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As filed with the Securities and Exchange Commission on ~~August 7,~~November 6, 2023

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____.

Commission File Number 001-14951


FEDERAL AGRICULTURAL MORTGAGE CORPORATION
(Exact name of registrant as specified in its charter)


Federally chartered instrumentality of the United States		52-1578738
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

1999 K Street, N.W., 4th Floor,
Washington,	DC	20006
(Address of principal executive offices)		(Zip code)


(202)			872-7700
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Exchange on which registered

Class A voting common stock

AGM.A

New York Stock Exchange

Class C non-voting common stock

AGM

New York Stock Exchange

6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C

AGM.PRC

New York Stock Exchange

5.700% Non-Cumulative Preferred Stock, Series D

AGM.PRD

New York Stock Exchange

5.750% Non-Cumulative Preferred Stock, Series E

AGM.PRE

New York Stock Exchange

5.250% Non-Cumulative Preferred Stock, Series F

AGM.PRF

New York Stock Exchange

4.875% Non-Cumulative Preferred Stock, Series G

AGM.PRG

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: Class B voting common stock

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of ~~August 1,~~October 31, 2023, the registrant had outstanding 1,030,780 shares of Class A voting common stock, 500,301 shares of Class B voting common stock, and ~~9,305,937~~9,309,771 shares of Class C non-voting common stock.

Table of Contents



PART I		3
	Financial Statements	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Equity	6
	Consolidated Statements of Cash Flows	78
	Notes to Consolidated Financial Statements	89
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	6261
	Forward-Looking Statements	6261
	Overview	6463
	Use of Non-GAAP Measures	6867
	Results of Operations	7069
	Outlook	8687
	Balance Sheet Review	9293
	Risk Management	9293
	Liquidity and Capital Resources	110
	Other Matters	~~111~~112
	Supplemental Information	112
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	116
Item 4.	Controls and Procedures	117
PART II		118
Item 1.	Legal Proceedings	118
Item 1A.	Risk Factors	118
Item 2.	Item 2. Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	118
Item 3.	Defaults Upon Senior Securities	118
Item 4.	Mine Safety Disclosures	~~118~~119
Item 5.	Other Information	~~118~~119
Item 6.	Exhibits	~~119~~120
Signatures		~~120~~121

PART I

Item 1.Financial Statements

~~FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(unaudited)~~

As of
June 30, 2023 December 31, 2022
(in thousands)
Assets:
Cash and cash equivalents $ 874,090 $ 861,002
Investment securities:
Available-for-sale, at fair value (amortized cost of $4,894,715 and $4,769,426, respectively) 4,717,619 4,579,564
Held-to-maturity, at amortized cost 45,032 45,032
Other investments 5,164 3,672
Total Investment Securities 4,767,815 4,628,268
Farmer Mac Guaranteed Securities:
Available-for-sale, at fair value (amortized cost of $8,159,474 and $8,019,495, respectively) 7,745,415 7,607,226
Held-to-maturity, at amortized cost 849,828 1,021,154
Total Farmer Mac Guaranteed Securities 8,595,243 8,628,380
USDA Securities:
Trading, at fair value 1,348 1,767
Held-to-maturity, at amortized cost 2,336,212 2,409,834
Total USDA Securities 2,337,560 2,411,601
Loans:
Loans held for investment, at amortized cost 9,129,176 9,008,979
Loans held for investment in consolidated trusts, at amortized cost 1,448,180 1,211,576
Allowance for losses (16,748) (15,089)
Total loans, net of allowance 10,560,608 10,205,466
Financial derivatives, at fair value 26,824 37,409
Accrued interest receivable (includes $15,737 and $12,514, respectively, related to consolidated trusts) 233,529 229,061
Guarantee and commitment fees receivable 46,181 47,151
Deferred tax asset, net 3,302 18,004
Prepaid expenses and other assets 214,413 266,768
Total Assets $ 27,659,565 $ 27,333,110
Liabilities and Equity:
Liabilities:
Notes payable $ 24,510,004 $ 24,469,113
Debt securities of consolidated trusts held by third parties 1,357,763 1,181,948
Financial derivatives, at fair value 188,652 175,326
Accrued interest payable (includes $8,556 and $8,081, respectively, related to consolidated trusts) 143,977 117,887
Guarantee and commitment obligation 45,873 46,582
Accounts payable and accrued expenses 65,036 68,863
Reserve for losses 1,705 1,433
Total Liabilities 26,313,010 26,061,152
Commitments and Contingencies (Note 6)
Equity:
Preferred stock:
Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding 73,382 73,382
Series D, par value $25 per share, 4,000,000 shares authorized, issued and outstanding 96,659 96,659
Series E, par value $25 per share, 3,180,000 shares authorized, issued and outstanding 77,003 77,003
Series F, par value $25 per share, 4,800,000 shares authorized, issued and outstanding 116,160 116,160
Series G, par value $25 per share, 5,000,000 shares authorized, issued and outstanding 121,327 121,327
Common stock:
Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding 1,031 1,031
Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding 500 500
Class C Non-Voting, $1 par value, no maximum authorization, 9,305,477 shares and 9,270,265 shares outstanding, respectively 9,305 9,270
Additional paid-in capital 130,147 128,939
Accumulated other comprehensive loss, net of tax (34,351) (50,843)
Retained earnings 755,392 698,530
Total Equity 1,346,555 1,271,958
Total Liabilities and Equity $ 27,659,565 $ 27,333,110

~~The accompanying notes are an integral part of these consolidated financial statements.~~

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(unaudited)


	As of
	September 30, 2023		December 31, 2022
	(in thousands)
Assets:
Cash and cash equivalents	$	782,318	$	861,002
Investment securities:
Available-for-sale, at fair value (amortized cost of $5,114,476 and $4,769,426, respectively)	4,873,414		4,579,564
Held-to-maturity, at amortized cost	45,032		45,032
Other investments	5,807		3,672
Total Investment Securities	4,924,253		4,628,268
Farmer Mac Guaranteed Securities:
Available-for-sale, at fair value (amortized cost of $5,536,437 and $8,019,495, respectively)	5,058,697		7,607,226
Held-to-maturity, at amortized cost	4,157,414		1,021,154
Total Farmer Mac Guaranteed Securities	9,216,111		8,628,380
USDA Securities:
Trading, at fair value	1,302		1,767
Held-to-maturity, at amortized cost	2,322,355		2,409,834
Total USDA Securities	2,323,657		2,411,601
Loans:

Loans held for investment, at amortized cost	9,130,933		9,008,979
Loans held for investment in consolidated trusts, at amortized cost	1,422,854		1,211,576
Allowance for losses	(16,614)		(15,089)
Total loans, net of allowance	10,537,173		10,205,466

Financial derivatives, at fair value	28,855		37,409
Accrued interest receivable (includes $10,666 and $12,514, respectively, related to consolidated trusts)	230,523		229,061
Guarantee and commitment fees receivable	49,809		47,151
Deferred tax asset, net	4,711		18,004
Prepaid expenses and other assets	213,971		266,768
Total Assets	$	28,311,381	$	27,333,110

Liabilities and Equity:
Liabilities:


Notes payable	$	25,123,545	$	24,469,113
Debt securities of consolidated trusts held by third parties	1,334,014		1,181,948
Financial derivatives, at fair value	188,362		175,326
Accrued interest payable (includes $6,568 and $8,081, respectively, related to consolidated trusts)	172,150		117,887
Guarantee and commitment obligation	47,607		46,582
Accounts payable and accrued expenses	58,776		68,863

Reserve for losses	1,660		1,433
Total Liabilities	26,926,114		26,061,152
Commitments and Contingencies (Note 6)
Equity:
Preferred stock:
Series C, par value $25 per share, 3,000,000 shares authorized, issued and outstanding	73,382		73,382
Series D, par value $25 per share, 4,000,000 shares authorized, issued and outstanding	96,659		96,659
Series E, par value $25 per share, 3,180,000 shares authorized, issued and outstanding	77,003		77,003
Series F, par value $25 per share, 4,800,000 shares authorized, issued and outstanding	116,160		116,160
Series G, par value $25 per share, 5,000,000 shares authorized, issued and outstanding	121,327		121,327
Common stock:
Class A Voting, $1 par value, no maximum authorization, 1,030,780 shares outstanding	1,031		1,031
Class B Voting, $1 par value, no maximum authorization, 500,301 shares outstanding	500		500
Class C Non-Voting, $1 par value, no maximum authorization, 9,309,351 shares and 9,270,265 shares outstanding, respectively	9,309		9,270
Additional paid-in capital	130,921		128,939
Accumulated other comprehensive loss, net of tax	(35,839)		(50,843)
Retained earnings	794,814		698,530
Total Equity	1,385,267		1,271,958
Total Liabilities and Equity	$	28,311,381	$	27,333,110

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


		For the Three Months Ended				For the Six Months Ended				For the Three Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(in thousands, except per share amounts)								(in thousands, except per share amounts)
Interest income:	Interest income:										Interest income:
Investments and cash equivalents	Investments and cash equivalents	$	69,779	$	11,200	$	129,482	$	16,916		Investments and cash equivalents	$	79,947	$	21,581	$	209,429	$	38,497
Farmer Mac Guaranteed Securities and USDA Securities	Farmer Mac Guaranteed Securities and USDA Securities	144,761		51,616		281,298		94,536			Farmer Mac Guaranteed Securities and USDA Securities	161,351		74,695		442,649		169,231
Loans	Loans	129,292		76,632		248,324		143,879			Loans	140,513		97,514		388,837		241,393
Total interest income	Total interest income	343,832		139,448		659,104		255,331			Total interest income	381,811		193,790		1,040,915		449,121
Total interest expense	Total interest expense	265,155		75,534		501,369		125,879			Total interest expense	294,168		125,937		795,537		251,816
Net interest income	Net interest income	78,677		63,914		157,735		129,452			Net interest income	87,643		67,853		245,378		197,305
(Provision for)/release of losses		(1,073)		1,372		(1,620)		1,316
Net interest income after (provision for)/release of losses		77,604		65,286		156,115		130,768
Release of/(provision for) losses											Release of/(provision for) losses	136		(617)		(1,484)		699
Net interest income after release of/(provision for) losses											Net interest income after release of/(provision for) losses	87,779		67,236		243,894		198,004
Non-interest income/(expense):	Non-interest income/(expense):										Non-interest income/(expense):
Guarantee and commitment fees	Guarantee and commitment fees	3,489		3,213		7,422		6,908			Guarantee and commitment fees	5,520		2,643		12,942		9,551
Gains on financial derivatives	Gains on financial derivatives	1,693		3,791		2,092		20,779			Gains on financial derivatives	2,671		772		4,763		21,551

(Losses)/gains on trading securities	(Losses)/gains on trading securities	(9)		29		16		(34)			(Losses)/gains on trading securities	(2)		(41)		14		(75)

(Provision for)/release of reserve for losses		(69)		163		(272)		273
Release of/(provision for) reserve for losses											Release of/(provision for) reserve for losses	45		167		(227)		440
Other income	Other income	767		479		1,968		1,154			Other income	1,271		651		3,239		1,805
Non-interest income	Non-interest income	5,871		7,675		11,226		29,080			Non-interest income	9,505		4,192		20,731		33,272
Operating expenses:	Operating expenses:										Operating expenses:
Compensation and employee benefits	Compensation and employee benefits	13,937		11,715		29,288		25,013			Compensation and employee benefits	14,103		11,648		43,391		36,661
General and administrative	General and administrative	9,420		7,520		16,947		14,798			General and administrative	9,100		6,919		26,047		21,717
Regulatory fees	Regulatory fees	831		813		1,666		1,625			Regulatory fees	831		812		2,497		2,437

Operating expenses	Operating expenses	24,188		20,048		47,901		41,436			Operating expenses	24,034		19,379		71,935		60,815
Income before income taxes	Income before income taxes	59,287		52,913		119,440		118,412			Income before income taxes	73,250		52,049		192,690		170,461
Income tax expense	Income tax expense	12,075		11,058		25,193		25,104			Income tax expense	15,113		10,631		40,306		35,735

Net income	Net income	47,212		41,855		94,247		93,308			Net income	58,137		41,418		152,384		134,726
Preferred stock dividends	Preferred stock dividends	(6,791)		(6,792)		(13,582)		(13,583)			Preferred stock dividends	(6,792)		(6,791)		(20,374)		(20,374)

Net income attributable to common stockholders	Net income attributable to common stockholders	$	40,421	$	35,063	$	80,665	$	79,725		Net income attributable to common stockholders	$	51,345	$	34,627	$	132,010	$	114,352

Earnings per common share:	Earnings per common share:										Earnings per common share:
Basic earnings per common share	Basic earnings per common share	$	3.73	$	3.25	$	7.46	$	7.40		Basic earnings per common share	$	4.74	$	3.21	$	12.20	$	10.61
Diluted earnings per common share	Diluted earnings per common share	$	3.70	$	3.23	$	7.39	$	7.33		Diluted earnings per common share	$	4.69	$	3.18	$	12.08	$	10.51

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


		For the Three Months Ended				For the Six Months Ended				For the Three Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(in thousands										(in thousands
Net income	Net income	$	47,212	$	41,855	$	94,247	$	93,308		Net income	$	58,137	$	41,418	$	152,384	$	134,726
Other comprehensive income/(loss):	Other comprehensive income/(loss):										Other comprehensive income/(loss):
Net unrealized gains/(losses) on available-for-sale securities	Net unrealized gains/(losses) on available-for-sale securities	23,334		(30,179)		23,992		(116,446)			Net unrealized gains/(losses) on available-for-sale securities	22,076		(41,827)		46,068		(158,273)
Net changes in held-to-maturity securities	Net changes in held-to-maturity securities	(321)		865		(1,103)		842			Net changes in held-to-maturity securities	(31,525)		(622)		(32,628)		220
Net unrealized gains/(losses) on cash flow hedges		9,279		16,884		(2,013)		48,088
Other comprehensive income/(loss) before tax		32,292		(12,430)		20,876		(67,516)
Income tax (expense)/benefit related to other comprehensive income/(loss)		(6,781)		2,611		(4,384)		14,179
Other comprehensive income/(loss) net of tax		25,511		(9,819)		16,492		(53,337)
Net unrealized gains on cash flow hedges											Net unrealized gains on cash flow hedges	7,566		24,596		5,553		72,684
Other comprehensive (loss)/income before tax											Other comprehensive (loss)/income before tax	(1,883)		(17,853)		18,993		(85,369)
Income tax benefit/(expense) related to other comprehensive (loss)/income											Income tax benefit/(expense) related to other comprehensive (loss)/income	395		3,748		(3,989)		17,927
Other comprehensive (loss)/income net of tax											Other comprehensive (loss)/income net of tax	(1,488)		(14,105)		15,004		(67,442)

Comprehensive income	Comprehensive income	$	72,723	$	32,036	$	110,739	$	39,971		Comprehensive income	$	56,649	$	27,313	$	167,388	$	67,284

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)


										Accumulated															Accumulated
								Additional		Other													Additional		Other
		Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total			Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
		Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity			Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
		(in thousands)															(in thousands)
Balance as of December 31, 2022	Balance as of December 31, 2022	19,980	$	484,531	10,801	$	10,801	$	128,939	$	(50,843)	$	698,530	$	1,271,958	Balance as of December 31, 2022	19,980	$	484,531	10,801	$	10,801	$	128,939	$	(50,843)	$	698,530	$	1,271,958
Net Income	Net Income	—	—		—	—		—		—		47,035		47,035		Net Income	—	—		—	—		—		—		47,035		47,035
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—	—		—		(9,019)		—		(9,019)		Other comprehensive loss, net of tax	—	—		—	—		—		(9,019)		—		(9,019)
Cash dividends:	Cash dividends:															Cash dividends:
Preferred stock	Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)		Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $1.10 per share)	Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,882)		(11,882)		Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,882)		(11,882)
Issuance of Class C Common Stock	Issuance of Class C Common Stock	—	—		19	19		51		—		—		70		Issuance of Class C Common Stock	—	—		19	19		51		—		—		70
Stock-based compensation cost	Stock-based compensation cost	—	—		—	—		2,254		—		—		2,254		Stock-based compensation cost	—	—		—	—		2,254		—		—		2,254
Other stock-based award activity	Other stock-based award activity	—	—		—	—		(1,240)		—		—		(1,240)		Other stock-based award activity	—	—		—	—		(1,240)		—		—		(1,240)
Balance as of March 31, 2023	Balance as of March 31, 2023	19,980	$	484,531	10,820	$	10,820	$	130,004	$	(59,862)	$	726,892	$	1,292,385	Balance as of March 31, 2023	19,980	$	484,531	10,820	$	10,820	$	130,004	$	(59,862)	$	726,892	$	1,292,385
Net Income	Net Income	—	—		—	—		—		—		47,212		47,212		Net Income	—	—		—	—		—		—		47,212		47,212
Other comprehensive income, net of tax	Other comprehensive income, net of tax	—	—		—	—		—		25,511		—		25,511		Other comprehensive income, net of tax	—	—		—	—		—		25,511		—		25,511
Cash dividends:	Cash dividends:															Cash dividends:
Preferred stock	Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)		Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $1.10 per share)	Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,921)		(11,921)		Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,921)		(11,921)
Issuance of Class C Common Stock	Issuance of Class C Common Stock	—	—		16	16		54		—		—		70		Issuance of Class C Common Stock	—	—		16	16		54		—		—		70
Stock-based compensation cost	Stock-based compensation cost	—	—		—	—		1,223		—		—		1,223		Stock-based compensation cost	—	—		—	—		1,223		—		—		1,223
Other stock-based award activity	Other stock-based award activity	—	—		—	—		(1,134)		—		—		(1,134)		Other stock-based award activity	—	—		—	—		(1,134)		—		—		(1,134)
Balance as of June 30, 2023	Balance as of June 30, 2023	19,980	$	484,531	10,836	$	10,836	$	130,147	$	(34,351)	$	755,392	$	1,346,555	Balance as of June 30, 2023	19,980	$	484,531	10,836	$	10,836	$	130,147	$	(34,351)	$	755,392	$	1,346,555

Balance as of December 31, 2021		19,980	$	484,531	10,766	$	10,766	$	125,993	$	3,853	$	588,557	$	1,213,700
Net Income	Net Income	—	—		—	—		—		—		51,453		51,453		Net Income	—	—		—	—		—		—		58,137		58,137
Other comprehensive loss, net of tax	Other comprehensive loss, net of tax	—	—		—	—		—		(43,518)		—		(43,518)		Other comprehensive loss, net of tax	—	—		—	—		—		(1,488)		—		(1,488)
Cash dividends:	Cash dividends:															Cash dividends:
Preferred stock	Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)		Preferred stock	—	—		—	—		—		—		(6,792)		(6,792)
Common stock (cash dividend of $0.95 per share)		—	—		—	—		—		—		(10,229)		(10,229)
Common stock (cash dividend of $1.10 per share)																Common stock (cash dividend of $1.10 per share)	—	—		—	—		—		—		(11,923)		(11,923)
Issuance of Class C Common Stock	Issuance of Class C Common Stock	—	—		22	22		46		—		—		68		Issuance of Class C Common Stock	—	—		4	4		64		—		—		68
Stock-based compensation cost	Stock-based compensation cost	—	—		—	—		2,113		—		—		2,113		Stock-based compensation cost	—	—		—	—		1,221		—		—		1,221
Other stock-based award activity	Other stock-based award activity	—	—		—	—		(1,049)		—		—		(1,049)		Other stock-based award activity	—	—		—	—		(511)		—		—		(511)
Balance as of March 31, 2022		19,980	$	484,531	10,788	$	10,788	$	127,103	$	(39,665)	$	622,990	$	1,205,747
Net Income		—	—		—	—		—		—		41,855		41,855
Other comprehensive loss, net of tax		—	—		—	—		—		(9,819)		—		(9,819)
Cash dividends:
Preferred stock		—	—		—	—		—		—		(6,792)		(6,792)
Common stock (cash dividend of $0.95 per share)		—	—		—	—		—		—		(10,256)		(10,256)
Issuance of Class C Common Stock		—	—		9	9		46		—		—		55
Stock-based compensation cost		—	—		—	—		862		—		—		862
Other stock-based award activity		—	—		—	—		(442)		—		—		(442)
Balance as of June 30, 2022		19,980	$	484,531	10,797	$	10,797	$	127,569	$	(49,484)	$	647,797	$	1,221,210
Balance as of September 30, 2023																Balance as of September 30, 2023	19,980	$	484,531	10,840	$	10,840	$	130,921	$	(35,839)	$	794,814	$	1,385,267


									Accumulated
							Additional		Other
	Preferred Stock			Common Stock			Paid-In		Comprehensive		Retained		Total
	Shares	Amount		Shares	Amount		Capital		Income/(Loss)		Earnings		Equity
	(in thousands)
Balance as of December 31, 2021	19,980	$	484,531	10,766	$	10,766	$	125,993	$	3,853	$	588,557	$	1,213,700
Net Income	—	—		—	—		—		—		51,453		51,453
Other comprehensive loss, net of tax	—	—		—	—		—		(43,518)		—		(43,518)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $0.95 per share)	—	—		—	—		—		—		(10,229)		(10,229)
Issuance of Class C Common Stock	—	—		22	22		46		—		—		68
Stock-based compensation cost	—	—		—	—		2,113		—		—		2,113
Other stock-based award activity	—	—		—	—		(1,049)		—		—		(1,049)
Balance as of March 31, 2022	19,980	$	484,531	10,788	$	10,788	$	127,103	$	(39,665)	$	622,990	$	1,205,747
Net Income	—	—		—	—		—		—		41,855		41,855
Other comprehensive loss, net of tax	—	—		—	—		—		(9,819)		—		(9,819)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,792)		(6,792)
Common stock (cash dividend of $0.95 per share)	—	—		—	—		—		—		(10,256)		(10,256)
Issuance of Class C Common Stock	—	—		9	9		46		—		—		55
Stock-based compensation cost	—	—		—	—		862		—		—		862
Other stock-based award activity	—	—		—	—		(442)		—		—		(442)
Balance as of June 30, 2022	19,980	$	484,531	10,797	$	10,797	$	127,569	$	(49,484)	$	647,797	$	1,221,210
Net Income	—	—		—	—		—		—		41,418		41,418
Other comprehensive loss, net of tax	—	—		—	—		—		(14,105)		—		(14,105)
Cash dividends:
Preferred stock	—	—		—	—		—		—		(6,791)		(6,791)
Common stock (cash dividend of $0.95 per share)	—	—		—	—		—		—		(10,260)		(10,260)
Issuance of Class C Common Stock	—	—		3	3		48		—		—		51
Stock-based compensation cost	—	—		—	—		832		—		—		832
Other stock-based award activity	—	—		—	—		(332)		—		—		(332)
Balance as of September 30, 2022	19,980	$	484,531	10,800	$	10,800	$	128,117	$	(63,589)	$	672,164	$	1,232,023

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


		For the Six Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022
		(in thousands)				(in thousands)
Cash flows from operating activities:	Cash flows from operating activities:						Cash flows from operating activities:
Net income	Net income	$	94,247	$	93,308		Net income	$	152,384	$	134,726
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	(6,073)		2,819			Net amortization of deferred gains, premiums, and discounts on loans, investments, Farmer Mac Guaranteed Securities, and USDA Securities	(11,456)		2,456
Amortization of debt premiums, discounts, and issuance costs	Amortization of debt premiums, discounts, and issuance costs	13,514		5,655			Amortization of debt premiums, discounts, and issuance costs	22,851		11,839
Net change in fair value of trading securities, hedged assets, and financial derivatives	Net change in fair value of trading securities, hedged assets, and financial derivatives	69,056		488,280			Net change in fair value of trading securities, hedged assets, and financial derivatives	340,035		665,775

Total provision for/(release of) allowance for losses	Total provision for/(release of) allowance for losses	1,892		(1,589)			Total provision for/(release of) allowance for losses	1,711		(1,139)
Excess tax benefits related to stock-based awards	Excess tax benefits related to stock-based awards	257		(64)			Excess tax benefits related to stock-based awards	470		87
Deferred income taxes	Deferred income taxes	10,318		3,816			Deferred income taxes	9,304		14,820

Stock-based compensation expense	Stock-based compensation expense	3,478		2,975			Stock-based compensation expense	4,699		3,807

Proceeds from repayment of loans purchased as held for sale	Proceeds from repayment of loans purchased as held for sale	18,114		17,381			Proceeds from repayment of loans purchased as held for sale	19,364		31,086
Net change in:	Net change in:						Net change in:
Interest receivable	Interest receivable	(10,549)		(1,700)			Interest receivable	(7,116)		(1,931)
Guarantee and commitment fees receivable	Guarantee and commitment fees receivable	261		214			Guarantee and commitment fees receivable	(1,633)		991
Other assets	Other assets	(8,627)		(89,106)			Other assets	(7,903)		(144,031)
Accrued interest payable	Accrued interest payable	26,090		11,569			Accrued interest payable	54,263		31,818
Custodial deposit liability	Custodial deposit liability	(24,944)		(11,070)			Custodial deposit liability	(31,489)		(41,392)
Other liabilities	Other liabilities	(7,371)		3,522			Other liabilities	(2,836)		(2,654)
Net cash provided by operating activities	Net cash provided by operating activities	179,663		526,010			Net cash provided by operating activities	542,648		706,258
Cash flows from investing activities:	Cash flows from investing activities:						Cash flows from investing activities:
Purchases of available-for-sale investment securities	Purchases of available-for-sale investment securities	(857,168)		(1,439,695)			Purchases of available-for-sale investment securities	(1,381,795)		(1,789,932)
Purchases of other investment securities	Purchases of other investment securities	(1,492)		(308)			Purchases of other investment securities	(2,135)		(877)
Purchases of Farmer Mac Guaranteed Securities and USDA Securities	Purchases of Farmer Mac Guaranteed Securities and USDA Securities	(1,636,111)		(3,061,500)			Purchases of Farmer Mac Guaranteed Securities and USDA Securities	(3,182,678)		(4,308,083)
Purchases of loans held for investment	Purchases of loans held for investment	(1,045,498)		(1,466,667)			Purchases of loans held for investment	(1,520,116)		(2,122,360)

Proceeds from repayment of available-for-sale investment securities	Proceeds from repayment of available-for-sale investment securities	856,133		917,618			Proceeds from repayment of available-for-sale investment securities	1,146,861		1,103,046
Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities	Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities	1,739,248		2,867,305			Proceeds from repayment of Farmer Mac Guaranteed Securities and USDA Securities	2,578,193		3,933,894
Proceeds from repayment of loans purchased as held for investment	Proceeds from repayment of loans purchased as held for investment	662,458		726,196			Proceeds from repayment of loans purchased as held for investment	1,081,265		1,077,209
Proceeds from sale of loans previously classified as held for investment	Proceeds from sale of loans previously classified as held for investment	—		9,000			Proceeds from sale of loans previously classified as held for investment	—		9,000

Proceeds from sale of Farmer Mac Guaranteed Securities	Proceeds from sale of Farmer Mac Guaranteed Securities	—		25,928			Proceeds from sale of Farmer Mac Guaranteed Securities	—		47,212

Net cash used in investing activities	Net cash used in investing activities	(282,430)		(1,422,123)			Net cash used in investing activities	(1,280,405)		(2,050,891)
Cash flows from financing activities:	Cash flows from financing activities:						Cash flows from financing activities:
Proceeds from issuance of discount notes	Proceeds from issuance of discount notes	22,223,928		27,110,295			Proceeds from issuance of discount notes	36,018,319		40,788,399
Proceeds from issuance of medium-term notes	Proceeds from issuance of medium-term notes	3,139,016		4,797,774			Proceeds from issuance of medium-term notes	5,559,198		6,866,487
Proceeds from third parties from issuance of debt securities of consolidated trusts	Proceeds from third parties from issuance of debt securities of consolidated trusts	222,188		—			Proceeds from third parties from issuance of debt securities of consolidated trusts	222,188		258,198
Payments to redeem discount notes	Payments to redeem discount notes	(21,840,244)		(27,804,791)			Payments to redeem discount notes	(35,059,286)		(42,096,456)
Payments to redeem medium-term notes	Payments to redeem medium-term notes	(3,531,650)		(3,029,315)			Payments to redeem medium-term notes	(5,931,450)		(4,261,315)

Payments to third parties on debt securities of consolidated trusts	Payments to third parties on debt securities of consolidated trusts	(57,763)		(141,769)			Payments to third parties on debt securities of consolidated trusts	(91,118)		(198,463)
Proceeds from common stock issuance	Proceeds from common stock issuance	105		92			Proceeds from common stock issuance	169		140

Tax payments related to share-based awards	Tax payments related to share-based awards	(2,340)		(1,460)			Tax payments related to share-based awards	(2,847)		(1,789)

Dividends paid on common and preferred stock	Dividends paid on common and preferred stock	(37,385)		(34,068)			Dividends paid on common and preferred stock	(56,100)		(51,119)
Net cash provided by financing activities	Net cash provided by financing activities	115,855		896,758			Net cash provided by financing activities	659,073		1,304,082
Net change in cash and cash equivalents	Net change in cash and cash equivalents	13,088		645			Net change in cash and cash equivalents	(78,684)		(40,551)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	861,002		908,785			Cash and cash equivalents at beginning of period	861,002		908,785
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	874,090	$	909,430		Cash and cash equivalents at end of period	$	782,318	$	868,234


Non-cash activity:	Non-cash activity:			Non-cash activity:

Loans securitized as Farmer Mac Guaranteed Securities	Loans securitized as Farmer Mac Guaranteed Securities	4,174	25,928	Loans securitized as Farmer Mac Guaranteed Securities	10,573	47,212
Loans held for investment transferred to consolidated trusts	Loans held for investment transferred to consolidated trusts	281,027	—	Loans held for investment transferred to consolidated trusts	281,027	297,713
Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment	Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment	1,863	569	Reclassification of defaulted loans from loans held for investment in consolidated trusts to loans held for investment	3,078	1,781

Capitalized interest	Capitalized interest	—	443	Capitalized interest	—	446
Matured securities receivable	Matured securities receivable	(97,500)	—	Matured securities receivable	(77,445)	—
Charge-off from the allowance for losses	Charge-off from the allowance for losses	—	84	Charge-off from the allowance for losses	—	84
Borrowers' payments not yet received from servicers	Borrowers' payments not yet received from servicers	(22,468)	—	Borrowers' payments not yet received from servicers	(3,335)	—
Purchases of securities - traded, not yet settled	Purchases of securities - traded, not yet settled	20,262	—	Purchases of securities - traded, not yet settled	16,012	268,370
Transfers of available-for-sale Farmer Mac Guaranteed Securities to held-to-maturity				Transfers of available-for-sale Farmer Mac Guaranteed Securities to held-to-maturity	2,684,096	—

The accompanying notes are an integral part of these consolidated financial statements.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim unaudited consolidated financial statements of the Federal Agricultural Mortgage Corporation

("Farmer Mac") and subsidiaries have been prepared pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission ("SEC"). These interim unaudited consolidated financial statements

reflect all normal and recurring adjustments that are, in the opinion of management, necessary to present a

fair statement of the financial position and the results of operations and cash flows of Farmer Mac and

subsidiaries for the interim periods presented. Certain information and footnote disclosures normally

included in the annual consolidated financial statements have been omitted as permitted by SEC rules and

regulations. The December 31, 2022 consolidated balance sheet presented in this report has been derived

from Farmer Mac's audited 2022 consolidated financial statements, as revised. Management believes that

the disclosures are adequate to present fairly the consolidated financial statements as of the dates and for

the periods presented. These interim unaudited consolidated financial statements should be read in

conjunction with the 2022 consolidated financial statements of Farmer Mac and subsidiaries included in

Farmer Mac's Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC

on February 24, 2023. Results for interim periods are not necessarily indicative of those that may be

expected for the fiscal year. Presented below are Farmer Mac's significant accounting policies that contain

updated information for the three and ~~six~~nine months ended ~~June~~September 30, 2023.

Farmer Mac has revised its prior period financial information to correct an error that was not material to those previous consolidated financial statements, taken as a whole. For more information on the revision, refer to Note 11, Revision of Prior Period Financial Statements.

Principles of Consolidation

The consolidated financial statements include the accounts of Farmer Mac and its two subsidiaries: (1) Farmer Mac Mortgage Securities Corporation, whose principal activities are to facilitate the purchase and issuance of Farmer Mac Guaranteed Securities; and (2) Farmer Mac II LLC, whose principal activity is the operation of substantially all of the business related to the USDA Securities included in the Agricultural Finance line of business. The consolidated financial statements also include the accounts of Variable Interest Entities ("VIEs") in which Farmer Mac determined itself to be the primary beneficiary.

Table 1.1


		Consolidation of Variable Interest Entities							Consolidation of Variable Interest Entities
		As of June 30, 2023							As of September 30, 2023
		Agricultural Finance		Treasury		Total			Agricultural Finance		Treasury		Total
		(in thousands)							(in thousands)
On-Balance Sheet:	On-Balance Sheet:							On-Balance Sheet:
Consolidated VIEs:	Consolidated VIEs:							Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	Loans held for investment in consolidated trusts, at amortized cost	$	1,448,180	$	—	$	1,448,180	Loans held for investment in consolidated trusts, at amortized cost	$	1,422,854	$	—	$	1,422,854
Debt securities of consolidated trusts held by third parties (1)(2)	Debt securities of consolidated trusts held by third parties (1)(2)	1,357,763		—		1,357,763		Debt securities of consolidated trusts held by third parties (1)(2)	1,334,014		—		1,334,014
Unconsolidated VIEs:	Unconsolidated VIEs:							Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:	Farmer Mac Guaranteed Securities:							Farmer Mac Guaranteed Securities:
Carrying value	Carrying value	36,943		—		36,943		Carrying value	39,131		—		39,131
Maximum exposure to loss (3)	Maximum exposure to loss (3)	39,052		—		39,052		Maximum exposure to loss (3)	38,689		—		38,689
Investment securities:	Investment securities:							Investment securities:
Carrying value (4)	Carrying value (4)	—		3,491,306		3,491,306		Carrying value (4)	—		3,532,286		3,532,286
Maximum exposure to loss (3) (4)	Maximum exposure to loss (3) (4)	—		3,704,038		3,704,038		Maximum exposure to loss (3) (4)	—		3,809,871		3,809,871
Off-Balance Sheet:	Off-Balance Sheet:							Off-Balance Sheet:
Unconsolidated VIEs:	Unconsolidated VIEs:							Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:	Farmer Mac Guaranteed Securities:							Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	Maximum exposure to loss (3) (5)	481,397		—		481,397		Maximum exposure to loss (3) (5)	455,681		—		455,681

(1)Includes borrower remittances of ~~$0.9~~$0.4 million. The borrower remittances had not been passed through to third-party investors as of ~~June~~September 30, 2023.

(2)Includes ~~$91.2~~$89.2 million in unamortized discount related to structured securitization transactions.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities, and other mission related investments.

(5)The amount under the Agricultural Finance line of business relates to unconsolidated trusts where it was determined that Farmer Mac was either not the primary beneficiary due to shared power with an unrelated party or a subordinate class majority holder has the unilateral right to remove Farmer Mac as Master Servicer without cause.

910


	Consolidation of Variable Interest Entities
	As of December 31, 2022
	Agricultural Finance		Treasury		Total
	(in thousands)
On-Balance Sheet:
Consolidated VIEs:
Loans held for investment in consolidated trusts, at amortized cost	$	1,211,576	$	—	$	1,211,576
Debt securities of consolidated trusts held by third parties (1)(2)	1,181,948		—		1,181,948
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Carrying value	28,466		—		28,466
Maximum exposure to loss (3)	31,208		—		31,208
Investment securities:
Carrying value (4)	—		3,138,619		3,138,619
Maximum exposure to loss (3) (4)	—		3,341,427		3,341,427
Off-Balance Sheet:
Unconsolidated VIEs:
Farmer Mac Guaranteed Securities:
Maximum exposure to loss (3) (5)	500,953		—		500,953

(1)Includes borrower remittances of $8.1 million. The borrower remittances had not been passed through to third-party investors as of December 31, 2022.

(2)Includes $37.7 million in unamortized discount related to a structured securitization transaction.

(3)Farmer Mac uses unpaid principal balance and outstanding face amount of investment securities to represent maximum exposure to loss.

(4)Includes auction-rate certificates, government-sponsored enterprise ("GSE")-guaranteed mortgage-backed securities, and other mission related investments.

1011

(a)Earnings Per Common Share

Basic earnings per common share ("EPS") is based on the daily weighted-average number of shares of common stock outstanding. Diluted earnings per common share is based on the daily weighted-average number of shares of common stock outstanding adjusted to include all potentially dilutive stock appreciation rights ("SARs") and unvested restricted stock awards. The following schedule reconciles basic and diluted EPS for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 1.2


		For the Three Months Ended										For the Three Months Ended
		June 30, 2023					June 30, 2022						September 30, 2023				September 30, 2022
		Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share					Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
		(in thousands, except per share amounts)										(in thousands, except per share amounts)
Basic EPS	Basic EPS													Basic EPS
Net income attributable to common stockholders	Net income attributable to common stockholders	$	40,421	10,833	$	3.73	$	35,063	10,796	$	3.25			Net income attributable to common stockholders	$	51,345	10,839	$	4.74	$	34,627	10,799	$	3.21
Effect of dilutive securities(1)	Effect of dilutive securities(1)													Effect of dilutive securities(1)
SARs and restricted stock	SARs and restricted stock	—		83	(0.03)		—		68	(0.02)				SARs and restricted stock	—		99	(0.05)		—		75	(0.03)
Diluted EPS	Diluted EPS	$	40,421	10,916	$	3.70	$	35,063	10,864	$	3.23			Diluted EPS	$	51,345	10,938	$	4.69	$	34,627	10,874	$	3.18

(1)For the three months ended ~~June~~September 30, 2023 and 2022, SARs and restricted stock of ~~34,500~~16,761 and ~~42,922~~18,432 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the three months ended ~~June~~September 30, 2023 and 2022, contingent shares of unvested restricted stock of ~~32,282~~32,469 and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.


		For the Six Months Ended										For the Nine Months Ended
		June 30, 2023					June 30, 2022						September 30, 2023				September 30, 2022
		Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share					Net Income		Weighted-Average Shares	$ per Share		Net Income		Weighted-Average Shares	$ per Share
		(in thousands, except per share amounts)										(in thousands, except per share amounts)
Basic EPS	Basic EPS													Basic EPS
Net income attributable to common stockholders	Net income attributable to common stockholders	$	80,665	10,817	$	7.46	$	79,725	10,782	$	7.40			Net income attributable to common stockholders	$	132,010	10,825	$	12.20	$	114,352	10,787	$	10.61
Effect of dilutive securities(1)	Effect of dilutive securities(1)													Effect of dilutive securities(1)
SARs and restricted stock	SARs and restricted stock	—		100	(0.07)		—		94	(0.07)				SARs and restricted stock	—		99	(0.12)		—		88	(0.10)
Diluted EPS	Diluted EPS	$	80,665	10,917	$	7.39	$	79,725	10,876	$	7.33			Diluted EPS	$	132,010	10,924	$	12.08	$	114,352	10,875	$	10.51

(1)For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, SARs and restricted stock of ~~48,605~~37,990 and ~~46,464~~37,120 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because they were anti-dilutive. For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, contingent shares of unvested restricted stock of ~~32,282~~32,407 and 18,535 respectively, were outstanding but not included in the computation of diluted earnings per share of common stock because performance conditions had not yet been met.

(b)Comprehensive Income

Comprehensive income represents all changes in stockholders' equity except those resulting from investments by or distributions to stockholders, and is comprised of net income and unrealized gains and losses on available-for-sale securities, certain held-to-maturity securities transferred from the available-for-sale classification, and cash flow hedges, net of related taxes.

1112

The following table presents the changes in accumulated other comprehensive income ("AOCI"), net of tax, by component for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

Table 1.3


		As of June 30, 2023								As of June 30, 2022									As of September 30, 2023								As of September 30, 2022
		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total			Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total		Available-for-Sale Securities		Held-to-Maturity Securities		Cash Flow Hedges		Total
		(in thousands)																	(in thousands)

For the Three Months Ended:	For the Three Months Ended:																	For the Three Months Ended:
Beginning Balance	Beginning Balance	$	(115,041)	$	15,739	$	39,440	$	(59,862)	$	(75,083)	$	16,134	$	19,284	$	(39,665)	Beginning Balance	$	(96,607)	$	15,486	$	46,770	$	(34,351)	$	(98,924)	$	16,818	$	32,622	$	(49,484)
Other comprehensive income/(loss) before reclassifications	Other comprehensive income/(loss) before reclassifications	18,438		—		11,352		29,790		(23,839)		—		12,426		(11,413)		Other comprehensive income/(loss) before reclassifications	17,443		(25,199)		10,376		2,620		(33,041)		—		20,277		(12,764)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(4)		(253)		(4,022)		(4,279)		(2)		684		912		1,594		Amounts reclassified from AOCI	(4)		294		(4,398)		(4,108)		(2)		(492)		(847)		(1,341)
Net comprehensive income/(loss)	Net comprehensive income/(loss)	18,434		(253)		7,330		25,511		(23,841)		684		13,338		(9,819)		Net comprehensive income/(loss)	17,439		(24,905)		5,978		(1,488)		(33,043)		(492)		19,430		(14,105)
Ending Balance	Ending Balance	$	(96,607)	$	15,486	$	46,770	$	(34,351)	$	(98,924)	$	16,818	$	32,622	$	(49,484)	Ending Balance	$	(79,168)	$	(9,419)	$	52,748	$	(35,839)	$	(131,967)	$	16,326	$	52,052	$	(63,589)

For the Six Months Ended:
For the Nine Months Ended:																		For the Nine Months Ended:
Beginning Balance	Beginning Balance	$	(115,561)	$	16,357	$	48,361	$	(50,843)	$	(6,932)	$	16,153	$	(5,368)	$	3,853	Beginning Balance	$	(115,561)	$	16,357	$	48,361	$	(50,843)	$	(6,932)	$	16,153	$	(5,368)	$	3,853
Other comprehensive income/(loss) before reclassifications	Other comprehensive income/(loss) before reclassifications	18,963		—		5,900		24,863		(91,986)		—		35,489		(56,497)		Other comprehensive income/(loss) before reclassifications	36,406		(25,199)		16,277		27,484		(125,027)		—		55,766		(69,261)
Amounts reclassified from AOCI	Amounts reclassified from AOCI	(9)		(871)		(7,491)		(8,371)		(6)		665		2,501		3,160		Amounts reclassified from AOCI	(13)		(577)		(11,890)		(12,480)		(8)		173		1,654		1,819
Net comprehensive income/(loss)	Net comprehensive income/(loss)	18,954		(871)		(1,591)		16,492		(91,992)		665		37,990		(53,337)		Net comprehensive income/(loss)	36,393		(25,776)		4,387		15,004		(125,035)		173		57,420		(67,442)
Ending Balance	Ending Balance	$	(96,607)	$	15,486	$	46,770	$	(34,351)	$	(98,924)	$	16,818	$	32,622	$	(49,484)	Ending Balance	$	(79,168)	$	(9,419)	$	52,748	$	(35,839)	$	(131,967)	$	16,326	$	52,052	$	(63,589)

1213

The following table presents other comprehensive income activity, the impact on net income of amounts reclassified from each component of AOCI, and the related tax impact for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 1.4


		For the Three Months Ended												For the Three Months Ended
		June 30, 2023						June 30, 2022							September 30, 2023				September 30, 2022
		Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax					Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
		(in thousands)												(in thousands)
Other comprehensive income:	Other comprehensive income:															Other comprehensive income:
Available-for-sale-securities:	Available-for-sale-securities:															Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	Unrealized holding gains/(losses) on available-for-sale securities	$	23,339	$	4,901	$	18,438	$	(30,176)	$	(6,337)	$	(23,839)			Unrealized holding gains/(losses) on available-for-sale securities	$	22,081	$	4,638	$	17,443	$	(41,824)	$	(8,783)	$	(33,041)
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(1)	Net interest income(1)	—		—		—		—		—		—				Net interest income(1)	—		—		—		—		—		—

Other income(2)	Other income(2)	(5)		(1)		(4)		(3)		(1)		(2)				Other income(2)	(5)		(1)		(4)		(3)		(1)		(2)
Total	Total	$	23,334	$	4,900	$	18,434	$	(30,179)	$	(6,338)	$	(23,841)			Total	$	22,076	$	4,637	$	17,439	$	(41,827)	$	(8,784)	$	(33,043)
Held-to-maturity securities:	Held-to-maturity securities:															Held-to-maturity securities:
Change in fair value(3)																Change in fair value(3)	$	(31,898)	$	(6,699)	$	(25,199)	$	—	$	—	$	—
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(3)		(321)		(68)		(253)		865		181		684
Net interest income(4)																Net interest income(4)	373		79		294		(622)		(130)		(492)
Total	Total	$	(321)	$	(68)	$	(253)	$	865	$	181	$	684			Total	$	(31,525)	$	(6,620)	$	(24,905)	$	(622)	$	(130)	$	(492)
Cash flow hedges	Cash flow hedges															Cash flow hedges
Unrealized gains on cash flow hedges	Unrealized gains on cash flow hedges	$	14,370	$	3,018	$	11,352	$	15,729	$	3,303	$	12,426			Unrealized gains on cash flow hedges	$	13,135	$	2,759	$	10,376	$	25,668	$	5,391	$	20,277
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(4)		(5,091)		(1,069)		(4,022)		1,155		243		912
Net interest income(5)																Net interest income(5)	(5,569)		(1,171)		(4,398)		(1,072)		(225)		(847)
Total	Total	$	9,279	$	1,949	$	7,330	$	16,884	$	3,546	$	13,338			Total	$	7,566	$	1,588	$	5,978	$	24,596	$	5,166	$	19,430
Other comprehensive income/(loss)		$	32,292	$	6,781	$	25,511	$	(12,430)	$	(2,611)	$	(9,819)
Other comprehensive loss																Other comprehensive loss	$	(1,883)	$	(395)	$	(1,488)	$	(17,853)	$	(3,748)	$	(14,105)

(1)Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

(2)Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

(3)Represents the accumulated unrealized loss on the AgVantage Securities transferred from available-for-sale to held-to-maturity.

(4)Relates to the amortization of unrealized gains or losses prior to the reclassification of these securities from available-for-sale to held-to-maturity. The amortization of unrealized gains or losses reported in AOCI for held-to-maturity securities will be offset by the amortization of the premium or discount created from the transfer into held-to-maturity securities, which occurred at fair value. These unrealized gains or losses will be recorded over the remaining life of the security with no impact on future net income.

~~(4)~~(5)Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

1314


		For the Six Months Ended												For the Nine Months Ended
		June 30, 2023						June 30, 2022							September 30, 2023				September 30, 2022
		Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax					Before Tax		Provision (Benefit)		After Tax		Before Tax		Provision (Benefit)		After Tax
		(in thousands)												(in thousands)
Other comprehensive income:	Other comprehensive income:															Other comprehensive income:
Available-for-sale-securities:	Available-for-sale-securities:															Available-for-sale-securities:
Unrealized holding gains/(losses) on available-for-sale securities	Unrealized holding gains/(losses) on available-for-sale securities	$	24,003	$	5,040	$	18,963	$	(116,439)	$	(24,453)	$	(91,986)			Unrealized holding gains/(losses) on available-for-sale securities	$	46,084	$	9,678	$	36,406	$	(158,263)	$	(33,236)	$	(125,027)
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(1)	Net interest income(1)	—		—		—		—		—		—				Net interest income(1)	—		—		—		—		—		—

Other income(2)	Other income(2)	(11)		(2)		(9)		(7)		(1)		(6)				Other income(2)	(16)		(3)		(13)		(10)		(2)		(8)
Total	Total	$	23,992	$	5,038	$	18,954	$	(116,446)	$	(24,454)	$	(91,992)			Total	$	46,068	$	9,675	$	36,393	$	(158,273)	$	(33,238)	$	(125,035)
Held-to-maturity securities:	Held-to-maturity securities:															Held-to-maturity securities:
Change in fair value(3)																Change in fair value(3)	$	(31,898)	$	(6,699)	$	(25,199)	$	—	$	—	$	—
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(3)		(1,103)		(232)		(871)		842		177		665
Net interest income(4)																Net interest income(4)	(730)		(153)		(577)		220		47		173
Total	Total	$	(1,103)	$	(232)	$	(871)	$	842	$	177	$	665			Total	$	(32,628)	$	(6,852)	$	(25,776)	$	220	$	47	$	173
Cash flow hedges	Cash flow hedges															Cash flow hedges
Unrealized gains on cash flow hedges	Unrealized gains on cash flow hedges	$	7,469	$	1,569	$	5,900	$	44,922	$	9,433	$	35,489			Unrealized gains on cash flow hedges	$	20,604	$	4,327	$	16,277	$	70,590	$	14,824	$	55,766
Less reclassification adjustments included in:	Less reclassification adjustments included in:															Less reclassification adjustments included in:
Net interest income(4)		(9,482)		(1,991)		(7,491)		3,166		665		2,501
Net interest income(5)																Net interest income(5)	(15,051)		(3,161)		(11,890)		2,094		440		1,654
Total	Total	$	(2,013)	$	(422)	$	(1,591)	$	48,088	$	10,098	$	37,990			Total	$	5,553	$	1,166	$	4,387	$	72,684	$	15,264	$	57,420
Other comprehensive income/(loss)	Other comprehensive income/(loss)	$	20,876	$	4,384	$	16,492	$	(67,516)	$	(14,179)	$	(53,337)			Other comprehensive income/(loss)	$	18,993	$	3,989	$	15,004	$	(85,369)	$	(17,927)	$	(67,442)

(1)Relates to the amortization of unrealized gains on hedged items prior to the application of fair value hedge accounting.

(2)Represents amortization of deferred gains related to certain available-for-sale USDA Securities and Farmer Mac Guaranteed USDA Securities.

(3)Represents the accumulated unrealized loss on the AgVantage Securities transferred from available-for-sale to held-to-maturity.

~~(4)~~(5)Relates to the recognition of unrealized gains and losses on cash flow hedges recorded in AOCI.

1415

Recently Adopted Accounting Guidance


Standard	Description	Date of Adoption	Effect on Consolidated Financial Statements
ASU 2020-04 and 2021-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting	The amendments in this Update provide optional guidance for a limited period of time to ease the potential burden in accounting for reference rate reform on financial reporting. They provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.	January 1, 2020	During the ~~period,~~second quarter 2023, Farmer Mac adopted optional expedients including those relating to qualifying hedging relationships and contract modification relief, and as of June 30, 2023, has no further variable-rate exposure to LIBOR. To date, these elections did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows. Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.
ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848	The amendments in this Update deferred the sunset date in Topic 848 from December 31, 2022 to December 31, 2024.	December 21, 2022	Farmer Mac does not expect to elect further expedients through the ending date of December 31, 2024.
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures	The Update addresses and amends areas identified by the Financial Accounting Standards Board as part of its post-implementation review of the accounting standard that introduced the current expected credit losses (“CECL”) model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, the amendments require disclosure of current-period gross write offs for financing receivables and net investment in leases by year of origination in the vintage disclosures.	January 1, 2023	The adoption of this Update did not have a material effect on Farmer Mac's financial position, results of operations, or cash flows.
ASU 2022-01, Fair Value Hedging - Portfolio Layer Method	The Update introduces the portfolio layer method, which expands the current single-layer method to allow multiple hedged layers of a single closed portfolio under the method (previously named, last-of-layer method). Additionally, it expands the scope of the portfolio layer method to include non-prepayable assets, specifies eligible hedging instruments in a single-layer hedge, provides additional guidance on the accounting for and disclosure of hedge basis adjustments under the portfolio layer method, specifies how hedge basis adjustments should be considered when determining credit losses for the assets included in the closed portfolio, and provides that an entity may reclassify HTM debt securities identified within 30 days of the date of adoption to AFS if the entity applies portfolio layer method hedging to those debt securities.	January 1, 2023	Farmer Mac adopted this guidance as of January 1, 2023. Farmer Mac does not currently hedge interest rate risk for single closed portfolios of financial assets, so adoption of this guidance had no effect on Farmer Mac's financial condition, results of operations, cash flows, or disclosures given current strategies.

1516

(d) Reclassifications

Certain reclassifications of prior period information were made to conform to the current period presentation. The reclassifications of prior period information were not material to the consolidated financial statements.

2.INVESTMENT SECURITIES

The following tables set forth information about Farmer Mac's available-for-sale and held-to-maturity investment securities as of ~~June~~September 30, 2023 and December 31, 2022:

Table 2.1


		As of June 30, 2023															As of September 30, 2023
		Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value			Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
		(in thousands)															(in thousands)
Available-for-sale:	Available-for-sale:															Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—	$	19,700	$	(28)	$	—	$	(640)	$	19,032	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—	$	19,700	$	(27)	$	—	$	(640)	$	19,033

Floating rate Government/GSE guaranteed mortgage-backed securities	Floating rate Government/GSE guaranteed mortgage-backed securities	2,473,942		(1,348)		2,472,594		—		2,486		(32,470)		2,442,610		Floating rate Government/GSE guaranteed mortgage-backed securities	2,499,578		(1,170)		2,498,408		—		2,054		(34,917)		2,465,545
Fixed rate GSE guaranteed mortgage-backed securities	Fixed rate GSE guaranteed mortgage-backed securities	1,540,857		(45,223)		1,495,634		—		1,565		(136,415)		1,360,784		Fixed rate GSE guaranteed mortgage-backed securities	1,629,166		(45,118)		1,584,048		—		—		(197,670)		1,386,378
Floating rate U.S. Treasuries	Floating rate U.S. Treasuries	50,000		(30)		49,970		—		28		—		49,998		Floating rate U.S. Treasuries	50,000		(23)		49,977		—		34		—		50,011
Fixed rate U.S. Treasuries	Fixed rate U.S. Treasuries	863,760		(6,943)		856,817		—		—		(11,622)		845,195		Fixed rate U.S. Treasuries	978,585		(16,242)		962,343		—		—		(9,896)		952,447
Total available-for-sale	Total available-for-sale	4,948,259		(53,544)		4,894,715		(28)		4,079		(181,147)		4,717,619		Total available-for-sale	5,177,029		(62,553)		5,114,476		(27)		2,088		(243,123)		4,873,414
Held-to-maturity:	Held-to-maturity:															Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		237		—		45,269		Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		930		—		45,962
Total held-to-maturity	Total held-to-maturity	$	45,032	$	—	$	45,032	$	—	$	237	$	—	$	45,269	Total held-to-maturity	$	45,032	$	—	$	45,032	$	—	$	930	$	—	$	45,962

(1)Amounts presented exclude ~~$12.2~~$17.4 million of accrued interest receivable on investment securities as of ~~June~~September 30, 2023.

(2)Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the consolidated statement of operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

(3)The held-to-maturity investment securities had a weighted average yield of ~~6.3%~~6.5% as of ~~June~~September 30, 2023.

1617


	As of December 31, 2022
	Amount Outstanding		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,700	$	—	$	19,700	$	(33)	$	—	$	(640)	$	19,027

Floating rate Government/GSE guaranteed mortgage-backed securities	2,433,696		(200)		2,433,496		—		1,954		(42,910)		2,392,540
Fixed rate GSE guaranteed mortgage-backed securities	1,207,416		(30,321)		1,177,095		—		2,128		(130,837)		1,048,386
Fixed rate U.S. Treasuries	1,145,915		(6,780)		1,139,135		—		621		(20,145)		1,119,611
Total available-for-sale	4,806,727		(37,301)		4,769,426		(33)		4,703		(194,532)		4,579,564
Held-to-maturity:
Floating rate Government/GSE guaranteed mortgage-backed securities(3)	45,032		—		45,032		—		2,433		—		47,465
Total held-to-maturity	$	45,032	$	—	$	45,032	$	—	$	2,433	$	—	$	47,465

(1)Amounts presented exclude $10.6 million of accrued interest receivable on investment securities as of December 31, 2022.

(3)The held-to-maturity investment securities had a weighted average yield of 4.5% as of December 31, 2022.

Farmer Mac did not sell any securities from its available-for-sale investment portfolio during the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

As of ~~June~~September 30, 2023 and December 31, 2022, unrealized losses on available-for-sale investment securities were as follows:

Table 2.2


		As of June 30, 2023									As of September 30, 2023
		Available-for-Sale Securities									Available-for-Sale Securities
		Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months					Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
		(dollars in thousands)									(dollars in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,032	$	(640)	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,033	$	(640)

Floating rate Government/GSE guaranteed mortgage-backed securities	Floating rate Government/GSE guaranteed mortgage-backed securities	686,887		(5,392)		1,307,943		(27,078)		Floating rate Government/GSE guaranteed mortgage-backed securities	583,799		(4,076)		1,431,925		(30,841)
Fixed rate Government/GSE guaranteed mortgage-backed securities	Fixed rate Government/GSE guaranteed mortgage-backed securities	638,700		(24,472)		650,838		(111,943)		Fixed rate Government/GSE guaranteed mortgage-backed securities	535,288		(29,649)		851,082		(168,021)

Fixed rate U.S. Treasuries	Fixed rate U.S. Treasuries	379,728		(3,300)		465,468		(8,322)		Fixed rate U.S. Treasuries	655,068		(4,552)		297,378		(5,344)

Total	Total	$	1,705,315	$	(33,164)	$	2,443,281	$	(147,983)	Total	$	1,774,155	$	(38,277)	$	2,599,418	$	(204,846)

Number of securities in loss position	Number of securities in loss position			83				151		Number of securities in loss position			85				170

1718


	As of December 31, 2022
	Available-for-Sale Securities
	Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in thousands)
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,027	$	(640)
Floating rate Government/GSE guaranteed mortgage-backed securities	1,884,146		(36,976)		193,964		(5,934)
Fixed rate Government/GSE guaranteed mortgage-backed securities	621,215		(56,434)		336,782		(74,403)
Fixed rate U.S. Treasuries	314,524		(2,842)		704,780		(17,303)
Total	$	2,819,885	$	(96,252)	$	1,254,553	$	(98,280)

Number of securities in loss position			174				51

The unrealized losses presented above are principally due to a general widening of market spreads and changes in the levels of interest rates from the dates of acquisition to ~~June~~September 30, 2023 and December 31, 2022, as applicable. The resulting decrease in fair values reflects an increase in the perceived risk by the financial markets related to those securities. As of both ~~June~~September 30, 2023 and December 31, 2022, all of the investment securities in an unrealized loss position either were backed by the full faith and credit of the U.S. government, a U.S. government sponsored enterprise, or had credit ratings of at least "AA+."

Securities in unrealized loss positions for 12 months or longer have a fair value as of ~~June~~September 30, 2023 that is, on average, approximately ~~94.3%~~92.7% of their amortized cost basis. Farmer Mac believes that all of these unrealized losses are recoverable within a reasonable period of time by way of maturity, changes in credit spread, and changes in levels of interest rates.

The amortized cost, fair value, and weighted-average yield of available-for-sale investment securities by remaining contractual maturity as of ~~June~~September 30, 2023 are set forth below. Asset-backed and mortgage-backed securities are included based on their final maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 2.3


		As of June 30, 2023						As of September 30, 2023
		Available-for-Sale Securities						Available-for-Sale Securities
		Amortized Cost		Fair Value		Weighted- Average Yield		Amortized Cost		Fair Value		Weighted- Average Yield
		(dollars in thousands)						(dollars in thousands)
Due within one year	Due within one year	$	591,260	$	583,923	0.52%	Due within one year	$	589,475	$	584,714	1.35%
Due after one year through five years	Due after one year through five years	858,917		845,415		4.39%	Due after one year through five years	1,171,601		1,135,888		4.06%
Due after five years through ten years	Due after five years through ten years	2,625,267		2,484,672		4.14%	Due after five years through ten years	2,534,914		2,358,496		4.39%
Due after ten years	Due after ten years	819,271		803,609		5.38%	Due after ten years	818,486		794,316		5.61%
Total	Total	$	4,894,715	$	4,717,619	3.95%	Total	$	5,114,476	$	4,873,414	4.16%

1819

3.FARMER MAC GUARANTEED SECURITIES AND USDA SECURITIES

The following tables set forth information about on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities as of ~~June~~September 30, 2023 and December 31, 2022:

Table 3.1


		As of June 30, 2023															As of September 30, 2023
		Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value			Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
		(in thousands)															(in thousands)
Held-to-maturity:	Held-to-maturity:															Held-to-maturity:
AgVantage	AgVantage	$	820,635	$	(80)	$	820,555	$	(64)	$	260	$	(46,500)	$	774,251	AgVantage	$	4,158,857	$	(30,389)	$	4,128,468	$	(196)	$	4,525	$	(49,221)	$	4,083,576
Farmer Mac Guaranteed USDA Securities	Farmer Mac Guaranteed USDA Securities	29,304		33		29,337		—		13		(786)		28,564		Farmer Mac Guaranteed USDA Securities	29,109		33		29,142		—		—		(1,362)		27,780
Total Farmer Mac Guaranteed Securities	Total Farmer Mac Guaranteed Securities	849,939		(47)		849,892		(64)		273		(47,286)		802,815		Total Farmer Mac Guaranteed Securities	4,187,966		(30,356)		4,157,610		(196)		4,525		(50,583)		4,111,356
USDA Securities	USDA Securities	2,312,632		23,580		2,336,212		—		439		(274,339)		2,062,312		USDA Securities	2,299,407		22,948		2,322,355		—		194		(390,322)		1,932,227
Total held-to-maturity	Total held-to-maturity	$	3,162,571	$	23,533	$	3,186,104	$	(64)	$	712	$	(321,625)	$	2,865,127	Total held-to-maturity	$	6,487,373	$	(7,408)	$	6,479,965	$	(196)	$	4,719	$	(440,905)	$	6,043,583
Available-for-sale:	Available-for-sale:															Available-for-sale:
AgVantage	AgVantage	$	8,149,002	$	724	$	8,149,726	$	(507)	$	1,778	$	(413,187)	$	7,737,810	AgVantage	$	5,526,857	$	—	$	5,526,857	$	(374)	$	—	$	(477,775)	$	5,048,708
Farmer Mac Guaranteed Securities(3)	Farmer Mac Guaranteed Securities(3)	—		9,748		9,748		—		—		(2,143)		7,605		Farmer Mac Guaranteed Securities(3)	—		9,580		9,580		—		409		—		9,989
Total available-for-sale	Total available-for-sale	$	8,149,002	$	10,472	$	8,159,474	$	(507)	$	1,778	$	(415,330)	$	7,745,415	Total available-for-sale	$	5,526,857	$	9,580	$	5,536,437	$	(374)	$	409	$	(477,775)	$	5,058,697
Trading:	Trading:															Trading:
USDA Securities(4)	USDA Securities(4)	$	1,350	$	64	$	1,414	$	—	$	—	$	(66)	$	1,348	USDA Securities(4)	$	1,314	$	57	$	1,371	$	—	$	—	$	(69)	$	1,302

(1)Amounts presented exclude ~~$56.8~~$53.3 million, ~~$33.6~~$58.9 million, and ~~$33,000~~$38,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of ~~June~~September 30, 2023.

(2)Represents the amount of impairment that has resulted from credit-related factors, and therefore was recognized in the statement of financial operations as a provision for losses. Amount excludes unrealized losses relating to non-credit factors.

(3)Fair value includes ~~$7.6~~$10.0 million of an interest-only security with a notional amount of ~~$243.2~~$239.1 million.

(4)The trading USDA securities had a weighted average yield of ~~5.51%~~5.50% as of ~~June~~September 30, 2023.


	As of December 31, 2022
	Unpaid Principal Balance		Unamortized Premium/(Discount)		Amortized Cost(1)		Allowance for losses(2)		Unrealized Gains		Unrealized Losses		Fair Value
	(in thousands)
Held-to-maturity:
AgVantage	$	1,000,689	$	(95)	$	1,000,594	$	(59)	$	353	$	(54,098)	$	946,790
Farmer Mac Guaranteed USDA Securities	20,586		33		20,619		—		2		(856)		19,765
Total Farmer Mac Guaranteed Securities	1,021,275		(62)		1,021,213		(59)		355		(54,954)		966,555
USDA Securities	2,384,946		24,888		2,409,834		—		668		(312,824)		2,097,678
Total held-to-maturity	$	3,406,221	$	24,826	$	3,431,047	$	(59)	$	1,023	$	(367,778)	$	3,064,233
Available-for-sale:
AgVantage	$	8,008,067	$	806	$	8,008,873	$	(546)	$	2,061	$	(411,009)	$	7,599,379
Farmer Mac Guaranteed Securities(3)	—		10,622		10,622		—		—		(2,775)		$	7,847
Total available-for-sale	$	8,008,067	$	11,428	$	8,019,495	$	(546)	$	2,061	$	(413,784)	$	7,607,226
Trading:
USDA Securities(4)	$	1,770	$	80	$	1,850	$	—	$	—	$	(83)	$	1,767

(1)Amounts presented exclude $51.5 million, $44.4 million, and $47,000 of accrued interest receivable on available-for-sale, held-to-maturity, and trading securities, respectively, as of December 31, 2022.

(3)Fair value includes $7.8 million of an interest-only security with a notional amount of $250.1 million.

(4)The trading USDA securities had a weighted average yield of 4.84% as of December 31, 2022.

On July 1, 2023, Farmer Mac transferred $2.7 billion of AgVantage Securities from available-for-sale to held-to-maturity to reflect Farmer Mac's positive intent and ability to hold these securities until maturity or payoff. Farmer Mac transferred these securities at fair value as of the date of the transfer, which included a cost basis adjustment of unrealized losses of $31.9 million. The accumulated unrealized losses were retained in accumulated other comprehensive income in the amount of $31.9 million. Farmer Mac accounts for held-to-maturity securities at amortized cost. Both the cost basis adjustment and accumulated unrealized depreciation will be amortized as an adjustment to the yield on the held-to-maturity AgVantage Securities over the remaining term of the transferred securities.

As of ~~June~~September 30, 2023 and December 31, 2022, unrealized losses on held-to-maturity and available-for-sale on-balance sheet Farmer Mac Guaranteed Securities and USDA Securities were as follows:

Table 3.2


		As of June 30, 2023									As of September 30, 2023
		Held-to-Maturity and Available-for-Sale Securities									Held-to-Maturity and Available-for-Sale Securities
		Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months					Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months
		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
		(in thousands)									(in thousands)
Held-to-maturity:	Held-to-maturity:									Held-to-maturity:
AgVantage	AgVantage	$	134,812	$	(2,646)	$	619,073	$	(43,854)	AgVantage	$	2,022,393	$	(2,613)	$	812,575	$	(46,608)
Farmer Mac Guaranteed USDA Securities	Farmer Mac Guaranteed USDA Securities	1,272		(33)		8,635		(753)		Farmer Mac Guaranteed USDA Securities	19,559		(322)		8,251		(1,040)
USDA Securities	USDA Securities	—		—		2,050,122		(274,339)		USDA Securities	1,495		(22)		1,921,243		(390,300)
Total held-to-maturity	Total held-to-maturity	$	136,084	$	(2,679)	$	2,677,830	$	(318,946)	Total held-to-maturity	$	2,043,447	$	(2,957)	$	2,742,069	$	(437,948)

Available-for-sale:	Available-for-sale:									Available-for-sale:
AgVantage	AgVantage	$	2,931,967	$	(45,218)	$	4,298,670	$	(367,969)	AgVantage	$	993,705	$	(30,193)	$	4,055,377	$	(447,582)
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	—		—		7,605		(2,143)		Farmer Mac Guaranteed Securities	—		—		—		—
Total available-for-sale	Total available-for-sale	$	2,931,967	$	(45,218)	$	4,306,275	$	(370,112)	Total available-for-sale	$	993,705	$	(30,193)	$	4,055,377	$	(447,582)

2021


	As of December 31, 2022
	Held-to-Maturity and Available-for-Sale Securities
	Unrealized loss position for less than 12 months				Unrealized loss position for more than 12 months
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(in thousands)
Held-to-maturity:
AgVantage	$	548,634	$	(11,455)	$	382,358	$	(42,643)
Farmer Mac Guaranteed USDA Securities	19,790		(856)		—		—
USDA Securities	2,086,108		(312,824)		—		—
Total held-to-maturity	$	2,654,532	$	(325,135)	$	382,358	$	(42,643)

Available-for-sale:
AgVantage	$	4,642,096	$	(267,886)	$	1,548,551	$	(143,123)
Farmer Mac Guaranteed Securities	7,847		(2,775)		—		—
Total available-for-sale	$	4,649,943	$	(270,661)	$	1,548,551	$	(143,123)

The unrealized losses presented above are principally due to changes in interest rates from the date of acquisition to ~~June~~September 30, 2023 and December 31, 2022, as applicable.

The credit exposure related to Farmer Mac's USDA Securities in the Agricultural Finance line of business is covered by the full faith and credit guarantee of the United States of America.

The unrealized losses from AgVantage securities were on ~~106~~76 and 95 available-for-sale securities as of ~~June~~September 30, 2023 and December 31, 2022, respectively. There were 3259 and 37 held-to-maturity AgVantage securities with an unrealized loss as of ~~June~~September 30, 2023 and December 31, 2022, respectively. As of ~~June~~September 30, 2023 and December 31, 2022, 5764 and 13 available-for-sale AgVantage securities, respectively, had been in a loss position for more than 12 months. As of ~~June~~September 30, 2023 and December 31, 2022, there were 2226 and 4 held-to-maturity AgVantage securities, respectively, in a loss position for more than 12 months.

During the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 Farmer Mac had no sales of AgVantage Farmer Mac Guaranteed Securities, USDA Farmer Mac Guaranteed Securities or USDA Trading Securities and, therefore, Farmer Mac realized no gains or losses.

2122

The amortized cost, fair value, and weighted-average yield of available-for-sale and held-to-maturity Farmer Mac Guaranteed Securities and USDA Securities by remaining contractual maturity as of ~~June~~September 30, 2023 are set forth below. The balances presented are based on their contractual maturities, although the actual maturities may differ due to prepayments of the underlying assets.

Table 3.3


		As of June 30, 2023							As of September 30, 2023
		Available-for-Sale Securities							Available-for-Sale Securities
		Amortized Cost(1)		Fair Value		Weighted- Average Yield			Amortized Cost(1)		Fair Value		Weighted- Average Yield
		(dollars in thousands)							(dollars in thousands)
Due within one year	Due within one year	$	1,704,120	$	1,694,039	5.02	%	Due within one year	$	693,100	$	682,379	3.25	%
Due after one year through five years	Due after one year through five years	3,553,450		3,399,931		3.80	%	Due after one year through five years	2,739,174		2,579,604		3.47	%
Due after five years through ten years	Due after five years through ten years	1,203,613		1,112,712		3.68	%	Due after five years through ten years	1,142,500		997,848		3.27	%
Due after ten years	Due after ten years	1,698,291		1,538,733		4.43	%	Due after ten years	961,663		798,866		3.55	%
Total	Total	$	8,159,474	$	7,745,415	4.16	%	Total	$	5,536,437	$	5,058,697	3.41	%

(1)Amounts presented exclude ~~$56.8~~$53.3 million of accrued interest receivable.


		As of June 30, 2023							As of September 30, 2023
		Held-to-Maturity Securities							Held-to-Maturity Securities
		Amortized Cost(1)		Fair Value		Weighted- Average Yield			Amortized Cost(1)		Fair Value		Weighted- Average Yield
		(dollars in thousands)							(dollars in thousands)
Due within one year	Due within one year	$	288,106	$	282,871	2.77	%	Due within one year	$	2,071,858	$	2,066,836	5.61	%
Due after one year through five years	Due after one year through five years	570,623		523,236		2.20	%	Due after one year through five years	1,321,681		1,269,796		4.22	%
Due after five years through ten years	Due after five years through ten years	298,239		266,808		3.42	%	Due after five years through ten years	453,755		409,148		4.30	%
Due after ten years	Due after ten years	2,029,136		1,792,212		3.39	%	Due after ten years	2,632,671		2,297,803		4.19	%
Total	Total	$	3,186,104	$	2,865,127	3.10	%	Total	$	6,479,965	$	6,043,583	4.68	%

(1)Amounts presented exclude ~~$33.6~~$58.9 million of accrued interest receivable.

4.FINANCIAL DERIVATIVES

Farmer Mac enters into financial derivative transactions to protect against risk from the effects of market price, or interest rate movements, on the value of certain assets, future cash flows, or debt issuance, and not for trading or speculative purposes. Certain financial derivatives are designated as fair value hedges of

fixed rate assets, classified as available-for-sale, to protect against fair value changes in the assets related

to changes in a benchmark interest rate (e.g., SOFR). Certain other financial derivatives are

designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate

debt. Certain financial derivatives are not designated in hedge accounting relationships.

Farmer Mac manages the interest rate risk related to loans it has committed to acquire, but has not yet

permanently funded, primarily through the use of ~~forward sale contracts on the debt of other GSEs and~~

futures contracts involving U.S. Treasury securities. ~~Farmer Mac uses forward sale contracts on GSE~~

~~securities to reduce its interest rate exposure to changes in both U.S. Treasury rates and spreads on Farmer~~

~~Mac debt.~~ Farmer Mac aims to achieve a duration-matched hedge ratio between the hedged item and the

hedge instrument. Gains or losses generated by these hedge transactions are expected to offset changes in

funding costs. All financial derivatives are recorded on the balance sheet at fair value as a freestanding

asset or liability.

2223

The following tables summarize information related to Farmer Mac's financial derivatives on a gross basis without giving consideration to master netting arrangements. The table below includes accrued interest on cleared swaps, but excludes ~~$9.4~~$14.3 million and $6.1 million of accrued interest receivable and ~~$5.4~~$6.3 million and $3.6 million of accrued interest payable on uncleared swaps as of ~~June~~September 30, 2023 and December 31, 2022, respectively. The aforementioned accrued interest on uncleared swaps is included within Accrued Interest Receivable and Accrued Interest Payable on the consolidated balance sheets.

Table 4.1


		As of June 30, 2023														As of September 30, 2023
				Fair Value				Weighted- Average Pay Rate		Weighted- Average Receive Rate		Weighted- Average Forward Price		Weighted- Average Remaining Term (in years)						Fair Value								Weighted- Average Pay Rate				Weighted- Average Receive Rate			Weighted- Average Forward Price		Weighted- Average Remaining Term (in years)
		Notional Amount		Asset		(Liability)					Notional Amount				Asset				(Liability)
		(dollars in thousands)														(dollars in thousands)
Fair value hedges:	Fair value hedges:														Fair value hedges:
Interest rate swaps:	Interest rate swaps:														Interest rate swaps:
Receive fixed non-callable	Receive fixed non-callable	$	9,858,235	$	2,520	$	(14)		5.16%				2.50%					1.60		Receive fixed non-callable		$	8,942,935			$	2,996			$	(11)			5.46%		2.74%			1.67
Pay fixed non-callable	Pay fixed non-callable	8,704,710		61		(14,237)		2.36%		5.19%				10.23	Pay fixed non-callable	8,830,943				81				(11,054)					2.39%				5.33%					9.89
Receive fixed callable	Receive fixed callable	3,716,577		—		(176,165)		5.07%		2.77%				2.51	Receive fixed callable	4,181,077				—				(179,299)				5.26%				3.06%					2.37
Cash flow hedges:	Cash flow hedges:														Cash flow hedges:
Interest rate swaps:	Interest rate swaps:														Interest rate swaps:
Pay fixed non-callable	Pay fixed non-callable	570,000		25,782		(292)		1.93%		5.54%				4.71	Pay fixed non-callable	563,000				27,510				(372)				1.94%				5.74%					4.51
No hedge designation:	No hedge designation:														No hedge designation:
Interest rate swaps:	Interest rate swaps:														Interest rate swaps:
Pay fixed non-callable	Pay fixed non-callable	182,072		931		(82)		3.00%		5.27%				4.15	Pay fixed non-callable	183,882				1,240				(166)				2.92%				5.44%					4.01
Receive fixed non-callable	Receive fixed non-callable	785,198		78		(2)		5.09%		4.00%				0.62	Receive fixed non-callable	851,146				69				(3)				5.34%				4.51%					0.70

Basis swaps	Basis swaps	1,450,384		56		(535)		5.19%		5.18%				2.63	Basis swaps	895,384				58				(625)				5.43%				5.45%					3.89
Treasury futures	Treasury futures	11,300		71		—						112.89			Treasury futures	11,900				81				(12)											108.64
Netting adjustments(1)	Netting adjustments(1)			(2,675)		2,675									Netting adjustments(1)					(3,180)				3,180
Total financial derivatives	Total financial derivatives	$	25,278,476	$	26,824	$	(188,652)								Total financial derivatives	$	24,460,267			$	28,855			$	(188,362)

(1)Amounts represent the application of the netting requirements that allow Farmer Mac to settle positive and negative positions, including accrued interest, held or placed with the same clearing agent.

2324


	As of December 31, 2022
			Fair Value				Weighted- Average Pay Rate	Weighted- Average Receive Rate	Weighted- Average Forward Price	Weighted- Average Remaining Term (in years)
	Notional Amount		Asset		(Liability)
	(dollars in thousands)
Fair value hedges:
Interest rate swaps:
Receive fixed non-callable	$	10,033,750	$	19	$	(4,686)	4.31%	2.03%		1.64
Pay fixed non-callable	8,149,871		13,689		(366)		2.23%	4.33%		10.76
Receive fixed callable	2,764,577		461		(174,757)		4.21%	1.98%		3.18
Cash flow hedges:
Interest rate swaps:
Pay fixed non-callable	588,000		27,275		—		1.93%	4.72%		5.05
No hedge designation:
Interest rate swaps:
Pay fixed non-callable	187,479		1,065		(1)		3.05%	4.09%		4.52
Receive fixed non-callable	287,750		—		(130)		4.31%	1.16%		1.76

Basis swaps	1,860,384		112		(456)		4.40%	4.42%		2.46
Treasury futures	6,800		—		(142)				114.38

Netting adjustments(1)			(5,212)		5,212
Total financial derivatives	$	23,878,611	$	37,409	$	(175,326)

As of ~~June~~September 30, 2023, Farmer Mac expects to reclassify $16.6 million after-tax from accumulated other comprehensive income to earnings over the next twelve months related to cash flow hedges. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, and the addition of other hedges after ~~June~~September 30, 2023. During the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, there were no gains or losses from interest rate swaps designated as cash flow hedges reclassified to earnings because it was probable that the originally forecasted transactions would occur.

2425

The following tables summarize the net income/(expense) recognized in the consolidated statements of operations related to derivatives for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 4.2

For the Three Months Ended June 30, 2023
Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
Net Interest Income Non-Interest Income Total
Interest Income Investments and Cash Equivalents Interest Income Farmer Mac Guaranteed Securities and USDA Securities Interest Income Loans Total Interest Expense Gains on financial derivatives
(in thousands)
Total amounts presented in the consolidated statement of operations $ 69,779 $ 144,761 $ 129,292 $ (265,155) $ 1,693 $ 80,370
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives 8,452 34,999 15,754 (88,228) — (29,023)
Recognized on hedged items 7,898 45,722 15,848 (80,552) — (11,084)
Premium/discount amortization recognized on hedged items 508 — — (713) — (205)
Income/(expense) related to interest settlements on fair value hedging relationships $ 16,858 $ 80,721 $ 31,602 $ (169,493) $ — $ (40,312)
(Losses)/gains on fair value hedging relationships:
Recognized on derivatives $ 30,824 $ 100,862 $ 46,762 $ (81,098) $ — $ 97,350
Recognized on hedged items (31,969) (101,921) (49,381) 81,020 — (102,251)
(Losses)/gains on fair value hedging relationships $ (1,145) $ (1,059) $ (2,619) $ (78) $ — $ (4,901)
Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives $ — $ — $ — $ 5,091 $ — $ 5,091
Recognized on hedged items — — — (7,848) — (7,848)
Discount amortization recognized on hedged items — — — (14) — (14)
Expense recognized on cash flow hedges $ — $ — $ — $ (2,771) $ — $ (2,771)
Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps $ — $ — $ — $ — $ 2,458 $ 2,458
Interest expense on interest rate swaps — — — — (1,568) (1,568)
Treasury futures — — — — 803 803
Gains on financial derivatives not designated in hedge relationships $ — $ — $ — $ — $ 1,693 $ 1,693


		For the Three Months Ended June 30, 2022													For the Three Months Ended September 30, 2023
		Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives													Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
		Net Interest Income								Non-Interest Income		Total			Net Interest Income								Non-Interest Income		Total
		Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives					Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
				(in thousands)											(in thousands)
Total amounts presented in the consolidated statement of operations:		$	11,200	$	51,616	$	76,632	$	(75,534)	$	3,791	$	67,705
Total amounts presented in the consolidated statement of operations														Total amounts presented in the consolidated statement of operations	$	79,947	$	161,351	$	140,513	$	(294,168)	$	2,671	$	90,314
Income/(expense) related to interest settlements on fair value hedging relationships:	Income/(expense) related to interest settlements on fair value hedging relationships:													Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	(1,008)		(15,693)		(4,459)		4,648		—		(16,512)		Recognized on derivatives	9,950		40,114		17,692		(92,663)		—		(24,907)
Recognized on hedged items	Recognized on hedged items	3,219		34,431		13,669		(23,443)		—		27,876		Recognized on hedged items	9,006		46,303		16,089		(91,525)		—		(20,127)
Discount amortization recognized on hedged items		(343)		—		—		(484)		—		(827)
Premium/discount amortization recognized on hedged items														Premium/discount amortization recognized on hedged items	623		—		—		(732)		—		(109)
Income/(expense) related to interest settlements on fair value hedging relationships	Income/(expense) related to interest settlements on fair value hedging relationships	$	1,868	$	18,738	$	9,210	$	(19,279)	$	—	$	10,537	Income/(expense) related to interest settlements on fair value hedging relationships	$	19,579	$	86,417	$	33,781	$	(184,920)	$	—	$	(45,143)

Gains/(losses) on fair value hedging relationships:	Gains/(losses) on fair value hedging relationships:													Gains/(losses) on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	$	24,138	$	148,182	$	109,419	$	(86,481)	$	—	$	195,258	Recognized on derivatives	$	42,051	$	110,196	$	107,265	$	9,475	$	—	$	268,987
Recognized on hedged items	Recognized on hedged items	(22,969)		(149,266)		(107,347)		84,873		—		(194,709)		Recognized on hedged items	(41,944)		(107,965)		(105,403)		(10,465)		—		(265,777)
Gains/(losses) on fair value hedging relationships	Gains/(losses) on fair value hedging relationships	$	1,169	$	(1,084)	$	2,072	$	(1,608)	$	—	$	549	Gains/(losses) on fair value hedging relationships	$	107	$	2,231	$	1,862	$	(990)	$	—	$	3,210

Expense related to interest settlements on cash flow hedging relationships:	Expense related to interest settlements on cash flow hedging relationships:													Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	(1,155)	$	—	$	(1,155)	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	5,569	$	—	$	5,569
Recognized on hedged items	Recognized on hedged items	—		—		—		(1,821)		—		(1,821)		Recognized on hedged items	—		—		—		(8,287)		—		(8,287)
Discount amortization recognized on hedged items	Discount amortization recognized on hedged items	—		—		—		(15)		—		(15)		Discount amortization recognized on hedged items	—		—		—		(14)		—		(14)
Expense recognized on cash flow hedges	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(2,991)	$	—	$	(2,991)	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(2,732)	$	—	$	(2,732)

Gains on financial derivatives not designated in hedge relationships:
Gains on financial derivatives not designated in hedging relationships:														Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	4,284	$	4,284	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	2,772	$	2,772
Interest expense on interest rate swaps	Interest expense on interest rate swaps	—		—		—		—		(1,955)		(1,955)		Interest expense on interest rate swaps	—		—		—		—		(805)		(805)

Treasury futures	Treasury futures	—		—		—		—		1,462		1,462		Treasury futures	—		—		—		—		704		704
Gains on financial derivatives not designated in hedge relationships	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	3,791	$	3,791	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	2,671	$	2,671


		For the Six Months Ended June 30, 2023													For the Three Months Ended September 30, 2022
		Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives													Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
		Net Interest Income								Non-Interest Income		Total			Net Interest Income								Non-Interest Income		Total
		Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives					Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
		(in thousands)															(in thousands)
Total amounts presented in the consolidated statement of operations		$	129,482	$	281,298	$	248,324	$	(501,369)	$	2,092	$	159,827
Total amounts presented in the consolidated statement of operations:														Total amounts presented in the consolidated statement of operations:	$	21,581	$	74,695	$	97,514	$	(125,937)	$	772	$	68,625
Income/(expense) related to interest settlements on fair value hedging relationships:	Income/(expense) related to interest settlements on fair value hedging relationships:													Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	15,001		63,909		28,933		(165,695)		—		(57,852)		Recognized on derivatives	957		(350)		1,837		(22,679)		—		(20,235)
Recognized on hedged items	Recognized on hedged items	14,859		87,693		31,056		(151,527)		—		(17,919)		Recognized on hedged items	4,617		35,763		14,857		(35,263)		—		19,974
Premium/discount amortization recognized on hedged items		776		—		—		(1,404)		—		(628)
Discount amortization recognized on hedged items														Discount amortization recognized on hedged items	(59)		—		—		(549)		—		(608)
Income/(expense) related to interest settlements on fair value hedging relationships	Income/(expense) related to interest settlements on fair value hedging relationships	$	30,636	$	151,602	$	59,989	$	(318,626)	$	—	$	(76,399)	Income/(expense) related to interest settlements on fair value hedging relationships	$	5,515	$	35,413	$	16,694	$	(58,491)	$	—	$	(869)

(Losses)/gains on fair value hedging relationships:	(Losses)/gains on fair value hedging relationships:													(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	$	3,671	$	7,070	$	(9,919)	$	41,441	$	—	$	42,263	Recognized on derivatives	$	49,373	$	201,864	$	105,683	$	(197,884)	$	—	$	159,036
Recognized on hedged items	Recognized on hedged items	(4,541)		(8,625)		7,576		(41,679)		—		(47,269)		Recognized on hedged items	(52,308)		(204,765)		(100,490)		197,902		—		(159,661)
(Losses)/gains on fair value hedging relationships	(Losses)/gains on fair value hedging relationships	$	(870)	$	(1,555)	$	(2,343)	$	(238)	$	—	$	(5,006)	(Losses)/gains on fair value hedging relationships	$	(2,935)	$	(2,901)	$	5,193	$	18	$	—	$	(625)

Expense related to interest settlements on cash flow hedging relationships:	Expense related to interest settlements on cash flow hedging relationships:													Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	9,482	$	—	$	9,482	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	1,072	$	—	$	1,072
Recognized on hedged items	Recognized on hedged items	—		—		—		(15,038)		—		(15,038)		Recognized on hedged items	—		—		—		(4,046)		—		(4,046)
Discount amortization recognized on hedged items	Discount amortization recognized on hedged items	—		—		—		(27)		—		(27)		Discount amortization recognized on hedged items	—		—		—		(15)		—		(15)
Expense recognized on cash flow hedges	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(5,583)	$	—	$	(5,583)	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(2,989)	$	—	$	(2,989)

Gains on financial derivatives not designated in hedging relationships:
Gains on financial derivatives not designated in hedge relationships:														Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	2,490	$	2,490	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	5,054	$	5,054
Interest expense on interest rate swaps	Interest expense on interest rate swaps	—		—		—		—		(3,193)		(3,193)		Interest expense on interest rate swaps	—		—		—		—		(2,613)		(2,613)

Treasury futures	Treasury futures	—		—		—		—		2,795		2,795		Treasury futures	—		—		—		—		(1,669)		(1,669)
Gains on financial derivatives not designated in hedge relationships	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	2,092	$	2,092	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	772	$	772


		For the Six Months Ended June 30, 2022													For the Nine Months Ended September 30, 2023
		Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives													Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
		Net Interest Income								Non-Interest Income		Total			Net Interest Income								Non-Interest Income		Total
		Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives					Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
				(in thousands)											(in thousands)
Total amounts presented in the consolidated statement of operations:		$	16,916	$	94,536	$	143,879	$	(125,879)	$	20,779	$	150,231
Total amounts presented in the consolidated statement of operations														Total amounts presented in the consolidated statement of operations	$	209,429	$	442,649	$	388,837	$	(795,537)	$	4,763	$	250,141
Income/(expense) related to interest settlements on fair value hedging relationships:	Income/(expense) related to interest settlements on fair value hedging relationships:													Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	(2,492)		(37,337)		(11,405)		18,848		—		(32,386)		Recognized on derivatives	24,952		104,023		46,625		(258,358)		—		(82,758)
Recognized on hedged items	Recognized on hedged items	5,816		66,359		26,288		(41,599)		—		56,864		Recognized on hedged items	23,865		133,995		47,144		(243,053)		—		(38,049)
Discount amortization recognized on hedged items		(757)		—		—		(924)		—		(1,681)
Premium/discount amortization recognized on hedged items														Premium/discount amortization recognized on hedged items	1,399		—		—		(2,137)		—		(738)
Income/(expense) related to interest settlements on fair value hedging relationships	Income/(expense) related to interest settlements on fair value hedging relationships	$	2,567	$	29,022	$	14,883	$	(23,675)	$	—	$	22,797	Income/(expense) related to interest settlements on fair value hedging relationships	$	50,216	$	238,018	$	93,769	$	(503,548)	$	—	$	(121,545)

Gains/(losses) on fair value hedging relationships:
(Losses)/gains on fair value hedging relationships:														(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	Recognized on derivatives	$	57,562	$	362,033	$	241,351	$	(323,494)	$	—	$	337,452	Recognized on derivatives	$	45,722	$	117,267	$	97,346	$	50,916	$	—	$	311,251
Recognized on hedged items	Recognized on hedged items	(55,694)		(359,914)		(236,953)		321,687		—		(330,874)		Recognized on hedged items	(46,485)		(116,591)		(97,827)		(52,144)		—		(313,047)
Gains/(losses) on fair value hedging relationships		$	1,868	$	2,119	$	4,398	$	(1,807)	$	—	$	6,578
(Losses)/gains on fair value hedging relationships														(Losses)/gains on fair value hedging relationships	$	(763)	$	676	$	(481)	$	(1,228)	$	—	$	(1,796)

Expense related to interest settlements on cash flow hedging relationships:	Expense related to interest settlements on cash flow hedging relationships:													Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	(3,166)	$	—	$	(3,166)	Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	15,051	$	—	$	15,051
Recognized on hedged items	Recognized on hedged items	—		—		—		(2,608)		—		(2,608)		Recognized on hedged items	—		—		—		(23,325)		—		(23,325)
Discount amortization recognized on hedged items	Discount amortization recognized on hedged items	—		—		—		(29)		—		(29)		Discount amortization recognized on hedged items	—		—		—		(41)		—		(41)
Expense recognized on cash flow hedges	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(5,803)	$	—	$	(5,803)	Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(8,315)	$	—	$	(8,315)

Gains on financial derivatives not designated in hedge relationships:
Gains on financial derivatives not designated in hedging relationships:														Gains on financial derivatives not designated in hedging relationships:
Gains on interest rate swaps	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	5,901	$	5,901	Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	5,263	$	5,263
Interest expense on interest rate swaps	Interest expense on interest rate swaps	—		—		—		—		(2,883)		(2,883)		Interest expense on interest rate swaps	—		—		—		—		(3,999)		(3,999)

Treasury futures	Treasury futures	—		—		—		—		17,761		17,761		Treasury futures	—		—		—		—		3,499		3,499
Gains on financial derivatives not designated in hedge relationships	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	20,779	$	20,779	Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	4,763	$	4,763


	For the Nine Months Ended September 30, 2022
	Net Income/(Expense) Recognized in Consolidated Statement of Operations on Derivatives
	Net Interest Income								Non-Interest Income		Total
	Interest Income Investments and Cash Equivalents		Interest Income Farmer Mac Guaranteed Securities and USDA Securities		Interest Income Loans		Total Interest Expense		Gains on financial derivatives
			(in thousands)
Total amounts presented in the consolidated statement of operations:	$	38,497	$	169,231	$	241,393	$	(251,816)	$	21,551	$	218,856
Income/(expense) related to interest settlements on fair value hedging relationships:
Recognized on derivatives	(1,536)		(37,687)		(9,568)		(3,831)		—		(52,622)
Recognized on hedged items	10,433		102,123		41,146		(76,862)		—		76,840
Discount amortization recognized on hedged items	(816)		—		—		(1,478)		—		(2,294)
Income/(expense) related to interest settlements on fair value hedging relationships	$	8,081	$	64,436	$	31,578	$	(82,171)	$	—	$	21,924

(Losses)/gains on fair value hedging relationships:
Recognized on derivatives	$	106,935	$	563,897	$	347,034	$	(523,432)	$	—	$	494,434
Recognized on hedged items	(108,002)		(564,679)		(337,443)		521,643		—		(488,481)
(Losses)/gains on fair value hedging relationships	$	(1,067)	$	(782)	$	9,591	$	(1,789)	$	—	$	5,953

Expense related to interest settlements on cash flow hedging relationships:
Interest settlements reclassified from AOCI into net income on derivatives	$	—	$	—	$	—	$	(2,094)	$	—	$	(2,094)
Recognized on hedged items	—		—		—		(6,654)		—		(6,654)
Discount amortization recognized on hedged items	—		—		—		(43)		—		(43)
Expense recognized on cash flow hedges	$	—	$	—	$	—	$	(8,791)	$	—	$	(8,791)

Gains on financial derivatives not designated in hedge relationships:
Gains on interest rate swaps	$	—	$	—	$	—	$	—	$	10,954	$	10,954
Interest expense on interest rate swaps	—		—		—		—		(5,496)		(5,496)

Treasury futures	—		—		—		—		16,093		16,093
Gains on financial derivatives not designated in hedge relationships	$	—	$	—	$	—	$	—	$	21,551	$	21,551

2829

The following table shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships as of ~~June~~September 30, 2023 and December 31, 2022:

Table 4.3


		Hedged Items in Fair Value Relationship									Hedged Items in Fair Value Relationship
		Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)					Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustments included in the Carrying Amount of the Hedged Assets/(Liabilities)
		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
		(in thousands)									(in thousands)
Investment securities, Available-for-Sale, at fair value	Investment securities, Available-for-Sale, at fair value	$	1,130,332	$	876,063	$	(111,648)	$	(107,107)	Investment securities, Available-for-Sale, at fair value	$	1,138,569	$	876,063	$	(153,592)	$	(107,107)
Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	5,029,633		4,814,784		(355,498)		(346,873)		Farmer Mac Guaranteed Securities, Available-for-Sale, at fair value	5,025,413		4,814,784		(463,464)		(346,873)
Loans held for investment, at amortized cost	Loans held for investment, at amortized cost	1,701,539		1,623,301		(319,702)		(327,278)		Loans held for investment, at amortized cost	1,570,732		1,623,301		(425,105)		(327,278)

Notes Payable(1)	Notes Payable(1)	(12,939,984)		(12,151,382)		489,407		531,086		Notes Payable(1)	(12,614,569)		(12,151,382)		478,942		531,086

(1)Carrying amount represents amortized cost.

The following tables present the fair value of financial assets and liabilities, based on the terms of Farmer Mac's master netting arrangements as of ~~June~~September 30, 2023 and December 31, 2022:

Table 4.4


		June 30, 2023															September 30, 2023
								Gross Amounts Not Offset in the Consolidated Balance Sheet															Gross Amounts Not Offset in the Consolidated Balance Sheet
		Gross Amount Recognized		Gross Amounts offset in the Consolidated Balance Sheet		Net Amount Presented in the Consolidated Balance Sheet(1)		Netting Adjustments		Financial instruments pledged		Cash Collateral(2)		Net Amount			Gross Amount Recognized		Gross Amounts offset in the Consolidated Balance Sheet		Net Amount Presented in the Consolidated Balance Sheet(1)		Netting Adjustments		Financial instruments pledged		Cash Collateral(2)		Net Amount
		(in thousands)															(in thousands)
Assets:	Assets:															Assets:
Uncleared derivatives	Uncleared derivatives	$	25,896	$	—	$	25,896	$	(25,826)	$	—	$	—	$	70	Uncleared derivatives	$	27,583	$	—	$	27,583	$	(27,501)	$	—	$	—	$	82
Cleared derivatives	Cleared derivatives	2,675		(2,675)		—		—		—		—		—		Cleared derivatives	3,180		(3,180)		—		—		—		—		—
Total	Total	$	28,571	$	(2,675)	$	25,896	$	(25,826)	$	—	$	—	$	70	Total	$	30,763	$	(3,180)	$	27,583	$	(27,501)	$	—	$	—	$	82

Liabilities:	Liabilities:															Liabilities:
Uncleared derivatives	Uncleared derivatives	$	(149,087)	$	—	$	(149,087)	$	25,826	$	—	$	120,415	$	(2,846)	Uncleared derivatives	$	(150,625)	$	—	$	(150,625)	$	27,501	$	—	$	120,556	$	(2,568)
Cleared derivatives	Cleared derivatives	(14,627)		2,675		(11,952)		—		220,611		—		208,659		Cleared derivatives	(11,622)		3,180		(8,442)		—		204,407		—		195,965
Total	Total	$	(163,714)	$	2,675	$	(161,039)	$	25,826	$	220,611	$	120,415	$	205,813	Total	$	(162,247)	$	3,180	$	(159,067)	$	27,501	$	204,407	$	120,556	$	193,397

(1)Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2)Cash collateral excludes ~~$26.7~~$24.1 million of collateral posted related to counterparties not subject to master netting agreements.

2930


	December 31, 2022
							Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Amount Recognized		Gross Amounts offset in the Consolidated Balance Sheet		Net Amount Presented in the Consolidated Balance Sheet(1)		Netting Adjustments		Financial instruments pledged		Cash Collateral(2)		Net Amount
	(in thousands)
Assets:
Uncleared derivatives	$	27,132	$	—	$	27,132	$	(27,132)	$	—	$	—	$	—
Cleared derivatives	14,450		(5,212)		9,238		—		203,993		—		213,231
Total	$	41,582	$	(5,212)	$	36,370	$	(27,132)	$	203,993	$	—	$	213,231

Liabilities:
Uncleared derivatives	$	(149,864)	$	—	$	(149,864)	$	27,132	$	—	$	121,065	$	(1,667)
Cleared derivatives	(5,212)		5,212		—		—		—		—		—
Total	$	(155,076)	$	5,212	$	(149,864)	$	27,132	$	—	$	121,065	$	(1,667)

(1)Amounts presented may not agree to the consolidated balance sheet related to counterparties not subject to master netting agreements.

(2)Cash collateral excludes $23.7 million of collateral posted related to counterparties not subject to master netting agreements.

Farmer Mac records posted cash as a reduction in the outstanding balance of cash and cash equivalents and an increase in the balance of prepaid expenses and other assets. Any investment securities posted as collateral are included in the investment securities balances on the consolidated balance sheets. If Farmer Mac had breached certain provisions of the derivative contracts as of ~~June~~September 30, 2023 or December 31, 2022, it could have been required to settle its obligations under the agreements, but would not have been required to post additional collateral. As of ~~June~~September 30, 2023 and December 31, 2022, there were no financial derivatives in a net payable position where Farmer Mac was required to pledge collateral which the counterparty had the right to sell or repledge.

Of Farmer Mac's ~~$25.3~~$24.5 billion notional amount of interest rate swaps outstanding as of ~~June~~September 30, 2023, ~~$20.2~~$19.5 billion were cleared through the swap clearinghouse, the Chicago Mercantile Exchange ("CME"). Of Farmer Mac's $23.9 billion notional amount of interest rate swaps outstanding as of December 31, 2022, $19.5 billion were cleared through the CME. During 2023 and throughout 2022, Farmer Mac continued the use of non-cleared basis swaps to prepare for the transition away from the use of LIBOR as a reference rate, which was completed as of the end of the ~~quarter.~~second quarter of 2023.

5.LOANS

Farmer Mac classifies loans as either held for investment or held for sale. Loans held for investment are recorded at the unpaid principal balance, net of unamortized premium or discount and other cost basis adjustments. Loans held for sale are reported at the lower of cost or fair value determined on a pooled

basis. As of both ~~June~~September 30, 2023 and December 31, 2022, Farmer Mac had no loans held for sale.

Under the Agricultural Finance line of business, Farmer Mac has two segments – Farm & Ranch and Corporate AgFinance. The segments are characterized by similarities in risk attributes and the manner in which Farmer Mac monitors and assesses credit risk.

3031

The following table includes loans held for investment and displays the composition of the loan balances as of ~~June~~September 30, 2023 and December 31, 2022:

Table 5.1


		As of June 30, 2023						As of December 31, 2022							As of September 30, 2023						As of December 31, 2022
		Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total			Unsecuritized		In Consolidated Trusts		Total		Unsecuritized		In Consolidated Trusts		Total
		(in thousands)													(in thousands)
Agricultural Finance loans	Agricultural Finance loans													Agricultural Finance loans
Farm & Ranch	Farm & Ranch	$	4,952,272	$	1,448,180	$	6,400,452	$	5,150,750	$	1,211,576	$	6,362,326	Farm & Ranch	$	4,987,818	$	1,422,854	$	6,410,672	$	5,150,750	$	1,211,576	$	6,362,326
Corporate AgFinance	Corporate AgFinance	1,187,903		—		1,187,903		1,166,253		—		1,166,253		Corporate AgFinance	1,223,777		—		1,223,777		1,166,253		—		1,166,253
Total Agricultural Finance loans	Total Agricultural Finance loans	6,140,175		1,448,180		7,588,355		6,317,003		1,211,576		7,528,579		Total Agricultural Finance loans	6,211,595		1,422,854		7,634,449		6,317,003		1,211,576		7,528,579
Rural Infrastructure Finance loans	Rural Infrastructure Finance loans	3,306,767		—		3,306,767		3,021,266		—		3,021,266		Rural Infrastructure Finance loans	3,342,713		—		3,342,713		3,021,266		—		3,021,266
Total unpaid principal balance(1)	Total unpaid principal balance(1)	9,446,942		1,448,180		10,895,122		9,338,269		1,211,576		10,549,845		Total unpaid principal balance(1)	9,554,308		1,422,854		10,977,162		9,338,269		1,211,576		10,549,845
Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	(317,766)		—		(317,766)		(329,290)		—		(329,290)		Unamortized premiums, discounts, fair value hedge basis adjustment, and other cost basis adjustments	(423,375)		—		(423,375)		(329,290)		—		(329,290)
Total loans	Total loans	9,129,176		1,448,180		10,577,356		9,008,979		1,211,576		10,220,555		Total loans	9,130,933		1,422,854		10,553,787		9,008,979		1,211,576		10,220,555
Allowance for losses	Allowance for losses	(16,200)		(548)		(16,748)		(14,629)		(460)		(15,089)		Allowance for losses	(16,162)		(452)		(16,614)		(14,629)		(460)		(15,089)
Total loans, net of allowance	Total loans, net of allowance	$	9,112,976	$	1,447,632	$	10,560,608	$	8,994,350	$	1,211,116	$	10,205,466	Total loans, net of allowance	$	9,114,771	$	1,422,402	$	10,537,173	$	8,994,350	$	1,211,116	$	10,205,466

(1)Unpaid principal balance is the basis of presentation in disclosures of outstanding balances for Farmer Mac's lines of business.

Allowance for Losses

The following table is a summary, by asset type, of the allowance for losses as of ~~June~~September 30, 2023 and December 31, 2022:

Table 5.2


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		Allowance for Losses		Allowance for Losses			Allowance for Losses		Allowance for Losses
		(in thousands)					(in thousands)
Loans:	Loans:					Loans:
Agricultural Finance loans	Agricultural Finance loans					Agricultural Finance loans
Farm & Ranch	Farm & Ranch	$	3,935	$	4,044	Farm & Ranch	$	3,910	$	4,044
Corporate AgFinance	Corporate AgFinance	7,367		2,731		Corporate AgFinance	3,678		2,731
Total Agricultural Finance Loans	Total Agricultural Finance Loans	11,302		6,775		Total Agricultural Finance Loans	7,588		6,775
Rural Infrastructure Finance loans	Rural Infrastructure Finance loans	5,446		8,314		Rural Infrastructure Finance loans	9,026		8,314
Total	Total	$	16,748	$	15,089	Total	$	16,614	$	15,089

3132

The following is a summary of the changes in the allowance for losses for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 5.3


		June 30, 2023										June 30, 2022																September 30, 2023													September 30, 2022
		Agricultural Finance loans						Rural Infrastructure Finance loans(3)				Agricultural Finance loans													Rural Infrastructure Finance loans(3)			Agricultural Finance loans											Rural Infrastructure Finance loans(3)		Agricultural Finance loans						Rural Infrastructure Finance loans(3)
		Farm & Ranch(1)		Corporate AgFinance(2)		Total				Farm & Ranch(1)				Corporate AgFinance(2)				Total						Farm & Ranch(1)					Corporate AgFinance(2)				Total				Farm & Ranch(1)				Corporate AgFinance(2)		Total
		(in thousands)																										(in thousands)
For the Three Months Ended	For the Three Months Ended																										For the Three Months Ended
Beginning Balance	Beginning Balance	$	3,933	$	7,039	$	10,972			$	4,701			$	2,875			$	1,073			$	3,948					$	9,622	Beginning Balance	$	3,935		$	7,367			$		11,302	$	5,446	$	2,265	$	1,750	$	4,015	$	8,388
Provision for/(release of) losses		2		328		330		745				(610)				677				67					(1,234)
(Release of)/provision for losses																											(Release of)/provision for losses	(25)				(3,689)			(3,714)				3,580		(153)		334		181		418
Charge-offs	Charge-offs	—		—		—		—				—				—				—					—		Charge-offs	—				—			—				—		—		—		—		—
Ending Balance	Ending Balance	$	3,935	$	7,367	$	11,302	$	5,446			$	2,265			$	1,750			$	4,015				$	8,388	Ending Balance	$	3,910			$	3,678		$	7,588			$	9,026	$	2,112	$	2,084	$	4,196	$	8,806

For the Six Months Ended
For the Nine Months Ended																											For the Nine Months Ended
Beginning Balance	Beginning Balance	$	4,044	$	2,731	$	6,775	$	8,314			$	2,882			$	560			$	3,442				$	10,599	Beginning Balance	$	4,044			$	2,731		$	6,775			$	8,314	$	2,882	$	560	$	3,442	$	10,599
(Release of)/provision for losses	(Release of)/provision for losses	(109)		4,636		4,527		(2,868)				(533)				1,190				657					(2,211)		(Release of)/provision for losses	(134)				947			813				712		(686)		1,524		838		(1,793)
Charge-offs	Charge-offs	—		—		—		—				(84)				—				(84)					—		Charge-offs	—				—			—				—		(84)		—		(84)		—
Ending Balance	Ending Balance	$	3,935	$	7,367	$	11,302	$	5,446			$	2,265			$	1,750			$	4,015				$	8,388	Ending Balance	$	3,910			$	3,678		$	7,588			$	9,026	$	2,112	$	2,084	$	4,196	$	8,806

(1)As of ~~June~~September 30, 2023 and 2022, allowance for losses for Agricultural Finance Farm & Ranch loans includes $1.1 million and no allowance for collateral dependent assets secured by agricultural real estate, respectively.

(2)As of ~~June~~September 30, 2023 and 2022, allowance for losses for Agricultural Finance Corporate AgFinance loans includes ~~$4.6~~$0.0 million and ~~$1.2~~$1.7 million allowance for collateral dependent assets secured by agricultural real estate, respectively.

(3)As of both ~~June~~September 30, 2023 and 2022, allowance for losses for Rural Infrastructure Finance loans includes no allowance for collateral dependent assets.

The ~~$0.7~~$3.6 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the quarter ended ~~June~~September 30, 2023 was primarily attributable to ~~increased~~a single telecommunications loan ~~volume.~~that was downgraded to substandard during the quarter. The ~~$0.3~~$3.7 million net release from the allowance for the Agricultural Finance mortgage loan portfolio during the quarter ended September 30, 2023 was primarily attributable to the full payoff of a single collateral dependent storage and processing loan.

The $0.7 million net provision to the allowance for the Rural Infrastructure Finance portfolio during the nine months ended September 30, 2023 was primarily attributable to a single telecommunications loan that was downgraded to substandard during the most recent quarter. The $0.8 million net provision to the allowance for the Agricultural Finance mortgage loan portfolio during the ~~quarter~~nine months ended ~~June~~September 30, 2023 was primarily attributable to increased ~~storage~~loan volume and ~~processing loan volume.~~certain risk rating downgrades.

The ~~$2.9 million~~ net ~~release from~~provision to the allowance for ~~the~~ Rural Infrastructure Finance ~~portfolio~~ loan losses of $0.4 million recorded

during ~~the six months ended June 30, 2023~~third quarter 2022 was primarily attributable to ~~an updated estimate of expected losses based on newly available loss-given-default industry data.~~net new loan volume. The ~~$4.5~~$0.2 million net

provision to the allowance for the Agricultural Finance mortgage loan portfolio during ~~the six months ended June 30, 2023~~ third quarter 2022

was primarily attributable to ~~declining valuation~~the deterioration of a single agricultural storage and processing loan, due to its ongoing bankruptcy proceedings, and an updated estimate of expected losses based on additional availability of loss-given-default industry data. See Note 12 ("Subsequent Event") to the consolidated financial statements for more information about this loan based on events that occurred after June 30, 2023.

~~The net release from the allowance for Rural Infrastructure Finance loan losses of $1.2 million recorded~~

~~during second quarter 2022 was primarily attributable to updated credit loss model forecast assumptions~~

~~and improvements in risk ratings. The $0.1 million net provision to the allowance for the Agricultural~~

~~Finance mortgage loan portfolio during second quarter 2022 was primarily attributable to a risk rating~~

~~downgrade on~~ a single agricultural storage and processing loan.

The ~~$2.2~~$1.8 million net release from the allowance for the Rural Infrastructure Finance portfolio for the ~~six~~nine

months ended ~~June~~September 30, 2022 was primarily attributable to ~~the updated credit loss model forecast~~improvements in forecasts of future

~~assumptions mentioned above~~economic conditions, and a first quarter risk rating upgrade on a single loan. The risk rating

upgrade on

that loan reflected that borrower's successful securitization of its large payable that arose

during the arctic

freeze that struck Texas in February 2021. The ~~$0.7~~$0.8 million net provision to the

allowance for the

Agricultural Finance mortgage loan portfolio for the ~~six~~nine months ended ~~June~~September 30, 2022 was

~~was~~ primarily attributable to a risk rating downgrade on a single agricultural storage and processing loan.

The following table presents the unpaid principal balances by delinquency status of Farmer Mac's loans and non-performing assets as of ~~June~~September 30, 2023 and December 31, 2022:

Table 5.4


		As of June 30, 2023															As of September 30, 2023
		Accruing															Accruing
		Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans			Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
		(in thousands)															(in thousands)
Loans(1):	Loans(1):															Loans(1):
Agricultural Finance loans	Agricultural Finance loans															Agricultural Finance loans
Farm & Ranch	Farm & Ranch	$	6,329,423	$	10,182	$	1,853	$	5,887	$	17,922	$	53,107	$	6,400,452	Farm & Ranch	$	6,319,094	$	15,652	$	5,321	$	6,739	$	27,712	$	63,866	$	6,410,672
Corporate AgFinance	Corporate AgFinance	1,173,307		—		—		—		—		14,596		1,187,903		Corporate AgFinance	1,223,777		—		—		—		—		—		1,223,777
Total Agricultural Finance loans	Total Agricultural Finance loans	7,502,730		10,182		1,853		5,887		17,922		67,703		7,588,355		Total Agricultural Finance loans	7,542,871		15,652		5,321		6,739		27,712		63,866		7,634,449
Rural Infrastructure Finance loans	Rural Infrastructure Finance loans	3,306,767		—		—		—		—		—		3,306,767		Rural Infrastructure Finance loans	3,342,713		—		—		—		—		—		3,342,713
Total	Total	$	10,809,497	$	10,182	$	1,853	$	5,887	$	17,922	$	67,703	$	10,895,122	Total	$	10,885,584	$	15,652	$	5,321	$	6,739	$	27,712	$	63,866	$	10,977,162

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Includes loans in consolidated trusts with beneficial interests owned by third parties that are 90 days or more past due.

(3)Includes loans that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(4)Includes ~~$24.1~~$23.8 million of nonaccrual loans for which there was no associated allowance. During the three and ~~six~~nine months ended ~~June~~September 30, 2023, Farmer Mac received ~~$1.0~~$0.4 million and ~~$1.5~~$1.9 million in interest on nonaccrual loans, respectively.


	As of December 31, 2022
	Accruing
	Current		30-59 Days		60-89 Days		90 Days and Greater(2)		Total Past Due		Nonaccrual loans(3)(4)		Total Loans
	(in thousands)
Loans(1):
Agricultural Finance loans
Farm & Ranch	$	6,287,326	$	10,066	$	392	$	1,140	$	11,598	$	63,402	$	6,362,326
Corporate AgFinance	1,150,690		—		—		—		—		15,563		1,166,253
Total Agricultural Finance loans	7,438,016		10,066		392		1,140		11,598		78,965		7,528,579
Rural Infrastructure Finance loans	3,021,266		—		—		—		—		—		3,021,266
Total	$	10,459,282	$	10,066	$	392	$	1,140	$	11,598	$	78,965	$	10,549,845

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Includes loans in consolidated trusts with beneficial interests owned by third parties that are 90 days or more past due.

(4)Includes $22.0 million of nonaccrual loans for which there was no associated allowance. During the year ended December 31, 2022, Farmer Mac received $5.6 million in interest on nonaccrual loans.

3334

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance mortgage loans and Rural Infrastructure Finance loans held as of ~~June~~September 30, 2023 and December 31, 2022, by year of origination:

Table 5.5

As of June 30, 2023
Year of Origination:
2023 2022 2021 2020 2019 Prior Revolving Loans - Amortized Cost Basis Total
(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable $ 242,874 $ 1,158,625 $ 1,669,627 $ 1,143,164 $ 328,246 $ 1,119,815 $ 362,794 $ 6,025,145
Special mention(2)
21,614 64,223 54,287 24,174 32,361 22,336 14,505 233,500
Substandard(3)
522 9,287 5,527 20,365 23,285 72,087 10,734 141,807
Total $ 265,010 $ 1,232,135 $ 1,729,441 $ 1,187,703 $ 383,892 $ 1,214,238 $ 388,033 $ 6,400,452
For the Three Months Ended June 30, 2023:
Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —
For the Six Months Ended June 30, 2023:
Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —

~~(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.~~

~~(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.~~

~~(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.~~


		As of June 30, 2023																	As of September 30, 2023
		Year of Origination:																	Year of Origination:
		2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total			2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Agricultural Finance - Corporate AgFinance(1):
Agricultural Finance - Farm & Ranch loans(1):																		Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	88,300	$	113,819	$	284,134	$	124,488	$	107,044	$	119,137	$	262,218	$	1,099,140	Acceptable	$	346,745	$	1,143,457	$	1,633,550	$	1,129,203	$	317,213	$	1,077,958	$	379,009	$	6,027,135
Special mention(2)	Special mention(2)	—		—		—		51,124		20,541		—		2,502		74,167		Special mention(2)	49,039		48,891		61,030		12,530		19,164		29,464		13,430		233,548
Substandard(3)	Substandard(3)	9,871		—		—		1,063		—		—		3,662		14,596		Substandard(3)	520		20,900		7,514		21,626		23,690		64,942		10,797		149,989
Total	Total	$	98,171	$	113,819	$	284,134	$	176,675	$	127,585	$	119,137	$	268,382	$	1,187,903	Total	$	396,304	$	1,213,248	$	1,702,094	$	1,163,359	$	360,067	$	1,172,364	$	403,236	$	6,410,672

For the Three Months Ended June 30, 2023:
Current period charge-offs		$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2023:
For the Three Months Ended September 30, 2023:																		For the Three Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2023:																		For the Nine Months Ended September 30, 2023:
Current period charge-offs																		Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of June 30, 2023																	As of September 30, 2023
		Year of Origination:																	Year of Origination:
		2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total			2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Rural Infrastructure Finance loans(1):
Agricultural Finance - Corporate AgFinance(1):																		Agricultural Finance - Corporate AgFinance(1):
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	383,710	$	732,146	$	183,029	$	610,440	$	720,113	$	632,462	$	44,867	$	3,306,767	Acceptable	$	180,030	$	98,524	$	262,572	$	123,685	$	99,696	$	113,758	$	240,977	$	1,119,242
Special mention(2)	Special mention(2)	—		—		—		—		—		—		—		—		Special mention(2)	—		14,625		15,632		50,856		20,347		1,021		2,054		104,535
Substandard(3)	Substandard(3)	—		—		—		—		—		—		—		—		Substandard(3)	—		—		—		—		—		—		—		—
Total	Total	$	383,710	$	732,146	$	183,029	$	610,440	$	720,113	$	632,462	$	44,867	$	3,306,767	Total	$	180,030	$	113,149	$	278,204	$	174,541	$	120,043	$	114,779	$	243,031	$	1,223,777

For the Three Months Ended June 30, 2023:

For the Three Months Ended September 30, 2023:																		For the Three Months Ended September 30, 2023:
Current period charge-offs																		Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Nine Months Ended September 30, 2023:																		For the Nine Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2023:
Current period charge-offs		$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

As of December 31, 2022
Year of Origination:
2022 2021 2020 2019 2018 Prior Revolving Loans - Amortized Cost Basis Total
(in thousands)
Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:
Acceptable $ 1,157,829 $ 1,704,547 $ 1,187,474 $ 360,704 $ 242,491 $ 947,535 $ 385,503 $ 5,986,083
Special mention(2)
91,099 68,260 25,629 11,254 5,325 17,797 2,452 221,816
Substandard(3)
3,094 8,814 22,976 23,937 17,845 67,654 10,107 154,427
Total $ 1,252,022 $ 1,781,621 $ 1,236,079 $ 395,895 $ 265,661 $ 1,032,986 $ 398,062 $ 6,362,326
For the Three Months Ended June 30, 2022:
Current period charge-offs $ — $ — $ — $ — $ — $ — $ — $ —
For the Six Months Ended June 30, 2022:
Current period charge-offs $ — $ — $ — $ — $ — $ (84) $ — $ (84)


	As of September 30, 2023
	Year of Origination:
	2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	450,241	$	694,635	$	189,385	$	598,689	$	711,794	$	610,062	$	58,413	$	3,313,219
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		29,494		—		—		—		—		—		29,494
Total	$	450,241	$	724,129	$	189,385	$	598,689	$	711,794	$	610,062	$	58,413	$	3,342,713

For the Three Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



For the Nine Months Ended September 30, 2023:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of December 31, 2022																	As of December 31, 2022
		Year of Origination:																	Year of Origination:
		2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Agricultural Finance - Corporate AgFinance loans(1):
Agricultural Finance - Farm & Ranch loans(1):																		Agricultural Finance - Farm & Ranch loans(1):
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	145,263	$	299,729	$	221,560	$	108,230	$	76,454	$	44,827	$	232,107	$	1,128,170	Acceptable	$	1,157,829	$	1,704,547	$	1,187,474	$	360,704	$	242,491	$	947,535	$	385,503	$	5,986,083
Special mention(2)	Special mention(2)	—		—		—		20,698		—		—		2,145		22,843		Special mention(2)	91,099		68,260		25,629		11,254		5,325		17,797		2,452		221,816
Substandard(3)	Substandard(3)	—		—		4,598		—		—		—		10,642		15,240		Substandard(3)	3,094		8,814		22,976		23,937		17,845		67,654		10,107		154,427
Total	Total	$	145,263	$	299,729	$	226,158	$	128,928	$	76,454	$	44,827	$	244,894	$	1,166,253	Total	$	1,252,022	$	1,781,621	$	1,236,079	$	395,895	$	265,661	$	1,032,986	$	398,062	$	6,362,326

For the Three Months Ended June 30, 2022:
For the Three Months Ended September 30, 2022:																		For the Three Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2022:
For the Nine Months Ended September 30, 2022:																		For the Nine Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	(84)	$	—	$	(84)

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of December 31, 2022																	As of December 31, 2022
		Year of Origination:																	Year of Origination:
		2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Rural Infrastructure Finance loans(1):
Agricultural Finance - Corporate AgFinance loans(1):																		Agricultural Finance - Corporate AgFinance loans(1):
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266	Acceptable	$	145,263	$	299,729	$	221,560	$	108,230	$	76,454	$	44,827	$	232,107	$	1,128,170
Special mention(2)	Special mention(2)	—		—		—		—		—		—		—		—		Special mention(2)	—		—		—		20,698		—		—		2,145		22,843
Substandard(3)	Substandard(3)	—		—		—		—		—		—		—		—		Substandard(3)	—		—		4,598		—		—		—		10,642		15,240
Total	Total	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266	Total	$	145,263	$	299,729	$	226,158	$	128,928	$	76,454	$	44,827	$	244,894	$	1,166,253

For the Three Months Ended June 30, 2022:
For the Three Months Ended September 30, 2022:																		For the Three Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2022:
For the Nine Months Ended September 30, 2022:																		For the Nine Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


	As of December 31, 2022
	Year of Origination:
	2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
	(in thousands)
Rural Infrastructure Finance loans(1):
Internally Assigned Risk Rating:
Acceptable	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266
Special mention(2)	—		—		—		—		—		—		—		—
Substandard(3)	—		—		—		—		—		—		—		—
Total	$	741,021	$	220,420	$	629,223	$	739,270	$	7,932	$	649,830	$	33,570	$	3,021,266

For the Three Months Ended September 30, 2022:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—



For the Nine Months Ended September 30, 2022:
Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Amounts represent unpaid principal balance of risk-rated loans, which is the basis Farmer Mac uses to analyze its portfolio, and recorded investment of past due loans.

(2)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(3)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

6.GUARANTEES AND COMMITMENTS

The following table presents the maximum principal amount of potential undiscounted future payments that Farmer Mac could be required to make under all off-balance sheet Farmer Mac Guaranteed Securities as of ~~June~~September 30, 2023 and December 31, 2022, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans:

Table 6.1


Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities	Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities					Outstanding Balance of Off-Balance Sheet Farmer Mac Guaranteed Securities
		As of June 30, 2023		As of December 31, 2022			As of September 30, 2023		As of December 31, 2022
		(in thousands)					(in thousands)
Agricultural Finance	Agricultural Finance					Agricultural Finance
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	$	481,397	$	500,953	Farmer Mac Guaranteed Securities	$	455,681	$	500,953
Rural Infrastructure Finance	Rural Infrastructure Finance					Rural Infrastructure Finance
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	1,098		1,169		Farmer Mac Guaranteed Securities	1,098		1,169
Total off-balance sheet Farmer Mac Guaranteed Securities	Total off-balance sheet Farmer Mac Guaranteed Securities	$	482,495	$	502,122	Total off-balance sheet Farmer Mac Guaranteed Securities	$	456,779	$	502,122

Eligible loans and other eligible assets may be placed into trusts that are used as vehicles for the securitization of the transferred assets and the Farmer Mac-guaranteed beneficial interests in the trusts are sold to investors.

The following table summarizes the significant cash flows received from and paid to trusts used for Farmer Mac securitizations:

Table 6.2


		For the Six Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022
		(in thousands)				(in thousands)
Proceeds from new securitizations	Proceeds from new securitizations	$	222,188	$	25,928		Proceeds from new securitizations	$	222,188	$	305,410
Guarantee fees received	Guarantee fees received	933		1,074			Guarantee fees received	1,280		1,464

Farmer Mac presents a liability for its obligation to stand ready under its guarantee in "Guarantee and commitment obligation" on the consolidated balance sheets. The following table presents the liability and the weighted-average remaining maturity of all loans underlying off-balance sheet Farmer Mac Guaranteed Securities:

Table 6.3

As of June 30, 2023

As of December 31, 2022

As of September 30, 2023

As of December 31, 2022

(dollars in thousands)

Guarantee and commitment obligation

6,200

6,461

Guarantee and commitment obligation

6,053

6,461

Weighted average remaining maturity:

Farmer Mac Guaranteed Securities

21.2 years

21.4 years

Farmer Mac Guaranteed Securities

22.1 years

21.4 years

AgVantage Securities

1.5 years

2.0 years

AgVantage Securities

1.2 years

2.0 years

Long-Term Standby Purchase Commitments

Farmer Mac has recorded a liability for its obligation to stand ready under the commitment in the guarantee and commitment obligation on the consolidated balance sheets. The following table presents the liability, the maximum principal amount of potential undiscounted future payments that Farmer Mac could be requested to make under all LTSPCs, not including offsets provided by any recourse provisions, recoveries from third parties, or collateral for the underlying loans, as well as the weighted-average remaining maturity of all loans underlying LTSPCs:

Table 6.4

As of June 30, 2023

As of December 31, 2022

As of September 30, 2023

As of December 31, 2022

(dollars in thousands)

Guarantee and commitment obligation(1)

39,672

40,121

Guarantee and commitment obligation(1)

41,554

40,121

Maximum principal amount

3,450,164

3,423,155

Maximum principal amount

3,613,934

3,423,155

Weighted-average remaining maturity

14.8 years

15.3 years

Weighted-average remaining maturity

14.7 years

15.3 years

(1) Relates to LTSPCs issued or modified on or after January 1, 2003.

Reserve for Losses - LTSPCs and Farmer Mac Guaranteed Securities

The following table is a summary, by asset type, of the reserve for losses as of ~~June~~September 30, 2023 and December 31, 2022:

Table 6.5


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		Reserve for Losses		Reserve for Losses			Reserve for Losses		Reserve for Losses
		(in thousands)					(in thousands)
Agricultural Finance	Agricultural Finance	$	1,471	$	819	Agricultural Finance	$	1,412	$	819
Rural Infrastructure Finance	Rural Infrastructure Finance	234		614		Rural Infrastructure Finance	248		614
Total	Total	$	1,705	$	1,433	Total	$	1,660	$	1,433

The following is a summary of the changes in the reserve for losses for the three and ~~six~~nine month periods ended ~~June~~September 30, 2023 and 2022:

Table 6.6


		For the Three Months Ended				For the Six Months Ended					For the Three Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022			September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022

		Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses			Reserve for Losses		Reserve for Losses		Reserve for Losses		Reserve for Losses
		(in thousands)				(in thousands)					(in thousands)				(in thousands)

Agricultural Finance	Agricultural Finance									Agricultural Finance
Beginning Balance	Beginning Balance	$	1,396	$	993	$	819	$	1,068	Beginning Balance	$	1,471	$	882	$	819	$	1,068
Provision for/(release of )losses		75		(111)		652		(186)
(Release of)/provision for losses										(Release of)/provision for losses	(59)		(139)		593		(325)
Ending Balance	Ending Balance	$	1,471	$	882	$	1,471	$	882	Ending Balance	$	1,412	$	743	$	1,412	$	743

Rural Infrastructure Finance	Rural Infrastructure Finance									Rural Infrastructure Finance
Beginning Balance	Beginning Balance	$	240	$	847	$	614	$	882	Beginning Balance	$	234	$	795	$	614	$	882
Release of losses		(6)		(52)		(380)		(87)
Provision for/(release of) losses										Provision for/(release of) losses	14		(28)		(366)		(115)
Ending Balance	Ending Balance	$	234	$	795	$	234	$	795	Ending Balance	$	248	$	767	$	248	$	767

The provision for the reserve for losses in the Agricultural Finance LTSPC portfolio recorded during the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data. The release from the reserve for losses in the Rural Infrastructure Finance LTSPC portfolio recorded during the ~~six~~nine months ended ~~June~~September 30, 2023 was primarily due to an updated estimate of expected losses based on additional available loss-given-default industry data.

The ~~release from the reserve~~allowance for ~~losses in~~ both the Agricultural Finance and Rural Infrastructure Finance

LTSPC and Farmer Mac Guaranteed portfolios recorded during the three and ~~six~~nine months ended ~~June~~September 30, 2022 ~~was primarily due to improvements in risk ratings in those portfolios.~~remained relatively constant.

The following table presents the unpaid principal balances by delinquency status of Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of ~~June~~September 30, 2023 and December 31, 2022:

Table 6.7


		As of June 30, 2023													As of September 30, 2023
		Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans			Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
		(in thousands)													(in thousands)
Agricultural Finance:	Agricultural Finance:	$	3,227,645	$	5,630	$	—	$	4,570	$	10,200	$	3,237,845	Agricultural Finance:	$	3,368,620	$	5,196	$	3,573	$	2,840	$	11,609	$	3,380,229
Rural Infrastructure Finance:	Rural Infrastructure Finance:	490,414		—		—		—		—		490,414		Rural Infrastructure Finance:	487,517		—		—		—		—		487,517
Total	Total	$	3,718,059	$	5,630	$	—	$	4,570	$	10,200	$	3,728,259	Total	$	3,856,137	$	5,196	$	3,573	$	2,840	$	11,609	$	3,867,746

(1)Includes loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days of more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.


	As of December 31, 2022
	Current		30-59 Days		60-89 Days		90 Days and Greater(1)		Total Past Due		Total Loans
	(in thousands)
Agricultural Finance:	$	3,174,939	$	11,614	$	622	$	3,817	$	16,053	$	3,190,992
Rural Infrastructure Finance:	523,192		—		—		—		—		523,192
Total	$	3,698,131	$	11,614	$	622	$	3,817	$	16,053	$	3,714,184

Credit Quality Indicators

The following tables present credit quality indicators related to Agricultural Finance and Rural Infrastructure loans underlying LTSPCs and Farmer Mac Guaranteed Securities as of ~~June~~September 30, 2023 and December 31, 2022, by year of origination:

Table 6.8


		As of June 30, 2023																	As of September 30, 2023
		Year of Origination:																	Year of Origination:
		2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total			2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Agricultural Finance:	Agricultural Finance:																	Agricultural Finance:
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	80,415	$	225,112	$	488,832	$	531,946	$	250,650	$	1,238,946	$	333,072	$	3,148,973	Acceptable	$	148,802	$	243,690	$	513,841	$	535,172	$	272,257	$	1,228,548	$	362,825	$	3,305,135
Special mention(1)	Special mention(1)	7,790		73		1,300		881		—		38,400		2,200		50,644		Special mention(1)	—		2,568		1,294		877		—		39,657		527		44,923
Substandard(2)	Substandard(2)	—		—		—		154		997		32,874		4,203		38,228		Substandard(2)	—		—		—		131		1,541		27,236		1,263		30,171
Total	Total	$	88,205	$	225,185	$	490,132	$	532,981	$	251,647	$	1,310,220	$	339,475	$	3,237,845	Total	$	148,802	$	246,258	$	515,135	$	536,180	$	273,798	$	1,295,441	$	364,615	$	3,380,229

For the Three Months Ended June 30, 2023:
For the Three Months Ended September 30, 2023:																		For the Three Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2023:
For the Nine Months Ended September 30, 2023:																		For the Nine Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of June 30, 2023																	As of September 30, 2023
		Year of Origination:																	Year of Origination:
		2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total			2023		2022		2021		2020		2019		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Rural Infrastructure Finance:	Rural Infrastructure Finance:																	Rural Infrastructure Finance:
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	—	$	—	$	—	$	—	$	—	$	433,896	$	56,518	$	490,414	Acceptable	$	—	$	—	$	—	$	—	$	—	$	426,504	$	61,013	$	487,517
Special mention(1)	Special mention(1)	—		—		—		—		—		—		—		—		Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	Substandard(2)	—		—		—		—		—		—		—		—		Substandard(2)	—		—		—		—		—		—		—		—
Total	Total	$	—	$	—	$	—	$	—	$	—	$	433,896	$	56,518	$	490,414	Total	$	—	$	—	$	—	$	—	$	—	$	426,504	$	61,013	$	487,517

For the Three Months Ended June 30, 2023:
For the Three Months Ended September 30, 2023:																		For the Three Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2023:
For the Nine Months Ended September 30, 2023:																		For the Nine Months Ended September 30, 2023:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of December 31, 2022																	As of December 31, 2022
		Year of Origination:																	Year of Origination:
		2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Agricultural Finance:	Agricultural Finance:																	Agricultural Finance:
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	202,998	$	496,269	$	535,798	$	254,293	$	207,379	$	1,107,834	$	296,508	$	3,101,079	Acceptable	$	202,998	$	496,269	$	535,798	$	254,293	$	207,379	$	1,107,834	$	296,508	$	3,101,079
Special mention(1)	Special mention(1)	—		1,319		1,778		—		1,198		42,680		3,205		50,180		Special mention(1)	—		1,319		1,778		—		1,198		42,680		3,205		50,180
Substandard(2)	Substandard(2)	—		—		176		—		3,588		32,597		3,372		39,733		Substandard(2)	—		—		176		—		3,588		32,597		3,372		39,733
Total	Total	$	202,998	$	497,588	$	537,752	$	254,293	$	212,165	$	1,183,111	$	303,085	$	3,190,992	Total	$	202,998	$	497,588	$	537,752	$	254,293	$	212,165	$	1,183,111	$	303,085	$	3,190,992

For the Three Months Ended June 30, 2022:
For the Three Months Ended September 30, 2022:																		For the Three Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2022:
For the Nine Months Ended September 30, 2022:																		For the Nine Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.


		As of December 31, 2022																	As of December 31, 2022
		Year of Origination:																	Year of Origination:
		2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total			2022		2021		2020		2019		2018		Prior		Revolving Loans - Amortized Cost Basis		Total
		(in thousands)																	(in thousands)
Rural Infrastructure Finance:	Rural Infrastructure Finance:																	Rural Infrastructure Finance:
Internally Assigned Risk Rating:	Internally Assigned Risk Rating:																	Internally Assigned Risk Rating:
Acceptable	Acceptable	$	—	$	—	$	—	$	—	$	—	$	470,659	$	52,533	$	523,192	Acceptable	$	—	$	—	$	—	$	—	$	—	$	470,659	$	52,533	$	523,192
Special mention(1)	Special mention(1)	—		—		—		—		—		—		—		—		Special mention(1)	—		—		—		—		—		—		—		—
Substandard(2)	Substandard(2)	—		—		—		—		—		—		—		—		Substandard(2)	—		—		—		—		—		—		—		—
Total	Total	$	—	$	—	$	—	$	—	$	—	$	470,659	$	52,533	$	523,192	Total	$	—	$	—	$	—	$	—	$	—	$	470,659	$	52,533	$	523,192

For the Three Months Ended June 30, 2022:
For the Three Months Ended September 30, 2022:																		For the Three Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

For the Six Months Ended June 30, 2022:
For the Nine Months Ended September 30, 2022:																		For the Nine Months Ended September 30, 2022:
Current period charge-offs	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	Current period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)Assets in the "Special mention" category generally have potential weaknesses due to performance issues but are currently considered to be adequately secured.

(2)Substandard assets have a well-defined weakness or weaknesses and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected.

7.NOTES PAYABLE

Farmer Mac's borrowings consist of discount notes and medium-term notes, both of which are unsecured general obligations of Farmer Mac. Discount notes generally have original maturities of 1 year or less, whereas medium-term notes generally have maturities of 0.5 years to 25.0 years.

The following tables set forth information related to Farmer Mac's borrowings as of ~~June~~September 30, 2023 and December 31, 2022:

Table 7.1


		June 30, 2023									September 30, 2023
		Outstanding as of June 30				Average Outstanding During the Quarter					Outstanding as of September 30				Average Outstanding During the Quarter
		Amount		Weighted- Average Rate		Amount		Weighted- Average Rate			Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
		(dollars in thousands)									(dollars in thousands)
Due within one year:	Due within one year:									Due within one year:
Discount notes	Discount notes	$	954,611	4.91	%	$	802,684	4.67	%	Discount notes	$	1,535,856	5.30	%	$	942,297	4.92	%
Medium-term notes	Medium-term notes	1,921,890		4.21	%	2,371,610		3.86	%	Medium-term notes	947,466		4.75	%	2,085,249		4.00	%
Current portion of medium-term notes	Current portion of medium-term notes	5,454,397		2.05	%					Current portion of medium-term notes	5,472,893		2.49	%
Total due within one year	Total due within one year	$	8,330,898	2.87	%					Total due within one year	$	7,956,215	3.30	%
Due after one year:	Due after one year:									Due after one year:
Medium-term notes due in:	Medium-term notes due in:									Medium-term notes due in:
Two years	Two years	$	4,377,382	2.58	%					Two years	$	5,231,168	3.05	%
Three years	Three years	3,346,872		2.00	%					Three years	3,243,230		2.21	%
Four years	Four years	3,109,837		2.18	%					Four years	3,297,724		2.64	%
Five years	Five years	2,096,324		3.81	%					Five years	2,306,430		4.07	%
Thereafter	Thereafter	3,738,098		2.73	%					Thereafter	3,567,720		2.80	%
Total due after one year	Total due after one year	$	16,668,513	2.58	%					Total due after one year	$	17,646,272	2.90	%
Total principal net of discounts	Total principal net of discounts	$	24,999,411	2.68	%					Total principal net of discounts	$	25,602,487	3.03	%
Hedging adjustments	Hedging adjustments	(489,407)								Hedging adjustments	(478,942)
Total	Total	$	24,510,004							Total	$	25,123,545


	December 31, 2022
	Outstanding as of December 31				Average Outstanding During the Year
	Amount		Weighted- Average Rate		Amount		Weighted- Average Rate
	(dollars in thousands)
Due within one year:
Discount notes	$	565,578	3.91	%	$	1,325,026	0.96	%
Medium-term notes	2,547,733		3.54	%	1,442,932		2.11	%
Current portion of medium-term notes	4,920,864		1.49	%
Total due within one year	$	8,034,175	2.31	%
Due after one year:
Medium-term notes due in:
Two years	$	4,072,740	1.71	%
Three years	3,506,480		2.10	%
Four years	2,967,625		1.44	%
Five years	2,361,197		3.12	%
Thereafter	4,057,982		2.60	%
Total due after one year	$	16,966,024	2.15	%
Total principal net of discounts	$	25,000,199	2.20	%
Hedging adjustments	(531,086)
Total	$	24,469,113

The maximum amount of Farmer Mac's discount notes outstanding at any month end during the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 was ~~$1.0~~$1.5 billion and $2.2 billion, respectively.

Callable medium-term notes give Farmer Mac the option to redeem the debt at par value on a specified call date or at any time on or after a specified call date. The following table summarizes by maturity date the amounts and costs for Farmer Mac debt callable in 2023 as of ~~June~~September 30, 2023:

Table 7.2


Debt Callable in 2023 as of June 30, 2023, by Maturity
Debt Callable in 2023 as of September 30, 2023, by Maturity						Debt Callable in 2023 as of September 30, 2023, by Maturity
		Amount		Weighted-Average Rate			Amount		Weighted-Average Rate
		(dollars in thousands)					(dollars in thousands)
Maturity:	Maturity:					Maturity:
2024	2024	$	1,038,243	3.61	%	2024	$	816,830	3.66	%
2025	2025	771,937		2.10	%	2025	664,046		2.33	%
2026	2026	1,184,809		1.46	%	2026	1,012,989		1.57	%
2027	2027	650,076		2.30	%	2027	560,204		2.27	%
Thereafter	Thereafter	1,698,156		2.21	%	Thereafter	1,161,379		2.51	%
Total	Total	$	5,343,221	2.31	%	Total	$	4,215,448	2.45	%

The following schedule summarizes the earliest interest rate reset date, or debt maturities, of total borrowings outstanding as of ~~June~~September 30, 2023, including callable and non-callable medium-term notes, assuming callable notes are redeemed at the initial call date:

Table 7.3


		Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding					Earliest Interest Rate Reset Date, or Debt Maturities, of Borrowings Outstanding
		Amount		Weighted-Average Rate			Amount		Weighted-Average Rate
		(dollars in thousands)					(dollars in thousands)
Debt with interest rate resets, or debt maturities in:	Debt with interest rate resets, or debt maturities in:					Debt with interest rate resets, or debt maturities in:
2023	2023	$	6,635,570	3.56	%	2023	$	5,468,108	4.57	%
2024	2024	5,058,851		2.38	%	2024	5,454,586		2.62	%
2025	2025	3,817,242		2.32	%	2025	4,222,333		2.60	%
2026	2026	3,133,807		1.61	%	2026	3,319,847		1.81	%
2027	2027	2,433,415		3.06	%	2027	2,573,406		3.14	%
Thereafter	Thereafter	3,920,526		2.51	%	Thereafter	4,564,207		2.87	%
Total principal net of discounts	Total principal net of discounts	$	24,999,411	2.68	%	Total principal net of discounts	$	25,602,487	3.03	%

During the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, Farmer Mac called ~~none~~$111.0 million and $26.0 million of callable medium-term notes, respectively.

Authority to Borrow from the U.S. Treasury

Farmer Mac's statutory charter authorizes it, upon satisfying certain conditions, 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. Any debt obligations issued by Farmer Mac under this authority would bear interest at a rate determined by the U.S. Treasury, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of the obligations from Farmer Mac. The charter requires Farmer Mac to repurchase any of its debt obligations held by the U.S. Treasury within a reasonable time. As of ~~June~~September 30, 2023, Farmer Mac had not used this borrowing authority.

Gains on Repurchases of Outstanding Debt

No outstanding debt repurchases were made in the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

8.EQUITY

Common Stock

During each of the first, second, and ~~second quarter~~third quarters 2023, Farmer Mac paid a quarterly dividend of $1.10 per share on all classes of its common stock. For each quarter in 2022, Farmer Mac paid a quarterly dividend of $0.95 per share on all classes of its common stock.

Farmer Mac's board of directors approved a share repurchase program during third quarter 2015 authorizing Farmer Mac to repurchase up to $25.0 million of its outstanding Class C non-voting common stock. The share repurchase program, last modified on March 14, 2019, authorized Farmer Mac to

repurchase up to $10.0 million of Farmer Mac's outstanding Class C non-voting common stock. During first quarter 2020, Farmer Mac repurchased approximately 4,000 shares of Class C non-voting common stock at a cost of approximately $0.2 million. Shortly after these repurchases were completed, Farmer Mac indefinitely suspended its share repurchase program in an effort to preserve capital and liquidity in view of market volatility and uncertainty caused by the COVID-19 pandemic. In March 2021, Farmer Mac's board of directors reinstated the share repurchase program on its previous terms (with a remaining authorization of up to $9.8 million in stock repurchases) and extended the expiration date of the program to March 2023. Farmer Mac did not repurchase any shares of its Class C non-voting common stock during that two-year period. In February 2023, Farmer Mac's board of directors renewed the share repurchase program on its previous terms (with a remaining authorization of up to $9.8 million in stock repurchases) and extended the expiration date of the program to February 2025. Farmer Mac did not repurchase any shares of its Class C non-voting common stock during ~~second~~third quarter 2023. As of ~~June~~September 30, 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.

Capital Requirements

Farmer Mac is required to comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of both ~~June~~September 30, 2023 and December 31, 2022, the minimum capital requirement was greater than the risk-based capital requirement. Farmer Mac's ability to declare and pay dividends could be restricted if it fails to comply with applicable capital requirements.

As of ~~June~~September 30, 2023, Farmer Mac's minimum capital requirement was ~~$814.7~~$840.1 million and its core capital level was $1.4 billion, which was ~~$566.2~~$581.1 million above the minimum capital requirement as of that date. As of December 31, 2022, Farmer Mac's minimum capital requirement was $805.9 million and its core capital level was $1.3 billion, which was $516.9 million above the minimum capital requirement as of that date.

In accordance with a rule of the Farm Credit Administration ("FCA") on Farmer Mac's capital planning, and as part of Farmer Mac's capital plan, Farmer Mac has adopted a policy for maintaining a sufficient level of Tier 1 capital (consisting of retained earnings, paid-in-capital, common stock, and qualifying preferred stock) and imposing restrictions on Tier 1-eligible dividends and any discretionary bonus payments in the event that this capital falls below specified thresholds.

9.FAIR VALUE DISCLOSURES

Fair Value Classification and Transfers

The following tables present information about Farmer Mac's assets and liabilities measured at fair value on a recurring basis as of ~~June~~September 30, 2023 and December 31, 2022, respectively, and indicate the fair value hierarchy of the valuation techniques used by Farmer Mac to determine such fair value:

Table 9.1


Assets and Liabilities Measured at Fair Value as of June 30, 2023
Assets and Liabilities Measured at Fair Value as of September 30, 2023										Assets and Liabilities Measured at Fair Value as of September 30, 2023
		Level 1		Level 2		Level 3(1)		Total			Level 1		Level 2		Level 3(1)		Total
		(in thousands)									(in thousands)
Recurring:	Recurring:									Recurring:
Assets:	Assets:									Assets:
Investment Securities:	Investment Securities:									Investment Securities:
Available-for-sale:	Available-for-sale:									Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,032	$	19,032	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,033	$	19,033

Floating rate Government/GSE guaranteed mortgage-backed securities	Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,442,610		—		2,442,610		Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,465,545		—		2,465,545
Fixed rate GSE guaranteed mortgage-backed securities	Fixed rate GSE guaranteed mortgage-backed securities	—		1,360,784		—		1,360,784		Fixed rate GSE guaranteed mortgage-backed securities	—		1,386,378		—		1,386,378

Floating rate U.S. Treasuries	Floating rate U.S. Treasuries	49,998		—		—		49,998		Floating rate U.S. Treasuries	50,011		—		—		50,011
Fixed rate U.S. Treasuries	Fixed rate U.S. Treasuries	845,195		—		—		845,195		Fixed rate U.S. Treasuries	952,447		—		—		952,447
Total Available-for-sale Investment Securities	Total Available-for-sale Investment Securities	895,193		3,803,394		19,032		4,717,619		Total Available-for-sale Investment Securities	1,002,458		3,851,923		19,033		4,873,414
Farmer Mac Guaranteed Securities:	Farmer Mac Guaranteed Securities:									Farmer Mac Guaranteed Securities:
Available-for-sale:	Available-for-sale:									Available-for-sale:
AgVantage	AgVantage	—		—		7,737,810		7,737,810		AgVantage	—		—		5,048,708		5,048,708
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	—		—		7,605		7,605		Farmer Mac Guaranteed Securities	—		—		9,989		9,989
Total Farmer Mac Guaranteed Securities	Total Farmer Mac Guaranteed Securities	—		—		7,745,415		7,745,415		Total Farmer Mac Guaranteed Securities	—		—		5,058,697		5,058,697
USDA Securities:	USDA Securities:									USDA Securities:
Trading	Trading	—		—		1,348		1,348		Trading	—		—		1,302		1,302
Total USDA Securities	Total USDA Securities	—		—		1,348		1,348		Total USDA Securities	—		—		1,302		1,302
Financial derivatives	Financial derivatives	71		26,753		—		26,824		Financial derivatives	81		28,774		—		28,855
Guarantee Asset	Guarantee Asset	—		—		4,331		4,331		Guarantee Asset	—		—		5,963		5,963
Total Assets at fair value	Total Assets at fair value	$	895,264	$	3,830,147	$	7,770,126	$	12,495,537	Total Assets at fair value	$	1,002,539	$	3,880,697	$	5,084,995	$	9,968,231
Liabilities:	Liabilities:									Liabilities:
Financial derivatives	Financial derivatives	$	—	$	188,652	$	—	$	188,652	Financial derivatives	$	12	$	188,350	$	—	$	188,362
Total Liabilities at fair value	Total Liabilities at fair value	$	—	$	188,652	$	—	$	188,652	Total Liabilities at fair value	$	12	$	188,350	$	—	$	188,362

(1) Level 3 assets represent ~~28%~~18% of total assets and ~~61%~~50% of financial instruments measured at fair value.


Assets and Liabilities Measured at Fair Value as of December 31, 2022
	Level 1		Level 2		Level 3(1)		Total
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	—	$	—	$	19,027	$	19,027

Floating rate Government/GSE guaranteed mortgage-backed securities	—		2,392,540		—		2,392,540
Fixed rate GSE guaranteed mortgage-backed securities	—		1,048,386		—		1,048,386
Fixed rate U.S. Treasuries	1,119,611		—		—		1,119,611
Total Available-for-sale Investment Securities	1,119,611		3,440,926		19,027		4,579,564
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	—		—		7,599,379		7,599,379
Farmer Mac Guaranteed Securities	—		—		7,847		7,847
Total Farmer Mac Guaranteed Securities	—		—		7,607,226		7,607,226
USDA Securities:
Trading	—		—		1,767		1,767
Total USDA Securities	—		—		1,767		1,767
Financial derivatives	—		37,409		—		37,409
Guarantee Asset	—		—		4,467		4,467
Total Assets at fair value	$	1,119,611	$	3,478,335	$	7,632,487	$	12,230,433
Liabilities:
Financial derivatives	$	142	$	175,184	$	—	$	175,326
Total Liabilities at fair value	$	142	$	175,184	$	—	$	175,326

(1) Level 3 assets represent 28% of total assets and 62% of financial instruments measured at fair value.

There were no material assets or liabilities measured at fair value on a non-recurring basis as of ~~June~~September 30, 2023 or December 31, 2022.

Transfers in and/or out of the different levels within the fair value hierarchy are based on the fair values of the assets and liabilities as of the beginning of the reporting period. During the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, there were no transfers within the fair value hierarchy.

The following tables present additional information about assets and liabilities measured at fair value on a recurring basis for which Farmer Mac has used significant unobservable inputs to determine fair value. Net transfers in and/or out of Level 3 are based on the fair values of the assets and liabilities as of the beginning of the reporting period. There were no liabilities measured at fair value using significant unobservable inputs during the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

Table 9.2


Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2023
Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2023																	Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2023
		Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized losses included in Income		Unrealized gains included in Other Comprehensive Income			Ending Balance			Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains included in Other Comprehensive Income		Transfers Out(1)		Ending Balance
		(in thousands)												(in thousands)
Recurring:	Recurring:																Recurring:
Assets:	Assets:																Assets:
Investment Securities:	Investment Securities:																Investment Securities:
Available-for-sale:	Available-for-sale:																Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,031	$	—	$	—	$	1	$	—	$	—		$	19,032	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,032	$	—	$	—	$	1	$	—	$	—	$	—	$	19,033
Total available-for-sale	Total available-for-sale	19,031		—		—		1		—		—			19,032		Total available-for-sale	19,032		—		—		1		—		—		—		19,033
Farmer Mac Guaranteed Securities:	Farmer Mac Guaranteed Securities:																Farmer Mac Guaranteed Securities:
Available-for-sale:	Available-for-sale:																Available-for-sale:
AgVantage	AgVantage	8,217,420		852,000		(1,257,413)		8		(101,872)		27,667			7,737,810		AgVantage	7,737,810		100,000		(6,875)		133		(107,917)		9,653		(2,684,096)		5,048,708
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	8,034		—		(441)		—		—		12			7,605		Farmer Mac Guaranteed Securities	7,605		—		(169)		—		—		2,553		—		9,989
Total available-for-sale	Total available-for-sale	8,225,454		852,000		(1,257,854)		8		(101,872)		27,679			7,745,415		Total available-for-sale	7,745,415		100,000		(7,044)		133		(107,917)		12,206		(2,684,096)		5,058,697
USDA Securities:	USDA Securities:																USDA Securities:

Trading	Trading	1,405		—		(48)		—		(9)		—			1,348		Trading	1,348		—		(44)		—		(2)		—		—		1,302
Total USDA Securities	Total USDA Securities	1,405		—		(48)		—		(9)		—			1,348		Total USDA Securities	1,348		—		(44)		—		(2)		—		—		1,302
Guarantee and commitment obligations:	Guarantee and commitment obligations:																Guarantee and commitment obligations:
Guarantee Asset	Guarantee Asset	4,570		—		(191)		—		(48)		—			4,331		Guarantee Asset	4,331		—		(84)		—		1,716		—		—		5,963
Total Guarantee and commitment obligations	Total Guarantee and commitment obligations	4,570		—		(191)		—		(48)		—			4,331		Total Guarantee and commitment obligations	4,331		—		(84)		—		1,716		—		—		5,963
Total Assets at fair value	Total Assets at fair value	$	8,250,460	$	852,000	$	(1,258,093)	$	9	$	(101,929)	$	27,679		$	7,770,126	Total Assets at fair value	$	7,770,126	$	100,000	$	(7,172)	$	134	$	(106,203)	$	12,206	$	(2,684,096)	$	5,084,995

(1) Includes $2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended June 30, 2022
Beginning Balance Purchases Settlements Allowance for Losses Realized and
unrealized (losses)/gains included
in Income Unrealized gains/(losses)
included in Other
Comprehensive
Income Ending Balance
(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans $ 18,961 $ — $ — $ 1 $ — $ 99 $ 19,061
Total available-for-sale 18,961 — — 1 — 99 19,061
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage 6,589,224 520,000 (513,342) 84 (149,205) (6,365) 6,440,396
Farmer Mac Guaranteed
Securities 11,022 — (358) — — (848) 9,816
Total available-for-sale 6,600,246 520,000 (513,700) 84 (149,205) (7,213) 6,450,212
USDA Securities:
Trading 3,386 — (1,140) — 29 — 2,275
Total USDA Securities 3,386 — (1,140) — 29 — 2,275
Guarantee and commitment obligations:
Guarantee Asset 6,138 — (188) — (314) — 5,636
Total Guarantee and commitment obligations 6,138 — (188) — (314) — 5,636
Total Assets at fair value $ 6,628,731 $ 520,000 $ (515,028) $ 85 $ (149,490) $ (7,114) $ 6,477,184


Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2023
Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2022																	Level 3 Assets and Liabilities Measured at Fair Value for the Three Months Ended September 30, 2022
		Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains included in Other Comprehensive Income			Ending Balance			Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized losses included in Income		Unrealized gains/(losses) included in Other Comprehensive Income		Ending Balance
		(in thousands)												(in thousands)
Recurring:	Recurring:																Recurring:
Assets:	Assets:																Assets:
Investment Securities:	Investment Securities:																Investment Securities:
Available-for-sale:	Available-for-sale:																Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,027	$	—	$	—	$	5	$	—	$	—		$	19,032	Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,061	$	—	$	—	$	11	$	—	$	171	$	19,243
Total available-for-sale	Total available-for-sale	19,027		—		—		5		—		—			19,032		Total available-for-sale	19,061		—		—		11		—		171		19,243
Farmer Mac Guaranteed Securities:	Farmer Mac Guaranteed Securities:																Farmer Mac Guaranteed Securities:
Available-for-sale:	Available-for-sale:																Available-for-sale:
AgVantage	AgVantage	7,599,379		1,539,650		(1,398,799)		40		(8,530)		6,070			7,737,810		AgVantage	6,440,396		1,370,000		(627,131)		(11)		(204,450)		(13,043)		6,965,761
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	7,847		—		(874)		—		—		632			7,605		Farmer Mac Guaranteed Securities	9,816		—		(468)		—		—		(1,107)		8,241
Total available-for-sale	Total available-for-sale	7,607,226		1,539,650		(1,399,673)		40		(8,530)		6,702			7,745,415		Total available-for-sale	6,450,212		1,370,000		(627,599)		(11)		(204,450)		(14,150)		6,974,002
USDA Securities:	USDA Securities:																USDA Securities:

Trading	Trading	1,767		—		(435)		—		16		—			1,348		Trading	2,275		—		(383)		—		(41)		—		1,851
Total USDA Securities	Total USDA Securities	1,767		—		(435)		—		16		—			1,348		Total USDA Securities	2,275		—		(383)		—		(41)		—		1,851
Guarantee and commitment obligations:	Guarantee and commitment obligations:																Guarantee and commitment obligations:
Guarantee Asset	Guarantee Asset	4,467		—		(422)		—		286		—			4,331		Guarantee Asset	5,636		—		(229)		—		(715)		—		4,692
Total Guarantee and commitment obligations	Total Guarantee and commitment obligations	4,467		—		(422)		—		286		—			4,331		Total Guarantee and commitment obligations	5,636		—		(229)		—		(715)		—		4,692
Total Assets at fair value	Total Assets at fair value	$	7,632,487	$	1,539,650	$	(1,400,530)	$	45	$	(8,228)	$	6,702		$	7,770,126	Total Assets at fair value	$	6,477,184	$	1,370,000	$	(628,211)	$	—	$	(205,206)	$	(13,979)	$	6,999,788


Level 3 Assets and Liabilities Measured at Fair Value for the Nine Months Ended September 30, 2023
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized (losses)/gains included in Income		Unrealized gains included in Other Comprehensive Income		Transfers Out(1)		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,027	$	—	$	—	$	6	$	—	$	—	$	—	$	19,033
Total available-for-sale	19,027		—		—		6		—		—		—		19,033
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	7,599,379		1,639,650		(1,405,674)		173		(116,447)		15,723		(2,684,096)		5,048,708
Farmer Mac Guaranteed Securities	7,847		—		(1,043)		—		—		3,185		—		9,989
Total available-for-sale	7,607,226		1,639,650		(1,406,717)		173		(116,447)		18,908		(2,684,096)		5,058,697
USDA Securities:

Trading	1,767		—		(479)		—		14		—		—		1,302
Total USDA Securities	1,767		—		(479)		—		14		—		—		1,302
Guarantee and commitment obligations:
Guarantee Asset	4,467		—		(506)		—		2,002		—		—		5,963
Total Guarantee and commitment obligations	4,467		—		(506)		—		2,002		—		—		5,963
Total Assets at fair value	$	7,632,487	$	1,639,650	$	(1,407,702)	$	179	$	(114,431)	$	18,908	$	(2,684,096)	$	5,084,995

(1) Includes $2.7 billion of AgVantage Securities transferred from available-for-sale to held-to-maturity on July 1, 2023.

Level 3 Assets and Liabilities Measured at Fair Value for the Six Months Ended June 30, 2022
Beginning Balance Purchases Settlements Allowance for Losses Realized and
unrealized losses included
in Income Unrealized losses
included in Other
Comprehensive
Income Ending Balance
(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans $ 19,254 $ — $ — $ 3 $ — $ (196) $ 19,061
Total available-for-sale 19,254 — — 3 — (196) 19,061
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage 6,316,145 1,352,750 (808,626) (334) (359,792) (59,747) 6,440,396
Farmer Mac Guaranteed
Securities 12,414 — (737) — — (1,861) 9,816
Total available-for-sale 6,328,559 1,352,750 (809,363) (334) (359,792) (61,608) 6,450,212
USDA Securities:
Trading 4,401 — (2,092) — (34) — 2,275
Total USDA Securities 4,401 — (2,092) — (34) — 2,275
Guarantee and commitment obligations:
Guarantee Asset 6,237 — (443) — (158) — 5,636
Total Guarantee and commitment obligations 6,237 — (443) — (158) — 5,636
Total Assets at fair value $ 6,358,451 $ 1,352,750 $ (811,898) $ (331) $ (359,984) $ (61,804) $ 6,477,184
52


Level 3 Assets and Liabilities Measured at Fair Value for the Nine Months Ended September 30, 2022
	Beginning Balance		Purchases		Settlements		Allowance for Losses		Realized and unrealized losses included in Income		Unrealized losses included in Other Comprehensive Income		Ending Balance
	(in thousands)
Recurring:
Assets:
Investment Securities:
Available-for-sale:
Floating rate auction-rate certificates backed by Government guaranteed student loans	$	19,254	$	—	$	—	$	14	$	—	$	(25)	$	19,243
Total available-for-sale	19,254		—		—		14		—		(25)		19,243
Farmer Mac Guaranteed Securities:
Available-for-sale:
AgVantage	6,316,145		2,722,750		(1,435,758)		(345)		(564,242)		(72,789)		6,965,761
Farmer Mac Guaranteed Securities	12,414		—		(1,205)		—		—		(2,968)		8,241
Total available-for-sale	6,328,559		2,722,750		(1,436,963)		(345)		(564,242)		(75,757)		6,974,002
USDA Securities:

Trading	4,401		—		(2,475)		—		(75)		—		1,851
Total USDA Securities	4,401		—		(2,475)		—		(75)		—		1,851
Guarantee and commitment obligations:
Guarantee Asset	6,237		—		(672)		—		(873)		—		4,692
Total Guarantee and commitment obligations	6,237		—		(672)		—		(873)		—		4,692
Total Assets at fair value	$	6,358,451	$	2,722,750	$	(1,440,110)	$	(331)	$	(565,190)	$	(75,782)	$	6,999,788

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The following tables present additional information about the significant unobservable inputs, such as discount rates and constant prepayment rates ("CPR"), used in the fair value measurements categorized in Level 3 of the fair value hierarchy as of ~~June~~September 30, 2023 and December 31, 2022:

Table 9.3

~~As of June 30, 2023~~

~~Financial Instruments~~

~~Fair Value~~

~~Valuation Technique~~

~~Unobservable Input~~

~~Range (Weighted-Average)~~

~~(in thousands)~~

~~Assets:~~

~~Investment securities:~~

~~Floating rate auction-rate certificates backed by Government guaranteed student loans~~

~~19,032~~

~~Indicative bids~~

~~Range of broker quotes~~

~~96.8% - 96.8% (96.8%)~~

~~Farmer Mac Guaranteed Securities:~~

~~AgVantage~~

~~7,737,810~~

~~Discounted cash flow~~

~~Discount rate~~

~~4.9% - 6.9% (5.5%)~~

~~Farmer Mac Guaranteed Securities~~

~~7,605~~

~~Discounted cash flow~~

~~Discount rate~~

~~4.9% - 5.4% (5.2%)~~

~~CPR~~

~~USDA Securities~~

~~1,348~~

~~Discounted cash flow~~

~~Discount rate~~

~~5.6% - 5.9% (5.6%)~~

~~CPR~~

~~12% - 13% (13%)~~

~~Guarantee Asset~~

~~4,331~~

~~Discounted cash flow~~

~~Discount rate~~

~~5.5% - 6.0% (5.7%)~~

~~CPR~~

As of September 30, 2023

Financial Instruments

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted-Average)

(in thousands)

Assets:

Investment securities:

Floating rate auction-rate certificates backed by Government guaranteed student loans

19,033

Indicative bids

Range of broker quotes

96.8% - 96.8% (96.8%)

Farmer Mac Guaranteed Securities:

AgVantage

5,048,708

Discounted cash flow

Discount rate

5.4% - 6.0% (5.7%)

Farmer Mac Guaranteed Securities

9,989

Discounted cash flow

Discount rate

8.5%

CPR

USDA Securities

1,302

Discounted cash flow

Discount rate

5.9% - 6.1% (6.0%)

CPR

11% - 11% (11%)

Guarantee Asset

5,963

Discounted cash flow

Discount rate

8.5%

CPR

As of December 31, 2022

Financial Instruments

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted-Average)

(in thousands)

Assets:

Investment securities:

Floating rate auction-rate certificates backed by Government guaranteed student loans

19,027

Indicative bids

Range of broker quotes

96.8% - 96.8% (96.8%)

Farmer Mac Guaranteed Securities:

AgVantage

7,599,379

Discounted cash flow

Discount rate

4.7% - 6.1% (5.1%)

Farmer Mac Guaranteed Securities

7,847

Discounted cash flow

Discount rate

4.8% - 5.3% (5.1%)

CPR

USDA Securities

1,767

Discounted cash flow

Discount rate

5.1% - 5.7% (5.3%)

CPR

19% - 27% (25%)

Guarantee Asset

4,467

Discounted cash flow

Discount rate

5.4% - 5.9% (5.7%)

CPR

The significant unobservable input used in the fair value measurements of AgVantage Farmer Mac Guaranteed Securities is the discount rate commensurate with the risks involved. Typically, significant increases (decreases) in this input in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease. Prepayment rates are not presented in the table above for AgVantage

5354

securities because they generally have fixed maturity dates when the secured general obligations are due and do not prepay.

The significant unobservable inputs used in the fair value measurements of USDA Securities are the prepayment rate and discount rate commensurate with the risks involved. Typically, significant increases (decreases) in any of these inputs in isolation may result in materially lower (higher) fair value measurements. Generally, in a rising interest rate environment, Farmer Mac would expect average discount rates to increase and would likely expect a corresponding decrease in forecasted prepayment rates. Conversely, in a declining interest rate environment, Farmer Mac would expect average discount rates to decrease and would likely expect a corresponding increase in forecasted prepayment rates.

Disclosures on Fair Value of Financial Instruments

The following table sets forth the estimated fair values and carrying values for financial assets, liabilities, and guarantees and commitments as of ~~June~~September 30, 2023 and December 31, 2022:

Table 9.4


		As of June 30, 2023				As of December 31, 2022					As of September 30, 2023				As of December 31, 2022
		Fair Value		Carrying Amount		Fair Value		Carrying Amount			Fair Value		Carrying Amount		Fair Value		Carrying Amount
		(in thousands)									(in thousands)
Financial assets:	Financial assets:									Financial assets:
Cash and cash equivalents	Cash and cash equivalents	$	874,090	$	874,090	$	861,002	$	861,002	Cash and cash equivalents	$	782,318	$	782,318	$	861,002	$	861,002
Investment securities	Investment securities	4,768,052		4,767,815		4,630,701		4,628,268		Investment securities	4,925,183		4,924,253		4,630,701		4,628,268
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	8,548,230		8,595,243		8,573,781		8,628,380		Farmer Mac Guaranteed Securities	9,170,053		9,216,111		8,573,781		8,628,380
USDA Securities	USDA Securities	2,063,660		2,337,560		2,099,445		2,411,601		USDA Securities	1,933,529		2,323,657		2,099,445		2,411,601
Loans	Loans	10,128,329		10,560,608		9,666,710		10,205,466		Loans	9,718,846		10,537,173		9,666,710		10,205,466
Financial derivatives	Financial derivatives	26,824		26,824		37,409		37,409		Financial derivatives	28,855		28,855		37,409		37,409
Guarantee and commitment fees receivable	Guarantee and commitment fees receivable	52,818		46,181		50,653		47,151		Guarantee and commitment fees receivable	58,819		49,809		50,653		47,151
Financial liabilities:	Financial liabilities:									Financial liabilities:
Notes payable	Notes payable	23,713,528		24,510,004		23,591,330		24,469,113		Notes payable	24,224,819		25,123,545		23,591,330		24,469,113
Debt securities of consolidated trusts held by third parties	Debt securities of consolidated trusts held by third parties	1,309,257		1,357,763		1,106,837		1,181,948		Debt securities of consolidated trusts held by third parties	1,209,757		1,334,014		1,106,837		1,181,948
Financial derivatives	Financial derivatives	188,652		188,652		175,326		175,326		Financial derivatives	188,362		188,362		175,326		175,326
Guarantee and commitment obligations	Guarantee and commitment obligations	52,509		45,873		50,083		46,582		Guarantee and commitment obligations	56,617		47,607		50,083		46,582

The carrying value of cash and cash equivalents is a reasonable estimate of their approximate fair value and is classified as Level 1. The fair value of investments in U.S. Treasuries are valued based on unadjusted quoted prices in active markets and are classified as Level 1. A significant portion of Farmer Mac's investment portfolio is valued using a reputable nationally recognized third-party pricing service. The prices obtained are non-binding and generally representative of recent market trades and are classified as Level 2. Farmer Mac internally models the fair value of its loan portfolio, including loans held for investment and loans held for investment in consolidated trusts, Farmer Mac Guaranteed Securities, and USDA Securities by discounting the projected cash flows of these instruments at projected interest rates. The fair values are based on the present value of expected cash flows using management's best estimate of certain key assumptions, which include prepayment speeds, forward yield curves and discount rates commensurate with the risks involved. These fair value measurements do not take into consideration the fair value of the underlying property and are classified as Level 3. Financial derivatives primarily are valued using the market standard methodology of netting the discounted future fixed cash payments (or

5455

receipts) and the discounted expected variable cash receipts (or payments) and are classified as Level 2. The fair value of the guarantee fees receivable/obligation and debt securities of consolidated trusts are estimated based on the present value of expected future cash flows of the underlying mortgage assets using management's best estimate of certain key assumptions, which include prepayments speeds, forward yield curves, and discount rates commensurate with the risks involved and are classified as Level 3. Notes payable are valued by discounting the expected cash flows of these instruments using a yield curve derived from market prices observed for similar agency securities and are also classified as Level 3. Because the cash flows of Farmer Mac's financial instruments may be interest rate path dependent, estimated fair values and projected discount rates for Level 3 financial instruments are derived using a Monte Carlo simulation model. Different market assumptions and estimation methodologies could significantly affect estimated fair value amounts.

10.BUSINESS SEGMENT REPORTING

The following table presents the alignment of the Farmer Mac's seven segments:

Agricultural Finance

Rural Infrastructure Finance

Treasury

Farm & Ranch

Corporate AgFinance

Rural Utilities

Renewable Energy

Funding

Investments

Corporate

The financial information presented below reflects the accounts of Farmer Mac and its subsidiaries on a

consolidated basis. Accordingly, the core earnings for Farmer Mac's segments would differ from any stand-alone financial statements of Farmer Mac's subsidiaries. These differences would be due to various factors, including the exclusion of unrealized gains and losses related to fair value changes of trading assets and financial derivatives, as well as the allocation of certain expenses such as operating expenses, dividends and interest expense related to the issuance of capital and the issuance of indebtedness managed at the corporate level.

The following tables present core earnings for Farmer Mac's segments and a reconciliation to consolidated net income for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022.

5556

Table 10.1


Core Earnings by Business Segment	Core Earnings by Business Segment																								Core Earnings by Business Segment
For the Three Months Ended June 30, 2023
For the Three Months Ended September 30, 2023																									For the Three Months Ended September 30, 2023
		Agricultural Finance				Rural Infrastructure				Treasury				Corporate													Agricultural Finance								Rural Infrastructure								Treasury								Corporate
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments				Consolidated Net Income				Farm & Ranch					Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments								Reconciling Adjustments				Consolidated Net Income
		(in thousands)																									(in thousands)
Net interest income	Net interest income	$	35,425	$	7,444	$	5,839	$	1,100	$	28,402	$	467			$	—			$	—				$	78,677		Net interest income	$	33,735			$	8,250			$	6,393			$	1,150			$	37,642			$	473			$	—			$	—			$	87,643
Less: reconciling adjustments(1)(2)(3)	Less: reconciling adjustments(1)(2)(3)	(1,037)		—		(31)		—		4,096		127		—				(3,155)				—			Less: reconciling adjustments(1)(2)(3)		(1,017)				—				(31)				—				(3,230)				59				—				4,219				—
Net effective spread	Net effective spread	34,388		7,444		5,808		1,100		32,498		594		—				(3,155)				—			Net effective spread		32,718				8,250				6,362				1,150				34,412				532				—				4,219				—
Guarantee and commitment fees	Guarantee and commitment fees	4,221		62		281		17		—		—		—				(1,092)				3,489			Guarantee and commitment fees		4,447				78				279				24				—				—				—				692				5,520

Other income/(expense)(3)	Other income/(expense)(3)	342		12		—		—		—		11		44				2,042				2,451			Other income/(expense)(3)		807				—				—				—				3				6				240				2,884				3,940
Total revenues	Total revenues	38,951		7,518		6,089		1,117		32,498		605		44				(2,205)				84,617			Total revenues		37,972				8,328				6,641				1,174				34,415				538				240				7,795				97,103

(Provision for)/release of losses		(5)		(327)		(632)		(110)		—		1		—				—				(1,073)
Release of/(provision for) losses																									Release of/(provision for) losses		13				3,694				(3,504)				(66)				—				(1)				—				—				136

(Provision for)/release of reserve for losses		(75)		—		6		—		—		—		—				—				(69)
Release of/(provision for) reserve for losses																									Release of/(provision for) reserve for losses		58				—				(13)				—				—				—				—				—				45
Operating expenses	Operating expenses	—		—		—		—		—		—		(24,188)				—				(24,188)			Operating expenses		—				—				—				—				—				—				(24,034)				—				(24,034)
Total non-interest expense	Total non-interest expense	(75)		—		6		—		—		—		(24,188)				—				(24,257)			Total non-interest expense		58				—				(13)				—				—				—				(24,034)				—				(23,989)
Core earnings before income taxes	Core earnings before income taxes	38,871		7,191		5,463		1,007		32,498		606		(24,144)				(2,205)		(4)		59,287			Core earnings before income taxes		38,043				12,022				3,124				1,108				34,415				537				(23,794)				7,795		(4)		73,250
Income tax (expense)/benefit	Income tax (expense)/benefit	(8,163)		(1,510)		(1,147)		(211)		(6,825)		(127)		5,444				464				(12,075)			Income tax (expense)/benefit		(7,989)				(2,525)				(656)				(233)				(7,226)				(113)				5,267				(1,638)				(15,113)
Core earnings before preferred stock dividends	Core earnings before preferred stock dividends	30,708		5,681		4,316		796		25,673		479		(18,700)				(1,741)		(4)		47,212			Core earnings before preferred stock dividends		30,054				9,497				2,468				875				27,189				424				(18,527)				6,157		(4)		58,137
Preferred stock dividends	Preferred stock dividends	—		—		—		—		—		—		(6,791)				—				(6,791)			Preferred stock dividends		—				—				—				—				—				—				(6,792)				—				(6,792)

Segment core earnings/(losses)	Segment core earnings/(losses)	$	30,708	$	5,681	$	4,316	$	796	$	25,673	$	479	$	(25,491)			$	(1,741)	(4)		$	40,421		Segment core earnings/(losses)		$	30,054			$	9,497			$	2,468			$	875			$	27,189			$	424			$	(25,319)			$	6,157	(4)		$	51,345

Total Assets	Total Assets	$	14,456,296	$	1,584,841	$	6,169,811	$	314,538	$	—	$	4,959,243	$	174,836			$	—			$	27,659,565		Total Assets		$	14,660,371			$	1,619,664			$	6,648,693			$	320,572			$	—			$	4,866,969			$	195,112			$	—			$	28,311,381
Total on- and off-balance sheet program assets at principal balance	Total on- and off-balance sheet program assets at principal balance	$	18,116,503	$	1,680,756	$	6,611,892	$	327,901	$	—	$	—	$	—			$	—			$	26,737,052		Total on- and off-balance sheet program assets at principal balance		$	18,461,835			$	1,741,306			$	7,118,295			$	330,575			$	—			$	—			$	—			$	—			$	27,652,011

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

(2)Includes the reclassification of interest income and interest expense from consolidated trusts owned by third parties to guarantee and commitment fees, to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee.

(3)Includes the reclassification of interest expense related to interest rate swaps not designated as hedges, which are included in "Gains on financial derivatives" on the consolidated financial statements, to determine the effective funding cost for each operating segment.

(4)Net adjustments to reconcile to the corresponding income measures: core earnings before income taxes reconciled to income before income taxes; core earnings before preferred stock dividends reconciled to net income; and segment core earnings reconciled to net income attributable to common stockholders.

5657


Core Earnings by Business Segment	Core Earnings by Business Segment																								Core Earnings by Business Segment
For the Three Months Ended June 30, 2022
For the Three Months Ended September 30, 2022																									For the Three Months Ended September 30, 2022
		Agricultural Finance				Rural Infrastructure				Treasury				Corporate													Agricultural Finance								Rural Infrastructure								Treasury								Corporate
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments				Consolidated Net Income				Farm & Ranch					Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments								Reconciling Adjustments				Consolidated Net Income
		(in thousands)																									(in thousands)

Net interest income	Net interest income	$	33,670	$	6,929	$	3,772	$	468	$	20,357	$	(1,282)			$	—			$	—				$	63,914		Net interest income	$	34,173			$	7,600			$	4,253			$	705			$	23,913			$	(2,791)			$	—			$	—			$	67,853
Less: reconciling adjustments(1)(2)(3)	Less: reconciling adjustments(1)(2)(3)	(1,080)		—		(39)		—		(1,849)		—		—				2,968				—			Less: reconciling adjustments(1)(2)(3)		(830)				—				(33)				—				(1,349)				—				—				2,212				—
Net effective spread	Net effective spread	32,590		6,929		3,733		468		18,508		(1,282)		—				2,968				—			Net effective spread		33,343				7,600				4,220				705				22,564				(2,791)				—				2,212				—
Guarantee and commitment fees	Guarantee and commitment fees	4,338		43		308		20		—		—		—				(1,496)				3,213			Guarantee and commitment fees		3,833				46				309				13				—				—				—				(1,558)				2,643

Other income/(expense)(3)	Other income/(expense)(3)	161		143		—		—		—		—		3				3,992				4,299			Other income/(expense)(3)		469				4				—				—				—				—				—				909				1,382
Total revenues	Total revenues	37,089		7,115		4,041		488		18,508		(1,282)		3				5,464				71,426			Total revenues		37,645				7,650				4,529				718				22,564				(2,791)				—				1,563				71,878

Release of/(provision for) losses	Release of/(provision for) losses	857		(650)		1,172		(8)		—		1		—				—				1,372			Release of/(provision for) losses		93				(333)				(414)				26				—				11				—				—				(617)

Release of reserve for losses	Release of reserve for losses	111		—		52		—		—		—		—				—				163			Release of reserve for losses		139				—				28				—				—				—				—				—				167
Operating expenses	Operating expenses	—		—		—		—		—		—		(20,048)				—				(20,048)			Operating expenses		—				—				—				—				—				—				(19,379)				—				(19,379)
Total non-interest expense	Total non-interest expense	111		—		52		—		—		—		(20,048)				—				(19,885)			Total non-interest expense		139				—				28				—				—				—				(19,379)				—				(19,212)
Core earnings before income taxes	Core earnings before income taxes	38,057		6,465		5,265		480		18,508		(1,281)		(20,045)				5,464		(4)		52,913			Core earnings before income taxes		37,877				7,317				4,143				744				22,564				(2,780)				(19,379)				1,563		(4)		52,049
Income tax (expense)/benefit	Income tax (expense)/benefit	(7,991)		(1,357)		(1,105)		(101)		(3,887)		269		4,263				(1,149)				(11,058)			Income tax (expense)/benefit		(7,953)				(1,536)				(869)				(156)				(4,739)				584				4,366				(328)				(10,631)
Core earnings before preferred stock dividends	Core earnings before preferred stock dividends	30,066		5,108		4,160		379		14,621		(1,012)		(15,782)				4,315		(4)		41,855			Core earnings before preferred stock dividends		29,924				5,781				3,274				588				17,825				(2,196)				(15,013)				1,235		(4)		41,418
Preferred stock dividends	Preferred stock dividends	—		—		—		—		—		—		(6,792)				—				(6,792)			Preferred stock dividends		—				—				—				—				—				—				(6,791)				—				(6,791)

Segment core earnings/(losses)	Segment core earnings/(losses)	$	30,066	$	5,108	$	4,160	$	379	$	14,621	$	(1,012)	$	(22,574)			$	4,315	(4)		$	35,063		Segment core earnings/(losses)		$	29,924			$	5,781			$	3,274			$	588			$	17,825			$	(2,196)			$	(21,804)			$	1,235	(4)		$	34,627

Total Assets	Total Assets	$	13,686,589	$	1,521,102	$	5,632,551	$	126,513	$	—	$	4,781,990	$	147,076			$	—			$	25,895,821		Total Assets		$	14,113,686			$	1,558,139			$	5,779,300			$	186,832			$	—			$	4,608,868			$	194,763			$	—			$	26,441,588
Total on- and off-balance sheet program assets at principal balance	Total on- and off-balance sheet program assets at principal balance	$	16,591,999	$	1,567,311	$	6,172,063	$	148,018	$	—	$	—	$	—			$	—			$	24,479,391		Total on- and off-balance sheet program assets at principal balance		$	17,199,347			$	1,634,786			$	6,296,263			$	196,242			$	—			$	—			$	—			$	—			$	25,326,638

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

5758


Core Earnings by Business Segment	Core Earnings by Business Segment																								Core Earnings by Business Segment
For the Six Months Ended June 30, 2023
For the Nine Months Ended September 30, 2023																									For the Nine Months Ended September 30, 2023
		Agricultural Finance				Rural Infrastructure				Treasury				Corporate													Agricultural Finance								Rural Infrastructure								Treasury								Corporate
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments				Consolidated Net Income				Farm & Ranch					Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments								Reconciling Adjustments				Consolidated Net Income
		(in thousands)																									(in thousands)
Net interest income	Net interest income	$	68,936	$	14,592	$	11,379	$	1,958	$	60,946	$	(76)			$	—			$	—				$	157,735		Net interest income	$	102,671			$	22,842			$	17,772			$	3,108			$	98,588			$	397			$	—			$	—			$	245,378
Less: reconciling adjustments(1)(2)(3)	Less: reconciling adjustments(1)(2)(3)	(2,083)		—		(64)		—		3,290		127		—				(1,270)				—			Less: reconciling adjustments(1)(2)(3)		(3,100)				—				(95)				—				60				186				—				2,949				—
Net effective spread	Net effective spread	66,853		14,592		11,315		1,958		64,236		51		—				(1,270)				—			Net effective spread		99,571				22,842				17,677				3,108				98,648				583				—				2,949				—
Guarantee and commitment fees	Guarantee and commitment fees	8,513		115		562		45		—		—		—				(1,813)				7,422			Guarantee and commitment fees		12,960				193				841				69				—				—				—				(1,121)				12,942

Other income/(expense)(3)	Other income/(expense)(3)	1,409		12		—		—		—		11		44				2,600				4,076			Other income/(expense)(3)		2,216				12				—				—				3				17				284				5,484				8,016
Total revenues	Total revenues	76,775		14,719		11,877		2,003		64,236		62		44				(483)				169,233			Total revenues		114,747				23,047				18,518				3,177				98,651				600				284				7,312				266,336

Release of/(provision for) losses	Release of/(provision for) losses	123		(4,628)		2,852		28		—		5		—				—				(1,620)			Release of/(provision for) losses		136				(934)				(652)				(38)				—				4				—				—				(1,484)

(Provision for)/release of reserve for losses	(Provision for)/release of reserve for losses	(652)		—		380		—		—		—		—				—				(272)			(Provision for)/release of reserve for losses		(594)				—				367				—				—				—				—				—				(227)
Operating expenses	Operating expenses	—		—		—		—		—		—		(47,901)				—				(47,901)			Operating expenses		—				—				—				—				—				—				(71,935)				—				(71,935)
Total non-interest expense	Total non-interest expense	(652)		—		380		—		—		—		(47,901)				—				(48,173)			Total non-interest expense		(594)				—				367				—				—				—				(71,935)				—				(72,162)
Core earnings before income taxes	Core earnings before income taxes	76,246		10,091		15,109		2,031		64,236		67		(47,857)				(483)		(4)		119,440			Core earnings before income taxes		114,289				22,113				18,233				3,139				98,651				604				(71,651)				7,312		(4)		192,690
Income tax (expense)/benefit	Income tax (expense)/benefit	(16,012)		(2,119)		(3,173)		(426)		(13,490)		(14)		9,939				102				(25,193)			Income tax (expense)/benefit		(24,001)				(4,644)				(3,829)				(659)				(20,716)				(127)				15,206				(1,536)				(40,306)
Core earnings before preferred stock dividends	Core earnings before preferred stock dividends	60,234		7,972		11,936		1,605		50,746		53		(37,918)				(381)		(4)		94,247			Core earnings before preferred stock dividends		90,288				17,469				14,404				2,480				77,935				477				(56,445)				5,776		(4)		152,384
Preferred stock dividends	Preferred stock dividends	—		—		—		—		—		—		(13,582)				—				(13,582)			Preferred stock dividends		—				—				—				—				—				—				(20,374)				—				(20,374)

Segment core earnings/(losses)	Segment core earnings/(losses)	$	60,234	$	7,972	$	11,936	$	1,605	$	50,746	$	53	$	(51,500)			$	(381)	(4)		$	80,665		Segment core earnings/(losses)		$	90,288			$	17,469			$	14,404			$	2,480			$	77,935			$	477			$	(76,819)			$	5,776	(4)		$	132,010

Total Assets	Total Assets	$	14,456,296	$	1,584,841	$	6,169,811	$	314,538	$	—	$	4,959,243	$	174,836			$	—			$	27,659,565		Total Assets		$	14,660,371			$	1,619,664			$	6,648,693			$	320,572			$	—			$	4,866,969			$	195,112			$	—			$	28,311,381
Total on- and off-balance sheet program assets at principal balance	Total on- and off-balance sheet program assets at principal balance	$	18,116,503	$	1,680,756	$	6,611,892	$	327,901	$	—	$	—	$	—			$	—			$	26,737,052		Total on- and off-balance sheet program assets at principal balance		$	18,461,835			$	1,741,306			$	7,118,295			$	330,575			$	—			$	—			$	—			$	—			$	27,652,011

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

5859


Core Earnings by Business Segment	Core Earnings by Business Segment																								Core Earnings by Business Segment
For the Six Months Ended June 30, 2022
For the Nine Months Ended September 30, 2022																									For the Nine Months Ended September 30, 2022
		Agricultural Finance				Rural Infrastructure				Treasury				Corporate													Agricultural Finance								Rural Infrastructure								Treasury								Corporate
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Funding		Investments				Reconciling Adjustments				Consolidated Net Income				Farm & Ranch					Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments								Reconciling Adjustments				Consolidated Net Income
		(in thousands)																									(in thousands)

Net interest income	Net interest income	$	65,024	$	14,138	$	6,965	$	843	$	43,760	$	(1,278)			$	—			$	—				$	129,452		Net interest income	$	99,197			$	21,738			$	11,218			$	1,548			$	67,673			$	(4,069)			$	—			$	—			$	197,305
Less: reconciling adjustments(1)(2)(3)	Less: reconciling adjustments(1)(2)(3)	(2,080)		—		(73)		—		(8,514)		—		—				10,667				—			Less: reconciling adjustments(1)(2)(3)		(2,910)				—				(106)				—				(9,863)				—				—				12,879				—
Net effective spread	Net effective spread	62,944		14,138		6,892		843		35,246		(1,278)		—				10,667				—			Net effective spread		96,287				21,738				11,112				1,548				57,810				(4,069)				—				12,879				—
Guarantee and commitment fees	Guarantee and commitment fees	8,554		62		620		30		—		—		—				(2,358)				6,908			Guarantee and commitment fees		12,387				108				929				43				—				—				—				(3,916)				9,551

Other income/(expense)(3)	Other income/(expense)(3)	561		257		—		—		—		—		3				21,078				21,899			Other income/(expense)(3)		1,030				261				—				—				—				—				3				21,987				23,281
Total revenues	Total revenues	72,059		14,457		7,512		873		35,246		(1,278)		3				29,387				158,259			Total revenues		109,704				22,107				12,041				1,591				57,810				(4,069)				3				30,950				230,137

Release of/(provision for) losses	Release of/(provision for) losses	347		(1,165)		2,341		(210)		—		3		—				—				1,316			Release of/(provision for) losses		440				(1,498)				1,927				(184)				—				14				—				—				699

Release of reserve for losses	Release of reserve for losses	185		—		88		—		—		—		—				—				273			Release of reserve for losses		324				—				116				—				—				—				—				—				440
Operating expenses	Operating expenses	—		—		—		—		—		—		(41,436)				—				(41,436)			Operating expenses		—				—				—				—				—				—				(60,815)				—				(60,815)
Total non-interest expense	Total non-interest expense	185		—		88		—		—		—		(41,436)				—				(41,163)			Total non-interest expense		324				—				116				—				—				—				(60,815)				—				(60,375)
Core earnings before income taxes	Core earnings before income taxes	72,591		13,292		9,941		663		35,246		(1,275)		(41,433)				29,387		(4)		118,412			Core earnings before income taxes		110,468				20,609				14,084				1,407				57,810				(4,055)				(60,812)				30,950		(4)		170,461
Income tax (expense)/benefit	Income tax (expense)/benefit	(15,243)		(2,791)		(2,087)		(139)		(7,402)		268		8,461				(6,171)				(25,104)			Income tax (expense)/benefit		(23,196)				(4,327)				(2,956)				(295)				(12,141)				852				12,827				(6,499)				(35,735)
Core earnings before preferred stock dividends	Core earnings before preferred stock dividends	57,348		10,501		7,854		524		27,844		(1,007)		(32,972)				23,216		(4)		93,308			Core earnings before preferred stock dividends		87,272				16,282				11,128				1,112				45,669				(3,203)				(47,985)				24,451		(4)		134,726
Preferred stock dividends	Preferred stock dividends	—		—		—		—		—		—		(13,583)				—				(13,583)			Preferred stock dividends		—				—				—				—				—				—				(20,374)				—				(20,374)

Segment core earnings/(losses)	Segment core earnings/(losses)	$	57,348	$	10,501	$	7,854	$	524	$	27,844	$	(1,007)	$	(46,555)			$	23,216	(4)		$	79,725		Segment core earnings/(losses)		$	87,272			$	16,282			$	11,128			$	1,112			$	45,669			$	(3,203)			$	(68,359)			$	24,451	(4)		$	114,352

Total Assets	Total Assets	$	13,686,589	$	1,521,102	$	5,632,551	$	126,513	$	—	$	4,781,990	$	147,076			$	—			$	25,895,821		Total Assets		$	14,113,686			$	1,558,139			$	5,779,300			$	186,832			$	—			$	4,608,868			$	194,763			$	—			$	26,441,588
Total on- and off-balance sheet program assets at principal balance	Total on- and off-balance sheet program assets at principal balance	$	16,591,999	$	1,567,311	$	6,172,063	$	148,018	$	—	$	—	$	—			$	—			$	24,479,391		Total on- and off-balance sheet program assets at principal balance		$	17,199,347			$	1,634,786			$	6,296,263			$	196,242			$	—			$	—			$	—			$	—			$	25,326,638

(1)Includes the amortization of premiums and discounts on assets consolidated at fair value, originally included in interest income, to reflect core earnings amounts.

~~11.REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS~~

Farmer Mac revised certain prior period financial statements to correct an error related to the recognition of accrual of interest for derivative contracts cleared through the swap clearinghouse, the CME. Farmer Mac determined that the error was immaterial to these previous consolidated financial statements, taken as a whole. Although Farmer Mac has concluded these errors are immaterial to the previously issued consolidated financial statements, Farmer Mac has corrected this error by revising the accompanying consolidated financial statements. Farmer Mac will also correct previously reported financial information

~~for such immaterial errors in future filings, as applicable. The following tables summarize the effect of the revision on each financial statement line item:~~

~~Revised Consolidated Statements of Operations~~

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022
As previously Reported Adjustments As Revised As previously Reported Adjustments As Revised
(in thousands)
Interest Income:
Farmer Mac Guaranteed Securities and USDA Securities $ 57,104 $ (5,488) $ 51,616 $ 96,361 $ (1,825) $ 94,536
Total interest income 144,936 (5,488) 139,448 257,156 (1,825) 255,331
Net interest income 69,402 (5,488) 63,914 131,277 (1,825) 129,452
Non-interest income/(expense):
(Losses)/gains on financial derivatives 3,418 373 3,791 19,492 1,287 20,779
Non-Interest Income 7,302 373 7,675 27,793 1,287 29,080
Income before income taxes 58,028 (5,115) 52,913 118,950 (538) 118,412
Income tax expense 12,132 (1,074) 11,058 25,217 (113) 25,104
Net Income 45,896 (4,041) 41,855 93,733 (425) 93,308
Net Income attributable to common stockholders 39,104 (4,041) 35,063 80,150 (425) 79,725

~~Revised Consolidated Statements of Comprehensive Income~~

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022
As previously Reported Adjustments As Revised As previously Reported Adjustments As Revised
(in thousands)
Net Income $ 45,896 $ (4,041) $ 41,855 $ 93,733 $ (425) $ 93,308
Comprehensive Income 36,077 (4,041) 32,036 40,396 (425) 39,971

~~Revised Consolidated Statements of Equity~~
Retained Earnings Total Equity
As previously Reported Adjustments As Revised As previously Reported Adjustments As Revised
(in thousands)
Balance as of December 31, 2021 $ 579,270 $ 9,287 $ 588,557 $ 1,204,413 $ 9,287 $ 1,213,700
Net Income 47,837 3,616 51,453 47,837 3,616 51,453
Balance as of March 31, 2022 $ 610,087 $ 12,903 $ 622,990 $ 1,192,844 $ 12,903 $ 1,205,747
Net Income 45,896 (4,041) 41,855 45,896 (4,041) 41,855
Balance as of June 30, 2022 $ 638,935 $ 8,862 $ 647,797 $ 1,212,348 $ 8,862 $ 1,221,210

~~Revised Consolidated Statements of Cash Flows~~

Six Months Ended June 30, 2022
As previously Reported Adjustments As Revised
(in thousands)
Cash flows from operating activities:
Net income/(loss) $ 93,733 $ (425) $ 93,308
Adjustments to reconcile net income to net cash provided by operating activities:
Net change in fair value of trading securities, hedged assets, and financial derivatives 461,598 26,682 488,280
Deferred income taxes 3,765 51 3,816
Net change in:
Interest receivable (739) (961) (1,700)
Other assets (89,794) 688 (89,106)
Accrued interest payable 9,831 1,738 11,569
Other liabilities 31,295 (27,773) 3,522
Net cash provided by operating activities 526,010 — 526,010

~~12.SUBSEQUENT EVENT~~

As described above in Note 5, Farmer Mac had a single agricultural storage and processing loan that was subject to bankruptcy proceedings during second quarter 2023. On July 31, 2023, an entity purchased the assets and assumed the liabilities of the borrower on this loan, which ended the bankruptcy proceedings. Farmer Mac received proceeds from this bankruptcy sale in an amount that closely approximated the loan's amortized cost. Farmer Mac will release the entire allowance for loan loss attributable to this loan during third quarter 2023, which was approximately $4.6 million as of June 30, 2023.

Item 2.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 quarter ended ~~June~~September 30, 2023. Financial information included in this report is

consolidated to include the accounts of Farmer Mac and its two subsidiaries – Farmer Mac Mortgage

Securities Corporation and Farmer Mac II LLC. This discussion and analysis of financial condition and

results of operations should be read together with: (1) the interim unaudited consolidated financial

statements and the related notes that appear elsewhere in this report; and (2) Farmer Mac's Annual Report

on Form 10-K for the fiscal year ended December 31, 2022 as filed with the SEC on February 24, 2023

(the "2022 Annual Report").

FORWARD-LOOKING STATEMENTS

In this report, the words "Farmer Mac," "we," "our," and "us" refer to the Federal Agricultural Mortgage Corporation unless otherwise stated or unless the context otherwise requires.

Some statements made in this report, such as in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section, are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 about management's current expectations for Farmer Mac's future financial results, business prospects, and business developments. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. These statements typically include terms such as "anticipates," "believes," "continues," "estimates," "expects," "forecasts," "intends," "outlook," "plans," "potential," "project," "target," and similar terms, and future or conditional tense verbs like "could," "may," "might," "should," "will," and "would." This report includes forward-looking statements addressing Farmer Mac's:

•prospects for earnings;

•prospects for growth in business volume;

•trends in net interest income and net effective spread;

•trends in portfolio credit quality, delinquencies, substandard assets, credit losses, and provisions for losses;

•assessment of economic and market trends;

•trends in expenses;

•trends in investment securities;

•prospects for asset impairments and allowance for losses;

•changes in capital position;

•future dividend payments; and

•other business and financial matters.

Management's expectations for Farmer Mac's future necessarily involve assumptions, estimates, and the evaluation of risks and uncertainties. Various factors or events, both known and unknown, could cause Farmer Mac's actual results to differ materially from the expectations as expressed or implied by the

6261

forward-looking statements, including the factors discussed under "Risk Factors" in Part I, Item 1A of Farmer Mac's 2022 Annual Report, as well as uncertainties about:

•the availability to Farmer Mac of debt and equity financing and, if available, the reasonableness of rates and terms;

•legislative or regulatory developments that could affect Farmer Mac, its sources of business, or agricultural or rural infrastructure industries;

•fluctuations in the fair value of assets held by Farmer Mac and its subsidiaries;

•the level of lender interest in Farmer Mac's products and the secondary market provided by Farmer Mac;

•the general rate of growth in agricultural mortgage and rural infrastructure indebtedness;

•the effect of economic conditions stemming from disruptive global events or otherwise on agricultural mortgage or rural infrastructure lending, borrower repayment capacity, or collateral values, including rapid inflation, fluctuations in interest rates, changes in U.S. trade policies, fluctuations in export demand for U.S. agricultural products and foreign currency exchange rates, supply chain disruptions, increases in input costs, labor availability, volatility from the recent commercial banking failures, and volatility in commodity prices;

•the degree to which Farmer Mac is exposed to interest rate risk resulting from fluctuations in Farmer Mac's borrowing costs relative to market indexes;

•developments in the financial markets, including possible investor, analyst, and rating agency reactions to events involving government-sponsored enterprises, including Farmer Mac;

•the effects of the Federal Reserve’s efforts to achieve monetary policy normalization and slow inflation; and

•other factors that could hinder agricultural mortgage lending or borrower repayment capacity, including the effects of severe weather, flooding and drought, climate change, or fluctuations in agricultural real estate values.

Considering these potential risks and uncertainties, no undue reliance should be placed on any forward-looking statements expressed in this report. Farmer Mac undertakes no obligation to release publicly the results of revisions to any forward-looking statements to reflect new information or any future events or circumstances, except as otherwise required by applicable law. The information in this report is not necessarily indicative of future results.

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Overview

Farmer Mac is a mission-focused, purpose-driven company determined to drive economic opportunity and prosperity by increasing the accessibility of financing for American agriculture and rural infrastructure. As the nation’s secondary market for agricultural and rural infrastructure loans, we help strengthen and connect rural America by providing a broad array of financial solutions to lenders that support flexible low-cost financing to farmers, ranchers, agribusinesses, renewable energy projects, rural utilities, and other related rural businesses and enterprises. Farmer Mac also serves as a critical investment tool for entities such as states, counties, municipalities, pension funds, banks, public trust funds, and credit unions. Farmer Mac offers those entities a variety of investment opportunities that may diversify their investment portfolios and provide the opportunity to earn a competitive return on their investment dollars.

During ~~second~~third quarter 2023:

•we continued to increase net income and core earnings;

•we maintained strong liquidity in our investment portfolio well above regulatory requirements;

•we maintained our strong capital position, well above regulatory requirements, and uninterrupted access to the debt capital markets, which historically have not been subject to the same short-term disruptions and liquidity concerns experienced by institutions that rely primarily on deposits to fund their assets; and

•we provided ~~$1.6~~$2.3 billion in liquidity and lending capacity to lenders serving rural ~~America; and~~

•~~we acquired servicing rights on $0.6 billion of loans serviced for others.~~America.

Farmer Mac’s performance during ~~second~~third quarter 2023, described in more detail below, reflects the success of our continued focus on pursuing new channels and innovative ways to further our mission to increase the accessibility of financing for American agriculture and rural infrastructure. Despite ongoing macroeconomic concerns ~~and potential headwinds~~ such as ~~volatile macroeconomic conditions,~~ inflation, failures and liquidity concerns in the banking industry, rising interest rates, and ~~war in Ukraine,~~geopolitical conflicts, Farmer Mac continued to deliver solid financial results. These financial results for ~~second~~third quarter 2023 reflected a variety of factors, including:

•the resilience of the farm economy, as producers have benefited from healthy farm incomes and liquidity from relatively high commodity prices ~~resulting from heightened demand, with revenues rising faster than the costs of inputs;~~in 2021 and 2022;

•an increase in outstanding business volume at higher spreads while credit quality improved;

•our disciplined approach to interest rate risk management that helps to protect earnings from the effects of interest rate volatility and ishas been accretive to Farmer Mac during periods of rising interest rates; and

•effective ~~funding~~capital strategies that resulted in advantageous funding ~~which have also benefited from the~~in a rising interest rate environment in the current period.

The discussion below of Farmer Mac's financial information includes "non-GAAP measures," which are measures of financial performance not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). 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."

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Net Income and Core Earnings

The following table shows our net income attributable to common stockholders and core earnings for the periods presented. Core earnings and core earnings per share are non-GAAP measures that differ from net income attributable to common stockholders and earnings per common share, respectively, by excluding the effects of fair value fluctuations and specified infrequent or unusual transactions.

Table 1


		For the Three Months Ended							For the Three Months Ended
		June 30, 2023		March 31, 2023		June 30, 2022			September 30, 2023		June 30, 2023		September 30, 2022
		(in thousands)							(in thousands)
Net income attributable to common stockholders	Net income attributable to common stockholders	$	40,421	$	40,244	$	35,063	Net income attributable to common stockholders	$	51,345	$	40,421	$	34,627
Core earnings	Core earnings	42,162		38,884		30,748		Core earnings	45,188		42,162		33,392

The ~~$0.2~~$10.9 million sequential increase in net income attributable to common stockholders was due to a $7.1 million after-tax increase in net interest income, a $1.6 million after-tax increase in guarantee fees, a $1.0 million after-tax decrease in our provision for credit losses, and a $0.8 million after-tax increase in the fair value of undesignated financial ~~derivatives, partially offset by a $0.4 million after-tax increase in operating expenses and a $0.4 million after-tax decrease in guarantee fees.~~derivatives.

The ~~$5.4~~$16.7 million year-over-year increase in net income attributable to common stockholders was due to a ~~$11.7~~$15.6 million after-tax increase in net interest ~~income. This factor was partially offset by~~income, a ~~$3.3~~$2.3 million after-tax increase in ~~operating expenses,~~guarantee fees, a ~~$2.1~~$1.5 million after-tax increase ~~in our provision for credit losses, and a $1.7 million after-tax decrease~~ in the fair value of undesignated financial ~~derivatives.~~derivatives, and a $0.5 million after-tax decrease in our provision for credit losses. These factors were partially offset by a $3.7 million after-tax increase in operating expenses.

The ~~$3.3~~$3.0 million sequential increase in core earnings was due to a ~~$3.7~~$1.3 million after-tax increase in net effective spread ~~partially offset by~~and a ~~$0.4~~$1.0 million after-tax ~~increase~~decrease in ~~operating expenses.~~our provision for credit losses.

The ~~$11.4~~$11.8 million year-over-year increase in core earnings was due to a ~~$16.5~~$14.0 million after-tax increase in net effective spread and a $0.5 million after-tax decrease in our provision for credit losses, partially offset by a ~~$3.3~~$3.7 million after-tax increase in operating ~~expenses and a $2.1 million after-tax increase in our provision for credit losses.~~expenses.

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 "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."

Net Interest Income and Net Effective Spread

The following table shows our net interest income and net effective spread in both dollars and percentage yield or spread for the periods presented. Farmer Mac uses net effective spread, a non-GAAP measure, as an alternative to net interest income because management believes it is a useful metric that reflects the economics of the net spread between all the assets owned by Farmer Mac and all related funding, including any associated derivatives, some of which may not be included in net interest income.

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Table 2


		For the Three Months Ended										For the Three Months Ended
		June 30, 2023			March 31, 2023			June 30, 2022				September 30, 2023			June 30, 2023			September 30, 2022
		(in thousands)										(in thousands)
Net interest income	Net interest income	$	78,677		$	79,058		$	63,914		Net interest income	$	87,643		$	78,677		$	67,853
Net interest yield %	Net interest yield %	1.12		%	1.14		%	1.00		%	Net interest yield %	1.22		%	1.12		%	1.04		%
Net effective spread	Net effective spread	$	81,832		$	77,173		$	60,946		Net effective spread	$	83,424		$	81,832		$	65,641
Net effective spread %	Net effective spread %	1.20		%	1.15		%	0.99		%	Net effective spread %	1.20		%	1.20		%	1.03		%

The ~~$0.4~~$9.0 million sequential ~~decrease~~increase in net interest income was primarily due to a ~~$4.8~~$8.1 million ~~decrease~~increase in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives)~~. This factor was partially offset by~~, and an increase of ~~$2.3 million in cash-basis interest income, an increase of $1.1~~$0.8 million related to net new business volume, and a decrease of $0.8 million in funding costs primarily due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess capital that is held in our short-term investment portfolio.volume. In percentage terms, the sequential ~~(0.02)% decrease~~0.10% increase was primarily attributable to ~~a decrease~~the increase in net fair value changes from designated financial derivatives.

The ~~$14.8~~$19.8 million year-over-year increase in net interest income was primarily due to a ~~$17.7~~$10.7 million decrease in funding costs primarily due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess capital that is held in our short-term investment portfolio, ~~and~~ a ~~$2.8~~$4.3 million increase related to net new business ~~volume. These factors were partially offset by~~volume, and a ~~$5.5~~$3.8 million ~~decrease~~increase in the fair value of derivatives designated in fair value hedge accounting relationships (designated financial derivatives). In percentage terms, the ~~0.12%~~0.18% increase was primarily attributable to a decrease of ~~0.25%~~0.14% in funding costs ~~partially offset by a decrease~~and an increase of ~~0.08%~~0.05% in net fair value changes from designated financial derivatives.

The ~~$4.6~~$1.6 million sequential increase in net effective spread ~~in dollars~~ was primarily due to ~~an increase of $2.3 million in cash-basis interest income,~~ a decrease of $1.2 million in non-GAAP funding costs due to the same factors mentioned above that decreased our funding ~~costs, and an increase of $0.5 million in net new business volume.~~costs. In percentage terms, ~~the sequential increase of 0.05% was primarily attributable to an increase of 0.03% in cash-basis interest income and a decrease of 0.01% in non-GAAP funding costs.~~net effective spread remained relatively constant.

The ~~$20.9~~$17.8 million year-over-year increase in net effective spread ~~in dollars~~ was primarily due to a ~~$16.0~~$14.8 million decrease in non-GAAP funding costs, due to the same factors mentioned above that decreased our funding costs, and a ~~$5.8~~$3.5 million increase related to net new business volume. ~~These factors were partially offset by a $0.9 million decrease in cash-basis interest income.~~ In percentage terms, the year-over-year increase of ~~0.21%~~0.17% was primarily attributable to a decrease in non-GAAP funding costs.

For more information about Farmer Mac's use of net effective spread as a financial measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures." For a reconciliation of net interest income to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Business Volume

Our outstanding business volume was ~~$26.7~~$27.7 billion as of ~~June~~September 30, 2023, a net increase of ~~$0.3~~$0.9 billion from ~~March 31,~~June 30, 2023 after taking into account all new business, ~~servicing rights acquisitions,~~ maturities, ~~sales,~~ and paydowns on existing assets. The net increase was primarily attributable to a net increase of ~~$511.3 million in the Agricultural Finance line of business and was partially offset by a net decrease of $258.4~~$509.1 million in the Rural Infrastructure Finance line of ~~business. Included in the $511.3 million~~business and a net increase of $405.9 million in the Agricultural Finance line of ~~business is new servicing rights on $563.0 million of loans (i.e., loans serviced for others). These new servicing rights were acquired to further leverage our loan servicing function.~~business.

For more information about Farmer Mac's business volume, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Business Volume."

Capital

Table 3


		As of					As of
		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
		(in thousands)					(in thousands)
Core capital	Core capital	$	1,380,906	$	1,322,801	Core capital	$	1,421,106	$	1,322,801
Capital in excess of minimum capital level required	Capital in excess of minimum capital level required	566,223		516,882		Capital in excess of minimum capital level required	581,053		516,882

The increase in capital in excess of the minimum capital level required was primarily due to an increase in retained earnings.

Credit Quality

The following table presents Agricultural Finance on- and off-balance sheet substandard assets, in dollars and as a percentage of the respective portfolio as of ~~June~~September 30, 2023, ~~March 31,~~June 30, 2023, and December 31, 2022:

Table 4


		On-Balance Sheet				Off-Balance Sheet					On-Balance Sheet				Off-Balance Sheet
		Substandard Assets		% of Portfolio		Substandard Assets		% of Portfolio			Substandard Assets		% of Portfolio		Substandard Assets		% of Portfolio
		(dollars in thousands)									(dollars in thousands)
September 30, 2023										September 30, 2023	$	149,989	2.0	%	$	30,171	0.9	%
June 30, 2023	June 30, 2023	$	156,403	2.1	%	$	38,228	1.2	%	June 30, 2023	156,403		2.1	%	38,228		1.2	%
March 31, 2023		173,256		2.3	%	31,816		1.0	%
December 31, 2022	December 31, 2022	169,667		2.3	%	39,733		1.2	%	December 31, 2022	169,667		2.3	%	39,733		1.2	%

Increase/(decrease) from prior quarter-ending	Increase/(decrease) from prior quarter-ending	$	(16,853)	(0.2)	%	$	6,412	0.2	%	Increase/(decrease) from prior quarter-ending	$	(6,414)	(0.1)	%	$	(8,057)	(0.3)	%
Increase/(decrease) from prior year-ending	Increase/(decrease) from prior year-ending	$	(13,264)	(0.2)	%	$	(1,505)	—	%	Increase/(decrease) from prior year-ending	$	(19,678)	(0.3)	%	$	(9,562)	(0.3)	%

The decrease of ~~$16.9~~$6.4 million in on-balance sheet substandard assets during the ~~second~~third quarter was primarily driven by ~~credit upgrades in crops and was partially offset by credit downgrades in~~the full payoff of a substandard agricultural storage and processing ~~livestock, permanent plantings, and part-time farms.~~loan. The ~~$6.4~~$8.1 million ~~increase~~decrease in substandard assets in our off-balance sheet portfolios during ~~second~~third quarter was primarily due to credit ~~downgrades~~upgrades in livestock, permanent plantings, crops, and part-time ~~farms and was partially offset by credit upgrades in crops and livestock.~~

farms.

There ~~were no~~was one substandard ~~assets~~asset with an outstanding balance of $29.5 million in the Rural Infrastructure Finance portfolio as of ~~both June~~September 30, 2023, and there were no substandard assets as of December 31, 2022.

For an analysis of current loan-to-value ratios across substandard and other internally assigned risk ratings, see Table 24 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

The following table presents 90-day delinquencies for the on- and off-balance sheet Agricultural Finance portfolios in dollars and as a percentage of the respective balance sheet category as of ~~June~~September 30, 2023, ~~March 31,~~June 30, 2023, and December 31, 2022:

Table 5


		On-Balance Sheet				Off-Balance Sheet					On-Balance Sheet				Off-Balance Sheet
		90-Day Delinquencies		% of Portfolio		90-Day Delinquencies		% of Portfolio			90-Day Delinquencies		% of Portfolio		90-Day Delinquencies		% of Portfolio
		(dollars in thousands)									(dollars in thousands)
September 30, 2023										September 30, 2023	$	39,602	0.52	%	$	2,840	0.08	%
June 30, 2023	June 30, 2023	$	40,798	0.54	%	$	4,570	0.14	%	June 30, 2023	40,798		0.54	%	4,570		0.14	%
March 31, 2023		65,601		0.88	%	5,045		0.16	%
December 31, 2022	December 31, 2022	39,681		0.53	%	3,817		0.12	%	December 31, 2022	39,681		0.53	%	3,817		0.12	%

Increase/(decrease) from prior quarter-ending	Increase/(decrease) from prior quarter-ending	$	(24,803)	(0.34)	%	$	(475)	(0.02)	%	Increase/(decrease) from prior quarter-ending	$	(1,196)	(0.02)	%	$	(1,730)	(0.06)	%
Increase/(decrease) from prior year-ending	Increase/(decrease) from prior year-ending	$	1,117	0.01	%	$	753	0.02	%	Increase/(decrease) from prior year-ending	$	(79)	(0.01)	%	$	(977)	(0.04)	%

On-balance sheet Agricultural Finance assets 90 or more days delinquent decreased in ~~permanent plantings, crops,~~agricultural storage and processing, part-time farms, and livestock, and was partially offset by increases in ~~storage~~permanent plantings and ~~processing.~~crops. Off-balance sheet Agricultural Finance assets 90 days or more delinquent decreased in livestock and permanent plantings and was partially offset by increases in ~~part-time farms.~~crops. The top ten borrower exposures over 90 days delinquent in either the on- or off-balance sheet Agricultural Finance portfolio represented over half of the aggregate 90-day delinquencies as of ~~June~~September 30, 2023.

As of both ~~June~~September 30, 2023 and December 31, 2022, there were no 90-day delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loan purchases and loans underlying LTSPCs.

For more information about Farmer Mac's credit metrics, including 90-day delinquencies, the total allowance for losses, and substandard assets, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

Use of Non-GAAP Measures

In the accompanying analysis of its financial information, Farmer Mac uses "non-GAAP measures," which are measures of financial performance that are not presented in accordance with GAAP. Specifically, Farmer Mac uses the following non-GAAP measures: "core earnings," "core earnings per share," and "net effective spread." Farmer Mac uses these non-GAAP measures to measure corporate economic performance and develop financial plans because, in management's view, they are useful alternative measures in understanding Farmer Mac's economic performance, transaction economics, and business trends.

The non-GAAP financial measures that Farmer Mac uses may not be comparable to similarly labeled non-GAAP financial measures disclosed by other companies. Farmer Mac's disclosure of these non-GAAP

measures is intended to be supplemental in nature and is not meant to be considered in isolation from, as a substitute for, or as more important than, the related financial information prepared in accordance with GAAP.

Core Earnings and Core Earnings Per Share

The main difference between core earnings and core earnings per share (non-GAAP measures) and net income attributable to common stockholders and earnings per common share (GAAP measures) is that those non-GAAP measures exclude the effects of fair value fluctuations. These fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations reported in accordance with GAAP if the related financial instruments are held to maturity, as is expected. Another difference is that these two non-GAAP measures exclude specified infrequent or unusual transactions that we believe are not indicative of future operating results and that may not reflect the trends and economic financial performance of Farmer Mac's core business. 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. As further explained below, net effective spread differs from net interest income and net interest yield by excluding certain items from net interest income and net interest yield and including certain other items that net interest income and net interest yield do not contain.

Farmer Mac excludes from net effective spread the interest income and interest expense associated with the consolidated trusts and the average balance of the loans underlying these trusts to reflect management's view that the net interest income Farmer Mac earns on the related Farmer Mac Guaranteed Securities owned by third parties is effectively a guarantee fee. Accordingly, the excluded interest income and interest expense associated with consolidated trusts is reclassified to guarantee and commitment fees in determining Farmer Mac's core earnings. Farmer Mac also excludes from net effective spread the fair value changes of financial derivatives and the corresponding assets or liabilities designated in fair value hedge accounting relationships because they are not expected to have an economic effect on Farmer Mac's financial performance, as we expect to hold the financial derivatives and corresponding hedged items to maturity.

Net effective spread also differs from net interest income and net interest yield because it includes the accrual of income and expense related to the contractual amounts due on financial derivatives that are not designated in hedge accounting relationships ("undesignated financial derivatives"). Farmer Mac uses interest rate swaps to manage its interest rate risk exposure by synthetically modifying the interest rate reset or maturity characteristics of certain assets and liabilities. The accrual of the contractual amounts due on interest rate swaps designated in hedge accounting relationships is included as an adjustment to the yield or cost of the hedged item and is included in net interest income. For undesignated financial derivatives, Farmer Mac records the income or expense related to the accrual of the contractual amounts due in "Gains on financial derivatives" on the consolidated statements of operations. However, the accrual of the contractual amounts due for undesignated financial derivatives are included in Farmer Mac's calculation of net effective spread.

Net effective spread also differs from net interest income and net interest yield because it includes the net effects of terminations or net settlements on financial derivatives, which consist of: (1) the net effects of cash settlements on agency forward contracts on the debt of other GSEs and U.S. Treasury security futures

that we use as short-term economic hedges on the issuance of debt; and (2) the net effects of initial cash payments that Farmer Mac receives upon the inception of certain swaps. The inclusion of these items in net effective spread is intended to reflect our view of the complete net spread between an asset and all of its related funding, including any associated derivatives, whether or not they are designated in a hedge accounting relationship.

For a reconciliation of net interest income and net interest yield to net effective spread, see Table 10 in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Net Interest Income."

Results of Operations

Reconciliations of Farmer Mac's net income attributable to common stockholders to core earnings and core earnings per share are presented in the following tables along with information about the composition of core earnings:

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Table 6


Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings	Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings					Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
		For the Three Months Ended					For the Three Months Ended
		June 30, 2023		June 30, 2022					September 30, 2023		September 30, 2022
		(in thousands, except per share amounts)					(in thousands, except per share amounts)
Net income attributable to common stockholders	Net income attributable to common stockholders	$	40,421	$	35,063			Net income attributable to common stockholders	$	51,345	$	34,627
Less reconciling items:	Less reconciling items:							Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13)	Gains on undesignated financial derivatives due to fair value changes (see Table 13)	2,141		2,846				Gains on undesignated financial derivatives due to fair value changes (see Table 13)	2,921		6,441
(Losses)/gains on hedging activities due to fair value changes		(4,901)		428
Unrealized losses on trading securities		(57)		(285)
Gains/(losses) on hedging activities due to fair value changes								Gains/(losses) on hedging activities due to fair value changes	3,210		(624)
Unrealized gains/(losses) on trading securities								Unrealized gains/(losses) on trading securities	1,714		(757)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	29		(62)				Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	29		24
Net effects of terminations or net settlements on financial derivatives	Net effects of terminations or net settlements on financial derivatives	583		2,536				Net effects of terminations or net settlements on financial derivatives	(79)		(3,522)

Income tax effect related to reconciling items	Income tax effect related to reconciling items	464		(1,148)				Income tax effect related to reconciling items	(1,638)		(327)
Sub-total	Sub-total	(1,741)		4,315				Sub-total	6,157		1,235
Core earnings	Core earnings	$	42,162	$	30,748			Core earnings	$	45,188	$	33,392

Composition of Core Earnings:	Composition of Core Earnings:							Composition of Core Earnings:
Revenues:	Revenues:							Revenues:
Net effective spread(1)	Net effective spread(1)	$	81,832	$	60,946			Net effective spread(1)	$	83,424	$	65,641
Guarantee and commitment fees(2)	Guarantee and commitment fees(2)	4,581		4,709				Guarantee and commitment fees(2)	4,828		4,201

Other(3)	Other(3)	409		307				Other(3)	1,056		473
Total revenues	Total revenues	86,822		65,962				Total revenues	89,308		70,315

Credit related expense (GAAP):	Credit related expense (GAAP):							Credit related expense (GAAP):
Provision for/(release of) losses		1,142		(1,535)
(Release of)/provision for losses								(Release of)/provision for losses	(181)		450

Total credit related expense	Total credit related expense	1,142		(1,535)				Total credit related expense	(181)		450

Operating expenses (GAAP):	Operating expenses (GAAP):							Operating expenses (GAAP):
Compensation and employee benefits	Compensation and employee benefits	13,937		11,715				Compensation and employee benefits	14,103		11,648
General and administrative	General and administrative	9,420		7,520				General and administrative	9,100		6,919
Regulatory fees	Regulatory fees	831		813				Regulatory fees	831		812
Total operating expenses	Total operating expenses	24,188		20,048				Total operating expenses	24,034		19,379

Net earnings	Net earnings	61,492		47,449				Net earnings	65,455		50,486
Income tax expense(4)	Income tax expense(4)	12,539		9,909				Income tax expense(4)	13,475		10,303

Preferred stock dividends (GAAP)	Preferred stock dividends (GAAP)	6,791		6,792				Preferred stock dividends (GAAP)	6,792		6,791
Core earnings	Core earnings	$	42,162	$	30,748			Core earnings	$	45,188	$	33,392

Core earnings per share:	Core earnings per share:							Core earnings per share:
Basic	Basic	$	3.89	$	2.85			Basic	$	4.17	$	3.09
Diluted	Diluted	$	3.86	$	2.83			Diluted	$	4.13	$	3.07
Weighted-average shares:	Weighted-average shares:							Weighted-average shares:
Basic	Basic	10,833		10,796				Basic	10,839		10,799
Diluted	Diluted	10,916		10,864				Diluted	10,938		10,874

(1)Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table 10 for a reconciliation of net interest income to net effective spread.

(2)Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.

(3)Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.

(4)Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.


Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
	For the Nine Months Ended
	September 30, 2023		September 30, 2022
	(in thousands, except per share amounts)
Net income attributable to common stockholders	$	132,010	$	114,352
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13)	5,978		11,899
(Losses)/gains on hedging activities due to fair value changes	(1,796)		5,491
Unrealized gains/(losses) on trading securities	2,016		(948)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	87		(18)
Net effects of terminations or net settlements on financial derivatives	1,027		14,526


Income tax effect related to reconciling items	(1,536)		(6,499)
Sub-total	5,776		24,451
Core earnings	$	126,234	$	89,901

Composition of Core Earnings:
Revenues:
Net effective spread(1)	$	242,429	$	184,426
Guarantee and commitment fees(2)	14,063		13,467

Other(3)	2,532		1,294
Total revenues	259,024		199,187

Credit related expense (GAAP):
Provision for/(release of) losses	1,711		(1,139)


Total credit related expense	1,711		(1,139)

Operating expenses (GAAP):
Compensation and employee benefits	43,391		36,661
General and administrative	26,047		21,717
Regulatory fees	2,497		2,437
Total operating expenses	71,935		60,815

Net earnings	185,378		139,511
Income tax expense(4)	38,770		29,236

Preferred stock dividends (GAAP)	20,374		20,374
Core earnings	$	126,234	$	89,901

Core earnings per share:
Basic	$	11.66	$	8.33
Diluted	$	11.56	$	8.27
Weighted-average shares:
Basic	10,825		10,787
Diluted	10,924		10,875

(4)Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.

Reconciliation of Net Income Attributable to Common Stockholders to Core Earnings
For the Six Months Ended
June 30, 2023 June 30, 2022
(in thousands, except per share amounts)
Net income attributable to common stockholders $ 80,665 $ 79,725
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13) 3,057 5,458
(Losses)/gains on hedging activities due to fair value changes (5,006) 6,115
Unrealized gains/(losses) on trading securities 302 (191)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value 58 (42)
Net effects of terminations or net settlements on financial derivatives 1,106 18,048
Income tax effect related to reconciling items 102 (6,172)
Sub-total (381) 23,216
Core earnings $ 81,046 $ 56,509
Composition of Core Earnings:
Revenues:
Net effective spread(1)
$ 159,005 $ 118,785
Guarantee and commitment fees(2)
9,235 9,266
Other(3)
1,476 821
Total revenues 169,716 128,872
Credit related expense (GAAP):
Provision for/(release of) losses 1,892 (1,589)
Total credit related expense 1,892 (1,589)
Operating expenses (GAAP):
Compensation and employee benefits 29,288 25,013
General and administrative 16,947 14,798
Regulatory fees 1,666 1,625
Total operating expenses 47,901 41,436
Net earnings 119,923 89,025
Income tax expense(4)
25,295 18,933
Preferred stock dividends (GAAP) 13,582 13,583
Core earnings $ 81,046 $ 56,509
Core earnings per share:
  Basic $ 7.49 $ 5.24
  Diluted $ 7.42 $ 5.20
Weighted-average shares:
  Basic 10,817 10,782
  Diluted 10,917 10,876

~~(1)~~Net effective spread is a non-GAAP measure. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for an explanation of net effective spread. See Table ~~10 for a reconciliation of net interest income to net effective spread.~~7

~~(2)~~Includes interest income and interest expense related to consolidated trusts owned by third parties reclassified from net interest income to guarantee and commitment fees to reflect management's view that the net interest income Farmer Mac earns is effectively a guarantee fee on the consolidated Farmer Mac Guaranteed Securities.

~~(3)~~Reflects reconciling adjustments for the reclassification to exclude expenses related to interest rate swaps not designated as hedges and terminations or net settlements on financial derivatives, and reconciling adjustments to exclude fair value adjustments on financial derivatives and trading assets and the recognition of deferred gains over the estimated lives of certain Farmer Mac Guaranteed Securities and USDA Securities.

~~(4)Includes the tax impact of non-GAAP reconciling items between net income attributable to common stockholders and core earnings.~~


Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share
	For the Three Months Ended				For the Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
	(in thousands, except per share amounts)
GAAP - Basic EPS	$	4.74	$	3.21	$	12.20	$	10.61
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13)	0.27		0.60		0.55		1.10
Gains/(losses) on hedging activities due to fair value changes	0.30		(0.06)		(0.17)		0.51
Unrealized gains/(losses) on trading securities	0.16		(0.07)		0.19		(0.09)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		—		0.01		—
Net effects of terminations or net settlements on financial derivatives	(0.01)		(0.32)		0.10		1.36

Income tax effect related to reconciling items	(0.15)		(0.03)		(0.14)		(0.60)
Sub-total	0.57		0.12		0.54		2.28
Core Earnings - Basic EPS	$	4.17	$	3.09	$	11.66	$	8.33

Shares used in per share calculation (GAAP and Core Earnings)	10,839		10,799		10,825		10,787

~~Table 7~~
Reconciliation of GAAP Basic Earnings Per Share to Core Earnings - Basic Earnings Per Share
For the Three Months Ended For the Six Months Ended
June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
(in thousands, except per share amounts)
GAAP - Basic EPS $ 3.73 $ 3.25 $ 7.46 $ 7.40
Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13) 0.20 0.26 0.28 0.51
(Losses)/gains on hedging activities due to fair value changes (0.45) 0.04 (0.46) 0.57
Unrealized (losses)/gains on trading securities — (0.03) 0.03 (0.02)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value — (0.01) 0.01 —
Net effects of terminations or net settlements on financial derivatives 0.05 0.24 0.10 1.67
Income tax effect related to reconciling items 0.04 (0.10) 0.01 (0.57)
Sub-total (0.16) 0.40 (0.03) 2.16
Core Earnings - Basic EPS $ 3.89 $ 2.85 $ 7.49 $ 5.24
Shares used in per share calculation (GAAP and Core Earnings) 10,833 10,796 10,817 10,782


Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share	Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share									Reconciliation of GAAP Diluted Earnings Per Share to Core Earnings - Diluted Earnings Per Share
		For the Three Months Ended				For the Six Months Ended					For the Three Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022					September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(in thousands, except per share amounts)									(in thousands, except per share amounts)
GAAP - Diluted EPS	GAAP - Diluted EPS	$	3.70	$	3.23	$	7.39	$	7.33			GAAP - Diluted EPS	$	4.69	$	3.18	$	12.08	$	10.51
Less reconciling items:	Less reconciling items:											Less reconciling items:
Gains on undesignated financial derivatives due to fair value changes (see Table 13)	Gains on undesignated financial derivatives due to fair value changes (see Table 13)	0.20		0.26		0.28		0.50				Gains on undesignated financial derivatives due to fair value changes (see Table 13)	0.27		0.59		0.54		1.09
(Losses)/gains on hedging activities due to fair value changes		(0.45)		0.04		(0.46)		0.56
Unrealized (losses)/gains on trading securities		—		(0.03)		0.03		(0.02)
Gains/(losses) on hedging activities due to fair value changes												Gains/(losses) on hedging activities due to fair value changes	0.29		(0.06)		(0.16)		0.50
Unrealized gains/(losses) on trading securities												Unrealized gains/(losses) on trading securities	0.16		(0.07)		0.18		(0.09)
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		(0.01)		0.01		—				Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	—		—		0.01		—
Net effects of terminations or net settlements on financial derivatives	Net effects of terminations or net settlements on financial derivatives	0.05		0.23		0.10		1.66				Net effects of terminations or net settlements on financial derivatives	(0.01)		(0.32)		0.09		1.34

Income tax effect related to reconciling items	Income tax effect related to reconciling items	0.04		(0.09)		0.01		(0.57)				Income tax effect related to reconciling items	(0.15)		(0.03)		(0.14)		(0.60)
Sub-total	Sub-total	(0.16)		0.40		(0.03)		2.13				Sub-total	0.56		0.11		0.52		2.24
Core Earnings - Diluted EPS	Core Earnings - Diluted EPS	$	3.86	$	2.83	$	7.42	$	5.20			Core Earnings - Diluted EPS	$	4.13	$	3.07	$	11.56	$	8.27

Shares used in per share calculation (GAAP and Core Earnings)	Shares used in per share calculation (GAAP and Core Earnings)	10,916		10,864		10,917		10,876				Shares used in per share calculation (GAAP and Core Earnings)	10,938		10,874		10,924		10,875

The non-GAAP reconciling items between net income attributable to common stockholders and core earnings are:

1. Gains/(losses) 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) (Losses)/gains on hedging activities due to fair value changes.

7372

2. Unrealized gains/(losses)~~/gains~~ on trading securities. The unrealized gains/(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. The amount of this non-GAAP reconciling item is the recorded amount of premium, discount, or deferred gain amortization during the reporting period on those assets for which the premium, discount, or deferred gain was based on the application of an accounting principle (e.g., consolidation of variable interest entities) rather than on a cash transaction (e.g., a purchase price premium or discount).

4. The net effects of terminations or net settlements on financial derivatives. These terminations or net settlements relate to:

•Forward contracts on the debt of other GSEs and futures contracts on U.S. Treasury securities. These contracts are used as a short-term economic hedge of the issuance of debt. 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.

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 ~~six~~three and nine months ended ~~ended June~~September 30, 2023 and 2022. The average balance of non-accruing loans is included in the average balance of loans, Farmer Mac Guaranteed Securities, and USDA Securities presented, though the related income is accounted for on a cash basis. Therefore, as the average balance of non-accruing loans and the income received increases or decreases, the net interest income and yield will fluctuate accordingly. The average balance of loans in consolidated trusts with beneficial interests owned by third parties and for which Farmer Mac guarantees all classes of securities issued is disclosed in the net effect of consolidated trusts and is not included in the average balances of interest-earning assets and interest-bearing liabilities. The interest income and expense associated with these trusts are shown in the net effect of consolidated trusts.

7473

Table 8
For the Six Months Ended
June 30, 2023 June 30, 2022
Average
Balance Income/
Expense Average
Rate Average
Balance Income/
Expense Average
Rate
(dollars in thousands)
Interest-earning assets:
Cash and investments $ 5,763,409 $ 129,482 4.49 % $ 5,045,219 $ 16,916 0.67 %
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)
21,347,914 512,544 4.80 % 19,242,681 222,418 2.31 %
Total interest-earning assets 27,111,323 642,026 4.74 % 24,287,900 239,334 1.97 %
Funding:
Notes payable due within one year 3,589,110 76,853 4.28 % 2,675,834 5,951 0.44 %
Notes payable due after one year(2)
21,971,243 409,537 3.73 % 20,501,101 106,132 1.04 %
Total interest-bearing liabilities(3)
25,560,353 486,390 3.81 % 23,176,935 112,083 0.97 %
Net non-interest-bearing funding 1,550,970 — 1,110,965 —
Total funding 27,111,323 486,390 3.59 % 24,287,900 112,083 0.92 %
Net interest income/yield prior to consolidation of certain trusts 27,111,323 155,636 1.15 % 24,287,900 127,251 1.05 %
Net effect of consolidated trusts(4)
889,235 2,099 0.47 % 866,438 2,201 0.51 %
Net interest income/yield $ 28,000,558 $ 157,735 1.13 % $ 25,154,338 $ 129,452 1.03 %


	For the Three Months Ended
	September 30, 2023						September 30, 2022
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
	(dollars in thousands)
Interest-earning assets:
Cash and investments	$	5,974,669	$	79,947	5.35	%	$	5,254,260	$	21,581	1.64	%
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)	21,859,457		293,378		5.37	%	20,144,586		164,548		3.27	%
Total interest-earning assets	27,834,126		373,325		5.36	%	25,398,846		186,129		2.93	%
Funding:
Notes payable due within one year	3,212,217		38,704		4.82	%	2,873,545		15,679		2.18	%
Notes payable due after one year(2)	22,784,190		248,002		4.35	%	21,205,661		103,440		1.95	%
Total interest-bearing liabilities(3)	25,996,407		286,706		4.41	%	24,079,206		119,119		1.98	%
Net non-interest-bearing funding	1,837,719		—				1,319,640		—
Total funding	27,834,126		286,706		4.12	%	25,398,846		119,119		1.88	%
Net interest income/yield prior to consolidation of certain trusts	27,834,126		86,619		1.24	%	25,398,846		67,010		1.06	%
Net effect of consolidated trusts(4)	861,980		1,024		0.48	%	823,793		843		0.41	%
Net interest income/yield	$	28,696,106	$	87,643	1.22	%	$	26,222,639	$	67,853	1.04	%

(1)Excludes interest income of ~~$17.1~~$8.5 million and ~~$16.0~~$7.7 million in the ~~first half~~third quarter of 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties.

(2)Includes current portion of long-term notes.

(3)Excludes interest expense of ~~$15.0~~$7.5 million and ~~$13.8~~$6.8 million in the third quarter of 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties.

(4)Includes the effect of consolidated trusts with beneficial interests owned by third parties.


	For the Nine Months Ended
	September 30, 2023						September 30, 2022
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
	(dollars in thousands)
Interest-earning assets:
Cash and investments	$	5,833,829	$	209,429	4.79	%	$	5,114,900	$	38,497	1.00	%
Loans, Farmer Mac Guaranteed Securities and USDA Securities(1)	21,518,428		805,922		4.99	%	19,543,316		386,968		2.64	%
Total interest-earning assets	27,352,257		1,015,351		4.95	%	24,658,216		425,465		2.30	%
Funding:
Notes payable due within one year	3,463,479		115,557		4.45	%	2,741,738		21,630		1.05	%
Notes payable due after one year(2)	22,242,225		657,538		3.94	%	20,735,954		209,573		1.35	%
Total interest-bearing liabilities(3)	25,705,704		773,095		4.01	%	23,477,692		231,203		1.31	%
Net non-interest-bearing funding	1,646,553		—				1,180,524		—
Total funding	27,352,257		773,095		3.77	%	24,658,216		231,203		1.25	%
Net interest income/yield prior to consolidation of certain trusts	27,352,257		242,256		1.18	%	24,658,216		194,262		1.05	%
Net effect of consolidated trusts(4)	880,150		3,122		0.47	%	852,223		3,043		0.48	%
Net interest income/yield	$	28,232,407	$	245,378	1.16	%	$	25,510,439	$	197,305	1.03	%

(1)Excludes interest income of $25.6 million and $23.7 million in the first ~~half~~nine months of 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties.

(2)Includes current portion of long-term notes.

(3)Excludes interest expense of $22.4 million and $20.6 million in the first nine months of 2023 and 2022, respectively, related to consolidated trusts with beneficial interests owned by third parties.

(4)Includes the effect of consolidated trusts with beneficial interests owned by third parties.

The ~~$28.3~~$48.1 million year-over-year increase in net interest income was primarily due to a ~~$29.6~~$40.3 million decrease in funding costs primarily due to our disciplined funding strategies and higher nominal interest rates that have led to an upward repricing of our excess capital that is held in our short-term investment portfolio, and a ~~$12.8~~$17.0 million increase related to net new business volume. These factors were partially offset by a ~~$11.6~~$7.7 million decrease in the fair value of derivatives designated in fair value hedge accounting

relationships (designated financial derivatives) and a ~~$2.1~~$1.1 million decrease in cash-basis interest income. In percentage terms, the ~~0.10%~~0.13% increase was primarily attributable to a decrease of ~~0.20%~~0.18% in funding costs, partially offset by a decrease of ~~0.08%~~0.04% in net fair value changes from designated financial derivatives.

The following table sets forth information about changes in the components of Farmer Mac's net interest income prior to consolidation of certain trusts for the periods indicated. For each category, information is provided on changes attributable to changes in volume (change in volume multiplied by old rate), and changes in rate (change in rate multiplied by old volume), and then allocated based on the relative size of rate and volume changes from the prior period.

Table 9


		For the Six Months Ended June 30, 2023 Compared to Same Period in 2022							For the Nine Months Ended September 30, 2023 Compared to Same Period in 2022
		Increase/(Decrease) Due to							Increase/(Decrease) Due to
		Rate		Volume		Total					Rate		Volume		Total
		(in thousands)						(in thousands)
Income from interest-earning assets:	Income from interest-earning assets:									Income from interest-earning assets:
Cash and investments	Cash and investments	$	109,824	$	2,742	$	112,566			Cash and investments	$	164,788	$	6,144	$	170,932
Loans, Farmer Mac Guaranteed Securities and USDA Securities	Loans, Farmer Mac Guaranteed Securities and USDA Securities	263,376		26,750		290,126				Loans, Farmer Mac Guaranteed Securities and USDA Securities	376,296		42,658		418,954
Total	Total	373,200		29,492		402,692				Total	541,084		48,802		589,886
Expense from other interest-bearing liabilities	Expense from other interest-bearing liabilities	361,636		12,671		374,307				Expense from other interest-bearing liabilities	517,961		23,931		541,892
Change in net interest income prior to consolidation of certain trusts(1)	Change in net interest income prior to consolidation of certain trusts(1)	$	11,564	$	16,821	$	28,385			Change in net interest income prior to consolidation of certain trusts(1)	$	23,123	$	24,871	$	47,994

(1)Excludes the effect of debt in consolidated trusts with beneficial interests owned by third parties.

The following table presents a reconciliation of net interest income and net interest yield to net effective spread. Net effective spread is measured by: including (1) expenses related to undesignated financial derivatives, which consists of income or expense related to contractual amounts due on financial derivatives not designated in hedge relationships (the income or expense related to financial derivatives designated in hedge accounting relationships is already included in net interest income), and (2) the amortization of losses due to terminations or net settlements of financial derivatives; and excluding (1) the amortization of premiums and discounts on assets consolidated at fair value, (2) the net effects of consolidated trusts with beneficial interests owned by third parties, and (3) the fair value changes of financial derivatives and corresponding financial assets or liabilities in fair value hedge relationships. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Measures—Net Effective Spread" for more information about net effective spread.

Table 10


		For the Three Months Ended								For the Six Months Ended								For the Three Months Ended							For the Nine Months Ended
		June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022					September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
		Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield					Dollars		Yield		Dollars		Yield		Dollars		Yield		Dollars		Yield
		(dollars in thousands)																			(dollars in thousands)
Net interest income/yield	Net interest income/yield	$	78,677	1.12	%	$	63,914	1.00	%	$	157,735	1.13	%	$	129,452	1.03	%			Net interest income/yield	$	87,643	1.22	%	$	67,853	1.04	%	$	245,378	1.16	%	$	197,305	1.03	%
Net effects of consolidated trusts	Net effects of consolidated trusts	(1,044)		0.02	%	(1,183)		0.02	%	(2,099)		0.02	%	(2,201)		0.02	%			Net effects of consolidated trusts	(1,024)		0.02	%	(843)		0.02	%	(3,123)		0.02	%	(3,044)		0.02	%
Expense related to undesignated financial derivatives	Expense related to undesignated financial derivatives	(1,568)		(0.02)	%	(2,026)		(0.03)	%	(3,193)		(0.02)	%	(3,020)		(0.02)	%			Expense related to undesignated financial derivatives	(805)		(0.01)	%	(2,613)		(0.05)	%	(3,999)		(0.02)	%	(5,633)		(0.03)	%
Amortization of premiums/discounts on assets consolidated at fair value	Amortization of premiums/discounts on assets consolidated at fair value	(24)		—	%	65		—	%	(48)		—	%	49		—	%			Amortization of premiums/discounts on assets consolidated at fair value	(24)		—	%	(21)		—	%	(71)		—	%	28		—	%
Amortization of losses due to terminations or net settlements on financial derivatives	Amortization of losses due to terminations or net settlements on financial derivatives	890		0.01	%	725		0.01	%	1,604		0.01	%	1,083		0.01	%			Amortization of losses due to terminations or net settlements on financial derivatives	844		0.01	%	640		0.01	%	2,448		0.01	%	1,723		0.01	%
Fair value changes on fair value hedge relationships	Fair value changes on fair value hedge relationships	4,901		0.07	%	(549)		(0.01)	%	5,006		0.03	%	(6,578)		(0.06)	%			Fair value changes on fair value hedge relationships	(3,210)		(0.04)	%	625		0.01	%	1,796		0.01	%	(5,953)		(0.03)	%
Net effective spread	Net effective spread	$	81,832	1.20	%	$	60,946	0.99	%	$	159,005	1.17	%	$	118,785	0.98	%			Net effective spread	$	83,424	1.20	%	$	65,641	1.03	%	$	242,429	1.18	%	$	184,426	1.00	%

The ~~$40.2~~$58.0 million year-over-year increase in net effective spread ~~in dollars~~ was primarily due to a ~~$31.0~~$45.8 million decrease in non-GAAP funding costs due to the same factors mentioned above that decreased our funding costs, and a ~~$12.9~~$16.4 million increase related to net new business volume. These factors were partially offset by a ~~$2.1~~$1.1 million decrease in cash-basis interest income. In percentage terms, the year-over-year increase of ~~0.19%~~0.18% was primarily attributable to a decrease in non-GAAP funding costs.

See Note 10 to the consolidated financial statements for more information about net interest income and net effective spread from Farmer Mac's individual business segments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Supplemental Information" for quarterly net effective spread by line of business.

Provision for and Release of Allowance for Losses and Reserve for Losses. The following table summarizes the components of Farmer Mac's total allowance for losses for the three and ~~six~~nine month periods ended ~~June~~September 30, 2023 and 2022:

Table 11


		As of June 30, 2023								As of June 30, 2022							As of September 30, 2023								As of September 30, 2022
		Allowance for Losses		Reserve for Losses		Total Allowance for Losses				Allowance for Losses		Reserve for Losses		Total Allowance for Losses			Allowance for Losses		Reserve for Losses		Total Allowance for Losses				Allowance for Losses		Reserve for Losses		Total Allowance for Losses
		(in thousands)															(in thousands)

For the Three Months Ended	For the Three Months Ended															For the Three Months Ended
Beginning Balance	Beginning Balance	$	16,278	$	1,636	$	17,914	$	17,914	$	14,464	$	1,840	$	16,304	Beginning Balance	$	17,351	$	1,705	$	19,056	$	19,056	$	13,092	$	1,677	$	14,769
Provision for/(release of) losses		1,073		69		1,142				(1,372)		(163)		(1,535)
(Release of)/provision for losses																(Release of)/provision for losses	(136)		(45)		(181)				617		(167)		450
Charge-offs	Charge-offs	—		—		—				—		—		—		Charge-offs	—		—		—				—		—		—

Ending Balance	Ending Balance	$	17,351	$	1,705	$	19,056			$	13,092	$	1,677	$	14,769	Ending Balance	$	17,215	$	1,660	$	18,875			$	13,709	$	1,510	$	15,219

For the Six Months Ended
For the Nine Months Ended																For the Nine Months Ended
Beginning Balance	Beginning Balance	$	15,731	$	1,433	$	17,164	$	17,164	$	14,492	$	1,950	$	16,442	Beginning Balance	$	15,731	$	1,433	$	17,164	$	17,164	$	14,492	$	1,950	$	16,442
Provision for/(release of) losses	Provision for/(release of) losses	1,620		272		1,892				(1,316)		(273)		(1,589)		Provision for/(release of) losses	1,484		227		1,711				(699)		(440)		(1,139)
Charge-offs	Charge-offs	—		—		—				(84)		—		(84)		Charge-offs	—		—		—				(84)		—		(84)

Ending Balance	Ending Balance	$	17,351	$	1,705	$	19,056			$	13,092	$	1,677	$	14,769	Ending Balance	$	17,215	$	1,660	$	18,875			$	13,709	$	1,510	$	15,219

See Notes 5 and 6 to the consolidated financial statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

During the three months ended ~~June~~September 30, 2023, we recorded a ~~$1.1~~$0.2 million ~~provision to~~release from the allowance for losses primarily as a result of ~~increased loan volume in~~a single collateral dependent agricultural storage and processing ~~and telecommunications.~~loan that fully paid off during the quarter, partially offset by one rural infrastructure loan that was downgraded to substandard during the quarter. During the ~~six~~nine months ended ~~June~~September 30, 2023, we recorded a ~~$1.9~~$1.7 million provision to the allowance for loan losses as a result of the above mentioned increased loan volume and a single agricultural storage and processing loan whose financial position continued to deteriorate related to the borrower's ongoing bankruptcy. See Note 12 ("Subsequent Event") to the consolidated financial statements for more information about this loan based on events that occurred after June 30, 2023.above-mentioned rural infrastructure loan.

Guarantee and Commitment Fees. The following table presents guarantee and commitment fees, which compensate Farmer Mac for assuming the credit risk on loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs, for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 12


		For the Three Months Ended								For the Six Months Ended							For the Three Months Ended										For the Nine Months Ended
						Change								Change									Change									Change
		June 30, 2023		June 30, 2022		$		%		June 30, 2023		June 30, 2022		$		%			September 30, 2023		September 30, 2022		$		%			September 30, 2023		September 30, 2022		$		%
		(dollars in thousands)															(dollars in thousands)
Contractual guarantee and commitment fees	Contractual guarantee and commitment fees	$	3,697	$	3,560	$	137	4	%	$	7,402	$	7,062	$	340	5	%	Contractual guarantee and commitment fees	$	3,794	$	3,494	$	300	9	%		$	11,195	$	10,556	$	639	6	%
Guarantee obligation amortization	Guarantee obligation amortization	1,152		1,596		(444)		(28)	%	2,920		3,791		(871)		(23)	%	Guarantee obligation amortization	847		1,030		(183)		(18)	%		3,767		4,821		(1,054)		(22)	%
Guarantee asset fair value changes	Guarantee asset fair value changes	(1,360)		(1,943)		583		30	%	(2,900)		(3,945)		1,045		(26)	%	Guarantee asset fair value changes	879		(1,880)		2,759		147	%		(2,020)		(5,826)		3,806		(65)	%
Guarantee and commitment fee income	Guarantee and commitment fee income	$	3,489	$	3,213	$	276	9	%	$	7,422	$	6,908	$	514	7	%	Guarantee and commitment fee income	$	5,520	$	2,644	$	2,876	109	%		$	12,942	$	9,551	$	3,391	36	%

Guarantee and commitment fees increased for the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to 2022, which was due to increases in the average outstanding balance of LTSPCs during the period. As adjusted for the core earnings presentation, guarantee and commitment fees were ~~$4.6~~$4.8 million and ~~$9.2~~$14.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2023, respectively, compared to ~~$4.7~~$4.2 million and ~~$9.3~~$13.5 million for the three and ~~six~~nine months ended ~~June~~September 30, 2022, respectively.

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. Farmer Mac has also excluded guarantee asset fair value changes from the presentation of core earnings because these fluctuations are not expected to have a cumulative net impact on Farmer Mac's financial condition or results of operations if Farmer Mac fulfills its guarantee obligation throughout the term of the guaranteed securities, as is expected.

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. The components of gains and losses on financial derivatives for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 are summarized in the following table:

Table 13


		For the Three Months Ended								For the Six Months Ended								For the Three Months Ended								For the Nine Months Ended
						Change								Change										Change								Change
		June 30, 2023		June 30, 2022		$		%		June 30, 2023		June 30, 2022		$		%				September 30, 2023		September 30, 2022		$		%		September 30, 2023		September 30, 2022		$		%
		(dollars in thousands)																(dollars in thousands)
Gains due to fair value changes	Gains due to fair value changes	$	2,141	$	2,846	$	(705)	(25)	%	$	3,057	$	5,458	$	(2,401)	(44)	%		Gains due to fair value changes	$	2,921	$	6,441	$	(3,520)	(55)	%	$	5,978	$	11,899	$	(5,921)	(50)	%
Accrual of contractual payments	Accrual of contractual payments	(1,568)		(2,026)		458		(23)	%	(3,194)		(3,020)		(174)		6	%		Accrual of contractual payments	(805)		(2,613)		1,808		(69)	%	(3,999)		(5,633)		1,634		(29)	%
Gains due to terminations or net settlements	Gains due to terminations or net settlements	1,120		2,971		(1,851)		(62)	%	2,229		18,341		(16,112)		(88)	%		Gains due to terminations or net settlements	555		(3,056)		3,611		(118)	%	2,784		15,285		(12,501)		(82)	%
Gains on financial derivatives	Gains on financial derivatives	$	1,693	$	3,791	$	(2,098)	(55)	%	$	2,092	$	20,779	$	(18,687)	(90)	%		Gains on financial derivatives	$	2,671	$	772	$	1,899	246	%	$	4,763	$	21,551	$	(16,788)	(78)	%

These changes in fair value are primarily the result of fluctuations in long-term interest rates. The accrual of periodic cash settlements for interest paid or received from Farmer Mac's interest rate swaps that are undesignated financial derivatives is shown as expense related to financial derivatives. Payments or receipts to terminate undesignated derivative positions or net cash settled forward sales contracts on the debt of other GSEs and undesignated U.S. Treasury security futures and initial cash payments received upon the inception of certain undesignated swaps are included in ~~"Gains~~"Gains/(losses) due to terminations or net settlements" in the table above.

Operating Expenses. The components of operating expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 are summarized in the following table:

Table 14


		For the Three Months Ended								For the Six Months Ended							For the Three Months Ended										For the Nine Months Ended
						Change								Change									Change									Change
		June 30, 2023		June 30, 2022		$		%		June 30, 2023		June 30, 2022		$		%			September 30, 2023		September 30, 2022		$		%			September 30, 2023		September 30, 2022		$		%
		(dollars in thousands)															(dollars in thousands)
Compensation and employee benefits	Compensation and employee benefits	$	13,937	$	11,715	$	2,222	19	%	$	29,288	$	25,013	$	4,275	17	%	Compensation and employee benefits	$	14,103	$	11,648	$	2,455	21	%		$	43,391	$	36,661	$	6,730	18	%
General and administrative	General and administrative	9,420		7,520		1,900		25	%	16,947		14,798		2,149		15	%	General and administrative	9,100		6,919		2,181		32	%		26,047		21,717		4,330		20	%
Regulatory fees	Regulatory fees	831		813		18		2	%	1,666		1,625		41		3	%	Regulatory fees	831		812		19		2	%		2,497		2,437		60		2	%
Total Operating Expenses	Total Operating Expenses	$	24,188	$	20,048	$	4,140	21	%	$	47,901	$	41,436	$	6,465	16	%	Total Operating Expenses	$	24,034	$	19,379	$	4,655	24	%		$	71,935	$	60,815	$	11,120	18	%

Compensation and Employee Benefits. The increase in compensation and employee benefits expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same periods in 2022 was largely due to increased headcount.

General and Administrative Expenses (G&A). The increase in G&A expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2023 compared to the same periods in 2022 was primarily due to increased spending on software licenses and information technology and other consultants to support growth and strategic initiatives. One of those initiatives is a multi-year effort to replace Farmer Mac's platform for securities trades and to implement a treasury management system.

Income Tax Expense. The following table presents income tax expense and the effective income tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 15


		For the Three Months Ended										For the Six Months Ended									For the Three Months Ended												For the Nine Months Ended
								Change										Change											Change											Change
		June 30, 2023			June 30, 2022			$		%		June 30, 2023			June 30, 2022			$		%			September 30, 2023			September 30, 2022			$		%			September 30, 2023			September 30, 2022			$		%
		(dollars in thousands)																			(dollars in thousands)
Income tax expense	Income tax expense	$	12,075		$	11,058		$	1,017	9	%	$	25,193		$	25,104		$	89	—	%	Income tax expense	$	15,113		$	10,631		$	4,482	42	%		$	40,306		$	35,735		$	4,571	13	%
Effective tax rate	Effective tax rate	20.4		%	20.9		%			(0.5)	%	21.1		%	21.2		%			(0.1)	%	Effective tax rate	20.6		%	20.5		%			0.1	%		20.9		%	21.0		%			(0.1)	%

7980

Business Volume.

The following table sets forth the net growth or decrease in Farmer Mac's lines of business for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022:

Table 16


Net New Business Volume	Net New Business Volume										Net New Business Volume
			For the Three Months Ended				For the Six Months Ended						For the Three Months Ended				For the Nine Months Ended
			June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		On or Off Balance Sheet	Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)			On or Off Balance Sheet	Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)		Net Growth/(Decrease)
			(in thousands)										(in thousands)
Agricultural Finance:	Agricultural Finance:										Agricultural Finance:
Farm & Ranch:	Farm & Ranch:										Farm & Ranch:
Loans	Loans	On-balance sheet	$	114,550	$	278,741	$	(198,478)	$	439,237	Loans	On-balance sheet	$	35,546	$	(160,600)	$	(162,932)	$	278,637
Loans held in consolidated trusts:	Loans held in consolidated trusts:										Loans held in consolidated trusts:
Beneficial interests owned by third-party investors (Pass-Through)(1)	Beneficial interests owned by third-party investors (Pass-Through)(1)	On-balance sheet	(18,194)		(53,259)		(37,855)		(113,682)		Beneficial interests owned by third-party investors (Pass-Through)(1)	On-balance sheet	(17,146)		(11,835)		(55,001)		(125,517)
Beneficial interests owned by third-party investors (Structured)(1)	Beneficial interests owned by third-party investors (Structured)(1)	On-balance sheet	(1,983)		—		274,459		—		Beneficial interests owned by third-party investors (Structured)(1)	On-balance sheet	(8,180)		297,298		266,279		297,298
IO-FMGS(2)	IO-FMGS(2)	On-balance sheet	(441)		(358)		(874)		(736)		IO-FMGS(2)	On-balance sheet	(168)		(469)		(1,042)		(1,205)
USDA Securities	USDA Securities	On-balance sheet	(13,409)		(11,400)		(64,016)		(16,399)		USDA Securities	On-balance sheet	(13,456)		(2,149)		(77,472)		(18,548)
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	(215,000)		(160,000)		(145,000)		270,000		AgVantage Securities(1)	On-balance sheet	225,000		310,000		80,000		580,000
LTSPCs and unfunded commitments	LTSPCs and unfunded commitments	Off-balance sheet	4,949		(15,863)		12,711		(24,687)		LTSPCs and unfunded commitments	Off-balance sheet	157,041		189,906		169,752		165,219
Other Farmer Mac Guaranteed Securities(3)	Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	(6,698)		(20,904)		(19,556)		(54,778)		Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	(25,716)		(14,466)		(45,272)		(69,244)
Loans serviced for others	Loans serviced for others	Off-balance sheet	566,768		(553)		566,320		(1,595)		Loans serviced for others	Off-balance sheet	(7,589)		(337)		558,731		(1,932)
Total Farm & Ranch	Total Farm & Ranch		$	430,542	$	16,404	$	387,711	$	497,360	Total Farm & Ranch		$	345,332	$	607,348	$	733,043	$	1,104,708
Corporate AgFinance:	Corporate AgFinance:										Corporate AgFinance:
Loans	Loans	On-balance sheet	$	15,039	$	41,151	$	21,650	$	26,314	Loans	On-balance sheet	$	35,874	$	51,433	$	57,524	$	77,747
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	30,438		(22,294)		8,523		(14,496)		AgVantage Securities(1)	On-balance sheet	15,050		(4,282)		23,573		(18,778)
Unfunded commitments	Unfunded commitments	Off-balance sheet	35,297		7,694		47,076		17,659		Unfunded commitments	Off-balance sheet	9,626		20,324		56,702		37,983
Total Corporate AgFinance	Total Corporate AgFinance		$	80,774	$	26,551	$	77,249	$	29,477	Total Corporate AgFinance		$	60,550	$	67,475	$	137,799	$	96,952
Total Agricultural Finance	Total Agricultural Finance		$	511,316	$	42,955	$	464,960	$	526,837	Total Agricultural Finance		$	405,882	$	674,823	$	870,842	$	1,201,660
Rural Infrastructure Finance:	Rural Infrastructure Finance:										Rural Infrastructure Finance:
Rural Utilities:	Rural Utilities:										Rural Utilities:
Loans	Loans	On-balance sheet	$	103,852	$	172,089	$	193,774	$	329,321	Loans	On-balance sheet	$	29,170	$	67,721	$	222,944	$	397,042
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	(373,871)		(23,477)		97,358		(46,858)		AgVantage Securities(1)	On-balance sheet	476,028		76,425		573,386		29,567
LTSPCs and unfunded commitments	LTSPCs and unfunded commitments	Off-balance sheet	(7,771)		17,005		(38,782)		(5,627)		LTSPCs and unfunded commitments	Off-balance sheet	1,205		(19,946)		(37,577)		(25,573)
Other Farmer Mac Guaranteed Securities(3)	Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	—		—		(71)		—		Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	—		—		(71)		—
Total Rural Utilities	Total Rural Utilities		$	(277,790)	$	165,617	$	252,279	$	276,836	Total Rural Utilities		$	506,403	$	124,200	$	758,682	$	401,036
Renewable Energy:	Renewable Energy:										Renewable Energy:
Loans	Loans	On-balance sheet	$	24,811	$	34,053	$	91,727	$	39,536	Loans	On-balance sheet	$	6,776	$	59,979	$	98,503	$	99,515
Unfunded commitments	Unfunded commitments	Off-balance sheet	(5,403)		(6,644)		6,004		21,719		Unfunded commitments	Off-balance sheet	(4,102)		(11,755)		1,902		9,964
Total Renewable Energy	Total Renewable Energy		$	19,408	$	27,409	$	97,731	$	61,255	Total Renewable Energy		$	2,674	$	48,224	$	100,405	$	109,479
Total Rural Infrastructure Finance	Total Rural Infrastructure Finance		$	(258,382)	$	193,026	$	350,010	$	338,091	Total Rural Infrastructure Finance		$	509,077	$	172,424	$	859,087	$	510,515
Total	Total		$	252,934	$	235,981	$	814,970	$	864,928	Total		$	914,959	$	847,247	$	1,729,929	$	1,712,175

(1)Categories of Farmer Mac Guaranteed Securities.

(2)An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.

(3)Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

Farmer Mac's outstanding business volume was ~~$26.7~~$27.7 billion as of ~~June~~September 30, 2023, a net increase of ~~$0.3~~$0.9 billion from ~~March 31,~~June 30, 2023 after taking into account all new business, ~~servicing rights acquisitions,~~ maturities, ~~sales,~~ and paydowns on existing assets.

The ~~$0.4~~$0.3 billion net increase in Farm & Ranch during ~~second~~third quarter 2023 resulted from ~~$1.6~~$1.4 billion of new purchases, commitments, ~~guarantees,~~ and ~~loans serviced for others,~~guarantees, partially offset by ~~$1.1~~$1.0 billion of scheduled maturities and repayments. Included in the $1.6 billion of new volume is newly purchased servicing rights on $0.6 billion of loans (i.e., loans serviced for others). These new servicing rights were acquired to further leverage our loan servicing function. Loans serviced for others earn servicing fee income rather than interest income and are a component of outstanding business volume because they are assets under our management.

Farmer Mac purchased a total of $0.2 billion in Farm & Ranch loans, partially offset by $0.1 billion in repayments. The $0.1 billion net increase was primarily driven by ~~improved~~strong borrower economics despite the continued higher interest rate environment.

Farmer Mac also purchased a total of ~~$0.7~~$1.0 billion in Farm & Ranch AgVantage Securities during ~~second~~third quarter 2023, which primarily reflected the refinancing of maturing securities. The ~~$0.7~~$1.0 billion in gross purchases was ~~more than~~partially offset by ~~$0.9~~$0.8 billion in scheduled maturities.

The $0.1 billion net increase in Corporate AgFinance during ~~second~~third quarter 2023 resulted from ~~$0.2~~$0.3 billion of new purchases and commitments, which was partially offset by ~~$0.1~~$0.2 billion of scheduled maturities ~~repayments,~~ and ~~sales.~~repayments. Farmer Mac purchased a total of ~~$105.3~~$195.6 million in loans, which was partially offset by ~~$90.3~~$159.7 million in scheduled maturities and repayments. The increase in loan purchases was primarily due to Farmer Mac's continued focus to support loans to larger and more complex agribusinesses focused on food and fiber processing and other food supply chain production.

The ~~$0.3~~$0.5 billion net ~~decrease~~increase in Rural Utilities during ~~second~~third quarter 2023 resulted from ~~$0.3~~$0.6 billion of new purchases, commitments, and guarantees, which was ~~more than~~partially offset by ~~$0.6~~$0.1 billion of scheduled maturities and repayments. Farmer Mac purchased a total of ~~$150.0~~$500.0 million in AgVantage Securities, ~~$80.1~~$43.5 million in telecommunications loans, and ~~$55.2~~$47.0 million in electric distribution and generation and transmission loans. The ~~$135.3~~$90.5 million in loan purchases was partially offset by ~~$31.4~~$61.4 million in scheduled maturities and repayments. The net increase in loan purchases primarily reflected borrowers' normal-course capital expenditures related to maintaining and upgrading utility infrastructure as well as investments in broadband infrastructure, and Farmer Mac's continued focus to support telecommunications investment in rural America.

The ~~$19.4~~$2.7 million net increase in Renewable Energy during ~~second~~third quarter 2023 primarily reflects ~~$71.6~~$17.4 million in loan purchases and unfunded commitments, partially offset by ~~$52.2~~$14.7 million in repayments.

Farmer Mac's outstanding business volume was ~~$24.5~~$25.3 billion as of ~~June~~September 30, 2022, a net increase of ~~$0.2~~$0.8 billion from ~~March 31,~~June 30, 2022 after taking into account all new business, scheduled maturities, and paydowns on existing assets.

The ~~$16.4~~$607.3 million net increase in Farm & Ranch during ~~second~~third quarter 2022 resulted from ~~$1.4~~$1.9 billion of

new purchases, commitments, and guarantees, mostly offset by ~~$1.4~~$1.3 billion of scheduled maturities and

repayments. Farmer Mac purchased a total of ~~$432.6~~$303.9 million in loans, which was primarily driven by

improved borrower economics albeit navigating a substantially higher interest rate environment. The

$303.9 million in gross Farm & Ranch loan purchases was partially offset by $166.8 million in scheduled

maturities and repayments.

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~~improved borrower economics as well as a competitive, albeit an increasing, interest rate environment~~

~~resulting in demand for intermediate and long-term financing solutions. The $432.6 million in gross Farm~~

~~& Ranch loan purchases was partially offset by $153.8 million in scheduled maturities and repayments.~~

Farmer Mac also purchased a total of ~~$0.8~~$1.0 billion in Farm & Ranch AgVantage Securities during ~~second~~third

quarter 2022, which primarily reflected the refinancing of maturing securities as well as financial

counterparties seeking to add longer term AgVantage securities to manage their asset-liability maturity

profile given recent increases in credit spreads and interest rates. The ~~$0.8~~$1.0 billion in gross purchases was

~~more than~~partially offset by ~~$1.0~~$0.7 billion in scheduled maturities. ~~Approximately $0.3 billion of the total $0.8~~

~~billion in gross purchases reflected purchases that refinanced maturing AgVantage securities and were~~

~~issued at short-term tenors, which may create some volatility in AgVantage volumes throughout the year.~~

The ~~$26.6~~$67.5 million net increase in Corporate AgFinance during ~~second~~third quarter 2022 resulted from

$~~107.9~~169.9 million of new ~~loan~~ purchases and commitments, which was ~~partially~~ offset by ~~$81.4~~$102.5 million of scheduled ~~maturities,~~

~~repayments,~~maturities and ~~sales.~~repayments. Farmer Mac purchased a total of ~~$85.4~~$136.0 million in loans, which was ~~partially~~ offset by ~~$44.3~~

$84.6 million in scheduled maturities ~~repayments,~~ and ~~sales.~~repayments. This net increase in loans was primarily due to

Farmer Mac's continued focus to support loans to larger and more complex agribusinesses focused on food

and fiber processing, and other food supply chain production.

The ~~$165.6~~$124.2 million net increase in Rural Utilities during ~~second~~third quarter 2022 resulted from ~~$326.9~~$547.1 million

of new purchases, commitments, and guarantees, which was partially offset by ~~$161.3~~$422.9 million of

scheduled maturities and repayments. Farmer Mac purchased a total of ~~$196.5~~$400.0 million in ~~Rural Utilities~~AgVantage

~~loans;~~Securities, $75.8 million in telecommunications loans and $60.0 million in electric distribution and

generation and transmission ~~comprised $161.5 million and~~

~~telecommunication comprised $35.0 million, which was fueled by a competitive but increasing interest~~

~~rate environment resulting in demand for long-term financing solutions for planned maintenance and~~

~~capital expenditures.~~loans. The ~~$196.5~~$135.8 million in loan purchases was partially offset by ~~$24.4~~ $68.1

million in

scheduled maturities and repayments.

The ~~$27.4~~$48.2 million net increase in Renewable Energy during ~~second~~third quarter 2022 primarily reflects

$~~35.3~~61.7 million in loan purchases, partially offset by ~~$7.9~~$13.4 million in repayments.

The level and composition of Farmer Mac’s outstanding business volume is based on the relationship between new business, loan sales, scheduled maturities, and repayments on existing assets from year to year. This relationship in turn depends on a variety of factors both internal and external to Farmer Mac. The external factors include general market forces, competition, and our counterparties’ liquidity needs, access to alternative funding, desired products, and assessment of strategic factors. The internal factors include our assessment of profitability, mission fulfillment, credit risk, and customer relationships. For more information about potential growth opportunities in Farmer Mac's lines of business, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Outlook" in this report.

The following table sets forth information about the Farmer Mac Guaranteed Securities issued during the periods indicated:

Table 17


		For the Three Months Ended				For the Six Months Ended				For the Three Months Ended				For the Nine Months Ended
		June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022				September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
		(dollars in thousands)								(dollars in thousands)
AgVantage securities	AgVantage securities	$	878,455	$	905,796	$	1,573,655	$	2,847,156		AgVantage securities	$	1,519,715	$	1,398,807	$	3,093,370	$	4,245,963

Loans securitized and held in consolidated trusts with beneficial interests owned by third parties	Loans securitized and held in consolidated trusts with beneficial interests owned by third parties	—		—		285,201		25,928			Loans securitized and held in consolidated trusts with beneficial interests owned by third parties	6,399		318,997		291,600		344,925

Total Farmer Mac Guaranteed Securities Issuances	Total Farmer Mac Guaranteed Securities Issuances	$	878,455	$	905,796	$	1,858,856	$	2,873,084		Total Farmer Mac Guaranteed Securities Issuances	$	1,526,114	$	1,717,804	$	3,384,970	$	4,590,888

Farmer Mac either retains the loans it purchases or securitizes them and retains or sells Farmer Mac Guaranteed Securities backed by those securitized loans. During first quarter 2023, Farmer Mac executed

its third structured securitization transaction, whereby it sold and securitized agricultural mortgage loans resulting in $281.0 million of Farmer Mac Guaranteed Securities. In this transaction, Farmer Mac transferred selected loans to a depositor which then deposited the loans into a trust, at which time the loans became assets of the trust. Farmer Mac concluded that it was the primary beneficiary of the trust because Farmer Mac retained significant interest and has power over the activities most significant to the economic performance of the Variable Interest Entity in its role as Master Servicer. Therefore, Farmer Mac consolidates the assets and liabilities of the trust for this structured securitization. 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 the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, Farmer Mac realized no gains or losses from the securitization of loans that it holds in consolidated trusts. Farmer Mac consolidates these loans and presents them as "Loans held for investment in consolidated trusts, at amortized cost" on the consolidated balance sheets.

During the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, Farmer Mac realized no gains or losses from the issuance of Farmer Mac Guaranteed USDA Securities or AgVantage Securities.

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The following table sets forth information about outstanding volume in each of Farmer Mac's lines of business as of the dates indicated:

Table 18


Outstanding Business Volume	Outstanding Business Volume						Outstanding Business Volume

		On or Off Balance Sheet	As of June 30, 2023		As of December 31, 2022				On or Off Balance Sheet	As of September 30, 2023		As of December 31, 2022
			(in thousands)						(in thousands)
Agricultural Finance:	Agricultural Finance:							Agricultural Finance:
Farm & Ranch:	Farm & Ranch:							Farm & Ranch:
Loans	Loans	On-balance sheet	$	4,952,272	$	5,150,750		Loans	On-balance sheet	$	4,987,818	$	5,150,750
Loans held in consolidated trusts:	Loans held in consolidated trusts:							Loans held in consolidated trusts:
Beneficial interests owned by third-party investors (Pass-Through)(1)	Beneficial interests owned by third-party investors (Pass-Through)(1)	On-balance sheet	877,063		914,918			Beneficial interests owned by third-party investors (Pass-Through)(1)	On-balance sheet	859,917		914,918
Beneficial interests owned by third-party investors (Structured)(1)	Beneficial interests owned by third-party investors (Structured)(1)	On-balance sheet	571,117		296,658			Beneficial interests owned by third-party investors (Structured)(1)	On-balance sheet	562,937		296,658
IO-FMGS(2)	IO-FMGS(2)	On-balance sheet	9,748		10,622			IO-FMGS(2)	On-balance sheet	9,580		10,622
USDA Securities	USDA Securities	On-balance sheet	2,343,286		2,407,302			USDA Securities	On-balance sheet	2,329,830		2,407,302
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	5,460,000		5,605,000			AgVantage Securities(1)	On-balance sheet	5,685,000		5,605,000
LTSPCs and unfunded commitments	LTSPCs and unfunded commitments	Off-balance sheet	2,835,020		2,822,309			LTSPCs and unfunded commitments	Off-balance sheet	2,992,061		2,822,309
Other Farmer Mac Guaranteed Securities(3)	Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	481,397		500,953			Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	455,681		500,953
Loans serviced for others	Loans serviced for others	Off-balance sheet	586,600		20,280			Loans serviced for others	Off-balance sheet	579,011		20,280
Total Farm & Ranch	Total Farm & Ranch		$	18,116,503	$	17,728,792		Total Farm & Ranch		$	18,461,835	$	17,728,792
Corporate AgFinance:	Corporate AgFinance:							Corporate AgFinance:
Loans	Loans	On-balance sheet	$	1,187,903	$	1,166,253		Loans	On-balance sheet	$	1,223,777	$	1,166,253
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	368,123		359,600			AgVantage Securities(1)	On-balance sheet	383,173		359,600
Unfunded commitments	Unfunded commitments	Off-balance sheet	124,730		77,654			Unfunded commitments	Off-balance sheet	134,356		77,654
Total Corporate AgFinance	Total Corporate AgFinance		$	1,680,756	$	1,603,507		Total Corporate AgFinance		$	1,741,306	$	1,603,507
Total Agricultural Finance	Total Agricultural Finance		$	19,797,259	$	19,332,299		Total Agricultural Finance		$	20,203,141	$	19,332,299
Rural Infrastructure Finance:	Rural Infrastructure Finance:							Rural Infrastructure Finance:
Rural Utilities:	Rural Utilities:							Rural Utilities:
Loans	Loans	On-balance sheet	$	2,995,470	$	2,801,696		Loans	On-balance sheet	$	3,024,640	$	2,801,696
AgVantage Securities(1)	AgVantage Securities(1)	On-balance sheet	3,141,514		3,044,156			AgVantage Securities(1)	On-balance sheet	3,617,542		3,044,156
LTSPCs and unfunded commitments	LTSPCs and unfunded commitments	Off-balance sheet	473,810		512,592			LTSPCs and unfunded commitments	Off-balance sheet	475,015		512,592
Other Farmer Mac Guaranteed Securities(3)	Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	1,098		1,169			Other Farmer Mac Guaranteed Securities(3)	Off-balance sheet	1,098		1,169
Total Rural Utilities	Total Rural Utilities		$	6,611,892	$	6,359,613		Total Rural Utilities		$	7,118,295	$	6,359,613
Renewable Energy:	Renewable Energy:							Renewable Energy:
Loans	Loans	On-balance sheet	$	311,297	$	219,570		Loans	On-balance sheet	$	318,073	$	219,570
Unfunded commitments	Unfunded commitments	Off-balance sheet	16,604		10,600			Unfunded commitments	Off-balance sheet	12,502		10,600
Total Renewable Energy	Total Renewable Energy		$	327,901	$	230,170		Total Renewable Energy		$	330,575	$	230,170
Total Rural Infrastructure Finance	Total Rural Infrastructure Finance		$	6,939,793	$	6,589,783		Total Rural Infrastructure Finance		$	7,448,870	$	6,589,783
Total	Total		$	26,737,052	$	25,922,082		Total		$	27,652,011	$	25,922,082

(1)A Farmer Mac Guaranteed Security.

(2)An interest-only Farmer Mac Guaranteed Security retained as part of a structured securitization.

(3)Other categories of Farmer Mac Guaranteed Securities that were sold by Farmer Mac to third parties.

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The following table summarizes by maturity date the scheduled principal amortization of loans held, loans underlying off-balance sheet Farmer Mac Guaranteed Securities (excluding AgVantage securities) and LTSPCs, USDA Securities, and Farmer Mac Guaranteed USDA Securities as of ~~June~~September 30, 2023:

Table 19


Schedule of Principal Amortization as of June 30, 2023
Schedule of Principal Amortization as of September 30, 2023										Schedule of Principal Amortization as of September 30, 2023
		Loans		Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs		USDA Securities and Farmer Mac Guaranteed USDA Securities		Total			Loans		Loans Underlying Off-Balance Sheet Farmer Mac Guaranteed Securities and LTSPCs		USDA Securities and Farmer Mac Guaranteed USDA Securities		Total
		(in thousands)									(in thousands)
2023	2023	$	277,432	$	148,592	$	54,524	$	480,548	2023	$	97,947	$	72,738	$	26,915	$	197,600
2024	2024	512,374		275,925		112,397		900,696		2024	534,148		303,216		111,733		949,097
2025	2025	580,970		236,463		112,836		930,269		2025	588,262		244,862		112,693		945,817
2026	2026	557,249		271,701		117,372		946,322		2026	572,745		287,332		116,993		977,070
2027	2027	665,966		255,874		118,340		1,040,180		2027	686,149		256,126		118,859		1,061,134
Thereafter	Thereafter	8,301,131		2,539,704		2,031,119		12,871,954		Thereafter	8,497,911		2,703,472		2,044,506		13,245,889
Total	Total	$	10,895,122	$	3,728,259	$	2,546,588	$	17,169,969	Total	$	10,977,162	$	3,867,746	$	2,531,699	$	17,376,607

Of Farmer Mac's ~~$26.7~~$27.7 billion outstanding principal balance of business volume as of ~~June~~September 30, 2023, ~~$9.0~~$9.7 billion were AgVantage securities included in the Agricultural Finance and Rural Infrastructure Finance lines of business. Unlike business volume in the form of purchased loans, USDA Securities, and loans underlying LTSPCs and non-AgVantage Farmer Mac Guaranteed Securities, most AgVantage securities do not require periodic payments of principal based on amortization schedules and instead have fixed maturity dates when the secured general obligation is due. The following table summarizes by maturity date the outstanding principal amount of both on- and off-balance sheet AgVantage securities as of ~~June~~September 30, 2023:

Table 20


AgVantage Balances by Year of Maturity	AgVantage Balances by Year of Maturity			AgVantage Balances by Year of Maturity
		As of			As of
		June 30, 2023			September 30, 2023
		(in thousands)			(in thousands)
2023	2023	$	1,191,302	2023	$	805,781
2024	2024	1,432,199		2024	2,191,199
2025	2025	1,066,125		2025	1,247,625
2026	2026	1,155,315		2026	1,186,530
2027	2027	1,025,698		2027	1,050,698
Thereafter(1)	Thereafter(1)	3,100,096		Thereafter(1)	3,204,980
Total	Total	$	8,970,735	Total	$	9,686,813

(1)Includes various maturities ranging from 2028 to 2049.

The weighted-average remaining maturity of the outstanding AgVantage securities shown in the table above was ~~4.8~~4.4 years as of ~~June~~September 30, 2023.

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Outlook

Farmer Mac continues to provide a stable source of liquidity, capital, and risk management tools as a secondary market that helps meet the financing needs of rural America. The pace and trajectory of Farmer Mac's growth will depend on the capital and liquidity needs of the lending institutions serving agriculture and rural infrastructure businesses and the overall financial health of borrowers in the sectors we serve. Market interest rates have increased significantly since the lows experienced in 2021, and interest rates on Farmer Mac products during ~~second~~third quarter 2023 continued to be higher than Farmer Mac's 15-year historical averages. New loan origination volumes tend to correlate inversely with changes in interest rates. However, prepayment rates also generally correlate inversely with changes in interest rates, with higher interest rates typically slowing the pace of portfolio loan repayments. Future changes to monetary policy and the overall level, pace, and duration of elevated interest rates could continue to impact the pace and timing of the Agricultural Finance mortgage loan purchase demand and repayments. Farmer Mac anticipates positive momentum in wholesale volume refinancing activity in ~~the second half of~~fourth quarter 2023, with most of the AgVantage Securities scheduled to mature in ~~the second half of~~fourth quarter 2023 expected to be successfully refinanced through the purchase of new AgVantage Securities.

~~Despite a higher interest rate environment,~~ Farmer Mac foresees opportunities for profitable growth across our lines of business driven by several key factors:

•As agricultural and rural infrastructure lenders seek to manage liquidity, equity capital, and return on equity capital requirements or reduce exposure due to lending or concentration limits, Farmer Mac can provide relief for those institutions through loan and portfolio purchases, participations, guarantees, LTSPCs, wholesale funding, or securitizations.

•As a result of business and product development efforts and continued interest in the agricultural and rural infrastructure asset classes from institutional investors and nontraditional lenders, Farmer Mac's customer base and product set continue to expand and diversify, which may generate more demand for Farmer Mac's products from new sources.

•Farmer Mac's growing relationships with larger regional and national lenders, as well as consolidation within the agricultural and rural infrastructure lending industry, continue to provide opportunities that could influence Farmer Mac's loan and wholesale funding demand and increase the average transaction size within Farmer Mac's lines of business.

•Future growth opportunities in Farmer Mac's Rural Infrastructure Finance line of business may evolve by deepening business relationships with eligible counterparties, financing broadband-related capital expenditures and rural telecommunications facilities, growing opportunities for renewable energy project finance, and exploring new types of loan products.

•Expansion and acquisition opportunities for agricultural producers resulting from high agricultural incomes and rising input costs have increased financing requirements for mergers and acquisitions, consolidation, and vertical integration across many sectors of the agricultural industry, which may also generate demand for Farmer Mac's loan products.

•Investments necessary to support consumer demand could increase the need for financing within the food and agriculture supply chain, which may increase the need for incremental capital support from the secondary market.

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•Resilient access to debt capital markets as investors seek government and agency issuances.

~~The higher~~In third quarter 2023, elevated interest ~~rate environment~~rates continued to ~~create volatility~~cause fluctuations in bank liquidity ~~in second quarter 2023 in response~~due to ~~bank failures in first quarter 2023, which included the first commercial bank failures since 2020 and the largest bank failure since 2009.~~deposit withdrawals. Farmer Mac, is not being a depository institution, ~~with volatility in investor withdrawals, which we believe insulates our portfolio~~is insulated from ~~the same kinds of~~similar liquidity ~~concerns recently facing some commercial banks. Some~~concerns. In fact, certain economic disruptions could ~~actually positively affect~~potentially have a positive impact on Farmer ~~Mac's~~Mac’s funding costs relative to the ~~market because, historically, major~~market. Historically, significant economic events have ~~tended to cause~~often led investors to seek high-quality fixed income investments, ~~like~~such as Farmer ~~Mac's~~Mac’s debt securities. ~~Because~~As Farmer ~~Mac's~~Mac’s funding strategies ~~are~~do not ~~depository in nature, Farmer Mac~~rely on deposits, it is generally ~~able to fund~~capable of extending funding beyond short-term disruptions, ~~and avoid~~thereby circumventing many potential liquidity concerns. ~~Funding advantages~~This funding advantage could ~~provide~~present Farmer Mac with ~~more~~increased opportunities in a competitive lending environment.

The U.S. economy continued to exhibit signs of ~~slowing~~growing volatility in ~~second~~third quarter 2023. While consumer spending has retreated modestly from the highs experienced in 2022, the significantly higher interest rate environment continues to create uncertainty for the economic outlook for the U.S. economy in the remainder of 2023 and into 2024. And while labor markets continue to remain resilient, slower consumer spending, declines in residential housing investment, and the continued tightening of credit conditions following bank industry stress indicate that the probability of a U.S. or global recession remains elevated. Farmer Mac believes that its portfolio is sufficiently balanced to withstand the market volatility that arises with an economic recession, as the agricultural, food, and infrastructure industries tend not to be directly correlated with the general economy. Farmer Mac believes these sectors are generally well positioned to withstand an economic downturn due to ample consumer demand and government support.

The recent rise in short-term rates has provided an asymmetric benefit to Farmer Mac's earnings, and Farmer Mac projects limited downside to earnings when rates decline due to its proactive equity capital allocation strategies. This is due to our fundamental asset liability management approach, where Farmer Mac ~~match funds~~matches the duration and convexity of our assets and liabilities in all rate environments, which enables Farmer Mac to minimize earnings volatility in periods of short-term interest rate volatility.

In addition to active fundamental asset liability management that enables Farmer Mac to mitigate earnings volatility in periods of short-term interest rate volatility, Farmer Mac's business has certain natural business hedges that help to insulate it from interest rate volatility. This is a key differentiator for Farmer Mac relative to other financial services entities. For example, when interest rates rise, prepayments also tend to decline - but interest earned on excess cash and capital would likely increase and Farmer Mac would continue to have strong market access, as Farmer Mac does not rely on deposits as a source of funding. Conversely, when interest rates decline, loan purchase volume often increases but prepayments also tend to ~~increase, and interest earned on our liquidity portfolio usually ebbs.~~increase. Farmer Mac is able to manage its interest rate risk through exercising callable issuances and maintaining its market-based credit spreads. Although these natural business dynamics are not perfect offsets, they do counterbalance to mitigate volatility from changes in short-term interest rates.

Operating Expense. Farmer Mac continues to expand its investments in human capital, technology, and business infrastructure to increase capacity and efficiency as it seeks to accommodate its growth opportunities and achieve its long-term strategic objectives. Farmer Mac expects continued increases in its operating expenses over the next several ~~years, but the growth rate in employee headcount may slow in the coming quarters.~~years. We will continue making investments in our infrastructure and funding platforms to support these strategies and scale with our growth.

Agricultural Industry. The agricultural economy experienced somewhat favorable conditions in ~~second~~third quarter 2023, with mixed commodity prices and continued easing in input price inflation. In response to Russia's invasion of Ukraine in early 2022, grain commodity prices rose rapidly during first half of 2022

and continued to be elevated during much of the second half of 2022. Higher commodity prices for grains and many animal proteins substantially increased gross cash receipts for the 2022 marketing year. Farm expense price levels ~~fell again~~partially stabilized in ~~second~~third quarter 2023, ~~driven by moderating feed, energy, and fertilizer prices. However,~~after falling for several ~~farm~~consecutive quarters. While many expense categories have dropped significantly from their 2022 peak levels, several other categories such as interest, labor, and other inputs remain elevated and could experience additional upward pressure ~~throughout 2023~~through the remainder of the year and into 2024. Grain commodity prices moderated again in ~~second~~third quarter 2023 due to stabilizing supply expectations, though uncertainty in Ukraine could increase price volatility in the ~~second half~~last quarter of 2023 and into 2024.

Overall farm ~~income reached~~incomes are expected to trend lower in 2023 after reaching new highs in ~~2022 following a very profitable year in 2021. Net cash farm income increased by more than 28% in 2021 to $149.5 billion.~~2022. The USDA estimates that net cash farm income climbed another ~~27%~~35% to ~~$189.9~~$202.2 billion in 2022, a new all-time high. ~~For both years, the~~The primary driver of increased profitability was higher cash revenues, contrary to 2019 and ~~not~~2020 when elevated government support payments ~~like in 2019 and 2020.~~lifted farm incomes. The USDA estimates production expenses rose by ~~19%~~15% in 2022, a level experienced in the 1970s and again in the 2012-2014 agricultural economy expansion. Looking forward, the USDA expects net cash farm income to fall by ~~21%~~27% to ~~$150.6~~$148.6 billion in 2023 due to lower commodity prices and elevated farm expenses. However, the 2023 farm income projections are 20% higher than the 10-year average, demonstrating the continued strength in ~~the~~ farm ~~economy.~~profitability.

~~The increase in~~Rising farm ~~profitability combined with~~incomes alongside low interest rates in 2020 and 2021 drove a rapid rise in land values and a decrease in farm delinquencies and ~~bankruptcies that extended~~bankruptcies. This trend has continued into 2023. Land value survey data from the USDA show a ~~12.4%~~7.4% increase in average farm real estate values from June ~~2021~~2022 to June ~~2022.~~2023. Annual farm real estate value gains were highest in the Northern Plains ~~(19.8%~~(13.7%) and the ~~Corn Belt (14.9%~~Southern Plains (9.4%) but also strong in the Lake states ~~(13.7%~~(8.2%), the ~~Southern Plains (11.3%~~Corn Belt (7.1%), and the ~~Pacific (9.7%~~Southeast (5.7%). The Federal Reserve Bank of Chicago AgLetter reported a ~~10%~~9% gain in farmland values in the Seventh District (primarily Iowa, Indiana, Illinois, and Wisconsin) between ~~April~~July 2022 and ~~April~~July 2023. Data from the Federal Reserve Bank of Kansas City show a similar rise in land values in the Tenth District (primarily Kansas, Missouri, Nebraska, and Oklahoma) during that same period. Farmland value growth rates moderated in ~~first~~second quarter 2023 in the face of rapidly rising interest rates. Growth rates in land values could remain low in 2023 and into 2024 due to compressing farm profitability and an elevated interest rate environment. While regional averages for farmland values provide a good barometer for the overall movement in U.S. farmland values, economic forces affecting land markets are highly localized, and some markets may experience greater volatility in farmland values than state or national averages indicate.

Economic conditions are likely to bring mixed effects to credit demand during the ~~second half~~remainder of 2023. Strong asset appreciation in recent years could signal additional demand and capacity for farm debt as financial decision-makers look to lock in long-term economics for their appreciating farm and agribusiness assets. Farm profitability generally increases asset values and demand for the asset class for multiple years, which also contributes to increasing credit demand. However, the elevated interest rate environment could adversely impact mortgage portfolio growth, lowering new sales and originations but also potentially slowing portfolio prepayments. Finally, a changing yield curve coupled with widening market credit spreads could increase opportunities for corporate and institutional lending, as Farmer Mac's programs become more attractive at higher costs of capital. Combined, these factors are expected to be generally supportive of continued net portfolio growth for Farmer Mac during the ~~second half~~last quarter of 2023.

Positive economic conditions in the agricultural economy improved Farmer Mac's agricultural portfolio performance in 2022 and ~~they could continue to positively influence loan delinquencies and losses~~ throughout the first three quarters of 2023. Farmer Mac's 90-day delinquency levels decreased slightly in ~~second~~third quarter 2023 relative to ~~first~~second quarter 2023. The overall delinquency

rate decreased from ~~0.66% of the Agricultural Finance line of business as of March 31, 2023 to~~ 0.42% of the Agricultural Finance line of business as of June 30, 2023 to 0.39% of the Agricultural Finance line of business as of September 30, 2023. The ~~second~~third quarter 2023 percentage is ~~higher~~also slightly lower than the ~~0.20%~~0.42% delinquency rate as of ~~June~~September 30, 2022. The year-over-year ~~increase~~decrease in the seriously delinquent rate was caused by typical, seasonal portfolio delinquency activity as well as a ~~small number~~resolution of ~~larger exposures experiencing idiosyncratic business disruptions.~~a large, agribusiness credit workout. The top five exposures of seriously delinquent loans as of ~~second~~third quarter 2023 represent over ~~two-thirds~~half of all 90-day delinquent loans. ~~See Note 12 - ("Subsequent Event") to the consolidated financial statements for more information about one of these delinquent loans based on events that occurred after June 30, 2023.~~ Rising input costs, market volatility, and the potential for continued economic and weather-related stress increase the level of uncertainty inherent in the agricultural credit sector, which could negatively affect the trajectory of the current agricultural cycle. Farmer Mac believes that its portfolio continues to be highly diversified, both geographically and by commodity and that its portfolio has been underwritten to high credit quality standards. Therefore, Farmer Mac believes that its portfolio is well-positioned to endure reasonably foreseeable volatility from cyclical and external factors. For more information about the loan balances, loan-to-value ratios, 90-day delinquencies, and substandard asset rate for the Agricultural Finance mortgage loans in Farmer Mac's portfolio as of ~~June~~September 30, 2023, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Management—Credit Risk—Loans and Guarantees."

Exogenous factors facing farm and food producers can create uncertainty and market instability within the sector. External market conditions that could adversely impact the farm and food sectors in the remainder of 2023 and into 2024 include foreign trade and trade policy, supply chain disruptions, 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. The ~~USDA's estimate for fiscal year~~USDA projects U.S. agriculture exports will drop to $177.5 billion in 2023, is a ~~small decrease in export value over 2022.~~9% decline relative to last year. Through ~~May~~August 2023, agricultural export values were down approximately 8%12% in 2023 compared to 2022. The value of the U.S. dollar relative to other major currencies ~~fell 2%~~rose 3% in ~~second~~third quarter ~~2023, which may help support~~2023. A strong U.S. dollar could potentially be a headwind for farm, food, fiber, and fuel exports through the ~~second half~~last quarter of 2023. Slower global growth could also be a headwind for consumer-oriented products like animal proteins, dairy, fruits, and nuts, and Ukrainian corn and wheat production may eventually stabilize. Because Farmer Mac has significant exposure to crop commodities like corn, soybeans, hay, wheat, and cotton, any increase in agricultural commodity prices is likely to benefit Farmer Mac's overall portfolio credit quality more than degradation from downward pressure on livestock and consumer product profitability.

Severe weather conditions and long-term environmental change continue to shape agricultural sectors. The U.S. experienced 18 separate billion-dollar weather disasters in 2022, as tracked by the National Oceanic and Atmospheric Administration. Many of those events affected agriculture, including midwestern storms, western wildfires, excessive heat, and drought. Federal crop insurance provides a strong mitigator against this risk, but farmers and ranchers face increasingly-severe weather incidents. 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, but there~~2022.

There has been a sizable improvement in conditions in 2023 ~~particularly~~for large portions of the West Coast, especially California, but drought conditions have intensified in ~~California. Only 3%~~other areas of the country. Approximately 19% of the continental U.S. ~~remained~~was classified as being in ~~exceptional or~~severe to extreme drought as of ~~July 18,~~September 30, 2023, according to data from the National ~~Drought Mitigation Center.~~Center for Environmental Information. Much of the U.S. ~~that experienced high~~affected by drought conditions in ~~second~~third quarter 2023 is in the Central and Southern Plains. Dry weather across a significant portion of the Mississippi River basin this summer has led to sharply lower river levels this fall. Barge traffic has been reduced as a result, complicating logistics for grain processors across the northern U.S. this fall. Higher transportation costs for barges may ultimately lead to lower farmgate prices,

although the impact will likely vary significantly based on alternative transportation options such as rail. For loans in other areas that commonly experience exceptional drought (primarily in California), Farmer Mac's underwriting process

includes an assessment of anticipated long-term water availability for the related property and how that impacts the collateral value and borrower's cash flow position to mitigate that risk. Flooding can also disrupt agricultural production, although the impacts are generally more temporary than those from extended drought. Copious winter precipitation in California has resulted in field flooding, particularly in the Tulare Lake bed. Farmer Mac has limited portfolio exposure in affected areas, but California flooding could remain a disruptor for western agricultural production in 2023.

Rural Infrastructure Industry. Economic conditions affecting the rural infrastructure industry typically follow those in the general economy. According to data from the U.S. Energy Information Administration, sales and the revenue from the sale of electricity to customers ~~increased by 1.4%~~has slowed with an annual decline in sales of 1.2% and ~~14.9%~~an increase in revenue of 7.5%, respectively, in the last 12 months through ~~April~~July 2023 compared to ~~April~~July 2022. This ~~increase~~decline in sales was driven by a ~~sharp increase in sales to the commercial, industrial, and transportation sectors and an increase~~drop in the ~~retail~~residential and industrial sectors. The average price of ~~electricity.~~electricity to industrial customers decreased 10.2% in July 2023 relative to last year. Higher energy input prices such as natural gas and coal became a headwind in 2022. Natural gas prices rose consistently in 2021 and 2022 because of reduced supply and additional demand for U.S. liquified natural gas from European countries. Coal prices also rapidly increased in 2022, driven by higher natural gas prices and additional overseas demand to offset limited Russian coal exports. Despite higher input costs, power producers are generally able to pass cost increases through higher retail electricity prices, which has contributed to the increase in electricity costs ~~impacting~~for retail customers throughout 2022. Oil and natural gas prices were volatile during much of 2022 but have moderated throughout 2023, contributing to modest declines in ~~fourth quarter 2022 and the first half~~electricity prices this year as of ~~2023.~~July. Through ~~June~~September 30, 2023, Farmer Mac had not observed material degradation in the financial performance of its rural infrastructure portfolio, and that portfolio has never experienced a serious delinquency or default since inception.

Prospects for loan growth within the rural infrastructure ~~industry overall appear to be moderate in the near term, as~~segment are varied by industry. For electric cooperatives, ongoing normal-course capital expenditures related to maintaining and upgrading utility infrastructure are expected to continue at ~~typical levels. Farmer Mac's future~~historical levels based on replacement and modernization of existing infrastructure. These growth opportunities ~~for financing the electric cooperative industry~~ 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. ~~Cooperatives~~Investment in rural telecommunications infrastructure continues to be robust for cooperative and ~~service~~non-cooperative providers ~~have~~due to their access to ~~numerous~~ federally funded programs, such as USDA's Broadband Equity Access and Deployment Program (BEAD), the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF), the USDA’s ReConnect, and the USDA’s Telecommunications Infrastructure Loan and Loan Guarantee program. In addition to capital projects spurred by these programs, Farmer Mac could see an increase in financing opportunities for other telecommunications providers in rural areas, with fiber line expansion and wireless broadband increasingly important to rural economic opportunity and precision agriculture.

~~The~~Finally, the growth in renewable energy generation and deployment of energy storage technologies may ~~help~~continue to deepen Farmer Mac's relationships with existing customers through new business opportunities. According to data from the U.S. Energy Information Administration, renewable electricity capacity is expected to grow by 48% in the next five years, compared to total electric capacity growth of 10%. The rising cost of fossil fuel-based inputs combined with the falling costs of renewable power generation may hasten this increase in capacity along with recently enacted legislation, such as the Inflation Reduction Act of 2022 that incentivizes domestic production in clean energy technologies such as solar and wind. ~~Any such~~Because of these policy tailwinds, analytics from Bloomberg New Energy Finance (BNEF) estimate that investors will install nearly 400 gigawatts of renewable energy capacity between

2023 and 2030. BNEF analysis also anticipates that nearly $2.5 trillion will be invested in renewable projects between 2021 and 2050. If realized, growth in renewable energy capacity may broaden Farmer Mac's customer base ~~with cooperative lenders~~ focused on ~~lending to~~financing renewable energy ~~customers.~~projects and companies. In response to this expected growth, Farmer Mac has deployed new financing products tailored to the renewable energy sector, which represents a new and growing market opportunity for Farmer Mac. Under this initiative, Farmer Mac's total outstanding loans and loan commitments of renewable energy financing transactions was ~~$327.9~~$330.6 million as of ~~June~~September 30, 2023.

Legislative and Regulatory Outlook. Farmer Mac continues to monitor potential legislative and regulatory changes that could affect Farmer Mac or its stakeholders, including:

•The current farm bill ~~expires~~expired on September 30, 2023. Covering a variety of programs impacting farm profitability, agricultural credit, and rural infrastructure, it is a critical piece of legislation for rural America and the agricultural sector which includes Farmer Mac's customers. Congress has started an extensive process to review programs that are included in the farm bill in preparation for reauthorization. Farmer Mac is seeking changes to its charter to enhance its partnerships and services in support of farmers, ranchers, agribusinesses, and rural infrastructure in this farm bill reauthorization.

•InOn October 5, 2023, FCA approved a final rule on cyber risk management. The rule requires an assessment of internal and external risk factors, identification of potential systems and software vulnerabilities, the establishment of a risk management program for the risks identified, development of a cyber risk training program, policies for managing third-party relationships, and the establishment of board reporting requirements. The effective date of the final rule is January 2023, the FCA board approved an advanced notice of proposed rulemaking to review Farmer Mac's regulatory capital framework. The notice sought public comment on Farmer Mac's regulatory capital requirements in the context of its business activities. The comment period was originally scheduled to close March 27, 2023 but was later extended to April 26, 2023. Farmer Mac and ten other organizations submitted comment letters before the extended deadline. 1, 2025.

•In the FCA's proposed 2023 regulatory agenda, the agency is targeting a proposed rulemaking on Farmer Mac's regulatory capital framework for May 2024. This timeline may change, and Farmer Mac's management team will continue to monitor the FCA's process for this potential rulemaking.

•Two of the three members of the FCA board are currently serving in holdover status because their terms have expired. These board members will continue to serve in their roles until replacements are nominated by the President and confirmed by the U.S. Senate. In addition to potential changes at the board level, the FCA appointed Thomas R. Fay as the new director of the Office of Secondary Market Oversight (OSMO) in July 2023. OSMO is the office at FCA responsible for the examination, regulation, and supervision of the activities of Farmer Mac.

9192

Balance Sheet Review

The following table summarizes Farmer Mac's balance sheet as of the periods indicated:

Table 21


		As of				Change					As of				Change
		June 30, 2023		December 31, 2022		$		%			September 30, 2023		December 31, 2022		$		%
		(in thousands)									(in thousands)
Assets	Assets									Assets
Cash and cash equivalents	Cash and cash equivalents	$	874,090	$	861,002	$	13,088	2	%	Cash and cash equivalents	$	782,318	$	861,002	$	(78,684)	(9)	%
Investment securities	Investment securities	4,767,815		4,628,268		139,547		3	%	Investment securities	4,924,253		4,628,268		295,985		6	%
Farmer Mac Guaranteed Securities	Farmer Mac Guaranteed Securities	8,595,243		8,628,380		(33,137)		—	%	Farmer Mac Guaranteed Securities	9,216,111		8,628,380		587,731		7	%
USDA Securities	USDA Securities	2,337,560		2,411,601		(74,041)		(3)	%	USDA Securities	2,323,657		2,411,601		(87,944)		(4)	%
Loans, net of allowance	Loans, net of allowance	9,112,976		8,994,350		118,626		1	%	Loans, net of allowance	9,114,771		8,994,350		120,421		1	%
Loans held in trusts	Loans held in trusts	1,447,632		1,211,116		236,516		20	%	Loans held in trusts	1,422,402		1,211,116		211,286		17	%
Other	Other	524,249		598,393		(74,144)		(12)	%	Other	527,869		598,393		(70,524)		(12)	%
Total assets	Total assets	$	27,659,565	$	27,333,110	$	326,455	1	%	Total assets	$	28,311,381	$	27,333,110	$	978,271	4	%
Liabilities	Liabilities									Liabilities
Notes Payable	Notes Payable	$	24,510,004	$	24,469,113	$	40,891	—	%	Notes Payable	$	25,123,545	$	24,469,113	$	654,432	3	%
Debt securities of consolidated trusts held by third parties	Debt securities of consolidated trusts held by third parties	1,357,763		1,181,948		175,815		15	%	Debt securities of consolidated trusts held by third parties	1,334,014		1,181,948		152,066		13	%
Other	Other	445,243		410,091		35,152		9	%	Other	468,555		410,091		58,464		14	%
Total liabilities	Total liabilities	$	26,313,010	$	26,061,152	$	251,858	1	%	Total liabilities	$	26,926,114	$	26,061,152	$	864,962	3	%
Total equity	Total equity	1,346,555		1,271,958		74,597		6	%	Total equity	1,385,267		1,271,958		113,309		9	%
Total liabilities and equity	Total liabilities and equity	$	27,659,565	$	27,333,110	$	326,455	1	%	Total liabilities and equity	$	28,311,381	$	27,333,110	$	978,271	4	%

Assets. The increase in total assets was primarily attributable to new Farmer Mac Guaranteed Securities volume, new loan volume, including those held in consolidated trusts, and a larger investment portfolio.

Liabilities. The increase in total liabilities was primarily due to an increase in total notes payable to fund the acquisition of Farmer Mac Guaranteed Securities and loan volume, including those held in consolidated trusts.

Equity. The increase in total equity was primarily due to an increase in retained earnings and an increase in accumulated other comprehensive income.

Risk Management

Credit Risk – Loans and Guarantees.

Agricultural Finance - Direct Credit Exposure

Farmer Mac's direct credit exposure to Agricultural Finance mortgage loans as of ~~June~~September 30, 2023 was ~~$10.8~~$11.0 billion across 48 states. Farmer Mac applies credit underwriting standards and methodologies to help assess exposures to loan purchases, which may include collateral valuation, financial metrics, and other appropriate borrower financial and credit information. 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 underwriting and collateral valuation standards for

Agricultural Finance mortgage loans, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Farm & Ranch" and "Business—Farmer Mac's Lines of Business—Agricultural Finance—Underwriting and Collateral Standards—Corporate AgFinance" in Farmer Mac's 2022 Annual Report.

Farmer Mac's 90-day delinquency measure includes loans 90 days or more past due, as well as loans in foreclosure and non-performing loans where the borrower is in bankruptcy. For Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, Farmer Mac's 90-day delinquencies as of ~~June~~September 30, 2023, were ~~$45.4~~$42.4 million ~~(0.42%~~(0.39% of the Agricultural Finance mortgage loan portfolio to which Farmer Mac has direct credit exposure), compared to ~~$70.6~~$45.4 million ~~(0.66%~~(0.42% of the Agricultural Finance mortgage loan portfolio) as of ~~March 31,~~June 30, 2023 and $43.5 million (0.41% of the Agricultural Finance mortgage loan portfolio) as of December 31, 2022. Those 90-day delinquencies consisted of 23 delinquent loans as of September 30, 2023, compared to 42 delinquent loans as of June 30, ~~2023, compared to 51 delinquent loans as of March 31,~~ 2023 and 37 delinquent loans as of December 31, 2022. The decrease in the number of 90-day delinquencies was primarily driven by decreased delinquencies in ~~permanent plantings, crops,~~storage and processing, livestock, and part-time farms and was partially offset by increased delinquencies in ~~storage~~permanent plantings and ~~processing.~~crops. The top ten borrower exposures over 90 days delinquent represented over half of the 90-day delinquencies as of ~~June~~September 30, 2023. Farmer Mac believes that it remains adequately collateralized on its delinquent loans.

Farmer Mac's 90-day delinquency rate as of ~~June~~September 30, 2023 was below Farmer Mac's historical average. 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%. The highest 90-day delinquency rate observed during that period occurred in 2009 at approximately 2%, which coincided with increased delinquencies in loans within Farmer Mac's ethanol loan portfolio.

The following table presents historical information about Farmer Mac's 90-day delinquencies in the Agricultural Finance mortgage loan portfolio compared to the unpaid principal balance of all Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure:

Table 22


		Agricultural Finance Mortgage Loans		90-Day Delinquencies		Percentage			Agricultural Finance Mortgage Loans		90-Day Delinquencies		Percentage
		(dollars in thousands)							(dollars in thousands)
As of:	As of:							As of:
September 30, 2023								September 30, 2023	$	11,014,678	$	42,443	0.39	%
June 30, 2023	June 30, 2023	$	10,826,201	$	45,368	0.42	%	June 30, 2023	10,826,201		45,368		0.42	%
March 31, 2023	March 31, 2023	10,680,419		70,646		0.66	%	March 31, 2023	10,680,419		70,646		0.66	%
December 31, 2022	December 31, 2022	10,719,571		43,498		0.41	%	December 31, 2022	10,719,571		43,498		0.41	%
September 30, 2022	September 30, 2022	10,508,549		44,232		0.42	%	September 30, 2022	10,508,549		44,232		0.42	%
June 30, 2022	June 30, 2022	10,128,083		20,623		0.20	%	June 30, 2022	10,128,083		20,623		0.20	%
March 31, 2022	March 31, 2022	9,879,978		55,847		0.57	%	March 31, 2022	9,879,978		55,847		0.57	%
December 31, 2021	December 31, 2021	9,811,749		47,307		0.48	%	December 31, 2021	9,811,749		47,307		0.48	%
September 30, 2021	September 30, 2021	9,445,359		54,792		0.58	%	September 30, 2021	9,445,359		54,792		0.58	%
June 30, 2021		9,056,152		63,076		0.70	%

Across all of Farmer Mac's lines of business, 90-day delinquencies represented ~~0.17%~~0.15% of total outstanding business volume as of ~~June~~September 30, 2023, compared to 0.17% as of December 31, 2022 and ~~0.08%~~0.17% as of ~~June~~September 30, 2022.

9395

The following table presents outstanding Agricultural Finance mortgage loans and 90-day delinquencies as of ~~June~~September 30, 2023 by year of origination, geographic region, commodity/collateral type, original loan-to-value ratio, and range in the size of borrower exposure:

Table 23


Agricultural Finance Mortgage Loans 90-Day Delinquencies as of June 30, 2023
Agricultural Finance Mortgage Loans 90-Day Delinquencies as of September 30, 2023										Agricultural Finance Mortgage Loans 90-Day Delinquencies as of September 30, 2023
		Distribution of Agricultural Loans		Agricultural Loans		90-Day Delinquencies(1)		Percentage			Distribution of Agricultural Loans		Agricultural Loans		90-Day Delinquencies(1)		Percentage
		(dollars in thousands)									(dollars in thousands)
By year of origination:	By year of origination:									By year of origination:
2013 and prior	2013 and prior	7	%	$	793,770	$	2,334	0.29	%	2013 and prior	7	%	$	754,821	$	2,861	0.38	%
2014	2014	2	%	205,972		1,001		0.49	%	2014	2	%	201,039		2,047		1.02	%
2015	2015	3	%	331,259		9,585		2.89	%	2015	3	%	323,275		9,585		2.96	%
2016	2016	5	%	514,981		1,884		0.37	%	2016	5	%	522,172		3,070		0.59	%
2017	2017	5	%	522,750		3,725		0.71	%	2017	5	%	520,982		—		—	%
2018	2018	6	%	596,963		2,707		0.45	%	2018	5	%	592,179		4,057		0.69	%
2019	2019	8	%	856,691		1,491		0.17	%	2019	7	%	830,527		12,177		1.47	%
2020	2020	18	%	1,997,640		6,294		0.32	%	2020	18	%	1,977,670		5,824		0.29	%
2021	2021	24	%	2,643,844		931		0.04	%	2021	24	%	2,608,527		931		0.04	%
2022	2022	16	%	1,758,009		2,135		0.12	%	2022	16	%	1,760,959		1,891		0.11	%
2023	2023	6	%	604,322		13,281		0.12	%	2023	8	%	922,527		—		0.11	%
Total	Total	100	%	$	10,826,201	$	45,368	0.42	%	Total	100	%	$	11,014,678	$	42,443	0.39	%
By geographic region(2):	By geographic region(2):									By geographic region(2):
Northwest	Northwest	13	%	$	1,415,190	$	3,364	0.24	%	Northwest	13	%	$	1,398,926	$	2,844	0.20	%
Southwest	Southwest	30	%	3,283,820		10,997		0.33	%	Southwest	30	%	3,321,507		22,000		0.66	%
Mid-North	Mid-North	27	%	2,860,745		5,065		0.18	%	Mid-North	26	%	2,883,439		4,845		0.17	%
Mid-South	Mid-South	17	%	1,832,717		10,551		0.58	%	Mid-South	18	%	1,941,821		10,355		0.53	%
Northeast	Northeast	4	%	432,548		1,857		0.43	%	Northeast	4	%	464,516		1,297		0.28	%
Southeast	Southeast	9	%	1,001,181		13,534		1.35	%	Southeast	9	%	1,004,469		1,102		0.11	%
Total	Total	100	%	$	10,826,201	$	45,368	0.42	%	Total	100	%	$	11,014,678	$	42,443	0.39	%
By commodity/collateral type:	By commodity/collateral type:									By commodity/collateral type:
Crops	Crops	50	%	$	5,441,466	$	18,321	0.34	%	Crops	49	%	$	5,436,386	$	19,628	0.36	%
Permanent plantings	Permanent plantings	22	%	2,365,839		3,801		0.16	%	Permanent plantings	22	%	2,397,576		18,007		0.75	%
Livestock	Livestock	18	%	1,974,850		5,826		0.30	%	Livestock	19	%	2,066,164		2,332		0.11	%
Part-time farm	Part-time farm	5	%	473,121		2,824		0.60	%	Part-time farm	4	%	471,934		2,476		0.52	%
Ag. Storage and Processing	Ag. Storage and Processing	5	%	553,809		14,596		2.64	%	Ag. Storage and Processing	6	%	625,774		—		—	%
Other	Other	—	%	17,116		—		—	%	Other	—	%	16,844		—		—	%
Total	Total	100	%	$	10,826,201	$	45,368	0.42	%	Total	100	%	$	11,014,678	$	42,443	0.39	%
By original loan-to-value ratio:	By original loan-to-value ratio:									By original loan-to-value ratio:
0.00% to 40.00%	0.00% to 40.00%	20	%	$	2,146,016	$	17,009	0.79	%	0.00% to 40.00%	20	%	$	2,206,837	$	4,081	0.18	%
40.01% to 50.00%	40.01% to 50.00%	23	%	2,449,038		11,972		0.49	%	40.01% to 50.00%	23	%	2,448,046		10,400		0.42	%
50.01% to 60.00%	50.01% to 60.00%	36	%	3,843,821		10,019		0.26	%	50.01% to 60.00%	35	%	3,867,086		20,708		0.54	%
60.01% to 70.00%	60.01% to 70.00%	19	%	2,115,628		6,148		0.29	%	60.01% to 70.00%	20	%	2,226,680		7,254		0.33	%
70.01% to 80.00%(3)	70.01% to 80.00%(3)	2	%	246,078		220		0.09	%	70.01% to 80.00%(3)	2	%	240,411		—		—	%
80.01% to 90.00%(3)	80.01% to 90.00%(3)	—	%	25,620		—		—	%	80.01% to 90.00%(3)	—	%	25,618		—		—	%
Total	Total	100	%	$	10,826,201	$	45,368	0.42	%	Total	100	%	$	11,014,678	$	42,443	0.39	%
By size of borrower exposure(4):	By size of borrower exposure(4):									By size of borrower exposure(4):
Less than $1,000,000	Less than $1,000,000	26	%	$	2,774,649	$	9,005	0.32	%	Less than $1,000,000	25	%	$	2,806,391	$	4,363	0.16	%
$1,000,000 to $4,999,999	$1,000,000 to $4,999,999	37	%	4,030,386		16,904		0.42	%	$1,000,000 to $4,999,999	37	%	4,095,503		18,360		0.45	%
$5,000,000 to $9,999,999	$5,000,000 to $9,999,999	14	%	1,628,493		9,874		0.61	%	$5,000,000 to $9,999,999	15	%	1,633,998		10,135		0.62	%
$10,000,000 to $24,999,999	$10,000,000 to $24,999,999	13	%	1,362,658		9,585		0.70	%	$10,000,000 to $24,999,999	13	%	1,399,862		9,585		0.68	%
$25,000,000 and greater	$25,000,000 and greater	10	%	1,030,015		—		—	%	$25,000,000 and greater	10	%	1,078,924		—		—	%
Total	Total	100	%	$	10,826,201	$	45,368	0.42	%	Total	100	%	$	11,014,678	$	42,443	0.39	%

(1)Includes loans held and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs that are 90 days or more past due, in foreclosure, or in bankruptcy with at least one missed payment, excluding loans performing under either their original loan terms or a court-approved bankruptcy plan.

(2)Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

(3)Primarily part-time farm loans. Loans with an original loan-to-value ratio of greater than 80% are required to have private mortgage insurance.

(4)Includes aggregated loans to single borrowers or borrower-related entities.

Another indicator that Farmer Mac considers in analyzing the credit quality of its Agricultural Finance mortgage loans is the level of internally-rated "substandard" assets, both in dollars and as a percentage of the outstanding portfolio. Assets categorized as "substandard" have a well-defined weakness or weaknesses, and there is a distinct possibility that some loss will be sustained if deficiencies are not corrected. As of ~~June~~September 30, 2023, Farmer Mac's Agricultural Finance mortgage loans (to which it has direct credit exposure) comprising substandard assets were $180.2 million (1.6% of the portfolio), compared to $194.6 million (1.8% of the portfolio)~~, compared to $205.1 million (1.9% of the portfolio)~~ as of ~~March 31,~~June 30, 2023, and $209.4 million (2.0% of the portfolio) as of December 31, 2022. Those substandard assets comprised 210 loans as of September 30, 2023, 239 loans as of June 30, ~~2023, 241 loans as of March 31,~~ 2023, and 243 loans as of December 31, 2022.

The decrease of ~~$10.5~~$14.4 million in Agricultural Finance substandard assets during ~~second~~third quarter 2023 was primarily driven by ~~credit upgrades~~a substandard loan payoff in our on-balance sheet portfolios. ~~Substandard~~Agricultural Finance substandard assets decreased as a percentage of both our on-balance sheet ~~portfolio~~ and ~~increased as a percentage of~~ our off-balance sheet ~~portfolio~~Agricultural Finance portfolios during ~~second~~third quarter 2023.

The percentage of Agricultural Finance substandard assets within the portfolio as of ~~June~~September 30, 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 highest substandard asset rate observed during the last 15 years occurred in 2010 at approximately 8%, which coincided with an increase in substandard loans within Farmer Mac's ethanol portfolio. If Farmer Mac's substandard asset rate increases from current levels, it is likely that Farmer Mac's provision to the allowance for loan losses and the reserve for losses will also increase.

Although some credit losses are inherent to the business of agricultural lending, Farmer Mac believes that losses associated with the current agricultural credit cycle will be moderated by the strength and diversity of its Agricultural Finance portfolio, which Farmer Mac believes is adequately collateralized.

Within Agricultural Finance, Farmer Mac considers a Farm & Ranch loan's original loan-to-value ratio as one of many factors in evaluating loss severity. Loan-to-value ratios depend on the market value of a property, as determined in accordance with Farmer Mac's collateral valuation standards. As of ~~June~~September 30, 2023 and December 31, 2022, the average unpaid principal balances for ~~Agricultural Finance mortgage~~Farm & Ranch loans outstanding and to which Farmer Mac has direct credit exposure was $800,000 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. This calculation does not reflect any amortization of the original loan balance or any adjustment to the original appraised value to provide a current market value. The original loan-to-value ratio of any cross-collateralized loans is calculated on a combined basis rather than on a loan-by-loan basis. The weighted-average original loan-to-value ratio for ~~Agricultural Finance~~Farm & Ranch mortgage loans purchased during ~~second~~third quarter 2023 was ~~51%~~49%, compared to ~~43%~~47% for loans purchased during ~~second~~third quarter 2022. The weighted-average original loan-to-value ratio for ~~Agricultural Finance~~Farm & Ranch mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 50% and 51% as of ~~June~~September 30, 2023 and December 31, 2022, respectively. The weighted-average original loan-to-value ratio for all 90-day delinquencies was ~~37%~~54% and 46% as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

The weighted-average current loan-to-value ratio (the loan to-value ratio based on original appraised value and current outstanding loan amount adjusted to reflect amortization) for Agricultural Finance mortgage loans and loans underlying off-balance sheet Farmer Mac Guaranteed Securities and LTSPCs was 45% and 46% as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

The following table presents the current loan-to-value ratios for the Agricultural Finance mortgage loans to which Farmer Mac has direct credit exposure, as disaggregated by internally assigned risk ratings:

Table 24


Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of June 30, 2023
Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of September 30, 2023										Agricultural Finance Mortgage Loans current loan-to-value ratio by internally assigned risk rating as of September 30, 2023
		Acceptable		Special Mention		Substandard		Total			Acceptable		Special Mention		Substandard		Total
		(in thousands)									(in thousands)
Current loan-to-value ratio(1):	Current loan-to-value ratio(1):									Current loan-to-value ratio(1):
0.00% to 40.00%	0.00% to 40.00%	$	3,269,239	$	67,333	$	71,655	$	3,408,227	0.00% to 40.00%	$	3,383,689	$	100,328	$	57,113	$	3,541,130
40.01% to 50.00%	40.01% to 50.00%	2,690,301		77,079		43,412		2,810,792		40.01% to 50.00%	2,782,252		106,362		36,305		2,924,919
50.01% to 60.00%	50.01% to 60.00%	2,855,370		102,720		37,432		2,995,522		50.01% to 60.00%	2,803,606		109,240		46,605		2,959,451
60.01% to 70.00%	60.01% to 70.00%	1,262,757		96,577		22,053		1,381,387		60.01% to 70.00%	1,310,122		53,242		22,761		1,386,125
70.01% to 80.00%	70.01% to 80.00%	183,491		13,821		16,154		213,466		70.01% to 80.00%	158,890		13,056		13,453		185,399
80.01% and greater	80.01% and greater	12,101		781		3,925		16,807		80.01% and greater	12,953		778		3,923		17,654
Total	Total	$	10,273,259	$	358,311	$	194,631	$	10,826,201	Total	$	10,451,512	$	383,006	$	180,160	$	11,014,678

(1)The current loan-to-value ratio is based on original appraised value (or most recently obtained valuation, if available) and current outstanding loan amount adjusted to reflect loan amortization.

9798

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 ~~June~~September 30, 2023 by year of origination, geographic region, and commodity/collateral type. The purpose of this table is to present information about realized losses relative to original Farm & Ranch purchases, guarantees, and commitments.

Table 25


Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative	Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative							Agricultural Finance Mortgage Loans Credit Losses Relative to Cumulative
Original Loans, Guarantees, and LTSPCs as of June 30, 2023
Original Loans, Guarantees, and LTSPCs as of September 30, 2023								Original Loans, Guarantees, and LTSPCs as of September 30, 2023
		Cumulative Original Loans, Guarantees and LTSPCs		Cumulative Net Credit Losses/(Recoveries)		Cumulative Loss Rate			Cumulative Original Loans, Guarantees and LTSPCs		Cumulative Net Credit Losses/(Recoveries)		Cumulative Loss Rate
		(dollars in thousands)							(dollars in thousands)
By year of origination:	By year of origination:							By year of origination:
2013 and prior	2013 and prior	$	18,735,695	$	33,785	0.18	%	2013 and prior	$	18,729,043	$	33,785	0.18	%
2014	2014	1,088,631		—		—	%	2014	1,088,631		—		—	%
2015	2015	1,249,421		(516)		(0.04)	%	2015	1,251,414		(516)		(0.04)	%
2016	2016	1,591,052		903		0.06	%	2016	1,596,330		903		0.06	%
2017	2017	1,696,472		4,311		0.25	%	2017	1,708,843		4,311		0.25	%
2018	2018	1,389,300		—		—	%	2018	1,396,862		—		—	%
2019	2019	1,600,111		—		—	%	2019	1,630,441		—		—	%
2020	2020	2,914,730		—		—	%	2020	2,926,857		—		—	%
2021	2021	3,295,240		—		—	%	2021	3,325,688		—		—	%
2022	2022	1,979,278		—		—	%	2022	2,006,572		—		—	%
2023	2023	674,579		—		—	%	2023	1,057,544		—		—	%
Total	Total	$	36,214,509	$	38,483	0.11	%	Total	$	36,718,225	$	38,483	0.10	%
By geographic region(1):	By geographic region(1):							By geographic region(1):
Northwest	Northwest	$	4,639,194	$	12,094	0.26	%	Northwest	$	4,676,155	$	12,094	0.26	%
Southwest	Southwest	12,181,868		8,542		0.07	%	Southwest	12,270,175		8,542		0.07	%
Mid-North	Mid-North	9,020,543		17,165		0.19	%	Mid-North	9,112,740		17,165		0.19	%
Mid-South	Mid-South	5,148,787		(613)		(0.01)	%	Mid-South	5,315,291		(613)		(0.01)	%
Northeast	Northeast	1,861,891		323		0.02	%	Northeast	1,904,527		323		0.02	%
Southeast	Southeast	3,362,226		972		0.03	%	Southeast	3,439,337		972		0.03	%
Total	Total	$	36,214,509	$	38,483	0.11	%	Total	$	36,718,225	$	38,483	0.10	%
By commodity/collateral type:	By commodity/collateral type:							By commodity/collateral type:
Crops	Crops	$	16,728,948	$	3,790	0.02	%	Crops	$	16,890,404	$	3,790	0.02	%
Permanent plantings	Permanent plantings	7,887,146		9,783		0.12	%	Permanent plantings	7,952,588		9,783		0.12	%
Livestock	Livestock	7,925,747		3,836		0.05	%	Livestock	8,066,465		3,836		0.05	%
Part-time farm	Part-time farm	1,903,123		1,090		0.06	%	Part-time farm	1,909,960		1,090		0.06	%
Ag. Storage and Processing	Ag. Storage and Processing	1,600,793		19,984		1.25	%	Ag. Storage and Processing	1,730,020		19,984		1.16	%
Other	Other	168,752		—		—	%	Other	168,788		—		—	%
Total	Total	$	36,214,509	$	38,483	0.11	%	Total	$	36,718,225	$	38,483	0.10	%

(1)Geographic regions: Northwest (AK, ID, MT, OR, WA, WY); Southwest (AZ, CA, CO, HI, NM, NV, UT); Mid-North (IA, IL, IN, MI, MN, NE, ND, SD, WI); Mid-South (AR, KS, LA, MO, OK, TX); Northeast (CT, DE, KY, MA, MD, ME, NH, NJ, NY, OH, PA, RI, VA, VT, WV); Southeast (AL, FL, GA, MS, NC, SC, TN).

9899

Analysis of portfolio performance indicates that commodity type is the primary determinant of Farmer Mac's exposure to loss on a given loan. 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 26


		As of June 30, 2023																						As of September 30, 2023
		Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region																						Agricultural Finance Mortgage Loans Concentrations by Commodity Type within Geographic Region
		Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing			Other			Total				Crops			Permanent Plantings			Livestock			Part-time Farm			Ag. Storage and Processing			Other			Total
		(dollars in thousands)																						(dollars in thousands)
By geographic region(1):	By geographic region(1):																						By geographic region(1):
Northwest	Northwest	$	749,413		$	231,050		$	297,315		$	109,424		$	27,965		$	23		$	1,415,190		Northwest	$	732,692		$	233,353		$	299,186		$	110,339		$	23,333		$	23		$	1,398,926
		6.9		%	2.2		%	2.7		%	1.0		%	0.3		%	—		%	13.1		%		6.7		%	2.1		%	2.7		%	1.0		%	0.2		%	—		%	12.7		%
Southwest	Southwest	713,354			1,758,751			555,610			107,025			133,612			15,468			3,283,820			Southwest	706,411			1,794,271			565,136			107,611			132,777			15,301			3,321,507
		6.6		%	16.3		%	5.1		%	1.0		%	1.2		%	0.1		%	30.3		%		6.5		%	16.3		%	5.1		%	1.0		%	1.2		%	0.1		%	30.2		%
Mid-North	Mid-North	2,380,061			11,207			247,750			84,620			135,693			1,414			2,860,745			Mid-North	2,359,328			10,746			256,906			83,326			171,805			1,328			2,883,439
		22.0		%	0.1		%	2.3		%	0.8		%	1.3		%	—		%	26.5		%		21.4		%	0.1		%	2.3		%	0.8		%	1.6		%	—		%	26.2		%
Mid-South	Mid-South	1,080,426			78,544			556,684			62,159			54,888			16			1,832,717			Mid-South	1,116,811			84,500			619,109			61,942			59,459			—			1,941,821
		10.0		%	0.7		%	5.1		%	0.6		%	0.5		%	—		%	16.9		%		10.1		%	0.8		%	5.6		%	0.6		%	0.5		%	—		%	17.6		%
Northeast	Northeast	189,807			44,043			68,381			49,740			80,577			—			432,548			Northeast	188,431			43,133			72,144			48,991			111,817			—			464,516
		1.8		%	0.4		%	0.6		%	0.5		%	0.7		%	—		%	4.0		%		1.7		%	0.4		%	0.7		%	0.4		%	1.0		%	—		%	4.2		%
Southeast	Southeast	328,405			242,244			249,110			60,153			121,074			195			1,001,181			Southeast	332,713			231,573			253,683			59,725			126,583			192			1,004,469
		3.0		%	2.2		%	2.3		%	0.6		%	1.1		%	—		%	9.2		%		3.0		%	2.1		%	2.4		%	0.5		%	1.1		%	—		%	9.1		%
Total	Total	$5,441,466			$2,365,839			$1,974,850			$473,121			$553,809			$17,116			$10,826,201			Total	$5,436,386			$2,397,576			$2,066,164			$471,934			$625,774			$16,844			$11,014,678
		50.3		%	21.9		%	18.1		%	4.5		%	5.1		%	0.1		%	100.0		%		49.4		%	21.8		%	18.8		%	4.3		%	5.6		%	0.1		%	100.0		%

99100

Table 27


		As of June 30, 2023													As of September 30, 2023
		Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type													Agricultural Loans Cumulative Credit Losses by Origination Year and Commodity Type
		Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Total			Crops		Permanent Plantings		Livestock		Part-time Farm		Ag. Storage and Processing		Total
		(in thousands)													(in thousands)
By year of origination:	By year of origination:													By year of origination:
2013 and prior	2013 and prior	$	3,427	$	9,783	$	3,836	$	1,066	$	15,673	$	33,785	2013 and prior	$	3,427	$	9,783	$	3,836	$	1,066	$	15,673	$	33,785
2014	2014	—		—		—		—		—		—		2014	—		—		—		—		—		—
2015	2015	(540)		—		—		24		—		(516)		2015	(540)		—		—		24		—		(516)
2016	2016	903		—		—		—		—		903		2016	903		—		—		—		—		903
2017	2017	—		—		—		—		4,311		4,311		2017	—		—		—		—		4,311		4,311
2018	2018	—		—		—		—		—		—		2018	—		—		—		—		—		—
2019	2019	—		—		—		—		—		—		2019	—		—		—		—		—		—
2020	2020	—		—		—		—		—		—		2020	—		—		—		—		—		—
2021	2021	—		—		—		—		—		—		2021	—		—		—		—		—		—
2022	2022	—		—		—		—		—		—		2022	—		—		—		—		—		—
2023	2023	—		—		—		—		—		—		2023	—		—		—		—		—		—
Total	Total	$	3,790	$	9,783	$	3,836	$	1,090	$	19,984	$	38,483	Total	$	3,790	$	9,783	$	3,836	$	1,090	$	19,984	$	38,483

For more information about the credit quality of Farmer Mac's Agricultural Finance mortgage loans and the associated allowance for losses please refer to Note 5 and Note 6 to the consolidated financial statements. 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 ~~June~~September 30, 2023 was $3.8 billion across 45 states. For more information about Farmer Mac's underwriting and collateral valuation standards for Rural Infrastructure Finance loans, see "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Underwriting and Collateral Standards" in Farmer Mac's 2022 Annual Report. As of ~~June~~September 30, 2023, there were no delinquencies in Farmer Mac's portfolio of Rural Infrastructure Finance loans. As of September 30, 2023, there was one telecommunications loan downgraded to substandard, with an unpaid principal balance of $29.5 million.

Farmer Mac evaluates credit risk ~~for these~~of Rural Infrastructure assets by reviewing a variety of borrower credit risk characteristics. 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.

The following table ~~presents~~disaggregates Farmer Mac’s portfolio of ~~generation~~Rural Infrastructure loans by portfolio segment and ~~transmission ("G&T") and distribution cooperative borrowers, as well as renewable energy loans, disaggregated~~ by internally assigned risk ratings.

~~100~~101

Table 28


											As of September 30, 2023
		Rural Infrastructure Finance portfolio by internally assigned risk rating as of June 30, 2023									Rural Infrastructure Finance portfolio by internally assigned risk rating
		Acceptable		Special Mention		Substandard		Total			Acceptable		Special Mention		Substandard		Total
		(in thousands)									(in thousands)
Distribution Cooperative	Distribution Cooperative	$	2,331,562	$	—	$	—	$	2,331,562	Distribution Cooperative	$	2,321,834	$	—	$	—	$	2,321,834
G&T Cooperative		697,645		—		—		697,645
Generation and Transmission Cooperative										Generation and Transmission Cooperative	692,779		—		—		692,779
Renewable Energy	Renewable Energy	327,901		—		—		327,901		Renewable Energy	330,575		—		—		330,575
Telecommunications	Telecommunications	440,073		—		—		440,073		Telecommunications	455,548		—		29,494		485,042
Rural Infrastructure Total	Rural Infrastructure Total	$	3,797,181	$	—	$	—	$	3,797,181	Rural Infrastructure Total	$	3,800,736	$	—	$	29,494	$	3,830,230

For more information about the credit quality of Farmer Mac's Rural Infrastructure Finance portfolio and the associated allowance for losses please refer to Notes 5 and 6 of the consolidated financial statements.

Other Considerations Regarding Credit Risk Related to Loans and Guarantees

The credit exposure on USDA Securities, including those underlying Farmer Mac Guaranteed USDA Securities, is guaranteed by the full faith and credit of the United States. Therefore, Farmer Mac believes that we have little or no credit risk exposure to the USDA Securities in the Agricultural Finance line of business because of the USDA guarantee. As of ~~June~~September 30, 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.

Farmer Mac requires many lenders to make representations and warranties about the conformity of Agricultural Finance mortgage loans to Farmer Mac's standards, the accuracy of loan data provided to Farmer Mac, and other requirements related to the loans. Sellers who make these representations and warranties are responsible to Farmer Mac for breaches of those representations and warranties. Farmer Mac has the ability to require a seller to cure, replace, or repurchase a loan sold or transferred to Farmer Mac if any breach of a representation or warranty is discovered that was material to Farmer Mac's decision to purchase the loan or that directly or indirectly causes a default or potential loss on a loan sold or transferred by the seller to Farmer Mac. During the previous three years ended ~~June~~September 30, 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. 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. For rural housing and part-time farm mortgage loans, Farmer Mac relies on representations and warranties from the seller that those loans conform to Farmer Mac's specified underwriting criteria. 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" in Farmer Mac’s 2022 Annual Report.

Under contracts with Farmer Mac and in consideration for servicing fees, Farmer Mac-approved servicers service loans in accordance with Farmer Mac's requirements. Servicers are responsible to Farmer Mac for material errors in the servicing of those loans. If a servicer materially breaches the terms of its servicing

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agreement with Farmer Mac, such as failing to forward payments received or releasing collateral without

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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. Farmer Mac also can proceed against the servicer in arbitration or exercise any remedies available to it under law. During the previous three years ended ~~June~~September 30, 2023, Farmer Mac had not exercised any remedies or taken any formal action against any servicers. For more information about Farmer Mac's servicing requirements, see "Business—Farmer Mac's Lines of Business—Agricultural Finance—Loan Servicing" and "Business—Farmer Mac's Lines of Business—Rural Infrastructure Finance—Lenders and Loan Servicing" in Farmer Mac’s 2022 Annual Report.

Credit Risk – Counterparty Risk. Farmer Mac is exposed to credit risk arising from its business relationships with other institutions, which include:

•issuers of AgVantage securities;

•approved lenders and servicers; and

•interest rate swap counterparties.

Farmer Mac approves AgVantage counterparties and manages institutional credit risk related to those AgVantage counterparties by requiring them to meet Farmer Mac's standards for creditworthiness for the particular counterparty type and transaction. The required collateralization level 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 without Farmer Mac's consent. In AgVantage transactions, the corporate obligor is typically required to remove from the pool of pledged collateral loans that become and remain (within specified parameters) delinquent in the payment of principal or interest and to substitute eligible loans that are current in payment or pay down the AgVantage securities to maintain the minimum required collateralization level.

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. For AgVantage counterparties that are institutional real estate investors or financial funds and other similar entities, Farmer Mac also typically requires that the counterparty (1) maintain a higher collateralization level, through either a higher overcollateralization percentage or lower loan-to-value ratio thresholds and (2) comply with specified financial covenants for the life of the related AgVantage security to avoid default. As of ~~June~~September 30, 2023, Farmer Mac had not experienced any credit losses on any AgVantage securities. 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" in Farmer Mac’s 2022 Annual Report.

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The unpaid principal balance of outstanding on-balance sheet AgVantage securities secured by loans eligible for the Agricultural Finance line of business totaled ~~$5.8~~$6.1 billion as of ~~June~~September 30, 2023 and $6.0 billion as of December 31, 2022. The unpaid principal balance of on-balance sheet AgVantage securities secured by loans eligible for the Rural Infrastructure Finance line of business totaled ~~$3.1~~$3.6 billion as of ~~June~~September 30, 2023 and $3.0 billion as of December 31, 2022. The unpaid principal balance of outstanding off-balance sheet AgVantage securities totaled $1.1 million as of ~~June~~September 30, 2023 and $1.2 million as of December 31, 2022.

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The following table provides information about the issuers of AgVantage securities and the required collateralization levels for those transactions as of ~~June~~September 30, 2023 and December 31, 2022:

Table 29


		As of June 30, 2023		As of December 31, 2022			As of September 30, 2023			As of December 31, 2022
Counterparty	Counterparty	Balance		Required Collateralization	Balance			Required Collateralization	Counterparty	Balance		Required Collateralization	Balance		Required Collateralization
		(dollars in thousands)					(dollars in thousands)
AgVantage:	AgVantage:								AgVantage:
CFC	CFC	$	3,142,612	100%	$	3,045,325		100%	CFC	$	3,618,640	100%	$	3,045,325	100%
MetLife	MetLife	2,050,000		103%	2,050,000			103%	MetLife	2,050,000		103%	2,050,000		103%
Rabo AgriFinance	Rabo AgriFinance	2,710,000		105%	2,855,000			105%	Rabo AgriFinance	2,935,000		105%	2,855,000		105%
Other(1)	Other(1)	1,068,123		100% to 125%	1,059,600			100% to 125%	Other(1)	1,083,173		100% to 125%	1,059,600		100% to 125%
Total outstanding	Total outstanding	$	8,970,735		$	9,009,925			Total outstanding	$	9,686,813		$	9,009,925

(1)Consists of AgVantage securities issued by 10 and 12 different issuers as of ~~June~~September 30, 2023 and December 31, 2022, respectively.

Farmer Mac manages institutional credit risk related to lenders and servicers by requiring those institutions to meet Farmer Mac's standards for creditworthiness. Farmer Mac monitors the financial condition of those institutions by evaluating financial statements and credit rating agency reports. 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" in Farmer Mac’s 2022 Annual Report.

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. Farmer Mac and its interest rate swap counterparties are required to fully collateralize their derivatives positions without any minimum threshold for cleared swap transactions, as well as for non-cleared swap transactions entered into after March 1, 2017. Farmer Mac transacts interest rate swaps with multiple counterparties to reduce counterparty credit exposure concentration. Farmer Mac's usage of cleared derivatives has increased over time as has its exposure to clearinghouses. The usage of cleared swap transactions reduces Farmer Mac's exposure to individual counterparties with the central clearinghouse acting to settle the change in value of contracts on a daily basis. 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 4 to the consolidated financial statements.

Credit Risk – Other Investments. As of ~~June~~September 30, 2023, Farmer Mac had ~~$0.9~~$0.8 billion of cash and cash equivalents and ~~$4.8~~$4.9 billion of investment securities. The management of the credit risk inherent in these investments is governed by Farmer Mac's internal policies as well as regulations issued by the FCA found at 12 C.F.R. §§ 652.1-652.45 ("Liquidity and Investment Regulations"). In addition to establishing a portfolio of highly liquid investments as an available source of cash, the goals of Farmer Mac's investment

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policies are designed to minimize Farmer Mac's exposure to financial market volatility, preserve capital, and support Farmer Mac's access to the debt markets.

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

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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 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 also establish concentration limits, which are intended to limit exposure to any single entity, issuer, or obligor. The Liquidity and Investment Regulations limit Farmer Mac's total credit exposure to any single entity, issuer, or obligor of securities to 10% of Farmer Mac's regulatory capital ($~~140.0~~144.0 million as of ~~June~~September 30, 2023). However, Farmer Mac's current policy limits this total credit exposure to 5% of its regulatory capital ($~~70.0~~72.0 million as of ~~June~~September 30, 2023). These exposure limits do not apply to obligations of U.S. government agencies or GSEs, although Farmer Mac's current policy restricts investing more than 100% of regulatory capital in the senior non-convertible debt securities of any one GSE.

Although the Liquidity and Investments Regulations do not establish limits on the maximum amount, expressed as a percentage of Farmer Mac's investment portfolio, that can be invested in each eligible asset class, Farmer Mac's internal policies set forth asset class limits as part of Farmer Mac's overall risk management framework.

Interest Rate Risk. Farmer Mac is subject to interest rate risk on all interest-earning assets on its balance sheet because of timing differences in the cash flows due to maturity, paydown, or repricing of the assets and debt together with financial derivatives. Cash flow mismatches due to changing interest rates can reduce the earnings of Farmer Mac if assets prepay sooner than expected and the resulting cash flows must be reinvested in lower-yielding investments when Farmer Mac's funding costs cannot be correspondingly reduced. Alternatively, Farmer Mac could realize a decline in income if assets repay more slowly than originally forecasted and the associated maturing debt must be replaced by debt issuances at higher interest rates.

Interest Rate Risk Management

The goal of interest rate risk management at Farmer Mac is to manage the balance sheet in a manner that generates stable earnings and value across a variety of interest rate environments. 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. Farmer Mac's management-level Asset and Liability Committee ("ALCO") provides oversight, establishes guidelines, and approves strategies to maintain interest rate risk within the board-established limits.

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Farmer Mac's primary strategy for managing interest rate risk is to fund asset purchases with debt that together with financial derivatives have similar duration and convexity characteristics and help mitigate impacts from interest rate changes across the yield curve. 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.

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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. 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, prepayments typically increase, and Farmer Mac is able to economically extinguish certain callable debt issuances. In addition, Farmer Mac enters into financial derivatives, primarily interest rate swaps, to better match the durations of Farmer Mac's assets and liabilities, thereby reducing overall sensitivity to changing interest rates.

Taking into consideration the prepayment provisions and the default probabilities associated with its portfolio of interest-earning assets, Farmer Mac incorporates behavioral models when projecting and valuing cash flows associated with these assets. In recognition that borrowers' behaviors in various interest rate environments may change over time, Farmer Mac periodically evaluates the effectiveness of these models compared to actual prepayment experience and adjusts and refines the models as necessary to improve the precision of future prepayment forecasts.

Changes in interest rates may affect the timing of asset prepayments which may, in turn, impact durations and values of the assets. Declining interest rates generally result in increased prepayments, which shortens the duration of these assets, while rising interest rates generally result in lower prepayments, thereby extending the duration of the assets.

Farmer Mac is subject to interest rate risk on loans and securities it has committed to acquire but not yet purchased (other than delinquent loans purchased through LTSPCs or loans designated for securitization under a forward purchase agreement). When Farmer Mac commits to purchase these assets, it is exposed to interest rate risk between the time it commits to purchase the loans and the time it issues debt to fund the purchase of these loans. Farmer Mac manages the interest rate risk exposure related to these loans by entering into exchange-traded futures contracts involving U.S. 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~~$0.8 billion of cash and cash equivalents held as of ~~June~~September 30, 2023 mature within three months. As of ~~June~~September 30, 2023, $3.1 billion of the ~~$4.8~~$4.9 billion of investment securities ~~(66%~~(63%) were floating rate securities with rates that adjust within one year or fixed rate securities with original maturities between three months and one year. Farmer Mac's floating rate investment securities are funded with floating rate debt. The fixed rate investment securities are generally funded in a manner consistent with Farmer Mac's overall funding strategy that approximates a duration and convexity match.

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Interest Rate Risk Metrics

Farmer Mac regularly evaluates and conducts interest rate shock simulations on its portfolio of financial assets, debt, and financial derivatives and examines a variety of metrics to quantify and manage its exposure to interest rate risk. These metrics include sensitivity to interest rate movements on the market value of equity ("MVE") and forecasted net effective spread ("NES") as well as a duration gap analysis.

MVE represents management's estimate of the present value of all future cash flows from its current portfolio of on- and off-balance sheet assets, liabilities, and financial derivatives, discounted at current interest rates and appropriate spreads. 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.

Farmer Mac's NES simulation represents the difference between projected income over the next twelve months from the current portfolio of interest-earning assets and interest expense produced by the related funding, including associated financial derivatives. Farmer Mac's NES simulation may be impacted by changes in market interest rates resulting from timing differences between maturities and re-pricing characteristics of funded assets and debt together with the associated financial derivatives. The direction and magnitude of any such effect depends on the direction and magnitude of the change in interest rates across the yield curve as well as the composition of Farmer Mac's portfolio. The NES simulation represents an estimate of the net effective spread income that Farmer Mac's current portfolio is expected to produce over a twelve-month horizon. As a result, the NES simulation sensitivity statistics provide a short-term view of Farmer Mac's NES income sensitivity to interest rate shocks.

Duration is a measure of a financial instrument's fair value sensitivity to small changes in interest rates. Duration gap is calculated using the net estimated durations of Farmer Mac's interest-earning assets, debt, and financial derivatives. Duration gap quantifies the extent to which estimated fair value sensitivities are matched for interest-earning assets, debt and financial derivatives. Duration gap provides a relatively concise measure of the interest rate risk inherent in Farmer Mac's outstanding portfolio.

A positive duration gap denotes that the duration of Farmer Mac's interest-earning assets is greater than the duration of its debt and financial derivatives. A positive duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is more sensitive than the fair value change of its debt and financial derivatives. Conversely, a negative duration gap indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets are less sensitive than the fair value change of its debt and financial derivatives. A duration gap of zero indicates that with small changes in interest rate movements the fair value change of Farmer Mac's interest-earning assets is effectively offset by the fair value change of its debt and financial derivatives.

Each of the interest rate risk metrics is quantified using asset/liability models and derived based on management's best estimates of factors such as implied forward interest rates across the yield curve, interest rate volatility, and timing of asset prepayments and callable debt redemptions. Accordingly, these metrics are estimates rather than precise measurements. Actual results may differ to the extent there are material changes to Farmer Mac's financial asset portfolio or changes in funding or hedging strategies undertaken to mitigate unfavorable sensitivities to interest rate changes.

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The following schedule summarizes the results of Farmer Mac's MVE and NES sensitivity analysis as of ~~June~~September 30, 2023 and December 31, 2022 to an immediate and instantaneous uniform or "parallel" shift in the yield curve:

Table 30


		Percentage Change in MVE from Base Case					Percentage Change in MVE from Base Case
Interest Rate Scenario	Interest Rate Scenario	As of June 30, 2023		As of December 31, 2022		Interest Rate Scenario	As of September 30, 2023		As of December 31, 2022
+100 basis points	+100 basis points	(3.9)	%	(3.7)	%	+100 basis points	(4.0)	%	(3.7)	%
-100 basis points	-100 basis points	3.1	%	2.7	%	-100 basis points	3.5	%	2.7	%


		Percentage Change in NES from Base Case					Percentage Change in NES from Base Case
Interest Rate Scenario	Interest Rate Scenario	As of June 30, 2023		As of December 31, 2022		Interest Rate Scenario	As of September 30, 2023		As of December 31, 2022
+100 basis points	+100 basis points	(0.8)	%	0.4	%	+100 basis points	(0.2)	%	0.4	%
-100 basis points	-100 basis points	0.4	%	(0.6)	%	-100 basis points	0.1	%	(0.6)	%

As of ~~June~~September 30, 2023, Farmer Mac's duration gap was positive ~~3.4~~3.8 months, compared to positive 3.6 months as of December 31, 2022. Interest rates within the yield curve ~~flattened~~increased during the first ~~half~~nine months of 2023, as the 2-year U.S. Treasury Note yield-to-maturity increased by approximately 4762 basis points and the 10-year U.S. Treasury Note yield-to-maturity decreased by approximately 470 basis points versus year-end 2022. This rate movement contributed to lengthening the duration of Farmer Mac's funded assets compared to its debt and financial derivatives, thereby widening Farmer Mac's duration gap.

Financial Derivatives Transactions

The economic effects of financial derivatives are included in Farmer Mac's MVE, NES, and duration gap analyses. Farmer Mac typically enters into the following types of financial derivative transactions principally to protect against risk from the effects of market price or interest rate movements on the value of interest-earning assets, future cash flows, and debt issuance, and not for trading or speculative purposes:

•"pay-fixed" interest rate swaps, in which Farmer Mac pays fixed rates of interest to, and receives floating rates of interest from, counterparties;

•"receive-fixed" interest rate swaps, in which Farmer Mac receives fixed rates of interest from, and pays floating rates of interest to, counterparties;

•"basis swaps," in which Farmer Mac pays floating rates of interest based on one index to, and receives floating rates of interest based on a different index from, counterparties; and

•exchange-traded futures contracts involving U.S. Treasury securities.

As of ~~June~~September 30, 2023, Farmer Mac had ~~$25.3~~$24.5 billion combined notional amount of interest rate swaps, with terms ranging from less than one year to just over thirty years, of which ~~$9.5~~$9.6 billion were pay-fixed interest rate swaps, ~~$14.4~~$14.0 billion were receive-fixed interest rate swaps, and ~~$1.5~~$0.9 billion were basis swaps.

Farmer Mac enters into interest rate swaps to more closely match the cash flow and duration characteristics of its interest-earning assets with those of its debt. For example, Farmer Mac transacts pay-fixed interest rate swaps and issues floating rate debt to effectively create fixed rate funding that approximately matches the duration of the corresponding fixed rate assets being funded. Farmer Mac evaluates the overall cost of using interest rate swaps in conjunction with debt issuance as a funding

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alternative to duration-matched debt and enters into interest rate swaps to manage interest rate risks across the balance sheet.

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Certain financial derivatives are designated as fair value hedges of fixed rate assets classified as available for sale or liabilities to protect against fair value changes in the assets or liabilities related to a benchmark interest rate (e.g. SOFR). Also, certain financial derivatives are designated as cash flow hedges to mitigate the volatility of future interest rate payments on floating rate debt.

As discussed in Note 4 to the consolidated financial statements, all financial derivatives are recorded on the balance sheet at fair value as derivative assets or as derivative liabilities. 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. Interest accruals on derivatives designated in fair value hedge accounting relationships are also recorded in "Net interest income" in the consolidated statements of operations. For financial derivatives designated in cash flow hedge accounting relationships, the unrealized gain or loss on the derivative is recorded in other comprehensive income. Because the hedging instrument is an interest rate swap and the hedged forecasted transactions are future interest payments on floating rate debt, amounts recorded in accumulated other comprehensive income are reclassified to "Total interest expense" in conjunction with the recognition of interest expense on the debt. 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 ~~June~~September 30, 2023 and December 31, 2022, Farmer Mac had no uncollateralized net exposures based on the mark-to-market value of the portfolio of interest rate swaps.

Re-funding and repricing risk

Farmer Mac is subject to re-funding and repricing risk on any floating rate assets that are not funded to contractual maturity. Re-funding and repricing risk arises from potential changes in funding costs resulting from a funding strategy whereby Farmer Mac issues floating rate debt across a variety of maturities to fund floating rate or synthetically floating rate assets that on average may have longer maturities. Changes in Farmer Mac's funding costs relative to the benchmark market index rate to which the assets are indexed can cause changes to net interest income when debt matures and is reissued at then current interest rates to continue funding those assets.

Farmer Mac is subject to re-funding and repricing risk on a portion of its fixed rate assets as a result of its use of pay-fixed receive-floating interest rate swaps that effectively convert the required funding needed from fixed rate to floating rate. These fixed rate assets are then effectively floating rate assets that require floating rate funding.

Farmer Mac can meet floating rate funding needs in several ways, including:

•issuing short-term fixed rate discount notes with maturities that match the reset period of the assets;

•issuing floating rate medium-term notes with maturities and reset frequencies that match the assets being funded;

•issuing non-maturity matched, floating rate medium-term notes with reset frequencies that match the assets being funded; or

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•issuing non-maturity matched, fixed rate discount notes or medium-term notes swapped to floating rate to match the interest rate reset dates of the assets.

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To meet certain floating rate funding needs, Farmer Mac frequently issues shorter-term floating-rate medium-term notes or fixed rate medium-term notes paired with a received-fixed interest rate swap because these funding alternatives generally provide a lower cost of funding while generating an effective interest rate match. As funding for these floating rate assets matures, Farmer Mac seeks to refinance the debt associated with these assets in a similar fashion to achieve an appropriate interest rate match in the context of Farmer Mac's overall debt issuance and liquidity management strategies. However, if the funding cost of Farmer Mac’s discount notes or medium-term notes increased relative to the benchmark market index of the associated assets during the time between when these floating rate assets were first funded and when Farmer Mac refinanced the associated debt, Farmer Mac would be exposed to a commensurate reduction of net effective spread. Conversely, if the funding cost on Farmer Mac’s discount notes or medium-term notes decreased relative to the benchmark market index during that time, Farmer Mac would benefit from a commensurate increase to net effective spread.

Farmer Mac's debt issuance strategy targets balancing liquidity risk and re-funding and repricing risk while maintaining an appropriate liability management profile that is consistent with Farmer Mac's risk tolerance. Farmer Mac regularly adjusts its funding strategies to mitigate the effects of interest rate variability and seeks to maintain an effective mixture of funding structures in the context of its overall liability and liquidity management strategies.

As of ~~June~~September 30, 2023, Farmer Mac held ~~$7.1~~$7.9 billion of floating rate assets in its lines of business and its investment portfolio that reset based on floating rate market indices, such as SOFR. As of the same date, Farmer Mac also had ~~$9.5~~$9.6 billion of interest rate swaps outstanding where Farmer Mac pays a fixed rate of interest and receives a floating rate of interest, primarily SOFR.

Discontinuation of LIBOR

~~As described in "Risk Factors—Market Risk" in Part I, Item 1A of the 2022 Annual Report,~~ Farmer Mac ~~faces risks associated with the reform, replacement, or discontinuation of the LIBOR benchmark interest rate~~has not had, and ~~the transition to an alternative benchmark interest rate. Farmer Mac~~ does not foresee, a material impact on our business due to the replacement benchmark interest rates expected to replace LIBOR, including SOFR, which is the replacement benchmark rate recommended by the Alternative Reference Rates Committee and designated by the Adjustable Interest Rate (LIBOR) Act and implementing regulations.

As of June 30, 2023, Farmer Mac held $2.3 billion of floating rate assets in its lines of business and its investment portfolio, had issued $0.2 billion of floating rate debt, and had entered into $8.3 billion notional amount of interest rate swaps, each of which previously reset based on LIBOR. Our Non-Cumulative Series C Preferred Stock currently pays a fixed rate of interest until July 17, 2024 and thereafter pays interest at a floating rate equal to three-month LIBOR plus 3.260% if we do not redeem it.

~~As discussed above, some of Farmer Mac’s assets, liabilities, and equity were indexed to~~ LIBOR with SOFR. We had no further variable LIBOR exposure ~~extending past June~~as of September 30, 2023.

~~The publication of LIBOR on a representative basis ceased for one-week and two-month LIBOR as of January 1, 2022, and the remaining LIBOR tenors ceased immediately after June 30, 2023.~~

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During the period, Farmer Mac had LIBOR exposure related to assets, liabilities, and equity with interest rates indexed to LIBOR. As of June 30, 2023, Farmer Mac has transitioned all outstanding LIBOR exposure to convert to reference rate SOFR beginning July 3, 2023 or at the start of the next reset period. Therefore, we have no further variable LIBOR exposure at June 30, 2023.

The market transition away from LIBOR and towards alternative benchmark interest rate indices may be complicated and is expected to require term and credit adjustments to accommodate for differences between reference rate SOFR.

Liquidity and Capital Resources

Farmer Mac's primary sources of funds to meet its liquidity and funding needs are the proceeds of its debt issuances, guarantee and commitment fees, net effective spread, loan repayments, and ~~maturities~~repayments of AgVantage and investment securities. 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. As of ~~June~~September 30, 2023, Farmer Mac had outstanding discount notes of ~~$1.0~~$1.5 billion, medium-term notes that mature within one year of ~~$7.4~~$6.4 billion, and medium-term notes that mature after one year of ~~$16.7~~$17.6 billion.

Assuming continued access to the debt capital markets, Farmer Mac believes it has sufficient liquidity and capital resources to support its operations for the next 12 months and for the foreseeable future. Farmer Mac has a contingency funding plan to manage unanticipated disruptions in its access to the debt capital markets. Farmer Mac must maintain a minimum of 90 days of liquidity under the Liquidity and

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Investment Regulations. In accordance with the methodology for calculating available days of liquidity under those regulations, Farmer Mac maintained a monthly average of ~~307~~293 days of liquidity throughout ~~second~~third quarter 2023 and had ~~307~~297 days of liquidity as of ~~June~~September 30, 2023.

Farmer Mac maintains cash, cash equivalents (including U.S. Treasury securities, operational deposits, and other short-term money market instruments), and other investment securities that can be drawn upon for liquidity needs. Farmer Mac's current policies authorize liquidity investments in:

•obligations of or fully guaranteed by the United States or a U.S. government agency;

•obligations of or fully guaranteed by GSEs;

•municipal securities;

•international and multilateral development bank obligations;

•money market instruments;

•diversified investment funds;

•asset-backed securities;

•corporate debt securities; and

•mortgage-backed securities.

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The following table presents these assets as of ~~June~~September 30, 2023 and December 31, 2022:

Table 31


		As of June 30, 2023		As of December 31, 2022			As of September 30, 2023		As of December 31, 2022
		(in thousands)					(in thousands)
Cash and cash equivalents	Cash and cash equivalents	$	874,090	$	861,002	Cash and cash equivalents	$	782,318	$	861,002
Investment securities:	Investment securities:					Investment securities:
Guaranteed by U.S. Government and its agencies	Guaranteed by U.S. Government and its agencies	1,232,403		1,444,650		Guaranteed by U.S. Government and its agencies	1,348,081		1,444,650
Guaranteed by GSEs	Guaranteed by GSEs	3,516,154		3,160,919		Guaranteed by GSEs	3,551,332		3,160,919
Asset-backed securities	Asset-backed securities	19,032		19,027		Asset-backed securities	19,033		19,027
Total	Total	$	5,641,679	$	5,485,598	Total	$	5,700,764	$	5,485,598

The objectives of the investment portfolio as of ~~June~~September 30, 2023 and December 31, 2022 are to provide a level of liquidity that mitigates enterprise risk, provides a reliable source of short-term and long-term liquidity, to prepare for the possibility of future volatility in the debt capital markets, and to support program asset growth.

Capital Requirements. Farmer Mac is subject to the following statutory capital requirements – minimum, critical, and risk-based. Farmer Mac must comply with the higher of the minimum capital requirement and the risk-based capital requirement. As of ~~June~~September 30, 2023, Farmer Mac was in compliance with its statutory capital requirements and was classified as within "level 1" (the highest compliance level).

In accordance with the FCA's rule on capital planning, Farmer Mac's board of directors has adopted a policy for maintaining a sufficient level of "Tier 1" capital (consisting of retained earnings, paid-in capital, common stock, and qualifying preferred stock). That policy restricts Tier 1-eligible dividends and any discretionary bonus payments if Tier 1 capital falls below specified thresholds. As of ~~June~~September 30, 2023 and 2022, Farmer Mac's Tier 1 capital ratio was ~~15.9%~~16.0% and ~~14.7%~~14.9%, respectively. As of ~~June~~September 30, 2023, Farmer Mac was in compliance with its capital adequacy policy. Farmer Mac does not expect its compliance on an ongoing basis with the FCA's rule on capital planning, including Farmer Mac's policy on Tier 1 capital, to materially affect Farmer Mac's operations or financial condition.

111

For more information about the capital requirements applicable to Farmer Mac, its capital adequacy policy, and the FCA's rule on capital planning, see "Business—Government Regulation of Farmer Mac—Capital Standards" in Farmer Mac's 2022 Annual Report. See Note 8 to the consolidated financial statements for more information about Farmer Mac's capital position.

Other Matters

None.

~~111~~

Supplemental Information

The following tables present quarterly and annual information about new business volume, repayments, and outstanding business volume:

Table 32


New Business Volume	New Business Volume											New Business Volume
		Agricultural Finance				Rural Infrastructure Finance							Agricultural Finance				Rural Infrastructure Finance
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total			Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
		(in thousands)											(in thousands)
For the quarter ended:	For the quarter ended:											For the quarter ended:
September 30, 2023												September 30, 2023	$	1,384,273	$	275,932	$	607,979	$	17,390	$	2,285,574
June 30, 2023	June 30, 2023	$	1,574,169	$	218,136	$	294,292	$	71,611	$	2,158,208	June 30, 2023	1,574,169		218,136		294,292		71,611		2,158,208
March 31, 2023	March 31, 2023	750,040		203,211		683,232		89,747		1,726,230		March 31, 2023	750,040		203,211		683,232		89,747		1,726,230
December 31, 2022	December 31, 2022	1,114,255		165,395		140,222		43,737		1,463,609		December 31, 2022	1,114,255		165,395		140,222		43,737		1,463,609
September 30, 2022	September 30, 2022	1,927,209		169,932		547,117		61,653		2,705,911		September 30, 2022	1,927,209		169,932		547,117		61,653		2,705,911
June 30, 2022	June 30, 2022	1,418,397		107,916		326,899		35,307		1,888,519		June 30, 2022	1,418,397		107,916		326,899		35,307		1,888,519
March 31, 2022	March 31, 2022	2,452,539		103,353		377,965		41,636		2,975,493		March 31, 2022	2,452,539		103,353		377,965		41,636		2,975,493
December 31, 2021	December 31, 2021	2,075,540		411,838		631,338		12,594		3,131,310		December 31, 2021	2,075,540		411,838		631,338		12,594		3,131,310
September 30, 2021	September 30, 2021	1,791,662		122,043		609,745		4,152		2,527,602		September 30, 2021	1,791,662		122,043		609,745		4,152		2,527,602
June 30, 2021		925,950		159,958		410,666		3,441		1,500,015

For the year ended:	For the year ended:											For the year ended:
December 31, 2022	December 31, 2022	$	6,912,400	$	546,596	$	1,392,203	$	182,333	$	9,033,532	December 31, 2022	$	6,912,400	$	546,596	$	1,392,203	$	182,333	$	9,033,532
December 31, 2021	December 31, 2021	5,881,049		880,232		1,823,295		43,671		8,628,247		December 31, 2021	5,881,049		880,232		1,823,295		43,671		8,628,247

112

Table 33


Repayments of Assets	Repayments of Assets											Repayments of Assets
		Agricultural Finance				Rural Infrastructure Finance							Agricultural Finance				Rural Infrastructure Finance
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total			Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
		(in thousands)											(in thousands)
For the quarter ended:	For the quarter ended:											For the quarter ended:
Scheduled												Scheduled	$	922,223	$	110,383	$	80,998	$	14,716	$	1,128,320
Unscheduled												Unscheduled	108,960		104,999		20,578		—		234,537
September 30, 2023												September 30, 2023	$	1,031,183	$	215,382	$	101,576	$	14,716	$	1,362,857

Scheduled	Scheduled	$	1,050,480	$	81,386	$	558,944	$	52,203	$	1,743,013	Scheduled	$	1,050,480	$	81,386	$	558,944	$	52,203	$	1,743,013
Unscheduled	Unscheduled	96,507		55,976		13,138		—		165,621		Unscheduled	96,507		55,976		13,138		—		165,621
June 30, 2023	June 30, 2023	$	1,146,987	$	137,362	$	572,082	$	52,203	$	1,908,634	June 30, 2023	$	1,146,987	$	137,362	$	572,082	$	52,203	$	1,908,634

Scheduled	Scheduled	$	279,676	$	78,482	$	95,809	$	11,424	$	465,391	Scheduled	$	279,676	$	78,482	$	95,809	$	11,424	$	465,391
Unscheduled	Unscheduled	231,288		128,254		57,354		—		416,896		Unscheduled	231,288		128,254		57,354		—		416,896
March 31, 2023	March 31, 2023	$	510,964	$	206,736	$	153,163	$	11,424	$	882,287	March 31, 2023	$	510,964	$	206,736	$	153,163	$	11,424	$	882,287

Scheduled	Scheduled	$	447,976	$	64,308	$	75,671	$	9,809	$	597,764	Scheduled	$	447,976	$	64,308	$	75,671	$	9,809	$	597,764
Unscheduled	Unscheduled	136,245		132,366		1,201		—		269,812		Unscheduled	136,245		132,366		1,201		—		269,812
December 31, 2022	December 31, 2022	$	584,221	$	196,674	$	76,872	$	9,809	$	867,576	December 31, 2022	$	584,221	$	196,674	$	76,872	$	9,809	$	867,576

Scheduled	Scheduled	$	724,580	$	38,018	$	422,917	$	13,429	$	1,198,944	Scheduled	$	724,580	$	38,018	$	422,917	$	13,429	$	1,198,944
Unscheduled	Unscheduled	296,763		64,439		—		—		361,202		Unscheduled	296,763		64,439		—		—		361,202
September 30, 2022	September 30, 2022	$	1,021,343	$	102,457	$	422,917	$	13,429	$	1,560,146	September 30, 2022	$	1,021,343	$	102,457	$	422,917	$	13,429	$	1,560,146

Scheduled	Scheduled	$	1,114,779	$	42,162	$	159,491	$	7,898	$	1,324,330	Scheduled	$	1,114,779	$	42,162	$	159,491	$	7,898	$	1,324,330
Unscheduled	Unscheduled	286,303		30,203		1,791		—		318,297		Unscheduled	286,303		30,203		1,791		—		318,297
June 30, 2022	June 30, 2022	$	1,401,082	$	72,365	$	161,282	$	7,898	$	1,642,627	June 30, 2022	$	1,401,082	$	72,365	$	161,282	$	7,898	$	1,642,627

Scheduled	Scheduled	$	1,535,369	$	39,480	$	266,349	$	7,790	$	1,848,988	Scheduled	$	1,535,369	$	39,480	$	266,349	$	7,790	$	1,848,988
Unscheduled	Unscheduled	434,794		60,947		397		—		496,138		Unscheduled	434,794		60,947		397		—		496,138
March 31, 2022	March 31, 2022	$	1,970,163	$	100,427	$	266,746	$	7,790	$	2,345,126	March 31, 2022	$	1,970,163	$	100,427	$	266,746	$	7,790	$	2,345,126

Scheduled	Scheduled	$	928,663	$	205,778	$	816,802	$	18,526	$	1,969,769	Scheduled	$	928,663	$	205,778	$	816,802	$	18,526	$	1,969,769
Unscheduled	Unscheduled	318,024		48,042		—		—		366,066		Unscheduled	318,024		48,042		—		—		366,066
December 31, 2021	December 31, 2021	$	1,246,687	$	253,820	$	816,802	$	18,526	$	2,335,835	December 31, 2021	$	1,246,687	$	253,820	$	816,802	$	18,526	$	2,335,835

Scheduled	Scheduled	$	725,713	$	406,285	$	95,443	$	4,043	$	1,231,484	Scheduled	$	725,713	$	406,285	$	95,443	$	4,043	$	1,231,484
Unscheduled	Unscheduled	374,287		—		201		—		374,488		Unscheduled	374,287		—		201		—		374,488
September 30, 2021	September 30, 2021	$	1,100,000	$	406,285	$	95,644	$	4,043	$	1,605,972	September 30, 2021	$	1,100,000	$	406,285	$	95,644	$	4,043	$	1,605,972

Scheduled		$	380,684	$	139,774	$	225,257	$	4,704	$	750,419
Unscheduled		409,393		3,921		1,652		—		414,966
June 30, 2021		$	790,077	$	143,695	$	226,909	$	4,704	$	1,165,385

For the year ended:	For the year ended:											For the year ended:
Scheduled	Scheduled	$	3,822,704	$	183,968	$	924,428	$	38,926	$	4,970,026	Scheduled	$	3,822,704	$	183,968	$	924,428	$	38,926	$	4,970,026
Unscheduled	Unscheduled	1,154,105		287,955		3,389		—		1,445,449		Unscheduled	1,154,105		287,955		3,389		—		1,445,449
December 31, 2022	December 31, 2022	$	4,976,809	$	471,923	$	927,817	$	38,926	$	6,415,475	December 31, 2022	$	4,976,809	$	471,923	$	927,817	$	38,926	$	6,415,475

Scheduled	Scheduled	$	2,756,150	$	872,458	$	1,237,984	$	29,944	$	4,896,536	Scheduled	$	2,756,150	$	872,458	$	1,237,984	$	29,944	$	4,896,536
Unscheduled	Unscheduled	1,603,355		134,053		4,132		—		1,741,540		Unscheduled	1,603,355		134,053		4,132		—		1,741,540
December 31, 2021	December 31, 2021	$	4,359,505	$	1,006,511	$	1,242,116	$	29,944	$	6,638,076	December 31, 2021	$	4,359,505	$	1,006,511	$	1,242,116	$	29,944	$	6,638,076

113

Table 34


Outstanding Business Volume	Outstanding Business Volume											Outstanding Business Volume
		Agricultural Finance				Rural Infrastructure Finance							Agricultural Finance				Rural Infrastructure Finance
		Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total			Farm & Ranch		Corporate AgFinance		Rural Utilities		Renewable Energy		Total
		(in thousands)											(in thousands)
As of:	As of:											As of:
September 30, 2023												September 30, 2023	$	18,461,835	$	1,741,306	$	7,118,295	$	330,575	$	27,652,011
June 30, 2023	June 30, 2023	$	18,116,503	$	1,680,756	$	6,611,892	$	327,901	$	26,737,052	June 30, 2023	18,116,503		1,680,756		6,611,892		327,901		26,737,052
March 31, 2023	March 31, 2023	17,685,961		1,599,982		6,889,682		308,493		26,484,118		March 31, 2023	17,685,961		1,599,982		6,889,682		308,493		26,484,118
December 31, 2022	December 31, 2022	17,728,792		1,603,507		6,359,613		230,170		25,922,082		December 31, 2022	17,728,792		1,603,507		6,359,613		230,170		25,922,082
September 30, 2022	September 30, 2022	17,199,347		1,634,786		6,296,263		196,242		25,326,638		September 30, 2022	17,199,347		1,634,786		6,296,263		196,242		25,326,638
June 30, 2022	June 30, 2022	16,591,999		1,567,311		6,172,063		148,018		24,479,391		June 30, 2022	16,591,999		1,567,311		6,172,063		148,018		24,479,391
March 31, 2022	March 31, 2022	16,575,595		1,540,760		6,006,446		120,609		24,243,410		March 31, 2022	16,575,595		1,540,760		6,006,446		120,609		24,243,410
December 31, 2021	December 31, 2021	16,094,639		1,537,834		5,895,227		86,763		23,614,463		December 31, 2021	16,094,639		1,537,834		5,895,227		86,763		23,614,463
September 30, 2021	September 30, 2021	15,565,589		1,379,816		6,080,691		92,695		23,118,791		September 30, 2021	15,565,589		1,379,816		6,080,691		92,695		23,118,791
June 30, 2021		14,873,926		1,664,059		5,566,591		92,585		22,197,161

Table 35


On-Balance Sheet Outstanding Business Volume	On-Balance Sheet Outstanding Business Volume									On-Balance Sheet Outstanding Business Volume
		Fixed Rate		5- to 10-Year ARMs & Resets		1-Month to 3-Year ARMs		Total Held in Portfolio			Fixed Rate		5- to 10-Year ARMs & Resets		1-Month to 3-Year ARMs		Total Held in Portfolio
		(in thousands)									(in thousands)
As of:	As of:									As of:
September 30, 2023										September 30, 2023	$	13,727,280	$	3,019,317	$	6,255,690	$	23,002,287
June 30, 2023	June 30, 2023	$	13,721,129	$	3,003,560	$	5,493,104	$	22,217,793	June 30, 2023	13,721,129		3,003,560		5,493,104		22,217,793
March 31, 2023	March 31, 2023	13,607,740		3,020,229		5,924,032		22,552,001		March 31, 2023	13,607,740		3,020,229		5,924,032		22,552,001
December 31, 2022	December 31, 2022	13,693,810		3,031,288		5,251,427		21,976,525		December 31, 2022	13,693,810		3,031,288		5,251,427		21,976,525
September 30, 2022	September 30, 2022	13,810,162		2,960,596		4,644,958		21,415,716		September 30, 2022	13,810,162		2,960,596		4,644,958		21,415,716
June 30, 2022	June 30, 2022	13,798,771		2,939,467		3,993,956		20,732,194		June 30, 2022	13,798,771		2,939,467		3,993,956		20,732,194
March 31, 2022	March 31, 2022	14,174,611		2,858,521		3,443,816		20,476,948		March 31, 2022	14,174,611		2,858,521		3,443,816		20,476,948
December 31, 2021	December 31, 2021	13,228,675		2,896,014		3,695,269		19,819,958		December 31, 2021	13,228,675		2,896,014		3,695,269		19,819,958
September 30, 2021	September 30, 2021	12,921,572		2,872,499		3,818,550		19,612,621		September 30, 2021	12,921,572		2,872,499		3,818,550		19,612,621
June 30, 2021		11,800,429		2,878,637		4,254,625		18,933,691

114

The following table presents the quarterly net effective spread (a non-GAAP measure) by segment:

Table 36


		Net Effective Spread(1)																									Net Effective Spread(1)
		Agricultural Finance								Rural Infrastructure Finance								Treasury																				Agricultural Finance												Rural Infrastructure Finance												Treasury
		Farm & Ranch				Corporate AgFinance				Rural Utilities				Renewable Energy				Funding				Investments								Net Effective Spread								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			Yield			Dollars			Yield			Dollars			Yield			Dollars			Yield			Dollars			Yield			Dollars		Yield		Dollars	Yield
		(dollars in thousands)																									(dollars in thousands)
For the quarter ended:	For the quarter ended:																								For the quarter ended:
June 30, 2023(2)		$	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	%
September 30, 2023(2)																								September 30, 2023(2)	$	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																								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	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	%	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	December 31, 2022	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	%	December 31, 2022		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(2)		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	%
September 30, 2022(2)																								September 30, 2022(2)	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																								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	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	%	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	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	%	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	%
September 30, 2021	September 30, 2021	28,914		1.06	%	7,163		1.80	%	2,067		0.16	%	236		1.09	%	17,386		0.31	%	159					0.01	%		55,925				0.99	%	September 30, 2021		28,914			1.06	%		7,163			1.80	%		2,067			0.16	%		236			1.09	%		17,386			0.31	%		159		0.01	%	55,925	0.99	%
June 30, 2021		29,163		1.06	%	6,676		1.65	%	1,759		0.14	%	378		1.80	%	18,449		0.33	%	126					0.01	%		56,551				1.01	%

(1)Farmer Mac excludes the Corporate segment in the presentation above because the segment does not have any interest-earning assets.

(2)See Note 10 to the consolidated financial statements for a reconciliation of GAAP net interest income by segment to net effective spread by segment for the three months ended ~~June~~September 30, 2023 and 2022.

115

The following table presents quarterly core earnings (a non-GAAP measure) reconciled to net income attributable to common stockholders:

Table 37


		Core Earnings by Quarter End																			Core Earnings by Quarter End
		June 2023		March 2023		December 2022		September 2022		June 2022		March 2022		December 2021		September 2021		June 2021			September 2023		June 2023		March 2023		December 2022		September 2022		June 2022		March 2022		December 2021		September 2021
		(in thousands)																			(in thousands)
Revenues:	Revenues:																			Revenues:
Net effective spread	Net effective spread	$	81,832	$	77,173	$	71,103	$	65,641	$	60,946	$	57,839	$	54,333	$	55,925	$	56,551	Net effective spread	$	83,424	$	81,832	$	77,173	$	71,103	$	65,641	$	60,946	$	57,839	$	54,333	$	55,925
Guarantee and commitment fees	Guarantee and commitment fees	4,581		4,654		4,677		4,201		4,709		4,557		4,637		4,322		4,334		Guarantee and commitment fees	4,828		4,581		4,654		4,677		4,201		4,709		4,557		4,637		4,322
Gains on sale of mortgage loans	Gains on sale of mortgage loans	—		—		—		—		—		—		6,539		—		—		Gains on sale of mortgage loans	—		—		—		—		—		—		—		6,539		—
Other	Other	409		1,067		390		473		307		514		241		687		301		Other	1,056		409		1,067		390		473		307		514		241		687
Total revenues	Total revenues	86,822		82,894		76,170		70,315		65,962		62,910		65,750		60,934		61,186		Total revenues	89,308		86,822		82,894		76,170		70,315		65,962		62,910		65,750		60,934

Credit related expense/(income):	Credit related expense/(income):																			Credit related expense/(income):
Provision for/(release of) losses		1,142		750		1,945		450		(1,535)		(54)		(1,428)		255		(983)
(Release of)/provision for losses																				(Release of)/provision for losses	(181)		1,142		750		1,945		450		(1,535)		(54)		(1,428)		255
REO operating expenses	REO operating expenses	—		—		819		—		—		—		—		—		—		REO operating expenses	—		—		—		819		—		—		—		—		—

Total credit related expense/(income)	Total credit related expense/(income)	1,142		750		2,764		450		(1,535)		(54)		(1,428)		255		(983)		Total credit related expense/(income)	(181)		1,142		750		2,764		450		(1,535)		(54)		(1,428)		255

Operating expenses:	Operating expenses:																			Operating expenses:
Compensation and employee benefits	Compensation and employee benefits	13,937		15,351		12,105		11,648		11,715		13,298		11,246		10,027		9,779		Compensation and employee benefits	14,103		13,937		15,351		12,105		11,648		11,715		13,298		11,246		10,027
General and administrative	General and administrative	9,420		7,527		8,055		6,919		7,520		7,278		8,492		6,330		6,349		General and administrative	9,100		9,420		7,527		8,055		6,919		7,520		7,278		8,492		6,330
Regulatory fees	Regulatory fees	831		835		832		812		813		812		812		750		750		Regulatory fees	831		831		835		832		812		813		812		812		750
Total operating expenses	Total operating expenses	24,188		23,713		20,992		19,379		20,048		21,388		20,550		17,107		16,878		Total operating expenses	24,034		24,188		23,713		20,992		19,379		20,048		21,388		20,550		17,107

Net earnings	Net earnings	61,492		58,431		52,414		50,486		47,449		41,576		46,628		43,572		45,291		Net earnings	65,455		61,492		58,431		52,414		50,486		47,449		41,576		46,628		43,572
Income tax expense	Income tax expense	12,539		12,756		11,210		10,303		9,909		9,024		9,809		9,152		9,463		Income tax expense	13,475		12,539		12,756		11,210		10,303		9,909		9,024		9,809		9,152
Preferred stock dividends	Preferred stock dividends	6,791		6,791		6,791		6,791		6,792		6,791		6,792		6,774		5,842		Preferred stock dividends	6,792		6,791		6,791		6,791		6,791		6,792		6,791		6,792		6,774
Core earnings	Core earnings	$	42,162	$	38,884	$	34,413	$	33,392	$	30,748	$	25,761	$	30,027	$	27,646	$	29,986	Core earnings	$	45,188	$	42,162	$	38,884	$	34,413	$	33,392	$	30,748	$	25,761	$	30,027	$	27,646

Reconciling items:	Reconciling items:																			Reconciling items:
Gains/(losses) on undesignated financial derivatives due to fair value changes	Gains/(losses) on undesignated financial derivatives due to fair value changes	$	2,141	$	916	$	1,596	$	6,441	$	2,846	$	2,612	$	(1,242)	$	(405)	$	(3,020)	Gains/(losses) on undesignated financial derivatives due to fair value changes	$	2,921	$	2,141	$	916	$	1,596	$	6,441	$	2,846	$	2,612	$	(1,242)	$	(405)
(Losses)/gains on hedging activities due to fair value changes		(4,901)		(105)		(148)		(624)		428		5,687		(2,079)		1,818		(5,866)
Unrealized (losses)/gains on trading assets		(57)		359		31		(757)		(285)		94		(76)		36		(61)
Gains/(losses) on hedging activities due to fair value changes																				Gains/(losses) on hedging activities due to fair value changes	3,210		(4,901)		(105)		(148)		(624)		428		5,687		(2,079)		1,818
Unrealized gains/(losses) on trading assets																				Unrealized gains/(losses) on trading assets	1,714		(57)		359		31		(757)		(285)		94		(76)		36
Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	29		29		57		24		(62)		20		71		23		20		Net effects of amortization of premiums/discounts and deferred gains on assets consolidated at fair value	29		29		29		57		24		(62)		20		71		23
Net effects of terminations or net settlements on financial derivatives	Net effects of terminations or net settlements on financial derivatives	583		523		1,268		(3,522)		2,536		15,512		(429)		(351)		109		Net effects of terminations or net settlements on financial derivatives	(79)		583		523		1,268		(3,522)		2,536		15,512		(429)		(351)

Income tax effect related to reconciling items	Income tax effect related to reconciling items	464		(362)		(590)		(327)		(1,148)		(5,024)		789		(236)		1,852		Income tax effect related to reconciling items	(1,638)		464		(362)		(590)		(327)		(1,148)		(5,024)		789		(236)
Net income attributable to common stockholders	Net income attributable to common stockholders	$	40,421	$	40,244	$	36,627	$	34,627	$	35,063	$	44,662	$	27,061	$	28,531	$	23,020	Net income attributable to common stockholders	$	51,345	$	40,421	$	40,244	$	36,627	$	34,627	$	35,063	$	44,662	$	27,061	$	28,531

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Farmer Mac is exposed to market risk from changes in interest rates. Farmer Mac manages this market risk by entering into various financial transactions, including financial derivatives, and by monitoring and measuring its exposure to changes in interest rates. See "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

116

information about Farmer Mac's use of financial derivatives and related accounting policies, see Note 4 to the consolidated financial statements.

Item 4.Controls and Procedures

Management's Evaluation of Disclosure Controls and Procedures. Farmer Mac maintains disclosure controls and procedures designed to ensure that information required to be disclosed in its periodic filings under the Securities Exchange Act of 1934 (“Exchange Act”), including this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported on a timely basis. These disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to Farmer Mac's management on a timely basis to allow decisions about required disclosure. Management, including Farmer Mac's Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of Farmer Mac's disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of ~~June~~September 30, 2023.

Farmer Mac carried out the evaluation of the effectiveness of its disclosure controls and procedures, required by paragraph (b) of Exchange Act Rules 13a-15 and 15d-15, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Farmer Mac's disclosure controls and procedures were effective as of ~~June~~September 30, 2023.

Changes in Internal Control Over Financial Reporting. There were no changes in Farmer Mac's internal control over financial reporting during the three months ended ~~June~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, Farmer Mac's internal control over financial reporting.

117

PART II

Item 1.Legal Proceedings

None.

Item 1A.Risk Factors

Information about risk factors can be found in “Management’s Discussion and Analysis of Financial

Condition and Results of Operations—Forward-Looking Statements” in Part I, Item 2 of this Form 10-Q

and in Part I, Item 1A of Farmer Mac’s 2022 Annual Report.

Item 2.Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities

(a) Farmer Mac is a federally chartered instrumentality of the United States whose debt and equity

securities are exempt from registration under Section 3(a)(2) of the Securities Act of 1933. During ~~second~~third

quarter 2023, the following transactions occurred related to Farmer Mac's equity securities that were not

registered under the Securities Act of 1933 and were not otherwise reported on a Current Report on

Form 8-K:

Class C Non-Voting Common Stock. Under 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 ~~410~~451 shares of its Class C non-voting common stock in ~~April~~July 2023 to the ~~six~~seven

directors who elected to receive stock in lieu of their cash retainers. Farmer Mac calculated the number of

shares issued to the directors based on a price of ~~$133.19~~$143.74 per share, which was the closing price of the

Class C non-voting common stock on ~~March 31,~~June 30, 2023 (the last trading day of the previous quarter) as

reported by the New York Stock Exchange.

On September 29, 2023, Farmer Mac granted an aggregate of 2,979 time-vested restricted stock units of Farmer Mac’s Class C non-voting common stock ("RSUs") to 77 employees under Farmer Mac's Amended and Restated 2008 Omnibus Incentive Plan. Those RSUs will vest in three equal installments on March 31, 2024, March 31, 2025, and March 31, 2026 if those individuals are employed by Farmer Mac on those dates.

(b) Not applicable.

Item 3.Defaults Upon Senior Securities

(a) None.

(b) None.

118

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

Director and Officer Trading Arrangements

~~118~~

None of our directors or executive officers (as defined in Rule 16a-1(f) ofunder the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the quarterly period covered by this report.

119

Item 6.Exhibits


*	3.1	—	Title VIII of the Farm Credit Act of 1971, as most recently amended on June 18, 2020 (Previously filed as Exhibit 3.1 to Form 10-Q filed August 10, 2020).
*	3.2	—	Amended and Restated By-Laws of the Registrant (Previously filed as Exhibit 3.2 to Form 10-K filed February 24, 2023).
*	4.1	—	Specimen Certificate for Farmer Mac Class A Voting Common Stock (Previously filed as Exhibit 4.1 to Form 10-Q filed May 15, 2003).
*	4.2	—	Specimen Certificate for Farmer Mac Class B Voting Common Stock (Previously filed as Exhibit 4.2 to Form 10-Q filed May 15, 2003).
*	4.3	—	Specimen Certificate for Farmer Mac Class C Non-Voting Common Stock (Previously filed as Exhibit 4.3 to Form 10-Q filed May 15, 2003).
*	4.4	—	Specimen Certificate for 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.6 to Form 10-Q filed August 11, 2014).
*	4.4.1	—	Certificate of Designation of Terms and Conditions of 6.000% Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series C (Previously filed as Exhibit 4.1 to Form 8-A filed June 20, 2014).
*	4.5	—	Specimen Certificate for 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.7 to Form 10-Q filed August 1, 2019).
*	4.5.1	—	Certificate of Designation of Terms and Conditions of 5.700% Non-Cumulative Preferred Stock, Series D (Previously filed as Exhibit 4.1 to Form 8-A filed May 13, 2019).
*	4.6	—	Specimen Certificate for 5.750% Non-Cumulative Preferred Stock, Series E (Previously filed as Exhibit 4.7 to Form 10-Q filed August 10, 2020).
*	4.6.1	—	Certificate of Designation of Terms and Conditions of 5.750% Non-Cumulative Preferred Stock, Series E (Previously filed as Exhibit 4.1 to Form 8-A filed May 20, 2020).
*	4.7	—	Specimen Certificate for 5.250% Non-Cumulative Preferred Stock, Series F (Previously filed as Exhibit 4.8 to Form 10-Q filed November 9, 2020).
*	4.7.1	—	Certificate of Designation of Terms and Conditions of 5.250% Non-Cumulative Preferred Stock, Series F (Previously filed as Exhibit 4.1 to Form 8-A filed August 20, 2020).
*	4.8		Specimen Certificate for 4.875% Non-Cumulative Preferred Stock, Series G (Previously filed as Exhibit 4.8 to Form 10-Q filed August 5, 2021).
*	4.8.1		Certificate of Designation of Terms and Conditions of 4.875% Non-Cumulative Preferred Stock, Series G (Previously filed as Exhibit 4.1 to Form 8-A filed May 27, 2021).
*	4.9	—	Description of the Registrant's securities that are registered under Section 12 of the Securities Exchange Act of 1934 (Previously filed as Exhibit 4.9 to Form 10-Q filed August 5, 2021).
**	31.1	—	Certification of Registrant's principal executive officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30,, 2023, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	31.2	—	Certification of Registrant's principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~June~~Septemb er 30,, 2023, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	32	—	Certification of Registrant's principal executive officer and principal financial officer relating to the Registrant's Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30,, 2023, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**	101.INS	—	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
**	101.SCH	—	Inline XBRL Taxonomy Extension Schema
**	101.CAL	—	Inline XBRL Taxonomy Extension Calculation
**	101.DEF	—	Inline XBRL Taxonomy Extension Definition
**	101.LAB	—	Inline XBRL Taxonomy Extension Label
**	101.PRE	—	Inline XBRL Taxonomy Extension Presentation
**	104	—	Cover Page Inline Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document included as Exhibit 101

~~119~~


*			Incorporated by reference to the indicated prior filing.
**			Filed with this report.
#			Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
†			Management contract or compensatory plan.

120

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FEDERAL AGRICULTURAL MORTGAGE CORPORATION


/s/ Bradford T. Nordholm		~~August 7,~~November 6, 2023
By:	Bradford T. Nordholm
	President and Chief Executive Officer
	(Principal Executive Officer)

/s/ Aparna Ramesh		~~August 7,~~November 6, 2023
By:	Aparna Ramesh
	Executive Vice President – Chief Financial Officer and Treasurer
	(Principal Financial Officer)

~~120~~121


	Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
	As previously Reported		Adjustments		As Revised		As previously Reported		Adjustments		As Revised
	(in thousands)
Interest Income:
Farmer Mac Guaranteed Securities and USDA Securities	$	57,104	$	(5,488)	$	51,616	$	96,361	$	(1,825)	$	94,536
Total interest income	144,936		(5,488)		139,448		257,156		(1,825)		255,331
Net interest income	69,402		(5,488)		63,914		131,277		(1,825)		129,452
Non-interest income/(expense):
(Losses)/gains on financial derivatives	3,418		373		3,791		19,492		1,287		20,779
Non-Interest Income	7,302		373		7,675		27,793		1,287		29,080
Income before income taxes	58,028		(5,115)		52,913		118,950		(538)		118,412
Income tax expense	12,132		(1,074)		11,058		25,217		(113)		25,104
Net Income	45,896		(4,041)		41,855		93,733		(425)		93,308
Net Income attributable to common stockholders	39,104		(4,041)		35,063		80,150		(425)		79,725