabletop exercises to test and fortify the controls of its cybersecurity incident response program.
That program includes processes to triage, assess severity for, escalate, contain, investigate, and remediate any cybersecurity incident, as well as to comply with any applicable legal obligations (including to preserve evidence) and to mitigate brand and reputational damage. Farmer Mac also conducts regular tabletop exercises to test and fortify the controls of its cybersecurity incident response program.
Farmer Mac’s security operations center and incident response team assesses the severity and priority of incidents on a rolling basis, with escalations of cybersecurity incidents provided to Farmer Mac’s management team. If a cybersecurity incident is determined to be a material cybersecurity incident, Farmer Mac’s incident response plan defines the process for any required regulatory disclosures.
Farmer Mac’s security operations center and incident response team assesses the severity and priority of incidents on a rolling basis, with escalations of cybersecurity incidents provided to Farmer Mac’s management team and board as appropriate. If a cybersecurity incident is determined to be a material cybersecurity incident, Farmer Mac’s incident response plan defines the process for any required regulatory disclosures.
The CISO has more than 19 years of experience in cybersecurity and information technology and holds a Master’s degree in Business Administration with a focus on Information Technology.
The CISO has more than 20 years of experience in cybersecurity and information technology and holds a Master’s degree in Business Administration with a focus on Information Technology.
Farmer Mac’s approach includes: • an enterprise risk management program that includes cybersecurity risk assessment and management and is periodically refreshed; • security reviews designed to identify risks from many new features, software, and vendors, including a security operations center to monitor our systems; • a team of trained and experienced security professionals to investigate and remediate cybersecurity incidents; • regular cybersecurity training for all employees and network users to raise and maintain awareness of cybersecurity risks and best practices; • a vulnerability management program designed to identify vulnerabilities in the systems and software Farmer Mac uses; • regular cybersecurity testing, including penetration testing on a periodic basis to allow security researchers to help identify vulnerabilities in Farmer Mac’s systems before they mature into real-world cybersecurity threats; • a third-party service provider risk management program designed to identify and mitigate risks associated with third-party vendors and business partners, which includes pre-engagement diligence, contractual security and notification provisions, and ongoing monitoring, as appropriate; • a threat intelligence program designed to model and research potential cybersecurity threat actors to identify vulnerabilities and anticipate attack vectors before they are exploited; 49 • cybersecurity controls designed to segment access to systems and to limit access to sensitive data; and • patch management controls aimed at reducing system vulnerabilities.
Farmer Mac’s approach includes: • an enterprise risk management program that includes an annual cybersecurity risk assessment and management and is periodically refreshed; • security reviews designed to identify risks from many new features, software, and vendors, including a security operations center to monitor our systems; • a team of trained and experienced security professionals to investigate and remediate cybersecurity incidents; • regular cybersecurity training for all employees and network users to raise and maintain awareness of cybersecurity risks and best practices; • a vulnerability management program designed to identify vulnerabilities in the systems and software Farmer Mac uses; • regular cybersecurity testing, including third-party penetration testing on a periodic basis to allow security researchers to help identify vulnerabilities in Farmer Mac’s systems before they mature into real-world cybersecurity threats; • a third-party service provider risk management program designed to identify and mitigate risks associated with third-party vendors and business partners, which includes pre-engagement diligence, risk assessments, contractual security and notification provisions, and ongoing monitoring, as appropriate; • a threat intelligence program designed to model and research potential cybersecurity threat actors to identify vulnerabilities and anticipate attack vectors before they are exploited; 49 • cybersecurity controls designed to segment access to systems and to limit access to sensitive data, which controls are tested and updated regularly; • patch management controls aimed at reducing system vulnerabilities; and • a generative artificial intelligence policy that describes how users may utilize generative artificial intelligence tools in alignment with Farmer Mac's values, ethical standards, and legal requirements, while also safeguarding sensitive information.
The participants in these meetings also discuss their management of, and participation in, the cybersecurity risk management and strategy processes described in this report, including the operation of Farmer Mac’s incident response plan. Farmer Mac provides quarterly cybersecurity training to all employees, board members, and users of Farmer Mac's technology assets.
The participants in these meetings also discuss their management of, and participation in, the cybersecurity risk management and strategy processes described in this report, including the operation of Farmer Mac’s incident response plan.
Item 1C. Cybersecurity Risk Management and Strategy Farmer Mac recognizes the importance of assessing, identifying, and managing risks associated with cybersecurity threats.
Item 1C. Cybersecurity Risk Management and Strategy Farmer Mac recognizes the importance of assessing, identifying, and managing risks associated with cybersecurity threats. Farmer Mac’s process to identify and assess material risks from cybersecurity threats operates alongside Farmer Mac’s broader overall risk assessment process that contemplates all company risks.
At each regular quarterly meeting of the board enterprise risk committee, the cybersecurity subcommittee reviews a summary of the information discussed in the most recent cybersecurity subcommittee meetings.
The materials provided to Farmer Mac’s cybersecurity subcommittee and discussed in the meetings may include updates about cybersecurity risks, controls, and assessments, including those from third parties. At each regular quarterly meeting of the board enterprise risk 50 committee, the cybersecurity subcommittee reviews a summary of the information discussed in the most recent cybersecurity subcommittee meetings.
Farmer Mac’s process to identify and assess material risks from cybersecurity threats operates alongside Farmer Mac’s broader overall risk assessment process that contemplates all company risks. As part of this process, appropriate personnel collaborate with subject matter specialists, as necessary, to gather information to identify and assess material cybersecurity threat risks, their severity, and potential mitigations.
As part of this process, appropriate personnel collaborate with subject matter specialists, as necessary, to gather information to identify and assess material cybersecurity threat risks, their severity, and potential mitigations. Farmer Mac has implemented a variety of processes, technologies, and controls to aid in its efforts to identify, assess, and manage cybersecurity risks.
Material cybersecurity threat risks are also considered during separate board and committee meeting discussions of important matters like enterprise risk management, operational budgeting, business continuity planning, business transactions and acquisitions, and brand management. Farmer Mac’s CISO manages Farmer Mac’s cybersecurity program, including the identification, evaluation, and prioritization of security risks, as well as the company’s response to security incidents.
Farmer Mac’s CISO manages Farmer Mac’s cybersecurity program, which aligns to industry standards and is reviewed by the cybersecurity subcommittee and approved by the board enterprise risk committee annually, and which includes the identification, evaluation, and prioritization of security risks, as well as the company’s response to security incidents.
Removed
These risks include the potential for: • unauthorized access to or acquisition, destruction, alteration, release, theft, or loss of confidential, proprietary, or personal data; • fraud or extortion; • financial and economic loss or costs; • errors in Farmer Mac’s financial statements; • impairment of Farmer Mac’s liquidity; • harm to employees, customers, or vendors; • liability or service interruptions to customers; • loss of customers or vendors; • violation of data protection laws and other litigation and legal risk; • increased regulatory or legislative scrutiny; and • reputational damage.
Removed
Farmer Mac has implemented a variety of processes, technologies, and controls to aid in its efforts to identify, assess, and manage cybersecurity risks.
Removed
Two members of that subcommittee have successfully completed the National Association of Corporate Directors (“NACD”) certificate in cyber-risk oversight program. The other member of the subcommittee is the CEO of an energy company and has direct experience managing cyber risk and cybersecurity incidents in that capacity.
Removed
The chair of the board audit committee has also successfully completed the NACD certificate in cyber-risk oversight program (but is not a member of the cybersecurity subcommittee).
Removed
The board of directors has determined that cybersecurity is a priority area of focus and regularly engages with the CISO and other members of senior management in substantial discussions in board and committee meetings to address cybersecurity topics relating to risk management, compliance, strategy, innovation, and governance.
Removed
Employees with elevated privileges within the computing environment also receive specialized training tailored to their job responsibilities. Farmer Mac tracks the metrics from the cybersecurity training program and includes the results in dashboard reports shared and discussed with senior management, the board enterprise risk committee, and the board cybersecurity subcommittee.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−2 removed0 unchanged
Biggest changeItem 2. Properties Farmer Mac maintains its principal office at 1999 K Street, N.W., 4th Floor, Washington, D.C. 20006, under a lease that ends on August 30, 2024. During 2023, Farmer Mac signed a new lease for office space at 2100 Pennsylvania Avenue, N.W., Washington, D.C., which begins on September 1, 2024 and ends on April 30, 2036.
Biggest changeItem 2. Properties Farmer Mac maintains its principal office at 2100 Pennsylvania Avenue, N.W., Washington, D.C. 20037, under a lease that began on September 1, 2024 and ends on April 30, 2036.
Farmer Mac also maintains another office location at 9169 Northpark Drive, Johnston, Iowa 50131, under an amended lease that began on 51 October 1, 2017 and ends on August 31, 2027.
Farmer Mac also maintains another office location at 9169 Northpark Drive, Johnston, Iowa 50131, under an amended lease that began on October 1, 2017 and ends on August 31, 2027. Farmer Mac believes that its offices are suitable and adequate for its current and anticipated needs for the near future. Item 3. Legal Proceedings None. Item 4.
Removed
Under the terms of that lease, Farmer Mac has had access to the property since May 2023 and may take possession of its new office space upon completion of the agreed-upon buildout of tenant improvements, which is expected before September 1, 2024.
Added
Mine Safety Disclosures Not applicable. 51 PART II
Removed
Farmer Mac believes that its offices (including the anticipated office space under Farmer Mac's new lease) are suitable and adequate for its current and anticipated needs for the near future. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+0 added−0 removed14 unchanged
Biggest changeThe quarterly dividend of $1.40 per share on all three classes of common stock for first quarter 2024 represents an increase of $0.30 per common share, or 27%, over the quarterly dividend payout in 2023.
Biggest changeThe quarterly dividend of $1.50 per share on all three classes of common stock for first quarter 2025 represents an increase of $0.10 per common share, or 7%, over the quarterly dividend payout in 2024.
Farmer Mac obtained the information in the performance graph from S&P Global Market Intelligence. 54 This performance graph shall not be deemed to be "soliciting material" or to be "filed" with the SEC, and this performance graph shall not be incorporated by reference into any of Farmer Mac's filings under the Securities Act or the Securities Exchange Act of 1934 and related regulations, or any other document, whether made before or after the date of this report and despite any general incorporation language contained in a filing or document (except to the extent Farmer Mac specifically incorporates this section by reference into a filing or document).
Farmer Mac obtained the information in the performance graph from S&P Global Market Intelligence. 53 This performance graph shall not be deemed to be "soliciting material" or to be "filed" with the SEC, and this performance graph shall not be incorporated by reference into any of Farmer Mac's filings under the Securities Act or the Securities Exchange Act of 1934 and related regulations, or any other document, whether made before or after the date of this report and despite any general incorporation language contained in a filing or document (except to the extent Farmer Mac specifically incorporates this section by reference into a filing or document).
The graph assumes that $100 was invested on December 31, 2018 in each of: Farmer Mac's Class A voting common stock; Farmer Mac's Class C non-voting common stock; the NYSE Composite Index; and the S&P 500 Financial Services Index. The graph also assumes that all dividends were reinvested into the same securities throughout the past five years.
The graph assumes that $100 was invested on December 31, 2019 in each of: Farmer Mac's Class A voting common stock; Farmer Mac's Class C non-voting common stock; the NYSE Composite Index; and the S&P 500 Financial Services Index. The graph also assumes that all dividends were reinvested into the same securities throughout the past five years.
Farmer Mac's ability to pay dividends on its common stock is also subject to the payment of dividends on its outstanding preferred stock. Applicable FCA regulations also require Farmer Mac to provide FCA with 15 days' 53 advance notice of certain capital distributions.
Farmer Mac's ability to pay dividends on its common stock is also subject to the payment of dividends on its outstanding preferred stock. Applicable FCA regulations also require Farmer Mac to provide FCA with 15 days' 52 advance notice of certain capital distributions.
One type of transaction related to Farmer Mac's common stock occurred during fourth quarter 2023 that was not registered under the Securities Act and not otherwise reported on a Current Report on Form 8-K: • In October 2023, consistent with Farmer Mac's policy that permits directors of Farmer Mac to elect to receive shares of Class C non-voting common stock in lieu of their cash retainers, Farmer Mac issued an aggregate of 420 shares of Class C non-voting common stock to the seven directors who elected to receive such stock in lieu of a portion of their cash retainers.
One type of transaction related to Farmer Mac's common stock occurred during fourth quarter 2024 that was not registered under the Securities Act and not otherwise reported on a Current Report on Form 8-K: • In October 2024, consistent with Farmer Mac's policy that permits directors of Farmer Mac to elect to receive shares of Class C non-voting common stock in lieu of their cash retainers, Farmer Mac issued an aggregate of 421 shares of Class C non-voting common stock to the eight directors who elected to receive such stock in lieu of a portion of their cash retainers.
Information about securities authorized for issuance under Farmer Mac's equity compensation plans appears under "Equity Compensation Plans" in Farmer Mac's definitive proxy statement to be filed on or about April 17, 2024. That portion of the definitive proxy statement is incorporated by reference into this Annual Report on Form 10-K.
Information about securities authorized for issuance under Farmer Mac's equity compensation plans appears under "Equity Compensation Plans" in Farmer Mac's definitive proxy statement to be filed on or about April 16, 2025. That portion of the definitive proxy statement is incorporated by reference into this Annual Report on Form 10-K.
The following graph compares the performance of Farmer Mac's Class A voting common stock and Class C non-voting common stock with the performance of the New York Stock Exchange Composite Index ("NYSE Comp") and the Standard & Poor's 500 Financial Services Index ("S&P 500 Financial Services Index") over the period from December 31, 2018 to December 31, 2023.
The following graph compares the performance of Farmer Mac's Class A voting common stock and Class C non-voting common stock with the performance of the New York Stock Exchange Composite Index ("NYSE Comp") and the Standard & Poor's 500 Financial Services Index ("S&P 500 Financial Services Index") over the period from December 31, 2019 to December 31, 2024.
The number of shares issued to the directors was calculated based on a price of $154.30 per share, which was the closing price of the Class C non-voting common stock on September 30, 2023, the last business day of the third quarter, as reported by the New York Stock Exchange. Performance Graph .
The number of shares issued to the directors was calculated based on a price of $187.41 per share, which was the closing price of the Class C non-voting common stock on September 30, 2024, the last business day of the previous quarter, as reported by the New York Stock Exchange. Performance Graph .
On February 21, 2024, Farmer Mac's board of directors declared a dividend of $1.40 per share on Farmer Mac's common stock payable for first quarter 2024. See "Business—Financing—Equity Issuance" for more information on Farmer Mac's common stock.
On February 20, 2025, Farmer Mac's board of directors declared a dividend of $1.50 per share on Farmer Mac's common stock payable for first quarter 2025. See "Business—Financing—Equity Issuance" for more information on Farmer Mac's common stock.
(b) Not applicable. (c) None. Item 6. [Reserved]. 55
(b) Not applicable. (c) None. Item 6. [Reserved]. 54
On February 24, 2022, Farmer Mac's board of directors declared a dividend of $0.95 per share on Farmer Mac's common stock payable for first quarter 2022. That dividend was paid quarterly through fourth quarter 2022.
On February 21, 2024, Farmer Mac's board of directors declared a dividend of $1.40 per share on Farmer Mac's common stock payable for first quarter 2024. That dividend was paid quarterly through fourth quarter 2024.
As of February 5, 2024, Farmer Mac had 833 registered owners of the Class A voting common stock, 75 registered owners of the Class B voting common stock, and 789 registered owners of the Class C non-voting common stock.
As of February 7, 2025, Farmer Mac had 819 registered owners of the Class A voting common stock, 72 registered owners of the Class B voting common stock, and 774 registered owners of the Class C non-voting common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] 5 3 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 56 Overview 56 Critical Accounting Estimates 61 Use of Non-GAAP Measures 62 Results of Operations 64 Outlook 83 Balance Sheet Review 89 Risk Management 89 Liquidity and Capital Resources 105 Other Matters 109 Supplemental Information 109 Item 7 A .
Biggest changeItem 6. [Reserved] 54 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 55 Overview 55 Critical Accounting Estimates 59 Use of Non-GAAP Measures 60 Results of Operations 62 Outlook 80 Balance Sheet Review 87 Risk Management 88 Liquidity and Capital Resources 104 Other Matters 107 Supplemental Information 108 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 113 Item 8. Financial Statements 114 Consolidated Balance Sheets 118 2 Consolidated Statements of Operations 119 Consolidated Statements of Comprehensive Income 120 Consolidated Statements of Equity 121 Consolidated Statements of Cash Flows 122 Notes to Consolidated Financial Statements 123
Quantitative and Qualitative Disclosures About Market Risk 112 Item 8. Financial Statements 113 Consolidated Balance Sheets 117 2 Consolidated Statements of Operations 118 Consolidated Statements of Comprehensive Income 119 Consolidated Statements of Equity 120 Consolidated Statements of Cash Flows 121 Notes to Consolidated Financial Statements 122

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

232 edited+76 added−52 removed131 unchanged
Biggest changeSupplemental Information The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume: Table 37 New Business Volume Agricultural Finance Rural Infrastructure Finance Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total (in thousands) For the quarter ended: December 31, 2023 $ 1,282,045 $ 188,272 $ 434,511 $ 225,986 $ 2,130,814 September 30, 2023 1,384,273 275,932 607,979 17,390 2,285,574 June 30, 2023 1,574,169 218,136 294,292 71,611 2,158,208 March 31, 2023 750,040 203,211 683,232 89,747 1,726,230 December 31, 2022 1,114,255 165,395 140,222 43,737 1,463,609 September 30, 2022 1,927,209 169,932 547,117 61,653 2,705,911 June 30, 2022 1,418,397 107,916 326,899 35,307 1,888,519 March 31, 2022 2,452,539 103,353 377,965 41,636 2,975,493 December 31, 2021 2,075,540 411,838 631,338 12,594 3,131,310 For the year ended: December 31, 2023 $ 4,990,527 $ 885,551 $ 2,020,014 $ 404,734 $ 8,300,826 December 31, 2022 6,912,400 546,596 1,392,203 182,333 9,033,532 109 Table 38 Repayments of Assets Agricultural Finance Rural Infrastructure Finance Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total (in thousands) For the quarter ended: Scheduled $ 827,122 $ 133,468 $ 53,614 $ 69,040 $ 1,083,244 Unscheduled 106,041 102,131 18,469 — 226,641 December 31, 2023 $ 933,163 $ 235,599 $ 72,083 $ 69,040 $ 1,309,885 Scheduled $ 922,223 $ 110,383 $ 80,998 $ 14,716 $ 1,128,320 Unscheduled 108,960 104,999 20,578 — 234,537 September 30, 2023 $ 1,031,183 $ 215,382 $ 101,576 $ 14,716 $ 1,362,857 Scheduled $ 1,050,480 $ 81,386 $ 558,944 $ 52,203 $ 1,743,013 Unscheduled 96,507 55,976 13,138 — 165,621 June 30, 2023 $ 1,146,987 $ 137,362 $ 572,082 $ 52,203 $ 1,908,634 Scheduled $ 279,676 $ 78,482 $ 95,809 $ 11,424 $ 465,391 Unscheduled 231,288 128,254 57,354 — 416,896 March 31, 2023 $ 510,964 $ 206,736 $ 153,163 $ 11,424 $ 882,287 Scheduled $ 447,976 $ 64,308 $ 75,671 $ 9,809 $ 597,764 Unscheduled 136,245 132,366 1,201 — 269,812 December 31, 2022 $ 584,221 $ 196,674 $ 76,872 $ 9,809 $ 867,576 Scheduled $ 724,580 $ 38,018 $ 422,917 $ 13,429 $ 1,198,944 Unscheduled 296,763 64,439 — — 361,202 September 30, 2022 $ 1,021,343 $ 102,457 $ 422,917 $ 13,429 $ 1,560,146 Scheduled $ 1,114,779 $ 42,162 $ 159,491 $ 7,898 $ 1,324,330 Unscheduled 286,303 30,203 1,791 — 318,297 June 30, 2022 $ 1,401,082 $ 72,365 $ 161,282 $ 7,898 $ 1,642,627 Scheduled $ 1,535,369 $ 39,480 $ 266,349 $ 7,790 $ 1,848,988 Unscheduled 434,794 60,947 397 — 496,138 March 31, 2022 $ 1,970,163 $ 100,427 $ 266,746 $ 7,790 $ 2,345,126 Scheduled $ 928,663 $ 205,778 $ 816,802 $ 18,526 $ 1,969,769 Unscheduled 318,024 48,042 — — 366,066 December 31, 2021 $ 1,246,687 $ 253,820 $ 816,802 $ 18,526 $ 2,335,835 For the year ended: Scheduled $ 3,079,501 $ 403,719 $ 789,365 $ 147,383 $ 4,419,968 Unscheduled 542,796 391,360 109,539 — 1,043,695 December 31, 2023 $ 3,622,297 $ 795,079 $ 898,904 $ 147,383 $ 5,463,663 Scheduled $ 3,822,704 $ 183,968 $ 924,428 $ 38,926 $ 4,970,026 Unscheduled 1,154,105 287,955 3,389 — 1,445,449 December 31, 2022 $ 4,976,809 $ 471,923 $ 927,817 $ 38,926 $ 6,415,475 110 Table 39 Outstanding Business Volume Agricultural Finance Rural Infrastructure Finance Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Total (in thousands) As of: December 31, 2023 $ 18,808,801 $ 1,693,979 $ 7,480,723 $ 487,521 $ 28,471,024 September 30, 2023 18,461,835 1,741,306 7,118,295 330,575 27,652,011 June 30, 2023 18,116,503 1,680,756 6,611,892 327,901 26,737,052 March 31, 2023 17,685,961 1,599,982 6,889,682 308,493 26,484,118 December 31, 2022 17,728,792 1,603,507 6,359,613 230,170 25,922,082 September 30, 2022 17,199,347 1,634,786 6,296,263 196,242 25,326,638 June 30, 2022 16,591,999 1,567,311 6,172,063 148,018 24,479,391 March 31, 2022 16,575,595 1,540,760 6,006,446 120,609 24,243,410 December 31, 2021 16,094,639 1,537,834 5,895,227 86,763 23,614,463 Table 40 On-Balance Sheet Outstanding Business Volume Fixed Rate 5- to 10-Year ARMs & Resets 1-Month to 3-Year ARMs Total Held in Portfolio (in thousands) As of: December 31, 2023 $ 14,133,794 $ 3,171,672 $ 6,455,359 $ 23,760,825 September 30, 2023 13,727,280 3,019,317 6,255,690 23,002,287 June 30, 2023 13,721,129 3,003,560 5,493,104 22,217,793 March 31, 2023 13,607,740 3,020,229 5,924,032 22,552,001 December 31, 2022 13,693,810 3,031,288 5,251,427 21,976,525 September 30, 2022 13,810,162 2,960,596 4,644,958 21,415,716 June 30, 2022 13,798,771 2,939,467 3,993,956 20,732,194 March 31, 2022 14,174,611 2,858,521 3,443,816 20,476,948 December 31, 2021 13,228,675 2,896,014 3,695,269 19,819,958 111 The following table presents the quarterly net effective spread (a non-GAAP measure) by segment: Table 41 Net Effective Spread (1) Agricultural Finance Rural Infrastructure Finance Treasury Farm & Ranch Corporate AgFinance Rural Utilities Renewable Energy Funding Investments Net Effective Spread Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield (dollars in thousands) For the quarter ended: December 31, 2023 (2) $ 33,329 0.98 % $ 8,382 2.06 % $ 7,342 0.43 % $ 1,540 1.69 % $ 33,361 0.47 % $ 597 0.04 % $ 84,551 1.19 % September 30, 2023 32,718 0.97 % 8,250 2.05 % 6,362 0.39 % 1,150 1.46 % 34,412 0.49 % 532 0.04 % 83,424 1.20 % June 30, 2023 34,388 1.03 % 7,444 1.92 % 5,808 0.38 % 1,100 1.47 % 32,498 0.48 % 594 0.04 % 81,832 1.20 % March 31, 2023 32,465 0.97 % 7,148 1.94 % 5,507 0.36 % 858 1.53 % 31,738 0.47 % (543) (0.04) % 77,173 1.15 % December 31, 2022 (2) 32,770 0.98 % 7,471 1.94 % 4,960 0.34 % 935 1.76 % 27,656 0.42 % (2,689) (0.19) % 71,103 1.07 % September 30, 2022 33,343 1.04 % 7,600 1.99 % 4,220 0.30 % 705 1.97 % 22,564 0.36 % (2,791) (0.21) % 65,641 1.03 % June 30, 2022 32,590 1.05 % 6,929 1.87 % 3,733 0.27 % 468 1.78 % 18,508 0.30 % (1,282) (0.10) % 60,946 0.99 % March 31, 2022 30,354 1.02 % 7,209 1.96 % 3,159 0.23 % 375 1.69 % 16,738 0.28 % 4 — % 57,839 0.97 % December 31, 2021 28,998 0.99 % 6,321 1.84 % 2,521 0.19 % 356 1.53 % 15,979 0.28 % 158 0.01 % 54,333 0.94 % (1) Farmer Mac excludes the Corporate segment in the presentation above because the segment does not have any interest-earning assets.
Biggest changeOther Matters None. 107 Supplemental Information The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume: Table 36 New Business Volume Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) For the quarter ended: December 31, 2024 $ 1,034,489 $ 313,123 $ 78,018 $ 209,729 $ 496,437 $ 2,131,796 September 30, 2024 776,023 307,325 360,950 187,021 357,659 1,988,978 June 30, 2024 698,787 288,740 132,958 102,075 271,890 1,494,450 March 31, 2024 665,916 290,525 113,545 2,250 347,898 1,420,134 December 31, 2023 1,282,045 188,272 404,908 29,603 225,986 2,130,814 September 30, 2023 1,384,273 275,932 557,043 50,936 17,390 2,285,574 June 30, 2023 1,574,169 218,136 205,236 89,056 71,611 2,158,208 March 31, 2023 469,013 203,211 590,412 92,819 89,747 1,445,202 December 31, 2022 1,114,255 165,395 71,278 68,944 43,737 1,463,609 For the year ended: December 31, 2024 $ 3,175,215 $ 1,199,713 $ 685,471 $ 501,075 $ 1,473,884 $ 7,035,358 December 31, 2023 4,709,500 885,551 1,757,599 262,414 404,734 8,019,798 108 Table 37 Repayments of Assets Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) For the quarter ended: Scheduled $ 41,265 $ 231,672 $ 38,003 $ 52,970 $ 174,920 $ 538,830 Unscheduled 120,505 36,526 25,084 — — 182,115 December 31, 2024 $ 161,770 $ 268,198 $ 63,087 $ 52,970 $ 174,920 $ 720,945 Scheduled $ 1,079,136 $ 239,596 $ 548,161 $ 94,513 $ 138,123 $ 2,099,529 Unscheduled 117,538 41,842 26,629 — — 186,009 September 30, 2024 $ 1,196,674 $ 281,438 $ 574,790 $ 94,513 $ 138,123 $ 2,285,538 Scheduled $ 752,473 $ 141,565 $ 62,237 $ 16,062 $ 138,725 $ 1,111,062 Unscheduled 342,594 89,576 32,984 — — 465,154 June 30, 2024 $ 1,095,067 $ 231,141 $ 95,221 $ 16,062 $ 138,725 $ 1,576,216 Scheduled $ 402,088 $ 118,885 $ 90,096 $ 36,218 $ 93,112 $ 740,399 Unscheduled 150,903 99,325 32,481 — — 282,709 March 31, 2024 $ 552,991 $ 218,210 $ 122,577 $ 36,218 $ 93,112 $ 1,023,108 Scheduled $ 827,122 $ 133,468 $ 40,122 $ 13,492 $ 69,040 $ 1,083,244 Unscheduled 106,041 102,131 18,469 — — 226,641 December 31, 2023 $ 933,163 $ 235,599 $ 58,591 $ 13,492 $ 69,040 $ 1,309,885 Scheduled $ 922,223 $ 110,383 $ 75,031 $ 5,967 $ 14,716 $ 1,128,320 Unscheduled 108,960 104,999 20,578 — — 234,537 September 30, 2023 $ 1,031,183 $ 215,382 $ 95,609 $ 5,967 $ 14,716 $ 1,362,857 Scheduled $ 1,050,480 $ 81,386 $ 553,860 $ 5,084 $ 52,203 $ 1,743,013 Unscheduled 96,507 55,976 13,138 — — 165,621 June 30, 2023 $ 1,146,987 $ 137,362 $ 566,998 $ 5,084 $ 52,203 $ 1,908,634 Scheduled $ 279,676 $ 78,482 $ 42,475 $ 53,334 $ 11,424 $ 465,391 Unscheduled 231,288 128,254 57,354 — — 416,896 March 31, 2023 $ 510,964 $ 206,736 $ 99,829 $ 53,334 $ 11,424 $ 882,287 Scheduled $ 447,976 $ 64,308 $ 71,624 $ 4,047 $ 9,809 $ 597,764 Unscheduled 136,245 132,366 1,201 — — 269,812 December 31, 2022 $ 584,221 $ 196,674 $ 72,825 $ 4,047 $ 9,809 $ 867,576 For the year ended: Scheduled $ 2,274,962 $ 731,718 $ 738,497 $ 199,763 $ 544,880 $ 4,489,820 Unscheduled 731,540 267,269 117,178 — — 1,115,987 December 31, 2024 $ 3,006,502 $ 998,987 $ 855,675 $ 199,763 $ 544,880 $ 5,605,807 Scheduled $ 3,079,501 $ 403,719 $ 711,488 $ 77,877 $ 147,383 $ 4,419,968 Unscheduled 542,796 391,360 109,539 — — 1,043,695 December 31, 2023 $ 3,622,297 $ 795,079 $ 821,027 $ 77,877 $ 147,383 $ 5,463,663 109 Table 38 Outstanding Business Volume Agricultural Finance Infrastructure Finance Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Total (in thousands) As of: December 31, 2024 $ 18,606,968 $ 1,887,705 $ 6,809,366 $ 802,465 $ 1,416,525 $ 29,523,029 September 30, 2024 18,090,374 1,842,780 6,794,435 645,706 1,095,008 28,468,303 June 30, 2024 18,504,501 1,816,893 7,008,276 553,197 875,472 28,758,339 March 31, 2024 18,900,906 1,766,294 6,970,537 467,186 742,307 28,847,230 December 31, 2023 18,808,801 1,693,979 6,979,570 501,153 487,521 28,471,024 September 30, 2023 18,461,835 1,741,306 6,633,252 485,043 330,575 27,652,011 June 30, 2023 18,116,503 1,680,756 6,171,818 440,074 327,901 26,737,052 March 31, 2023 17,685,961 1,599,982 6,533,581 356,101 308,493 26,484,118 December 31, 2022 17,728,792 1,603,507 6,042,997 316,616 230,170 25,922,082 Table 39 On-Balance Sheet Outstanding Business Volume Fixed Rate 5- to 10-Year ARMs & Resets 1-Month to 3-Year ARMs Total Held in Portfolio (in thousands) As of: December 31, 2024 $ 14,356,171 $ 3,370,540 $ 6,815,034 $ 24,541,745 September 30, 2024 14,328,691 3,311,001 6,265,792 23,905,484 June 30, 2024 14,064,831 3,273,764 6,850,137 24,188,732 March 31, 2024 14,166,500 3,194,246 6,849,237 24,209,983 December 31, 2023 14,133,794 3,171,672 6,455,359 23,760,825 September 30, 2023 13,727,280 3,019,317 6,255,690 23,002,287 June 30, 2023 13,721,129 3,003,560 5,493,104 22,217,793 March 31, 2023 13,607,740 3,020,229 5,924,032 22,552,001 December 31, 2022 13,693,810 3,031,288 5,251,427 21,976,525 110 The following table presents the quarterly net effective spread (a non-GAAP measure) by segment: Table 40 Net Effective Spread Agricultural Finance Infrastructure Finance Treasury Farm & Ranch Corporate AgFinance Power & Utilities Broadband Infrastructure Renewable Energy Funding Investments Net Effective Spread Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield Dollars Yield (dollars in thousands) For the quarter ended: December 31, 2024 $ 32,556 $ 7,891 $ 5,059 $ 3,414 $ 4,859 $ 31,242 $ 2,507 $ 87,528 0.96 % 1.95 % 0.32 % 2.34 % 1.76 % 0.42 % 0.15 % 1.16 % September 30, 2024 35,755 6,397 4,785 2,794 3,810 30,912 943 85,396 1.05 % 1.56 % 0.30 % 2.21 % 1.78 % 0.42 % 0.05 % 1.16 % June 30, 2024 34,156 7,866 5,253 2,393 2,999 30,268 661 83,596 0.98 % 1.91 % 0.32 % 2.16 % 1.86 % 0.41 % 0.04 % 1.14 % March 31, 2024 32,843 7,971 4,890 2,342 2,049 32,474 475 83,044 0.95 % 2.05 % 0.30 % 2.08 % 1.75 % 0.45 % 0.03 % 1.14 % December 31, 2023 33,329 8,382 4,916 2,426 1,540 33,361 597 84,551 0.98 % 2.06 % 0.31 % 2.06 % 1.69 % 0.47 % 0.04 % 1.19 % September 30, 2023 32,718 8,250 3,979 2,383 1,150 34,412 532 83,424 0.97 % 2.05 % 0.26 % 2.15 % 1.46 % 0.49 % 0.04 % 1.20 % June 30, 2023 34,388 7,444 3,681 2,127 1,100 32,498 594 81,832 1.03 % 1.92 % 0.25 % 2.25 % 1.47 % 0.48 % 0.04 % 1.20 % March 31, 2023 32,465 7,148 3,599 1,908 858 31,738 (543) 77,173 0.97 % 1.94 % 0.24 % 2.53 % 1.53 % 0.47 % (0.04) % 1.15 % December 31, 2022 32,770 7,471 3,271 1,689 935 27,656 (2,689) 71,103 0.98 % 1.94 % 0.24 % 2.39 % 1.76 % 0.42 % (0.19) % 1.07 % 111 The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders: Table 41 Core Earnings by Quarter End December 2024 September 2024 June 2024 March 2024 December 2023 September 2023 June 2023 March 2023 December 2022 (in thousands) Revenues: Net effective spread $ 87,528 $ 85,396 $ 83,596 $ 83,044 $ 84,551 $ 83,424 $ 81,832 $ 77,173 $ 71,103 Guarantee and commitment fees 5,086 4,997 5,256 4,982 4,865 4,828 4,581 4,654 4,677 Gain on sale of investment securities — — 1,052 — — — — — — Loss on sale of mortgage loan — — (1,147) — — — — — — Other (491) 1,133 481 1,077 767 1,056 409 1,067 390 Total revenues 92,123 91,526 89,238 89,103 90,183 89,308 86,822 82,894 76,170 Credit related expense/(income): Provision for/(release of) losses 3,872 3,258 6,230 (1,870) (575) (181) 1,142 750 1,945 REO operating expenses — 196 — — — — — — 819 Total credit related expense/(income) 3,872 3,454 6,230 (1,870) (575) (181) 1,142 750 2,764 Operating expenses: Compensation and employee benefits 15,641 15,237 14,840 18,257 15,523 14,103 13,937 15,351 12,105 General and administrative 12,452 8,625 8,904 8,255 8,916 9,100 9,420 7,527 8,055 Regulatory fees 1,000 725 725 725 725 831 831 835 832 Total operating expenses 29,093 24,587 24,469 27,237 25,164 24,034 24,188 23,713 20,992 Net earnings 59,158 63,485 58,539 63,736 65,594 65,455 61,492 58,431 52,414 Income tax expense 9,938 12,681 11,970 13,553 13,881 13,475 12,539 12,756 11,210 Preferred stock dividends 5,666 5,897 6,792 6,791 6,791 6,792 6,791 6,791 6,791 Core earnings $ 43,554 $ 44,907 $ 39,777 $ 43,392 $ 44,922 $ 45,188 $ 42,162 $ 38,884 $ 34,413 Reconciling items: Gains/(losses) on undesignated financial derivatives due to fair value changes $ 3,084 $ (1,064) $ (359) $ 1,683 $ (836) $ 2,921 $ 2,141 $ 916 $ 1,596 Gains/(losses) on hedging activities due to fair value changes 5,737 205 2,604 3,002 (3,598) 3,210 (4,901) (105) (148) Unrealized (losses)/gains on trading assets (83) 99 (87) (14) (37) 1,714 (57) 359 31 Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value (39) 27 26 31 88 29 29 29 57 Net effects of terminations or net settlements on financial derivatives 534 (503) (1,505) (192) (800) (79) 583 523 1,268 Issuance costs on the retirement of preferred stock — (1,619) — — — — — — — Income tax effect related to reconciling items (1,939) 260 (143) (947) 1,089 (1,638) 464 (362) (590) Net income attributable to common stockholders $ 50,848 $ 42,312 $ 40,313 $ 46,955 $ 40,828 $ 51,345 $ 40,421 $ 40,244 $ 36,627
The unrealized gains/(losses) on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period. 3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value.
The unrealized (losses)/gains on trading securities are reported on Farmer Mac's consolidated statements of operations, which represent changes during the period in fair values for trading assets remaining on Farmer Mac's balance sheet as of the end of the reporting period. 3. The net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value.
For more information about net income attributable to common stockholders, the composition of core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." Gains on financial derivatives .
For more information about net income attributable to common stockholders, the composition of non-GAAP core earnings, and a reconciliation of net income attributable to common stockholders to core earnings, see Table 6 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." Gains on financial derivatives .
(2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.
(2) An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.
In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Rural Infrastructure Finance loans on which it has direct credit exposure.
In addition to relying on the representations and warranties of sellers, Farmer Mac also underwrites the Agricultural Finance mortgage loans (other than rural housing and part-time farm mortgage loans) and Infrastructure Finance loans on which it has direct credit exposure.
For Corporate AgFinance loans, which are often larger loan exposures to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and 89 transaction complexity.
For Corporate AgFinance loans, which are often larger loan exposures to agriculture production and agribusinesses that support agriculture production, food and fiber processing, and other supply chain production, and which may have risk profiles that differ from smaller agricultural mortgage loans, Farmer Mac has implemented methodologies and parameters that help assess credit risk based on the appropriate sector, borrower construct, and transaction complexity.
For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing." Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that vary based on the market value of its swap portfolio with each counterparty.
For more information about Farmer Mac's lender eligibility requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Lenders" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Lenders and Loan Servicing." Farmer Mac manages institutional credit risk related to its interest rate swap counterparties through collateralization provisions contained in each of its swap agreements that vary based on the market value of its swap portfolio with each counterparty.
Off-Balance Sheet Arrangements Farmer Mac offers approved lenders two credit enhancement alternatives to increase their liquidity or lending capacity while retaining the cash flow benefits of their loans: (1) certain categories of Farmer Mac Guaranteed Securities; and (2) LTSPCs. Both products are available through each of the Agricultural Finance and Rural Infrastructure Finance lines of business.
Off-Balance Sheet Arrangements Farmer Mac offers approved lenders two credit enhancement alternatives to increase their liquidity or lending capacity while retaining the cash flow benefits of their loans: (1) certain categories of Farmer Mac Guaranteed Securities; and (2) LTSPCs. Both products are available through each of the Agricultural Finance and Infrastructure Finance lines of business.
However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. The MVE sensitivity analysis measures the degree to which the market values of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates.
However, MVE is not indicative of the market value of Farmer Mac as a going concern because these market values are theoretical and do not reflect future business activities. 100 The MVE sensitivity analysis measures the degree to which the market values of Farmer Mac's assets, liabilities, and financial derivatives are estimated to change for a given change in interest rates.
For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years.
For GAAP purposes, realized gains or losses on settlements of these contracts are reported in the consolidated statements of operations in the period in which they occur. For core earnings purposes, these realized gains or losses are deferred and amortized as net yield adjustments over the term of the related debt, which generally ranges from 3 to 15 years. 5.
The Liquidity and Investment Regulations and Farmer Mac's internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of 99 the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held.
The Liquidity and Investment Regulations and Farmer Mac's internal policies require that investments held in Farmer Mac's investment portfolio meet the following creditworthiness standards: (1) at a minimum, at least one obligor of the investment must have a very strong capacity to meet financial commitments for the life of the investment, even under severely adverse or stressful conditions, and generally present a very low risk of default; (2) if the obligor whose capacity to meet financial 98 commitments is being relied upon to meet the standard set forth in subparagraph (1) is located outside of the United States, the investment must also be fully guaranteed by a U.S. government agency; and (3) the investment must exhibit low credit risk and other risk characteristics consistent with the purpose or purposes for which it is held.
As part of this strategy, Farmer Mac seeks to issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows. Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its debt issuance strategy.
As part of this strategy, Farmer Mac seeks to issue debt securities across a variety of maturities that together with financial derivatives closely align the forecasted debt and financial derivative cash flows with forecasted asset cash flows. 99 Farmer Mac issues discount notes and both callable and non-callable medium-term notes across a spectrum of maturities to execute its debt issuance strategy.
In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Rural Infrastructure loans that secure AgVantage securities.
In the event of a default on an AgVantage security, Farmer Mac would have recourse to the pledged collateral and have rights to the ongoing borrower payments of principal and interest. As a result, Farmer Mac has indirect credit exposure to the Agricultural Finance mortgage loans and Infrastructure loans that secure AgVantage securities.
Farmer Mac does not consider the assets held by the related securitization trust to be available to satisfy the claims of the creditors of Farmer Mac and/or the depositor. During 2023 and 2022, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts.
Farmer Mac does not consider the assets held by the related securitization trust to be available to satisfy the claims of the creditors of Farmer Mac and/or the depositor. During 2024, 2023, and 2022, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts.
For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards." Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements.
For more information about Farmer Mac's loan eligibility requirements and underwriting standards, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Eligibility," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch," "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance," and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Underwriting and Collateral Standards." Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements.
For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." Net Income and Core Earnings The following table shows our net income attributable to common stockholders and core earnings for the periods presented.
For more information about the non-GAAP measures Farmer Mac uses, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." 55 Net Income and Core Earnings The following table shows our net income attributable to common stockholders and core earnings for the periods presented.
For securitization trusts where Farmer Mac is the primary beneficiary, the trust assets and liabilities are included on Farmer Mac's consolidated balance sheet. For securitization trusts where Farmer Mac is not the primary beneficiary and in the event of deconsolidation, both of these alternatives create off-balance sheet obligations for Farmer Mac.
For securitization trusts where Farmer Mac is the primary beneficiary, the trust assets and liabilities are included on Farmer Mac's consolidated balance 106 sheet. For securitization trusts where Farmer Mac is not the primary beneficiary and in the event of deconsolidation, both of these alternatives create off-balance sheet obligations for Farmer Mac.
Gains/(losses) on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) Gains/(losses) on undesignated financial derivatives due to fair value changes; and (b) (Losses)/gains on hedging activities due to fair value changes. 66 2. Unrealized gains/(losses) on trading securities.
Gains on financial derivatives due to fair value changes are presented by two reconciling items in Table 6 above: (a) Gains on undesignated financial derivatives due to fair value changes; and (b) Gains/(losses) on hedging activities due to fair value changes. 2. Unrealized (losses)/gains on trading securities.
The growth trajectory of Farmer Mac is closely tied to the capital and liquidity needs of the lending institutions serving agriculture and rural infrastructure businesses and the overall financial health of borrowers in these sectors.
The growth trajectory of Farmer Mac is closely tied to the capital and liquidity needs of the lending institutions serving agriculture and infrastructure businesses and the overall financial health of borrowers in these sectors.
If a servicer materially breaches the terms of its servicing 97 agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer.
If a servicer materially breaches the terms of its servicing 96 agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without Farmer Mac's consent, or experiences insolvency or bankruptcy, the servicer is responsible for any corresponding damages to Farmer Mac and, in most cases, Farmer Mac has the right to terminate the servicing relationship for a particular loan or the entire portfolio serviced by the servicer.
The related parties listed in the table below consist of (1) all holders of at least five percent of a class of Farmer Mac voting common stock as of December 31, 2023 and (2) other institutions that are considered "related parties" through an affiliation with a Farmer Mac director and that have conducted business with Farmer Mac during the two years ended December 31, 2023.
The related parties listed in the table below consist of (1) all holders of at least five percent of a class of Farmer Mac voting common stock as of December 31, 2024 and (2) other institutions that are considered "related parties" through an affiliation with a Farmer Mac director and that have conducted business with Farmer Mac during the two years ended December 31, 2024.
In the near-term, our delinquency rate may exceed our historical average due to changes in the agricultural or general economy or unforeseen and idiosyncratic events like adverse weather events. Farmer Mac's average 90-day delinquency rate as a percentage of its Agricultural Finance mortgage loan portfolio over the last 15 years is approximately 1%.
In the near-term, our delinquency rate may exceed our historical average due to the current agricultural cycle or changes in the general economy or unforeseen and idiosyncratic events like adverse weather events. Farmer Mac's average 90-day delinquency rate as a percentage of its Agricultural Finance mortgage loan portfolio over the last 15 years is approximately 1%.
For more information about discount notes and medium-term notes, see Note 7 to the consolidated financial statements. (2) Interest payments on callable medium-term notes are calculated based on maturity. Future calls of these notes could cause actual interest payments to differ significantly from the amounts presented. (3) Calculated using the effective interest rates as of December 31, 2023.
For more information about discount notes and medium-term notes, see Note 7 to the consolidated financial statements. (2) Interest payments on callable medium-term notes are calculated based on maturity. Future calls of these notes could cause actual interest payments to differ significantly from the amounts presented. (3) Calculated using the effective interest rates as of December 31, 2024.
All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both December 31, 2023 and 2022, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.
All of Farmer Mac's interest rate swap transactions are conducted under standard collateralized agreements that limit Farmer Mac's potential credit exposure to any counterparty. As of both December 31, 2024 and 2023, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.
For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." Net Effective Spread Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of these assets.
For a reconciliation of Farmer Mac's net income attributable to common stockholders to core earnings and of earnings per common share to core earnings per share, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations." Net Effective Spread Farmer Mac uses net effective spread to measure the net spread Farmer Mac earns between its interest-earning assets and the related net funding costs of those assets.
The purpose of this table is to present information about realized losses relative to original Farm & Ranch purchases, guarantees, and commitments.
The purpose of this table is to present information about realized credit losses relative to original Farm & Ranch purchases, guarantees, and commitments.
In Farmer Mac's presentation of core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities.
In Farmer Mac's presentation of non-GAAP core earnings, guarantee and commitment fees include interest income and interest expense related to consolidated trusts owned by third parties to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on those consolidated Farmer Mac Guaranteed Securities.
The fair values of the contracts change daily as market interest rates change. Because the financial derivative liabilities recorded on the consolidated balance sheet as of December 31, 2023 do not represent the amounts that may ultimately be paid under the financial derivative contracts, those liabilities are not included in the table presented above.
The fair values of the contracts change daily as market interest rates change. Because the financial derivative liabilities recorded on the consolidated balance sheet as of December 31, 2024 do not represent the amounts that may ultimately be paid under the financial derivative contracts, those liabilities are not included in the table presented above.
As of December 31, 2023, Farmer Mac had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Securities.
As of December 31, 2024, Farmer Mac had not experienced any credit losses on any USDA Securities or Farmer Mac Guaranteed USDA Securities and does not expect to incur any such losses in the future. Because we do not expect credit losses on this portfolio, Farmer Mac does not provide an allowance for losses on its portfolio of USDA Securities.
Farmer Mac also considers the fair value of AgVantage to be a critical accounting estimate because Farmer Mac applies a discount rate in calculating the net present value of future expected cash flows that is both significant to the estimate of their fair value and 61 unobservable in the market.
Farmer Mac also considers the fair value of AgVantage to be a critical accounting estimate because Farmer Mac applies a discount rate in calculating 59 the net present value of future expected cash flows that is both significant to the estimate of their fair value and unobservable in the market.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The objective of this section of the report is to provide a discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's financial condition and results of operations for the year ended December 31, 2023.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The objective of this section of the report is to provide a discussion and analysis, from management’s perspective, of the material information necessary to assess Farmer Mac's financial condition and results of operations for the year ended December 31, 2024.
See Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities for more information. Farmer Mac applies discount rates that are commensurate with the risks involved to estimate the fair value measurement of AgVantage AFS.
See Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities for more information. Farmer Mac applies discount rates that are commensurate with the risks involved to estimate the fair value measurement of both AgVantage AFS and HTM.
During the previous three years ended December 31, 2023, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan.
During the previous three years ended December 31, 2024, there have been no breaches of representations and warranties by sellers that resulted in Farmer Mac requiring a seller to cure, replace, or repurchase a loan.
The following sections provide more detail about specific components of Farmer Mac's results of operations. Net Interest Income . The following table provides information about interest-earning assets and funding for the years ended December 31, 2023, 2022, and 2021.
The following sections provide more detail about specific components of Farmer Mac's results of operations. Net Interest Income . The following table provides information about interest-earning assets and funding for the years ended December 31, 2024, 2023, and 2022.
The percentage of Agricultural Finance substandard assets within the portfolio as of December 31, 2023 was below the historical average. Farmer Mac's average Agricultural Finance substandard assets as a percentage of its Agricultural Finance mortgage loans over the last 15 years is approximately 4%.
The percentage of Agricultural Finance substandard assets within the portfolio as of December 31, 2024 was below the historical average. Farmer Mac's average Agricultural Finance substandard assets as a percentage of its Agricultural Finance mortgage loans over the last 15 years is approximately 4%.
Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac regularly assesses this exposure and, if necessary, adjusts its portfolio of interest-earning assets, debt, and financial derivatives. Farmer Mac's objective is to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's board of directors.
Recognizing that interest rate sensitivities may change with the passage of time and as interest rates change, Farmer Mac regularly assesses this exposure and, if necessary, adjusts its portfolio of interest-earning assets, debt, and financial derivatives. Farmer Mac seeks to maintain its exposure to interest rate risk within appropriate limits, as approved by Farmer Mac's board of directors.
These characteristics can include (but is not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment.
These characteristics can include (but are not limited to) financial metrics, internal risk ratings, ratings assigned by ratings agencies, types of customers served, sources of power supply, and the regulatory environment.
Farmer Mac regularly accesses the debt capital markets for funding, and Farmer Mac has maintained steady access to the debt capital markets throughout 2023. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the debt capital markets.
Farmer Mac regularly accesses the debt capital markets for funding, and Farmer Mac maintained steady access to the debt capital markets throughout 2024. Farmer Mac funds its purchases of eligible loan assets, USDA Securities, Farmer Mac Guaranteed Securities, and investment assets and finances its operations primarily by issuing debt obligations of various maturities in the debt capital markets.
The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of December 31, 2023. Farmer Mac believes that it remains adequately collateralized on its delinquent loans. Farmer Mac's 90-day delinquency rate as of December 31, 2023 was below Farmer Mac's historical average.
The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of December 31, 2024. Farmer Mac believes that it remains adequately collateralized on its delinquent loans. Farmer Mac's 90-day delinquency rate as of December 31, 2024 was slightly below Farmer Mac's historical average.
Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Farmer Mac's $0.9 billion of cash and cash equivalents held as of December 31, 2023 mature within three months.
Treasury securities and other financial derivatives. Similarly, when Farmer Mac commits to sell certain assets, the associated interest rate exposure is primarily managed with exchange-traded futures contracts involving U.S. Treasury securities and other financial derivatives. Farmer Mac's $1.0 billion of cash and cash equivalents held as of December 31, 2024 mature within three months.
Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one ore more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques. 93 The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of December 31, 2023 by year of origination, geographic region, and commodity/collateral type.
Enterprise Value is the estimated value of the borrower as a going concern, which is estimated using one or more valuation techniques such as discounted cash flow, cash flow multiples, asset liquidation, or other valuation techniques. 92 The following table presents Farmer Mac's cumulative net credit losses relative to the cumulative original balance for all Agricultural Finance mortgage loans as of December 31, 2024 by year of origination, geographic region, and commodity/collateral type.
As of December 31, 2023, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level).
As of December 31, 2024, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level).
Unlike depository institutions, Farmer Mac's funding strategies do not rely on deposits, allowing us to navigate beyond short-term liquidity disruptions and to take advantage of increased opportunities in a competitive lending environment.
Funding Unlike depository institutions, Farmer Mac's funding sources do not rely on deposits, allowing us to navigate beyond short-term liquidity disruptions and to potentially take advantage of increased opportunities in a competitive lending environment.
Farm Credit Bank of Texas (FCBT) 38,503 shares of Class B voting common stock (7.70% of outstanding Class B stock and 2.51% of total voting common stock outstanding) None In 2023 and 2022, Farmer Mac earned approximately $3.4 million and $2.9 million, respectively, in fees attributable to transactions with FCBT, primarily commitment fees for LTSPCs.
Farm Credit Bank of Texas (FCBT) 38,503 shares of Class B voting common stock (7.70% of outstanding Class B stock and 2.51% of total voting common stock outstanding) None In 2024 and 2023, Farmer Mac earned approximately $3.6 million and $3.4 million, respectively, in fees attributable to transactions with FCBT, primarily commitment fees for LTSPCs.
These growth opportunities may be affected by the demand for electric power in rural areas, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry.
These growth opportunities may be affected by the demand for electric power in rural areas, increased power demand from regional data centers, capital expenditures by electric cooperatives driven by regulatory or technological changes, the changing interest rate environment, increased policy initiatives to support rural connectivity, and competitive dynamics within the rural utilities cooperative finance industry.
In both 2023 and 2022, FCBT retained approximately $0.1 million in servicing fees for its work as a Farmer Mac servicer.
In both 2024 and 2023, FCBT retained approximately $0.1 million in servicing fees for its work as a Farmer Mac servicer.
Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values due to external factors. Markets and Weather. Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector.
Based on our robust collateral underwriting standards, we believe that our loan collateral is well-positioned to endure reasonably foreseeable volatility in farmland values that could result from external factors. Markets and Weather Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector.
For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Other Products – Rural Infrastructure Finance—AgVantage Securities." The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $6.1 billion as of December 31, 2023 and $6.0 billion as of December 31, 2022.
For a more detailed description of AgVantage securities, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Other Products – Agricultural Finance—AgVantage Securities" and "Business—Farmer Mac's Lines of Business—Infrastructure Finance—Other Products – Infrastructure Finance—AgVantage Securities." The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled $5.0 billion as of December 31, 2024 and $6.1 billion as of December 31, 2023.
Through December 31, 2023, Farmer Mac had not observed material degradation in the financial performance of its rural utilities portfolio, and that portfolio has never had a serious delinquency or default since its inception. Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure.
Through December 31, 2024, Farmer Mac had not observed material degradation in the financial performance of its Power & Utilities loans, and that portfolio has never had a serious delinquency or default since its inception. Credit demand for electric cooperatives will likely be tied to ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure.
This growth may lead to an increase in the average transaction size within Farmer Mac’s lines of business. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and rural infrastructure industries present further opportunities for Farmer Mac’s loan purchase products and other financing solutions.
Any such growth may lead to an increase in the average transaction size within Farmer Mac’s lines of business. The financing needs arising from mergers, acquisitions, consolidation, and vertical integration in the agricultural and infrastructure industries present further opportunities for Farmer Mac’s loan purchase products and other financing solutions.
As of December 31, 2023 and 2022, the average unpaid principal balances for Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $804,000 and $806,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value.
As of December 31, 2024 and 2023, the average unpaid principal balances for Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $817,000 and $804,000, respectively. Farmer Mac calculates the "original loan-to-value" ratio of a loan by dividing the original loan principal balance by the original appraised property value.
As of December 31, 2023, Farmer Mac had not experienced any credit losses on any AgVantage securities over the life of the program.
As of December 31, 2024, Farmer Mac had not experienced any credit losses on any AgVantage securities over the life of the program.
Changes in the fair values of undesignated financial derivatives are reported in "Gains on financial derivatives" in the consolidated statements of operations. For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations.
For financial derivatives designated in fair value hedge accounting relationships, changes in the fair values of the hedged items related to the risk being hedged are reported in "Net interest income" in the consolidated statements of operations.
The $2.7 billion in gross purchases was partially offset by $2.5 billion in scheduled maturities. The $90.5 million net increase in Corporate AgFinance during 2023 resulted from $0.9 billion of new purchases and unfunded loan commitments, which was partially offset by $0.8 billion of scheduled maturities, repayments, and paydowns on revolving commitments.
The $2.7 billion in gross purchases was partially offset by $2.5 billion in scheduled maturities. 72 The $0.1 billion net increase in Corporate AgFinance during 2023 resulted from $0.9 billion of new purchases and unfunded loan commitments, which was partially offset by $0.8 billion of scheduled maturities, repayments, and paydowns on revolving commitments.
Portions of Farmer Mac's callable debt is 100 issued to mitigate prepayment risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, prepayments typically increase, and Farmer Mac is able to economically extinguish certain callable debt issuances.
Portions of Farmer Mac's callable debt is issued to mitigate prepayment risk associated with certain interest-earning assets held on balance sheet. In general, as interest rates decline, asset prepayments typically increase, and Farmer Mac may be able to economically extinguish certain callable debt issuances.
The following tables present concentrations of Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit losses by origination year and commodity type: Table 28 As of December 31, 2023 Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region Crops Permanent Plantings Livestock Part-time Farm Ag.
The following tables present concentrations of Agricultural Finance mortgage loans by commodity type within geographic region and cumulative credit losses by origination year and commodity type: Table 27 As of December 31, 2024 Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region Crops Permanent Plantings Livestock Part-time Farm Ag.
Farmer Mac considers the fair value of AgVantage Securities that are classified as held-to-maturity (AgVantage HTM) because of their impact on the company's fair value disclosures in Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities and Note 13 to the consolidated financial statements – Fair Value Disclosures.
Farmer Mac considers the fair value of AgVantage Securities that are classified as held-to-maturity (AgVantage HTM) to be a critical estimate because of their impact on the company's fair value disclosures in Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities and Note 13 to the consolidated financial statements – Fair Value Disclosures.
Table 22 Name of Institution Ownership of Farmer Mac Voting Common Stock Affiliation with Any Farmer Mac Directors Primary Aspects of Institution's Business Relationship with Farmer Mac AgFirst Farm Credit Bank 84,024 shares of Class B voting common stock (16.79% of outstanding Class B stock and 5.49% of total voting common stock outstanding) None In 2023 and 2022, Farmer Mac earned approximately $1.4 million and $1.2 million, respectively, in fees attributable to transactions with AgFirst, primarily commitment fees for LTSPCs. 80 Name of Institution Ownership of Farmer Mac Voting Common Stock Affiliation with Any Farmer Mac Directors Primary Aspects of Institution's Business Relationship with Farmer Mac AgriBank, FCB 201,621 shares of Class B voting common stock (40.30% of outstanding Class B stock and 13.17% of total voting common stock outstanding) None Farmer Mac did not conduct any business with AgriBank during 2023 or 2022.
Table 21 Name of Institution Ownership of Farmer Mac Voting Common Stock Affiliation with Any Farmer Mac Directors Primary Aspects of Institution's Business Relationship with Farmer Mac AgFirst Farm Credit Bank 84,024 shares of Class B voting common stock (16.79% of outstanding Class B stock and 5.49% of total voting common stock outstanding) None In 2024 and 2023, Farmer Mac earned approximately $1.3 million and $1.4 million, respectively, in fees attributable to transactions with AgFirst, primarily commitment fees for LTSPCs. 77 Name of Institution Ownership of Farmer Mac Voting Common Stock Affiliation with Any Farmer Mac Directors Primary Aspects of Institution's Business Relationship with Farmer Mac AgriBank, FCB 201,621 shares of Class B voting common stock (40.30% of outstanding Class B stock and 13.17% of total voting common stock outstanding) None Farmer Mac did not conduct any business with AgriBank during 2024 or 2023.
As of both December 31, 2023 and 2022, there were no 90-day delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loan purchases and loans underlying LTSPCs.
As of both December 31, 2024 and 2023, there were no 90-day delinquencies in Farmer Mac's portfolio of Infrastructure Finance loan purchases and loans underlying LTSPCs.
Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in "Gains/(losses) due to 71 terminations or net settlements" in the table above. See Note 6 to the consolidated financial statements for more information about Farmer Mac's financial derivatives.
Treasury security futures and initial cash 69 payments received upon the inception of certain undesignated swaps are included in "Gains due to terminations or net settlements" in the table above. See Note 6 to the consolidated financial statements for more information about Farmer Mac's financial derivatives. Operating Expenses .
Approximately 51% of the Class A voting common stock is held by four financial institutions, with 31% held by one institution. Approximately 97% of the Class B voting common stock is held by five FCS institutions (two of which are related to each other through a parent-subsidiary relationship).
Approximately 47% of the Class A voting common stock is held by three financial institutions, with 31% held by one institution. Approximately 97% of the Class B voting common stock is held by five FCS institutions (two of which are related to each other through a parent-subsidiary relationship).
Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 6 to the consolidated financial statements. Credit Risk – Other Investments . As of December 31, 2023, Farmer Mac had $0.9 billion of cash and cash equivalents and $5.0 billion of investment securities.
Credit risk related to interest rate swap contracts is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" and Note 6 to the consolidated financial statements. Credit Risk – Other Investments . As of December 31, 2024, Farmer Mac had $1.0 billion of cash and cash equivalents and $6.0 billion of investment securities.
Discount and Medium-term Notes . The following table presents the amount and timing of Farmer Mac's known, fixed, and determinable discount and medium-term note obligations by payment date as of December 31, 2023.
The following table presents the amount and timing of Farmer Mac's known, fixed, and determinable discount and medium-term note obligations by payment date as of December 31, 2024.
Farmer Mac relies upon this significant unobservable input to estimate the fair value of AgVantage because there are no observable transactions in these securities in the market. Farmer Mac's AgVantage HTM amortized cost was $4.2 billion and $1.0 billion as of December 31, 2023 and 2022, respectively.
Farmer Mac relies upon this significant unobservable input to estimate the fair value of AgVantage because there are no observable transactions in these securities in the market. Farmer Mac's AgVantage HTM amortized cost was $2.7 billion and $4.2 billion as of December 31, 2024 and 2023, respectively.
Farmer Mac also purchased $0.3 million and $2.1 million in Agricultural Finance mortgage loans from Bath State Bank in 2023 and 2022, respectively. CoBank, ACB 163,253 shares of Class B voting common stock (32.63% of outstanding Class B stock and 10.66% of total voting common stock outstanding) Farmer Mac director Everett M.
Farmer Mac also purchased $3.0 million and $0.3 million in Agricultural Finance mortgage loans from Bath State Bank in 2024 and 2023, respectively. CoBank, ACB 163,253 shares of Class B voting common stock (32.63% of outstanding Class B stock and 10.66% of total voting common stock outstanding) Former Farmer Mac director Everett M.
Lower consumer prices increased the volume of consumer spending but also limited the profit expansion of food and fiber businesses. Biofuels have gained more demand due to low-carbon regulations in several states and incremental tax benefits for the production of renewable diesel and sustainable aviation fuel.
Moderating consumer prices in 2023 and 2024 increased the volume of consumer spending but also limited the profit expansion of food and fiber businesses. Biofuels have gained demand due to low-carbon regulations in several states and incremental tax benefits for the production of renewable diesel and sustainable aviation fuel.
In response to this expected growth, Farmer Mac has hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represents a new and growing market opportunity for Farmer Mac. 87 Legislative and Regulatory Outlook .
In response to this expected growth, Farmer Mac has hired industry-specialized staff and deployed new financing products tailored to the renewable energy sector, which represents a new and growing market opportunity for Farmer Mac.
This discussion and analysis of financial condition and results of operations should be read together with Farmer Mac's consolidated financial statements and the related notes to the consolidated financial statements for the fiscal years ended December 31, 2023, 2022, and 2021.
This discussion and analysis of financial condition and results of operations should be read together with Farmer Mac's consolidated financial statements and the related notes to the consolidated financial statements for the fiscal year ended December 31, 2024, 2023, and 2022.
See Note 12 to the consolidated financial statements for more information about consolidation and Farmer Mac's off-balance sheet business activities. As of December 31, 2023 and 2022, outstanding off-balance sheet LTSPCs and Farmer Mac Guaranteed Securities totaled $4.1 billion and $3.9 billion, respectively.
See Note 12 to the consolidated financial statements for more information about consolidation and Farmer Mac's off-balance sheet business activities. As of December 31, 2024 and 2023, outstanding off-balance sheet LTSPCs and Farmer Mac Guaranteed Securities totaled $4.5 billion and $4.1 billion, respectively.
Some of the external market conditions that could adversely affect the farm and food sectors in 2024 include foreign trade and trade policy, supply chain disruptions, and 85 environmental conditions. The U.S. agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms and food.
Some of the external market conditions that could adversely affect the farm and food sectors into 2025 include foreign trade and trade policy, supply chain disruptions, and weather and environmental conditions. The U.S. agricultural sector has become increasingly dependent on foreign markets as a source of demand, making trade policy an important consideration for farms and food.
Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses." Rural Infrastructure Finance - Direct Credit Exposure Farmer Mac's direct credit exposure to Rural Infrastructure Finance loans held and loans underlying LTSPCs as of December 31, 2023 was $4.1 billion across 45 states.
Activity affecting the allowance for loan losses and reserve for losses is discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for and Release of Allowance for Loan Losses and Reserve for Losses." Infrastructure Finance - Direct Credit Exposure Farmer Mac's direct credit exposure to Infrastructure Finance loans held and loans underlying LTSPCs as of December 31, 2024 was $5.5 billion across 45 states.
The $56.6 million year-over-year increase in net interest income was primarily due to a $48.9 million decrease in funding costs and a $19.9 million increase related to net new business volume.
The $56.6 million year-over-year increase in net interest income for 2023 compared to 2022 was primarily due to a $48.9 million decrease in funding costs and a $19.9 million increase related to net new business volume.
For loans in other areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting standards include an assessment of anticipated long-term water availability for the related property and how water availability impacts the collateral value and the borrower's liquidity position to mitigate that risk. Ag Processing and Food Supply Chain.
For loans in areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting standards include an assessment of anticipated long-term water availability for the related property and how water availability impacts the collateral value and the borrower's liquidity position to mitigate that risk.
As of December 31, 2023, there was one telecommunications loan classified as substandard, with an unpaid principal balance of $29.4 million. Farmer Mac evaluates credit risk of Rural Infrastructure assets by reviewing a variety of borrower credit risk characteristics.
As of December 31, 2023, there was one Broadband Infrastructure borrower classified as substandard, with an unpaid principal balance of $29.4 million. Farmer Mac evaluates credit risk of Infrastructure Finance assets by reviewing a variety of borrower credit risk characteristics.
(2) Includes current portion of long-term notes. (3) Excludes interest expense of $30.0 million, $27.4 million, and $34.1 million in 2023, 2022, and 2021, respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). (4) Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class).
(2) Includes current portion of long-term notes. (3) Excludes interest expense of $33.9 million, $30.0 million, and $27.4 million in 2024, 2023, and 2022 respectively, related to consolidated trusts with beneficial interests owned by third parties (single-class). (4) Includes the effect of consolidated trusts with beneficial interests owned by third parties (single-class).
The fair value of AgVantage HTM had net unrealized losses in the amount of $34.8 million and $53.7 million as of December 31, 2023 and 2022, respectively. See Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities for more information.
The fair value of AgVantage HTM had net unrealized losses in the amount of $15.6 million and $34.8 million as of December 31, 2024 and 2023, respectively. See Note 5 to the consolidated financial statements – Farmer Mac Guaranteed Securities and USDA Securities for more information.
As of December 31, 2023 and 2022, Farmer Mac's Tier 1 capital ratio was 15.4% and 14.9%, respectively. As of December 31, 2023, Farmer Mac was in compliance with its capital adequacy policy.
As of December 31, 2024 and 2023, Farmer Mac's Tier 1 capital ratio was 14.2% and 15.4%, respectively. As of December 31, 2024, Farmer Mac was in compliance with its capital adequacy policy.
The $71.5 million year-over-year increase in net effective spread was primarily due to a $54.6 million decrease in non-GAAP funding costs, due to the same factors mentioned above that decreased our funding costs, and a $20.6 million increase related to net new business volume.
The $71.5 million year-over-year increase in net effective spread for 2023 compared to 2022 was primarily due to a $54.6 million decrease in funding costs, due to the same factors mentioned above that decreased our funding costs, and a $20.6 million increase related to net new business volume.
Table 7 Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share For the Years Ended December 31, 2023 2022 2021 (in thousands, except per share amounts) GAAP - Basic EPS $ 15.97 $ 14.00 $ 10.36 Less reconciling items: Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 13) 0.49 1.25 (0.13) (Losses)/gains on hedging activities due to fair value changes (0.50) 0.50 (0.17) Unrealized gains/(losses) on trading securities 0.18 (0.08) (0.01) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 0.02 — 0.01 Net effects of terminations or net settlements on financial derivatives 0.02 1.47 0.04 Income tax effect related to reconciling items (0.04) (0.66) 0.06 Sub-total 0.17 2.48 (0.20) Core Earnings - Basic EPS $ 15.80 $ 11.52 $ 10.56 Shares used in per share calculation (GAAP and Core Earnings) 10,829 10,791 10,758 Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share For the Years Ended December 31, 2023 2022 2021 (in thousands, except per share amounts) GAAP - Diluted EPS $ 15.81 $ 13.87 $ 10.27 Less reconciling items: Gains/(losses) on undesignated financial derivatives due to fair value changes (see Table 13) 0.47 1.24 (0.13) (Losses)/gains on hedging activities due to fair value changes (0.49) 0.49 (0.17) Unrealized gains/(losses) on trading securities 0.18 (0.08) (0.01) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 0.02 — 0.01 Net effects of terminations or net settlements on financial derivatives 0.02 1.45 0.05 Income tax effect related to reconciling items (0.04) (0.65) 0.05 Sub-total 0.16 2.45 (0.20) Core Earnings - Diluted EPS $ 15.65 $ 11.42 $ 10.47 Shares used in per share calculation (GAAP and Core Earnings) 10,937 10,883 10,846 The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are: 1.
Table 7 Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share For the Years Ended December 31, 2024 2023 2022 (in thousands, except per share amounts) GAAP - Basic EPS $ 16.59 $ 15.97 $ 14.00 Less reconciling items: Gains on undesignated financial derivatives due to fair value changes (see Table 13) 0.31 0.49 1.25 Gains/(losses) on hedging activities due to fair value changes 1.06 (0.50) 0.50 Unrealized (losses)/gains on trading securities (0.01) 0.18 (0.08) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — 0.02 — Net effects of terminations or net settlements on financial derivatives (0.15) 0.02 1.47 Issuance costs on the retirement of preferred stock (0.15) — — Income tax effect related to reconciling items (0.25) (0.04) (0.66) Sub-total 0.81 0.17 2.48 Core Earnings - Basic EPS $ 15.78 $ 15.80 $ 11.52 Shares used in per share calculation (GAAP and Core Earnings) 10,874 10,829 10,791 Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share For the Years Ended December 31, 2024 2023 2022 (in thousands, except per share amounts) GAAP - Diluted EPS $ 16.44 $ 15.81 $ 13.87 Less reconciling items: Gains on undesignated financial derivatives due to fair value changes (see Table 13) 0.30 0.47 1.24 Gains/(losses) on hedging activities due to fair value changes 1.05 (0.49) 0.49 Unrealized (losses)/gains on trading securities (0.01) 0.18 (0.08) Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — 0.02 — Net effects of terminations or net settlements on financial derivatives (0.14) 0.02 1.45 Issuance costs on the retirement of preferred stock (0.15) — — Income tax effect related to reconciling items (0.25) (0.04) (0.65) Sub-total 0.80 0.16 2.45 Core Earnings - Diluted EPS $ 15.64 $ 15.65 $ 11.42 Shares used in per share calculation (GAAP and Core Earnings) 10,975 10,937 10,883 64 The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are: 1.
The components of gains and losses on financial derivatives for the years ended December 31, 2023, 2022, and 2021 are summarized in the following table: Table 13 For the Years Ended December 31, 2023 2022 2021 (dollars in thousands) Gains/(losses) due to fair value changes $ 5,142 $ 13,495 $ (1,431) Accrual of contractual payments (4,845) (7,756) 2,841 Gains/(losses) due to terminations or net settlements 2,585 16,892 (1,086) Gains on financial derivatives $ 2,882 $ 22,631 $ 324 These changes in fair value are primarily the result of fluctuations in long-term interest rates.
The components of gains and losses on financial derivatives for the years ended December 31, 2024, 2023, and 2022 are summarized in the following table: Table 13 For the Years Ended December 31, 2024 2023 2022 (dollars in thousands) Gains due to fair value changes $ 3,344 $ 5,142 $ 13,495 Accrual of contractual payments (1,377) (4,845) (7,756) Gains due to terminations or net settlements 669 2,585 16,892 Gains on financial derivatives $ 2,636 $ 2,882 $ 22,631 These changes in fair value are primarily the result of fluctuations in long-term interest rates.

… 280 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed1 unchanged
Biggest changeSee "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" for more information about Farmer Mac's exposure to interest rate risk and its strategies to manage that risk. For 113 information about Farmer Mac's use of financial derivatives and related accounting policies, see Note 6 to the consolidated financial statements.
Biggest changeSee "Management's Discussion and Analysis of 112 Financial Condition and Results of Operations—Risk Management—Interest Rate Risk" for more information about Farmer Mac's exposure to interest rate risk and its strategies to manage that risk. For information about Farmer Mac's use of financial derivatives and related accounting policies, see Note 6 to the consolidated financial statements.

Other AGM 10-K year-over-year comparisons